Final Health

What is policy limited to when paying accelerated death benefit

75%

Residual disability benefits

Based on reduction of loss on someones income

what is purpose of benefit schedule

to state what and how much is covered in plan

an illustration used in sale of policy must have label stating

"life insurance illustration"

To be eligible for HSA account

1. must be covered by High deductible plan 2. must not be covered by other health insurance except for disability, dental, LTC 3. can't be eligible for medicare (younger than 65)

Needs approach is determined by

1. predicted needs of family after premature death 2. death will occur immediately

what is minimum number of members required for group life in this state

10

what are consequences of withdrawing funds from a IRA prior to age 59.5

10% penalty

Under Affordable Care Act, what % of preventive care must be covered without cost sharing

100%

what are continuing education requirements for agents who market long-term care insurance poliy

8 hours of education INCLUDED in regular CE requirements

what is maximum amount that can be contributed to an MSA of the high-deductible plan for individuals

65%

If a consumer requests additional info concerning investigative consumer report, how long to comply?

5 days

What is the penalty for IRA distributions that are below the required minimum for the year

50%

how many separate requirements should an insurance policy have

6

Which is true regarding taxation of the accelerated benefits

A portion of the benefit up to a limit is tax free, the rest is taxable income

What elements of adjustable life can be changed by policywoner?

Amount and payment period of premium, face amount, period for protection

Waiver of premium

Allows an insured to have premiums forgiven if insured incurs a disability and can't pay

PPO

Allows insured the ability to see a specialist without getting a referell

When is an employer allowed to cancel the health reimbursement account

Anytime - these funds can also be used as a tax deduction

Accelerated death benefits

Clause in life insurance permits insureds to receive benefits before death if there is a diagnosis of a terminal illness

Guaranteed convertible

Convertible provision provides policyholders the opportunity to change a term policy to a whole life or universal life without need of physical exam

Difference between universal life and variable whole life

Defined guarantees with universal life versus the greater flexibility in variable life With universal, insured pays premiums so that beneficiary will receive benefit upon death - in contrast, variable whole life provide greater discretion allowing insured to establish both premium and death benefit Variable whole life is more expensive because the policyholder can set aside a portion of premium dollars in an investment vehicle

Which of following offers a limited choice of health care providers

EPO - exclusive provider organizations - use specific providors

Non-tax qualified

Income is taxed under non-qualified plans

What is true regarding single life settlement option

It provides income the beneficiary cannot outlive - can provide income for rest of life - upon the death of the beneficiary, the payments stop

medicare part B doesn't cover

LTC services

Return of premium rider

Lets policyholders regain total premiums they paid to insurer over lifetime if they don't pass away during coverage term

All of following are true about MIB except

MIB reports are based upon info supplied by doctors and hospitals - incorrect because they come from underwriting

what type of medicare policy requires insureds to use specific healthcare providers and hospitals and restricted network provisions

Medicare SELECT

Whole life elimination period

Period is two years and applies to this suicide clause

Change of plan provision

Policy provision that allows policyholder to make changes to his policy to keep with with changes

Tax qualified life

Premiums are tax-deductible

Life insurance can be delivered by all EXCEPT

Priority mail

Decreasing term

Rate of death benefit lessens over term of policy

Consideration clause

Sections that states how much her premium payments are and when they are due

Representation

Statements made by applicant that impact insurers decision (date of birth, medical conditions)

The health insurance counseling and advocacy program (HICAP) is administered by

The California department of aging

In an adjustable life, all can be changed by policy owner except

Type of investment

Surrender charge is determined by

a % of cash value and decreases over time

a hospital indemnity policy will pay

a benefit for each day the insured is in a hospital

Where are premiums from fixed annuities invested

a general account

The two types of assignments are

absolute and collateral

what is the amount a physician for a service charges

actual charge

which of following departments is responsible for developing mortality and morbidity tables

actuarial

which of following is NOT covered under LTC policy

acute care in hospital - correct at home health care, adult day care, hospice care

Contract that is only prepared by insurer is known as

adhesion

C receives 50,000 from 100,000 accidental policy - he recieved the

capital amount - this is 50% of the principal, and paid for a loss of a single body part

which describes relationship between capital sum and principal sum

capital sums are percentages of principal sums

An insured receives an annual life insurance dividend check - what term best describes this

cash option

what happens to the cash value when a WHOLE LIFE policy matures

cash value is paid to policy owner

the types of perils which are usually exlucded from coverage and slant the law of large numbers is known as

catastrophic losses

which would be an example of issuer doing unfair trade practice of discrimination

charging the insured higher premiums based on her race

Which is a qualifying event under COBRA

divorce

When can a change be made in benefits for a flexible spending account

during the open enrollment period

What is it when unassigned funds must be reported on a stock insurers' annual statement

earned surplus

at what point does life coverage begin when an agent issues a conditional receipt for life policy

either on date of application or date of medical exam - whichever occurs last

Health provider shares an ssumed risk and encourage preventive care - which system

managed care

in group insurance, what is the policy called

master policy

which is NOT included in general information section of application

medical backbround

an insured who signs a fraudulent claim form may be guilty of

perjury

Family income policy

provides monthly income upon death of insured while maintaining permanent coverage

Legal hazard is

set of legal or regulatory conditions that affect insurer's ability to collect premiums

the ownership provision entitles the policy owner to do all EXCEPT

set premium rates

a fee charged to the insured when a policy or annuity is exchanged for its cash value

surrender charge

tax implications for contributions to HSA are

tax deductible

What is included in presumptive disability

total loss of sight, speech, hearing, or two limbs

HICAP counselors are primarily

trained and registered volunteers

HIPAA aplies to groups of

two or more

What are features of a noncancellable policy

the premiums can't be increased, the guarantee to renew coverage applies until the insured reaches a certain age, the insured has the right to renew the policy for life of contract - the isnruacne company cannot cancel a noncancellable policy

if insured and primary beneficiary are killed in same accident, who dies first

the primary beneficiary died before the insured

How does a member of an HMO see a specialist

the primary care physician refers the member

An agent is a legal person who acts on behalf of

the principal (insurer)

under an extended term nonforfeiture option, the policy cash value is converted to

the same face amount as in the whole life policy

True regarding METs

they allow several small employers purchase less expensive insurance together

what is purpose of rehabilitation benefit in disability insurance

to cover the expenses of retraining the insured to return to work

what is the purpose of medicare supplement plans

to fill in the gaps in medicare coverage

why do group health providers require a certain amount of participation in the plan by employees

to guard against adverse selection and reduce cost

what is purpose of coinsurance provisions

to help the insurance company to prevent overutlization of the polocy

which is NOT a goal of risk retention

to minimize the insureds level of liability in event of loss

what is purpose of insurance guaranty associations

to protect policy owners, insureds and beneficiaries from financial losses caused by insolvent insurers

Entire contract provision

to protect the insured from insurance company makingg changes without their knowledge

what would give underwriter a better understanding of how applicant has been treated for ilnesses

attending physicians statement

creditable coverage includes

coverage under a state health benefits risk pool

Which of following is NOT an appropriate use of a deferred anuity

created an estate

Which of following would be beneficiary in credit life insurance

creditor - the creditor is the owner and beneficiary

if the current interest rate on an annuity is higher than guaranteed rate, which rate will the annuity owner receive as part of the annuity payment

current

which meets the insureds personal needs, and is provided by nonmusical personnel

custodial care - this is eating, dressing, bathing

What LTC is provided in institutional setting

custodial care, skilled nursing care, intermediate care

making false statements about financial condition of any insurer is

defamation

Needs approach is

determining how much insurance you would require based on financial objectives

which is an example of a physical hazard

diabetes

which of the following is an example of a physical hazard

diabetes

a waiver of premium provision may be included with which kind of health insurance policy

disability income

Which of the following best describes an applicants avocations

hobbies and interestes

what are three basic coverages for medical expense insurace

hospital, surgical, medical

Primary beneficiary

identified as individual with the first claims right to the policy upon the insured's death - can be multiple parties

Own occupation

if insured cannot return to work in insured's own specific field

under which conditions would life insurance proceeds be taxable by federal government

if there is a transfer of value

in annually renewable terms, what is annual premium based upon

insureds attained age

which regarding insurable risks is NOT correct

insureds cannot be randomly selected

All of following must sign an application for health insurance EXCEPT the

insurer

who makes up the MIB

insurers

what portion of a non qualified annuity payment would be taxed

interest earned on principal

in health insurance, if a doctor charges $50 more, the extra cost

is not covered

once the initial benefit limit in medicare D is reached, how is beneficiary affected

is then responsible for a portion of prescription drug costs

Which is true about 10-day free look period

it begins when the policy is delivered

What is main purpose of seven-pay test

it determines if insurance policy is a MEC

which of the following insurance coverages would be allowed with an MSA

long-term care

medical is designed for persons who are

low-income and uninsured

a person has history of DUIs - what type of hazard is he

morale

what are the 3 factors that determine the premium for a particular life insurance policy

mortality, interest, and expense

Financial objectives is known as

needs approach

under Affordable care act, when would pregnancy be considered pre-existing condition

never

What does nolo contendere mean

no contest

the classification small employer means

no more than 100 employees

MSA are available to groups of how many employees

no more than 50

Which renewal provisions must be included in long-term care policy

noncancellable and guaranteed renewable

Assisted living offers

nonmedical assistance

what does basic medical expense cover

nonsurgical services a physician provides

an equity indexed annuity will grow based upon

performance of a recognized index

Which renewability provision are you most likely seeing on a travel accident policy

period of time - means policy will only last a certain period of time and cannot be renwewed

what annuity settlement option provides income payments to the annuitant for the duration of his life and ceases at annuitants death

pure life

which best describes a pure life annuity settlement option

pure life provides payments for as long as the annuitant is alive

Insurers may change which of the following on a guaranteed renewable health insurance policy

rates by class

if an insured becomes disabled again because of original injury, it is known as

recurring disability

which nonforfeiture option provides coverage for longest period of time

reduced paid up (provides protection until insured reaches 100)

COBRA applies to employers with at least

20 employes

first-year commission on a medicare supplement may NOT exceed

200% of the 2nd year commission on same policy

how many hours of continuing education must agents complete each licensing term

24

what is education requirements for life-only agents in california

24 hours every 2 years

What % of medicare part d is resposnible

25%

the patient protection and affordable act mandates that insurers provide coverage for adult children to the age of

26

when is initial enrollment period of Medicare part A

3 months before turning 65 and ending 3 months after the 65th birthday

Max age for catastrophic plan

30

what is max age for qualifying for a catastrophic plan

30

a medicare supplement policy must have free look period of at least

30 days

Additional violates of replacement will result in fine of

30,000

what is the period of coverage for events such as death or divorce under COBRA

36 months

an insured owns a 50,000 whole life - he decides to cancel and exercise extended term option for cash value which is 20,000. what would be face amount of new term polocy

50,000

how long is an open enrollment for medicare supplement polocies

6 months

What is waiting period on waiver of premium

6 motnhs

What is the penalty for excessive contributions to an IRA

6%

in social security blackout period, the surviving spouse will not receive benefits until age of

60

at what age may an individual make withdrawals from an HSA without being penalzied

65

How long does enrollment period for medicare B last

7 months

How many eligibly employees in a contributory plan

75%

a disability has a waiting period of 7 days, if insured is disabled for 15 days, how many days of benefit will policy pay

8 days

according to medical loss ration, what is minimum percentage of health coverage premium that must be applied to actual medical care in large group health plan

85%

what are death benefits in universal life

A - level death benefit B - increasing death benefit

Single premium immediate annuity

Gives the annuitant income security after he or she pays one up-front premium Set up to give annuitants immediate income at start of annuity

PPO

Group of contracted doctors, hospitals, and pharmacies who provide services at a negtioted discount - lower fees

HMO

HMO physicians receive a cpaitated monthly rate up from to provide health care to enrolled members Primary care providers also act as gatekeeper providing referrals to HMO specialists

Which is true concerning relationship between medicare and HMO

HMOs may pay for services not covered by Medicare

which of following is available to employers of all sizes

HRAs

Stop-loss coverage

Helps the employer and places a limit the amount the employer is responsible for paying for each employee's medical care

Long-term care riders

If long-term care is needed, the life insurance policy can convert the coverage to provide long-term care benefits Instead of a death benefit pad out to beneficiary, long-term care benefits then become available instead

Revocable vs irrevocable beneficary

If person named as beneficiary is revocable, the insured can change his mind whenever

Contingent beneficiary

If primary beneficiary predeceases the insured, the contingent beneficiary receives the death benefit

Death by suicide

If the insured's death by suicide occurs during a time period specified in the policy, the death benefit paid to the beneficiary is only equal to the amount o premiums paid up to the time of death

Adjustable life

Flexibility is a key attribute - alterations to premiums paid, face amount Adjustable uses ordinary, straight life as their starting point Gives higher premiums due to the flexibility

Limited pay and single premium

For those who only want to pay life insurance premiums for limited time - it delivers lifetime of protection but requires only limited number of premium payments Because of more limited premium payment, policy premiums are higher under this type

Making withdrawals from cash value under life insurance

Insured is invoking his right to take available funds from cash value - can only be made if there is adequate cash value in policy - they are usually made tax-free

3 clauses that make up first page of policy

Insuring clause, free-look clause, consideration clause

Variable universal life

It builds cash value and can be invested It is a permanent life insurance so death benefit will be paid - premium payments are extremely flexible - can choose how the death benefit can be paid to beneficiary

What is health coverage for small groups whose numbers are too small to qualify for true group insurance

franchise insurance

a deceptive act or practice committed by a person with the intent to secure an unfair advantage

fraud

Health reimbursement accounts

funded by employers to help with costs of uncovered medical expenses

which expenses is NOT covered by health insurance polocy

funeral

Medicare part b enrollment

general/annual enrollment

How are HMO territories divided

geographic areas

what provision extends coverage beyond premium due date

grace period

Which rider ensures that owner will receive from an annuity at least the amount paid for the annuity

guaranteed lifetime withdrawl

Which of annuity riders ensures investors will receive a set amount of income annually

guaranteed minimum income benefit

which annuity rider ensures investors will receive a set amount of income annually

guaranteed minimum income benefit

most LTC plans have which of following features

guaranteed renewability

a medicare supplement plan must have provision on

guaranteed renewable

most LTC plans have which features

guaranteed renwability

Which of the following doesn't build cash value

guaranteed universal life -- variable, whole, and universal build cash value

Personal care includues

hands-on services and with daily living

First dollar coverage refers to insurance which

has no deductible - insurer pays full amount, up to policy limit

what are 2 types of flexible spending accounts

health care accounts and dependent care accounts

Any occupation is

if they cannot perform any job they are suited for by prior education training or experience

what type of annuity can be purchased with a single premium

immediate annuity

representations in insurance contracts qualify as

implied warranties

In which location would skilled care most likely be provided

in an institutional setting

what is main difference between franchise and group insurance

in franchise, underwriting is done for each person

Surrender chargers

included by insurance companies to limit the amount of withdrawals an annuitant can take of annuity's first couple years

Life income joint and survivor guarantees

income for 2 or more recipients until they die

what life insurance provision prevents an insurer from disputing or denying a claim due to misstatements on the application after a certain period of time

incontestability

annually renewable term policies provide a death benefit for a premium that

increases annually

Annually renewable term policies provide level death benefit that

increases annually as the insured ages

Death benefit under universal life option B

increases each year by the amount that the cash value increases

Indexed whole life

increases the insureds benefits in proportion to a elected measurement of the economy (CPI) to prevent inflation from decreasing life insurance death benefit

a return of premium term life is what type of term coverage

increasing

a return or premium term life is written as what type of term coverage

increasing

which type of hospital policy pays a fixed amount each day that the insured is in a hospital

indemnity

who will be affected by the share of cost requirement for medi-cal

individuals whose income exceed the medi-cal limit

all of following must be communicated in an insurance contract EXCEPT

information the other party already knows

3 types of enrollment periods for medicare part A

initial, general, special

to purchase insurance, the policy owner must face possibility of losing money or something of value in event of loss - this is called

insurable interest

A contract when one party undertakes to indemnify another against loss is called

insurance

Single premium deferred annuity

insured makes one lump-sum premium payment in exchange for defined income to access in his retirement years With deferred annuity, the insured gets benefit of tax deferral - means annuity value gains interest without being taxed until funds are taken out

Comprehensive major medical plan

is a combination of basic expense and major medical coverage

under a straight life, if annuitant dies before principal amount is paid out, the beneficiary will recieve

nothing - payments will cease

the insured is unsure whether the free-look applies. it is in the

notice regarding replacement

what is annual open enrollment for state insurance exchanges

novermber 1 through jan 31

Intermediate care is

nursing and rehabilitative care

HRA's are open to employees

of companies of all sizes

The dividend option in which the policywoner uses dividends to purchase a term policy for one year is referred as

one-year term option

how long is income paid under a pure life annuity

only for the life of the anniuitant

when may HIV related test results be provided to MIB

only if individual is not identified

Which renewability provision allows insurer to terminate policy for any reason and to increase premiums for any class

optionally renewable

medicare part A doesn't include which

outpatient hospital treatment

a stock insurer is defined as an insurer

owned by its stockholders

which parts requires a monthly payment from insured on the social security medicare program

part B

Insuring clause

part of the policy where you can find how much the insurer will pay in event of the insurers death

Prior to purchasing medigap, a person must be enrolled in

parts A and B of medicare

prior to purchasing a medigap policy, a person must be enrolled in

parts a and b of medicare

which applies to partial disability benefits

payment is limited to a certain period of time

which of following is NOT true about joint and survivor

payments stop after the first death among annuity's

Critical illness policy

pays a lump sum if insured suffers from heart attack or stroke

Benefits required in health plans purchased in marketplace

pediatric vision, hospitalization, maternity

ERISA was designed to protect

plan participants and beneficiaries

What is most common time for errors and omissions to occur on part of insurer

policy delivery

HSA's are

portable - individual is not dependent on a particular employer to enjoy HSA

which of following is NOT allowed under the no-loss/no gain provision

pre existing condition exclusion

when a group coverage replacement sale has occurred, which normal provision of the new police cannot be applied as usual

pre-existing condition

which will be included in a policy summary

premium amounts and surrender values

in a group life policy with a death benefit of more than 50,000

premium cost above 50,000 is taxable as income

all are examples of risk retention EXCEPT

premiums

which do the standard and preferred risk categories share

premiums are not elevated

Taxing individual life insurnace

premiums paid are not tax-deductible - no income tax on death benefits - dividends are not taxed

which instances would the premium be tax deductible

premiums paid by an employer on a 30,000 group term life insurance plan for employees

an HMO provides array of services on a

prepaid basis

an underwrite may reject an application for health insurance if based upon

prescription usage

what are illustrations in a life insurance policy

presentations of non guaranteed elements of the policy

in group insurance the primary purpose of coordination of benefits provision is to

prevent overinsurance

which best describes the type of care provided by HMOs

preventive

Incontestable provision

prevents an insurance company from contesting any claims during period

spendthrift provision purpose

prevents beneficiary's reckless spending of benefits - and protects policy proceeds from creditors of beneficiary

Under Accidental death and dismemberment, what type of benefit will be paid to beneficiary

principal sum

Medicare part A doesn't include

private duty nursing

what benefits are provided by medicare part C

private insurance programs like HMO and PPO

what is initial period of time in a disability income policy that must pass, before a loss can be covered

probationary period

what is initial period of time specified in a disability income policy that must pass, after policy is force, before a loss can be covered

probationary period

Which can an insured submit to the insurer that would provide evidence of a claim and show how severe the loss is

proof of claim

Purpose of errors and omissions insurance

protect agents against charges that they didn't properly serve a client

Term life

provides coverage for a specified period of time and provides largest death benefit at less cost Temporary coverage for a short term that is afordable

Accidental death and dismemberment rider

provides coverage for accidents to a policyholder that cause harm or death - not covered for illnesses

Level term

provides same death benefit whether death occurs on day 500 or day 5,000 The terms "level" and "decreasing" refer to death benefit status

Presumptive disability is a

provision that specifies the conditions that will qualify them for full disability benefits

which will be eligible for a tax sheltered annuity

public school teachers

If a person receives benefits for long term care from Medical, when that recipient dies, the state may

pursue asset recovery against the estate of the recipient

when producers give or promise anything

rebating

the federal fair credit reporting act

regulates consumer reports

what provision allows the policy owner to reactivate a lapsed life insurance policy within a specified period of time with proof of insurability

reinstatement

What type of care is respite care

relief for a major care giver

harry is recovering from long period of disability. Which rider could protect his business from loss of absence

residual rider

All are long-term care coverages to receive at home

respite care, home health care, custodial care in insured hose - NOT SKILLED CARE

if an insured purchases an insurance policy with large deductible, what risk management technique is insured using

retention

Steps taken to prevent losses from occurring are called

risk reduction

adverse selection is a concept best described as

risks with higher probability of loss seeking insurance more often than other risks

which of following dental insurance would cover the filling of cavaties

routine and major restorative care (others are oral surgery, bridges, dentures, cavity)

Which is not covered under medicare part B

routine dental care

health insurance underwriting is best defined as

selection, classification, and rating of risks

Formal arrangement of providing health care benefits without providing financial protection to the principal is what type of plan

self-insurance

If a licensee wants to terminate his license

send the license to the commissioner for termination

Who does HICAP servce

seniors receiving social security or medicare

HMOs are known as what type of plans

service

blue cross and blue shield are

service organizations

Complete disability

she can't work at any job relating to experience

Which two terms are associated with way annuity is funded

single payment or periodic payments

a whole life policy that generates immediate cash value is a

single premium policy

Which is a daily nursing and rehabilitative care that can only be provided by medical personnel

skilled care

all are beneficiary designations EXCEPT

specified

California insurance code is

statutes established by the state legislature

when an employee covered under a HRA changes employers, the HRA

stays with the employer

which terms describes the specified dollar mount beyond which the insured no longer participates in the sharing of expenses

stop loss limit

what type of annuity is suitable for someone who wants to select the benefit option that will pay the largest amount

straight life

Employer contributions made to a qualified plan are

subject to vesting requirements

If a basic medical insurance plans benefits are exhausted, what type of plan will then begin covering the loses

supplementary major medical

Which of following is NOT covered under basic hospital expense coverage

surgeons fees - correct is lab charges, x-ray, hospital room and board

what type of annuity activity will cause immediate taxation of interest earned

surrendering the annuity for cash

taxation on disability benefits are

tax free

during accumulation period in a non qualified annuity, what are tax consequences of a witdrawl

taxable interest will be withdrawn first and 10% penalty if under age 59.5

Upon surrender of a life insurance policy, any cash value accumulated in excess of the premium payments is

taxed as ordinary income

A 403b plan is used by

teachers and non profit organizations

the time period between the issuance of the binder and policy effective date is called

temporary term

what type of life insurance offers pure death portection

term

The annual contribution limit of flexible spending account is set by

the IRS

what is indemnification

the act of one person who agrees to restore an injured person to the condition they enjoyed prior to loss

when a client replaces an existing LTC or medicare supplement policy with another from same company, california law requires that

the agent must advice client about HICAP and its services

whose responsibility is it to ensure application is complete and accurate

the agents

what is purpose of agent's report during application process

the agents report discusses the agents personal observations about the proposed insured that may help in the underwriting process

what is elimination period under a LTC policy

the amount of time during which no benefits will be paid

what happens if a non-member physician is utilized under the POS plan

the attending physician will be paid a fee for service, but member patient will have to pay a higher coinsurance amount

who does the spendthrift clause in a life insurance policy protect

the beneficary

in group life insurance, employer may select all of following EXCEPT

the beneficiary

which is NOT required to have an insurable interest in the insured

the beneficiary

If a life insurance policy has an irrevocable beneficiary,

the beneficiary can only be changed with written permission of the beneficiary

Whole life benefit level

the benefit level is steady over its lifetime, to the age of 100

an insured who has an AD and d policy loses her left arm. what type of benefit will she recieve

the capital amount in a lump sum

which describes the client which will benefit from extension of benefits

the client who was disabled prior to a policy continuance and remains disabled

what is written document called in which insurance coverage is set forth

the contract

When an insured receives a written binder,

the coverage will be effective immediately

In credit life insurance

the creditor is the policy owner/beneficary and the debtor is the insured

what is unique of investigative consumer reports

the customers associates, friends, and neighbors provide the reports data

if an individual is covered by medicare, and is also covered by his employers health plan, which plan would be considered primary

the employer plan

Nonforfeiture values

the insurance policy's cash values is not able to be forfeited

"first dollar coverage"

the insured is not required to pay a deductible

What is difference between blanket and group health insurance

the insured members are not named

If a medicare insured uses a health care provider who doesn't accept medicare payments, which will be true

the insured might need to sign a private contract with the providor

Attending phsycians statement

the insured's medical history, healthcare plan, and how condition came to be

the primrose of policy exclusions to proect

the insurer from claims for losses which were not included in the initial risk assessment

if an annuity has a guaranteed minimum interest rate, this means

the interest rate will never drop below the guaranteed minimum

an annuitant dies before the effective date of a purchased annuity - assuming wife is beneficiary, what will occur

the interest will continue to accumulate tax deferred

which depicts the law of large numbers

the larger the pool of risks under study, the more accurate the predictions will be

which of the following is true regarding elimination periods and cost of coverage

the longer elimination period, lower cost of coverage

which is NOT a characteristic of pure risk

the loss must be catastrophic

The more predictable a loss

the more insurable it is

a warrant may relate to which of following

the past, the present, and future

if a retirement plan is qualified, what does that mean

the plan has a favorable tax treatment

if an insurer issued a policy based on application that had unanswered question, which would be TRUE

the policy will be interpreted as if insurer waived its right to have an answer on the application

If an insured continually uses APL to pay policy premium

the policy will terminate when cash value is reduced to nothing

When an insured incurs medical expenses during the last 90 days of a calendar year, the carry-over provision allows

them to apply such expenses to the new year's deductible

which is true regarding taxation of accelerate benefits paid under a policy

they are received tax free

how is key-person life benefits taxed

they are tax free

which statements regarding conditional receipts is true

they are temporary insuring agreements

Regarding Medicare SELECT, what are restricted network provisions

they condition the payment of benefits

all of following are requirements for life insurance illustrations EXCEPT

they must be part of the contract

which will be appropriate for a parent buying life insurance policy on a child where the parent is policyowner

third party ownership

An insured wants to change from annual to monthly premium, what is true

this change can only be made on policy's anniversery

medicare is a program for all individuals except

those with low income and low assets Medicare is for those over 65, have been on social security for 2 years, and those with permanent kidney failure

How can insurers obtain information on an applicants avocations and the way they will affect a risk

through the use of questionnaire

Waiting period is

time the insured has to wait after a disability occurs before benefit payments begin

what is purpose of annuity riders

to allow investors to obtain additional benefit

The term illustration in life insurance policy refers to

a presentation of non guaranteed elements of a policy

which best describes a rebate

a producer returning part of her commission to her client

Contracts that are prepared by one party and submitted to other on take it or leave it

adhesion - the insured doesn't have any input

which of following types of care could be provided at a community center

adult day care

which LTC benefits would provide coverage for care on a less than 24-hour basis

adult day care - need assistance, but not around the clock

what is it when a doctor accepts the medicare approved amount

assignment

What % of a company's employees must take part in a NONCONTRIBUTORY group life plan

100%

anyone convicted of committing an insurance fraud may be fined up to

150,000

Equity-indexed universal life

Ability to increase cash value with the stock index through interest rate - tax deferred accumulation, tax free proceeds at death

COBRA

giving health care for up to 18 months to individuals have been fired

Whey are HMO insurance plans lower in premium compared to others

Because they have contracts with providers and direct their insureds to those providers

Universal whole life

Blend of term and whole life - offers flexibility to insureds with low-cost premiums (similar to term) as well as savings feature (like whole life)

Medi-cal is

California's medicaid health care program

Guaranteed insurability rider

Can have opportunity to buy additional life insurance with no underwriting or medical screening

Variable whole life

Can span an entire life, includes ability to add cash value, and can be permanent if insured pays each premium on time as required Allows flexibility and discretion to the policyholder in how he makes premium payments

Partial disability

Cant do one or more but is not prevented from doing all

Taxing group life insurance

Employers have a levy on the cost of the first 50,000 - death benefit is tax free

Entire contract provision rider

Entire contract includes both application and policy - once contract is completed and signed, no changes can be made by anyone

Renewable

Feature allows the policy to be renewed for another term without having to show that he or she is still in good health

what are examples of qualified plan

IRA, 401k, Keogh

the automatic premium loan provision s activated at the end of the

grace period

Non-forfeiture option

States that the insured may receive all or some benefits on the premiums that have already been paid - clause is added in case that the insured neglects to make premium payments causing policy to lapse

if annuitant dies during accumulation period, who will receive annuity benefits

beneficary

which of the following is TRUE about class designation

beneficiaries are not identified by name - class designation would be "my children"

which is NOT true regarding an annuity certain

benefits stop at the annuitants death

Which is NOT a temporary insuring agreement

bridge coverage receipt

which of following is NOT an indicator of a competent party

business profession

Services provided by HICAP are paid for

by state and local governments

to legally transact insurance in this state, an insurer must obtain

certificate of authority

when a polocyowner designates a group of individuals as the beneficiary of life insurance without naming individuals, this is called

class designation

What term when medical caregiver provides services to only members of a health organization and isn't allowed to treat other patients

closed panel

What is clause that describes event that insured and beneficiary are both killed in same accident

common disaster clause

What is contract provision that allows insurer to non renew health coverage

conditionally renewable

every expressed warranty made at or before execution of policy must be

contained in and referred to in the policy or other document and signed by insured

every expressed warranty made at or before the execution of a policy must be

contained in and referred to in the policy or other document and signed by insured

a whole life policy is surrendered for a reduce-paid up policy - the cash value in the new policy will remain

continue to increase

an adjustable life policy can assume the form of

either term or permanent insurance

which is NOT covered by HMOs

elective services - correct are well baby care, immunizations, routine physicals

for a retirement plan to be qualified, it must be designed for benefit of

employees

what are income tax benefits of a qualified plan

employer contributions are tax deductible and are tax free to employee - earnings accumulate tax deffered

what type of annuity creates its interest based upon an index such as s & p 500

equity indexed annuity

which provisions requires an insurer to document all correspondence with an insured

errors and omissions

what is main advantage of converting from group life to individual

evidence of insurability is not required

In executive bonus plan, who is owner of policy and who pays premium

executive is owner, and executive pays premium

What type of rating do blue cross and blue shield use as a factor in developing rates

experience rating

Factual statements about the insured or the risk in an insurance policy are considered

express warranty

which covers the whole family in a single contract

family policy

7 which is true regarding taxation of the accelerated benefits

a portion of the benefit up to a limit is tax free- the rest is taxable income

a policy that pays monthly income, plus a lump sum, and combines level term and whole life is a

family maintance

Deductibles that are available are

family, common accident, per cause

A person caught violating provisions regarding misrepresentation is subject to

fine up to 25,000

health coverage becomes effective when the

first premium has been paid and application has been approved

Which option does the annuitant select the amount of each payment, and insurer determines how long they will pay benefits

fixed amount

an applicant for insurance is requesting more information from agent about a claim that is being settled - what time period must agent respond

15 days

how many tiers must be included in each treatment of medicare part d

2

all are divided options EXCEPT

fixed-period installments (that is a settlement option)

What tern refers to listing of approved drugs

formulary

how is emergency care covers for a member of an HMO

a member of an HMO can receive care in or out of the HMO service area, but care is preferred in the service area

if an insured is injured while committing an illegal act, what percentage of claim will be paid

nothing

Which time period is general enrollment for medicare part B

Jan 1 to March 31

Payer benefit provision rider

Most found in children's life insurance - provides that premiums will be suspended if the person responsible for paying the premiums becomes disabled or dies

Contributory and non-contributory group life

Non-contributory -- the full premium is provided by employer with zero contribution from employees - also don't need medical coverage Contributory - both contribute to the plan, but employer can offer better coverage than provided because of enhance funding levels

what universal life option has increasing cash value and level death benefit

Option A

Which organization is on a fee-for-service basis

PPO

which describes the waiting period

a period of time the insured has to wait before payments of benefits begin after a disability

Whole life

Pays a death benefit whenever the insured passes away Three types: traditional whole life, universal life, variable universal life Traditional - covers the life of insured and with stable premiums and guaranteed death benefits, includes an added ability to build cash value on tax-differed basis (provides life insurance protection with added bonus of savings feature) Universal life - low-cost premium structure but also has savings component Variable universal life - direct a portion of premium to a operate investment account

Three time periods in medical expense policies

Probationary period, waiting period, benefit period Prob - prior to beginning of coverage Waiting - after policy is issued by prior to payments Benefit - claim payment period

Return of premium

Provide a return on the premiums paid by the insured if the term ends without a death benefit being paid out - if insured outlives the payment period, the insured will receive premiums back

which would automatically qualify for MEdi-cal benefits

a person receiving supplementary security income assistance

MIB

Used to detemrine an indivudla;s risk and eligibility during underwriting of insurance policies

Grace period

When insured fails to make schedule premium, will enter grace period - the premium payment can be mad without possibility of insurer terminating the coverage (30 days)

Warranty

When the contract is to take effect

when transacting business in this state an insurer formed under the laws of another country is an

alien insurer

HRA's are avaialbe to

all sizes of employers

The purpose of having elimination period is to

allow the client some flexibility in determining their own premium

if annuitant dies before annuitaizaation period starts, what will beneficiary recieve

amount paid into annuity or cash value, whichever is greater

in insurance, an offer is usually made when

an applicant submits an application to the insurer

Group insurance may be issued to everyone EXCEPT

an association of 35 people

which is NOT a personal use of life insurance

an individual buys insurance to fund a buy-sell agreemtn

What is a foreign insurer

an insurer with a home office in another state

The least expensive first-year premium is found in

annually renewable term

Whose life expectancy is taken into consideration in an annuity contract

annuitant

regarding annuity payments, what is difference between annuitant and beneficiary of annuity

annuitant receives payments from annuity during annuiatization period; the beneficiary receives benefits after the annuitants death

which concept is associated with exclusion ratio

annuities payments

which is a short-term annuity that limits amounts paid to a certain fixed period

annuity certain

if an insured is unhappy regarding his or her medicare services, what may he do

appeal the decision

Who must sign notice regarding replacement

applicant and agent

which would NOT be an underwriting consideration for health insurance applicatn

applicants sexual orientation

Nonforfeiture options

are in place to the insurer if he would like to discontinue the policy

Morale hazards

arise from a state of mind that causes indifference to loss, carelessness

what is it called when a doctor accepts the medicare approved amount

assignment

when must the policy summary for life insurance policy be delivered to policyowner

at the time of policy delivery

an insurer that holds a certificate of authority in the state in which it transacts business is an

authorized insurer

what are tax implications for contributions to a HSA by the individual

contributions are tax deductible

Purpose of managed health care insurance plans is to

control health insurance claims expenses

the gatekeeper of an HMO helps

control specialist costs

the type of policy that can be changed from one that doesn't accumulate cash value to the one that

convertible term polciy

According to entire contract provision, what document must be made part of insurance policy

copy of the original application

which term refers to nontaxable portion of each annuity benefit payment

cost base

Long term care insurance

covers a range of services and supports individuals to meet they personal care needs

which is NOT a standard exclusion in life insurance polocies

disability - common exclusions are hazardous, war and military service, aviation

Which of the following statements about occupational vs nonoccupational

disability insurance can be written as occupational or nonoccupational

an applicant is denied because of information found on consumer report, which requires that insurance company supply applicant with name and address

fair credit reporting act

a husband and wife incur expenses that are attributed to a single major medical insurance deductible - what type do they have in their policy

family

which is NOT true regarding a flexible spending account

it does not have limits on contributions

which is NOT true regarding a flexible spending account

it doesn't have limits on contributions

what is an advantage of the temporary insuring agreement to the applicant

it gives the applicant immediate coverage

What is benefit of choosing extender term as a nonforfetirue option

it has the highest amount of insurance protection

which best describes the MIB

it is a nonprofit organization that maintains underwriting information on applicants for life and health insurance

Which is true regarding a term health policy

it is nonrenewable

if an insured surrenders his life insurance polouc, which is true regarding cash value of policy

it is only taxable if cash value exceeds amount paid for premiums

when a reduce-paid up nonforfeiture option is chosen, what happens to face amount of policy

it is reduced to the amount of what the cash value would buy as a single premium

which is true about reinstatement provision

it requires policy owner to pay all overdue premiums with interest before policy is reinstated

In modified life policies, what happens to premium

its level at beginning and increases after first few years

in group health policy, a probationary is intended for people who

join the group after the effective date

If a contract provides income for two or more persons with income stopping upon first death, its called

joint life annuity

if an annuity provides a set amount of income for two or more persons with the income ceasing upon first death, what type of annuity is that

joint life annuity

if a life insurance policy increases significantly in face amount when insured reaches a specified age, what type of policy is this

jumping juvenile policy

who would be the insured in business disability insurance

key employees

Which of following settlement options is known as straight life

life income

what annuity settlement option provides income payments to the annuitant for duration of his life and also guarantees payment for a specified number of years

life income with period certain

Single premium whole life

limited payment whole life with one very large payment due at time of issuance - policy is fully paid up - because of this, the policy at the start has a cash value and loan value from the beginning

A whole life policy that requires policy owner pays a premium for specified number of years is a

limited-pay whole life

A whole life policy that requires policy owner pays premiums for a specified number of years is

limited-pay whole life

In a disability policy, the probationary period refers to time

limits coverage on new policies for certain illness-related conditions

which rider provides the payment of part of policy death benefit if insured is diagnosed with a terminal illness that will result in death within 2 years

living needs rider

the human life value approach to determine life insurance needs is based upon

loss of breadwinner's income (human life value approach is based upon loss of income)

in franchise insurance, premiums are usually

lower than individual policies, but higher than group policies

what is other term for cash payment settlement option

lump sum

High-Deductible health plan

makes insured pay for initial part of expenses - was designed to make policy holders more conscious of the expenses associated with medical care Higher deductibles in turn result in lower premiums

what part of application would contain information regarding cause of death of applicants deceased relatives

medical information

which part of insurance app would contain info regarding cause of death of applicants deceased relatives

medical information

which used to be called medicare + choice plans

medicare advantage

Medicare advantage is also known as

medicare part c

probability of sickness within a given group of people

mobidity

Any cash value that develops cash value faster than a seven-pay is called

modified endowment contract

Disability insurance is paid out on what basis

monthly

credit disability insurance will pay

monthly payments until the insured recovers or loan is paid off

The agent's statement is

not included in the entire contract

Qualified medical expenses paid for participants in MSA are

not taxable

when an insurer issue an individual health insurance policy that is guaranteed renewable, the issuer agrees

to renew policy until insured has reached 65

social security was created to provide all the following except

unemployment income - correct are disability income, retirement income, survivors income

Waiver of cost of insurance rider is found in

universal life

which of following would have an IRS required corridor or gap between cash value

universal life - option A

under a credit disability policy, until what point will payments to the creditor be made for the insured?

until the disability ends or debt is satisfied

joint and survivor will pay

until the last annuitant has die - the surviving annuitant may receive reduced payments

in a survivorship life policy, when does insurer pay death beenfit

upon the last death

FSA's are subject to

use or lose rule - unused benefits don't carry over to next year

STOLI

used when a person applying for life insurance wants to located beneficiary who doesn't have insurable interest

Flexible spending account

way to save money on excessive costs and can save money aside from paycheck

Spendthrift provision

when a life insurance stipulates that beneficiary will receive payments in specified installments or for a specified number of years

Executive bonus

when an employer gives employee a wage increase in amount of premium on new life insurance policy

when would a 20-pay whole life endow

when insured reaches 100

main difference between immediate and deferred annuities is

when the income payments begin

when does an adjustable life policy accumulate cash value

when the premiums paid are more than cost of policy

a graded premium life is modified form of

whole life

which products does the replacement regulation apply

whole life insurance

Ordinary life insurance is often called

whole life or straight life

An employee has been terminated, how long must exercise extension under COBRA

within 60 days

Any occupation

would pay benefits only if the individual cannot perform any job