work exam 5
a
Charla wants to serve as a producer for Commissions Galore Insurance Company. In addition to obtaining her producer's license, what else must happen before she can officially transact insurance for CGIC? a. She must be appointed specifically by CGIC. b. she must be appointed by the Commissioner
a
Concerning insurance, the definition of a fiduciary responsibility is a. Handling insurer funds in a trust capacity. b. Commingling premiums collected with agent's personal funds.
a
If an insured continually uses the automatic premium loan option to pay the policy premium, a. The policy will terminate when the cash value is reduced to nothing. b. The face amount of the policy will be reduced by the automatic premium loan amount.
b
What is the benefit of experience rating? a. Experience rating helps employers with high claims experience get group coverage. b. Experience rating helps employers with low claims experience because they get lower premiums.
b
If an insurer becomes insolvent, which of the following would pay benefits to policyholders? a. the state b. Guaranty Association
a
Mortality - Interest + Expense = a. Gross premium b. net premium
b
To be eligible under HIPAA regulations, for how long should an individual converting to an individual health plan have been covered under the previous group plan? a. 63 days b. 18 months
a
What does "level" refer to in level term insurance? a. Face amount b. Premium
b
What is a penalty tax for nonqualified distributions from a health savings account? a. 10% b. 20%
a
Which type of care is NOT covered by Medicare? a. Long-term b. respite
a
A deferred annuity is surrendered prior to annuitization. Which of the following best describes the nonforfeiture value of the annuity? a. The surrender value should be equal to 100% of the premium paid, minus any prior withdrawals and surrender charges. b. A deferred annuity cannot be surrendered prior to annuitization. The owner must wait until the annuitization period begins to receive any payments.
a
A participant contributes more than the maximum amount to her Roth IRA. What kind of tax penalty will he or she have to pay? a. 6% b. 10%
b
A rider attached to a life insurance policy that provides coverage on the insured's family members is called the a. payor rider b. other-insured rider
b
After a person's employment is terminated, it is possible to obtain individual health insurance after losing the group health coverage provided by the employer. Which of the following is NOT true? a. The employee can convert from group to individual insurance within 31 days of termination. b.By law, the new, individual policy must provide the same benefits as the group insurance policy.
a
All of the following are covered by Part A of Medicare EXCEPT a. physician and surgeon services b. in-patient hospital services
a
All of the following are true regarding a decreasing term policy EXCEPT a. The payable premium amount steadily declines throughout the duration of the contract. b. The contract pays only in the event of death during the term and there is no cash
a
All of the following are true regarding insurance policy loans EXCEPT a. Policy loan can be made on policies that do not accumulate cash value. b. The policy will terminate if the loan plus interest equals or exceeds the cash value of the policy.
a
An HSA holder who is 65 years old decides to use the money in the account for a nonhealth expense. Which of the following is true? a. there will be a tax b. there will be a tax and a 20% penalty
a
An individual has just borrowed $10,000 from his bank on a 5-year note. What type of life insurance policy would be best suited to this situation? a. Decreasing term b. universal life
a
An insured has a Level Term Life Insurance policy that is guaranteed renewable and also includes a reentry provision. The reentry provision would allow the insured to renew the policy and a. Pay a lower renewal premium by proving insurability. b. Change the type of insurance by proving insurability.
b
Existing and replacing life insurers are required to keep copies of all summaries, notices, and statements used in sales transactions until the conclusion of their next examination by the Insurance Department, or for a period of at least a. 2 years b. 5 years
a
Sarah is upset that her new health insurance policy was delivered to her by certified mail and not through her agent. Which of the following is true? a. there is nothing wrong with the above situation b. sarah should ask for a new policy to be delivered
b
The corridor in a Universal Life Insurance policy raises the death benefit to avoid a. section 1035 classification b. losing tax advantages
a
When a policy is surrendered for its cash value a. Coverage ends and the policy cannot be reinstated. b. Coverage ends but the policy can be reinstated at anytime
a
When a replacement is involved, a replacing insurance company is responsible for all of the following EXCEPT a. Provide a copy of the Important Notice Regarding Replacement of Life Insurance to the applicant. b. Obtain from the producer a list of the applicant's life insurance or annuity contracts to be replaced.
b
When an insurer offers services like preadmission testing, second opinions regarding surgery, and preventative care, which term would best apply? a. claimes reduction b. case management provison
b
Which of the following LTC Coverages would NOT encourage an insured to receive care at home? a. Respite Care b. residnetial care
b
Which of the following are the main factors taken into account when calculating residual disability benefits? a. Present earnings and standard cost of living b. Present earnings and earnings prior to disability
b
Which of the following best describes gross annual premium? a. Expense premium b. Annual cost of mortality plus expenses
a
Which of the following is NOT a goal of risk retention? a. To minimize the insured's level of liability in the event of loss b. To increase control of claim reserving and claims settlements
b
During replacement of life insurance, a replacing insurer must do which of the following? a. Send a copy of the Notice Regarding Replacement to the Department of Insurance b. Obtain a list of all life insurance policies that will be replaced
a
The purpose of managed care health insurance plans is to a. Control health insurance claims expenses. b. Provide for the continuation of coverage when an employee leaves the plan.
b
What is the purpose of a Medicare Carve-out or Supplements? a. They act as excess insurance paying those covered expense not paid by Medicare because of previous disabilities. b. They pay deductibles or copayments that are not paid by Medicare.
b
During partial withdrawal from a universal life policy, which portion will be taxed? a. principal b. interest
b
In franchise insurance, premiums are usually a. Higher than individual policies, but lower than group policies. b. Lower than individual policies, but higher than group policies.
b
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? a. Law of Large Numbers b. discrimination
b
What provision can reduce the disability benefit based upon the insured's current income? a. Rehabilitation benefit b. Relation of earnings to insurance
b
What is the goal of the HMO? a. Providing health services close to home b. Early detection through regular checkups
a
What is the maximum amount of time a health plan can exclude a pre-existing condition? a. 12 months b. 6 monthes
b
Which of the following is NOT an enrollment period for Medicare Part A applicants? a. Special enrollment b. automatic enrollment
b
Which of the following would be considered a non-medical insurance application? a. An application that does not ask any questions about the applicant's medical history b. An application on which the medical information is completed by the applicant and the agent only
b
Which term describes a situation in which people who are the most likely to have claims are also the most likely to seek insurance? a. Law of Numbers b. Adverse Selection
a
Which type of service under a nonscheduled plan typically has large deductibles and pays around 50% for the services provided? a. Major service b. Basic service
a
A Universal Life insurance policy has two types of interest rate that are called a. Guaranteed and Current b. minimum and target
b
What does "liquidity" refer to in a life insurance policy? a. The policyowner receives dividend checks each year. b. Cash values can be borrowed at any time.
a
Which of the following is NOT true of Section 1035 Policy Exchanges? a. Any exchange made under Section 1035 of the Internal Revenue Code must be completed within 30 days. b. It is an IRS Code which permits like kind exchanges of property.
b
Which of the following is true regarding statistics used in an advertisement? a. The equations used to figure them must also be shown. b. The source must be identified.
b
Which of the following regulatory authorities participated in creating the National Do Not Call Registry? a. SEC b. FTC
