Review Qs
Federal tax advantages of a qualified plan
1. accumulate on a tax deferred basis 2. employee and employer contributions are not counted as income to the employee for income tax purposes 3. employer contributions are tax deductible as ordinary business expense
An insured pays a monthly premium of $100 for her health insurance. What would be the duration of the grace period under her policy?
10 days
COBRA applies to employers with at least
20 employees
Following in injury, a policyowner covered under Medicare part A&B was treated by her physician required to pay OOP
20% covered charges above the deductible
What must the patient pay under Medicare part b
20% of covered charges above the deductible
What is the period of coverage for events such as death or divorce under cobra
36 months
In the event a policy lapses due to nonpayment of premium, within how many days would the policy be automatically reinstated once the outstanding premium is paid?
45 days
Once the person meets the stringent requirements for disability benefits, how long is the waiting period under Social Security before any benefits will be paid?
5 months
Before he died, an annuitant had received $12,500 in monthly benefits from his $25,000 straight life annuity. He was also the insured under a $50,000 paid-up whole life policy that named his wife as primary beneficiary. Considering both contracts, how much will the annuitant's spouse receive in benefits?
50k (straight life annuity stop at death of annuitant)
Under the uniform required provisions, proof of loss under a health insurance policy normally should be filed within
90 days of loss
All of the following are correct about the required provisions of health insurance policy EXCEPT
A reinstated policy provides immediate coverage for an illness
Least expensive first year premium is in which policies
ART
Group health insurance is characterized by all of the following except
Adverse selection
An insured pays a $100 premium every month for his insurance coverage, yet the insurer promises to pay $10,000 for a covered loss. What characteristic of an insurance contract does this describe?
Aleatory
Buyer's Guide
Allow consumer ti compare costs of different policies
An agent makes a mistake on the app and corrects his mistakes by physically enter the neccesary info. Who must then initial that change?
Applicant
What document describes an insured's medical history, diagnoses and treatments
Attending physician's statements
The annuitant dies while the annuity in accumulation
Beneficiary receive greater of the money paid into annuity (premiums) or cash value
Feature of variable annuity
Benefit payment amounts are not guaranteed (interest rate not guaranteed)
Statements regarding Business Overhead Expense policies
Benefits are NOT limited to 6 months; Premiums tax deductible; Benefits are taxable; Leased equipment are covered
Inpatient hospial care for HMO memebrs
Care can be provided outside of service area
When an insured makes truthful statements on the application for insurance and pays the required premium, it is known as which of the following?
Consideration
Longterm care coverages allow an insured to receive care at home
Custodial care Respite care Home health
The policyowner of an adjustable life policy wants to increase the death benefit. Which of the following statements is correct regarding this change?
Db can increase by providing evidence of insurability
An insured is hospitalized with a back injury. Upon checking his disability income policy, he learns that he will not be eligible for benefits for at least 30 days. This indicates that his policy is written with a 30-day
Elimination period
Taxation if longterm care insurance
Excessive benefits taxable
Which nonforfeiture option has the highest amount of insurance protection
Extended
Which component decreasesin decreasing term insurance
Face amount
Group health insurance, COBRA stipulates that
Group coverage must be extended for terminated employees up to a certain period of time at the former insurance
Which of the following is true regarding Medicare supplement policies
Guaraneed 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. The guaranteed insurability option allows the insured to purchase specific amounts of additional insurance at specific times without proving insurability.
Purpose if life insurance guaranty association
Help protect policyowners and beneficiary bc of insolvency of company
Which ride would not increase prem for policy owners
Impairment
What type of insurance would be used for a Return of Premium rider?
Increasing Term
In order for an insured under Medicare Part A to receive benefits for care in a skilled nursing facility, which of the following conditions must be met?
Insured must have first been hospitalized for 3 consecutive days
Life insurance where the policyowner designated primary and contingent beneficiary. Both died in accident and impossible to determine who died first. Who would receive the death benefit?
Insured's contingent benefiacry (estate if not designated)
What is the purpose of establishing the target premium for a universial life policy
Keep the policy in force
Which two terms associated with premiums
Level or flexibl
The corridor deductible derives its name from the fact that its applied between the basic coverage and
Major medical coverage
An insurer advertises a health policy that is covered by the Life and Health Insurance Guaranty Association. The advertisement includes a short list of benefits and approximate rates. The end of the advertisement includes statement that protection is provided by the Guaranty Association. Which of the following is true?
Mentioning the Guaranty Association in advertisements is considered to be unfair trade practice.
What vary the length of grace period in health insurance policies
Mode of the premium payment
The primary eligibility requirement for medicaid benefits is based upon
Need ( Medicaid is a program operated by the state with some federal funding to provide medical care for those in need)
An applicant for a health insurance policy returns a completed application to her agent, along with conidtional receipt. Insurer
Netiehr approved the app nor issued the policy
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 benefit (only for total loss)
During replacement of life insurance, a replacing insurer must do which of the following?
Obtain a list of all life insurance policies that will be replaced
in LTC, which care is provided with intermediate care
Occasional nursnig or rehabilitative care
Under a pure life annuity, an income is payable by the company
Only for the life of the annuitant
An insured has had a life insurance policy that he purchased 3 years ago when he was 40 years old. He is killed in an automobile accident and it is discovered that he is actually 45 years old, and not 43, as stated on the application. What will the company do?
Pay a reduced DB (Incontestibility clause prevent insurer denying a claim due to statements regarding age, sex, identity)
Which provisions prevent insurance company from paying a reimbursement
Payment of claims
What is mandatory for health insurance policies
Physical examination and autopsy
Requirements of a qualified plan except
Plan must provide an offset for social security benefits (must meet requirements by IRS)
All of the following are mandatory life insurance policy provisions except
Policy backdating (Incontestability, grace period, misstatement age)
Use of life insurance as an executive bonus
Policy owner = employee Employer pays bonus to a selected employee to fund Non qualified employee benefit
What document describes the specific information about a policy?
Policy summary
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.
What included in policy summary
Prem amounts and surrender values
Most agents try to collect the initial premium for submission with the application. When an agent collects the initial premium from the applicant, the agent should issue the applicant a
Premium receipt
Taxation of Business Overhead
Premiums are deductible, benefits are taxed
Taxation of premiums in a key-person life
Premiums are not tax deductible as a business expense
Characteristics of group life insurance
Prems are determined by age, sex and occupation of the entire group; Individuals receive a cert of insurance; amount of coverage is determined nondiscrimnitaroy; certificate holders may convert coverage to an indiciual policy wihtout evidence of insurability
When a whole life polocy lapses or is surrendered prior to maturity, the cash value can be used to
Purchase a single premium policy for a reduced face amount
Any inducement offered to the insured in the sale of an insurance policy that is not specified in the policy is an unlawful practice known as
Rebating
Reinstatement povision
Requires the policyowner to pay all overdue premiums with interest before the policy is resintated
Which is not covered under part b of medicare polocy
Routine dental
What license must agent have for variable policies
Securities
Regarding LTC policies, which not included in ALS
Sleeping
Worker Compensation benefits regulated by which entity
State govermenet
Which of the following is not covered under plan A in medigap insurance
The Medicare Part A deductible (Covers 20%B coinsurance, 3 pints if blood, approved hospital cost)
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
If an insured withdraws a portion of the face amount in the form of accelerated benefits because of a terminal illness, how will that affect the payable death benefit from the policy?
The death benefit will be smaller
An employee insured under a group health policy is injured in a car wreck while performing her duties for her employer. This results in a long hospitalization period. Which of the following is true?
The group plan will not pay because the employee insured at work
Reduction of premium
The insurer uses the dividend to reduce the next year's premium
An employee quits his job on May 15 and doesn't convert his Group Life policy to an individual policy for 2 weeks. He dies in a freak accident on June 1. Which of the following statements best describes what will happen?
The insurer will pay the full death benefit from the group policy to the beneficiary.
Decreasing term policy except
The payable premium amount steadily declines throughout the duration of contract
Under an extended term nonforfeiture option, the policy cash value is converted to
The same face amount as in the whole life policy
The purpose of managed care health insurance plans is to
To control health insurance claims expenses
Purpose if coinsurance provision
To help the insurance company to prevent overutilization
According to the rights of renewability rider for cancellable policies, all of the following are correct about the cancellation of an individual insurance policy
Unearned premiums are returned by the insurance company. ()
Which policy allow withdrawlas or partial surrenders
Universial life
Which statement accurately descrbes the change of benefiary provision
any policy that has DB must have change of benefiacry provision
A husband and wife are insured under group health insurance plans at their own places of employment, and as dependents under their spouse's coverage. If one of them incurs hospital expenses, how will those expenses likely be paid?
benefits will be coordinated
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 coverage
Which of the following reports will provide the underwriter with the information about an insurance applicant's credit?
consumer report
Taxations of dividends in participating policies
dividends are not taxable
In disability policy, the probationary period refers to the time
during which illness-related disabilities are excluded from coverage
Who bears all of the investment risk in a fixed annuity?
insurance company
Purpose of conditional receipt
intended to provide coverage on a date prior to policy issue
A guaranteed reneable disability insurance policy
is renewable at the insured's otpion to a specified age
decreasing term policy
level premium and a death benefit that decreases each year of the policy till 0 Pay in event of death during term No cash value
Which is true about a spouse term rider
level term
Primar eligibility requirement for medicaid benefits is based upon
need
Best describe MIB
nonprofit organization that maintains underwriting information on applicants
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
Accumulation period of annuity
pay in period
An isnured pays her major medical insurance premium annually on Mar 1. Last march she broke her leg. Insurance company would
pay the caim
Which two terms are associated directly w the way annuity funded
single or periodic
Which of the following policies would be classified as a traditional level premium contract
straight life (build cash value, guaranteed DB, level premium)(
The interest earned on policy dividends is
taxable
Which of the following when attached to a permanent life insurance policy allows the policy owner to customize the policy to provide an additional amount of temporary insurance of the insured, or allows amounts of temporary to cover other family members
term rider
When would a 20-pay whole life policy endow
when insured reach 100
