Life and Health #2

Which of the following can surrender a deferred annuity contract? a) The beneficiary after the owner's death b) Deferred annuity cannot be surrendered. c) Only the annuity owner d) Only the insurance company for nonpayment of premiums

c

Employer contributions made to a qualified plan a) Are subject to vesting requirements. b) May discriminate in favor of highly paid employees. c) Are after-tax contributions. d) Are taxed annually as salary.

a

Which of the following statements about occupational vs. nonoccupational coverage is TRUE? a) Disability insurance can be written as occupational or nonoccupational. b) Group medical expense policies and individual medical expense policies always cover both occupational and nonoccupational injuries. c) Individual disability policies never cover nonoccupational injuries. d) Only group disability income policies can be written on an occupational basis.

a

In which Medicare supplemental policies are the core benefits found? a) Plans A-D only b) All plans c) Plans A and B only d) Plan A only

b

Under the Affordable Care Act, which classification applies to health plans based on the amount of covered costs? a) Grandfathers and non-grandfathered b) Risk classification c) Metal level classification d) Guaranteed and nonguaranteed

c

Which of the following is a feature of a variable annuity? a) Interest rate is guaranteed. b) Securities license is not required. c) Benefit payment amounts are not guaranteed. d) Payments into the annuity are kept in the company's general account.

c

Which of the following dental insurance categories would cover the filling of cavities? a) Orthodontic care b) This type of work is not covered. c) Routine and preventative maintenance d) Routine and major restorative care

d

What is the maximum period that an insurer would pay benefits in accordance with an Additional Monthly Benefit rider? a) For the duration of the disability or the contract, depending on which ends first b) 1 month c) 1 year d) 2 years

c

An agent and an applicant for a life insurance policy fill out and sign the application. However, the applicant does not wish to give the agent the initial premium, and no conditional receipt is issued. When will coverage begin? a) When the agent submits the application to the company and the company issues a conditional receipt b) When the agent delivers the policy, collects the initial premium, and the applicant completes an acceptable Statement of Good Health c) On the designated effective date d) On the application date

b

For how many days of skilled nursing facility care will Medicare pay benefits? a) 90 b) 100 c) 30 d) 60

b

All of the following are Nonforfeiture options EXCEPT a) Cash surrender b) Extended term c) Reduced paid-up d) Interest only

d

Before he died, an annuitant had received $12,500 in monthly benefits from his $25,000 straight life annuity. He was also the insured under a $50,000 paid-up whole life policy that named his wife as primary beneficiary. Considering both contracts, how much will the annuitant's spouse receive in benefits? a) $50,000 b) $62,500 c) $75,000 d) Nothing

a

Which of the following hospice expenses would NOT be covered in a cost-containment setting? a) Antibiotics b) Tylenol c) Morphine d) Special hospital bed

a

Which of the following is true regarding a term health policy? a) It is nonrenewable. b) It is conditionally renewable. c) It is guaranteed renewable. d) It is noncancellable.

a

Rebating is an unfair trade practice and is regulated by law. All of the following would be considered to be rebating EXCEPT a) An agent offers tickets to a baseball game as an inducement to buy insurance. b) An agent uses misrepresentation to convince a person to cancel an existing policy and take a new policy from him. c) An agent offers the use of his lake house to person as an inducement to buy. d) An agent offers to share his commission with a policyholder.

b

Which of the following best describes the MIB? a) It is a rating organization for health insurance. b) It is a nonprofit organization that maintains underwriting information on applicants for life and health insurance. c) It is a government agency that collects medical information on the insured from the insurance companies. d) It is a member organization that protects insured against insolvent insurers.

b

When Linda suffered a broken hip, she notified her agent, in writing, within 12 days of the loss. However, her agent did not notify the insurance company until 60 days after the loss. Which of the following statements correctly explains how this claim would be handled? a) The insurer may delay the payment of this claim for up to 6 months. b) The insurer may settle this claim for less than it otherwise would have had the notification been provided in a timely manner. c) The insurer may deny the claim since it was not notified within the required 20-day time frame. d) The insurer is considered to be notified since the notification to agent equals notification to the insurer.

d

Which of the following does NOT have to be disclosed in a long-term care (LTC) policy? a) The aggregate amount of premiums due b) The meaning of the terms "reasonable" and "customary" c) Any limitations or conditions of eligibility for LTC benefits d) Any riders or endorsements

a

An insurer neglects to pay a legitimate claim that is covered under the terms of the policy. Which of the following insurance principles has the insurer violated? a) Representation b) Adhesion c) Consideration d) Good faith

c

All of the following are dividend options EXCEPT a) Paid-up additions. b) Fixed-period installments. c) Accumulated at interest d) Reduction of premium.

b

Insurance producers that do not have company appointments are considered a/an a) Agent. b) Producer. c) Representative of the consumer. d) Managing General Agent.

c

Events or conditions that increase the chances of an insured loss occurring are referred to as a) Exposures. b) Risks. c) Perils. d) Hazards.

d

Which renewal option does NOT guarantee renewal and allows the insurance company to refuse renewal of a policy at any premium due date? a) Guaranteed renewable b) Noncancellable c) Optionally renewable d) Conditionally renewable

c

An annuity owner is funding an annuity that will supplement her retirement. Because she does not know what effect inflation may have on her retirement dollars, she would like a return that will equal the performance of the Standard and Poor's 500 Index. She would likely purchase a(n) a) Variable Annuity. b) Flexible Annuity. c) Immediate Annuity. d) Equity Indexed Annuity.

d

How does a member of an HMO see a specialist? a) HMOs do not cover specialists. b) The member is allowed to choose his/her own specialist. c) The primary care physician refers the member. d) The insurer chooses the specialist.

c

A policyowner 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? a) Incontestability period b) Assignment c) Automatic premium loan d) Waiver of premium

c

What kind of LTC benefit would provide coverage for care for functionally impaired adults on a less than 24-hour basis? a) Residential Care b) Respite Care c) Home Health Care d) Adult Day Care

d

Which of the following statements is true regarding LTC insurance? a) LTC policies must allow a 60-day free-look period. b) Every policy must offer nonforfeiture benefits to the applicant. c) Every policy must offer reduced paid-up insurance to the applicant. d) LTC policies may not include any riders.

b

What is a material misrepresentation? a) Any misstatement by the producer b) Concealment c) A statement by the applicant that, upon discovery, would affect the underwriting decision of the insurance company d) Any misstatement made by an applicant for insurance

c

Which of the following best describes a pure life annuity settlement option? a) Benefits are paid for a fixed period of time, specified when the policy begins to pay. b) Pure life provides payments for as long as both the annuitant and the spouse are living. c) Pure life provides payments for as long as the annuitant is alive. d) Pure life guarantees that all the proceeds will be paid out.

c

Agents who persuade insureds to cancel a policy in favor of another one when it might not be in the insured's best interest are guilty of a) Twisting. b) Defamation. c) Misrepresentation. d) Rebating.

a

How are the variable annuities regulated? a) By state and federal agencies b) By the National Association of Securities Dealers c) By the Commissioner of Insurance d) By the Department of Insurance

a

Which of the following statements is NOT correct concerning the COBRA Act of 1985? a) It requires all employers, regardless of the number or age of employees, to provide extended group health coverage. b) It covers terminated employees and/or their dependents for up to 36 months after a qualifying event. c) It applies only to employers with 20 or more employees that maintain group health insurance plans for employees. d) COBRA stands for Consolidated Omnibus Budget Reconciliation Act

a

An individual is purchasing a permanent life insurance policy with a face value of $25,000. While this is all the insurance that he can afford at this time, he wants to be sure that additional coverage will be available in the future. Which of the following options should be included in the policy? a) Nonforfeiture options b) Guaranteed insurability option c) Dividend options d) Guaranteed renewable option

b

Producers are responsible to collect and disperse premiums, and return premiums or other funds. Which insurance term is associated with this? a) Monetary gatekeeping b) Fiduciary capacity c) Financial trust d) Brokering

b

Terminally ill patients are expected to survive how many months or less? a) 25 b) 24 c) 6 d)

b

If an insured continually uses the automatic premium loan option to pay the policy premium, a) The cash value will continue to increase. b) The insurer will increase the premium amount. c) The policy will terminate when the cash value is reduced to nothing. d) The face amount of the policy will be reduced by the automatic premium loan amount.

c

Which of the following are the authorities that an agent can hold? a) Authorized and admitted b) Primary and secondary c) Express and implied d) Apparent and allowed

c

Which of the following is an example of apparent authority of an agent appointed by an insurer? a) The agent has business cards and stationery printed. b) The agent puts up a sign with the insurer's logo without express permission. c) The agent accepts a premium payment after the end of the grace period. d) The agent accepts a premium payment during the grace period.

c

Which of the following statements concerning buy-sell agreements is true? a) Benefits received are considered income taxable. b) Buy-sell agreements pay in the event of a medical emergency. c) Buy-sell agreements are normally funded with a life insurance policy. d) Premiums paid are deductible as a business expense.

c

After a hearing, if the Commissioner finds that a licensee is in violation of the state insurance laws, the Commissioner can do any of the following EXCEPT a) Impose a civil penalty. b) Issue a cease and desist order. c) Suspend or revoke the license. d) Imprison the licensee.

d

Julie must have orthodontic work performed on her incisors. Which type of service would this be called, under a nonscheduled plan? a) Basic service b) Minor service c) Repair service d) Major service

d

Medicare Part A services do NOT include which of the following? a) Post hospital Skilled Nursing Facility Care b) Hospitalization c) Hospice Care d) Outpatient Hospital Treatment

d

Under which of the following circumstances can financial institutions share insurance coverage information with third parties, for the purpose of soliciting the purchase of insurance? a) Whenever it is requested by the Commissioner b) Under no circumstances; nonpublic personal financial information cannot be shared with third parties c) If a consumer decides to opt out d) If a consumer does not sign and return the notice of disclosure within 30 days

d

Which of the following statements is true regarding the cash value in a Universal life policy? a) The insurer credits the cash value in the policy with a guaranteed interest rate. b) The insurer backs the cash value with a nonguaranteed interest rate. c) The insurer backs the cash value with a current interest rate. d) The insurer credits the cash value in the policy with a current interest rate.

d

he Probationary Period is a) The number of days the insured has to determine if he/she will accept the policy as received. b) The stated amount of time when benefits may be reduced under certain conditions. c) The number of days that must expire after the onset of an illness before benefits will be earned. d) A specified period of time that a person joining a group has to wait before becoming eligible for coverage.

d

Which of the following is TRUE about a class designation? a) Beneficiaries are not identified by name. b) Beneficiaries must be part of the insured's immediate family. c) It is not allowed. d) It determines the succession of beneficiaries.

a

All of the following are unfair claims settlement practices EXCEPT a) Failing to acknowledge pertinent communication pertaining to a claim. b) Suggesting negotiations in settling the claim. c) Refusing to pay claims without conducting a reasonable investigation. d) Failing to adopt and implement reasonable standards for settling claims.

b

A Medicare SELECT policy does all of the following EXCEPT a) Provide payment for full coverage under the policy for covered services not available through network providers. b) Provide for continuation of coverage in the event that Medicare SELECT policies are discontinued due to the failure of the Medicare SELECT program. c) Prohibit payment for regularly covered services if provided by non-network providers. d) Make full and fair disclosure in writing of the provisions, restrictions, and limitations of the Medicare SELECT policy to each applicant.

c

All of the following are characteristics of group life insurance EXCEPT a) Individuals covered under the policy receive a certificate of insurance. b) Certificate holders may convert coverage to an individual policy without evidence of insurability. c) Premiums are determined by the age, sex and occupation of each individual certificate holder. d) Amount of coverage is determined according to nondiscriminatory rules.

c

Which of the following statements about the reinstatement provision is true? a) It requires the policyowner to pay all overdue premiums with interest before the policy is reinstated. b) It permits reinstatement within 10 years after a policy has lapsed. c) It provides for reinstatement of a policy regardless of the insured's health. d) It guarantees the reinstatement of a policy that has been surrendered for cash.

a

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? a) The benefits will be coordinated. b) Neither plan would pay. c) Each plan will pay in equal shares. d) The insured will have to select a plan from which to collect benefits.

a

With regards to premium rates, which of the following statements is NOT true? a) If a premium rate is disapproved, the Commissioner must hold a hearing if requested by the insurer. b) The Commissioner sets all insurance premium rates used in Pennsylvania. c) Pennsylvania is a "prior approval" state in that premiums rates must be filed with the Insurance Department and approved by the Commissioner. d) After a premium rate is filed, the insurer must wait 30 days or until approval is received from the Commissioner before using the new rate.

b

All of the following statements about equity index annuities are correct EXCEPT a) The interest rate is tied to an index such as the Standard & Poor's 500. b) They invest on a more aggressive basis aiming for higher returns. c) The annuitant receives a fixed amount of return. d) They have a guaranteed minimum interest rate.

c

As it pertains to group health insurance, COBRA stipulates that a) Retiring employees must be allowed to convert their group coverage to individual policies. b) Terminated employees must be allowed to convert their group coverage to individual policies. c) Group coverage must be extended for terminated employees up to a certain period of time at the employer's expense. d) Group coverage must be extended for terminated employees up to a certain period of time at the former employee's expense.

d

Which of the following protects consumers against the circulation of inaccurate or obsolete personal or financial information? a) Consumer Privacy Act b) The Fair Credit Reporting Act c) Unfair Trade Practices Law d) The Guaranty Association

b

An employer has sponsored a qualified retirement plan for its employees where the employer will contribute money whenever a profit is realized. What is this called? a) Tax-sheltered account plan b) HR 10 plan c) Profit sharing plan d) 401(k) plan

c

Under the uniform required provisions, proof of loss under a health insurance policy normally should be filed within a) 90 days of a loss. b) 20 days of a loss. c) 30 days of a loss. d) 60 days of a loss

a

When a life insurance policy was issued, the policyowner designated a primary and a contingent beneficiary. Several years later, both the insured and the primary beneficiary died in the same car accident, and it was impossible to determine who died first. Which of the following would receive the death benefit? a) The insured's contingent beneficiary b) The insurance company c) The insured's estate d) The primary beneficiary's estate

a

The relation of earnings to insurance provision allows the insurance company to limit the insured's benefits to his/her average income over what period of time? a) 18 months b) 2 years c) 6 months d) 1 year

b