Quiz 4

Which of the following methods to designate a beneficiary literally means "by the head?" Per caputa

Per caputa

An insurer wants to obtain information from investigators regarding an applicant for insurance. What must the insurer do in order to legally acquire this information?

Present the insured with a Disclosure Authorization Notice

COBRA applies to employers with at least

20 employees

An applicant has a history of heart disease in his family, so he would like to buy a health insurance policy that strictly covers heart disease. What type of policy is this?

Dread disease coverage

Which of the following is considered to be a morale hazard?

Driving Recklessly

Health coverage becomes effective when the

First premium has been paid and the application has been approved

Which of the following methods of calculation the amount of life insurance needed takes into account the insured's wages, years until retirement, and inflation?

Human Life Approach

A father purchases a life insurance policy on his teenage daughter and adds the Payor Benefit rider. In which of the following scenarios will the rider waive the payment of premium?

If the father is disabled for more than 6 months

What type of annuity can be purchased with a single premium and provides benefits payments immediately?

Immediate

What is the main purpose of the seven-pay test?

It determines if the insurance policy is an MEC.

Which life insurance settlement option guarantees payment for the lifetime of the of the recipient, but also specifies a guaranteed period, during which, if the original recipient dies, the payments will continue to a designated beneficiary?

Life income with period certain

All of the following statements concerning Medicaid are correct EXCEPT

Medicaid is a state funded program that provides health care to persons over age 65

Which of the following information regarding an insured is NOT included in an investigative Consumer Report, which is requested by an underwriter?

Medical History

Which is not true about beneficiary designations?

The beneficiary must have insurable interest in the insured.

A health insurance policy clause that prevents an insurance company from denying payment of a claim after a specified period of time is known as the

Time Limit on Certain Defenses clause

Who has the legal title of the property in a trust?

Trustee

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

If a life insurance policy increases significantly in face amount when the insured reaches a specified age, what type of policy is this?

Jumping juvenile policy

Which clause stipulates that life insurance premiums can be paid in advance of policy issuance?

Payment of Premium Clause

What would the physician utilize if he/she wanted to know if a treatment is covered under an insured's plan and at what rate it will be paid?

Prospective review

After 3 years of making payments into a flexible premium deferred annuity, the owner decides to surrender the annuity. The insurer returns all the premium payments to the owner, except for a predetermined percentage. What is the percentage called?

Surrender charge

A producer is helping a married couple of their financial needs of their children in the event one or both should die prematurely. This is a personal use of life insurance known as

Survivor protection

Your client has a Social Insurance Supplement (SIS) rider on his disability policy. After he becomes disabled, he receives payments from the company. Shortly thereafter, he also begins receiving Social Security benefit payments. Which of the following will happen?

The SIS payment will be reduced dollar-for-dollar by the Social Security benefit payment.

An insured receives a monthly summary for his life insurance policy. He notices that the cash value of the policy is significantly lower this month than it was last month. What type of plicy does the insured have?

Variable

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

20%

Which of the following must a patient pay under Medicare B

20% of covered charges above the deductible

Insurers must keep files all the advertisements used in Louisiana for how many years?

4

An insured is covered under 2 group health plans-under his own and his spouse's . He suffered a loss of $2000. After the insured paid the total loss of $500 in deductibles and coinsurance, the primary insurer covered $1500 of medical expenses. What amount, if any would be paid by the secondary insurer?

500

If a consumer requests additional information concerning an investigative consumer report, how long does the insurer or reporting agency have to comply?

5days

When the policy premium wasn't submitted with the application, what should the agent obtain from the insured upon policy delivery?

A statement of good health

Employer contributions made to a qualified plan

Are subject to vesting requirements

Which of the following best describes what the annuity period is?

The period of time during which accumulated money is converted into income payments

Which of the following is true regarding Medicare supplement policies?

They must be guaranteed renewable

An insurer offers a policy very similar to Medicare, although it differs slightly. An agent tell an applicant that the policy is Medicare, since the policies are so similar anyway. Which of the following is true?

This practice is illegal

The Waiver of Cost of Insurance rider is found in what type of insurance?

Universal Life`

How long will the beneficiary receive payments under the single life settlement option?

Until the beneficiary's death

A 70-year old individual who bought a Part B Medicare policy 2 months ago just began kidney dialysis treatments this week. The individual is now applying for a Medicare supplement policy, which would begin in 8 months. Which of the following could the insurer do to avoid paying for the dialysis?

declare a pre-existing condition

Benefit periods for individuals short-term disability policies will usually continue from

six months to 2 years

What is the goal of HMO?

Early detection through regular checkups

A Universal Life insurance policy has two types of interest rates that are called

Guaranteed and Current

Credit Life insurance

Insurance the life of the debtor

A fixed annuity provides for

Level benefit payment

Regarding long-term care policies, which of the following would NOT be included in activities of daily living?

Sleeping

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

Fixed Amount

What type of insurance would be used for a Return of Premium rider?

Increasing Term

How many eligible employees must be included in a contributory plan?

75%

Which of the following losses will be covered by a group medical expense policy?

A pre-existing condition

Which term describes a situation in which people who are the most likely to have claims are also the most likely to seek insurance?

Adverse selection

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

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

Which of the following statements best describes the effect the Accelerated Benefit provision would have on the benefits paid to the beneficiary?

It will decrease the benefits paid to the beneficiary.

Which of the following statements pertaining to Medicare Part A is correct?

Medicare Part A is automatically provided when an individual qualifies for Social Security benefits age 65.

An insured neglected to pay his premiums, so his policy lapsed. He filed a reinstatement application and another premium and was reinstated shortly thereafter. Five days after the reinstatement, he had a consultation with a general physician. Which part of the consultation costs will be covered?

None

An individual wants to purchase a life insurance policy. His agent asks if the transaction will involve replacing any existing life insurance policies. If the customer replies, "yes". Which of the following best describes the agent's next step?

The agent must provide a replacement notice to the applicant

Which of the following is true about the requirements regarding HIV exams?

The applicant must give prior informed written consent

What do long-term care policies offer to policyholders to account for inflation?

They offer the option of purchasing coverage that raises benefit levels accordingly.

Which of the following life insurance policies would be considered interest sensitive?

Universal Life

All of the following statements about equity index annuities are correct EXCEPT

the annuitant receives a fixed amount of return

All other factors being equal, the least expensive first-year premium payment is found in

Annually Renewable Term

Which of the following hospice expenses would NOT be covered in a cost-containment setting?

Antibiotics

An insured purchases a policy in 20008 and died in 2013. The insurance company discovers at the time that the insured concealed information during the application process, What can they do?

Pay the death benefit

A prospective insured receives a conditional receipt but dies before the policy is issued. The insurer will

Pay the policy proceeds only if it would have issued the policy.

AN insured wants to name her husband as the beneficiary of her health policy. She also wishes to retain all of the rights of ownership. The insured should have her husband named as what type of beneficiary?

Revocable

Which of the following is true about suicide clause in a life insurance policy is TRUE?

Suicide is excluded for a specific period of years and covered thereafter.

Regarding the return of premium option for LTC policies, what happens to the premium if the policy lapses?

The insurer will return a percentage of the premium paid

When is the earliest a policy may go into effect?

When the application is signed and a check is given to the agent

Which rider, when added to a disability income policy, provides for changes in the benefits payable based on changes in the consumer price index?

cost of living adjustment rider

All of the following statements concerning Accidental Death and Dismemberment coverage are correct EXCEPT

death benefits are paid only if death occurs within 24 hours of accident.