Life and Health Exam Missed Questions Part 2

If $100,000 of life insurance proceeds were used in a settlement option, which paid $13,000 per year for ten years, which of the following would be taxable annually?

$3,000

What percentage of individually-owned disability income is taxable?

0%

Under the Affordable Care Act, what percentage of preventive care must be covered without cost sharing?

100%

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

20%

The Department of Insurance contacts an agent about a claim that was settled two months ago. Within what timeframe must the agent issue a complete response?

21 days

Every policy of individual life insurance must include a notice of right to cancel the policy, stating the specific time frame for the free-look period. Once the insured has cancelled the policy, within how many days must the insurer refund all premiums and policy fees?

30 days

An IRA uses immediate annuities to pay out benefits; the IRA owner is nearly 75 years old when he decides to collect distributions. What kind of penalty would the IRA owner pay?

50% tax on the amount not distributed as required

A new insurance must be treated as a replacement if a new insurer sells a policy to a group which discontinued its group medical insurance within how many days?

60

In order to maintain coverage under COBRA, how soon from termination of employment must an employee exercise extension of benefits?

60 days

As part of the continuing education requirement, what is the minimum number of hours of continuing education specific to long-term care insurance to be completed prior to each license renewal?

8

A hospital indemnity policy will pay

A benefit for each day the insured is in a hospital.

Which of the following best describes the waiting period?

A period of time the insured has to wait before payments of benefits begin after a disability.

Which of the following would automatically qualify for Medi-Cal benefits?

A person receiving Supplementary Security Income assistance

Which of the following persons is NOT eligible for Medicare?

A person who has been entitled to Social Security disability benefits for the last 6 months (2 years)

Insurance policies are not drawn up through negotiations, and an insured has little to say about its provisions. What contract characteristic does this describe

Adhesion

Which of the following best describes the concept that the insured pays a small amount of premium for a large amount of risk on the part of the insurance company?

Aleatory

In disability income insurance, if an insured is considered disabled if they cannot perform any job they are suited for by prior education, training or experience, they fall under which definition of total disability?

Any Occupation

Which of the following is TRUE about a class designation?

Beneficiaries are not identified by name.

Which of the following categories of benefits are not covered by an LTC policy?

Care given in an acute care unit of a hospital

If a Medicare insured uses a non-participating in Medicare physician, he or she may be asked to sign a private contract. Which of the following conditions will NOT apply when the insured signs a private contract with the provider?

Claims should be submitted to Medicare.

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

Which of the following is NOT a characteristic or a service of an HMO plan?

Contracting with insurance companies

Contracts that are prepared by one party and submitted to the other party on a take-it-or-leave-it basis are classified as

Contracts of adhesion

Concerning AIDS and HIV risks, all of the following acts may subject an insurer to liability claims or fines EXCEPT

Declining applicant for a positive HIV test result

Which of the following is NOT a term for the period of time during which the annuitant or the beneficiary receives income?

Depreciation period

A waiver of premium provision may be included with which kind of health insurance policy?

Disability income

Your client wants to buy a par policy to supplement his retirement savings program. Which of the following does your client need to understand about insurance policy dividends?

Dividends are considered a refund of unused premiums.

All insurers doing business in California must maintain a department to investigate possible

Fraudulent claims by insureds.

An insured is involved in an accident that renders him permanently deaf, although he does not sustain any other major injuries. The insured is still able to perform his current job. To what extent will he receive Presumptive Disability benefits?

Full benefit

A Medicare supplement plan must have at least which of the following renewal provisions?

Guaranteed Renewable

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?

Guaranteed insurability option

Most LTC plans have which of the following features?

Guaranteed renewability

Harry has just received his life insurance policy. In reviewing the title page, Harry was able to ascertain the following information EXCEPT

His spouse had been assigned the primary beneficiary.

What are the three basic coverages for medical expense insurance?

Hospital, Surgical, Medical

Who will be affected by the share of cost requirement for Medi-Cal?

Individuals whose income exceed the Medi-Cal limit

Kayla's husband died in a plane crash. She needs a new source of funding that will help put her child through daycare. Which of the following would be the best source?

Life insurance proceeds

Which operating division of an insurer is responsible for advertising, promoting, and distributing the insurer's products to the public

Marketing and Sales

Under the Affordable Care Act, which classification applies to health plans based on the amount of covered costs?

Metal level classification

An insured is involved in a car accident. In addition to general, less serious injuries, he permanently loses the use of his leg and is rendered completely blind. The blindness improves a month later. To what extent will he receive Presumptive Disability benefits?

No benefits

Which renewal provision(s) must be included in a long-term care policy issued to an individual?

Noncancellable and guaranteed renewable

The dividend option in which the policyowner uses dividends to purchase a term policy for one year is referred to as the

One-year term option.

What term is used to describe when a medical caregiver contracts with a health organization to provide services to its members or subscribers, but retains the right to treat patients who are not members or subscribers?

Open panel

Which renewability provision allows an insurer to terminate a policy for any reason, and to increase the premiums for any class of insureds?

Optionally renewable

What do living benefit riders do?

Pay part of the policy death benefit to insureds in order to help fund long-term care or nursing home care

Which of the following individuals must have insurable interest in the insured?

Policyowner

HSAs are owned by the individual, not the employer, which means the individual is not dependent on a particular employer to enjoy the advantages of having an HSA. What term best describes this?

Portable

Based on Human Life Value Approach, which of the following is NOT used to calculate an individual's life value?

Predicted needs of the family after the insured's death

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

Premiums are not tax deductible as a business expense

If a person receives benefits for long term care from Medi-Cal, when that recipient dies, the state may

Pursue asset recovery against the estate of the recipient.

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

Single premium whole life

All of the following are beneficiary designations EXCEPT

Specified.

All the factors are FALSE when used to provide data and statistics to an insurer in order to project losses and the subsequent cost of insuring risks in a group disability policy, EXCEPT

Stability, Price, Longevity with a particular carrier.

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.

In a group life insurance policy, the employer may select all of the following EXCEPT

The beneficiary.

An Adjustable Life policyowner can change which of the following policy features?

The coverage period

An employer employs 500 workers and contributes to their Health Savings Accounts (HSAs). To reduce turnover, the employer wants to tell employees that they will lose their HSAs if they leave the company. Which of the following is true?

The employees own the accounts and may take them with them when they leave. The employer will have to find another way to improve retention

What method is used to determine the taxable portion of each annuity payment?

The exclusion ratio

An insured purchased a noncancellable health insurance policy 1 year ago. Which of the following circumstances would NOT be a reason for the insurance company to cancel the policy?

The insured is in an accident and incurs a large claim.

Which of the following is NOT a characteristic of pure risk?

The loss must be catastrophic.

All of the following are general requirements of a qualified plan EXCEPT

The plan must provide an offset for social security benefits.

An insured stops making payments on a loan taken from his cash value policy. What will most likely happen?

The policy will terminate when the loan amount with interest equals or exceeds the cash value

An insured has chosen joint and 2/3 survivor as the settlement option. What does this mean to the beneficiaries?

The surviving beneficiary will continue receiving 2/3 of the benefit paid when both beneficiaries were alive.

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 about labor unions, fraternals and co-ops?

They may opt for a self-insured medical and disability plan.

What is the purpose of annuity riders?

To allow investors to obtain additional benefit

The rider in a whole life policy that allows the company to forgo collecting the premium if the insured is disabled is called

Waiver of premium.

When would a 20-pay whole life policy endow?

When the insured reaches age 100

Which of the following is true regarding the gender of the applicants in disability income insurance?

Women, as they age, present a higher health risk and are more prone to disability.

Insurance is the transfer of

risk