A.D. Banker Life&Health Guarantee Exam

A Specialist Physician will treat an HMO member if the Primary Care Physician has obtained a referral, most often when _____________________. A They both work at a "teaching" hospital B All other treatment options have been exhausted C They are partners in the same medical practice D They are in the same geographic location

B All other treatment options have been exhausted

All of the following statements regarding group life insurance policies are true except: A A contributory plan must generally cover 75% of the eligible employees B An otherwise eligible employee with any physical impairment is permanently uninsurable C A policy must be convertible to an individual plan of insurance upon termination of employment D A noncontributory plan must generally cover 100% of the eligible employees

B An otherwise eligible employee with any physical impairment is permanently uninsurable

How does a policyowner reinstate a lapsed life insurance policy? A By paying past due premiums plus interest and proving insurability B By paying all past due premiums plus interest within 30 days of the insured's death C By paying all past due premiums for the number of years stated in the policy D By submitting a completed reinstatement application

B By paying all past due premiums plus interest within 30 days of the insured's death

____________ are intended to discourage the unnecessary use of costly medical resources, such as emergency room services for non-emergency care. A Premiums B Deductibles C Stop losses D Copayments

B Deductibles

In California, all insurers are subject to regulation by the Department of Insurance. However, the primary regulator of most HMO corporations in the state is the: A Employee Development Department B Department of Managed Health Care C Department of Health Care Services D Department of Corporations

B Department of Managed Health Care

Which one of the following policy provisions starts at the time the policy is delivered and allows the owner to return the policy for a full refund within a specified period of time? A Suicide clause B Free look period C Contestable clause D Grace period

B Free look period

If written consent of the beneficiary is required to change policy ownership or to assign the policy, then the beneficiary designation must be: A Per stirpes B Tertiary C Irrevocable D Revocable

C Irrevocable

Which one of the following dividend options creates an immediate taxable event for the policyowner? A One-year term B Accumulate at interest C Paid in cash D Premium reduction

C Paid in cash

Which of the following statements is a correct interpretation of the Annuity Exclusion Ratio formula? A Expected return divided by premiums paid plus cost basis equals percentage of exclusion B Cost basis divided by expected return equals percentage of exclusion C Premiums paid plus expected return divided by cost basis equals percentage of exclusion D Annuitant's age divided by remaining life expectancy equals percentage of exclusion

C Premiums paid plus expected return divided by cost basis equals percentage of exclusion

A _____________ disability is one which an insurer will not require the insured to prove in the future, such as paralysis, loss of sight, hearing,speech, or the loss of limb. A Residual B Recurrent C Presumptive D Partial

C Presumptive

Enrollment in a Part C Medicare Advantage Plan with Prescription Drug benefits (MAPD) is: A A substitute for Medicare Parts A, B, and D B A replacement for Medicare Parts A and B C Prohibited if the applicant has only Medicare Parts A and B D A companion plan required with Medicare Supplement insurance

C Prohibited if the applicant has only Medicare Parts A and B

The cash values of which one of the following policies builds up the quickest? A Limited pay whole life B Ordinary straight whole life C Single premium whole life D Indeterminate premium term life

C Single premium whole life

The guaranteed insurability rider provides for which of the following? A The ability to convert whole life into term B The insurer guarantees the policy will not be cancelled if the insured's health changes C The ability to purchase more of the same kind of insurance without evidence of insurability D The insurer waives the premium in case of the insured's disability

C The ability to purchase more of the same kind of insurance without evidence of insurability

In underwriting an individual disability income policy, the most important factor is most likely: A The university the insured graduated from B Where the insured lives C The age and gender of the insured D The insured's occupation

C The age and gender of the insured

When determining the amount of life insurance needed, the Human Life Value approach takes into consideration all of the following except: A The insured's age and gender B The insured's occupation, regular wage, and the cash value of employee benefits (if any) C The insured's planned retirement age D The outstanding mortgage balance and the funds needed for college education for the children

D The outstanding mortgage balance and the funds needed for college education for the children

J has a major medical expense insurance plan with a $100 deductible and 80/20 coinsurance. J incurs $1,000 worth of medical bills. How much does J pay out of pocket if the maximum benefit for the plan is $50,000? A $200 B $800 C $280 D $180

A $200

The notice of claim provision states that it is the insured's responsibility to notify the insurer of a claim within _____ days of loss or as soon as reasonably possible. A 15 B 30 C 10 D 20

A 15

A life insurance waiver of premium rider usually has a ______ month elimination period prior to the premiums being waived by the insurer. A 6 B 2 C 1 D 3

A 6

A stop loss (out-of-pocket limit) feature in a Qualified Health Plan is the dollar amount beyond which the insured will no longer be required to pay for any covered medical expense in the remainder of the year. This means the insurer pays ____% of covered medical expenses. A 80 B 100 C 75 D 90

A 80

A(n) _______________ renewable policy is renewable unless it becomes nonrenewable because specified conditions in the policy, when issued, have not been met. A Conditionally B Noncancellable C Optionally D Guaranteed

A Conditionally

A health insurance policy that provides specific benefits for specified sickness such as cancer or heart disease is called: A Critical illness (dread disease or limited sickness) plans B Hospital income or indemnity C Major medical D Limited accident

A Critical illness (dread disease or limited sickness) plans

Which of the following policies will provide whole life insurance protection on the parent with the largest income and limited amounts of term insurance the spouse and children? A Family Protection Plan B Juvenile life insurance C Joint Life insurance D Joint and Survivor Life

A Family Protection Plan

The __________________ states the insurer's essential promise to provide the benefits described in the contract. A Insuring Agreement B Suicide provision C Right of assignment D Consideration clause

A Insuring Agreement

In a group insurance plan, the Insurer issues a _________ to the Plan Sponsor. A Master policy B Certificate of insurance C Blanket policy D Franchise policy

A Master policy

An insured must wait a minimum of ___ days after submitting proof of loss, but not longer than 3 years under California law, before legal action can be brought against the insurer for any claims-related dispute. A 10 B 20 C 30 D 60

B 20

A Medicare Supplement policy must contain a ___ day free look provision. A 10 B 30 C 45 D 20

B 30

A newborn infant has automatic and full coverage under a Qualified Health Plan for at least _____ days following birth. A 10 B 31 C 62 D 21

B 31

Which of these facilities should be used when the insured's primary care physician is unavailable and a non-life threatening medical condition, such as a sprain or infection, arises. A Ambulatory Surgicenter B After hours Emergency Room C Chronic Care Center D Urgent Care Center

B After hours Emergency Room

HMOs are required to provide coverage for all of the following except: A Preventative services B Convenience items such as private room and television C Laboratory and x-rays D Out-of-area coverage for emergencies only

B Convenience items such as private room and television

When benefit payments are made directly to the insured, this is referred to as: A Prepaid B Reimbursement C Fee-for-service D Usual, Customary, and Reasonable (UCR)

B Reimbursement

Medical Savings Accounts, Health Savings Accounts, and High Deductible Health Plans are generally described as: A Federally Subsidized Health Plans B Employer-Sponsored Health Plans C Consumer-Driven Health Plans D Consumer-Funded Health Plans

C Consumer-Driven Health Plans

The _________ is the initial amount payable by the insured before any insurance benefits apply. A Coinsurance B Copayment C Deductible D Capital sum

C Deductible

Medicare Part A provides beneficiaries all of the following coverages except: A Pain relief and support services provided to the terminally ill and their family members B Inpatient mental health care on the same basis as inpatient hospital care C Unlimited post-hospital skilled nursing care D Inpatient hospitalization for up to 90 days per benefit period

C Unlimited post-hospital skilled nursing care

All other factors being equal, which disability income policy will have the highest premium? A 2 year benefit and a 6 month elimination period B Lifetime benefits and a 30 day elimination period C Benefits to age 65 and a 90 day elimination period D 1 year benefit and a 9 month elimination period

D 1 year benefit and a 9 month elimination period

Death proceeds paid under the Life Income (Life Only) settlement option are: A Guaranteed to be paid out over the lifetime of the beneficiary B Made for the a set period of time or the beneficiary's lifetime, whichever is longer C Guaranteed to be paid out for the lifetimes of a primary and a contingent beneficiary D A specified dollar amount paid out until principal and interest is depleted

D A specified dollar amount paid out until principal and interest is depleted

All of the following statements regarding the application and underwriting process are true except: A Insurers must avoid unfair discrimination when underwriting for cancer or heart disease B Field underwriting is very important due to the risk of a moral hazard C An application is a written formal request by an applicant to an insurer requesting the insurer issue a policy based upon information contained in the application D The policy will not go into effect until the application has been approved, the policy has been issued, and premiums have been paid

A Insurers must avoid unfair discrimination when underwriting for cancer or heart disease

Which one of the following best describes the basic relationship between the components that make up a life insurance premium? A Mortality - expenses + interest B Interest + expenses - mortality C Mortality - interest + expenses D Expenses + interest - mortality

A Mortality - expenses + interest

Which one of the following provides limited medical information to a home office underwriter? A Part 2 of the application B Part 1 of the application C An inspection report D An agent's report

A Part 2 of the application

Which of the following Parts of Medicare requires payment of an additional premium and covers a beneficiary's physician and outpatient care? A Part C B Part D C Part A D Part B

A Part C ??

Which one of the following deaths would not be covered under an accidental death policy? A Plane crash B Murder C Heart attack D Automobile crash

A Plane crash

Prior medical conditions for which the applicant has received, or should have received, medical advice, diagnosis, or treatment within a specified period prior to the effective date of a policy are called: A Preexisting B Inflammatory C Acute or chronic D Sudden and unexpected

A Preexisting

The _________ period is a specified period of time after the effective date before claims due to sickness or preexisting conditions under a new or reinstated disability policy are covered. A Probationary B Elimination C Subrogation D Deductible

A Probationary

When a second disability is suffered due to the same cause within a limited period of time, the elimination period will not apply and the disability will be considered continuous. This is referred to as a ______ disability. A Recurrent B Partial C Presumptive D Residual

A Recurrent

In which one of the following term policies does the face amount remain the same from one year to the next? A Renewable Term B Increasing C Mortgage D Decreasing

A Renewable Term

When the insured is terminally ill and the policyowner sells the policy to a third party for less than the death benefit but more than the cash surrender value in order to obtain funds, especially when there is little or no loan value and no other money sources are readily available, this is referred to as a ________________ transaction. A Viatical life settlement B Replacement C 1035 exchange D Endowment

A Viatical life settlement

All of the following are components or features of an Indexed Universal Life (IUL) insurance policy except: A he insurer may use the premiums to purchase options and hedges tied to a stock market or other index B In "down markets" there is no reduction of the cash value due to the markets' declining performance C The agent is required to have a securities license to sell D Interest credits to the policy are linked to the performance of a stock index, such as the S&P 500®

B In "down markets" there is no reduction of the cash value due to the markets' declining performance

The primary purpose of a life insurance policy is to: A Create lifetime retirement income payments B Liquidate a sum of money over a set period of years C Liquidate a sum of money over the lifetime of an annuitant D Create an estate by making death benefits immediately available

B Liquidate a sum of money over a set period of years

Which of the following statements concerning federal taxation of individually owned life insurance is true? A Both the premiums and the death benefit are taxable to the beneficiary or the insured's estate B Lump sum death benefits are normally received 100% tax free by the beneficiary C Only the death benefit is taxable D Policy premiums are fully tax deductible to the policyowner

B Lump sum death benefits are normally received 100% tax free by the beneficiary

Which one of the following provisions requires an insurer to pay claims immediately upon receipt of an insured's proof of loss? A Time limit on certain defenses B Payment of claims C Time of payment of claims D Claim form

B Payment of claims

Medicare Part B covers all of the following except: A Physician's and Surgeon's services B Physical, occupational, and/or speech therapy C Preventative care D Hospital care and skilled nursing care

B Physical, occupational, and/or speech therapy

What is the normal succession of beneficiaries? A Primary, Tertiary, Contingent B Primary, Contingent, Tertiary C Contingent, Tertiary, Primary D Tertiary, Primary, Contingent

B Primary, Contingent, Tertiary

A life insurance transaction in which a new life insurance policy is being purchased and an existing policy will be surrendered, lapse, or forfeited, is known as: A Twisting B Replacement C Churning D Conversion

B Replacement

Which one of the following policies covers two insureds, but pays the death benefit only after the second death? A Variable Whole Life B Survivorship Life C Joint Life D Variable Universal Life

B Survivorship Life

All of the following concerning large group health insurance plans are correct except: A Most persons who are "offered" health insurance through their employment are ineligible for premium tax credits to pay a portion of individual health insurance premiums B The ACA has essentially eliminated most aspects of underwriting in both group and individual health insurance C When leaving employment, an individual may choose to remain in the same group health plan under COBRA/CalCOBRA continuation laws D Premiums for group health insurance are considered excessive if the insurer's Medical Loss Ratio is less than 75%

B The ACA has essentially eliminated most aspects of underwriting in both group and individual health insurance

If the primary beneficiary dies and the insured dies later with no other beneficiaries listed in the policy, the proceeds are payable to: A The contingent beneficiary B The estate of the beneficiary C The tertiary beneficiary D The estate of the insured

B The estate of the beneficiary

Every Long-Term Care policy must provide a ____ day free look period from the date the policy is delivered. A 10 B 15 C 30 D 20

C 30

If the insurer does not reject the reinstatement application for an insured's health insurance policy within ____ days, coverage will be automatically reinstated. A 10 B 20 C 45 D 30

C 45

All of the following regarding accident and sickness insurance taxation are true except: A Unless the employer adopts a different rule, an employee's unused FSA contributions are forfeited back to the employer B Group medical and dental expense premiums paid by the employer are tax deductible to the employer C Benefits received under any health insurance plan, including group insurance paid entirely by one's employer, are taxable as income to the employee D Group disability income insurance premiums paid by the employer are deductible by the employer

C Benefits received under any health insurance plan, including group insurance paid entirely by one's employer, are taxable as income to the employee

All of the following are true regarding business uses of insurance except: A Key Employee disability income insurance pays a tax-free benefit to the business when a key employee becomes disabled, which may be used to pay for a temporary replacement, continue the employee's salary, or reimburse the business for lost revenue due to the disabled employee's absence from work B A First-to-Die Joint-Life policy covering the two partners in a business could be used to pay debts of the business following the first death of one of the partners C Business Overhead Expense policies include benefits for expenses such as office rent, utilities, and employee labor, but not the owner's income D Disability Income insurance with a Buy-Out option pays a taxable benefit in monthly or annual installments, enabling the non-disabled partner to buy out the totally disabled partner's interest in the business

C Business Overhead Expense policies include benefits for expenses such as office rent, utilities, and employee labor, but not the owner's income

A long-term care insurance policy, will most likely have a higher the premium when the ______________ period is longer. A Benefit B Preexisting condition C Elimination D Probationary

C Elimination

If the insured dies and the policy proceeds are paid to the beneficiary over a specified period of time, this would be an example of the ___________settlement option. A Fixed amount B Interest only C Fixed period D Life only

C Fixed period

What happens if a life insurance policy is issued with questions left unanswered in the application? A The insurer can only get out of paying a claim if death was a result of one of the unanswered questions on the application, all other claims must be paid B The policy is null and void C The contract will be interpreted as if the question had not been asked and the answer is considered waived by the insurer D The contract can be contested by the insurer at any time in the future

C The contract will be interpreted as if the question had not been asked and the answer is considered waived by the insurer

If a health insurance claim occurs during the grace period which optional provision dictates how this is handled? A Cancellation B Other insurance with this insurer C Unpaid premiums D Relationship of earnings to insurance

C Unpaid premiums

"Flexible Premium Adjustable Life Insurance" is another name for which one of the following policies? A Single Premium Whole Life B Term Life C Variable Whole Life D Universal Life

C Variable Whole Life

Which policy's cash accumulation is tied directly to the performance of the stock market? A Whole life B Adjustable life C Variable universal life D Universal life

C Variable universal life

A requirement of contract law in which the insurer promises to pay benefits in exchange for the applicant's premium and application is called: A Capital B Collateral C Condition D Consideration

D Consideration

Which one of the following is not a dividend option? A Accumulate at interest B One-year additional term insurance C Paid-up additional insurance D Extended term insurance

D Extended term insurance

Life insurance policy loans in excess of the cost-basis in the policy remain tax-free unless the: A Insured and the policyowner are two different persons B IRS grants a waiver to the taxpayer C Policy lapses before the insured dies D Insured dies before age 59½, in which case a 10% penalty applies

D Insured dies before age 59½, in which case a 10% penalty applies

If the insured is certified as terminally ill (life expectancy less than 12 months), which rider would allow the policyowner to receive a specified amount of the face value prior to the death of the insured? A Waiver of Premium B Return of Premium C Disability Income D Living Needs (Accelerated Death Benefit)

D Living Needs (Accelerated Death Benefit)

A principal characteristic of PPO health plans compared to HMOs that subscribers most often cite as their preference when choosing the type of plan is its: A Unlimited access to providers B Cost of inpatient health care C Choice of hospital rooms D Lower premiums and out-of-pocket expenses

D Lower premiums and out-of-pocket expenses

If a life insurance policy is said to have failed the 7-pay test, the policy is known as a(n): A Void Contract B Irreversible Annuity Contract C STOLI Contract D Modified Endowment Contract

D Modified Endowment Contract

A policyowner agrees to give his entire policy's value over to a creditor as a promise to repay a loan. In the event the insured dies, how much will the creditor receive? A The outstanding loan balance plus any unpaid interest or fees B The full death benefit C The balance of the death benefit, after paying not less than half of the death benefit to the beneficiaries D Nothing. Such agreements violate public policy and are void as a matter of law

D Nothing. Such agreements violate public policy and are void as a matter of law

B decides to buy a single premium immediate annuity, choosing the Life Only distribution option. How long will the insurer make payments to B? A For B's lifetime or until the principal and interest are exhausted, whichever is shorter B For the period of time it takes B to recover the initial premium or his lifetime, whichever is shorter C For a guaranteed period of time, whether or not B survives to the end of that period D Only for as long as B is alive

D Only for as long as B is alive ??

Having excess insurance (or multiple policies) than is necessary to cover a claim is referred to as: A Excess loss insurance B Coinsurance C Under-insurance D Overinsurance

D Overinsurance

___________ plans are typically used by large employers with healthier workforces to reduce the cost of providing health care benefits by paying actual claims expenses instead of paying insurance premiums. A Partially-insured B Service C Fully-insured D Self-insured

D Self-insured

All of the following imply that the proposed insured for life insurance is a higher risk exposure, except: A Rated-up age B Graded death benefit C Flat rate increase D Standard

D Standard

All of the following are true regarding life insurance policy delivery except: A It is the producer's responsibility to deliver the policy and collect any premiums (if not paid at the time of application) B If the applicant's continuing good health is a requirement, the policy must be returned to the insurer if the applicant's health has declined since the time of the application C The producer should explain the policy to be sure the policyowner/insured understands the benefits, including any ratings, endorsements and riders D The burden of proof will be on the insured to establish that the policy was delivered

D The burden of proof will be on the insured to establish that the policy was delivered ??

What happens when the insured dies with a policy loan outstanding against their life insurance policy? A The loan is repaid in full by the beneficiary prior to any death claim payment B The insurer writes off the loan as uncollectable C The spendthrift trust will pay off any creditors prior to claim payment D The insurer deducts the outstanding loan balance from the death proceeds paid

D The insurer deducts the outstanding loan balance from the death proceeds paid

The owners of a successful fine dining restaurant have 10 full time employees who work 30 or more hours per week and another 15 employees who average 20 hours per week. To avoid losing good workers, the owners wish to offer health insurance to all of their employees, and are willing to contribute toward the cost of insurance. Which of the following statements is correct? A If the owners fail to pay 50% of the premiums, they could be subject to the "Shared Responsibility Payment" penalty B They don't have enough full time employees to be eligible for group health insurance C The must purchase a catastrophic coverage plan off the exchange D The owners can apply for group health insurance through the SHOP Exchange, and may be eligible for payroll tax credits

D The owners can apply for group health insurance through the SHOP Exchange, and may be eligible for payroll tax credits

W bought an insurance policy on his life. He named Z, his wife, as policyowner. Who has the right to name and change beneficiaries? A Z, with W's approval B W, with Z's consent C W only D Z only

D Z only

Medicare's Initial Enrollment Period lasts 7 months, beginning 3 months before the month of an individual's 65th birthday and ending 3 months following the month the individual turned age 65. If a person fails to enroll during the Initial Enrollment Period, the next opportunity will be a General Enrollment Period which occurs: A in January, February, and March of odd-numbered years B every six months, in April and October C annually, from January 1 to March 31 D annually, from October 15 to December 7

D annually, from October 15 to December 7