Life and Health Exam

Employer health plans must provide primary coverage for individuals with end-stage renal disease before Medicare becomes primary for how many months?

30 months

For how many years is an insurer required to maintain a complete file of its advertisements?

5 years

What is the waiting period on a Waiver of Premium rider in life insurance policies?

6 months

In order to reduce the premium, an insurer can backdate a life policy up to

6 months.

For the reported losses of an insured group to become more likely to equal the statistical probability of loss for that particular class, the insured group must become

Larger

Which of the following describes the taxation of an annuity when money is withdrawn during the accumulation phase?

Withdrawn amounts are taxed on a last in, first out basis.

If an insurer terminates a producer, the Commissioner must be notified. How many days does the insurer have to deliver this notice?

30 days

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

60 days?

If during the underwriting process an insurer obtains personal information about an applicant from the applicant, when must the insurer provide notice of its information practices?

?

Person A has an insurable interest in Person B and wants to insure B's life. A will be the policy beneficiary. Which of the following is true?

Person B must consent to be insured in writing.

Which of the following provisions is mandatory for health insurance policies?

Physical examination and autopsy

All of the following are marketing arrangements used by insurers EXCEPT

Reinsurance System.

The Ownership provision entitles the policyowner to do all of the following EXCEPT

Set premium rates.

A licensed counselor MAY NOT perform which of the following duties?

Solicit business as an insurance producer

When would a 20-pay whole life policy endow?

When the insured reaches age 100

Which of the following ultimately determines the interest rates paid to the owner of a fixed annuity?

Insurer's guaranteed minimum rate of interest

An applicant wants to buy a policy that has a cash value element. Which type should she buy?

Permanent

A policyowner who is also the insured wants to name her husband as the beneficiary of her life policy. She also wishes to retain all of the rights of ownership. The policyowner should have her husband named as the

Revocable beneficiary.

It would be considered unfair discrimination to ask an insurance applicant about which of the following and then use that information as a rating factor to determine insurability?

Sexual orientation

Which of the following is an example of a peril covered in an accident and health insurance policy?

Sickness

Under what condition are group disability income benefits received by an employee NOT taxable as income?

When the benefits received are equal or less than the employee's percentage of the contribution.

The purpose of managed care health insurance plans is to

Control health insurance claims expenses

The gatekeeper of an HMO helps

Control specialist costs.

A key person insurance policy can pay for which of the following?

Costs of training a replacement

What is another name for interest-sensitive whole life insurance?

Current assumption life

Circulating deceptive sales material to the public is what type of Unfair Trade Practice?

False advertising

Insurance that would pay for hiring a replacement for an important employee who becomes disabled is called

Key employee disability insurance.

How much is an agent's appointment fee?

$5

How long is the required grace period in life insurance policies in this state?

1 month

In a noncontributory health insurance plan, what percentage of eligible employees must participate in the plan before the plan can become effective?

100%

If an insurer wishes to appoint a producer, it must file a notice of appointment within how many days of the date that the contract is executed?

15 days

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

A temporary license in this state is valid for a maximum of

180 days.

COBRA applies to employers with at least

20 employees

What is the maximum age for qualifying for a catastrophic plan?

30

Within how many days does a licensee have to inform the Commissioner of a change of address?

30

Jason is insured under his employer's group health insurance. He splits the cost of the premiums with his employer. This is an example of

A contributory plan

Which of the following statements is NOT true concerning insurable interest as it applies to life insurance?

A debtor has an insurable interest in the life of a lender.

An applicant for a Counselor's license in Michigan must possess all of the following EXCEPT

A good business reputation and good moral character.

How is emergency care covered for a member of an HMO?

A member of an HMO can receive care in or out of the HMO service area, but care is preferred in the service area.

Long-term care policies MUST cover

A pre-existing condition.

Long-term care insurance policies must cover which of the following?

Alzheimer's disease

In insurance, an offer is usually made when

An applicant submits an application to the insurer

Under HIPAA, which of the following is INCORRECT regarding eligibility requirements for conversion to an individual policy?

An individual who was previously covered by group health insurance for 6 months is eligible.

Which of the following premium payment modes will incur the lowest overall payment?

Annual

The LEAST expensive first-year premium is found in which of the following policies?

Annually Renewable Term

All of the following qualify for Medicare Part A EXCEPT

Anyone who is at the end stage of renal disease

Because an agent is using stationery with the logo of an insurance company, applicants for insurance assume that the agent is authorized to transact on behalf of that insurer. What type of agent authority does this describe?

Apparent

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

Apparent

Which of the following is the basic source of information used by the company in the risk selection process?

Application

In a replacement situation, all of the following must be considered EXCEPT

Assets

To comply with Fair Credit Reporting Act, when must a producer notify an applicant that a credit report may be requested?

At the time of application

An insurance contract requires that both the insured and the insurer meet certain conditions in order for the contract to be enforceable. What contract characteristic does this describe?

Conditional

Which of the following statements regarding Business Overhead Expense policies is NOT true?

Benefits are usually limited to six months.

An insured is the recipient of an Accidental Death and Dismemberment (AD&D) policy purchased by his employer. The policy pays triple indemnity in case of accidental death. If the insured died as a result of an accident stipulated in the policy, how will the benefits paid be taxed?

Benefits received are considered income tax free.

The First Street Church plans to sponsor a summer camp for the youth of their congregation. They would like to purchase insurance that would pay benefits should one of the youth get injured while participating in the camp activities. The type of policy they would likely need is a/an

Blanket

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.

Producers are permitted to share or split commissions, providing that

Both are properly licensed for the line of insurance.

In comparison to a policy that uses the accidental means definition, a policy that uses the accidental bodily injury definition would provide a coverage that is

Broader in general

Which of the following could be used when a corporation, association, partnership, or limited liability partnership acts as a producer?

Business Entity

An insured receives an annual life insurance dividend check. What term best describes this arrangement?

Cash option

Under which nonforfeiture option does the company pay the surrender value and have no further obligations to the policyowner?

Cash surrender

If an applicant for a health insurance policy is found to be a substandard risk, the insurance company is most likely to

Charge an extra premium.

Forcing a client to buy insurance from a particular lender as a condition of granting a loan is defined as

Coercion

What term best describes the act of withholding material information that would be crucial to an underwriting decision?

Concealment

Prior to issuance of a Long-Term Care policy to an applicant age 80 or older, the insurer must obtain all of the following EXCEPT

Date of previous doctor visit.

Which of the following terms describes making false statements about the financial condition of any insurer that are intended to injure any person engaged in the business of insurance?

Defamation

What is the goal of the HMO?

Early detection through regular checkups

In a group policy, the contract is between

Employer and insurance company

The provision in a health insurance policy that ensures that the insurer cannot refer to any document that is not contained in the contract is the

Entire contract clause

A producer misrepresents the details of an insured's new insurance contract that will be replacing the current contract. Which of the following is the producer violating?

Errors and omissions liability

Which of the following best describes the aleatory nature of an insurance contract?

Exchange of unequal values

When an insurance agency published an advertising brochure, it emphasized the company's financial stability and sound business practices. In reality, its financial health is terrible, and the company will soon have to file for bankruptcy. Which of the following terms best describes the advertisement?

False financial statement

Under which installments option does the annuitant select the amount of each payment, and the insurer determines how long they will pay benefits?

Fixed period

In disability income insurance, the own occupation definition of disability applies

For the first 2 years of a disability.

A new employee who meets HIPAA eligibility requirements must be issued health coverage on what basis?

Guaranteed

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

An insured purchased a life insurance policy on his life naming his wife as primary beneficiary, and his daughter as contingent beneficiary. Under what circumstances could the daughter collect the death benefit?

If the primary beneficiary predeceased the insured

Which of the following factors about the insured determines the amount of disability benefit that the insured will receive?

Income

Which type of a hospital policy pays a fixed amount each day that the insured is in a hospital?

Indemnity

The Patient Protection and Affordable Care Act includes all of the following provisions EXCEPT

Individual tax deduction for premiums paid.

An underwriter may obtain information on an applicant's hobbies, financial status, and habits by ordering a(n)

Inspection report.

Under which of the following annuity options does the annuitant select the time period for the benefits, and the insurer determines how much each payment will be?

Installments for a fixed period

The mode of premium payment

Is defined as the frequency and the amount of the premium payment.

In health insurance, if a doctor charges $50 more than what the insurance company considers usual, customary and reasonable, the extra cost

Is not covered.

What is the benefit of experience rating?

It allows employers with low claims experience to get lower premiums

What is NOT a benefit of a POS plan?

It allows guaranteed acceptance of all applicants

Which of the following is TRUE of a qualified plan?

It has a tax benefit for both employer and employee.

All of the following statements are true of a Combination Dental Plan EXCEPT

It is also known as the Superimposed Plan.

In which of the following situations is it legal to limit coverage based on marital status?

It is never legal to limit coverage based on marital status.

Which of the following is true of a PPO?

Its goal is to channel patients to providers that discount services.

Which statement is NOT true regarding a Straight Life policy?

Its premium steadily decreases over time, in response to its growing cash value

If a contract provides a set amount of income for two or more persons with the income stopping upon the first death of the insured, it is called a

Joint life annuity.

All of the following statements describe a MEWA EXCEPT

MEWAs are groups of at least 3 employers.

Which of the following is NOT true regarding policy loans?

Money borrowed from the cash value is taxable.

An insured purchased an insurance policy 5 years ago. Last year, she received a dividend check from the insurance company that was not taxable. This year, she did not receive a check from the insurer. From what type of insurer did the insured purchase the policy?

Mutual

A long-term care insurance shopper's guide must be provided in the format developed by which of the following?

NAIC

During the accumulation period in a nonqualified annuity, what are the tax consequences of a withdrawal?

Neither interest nor principal is taxed, but penalties may be imposed.

On a participating insurance policy issued by a mutual insurance company, dividends paid to policyholders are

Not taxable since the IRS treats them as a return of a portion of the premium paid.

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

Notice of Claim

Which option for Universal life allows the beneficiary to collect both the death benefit and cash value upon the death of the insured?

Option B

When calculating the amount a policyowner may borrow from a variable life policy, what must be subtracted from the policy's cash value?

Outstanding loans and interest

Traditional IRA contributions are tax deductible based on which of the following?

Owner's income

If a health care plan has characteristics of an HMO and PPO, what type of plan is it?

POS

Which of the following applies to partial disability benefits?

Payment is limited to a certain period of time.

A guaranteed renewable health insurance policy allows the

Policyholder to renew the policy to a stated age, with the company having the right to increase premiums on the entire class.

A woman obtains health coverage through the Marketplace on October 1. Two weeks later she finds out that she is 3 months pregnant. Which of the following is true about coverage for pregnancy?

Pregnancy will be covered immediately

Which of the following terms is used to name the nontaxed return of unused premiums?

Premium return

Medicare Part D provides

Prescription drug benefit

Pertaining to insurance, what is the definition of a fiduciary responsibility?

Promptly forwarding premiums to the insurance company

A man's physician submits claim information to his insurer before she actually performs a medical procedure on him. She is doing this to see if the procedure is covered under the patient's insurance plan and for how much. This is an example of

Prospective review.

Which of the following is the most common way to transfer risk?

Purchase insurance

An agent offers his client free tickets to a sporting event in exchange for the purchase of an insurance policy. The agent is guilty of

Rebating

Installing deadbolt locks on the doors of a home is an example of which method of handling risk?

Reduction

Which of the following is NOT provided by an HMO?

Reimbursement

Workers Compensation benefits are regulated by which entity?

State government

The interest earned on policy dividends is

Taxable

Which of the following is NOT covered under Plan A in Medigap insurance?

The Medicare Part A deductible

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.

Which of the following does NOT have to be disclosed in a long-term care (LTC) policy?

The aggregate amount of premiums due

What happens if a non-member physician is utilized under the Point-Of-Service plan?

The attending physician will be paid a fee for service, but the member patient will have to pay a higher coinsurance amount.

All of the following are ways in which a Major Medical policy premium is determined EXCEPT

The average age of the group

An insured who has an Accidental Death and Dismemberment policy loses her left arm in an accident. What type of benefit will she most likely receive from this policy?

The capital amount in a lump sum

Which statement accurately describes group disability income insurance?

The extent of benefits is determined by the insured's income.

In a disability policy, the elimination (or waiting) period refers to the period between

The first day of disability and the day the insured starts receiving benefits.

A man works for Company A and his wife works for Company B. The spouses are covered by health plans through their respective companies that also cover the other spouse. If the husband files a claim,

The insurance through his company is primary.

An employee is insured under her employer's group life plan. If she terminates her group coverage, which of the following statements is INCORRECT?

The insured may choose to convert to term or permanent individual coverage

Which of the following is NOT a feature of a guaranteed renewable provision?

The insurer can increase the policy premium on an individual basis.

Who is the beneficiary in a credit disability income policy?

The lending institution

All of the following statements are true regarding installments for a fixed amount EXCEPT

The payments will stop when the annuitant dies.?

Which is true about a spouse term rider?

The rider is usually level term insurance.

When the insured selects the extended term nonforfeiture option, the cash value will be used to purchase term insurance with what face amount

The same as the original policy minus the cash value?

For the purpose of insurance, risk is defined as

The uncertainty or chance of loss.

Which of the following is true regarding benefits paid to disabled employees?

They may be subject to taxation if the premium was paid by the employer.

For what reason may a life insurance producer backdate a life insurance policy?

To avoid an increase in premium rate for the insured

Which of the following is the best reason to purchase life insurance rather than annuities?

To create an estate

Why should the producer personally deliver the policy when the first premium has already been paid?

To help the insured understand all aspects of the contract

Which of the following is NOT a goal of risk retention?

To minimize the insured's level of liability in the event of loss

When an insurer issues an individual health insurance policy that is guaranteed renewable, the insurer agrees

To renew the policy until the insured has reached age 65.

Which is NOT required of an applicant for an insurance license in Michigan?

Two letters of recommendation attesting to trustworthiness, reliability, and good reputation

Which of the following would least likely be considered a legitimate need that would be paid by insurance proceeds?

Vacation travel expenses