Connecticut Life and Health Final Exam

What type of risk involves the potential for loss with no possibility for gain?

pure risk

An insured has $25,000 whole life insurance policy with $6000 cash value available. Under the extended term nonforfeiture option, what is the amount of insurance available to the insured?

$25,000 - the extended term option uses the policy's cash value to purchase a level term insurance policy in an amount equal to the original policy's face value, for as long a period as the cash value will purchase.

To be classified as a small employer in Connecticut, an employer must employ how many eligible employees?

1 to 50

Starting in 2016, businesses with up to ___ employees will be defined by the ACA as a "small business".

100

After a life insurance policy has been in effect for _____ year(s), it becomes incontestable.

2

How many employees must an employer have for the COBRA of 1985 to apply

20 or more

Kate received a group accident and health termination notice. How many days does she have to apply for a converted policy?

31

Which of the following must clearly be illustrated in all sales material for market value adjusted annuities? 1. The market value adjustment must always be approved by the commissioner 2. The market value adjustment is always downward 3. The market value adjustment is always upwards 4. The market value adjustment can be either upward or downward

4. The market value adjustment can be either upward or downward

Social security disability income requirements state that in order to become fully insured on a permanent basis, you must have worked in a covered occupation for ____ quarters.

40

What is the maximum number of employees an employer may have for qualified medical savings accounts?

50 employees

In long-term care insurance, what is "ADL"?

Activities of daily living

Life settlement proceeds may be subject to the claims of

Adjusters

Which is an accurate description of the premium in a graded premium life insurance policy?

Annual increases in premium for a stated number of years then levels off for the remainder of the contract

During the liquidation phase of an annuity contract, to whom are the income benefits normally payable to?

Annuitant - the income benefits distributed during the liquidation phase of an annuity contract are normally payable to the annuitant

Before soliciting insurance applications for an insurer, a producer must secure a(n)

Appointment - a producer must secure an appointment with an insured before soliciting insurance applications for that insurer

How may an insurance company classify an accidental death benefit on a life policy?

As an optional policy rider - the accidental death benefit provided by a life insurance policy may be classified as an optional policy rider

When does a family health policy's coverage for a newborn child begin?

At the moment of birth

The coordination of benefits provision is added to a group health plan in order to

Avoid overinsurance - the coordination of benefits provision establishes an order on which plans pay their claims, and allows secondary plans to reduce their benefits so that the combined benefits of all plans do not exceed total allowable expenses (overinsurance)

A producer recently replaced an existing Medicare supplement policy with a new policy. The producers compensation for the new policy ____ exceed the renewal commission of the original policy.

CANNOT - compensation for a new Medicare supplement policy that replaces an existing policy cannot exceed the renewal commission of the original policy

Which of the following types of insurers limits the exposures it writes to those of its owners?

Captive insurer - an insurer that confines largely limits the exposures it writes to those of its owners is called a captive insurer

All of these are used to prevent adverse selection in a group dental plan except - provide evidence of insurability - probationary periods - waiting periods - decreased employee participation

Decreased employee participation - to prevent adverse selection in a group dental expense plan, the plan may require any of these except for decreased participation. Typically, when a Groupon plan is initially effective, maximum participation is required

What effect does interest income have upon insurance premiums?

Decreases premium

Which of these is not an underwriting responsibility of a life insurance agent? Asking relevant questions concerning an applicants avocations Requesting an attending physicians report Ordering an inspection report Determining the final rate classification

Determining the final rate classification

Which of these noncontributory group plans would a claim likely result in the payment of federal income? 1. Accidental health 2. Blanket health 3. Major medical 4. Disability income

Disability income

Elimination periods typically apply to

Disability policies

True or False: Interest on proceeds must be paid by the the beneficiary in a interest-only settlement option in a life insurance policy.

False

True or False: Regarding a cash value loan, a policy-owner's interest payment are tax deductible

False

What is another name for a Keogh plan?

HR 10 plan

A characteristic of preferred provider organizations (PPO) is PPOs operate like an HMO on a prepaid basis If a service is obtained outside the PPO, benefits are reduced and costs increase PPOs are generally public in nature rather than private Health care providers themselves are barred from forming a PPO due to conflict of interest

If service is obtained outside the PPO, benefits are reduced and costs increase - members are not mandated to use the PPO. However, if they go outside the PPO for health care services, benefits re deuces and costs increase

Which of the following does not help determine group health insurance premiums? Average age Claims experience of the group Income level of group members Size of the group

Income level of group members

When a policy loan is requested by a policyowner and it requires the consent of the beneficiary, what kind of beneficiary designation is this?

Irrevocable beneficiary

Which of the following is associated with an immediate annuity?

Lack of an accumulation period

An arrangement where an individual is authorized to act on behalf of another person or company is established through

Law of Agency

During the early years of a whole life insurance policy, the cash value will normally be

Less than the total premiums paid

What would be a valid reason for naming a trust as a beneficiary of a life insurance policy as opposed to naming an individual?

Management of proceeds would be provided

Bert's spouse passed away recently. Bert was covered under his spouse's group family health insurance plan but is now covered by COBRA. How much of the active-employee cost may be passed on to Betty for continued coverage.

Maximum of 102%

Medicare Part A coinsurance payments are covered by

Medicare Supplement Plan A

Which of these is a type of private insurance that covers the cost-sharing amounts under Medicare? Major medical insurance Medicaid Disability income Medicare supplement

Medicare supplement policy - helps pay for the out-of-pocket expenses involved under a Medicare claim

Which action will trigger a penalty tax on premature distributions from a modified endowment contract (MEC)? Policy loans Claim on a death benefit Extended term settlement option Policyowner reaching the age of 70 1/2

Policy loans - if a policy is classified an MEC, policy loans will be subject to penalty taxes

In most dental plans, a deductible typically is NOT applied to

Preventative and diagnostic services

Which of the following could be a future use of cash value that builds in a recently-purchased whole life insurance policy? Convert the cash value to a paid-up term policy Gives policyowner ability to borrow against funds within two years Increases policy's face amount Provide supplemental income in 35 years

Provide supplemental income in 35 years - whole kife policies typically begin to accrue cash value during the 3rd year after issue. The cash value that accumulates can be used to supplement income during retirement years

An insured is entitled to coverage under a policy that a prudent person would expect it to provide. This principle is called

Reasonable expectations

Security laws passed by Congress are enforced by which Federal agency?

Security and Exchange Commission (SEC)

If an individual would like to enroll in Medicare or seek public information about Medicare, which federal agency handles this?

Social Security Administration

XYZ Corp gives money to an employee to purchase a life insurance policy and allows the employee to select the beneficiary. What kind of plan is this?

Split-dollar

Which entity is responsible for regulating claims settlement practices of insurers?

State insurance departments - claims settlement practices of insurers are regulated by state insurance departments

Which factor determines the maximum disability benefit that can be purchased by an applicant?

The applicant's income

What is payable to the policy owner if a whole life policy is surrendered prior to its maturity date?

The cash value a as

The owner's cost basis for a non-qualified deferred annuity is typically the same as the

Total premium paid

self-maintenance expenses do not influence an individual's need for life insurance, true or false?

True

Insurance crimes which affect interstate commerce are prosecuted by the

US Attorney General - a violation of US Code 1033, crimes by or affecting persons engaged in the business of insurance whose activities affect interstate, commerce, is prosecuted by the US Attorney General

Which of the following best describes a "partial disability"? Becoming deaf in one ear Unable to perform all job duties due to a short-term disability Unable to perform one ore more job duties When a disability recurs from a previous illness accident

Unable to perform one or more job duties - partial disability is normally defined as the inability to perform one more duties of a job

The coinsurance for skilled nursing facility services covered by Medicare after the 100% Medicare coverage ends is

a flat dollar amount per day

The surrender charge on many deferred annuity contracts are waived when the

annuitant dies or becomes disabled

A television advertisement features a health insurance product that is endorsed by a specific group. In this advertisement

any control by the insurer over this group must be discloswd

According to the Pregnancy Discrimination Act of 1978, employers must treat a pregnancy in the same manner as

any other medical disability - the pregnancy discrimination act of 1978 requires that employers treat pregnancy in the same manner as a disability for any other medical reason

Who normally pays the premiums for group credit life insurance?

borrower

Chris has a single major medical contract which covers all medical expenses. His plan is considered to be

comprehensive

Reductions in coverage are one feature of _______ in Health insurance policies.

cost containment

A qualified profit-sharing plan is designed to

distribute a portion of company earnings to its employees

Under the law of agency, the principal is considered to be

insurer

Custodial care is normally covered under

long term care insurance

Rick recently died and left behind an individual IRA account in his name. His widow was forwarded the balance of the IRA. The widow qualifies for the

marital deduction

Sarah, age 88, is a life annuitant who has lived beyond her life expectancy. The funds for additional benefit payments will be derived primarily from funds that were

not distributed to life annuitants who died before life expectancy

Who typically makes the purchase payments in an individual annuity?

owner

Qualified long-term care premiums are treated for tax purposes as

tax-deductible to the extent they exceed 7 1/2% AGI

Giving up a known right on a voluntary basis is called a(n)

waiver

Medicare supplement insurance that provides a preventative medical care benefit will often cover

yearly physical examinations

What is the actuarial value of a bronze level health plan?

60

The time limit an individual has to "rollover" funds from an IRA or qualified plan is

60 days

According to the affordable care act, insurers can no longer deny health coverage due to pre-existing conditions unless that plan is a(n)

Grandfathered plan - under the affordable care act, health insurers can no longer charge more or deny coverage to you or your child because of a pre-existing health condition unless it is grandfathered health plan

The ____ is responsible for reporting to the commissioner any name or address change of the licensee

Licensee

What is another term used for "pure" life annuity?

Life income

What typically changes at the re-entry option date found in some life insurance policies?

Premium - a re-entry option gives the insured the opportunity to provide evidence of insurability at the end of the term to qualify to renew the policy at a lower premium

At what point must a producer give notification to the commissioner about using an assumed name?

Prior to using the assumed name

The inability to perform some of the duties of one's own occupation is known as

Residual disability

Under HIPAA requirements, eligibility for the pre-existing conditions exclusion waiver under new coverage is lost if there is a break in coverage of more than ____ days

63

According to ERISA regulations, a Summary Plan Description must be provided to a new plan member within ____ days of the member's eligibility date.

90

Which of these is not an advantage of term life insurance? - The greatest amount of coverage can be provided for the initial premium paid - It can be provided as a rider to another policy - A cash benefit will be provided if the insured is alive at the end of the policy period - temporary insurance needs can be met

A cash benefit will be provided if the insured is alive at the end of the policy period - term life insurance does not provide a cash benefit at the end of the policy period

In long-term care insurance, what is the length of time for which claims will be paid?

Benefit period

A life settlement ______ negotiates a life settlement between a policyowner and a life settlement provider.

Broker

A disabled business owner who has payroll and business expenses paid for has what kind of insurance policy?

Business Overhead Expense

In a disability buy-sell agreement, the policies funding the agreement are owned by the

Business entity

Health Reimbursement Arrangement (HRA) must be established

By the employer

An order issued by the Commissioner that prohibits a specific practice listed in the order is called a(n)

Cease and desist orded

An employee welfare plan exempt from ERISA regulations would be

Church plans

In Connecticut, continuing education courses must be approved by the

Commissioner

An accident and health insurance policy's premium requirements are set forth in which of the following provisions?

Consideration clause - sets forth an accident and health insurance policy's premium requirements

Which term refers to insurance written on the interests of the licensee, the licensee's employer, or the licensee's immediate family?

Controlled business - is insurance written on the interests of the licensee, the licensee's employer, or the licensee's immediate family

Linda is covered with long-term care insurance and has early-stage Alzheimer's. She is still able to reside in her home while receiving primary care, as opposed to moving into a nursing home. All of the following long-term benefits encourage this EXCEPT for Custodial care Home health care Adult day care Respite care

Custodial care

What type of doctor-ordered care assists an individual with performing basic faulty activities such as bathing, dressing, and eating?

Custodial care - custodial care is a doctor ordered service that assists an individual with performing basic daily activities such as bathing, dressing, and eating

An HMO prescription drug plan is generally characterized by Generic drugs only Annual deductibles Drugs dispensed through participating pharmacies Drugs dispensed through online pharmacies

Drugs dispensed through participating pharmacies

A group health insurance policy is a contract between an

Employer and the insurance company.

Which of the following health insurance provisions requires that the application becomes part of the policy? Consideration clause Insuring clause Entire contract clause Application clause

Entire contract clause

The "use it or lose it" rule applies tk

Flexible savings accounts

Some standard Medicare Supplement policies include which benefit? Hospice care Respite care Vision care Custodial care

Hospice care

Which statement regarding while life insurance is accurate? - cash value loans are permitted - insurance coverage can continue for life - policy normally matures at retirement - no cash value accumulations

Insurance coverage can continue for life

Who is required to notify the producer in the event of appointment termination?

Insurer

Which health policy clause specifies the amount of benefits to be paid?

Insuring

All of these are duties that a producer may be required to perform when delivering an insurance policy expect Acquire a statement of good health signature Gather the initial premium Review policy with applicant Leave a conditional receipt with client

Leave a conditional receipt with client - a conditional receipt is normally given prior to a policy being issued

Someone who is licensed to negotiate a life settlement contract is called a

Life settlement broker

Which of the following is excluded in a medical expense plan? Dread disease Tropical disease Military duty Terminal disease

Military duty

A producer's failure to provide title and true nature of a policy upon solicitation is an example of

Misrepresentation

In Connecticut, the Human Immunodeficiency Virus consent form

Must disclose who will be receiving a copy of the test results

How would preventative care be encouraged in a dental plan?

No deductible on routine examinations

Which of the following actions may result in a producer's license being suspended by the commissioner? Soliciting insurance under a temporary license Rebating part of a commission to the applicant Soliciting insurance on behalf of a foreign insurer Splitting the commission with another licensed producer

Rebating a portion of the commission to the insured may result in the commissioner suspending a producers license

How are qualified Roth IRA distributions normally treated for tax purposes?

Received income tax free

Which of the following would most likely purchase an immediate annuity?

Retiree having a lump sum to invest

Steve has a group disability income policy where the premiums are paid by his employer. He elected to pay for additional residual disability coverage. Which of the following statements is true? Steve's disability benefits are received tax free The premiums for Steve's disability policy are tax-deductible for Steve Steve can deduct the premium for the amount he paid for the additional residual disability coverage Steve will pay taxes on the disability benefit received from his employer, but will receive any residual disability benefits tax-free

Steve will pay taxes on the disability benefit received from his employer, but will receive any residual disability benefits tax-free

A group health certificate for coverage issued in CT must contain a

Summary of policy features and benefits

Under a deferred annuity, which contract feature initially charges a 5-10% fee that eventually reduces to $0 after a stated amount of time?

Surrender charge

How are monthly life annuity benefit payments treated under a tax sheltered annuity (TSA)?

Taxed as ordinary income in the year received

How are monthly life annuity benefit payments treated under a tax sheltered annuity (TSA)?

Taxed as ordinary income in the year received - monthly life annuity benefit payments received from a tax sheltered annuity (TSA) are taxed as ordinary income in the year received

Jonas is covered with disability insurance through his employer. The employer pays 75% of the premium, while Jonas pays the other 25%. What is Jonas' tax liability for any benefits paid from the disability plan?

Taxes must be paid on 75% of the benefits received

To secure authority for soliciting insurance products in Connecticut, an insurance company must secure a certificate of authority from

The Connecticut insurance Commissioner

Which statement concerning a deferred annuity contract is correct? The contract cannot be assignable by the owner Requires a single premium payment The owner can be the beneficiary, annuitant, or neither Benefits start immediately after contract formatjon

The owner can be the beneficiary, annuitant or neither

Under an adjustable life insurance policy, which of the following may NOT be changed without further underwriting? The person insured The period of coverage The payment period The plan of coverage

The person insured - all of these may normally be changed without further underwriting in an adjustable life insurance policy expect for the "person insurance"

Which of the following best describes the presumptive disability provision?

Waives the normal total disability requirements

Under what circumstance does an accident and health insurer have the right to request an autopsy?

When not prohibited by state law