FINAL TEST
All Agents shall maintain full and correct transaction records of business done by them for a period of AT LEAST
6 years
In an employer-sponsored contributory group Disability Income plan, the employer pays 60% of the premium and each employee pays 40% of the premium. Any income benefits paid are taxed to the employee at
60% of the benefit
a 10% excise tax is normally applied to an early withdrawal from an IRA according to HIPAA, This tax will not be applied if the withdrawal is used for medical expenses that exceed ____ of the individuals adjusted gross income
7.5%
Shawn, Mike, and Dave are brothers who have a $100,000 "first to die" joint life policy covering all three of their lives. If Mike dies first, the policy proceeds will no longer provide insurance protection will go to Mike's estate will be divided by probate will not be paid until the last brother dies
will no longer provide insurance protection
Which of the following is included in the entire contract provision
Application
A renewable term life insurance policy can be renewed
At a predetermined date or age regardless of the insureds health
The purpose of the coordination of benefits provision in group accident and health plans is to
Avoid overpayment of claims
A disability income policy can prevent an insured from earning a higher income than if he/she were working by utilizing
Benefit limits
What enables applicants to compare different life insurance policies and helps them choose which policy is best for their needs? - Policy Summary - Buyer's Guide - Buyer's Summary - Policy Guide
Buyers Guide
Donald is the primary insured of a life insurance policy and adds a children's term rider. What is the advantage of adding this rider? Can be converted to permanent coverage without evidence of insurability Coverage can be different for each child Premiums on this rider are not required until the limiting age is reached Increases the policy's overall cash value
Can be converted to permanent coverage without evidence of insurability
One of the most important considerations when replacing health insurance would be - Age of the insured - Exclusions on a new policy - Occupation of the insured - Cost
Exclusion on a new policy
Insurance premium is determined by each of the following factors EXECPT
Liquidity
The IRS allows a taxpayer to deduct medical expenses that exceed 7.5% of heir adjusted gross income. Which of the following is considered a tax deductible medical expense under this rule
Long term care insurance premiums
Small employers who are sponsored by an insurer to provide group benefits to its employees are called
MEWA - A multiple employer welfare association
Life settlement brokers are permitted to so all of the following except - Charge a fee for their services - Advertise the availability of life settlements - Introduce policy owners to settlement providers - Make the first transaction up to 30 days before approved for a license
Make the first transaction up to 30 days before approved for a license
An insurer would be committing Unfair Discrimination if coverage was denied based upon - HIV postive test - Martial Status - Diabetes -Mental disorder
Marital Status
The purpose of Medicare Supplement Insurance is to address gaps in medicare coverage which can include. - Medicare in hospital deductible - Replacing HMO coverage - Covering chiropractic treatment - Treatment provided in a government hospital.
Medicare in hospital deductible
The federal employees benefit program consists of two types of health plans for federal civilian employees. The t wo pals are fee-for service and
Prepaid. The two types of plants participate in the FEHB program: fee-for-service plans and health maintenance organizations (prepaid)
All Health Benefit Plans issued after January 1, 2014 must provide
Preventative health services
Fair Credit Reporting Act
Protects consumers with guidelines regarding credit reporting and distribution
What guarantees that the statements supplied by an insurance applicant are true?
Warranty
The coverage, conditions, and limitations in the master policy of a group contract can be found in which document? Certificate of Authority Consumer report Coverage document Certificate of coverage and benefits
- Certificate of coverage and benefits describes the coverage, conditions and limitations found in the master policy of a group contract
Pierre is covered by his employer's group major medical plan. His employer pays for 75% of the premium and he pays for 25%. How much would a $10,000 benefit be taxable as income under this plan?
0 Benefits that fall under a major medical plan are considered to be a reimbursement for a loss and is not taxable as income
Karen is a producer who has obtained personal information about a client without having a legitimate reason to do so. Under the McCarran-Ferguson Act, what is the minimum penalty for this?
10,000
A insurer may exclude preexisting conditions on a medicare supplement policy for __ Months 6 8 10 12
12
Written notice for a health claim must be given to the insurer ___ days after the occurrence of the loss.
20
In an insurance contract, the insurer is the only partly legally obligated to preform. Because of this an insurance contract is considered - Voidable -Conditional -Aleatory - Unilateral
A contact in which only the insurer would be legal obligated to perform is considered unilateral
All of these are valid options for an Adjustable Life Policy EXCEPT The policy's premium can be increased or decreased The policy's death benefit can be increased or decreased A nonforfeiture option can be used to increase the death benefit The policy's protection period can be modified
A nonforfeiture option can be used to increase the death benefit
HIPPA considers which of the following as individually identifiable health information
A persons health claim information
A single premium cash value policy can be described as
A single premium cash value policy is best described as a policy that is paid up after only one payment
At what age will a person normally enroll an insurance carrier under a Part C Medicare Advantage plan
Age 65
The ____ is responsible for determining the appropriateness of medicare supplement policy for an applicant - Agent - Underwriter - Applicant - Insurer
Agent
The term which describes the fact that both parties of a contract may NOT receive the same value is referred to as
Aleatory
Which of these is NOT considered to be a purpose of an annuity - Annuities are intended to create an estate - Annuities are intended to liquidate an estate - Annuities are intended for the tax free growth of principal - Annuities to distribute accumulated principal
Annuities are intended to create an estate
Which of the following is considered to be the period when the accumulated value in an annuity is paid out? - Annuitization phase - Accumulation Phase - Principle Phase - Period certain phase
Annuitization phase The period when the annuitant starts to receive payments from the annuity is the annuitization phase.
In what form do disability income policies typically pay benefits?
Annuity
Which of the following is not a required provision in an accident and health insurance policy
Change of occupation
All of the following are included as part of a contract in the entire contract provision EXECPT the - Riders - Application -Changes made by the producer - Policy
Changes made by the producer
All of the following are elements of an insurance policy except - Definitions - Other insurance e -Claim forms - Conditions
Claim Forms
Co-insurance vs deductible
Coinsurance is the percentage of costs you pay after you've met your deductible. A deductible is the set amount you pay for medical services and prescriptions before your coinsurance kicks in
In an insurance contract the element that shows each part is giving something of value is called - Offer _ Acceptance - Consideration -Purpose
Consideration
Which of these is affected by the frequency of an insurance policy premium payments - Settlement options - Cash Value - Death benefit - Cost
Cost
An example of a tax qualified retirement plan would be an
Defined contribution plan.
Under the health insurance protablity and accountability act ( HIPAA) the employee new group health plan will verify creditable coverage so that the
Emplpoyees waiting period for coverage of a preexisting condition can be reduced under the new employers health plan
All of the following are qualifications for establishing a health saving account (HSA) EXECPT - Enrolled in a high deductible health plan - Be under the age of 65 (not enrolled in medicare) - Enrolled in a health plan with a prescription drug benefit - Enrolled in a health plan that limits out of pocket expenses
Enrolled in a health plan with a prescription drug benefit
A professional liability for which producers can be sued for mistakes of putting a policy into effect is called - Fiduciary bond - Errors and ommisions - Fiduciary trust - Errors and oversights
Errors and ommisions
XYZ company has applied for group health insurance for its employees. What information would the insurers underwriters likely use to determine the appropriate coverage and final premium rate given to the group - Experience rating - Credit reports - Arrest reports - AM best rating
Experience Rating When determining the appropriate coverage and final premium rate for group health insurance. The insurer underwrites will use the groups experience rating. An experience rating system is used to estimate how much a specific group will have to spend on medical care.
What does the word "level in level term describe?
Face amount
The renewability provision for an individual long-term care insurance policy must be located on the policy forms
First page
Which of these statements about Medicaid is Correct - Pays for medicare charges exceeding the approved amount - Intended for Senior citizens - Funded by federal state and local taxes - Administered by the Federal government
Funded by federal state and local taxes
Which of these will typically authorize treatment from a specialist - Administration - Policy Owner - Insurance Company - Gate Keeper
Gatekeeper
Janice forgot to make her insurance premium payment by the due date. The specified period after the due date where she can still make payment and avoid discontinuance of her coverage is called the - Incontestable period - Courtesy Period - Reinstatement period - Grace Period
Grace Period The grace period is the specified period when the insured may still make payment for the continuance of the policy after the premium payment due date.
A proposed insured for a health insurance policy was treated for heart disease within the past year. When applying for health insurance, the heart disease treatment
Indicates a preexisting condition
The DO Not Call Registry offers exemptions for calls placed from all of the following expect - Charities - Poltical orgs - Insurance sales calls - Surveys
Insurance sales calls
What is a deductible that would apply a single deductible to both medical and dental insurance
Integrated deductible
Which settlement options involves having the proceeds remain with the insurer and earrings paid on a monthly basis to the beneficiary
Interest only
The open enrollment period for Medicare part B is
January 1 through march 31
When a decreasing term policy is purchased, it contains a decreasing death benefit and increasing premiums level premiums decreasing premiums variable premiums
Level Premiums
Which type of annuity stops all payments upon the death of the annuitant? Life annuity Period certain annuity Cash refund annuity Joint and survivor annuity
Life annuity
During the examination of an insurers books and records by the superintendent, the insurer
Must not impede the examination
All of these are considered sources of underwriting information about an applicant EXCEPT - Agents report - Medical information Bureau - Inspection repots - National association of insurance underwriters
National association of insurance underwriters
How are contributions made to a Roth IRA handled for tax purposes - Fully tax deductible - Not Tax deductible - Partially tax deductible - Conditionally tax deductible
Not tax deductible
Suitability is best described as - Converting a term policy to a whole life policy - Obtaining information from the applicant to determine theater an insurance or annuity product is appropriate - Properly applying the insurer's underwriting guidelines to an applicant - Delivering the buyers guide and policy summary to the applicant
Obtaining information from the applicant to determine theater an insurance or annuity product is appropriate
The difference between pre-certfication and concurrent review is that precertfication
Occurs before the treatment is provided
Richard owns an insurance policy that is renewable only at the option of the insurance company. His policy is considered to be: cancelable guaranteed renewable conditionally renewable optionally renewable
Optionally renewable
What clause defines disability as being unable to preform the major duties of the insured's regular occupation - Own occupation clause - Any occupation clause - Residual clause - Presumptive clause
Own occupation clause
Cordination of benefits regulation applies to all of the following plans except Group Vision Plan - PPO - Self funded group health plan - Group health plan
PPO
States that have "no loss no gain" laws require a replacing policy to
Pay for ongoing claims under the policy it replaces
Which of the following is NOT a common exclusion for a medical expense policy
Physical therapy
Variable life insurance and universal life insurance are very similar which of these features are held exclusively by variable universal life insurance
Policy owner has the right to select the investment which will provide the greatest return
Which of the following would evidence ownership in a participating health insurance contract - Stock ownership - Irrevocable beneficiary staus - Policy ownership - Collateral assignment
Policy ownership
Which of these is considered to be a document that describes the critical segments of a life insurance policy
Policy summary
Who is the individual paid on a fee-for service basis
Provider
Dread Disease Policy
Provides coverage for specific disease(s), such as cancer or leukemia.
Pure Risk
Pure Risk is a category of risk in which loss is the only possible outcome. Which is the opposite of speculative risk. Gambling is considered a speculative risk where there is a chance of either gain or loss
A life insurance company has transferred some of its risk to another insurer. The insurer assuming the risk is called the
Reinsurer
AN example of endodontic treatment is a
Root Canal
Continuous 24-hour care provided by licensed medical professionals under the direct supervision of a physician is called
Skilled nursing care
This MANDATORY health policy provision states that the policy, including endorsements and attached papers, constitutes - The partial insurance contract between the parties - The entire insurance contract between the parties - The conformity of state status - The legal purpose of the contract
The entire insurance contract between the parties
The statement which best describes the relationship between the premiums of a whole life policy and the premium payment period is. - The shorter the payment period, the lower the premium - The longer the payment period the higher the premium - The shorter the payment period the higher the premium - The payment period has no affect on the premium payment
The shorter the payment period the higher the premium
Which of the following decisions would a health savings account owner NOT be able to make - The amount contributed by the employer - The amount contributed by the owner - The underlying account investments used - The medical expenses paid for by the HSA
The underlying account investments used
What is the elimination period of an individual disability policy
Time period a disabled person must wait before benefits are paid.
Whats the purpose of the Medical Information Bureau (MIB)
To help underwriters evaluate risk
Reggie purchases a life insurance policy with a face amount of 500,000. After 15 years the cash value has accumulated to 100,000 and. the policy face amount has become 600000. Which type of life policy is this
Universal life
Adjustable Life Policy
Whole life insurance policy, but you can change your policy as your needs change. You can change your premium payments to increase or decrease coverage -- Adjustable life insurance is a hybrid of term life and whole life insurance that allows policyholders the option to adjust policy features, including the period of protection, face amount, premiums, and length of the premium payment period.
A renewable term life insurance policy allows the policy owner the right to renew the policy - At anytime the policy owner chooses - as many times as the policy owner chooses - Paying the same premium as before the renewal - Without producing proof of insurability
Without producing proof of insurability
How soon can the benefit payments begin with a deferred annuity?
a minimum of 12 months after the date of purchase
An individual most likely will have an insurable interest in insuring a person's life if
an economic interest exists for the continuance of the insureds life.
A change in an insurance application requires
an initial made by the applicant
What is issued to each employee of an employer health plan? - Provision - Receipt - Policy - Certificate
certificate
Business Overhead Expense Insurance
covers the costs of running your business when your absence, due a disability, means those costs would go unpaid. The expenses covered by BOE insurance include important day-to-day functions like paying wages, debts, rent or mortgage, and taxes.
Which of the following actions may an insurance company NOT do in a health policy that contains a guaranteed renewable premium benefit - Stop renewing policy when the insured reaches a specific age - Cancel policy if premiums are not paid - increase the premiums on a individual basis - Increase the premiums on the bassi of an entire classification
increase the premiums on a individual basis
Health insurance will typically cover which of the following perils - Death due to illness - Injury due to accident - Death due to accident - Dismemberment
injury due to accident is a covered peril in health insurance
Sharron is the policy owner of a 50,000 life insurance policy her son Mike, is the beneficiary. If Sharon must obtain Mikes signature in order to change the beneficiary what kind of beneficiary designation is this - Teriary - Contingent -revocable - irrevocable
irrevocable
Whos an annuitant
is an individual who is entitled to collect the regular payments of a pension or an annuity investment. The annuitant may be the contract holder or another person, such as a surviving spouse. Annuities are generally seen as retirement income supplements
The premium for a modified whole life policy is
lower than the typical whole life policy during the first few years and then higher than typical for the remainder
Term insurance is appropriate for someone who
seeks temporary protection and lower premiums
