combine Insurance
31
Newborn children are automatically covered under an existing family medical plan at the moment of birth for a period of at least____days.
employees who suffer non-work related disabilities, since work-related disabilities are covered by Workers' Compensation
Non-occupational disability coverage is designed for
20%
Nonqualified medical expense distributions from a Health Savings Account (HSA) have a tax penalty of
at least once a year
Notice of information practices must be given to a policyholder
every three years
Notice of information practices must be given to a policyholder at least
reduce the benefit level
Omar is covered by a disability income policy. He is hurt performing an occupation more hazardous than the occupation listed in his policy. The policy's change of occupation provision will have what effect?
120days of skilled nursing facility care
Part A Medicare includes coverage for all of the following services EXCEPT
180
Participants of a small group medical plan MUST be given advance notice of at least days prior to the plan's discontinuation.
If the amount of the fee or service charge is reasonably related to the cost of the service
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?
Policy will no longer be in force
What happens to a life insurance policy when the policy loan balance exceeds the cash value?
subject to market value adjustment
What happens to the cash value of a market value adjusted annuity if it's surrendered prior to the end of the stated guarantee period?
decreases
What happens to the purchasing power of benefit payments from a fixed life annuity when the cost of living goes up?
A review of the insured's ability to perform the activities of daily living
What is a "functional assessment" for long-term care benefits?
cervical cancer
What is a Pap test designed to detect?
A life policy that covers the life of a minor
What is a juvenile life insurance policy?
Solicit, receive and forward applications to the insurer
What is a life insurance producer authorized to do?
An HMO combines medical care delivery and funding in one organization
What is a major difference between private commercial insurers and HMO's?
HR 10 plan
What is another name for a Keogh plan?
life income
What is another term used for a "pure" life annuity?
Minors are normally not capable of handling money in a reasonable manner
What is considered a valid reason for an insurer's refusal to pay policy proceeds directly to a minor?
Puerto Rico
What is considered interstate travel under the Federal Fraud and False Statements Act?
The policy's cash value
What is considered the collateral on a life insurance policy loan?
limited perils and amounts
What is covered under a limited accident and health insurance policy?
A reduction in benefits
What is normally the consequence for NOT obtaining preadmission certification prior
the cash value
What is payable to a policy owner if a whole life policy is surrendered prior to its maturity date?
the insured's education, training, and experience
What is taken into consideration when defining "total disability" in a disability income insurance policy?
50 employees
What is the MAXIMUM number of employees an employer may have for qualified medical savings accounts?
reserves
What is the accounting measurement of an insurance company's future obligations to its policyowners?
60
What is the actuarial value of a bronze-level health plan?
80
What is the actuarial value of a gold-level health plan?
90
What is the actuarial value of a platinum-level health plan?
70
What is the actuarial value of a silver-level health plan?
transfers some of the investment risk to the policyowner
What is the effect of the market value adjustment in a market value adjustment annuity?
must be eligible for Medicare Part A
What is the eligibility requirement for Medicare Part B?
time period a disabled person must wait before benefits are paid
What is the elimination period of an individual disability policy?
50%
What is the excise tax rate the IRS imposes on individuals aged 70 1/2 or older who do not take the required minimum distributions from their qualified retirement plan?
under 50,000 increase over time
What is the face amount of a $50,000 graded death benefit life insurance policy when the policy is issued?
benefits are not taxable
What is the federal income tax liability of a death benefit paid from a health insurance policy to a named beneficiary?
less than the policy's face amount
What is the guaranteed cash value of a whole life insurance policy when the insured turns 65 years old?
Responsible for acts by the producer that are authority only
What is the insurer responsible for when a producer is acting within the scope of authority granted in the agency contract?
100% of the insured's Primary Insurance Amount (PIA)
What is the maximum Social Security Disability benefit amount an insured can receive?
100
What is the maximum number of employees (earning at least $5,000) that an employer can have in order to start a SIMPLE retirement plan?
Probationary Period
What is the name of the period of time during which a new employee is ineligible for group Health insurance coverage?
Guaranteed insurability rider
What is the name of the rider that provides an additional purchase option in a life insurance policy?
To help underwriters evaluate risk
What is the purpose of the Medical Information Bureau (MIB)?
benefit payments are always fully taxable
What is the tax treatment of benefit payments for a non-qualified annuity?
Revocable designation
What kind of arrangement gives the policy owner the right to change the beneficiary?
Conditional receipt
What must be given to a life insurance applicant when the agent receives an application and the initial premium?
an issued policy
What qualifies as acceptance of an insurance contract offer?
Federal estate tax
What tax is normally associated with an individual's death?
custodial care
What type of doctor-ordered care assists an individual with performing basic daily activities such as bathing, eating, and dressing?
church plans
What type of employee welfare plans are not subject to ERISA regulations?
Joint life
What type of life insurance policy covers two or more persons and pays the face amount upon the death of the first insured?
level premiums
What type of premiums are associated with individual mortgage protection life insurance policies?
speculative
What type of risk involves the potential for loss AND the possibility for gain?
pure risk
What type of risk involves the potential for loss with no possibility for gain?
late enrollment penalty
What will Medicare charge if someone doesn't enroll in certain Medicare programs or plans when they're first eligible?
Management of proceeds would be provided
What would be a valid reason for naming a trust as the beneficiary of a life insurance policy as opposed to naming an individual?
the initial premium in lower compared to an equivalent amount of whole life coverage
What would be considered an advantage of purchasing term life insurance?
trust administration fees would reduce policy proceeds
What would be the disadvantage of naming a trust as beneficiary of a life insurance policy?
Facultative reinsurance
When a ceding insurer transfers a portion of its risk to an assuming insurer on a case by case basis, this process is referred to as
owner
When a deferred annuity is surrendered, who must sign the authorization to do so?
seek a second opinion for specified elective surgeries
When a health insurance policy includes a Mandatory Second Surgical Opinion provision, the insured must
an immediate annuity
When a large sum of money is used to structure monthly payments, which product is typically used?
Irrevocable beneficiary
When a policy loan is requested by a policyowner and it requires the consent of the beneficiary, what kind of beneficiary designation is this?
Producer
When a producer submits an application that discloses personal information regarding the applicant, who supplies the privacy notice?
decrease in size
When a sum of money undergoes capital liquidation, that sum will
final contract settlement will be reduced
When an annuity contract has been fully surrendered, how will the surrender charges affect the final contract settlement?
investment risk is assumed by the purchaser
When compared to a fixed annuity, a variable annuity has what distinguishing feature?
Eating, bathing, dressing, and mobility
When dealing with long-term care coverage, which of the following are classified as ADLs?
Prior to or at the time of signing the application
When must a producer provide disclosure about information practices to an applicant?
Inception of the contract
When must insurable interest exist for a life insurance contract to be valid?
Insurer (They have operating expenses which need to be factored into the premiums)
When premiums are determined, one factor would be the expenses of the
Give notice, explain, and allow opting out
When the disclosure of an insured's nonpublic information is involved, what is the insurer obligated to do?
expenses and withdrawals
When determining the accumulation value of a deferred annuity, the total is calculated by taking the premiums paid plus interest earned minus
the full amount is non-taxable to the partner
When disability buy-sell insurance benefits exceed a partner's cost basis, which of the following is correct?
at the moment of birth
When does a family accident and health policy's coverage for a newborn child begin?
upon receiving distributions from the contract
When does interest income for a flexible premium deferred annuity get reported for federal income taxes?
At the time of death or 30 years after the policy's inception, whichever comes first
When does the insured stop making payments under a thirty-payment whole life policy?
time of purchase
When does the owner's contractual rights begin under an individual annuity contract?
When the initial premium has been paid with the application
When does the producer give a premium receipt for a life insurance application?
none
When funds are transferred directly from one IRA to another IRA, what percentage of the tax is withheld?
Individual health policy
When group benefits under COBRA have expired, a fully insured group policy can be converted to a(n)
Are paid directly to the beneficiary without interference from the insured's creditors
When there is a named beneficiary on a life insurance policy, the death benefits
federal payroll and self-employment taxes
Where does the primary funding for Medicare Part A come from?
Premium charges
Where is the difference between a standard risk and a substandard risk reflected?
insured's estate
Where will a life insurance policy's proceeds be directed to if all the beneficiaries die before the insured?
policy loans
Which action will trigger a penalty tax on premature distributions from a modified endowment contract (MEC)?
deferred
Which annuity allows contributions to an IRA?
protection against long-term inflation
Which benefit can be found in an equity indexed annuity, but not in a fixed annuity?
Accelerated (living) benefit
Which benefit is normally payable to a life insurance policyowner when the insured's life expectancy has been severely limited?
Family term rider
Which benefit supplement added to a life insurance policy insures an entire family?
offer
Which element of a contract constitutes a definite and unqualified proposal by one party to another?
when the contract is annuitized
Which event triggers a deferred annuity to start making benefit payments to the annuitant?
the applicant's income
Which factor determines the maximum disability income benefit that can be purchased by an applicant?
insuring
Which health policy clause specifies the amount of benefits to be paid?
Medicare enrollee
Which individual would be best suited for Medicare Supplement insurance?
Annual increases in premium for a stated number of years then levels off for the remainder of the contract
Which is an accurate description of the premium in a graded premium life insurance policy?
Incontestable clause
Which life insurance clause prohibits an insurance company from questioning the validity of the contract after a stated period of time has passed?
Extended term nonforfeiture option
Which life insurance policy option allows the policy owner to have coverage equal to the net death benefit of the lapsed policy?
free-look period
Which life insurance policy provision allows a policyowner to cancel the policy and receive a full refund within a limited time period after policy delivery?
spendthrift clause
Which life insurance policy provision prohibits a beneficiary from "commuting, encumbering, withdrawing, or assigning" any portion of the proceeds prior to actual receipt from the company?
fixed amount installment option
Which life insurance settlement option pays a stated monthly benefit until both principal and interest are exhausted?
joint and survivor
Which life insurance settlement option pays lifetime benefits to two or more people?
ages 71 and 73
Which of the co-annuitants listed below would receive the largest monthly benefit payments in a joint and 100% survivor annuity?
A producer who sells insurance to an individual by means of threat
Which of the following actions is considered to be an unfair trade practice?
Rebating part of a commission to the applicant
Which of the following actions may result in a producer's license being suspended by the Commissioner?
Misappropriation or premiums
Which of the following actions may result in a producer's license being suspended?
experience rating
Which of the following are used by most insurers when determining the premiums for large groups?
waives the typical total disability requirements
Which of the following best describes the presumptive disability provision?
100% of medical expense plan premiums are tax-deductible
Which of the following best describes the tax treatment of medical expense policies for the self-employed?
conduit IRA
Which of the following can be used to avoid the mandatory withholding tax on qualified plan distributions?
Intentional, self-inflicted injuries that occur at the worksite
Which of the following causes of disability is NOT covered under Arizona worker compensation laws?
A flexible premium deposit fund and a monthly renewable term insurance policy
Which of the following combinations best describe a universal life insurance policy?
flexible premium fixed annuity
Which of the following contracts offer deferred taxation, flexible payments, a guaranteed interest rate, and death benefits equal to the cash value?
A Medicare Supplement core benefit
Which of the following describes coverage for the Medicare Part B coinsurance?
Cross-purchase agreement
Which of the following disability buy-sell agreements is best suited for businesses with a limited number of partners?
private duty nursing
Which of the following does NOT fall under "hospital care" in a typical health maintenance organization (HMO) plan?
Income level of group members
Which of the following does NOT help determine group health insurance premiums?
Military families
Which of the following does TRI-CARE provide accident and health coverage to?
Small co-pay per visit or per service
Which of the following does a Medicare Advantage enrollee typically pay for?
treatment in a government facility
Which of the following does medical expense insurance NOT typically cover?
State attorney general
Which of the following entities does NOT establish regulations for variable insurance Products?
Life Insurance
Which of the following financial products creates an instant estate, no matter when the date of death?
Post-termination extensions of medical benefits must apply equally to pregnancy
Which of the following guidelines does NOT apply under the pregnancy provision of the Civil Rights Act?
Non cancelable
Which of the following health insurance plans charges a premium that cannot be increased?
entire contract clause
Which of the following health insurance provisions requires that the application becomes part of the policy?
HMO (health maintenance organization)
Which of the following health plans pay benefits on a pre-paid service basis?
A designated employee who is replacing a deceased producer
Which of the following individuals is eligible to receive a temporary producer license?
Removing uniform policy provisions
Which of the following is NOT a basic underwriting action for accident and health insurance?
Cause of death must be from a job-related injury
Which of the following is NOT a condition that must be met for an accidental death benefit to be paid?
Receiving the entire policy cash value
Which of the following is NOT a dividend option for a life insurance policy?
Pays a death benefit as a result of natural causes
Which of the following is NOT a function of accident and health insurance?
reduce fraudulent claims
Which of the following is NOT a reason the government provides insurance?
an annuity exchanged for a life insurance policy
Which of the following is NOT a valid contract exchange?
Misstatement of age
Which of the following is NOT a valid reason for an insurer to contest a life insurance policy during the policy's first two years of existence?
The insured is currently in poor health
Which of the following is NOT a valid reason for an insurer to refuse renewal of an individual accident and health insurance policy?
Care for incurable conditions
Which of the following is NOT an allowable exclusion for long-term care insurance policies?
Not doing a business deal after deciding it would be too risky
Which of the following is NOT an example of risk retention?
create new funds upon the death of a wage-earner
Which of the following is NOT an intended use of an annuity?
Regulate state insurance commissioners
Which of the following is NOT an objective of the National Association of Insurance Commissioners?
Acute care
Which of the following is NOT covered by a comprehensive long-term care policy?
rehabilitation
Which of the following is NOT included as a hospice benefit under a major medical plan?
level of education
Which of the following is NOT information needed to determine the suitability of an annuity recommendation?
Hospitals can only initiate preferred provider plans
Which of the following is NOT true of a preferred provider plan?
more than 60% of plan assets are in key employee accounts
Which of the following is TRUE about a qualified retirement plan that is "top heavy"?
Lloyd's Organization
Which of the following is a syndicate established by a group of insurers to share underwriting duties?
Reciprocal
Which of the following is an unincorporated association whose members provide coverage for one another?
lack of an accumulation period
Which of the following is associated with an immediate annuity?
cancer plan
Which of the following is considered a Limited accident and health plan?
bridgework
Which of the following is considered to be a prosthodontic dental procedure?
The insured must be disabled for a period of time
Which of the following is true regarding a person receiving a waiver of premium benefit?
Misleading or failing to adequately disclose the title and true nature of a policy offered to a client
Which of the following may be considered an act of misrepresentation?
Cancelable provision
Which of the following provisions allows an insured or the insurer to terminate the policy?
Coordination of benefits provision
Which of the following reduces the opportunity for overinsurance?
applicant's family members have a history of cancer
Which of the following situations would a medical exam NOT be required for an individual health insurance applicant?
An employee quits her job and receives $50,000 from her qualified plan
Which of the following situations would allow funds to be deposited into a rollover IRA?
cash value accumulations have a guaranteed minimum interest rate
Which statement regarding universal life insurance is correct?
insurance coverage can continue for life
Which statement regarding whole life insurance is accurate?
Federal estate tax
Which tax cost is normally associated with death?
Income tax and penalty tax
Which tax would an IRA participant be subjected to on distributions received prior to age 59 1/2?
per-cause
Which type of deductible must be satisfied again for each illness or accident in a major medical plan?
disability income
Which type of group plan is excluded from HIPAA rules?
variable universal life
Which type of life insurance policy allows a policy owner the choice of investment along with flexible premium payments?
30-year decreasing term
Which type of life insurance policy is best suited for paying off the outstanding balance of a 30-year mortgage in the event of the insured's death?
Reimbursement
Which type of policy pays benefits to a policyholder covered under a Hospital Expense policy?
Personal Residence
Which would NOT be a location where skilled nursing care is provided?
Children of the insured
Which would be described as a beneficiary designation by class?
pay proceeds based on what the premiums would have purchased at the insured's actual age
While processing a life insurance claim, the insurer discovers that the insured's age was misstated on the application. Under these circumstances, the insurer is entitled to
the participating employee
Who is normally considered to be the owner of a 403(b) tax-sheltered annuity?
insurance company
Who is protected with the "other insurance with this insurer" provision?
licensee
Who is responsible for reporting the licensee's change of name or address to the Superintendent of the Bureau of Insurance?
The stated person or entity who is designated to receive the death proceeds
Who is the beneficiary in a life insurance policy?
Attorney in fact
Who manages the premiums collected from a group's members for a reciprocal insurer?
the insurer of the insured
Who may terminate coverage under a cancelable health insurance policy?
insurer and producer
Who must sign a rider attached to a health insurance policy in order for it to be valid?
borrower
Who normally pays the premiums for group credit life insurance?
State insurance departments
Who regulates an insurer's claim settlement practices?
owner
Who typically makes the purchase payments in an individual annuity?
Minimize adverse selection
Why do insurers require a minimum number of employees participate in a group insurance plan?
the benefits arising from a worker's compensation claim could be inadequate to replace the loss of income
Why might it be beneficial for an employee to purchase private disability income insurance for workplace injuries when he/she is already covered by worker's compensation?
To create a one-stop market for standardized health insurance plans
Why were Exchanges implemented by the Affordable Care Act (ACA)?
Net Payment Cost Index
Wyatt is shopping for life insurance and is mainly concerned with the policy's death benefit. Which index should he be looking at when making comparisons?
in favor of employees with highly compensated employees
XYZ Corp has implemented a qualified retirement plan. This plan may NOT discriminate
split-dollar plan
XYZ Corporation gives money to an employee to purchase a life insurance policy and allows the employee to select the beneficiary. what kind of plan is this?
implied authority
XYZ Insurance Company gives direct authority to its producers to sell insurance through an agency contract, but nothing is stated regarding the collection of premiums. Which authority grants the producer the right to collect premiums?
10%
a "premature" distribution from a modified endowment contract (MEC) incurs a penalty tax of
qualified retirement plan for the self employed
a Keogh plan is a(n)
provide a 30 day free-look period
a Medicare Supplement policy is required to do which of the following?
hazard
a condition that increases the possibility of financial loss is called a(n) ___.
the consideration is unequal
a contract is considered void in all the following situations EXCEPT
proof of incapacity and dependency upon reaching the age limit
a handicapped child is covered under an individual health policy. if continuation of coverage is needed beyond the policy's age limit, which of the following is required?
2
a health insurance claim may be contested due to statements made on the applications for up to____year(s) after the issuance of the policy.
30
a licensee whose name or address change must notify the director within____days.
helps determine the insurability of the applicant
a life insurance applicant is tested for the human immunodeficiency virus (HIV). The applicant MUST be informed that the testing
accelerated (living) benefit
a life insurance policy provision that has the ability to reduce the death benefit is called the
30
a life insurance policy that is paid annually must contain a grace period of at least____days.
relieve the insured of premium payments following an initial waiting period after the insured becomes totally disabled
a life insurance policy's waiver of premium rider has the ability to
Prior to or at the signing of the application
a life insurance producer is required to give a disclosure notice about information practices to an applicant or proposed insured
conversion provision
the policy provision that permits an employee to change from group life coverage to an individual life policy is called the
express
the power directly given to a producer in an agency contract are called
tax-deductible to the employer
the premiums paid by an employer for his employee's group life insurance are usually considered to be
policyowner
the____ may change a revocable beneficiary as part of an accident and health policy.
producer
the____is responsible for determining the appropriateness of a Medical Supplement policy for an applicant.
3
upon meeting company requirements a lapsed life insurance policy may be reinstated for up to____year(s).
cancellation
voluntarily terminating an insurance policy is also known as
flat rate unrelated to borrower's age
what are premiums for group credit life insurance based on?
reduces the amount receivable upon surrender of the contract
what could be the potential result of taking out a cash value loan under a life insurance policy?
covers the approved cost of the rehabilitation necessary to help a disabled insured return to work
what does the rehabilitation benefit cover in a disability income policy?
reduced
what happens to the death benefit of a life insurance policy if the insured elects a partial payment from the accelerated (living) benefit provision?
the policy proceeds would be reduced by the outstanding loan balance
what happens when a policy owner borrows against the cash value of his life insurance policy?
initial offer is void
what happens when an initial offer is answered with a counteroffer?
group insurance
what is an insurance contract that identifies individuals by relationship to a specific organization?
fund a buy-sell agreement
what is considered a valid reason for a small corporations to insure the lives of its major stockholders?
a transaction in which a new life insurance policy is purchased and an existing life insurance policy is surrendered
what is the best way to define life insurance replacement?
to determine compliance with state insurance laws and regulations
what is the primary reason for the director examination of a producer's insurance records?
decreasing term- as the outstanding loan decreases, so does the amount of term coverage
what kind of life policy typically offers mortgage protection?
100%
what minimum percentage of all eligible employees must participate in a group life insurance plan if the premiums are completely paid for by the employer?
name of the actual insurer
what must be disclosed when a producer advertises a life insurance policy?
an individual permanent life insurance policy
what type of policy can group term life insurance normally be converted to?
premiums
what typically changes at the re-entry option date found in some term life policies?
2008
what year was the Mental Health parity and Addiction Equity Act Established?
reinstated
when a lapsed policy's premium has been paid current, it has the potential of being
ten year term insurance for a person aged 55
when a ten year renewable term life insurance policy issued at age 45 is renewed, the premium rate will be the current rate for
Identifies the needs of the individual and his/her dependents
when an individual is planning to protect his family with life insurance, one method of doing so is called needs analysis. what exactly does needs analysis involve?
when a parent purchases a policy on the life of a minor child
when can a life insurance policy be issued WITHOUT the insured's consent?
eating, bathing, dressing, and mobility
when dealing with long-term care coverage, which of the following are classified as ADLs?
shorten the benefit period
when issuing disability income coverage to a substandard risk, an insurance company may
the insurer
when the producer acts within the scope of his/her contractual authority, which of the following is legally responsible for these actions?
employee benefits
when using the needs approach for life insurance planning, a lump sum may be created to provide for all of the following EXCEPT
when the death benefit is increased
when would evidence of insurability be required for a person already covered with a variable universal life policy?
state insurance department
which entity is responsible for regulating claims settlement practices of insurers?
telemarketers
which group is the Do Not Call Registry designed to protect against?
whole life policy
which life insurance policy would be eligible to include an automatic premium loan provision?
unable to perform one or more job duties
which of the following BEST describes a "partial disability"?
policy owners may be entitled to receive dividends
which of the following accurately describes a participating insurance policy?
Attempting to defraud an insurer
which of the following actions would be considered a felony in the State of Arizona?
to reduce a pre-existing condition waiting period when coverage is sought for a new medical plan
which of the following best describes the purpose of HIPAA?
risk
which of the following can be defined as "the potential for loss"?
peril
which of the following can be defined as a cause of loss?
Provide supplemental income in 35 years
which of the following could be a future use of the cash value that builds in a recently-purchased whole life insurance policy?
medicare supplement core benefits
which of the following cover the part A deductible of medicare?
risk transfer
which of the following describes the act of insuring a risk against possible loss?
recurrent disability
which of the following disability income provision allows two periods of disability to be counted as one
an agent has personal contract with an applicant
which of the following distinguishes field underwriting from home office underwriting?
converting term life coverage to whole life insurance
which of the following does NOT involve a life settlement transaction?
must be provided exclusively in a hospital
which of the following does NOT meet the requirements of "skilled nursing care"?
unemployment tax expenses
which of the following in NOT considered to be an expense for surviving family members of a deceased wage earner?
suicide
which of the following incidents would NOT be covered by an Accidental Death and Dismemberment policy?
transfer
which of the following involves sharing an uncertain risk with another similar group?
an increased pension liability if the key employee dies
which of the following is NOT a reason for a business to buy key person life insurance?
dividend scale
which of the following is NOT guaranteed in a whole life policy?
how the premium is calculated
which of the following is NOT subject to the promise to pay in an insuring clause?
participants must purchase all coverages the trust offers
which of the following is NOT true to participants in multiple-employer trusts?
passing the appropriate examination
which of the following is a requirement for an individual to receive an insurance license in Arizona?
the policy will be issued regardless of health
which of the following is a true statement regarding a Medicare Supplement policy purchased during the open enrollment period?
a producer who publicly and erroneously announces that an insurance company is insolvent
which of the following is an example of defamation
making a statement that is false or maliciously critical of the financial condition of an insurer
which of the following is an example of defamation?
coercion
which of the following is considered to be an example of unfair restraint of competition?
non-surgical periodontal treatment
which of the following is covered by a basic dental indemnity plan?
military duty
which of the following is excluded in a medical expense plan?
decreasing term insurance
which of the following is generally a form of group credit life insurance
producer contract
which of the following outlines the authority given to the producer on behalf of the insurer?
Predictability of losses will be improved
According to the law of large numbers, how would losses be affected if the number of similar insured units increases?
rebating
Insurance producer Kelly offers insured a $500 shopping card if they purchase an insurance product through her. What is this an example of?
contract guaranteed rate
Interest is credited to a fixed annuity no lower than the
the insurer was not notified prior to the claim that the insured has other health coverage
James is covered with health insurance by two different insurers. The "insurance with other insurers" provision in an individual health insurance policy allows an insurer to pay benefits to the insured on a pro-rata basis when
key employee coverage
James owns a business and purchased a policy that covers the business expense of finding a permanent or temporary employee to replace a disabled one. This type of disability coverage is called
Nonoccupational coverage
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?
Jerry has an indemnity plan which covers dental expenses. Typically, these type of plans
Jerry has an indemnity plan which covers dental expenses. Typically, these type of plans
Continuation of coverage under COBRA
Jill has a group health plan with an employer that covers employees in more than one state. Which of the following aspects is NOT affected by the state regulatory jurisdiction established for this plan?
reduce the benefit level
Jim is covered under a disability income policy. He is hurt while engaged in an occupation that is more hazardous than the occupation he specified in the policy. What action will the insurer likely take?
loan amount is increased to reflect the amount of interest due
Joe is a life insurance policy owner who has failed to pay interest on his policy loan. What will result from this nonpayment?
Mary
John bought a deferred annuity on Mary. John amends the contract years later to name Tom as the recipient of the proceeds if Mary dies. Who is the annuitant for this contract?
Given written consent by the state insurance regulatory agency
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?
100%-Funds withdrawn from an MEC are subject to last-in-first-out (LIFO) tax treatment, which assumes that the investment or earnings portion of the contract's values is withdrawn first (making these funds fully taxable as ordinary income).
John received a one-time distribution of $50,000 from his modified endowment contract (MEC). Prior to that, the contract's cash value was $150,000, the contract investment amount was $100,000, and the death benefit was $500,000. What percentage of the $50,000 distribution was taxable as ordinary income?
taxes must be paid on 75% of the benefits received
Jonas is covered with disability insurance through his employer. The employer pays 75% of the premium, while Jonas pays the other 25%. What is Jonas' tax liability for any benefits paid from the disability plan?
Out-of-pocket expenses are lower when a second surgical opinion is obtained as opposed to having only one
Julie is an employee with a group health plan that contain the Mandatory Second Surgical Opinion provision. What is to be expected with this provision in place?
assisted living facility
Julie is in need of assistance with one or two activities of daily living. She may be eligible for a(n)
The date the agent delivered the policy, collected the initial premium, and obtained a good health statement from the insured
K is an agent who takes an application for individual life insurance and accepts a check from the client. He submits the application and check to the insurance company, however the check was never signed by the applicant. If the application is approved, when will coverage be effective?
may reduce her benefit
Karen is considering replacing her individual accident and health insurance policy with another individual policy. She has had issues in the past with her gall bladder that would be considered a pre-existing condition. How will a pre-existing conditions exclusion affect Karen's new insurance contract?
31
Kate received a group accident and health termination notice. How many days does she have to apply for a converted policy?
Specific reasons stated in the contract
Kelly purchases a health insurance policy issued on a conditionally renewable basis. The insurance company has a right to refuse renewal of the policy for
Government publications
Most Medicare Supplement information used by an insurer must be approved by the State. Which of the following types of information does NOT require State approval?
Oral examinations
Most prepaid dental plans cover
Transfer
A business becoming incorporated is an example of risk ____.
risk retention group
A group-owned insurance company that is formed to assume and spread the liability risks of its members is known as a
transfer
A hold-harmless clause is an example of risk
Attorney-in-fact
A reciprocal insurer typically has an administrator who manages the premiums collected from the group's members. This administrator is called a(n)
Captive
A(n)__agent is an insurance agent who represents only ONE insurance company.
Only one party makes any kind of legally enforceable offer
All of these statements correctly describe an aleatory contract EXCEPT
Reasonable expectations
Ambiguities in insurance contracts are typically interpreted in favor of the insured. This rule is referred to as
not backed by the insurer
An agent whose actions exceed the authority granted by contract is
agent's contract and the insurance company's appointment
An agent's authority to bind an insurer to an insurance contract may be granted in the
express authority
An appointed producer's implied authority is derived from
Contract of utmost good faith
An insurance application requires an applicant to make a full, accurate disclosure of the risk factor involved. Using this criteria, an insurance policy is considered what type of contract?
Homogeneous exposure units
For insurance purposes, similar objects which are exposed to the same group of perils are referred to as
material misrepresentation
Greg applies for insurance and makes a false statement on the application that will influence whether or not the insurer will accept the risk. Greg's false statement is called a(n)
Reinsuring risks
How can an insurance company minimize exposure to loss?
Involves the potential for the unequal exchange of value
In what way are insurance policies said to be aleatory?
contract of adhesion
The courts will normally interpret a policy in favor of the insured when the meaning of the policy is not clear. This is because an insurance policy is a(n)
implied authority
The unwritten authority given to a producer to carry out necessary incidental acts of the agency agreement is called
the insurer
Under the Law of Agency, the principal is considered to be
pure
Which of the following types of risk is insurable?
acts performed which are prohibited in the agency contract
a producer working for an insurance company may be personally liable for?
shareholders
a stock insurance company is owned by its ___.
independent
a(n) ___ agent may represent several insurers.
reinsurance
a(n) ___ insurer assumes risk from another insurance company.
equity
an agreement is reached when an insurance contract is formed. which of the following is NOT considered to be an element of an agreement?
The law of agency
an arrangement where an individual is authorized to act on behalf of another person or company is established through
the chance of loss be calculable
an insurable risk requires
when the agency contract is unclear concerning the authority given
an insurance company can be liable for a producer's unauthorized acts
shareholders
dividends from a stock insurance company are normally sent to ___.
waiver
giving up a known right on a voluntary basis is called a
one year
if a producer surrenders their licence, how long must they wait to re-apply for the same licence?
written evidence
the following are all elements of a valid contract except
conditional contract
the insurer's obligation to pay a claim depends on whether the insured or beneficiary has complied with all policy conditions. this makes the policy a(n)
small employer
which of the following would NOT have a restricted ability to enter into a contract?
the policy's surrender charges
which of these must be disclosed in a universal life policy
policy can alternate between forms of term and whole life insurance
which of these statements accurately portrays an adjustable life insurance policy?
treaty reinsurance
which reinsurance contract between two insurers involves an automatic sharing of the risks assumed?
evidence of insurability is required when there is a change in premium
which statement concerning an adjustable life insurance policy is FALSE?
risk avoidance
which term describes the elimination of a hazard?
according to federal fraud and false statements regulation, what is required for a prohibited person to transact insurance business in this state?
written consent from the state insurance regulatory agency
prior health matters
A pre-existing condition exclusion in an accident and health insurance policy pertains to
both pay on a fee-for-service basis
A preferred provider plan and an indemnity plan are similar in what way?
accepts an established amount as payment in full for the dental services rendered
A prepaid dental plan has an agreement in place with a network of dentists which
conducting business under an assumed name
A producer MUST notify the Commissioner for
may reduce the insured's benefits
A producer is purposing that a policyowner replace an existing individual health insurance policy with a new one. under the new contract, a pre-existing conditions exclusion
Distribute a portion of company earnings to its employees
A qualified profit-sharing plan is designed to
written consent from the state insurance regulatory agency
According to the federal regulations, what is required for a prohibited person to transact insurance business in this state?
Benefits are received tax-free by the company
ABC Corporation purchases and is beneficiary of an individual disability income insurance policy on a key employee. Which of the following statements is true?
cross purchase agreement
ABC Partnership is a business with a limited number of partners. Which disability buy-sell agreement is best suited for this business?
reduction
ABC company is attempting to minimize the severity of potential losses within its company. The company is engaged in risk ___.
assignment of benefits
Accident and health insurance claim handling is made more convenient to the insured by utilizing
90
According to ERISA regulations, a Summary Plan Description must be provided to a new plan member within ___ days of the member's eligibility date.
any period of prior coverage
According to HIPAA regulations, which of the following may reduce a medical plan's pre-existing conditions exclusion?
age 26
According to the Affordable Care Act (ACA), dependent children may remain on their parent's plan until what age?
Church plans
An employee welfare plan exempt from ERISA regulations would be
Deductible to the business
An employer pays the accident and health insurance premiums for its employees. The premiums paid by the employer are
make tax-deductible contributions to the plan
An employer that offers a qualified retirement plan (as opposed to a non-qualified plan) to its employees is eligible to
root canal
An example of endodontic treatment is a
$960,000 $50,500-$500 deductible = $50,000. $50,000 x 80%= $40,000. $100,000,000 lifetime benefit - $40,000 = $960,000
An individual is insured under a major medical plan with a $1,000,000 lifetime benefit. The plan has a $500 deductible and an 80% coinsurance. If the insured suffers a $50,500 medical expense during the calendar year, what is the remaining lifetime benefit?
AHCCCS (Arizona Health Care Cost Containment System)
An individual is seeking coverage for nursing home (custodial) care that does NOT require any previous period of hospitalization. Which program offers these specifications?
Social Security Disability
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 least 24 months?
20% is withheld for income taxes
An individual participant personally received eligible rollover funds from a profit-sharing plan. What is the income tax withholding requirements for this transaction?
an improvement in future income
An individual who purchases a modified life insurance policy expects
$5,000
An individual working part-time has a gross income of $5,000 for this year. If this individual has an IRA, what is the maximum deductible IRA contribution allowable?
deferred annuity
An individual, age 45, would like to help pay for his daughter's college expenses in 10 years. Which annuity would be appropriate for this individual?
material misrepresentation
An insurance applicant has made a false statement on the application that will affect the insurer's decision on whether or not to issue the policy. This false statement is considered to be a(n)
when the agency contract is unclear concerning the authority given
An insurance company can be liable for a producer's unauthorized acts
The provision must be amended to conform to the minimum statutory requirements
An insurance company is marketing a health insurance policy in Arizona which contains a provision that is in conflict with Arizona insurance law. What remedy must be taken by the insurer?
living in a rural area- Where an applicant lives is not a factor in determining preferred rates.
An insurance policy may be issued with a preferred insurance premium in all of these situations EXCEPT
if intentionally false statements were offered
According to the Affordable Care Act, coverage may be rescinded
CCIIO (Center for Consumer Information and Insurance Oversight)
According to the Affordable Care Act, new Health Insurance Marketplaces are established by the
Making false entries in a company's books
According to the Federal Fraud and False Statements Act, which of these is considered to be an intentional violation?
repossess the funds for business purposes
According to the IRS, a company may NOT do which of the following in regards to funds in a qualified retirement plan?
any other medical disability
According to the Pregnancy Discrimination Act of 1978, employers must treat pregnancy in the same manner as
8:00 AM
According to the Telemarketing Sales Rule, what is the earliest time of the day that telemarketing calls may be received?
variable life
An insurance policy that can also be classified as a securities product is called
principal place of business
An insurance producer must keep usual and customary records that pertain to transactions under the producer's license, at their
recurrent disability
An insured covered under a Disability Income policy is disabled and collecting benefits for a period of two months. He returns to work and is again disabled from the same cause, whereupon benefits continue to be paid. This is an example of which of the following?
Misrepresentation
False advertising of an insurance policy is considered
transference
purchasing insurance is an example of risk
Protect policyowners from misrepresentations and loss of benefits
replacement regulations exist in order to
20 or more
How many employees must an employer have for the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) to apply?
8
How many hours of initial long-term care training must a producer complete before soliciting long-term care products?
6
How many months can a life insurance policy normally be backdated from the date of application?
less than the death benefit
How much is normally paid to a policy owner in a life (viatical) settlement?
No deductible on routine examinations
How would preventative care be encouraged in a dental plan?
Nonpayment of premium
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?
At least once per year from when benefits began
If a disability income policy contains a cost-of-living adjustment rider, benefits must typically be increased
disclose that premium payments may need to be resumed depending on actual results
If a life insurance applicant is shown future premiums are to be paid out of non- guaranteed values, the illustration used in the sales presentation MUST
Wait until the new policy is issued and delivered before surrendering existing policy
If a producer replaces a client's existing life insurance policy with a new one, which of these actions is advisable?
Producer and applicant
If an existing Medicare Supplement policy is being replaced by a new policy, who is required to sign the notice of replacement?
Social Security Administration
If an individual would like to enroll in Medicare or seek public information about Medicare, which federal agency handles this?
Policy's face amount minus any premiums due
If an insured dies during the grace period without having paid the premium, how much will the insurer pay?
12
If an insured legally adopts a baby within ____ month(s) of birth, the maternity coverage for the child's birth is covered.
contain a statement that dividends are NOT guaranteed
If dividend option choices are offered on a whole life insurance policy, the policy MUST
overutilization of the plan
If group Health benefit levels are too high, what could be the end result?
application date
If replacement was involved int he sale of a life insurance policy, a producer must provide a replacement notice no later than the
lifetime
Impatient psychiatric care is covered under Part A medicare Insurance for 190 days per
2
In Arizona, at least___employee(s) are needed for a small employer medical expense plan.
Contact the employer if an employee stops coverage under a plan offered in the exchange
In Regards to the Affordable Care Act (ACA), which of these is NOT a role of a health insurance exchange?
Business entity
In a disability buy-sell agreement, the policies funding the agreement are owned by the
loses the ability to speak
In a disability income contract, an insured is considered to be totally disabled under the presumptive disability provision if he/she
are restricted to maximum levels set by the IRS
In a qualified retirement plan, the yearly contributions to an employee's account
in-house pharmacy
In a staff model HMO, enrollees normally have which of the following pharmacy options available to them?
Unlimited by dollar amount
In an individual retirement account (IRA), rollover contributions are
Activities of daily living
In long-term care insurance, what is an "ADL"?
preventative and diagnostic services
In most dental plans, a deductible typically is NOT applied to
the director
In order for a health plan to be an "accountable health plan", who has to approve it?
the applicant must be enrolled in a High Deductible Health Plan (HDHP)
In order to contribute to a Health Savings Account (HSA),
Be offered the same group health benefits offered to the younger employees
In regards to health insurance, employees age 65 or older are typically required to
it is the policy that will pay up to its limit before any other policy pays
In regards to health insurance, what is meant by the term "primary policy"?
States which operate with an Exchange must offer an internet-based portal
In regards to technology and the ACA, which of the following statements is correct?
corporation paying for group disability income coverage for its employees
In what situation would disability income insurance premiums be a deductible expense?
Decreasing the death benefit
In what way is a life insurance policy affected by an accelerated benefit payment?
Cosmetic surgery
Individual and group health insurance typically exclude coverage for which of the following?
Disability income
Individuals covered with employer-paid group health plans will normally receive tax-free benefits under all of these plans EXCEPT
12 months
Individuals seeking Social Security disability income benefits must have a disability that will eventually lead to death, or be expected to last at least
generally unlimited
Insurable interest in one's own life is legally considered as
US Attorney General
Insurance crimes which affect interstate commerce are prosecuted by the
Medicare Supplemental insurance
Medicare Part B excess charges are covered by
a federal health insurance program for individuals over the age of 65 or permanently disabled
Medicare can be described as
yearly physical examinations
Medicare supplement insurance that provides a preventative medical care benefit will often cover ___.
100 days
Medicare will cover a maximum of how many days per benefit period in a skilled nursing facility?
until they become self-supportive
Mentally or Physically Handicapped dependent Children MUST be covered under an individual health insurance policy
date of issuance of the conditional receipt
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?
accidental death and dismemberment
Mike recently lost sight in both eyes. He has a policy that pays a lump sum benefit for this injury. What type of insurance does Mike have?
self-funding of benefits
Third-party administration has become fairly common in accident and health insurance due to the growth of
A replacement form
Upon policy delivery which of the following must a producer have an applicant sign if no initial premium was collected with the life insurance application?
Apparent authority
Use of XYZ Insurance Company brochures, business cards, and rating guides is an example of
limit the amount of benefits an insured can receive from two disability policies with the same insurer
What action can an insurer take to discourage malingering and false disability claims?
average charges within a geographic region
What are reasonable and customary charges for health insurance primarily based on?
higher out-of-pocket expenses
What can be expected when a preferred provider organization (PPO) patient decides to use a non-PPO?
the market value variations of the securities backing it
What determines how much an annuitant is paid for a variable annuity?
a specific illness or event
What do Limited accident and health policies normally cover?
Salary-deferral option
What does a 401(k) plan generally provide its participants?
Containment of the employer's premium cost
What does a Mandatory Second Surgical Opinion provision provide to an employer-paid health insurance plan?
saving depletion due to longevity
What does a fixed life annuity offer protection against?
a producer's contract with the applicant
What does the term "field underwriting" refer to in the health insurance industry?
Reduced death benefit
What effect can a long-term care benefit rider have on a life insurance policy?
Decreases premium
What effect does interest income have upon insurance premiums?
income taxes plus a 10% penalty tax on$30,000
A 55 year old recently received a $30,000 distribution from a previous employer's 401k plan, minus $6,000 for income tax withholding. Which federal taxes apply if none of the funds were rolled over?
premiums which can only be increased per rate class
A Guaranteed Renewable provision allows
by the employer
A Health Reimbursement Arrangement MUST be established
marketing the plan
A MET third-party administrator may NOT perform which of the following functions?
informally funding a non-qualified deferred compensation plan.
A business may purchase an annuity for all of the following reasons EXCEPT
proof of coverage for employee
A certificate of coverage for a group health policy is best described as
an initial made by the applicant
A change in an insurance application requires?
if service is obtained outside the PPO, benefits are reduced and costs increase
A characteristic of preferred provider organizations (PPO) is
application date
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
Cataract Surgery
A comprehensive group policy also covers expenses related to vision care. Which of the following is not typically covered under a vision plan?
experimental and investigative services
A comprehensive major medical health insurance policy contains an Eligible Expenses provision which identifies the types of health care services that are covered. All of the following health care services are typically covered EXCEPT for
Fair Credit Reporting Act
A consumer who has been recently denied insurance, credit, or employment based on an unfavorable consumer report MUST be advised as such. Which of the following does this statute originate from?
Annual return / report (Form 5500)
A description of a qualified plan's insurance contract may be found in which ERISA?
Policyowner will be charged an additional premium
A disability income insurance policy was recently issued with a rating. What does this mean?
business overhead expense
A disabled business owner who has payroll and business expenses paid for has what kind of insurance policy?
hospice care
A family counseling benefit is typically offered under which of these coverages?
provide an offer of conversion to individual coverage
A group Medicare Supplement policy was terminated and not replaced by the insurer. In this situation, the insurer MUST
summary of policy features and benefits
A group health certificate for coverage issued in Arizona MUST contain a(n)
Employer and insurance company
A group health insurance policy is a contract between an
physical examinations are performed at the expense of the insurer
A health insurance applicants is notified that a physical examination is required. Which of the following statements is correct?
increased exposure to risk
A health insurance underwriter will most likely view alcohol abuse as a(n)
within 15 days of receipt of the notice of loss
A health insurer MUST provide a proof of loss form
A Medicare Supplement
A health plan offered by private insurance companies is
group deferred annuity
A large corporation pension plan purchased an accumulation annuity contract where all of the participating employees received certificates of participation. What is this contract called?
written statement
A licensee or applicant who is ordered into active military service may request that the license or application be placed on inactive status by sending the department a:
30
A licensee whose name or address changes must notify the Department of Insurance within ___ days.
period certain
A life annuity feature which provides benefit payments for a minimum number of years, no matter when the annuitant dies, is called
guaranteeing benefit payments for a stated minimum number of years
A life annuity with period certain is characterized as
kept by the insurance company
A life insurance beneficiary died after receiving only six payments under the policy's life income settlement option. What happens with the remaining balance of the death proceeds?
Nothing (When an insured dies, proceeds of a life insurance policy paid as a lump-sum death benefit to a beneficiary are exempt from federal income tax)
A life insurance company just paid a $100,000 death benefit to a beneficiary. When the insured died, the cash value was $15,000 and the total premiums-paid equal $10,000. How much of the proceeds will be added to the beneficiary's gross income for federal income tax purposes?
periodically purchase additional insurance
A life insurance guaranteed insurability rider gives the insured the right, without proving insurability, to
2
A life insurance policy can usually be contested by the insurer only during the first __years of the contract.
insured is expected to be confined to a nursing home for life.
A life insurance policy that contains an accelerated living benefit rider will provide funds if the
total premiums paid plus the policy face amount
A life insurance policy that includes a return of premium rider will pay the beneficiary how much upon the insured's death?
Person who receives the death benefits if the primary beneficiary dies before the insured
A life insurance policy's contingent beneficiary is the
Reduction of premium payment
A life insurance policyowner would like a dividend option that results in a limited current outlay of funds. Which dividend option would be chosen?
seeking additional information requested by the insurance company
A life insurance producer's underwriting duties may include
modified life
A life policy that has premiums that are lower than normal during the early years is called
Lump-sum payment
A life policy's spendthrift clause would have no effect if the beneficiary is paid the proceeds as a
a special enrollment period
A loss of minimum essential coverage usually counts as a qualifying event that triggers what?
general nursing care
A major medical expense plan typically includes coverage for hospital room and board. Which of the following is normally covered under the category "room and board"?
pay surgeon fees on a first-dollar basis
A major medical expense policy typically does NOT
the seven pay test, adjusted for cash value, applies again
A material change in a modified endowment contract (MEC) results in
highest amount payable
A medical fee schedule shows the amount an insurer will pay for a given procedure. This amount is considered to be the
$16,000 was received tax-free and $4,000 as ordinary income
A nonparticipating whole life insurance policy was surrendered for its $20,000 cash value. The total premiums paid had totaled $16,000. What were the federal income tax consequences to the policy owner on receipt of the cash value?
participating provider
A physician who accepts assignment on all Medicare claims is called a(n)
face amount minus the loan balance and past-due premium
A policy owner fell behind on the premium payments of a whole life policy and is now in the grace period. How much will the beneficiary receive if the insured dies during this grace period and the policy also contains an outstanding policy loan?
In the event of death, the loan amount is deducted from the policy proceeds
A policy owner has just borrowed from a life insurance policy's cash value. Which of these statements is true?
When the policy has a cash value
A policy owner is permitted to take out a policy loan on a whole life policy at what point?
6
A policyowner decides to surrender the cash value of a whole life insurance policy. The insurer has up to___month(s) to delay this payment.
Face amount minus the loan balance and past-due premiums
A policyowner fell behind on the premium payments of a whole life policy and is now in the grace period. how much will the beneficiary receive if the insured dies during this grace period and the policy also contains an outstanding policy loan?
Less than the face amount
A policyowner has a life insurance policy where she had listed her age on the application as 5 years younger than her actual age. If she dies and the insurer discovers the misstatement of age, how much will the insurance company pay?
beneficiary receives $50,000 income tax-free
A policyowner pays the first annual premium for a $50,000 life insurance policy and dies one month after the policy effective date. Which of these statements is normally true?
claim must be paid after proof of loss is received
A policyowner suffers a covered accident and health insurance loss on June 30 and submits the proof of loss to the insurer July 10. If the policyowner cancelled the coverage on July 2, how will the insurance company handle the claim?
partial disability
A policyowner suffers an injury that renders him incapable of performing one or more important job duties. Any decrease in income resulting from this injury would make him eligible for benefits under which provision?
Viator
A policyowner with a terminal illness who sells his life insurance policy to a third party is called a
joint and survivor annuity
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
Profit-sharing plan
A retirement plan that sets aside part of the company's net income for distributions to qualified employees is called a
if the interest rate falls below a specified level, the surrender charge is waived
A single premium deferred annuity sometimes contains a bailout feature. Which statement regarding this feature is correct?
Annuitant
A single-life annuity only has ONE
producer
A statement MUST be signed by the___for any illustrations used in the sale of a life insurance policy.
2
A survivorship life insurance policy usually covers how many lives?
$200,000
A teacher recently retired at age 63 and has a tax sheltered annuity (TSA). Periodic deposits total $120,000 and the value of the contract is now worth $200,000. How much is taxed if the current value is surrendered today?
any control by the insurer over this group must be disclosed
A television advertisement features a health insurance product that is endorsed by a specific group. In this advertisement,
Viatical Settlement
A terminally ill policyowner decides to sell his life insurance policy at a discount to help support his family. This sale is called a(n)
are probably in the same industry
A trade association group is seeking coverage for group medical benefits. The members of this association
mandatory income tax withholding on the transfer amount
A trustee-to-trustee transfer of rollover funds in a qualified plan allows a participant to avoid
foreign
A(n) ______ insurer writes business in a state other than the one in which it is domiciled.
Nonresident
A(n)____ producer who lives in another state and transacts insurance in Arizona.
alien
A(n)____insurer operates in the U.S but is headquartered outside the U.S.
captive
A(n)____insurer restricts the exposures it writes to those of its owners
authorized
A(n)__insurance business in Arizona. company is licensed by the Department of Insurance to conduct
the length of time spent in the hospital is monitored
Which of these is a typical result of a concurrent review?
2
After a life insurance policy sold in Arizona has been in force for___ years(s), it becomes incontestable
2
After an annuity has been in force for____year(s), it becomes incontestable.
a false statement could lead to loss of coverage
After an applicant reads and signs an insurance application, he/she should be conscious of the fact that
is the major personal contact to the insured
After an insurance application has been originated, the producer normally
primary level physician
After joining a health maintenance organization (HMO), a subscriber will typically select a(n)
level term for a stated period of time
After the extended term life nonforfeiture option is chosen, the available insurance will be
January through March of each year
After the initial enrollment period for Medicare Part B has expired, when may an individual purchasing again?
Cost basis
Al surrenders his life insurance policy for its cash value. The total of premiums paid into the policy minus total dividends received in cash or used to offset premiums is referred to as the
Proceed to the nearest emergency room
Alan is an enrollee of a health maintenance organization (HMO) which uses a gatekeeper system. If there ever comes a time when he needs emergency health services, what should he do?
Treatment which began before the eligibility date
All of the following are typically covered under dental insurance EXCEPT
Limit placed on number of teeth that may be treated annually
All of these are common limiting factors with dental insurance EXCEPT for
Initial premium is lower than for an equivalent amount of term insurance
All of these are considered features of whole life insurance EXCEPT
claims reimbursement
All of these are considered to be a violation of the Federal Fraud and False Statements Act EXCEPT
Leave a conditional receipt with client
All of these are duties that a producer may be required to perform when delivering an insurance policy EXCEPT
decreased employee particpation
All of these are used to prevent adverse selection in a group dental plan EXCEPT
the face amount is based on the outstanding loan balance
All of these statements concerning group credit life insurance are false EXCEPT
the Centers for Medicare and Medicaid Services
All parts of the Medicare program (except for public information and enrollment) are administered by which federal agency?
drugs dispensed through participating pharmacies
An HMO prescription drug plan is generally characterized by
Both the cause and resultant injury must be accidental
An accident and health insurance policy defines an injury as "bodily injury by accidental means". For an injury to be covered on this policy, what is required?
Consideration clause
An accident and health insurance policy's premium requirements are set forth in which of the following provisions?
bringing legal action against the insurer
An accident and health insurer has just received written proof of loss from one of its insureds. The insured must now wait 60 days before
HMO plan
An accident and health plan that typically covers ONLY the services of approved providers is called a(n)
When the conditions of the receipt are met
An agent gives a conditional receipt to a client for an insurance policy after collecting the initial premium. When will the policy become effective?
fixed amount
An annuitant is paid $495 per month until the contract value is exhausted at some undetermined date in the future. Which type of annuity payout option is this?
immediate annuity
An annuity which starts paying monthly benefits within a month after issuance is called a(n)
continue after the purchase payments stop
An annuity's accumulation period may
issued with a standard premium rate
An applicant for accident and health insurance has a risk factor that is similar to a majority of the insurer's other applicants. What will be the likely outcome of this applicant?
distribution is subject to federal income tax withholding
An employee requested that the balance of her 401(k) account be sent directly to her in one lump sum. Upon receipt of the distribution, she immediately has the funds rolled over into an IRA. What is the tax consequence of the distribution sent to this employee?
$300
An insured files for an accident and health insurance policy claim eight 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?
$25,000
An insured has a $25,000 whole life insurance policy with $6,000 cash value available. Under the extended-term nonforfeiture option, what is the amount of insurance available to the insured?
at any time
An insured has been court-ordered to provide a child's health insurance. Upon this order, the insurer must allow the enrollment of this child
notify the insurance company in writing
An insured is covered with a health insurance policy. If the insured would like to cancel the policy, he/she must
Reasonable expectations
An insured is entitled to coverage under a policy that a prudent person would expect it to provide. This principle is called
good health statement
An insured may be required to sign which document at policy delivery to ensure there has not been any adverse medical conditions since the time of the application?
20
An insured must notify an insurer of a medical claim within how many days after an accident?
testimony
An insured's statement of a policy's benefits which is to be used in marketing materials is called a(n)
the insured must be actively at work for a specified number of hours per week
An insured, age 67, is covered under a disability income policy. What will the insurer require in order for the insured to continue coverage?
Reinsurance contract
An insurer has a contractual agreement which transfers a portion of its risk exposure to another insurer. What type of contractual arrangement is this?
direct response
An insurer markets its products by soliciting customers by mass media advertising and mail WITHOUT using the services of a producer. Which of these marketing systems does the insurer utilize?
3 years
An insurer must keep advertising materials and records for at least how many years?
surrender charge
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 to as?
Boycott, coercion and intimidation
An intermediary who makes an agreement that unreasonably restrains the business of insurance may have violated regulations against
exclusive benefit rule
An officer for a corporation takes out numerous unsecured loans from the company's qualified retirement plan. Which of these rules is the plan in violation of?
HMO
An organization that requires healthcare services to be provided by a network of physicians and hospitals is known as a(n)
Intermediate 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?
30
Any administrative action taken against a producer MUST be reported to the Director within ___ days after the final disposition
4 attempts
Arizona allows a maximum of how many attempts in a 12-month period, before having to wait one year before attempting the exam again?
Separate account set up by the insurer
Assets that back the non-guaranteed values of variable life insurance products are held in which account?
65
At what age do most people become eligible for Medicare?
only if not prohibited by state law
Autopsies may be requested by an accident and health insurer
no limit
Beginning January 1, 2014, The restricted Annual Limit for plans under the Affordable Care act will be
maximum 102%
Bert's spouse passed away recently. Bert was covered under his spouse's group family health insurance plan but now is covered under COBRA. How much of the active-employee cost may be passed on to Bert for continued coverage?
$15,000
Beth is a surgeon who has an own-occupation disability income policy. She was injured six months ago and has been unable to return to her practice. Her monthly benefit from the policy is $15,000. During this time, Beth has been working part-time at a local boutique and receives $2,000 monthly. What is her ongoing monthly benefit while she is unable to perform her surgical duties?
guaranteed insurability rider
Bryce purchased a disability income policy with a rider that guarantees him the option of purchasing additional amounts of coverage at predetermined times without requiring to provide evidence of insurability. What kind of rider is this?
102%
COBRA extends coverage for a surviving spouse but at a rate not more than___ of the group premium.
unfair discrimination
Charging different premiums to policyholders in the same risk classification is referred to as
Comprehensive
Chris has a single major medical contract which covers all medical expenses. His plan is considered to be
somewhat less
Christine is receiving benefits provided from her disability income insurance. As compared to her previous earnings, the disability benefits should be
endorsement
Christopher is issued an insurance policy that contains an attached agreement which alters the terms of the policy. This attached agreement is called a(n)
subject to vesting schedule
Contributions made by an employee to a qualified retirement plan are required to be
30 days
Every producer licensed in Arizona must notify the Director within how many days of any change of residential, business, or e-mail address?
$240
Dan has a major medical expense policy with a $200 deductible and an 80/20 coinsurance provision. He incurs covered medical expenses of $100 in November and $400 in January. Under the carryover provision, what will the insurer pay?
he falls and breaks his hip at work
Dan owns a disability income insurance policy which provides ONLY nonoccupational coverage. Which of the following circumstances would likely NOT be covered under his plan?
the specified benefit amount is a percentage of his wages
Darrell has a group long-term disability income policy paid by his employer. Which of these statements is true?
Exempt from federal income tax
Death benefits from a life insurance policy are normally considered to be
For federal income tax reasons
Death proceeds from a life insurance policy are typically included in a deceased insured's gross estate
active military duty
Disability income insurance normally excludes coverage for disabilities that arise from
Economic Death
Disability income policies provide protection for which of the following?
Policyholders
Dividends from a mutual insurance company are paid to whom?
receives benefit payments at regular intervals
During an annuity's liquidation phase, the annuitant normally
Less than the total premiums paid
During the early years of a whole life insurance policy, the cash value will normally be?
annuitant
During the liquidation phase of an annuity contract, to whom are the income benefits normally payable to?
90
ERISA requires that a Summary Plan Description must be provided to a new plan member within how many days following the new member's eligibility date?
loss of any one limb
Each of the following will trigger a benefit under the presumptive disability provision, EXCEPT
Disability policies
Elimination periods typically apply to
A Medicare Supplement additional benefit
Emergency health care coverage for Medicare enrollees traveling abroad is
fully insured, according to Social Security
Emily is disabled. In order to become eligible for Social Security disability income benefits, she must be
lost wages and medical expenses due to occupational accidents
Employees generally receive workers compensation benefits for
Excluded from the employee's gross income
Employer-paid qualified long-term care insurance premiums are typically
Pay for finding and training a replacement if the employee dies prematurely.
Employers often purchase life insurance on a key employee in order to
in-house pharmacy
Enrollees in a staff model HMO normally have which of the following pharmacy options available?
family planning services
Federally qualified HMO's must offer
the cost of each service is scheduled
Fee-for-service is a method of administering health insurance benefit payments in which
may result in the disclosure of hazardous activities of the applicant
Field underwriting by a producer
10,000
First-time homebuyers are able to withdraw up to how much from their qualified IRAs without incurring the 10% early withdrawal penalty?
COBRA laws
For employees covered in multiple states under a group health plan, jurisdiction rules cannot alter
dividends
For purposes of disability income insurance, earned income would include all of the following EXCEPT
31 days
Greg had recently been terminated from his job that covered him for group life insurance. How long does he have to convert his coverage to an individual policy?
Provides an employer-employee relationship
Group accident and health insurance may be offered by an insurer when the sponsoring group
does NOT require evidence of insurability
Group life plans sold in Arizona typically contain a conversion option. If the insured elects this option, the new policy
diagnostic testing services
Health Maintenance Organization (HMO) wellness programs may include each of the following EXCEPT
Decreased fee schedules
Health Providers are compensated by a Preferred Provider Organization (PPO) for normal dental procedures by what means?
length of hospitalization
Health care costs can be better controlled by utilizing preadmission testing. Preadmission testing can reduce the
Prescriptions medication
Home health care benefits typically do NOT include coverage for
exempt from income taxes
How are benefit payments from individually-owned medical expense policies treated for tax purposes?
Premiums are averaged over the term of the policy
How are level term policies able to provide level premiums?
taxed as ordinary income in the year received
How are monthly life annuity benefit payments treated under a tax sheltered annuity (TSA)?
received income tax-free
How are qualified Roth IRA distributions normally treated for tax purposes?
Limit the duration of coverage
How can a group dental insurer discourage adverse selection?
reflects changes in the market value of assets in a separate account
How do benefit payments fluctuate over time in a variable life annuity?
Using certified nurse midwives
How do birthing centers reduce medical costs?
Transfers specific ownership rights to a creditor
How is a collateral assignment used in a life insurance contract?
the same rates are charged for individual and group plans in the same geographical area
How is a community rating used for underwriting purposes?
the unpaid premium may be subtracted from the reimbursement
How is an insured's accident and health claim handled by an insurer if it occurs during the policy's grace period?
6 months
How long can an insurer legally defer paying the cash value of a surrendered life insurance policy?
6 months
How long do most states allow an insurance company to delay the payment of a cash surrender under the Delayed Payment provision?
until age 100
How long does protection normally extend to under a limited pay whole life policy?
1 year
How long is individual medical expense insurance normally written for?
3 years
How long must a producer maintain customer records for an insurance transaction?
30
How many days notice does the Affordable Care Act require insurers to give before rescinding coverage?
It is available through application to Social Security
Ken is age 65 and has 2 years until he receives Social Security retirement income benefits. At his current age, which is true about Medicare Part A Hospital Insurance coverage?
As a Section 1035 exchange
Kevin has an existing life insurance policy and assigns it to another insurer for a new contract. How would this transaction be treated for tax purposes?
Plan A pays up to $5,000 and Plan B pays up to $2,000
Kim is covered under two medical expense plans. Plan A pays up to $5,000. Plan B pays up to $4,000. If she incurs $7,000 in expenses, the coordination of benefits provision dictates that
He may be reimbursed for the surgical procedure at a reduced benefit level
Kyle is an insured who disregarded an accident and health insurance policy provision that requires him to seek a second surgical opinion. What will the end result be?
higher out-of-pocket costs
Lamont has a point-of-service plan and is seeking to obtain health services outside the network. What will likely be the end result?
$800
Larry has a Major Medical Expense policy for his family with a $1,000 per family/per year deductible and an 80/20 coinsurance provision. If Larry's family files four claims of $400, $800, $100, and $700 in one year, how much will the insurance company pay?
60 days
Larry wants to purchase an individual disability income policy to provide continuous income while disabled. He is also covered by a two-month wage continuation benefit from his employer. What should the policy elimination period be for his individual policy?
level term
Laura added a children's rider to her life insurance policy. What type of coverage was added?
wellness program
Laura has an employer-based preventative health care plan that focuses on an enrollee's problems, such as drug abuse or stress. These plans are called
sign an enrollment card
Laura is a new employee and will be obtaining non-contributory group Major Medical insurance from her employer. Which of the following actions must she take during the open enrollment period?
Mortality, interest, expenses
Life insurance premiums are computed on what three factors?
complete transactions prior to being approved for a license
Life settlement brokers are NOT allowed to
creditors
Life settlement proceeds may be subject to the claims of
custodial care
Linda is covered with long-term care insurance and has early-stage Alzheimer's. She is still able to reside in her home while receiving primary care, as opposed to moving into a nursing home. All of the following long-term benefits encourage this EXCEPT for
expense incurred
Long Term Care policies will usually pay for eligible benefits using which of the following methods?
nursing homes
Long-term care policies normally cover expenses associated with
benefits are based on an individual's ability to perform activities of daily living
Long-term care policies sold in Arizona may offer coverage in which
flat deductible
Major Medical policies are typically characterized by which of the following?
custodial care
Major medical plans typically exclude coverage for which of the following benefits?
perform the substantial and material duties of his regular occupation
Mark is covered by a policy that uses the regular occupation (own-occ) definition of total disability. Using this definition, he will be considered disabled if unable to
20%
Mary has a Health Savings Account (HSA). Distributions that have been made for anything other than qualified medical expenses are considered taxable and subject to a penalty of
Residual benefits will be received income tax-free
Mary is an employee who is covered with a disability income policy through her employer. She pays for the portion of the premium attributable to the cost of residual disability benefits, while her employer pays for the remainder. What are the tax implications of this policy?
100%
Mary is the sole proprietor of her business and has a family health plan. She would like to deduct the premiums from her taxes. What percentage of her premiums are tax deductible?
must have financial need
Medicaid will pay for nursing home expenses under what condition?
Medicare Supplement Plan A
Medicare Part A coinsurance payments are covered by
skilled nursing facility care
Medicare Part A covers which type of care?
first 3 pints of blood
Medicare Part A does NOT provide coverage for
impatient drugs
Medicare Part A typically covers
benefits paid under workers compensation
Pat is covered by a disability income insurance policy that covers disabilities arising from a work-related illness or injury. The amount of his disability income payments for an on-the-job injury may be reduced by
Pre-existing condition
Patrick purchased a long-term care policy. He has a health condition for which medical treatment was recommended by a physician within 6 months prior to the policy's effective date. This condition is called a(n)
monthly
Periodic health claim payments MUST be made at least
Where the master contract was issued
Pete is covered by a group health insurance plan which covers employees in multiple states. This plan is governed by the laws of which state?
The gain is treated as taxable income and a penalty tax is imposed on the gain
Peter, age 50, surrenders his modified endowment contract (MEC). How is the gain treated in terms of federal income taxes?
better than average mortality or morbidity experience
Preferred risk policies with reduced premiums are issued by insurance companies because the insured has?
10%
Premature IRA distributions are subject to a penalty tax of
closed panel of dentists can only be used
Prepaid dental plans differ from most other types of dental plans in what way?
Tax-deductible to the extent they exceed 7 1/2% AGI
Qualified long-term care premiums are treated for tax purposes as
cost containment
Reductions in coverage are one feature of____in Health insurance policies
long term care policy
Respite Care coverage is typically found in a(n)
An income benefit which is a percentage of his primary insurance amount
Rick is a disabled worker receiving Social Security benefits. What benefits are his wife and dependent children eligible for?
fluctuate with changes in cash account
Rick owns a variable universal life policy and chooses a variable death benefit option. What will typically happen to the death benefit as a result of this selection?
the martial deduction
Rick recently died and left behind an individual IRA account in his name. His widow was forwarded the balance of the IRA. The widow qualifies for
remain a constant dollar amount for the duration of the annuity period
Ron recently purchased an immediate, straight life fixed annuity. His benefit payments will
not distributed to life annuitants who died before life expectancy
Sarah, age 88, is a life annuitant who has lived beyond her life expectancy. The funds for additional benefit payments will be derived primarily from funds that were
equal the net single premium for the same face amount at the insured's attained age
Scott has a life insurance policy in which the dividends are left with the insurance company. this particular policy may be paid up when the cash value plus accumulated dividends
security and exchange commission
Security laws passed by Congress are enforced by which Federal agency?
A percentage of weekly earning up to a stated maximum
Short-term group disability income benefits are
the beneficiary
Signatures for an insurance application MUST be obtained by the producer from all of the following sources EXCEPT?
medicare
Skilled nursing facility expenses sometimes covered by ______, but ONLY if the insured was hospitalized prior to entering the facility.
40 quarters
Social Security disability income requirements state that in order to become fully insured on a permanent basis, you must have worked in a covered occupation for
hospice care
Some standard Medicare Supplement policies include which benefit?
life settlement broker
Someone who is licensed to negotiate a life settlement contract is called a(n)
neurologist
Specialty care is provided by which of the following health maintenance organization (HMO) providers?
100
Starting in 2016, businesses with up to ___ employees will be defined by the ACA as a "small business".
Steve will pay taxes on the disability benefit received from his employer, but will receive any residual disability benefits tax-free
Steve has a group disability income policy where the premiums are paid by his employer. He elected to pay for additional residual disability coverage. Which of the following statements is true?
Policy protection expires at age 65
Straight whole life insurance can be accurately described in all of these statements EXCEPT
Section 1035 rules
Switching Life insurance policies without tax consequence is permitted under
single premium deferred annuity
Sylvia purchased an annuity for $100,000 from the proceeds of an inheritance. No further payments are permitted and the income stream begins in 15 years. This contract is a(n)
request of the change will be refused
T is covered by an Accidental Death and Dismemberment (AD&D) policy that contains an irrevocable beneficiary. What action will the insurance company take if T requests a change of beneficiary?
capital liquidation
Taking a sum of money and decreasing it in size is called
8:00 AM and 9:00 PM
Telemarketing calls may ONLY be received between the hours of
home health care
Terry receives long-term physical therapy at her residence. What type of insurance would cover this service?
excluded from coverage
Terry suffers an injury at his workplace which is covered by workers compensation. Terry also has a medical expense insurance policy. Under medical expense insurance policies, losses that are covered by workers compensation are typically
flexible saving accounts
The "Use it or Lose it' rule applies to
providers
The ACA (Affordable Care Act) must ensure a sufficient choice of marketplace:in the
assist individuals and small businesses when making their health insurance purchases
The Affordable Care Act (ACA) established "exchanges" in order to
insurer's insolvency
The Arizona Life and Disability Insurance Guaranty Fund protects an insured in the event of
benefits can be increased in the event of a covered claim
The Change of Occupation provision in a Disability Income policy states that, in the event the insured changes to a less hazardous occupation, which of the following may apply?
prohibits the use of genetic information in health insurance, unless the applicant signs a waiver
The Genetic Information Nondiscrimination Act of 2008 bars all of the following, EXCEPT:
benefit a broad cross-section of employees
The IRS has a "minimum coverage" rule regarding qualified retirement plans. This rule states that each qualified plan is required to
Insurance companies
The Medical Information Bureau consists of members from which group?
9:00 PM
The Telemarketing Sales Rule states that telemarketing calls may be received. is the LATEST time of day that
group deferred annuity
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?
Preferred Provider Organization (PPO)
The agreement in which hospitals and physician groups in a specific area contract with an insurance company to provide medical care at predetermined costs is
deductible amount
The amount of a covered loss to be paid by the insured before a major medical expense policy begins to pay is called the
makes only one premium payment
The annuitant in a single premium deferred annuity (SPDA)
owner
The authority to change the beneficiary in an individual annuity lies with the
provision that provides a policy loan to pay any premiums by the end of the grace period
The automatic premium loan provision can be accurately described as a
policy owner
The beneficiary of a life insurance policy is normally selected by whom?
enters a hospital
The benefit period of Medicare Part A begins on the first day the insured
a flat dollar amount per day
The coinsurance for skilled nursing facility services covered by Medicare after the 100% Medicare coverage ends is
nonforfeiture options
The contractual rights which allow the owner of a deferred annuity to surrender the cash value several years before the annuity date are called
lender
The death proceeds of a credit life insurance policy are typically paid to the
excess charge
The difference between a doctor's actual charges and the amount approved by Medicare is referred to as a(n)
non-cancelable with a health condition exclusion rider
The disability income policy most likely to have been issued on a substandard basis is
the amount of an annuity payment subject to income tax
The exclusion ratio determines
10
The free look period provided in life insurance policy is usually____days.
Buy addition coverage at a later date
The guarantee of insurability option provides a long-term care policyowner the ability to
100% tax deductible
The health insurance premiums paid for by each partner in a partnership is considered to be
Age 70 males
The highest mortality rate belongs to which group?
It is typically obtained by the producer and forwarded to the insurer
The initial premium for a life insurance policy is typically paid in what way?
underlying investments
The insurance coverage in a variable life insurance policy may vary based on the value of
the first premium payment and the application
The insured's consideration given for a health insurance policy is
tax-deferred
The interest credited to the cash values of personally-owned non-qualified annuities is considered
taxable as ordinary income
The interest paid during an annuity's payout period is considered
Predict losses
The law of large numbers enables an insurer to
create a stream of income
The main purpose of an annuity is to
Protect against medical care costs and the loss of earning power
The main role of accident and health and disability insurance is to
three
The major medical deductible carryover period normally applies to expenses incurred during the last___ months of the plan year.
15 years
The maximum prison sentence given under federal law for unfair and deceptive insurance practices is
total premiums paid
The owner's cost basis for a non-qualified deferred annuity is typically the same as the
completed application
The principal source of information concerning an applicant's identity, age, and marital status is found in the
benefit payments and overinsurance
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:
to obtain a premium rate based on an earlier age
The reason for backdating a policy is
boycott
The refusal of doing business with an individual or business is called a(n)
policy, endorsements, and attached papers constitute the "entire contract"
The standard provisions of an accident and health insurance policy require that the
annuitant dies or becomes disabled
The surrender charge on many deferred annuity contracts are waived when the
60 days
The time limit an individual has to "rollover" funds from an IRA or qualified plan is
individual
The type of health insurance in which underwriting procedures are the most restrictive is
policy loans are not permitted
These are all accurate statements regarding universal life insurance EXCEPT
benefits he receives from workers compensation
Tim had an on-the-job accident and collects benefits from his individual disability income policy. Which factor could possibly reduce these benefits?
a long-term care benefit rider
Tim is confined to a nursing home but doesn't have a terminal illness. which life insurance rider is designed to help pay for this type of expense?
Policy A will pay $4,000 and Policy B will pay $2,000
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?
non cancelable
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?
pre-admission testing
Tim is in need of surgery. Before being hospitalized, he is referred to an outpatient clinic for diagnostic tests. What is this an example of?
Alienation of benefits
Tim is retired and has recently separated from his wife. He receives benefits from a qualified retirement plan through his former employer. The plan's trustee has decided to split these benefit payments between Tim and his estranged wife. This decision is likely in violation of which IRS rule?
Business property rental expense
Tina is insured under a business overhead expense insurance policy. Which of the following would be covered if she were to become disabled?
Cybersecurity policy
To protect information systems, producers, brokers, and insurance companies must implement and maintain a(n):
If Toms employment is terminated, 20% of the funds could be forfeited
Tom has a qualified retirement plan with his employer that is currently considered to be 80% "vested". How can this be interpreted?
Her employer's group accident and health plan
Tonya has been diagnosed with kidney failure and has group accident and health insurance through her large employer. Which of these accident and health plans will be primary during the months following her diagnosis?
fixed life annuity with period certain
Tori has an annuity that pays her a $500 per month income benefit for life or for ten years, whichever is longer. What kind of annuity is this?
in the same industry
Trade association groups that are eligible for group medical benefits normally are
April 1st of the year following the year the participant age 70 1/2
Traditional Individual Retirement Account (IRA) distributions must start by
trust
Typically, states will permit the grouping of two or more small employers in the same industry for obtaining group health insurance at a favorable rate. This grouping of employers is known as a multiple employer
offered the same health benefits as the younger employees
Typically, working individuals age 65 or over must be
Producer embezzling funds from an insurer
Under Federal Law, which of the following actions may result in a producer becoming imprisoned?
There is a break in coverage for more than 63 days
Under HIPAA requirements, eligibility for the pre-existing conditions exclusion waiver under new coverage is lost if
18 months
Under HIPAA, medical plan late enrollees may be excluded for pre-existing conditions for a maximum of
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?
tax-free income to the business
Under a key person disability income policy, benefits will be received as
Periodically increase without proof of insurability
Under a long-term care inflation rider, the benefit levels
the person insured
Under an adjustable life insurance policy, which of the following may NOT be changed without further underwriting?
medical loss ratio
Under the Affordable Care Act (ACA), what is the proportion of premium revenues spent on clinical services and quality improvements?
When not prohibited by state law
Under what circumstance does an accident and health insurer have the right to request an autopsy?
the sponsoring group provides an employer-employee relationship
Under which circumstance can an insurance company offer group Health insurance?
when the contract has been held for the period specified in the policy
Under which circumstance is the interest rate guaranteed within a market value adjusted annuity?
Insurer discontinues offering the plan to all employers
Under which circumstance may an insurer discontinue a small employer group medical plan?
Making a recommendation to a potential insured to replace existing coverage
Which of the following situations would an insurance agent need to guard against liability for professional errors and omissions?
benefits are doubled under certain circumstances stated in the policy
Which of the following statements BEST describes a double indemnity provision in travel accident insurance?
Policy proceeds are typically received income tax-free
Which of the following statements BEST describes disability buy-sell insurance policies?
employer contributions are deductible
Which of the following statements BEST describes employer contributions for employer provided health insurance?
Reduces or eliminates any pre-existing conditions excluded under the new plan
Which of the following statements BEST describes the HIPAA portability rules for an individual who changes from one group medical plan to another?
The periodic payment amount is determined by the beneficiary's age
Which of the following statements about the installments for a fixed period settlement option in life insurance policies is NOT true?
Universal life insurance normally has a minimum guaranteed cash value for duration of the policy
Which of the following statements about universal life insurance is NOT true?
After a stated period of time, claims cannot be denied due to material misrepresentation on the application
Which of the following statements accurately describes the "time limit on certain defenses"?
may be worse than the financial impact of death
Which of the following statements accurately describes the financial impact of total disability?
Group health coverage is NOT available for workers over the age of 65
Which of the following statements is NOT true concerning the relationship between group health insurance plans and Medicare? (assuming the business has more than 20 employees)
the account can be rolled into the surviving spouse's IRA
Which of the following statements is TRUE if the owner of an IRA names their spouse as beneficiary, but then dies before any distributions are made?
policy indicates how much of each premium is used toward company expenses
Which of the following statements is a TRUE statement regarding universal life insurance?
claims can be sent directly to the insured
Which of the following statements is true regarding accident and health insurance claims that reimburse on an indemnity basis?
it encourages weekend admission
Which of the following statements regarding hospital pre-admission authorization is NOT true?
Provide benefits for the child if the parent dies
Which of the following would NOT be a reason for purchasing life insurance on a child's life?
a parent saving for a child's college
Which of the following would NOT be appropriate for an immediate annuity?
retiree having a lump sum to invest
Which of the following would most likely purchase an immediate annuity?
Elimination Period
Which of the following would permit an insurer to delay a covered disability policy claim?
Misrepresenting pertinent policy provisions relating to coverage after a loss
Which of these actions is considered to be an Unfair Claims Settlement Practice?
surrender charges
Which of these annuity contract features is meant to discourage withdrawals and exchanges?
producer certification
Which of these factors does NOT affect life insurance premium rates?
Self-maintenance expenses
Which of these factors does NOT influence an individual's need for life insurance?
an employee of a retired licensed producer
Which of these individuals may NOT obtain a temporary producer license?
Life income annuity
Which of these is NOT a common life insurance nonforfeiture option?
former residence
Which of these is NOT a factor during the health insurance underwriting process?
physical exams of groups members
Which of these is NOT a factor that influences group health insurance underwriting?
to accumulate savings
Which of these is NOT a reason to buy a term life policy?
Offering to settle a claim by arbitration
Which of these is NOT an Unfair Claims Settlement Practice?
Determining the final rate classification
Which of these is NOT an underwriting responsibility of a life insurance agent?
Community service
Which of these is NOT considered a federal punishment for unfair and deceptive insurance practices?
fillings
Which of these is NOT considered a preventative service in a dental plan?
endowment at age 70
Which of these is NOT considered a type of limited payment whole life insurance?
Selecting the final approval date
Which of these is NOT considered the responsibility of a producer during the underwriting process?
Number of children
Which of these is NOT considered to be a risk factor in life insurance underwriting?
national origin
Which of these is NOT used as selection criteria in the underwriting process of a life insurance application?
Survivor benefits can only be waived with the written consent of a married employees spouse
Which of these is a true statement regarding survivor benefits under a qualified retirement plan?
medicare supplement
Which of these is a type of private insurance that covers the cost-sharing amounts under Medicare?
a portion of the payments paid to the beneficiary comes from interest calculated on the proceeds of the policy
Which of these is an accurate statement regarding the fixed period settlement option on a life insurance policy?
Can be unequal
Which of these is true regarding the exchange of consideration among parties involved in an insurance contract?
dentures
Which of these is typically regarded as a major treatment in an indemnity dental plan?
the policy's surrender charges
Which of these must be disclosed in a universal life policy?
disability income
Which of these noncontributory group plans would a claim likely result in the payment of federal income taxes?
Rate of earnings on investments increase
Which of these occurrences could improve an insurer's ability to reduce premiums?
joint and survivor annuity
Which of these pays an income to two or more annuitants until the death of the last annuitant?
point-of-service
Which of these plans allow a participant to choose either a network or non-network provider at the time when medical care is needed?
single premium life
Which of these policies is considered a whole life policy?
major medical policy
Which of these policies is considered to be comprehensive health policy?
inpatient surgery
Which of these procedures is NOT designed for ambulatory care centers?
selling insurance with a nonresident license
Which of these situations would NOT potentially involve a prison sentence under Federal law?
10% penalty is applied to withdrawal prior to age 59 1/2
Which of these statements about traditional individual retirement accounts is accurate?
Rates can be calculated to compensate for losses
Which of these statements is NOT a characteristic of the law of large numbers?
Benefits are paid on a capitation basis
Which of these statements regarding Major Medical Expense insurance is NOT true?
As the number of insured units increases, the number of losses decreases
Which of these statements regarding insurance is false?
loss of sight in one eyex
Which of these would NOT likely qualify as a presumptive disability?
Speculative risk
Which one of these is NOT considered to be an element of an insurable risk?
Employer and Insurer
Which parties are directly involved in a group accident and health insurance contract?
a plan which combines indemnity plan features with those of an HMO
Which pf the following best describes a point-of-service (POS) plan?
consumer report
Which report contains information regarding an individual's general reputation and credit standing?
fixed-period
Which settlement option makes minimum guaranteed dollar payments over a stated number of years?
A policy is purchased by a parent for a minor child
Which situation would not require the insured's consent when a life insurance policy is issued?
Every policy must have a title on the face and on the back of the policy, briefly describing the policy
Which statement best defines what a Policy Title means on an insurance policy?
paid-up policy that offers lifetime protection
Which statement best describes a single premium whole life policy?
the owner can be the beneficiary, annuitant, or neither
Which statement concerning a deferred annuity contract is correct?
The face amount and premiums can be changed simultaneously by the policy owner- Adjustable life insurance combines features of both term and whole life coverage. Length of coverage, accumulated cash value, and premiums can be adjusted to fit specific needs.
Which statement concerning adjustable life insurance is accurate?
the agent doesn't have the authority to change the policy or waive its provisions
Which statement concerning the Entire Contract provision in an individual accident and health insurance policy is TRUE?
interest on proceeds must be paid by the beneficiary
Which statement is INCORRECT about the interest-only settlement option in a life insurance policy?
annual investment gains are included in participant's gross income
Which statement is INCORRECT concerning a tax-sheltered annuity (TSA)?
only persons under the age of 65 are eligible
Which statement is NOT true regarding health insurance policies that provide limited benefits?
Notification is required to be given after insured is admitted to the hospital
Which statement is true regarding hospital preadmission certification for emergency situations?
the installment payment amount is determined by the total number of installments
Which statement regarding a fixed period settlement option is correct?
Additional premium may be required under certain conditions
Which statement regarding a single premium life insurance policy is NOT correct?
Available to the policy owner when policy has been surrendered
Which statement regarding the cash value of a whole life insurance policy is correct?
The amount of each installment is larger than the single life income option
Which statement regarding the joint and survivor life insurance settlement option is NOT true?
Cash payment is not directly provided to the policy owner
Which statement regarding the waiver of premium rider is accurate?
replacement
a long-term care policyowner is replacing existing coverage with a new policy. Replacement regulations require a(n)_____ notice be signed by the applicant and retained by the replacing insurer.
the seven pay test, adjusted for cash value, applies again
a material change in a modified endowment contract (MEC) results in
prohibited by law
a producer has indicated to a potential client that the proposed life insurance policy is covered by the NH life and health guaranty association. this action taken by the producer is
financial status of the client
a producer is meeting with a client to determine whether an annuity will be suitable for purchase. Which of the following topics needs to be discussed with the client?
Misrepresentation
a producer's failure to provide title and true nature of a policy upon solicitation is an example of
coercion
a prospective client was intimidated by a producer to purchase an insurance contract. the producer could be found guilty of
policy delivery
a signed good health statement may be requested by a life producer at the time of
cash value
a source of supplement for a life insurance policyowner can be derived from the
war
accident and health policies exclude loss as result
grandfathered plan
according to the affordable care act(ACA), insurers can no longer deny health coverage due to pre-exciting conditions unless that plan is a(n)
cover the cost of unexpected expenses
according to the needs approach, an emergency reserve fund's primary purpose is to
mouth cancer
all of the following are covered under most dental plans EXCEPT for
18
an Arizona resident producer must be at least____ years of age.
the policy owner can make policy changes without difficult
an advantage of owning a flexible premium life insurance policy would be
free look period
an annuity contract may be returned for a full refund during the
Applicant has a right to receive a copy of the report
an applicant submits a life insurance application where an investigative consumer report is used in the underwriting process. Which of these statements is true?
eligible for the same type of coverage as the other employees
an employer has a group life coverage for his employees. how would an employee in poor health be treated in this situation?
splitting the commission with the buyer on a sale of insurance
an example of rebating would be
automatic premium loan
in the event of premium default, which life insurance provision will use the cash value to keep the policy in force?
waiver
an insurance company's failure to enforce a contract's provisions is called a(n)
Material
an insurance contract may be voided if a misrepresentation found on the application is determined to be
60
an insured MUST wait ____days to bring legal action against an insurer after written proof of loss has been received by the insurer.
$25,000
an insured has a $25,000 whole life insurance policy with $6,000 cash value available. under the extended term nonforfeiture option, what is the amount of insurance available to the insured?
after two years of disability
an insured is covered under a group long-term disability policy. under this type of policy, the definition of disability based on any occupation typically applies
reasonable expectations
an insured is entitled to coverage under a policy that a prudent person would expect it to provide. the principle is called:
reinsurance contract
an insurer has a contractual agreement which transfers a portion of its risk exposure to another insurer. what type of contractual agreement is this?
certificate of authority
an insurer wishing to conduct business in Arizona MUST obtain a
cease and desist order
an order issued by the Director that prohibits a specific practice listed in order is called a(n)
covered with term life insurance
any employee insured under a group life insurance is normally
when the first insured dies
at what point are death proceeds paid in a joint life insurance policy?
prior to using the assumed name
at what point must a producer give notification to the director about using an assumed name?
activities of daily living
bathing, eating, and transferring are all types of
long-term care insurance
custodial care is normally covered under
applicant is substandard risk
in what situation could an insurance policy's coverage be modified?
warranty
during the application process, a statement made by an applicant that becomes part of the contract is considered a(n)
decreasing term insurance
group credit life insurance is typically a form of
level term insurance
group life insurance is typically issued as
not tax-deductible at all
how are the premiums for an individually-owned disability income policy treated for tax purposes?
the time period in which premiums will be paid
how does a continuous premium whole life policy differ from a limited payment whole life policy?
survivorship life policy is lower
how does the cost for a survivorship life policy compare to the cost of combining two separate individual life insurance policies?
transfers specific ownership rights to a creditor
how is a collateral assignment used in a life insurance contract?
Premium payments are waived in the event the premium payor dies or becomes disabled
how is the insured protected if a payor benefit rider is attached to the life insurance policy?
full life of the policy
how long does one premium payment cover in a single premium whole life policy?
as an optional policy rider
how may an insurance company classify an accidental death benefit on a life policy?
tax deductible to the business
if an employer pays for accidental death and dismemberment insurance for its employees, the amount paid by the employer is generally
8%
in Arizona, life insurance policy loans may charge a maximum fixed rate of
must disclose who will be receiving a copy of the test results
in Arizona, the Human Immunodeficiency Virus (HIV) consent form
benefit period
in long-term care insurance, what is the length of time for which claims will be paid?
180
in mass, a temporary license may be issued for a period to not exceed______ days
subscribers
individuals who participate in an HMO plan are called
One person benefits from another person's continued life
insurable interest involves what assumption
as the number of insureds increase the number of losses decrease
insurance is NOT characterized as which of the following?
primary care physician
karen is a health maintenance organization (HMO) subscriber. who provides all of her preventative and routine care?
submitting written proof of loss
rick provides a notice of claim to his health insurer. if he does not receive a claim form within 15 days, he may comply with the proof of loss provision by
management
risk ___ is the process of analyzing exposures that create risk and designing programs to handle them.
an income benefit which is a percentage of his primary insurance amount
risk is a disabled worker receiving Social Security benefits. What benefits are his wife and dependent children eligible for?
representations
statements made by an insured on an accident and health insurance application are considered to be
the policy is surrendered for less than what is paid into it
taxable income may be the result from all of these modified endowment contract (MEC) transactions EXCEPT for
the insurer
the Optionally Renewable provision allows what party to cancel the contract?
all incidents of ownership transferred to the assignee
the absolute assignment of a life insurance policy results in
entire contract clause
the application is part of the annuity contract according to the
within 31 days of terminated employment
the conversion option for group term insurance may be exercised by an employee
avoid overinsurance
the coordination of benefits provision is added to a group health plan in order to
Prosthodontics
the dental specialty which deals with the replacement of missing teeth is called
trust
the grouping of two or more small employers in order to obtain group health insurance at a favorable rate is called a multiple employers
residual disability
the inability to perform SOME of the duties of one's own occupation is known as a
make additional payments into the annuity
the owner of a single premium deferred annuity is entitled to do all of these EXCEPT
consideration
the payment of the first premium, the promise to pay a covered loss, and the agreement tp abide by policy conditions are the examples of
insurance with other insurers
which of the following provisions permits an insurer to return a portion of the premiums and pay benefits on a pro rata basis if it finds that an insurer has duplicate coverage
marriage partners
which of the following relationships demonstrates insurable interest in the absence of economic interest?
may be worse than the financial impact of death
which of the following statements accurately describes the financial impact of total disability?
health maintenance organization
which of the following types of health insurance is characterized by a limited choice of providers?
captive insurer
which of the following types of insurers limits the exposures it writes to those of its owners?
180 days
which of the following waiting periods would result in the lowest premium for a disability income policy?
return of premium rider
which of the following would a reimbursement of some premiums when a long-term care policy is canceled?
decreasing term life
which of these insurance policies does NOT contain a cash value provision?
civil insurrections apply
which of these is NOT a true statement of the war exclusion?
cash benefit will be provided if the insured is alive at the end of the policy period
which of these is NOT an advantage of term life insurance?
Business expenses
which of these is NOT considered to be a cost connected with an individual's death?
driving
which of these is NOT considered to be an activity of daily living (ADL)?
federal premium taxes
which of these may NOT be deducted from premium payments or the cash value of a variable life insurance policy?
having multiple or periodic open enrollment periods
which of these may encourage adverse selection in an indemnity dental plan?
interest payments made by policyowner are deductible
which of these statements is NOT true regarding a cash value loan against a life insurance policy?
insured uses preferred providers in exchange for paying lower premiums
which of these statements reflects an accurate portrayal of Medicare SELECT?
the premium to purchase the coverage comes from the policy's cash value
which of these statements regarding the extended term insurance nonforfeiture option in a life policy is accurate?
it allows a policy loan to cover premium payments if the policy owner becomes totally disabled
which of these would NOT be a valid reason to add the waiver of premium rider to a life insurance policy?
local unemployment rates
which one of these is NOT relevant when determining the amount of personal life insurance needed?
each participant requires evidence of insurability
which statement about group life insurance is INCORRECT?
face amount decreases over the policy period
which statement concerning a decreasing term life policy is accurate?
coverage excludes nonoccupational injuries
which statement is true about a permanent disability under workers compensation coverage?
policy loans are not permitted
which statement regarding an adjustable life insurance policy is NOT true?
it indicates evidence of of an employee's insurance coverage
which statement regarding the certificate of insurance is correct?
premium remains the same no matter how many children
which statement regarding the life insurance premium for a children's rider is true?
level premiums
which type of premiums are associated with individual mortgage protection life insurance policies?
how much life insurance a client should apply for
with life insurance, the needs approach is used primarily in determining?
