Insurance Test

Stock insurance companies selling all types of insurance are required to maintain a minimum of

$1 million of capital stock.

The most the Insurance Guaranty Association will pay for net cash surrender values is

$100,000.

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

A noncontributory group disability income plan has a 30-day elimination period and offers benefits of $2,000 a month. If an employee is unable to work for 7 months due to a covered disability, the employee will receive

$12,000, all of which is taxable.

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

What is a penalty tax for nonqualified distributions from a health savings account?

20%

Which of the following must the patient pay under Medicare Part B?

20% of covered charges above the deductible

What is the maximum number of required continuing education requirements for a producer within a given 2-year period?

24

Within how many days of requesting an investigative consumer report must an insurer notify the consumer in writing that the report will be obtained?

3 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 (OBRA) requires that large group health plans must provide primary coverage for disabled individuals under

Age 65 who are not retired.

Under which condition would an employee's group medical benefits be exempt from income taxes?

An employee's group medical benefits are generally exempt from taxation as income.

A Certificate of Authority in Nebraska must be renewed on what kind of basis?

Annual

Bob purchased a policy to provide coverage on himself, his wife Linda, and their two children, John and Kristen. All of them would need to prove insurability EXCEPT

Any children born to them after the inception of the contract

All of the following qualify for Medicare Part A EXCEPT

Anyone who is willing to pay a premium.

Which of the following types of agent authority is also called "percieved authority"?

Apparent

Each of the following factors is a signicant consideration in the underwriting of individual health insurance risks EXCEPT

Applicant's geographic location

The automatic premium loan provision is activated at the end of the

Grace period

Which of the following terms best describe the coverage provided by term policies, as compared to any other form of protection?

Greatest

Which of the following LTC is NOT provided is an institutional setting?

Home Health Care

Under workers compensation, which of the following benefits are NOT included?

Legal benefits

Which of the following settlement options in life insurance is known as straight life?

Life income

Which of the following is correct concerning the taxation of premiums in a key-person life insurance?

Premiums are not tax deductible as a business expense.

A long-term care shopper's guide must be presented at what point?

Prior to the time of application

Which of the following is NOT provided by an HMO?

Reimbursement

What method do insurers use to protect themselves against catastrophic losses?

Reinsurance

An employee insured under a group health policy is injured in a car wreck while performing her duties for her employer. This results in a long hospitalization period. Which of the following is true?

The group plan will not pay because the employee was injured at work

A group of 15 skydivers met at a seminar and began talking about life insurance during a break. Because it was expensive to get individual life insurance, they decided to band together to form a small group so that they could qualify for group life insurance. After they applied for group life insurance, they were rejected. Why?

The purpose of the group was to purchase life insurance.

What is a definition of a unilateral contract?

Two or more parties go into a contract understanding there may be unequal exchange of value.

under the credit disability policy, until what point will payments to the creditor be made for the insured

Until the disability ends or the debt is satisfied, whichever is sooner

The main difference between immediate and deferred annuities is

When the income payments begin.

An insured and his wife are both involved in a head-on collision. The husband dies instantly, and the wife dies 15 days later. The company pays the death benefit to the estate of the insured. This indicates that the life insurance policy had what provision?

common disaster

For the retirement plan to be qualified, it must be designed for the benefit of

employees

all of the following are business uses of life insurance EXCEPT

funding against general company financial loss

An employee quits his job on May 15 and doesnt convert his group life policy to an individual policy for 2 weeks. He dies in a freak accident on June 1. Which of the following statements best describes what will happen?

the insurer will pay the full death benefit from the group policy to the beneficiary

Which of the following is TRUE regarding the premium in term policies?

the premium is level

Which of the following disability income policies would have the highest premium?

15-day waiting period / 10-year benefit period

To be eligible under HIPAA regulations, for how long should an individual converting to an individual health plan have been covered under the previous group plan?

18 months

COBRA applies to employers with at least

20 employees

For how long is an insurance company allowed to defer policy loan requests?

6 months

A group policy used to provide accident and health coverage on a group of persons being transported by a common carrier, without naming the insured persons individually is called

Blanket policy.

When an insured makes truthful statements on the application for insurance and pays the required premium, it is known as which of the following?

Consideration

An insurer publishes intimidating brochures that portray the insurer's competition as financially and professionally unstable. Which of the following best describes this act?

Illegal under any circumstances

Life income joint and survivor settlement option guarantees

Income for 2 or more recipients until they die.

Which of the following is NOT among the goals of a Medicare supplement application?

Presuming the applicant is eligible for Medicaid, based on the nature of the policy

All of the following are true about variable products EXCEPT

The premiums are invested in the insurer's general account.

In an Adjustable Life policy all of the following can be changed by the policy owner EXCEPT

The type of investment

Which of the following is true regarding Medicare supplement policies?

They must be garenteed renewable

Which of the following is NOT an example of a business use of Life insurance?

Workers-compensation

If a retirement plan or annuity is "qualified," this means

it is approved by the IRS

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 recieved?

no tax

How long is an open enrollment period for Medicare supplement policies?

6 months

A tornado that destroys property would be an example of which of the following?

A peril

Which of the following individuals will be eligible for coverage on the Health Insurance Marketplace?

A permanent resident lawfully present in the U.S.

Regarding a PPO, which of the following is correct when selecting a primary care physician?

All of the above are correct

What is the term used for an applicant's written request to an insurer for the company to issue a contract, based on the information provided?

Application

In order to get a non-resident license in this state a producer must

Apply and pay a fee to a non-resident state that reciprocates.

Employees actively at work on the date coverage is transferred to another insurance carrier are

Automatically covered and exempt from any probationary period.

Which of following is NOT typically excluded from life policies?

Death due to a plane crash for a fare-paying passenger

An individual has been making periodic premium payments on an annuity. The annuity income payments are scheduled to begin after 1 year since the annuity was purchased. What type of annuity is it?

Deferred

A producer agent must do all of the following when delivering a new policy to the insured EXCEPT

Disclose commissions earned from the sale of the policy.

When contributions to an immediate annuity are made with before-tax dollars, which of the following is true of the distributions?

Distributions are taxable.

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 does "level" refer to in level term insurance?

Face amount

How many pints of blood will be paid for by Medicare Supplement core benefits?

First 3

Which of the following criminal activities would be sufficient violation to warrant rejection, revocation, or suspension of an insurance producer's license?

Forgery

Most LTC plans have which of the following features?

Guaranteed renewability

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

in the event of loss, after a notice is submitted to the insurer, who is responsible for providing claims forms and to which party

Insurer to the insured

Which of the following is correct about a group health insurance policy?

It can provide coverage for handicapped children.

What is the benefit of choosing extended term as a nonforfeiture option?

It has the highest amount of insurance protection.

Which of the following best describes annually renewable term insurance?

It is level term insurance.

Which of the following is true regarding a term health policy?

It is nonrenewable.

Which of the following types of insurance provides coverage on human lives, including benefits of endowment and annuities?

Life

An insurance organization that does not issue insurance policies but provides a meeting place for underwriters to conduct business is known as a

Lloyd's association

Which of the following is the basis for a claim against an insurance policy?

Loss

When an applicant purchased a life insurance policy, the agent dated the application 4 months prior. When asked by the applicant, the agent said he was allowed to backdate policies up to 6 months if it would

Lower the insured's premium

Which of the following programs expands individual public assistance programs for people with insufficient income and resources?

Medicaid

Which of the following statements pertaining to Medicare Part A is correct?

Medicare Part A is automatically provided when an individual qualifies for Social Security benefits at age 65.

An insured is involved in a car accident. After the accident is determined to be her fault, the police give her a breathalyzer test to determine whether or not she had been drinking alcohol before the accident. Her blood alcohol level is over the legal limit. What type of health benefits will her health insurance policy pay for her injuries if the policy includes the narcotics and intoxicants provision?

No benefits

Susan owns an individual long-term care insurance plan and is able to deduct the premiums from her taxes. What income taxation will be imposed on the benefits she receives?

None

Which provision concerns the insured's duty to provide the insurer with reasonable notice in the event of a loss?

Notice of Claim

Fred and Jody are covered under a group health insurance plan at his place of employment. When Jody gave birth to their first child, what must he do in order to have coverage for their child?

Notify the insurer within 31 days in order for the coverage to continue without any evidence of insurability.

Part 2 of the application for life insurance provides questions regarding all of the following EXCEPT

Other insurance coverages.

Which of the following is NOT true about a joint and survivor annuity benefit option?

Payments stop after the first death among the annuitants.

Which act bars agents, brokers, and companies from disclosing health, financial, or other information gathered in the underwriting process about the consumer to any 3rd party without consent of the consumer?

Privacy of Insurance Consumer Information Act

Which of the following answers does NOT describe the principal goal of a Preferred Provider Organization?

Provide medical services only from physicians in the network

The Federal Fair Credit Reporting Act

Regulates consumer reports.

An employee has group life insurance through her employer. After 5 years, she decides to leave the company and work independently. How can she obtain an individual policy?

She can convert her group policy to an individual policy without proof of insurability within 31 days of leaving the group plan.

Which of the following is a risk classification used by underwriters for life insurance?

Standard

Which of the following would an accident-only policy NOT cover?

Surgery to repair a wrist damaged by tendonitis.

All of the following employees may use a 403(b) plan for their retirement EXCEPT

The CEO of a private corporation.

an employee becomes insured under a ppo plan provided by his employer. if the insured decides to go to a physician who is not a ppo provider, which of the following will happen

The PPO will pay reduced benefits.

Your client has a Social Insurance Supplement (SIS) rider on his disability policy. After he becomes disabled, he recieves payments from the company. Shortly thereafter, he also begins recieving 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.

In a fixed annuity, which of the following is true regarding the gaurenteed interest rate on the investment?

The annuitant will receive the higher of either the guaranteed minimum rate or current rate

Which is NOT true regarding an insured who is considered to be a standard risk?

The insured may have to pay slightly higher premiums.

The insured had his wife named as the beneficiary of his life insurance policy. To ensure that his wife had income for life after the insured's death, he chose the life income settlement option. The amount of payments will be determined by taking into account all of the following EXCEPT

The insured's age at death.

The insuring clause of a disability policy usually states all of the following EXCEPT

The method of premium payment.

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?

Those who have been insured under the plan for at least 5 years

An insurer has been injured in an accident. Although he still recieving benefits from his disability income policy, he does not have to pay premiums. This means that the policy includes

waiver of premium feature