Insurance State Exam

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a 10% excise tax normally applied to an early with-drawl from an IRA. According to HIPPA, this tax will not be applied if the with-drawl is used for medical expenses that exceed ____ of the individual adjusted gross income

7.5%

an insured MUST submit a proof of loss on a health insurance claim within how many days after the date of loss?

90

which BEST describes a conditional insurance contract?

a contract that requires certain conditions or acts by the insured individual

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?

a good health statement

of the following dividend options, which of these is taxable?

accumulation at interest

which dividend option would an insurer invest the policyowners money and add interest earnings as the dividends accrue?

accumulation at interest option

a policyowner may change two policy features on what type of life insurance

adjustable life

a non-contributory health insurance plan helps the insurer avoid

adverse selection

group dental plans will frequently place a limit on annual benefits in order to minimize

adverse selection

the term which describes the fact that both parties of a contract may NOT receive the same value is referred to as

aleatory

what is the nonforfeiture value of an annuity before annuitilization

all premiums pain, plus interest, minus any withdrawals and surrender chargers

fixed period settlement options are considered to be a form of a

annuity

the difference between a long term care partnership plan and a non partnership plan is which of the following?

asset protection

why are dividends from a mutual insurer not subject to taxation?

because dividends are considered to be a return of premium

Which type of business insurance is meant to cover the costs of continuing to do business while the owner is disabled?

business overhead expense policy

an example of replacement is

cancelling a term life policy to buy a whole life policy

which of the following is NOT a required provision in an accident and health insurance policy

change of occupation

_____ is NOT an element of a valid contract

countersignature

which of these is NOT subject to income taxation under a modified endowment contract (MEC)?

death benefit

making a statement that is false of maliciously critical of the financial condition of an insurer is known as

defamation

all of the following are examples of a business continuation plan except

deferred compensation

an example of a tax-qualified retirement plan would be a ****

defined contribution plan

example of a tax qualified retirement plan

defined contribution plan

a nonparticipating policy will not pay _____

dividends

statement concerning traditional IRA is correct

earnings are taxable when withdrawn

a disability elimination period is best described as a

eligibility period

which of the following is NOT a federal requirement of a qualified plan?

employee must be able to make unlimited contributions

level premium permanent insurance accumulates a reserve that will eventually

equal the face amount of the policy

what is created after policy proceeds are obtained in a lump sum and then immediately invested?

estate

the waiting period for a disability insurance policy

excluded payments for a short term illness or injury

which of these would limit a companys liability to provide insurance coverage?

exclusion

an insurance company needs to obtain personal information from a third party concerning an applicant. Which law do all insurers and their producers need to comply?

fair credit reporting act

NOT a characteristic of a universal life insurance policy

fixed surrender value

typically authorize treatment from a specialist?

gatekeeper

considered to be an event or condition that increases the probability of an insured loss?

hazard

fixed annuities provide each of the following except

hedge against inflation

major tax advantage of life insurance?

income tax is typically not owed on proceeds paid directly to a beneficiary

in regards to a life insurance contract which of the following statements is NOT true regarding the concept of insurable interest

insurable interest can be established sufficiently by sentimental attachment alone

ambiguities in an insurance policy are alway resolved in favor of the

insured

signature is not required on an individual insurance application?

insurer

Which settlement options involves having the proceeds remain with the insurer and earning paid on a monthly basis to the beneficiary?

interest only

a life insurance policy written on one contract for two people in which it is payable upon the first death is called

joint

which contract element is insurable interest aa component of?

legal purpose

an insurers ability to make unpredictable payouts to policyowners is called

liquidity

insurance premium is determined by each of the following factors except

liquidity

The IRS states that a taxpayers medical expenses that exceed 7.5% of their adjusted gross income is tax deductible. Which of the following may be considered a medical expense under this rule?

long term care insurance premiums

what is the primary feature of a viatial settlement?

longer contestable period

which of the following is considered to be a point of service (POS) plan?

managed care plan

the suicide clause of a life insurance policy states that if an insured commits suicide within a stated period from the policys inception, the insurer will only be liable for a return of premiums paid

minus indebtedness and without interest

when an insured has a major medical plan with first dollar coverage, how does this impact the benefits paid?

no deductible is required

a beneficiary change can occur

normally at any time during the policy term

The gate keepers role when used by an HMO is ****

obtaining referrals to specialists from primary care physicans

evidence ownership in a participating health insurance contract?

policy ownership

which of these describes the result of a modified endowment contract that failed to meet the seven-pay test

pre-death distributions are typically taxable

under a modified endowment contract, what are the likely tax consequences?

pre-death distributions will become taxable

which of the following is a reinstatement condition?

proof of insurability

in order to activate the reinstatement clause of a lapsed life insurance policy, the insured MUST

provide evidence of insurability to the insurer

in order to activate the reinstatement clause of a lapsed life insurance policy, the insured MUSt

provide evidence of insurability to the insurer

how are survivorship life insurance policies helpful in estate planning?

provide funds to help pay taxes

premiums paid that exceed 7 1/2% of an insureds adjusted gross income (AGI) are tax-deductible when paid for which of the following plans?****

qualified long-term care plan

Dana is an employee who deposits a percentage of her income into her individual annuity. Her company also contributes a percentage into a separate company pension plan. What kind of annuity is this considered?****

qualified retirement annuity

a life insurance company has transferred some of its risks to another insurer. The insurer assuming the risk is called the

reinsurer

under the subrogation clause, legal action can be taken by the insurer against the

responsible third party

an endorsement found in an insurance plan which modifies the provisions of the policy is called a

rider

premium payments for a universal life policy NOT used for?

separate account investments

NOT a type of medicare advantage plan

social security disability income (SSDI)

in order to operate as a domestic insurer, an insurance company MUST have a certificate of authority issued by the

south carolina department of insurance

proceeds from a life insurance policy are protected from the beneficiaries creditors by which clause?

spendthirft

which of these ensures that proceeds of a life insurance policy will be free from attachment or seizure by the beneficarys creditors?

spendthrift clause

In an insurance contract, the applicants "consideration" is the

statements made in the application and the premium

Distributions from a Health Savings Account (SHA) for qualified medical expenses are

tax free

policy that does NOT build cash value

term

signatures for an insurance application must be obtained by the producer from all of the following sources except

the beneficiary

what is a corridor in relation to a universal life insurance policy

the gap between the total death benefit and policy cash value

An insured individual and the policys beneficiary die from the same accident. The common disaster provision states the insurer will continue as if

the insured outlived the beneficiary

who assumes the investment risk with a fixed annuity contract?

the insurer

regarding an examination of an insurers books and records by the director is TRUE?

the insurer must not impede an examination and is required to assist in the examination procedures

which on the following statement regarding an examination of an insurers books and recored by the director is TRUE

the insurer must not impede an examination and is required to assist in the examination procedures

under the affordable care act, how would a grandfathered health plan lose its grandfathered status?

the insurer significantly raises co-insuance charges, deductibles, or co payments charges

a whole life insurance policy accumulates cash value that becomes

the policy loan value which the insured may borrow against

a false written or oral statement made by a producer for the purpose of replacing an existing policy to the detriment of the insured is

twisting

which of the following pertains to the analysis of an applicants personal information and determining whether insurance should be issued or declined

underwriting

all of the following riders can increase the death benefit amount EXCEPT

waiver of premium

Pierre is covered by his employers group major medical plan. His employer pays for 75% of the premium and he pays for 25%. How much would a $10,000 benefit be taxable as income under this plan?

$0

the typical long-term care insurance policy is designed to provide a minimum of ___ years of coverage

1

sole proprietors are permitted tax deductions for health costs paid from their earnings in the amount of***

100% of costs

Lorenzo is self employed with an S corporation. He is unmarried and had a net profit for the tax year. What are the tax ramifications of his health insurance premiums paid for the year?

100% of his health insurance costs can be deducted from his gross income

Frank is shopping for a disability income policy. which of the following would have the HIGHEST premium?

14 day waiting period/ 10 year benefit

an insurer must furnish to a claimant forms for filing proof of loss within _____ days upon receiving a notice of claim

15

an insurer must send a notice of appointment for a producer within _____ days from the date of an executed agency contract or after submitting the first application to the insurer

15

the maximum time period that an eligible employee can be excluded from coverage under a group health policy as a late enrollee

18 months

In the State of South Carolina, the Director may issue a temporary producer license for a MAXIMUM period of

180 days

the director must give a minimum of how many days notice of a disciplinary hearing?

30 days

The legal action provision in a health contract is limited to no more than ____ years

5

if an insurance producer receives compensation for giving advice to a member of the public and properly documents the transaction and amount with a memo signed by the person paying the fee, a copy of the memo or contract MUST be retained by the producer for at least

5 years

in south carolina, what is the maximum length of time an insurer can defer payment of a cash surrender value of an annuity?

6 months

Within how many days must a traditional IRA be rolled over to another IRA in order to avoid tax consequences

60

within how many days must a rollover be completed in order to avoid being taxed as current income

60

a pre-existing condition provision applies to a covered person if the previous creditable coverage was continuous to a date NOT more than how many days prior to the enrollment date of the new coverage

63 days

in health plans, premiums paid less frequent than monthly require a minimum grace period of at least

7 days


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