Tennessee Life & Health Insurance License, Practice Exams

A long-term care policy has a 90-day elimination period. Benefits begin:

1. After 90 days of qualifying care the insured pays for ✓
2. After a one-year waiting period measured from the policy's effective date
3. Only after the insured turns 80
4. Immediately on the first day of any care, because the 90 days apply only to the policy's lifetime maximum

Why: The elimination period is a deductible in days; the insured covers care during it, and benefits start afterward.

A rider that pays an additional amount (often double the face) if the insured dies in an accident is the:

1. Waiver of premium rider
2. Cost-of-living rider
3. Accidental death benefit rider ✓
4. The guaranteed future insurability rider

Why: The accidental death benefit (double indemnity) rider adds a benefit for accidental death.

Under T.C.A. § 56-8-105, when a claimant requests claim forms, the insurer must provide them within how many calendar days?

1. Ten (10) calendar days
2. Fifteen (15) calendar days ✓
3. Twenty (20) calendar days
4. Thirty (30) calendar days

Why: T.C.A. § 56-8-105(13) requires providing necessary claim forms within fifteen (15) calendar days of a request, with reasonable explanations — therefore fifteen calendar days.

A Medicare Supplement (Medigap) policy must provide a free-look period of at least:

1. 30 days ✓
2. 10 days
3. 24 hours
4. 6 months

Why: Medicare Supplement policies carry a 30-day free-look, longer than the typical 10-day individual health free-look.

Long-term care benefits are most often triggered by a covered person's inability to perform a stated number of activities of daily living OR by:

1. Voluntary retirement from full-time employment
2. A temporary illness expected to resolve within a week
3. Severe cognitive impairment such as dementia ✓
4. Reaching the policy's stated maturity age while healthy

Why: Benefits trigger on inability to perform a set number of ADLs (usually 2 of 6) or on severe cognitive impairment.

Workers' compensation insurance covers:

1. Job-related injuries and occupational illnesses ✓
2. Any injury an employee suffers, whether on or off the job
3. Only injuries that occur during an employee's commute home
4. Medical costs of an employee's dependents and family members

Why: Workers' compensation is a no-fault, state-mandated coverage for work-related injuries and occupational diseases; off-the-job losses are not covered.

Medicare Savings Programs (such as QMB) help low-income beneficiaries by:

1. Adding dental and vision to Medicare
2. Eliminating the need to enroll in Part A
3. Providing tax-free life insurance
4. Paying Medicare premiums and cost-sharing ✓

Why: Medicaid-administered Medicare Savings Programs (QMB, SLMB, QI) help pay Medicare premiums, deductibles, and coinsurance for those with limited means.

Under T.C.A. § 56-6-113, an unlicensed person not employed by or affiliated with the producer may receive a per-referral fee not exceeding:

1. Twenty-five dollars ($25.00) ✓
2. Fifty dollars ($50.00)
3. One hundred dollars ($100.00)
4. Ten dollars ($10.00)

Why: T.C.A. § 56-6-113(e) allows a fixed referral fee not to exceed twenty-five dollars ($25.00), or a lesser amount set by rule, for an unaffiliated unlicensed person — therefore $25.00.

Under T.C.A. § 56-42-108, a long-term care insurance policy generally may not be delivered in Tennessee unless the policyholder has been offered which option?

1. A guaranteed insurability rider
2. A return-of-premium-at-death rider
3. A nonforfeiture benefit ✓
4. An automatic inflation waiver

Why: T.C.A. § 56-42-108(a) prohibits delivery of an LTC policy unless the policyholder or certificate holder has been offered the option of purchasing a policy including a nonforfeiture benefit — therefore a nonforfeiture benefit is correct.

A Medicare supplement policy is issued outside of the open enrollment period. Under TN Rule 0780-1-58, any preexisting condition exclusion may last no longer than how long after the effective date?

1. three (3) months
2. six (6) months ✓
3. one (1) year
4. two (2) years

Why: TN Rule 0780-1-58 limits any preexisting-condition exclusion to no more than six months after the effective date — therefore six (6) months.

Under T.C.A. § 56-6-115, in a controversy arising from an application, a producer who solicited it is generally regarded as the agent of whom?

1. The insured who signed the application
2. The insured's named beneficiary
3. The state insurance guaranty fund
4. The insurer, not the insured or beneficiary ✓

Why: T.C.A. § 56-6-115(b) provides the soliciting producer is regarded as the agent of the insurer and not the insured or beneficiary — therefore that answer is correct.

An owner surrenders a policy for its $32,000 cash value after paying $20,000 in premiums. How much is taxable?

1. $12,000 ✓
2. $32,000
3. $20,000
4. $0

Why: On surrender, the gain over cost basis is taxable: $32,000 − $20,000 = $12,000 of ordinary income.

The Medical Information Bureau (MIB) helps insurers:

1. Set the exact premium rate an applicant will be charged
2. Skip the application's medical questions, because MIB supplies full records
3. Detect omissions or fraud by sharing coded prior medical information ✓
4. Decline an applicant outright whenever an adverse MIB code is returned

Why: The MIB is a member-supported database of coded medical information; an insurer may use it as an alert but cannot decline coverage solely on an MIB report.

An agent binding an insurer to a risk the company did not intend to cover is an example of which type of authority?

1. Express authority granted explicitly in the agency contract
2. Fiduciary authority arising from handling client premium funds
3. Apparent authority ✓
4. Implied authority needed to carry out expressly granted duties

Why: Apparent authority is the appearance of authority a reasonable client perceives; express and implied are actually granted, so the distractors describe legitimate authority.

A producer who holds client premiums must keep them in a fiduciary capacity, which means the producer must:

1. Report each premium directly to the federal tax authorities
2. Lend the premiums to other clients who are short on funds
3. Invest the premiums for personal profit until they are remitted
4. Keep those funds separate and not mix them with personal money ✓

Why: As a fiduciary, the producer holds premiums in trust for the insurer and must not commingle them with personal funds (doing so is commingling).

A primary tax advantage of a deferred annuity during accumulation is that earnings:

1. Are taxed each year but at a reduced capital-gains rate
2. Are completely exempt from income tax even when withdrawn
3. Generate an annual deduction equal to the interest credited
4. Grow tax-deferred until they are withdrawn ✓

Why: Annuity earnings accumulate tax-deferred; taxes apply only when distributions are taken.

In a variable annuity, the contract value during the accumulation phase is held in:

1. Separate accounts whose value fluctuates with investment performance ✓
2. An escrow account managed by the state insurance department
3. The insurer's general account with a fully guaranteed minimum interest rate
4. A federally insured bank deposit account protected against any loss

Why: Variable annuity funds are in separate accounts (sub-accounts); the owner bears investment risk, unlike a fixed annuity's guaranteed general-account return.

Three children are named 'per stirpes.' One child dies before the insured, leaving two children. Each surviving child gets 1/3, and the deceased child's 1/3 is:

1. Split between that child's two children ✓
2. Kept by the insurer
3. Divided among the two surviving children
4. Paid to the insured's estate

Why: Per stirpes passes a deceased beneficiary's share to that beneficiary's descendants — here, the deceased child's two children split the 1/3.

Pension maximization is a strategy in which a retiree:

1. Takes the larger single-life pension and buys life insurance to protect the spouse ✓
2. Delays starting the pension indefinitely in order to keep earning additional years of service credit
3. Withdraws the entire pension as a lump sum, drops all coverage, and self-insures the survivor need
4. Always elects the reduced joint-and-survivor pension on the view that it is the safest possible choice

Why: Pension max takes the higher single-life payout and uses life insurance to provide for the surviving spouse, instead of accepting a smaller joint-and-survivor benefit.

Under the 'paid-up additions' dividend option, dividends are used to:

1. Pay the policyowner the dividend directly in cash each year
2. Reduce the premium due on the next policy anniversary date
3. Purchase one-year term insurance equal to the cash value
4. Buy small amounts of additional paid-up whole life coverage ✓

Why: Paid-up additions use dividends to buy single-premium whole life, increasing both death benefit and cash value with no new underwriting.

A disability policy's benefits are paid monthly. The 'time of payment of claims' provision requires disability benefits to be paid at least:

1. Once per year
2. Monthly ✓
3. Within 24 hours of each loss
4. At the end of the benefit period

Why: For periodic (disability) claims, benefits must be paid at least monthly under the uniform provision.

The spendthrift clause in a life insurance policy:

1. Lets the insurer reduce the benefit if the policyowner overspends
2. Requires the beneficiary to draw down the proceeds within a fixed number of years
3. Lets the policyowner borrow the entire cash value without interest
4. Protects policy proceeds held by the insurer from the beneficiary's creditors ✓

Why: A spendthrift clause shields proceeds left with the insurer under a settlement option from claims by the beneficiary's creditors and bars assignment.

An annuitant has a $50,000 cost basis and a $100,000 expected return. Of each $10,000 annual payment, how much is taxable?

1. $5,000 ✓
2. $2,500
3. $10,000
4. $0

Why: Exclusion ratio = basis ÷ expected return = 50,000/100,000 = 50%. Half of each $10,000 payment ($5,000) is excluded; the other $5,000 is taxable.

A retiree with limited income and assets needs nursing-home care Medicare won't cover long term. The program that may help is:

1. Medicare Part B outpatient benefits
2. A Medicare Supplement policy covering Part A coinsurance
3. Social Security disability income
4. Medicaid (after meeting its means test) ✓

Why: Medicaid covers long-term custodial care for those who meet its income/asset limits, sometimes after a spend-down.

A Section 162 'double bonus' (zero-tax) arrangement is one in which the employer pays:

1. Twice the death benefit to the executive's chosen beneficiary
2. A bonus only in years the company reports a taxable profit
3. A second bonus to cover the income tax on the first bonus ✓
4. Half the premium, with the executive paying the remaining half

Why: In a double-bonus plan the employer grosses up the bonus with an extra amount so the executive's after-tax cost of the policy is effectively zero.

Under T.C.A. § 56-42-103, 'long-term care insurance' means a policy or rider designed to provide coverage for not less than how long for each covered person?

1. Thirty (30) days
2. Six (6) consecutive months
3. Twelve (12) consecutive months ✓
4. Twenty-four (24) consecutive months

Why: T.C.A. § 56-42-103(5) defines 'long-term care insurance' as coverage for not less than twelve (12) consecutive months for each covered person for necessary care in a setting other than an acute care hospital unit — therefore 12 consecutive months is correct.

Under T.C.A. § 56-7-2602, the alcohol and other drug dependency coverage requirement does NOT apply to which type of coverage?

1. A standard group major medical plan
2. A blanket or specified disease policy ✓
3. An employer-negotiated group HMO plan
4. A group service benefit contract

Why: T.C.A. § 56-7-2602(c) excludes blanket, short-term travel, accident-only, limited or specified disease, and individual conversion policies, among others — therefore a blanket or specified disease policy.

Under TN Rule 0780-1-40, a life insurance purchaser must be provided which two disclosure documents?

1. an annuity disclosure and a suitability form
2. a replacement notice and a claim form
3. a HIPAA notice and an outline of coverage
4. a Buyer's Guide and a Policy Summary ✓

Why: TN Rule 0780-1-40 (Life Insurance Solicitation) requires that purchasers receive a Buyer's Guide and a Policy Summary — therefore a Buyer's Guide and a Policy Summary.

Current assumption (interest-sensitive) whole life differs from traditional whole life because its premiums and cash values:

1. Adjust with current interest and mortality experience ✓
2. Are fixed by contract and can never be changed for the life of the policy
3. Decrease automatically each year until the policy becomes paid up
4. Are invested entirely in equity sub-accounts selected by the policyowner

Why: Current assumption whole life uses current interest and mortality assumptions, so premiums and cash values can be redetermined periodically.

Credit life insurance is typically structured so that:

1. The face amount increases over the life of the underlying loan
2. Coverage continues at the same level long after the loan is repaid
3. The borrower's family receives the full original loan amount in cash
4. It is decreasing term with the creditor named as the beneficiary ✓

Why: Credit life is usually decreasing term equal to the outstanding debt, with the lender as beneficiary; it cannot exceed the loan balance.

Under T.C.A. § 56-12-206, members of the association's board may be reimbursed for expenses but:

1. Receive a fixed annual salary
2. Are paid per meeting attended
3. Are not otherwise compensated ✓
4. Earn a share of assessments

Why: T.C.A. § 56-12-206(c) allows expense reimbursement but provides board members shall not otherwise be compensated by the association for their services — therefore not otherwise compensated.

A Medicare Supplement (Medigap) policy is designed to:

1. Pay only for outpatient prescription drug costs
2. Cover gaps like deductibles and coinsurance in Original Medicare ✓
3. Provide long-term custodial nursing-home care benefits for an indefinite period of time
4. Replace Original Medicare with a private network plan

Why: Medigap fills cost-sharing gaps in Original Medicare and is sold in standardized plans.

A plan has a $500 deductible, 80/20 coinsurance, and a $2,500 out-of-pocket maximum. On a $25,000 bill, the insured pays:

1. $2,500 ✓
2. $5,400
3. $4,900
4. $500

Why: Deductible $500 + 20% of $24,500 = $5,400, but the $2,500 out-of-pocket maximum caps the insured's cost at $2,500.

Under T.C.A. § 56-12-207, if a member insurer becomes an insolvent insurer, and the association assures payment of benefits under group policies, coverage for claims incurred must continue no later than the earlier of the next renewal date or how many days (but in no event less than 30 days)?

1. One hundred eighty (180) days
2. Sixty (60) days
3. Ninety (90) days
4. Forty-five (45) days ✓

Why: T.C.A. § 56-12-207(b)(2)(A)(i) requires the association, for group policies, to assure payment of benefits for claims incurred no later than the earlier of the next renewal date or forty-five (45) days (but no less than 30 days) after it becomes obligated — therefore 45 days is correct.

A reciprocal insurer is:

1. An unincorporated group of members who insure each other through an attorney-in-fact ✓
2. A federal chartering agency that licenses insurers under the McCarran-Ferguson Act
3. A stock company whose shareholders elect the board and receive taxable dividends
4. A fraternal benefit society organized in lodges that sells only to its own members

Why: A reciprocal is an unincorporated association whose subscribers exchange insurance among themselves, managed by an attorney-in-fact.

The Medicare Part D Low-Income Subsidy ('Extra Help') assists eligible beneficiaries with:

1. Premiums for a private Medicare Supplement policy
2. Prescription drug costs such as premiums and copays ✓
3. The cost of long-term custodial nursing-home care
4. Hospital room-and-board charges under Part A

Why: Extra Help (LIS) lowers Part D premiums, deductibles, and copays for beneficiaries with limited income and resources.

Under Tennessee's annuity best-interest rule (TN Rule 0780-01-86), a producer recommending an annuity must satisfy four obligations: care, disclosure, documentation, and...?

1. guaranteed return
2. premium financing
3. conflict of interest ✓
4. policy replacement

Why: TN Rule 0780-01-86 imposes the care, disclosure, conflict-of-interest, and documentation obligations on annuity recommendations — therefore conflict of interest.

COBRA generally allows a qualified employee who loses group coverage due to a reduction in hours or termination to continue that coverage for:

1. Only 30 days while they search for replacement coverage
2. The rest of their life, at the original employee contribution rate
3. Up to 10 years, fully subsidized by the former employer
4. Up to 18 months, by paying the premium themselves ✓

Why: COBRA continuation is typically 18 months (29 or 36 in some cases); the individual pays up to 102% of the full premium.

Industrial (home service / 'debit') life insurance is characterized by:

1. Mandatory medical exams for every single applicant
2. Small face amounts and frequent premium collection ✓
3. Coverage available only through a group employer plan
4. Large face amounts with cash value invested in the insurer's separate investment accounts

Why: Industrial (debit) policies carry small face amounts with premiums historically collected weekly or monthly by an agent at the insured's home.

A Tennessee life policy contains a suicide exclusion. Under T.C.A. § 56-7-2308, such an exclusion (sane or insane) is permitted only for suicide committed within...?

1. one (1) year from date of issue
2. three (3) years from date of issue
3. six (6) months from date of issue
4. two (2) years from date of issue ✓

Why: T.C.A. § 56-7-2308(5)(A)(i) allows excepting suicide, while sane or insane, only within two years from the date of issue — therefore two (2) years from date of issue.

A worker contributes to an HSA, then uses the funds for a non-qualified expense before age 65. The withdrawal is:

1. Deductible as a medical expense
2. Taxable and subject to an additional penalty ✓
3. Completely tax-free in all cases
4. Exempt because it is the worker's own money

Why: Non-qualified HSA withdrawals before 65 are taxable and subject to an additional 20% penalty; qualified medical withdrawals are tax-free.

Under T.C.A. § 56-7-2602, the offer of alcohol and other drug dependency benefits is subject to the group policyholder's right to:

1. demand double the standard physical illness benefits
2. waive the insurer's own policy filing obligations
3. extend coverage automatically to all former employees
4. reject the coverage or select an alternative benefit level ✓

Why: T.C.A. § 56-7-2602 makes the offer subject to the group policy or contract holder's right to reject the coverage or select an alternative level of benefits — therefore reject the coverage or select an alternative benefit level.

Under T.C.A. § 56-1-102, the term "commissioner" means the commissioner of what department?

1. Financial institutions
2. Consumer affairs
3. Commerce and insurance ✓
4. Revenue and taxation

Why: T.C.A. § 56-1-102(1) defines "commissioner" as the commissioner of commerce and insurance — therefore that answer is correct.

A 'corridor deductible' appears in supplementary major medical plans and is the amount:

1. Refunded to the insured at the end of a claim-free year
2. Deducted from the death benefit before any claim is paid
3. Between where basic coverage ends and major medical begins ✓
4. Charged each time the insured visits an in-network specialist

Why: In a supplementary major medical plan, the corridor deductible is the gap the insured pays after basic benefits are exhausted and before major medical starts.

Under T.C.A. § 56-7-2305, if an insured is not given notice of the conversion right at least 15 days before the conversion period expires, the extra period runs 15 days from notice but never beyond how many days after the period's stated expiration?

1. thirty-one (31) days
2. forty-five (45) days
3. ninety (90) days
4. sixty (60) days ✓

Why: T.C.A. § 56-7-2305(c) caps the additional conversion period at 15 days after notice but in no event beyond 60 days after the period's expiration date — therefore sixty (60) days.

An employee gets married, a HIPAA 'special enrollment' event. The employee may:

1. Never add a new spouse to an existing plan
2. Only enroll at the next annual open enrollment period
3. Enroll only after a 12-month waiting period
4. Enroll in the group plan outside the normal open enrollment ✓

Why: HIPAA special enrollment lets employees enroll after qualifying life events (marriage, birth, loss of other coverage) without waiting for open enrollment.

An insurer cancels a property policy solely because of the risk's geographic location, with no actuarial basis. Under T.C.A. § 56-8-104 this is:

1. Prohibited unfair discrimination ✓
2. Sound underwriting judgment
3. A permitted geographic underwriting exception
4. Lawful territorial rating

Why: T.C.A. § 56-8-104(7)(D) prohibits canceling or limiting property or casualty coverage solely because of the risk's geographic location absent sound underwriting and actuarial principles — therefore prohibited unfair discrimination.

Nonoccupational disability coverage pays benefits for disabilities that occur:

1. Only from sickness, since accidental injuries fall to the workers' compensation system
2. At any time, on or off the job, exactly as 24-hour occupational coverage does
3. Off the job (work-related injuries are covered by workers' compensation) ✓
4. Only while the insured is performing assigned duties during scheduled work hours

Why: Nonoccupational coverage excludes on-the-job injuries (covered by workers' compensation); occupational/24-hour coverage applies both on and off the job.

Nonforfeiture provisions in an annuity guarantee the owner:

1. A doubling of the account value after ten years
2. Free withdrawals of the entire balance in the first year
3. A minimum surrender value if the contract is cashed in ✓
4. The full original premium back with no charges at any time

Why: Annuity nonforfeiture laws guarantee a minimum cash surrender value, protecting the owner's accumulated funds.

A payor benefit rider, common on juvenile policies, provides that:

1. The child's coverage automatically doubles at age 21 with no new evidence of insurability
2. Premiums are waived if the premium-paying adult dies or becomes disabled ✓
3. The adult payor receives the policy's face amount as a death benefit if the insured child dies first
4. The policy pays a cash bonus at college graduation

Why: If the adult paying premiums on a child's policy dies or becomes disabled, the payor benefit rider waives the premiums until the child reaches a stated age.

Joint life (first-to-die) insurance pays the death benefit:

1. In equal installments to each surviving insured person
2. Upon the first death among the insureds covered ✓
3. When both insureds covered by the policy have died
4. Only if the insureds die within thirty days of each other

Why: Joint (first-to-die) life pays at the first death of the covered insureds; survivorship (second-to-die) pays at the second death.

An insurer keeps the right to decline renewal of a Tennessee A&H policy. Under T.C.A. § 56-26-126, the policy face must carry wording meaning the coverage is...?

1. renewable only at the company's option ✓
2. guaranteed renewable to age sixty-five
3. cancellable by the insured party only
4. automatically renewed each policy year

Why: T.C.A. § 56-26-126 requires face wording ('RENEWABLE AT OPTION OF COMPANY' or equivalent) showing renewal is at the company's option — therefore renewable only at the company's option.

The difference between a copayment and coinsurance is that a copayment is:

1. The total amount the insured pays before any benefits begin
2. A fixed dollar amount paid at the time of a covered service ✓
3. The yearly cap on what the insured can pay out of pocket
4. A percentage of the covered charge the insured shares with the plan

Why: A copay is a set dollar amount per service; coinsurance is a percentage of the charge shared after the deductible.

Under TN Rule 0780-1-58, a Medicare supplement policy may not define a preexisting condition more restrictively than one for which advice or treatment was recommended or received within what period before the effective date?

1. twelve (12) months
2. two (2) years
3. ninety (90) days
4. six (6) months ✓

Why: TN Rule 0780-1-58 limits the preexisting-condition look-back to conditions for which advice or treatment was received within six months before the effective date — therefore six (6) months.

Under T.C.A. § 56-6-111, a temporary insurance producer license may be issued without examination for a period not to exceed how long?

1. Ninety (90) days
2. Two hundred seventy (270) days
3. One hundred eighty (180) days ✓
4. Three hundred sixty-five (365) days

Why: T.C.A. § 56-6-111(a) authorizes a temporary license for a period not to exceed one hundred eighty (180) days without an examination — therefore that answer is correct.

Under T.C.A. § 56-12-206, board members are selected by member insurers subject to the approval of the:

1. Governor of Tennessee
2. Insurance commissioner ✓
3. NAIC board of directors
4. General Assembly leadership

Why: T.C.A. § 56-12-206(a) provides that board members are selected by member insurers subject to the approval of the commissioner — therefore the insurance commissioner.

A variable life insurance policy typically guarantees:

1. A fixed cash value that can never decline in any market
2. That the policy can never become a modified endowment contract
3. A level premium that is invested entirely in government bonds
4. A minimum death benefit regardless of separate-account performance ✓

Why: Variable life guarantees a minimum death benefit, but the cash value (and any benefit above the minimum) varies with the separate accounts the owner directs.

Under T.C.A. § 56-6-125, a producer who charges a permitted service fee under a written agreement must retain a copy of that agreement for at least:

1. one (1) year
2. two (2) years
3. three (3) years ✓
4. five (5) years

Why: T.C.A. § 56-6-125(a)(3) requires the producer to retain a copy of the agreement for not less than three years after completion of services — therefore three (3) years.

An agent sells a policy in Tennessee for an insurer not authorized to do business in the state. Under T.C.A. § 56-6-114, the agent has:

1. Made a lawful excess and surplus lines sale
2. Acted within an agency exemption
3. Committed only a licensing lapse
4. Committed a fraudulent insurance act ✓

Why: T.C.A. § 56-6-114(b) provides that selling insurance for an insurer not authorized to do business in this state is a fraudulent insurance act as defined by § 56-53-102 — therefore committed a fraudulent insurance act.

A joint and survivor annuity covering a couple continues full or reduced payments:

1. Only until the first annuitant dies
2. Until the second of the two annuitants dies ✓
3. To the couple's heirs after both die
4. For a fixed ten-year term regardless of survival

Why: A joint and survivor annuity pays as long as either annuitant lives, often reducing to a percentage for the survivor.

Standardized Medicare Supplement (Medigap) plans are labeled:

1. By the beneficiary's state of residence
2. With letters such as A through N ✓
3. With numbers 1 through 10
4. By the insurer's own brand names

Why: Medigap plans are standardized by letter (A–N in most states); the same letter offers the same core benefits across insurers.

Increasing term insurance is characterized by a death benefit that:

1. Falls steadily until it reaches zero at the end of the term
2. Is determined each year by the performance of a market index
3. Rises over the policy term ✓
4. Stays exactly level for the whole duration of the contract

Why: Increasing term's face amount grows over time (often used with return-of-premium or to track inflation); decreasing term does the opposite.

The primary purpose of the Medical Information Bureau (MIB) is to:

1. Help member insurers detect omissions or fraud on applications ✓
2. Sell consumer medical histories directly to the general public
3. Set the premium rates that all member companies must charge
4. Provide free medical examinations to insurance applicants

Why: The MIB is a nonprofit information exchange whose coded reports help member insurers identify errors, omissions, or misrepresentations on applications.

A key feature of convertible term insurance is that it can be changed to a permanent policy:

1. Only if the insured becomes totally disabled first
2. Only after a new medical exam confirms insurability
3. Only during the first policy year
4. Without providing evidence of insurability ✓

Why: Convertible term can be converted to permanent coverage without evidence of insurability.

Under T.C.A. § 56-7-2602, insurers offering group hospital and medical coverage must make available benefits for the care and treatment of alcohol and other drug dependency that are:

1. limited to a fixed lifetime maximum of ten thousand dollars
2. available only after a two-year waiting period
3. not less favorable than for physical illness generally ✓
4. payable at fifty percent of the physical illness benefit

Why: T.C.A. § 56-7-2602 requires the offered alcohol and other drug dependency benefits to be not less favorable than for physical illness generally, subject to the same limits and factors — therefore not less favorable than for physical illness generally.

Under T.C.A. § 56-42-105, a long-term care policy may NOT require that a policyholder first receive:

1. a physician's certification of chronic illness
2. an assessment of cognitive impairment
3. a completed elimination period
4. skilled care before custodial care benefits begin ✓

Why: T.C.A. § 56-42-105(b)(4) prohibits requiring a policyholder to have received skilled care before coverage for intermediate or custodial care begins — therefore skilled care before custodial care benefits begin.

Under T.C.A. § 56-7-2301, a family health policy covers their children. Coverage for a newly born child of the insured must begin...?

1. on the 31st day following birth
2. from the moment of birth ✓
3. when the newborn is discharged
4. at the next policy anniversary

Why: T.C.A. § 56-7-2301(a) requires newborn coverage from the moment of birth, including care for congenital defects and birth abnormalities — therefore from the moment of birth.

An applicant for a large policy must justify the amount with their income and net worth. This is:

1. Field underwriting
2. Reinsurance
3. Medical underwriting
4. Financial underwriting ✓

Why: Financial underwriting confirms the requested coverage is reasonable relative to the applicant's financial circumstances.

Under T.C.A. § 56-7-2602, benefits for treatment in an alcohol or other drug dependency treatment center are determined as if the care were provided in:

1. a hospital ✓
2. a physician's private office
3. a skilled nursing facility
4. an outpatient clinic

Why: T.C.A. § 56-7-2602 directs that benefits be determined as if necessary care in an alcohol or other drug dependency treatment center were care in a hospital — therefore a hospital.

A life insurer routinely offers far less than claims are worth so beneficiaries must sue to recover. Under T.C.A. § 56-8-105 this is:

1. Prudent reserve protection
2. Lawful settlement bargaining
3. A permitted litigation strategy
4. An unfair claims practice ✓

Why: T.C.A. § 56-8-105(5) prohibits compelling beneficiaries to sue by offering substantially less than the amounts ultimately recovered — therefore an unfair claims practice.

Long-term care policies commonly cover care in settings other than nursing homes, including:

1. Home health care, adult day care, and assisted living ✓
2. Just short-term rehabilitation after a surgery
3. Only acute-care hospitals and emergency rooms
4. Exclusively the insured's own private residence

Why: Modern LTC policies cover a range of settings — home health, adult day care, assisted living, and respite care — not only nursing homes.

Under T.C.A. § 56-6-105, an applicant who fails the licensing examination on the first attempt must wait at least how long before reapplying to take it a second time?

1. Thirty (30) calendar days
2. Five (5) business days
3. Sixty (60) calendar days
4. Ten (10) calendar days ✓

Why: T.C.A. § 56-6-105(d)(1) requires an applicant who fails the first attempt to wait at least ten (10) calendar days before reapplying — therefore 10 days is correct.

A Keogh (HR-10) plan is a qualified retirement plan designed for:

1. Government workers who are excluded from Social Security coverage
2. Self-employed individuals and unincorporated businesses ✓
3. Employees of public schools and tax-exempt charitable organizations only
4. Large publicly traded corporations with thousands of workers

Why: Keogh (HR-10) plans let self-employed persons and their employees make tax-deductible retirement contributions.

A 66-year-old just enrolled in Part B applies for a Medigap policy two months later. The insurer must:

1. Offer only its most comprehensive plan, at the highest premium
2. Decline the application, since Medigap open enrollment closed at age 65
3. Require a health questionnaire and an attending physician statement
4. Issue any offered plan on a guaranteed-issue basis ✓

Why: Within the 6-month Medigap open enrollment period (age 65 + Part B), coverage is guaranteed issue regardless of health.

Under T.C.A. § 56-1-102, the term "company" or "insurance company" includes which of the following engaged as principals in the business of insurance?

1. Only stock corporations chartered under the laws of this state
2. Only mutual insurers owned by their participating policyholders
3. Only risk retention groups chartered federally
4. Corporations, associations, partnerships, or individuals ✓

Why: T.C.A. § 56-1-102(2) defines "company" to include all corporations, associations, partnerships, or individuals engaged as principals in the business of insurance — therefore that answer is correct.

Under T.C.A. § 56-12-211, the commissioner's reporting duties to other states and to the board are intended to aid in the:

1. Statewide collection of premium taxes
2. Detection of insurer insolvencies ✓
3. Marketing of member insurers
4. Licensing of new producers

Why: T.C.A. § 56-12-211(a) states these duties exist to aid in the detection and prevention of insurer insolvencies or impairments — therefore detection of insurer insolvencies.

Under the ACA, the government-organized venue where individuals may compare and purchase qualified health plans is called the:

1. high-risk pool
2. Health Insurance Marketplace (Exchange) ✓
3. Medicare supplement clearinghouse
4. state guaranty association

Why: The ACA establishes the Health Insurance Marketplace, or Exchange, under Section 1311 for comparing and buying qualified health plans — therefore the Health Insurance Marketplace (Exchange).