WLDI - Washington Life and Disability Insurance Exam

Question 1: Under a major medical plan, after the insured pays the annual deductible, the plan and the insured share the remaining covered costs at a set ratio until an out-of-pocket maximum is reached. Which of the following features describes that sharing ratio?

The stop-loss limit

The deductible

Coinsurance

The premium

Question 2: An instructor lists the traits a risk must have to be insurable, such as being measurable, due to chance, part of a large group of similar exposures, and not catastrophic to the insurer. Which of the following describes what these traits define?

The duties of a field underwriter

The elements of a valid contract

The parts of an insurance application

The characteristics of an insurable risk

Question 3: A Washington insured knowingly accepts a cash rebate that the producer was prohibited from offering as an inducement to buy. Which of the following states the penalty the statute imposes on the insured who receives such an unlawful rebate?

A class C felony charge

A fine up to two hundred dollars

Automatic cancellation of the policy

A fine of one thousand dollars

Question 4: An insurer classifies a healthy applicant with excellent habits, ideal build, and a clean history into a category that qualifies for the lowest available premium rate, better than the ordinary standard class. Which of the following classifications is this?

Substandard

Standard

Preferred

Declined

Question 5: An annuity begins paying the annuitant an income within a short time after a single premium is paid, rather than accumulating value over years before payments start. Which of the following types of annuity is this?

A variable annuity

A deferred annuity

A flexible premium annuity

An immediate annuity

Question 6: A policy provision bars the insurer from contesting the validity of the contract or denying a claim based on statements in the application once the policy has been in force for a stated period during the insured's lifetime. Which of the following provisions is this?

The reinstatement provision

The grace period provision

The incontestability provision

The entire contract provision

Question 7: A permanent policy lets the owner allocate cash value among separate investment subaccounts, so the cash value and often the death benefit rise or fall with investment performance and are not guaranteed. Which of the following policies is this?

Variable life insurance

Whole life insurance

Term life insurance

Indexed whole life

Question 8: A policyowner exchanges an existing life insurance policy for a new annuity contract directly between insurers, and the transaction is structured so that any gain is not taxed at the time of the exchange. Which of the following provisions permits this tax-free exchange?

A reduced paid-up option

A rollover contribution

A collateral assignment

A Section 1035 exchange

Question 9: A Washington insurer terminates a producer's appointment for reasons unrelated to any misconduct and must notify the commissioner of the change. Which of the following states how long the insurer has to file that termination notice, and from what event the period runs?

Thirty days following the effective date

Fifteen days following the effective date

Sixty days following the effective date

Ten days following the producer's receipt

Question 10: A policy provision gives the policyowner a set number of days after a premium's due date during which the premium may still be paid and the coverage remains in force. Which of the following provisions is this?

The reinstatement period

The free look

The grace period

The elimination period

Question 11: A wealthy individual buys life insurance mainly so that, at death, the proceeds will supply cash to pay estate settlement costs and taxes without forcing the family to sell property. Which of the following personal uses does this serve?

Key person protection

Human life value replacement

Cash accumulation

Estate conservation

Question 12: A health plan lets members use any provider but pays a larger share of the cost when they choose doctors and hospitals within its contracted network, encouraging in-network use without requiring referrals. Which of the following plans is this?

A preferred provider organization

A health maintenance organization

A point-of-service gatekeeper plan

An exclusive provider organization

Question 13: A person becoming eligible for Medicare learns that one part covers inpatient hospital stays, skilled nursing, and hospice, and is generally premium-free for those with sufficient work history. Which of the following parts of Medicare is this?

Part B

Part A

Part C

Part D

Question 14: When an insured dies, the beneficiary receives the life insurance death benefit, and under the general federal rule the lump-sum proceeds are received free of federal income tax. Which of the following statements about the taxation of death proceeds is correct?

The lump-sum death benefit is income-tax-free

The entire death benefit is ordinary income

Only the premiums paid are tax-free

The proceeds are taxed as capital gains

Question 15: A Medicare beneficiary chooses to receive Part A and Part B benefits through a private plan that contracts with Medicare and often adds extra benefits and a provider network. Which of the following is this option called?

Medicaid

A Medicare supplement policy

Medicare Advantage, Part C

Original Medicare

Question 16: A federal statute makes it a crime for a person convicted of a felony involving dishonesty or breach of trust to engage in the business of insurance affecting interstate commerce without regulatory consent. Which of the following states the maximum imprisonment for willfully engaging in such conduct?

Five years

One year

Ten years

Fifteen years

Question 17: The board of directors of the Washington life and disability guaranty association is being assembled. Apart from the insurance commissioner serving in an official capacity, which of the following states the number of member insurers the statute requires on the board?

Exactly five members

Seven to eleven member insurers

Three to five members

Fifteen, appointed by the governor

Question 18: A whole life policyowner stops paying premiums and elects to keep the full original face amount as term insurance for as long a period as the accumulated cash value will purchase. Which of the following nonforfeiture options is this?

Cash surrender

Reduced paid-up insurance

Extended term insurance

Automatic premium loan

Question 19: A Washington long-term care policyholder receives her policy and wants to return it during the free look. Which of the following states the long-term care free-look period, its trigger, and whether a late-refund penalty applies under the statute?

Ten days from receipt, with penalty

Thirty days from delivery, with penalty

Twenty days from application, with penalty

Thirty days from delivery, no penalty

Question 20: A disability income policy requires the insured to be disabled for a stated number of days at the start of a claim before any benefits become payable, functioning like a time deductible. Which of the following provisions is this?