Final exam- Vermont life and health

Under HIPPA, medical plan late enrollees may be excluded for pre-existing conditions for a maximum of

18 months

If an individual health insurance policy is paid MONTHLY, the grave period is

10 days

The free look period for LIFE INSURANCE policy is usually

10 days

In Vermont a temporary license may be issued for a period but not exceed how many days?

180 days

An insured must notify an insurer of a medical claim within how many days after an accident?

20

A licensee who is required to take continuing education must complete 24 hours of continuing education, which includes ___ hour(s) of ethics courseworks?

3

Each domestic company must have its financial records examined by the Commissioner every

3 years

A licensee whose name or address changes must notify the Commissioner within

30 days

Any administrative action taken against a producer must be reported to the commissioner within

30 days

Newborn children are automatically covered under an existing family medical plan at the moment of birth for a period of at least (# days)

31

How long can an insurer legally defer paying the cash value of a surrendered life insurance policy?

6 months

How long do most states allow an insurance company to delay the payment of a cash surrender under the Delayed Payment provision?

6 months

Larry wants to purchase an individual disability income policy to provide continuous income while disabled. He is also covered by a two-month wage continuation benefit from his employer. What should the policy elimination period be for his individual policy?

60 day

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

Keogh Plan

A qualified retirement plan for self-employed individuals

Which of the following individuals is eligible to receive a temporary producer license?

A designated employee who is replacing a deceased producer

Which of the following combinations best describe a universal life insurance policy?

A flexible premium deposit fund and a monthly renewable term insurance policy

Which benefit is normally payable to a life insurance policyowner when the insured's life expectancy has been severely limited? Reduced paid-up option Accelerated (living) benefit Return of Premium benefit Extended term option

Accelerated (living) benefit

Mike recently lost sight in both eyes. He has a policy that pays a lump sum benefit for this injury. What type of insurance does Mike have?

Accidental Death and Dismemberment

Which of the following statements is TRUE if the owner of an it's named their spouse as beneficiary, but then dies before any distributions are made

Account can be rolled into the surviving spouses IRA

Rick is a disabled worker receiving Social Security benefits. What are his wife and dependent children eligible for?

An income benefit which is a percentage of his primary insurance amount

Which of the following statements is true about an insurers right to screen applicants for HIV

An insurer can require a blood test for HIV

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

A description of a qualified plan's insurance contract may be found in which ERISA reporting form? Annual return/report (Form 5500) Shareholder's report IRS Form 1040 Summary report (Form 6500)

Annual return/report (Form 5500)

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

Annuitant

A 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 disclosed

If a disability income policy contains a cost-of-living adjustment rider, benefits must typically be increased

At least once per year from when benefits begin

In the event of premium default, which life insurance provision will use the cash value to keep the policy in force?

Automatic premium loan

What is the tax treatment of benefit payments for non-qualified annuity?

Benefit payments are always fully taxable

A preferred provider plan and an indemnity plan are similar in what way?

Both pay on a fee-for-service basis

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

Business entity

A producer recently replaced an existing Medicare Supplement policy with a new policy. The producer's compensation for the new policy

CANNOT exceed the renewal commission of the original policy

Which of the following provisions allows an insured or the insurer to terminate the policy

Cancelable provision

Which of the following is NOT a condition that must be met for an accidental death benefit to be paid?

Cause of death must be from a job-related injury

All parts of the Medicare program (except for public information and enrollment) are administered by which federal agency?

Centers for Medicare and Medicaid Services

An insurer wishing to conduct business must obtain

Certificate of authority

Which would be described as a beneficiary designation by class?

Children of the insured

An employee welfare plan exempt from ERISA regulations would be

Church plans

Which of the following statements is true regarding accident and health insurance claims that reimburse on an indemnity basis

Claims can be sent directly to the insured

Which report contains information regarding an individual's general reputation and credit standing?

Consumer report

An insurance application requires an applicant to make a full, accurate disclosure of the risk factor involved. Using this criteria, an insurance policy is considered what type of contract?

Contract of utmost good faith

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

Controlled business

Life settlement proceeds may be subject to the claims of

Creditors

ABC Partnership is a business with a limited number of partners. Which disability buy-sell agreement is best suited for this business?

Cross-purchase agreement

Mike applied for life insurance and was issued a conditional receipt. He is later found to be insurable and is issued a policy. When does his coverage become effective?

Date of issuance of the conditional receipt

What kind of policy typically offers mortgage protection?

Decreasing term

Which of these life insurance policies do NOT contain a cash value provision

Decreasing term life

Which of these is NOT an underwriting responsibility of a life insurance agent?

Determining the final rate classification

Which type of group plans is excluded from HIPAA rules

Disability income

Elimination periods Typically applied to

Disability policies

Disability income policies provide protection for which of the following

Economic death

Which of these is NOT considered a type of limited payment whole life insurance?

Endowment at age 70

When an individual is planning to protect his family with life insurance one method of doing so is called needs analysis what exactly does needs analysis involve?

Establishes the needs of the individual and his dependents

Long-term care policies will usually pay for eligible benefits to using which of the following methods

Expense incurred

When a ceding insurer transfers a portion of its risk to an assuming insurer on a case by case basis, this process is referred to as

Facultative reinsurance

Which of these may NOT be deducted from premium payments or the cash value of an variable life insurance policy?

Federal premium taxes

The "use it or lose it" rule applies to

Flexible savings account

A business may purchase an annuity for all of the following reasons EXCEPT Structuring a liability settlement payment Funding a non-qualified deferred compensation plan Accumulating assets on a tax-deferred basis Providing a pension to employees

Funding a non-qualified deferred compensation plan

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 which circumstance may an insurer discontinue a small employer group medical plan

Insurer discontinues offering the plan to all employers

What is it in insurance contract that identifies individuals by relationship to a specific organization

Group insurance

What is the name of the rider that provides an additional purchase option in a life insurance policy?

Guaranteed insurability rider

An accident and health plan that typically covers only the services of approved providers is called a

HMO plan

Kyle is an insured who disregarded an accident and health insurance policy provision that requires him to seek a second surgical opinion. What will the end result be?

He may be reimbursed for the surgical procedure at a reduced benefit level

The unwritten authority given to a producer to carry out necessary incidental acts of the agency agreement is called

Implied authority

When long term care insurance is replaced, the insurer issuing the new policy cannot

Impose a new pre-existing conditions exclusion

When long-term care insurance is replaced, the insurer issuing the new policy cannot

Impose a new pre-existing conditions exclusion

Which life insurance clause prohibits an insurance company from questioning the validity of the contract after a stated period of time has passed

Incontestable clause

A health insurance underwriter will most likely view alcohol abuse as a(n)

Increased exposure to risk

Which of these statements reflects an accurate portrayal of Medicare select

Insured uses preferred providers in exchange for paying lower premiums

What type of life insurance policy covers two or more persons and pays the face amount upon death of the first insured

Joint Life

Which of these is NOT a common life insurance nonforfeiture option

Life income annuity

An existing life insurance policy is being sold by the policyowner to help finance the cost of a terminal illness. This is an example of

Life settlement

Which of these do NOT indicate the presence of insurance interest in a life insurance contract

Lifelong friendship

Inpatient Psychiatric Care is covered under Medicare Part A insurance for 190 days per

Lifetime

Which of these policies is considered to be a comprehensive health policy?

Major Medical policy

Which of the following is an example of defamation?

Making a statement that is false or maliciously critical of the financial condition of an insurer

According to the federal fraud and false statement act, which of these is considered to be an intentional violation

Making false entries in a company's books

John bought a deferred annuity on Mary. John amends the contract years later to name Tom as the recipient of the proceeds if Mary dies. Who is the annuitant for this contract?

Mary

Karen is considering replacing her individual accident and health insurance policy with another individual policy. She has had issues in the past with her gall bladder that would be considered a pre-existing condition. How will a pre-existing conditions exclusion affect Karen's new insurance contract?

May reduce her benefits

Which of the following covers the part a deductible of Medicare

Medicare supplement core benefits

A life policy that has premiums lower than normal During the early years

Modified life

Which of the following does not meet requirements of skilled nursing care

Must be provided exclusively in a hospital

If the commissioner requests access to a producers business records, the producer

Must provide access to the records upon request

Tim is covered by an accident and health insurance policy that may not be changed in any way by the insurer up to a stated age, as long as the premiums are paid. What type of policy is this?

Noncancelable

How are the premiums for an individually-owned disability income policy treated for tax purposes?

Not tax-deductible at all

A life insurance guaranteed insurability rider gives the insured the right, without proving insurability to

Periodically purchase additional life insurance

Which of these is not a factor that influences group health insurance underwriting?

Physical exams of group members

A signed good health statement may be requested by a life producer at the time of

Policy delivery

These are all accurate statements regarding universal life insurance EXCEPT

Policy loans are not permitted

Straight whole life insurance can be accurately described in all of these statements EXCEPT

Policy protection normally expires at age 65

Under which circumstance would inflation protection not be included in a long term policy

Policyowner declines the coverage in writing

The law of large numbers enables an insurer to

Predict losses

Where is he difference between a standard risk and a substandard risk reflected

Premium charges

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

Prior to using the assumed name

Which of the following outlines the authority given to the producer on behalf of the insurer

Producer contract

A producer has indicated to a potential client that the proposed life insurance policy is covered by the Vermont life and health insurance guaranty association. This action taken by the producer is

Prohibited by law

Insurance producer Kelly offers a $500 shopping card if a client purchases an insurance product through her. What is this an example of?

Rebating, which is an unfair trade practice

A life insurance policyowner would like a dividend option that results in a limited current outlay of funds. Which dividend option would be chosen.

Reduction of premium payment

The insurer assumes the risk from another insurance company

Reinsurance

Which of the following is NOT a basic underwriting action for accident and health insurance?

Removing uniform policy provisions

Which of the following is NOT prohibited sales practice for marketing long-term care coverage?

Replacing existing coverage with a new policy

T is covered by an accidental death and dismemberment (AD&D) policy that contains an irrevocable beneficiary. What action will the insurance company take if T requests a change of beneficiary?

Request of the change will be refused

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

Retiree having a lump sum to invest

What does a 401(k) plan generally provide its participants?

Salary-deferral contributions

What does a 401(k) plan generally provide its participants?

Salary-deferral option

Long-term care policies sold in Vermont must not exclude coverage for

Senile dementia

Assets that back the non-guaranteed values of variable life insurance products are held in which account?

Separate account set up by the insurer

Which one of these is not considered to be an element of an insurable risk

Speculative risk

Which entity is responsible for regulating claims settlement practices of insurers

State insurance departments

In regards to technology and the ACA, which of the following statements is correct?

States which operate with an Exchange must offer an internet-based portal

A group health certificate for coverage issued in Vermont MUST contain

Summary of policy features and benefits

Which of these annuity contract features is meant to discourage withdrawals and exchanges?

Surrender charges

Which of these is a true statement regarding survivor benefits under a qualified retirement plan?

Survivor benefits can only be waived with the written consent of a married employee's spouse

Which of the following financial products creates an instant estate, no matter when the date of death?

life insurance

Which parties are directly involved in a group accident and health insurance contract?

The employer and the insurer

Peter, age 50, surrenders his modified endowment contract (MEC). How is the gain treated in terms of federal income taxes?

The gain is treated as taxable income and a penalty tax is imposed on the gain

Where will a life insurance policy's proceeds be directed to if all the beneficiaries die before the insured?

The insured's estate

Who may terminate coverage under a cancelable health insurance policy

The insurer or the insured

Taxable income may be the result from all of these modified endowment contract transactions except for

The policy is surrendered for less than what was paid into it

An insurance company is marketing a new health insurance policy in Vermont which contains a provision that is in conflict with Vermont insurance law. What remedy must be taken by the insurer?

The provision must be amended to confirm the minimum statutory requirements

A life insurance policy can usually be contested by the insurer only during the first years of the contract?

Two years

Every years a producers license have to be renewed?

Two years

A life insurance contract policy can usually be contested by the insurer only during the first

Two years of the contract

Which of the following is NOT considered to be an expense for surviving family members if a deceased wage earner

Unemployment tax expenses

Charging different premiums to policyholders in the same risk classification is referred to as

Unfair discrimination

Which of the following best describes the presumptive disability provision

Waives the typical total disability requirements

Accidental and health policies exclude loss as a result of

War

Under what circumstances does an accident and health insurance have the right to request an autopsy

We're not prohibited by state law

An agent gives a conditional receipt to a client for an insurance policy after collecting the initial premium. When will the policy become effective?

When the conditions of the receipt are met

Under which circumstance is the interest rate guaranteed within a market value adjusted annuity

When the contract has been held for the period specified in the policy

A policyowner is permitted to take out a policy loan on a whole life policy at what point?

When the policy has a cash value

According to federal fraud and false statement regulation, what is required for a prohibited person to transact insurance business in this state?

Written consent from the state insurance regulatory agency

Which of the following is not covered by a comprehensive long-term care policy?

acute care

The surrender charge on many deferred annuity contracts are waived when the annuitant becomes unemployed annuitant dies or becomes disabled contract's interest rate falls below a stated percentage contract is canceled within the first year

annuitant dies or becomes disabled

Voluntarily terminating an insurance policy is also known as

cancellation

If dividend option choices are offered on a whole life insurance policy, the policy MUST

contain a statement that dividends are NOT guaranteed

Interest is credited to a fixed annuity no lower than the variable contract rate contract guaranteed rate current rate of inflation prime rate

contract guaranteed rate

What happens to the purchasing power of benefit payments from a fixed life annuity when the cost of living goes up

decreases

An employer pays the accident and health insurance premiums for its employees. The premiums paid by the employer are

deductible to the business

When using the needs approach for life insurance planning, lump sums may be created for all of the following reasons EXCEPT Final expenses Charitable donation Education Employee benefits

employee benefits

A producer is meeting with a client to determine whether an annuity would be suitable for purchase. Which of the following topics needs to be discussed with this client?

financial objectives

A medical fee schedule shows the amount an insurer will pay for a given procedure. This amount is considered to be the

highest amount payable

Who is protected with the other insurance with this insurer provision

insurance company

The optionally renewable provision allows what party to cancel the contract

insurer

Andy is in need of health care performed by skilled medical practitioners, but only on an intermittent basis. What level of care will his doctor likely prescribe?

intermediate care

The death proceeds of a credit life insurance policy are typically paid to the

lender

Which of the following is not information needed to determine the suitability of an annuity recommendation

level of education

After the extended term life nonforfeiture option is chosen, the available insurance will be

level term for a stated period of time

Group life insurance is typically issued as

level term insurance

Custodial care is normally covered under

long term care insurance

In a disability income contract an insured is considered to be totally disabled under the presumptive disability provision if he/she

loses the ability to speak

During the sale of a life insurance policy, a producer may provide an incomplete illustration

never

An agent whose actions exceed the authority granted by contract is

not backed by the insurer

In an IRA, rollover contributions are:

not limited by dollar amount

Long-term care policies normally cover expenses associated with

nursing homes

Under a long-term care inflation rider, the benefit levels

periodically increase without proof of insurability

A certificate of coverage for a group health policy is best described as

proof of coverage for the employee

Which of the following types of risk is insurable?

pure

When issuing disability income coverage on a substandard risk, an insurance company may

shorten the benefit period

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

The reason for backdating a policy is

to obtain a premium rate based on an earlier age

Which life insurance policy would be eligible to include an automatic premium loan provision?

whole life