NYS Life & Health Practice Quiz

What is the shortest possible elimination period for a group short-term disability benefits provided by an insurer

0 Days If an employer provides short-term disability benefits for its employees, the elimination period can be nonexistent and the benefits can last as long as two tears

If a life insurance policy develops cash value faster than a seven-pay whole life contract, it is

A modified endowment contract Any life insurance policy that develops cash value faster than a seven-pay whole life contract is called a Modified Endowment Contract. It loses the benefit of a standard life contract

Which of the following would be likely to establish an SEP?

A small employee A Simplified Employee Pension Plan (SEP) is a type of qualified plan suited for a small employer. SEP is an arrangement whereby an employee established and maintains an individual retirement account to which the employer contributes

When transacting insurance business in the state, an insurer formed under the laws of another country are known as what type of insurer

Alien Alien insurer is defined as an insurer formed under the laws of another country

Who is considered a nonresident agent

An agent who is licensed in another state, but is allowed to transact business in this state Agents who reside and are licensed in one state may obtain a nonresident producer license in another state by meeting nonresidnt agent qualifications

When an annuity is written, whose life expectancy is taken into account?

Annuitant The annuitant receives payments from an annuity and is the person whose life expectancy is considered when signing the contract

Employer contributions made to a qualified plan

Are subject to vesting requirements Qualified plans must have a vesting requirement

Which of the following is NOT true regarding an annuity certain

Benefits stop at the annuitants death Annuities certain are short-term annuities which limit the amount paid to a certain fixed period of time or until a certain fixed amount is liquidated. These are no life contingencies

Which of the following features of a dental expense plan is NOT typically fund in medical expense insurance plans?

Diagnostic and preventative care Dental expense insurance is a form of medical expense health insurance that covers the treatment, care, and prevention of dental disease and injury to the insured's teeth. Medical expense plans usually do not include diagnostic and preventative care

What type of agreement specifies how a business will transfer hands when one of the ownners dies or becomes disabled

Disability Buy-Sell The disability buy-sell agreement specifies how a business will pass between business owners if one of the ownwers dies or becomes disabled.

A waiver of premium rider will most likely be included with which one of the following types of health insurance policies

Disability income A waiver of premium is included with guaranteed renewable and noncancellable individual disability income policies. It is a valuable rider because it exempts the insured from paying the policy of a premium during total disability

Which of the following is an example of a peril

Fire Fire is a peril (a cause of loss), Smoking is a hazard, which increases the chance of loss. Death would be considered a loss. Gambling is a speculative risk

If taken as a lump sum, the insurance proceeds to beneficiaries are passed as

Free of federal income taxation Life insurance proceeds to beneficiaries are passed free of federal income taxation if taken as a lump-sum distribution

An insured is eligible for retirement, disability, and survivor benefits under Social Security. What insured status does this describe

Fully insured The fully insured status refers to someone who has earned 40 quarters of coverage, and is entitled to receive Social Security retirement, Medicare, and survivor benefits

An insure is eligible for retirement, disability, and survivor benefits under Social Security. What insured status does this describe

Fully insured The fully insured status refers to someone who has earned 40 quarters of coverage, and it entitled to receive Social Security retirement, Medicare, and survivor benefits

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

Guaranteed renewable Medicare supplement policies must be issued guaranteed renewable

Events or conditions that increase the chances of an insured loss occuring are referred to as

Hazards Conditions such as lifestyle and health status, or activities such as scuba diving are hazards and may increase the chance of a loss occurring

An insurer devises an ntimidation strategy to secure a large portion of the insurance market. Which of the following best describes this practice

Illegal It is illegal to participate in any boycott, coercion, fair trade or create a monopoly

The amount of disability benefits that an insured receives usually depends on the insured's

Income at the time of application To prevent over insurance, the amount of disability benefits that will be paid to an insured is usually limited to a percentage of the insured's income at the time of application.

An insured's hospital policy states that it will pay him a flat fee of $75 a day for each day of hospitalization. The policy pays benefits on what basis

Indemnity Indemnity policies do not pay expenses or bills, they provide the insured with a stated benefit amount for each day the insured is confined in a hospital

Who would be allowed to catch up contributions in an individual qualified plan?

Individuals age 50 and over Individuals who are age 50 or older are entitled to make additional catch-up contributions

All advertisements, regardless of their source, are the responsibility of the

Insurer The insurer whose policies are advertised is responsible for all of its advertisements, regardless of who wrote, created, presented or distributed them

When agents are acting within the scope of their contract, their actions are assumed to be the acts of the

Insurer While acting within the authority of the contract given by the insurer, the acts of an agent/producer are considered to be the acts of the insurer.

When a beneficiary receives payments consisting of both principal and interest portions, which parts are taxable as income?

Interest Only If a beneficiary receives payments that contain bth principal and interest portions, only he interest is taxable as income.

How does reinsurance benefit the insurer

It helps protect against catastrophic loss Reinsurance is a method used by insureres to protect against catastrophic losses

Which of the following is the basis for a claim against the insurance agency

Loss Claims result from losses by a peril insured against in an insurance policy

In group insurance, what is the policy called

Master policy In group insurance, the policy is called the master policy and is issued to the policyowner, which could be the employer, association, a union, or a trust

An out-of-state producer wants to start selling insurance in this state. What type of license should the producer obtain

Nonresident A nonresident producer is a producer who is domiciled and licensed as a resident producer in another state.

In what type of medical insurance plan does the provider receive a scheduled fixed amount for care to the insured and no additional compensation, regardless of the services provided

Prepaid Under a prepaid plan, the health care providers are paid for services in advance whether or not any services are provided

An agent who offers a cash reward to a prospect for buying a policy is guilty of..

Rebating Rebating includes premiums payable on the policy, special favors or services. advantages in dividends or benefits; stocks, bonds, securities, and similar inducements not specified in the policy

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 Rebating is defined as any inducement offered to the insured in the sale of insurance products that is not specified in the policy.

An insured may reactivate a lapsed life insurance policy within a specified period of time, with proof of insurability. Which policy provision allows this?

Reinstatement A lapsed policy may be reinstated within a specified period of time (usually 3 years) by paying back premiums, and proving insurability

A policyowner wants to name her husband as the beneficiary on her benefit policy. She also wishes to retain all of the rights of ownership, what beneficiary classification is appropriate in this situation?

Revocable If the beneficiary is named as revocable, the policyowner will be able to change the beneficiary at any time. Her husband would receive any death benefit

An annuity would normally be purchased by an individual who wants to

Secure income for retirement The main purpose of an annuity is to liquidate an estate and provide income for retirement.

Which of the hollowing may contribute to an HR - 10 plan

Self-employed plumber HR - 10 plans are for self-employed person

Which type of life insurance policy generates immediate cash value

Single premium whole life Single premium whole life policy generates immediate cash value due to the lump-sum premium payment made to the insurer

Which of the following transactions in an annuity will cause immediate taxation of the interest earned

Surrendering the annuity for cash One-sum cash surrenders result in immediate taxation with interest earned

The advantage of qualifed plans to employers is

Tax-deductible contributions Qualified plans have these tax advantages: employer contributions are tax deductible and are NOT taxed as income to the employee; the earnings in the plan accumulate tax deferred; lump-sum contributions to employees are eligible for favorable tax treatment.

Which of the following is NOT the consideration in an insurance policy

The application given to a prospective insured Consideration is something of value transferred between two parties to form a legal contract

In insurance, an offer is usually made when

The application is submitted In insurance, an offer is made by the applicant in the form of the application. Acceptance takes place when the insurer approves the application and issues a policy

Peril is most easily defined as

The cause of loss insured against Perils are the causes of loss insured against in an insurance policy.

In a survivorship life policy, when is the death benefit paid

Upon the last death Survivorship life pays on the last death rather than upon the first death

Which of the following determines whether disability insurance benefits are taxed

Whether the premiums were tax deductible Taxation of insurance benefits are often determined by whether or not the premiums were taxed