Missed questions attempt 2

Medicare part a covers

-Hotpitalization -Skilled nursing facility -Home health care -Hospice care -Blood

Medicare Part B

Pays for doctors visits and a variety of other medical services is optional and oferred to everyone who is enrolled in part a funded by monthly premiums

5 elements that make insurable risk

-due to chance -definite and measurable -statically predictable -cant be catastrophic -randomly selected (can have large loss)

What happens when a life insurance contracts fail the 7-pay test?

-Policy loans or withdrawals will become subject to taxation as provided by the regulation.

Apparent Authority

based on principals' actions or words

Which two settlement options guarantee that the principal and interest will be fully paid out? -extended term -level term -fixed-period -fixed-amount

-fixed-period -fixed-amount

Part A of Medicare

Provides coverage for hospital care and limited nursing home care.

A table showing the non forfeiture values must be included in the policy for a minimum of -30 years -20 years -20 days -30 days

-20 years

concealment

Intentional withholding of information of a material fact that is crucial in making a decision.

Express Authority

written contract

Which of the following statements is INCORRECT concerning Modified Endowment Contracts (MECs)? -A primary purpose of the regulations governing the MECs was to reduce the incentives for the use of life insurance as a short-term investment vehicle -A distribution from an MEC may be subject to a 10% if withdrawn before 59.5 age -An MEC must always pass the 7-pay test -A life insurance policy failing the 7-pay test is classified as an MEC

-An MEC must always pass the 7-pay test

Medicare Part B does NOT cover

-Private duty nursing -Skilled nursing home care -Intermediate charge above medicare approved amount -Most outpatient presciption drugs -Care recieved outside US -Custodial care received in home -Dental care, cusmatic surgery,eyeglasses,hearing aids, orthopedic shoes, acumpuncture expenses -Expenses incurred due to a war or act of war

An employee that becomes ineligible for group coverage because of termination of employment or change in status, must excursive extension of benefits under COBRA -Within 30 days -Within 20 days -Within 60 days -Within 90 days

-Within 60 days of separation from employment

Which of the following would be true of both fixed-period and fixed-amount settlement options? -The size of installments decreases after a certain period of time -Both guarantee payments for the life of the beneficiary -Both guarantee that the principal and interest will be fully paid out -The amount of payments is based on the recipients life expectancy

-Both guarantee that the principal and interest will be fully paid out

A lender who conditions approval of a loan on the condition that the borrower purchase insurance from that lender may be guilty of -Coercion -Illegal inducement -Misrepresentation -Unfair discrimination

-Coercion

Group medical and dental expense benefits are received -Taxed -Income tax free -Tax deferred -double taxed

-Income tax free

social security 4 main components

-Long term Disability -

Medicare supplement policies basics

-referred to as Medigap -policies issued by privite insurance companies to fill in gaps in medicare

coercion

the practice of persuading someone to do something by using force or threats

Cash value guarantees in a whole life policy are called: -Living benefits -Cash loans -Dividends -Nonforfeiture values

-Nonforfeiture values Because permanent life insurance policies have cash values, there are certain guarantees that are built into the policy that cannot be forfeited by the policy owner. These guarantees (known as nonforfeiture values) are required by state law to be included in the policy. A table showing the nonforfeiture values must be included in the policy for a minimum period of 20 years. The policy owner has options as how to exercise nonforfeiture values.

As it relates to life settlements , the term "owner" means -Broker -Provider -Owner of the original policy -Owner of insurance company

-Owner of the original policy (policy-owner)

Medicaid mandates that the states provide at least :

-Physicians services -Inpatient hospital care -Outpatient hospital care -Skilled nursing home services -Labortory and x-ray services -Home health care services -Rural health clinic services -Periodic screening, diagonsis, treatment -Family planning services -Prescription drugs, dental,eyeglasses, medical supplies

Any uncertain terms in the policy will be interpreted in the favor of -The insurer -The beneficiary -The insured -Provider

-The insured

All of the following are true of the survivorship life policy EXCEPT: -It can insure more than 2 lives -The premium is based on the age of each insured -The premium would be lower than a joint life policy -The death benefit is not paid until the last death

-The premium is based on the age of each insured Survivorship life, or second-to-die policy is much the same as joint life in that it insures two or more lives for a premium that is based on joint age.

Life insurance contracts must pass the 7-pay test otherwise

-They become classified as a MEC

An insured who is 44 years old, falls while mountain climbing on vacation. He is left paralyzed. After a year doctors feel he will never recover from his injuries. From which of the following programs will he be able to collect disability income? -Medicare -Medical -Workers comp -Social Security

-Social Security

if investment funds in a MEC are borrowed prior tot he age 59.5, they will also be subject to -10% penalty -6% penalty -3% penalty -no penalty

-10% penalty

A major medical expense policy would exclude coverage for all of the following treatments EXCEPT -Drug addiction -Eye refractions -Dental care -Cosmetic surgery

-Drug addiction Treatment for drug and alcohol addiction is provided on a limited basis

What does the application of contract of adhesion mean? -The insurer may go to another for representation -It makes sure that insured does not get more than the value of the loss. -Since the insured does not participate in preparing the contract, any ambiguities would be resolved in favor of the insured -The holder of the contract has the ultimate power of promise

-Since the insured does not participate in preparing the contract, any ambiguities would be resolved in favor of the insured

What do qualified plans and non qualified plans have in common?

Earnings grow tax deferred

Under a SIMPLE Plan, what is true regarding taxation of both Contributions and Earnings?

Contributions and earnings are both tax deferred until funds are withdrawn.

Excess or surplus line broker

does not need certificate of authority

Under SIMPLE plans, participating employees may defer up to a specified amount each year, and the employer then makes a matching contribution up to an amount equal to what percent of the employee's annual wages? -3% -6% -60% -5%

3% of an employees annual compensation

Fraud

intentional misrepresentation of an existing, important fact

Implied Authority

is assumed

Entity purchase

used when the partnership buys the policies on the partners

An employee is insured by a group major medical plan that is provided through her employer. The employer contributes 75% of the premium and the employee contributes 25%. The the insured received benefit from this policy in the amount of 1000, how much of this benefit would be taxed as income? -1000 -750 -250 -0

-0 Group medical and dental benefits are received income tax free by the employee

Which of the following statements is true regarding SIMPLE plans? -The employer cannot contribute to the plan -The employee cannot contribute to the plan -The employee can contribute up to 5% of the employees annual compensation -Contributions and earnings are tax-deferred until the funds are withdrawn

-Contributions and earnings are tax-deferred until funds are withdrawn

Whose responsibility is it to confirm, prior to transacting insurance with an insurer, that the company is authorized? -Policy-owner -Producer -Insured -Noone

-Producer

Agent Authorities

-Expressed, implied, apparent

In which of the following scenarios would a producer be allowed to obtain insurance through an unauthorized insurer? -If the producer has no knowledge that the company is authorized -If there are no authorized insurers for a specific type of coverage in this state -If the insurer needs to investigate insurance claims

If there are no authorized insurers for a specific type of coverage in this state

Key person insurance can provide protection for all of the following economic losses to a business EXCEPT: -Fund the expense of finding a suitable replacement following the death of an employee -Provide deferred compensation retirement benefit if the insured key person survives to retirement -Fund the cost of training a current employee to perform the duties of a deceased employee -Pay the death benefit to the estate of the insured

-Pay the death benefit to the estate of the insured