rfk life and health test
An IRA uses immediate annuities to pay out benefits; the IRA owner is nearly 75 years old when he decides to collect distributions. What kind of penalty would the IRA owner pay?
50% tax on the amount not distributed as required
What is the waiting period on a Waiver of Premium rider in life insurance policies?
6 months
According to the PPACA rules, what percentage of health care costs will be covered under a bronze plan?
60%
If a telemarketer wants to make an unsolicited sales call to a potential customer, what is the earliest time the telemarketer can call the prospect's residence?
8 am
An investor buys a life policy on an elderly person in order to sell it for a life settlement. This is an example of
A STOLI policy.
Which of the following individuals will be eligible for coverage on the Health Insurance Marketplace?
A permanent resident lawfully present in the U.S.
Which of the following is NOT an allowable 1035 exchange?
A whole life insurance policy is exchanged for a term insurance policy.
Within how many days of requesting an investigative consumer report must an insurer notify the consumer in writing that the report will be obtained?
3 days
Replacing insurers that use producers must provide applicants with the right to return their policy within a few days of its delivery. How many days?
30
Which of the following statements about a suicide clause in a life insurance policy is TRUE?
Suicide is excluded for a specific period of years and covered thereafter.
Which of the following is NOT an activity of daily living (ADL)?
Talking
The advantage of qualified plans to employers is
Tax-deductible contributions.
How does a member of an HMO see a specialist?
The primary care physician refers the member.
A person buys an individual long-term care policy and is not satisfied with the provisions. Within how many days will the insured be able to return the policy for a full premium refund?
30 days
A provision in a life insurance policy that provides for the early payment of some portion of the policy face amount should the insured suffer from a terminal illness or injury is called
Accelerated Benefit provision.
If an annuitant dies during the accumulation period, what benefit (if any) will be included in the annuitant's estate?
Accumulated cash value
The Omnibus Budget Reconciliation Act of 1990 requires that large group health plans must provide primary coverage for disabled individuals under
Age 65 who are not retired.
Which of the following are unlawful with regard to the ADEA?
All of the above are unlawful.
A resident agent licensed in another state may obtain a nonresident license in Utah without taking the examination provided that
All of these requirements are met.
Which of the following applicants could the insurer charge a higher rate of premium and not violate regulations regarding unfair discrimination?
An applicant who is a smoker
Which of the following would be considered a routine procedure?
Annual check-up
When an annuity is written, whose life expectancy is taken into account?
Annuitant
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 is NOT required to be stated in the outline of coverage provided with a long-term care policy?
Basic information about supplementary policies
All of the following statements are correct regarding credit life insurance EXCEPT
Benefits are paid to the borrower's beneficiary.
A producer who fails to segregate premium monies from his own personal funds is guilty of
Commingling.
Which of the following provisions requires that any policy language that is in conflict with the state statutes of the state in which the insured resides is automatically amended to conform with those of the state of residence?
Conformity with State Statutes
The purpose of managed care health insurance plans is to
Control health insurance claims expenses.
A long stretch of national economic hardship causes a 7% rate of inflation. A policyowner notices that the face value of her life insurance policy has been raised 7% as a result. Which policy rider caused this change?
Cost of Living Rider
Which of the following will NOT be an appropriate use of a deferred annuity?
Creating an estate
Under the Civil Rights Act, if 41-year-old Jared applies to be a Union foreman, for which of the following reasons could Jared be denied employment?
Disability
Two individuals are in the same risk and age class; yet, they are charged different rates for their insurance policies due to an insignificant factor. What is this called?
Discrimination
Which of the following scenarios will incur a 10% tax penalty on distributions?
Distributions are made on a policy before age 59½.
Which of the following terms is used to name the nontaxed return of unused premiums?
Dividend
Who can provide skilled nursing care?
Doctor
An insurance company assures its new policyholders that their premium costs will not increase for a period of at least five years. However, due to increasing financial strain, they plan to raise premium costs for all insureds by 10% over the next two years. What term best describes this act?
Fraud
In a direct rollover, how is the money transferred from one plan to the new one?
From trustee to trustee
What required provision protects against unintentional lapse of the policy?
Grace period
Which of the following is TRUE of a qualified plan?
It has a tax benefit for both employer and employee.
Which of the following is NOT true regarding the accumulation period of an annuity?
It would not occur in a deferred annuity.
In respect to the consideration clause, which of the following is consideration on the part of the insurer?
Promising to pay in accordance with the contract terms
Under which provision can a physician submit claim information prior to providing treatment?
Prospective Review
Which of the following insurance options would be considered a risk-sharing arrangement?
Reciprocal
When an employee is still employed upon reaching age 65 and eligible for Medicare, which of the following is the employee's option?
Remain on the group health insurance plan and defer eligibility for Medicare until retirement
Annuities can be used to fund which of the following?
Retirement plans
Which of the following components of dental insurance does NOT require the payment of a deductible?
Routine and preventive maintenance
A domestic insurer issuing variable contracts must establish one or more
Separate accounts.
Which of the following is the best scenario for self-insurance?
Smaller, frequent losses
Which of the following would be a qualifying event as it relates to COBRA?
Termination of employment due to downsizing
All of the following employees may use a 403(b) plan for their retirement EXCEPT
The CEO of a private corporation.
If the annuitant dies during the accumulation period, who will receive the annuity benefits?
The beneficiary
An Adjustable Life policyowner can change which of the following policy features?
The coverage period
Which of the following is true regarding reinstatement of insurance coverage that lapsed due to the insured's being on active duty in the U.S. armed forces?
The coverage will be reinstated if applied for within 6 months of release from active duty.
An insured has chosen joint and 2/3 survivor as the settlement option. What does this mean to the beneficiaries?
The surviving beneficiary will continue receiving 2/3 of the benefit paid when both beneficiaries were alive.
Which of the following statements regarding conditional receipts is true?
They are temporary insuring agreements.
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
An insured notifies the insurance company that he has become disabled. What provision states that claims must be paid immediately upon written proof of loss?
Time of Payment of Claims
Which of the following Life Insurance policies would be considered interest sensitive?
Universal life
An employee quits her job where she has a balance of $10,000 in her qualified plan. If she decides to do a direct transfer from her plan to a Traditional IRA, how much will be transferred from one plan administrator to another and what is the tax consequence of a direct transfer?
$10,000, no tax consequence
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?
$50,000
The sole proprietor of a business makes a total salary of $50,000 a year. This year, his medical expenses have reached a total of $75,000. What amount may the sole proprietor deduct in regards to his medical expenses?
$50,000
What is the shortest possible elimination period for group short-term disability benefits provided by an employer?
0 days
What percentage of individually-owned disability income benefits is taxable?
0%
An agent voluntarily surrendered her license. How soon after this surrender can her license be reinstated?
1 year
S is a sole business proprietor who owns a medical expense plan. What percentage of the cost of the plan may he deduct?
100%
A policyowner cancels his life policy but instructs the insurance company to transfer the cash value of his policy to an annuity. This nontaxable transaction is called
1035 exchange.
The Pregnancy Discrimination Act specifically prohibits pregnancy discrimination by employers with the minimum of how many employees?
15
What is a penalty tax for nonqualified distributions from a health savings account?
20%
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
What is the term used for an applicant's written request to an insurer for the company to issue a contract, based on the information provided?
Application
In a replacement situation, all of the following must be considered EXCEPT
Assets
When must insurable interest exist in a life insurance policy?
At the time of application
Which of the following is considered a qualifying event under COBRA?
Divorce
A license may be denied, suspended, or revoked if the licensee
Engages in fraud. Was convicted of a felony Intentionally misrepresents an insurance policy. All of the above.
An annuity owner is funding an annuity that will supplement her retirement. Because she does not know what effect inflation may have on her retirement dollars, she would like a return that will equal the performance of the Standard and Poor's 500 Index. She would likely purchase a(n)
Equity Indexed Annuity.
Which of the following best describes the aleatory nature of an insurance contract?
Exchange of unequal values
When an employer offers to give an employee a wage increase in the amount of the premium on a new life insurance policy, this is called a(n)
Executive bonus.
The authority granted to an agent through the agent's contract is referred to as
Express authority.
An agent selling variable annuities must be registered with
FINRA.
A producer is acting in what capacity when he or she is trying to obtain credible information about an applicant for health insurance?
Field underwriter
An applicant wants to buy a life insurance policy in which he can count on receiving the same benefits as stated in the contract. Which type should he buy?
Fixed
In the event of loss, after a notice of claim is submitted to the insurer, who is responsible for providing claims forms and to which party?
Insurer to the insured
Which of the following is NOT a metal level of coverage offered under the Patient Protection and Affordable Care Act?
Iron
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.
When Y applied for insurance and paid the initial premium on August 14, he was issued a conditional receipt. During the underwriting process, the insurance company found no reason to reject the risk or classify it other than as standard. Y was killed in an automobile accident on August 22, before the policy was issued. In this case, the insurance company will
Issue the policy anyway and pay the face value to the beneficiary.
Medicare Advantage is also known as
Medicare Part C. Medicare consists of Hospital Insurance protection (Part A), Medical Insurance protection (Part B), and Medicare Advantage (Part C) (formerly known as Medicare+Choice). Medicare Part D is a "stand alone" drug insurance policy for persons who need the coverage and are eligible for Medicare Part A and/or Part B
Which of the following best describes gross annual premium?
Net premium plus expenses
Which renewal provision(s) must be included in a long-term care policy issued to an individual?
Noncancellable and guaranteed renewable
Under a straight life annuity, if the annuitant dies before the principal amount is paid out, the beneficiary will receive
Nothing; the payments will cease.
Underwriting is a major consideration when an insured wishes to replace her current policy for all of the following reasons EXCEPT
Premiums always stay the same.
All of the following are unfair claims settlement practices EXCEPT
Suggesting negotiations in settling the claim.
Which of the following is TRUE regarding the insurance amount in a credit life policy?
The creditor can only insure the debtor for the amount owed.
Which of the following describes the tax advantage of a qualified retirement plan?
The earnings in the plan accumulate tax deferred.
When a life insurance policy was issued, the policyowner designated a primary and a contingent beneficiary. Several years later, both the insured and the primary beneficiary died in the same car accident, and it was impossible to determine who died first. Which of the following would receive the death benefit?
The insured's contingent beneficiary
All of the following are true regarding a decreasing term policy EXCEPT
The payable premium amount steadily declines throughout the duration of the contract.
If a policy is rated-up, which of the following is true?
The premium increases.
Which of the following is NOT the purpose of HIPAA?
To provide immediate coverage to new employees who had been previously covered for 18 months
Under a credit disability policy, until what point will payments to the creditor be made for the insured?
Until the disability ends or the debt is satisfied, whichever is sooner
Which of the following would least likely be considered a legitimate need that would be paid by insurance proceeds?
Vacation travel expenses
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 policy does the insured have?
Variable
Which of the following products requires a securities license?
Variable annuity
Which of the following is a statement that is guaranteed to be true, and if untrue, may breach an insurance contract?
Warranty
When would a 20-pay whole life policy endow?
When the insured reaches age 100
Which of the following statements regarding the taxation of Modified Endowment Contracts is FALSE?
Withdrawals are not taxable.
What is the maximum penalty for habitual willful noncompliance with the Fair Credit Reporting Act?
$2,500
Which of the following health care plans would most likely provide the insured/subscriber with comprehensive health care coverage?
Health Maintenance Organization plan
When would a misrepresentation on the insurance application be considered fraud?
If it is intentional and material
When can a small employer health benefit plan be discontinued by the carrier?
If the plan sponsor fails to pay premiums
Which of the following factors about the insured determines the amount of disability benefit that the insured will receive?
Income
A typical Accidental Death & Dismemberment policy covers all of the following losses EXCEPT
Income.
In an optionally renewable policy, the insurer has which of the following options?
Increase premiums
When a reduced-paid up nonforfeiture option is chosen, what happens to the face amount of the policy?
It is reduced to the amount of what the cash value would buy as a single premium.
Which of the following statements is NOT correct concerning the COBRA Act of 1985?
It requires all employers, regardless of the number or age of employees, to provide extended group health coverage.
Which of the following is excluded in a dental insurance plan?
Lost dentures
Death benefits payable to a beneficiary under a life insurance policy are generally
Not subject to income taxation by the Federal Government.
Who is involved in completing the agent's report?
Only the agent
An insured has a life insurance policy from a participating company and receives quarterly dividends. He has instructed the company to apply the policy dividends to increase the death benefit. The dividend option that the insured has chosen is called
Paid-up additions.
Prior to purchasing a Medigap policy, a person must be enrolled in which of the following?
Parts A and B of Medicare
In a group policy, who is issued a certificate of insurance?
The individual insured
Who chooses a primary care physician in an HMO?
The individual member
Who bears all of the investment risk in a fixed annuity?
The insurance company
The Patient Protection and Affordable Care Act includes all of the following provisions EXCEPT
Individual tax deduction for premiums paid.
The Medical Information Bureau (MIB) was created to protect
Insurance companies from adverse selection by high risk persons.
Which of the following is TRUE regarding the accumulation period of an annuity?
It is a period during which the payments into the annuity grow tax deferred.
Shortly after a replacement transaction on a Medicare supplement policy, the insured decided to cancel the policy, but is unsure whether the free-look provision applies. The insured could find that information in the
Notice Regarding Replacement.
