Life, accidental, and health review

Victoria's adjusted gross income was $60,000. The total cost of her individual medical insurance, LTC insurance, and out-of-pocket medical expenses was $7,500. Victoria may qualify for a deduction in the amount of ______.

$3,000

How many days after appointing an agent must an insurer notify the Commissioner of the appointment?

15 days

B's policy had a $1,000 annual premium. B has not paid it for 2 years and wants to put the policy back in force. The insurer charges 10% interest on overdue premiums. What does B have to pay in order to reinstate their policy?

2 years of premiums, plus interest due on overdue premiums amounts

Which Term Life insurance policy would have the highest initial premium, all else being equal? A 10-year Term B 20-year Term C 5-year Term D 1-year Term

20 year term

In order to be sold as a long-term care insurance policy, an insurance product must:

Have an pre-existing exclusion period of no more than 6 months

All of the following are true about indeterminate premium whole life policies, except: A There is a maximum guaranteed premium stated in the policy B The company charges a current premium based on current estimates C The policy has adjustable premiums D They are like participating whole life

They are like participating whole life

Benefit payments made on a ____________ basis are not scheduled, but are based on the average fee charged by all doctors in a given geographical area.

UCR

How long after reinstatement will a health policy reinstate coverage for sickness?

after 10 days

All of the following are ways consumers can insure themselves with 'minimum essential coverage' without having to pay a penalty under the Affordable Care Act, except: A Be self-insured B Purchase insurance directly from an insurer in the individual market C Purchase insurance offered by an employer D Enroll in a government program or purchase coverage through a state exchange

be self-insured

A generic brochure developed by the NAIC to provide consumers with descriptions of basic types of life insurance as well as the comparative costs of each is called the _______.

buyer's guide

This type of coverage is used for replacing the insured's loss of earnings.

disability income

Optional uniform provisions found in health insurance policies are designed to protect the:

insurer

Individuals who do not enroll during the initial enrollment period are considered ___________ enrollees.

late

If a policy is at risk of cancellation or lapse due to nonpayment of premium, which of the following provides paid-up coverage?

Nonforfeiture

Generally, which of the following Annuities is not designed to guarantee the principal value of the policy in stable interest rate environments?

variable

An insurer replacing a life policy must notify the existing insurer of the proposed replacement within how many business days of receiving an application?

3 days

In a long-term care policy transaction, when must the outline of coverage be provided to the applicant?

At the time of initial solicitation and prior to the application

Experience rating utilizes _______ in determining the rate the insurer will charge for group coverage in each year of coverage.

Actual loss experience of the group

When are LTC premiums deductible for an employer?

Any time premiums for employee policies are paid by the employer

Which of the following is FALSE regarding Settlement Options?

Both principal and interest received as a result of a settlement option are taxed as ordinary income to the beneficiary, as received

A variable life policy:

Death benefit varies to reflect the investment results of the underlying separate account, but never falls below a guaranteed minimum

What type of annuity is designed to start benefit payments many years from now and subjects the owner to investment risk?

Deferred variable

Edward applies for a disability insurance policy. He pays the initial premium at the time of application and receives a conditional receipt. Three days after the insurance company conducts a medical examination, but before it issues a policy, Edward suffers a stroke. Upon reviewing the results of his medical exam, the company discovers that Edward has been diagnosed with high blood pressure and atherosclerosis. Under the terms of the conditional receipt, the insurance company:

Denies the claim because the insurer would not have issued the policy as applied for as standard or better

The Minimum Benefit Standards under a qualified LTC policy include all of the following, except:

Every LTC policy must be issued as noncancellable

When a producer personally delivers a life insurance policy, they are responsible for doing which of the following?

Explain the policy policy benefits

Who pays all future premiums after the Viatical Settlement?

The Viatical Company

Which is true regarding the advertising of Accident and Sickness Insurance? A Sales talks and personal testimonials are not considered advertising B When an agent misleads the public in an advertisement, only the agent is accountable C When insurers advertise that a group endorses a certain health product, the public must be made aware of any control the insurer may have regarding the group D Advertisements may use words or phrases such as 'all', 'complete', 'comprehensive

When insurers advertise that a group endorses a certain health product, the public must be made aware of any control the insurer may have regarding the group

Harry was hospitalized and in a coma for 6 months. When does proof of loss for this claim have to be submitted?

Within 1 year, unless he suffers legal incapacity

With a modified premium whole life contract, premium payments:

are lower in the early years of the contract

In a legal sense, an insurance premium is the insured's _______.

consideration

An initial amount the insured must meet per year before benefits are paid is known as the:

deductible

Which of the following limitations is not included in most dental expense insurance plans?

deductibles for preventive care

A family has a $1,000 annual family deductible with a coinsurance provision of 80/20. The family's claims for the year are $200, $300, $400, $500, $300, and $300 totaling $2,000. The insured is responsible for paying:

$1,200

With regard to life insurance policies, the maximum liability of the Michigan Life and Health Guaranty Association liability is limited to the lesser of the impaired insurer's contractual obligation, or:

$300,000 in death benefits per insured

In Michigan, the Free Look period for life policies is set at how many days?

10 days

Which of the following traditional whole life policies has the highest first-year annual premium, all other factors being equal?

10-pay life (lowest value)

The Social Security blackout period for surviving spouses begins when the youngest child reaches age ______, and ends when the surviving spouse reaches age ______.

16/60

There are ____ broad categories of qualified retirement plans.

2

How long must a life insurer maintain files containing the advertisements it has used?

4 years

If Mary is 30 years old and buys a 15 Pay Life policy, how old will Mary be when she stops paying premiums?

45

A partnership has 3 partners who each have an equal ownership interest in their $3,000,000 business. How many policies would have to be purchased under a traditional cross purchase buy-sell agreement plan?

6

Which of the following statements about blanket disability insurance coverage is correct? A Credit disability insurance is considered a blanket policy B An application is required from each person covered C Blanket insurance benefits are paid to the plan sponsor D The term blanket insurance does not apply to employer-sponsored group insurance

Credit disability insurance is considered a blanket policy Blanket policies are group policies, including employer groups, and do not require individual applications.

All of the following are characteristics of Group Life Insurance, except:

Group is typically written utilizing Permanent Insurance

Sylvia is a participant in a Preferred Provider Organization and finds that if she opts to use a provider outside the network:

Her PPO will pay a reduced amount with Sylvia paying the balance

One of your clients just reinstated an Accident and Health policy. When is coverage effective?

In 10 days for sickness and immediately for accidental injuries

Which of the following statements about maintaining an insurance license is correct? A Insurance producers may not use assumed names B Information regarding violations reported by producers becomes public information C All producer licenses expire after 2 years D Insurance producers must report disciplinary actions in other jurisdictions within 30 days

Insurance producers must report disciplinary actions in other jurisdictions within 30 days

Which of the following is correct concerning an LTC policy? A It may define a preexisting condition as a condition for which advice or treatment was recommended or received within 6 months of the effective date of coverage B A new waiting period may be established when existing coverage is converted or replaced by another policy C A policy may be canceled or nonrenewed on the basis of age D It may provide coverage for only skilled nursing care and not any lower levels of care

It may define a preexisting condition as a condition for which advice or treatment was recommended or received within 6 months of the effective date of coverage

A life insurance applicant wants a combination of savings and insurance protection with guarantees. If the applicant is willing to pay premiums only until the age of 65, at which time the policy is fully paid-up, which of the following should he/she purchase?

Limited Pay Whole Life-Age to age 65

_____________ consists of groups of underwriters called syndicates, each of which specializes in insuring a particular type of risk.

Lloyds of London

When employers who self-fund their employee benefits form a larger group in order to offer health insurance benefits to each employer's workers, it is called a (an):

Multiple Employer Welfare Association (MEWA)

All of the following are requirements that insurers may place on a group plan to avoid adverse selection, except: A A minimum level of employee participation B Coverage only for full-time employees C Proof of insurability from each employee D A purpose other than obtaining insurance

Proof of insurability from each employee

Which of the following statements is not correct regarding rates and premiums? A Rates may only be excessive if the insurer is making up for lost reserves B A premium is the total cost for the amount of insurance purchased C Rates are considered inadequate when they do not cover projected losses and expenses D The rate is the amount charged for a particular unit of insurance

Rates may only be excessive if the insurer is making up for lost reserves

The nonforfeiture option that provides coverage for the longest period of time is:

Reduced Paid-Up

Which of the following would be considered boycott or coercion? A Restricting access to insurance products based on one's race or marital status B Imposing underwriting standards on individual application C Requiring that payments received for insurance premiums be made out to the name of the insurer D Restricting access to insurance products except in conjunction with sale of unrelated financial services

Restricting access to insurance products except in conjunction with sale of unrelated financial services

The primary categories of Social Security Benefits provided are:

Retirement, Death, and Survivor

Bert is the owner and insured of a permanent life insurance policy he purchased 20 years ago. He has never missed a premium payment. He would like to buy a new car but his bank account is running low. How can he obtain the necessary funds while still maintaining coverage?

Take a policy loan from the insurer

Karen, age 50, withdraws $1,000 from her Health Savings Account (HSA) for a purpose other than a qualified medical expense. As a result of this action:

The $1,000 is taxed as ordinary income, with an additional $200 penalty tax applied

A is the insured under a $100,000 10 year term life insurance policy with her spouse named as her beneficiary. If she dies in year 9, what will her spouse receive?

The face amount of the policy

Which of the following statements about policy roles is TRUE? A The applicant, insured, and policyowner must approve any changes to a policy in writing B The insured and the policyowner are usually the same, but not necessarily C The insured and the policyowner are always the same D Any changes to a policy must be approved by both the insured and policyowner in writing

The insured and the policyowner are usually the same, but not necessarily

Which of the following scenarios will cause the value of a life insurance policy death benefit to be included in the insured's estate?

The insured is also the policyowner

Regarding penalties that may be imposed on a Michigan licensee, which statement is TRUE? A The Commissioner must provide 30 day's notice before any hearing B Rebating is considered a felony C The maximum fine for a misrepresentation violation is $2,000 D The Commissioner cannot suspend a license without holding a hearing first

The maximum fine for a misrepresentation violation is $2,000

All of the following are characteristics of Universal Life Insurance, except: A The policyowner has the option to adjust the death benefit up or down B Each month a mortality charge is deducted from the policy's cash value for the cost of the insurance protection and expenses C The policyowner may determine the amount and mode of premium payments D The policyowner can choose which investment(s) to place the cash values into from those available

The policyowner can choose which investment(s) to place the cash values into from those available

All of the following are situations in which the insurer is obligated to pay out a death benefit after the insured has died, except: A The insured was an experienced pilot who died in a plane crash but had a policy issued with an aviation rider for an additional premium B The insurer discovers the gender of the insured was misstated C An insured commits suicide 7 years after the policy was issued D The premiums have not been paid and have been overdue for 3 years

The premiums have not been paid and have been overdue for 3 years

Which of the following statements is a required provision in all individual health insurance policy? A The time limit on defenses is 2 years B If an insured changes to a more hazardous occupation, benefits will be paid in accordance to what the premiums would have purchased at the more hazardous occupation C Insurers are not liable for losses incurred during the course of illegal activities D Any unpaid premiums will be deducted

The time limit on defenses is 2 years

Which of the following statements about policy dividends is TRUE? A There are several dividend options to choose from B Nonparticipating policies are eligible for dividends C Dividends are guaranteed and taxable as income when received D Dividends can only be withdrawn at certain specified intervals

There are several dividend options to choose from

J and his insurance company disagree over some ambiguous language in J's life insurance policy. If the parties end up in court, which principle would direct the court to rule in favor of J?

adhesion

_________ consist(s) of the amount of premium that is returned to the policyowner if the insurer achieves lower mortality and expense costs than expected.

dividend

Beth has a contract stating she must be disabled for 3 months before benefits will begin to be paid. This 3-month period is known as the:

elimination period

The __________ allows an insurer to pay death benefits anyone it deems to be entitled in the absence of a designated beneficiary.

facility of payment clause

Under HIPAA, coverage may be nonrenewed for all of the following reasons, except: A Frequency of claims B Participation requirements not fulfilled C Noncompliance with plan provisions D Nonpayment of premium

frequency of claims

To be eligible for social security disability the insured worker must be:

fully insured

If a beneficiary has the choice and is interested in capital conservation, then which of the following settlement options should be chosen? A Interest Only B Fixed Amount C Life Only D Period Certain

interest only

A (an)_________ is used when the insured's age, medical history, or amount of coverage does not require a medical exam for underwriting purposes.

nonmedical application

Most group Disability Income contracts are offered on a(n):

nonoccupational basis

Most group Disability Income contracts are offered on a/an:

nonoccupational basis

Bill is a retired military officer suffering from complications caused by Agent Orange exposure during his military service. He incurs $54, 510 in medical expenses during hospitalization at the local Veterans Administration Hospital. The private health insurance he now owns will likely pay:

nothing

When an individual is covered by a three-tiered, consumer driven health plan, the second source or tier of payment usually comes from a/an:

out of pocket funds

All of the following are risks to the life settlement purchaser, except: A The insured dies sooner than expected B The third party runs out of funds to pay on-going premiums C The insurer becomes insolvent D The insurer will not honor the claim based on lack of insurable interest

the insured dies sooner than expected