Arizona life and health final exam
How long is individual medical expense insurance written for
1 year
If an insured legally adopts a baby within____ months of birth, the maternity coverage for the child's birth is covered
12
Which of these individuals may not obtain a temp producer license
An employee of a retired licensed producer
Which of the following actions would be considered a felony in the sate of Arizona?
Attempting to defraud an insurer
Custodial care is normally covered under
Long term care insurance
Which of the following is an unincorporated association whose members provide coverage for one another?
Reciprocal
Which of these is NOT a true statement of the war exclusion?
Civil insurrection apply
Mike applied for life insurance and was issued a conditional receipt. He is later found to be insurable and is issued a policy. When does his coverage become effective?
Date of issuance of the conditional receipt
An employer pays the accident and health insurance premiums for its employees. The premiums paid by the employer are
Deductible to the business
Which of these is typically regarded as a major treatment in a indemnity dental plan
Dentures
Which of these is NOT an underwriting responsibility of a life insurance agent
Determining the final rate classification
If a life insurance applicant is shown future premiums are to be paid out of non-guaranteed values, the illustrations used in the sales presentations must
Disclose that premium payments may need to be resumed depending on actual results
For purpose of disability income insurance, earned income would include all of the following EXCEPT
Dividends
Which of the following statements BEST describes employer contributions for employer provided health insurance
Employer contributions are deductible
Which statement best defines what a policy title means on an insurance policy
Every policy must have a title on the face and on the back of the policy, briefly describing the policy
Long term care policies will usually pay for eligible benefits using which of the following methods
Expense incurred
Which statement concerning a decreasing term life policy is accurate
Face amount decreases over the policy period
Federally qualified HMO's must offer
Family planning services
When an annuity contract ha been fully surrendered, how will the surrender charges affect the final settlement
Final contract settlement will be reduced
An annuitant is paid $495 per month until the contract value is exhausted at some undetermined date in the future. Which type of annuity pay out option is this?
Fixed amount
The "Use it or lose it" rule applies to
Flexible savings accounts
what is considered a valid reason for a small corporation to insure lives of its major stockholders?
Fund a buy-sell agreement
When the disclosure of an uninsured's non public information is involved, what is the insurer obligated to do
Give notice, explain, and allow opting out
John has a criminal record in which he was convicted of a felony that involved dishonesty. Under federal law, how would john be able to engage in insurance transactions
Given written consent by the state insurance regulatory agency
The administrator for a corporate pension plan bought an accumulation annuity contract for its 2,000 employees.All 2,000 participating employees received certificates of participation. what kind of contract is this
Group deferred annuity
How many days notice does the Affordable care act require insurers to give before rescinding coverage
30
Which of the following is NOT covered by a comprehensive long term care policy
Acute Care
Which of the following accurately describes the "time limit on certain defenses"
After a stated period of time, claims can not be denied due to material misrepresentation
An insured is covered under a group long term disability policy. Under this type of of policy, the definition of disability based on any occupation typically applies
After two years of disability
Which of the following distinguishes field underwriting from home home office underwriting
An agent has personal contact with an applicant
Who manages the premiums collected from a group's members for a reciprocal insurer
Attorney in fact
A policy owner pays the first annual premium for a $50,000 life insurance policy and dies one month later, which is true
Beneficiary receives $50,000 income tax free
Which of the following provisions allows an insured or the insurer to terminate the policy
Cancelable provision
Bryce purchases a disability income policy with a rider that guarantees him the option of purchasing additional amounts of coverage at predetermined times with out requiring to provide evidence of insurability. What kind of rider is this
Guaranteed insurability rider
Which of the following health plans pay benefits on a pre paid service basis
HMO
Some standard Medicare supplement policies include which benefit
Hospice care
Andy is in need of health care performed by skilled medical practitioners, but only on an intermittent basis. what level of care will his doctor likely prescribe
Intermediate care
The death proceeds of a credit life insurance policy are typically paid to the
Lender
What would be a valid reason for naming a trust as the beneficiary of a life insurance policy opposed to naming an individual
Management of proceeds would be provided
Which of the following relationships demonstrates insurable interest in the absence of economic interest
Marriage partners
A producer is proposing that a policy owner replace an existing individual health insurance policy with a new one. Under the new contract, a pre existing conditions exclusion
May reduce the insured's benefits
Which of the following is excluded in a medical expense plan?
Military duty
What is considered a valid reason for an insurer's refusal to pay policy proceeds directly to a minor
Minors are normally not capable of handling money in a reasonable manner
Which of the following actions may result in a producers license being suspended?
Misappropriation of premiums
Which of these actions is considered to be an unfair claims settlement practice
Misrepresenting pertinent policy provisions relating to coverage after a loss
Tim is covered by Policy A with a $4,000 limit and by Policy B with a $2,000 limit. Policy A is primary. If a $6,000 loss is incurred, what will each policy pay
Policy A will be pay $4,000, Policy B will pay $2,000
Which actions will trigger a penalty tax on premature distributions from a modified endowment contract
Policy loans
These are all accurate statements regarding universal life insurance EXCEPT
Policy loans are not permitted
The ACA must ensure a sufficient choice of ______ in the marketplace
Providers
What type of risk involves the potential for loss with no possibility of gain
Pure risk
which of these occurrences could improve an insurers ability to reduce premiums
Rate of earnings on investments increase
Jim is covered under a disability income policy. He is hurt while engaging in an occupation that is more hazardous than the occupation he specified in the policy, what action will the insurer likely take
Reduce the benefit level
What happens to the death benefit of a life insurance policy if the insured elects a partial payment from the accelerated (living) benefit provision
Reduced
What effect can a long term care benefit a rider have on a life insurance policy
Reduced death benefit
A life insurance policy's waiver of premium rider has the ability to
Relieve the insured of premium payments following an initial waiting period after the insured becomes totally disabled
After an applicant reads and signs an insurance application, he/she should be conscious of the fact that
a false statement could lead to loss of coverage
In long-term care insurance, what is an ADL
activities of daily living
Chris has a single major medical contract which covers all medical expenses. His plan is considered to be
comprehensive
An individual may receive Medicare part A hospital benefits, regardless of age, as long as the person has received which of the following benefits for at lest 24 months
Social security benefits
How do birthing centers reduce medical cost
Using certified midwives
The main role of accident and health and disability insurance is to
protect against medical care costs and the loss of earning power
Ron recently purchased an immediate, straight life fixed annuity, his benefit payments will
remain a constant dollar amount for the duration of the annuity period
Statements made by an insured on an accident and health insurance application are considered to be
representations
How long must a producer maintain customer records for an insurance transactions
3 years
An insured files for an accident and health insurance policy claim 8 days after the premium due date. the benefit payable is $500 and the overdue premium is $200. Assuming that the policy pays on a first dollar basis and contains the unpaid premium provision, how much will the insurer pay
$300
Larry has a major medical expense policy for his family with a $1000 per family/per year deductible and an 80/20coinsurance provision. If Larry's family files for claims of $400, $800, $100, and $700in one year, how much will the insurance company pay?
$800
Under HIPPA, medical plan late enrollees may be excluded for pre existing conditions for a maximum of
18 months
A health insurance clam may be contested due to statements made on the applications for up to ____ years after issuance of the policy
2 years
A life insurance policy can usually be contested by the insurer only during the first ____ years of the contract
2 years
After an annuity has been in force for ____ years, it becomes incontestable
2 years
Mary has a health savings account (HSA). Distributions that she has made for anything other than qualified medical expenses are considered taxable and subject to a penalty of
20%
ERISA requires that a summary plan description must be provided to a new plan member within how many days following the new members eligibility date
90
Which of these is NOT an advantage of term life insurance
A cash benefit will be provided if the insured is alive at the end of the policy period
Which of the following would NOT be appropriate for an immediate annuity?
A parent saving for a child's college
A life insurance policy provision that has the ability to reduce the death benefit is called the
Accelerated (living) benefit
What is a "functional assessment " for long term care benefits
A review of the insureds ability to perform the activities of daily living
A loss of minimum essential coverage usually counts as a qualifying event that triggers what?
A special enrollment period
A client applies for an individual accident and health policy in Arizona. If the insurer collects personal information from any source other than public records or the applicant, a notice of application practices must be given to the applicant no later than the
Application date
The ACA established 'exchanges' in order to
Assist individuals and small businesses when making their health insurance policies
In long term care insurance, what is the length of time for which claims will be paid
Benefit period
Long-term care policies sold in Arizona may offer coverage in which
Benefits are based on a individuals ability to perform activities of daily living
The purpose of the 'No loss No Gain' provision is to avoid duplication of _____ and _____ when an individual is covered under multiple group health insurance plans:
Benfit payments and overinsurance
Who normally pays the premiums for a group credit life insurance
Borrower
An accident and health insurance policy defines an injury as 'bodily injury by accidental mans'. For an injury to be covered on this policy, what is required
Both the cause and resultant injury must be accidental
A disabled business owner who has payroll and business expenses paid for has what kind of insurance policy
Business Overhead Expense
Which of these is not considered to be a cost connected with an individuals death
Business expenses
If dividend option choices are offered on a whole life insurance policy, the policy MUST
Contain a statement that dividends are not guaranteed
An annuity's accumulation period may
Continue after the purchase payments stop
In what situation would disability income insurance premiums be a deductible expense
Corporation paying for group disability income coverage for its employees
ANY employee insured under a group life insurance plan is normally
Covered with term life insurance
To protect informations systems, producers, brokers, and insurance companies must implement and maintain a
Cyber security policy
With life insurance, the needs approach is used primarily in determining
How much life insurance a client should apply for
Tom has a qualified retirement plan with his employer that is currently considered to be 80% "vested". How can this be interpreted
If Tom's employment is terminated, 20% of the funds could be forfeited
When is it acceptable to charge or receive a fee or service charge in addition to the premium in connection with the transaction of insurance
If the amount of the fee or service charge is reasonably related to the cost of service
After an insurance application has been originated, the producer normally
Is the major personal contact to the insured
Which statement regarding the certificates of insurance is accurate
It indicates evidence of an employees insurance coverage
A retired couple would like to maximize the income derived from their combined life savings and have it payable until they both die. Which annuity would be their best choice
Joint and survivor annuity
A life policy that has premiums that are lower than normal during the early years is called
Modified life
Life insurance premiums are computed on what three factors
Mortality, interest, expenses
If a Medicare supplement policy is cancelled by the insurer, which of these circumstances does NOT require prior approval by the Arizona department of insurance
Non payment of premium
Tim is covered by an accident and health insurance policy that may not be changed in any way by the insurer up to a stated age, as long as the premiums are paid. What type of policy is this
Noncancelable
Jerome is covered by a disability income policy that does NOT provide benefits for losses occurring as the result of his employment. What kind of coverage is this
Nonoccupational coverage
Which of these is NOT an unfair claims settlement practice?
Offering to settle a claim by arbitration
If a producer surrenders their license, how long must they wait to re apply for the same license?
One year
Which of the following is NOT a function of accident and health insurance
Pays a death benefit as result of natural causes
A life insurance policy's contingent beneficiary Is the
Person who relieves the death benefit if the primary beneficiary dies before the insured
What happens to a life insurance policy when the policy loan balance exceeds the cash value
Policy will no longer be in force
Dividends from a mutual insurance company are paid to whom
Policyholders
Patrick purchased a long-term care policy. He has a health condition for which medical treatment was recommended by a physician within 6 month prior to the policy's effective date. This condition is called a
Pre-existing condition
According to the law of large numbers, how would losses be affected if the number of similar insured units increased
Predictability of losses will be improved
A pre-existing condition exclusion is accident and health insurance policy pertains to
Prior health matters
A statement MUST be signed by the ____ for any illustrations used in the sale of a life insurance policy
Producer
Switching life insurance policies with out tax consequences is permitted under
Section 1035 rules
which of the following entities does NOT establish regulations for variable insurance products?
State attorney general
Who regulates an insurers claim settlement practices?
State insurance departments
An insurer will typically assess a back end load on a deferred annuity that is cancelled during the early contract years. What is this back end load referred as?
Surrender charge
Under a deferred annuity, which contract feature initially charges a 5-10% fee that eventually reduces to $0 after a stated amount of time
Surrender fee
when a ten year renewable term life insurance policy issued at age 45 is renewed, the premium rate will be the current rate for
Ten year term insurance for a person aged 55
In order for a health plan to be an accountable health plan, who has to approve it
The director
Medicare part A does NOT provide coverage for
The first 3 pints of blood
Who may terminate coverage under a cancelable health insurance policy
The insurer or Insured
The Arizona life and disability insurance guaranty fund protects an insured in the event of
The insurers insolvency
Which statement concerning a deferred annuity contract is correct
The owner can be the beneficiary, annuitant, or neither
Under an adjustable life insurance policy, which of the following may NOT be changed without further underwriting
The person insured
Taxable income may be the result from all of these modifies endowment contract (MEC) transactions EXCEPT for
The policy is surrendered for less than what was paid into it
What is considered the collateral on a life insurance policy loan
The policy's cash value
which of these must be disclosed in a universal life policy
The policy's surrender charges
A business becoming incorporated is an example of risk______
Transfer
What is the face amount of a $50,000 graded death benefit life insurance policy when the policy is issued
Under $50,000 initially, but increases over time
Which of the following best describes the presumptive disability provision?
Waives the typical total disability requirements
A contract is considered void in all of the following situations except
When consideration is unequal
An agent gives a conditional receipt to a client for an insurance policy after collecting initial premium. When will the policy become effective
When the conditions of the receipt are met
When would evidence of insurability be required for a person already covered with a variable universal life policy
When the death benefit is increased
A policy owner is permitted to take out a policy loan on a whole life policy at what point?
When the policy has cash value
An insurance policy may be issued with a preferred insurance premium in all of these situations EXCEPT
living in a rural area
Field underwriting by a producer
may result in the disclosure of hazardous activities of the applicant
A health insurer MUST provide a proof of loss form
within 15 days of receipt of the notice of loss
