New York Life & Health Insurance License, Practice Exams

Group life insurance is most commonly written as:

1. A single-premium endowment that is paid up at issue
2. Annually renewable term that renews each year ✓
3. A paid-up whole life policy with no premiums
4. Decreasing term tied to a mortgage balance

Why: Employer group life is typically annually renewable term; individual evidence of insurability is usually not required up to a guaranteed-issue limit.

A life policy has a two-year suicide clause. The insured dies by suicide in the third policy year. The insurer:

1. Pays the full death benefit ✓
2. Refunds only the premiums that were paid
3. Pays one half of the policy's face amount
4. Denies the claim and keeps the premiums

Why: Because the suicide occurred after the two-year period, the death is treated as any other and the full benefit is paid.

A joint and survivor annuity continues payments:

1. As long as either annuitant is still living ✓
2. Only until the first of the two annuitants dies
3. For a fixed ten-year period regardless of survival
4. To the couple's children after both annuitants die

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

A person generally becomes eligible for Medicare at:

1. Age 65, or earlier after 24 months of Social Security disability ✓
2. Age 62, the earliest age for Social Security retirement benefits
3. Age 70, once delayed retirement credits stop accruing
4. Any age, as long as they have private health insurance

Why: Eligibility begins at 65, or earlier for those receiving Social Security disability for 24 months, or with ESRD/ALS.

A licensed producer moves to a new business address. Within what period must the producer inform the superintendent under § 2134?

1. Within ten days of the change
2. Within thirty days of the change ✓
3. Within sixty days of the change
4. Before the move takes effect

Why: Section 2134(a) requires a licensee to inform the superintendent of a change of address within thirty days of the change.

Under Section 3212, when life insurance is effected by a person on his own life in favor of a third-person beneficiary, how are the proceeds treated relative to the creditors of the person who effected the insurance?

1. The third person is entitled to the proceeds as against those creditors and trustees in bankruptcy ✓
2. The proceeds are fully reachable by the insured's creditors unless an exception clearly applies for the coverage that is in force
3. Only half the proceeds are exempt from creditors
4. The exemption applies only if the policy is irrevocable

Why: Section 3212(b)(1) entitles the third-person beneficiary to the proceeds and avails as against the creditors, representatives, trustees in bankruptcy, and receivers of the person effecting the insurance.

Under § 3217(b), which of the following is listed as a purpose of the minimum standards for A&H policies?

1. Maximizing insurer profitability across product lines unless an exception clearly applies for the coverage that is in force
2. Standardizing agent commission schedules statewide
3. Elimination of coverages so limited in scope as to be of no substantial economic value to the holders ✓
4. Requiring annual policyholder dividends

Why: Section 3217(b)(5) lists the elimination of coverages so limited in scope as to be of no substantial economic value to holders among the purposes of the minimum standards (along with standardization, eliminating misleading or deceptive provisions, etc.).

In a variable annuity, the contract value is measured in accumulation units during the pay-in phase and in ___ during the payout phase.

1. Annuity units ✓
2. Mortality credits
3. Surrender shares
4. Guaranteed dollars

Why: During accumulation the value is tracked in accumulation units; at annuitization it converts to a fixed number of annuity units whose dollar value varies.

Under Article 43, an individual home care benefit may limit covered home care visits, but to no fewer than how many visits in a calendar year or any 12-month period for each covered person?

1. Forty home care visits ✓
2. Twenty home care visits
3. Three hundred sixty-five home care visits
4. Sixty home care visits

Why: Section 4303(a)(3)(D) allows a contract to limit home care visits but not to fewer than forty such visits in any calendar year or continuous 12-month period for each covered person.

The McCarran-Ferguson Act established that the insurance business is primarily regulated by:

1. The individual states ✓
2. A single federal insurance agency in Washington
3. The Internal Revenue Service and the U.S. Treasury
4. International treaty organizations and trade bodies

Why: McCarran-Ferguson (1945) affirmed that regulation of insurance is left to the states, except where federal law specifically applies.

If the named beneficiary of a life policy is a minor child, the death proceeds:

1. Are usually paid to a guardian or trust, not directly to the minor ✓
2. Are forfeited entirely until the child reaches the age of majority
3. Must by law be split equally among all of the insured's relatives
4. Revert to the insurance company until a court orders otherwise

Why: Insurers generally will not pay proceeds directly to a minor; a guardian, custodian, or trust receives and manages the funds.

How does Section 3205 define an 'insurable interest' for persons NOT closely related by blood or by law?

1. A lawful and substantial economic interest in the continued life, health or bodily safety of the insured ✓
2. Any emotional attachment to the insured, however slight
3. An interest that arises from or is enhanced by the insured's death unless an exception clearly applies for the coverage that is in force
4. A relationship of love and affection between the parties

Why: Section 3205(a)(1)(B) defines insurable interest for other persons as a lawful and substantial economic interest in the insured's continued life, health, or bodily safety.

How does the Insurance Law define 'negotiate' or 'negotiation' for purposes of Article 21?

1. Merely handing a prospect a brochure that lists several insurers and their general product offerings without further comment unless an exception clearly applies for the coverage that is in force according to the insurer's rules
2. Conferring directly with or offering advice directly to a purchaser concerning substantive benefits, terms or conditions of a particular contract, by one who sells or obtains insurance for purchasers ✓
3. Quoting a published premium rate to anyone who telephones the agency office
4. Processing the paperwork after a policy has already been bound by a licensed agent

Why: Section 2101(m) defines 'negotiate' as conferring directly with or offering advice directly to a purchaser concerning substantive benefits, terms or conditions, by a person who sells or obtains insurance.

A course is developed and sponsored by an insurer. Under § 2132, when will it qualify as approved continuing education?

1. Only if at least half of the attendees are appointed by that insurer
2. Only if such insurer is authorized to write that class of insurance in this state ✓
3. Whenever the course content covers any branch of insurance, regardless of the insurer's authorization
4. Only if the course is offered free of charge to all licensees

Why: Section 2132(e) provides that an insurer-developed or insurer-sponsored course does not meet CE standards unless the insurer is authorized to write that class of insurance in this state.

Under the 'three-year rule,' if an insured gives away a life insurance policy but dies within three years, the proceeds are:

1. Pulled back into the insured's taxable estate ✓
2. Treated as fully tax-free regardless of the timing of the gift
3. Taxed as ordinary income to the person who received the gift
4. Forfeited entirely back to the issuing insurance company

Why: If an insured transfers a policy and dies within three years, the death proceeds are included in the gross estate for federal estate-tax purposes.

Under Section 4318, what is the maximum look-back period for a condition that a pre-existing condition provision may relate to?

1. A condition treated within the twelve-month period ending on the enrollment date
2. A condition treated within the six-month period ending on the enrollment date ✓
3. A condition treated within the three-month period ending on the enrollment date
4. Any condition ever diagnosed before enrollment

Why: Section 4318(b) limits a pre-existing condition provision to a condition for which medical advice, diagnosis, care or treatment was recommended or received within the six-month period ending on the enrollment date.

What is the cap on the number of directors of an Article 43 corporation who may be persons licensed to practice medicine in New York (excluding certain full-time public-sector physicians) or hospital trustees/directors/employees?

1. Not more than one-eighth of the directors
2. Not more than one-half of the directors, as nearly as possible
3. Not more than one-fifth of the directors ✓
4. Not more than one-third of the directors

Why: Section 4301(k)(1) provides that not more than one-fifth of the directors shall be such licensed physicians or hospital trustees/directors/employees.

Under New York Insurance Law, what is the stated purpose of Article 24?

1. To set minimum capital and surplus requirements for newly authorized insurers
2. To regulate trade practices in the business of insurance by defining and prohibiting unfair methods of competition and unfair or deceptive acts ✓
3. To establish the rates that property/casualty insurers may charge in the state unless an exception clearly applies for the coverage that is in force
4. To create a guaranty fund covering claims against insolvent insurers

Why: Section 2401 states the article's purpose is to regulate trade practices by defining, or providing for the determination of, all practices that constitute unfair methods of competition or unfair or deceptive acts or practices and by prohibiting them.

An agent circulates a memorandum that misrepresents the dividends a life policy will pay in order to induce a prospect to surrender an existing policy. Which statute most directly addresses this conduct?

1. Section 2123, on misrepresentations, misleading statements, and incomplete comparisons ✓
2. Section 2601, on unfair claim settlement practices unless an exception clearly applies for the coverage that is in force
3. Section 2606, on discrimination
4. Section 2610, on motor vehicle repairs

Why: Section 2123(a) bars issuing or circulating any illustration, circular, statement, or memorandum misrepresenting the terms, benefits, or advantages of a life, accident, or health policy, including misleading estimates of dividends.

A temporary insurance license is most commonly issued to:

1. Continue the business of a producer who died or became disabled ✓
2. Anyone who has not yet taken the licensing exam in most situations
3. Replace continuing-education requirements
4. Allow unlimited sales for one year

Why: Temporary licenses (no exam) let someone service an existing book when a producer dies, becomes disabled, or enters military service.

Under § 3221's conversion provisions, if notice of the conversion privilege is not given within ninety days after termination of group coverage, what happens to the time allowed to exercise the privilege?

1. It is extended indefinitely until notice is given
2. It is extended by another sixty days
3. It expires at the end of such ninety days ✓
4. It is reduced to fifteen days from termination

Why: Section 3221(e)(6)(A) provides that if notice is not given within ninety days after termination, the time to exercise the conversion privilege expires at the end of that ninety-day period.

Survivorship (second-to-die) life insurance is most commonly used to:

1. Provide estate liquidity after the second insured dies ✓
2. Replace the income of a sole wage earner who has several young children at home
3. Cover a short-term business loan that must be fully repaid within five years
4. Fund a child's future college costs through the policy's accumulated cash value

Why: It pays at the second death and is widely used to fund estate taxes and costs.

In computing the actual accumulation amount of an annuity, the administrative charges that may be deducted shall not exceed:

1. Twenty-five dollars per year per contract
2. Fifty dollars per year per contract ✓
3. One hundred dollars per year per contract
4. Ten percent of considerations

Why: Administrative charges deducted in the actual accumulation amount shall not exceed fifty dollars per year per contract.

Under Section 3211, the lapse-notice protection does not bar lapse in less than one year only if the required notice is given. For flexible-premium life policies, when must that notice be sent?

1. No earlier than and within thirty days after the insurer determines the net cash surrender value is insufficient to keep the policy in force ✓
2. At least fifteen and not more than forty-five days before any anniversary unless an exception clearly applies for the coverage that is in force
3. Exactly one month before the policy's issue-date anniversary
4. At least sixty days before the cash value is projected to be exhausted

Why: Section 3211(a)(1) provides that for flexible-premium life policies the notice must be sent no earlier than, and within thirty days after, the insurer determines the net cash surrender value is insufficient to pay the charges needed to keep the policy in force.

Which dividend option purchases small amounts of additional paid-up insurance?

1. Cash
2. Reduction of premium
3. Paid-up additions ✓
4. Accumulate at interest

Why: Paid-up additions use dividends to buy small single-premium amounts of permanent insurance, increasing both death benefit and cash value.

Medicare Part A primarily covers:

1. Physician and outpatient services
2. Inpatient hospital care ✓
3. Prescription drugs
4. Routine vision and dental

Why: Part A is hospital insurance (inpatient hospital, skilled nursing, hospice).

An exclusive provider organization (EPO) plan generally:

1. Covers care only from network providers, with no out-of-network benefits ✓
2. Lets members see any provider nationwide at the same low cost share
3. Requires a referral from a primary care physician for routine visits
4. Pays a fixed indemnity amount per day regardless of actual charges

Why: An EPO covers only in-network care (no out-of-network benefits except emergencies) but usually does not require referrals.