Fin 440 Estate Planning Exam 2

An employer may require a former employee who has COBRA coverage to pay up to _____% of the premium.

102%

An insured should receive necessary claim forms within _____ days after notice of claim.

15 (Claims form provision)

If a policy being delivered is not a replacement policy, what is the free look period?

15 days

If the Buyer's Guide and disclosure statement are not provided at or before application, a free look period of at least ____ must be provided

15 days

A one-time benefit of $________ is paid to a surviving spouse or child if he/she is eligible for Social Security benefits.

$255

Facility of Payment of Proceeds states that the insurer may pay up to $_____________ to anyone incurring expenses because of the insured's death if no named beneficiary is living when the insured person dies

$5000

In Colorado, providing false testimony to an examiner is punishable by a fine up to what amount?

$5000

Once a life insurance policy has been in force for ____ year(s) the insurer may not deny a claim based on the insured's suiciude

1

If funds are prematurely withdrawn from a Modified Endowment Contract (MEC) they are subject to a _____% penalty on any gains.

10%

The existing insurer must notify the policy/contract owner withing ____________ of the replacement receipt that they have a right to receive information regarding the existing policy or contract values

5 business days

The replacing insurer must notify any other existing insurer within ___________ days of receipts of the completed application

5 business days

A licensed insurer must be examined by the Commissioner at least once every how many years?

5 years

Files for every advertisement must be maintained for ____ years

5 years

The existing insurer has to be able to retain and produce all replacement notifications received by the replacing insurer for at least _________ years

5 years

The replacing insurer must maintain copies of replacement records for at least _________ _________

5 years

If an insurer makes a payment for a claim but the insured is dissatisfied with it, the insured must wait _____ days after proof of loss before taking any legal action.

60

The Legal Actions provision preserves the insured's right to bring suit against their own insurer, but the insured must wait at least _____ days after filing a proof of loss before pursuing this action.

60

An individual is eligible for a Medicare Supplement as early as age:

65

The Commissioner may assign penalties in addition to those authorized by law, including: A) Fine the producer up to $3,000 for the violation B) Assess a fine of $50,000 for violating a cease and desist order C) Order increased payment of a claim that has already been closed D) No penalty can be imposed once a license has been lapsed or surrendered

A) Fine the producer up to $3,000 for the violation The Commissioner may fine the producer or insurer a monetary penalty up to $3,000 per violation, up to an aggregate penalty of $30,000. The fine for violating a cease and desist order is up to $10,000. Penalties may still be imposed if a license is lapsed or surrendered. And the Commissioner cannot order an increased payment on a closed claim.

What is the result of an insured not receiving a claim form within the time period allotted after submitting a notice of claim? A) The insured can submit written proof of the loss B) The claim is automatically accepted C) The claim is automatically denied D) The insurer must add a 10% penalty to any amount eventually paid

A) The insured can submit written proof of the loss The claim form must be received by the insured from the company within 15 days after notice of claim. If forms are not furnished, the insured may submit written proof of occurrence, character, and extent of loss.

Which of the following types of coverage provides custodial care outside the home for individuals not requiring confinement?

Adult Day Care

To be a qualified accelerated death benefit it must meet all of the following criteria:

Amount of the benefit must at least be equal to the present value of the reduced death benefit remaining after payment of the accelerated benefit A physician must give a prognosis of 24 months or less life expectancy for the named insured The insurer provides a monthly report to the insured showing the amount paid and the amount of benefit remaining in the life insurance policy

If the applicant has existing coverage, the producer must read aloud to the applicant: "A__ I_______________ N_______________ R______________ R_______________ o____ L___________ I____________ o___ A_____________

An Important Notice Regarding Replacement of Life Insurance or Annuities

Gary participates in a group long-term care insurance program through his employer. The employer pays for a standard level of coverage for all employees, and Gary pays for an additional voluntary amount of coverage. In all, Gary's employer pays two thirds of the cost and Gary pays the remaining one third of the cost. If Gary makes a claim under this policy, what percentage of his benefits would be taxable based on the premium structure? A) 67% B) 0% C) 33% D) 100%

B 0% This is a long-term care insurance plan, not disability insurance. The tax-status of benefits does not depend on who pays the premium.

Which policy covers inpatient doctor visits and may be expanded to include payment for office visits, diagnostic x-rays, laboratory charges, ambulance and nurse's expenses when not hospitalized, and maternity benefits for an additional premium?

Basic Medical Expense

Which type of policy determines benefits based on a relative value scale?

Basic surgical expense

A person who purchases a Medicare Supplement policy cannot enroll in Medicare Part _________.

C

Which is the best description of a Limited Accident Policy? A) It provides coverage for any type of accident, but not sickness B) It only provides coverage for a limited time after an accident C) It provides benefits for injuries associated with specific events D) It is limited in geographical scope (i.e., only in the state where it was written)

C) It provides benefits for injuries associated with specific events A Limited Accident Policy provides benefits for accidental injuries associated with specific events, such as foreign travel or while on a common carrier, such as an airplane or cruise ship.

Which type of insurance policy combines Basic Medical Expense Coverage with Major Medical Coverage?

Comprehensive Major Medical

_______________ Major Medical insurance coverage combines the features of the Basic Medical Expense policies and a Major Medical policy into a single policy and includes reimbursement for covered expenses on a 'usual, customary, and reasonable' basis.

Comprehensive Major Medical

Which of the following is not a Mandatory Uniform Provision? A) Reinstatement B) Payment of Claims C) Physical Exam and Autopsy D) Conformity with State Statutes

D) Conformity with State Statutes

When an insurer relies on the prior claims history of the group to be insured in determining the rate to be charged, it is called:

Experience Rating

What is the Cost Recovery Rule?

Generally, the difference between the amount of cash value received and the amount of premium paid in is subject to income tax upon surrender The 'Cost Recovery Rule' stipulates that upon a partial withdrawal of cash or the surrender of a policy, the cash value in excess of premiums paid (cost basis) is subject to income tax.

Certificate of insurance

Issued by the insurer, states the coverage provided, who the benefits are payable, and the rights and conditions

What is the penalty for violating a cease and desist order?

License suspension or revocation, and a fine up to $500 or $10,000 per violation a person or insurer, license suspension or revocation, or both.

If an accelerated death benefit is in effect, how often must the insurer provide a report showing the amount paid and the amount of the remaining benefit?

Monthly

Which Act was implemented in order to protect consumers from questionable Medicare Supplement Policy marketing practices?

NAIC model law

Can a fully insured worker lose their fully insured status?

Never

In a replacement, the producer must submit what things to the replacing insurer?

Signed replacement notice and copy of all sales material

Medicare is available to individuals who have been receiving ______________ benefits for 24 months.

Social Security

Which policy utilizes a Corridor Deductible after Basic Medical Expense Coverage benefits have been exhausted and before Major Medical benefits begin?

Supplementary Major Medical

Who reviews and approves advertisements?

The commissioner

If not delivered in person, when must a buyer's guide and disclosure statement be delivered?

Within 5 business days

Optional uniform provisions found in health insurance policies are designed to protect the:

insurer

Replacement regulations do not apply to existing term life insurance that is __________ and ____________ and expires in ________ years or less

nonrenewable; nonconvertible; 5

Any domestic company issuing variable annuities must establish ________________ separate accounts

one or more

Cash surrenders or withdrawals will accrue interest at an annual rate of _____% above the federal discount rate when benefits are not paid within ______ days after the date of receipt of the request for payment by the insured

2%; 30

The group must have at least ______ people covered at the time the group policy is issued

3

Numbers on Colorado's No Call List must be removed from insurers' telemarketing lists at least once every _____ days

30

A Medicare Supplement or LTC policy's free look period is:

30 days

How long is the free look period for a Medicare Supplement policy?

30 days

If the policy being delivered is a replacement policy what is the free look period?

30 days

Admitted life insurers must pay interest on death benefits, using a rate that is not less than the rate for proceeds left on deposit with the insurer, from the date of the insured's death through ____ days following the date the insurer receives a claim that includes proof of death. From the _____ day until the date of settlement of a claim, the annual interest rate will be ____ percentage points above the federal discount rate.

30; 31st; 2%

A Medicare Supplement policy must contain a -day free look provision on the first page in bold print. The policy must also contain an _____________ in bold print, containing information on benefits, deductibles, exclusions, and premiums.

30; Outline of Coverage

What is the grace period for group life?

31 days

A maximum of ________ credits may be earned in one calendar year of employment.

4

Before selling annuities, a producer must complete a one-time ________ credit hour annuity training course

4

Fully insured status requires an individual to have earned ____ quarter credits, or approximately ______ years of employment.

40; 10

The replacing insurer and existing insurer must retain records relating to replacements for ___ years

5

What is required for a producer or insurer to give the applicant of an annuity?

A buyer's guide and disclosure document before the time of application

Other than the applicant, which signature is required on an application?

Producer (agent)

Which of the following is required to sign the application for insurance?

Producer and applicant

T/F if any plan fails to include a coordination of benefits provision, that plan would automatically be primary.

True

If a group policy is issued other than term insurance, it must contain ____________________

a nonforfeiture provision

For an annuity in the payout period with changes in nonguaranteed elements, and for a deferred annuity in the accumulation period, an insurer must give each contract owner a status report at least ___________ on the status of the contract.

annually

When group life proceeds are paid, they are not subject to _________

creditors

For people under 24, __________ __________ under Social Security means a worker has at least 6 work credits during the 13-quarter period ending with the quarter in which the worker dies, becomes disabled, or reaches retirement age.

currently insured

Each insurer marketing policies must notify the commissioner whether a policy form is to be marked with or without an __________

illustration

A producer must make reasonable efforts to determine a consumer's financial and tax status, investment objectives, and other pertinent and financial information ______________________ in order to determine whether a recommendation to obtain or replace an annuity is suitable.

prior to reccomendation