EXAMFX
Clay's estimated human life value is $1,5,00,000. If his family support ratio is 75%, what is the amount of insurance he should take out on a life policy?
$1,125,000
An insured's long-term care indemnity policy is scheduled to pay a fixed amount of coverage of $120 per day. The long-term care facility only charged a $100 per day. How much will the insurance company pay?
$120 a day
An insured has a $1,000 HRA account through his employer. He incurred $750 in medical expenses the first year of the plan. How much, if anything, will the insured be able to roll over toward the next year's expenses?
$250
An insured owns a $50,000 whole life policy. At age 47, the insured decides to cancel his policy and exercise the extended term option for the policy's cash value, which is currently $20,000. What would be the face amount of the new term policy?
$50,000
What percentage of individually-owned disability income benefits is taxable?
0%
Unreimbursed medical expenses paid for the insured may be claimed as deductions if the expenses exceed what percentage of the adjusted gross income?
7.5%
Which Statement best defines a multiple employer welfare arrangement (MEWA)?
A joining of employers to provide health benefits for employees
JD is a 45-year-old farmer who is interested in taking out a life insurance policy. What type of life insurance planning should JD consider?
A. Pre-retirement Planning
A provision in a life insurance policy that provides for the early payment of some portion of the policy face amount should the insured suffer from a terminal illness or injury is called
Accelerated Benefit Provision
Who can make a fully deductible contribution to a traditional IRA?
An individual not covered by an employer-sponsored plan who has earned income
When an annuity is written, whose life expectancy is taken into account?
Annuitant
Which of the following would NOT be an underwriting consideration for a health insurance applicant?
Applicant's sexual orientation
Employer contributions made to a qualified plan
Are subject to vesting requirements
An underwriter is reviewing the medical questions in the application and needs further information due to a medical situation the applicant had in the past. What will the underwriter require?
Attending Physician Statement
A policy owner fails to pay the premium due on his whole life policy after the grace period passes, but the policy remains in force. This is due to what provision?
Automatic Premium Loan
What coverage, written in conjunction with hospital expense policies, covers surgeons' fees, anesthesiologist, and the operating room?
Basic Surgical Expense
All of the following are true of the Key Person disability income policy EXCEPT
Benefits are considered taxable income to the business.
Which of the following is not true of Disability Buy-Sell coverage?
Benefits are considered taxable income to the business.
All of the following are true regarding Key Employee Disability Income insurance EXCEPT
Benefits are taxable to the employer.
Which of the following statements regarding Business Overhead Expense policies is NOT true?
Benefits are usually limited to six months
An insured is the recipient of an Accidental Death and Dismemberment (AD&D) policy purchased by his employer. The policy pays triple indemnity in case of accidental death. If the insured died as a result of an accident stipulated in the policy, how will the benefits paid taxed?
Benefits received are considered income tax free.
Which of the following options best depicts how the eligibility of members for group health insurance is determined?
By conditions of employment
A tax-sheltered annuity is a special tax-favored retirement plan available to
Certain groups of employees only
Which of the following would not be used in preventative care?
Chemotherapy
What size companies are eligible for health reimbursement accounts (HRAs)?
Companies of all sizes
What happens when a policy is surrendered?
Coverage ends and the policy cannot be reinstated
An insurance policy that only requires a payment of premium at its inception, provides insurance protection for the life of the insured, and matures at the insured's age 100 is called
D. Single Premium Whole Life
Which of the following is NOT a cost-saving service in a medical plan?
Denial of coverage
Which type of insurance provides funds for a business organization to purchase the business interest of a disabled partner?
Disability Buy-Sell
All of the statements are true concerning the taxation of a traditional IRA EXCEPT
Early distributions are always subject to penalty
Concerning group Medical and Dental insurance which of the following statements in INCORRECT?
Employee benefits are tax deductible the year in which they were received.
For a retirement plan to be qualified, it must be designed for the benefit of
Employees
Which type of dental treatment involves the dental pulp within the teeth?
Endodontics
The provision that states that both the printed contract and a copy of the application form the contract between the policy owner and the insurer is called the
Entire contract
Under a typical health insurance policy, claims that result from injuries while the insured was intoxicated or under the influence of drugs are generally
Excluded
Which provision allows the policyholder a period of time, while coverage is in force, to examine a health insurance policy and determine whether or not to keep it?
Free Look Period
If an insured worker has earned 40 quarters of coverage, the worker's status under Social Security disability is
Fully insured
The automatic premium provision is activated at the end of
Grace Period
The death benefit under the Universal Life Option B
Gradually increases each year by the amount that the cash value increases
Which of the following is available to employers of all sizes?
HRAs
An association could buy group insurance for its members if it meets all of the following requirements EXCEPT
Has at least 50 members
Which of the following is an eligibility requirement for all Social Security Disability Income benefits?
Have attained fully insured status
What are the three basic coverage for medical expense insurance?
Hospital, Surgical, Medical
Which of the following factors about the insured determines the amount of disability benefit that the insured will receive?
Income
Which of the following ultimately determines the interest rates paid to the owner of the fixed annuity?
Insurer's guaranteed minimum rate of interest
What is the benefit of experience rating?
It allows employers with low claims experience to get lower premiums.
What statement best describes the Free-look provision?
It allows the insured to return the policy witin 10 days for a full refund of premiums if dissatisfied for any reason
Which of the following is TRUE about the 10-day free-look period in a life insurance policy?
It begins when the policy is delivered
Which of the following is NOT true concerning Medicaid?
It consists of 3 parts: Part A: hospitalization, Part B: doctor's services, Part C: disability income.
All of the following statements are true of a Combination Dental Plan EXCEPT
It is also known as the Superimposed Plan.
Concerning Juvenile Life insurance, which of the following statements is INCORRECT?
Juvenile Life is classified as any life insurance purchased by a minor
If a business owner becomes totally disabled, a Business Overhead Expense policy will pay all of the following EXCEPT
Loss of the Owner's income
Which of the following is excluded in a dental insurance plan?
Lost dentures
All of the following statements describe a MEWA EXCEPT
MEWAs are groups of at least 3 employers.
If a life insurance policy develops cash value faster than a seven-pay whole life contract, it becomes a/an
Modified Endowment Contract
After a back injury, an insured is disabled for a year. His insurance policy carries a Disability Income Benefit rider. Which of the following benefits will he receive?
Monthly premium waiver and monthly income
In an individual long-term care insurance plan, the insured is able to deduct the premiums from taxes. What income taxation will be imposed on the benefits received?
No tax
Premium payments for personally-owned disability income policies are
Not tax deductible
An insured purchased a disability income policy with a 10-year benefit period. The policy stated a 20-day probationary period for illness. If the insured is hospitalized with an illness 2 weeks after the policy was issued. How will the policy pay?
Nothing. Illness is not covered during the first 20 days of the contract
Which provision concerns the insured's duty to provide the insurer with reasonable notice in the event of a loss?
Notice of Claim
Traditional IRA contributions are tax deductable based on which of the following?
Owner's Income
An insured has a life insurance policy from a participating company and receives 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 pays her Major Medical Insurance premium annually on March 1. Last March she forgot to mail her premium to the company. On March 19, she had an accident and borke her leg. The insurance company would
Pay the claim
Which of the following describes taxation of individual disability income insurance premiums and benefits?
Premiums are not tax deductible, and benefits are not taxable.
Which of the following is correct regarding the taxation of group medical expense premiums and benefits?
Premiums are tax deductible and benefits are not taxed.
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
Prospective Review
What would a physician utilize if he/she wanted to know if a treatment is covered under an insured's plan and at what rate it will be paid?
Prospective review
In dental insurance, what type of care will cover crowns?
Restorative
Which of the following services would be covered by endodontics?
Root canal
Which of the following is NOT covered under Part B of a Medicre policy?
Routine dental care
What part of the Internal Revenue Code allows and owner of a life insurance policy or annuity to exchange or replace their current contract with another contract without creating adverse tax consequences?
Section 1035 Policy Exchange
All of the following are examples of noncash compensation EXCEPT
Service Fee
When the insured initiates the cancellation of a policy, the unearned premium will be refunded on a
Short rate basis
Upon policy delivery, the producer may be required to obtain any of the following EXCEPT
Signed Waiver of Premium
When an employee covered under a health reimbursement account changes employers, the HRA
Stays with the employer
Agent X tells an insured that her new policy requires lower premiums than the original, even though the premium amounts are actually the same. Which of the following could be a consequence of the agent's action?
Suspension of license
Which of the following is a healthcare program funded by the federal government for the retirees and spouses of the military services?
TRICARE
Which of the following is NOT covered under Plan A in Medigap insurance?
The Medicare Part A deductable
Which of the following statements about HRAs is TRUE?
The account allows roll-over of unused balances at the end of the year at the employer's discretion
The annuity owner dies during the accumulation period without naming a beneficiary. Annuity's cash value exceeds premiums paid. Which of the following is TRUE?
The cash value will be paid to the annuitant's estate
The limits of a health reimbursement account are set by
The employer
Who determines the eligibility and contribution limits of an HRA?
The employer
Who determines the eligibility and contribution limits in an HRA?
The employer determines both
In a group policy, who is issued a certificate of insurance
The individual insured
Which of the following best describes the "first-dollar coverage" principle in basic medical insurance?
The insured is not required to pay the deductable
Which of the following will vary the length of the grace period in health insurance policies?
The mode of the premium payment
All of the following are general requirements of a qualified plan EXCEPT
The plan must provide an offset for Social Security benefits
All of the following would be eligible to establish a Keogh retirement plan EXCEPT
The president and employee of a family corporation
Under an extended term nonforfeiture option, the policy cash value is converted to
The same face amount as in the whole life policy
Which of the following statements is most correct concerning the changing of an irrevocable beneficiary?
They can be changed only with the written consent of the beneficiary
Which of the following is true regarding benefits paid to disabled employees?
They may be subject to taxation if the premium was paid by the employer.
What is the purpose of Medicare Carve-out or Supplements?
They pay deductibles or copayments that are not paid by Medicare.
Premiums paid by self-employed sole proprietors or partners for medical expense insurance are
Totally tax deductible
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
Vision Inc., employs 500 people. The company offers group life insurance to its employees after 90 days of service. Who is considered the policy holder of the life insurance policies Vision, Inc. offers?
Vision, Inc.
When may an insured deduct unreimbursed medical expenses paid under a long-term care policy?
When the expenses exceed a certain percentage of the insured's adjusted gross income
An insured bought a policy 20 years ago. The policy stated that 20 years later the cash value would be $480 per $1,000 of coverage. What policy does the insured have?
Whole Life
Which of the following statements regarding the taxation of Modified Endowment Contracts is FALSE?
Withdrawals are not taxable
Medicaid is sponsored by what kind of sources?
both state and federal
Who may contribute to a Keogh (HR-10) plan?
self-employed plumber
