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MO Life & Health practice questions

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Question 1Missouri Insurance Laws, Rules and Regulations

Insurance transactions in Missouri are regulated primarily by which of the following?

  1. The Missouri Department of Insurance Correct answer.
  2. The Missouri Public Service Commission
  3. The Missouri Attorney General's office
  4. The federal Department of Health and Human Services

Explanation

Insurance regulation in Missouri is administered by the Department of Insurance, Financial Institutions and Professional Registration, headed by a Director appointed by the Governor. That department enforces the state's insurance statutes, licenses producers and agents, and examines insurers. The Attorney General and the Public Service Commission have other, unrelated statutory duties.

Question 2Missouri Insurance Laws, Rules and Regulations

A Missouri resident insurance producer license remains in force for how long before renewal is required?

  1. Two years Correct answer.
  2. One year
  3. Four years
  4. Three years

Explanation

Missouri issues producer licenses on a biennial basis, so the license must be renewed every two years. Renewal is conditioned on completing the required continuing education and paying the renewal fee. A producer may not transact insurance while the license is lapsed.

Question 3Missouri Insurance Laws, Rules and Regulations

How many hours of continuing education must a Missouri life and health producer complete during each two-year licensing period?

  1. 10 hours
  2. 16 hours Correct answer.
  3. 8 hours
  4. 24 hours

Explanation

Missouri requires 16 hours of continuing education every two years, and at least 3 of those hours must be in ethics. The hours must be completed before the renewal date for the license to remain active.

Question 4Missouri Insurance Laws, Rules and Regulations

What is the minimum age at which a person may qualify for a Missouri insurance producer license?

  1. 21
  2. 19
  3. 16
  4. 18 Correct answer.

Explanation

An applicant must be at least 18 years old, complete the required education and examination, and be competent and trustworthy. Age 18 is the general age of majority used throughout Missouri licensing statutes.

Question 5Missouri Insurance Laws, Rules and Regulations

An individual life insurance policy delivered in Missouri must include a free-look period of at least how many days?

  1. 5 days
  2. 30 days
  3. 10 days Correct answer.
  4. 20 days

Explanation

Missouri requires at least a 10-day right to return an individual life insurance policy for a full refund of premium. The period generally begins when the policy is delivered to the owner. Longer free-look periods apply to products such as long-term care insurance.

Question 6Missouri Insurance Laws, Rules and Regulations

Within what period must a Missouri licensed producer notify the Director of a change of address?

  1. 15 days
  2. 10 days
  3. 60 days
  4. 30 days Correct answer.

Explanation

A producer must report a change of business or mailing address to the Director within 30 days so that licensing records and official notices remain accurate. Failure to keep the department informed can result in discipline against the license.

Question 7Missouri Insurance Laws, Rules and Regulations

What is the maximum death benefit the Missouri Life and Health Insurance Guaranty Association will pay on a single insured life?

  1. $300,000 Correct answer.
  2. $250,000
  3. $100,000
  4. $500,000

Explanation

The guaranty association pays death benefits up to $300,000 per insured life when a member insurer becomes insolvent. Separate, lower limits apply to cash surrender values, annuity present values, and health insurance benefits.

Question 8Missouri Insurance Laws, Rules and Regulations

Under Missouri law, a licensed producer may share commissions with which of the following?

  1. A friend who referred the client but holds no license
  2. Another producer who is properly licensed for that line of business Correct answer.
  3. The client, as an inducement to purchase the policy
  4. Any clerical employee of the insurer

Explanation

Commissions may be divided only with persons who hold a valid license for the same class of insurance, or with the insurer itself. Paying an unlicensed person for a referral of insurance business is unlawful sharing of commissions. Giving value to a client as an inducement is rebating.

Question 9Missouri Insurance Laws, Rules and Regulations

An insurer appoints a new Missouri producer. Within how many days must the insurer notify the Director of the appointment?

  1. 60 days
  2. 45 days
  3. 30 days Correct answer.
  4. 10 days

Explanation

The appointing insurer must file notice of the appointment with the Director within 30 days after the agency contract is executed. The obligation belongs to the insurer, not to the producer, and the insurer pays any associated fee.

Question 10Missouri Insurance Laws, Rules and Regulations

When an insurer ends a producer's appointment, within what period must the insurer notify the Missouri Director?

  1. 15 days
  2. 30 days Correct answer.
  3. 60 days
  4. 10 days

Explanation

The insurer must report termination of an appointment to the Director within 30 days after the termination. If the termination is for cause, the notice must disclose the reason so the department can review the producer's conduct.

Question 11Missouri Insurance Laws, Rules and Regulations

A temporary Missouri producer license may be issued for a maximum period of how long?

  1. 90 days
  2. 30 days
  3. One year
  4. 180 days Correct answer.

Explanation

The Director may issue a temporary license, generally to allow a business to continue operating after the death or disability of a licensed producer, for up to 180 days. The temporary license ends earlier if the Director revokes it or the stated purpose is fulfilled.

Question 12Missouri Insurance Laws, Rules and Regulations

Inducing a policyholder to surrender an existing policy by misrepresenting the terms of the replacement policy is called:

  1. Defamation
  2. Coercion
  3. Twisting Correct answer.
  4. Rebating

Explanation

Twisting is the use of misrepresentation or incomplete comparison to persuade a policyholder to lapse, surrender, or replace coverage. It is an unfair trade practice and grounds for license discipline. Rebating involves inducements of value, while coercion involves unlawful pressure.

Question 13Missouri Insurance Laws, Rules and Regulations

Which of the following is rebating under Missouri insurance law?

  1. Charging an approved rate that is available to all similarly situated buyers
  2. Sharing a commission with another properly licensed producer
  3. Publishing an advertisement that compares policy costs
  4. Offering a buyer an inducement not stated in the policy contract Correct answer.

Explanation

Rebating is offering any inducement, such as cash, gifts, or special favors, that is not specified in the policy, in order to persuade a person to buy. It is prohibited because it gives selected buyers an unfair advantage over others. Truthful comparative advertising and lawful commission sharing are permitted.

Question 14Missouri Insurance Laws, Rules and Regulations

A producer submits an application for a policy that will replace the applicant's existing life insurance. Under Missouri replacement rules, the replacing insurer must notify the existing insurer within:

  1. 30 days
  2. 15 days
  3. 10 days
  4. 5 business days Correct answer.

Explanation

The replacing insurer must send notice of replacement to the existing insurer within five business days of receiving the completed application. The existing insurer then has an opportunity to furnish policy information to the applicant. The producer must also give the applicant a signed replacement notice.

Question 15Missouri Insurance Laws, Rules and Regulations

The Missouri guaranty association covers a covered person's net cash surrender value on a life insurance policy up to what amount?

  1. $300,000
  2. $50,000
  3. $100,000 Correct answer.
  4. $250,000

Explanation

Net cash surrender values are protected up to $100,000 per insured life, a limit separate from the $300,000 death benefit cap. The association pays only after a member insurer has been declared insolvent and the claim has been validated.

Question 16Missouri Insurance Laws, Rules and Regulations

A Missouri producer collects an initial premium from an applicant. The producer holds those funds:

  1. As funds belonging to the insurer from the moment of receipt
  2. As unrestricted personal funds until delivery
  3. In a fiduciary capacity Correct answer.
  4. As a rebate owed to the client

Explanation

Premiums collected on behalf of an insurer are held in a fiduciary capacity and must be accounted for and remitted promptly. Commingling premium funds with the producer's own money is prohibited and is grounds for license discipline.

Question 17Missouri Insurance Laws, Rules and Regulations

For a life insurance policy issued in Missouri, insurable interest must exist at which point?

  1. When a claim is submitted
  2. When the policy is applied for Correct answer.
  3. Continuously for the life of the policy
  4. When the insured dies

Explanation

Insurable interest is tested at the time the policy is applied for and issued; it need not continue afterward unless the policy is obtained for a speculative purpose. Requiring interest at issue prevents wagering on another person's life without a legitimate relationship.

Question 18Missouri Insurance Laws, Rules and Regulations

If the Missouri Director determines that an insurer has committed an unfair trade practice, the Director may:

  1. Only send a warning letter, because fines require a court judgment
  2. Refer the matter exclusively to federal regulators
  3. Act only after a consumer has filed a private lawsuit
  4. Issue a cease and desist order and hold a hearing on penalties Correct answer.

Explanation

The Director may order a person or insurer to cease and desist from a prohibited practice and may assess penalties after providing notice and an opportunity for a hearing. The Director's authority is independent of any private civil action by a consumer.

Question 19Missouri Insurance Laws, Rules and Regulations

A Missouri producer has an administrative action taken against a license in another state. Within what period must the producer report it to the Missouri Director?

  1. 10 days
  2. 60 days
  3. 90 days
  4. 30 days Correct answer.

Explanation

A producer must report an administrative action, criminal prosecution, or similar event to the Director within 30 days of the final disposition. The report is required even if the matter occurred in another state and even if the producer believes there was no wrongdoing.

Question 20Missouri Insurance Laws, Rules and Regulations

A long-term care insurance policy delivered in Missouri must provide a free-look period of at least:

  1. 20 days
  2. 30 days Correct answer.
  3. 10 days
  4. 14 days

Explanation

Missouri requires at least a 30-day free-look period on long-term care insurance, which is longer than the standard period for individual life policies. If the policy is returned within that period, the premium must be refunded.

Question 21Missouri Insurance Laws, Rules and Regulations

Which insurer action violates Missouri's unfair claims settlement practices rules?

  1. Denying a claim after a reasonable investigation shows no coverage
  2. Requesting a written proof of loss from the claimant
  3. Failing to conduct a reasonable investigation before denying a claim Correct answer.
  4. Using an independent adjuster to evaluate a claim

Explanation

Missouri prohibits denying or delaying a claim without a reasonable investigation of the facts and the applicable policy provisions. An insurer may properly deny a claim once a good-faith investigation establishes that coverage does not apply, and it may use adjusters and require proof of loss.

Question 22Missouri Insurance Laws, Rules and Regulations

Before recommending an annuity to a Missouri consumer, a producer must:

  1. Make reasonable efforts to obtain the consumer's suitability information Correct answer.
  2. Always recommend the product with the highest surrender charge
  3. Obtain the Director's prior written approval of the sale
  4. Rely solely on the insurer's underwriting decision

Explanation

Annuity sales require a suitability review, meaning the producer must gather information about the consumer's finances, objectives, and needs and have reasonable grounds for the recommendation. The recommendation must be in the consumer's best interest rather than driven by compensation.

Question 23Missouri Insurance Laws, Rules and Regulations

When a life insurance sale involves replacement, Missouri rules require the producer to:

  1. Give the applicant a copy of the signed replacement notice Correct answer.
  2. Wait for the existing insurer's written consent
  3. Delay delivery of the new policy for 30 days
  4. Notify the Director before submitting the application

Explanation

The producer must present and obtain the applicant's signature on a notice regarding replacement and leave a copy with the applicant. The replacing insurer then notifies the existing insurer. No Director approval or consent from the old insurer is required.

Question 24Missouri Insurance Laws, Rules and Regulations

The grace period required in a Missouri individual life insurance policy is at least:

  1. 7 days
  2. 30 days Correct answer.
  3. 10 days
  4. 31 days

Explanation

Individual life insurance policies delivered in Missouri must allow a grace period of at least 30 days for payment of an overdue premium. Coverage remains in force during the grace period, although the insurer may deduct the overdue premium from any benefit paid.

Question 25Missouri Insurance Laws, Rules and Regulations

A producer who holds a valid resident license in another state may obtain a Missouri nonresident producer license by:

  1. Applying without taking the Missouri exam Correct answer.
  2. Establishing a business office in Missouri
  3. Completing Missouri prelicensing education
  4. Passing the Missouri licensing examination first

Explanation

Missouri grants nonresident licenses on a reciprocal basis to producers who are licensed and in good standing in their home state, without requiring the Missouri examination. The applicant must submit the application, pay the fee, and meet the home state's licensing standards.

Question 26Missouri Insurance Laws, Rules and Regulations

A Missouri resident life insurance producer must complete how many continuing education hours every two years, including ethics?

  1. Sixteen hours, including three hours of ethics Correct answer.
  2. Twenty hours, including four hours of ethics
  3. Twelve hours, including two hours of ethics
  4. Eight hours, including one hour of ethics

Explanation

Missouri requires resident producers to complete 16 hours of continuing education every two years, and at least 3 of those hours must be in ethics. Completing fewer hours can prevent license renewal.

Question 27Missouri Insurance Laws, Rules and Regulations

Who appoints the Director of the Missouri Department of Commerce and Insurance?

  1. The state Senate
  2. The voters
  3. The insurance industry advisory board
  4. The Governor Correct answer.

Explanation

The Director of the Missouri Department of Commerce and Insurance is appointed by the Governor. The Director oversees the division that regulates insurers and producers.

Question 28Missouri Insurance Laws, Rules and Regulations

What is the minimum age for a person to be eligible for a Missouri insurance producer license?

  1. Seventeen
  2. Eighteen Correct answer.
  3. Twenty-one
  4. Sixteen

Explanation

Missouri requires a producer to be at least 18 years old. Other qualifications include passing the exam and meeting licensing requirements.

Question 29Missouri Insurance Laws, Rules and Regulations

A business entity applying for a Missouri insurance producer license must do which of the following?

  1. Limit its business to one insurer
  2. Name a licensed producer for compliance Correct answer.
  3. Post a surety bond equal to annual commissions
  4. Have every employee licensed as a producer

Explanation

A business entity must hold a Missouri producer license and must name an individual licensed producer who is responsible for the entity's compliance with insurance law.

Question 30Missouri Insurance Laws, Rules and Regulations

A Missouri licensed producer is convicted of a felony. Within what period must the producer notify the Director?

  1. 60 days after the conviction
  2. 30 days after the conviction Correct answer.
  3. By the next license renewal date
  4. 10 days after the conviction

Explanation

A Missouri producer must notify the Director within 30 days after a felony conviction. This allows the Director to review the licensee's fitness.

Question 31Missouri Insurance Laws, Rules and Regulations

An individual life insurance policy delivered in Missouri must give the owner a free-look period of at least how long?

  1. Ten days Correct answer.
  2. Three days
  3. Thirty days
  4. Twenty days

Explanation

Individual life policies delivered in Missouri must include a free-look period of at least 10 days. During that time the owner may return the policy for a refund.

Question 32Missouri Insurance Laws, Rules and Regulations

After a Missouri life insurance policy has been in force for how long does the incontestability clause generally prevent the insurer from contesting the policy based on misstatements in the application?

  1. One year
  2. Five years
  3. Eighteen months
  4. Two years Correct answer.

Explanation

The incontestability clause generally makes a life policy incontestable after it has been in force for two years from issue, except for nonpayment of premium.

Question 33Missouri Insurance Laws, Rules and Regulations

An insurer discovers that a deceased insured misstated his age on a Missouri life insurance application. The insurer will generally do which of the following?

  1. Rescind the policy and return all premiums
  2. Adjust benefits to the correct age Correct answer.
  3. Pay nothing because the application was inaccurate
  4. Pay the full face amount without adjustment

Explanation

When age is misstated, the insurer generally adjusts the death benefit to the amount the premium would have purchased at the insured's correct age. The policy is not automatically voided.

Question 34Missouri Insurance Laws, Rules and Regulations

A Missouri life insurance policy contains a suicide exclusion. The exclusion may generally be enforced only if the suicide occurs within what period after policy issue?

  1. Five years
  2. Two years Correct answer.
  3. One year
  4. Six months

Explanation

Missouri life policies may exclude death by suicide only during a limited period, generally two years from issue. After that period, the exclusion may not be applied.

Question 35Missouri Insurance Laws, Rules and Regulations

A Medicare supplement policy delivered in Missouri must provide a free-look period of at least how long?

  1. Thirty days Correct answer.
  2. Forty-five days
  3. Ten days
  4. Sixty days

Explanation

Medicare supplement policies delivered in Missouri must give the applicant a 30-day free-look period. The policy may be returned for a full refund during that time.

Question 36Missouri Insurance Laws, Rules and Regulations

A Missouri resident who is age 65 and newly enrolled in Medicare Part B has a Medicare supplement open enrollment period of how long?

  1. Six months Correct answer.
  2. Four months
  3. Twelve months
  4. Three months

Explanation

The Medicare supplement open enrollment period lasts six months. It begins when the person is 65 or older and first enrolls in Medicare Part B.

Question 37Missouri Insurance Laws, Rules and Regulations

A Missouri producer who sells long-term care insurance must complete initial training of at least how many hours, and ongoing training of how many hours every 24 months?

  1. Two hours initial and one hour ongoing
  2. Four hours initial and two hours ongoing
  3. Six hours initial and three hours ongoing
  4. Eight hours initial and four hours ongoing Correct answer.

Explanation

Missouri requires long-term care producers to complete 8 hours of initial training and 4 hours of ongoing training every 24 months. The training covers long-term care insurance and related topics.

Question 38Missouri Insurance Laws, Rules and Regulations

When must a long-term care insurance outline of coverage be delivered to a Missouri applicant?

  1. At the time of application Correct answer.
  2. Only after the policy is issued
  3. Only upon the applicant's request
  4. Within 30 days after policy delivery

Explanation

The outline of coverage for long-term care insurance must be delivered at the time of application. It helps the applicant compare benefits and limitations before buying.

Question 39Missouri Insurance Laws, Rules and Regulations

A Missouri health insurance policy covering a family includes a newborn child. Coverage for the newborn must begin at what point?

  1. At the moment of birth Correct answer.
  2. After the newborn is 30 days old
  3. After the insurer approves an application for the newborn
  4. At the next policy anniversary

Explanation

Missouri requires health policies covering family members to cover a newborn from the moment of birth, including congenital defects. The insurer may not require a separate application.

Question 40Missouri Insurance Laws, Rules and Regulations

Missouri's small employer health insurance rules generally apply to employers with how many eligible employees?

  1. One to twenty-five
  2. One to four
  3. Two to fifty Correct answer.
  4. Fifty-one to one hundred

Explanation

Missouri's small employer health insurance rules generally apply to employers with 2 to 50 eligible employees. These rules include guaranteed availability and renewal requirements.

Question 41Missouri Insurance Laws, Rules and Regulations

A Missouri claimant knowingly presents a false statement in support of an insurance claim. This conduct is best described as which of the following?

  1. A civil breach of contract only
  2. A permissible claims negotiation tactic
  3. Insurance fraud, which is a crime Correct answer.
  4. An unfair trade practice but not a crime

Explanation

Knowingly presenting a false statement to obtain insurance benefits is insurance fraud. Missouri treats insurance fraud as a crime and also as prohibited conduct.

Question 42Missouri Insurance Laws, Rules and Regulations

How long must a Missouri insurance producer generally keep records of insurance transactions?

  1. At least six months
  2. At least three years Correct answer.
  3. At least ten years
  4. At least one year

Explanation

Missouri producers must keep records of insurance transactions for at least three years. The records must be available for examination by the Director.

Question 43Missouri Insurance Laws, Rules and Regulations

A Missouri producer makes false oral statements that an insurer is financially unstable. This conduct is which unfair trade practice?

  1. Coercion
  2. Defamation Correct answer.
  3. Twisting
  4. Rebating

Explanation

Defamation is an unfair trade practice that involves false statements that harm an insurer's reputation. It can include false oral or written statements about financial condition.

Question 44Missouri Insurance Laws, Rules and Regulations

An insurer charges two Missouri applicants different life insurance premiums even though they are in the same actuarial class and present the same risk. This is an example of which prohibited practice?

  1. Unfair discrimination Correct answer.
  2. Adverse selection
  3. Replacement
  4. Subrogation

Explanation

Unfair discrimination occurs when an insurer charges different premiums to applicants in the same actuarial class and with the same risk. Rates must be based on actuarial factors, not arbitrary distinctions.

Question 45Missouri Insurance Laws, Rules and Regulations

A Missouri producer sells a life insurance policy issued by an insurer that is not authorized to transact business in Missouri. The producer has done which of the following?

  1. Violated Missouri law on unauthorized insurers Correct answer.
  2. Acted lawfully because life insurance is exempt from authorization
  3. Acted lawfully if the buyer signed a waiver
  4. Committed a minor recordkeeping violation

Explanation

A producer may not sell insurance for an insurer that is not authorized to transact business in Missouri. Doing so violates Missouri insurance law and can lead to penalties.

Question 46Missouri Insurance Laws, Rules and Regulations

Under Missouri life insurance solicitation rules, a buyer's guide and policy summary must generally be delivered to the applicant at what time?

  1. Within 30 days after the first premium
  2. At the first policy anniversary
  3. No later than policy delivery Correct answer.
  4. Only if the applicant asks for them

Explanation

Missouri solicitation rules generally require the buyer's guide and policy summary to be delivered no later than policy delivery. They help the buyer understand the policy and its costs.

Question 47Missouri Insurance Laws, Rules and Regulations

A Missouri annuity contract must give the owner a free-look period of at least how long after delivery?

  1. Three days
  2. Twenty days
  3. Ten days Correct answer.
  4. Thirty days

Explanation

Annuity contracts delivered in Missouri must give the owner at least a 10-day free-look period. The owner may return the annuity for a refund during that time.

Question 48Missouri Insurance Laws, Rules and Regulations

A Missouri producer who has not earned the Chartered Life Underwriter designation uses the letters 'CLU' after his name in advertisements. This is which of the following?

  1. Permissible if the advertisement includes a disclaimer
  2. Permissible if the producer has ten years of experience
  3. A violation only if a consumer complains
  4. A prohibited misrepresentation of qualifications Correct answer.

Explanation

Using a professional designation that the producer has not earned is a misrepresentation. Missouri prohibits false or misleading claims about qualifications.

Question 49Missouri Insurance Laws, Rules and Regulations

An applicant for a Missouri producer license has a felony conviction involving dishonesty or breach of trust. What is required before the Director may issue the license?

  1. The applicant must obtain a pardon from the Governor
  2. The applicant must wait five years after the conviction
  3. The applicant must obtain the Director's written consent Correct answer.
  4. Nothing; the conviction is automatically expunged for licensing purposes

Explanation

A felony conviction involving dishonesty or breach of trust does not automatically bar licensing, but the applicant must obtain the Director's written consent. The Director reviews fitness and may impose conditions.

Question 50Missouri Insurance Laws, Rules and Regulations

A Missouri producer fails to complete required continuing education before the license renewal deadline. What is the result?

  1. The license is automatically upgraded to a nonresident license
  2. The license remains active with a warning
  3. The producer may continue selling for 90 days while completing education
  4. The license lapses until the producer is reinstated Correct answer.

Explanation

If a producer does not complete CE by the deadline, the license lapses. The producer cannot transact insurance until the license is reinstated.