Comprehensive Exam (Life & Health)
An employee quits her job where she has a balance of $10,000 in her qualified plan. If she decides to do a direct transfer from her plan to a Traditional IRA, how much will be transferred from one plan administrator to another and what is the tax consequence of a direct transfer?
$10,000, no tax consequence
An insured purchased a 15-year level term life insurance policy with a face amount of $100,000. The policy contained an accidental death rider, offering a double indemnity benefit. The insured was severely injured in an auto accident, and after 10 weeks of hospitalization, died from the injuries. What amount would his beneficiary receive as a settlement?
$200,000 The beneficiary would most likely receive twice the face value of the policy, since his fatal injuries were caused by an accident and he died within the 90-day benefit limit stipulated in most policies.
An employee quits her job where she has a balance of $10,000 in her qualified plan. The balance was paid out directly to the employee in order for her to move the funds to a new account. If she decides to rollover her plan to a Traditional IRA, how much will she receive from the plan administrator and how long does she have to complete the tax-free rollover?
$8000, 60 days
A man's physician submits claim information to his insurer before she actually performs a medical procedure on him. She is doing this to see if the procedure is covered under the patient's insurance plan and for how much. This is an example of
*Under the prospective review or precertification provision, the physician can submit claim information prior to providing treatment to know in advance if the procedure is covered under the insured's plan and at what rate it will be paid.
According to the proof of loss provision, which of the following must be specified in a contract that provides disability benefits? 1. When and how an insured may prove a loss 2. How a claim can be invalidated 3. A disclaimer that no benefits will be paid if proof of loss is not furnished 4. Specific losses that are covered and not covered
1
An insured has medical insurance coverage through 2 different providers, both covering the same expenses on an expense-incurred basis. Neither company knows in advance that the insured has coverage through any other insurers. The insured submits a claim to both insurers. How should the claim be handled? 1. Each insurer should pay a proportionate share of the claim. 2. One of the insurers will pay fully, while the other will not pay any benefits. 3. Once the insurers discover the duplicate coverage, the policies would most likely be cancelled, and no claim paid. 4. The insured should receive full benefits from each insurer.
1
An insured's disability income policy includes an additional monthly benefit rider. For how many years can the insured expect to receive payment from the insurer before Social Security benefits begin?
1
In a shared-care policy, the benefits of 2 LTC policies 1. Are split between the couple who signed the contract. 2. Are multiplied according to the number of people in the contract. 3. Can be divided by as many as 5 people. 4. Go to the couple if they get sick at the same time and share resources.
1
Which of the following is NOT considered Business of Life Settlement? 1. A producer discusses the advantages of a universal life policy and how the flexible premium allows the owner to control the cash value and death benefit income. 2. A producer mails life settlement advertising to a client outside of the state. 3. A producer tracks the progress of a life settlement contract he has submitted to a life settlement provider. 4. A producer discusses the advantages and disadvantages of a life settlement contract for a client.
1
Which of the following is TRUE regarding the annuity period? 1. It may last for the lifetime of the annuitant. 2. During this period of time the annuity payments grow interest tax deferred. 3. It is also referred to as the accumulation period. 4. It is the period of time during which the annuitant makes premium payments into the annuity.
1
Which of the following is true regarding optional benefits with long-term care policies? 1. They are available for an additional premium. 2. Only standard benefits are available with LTC policies. 3. They are offered at no additional cost to the insured. 4. They are included in all policies.
1
Which of the following will NOT be considered unfair discrimination by insurers? 1. Discriminating in benefits and coverages based on the insured's habits and lifestyle 2. Charging applicants with similar health histories different premiums based on their ethnicity 3. Cancelling individual coverage based on the insured's marital status 4. Assigning different risk classifications to applicants based on gender identity
1
Which of the following would NOT be considered an improper claims practice? 1. Denying a claim after proof of loss statements are completed and submitted by insureds. 2. Failing to acknowledge and act promptly upon communications with respect to an insurance claim. 3. Misrepresenting to insureds pertinent facts or policy provisions relating to coverages at issue. 4. Failing to adopt and implement reasonable standards for prompt investigation and processing of insureds' claims.
1
Which state has jurisdiction over a group policy that covers individuals that reside in more than one state? 1. The state in which the policy was delivered 2. The state of employer's choice 3. All states in which covered individuals reside 4. The state in which the majority of individuals live
1
Which statement is NOT true regarding a Straight Life policy? 1. Its premium steadily decreases over time, in response to its growing cash value. 2. The face value of the policy is paid to the insured at age 100. 3. It usually develops cash value by the end of the third policy year. 4. It has the lowest annual premium of the three types of Whole Life policies.
1 *premium is level term
An insured pays a monthly premium of $100 for her health insurance. What would be the duration of the grace period under her policy?
10 days *weekly is 7 days *monthly is 10 days *all other modes is 31 days
According to OBRA, what is the minimum number of employees required to constitute a large group?
100
Under the Affordable Care Act, what percentage of preventive care must be covered without cost sharing?
100%
An employee insured under a group health plan has been paying $25 monthly premium for his group health coverage. The employer has been contributing $75, for the total monthly cost of $100. If the employee leaves the company, what would be his maximum monthly premium for COBRA coverage?
102 The employer is allowed to collect a premium from the terminated employee at a rate of no more than 102% of the individual's group premium rate. In this case, 102% of 100 total premium is 102. 2% charge is to cover the administrative costs.
Under HIPPA, how many months of creditable coverage must a new employee have earned to not have pre-exiisting exclusions in the new plan ?
12 months Creditable coverage can be used to reduce the pre-existing condition period in a new group plan. Pre-existing condition exclusions cannot exclude coverage for more than 12 months, so 12 months of credible coverage would mean the employee has no pre-existing condition's
The Superintendent will not renew an agent or broker's license upon finding that the license has been used to write controlled business. Which of the following would be a violation of controlled business practices?
15% of the agent's annual commission is from business sold to the agent's family. Controlled business is when an agent receives more than 10% of the aggregate commissions during a 12-month period from insurance business sold to family, or business associates and their family members.
25 Which of the following is true regarding the insurance amount in a credit life policy? 1. The amount of coverage can be greater than the amount owed. 2. Creditor can only insure the debtor for the amount owed. 3. Creditor may insure the debtor for an unlimited amount of coverage. 4. Allowable amount of coverage is determined by the State Insurance Commissioner.
2
57 A couple near retirement is planning for their golden years. They want to make sure that their retirement annuity provides monthly benefits for the rest of their lives. Should one of them die, the other would still like to continue receiving benefits. Which settlement option should they choose? 1. Straight life 2. Joint and Survivor 3. Joint life 4. Life with period certain
2
A couple owns a life insurance policy with a Children's Term rider. Their daughter is reaching the maximum age of dependent coverage, so she will have to convert to permanent insurance in the near future. Which of the following will she need to provide for proof of insurability? 1. Medical exam and parents' medical history 2. Proof of insurability is not required. 3. Medical exam 4. Her parents' federal income tax receipts
2
All of the followings are true regarding the convertibility option under a term life insurance policy except: 1.upon conversion, the premium for the permanent policy will be based upon attained age. 2. upon conversion, the death benefit of the permanent policy will be reduced by 50% c. evidence of insurability is not required d. most term policies contain a convertibility option
2
Certain conditions, such as dismemberment or total and permanent blindness, will automatically qualify the insured for full disability benefits. Which disability policy provision does this describe? 1. Residual disability 2. Presumptive disability 3. Dismemberment disability 4.Partial disability
2
During replacement of life insurance, a replacing insurer must do which of the following? 1. Send a copy of the Notice Regarding Replacement to the Department of Insurance 2. Obtain a list of all life insurance policies that will be replaced 3. Guarantee a replacement for each existing policy 4. Designate a new producer for a replaced policy
2
In life insurance policies, cash value increases 1. Are only taxed when the owner reaches age 65. 2. Grow tax deferred. 3. Are income taxable immediately. 4. Are taxed annually.
2
What type of information is NOT included in a certificate of insurance? 1. The length of coverage 2. The cost the company is paying for monthly premiums 3. The policy benefits and exclusions 4. The procedures for filing a claim
2
Which of the following is NOT true regarding the Life with Guaranteed Minimum annuity settlement option? 1. Payments can be made in installments and as a single cash refund. 2. It does not guarantee that the entire principal amount will be paid out. 3. It is a life contingency option. 4. The beneficiary receives the remainder of the principal amount upon the annuitant's death.
2
Which of the following is NOT true regarding the needs approach method of determining the value of an individual's life? 1. It must be assumed that the death of the insured will occur immediately. 2. Need is predicted using the number of years until the insured's retirement. 3. Coverage is based on the predicted needs of that family. 4. The death of an insured must be premature.
2
Which of the following is true regarding inpatient hospital care for HMO members? 1. Inpatient hospital care is not part of HMO services. 2. Care can be provided outside of the service area. 3. Care can only be provided in the service area. 4. Services for treatment of mental disorders are unlimited.
2
Which of the following would be the best option that would help the surviving spouse of the insured to put her child through daycare after the insured's death? 1. Estate conservation 2. Life insurance proceeds 3. State Education Waiver 4. Viatical settlement
2
Which type of a hospital policy pays a fixed amount each day that the insured is in a hospital? 1. Medigap 2. Indemnity 3. Surgical 4. Blanket
2
HIPPA applies to groups of
2 or more
An insured was involved in an accident and could not perform her current job for 3 years. If the insured could reasonably perform another job utilizing similar skills after 1 month, for how long would she be receiving benefits under an "own occupation" disability plan?
2 years Under an Own Occupation plan, if the insured cannot perform his/her current job for a period of up to two years, disability benefits will be issued, even if the insured would be capable of performing a similar job during that two-year period. After that, if the insured is capable of performing another job utilizing similar skills, benefits will not be paid.
The Patient Protection and Affordable Care Act includes all of the following provisions EXCEPT 1. Coverage for preventive benefits. 2. Individual tax deduction for premiums paid. 3. Right to appeal. 4. No lifetime dollar limits.
2.
The death protection component of Universal Life Insurance is always 1. Increasing Term 2. Annually Renewable Term 3. Whole Life 4. Adjustable Life
2.
Which of the following policies would be classified as a traditional level premium contract? 1. Variable Universal Life 2. Straight Life 3. Adjustable Life 4. Universal Life
2.
Following hospitalization because of an accident, Bill was confined in a skilled nursing facility. Medicare will pay full benefits in this facility for how many days?
20 days
When a health insurance policy is purchased in the state of NY, the insured may return the policy to the policy to the insurer and receive a premium refund within the maximum period of
20 days *NY, the insured can review the policy from anywhere between 10 and 20 days.
Under the New York State Disability Benefit Law, no employee may be entitled to benefits for more than how many weeks after 52 consecutive calendar weeks or during any one period of disability?
26 weeks
A 55-year-old employee has worked part-time for his new employer for 3 months now, but has not been offered health insurance. What factor has limited the employee's eligibility? 1. Income 2. Number of hours worked per week 3. The total amount of time worked for the company 4. Age
3
All of the following qualify for Medicare Part A EXCEPT 1. Anyone who is at the end stage of renal disease. 2. Anyone who is over 65, not covered by Social Security, and is willing to pay premium. 3. Anyone who is willing to pay a premium. 4. Anyone that qualifies through Social Security.
3
Based on Human Life Value Approach, which of the following is NOT used to calculate an individual's life value? 1. Insured's annual expenses. 2. Effect of inflation on income over time. 3. Predicted needs of the family after the insured's death. 4. Insured's current and future income.
3
If an association is applying for a life settlement broker's license, which of the following requirements must the association meet? 1. Maintain an active life license for at least 1 year 2. Establish a board of directors 3. Authorize a natural person to act individually as a broker 4. Employ a minimum of 10 individual brokers
3
In comparison to consumer reports, which of the following describes a unique characteristic of investigative consumer reports? 1. They provide information about a customer's character and reputation. 2. The customer has no knowledge of this action. 3. The customer's associates, friends, and neighbors provide the report's data. 4. They provide additional information from an outside source about a particular risk.
3
In order to qualify for a certificate of authority, every person, firm, association, corporation or joint-stock company must meet all of the following requirements EXCEPT 1. If a stock company, the amount of capital and surplus required by law must be paid in cash or investments. 2. If a mutual company, provide statements of at least 3 incorporators, proof of the required initial surplus in cash or investments, and the required number and amount of actual applications for insurance. 3. The entity must be part of the New York Labor Union. 4. The entity must fully comply with all applicable provisions of New York's insurance laws.
3
To sell variable life insurance policies, an agent must receive all of the following EXCEPT 1. A securities license. 2. A life insurance license. 3. SEC registration. 4. FINRA registration.
3
What describes the specific information about a policy? 1. Buyer's guide 2. Producer's report 3. Policy summary 4. Illustrations
3
When does Medicare cover nursing home care? 1. Only for those age 80 and older 2. Medicare covers all nursing home care for eligible policyholders 3. Only if it is part of treatment for a covered illness or injury 4. Only if the deductible has been met
3
Which of the following best defines the owner of a life settlement contract? 1. A fiduciary for the contract 2. An insurance provider 3. A person who is selling the contract 4. A person insured under the contract
3
Which of the following does NOT have to be disclosed in a long-term care (LTC) policy? 1. Any limitations or conditions of eligibility for LTC benefits 2. Any riders or endorsements 3. The aggregate amount of premiums due 4. The meaning of the terms "reasonable" and "customary"
3
Which of the following is NOT a goal of risk retention? 1. To increase control of claim reserving and claims settlements 2. To fund losses that cannot be insured 3. To minimize the insured's level of liability in the event of loss 4. To reduce expenses and improve cash flow
3
Which of the following is a type of covered employment under the New York State Disability Benefit Law? 1. Maritime employment 2. Casual employment 3. Trade organization employment 4. Services performed for a state agency
3
Which of the following is NOT covered under Part B of a Medicare policy? 1. Lab services 2. Physician expenses 3. Routine dental care 4. Home health care
3. Routine dental care *accidents only
What is the maximum age for qualifying for a catastrophic plan?
30
How long does a licensee have to notify the Superintendent of a change of address?
30 days
If a certificate of appointment is terminated, a statement must be filed with the Superintendent within how many days?
30 days explaining the cause of termination and facts surrounding it
If payment of a premium is required to provide health insurance coverage for a child of the insured, the insured may be required to notify the company of the child's birth and pay the premium within
30 days.
Employer health plans must provide primary coverage for individuals with end-stage renal disease before Medicare becomes primary for how many months?
30 months The Omnibus Budget Reconciliation Act of 1990 as amended by the Balanced Budget Act of 1997 requires the employer health plan to provide primary coverage for 30 months for individuals with end-stage renal (kidney) disease before Medicare becomes primary.
Under which installments option does the annuitant select the amount of each payment, and the insurer determines how long they will pay benefits? 1. Variable period 2. Variable amount 3. Fixed period 4. Fixed amount
4
What type of policy contains a coverage that is only activated upon the insured's losses reaching a certain level? 1. Modified coverage 2. Fully funded plan 3. Modified fully insured plan 4. Partially funded plan
4
Which of the following components of dental insurance does NOT require the payment of a deductible? 1. Routine and major restorative care 2. Orthodontic care 3. Cosmetic dentistry 4. Routine and preventive maintenance
4
Which of the following provisions requires that any policy language that is in conflict with the state statutes of the state in which the insured resides is automatically amended to conform with those of the state of residence? 1. Incontestability 2. Insurance with Other Insurers 3. Legal actions 4. Conformity with State Statutes
4
How long is the elimination period for Social Security disability benefits?
5 months
The inflation protection feature in long-term care policies issued in this state must provide protection for inflation at what percent annually?
5%
One of the differences between group underwriting and individual underwriting is that there is little or no medical information required regarding plan participants in groups of
50 or more
The law states that an insurer is allowed to pay the entire Death Benefit to the insured if they qualify to use the Accelerated Death Benefit Rider; however, most insurers limit the amount of the Death Benefit paid to how many percent?
50%
Under the New York State Disability Benefit Law, the weekly benefit that the disabled employee is entitled to receive is
50% of weekly wage
To attain currently insured status under Social Security, a worker must have earned at least how many credits during the last 13 quarters?
6
How long is an open enrollment period for Medicare supplement policies?
6 months An open enrollment period is a 6-month period that guarantees the applicants the right to buy Medigap once they first sign up for Medicare Part B.
Under the Affordable Care Act, a special enrollment period allows an individual to enroll in a qualified health plan within how many days of a qualifying event?
60 days
under the New York State disability benefit law, for an employed individual, disability benefits will be payable after a waiting period of
7 days
According to the Medical Loss Ratio (MLR), what is the minimum percentage of health coverage premium that must be applied to actual medical care in an individual health plan?
80%
According to the Medical Loss Ratio (MLR), what is the minimum percentage of health coverage premium that must be applied to actual medical care in a large group health plan?
85%
A policyowner is reading a statement on the first page of his health insurance policy, which says "this is a limited policy." What is the name of this statement? a) Limited Policy Notice b) Policy Limitation Notice c) Statute of Limitations d) Limited Benefit Statement
A
All of the following are general requirements of a qualified plan EXCEPT a) The plan must provide an offset for social security benefits. b) The plan must be communicated to all employees. c) The plan must be for the exclusive benefits of the employees and their beneficiaries. d) The plan must be permanent, written and legally binding.
A
Which of the following is NOT an allowable 1035 exchange?
A whole life insurance policy is exchanged for a term insurance policy.
In a replacement situation, all followings are considered except:
Assets: *Agent must be careful to compare the benefits, limitations and exclusions found in the current and the proposed replacement policy
If compensation is authorized it must be made in writing, including the amount of compensation and signed by the person to be charged. How long must a copy of this record be kept?
At least 3 years , No licensed person may charge directly or indirectly any additional fees of compensation not authorized for examining, appraising, reviewing or evaluating any insurance policy, annuity or retirement plan. This also includes other services in connection with a life insurance contract. A copy of this record must be kept for at least 3 years
When must agents submit license renewal applications to the Superintendent?
At least 60 days before the license expires
When must the Buyer's Guide be delivered to the proposed insured?
At the time of application
At what point must an Outline of Coverage be delivered?
At the time of application or upon delivery of the policy
Owner fails to pay premium on his whole life policy after the grace period passes, but the policy remains in force due to which provision?
Automatic Premium Loan * a special type of loan added to contracts with a cash value at no additional charge. Prevents the unintentional lapse of a policy due to nonpayment of the premium.
An insured owns a medical expense policy that he purchased for his family. The insured's employer purchased a Group Disability Income policy for the insured and all eligible employees. The insured subsequently suffered an accident on the job that left him unable to work for four months. If the insured receives benefits from his disability income policy, which of the following would be true?
Benefits received that are attributable to employer contributions are fully taxable to the employee as income.
Which of the following provisions requires that any policy language that is in conflict with the state statutes of the state in which the insured resides is automatically amended to conform with those of the state of residence?
Conformity with State Statutes
The type of policy that can be changed from one that does not accumulate cash value to the one that does is a
Convertible Term Policy. A convertible term policy has a provision that allows the policyowner to convert to permanent insurance.
An insured wants to buy a disability income policy that pays a maximum monthly benefit of $1,200. To make sure that the disability benefit keeps up with inflation, the insured would need to add what kind of rider?
Cost of living
Which of the following is NOT allowed in credit life insurance?
Creditor requiring that a debtor buys insurance from a certain insurer
An approved written document that identifies procedures in place to keep the insurer's Information System safe?
Cybersecurity Policy
What type of insurance would be used for a return of Premium rider
Increasing Term The return of Premium Rider is achieved by using increasing term insurance. When added to whole life policy it provides that a death prior to a given age, not only is the original face amount payable, but also all premiums previously paid are payable to the beneficiary
Which insurance principle states that if a policy allows for greater compensation than the financial loss incurred, the insured may only receive benefits for the amount lost? a) Stop-loss b) Consideration c) Reasonable expectations d) Indemnity
Indemnity The principle of indemnity stipulates that the insured can only collect for the amount of the loss even if the policy is written with greater benefit limits.
The Patient Protection and Affordable Care Act includes all of the following provisions EXCEPT ) Coverage for preventive benefits. b) Individual tax deduction for premiums paid. c) Right to appeal. d) No lifetime dollar limits.
Individual tax deduction for premiums paid. The Act does not offer tax deductions for health insurance premiums. The Act does offer a tax credit, which is different from a tax deduction. All the other provisions are included in the Act.
An insurer receives a report regarding a potential insured that includes the insured's financial status, hobbies and habits. What type of a report is that?
Inspection report *This report covers moral and financial information regarding a potential insured, usually supplied by private investigators and credit agencies. Companies that use inspection report are subject to the rules outlined in the Fair Credit Reporting Act.
Which of the following is TRUE of a qualified plan?
It has a tax benefit for both employer and employee.
In health insurance, if a doctor charges $50 more than what the insurance company considers usual, customary and reasonable, the extra cost
Not covered.
Shortly after a replacement transaction on a Medicare supplement policy, the insured decided to cancel the policy, but is unsure whether the free-look provision applies. The insured could find that information in the
Notice Regarding Replacement.
When is the annual open enrollment for state insurance exchanges?
November 1 through January 31
In long-term care insurance, what type of care is provided with intermediate care?
Occasional nursing or rehabilitative care
When does Medicare cover nursing home care?
Only if it is part of treatment for a covered illness or injury
What term is used to describe when a medical caregiver contracts with a health organization to provide services to its members or subscribers, but retains the right to treat patients who are not members or subscribers?
Open Panel
Which option for Universal life allows the beneficiary to collect both the death benefit and cash value upon the death of the insured?
Option B Under Option B the death benefit includes the annual increase in cash value so that the death benefit gradually increases each year by the amount that the cash value increases. At any point in time, the total death benefit will always be equal to the face amount of the policy plus the current amount of cash value.
Part 2 of the application for life insurance provides questions regarding all of the following EXCEPT
Other insurance coverages.
An insured has a life insurance policy from a participating company and received quarterly dividends. He has instructed the company to apply the policy dividends to increase the death benefit. The dividend option that the insured has chosen is called
Paid up additions
An insured has a continuous premium whole life policy. She would like to use the policy dividends to pay off her policy sooner than would have been possible otherwise. What dividend option could she use?
Paid up option
When an employee is still employed upon reaching age 65 and eligible for Medicare, which of the following is the employee's option?
Remain on the group health insurance plan and defer eligibility for Medicare until retirement.
what part of the internal Revenue code allows an owner of a life insurance policy or annuity to exchange or replace their current contract with another contract with out creating adverse tax consequences?
Section 1035 Policy Exchange As long as the funds are transferred intact and the form is filled, taxation is differed
Which two terms are associated directly with the way an annuity is funded?
Single payment or periodic payments Annuities are characterized by how they can be paid for: either a single payment (lump sum) or through periodic payments in which the premiums are paid in installments over a period of time. Periodic payment annuities can be either level, in which the annuitant/owner pays a fixed installment, or the payments can be flexible, in which the amount and frequency of each installment varies.
Which of the following is monitored by ERISA?
Stock profit-sharing plans *Not regulated by ERISA would be cash profit sharing plan, severance pay of less than 2 years, cash bonus plans
An insured pays $1,200 annually for her life insurance premium. The insured applies this year's $300 worth of accumulated dividends to the next year's premium, thus reducing it to $900. What option does this describe?
The Reduction of Premium option allows the policyholder to apply policy dividends toward the next year's premium. The dividend is subtracted from the premium amount, yielding the new premium due for the next year.
Your client has a Social Insurance Supplement (SIS) rider on his disability policy. After he becomes disabled, he receives payments from the company. Shortly thereafter, he also begins receiving Social Security benefit payments. Which of the following will happen?
The SIS payment will be reduced dollar-for-dollar by the Social Security benefit payment.
Life settlement contracts must be approved by which of the following?
The Superintendent of Insurance *Also regulate the issuance and sale of variable contracts
The president of a company is starting an annuity and decides that his corporation will be the annuitant. Which of the following statements is true?
The annuitant must be a natural person.
What type of information is NOT included in a certificate of insurance? a) The cost the company is paying for monthly premiums b) The policy benefits and exclusions c) The procedures for filing a claim d) The length of coverage
The cost the company is paying for monthly premiums The individuals covered under the insurance contract are issued certificates of insurance. The certificate tells what is covered in the policy, how to file a claim, how long the coverage will last, and how to convert the policy to an individual policy.
The insuring clause of a disability policy usually states all of the following EXCEPT a) The types of losses covered. b) The method of premium payment. c) The identities of the insurance company and the insured. d) That insurance against loss is provided.
The insuring clause, usually on the first page of the policy, is the general statement that defines the insurance agreement and identifies the insured and the insurance company and states what kind of loss (peril) is covered.
Which of the following will vary the length of the grace period in health insurance policies?
The mode of the premium payment
What is the advantage of reinstating a policy instead of applying for a new one?
The original age is used for premium determination
which of the following is true regarding METs?
They allow several small employers to purchase less expensive insurance together. These small employers who cannot qualify for group health insurance band together for the purpose of buying insurance.
An insured makes regular contributions to his Health Savings Account. How are those contributions treated in regards to taxation?
They are tax deductible. An individual covered by a high deductible health plan can make a tax-deductible contribution to an HSA and use it to pay for out-of-pocket medical expenses.
Which of the following statements regarding conditional receipts is true?
They are temporary insuring agreements.
All of the following statements about Medicare supplement insurance policies are correct EXCEPT
They cover the cost of extended nursing home care. *Medicare supplement policies (aka medigap) are used by private insurance companies
Which of the following is TRUE for both equity indexed annuities and fixed annuities?
They have a guaranteed minimum interest rate.
Which of the following CANNOT be included along with illustrations used to sell life insurance? a) Vanishing premium information b) Name of the insurer c) Rating information d) Original death benefit
Vanishing premium information Illustrations used to sell life insurance cannot use the term "vanishing premium" - or any similar term - that implies the policy becomes paid up.
Can an individual who belongs to a POS plan use an out-of-network physician?
Yes, and they may use any preferred physician, even if not part of the HMO In a POS plan the individuals can visit an in-network provider at their discretion. If they decide to use an out-of-network physician, they may do so.
On a major medical insurance policy, the amount that an insured must pay on a claim before the insurer will pay is known as
deductible
Under the Privacy Rule for HIPPA, protected information includes all individually identifiable health information
held or transmitted in any form
What is the benefit of experience rating?
helps employers with low claims experience because they get lower premiums.
The gatekeeper of an HMO helps 1. Prevent double coverage. 2. Determine which doctors can participate in an HMO plan. 3. Control specialist costs. 4. Determine who will be allowed to enroll in an HMO program.
3
In a shared-care policy, the benefits of 2 LTC policies
Are split between the couple who signed the contract.
To be eligible for tax credits under the ACA, individuals must have income that is what percent of the Federal Poverty Level?
Between 100% and 400%
When an insurer offers services like preadmission testing, second opinions regarding surgery, and preventative care, which term would be apply?
Case management provision aka cost saving service
Which of the following health care plans would most likely provide the insured/subscriber with comprehensive health care coverage?
HMO
Which of the following is true regarding the spendthrift clause in life insurance policies?
It can protect the policy proceeds from creditors of the beneficiary.
On a disability income policy that contains the "own occupation" definition of total disability, the insured will be entitled to benefits if they cannot perform
Their regular job
If seeking repayment of Medicaid funds per the Medicaid Estate Recovery Act would cause a hardship to survivors, states may
Waive the estate recovery requirement
In this state a temporary license may be issued for all of the following reasons EXCEPT
an agent's retirement
Which of the following will NOT be an appropriate use of a deferred annuity?
creating an estate
In disability income insurance, the own occupation definition of disability applies
to the first 2 years of a disability *or first 24 months after a loss
A husband and wife are insured under group health insurance plans at their own places of employment, and as dependents under their spouse's coverage. If one of them incurs hospital expenses, how will those expenses likely be paid?
Benefits will be coordinated when individuals are covered under two or more health plans.
Which of the following best defines the owner of a life settlement contract?
A person who is selling the contract *"life settlement" transaction, a life insurance policy owner sells his or her policy to an investor in exchange for a lump sum payment.
Which of the following is NOT true of basic medical expense plans?
Coverage for catastrophic medical expenses
Who is the beneficiary in credit life insurance?
Creditor
While repairing the roof of his house an insured accidentally falls off and breaks his arm and sustains a head injury that results in total blindness of both eyes. His policy contains an Accidental Death & Dismemberment Rider. What is the extent of benefits that he will receive?
Principal Sum *If the insured dies, the insurer pays the full amount, also known as the "principal sum", which is also paid if the insured loses sight in both eyes or loses two limbs. If the insured lives but loses a hand or foot or the sight in one eye, the insured will be paid a percentage of the principal sum, usually 50%, which is called the "capital sum".
The owner of a life insurance policy wishes to name two beneficiaries for the policy proceeds. What will the soliciting insurance producer say?
The policyowner can specify the way proceeds are split in the policy.
Which of the following is true regarding limited health insurance policies?
They only cover specific accidents or diseases.
What is the purpose of a Medicare Carve out or Supplements?
They pay deductibles or copayments that are not paid by Medicare.
In major medical insurance policies, when the insured's share of coinsurance reaches a certain amount, the insured is no longer obligated to pay it. This feature is known as
Stop-loss
Which of the following types of annuities will generally provide the highest monthly income?
Straight Light
A Universal Life insurance policy has two types of interest rates that are called
guaranteed and current
A broker represents
the owner
Which of the following life insurance policies would be considered interest sensitive?
universal life As well as being a flexible premium policy universal life is also an interest sensitive policy. The insurer credits the cash value in the policy with a current(non-guaranteed) interest rate and backs the cash value with a contract ( Lower guaranteed) rate of interest.
General disability policies do not cover losses caused by...
war, military service, intentionally self-inflicted injuries, overseas residence, or injuries suffered while committing a felony
How many pints of blood will be paid for by Medicare Supplement core benefits?
first 3 *Medicare supplemental policies cover costs of deductibles and coinsurance for Parts A and B. Since Medicare will not pay for the first 3 pints of blood, a Medicare Supplement plan will cover that. This is considered to be a core benefit.
Other than for a qualified life event, when can a change be made in benefits for a Flexible Spending Account (FSA)
During the open enrollment period.
What is the shortest possible elimination period for group short-term disability benefits provided by an employer?
0 days
The Patient Protection and Affordable Care Act mandates that insurers provide coverage for adult children of the insured up to the age of
26
All of the following statements are true regarding installments for a fixed period annuity settlement option EXCEPT 1. It will pay the benefit only for a designated period of time. 2. The payments are not guaranteed for life. 3. The insurer determines the amount for each payment. 4. It is a life contingency option.
4
An agent is completing an application for a long term care policy. The agent is required to do all of the following except -Warn the applicant about the 10 day look period -Make sure the policy is appropriate for the applicant's needs -Provide the applicant with the Outline of Coverage -Ask where the applicant has another LTC policy in force
A *LTC policies required 30 day free look period
The main purpose of ERISA is to ensure that
Employees receive the pension and other benefits promised by their employers.
A hospital indemnity policy will pay
A benefit for each day the insured is in a hospital.
All of the following are correct about the required provisions of a health insurance policy EXCEPT a) The entire contract clause means the signed application, policy, endorsements, and attachments constitute the entire contract. b) A reinstated policy provides immediate coverage for an illness. c) Proof-of-loss forms must be sent to the insured within 15 days of notice of claim. d) A grace period of 31 days is found in an annual pay policy.
A reinstated policy provides immediate coverage for an illness. Accidental injury is covered immediately, but to protect the insurer against adverse selection, losses resulting from sickness are covered only if the sickness occurs at least 10 days after the reinstatement date.
Which of the following long-term care benefits would provide coverage for care for functionally impaired adults on a less than 24-hour basis?
Adult day care
In reference to the standard Medicare Supplement benefits plans, what does the term standard mean?
All providers will have the same coverage options and conditions for each plan. In reference to the standard Medicare Supplement benefits plans, the term "standard" implies that all providers will have the same coverage options and conditions for each plan.
In insurance, an offer is usually made when
An applicant submits an application to the insurer.
Which of the following choices defines 24-hour coverage?
An employee is covered by both workers compensation and a medical insurance coverage
Under HIPAA, which of the following is INCORRECT regarding eligibility requirements for conversion to an individual policy? An individual who doesn't qualify for Medicare may be eligible. b) The gap of coverage for eligibility is a period of 63 or less days. c) An individual who was previously covered by group health insurance for 6 months is eligible. d) An individual who has used up COBRA continuation coverage is eligible.
An individual who was previously covered by group health insurance for 6 months is eligible. All of these eligibility requirements are correct, except an individual who was previously covered for at least 6 months. HIPAA requires that the individual have a previous continuous creditable health coverage for at least 18 months.
Which of the following is a short-term annuity that limits the amounts paid to a certain fixed period or until a certain fixed amount is liquidated?
Annuity Certain
A 70 year old bought a part b medicare policy 2 months ago just began kidney dialysis treatments this week. The individual is now applying for Medicare supplement policy, which would begin in 8 months. What could the insurer do to avoid paying for the dialysis?
Ask for pre-existing condition.
The accelerated benefits provision will provide for an early payment of the death benefit when the insured
Becomes terminally ill. *This provision allows the owner to be advanced a significant portion of the death benefit when the insured is terminally ill.
Which of the following is NOT true regarding Workers Compensation?
Benefits are offered by the insurer.
The provision in a health insurance policy that ensures that the insurer cannot refer to any document that is not contained in the contract is the
Entire contract clause.
When an insurer offers services like preadmission testing, second opinions regarding surgery, and preventative care, which term would best apply? a) Claims discrimination b) Case management provision c) Cost reduction d) Claims reduction
Case management provision Cost-saving services, also known as "case management provisions", include the following: controlled access of providers, large claim management, preventive care, hospitalization alternatives, second surgical opinions, preadmission testing, catastrophic case management, risk sharing, and providing high quality of care.
An insured receives an annual life insurance dividend check. What term best describes this arrangement?
Cash option
Tax sheltered annuity is a special tax-favored retirement plan available to
Certain groups of employees only (for example, non profit, educational, religious, and other 501c(3) orgs, including all employees in public education
In New York, how must all medical expense health insurance sold to individuals or small groups be rated?
Community rated New York law mandates that all medical expense health insurance sold to individuals or small groups must be community rated. Essentially, all insureds (regardless of age, sex, or occupation) pay the same premium into a predetermined geographic pool and the claims from that geographic area are paid from the pool's collection.
What is the process where the insurance company use to monitor the insured's hospital stay to make sure that everything is proceeding according to schedule?
Concurrent review
The purpose of managed care health insurance plans is to
Control health insurance claims expenses.
Which of the following is an eligibility requirement for all Social Security Disability Income benefits?
Have attained a fully insured status.
In which of the following scenarios will repayment of funds take place per the Medicaid Estate Recovery Act? -A Medicaid recipient is survived by his wife -The 22 year old son of a Medicaid recipient is blind -Mother of a 10 year old die after receiving 8 months of Medicaid payments - Before her death, a 23 year old was living in a long term nursing facility paid for with Medicaid funds
D *estate recovery can't take place if the medicaid recipient, at the time of his or her death, has a surviving spouse, a child younger than 21 or a child who is blind or permanently disabled.
Which of the following is NOT true regarding a flexible spending account?
It does not have limits on contributions.
Assuming that all of the following people are covered by a High Deductible Health Plan and are dependents on anyone's tax returns, which would NOT be eligible for a Health Savings Account -Andy is 55 and is covered under a dental care policy -Jenny is 60 and also has a long-term care insurance -Joe is 40 and is not covered by any other health insurance -Amanda is 67 and is covered by a basical medical expense policy
D. To be eligible for Health Savings Account, a person must be covered by a High Deductible Health Plan, must not be covered by other health insurance except for specific injury, accident, disability, dental care, vision care, or long-term care insurance, must not be eligible (usually age 65), and can't be claim as a depend on someone else's tax return.fmaxim
Under workers compensation, which of the following benefits are NOT included?
Death Benefits
Which of the following types of insurance policies is most commonly used in credit life insurance?
Decreasing term *Credit insurance is a special type of coverage written to insure the life of the debtor and pay off the balance of a loan in the vent of the death of the debtor.
Which of the following statements is true regarding LTC insurance? -LTS policies must allow a 60 day free look period -Every policy must offer nonforfeiture benefits to the applicant -Every policy must offer reduced paid-up insurance to the applicant -LTC policies may not include any riders.
Every policy must offer nonforfeiture benefits to the applicant
What type of group rating uses the actual experience of the group as a factor in developing the rates to be charged?
Experience rating
what policy component must decrease in the decreasing term insurance?
Face amount Decreasing term policies feature a level premium and a death benefit that decreases each year over the duration of the policy term
In which of the following health plans are benefit payments attributed to employer contributions taxable to the employee?
Group Disability Income
What option allows the insured to periodically increase benefit levels without providing evidence of insurability?
Guarantee of Insurability
Most LTC plans have which of the following features?
Guaranteed renewability The benefit amount payable under most LTC policies is usually a specific amount per day, and some policies pay the actual charge incurred per day. Most LTC policies are also guaranteed renewable; however, insurers do have the right to increase the premiums.
What are the 2 types of Flexible Spending Accounts?
Health Care Accounts and Dependent Care Accounts
The methods of calculating the amount of life insurance needed takes into account the insured's wages, years until retirement, and inflation?
Human life value approach
A man purchased a $90,000 annuity with a single premium, and began receiving payments 2 months after that. What type of annuity is it?
Immediate
A lucky individual won the state lottery, so the state will be sending him a check each month for the next 25 years. What type of annuity products are they likely to use to provide these benefits?
Immediate annuity
An insured has a life insurance policy that requires him to only pay premiums for a specified number of years until the policy is paid up. What kind of policy is it?
In limited-pay policies, the premiums for coverage will be completely paid-up well before age 100, usually after a specified number of years.
What is the tax consequence of amounts received from a Traditional IRA after the money was left in the tax-deferred account (doesn't get tax) by the beneficiary?
Income tax on distributions and no penalty.
Credit Life insurance
Insures the life of a debtor. Credit insurance is a special type of coverage written to insure the life of the debtor and pay off the balance of a loan in the event of the death of the debtor.
The section of a health policy that states the causes of eligible loss under which an insured is assumed to be disabled is the
Insuring clause.
Which of the following is correct about a group health insurance policy issued in New York?
It cannot exclude coverage from an occupational accident.
What is the purpose of the New York State Partnership for LTC?
It combines LTC insurance and Medicaid to help people prepare for nursing home care.
Which of the following is true regarding health insurance? a) It could provide payments for loss of income. b) Disability coverage is excluded. c) It provides death benefit coverage. d) It only covers expenses related to health care.
It could provide payments for loss of income. Health insurance is a generic term, encompassing several types of insurance contracts, which, though related, are designed to protect against different risks. It provides coverage for expenses related to health care, loss of income, and disability income.
Which of the following is NOT true regarding a disclosure statement for Medicare supplement policies?
It must be provided to the applicant within 30 days of the application.
Which of the following statements about the reinstatement provision is true?
It requires the policyowner to pay all overdue premiums with interest before the policy is reinstated.
Which of the following statements is TRUE concerning the Accidental Death Rider?
It will pay double or triple the face amount. This rider pays 2 or 3 times the face amount if death is the result of an accident as defined in the policy and occurs within 90 days of such an accident.
All of the following would be qualified as a dependent under a Dependent Care Flexible Spending Account, EXCEPT a) Joe was paralyzed from the neck down in a car accident and is cared for by his wife b) Matt must be constantly watched due to his violent muscle spasms which often lead to Matt injuring himself c) Pete is severely autistic and refuses to take care of his own personal needs, which are taken care of by his father d) Jeremy had to have both legs amputated, but has learned how to take care of himself and to get around in a wheelchair
Jeremy had to have both legs amputated, but has learned how to take care of himself and to get around in a wheelchair Persons who cannot dress, clean, or feed themselves because of physical or mental problems are considered not able to care for themselves. Also, persons who must have constant attention to prevent them from injuring themselves or others are considered not able to care for themselves.
The form used to establish the terms for both parties when a person sells his life insurance policy to a 3rd unrelated person is called a
Life Settlement Contract.
Regarding health insurance coverage for small groups, insurers are permitted to do any of the following Except
Limit enrollment to a specific period
A presumptive disability under a disability income policy is
Loss of 2 limbs or a full disability
Which of the following is NOT covered under Plan A in Medigap insurance? -The Medicare Part A deductible -Approved hospital costs for 365 additional days after Medicare benefits end -the 20% Part B coinsurance amounts for Medicare approved services -The first three pints of blood each year
Medicare Part A deductible *Provides the core, or basic benefits established by law. All the choices are part of the basic benefit, except for the deductible, which is a benefit offered through nine other plans.
In cases where a covered employee is eligible for Medicare benefits to treat end-stage renal disease (ESRD) with dialysis or kidney transplant, which of the following is correct? a) Because Medicare does not cover treatment of ESRD, the group plan will pay 100%. b) Medicare is primary for the first 12 months of treatment and the employer group insurance is secondary. c) Medicare is the secondary payer during the first 30 months of treatment. d) Medicare and the employer group insurance plan will share the cost equally.
Medicare is the secondary payer during the first 30 months of treatment. Individuals eligible for Medicare because of end-stage renal disease (ESRD) and covered under the employer's group plan are primarily covered by the group health coverage for the first 30 months, then Medicare would become the primary health provider.
An insured is involved in a car accident. In addition to general, less serious injuries, he permanently loses the use of his leg and is rendered completely blind. The blindness improves a month later. To what extent will he receive Presumptive Disability benefits?
No benefit *Presumptive Disability plans offer full benefits for specified conditions. These policies typically require the loss of use of at least two limbs, total and permanent blindness, or loss of speech or hearing. Benefits are paid, even if the insured is able to work. Because the insured's blindness was only temporary and the loss of use in only 1 leg, he does not qualify for presumptive disability benefits.
An insured has a continuous whole life policy. She would like to use the policy dividends to pay off her policy sooner than would have been otherwise. What dividend option could she use?
Paid-up option *With this option, insurer can accumulate dividends at interest and then use them. In addition to interest and the policy's cash value, to pay the policy earlier than planned. This is different from paid up addition, in which the dividends are used to buy additional policies that increase the face amount of the original policy.
An insured has a continuous premium whole life policy. She would like to use the policy dividends to pay off her policy sooner than would have been possible otherwise. What dividend option could she use? a) Reduction of premium b) Accumulation at interest c) Paid-up option d) One-year term
Paid-up option With the paid-up option, the insurer can accumulate dividends at interest and then use them, in addition to interest and the policy's cash value, to pay the policy earlier than planned. This is different from paid-up additions, in which the dividends are used to buy additional policies that increase the face amount of the original policy
Which of the following is NOT true about a joint and survivor annuity benefit option?
Payments stop after the first death among the annuitants. *This annuity will pay until the last annuitant has died. The surviving annuitant may received reduced payments.
Which of the following is an entity that can be hired by an employer to handle all its employee management tasks?
Professional Employer Organization Professional Employer Organizations (PEOs) handle employee management tasks, including employee benefits and payroll and workers compensation. Because they combine the employees of several companies under one umbrella, they can negotiate better rates on health care and workers compensation coverage.
Under which provision can a physician submit claim information prior to providing treatment?
Prospective Review
What form of the annuity settlement options provides payments to an annuitant for the rest of the annuitant's life and ceases at the annuitant's death?
Pure Life
The Federal Fair Credit Reporting Act
Regulates consumer reports. The Federal Fair Credit Reporting Act regulates consumer reports, also known as consumer investigative reports, or credit reports.
What is NOT provided by an HMO?
Reimbursement
When benefits are paid directly to the insured under a health insurance policy, the policy provides benefits on what type of basis?
Reimbursement
The minimum # of persons to be insured under a group health insurance plan is established by
State Law
Which nonforfeiture option provides coverage for the longest period of time?
Reduced paid-up *this option would provide protection until the insured reaches 100, but the face amount is reduced to what the cash would buy
Which of the following is NOT specifically prohibited by state law as an unfair trade practice?
Reducing the premiums paid by employers for group insurance based on loss experience
Which nonforfeiture option has the highest amount of insurance protection?
Reduced Paid-up
When an insured under a life insurance policy died, the designated beneficiary received the face amount of the policy as well as a refund of all of the premiums paid. Which rider is attached to the policy?
Return of premium The Return of Premium Rider pays the beneficiary not only the face amount of the policy but also the amount that had been paid in premiums. The rider stipulates that death must occur prior to a certain age in order for the premium amount to be returned. The Return of Premium Rider is funded by using increasing term insurance.
A policyholder is entitled to which of the following under an individual accident and health policy? a) Return of earned premiums b) Extension of renewal period c) Return of unearned premiums d) Refusal of cancellation
Return of unearned premiums Most policies are cancelable, which means the insurer may cancel at any time with proper notice while retaining any earned premium. Only unearned premiums must be refunded.
What dental insurance categories would cover the fillings of cavities?
Routine and major restorative care *routine and preventative maintenance covers routine check ups only
Equity indexed annuities
Seeks higher returns
A producer is helping a married couple determine the financial needs of their children in the event one or both should die prematurely. This is a personal use of life insurance known as
Survivor protection Life insurance can provide the funds necessary for the survivors of the insured to be able to maintain their lifestyle in the event of the insured's death. This is known as survivor protection.
When a group disability insurance policy is paid entirely by the employer, benefits paid to disabled employees are
Taxable income to the employee.
children's rider attached to a whole life policies are usually issued as what type of insurance
Term
In addition to examinations that are specifically authorized by the Insurance Code, the Superintendent may examine each domestic life insurer as often as it is deemed necessary for the protection of the consumers.
The Code requires examination of domestic life insurers every 5 years
All of the following entities regulate variable life policies EXCEPT
The Guaranty Association.
Which of the following is NOT covered under Plan A in Medigap insurance?
The Medicare Part A deductible
A spouse was granted a temporary license for her deceased husband's agency on March 1. On May 1 she processed an application for life insurance on a new applicant. Which of the following is true?
The application was processed without a valid license. A temporary license may only be used to service existing business, not to solicit, negotiate or procure new business.
The annuity owner dies while the annuity is still in the accumulation stage. Which of the following is TRUE?
The beneficiary will receive the greater of the money paid into the annuity or the cash value.
which of the following is NOT a characteristic of group long-term disability plan?
The benefit can be up to 50% of ones yearly income *The maximum benefit is based upon monthly income
Which of the following is an example of liquidity in a life insurance contract?
The cash value available to the policyowner
In a defined contribution plan,
The contribution is known and the benefit is unknown. In a defined contribution plan the contribution is defined (known) and the benefit is undefined (unknown).
If an insured withdraws a portion of the face amount in the form of accelerated benefits because of a terminal illness, how will that affect the payable death benefit from the policy?
The death benefit will be smaller.
A life insurance policy doesn't have a war clause. If the insured is killed during a time of war, what will the beneficiary receive from the policy.
The full death benefit
In a group policy, who is issued a certificate of insurance?
The individual insured
An insured purchased a noncancellable health insurance policy 1 year ago. Which of the following circumstances would NOT be a reason for the insurance company to cancel the policy?
The insured is in an accident and incurs a large claim.
An insured has a Social Insurance Supplement rider in her disability income plan. Following a disability, she begins receiving benefit payments from the insurer. She then begins receiving Social Security benefits that are smaller than the SIS benefit payments. At that point, her insurer ends the SIS benefit payments. Which of the following best describes the situation?
The insured should contact the insurer to confirm her actual Social Security benefit amount. The SIS rider should pay the difference between the rider amount and the actual benefit.
Which of the following is NOT a feature of a guaranteed renewable provision? a) The insurer can increase the policy premium on an individual basis. b) The insured has a unilateral right to renew the policy for the life of the contract. c) Coverage is not renewable beyond the insured's age 65. d) The insured's benefits cannot be reduced.
The insurer can increase the policy premium on an individual basis. Guaranteed renewable provision has all the same features that the noncancellable provision does, with the exception that the insurer can increase the policy premium on the policy anniversary date. However, the premiums can only be increased on a class basis, not on an individual policy.
All of the following are general requirements of a qualified plan EXCEPT a) The plan must be communicated to all employees. b) The plan must be for the exclusive benefits of the employees and their beneficiaries. c) The plan must be permanent, written and legally binding. d) The plan must provide an offset for social security benefits.
The plan must provide an offset for social security benefits. Plans must meet the general requirements established by IRS.
The policyowner of a Universal Life policy may skip paying the premium and the policy will not lapse as long as
The policy contains sufficient cash value to cover the cost of insurance
A policy with a 31-day grace period implies
The policy will not lapse for 31 days if the premium is not paid when due.
An insured stops making payments on a loan taken from his cash value policy. What will most likely happen?
The policy will terminate when the loan amount with interest equals or exceeds the cash value.
An insured has chosen joint and 2/3 survivor as the settlement option. What does this mean to the beneficiaries? a) One of the beneficiaries will receive 1/3 and the other 2/3 of the proceeds when the insured dies. b) The surviving beneficiary will continue receiving 2/3 of the benefit paid when both beneficiaries were alive. c) The beneficiary will receive 2/3 of the lump sum up front, and the remaining 1/3 will be paid over time. d) The beneficiary will receive 2/3 of the total benefit, with the final 1/3 payable when the first beneficiary dies.
The surviving beneficiary will continue receiving 2/3 of the benefit paid when both beneficiaries were alive. When the reduced option is written as "joint and 2/3 survivor," the surviving beneficiary receives 2/3 of what was received when both beneficiaries were alive.
Which of the following is an example of a producer's fiduciary duty? a) The trust that a client places in the producer in regard to handling premiums. b) An obligation to state every known fact about the policy the producer is selling. c) A duty to base all transactions upon the principle of Utmost Good Faith. d) The obligation to tell the truth to the best of one's knowledge
The trust that a client places in the producer in regard to handling premiums An agent acts in a fiduciary capacity, based upon trust and confidence, when handling the financial affairs of their customers, including the handling of premiums.
in an adjustable life policy all of the following can be changed by the policy owner EXCEPT
The type of investment Typically, the owner of an adjustable life policy has the following privilege, increasing or decreasing the premium, changing the premium-paying period, increasing or decreasing the face amount of coverage or changing the period of protection
Which of the following employees insured under a group life plan would be allowed to convert to individual insurance of the same coverage once the plan is terminated? a) Those who have no history of claims b) Those who have been insured under the plan for at least 5 years c) Those who have worked in the company for at least 3 years d) Those who have dependents
Those who have been insured under the plan for at least 5 years If the master contract is terminated, every individual who has been on the plan for at least 5 years will be allowed to convert to individual insurance of the same coverage.
The Waiver of Cost of Insurance rider is found in what type of insurance?
Universal Life
Which of the following policies would have an IRS required corridor or gap between the cash value and the death benefit?
Universal Life - Option A
Which of the following types of policies allows the policyowner to skip premium payments, provided that there is enough cash value in the policy to cover the premium amount?
Universal life
Which type of life insurance policy allows the policyowner to pay more or less than the planned premium?
Universal life
An insured owns a life insurance policy. To be able to pay some of her medical bills, she withdraws a portion of the policy's cash value. There is a limit for a withdrawal and the insurer charges a fee. What type of policy does the insured most likely have?
Universal life Universal Life policies allow for policyholders to withdraw a limited portion of the policy's cash value. Each withdrawal, however, is usually charged, and the amount and frequency of withdrawals are usually limited.
An insured owes his insurer a premium payment. Since then, he incurs medical expenses. The insurer deducts the unpaid premium amount from the claim amount and pays the insured the difference. What provision allows for this?
Unpaid Premium
Child Health Plus provides health insurance for children
Whose families meet income guidelines. o qualify for coverage under Child Health Plus, a child must be under the age of 19 and his or her family must meet income guidelines.
Group Life Insurance
cost of coverage is based on average group age and ratio of men to women. sponsor gets master contract for a group; each eligible group member receives a certificate of insurance. can be converted to individual whole life, not term policy. Premium in group is lower than individual.