WLDI - Washington Life and Disability Insurance Exam

Question 1: A Washington life insurer disputes a claim and points to statements in the application, but the application was never attached to the policy at issue. Which of the following states how Washington treats the application and those statements in that situation?

Statements are warranties, always usable

The application binds even if never attached

Representations; application counts if attached

The policy is automatically void

Question 2: A disability income rider periodically increases the monthly benefit an insured is already receiving during a long claim, so the payments keep pace with rising consumer prices over the course of the disability. Which of the following riders is this?

A return of premium rider

A future increase option rider

A Social Security rider

A cost of living adjustment rider

Question 3: The Washington commissioner learns that a licensed producer is not in compliance with a child support order certified by the state agency. Which of the following states the action the commissioner must take regarding that producer's license under the support-order statute?

Issue a warning and monitor compliance

Reduce the license to limited lines

Immediately suspend the license

Take no action until renewal

Question 4: When completing a life insurance application, the applicant must sign it, and if any answer is changed the applicant typically must initial the correction so the insurer knows the change was authorized. Which of the following parts of the application process does this describe?

Signatures and corrections

The conditional receipt

The policy summary

The buyer's guide

Question 5: When an annuity begins paying income, a portion of each payment is treated as a nontaxable return of the owner's investment and the rest as taxable earnings, based on a ratio the insurer computes. Which of the following describes this mechanism?

The seven-pay test

The exclusion ratio

The transfer-for-value rule

The coordination of benefits

Question 6: A corporation insures its founder, a person whose specialized knowledge and relationships are vital to the business, so that the company will have funds to recruit and train a replacement if the founder dies. Which of the following business uses is this?

An executive bonus plan

An entity buy-sell plan

Key person insurance

A split-dollar plan

Question 7: A producer previously licensed in another state applies for a Washington resident license soon after that prior license ended. Which of the following states the condition under which Washington exempts the applicant from prelicensing education and examination based on the prior license?

There is no such exemption

If the prior license lasted five years

Only if the states share a border

Within ninety days of cancellation

Question 8: The Washington commissioner orders a producer to pay a fine after a disciplinary proceeding, and the producer wants to know how quickly it must be paid. Which of the following states the payment window the statute sets for a fine, expressed as a range from the date of the order?

Within ten days flat

Fifteen to thirty days

Within ninety days flat

Immediately upon service

Question 9: A Washington producer circulates a statement that is maliciously critical of a competing authorized insurer's financial condition, hoping to injure its business and drive away its customers. Which of the following unfair practices does that conduct describe under the Washington insurance code?

Defamation of an insurer

Twisting a policyholder

Rebating an inducement

Misrepresenting a policy term

Question 10: A policyholder covered by a company that becomes insolvent moves shortly before the liquidation, and the Washington guaranty association must decide which state's association covers her. Which of the following states how the statute fixes residency for guaranty association purposes?

In every state where she has lived

On the date the policy was issued

Wherever the policyholder currently lives

Court order date; one state only

Question 11: An insurer collects premiums from many similar policyholders and uses that pool to pay the losses of the few who suffer them, spreading the cost of losses across the whole group. Which of the following describes this basic mechanism of insurance?

The speculation on future gains

The sharing of risk among many

The retention of risk by each person

The avoidance of all exposures

Question 12: A Washington life insurer settles a death claim and proposes to reduce the payout by certain amounts before paying the beneficiary. Which of the following correctly states the deductions the settlement statute permits the insurer to take from the amount due?

Unpaid current-year premiums and policy indebtedness

Any prior claims paid on other policies

A flat administrative processing fee

Future premiums the insured would have owed

Question 13: An insurer offers a whole life policy on which the premium starts lower than ordinary whole life and increases in steps over the first several years until it reaches and stays at the ordinary level. Which of the following whole life variations is this?

Single-premium whole life

Graded premium whole life

Twenty-pay whole life

Straight whole life

Question 14: A Washington group life insurer issues certificates to be distributed to covered employees under the master policy. Which of the following states what the group life certificate must contain and to whom the insurer issues it for delivery?

Premium only; issued to employees

Nothing specific; issued to the state agency

Protection and conversion; to policyholder for delivery

Only the exclusions; issued to the beneficiary

Question 15: A major medical plan combines basic first-dollar hospital and surgical benefits with a large layer of catastrophic coverage into a single policy with one deductible and coinsurance, avoiding separate basic and major layers. Which of the following plans is this?

A comprehensive major medical plan

A basic hospital expense plan

A supplementary major medical plan

A specified disease plan

Question 16: A producer describes the person or interest named to receive the death proceeds and reminds a client that naming the estate, rather than a living person, can expose the proceeds to probate and creditors. Which of the following parties is being discussed?

The policyowner

The insured

The beneficiary

The underwriter

Question 17: A long-term care policy distinguishes among levels of care, and one level provides daily nursing and rehabilitative care ordered by a physician and performed by skilled medical personnel around the clock. Which of the following levels of care is this?

Adult day care

Custodial care

Intermediate care

Skilled nursing care

Question 18: A health policy provision adjusts the benefit if the insured's age was stated incorrectly, paying the amount the premium actually paid would have purchased at the insured's true age rather than voiding coverage. Which of the following provisions is this?

Misstatement of age

Time limit on certain defenses

Grace period

Reinstatement

Question 19: The process by which an insurer reviews an applicant's information, classifies the risk, and decides whether to accept it and at what premium protects the pool against poorer-than-average risks. Which of the following functions does this describe?

Loss control engineering

Claims adjusting

Reinsurance

Underwriting

Question 20: A Washington insurer violates several of the long-term care insurance requirements, and the commissioner sits down to calculate the maximum penalty it may impose. Which of the following states how the long-term care penalty statute measures the maximum fine for such a violation?

Triple commission, or ten thousand, whichever greater

A flat one thousand dollars per policy

One percent of annual premium

No monetary penalty is authorized

WLDI Washington Life and Disability Insurance Exam - Set 5 - Part 1