HEALTH AND LIFE INSURANCE - SIMULATION QUESTIONS

20 employees

COBRA applies to employers with at least

Nonforfeiture Values

Cash value guarantees in a whole life policy are called

Employee benefits are tax deductible the year in which they were received.

Concerning group Medical and Dental insurance, the following statement is INCORRECT

90 days

If the commissioner does not receive certification of successful course completion by the deadline, the producer's license will be suspended until he/she completes the education requirement or for

During which illness-related disabilities are excluded from coverage.

In a disability policy, the probationary period refers to the time

The owner

In a life settlement contract, whom does the life settlement broker represent?

Upon the last death

In a survivorship life policy, when does the insurer pay the death benefit?

Both guarantee that the principal and interest will be fully paid out

The following is would be TRUE of both the fixed-amount settlement options

In an institutional setting

The following locations would skilled care most likely be provided

Variable annuities

The following products requires a securities license

Payment claims

The following provisions would prevent an insurance company from paying a reimbursement claim to someone other than the policyowner

Impairment rider

The following rider would NOT increase the premium for the policyowner

Dividend amounts are guaranteed in the policy

The following statement concerning dividends is NOT true

The policy is owned by the company

The following statement concerning the use of life insurance as an Executive Bonus is NOT correct

The policyowner has the right to change beneficiaries in any case

The following statement regarding the Change of Beneficiaries Provision is false

Withdrawals are not taxable

The following statement regarding the taxation of Modified Endowment Contracts is FALSE

The policyowner is entitled to policy loans

The following statements is CORRECT regarding a whole life policy

Variable universal life insurance

The following types of policies allows for a flexible premium and a variable investment component

It has the highest amount of insurance protection

What is the benefit of choosing extended term as a nonforfeiture option?

$1,000

What is the maximum monetary fine for a non-willful violation of insurance statutes regarding unfair trade practices?

6 months

What is the waiting period on a Waiver of Premium rider in life insurance policies?

6 months

What is the waiting period on a waiver of premium rider in life insurance policies?

Cancellable

What type of policy allows the insurance company to cancel a policy at any time?

Flexible

What type of premium do both universal life and variable universal life policies have?

Interest only

When a beneficiary receives payments consisting of both principal and interest portions, which part are taxable as income?

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

When a reduced-paid up nonforfeiture option is chosen, what happens to the face amount of the policy?

Preferred Provider Organization (PPO)

When healthcare insurers negotiate contracts with healthcare providers or physicians to provide health care services for subscribers at favorable cost is called

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

When is reduced paid-up nonforfeiture option is chosen, what happens to the face amount of the policy?

When the application is signed and a check is given to the agent.

When is the earliest a policy may go into effect?

Term rider

When term insurance is added to the main policy to enhance the policy or provide added benefit or coverage, it is called a

It is level insurance

Which of the following best describes annually renewable term insurance?

The insurer can increase the policy premium on an individual basis

Which of the following is NOT a feature of a guaranteed renewable provision

Dividends are not taxable

Which of the following is true regarding taxation of dividends in participating policies?

An accidental death rider

Which of the following riders pays a beneficiary a death benefit that is double or triple the face amount if the insured's death was caused by an accident as defined in the policy?

Life income

Which of the following settlement options in life insurance is known as straight life?

Variable whole life

Which of the following types of insurance is investment base, has a level fixed premium, and a nonguaranteed cash value?

Term Insurance

Which of the following types of insurance products would be appropriate for an individual with a low income and high insurance needs

Family Term Rider

Which rider, when attached to a permanent life insurance policy, provides an amount of insurance on every family member?

Life income

Which settlement option in life insurance is known as straight life?

Its premiums steadily decrease over time, in response to its growing cash value

Which statement is NOT true regarding Straight Life Policy?

The lawful beneficiary is entitled to all policy benefits free from all claims of creditors or representatives of the insured's estate

Which statement is true about the proceeds of a life insurance policy?

Single payment or periodic payments

Which two terms are associated directly with the way an annuity is funded?

The insurance company

Who bears all of the investment risk in a fixed annuity?

An individual not covered by an employer-sponsored plan who has earner income

Who can make a fully deductible contribution to a traditional IRA?

only an executive officer of the company

With respect to the entire contract clause in health policies, who has the authority to make changes to an existing policy?

The amount of the distributions is reduced by the amount of 20% withholding tax

A 60 year old participation in a 401(k) plan takes a distribution and rolls it over to an IRA within 60 days. The following is TRUE.

Nonoccupational Coverage

A coverage provided by a disability income policy that does not pay benefits for losses occurring as the result of the insured's employment called

A specified dollar amount that the insured must pay first before the insurance company will pay the policy benefits

A deductible is

Is renewable at the insured's option to a specified age

A guaranteed renewable disability insurance policy

A benefit for each day the insured is in the hospital

A hospital indemnity will pay

Level term

A policy will pay the death benefit if the insured dies during the 20-year premium-paying period, and nothing if death occurs after the 20-year period. What type of policy is this?

Survivor Protection

A producer is helping a married couple determine the financial needs of their children in the event one or both should die prematurely. This is a personal use of life insurance known as

Pay the policy proceeds only if it would have issued the policy

A prospective insured receives a conditional receipt but dies before the policy is issued. The insurer will

By law, the new, individual policy must provide the same benefits as the group insurance policy

After a person's employment is terminated, it is possible to obtain individual health insurance after losing the group health coverage provided by the employer. The following statement is NOT true

Maintain membership in Kansas Life and Health Insurance Guaranty Association

All insurance companies admitted to sell life and or health insurance contracts in Kansas must do which of the following as a condition for their certificate of authority?

Group coverage must be extended for terminated employees up to a certain period of time at the former employee's expense

As it pertains to group health insurance, COBRA stipulates that

Provide income for retirement

An annuity would normally be purchased by an individual who wants to

$10,000, no tax consequences

An employee quits her job where she has a balance of $10,000 in her qualified plan. If she decides to do a direct transfer from her plan to a traditional IRA, how much will be transferred from one plan administrator to another and what is the tax consequence of a direct transfer?

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

An individual has been diagnosed with Alzheimer's disease. He is insured under a life insurance policy with the accelerated benefits rider. What is TRUE regarding taxation of the accelerated benefits?

Guaranteed Insurability Option

An individual is purchasing a permanent life insurance policy with a face value of $25,000. While this is all the insurance that he can afford at this time, he wants to be sure that additional coverage will be available in the future. Which of the following options should be included in the policy?

Pay a reduced death benefit

An insured had a life insurance policy that he purchased 3yrs ago when he was 40 yrs old. He is killed in an automobile accident, and it discovered that he is actually 45 yrs old, as stated on the application. What will the company do?

The surviving beneficiary will continue receiving 2/3 of the benefit paid when both beneficiaries were alive

An insured has chosen joint and 2/3 survivor as the settlement option. What does this mean to the beneficiaries

Occupational

An insured has health insurance that covers them at work and at home. This policy was written on what basis?

Elimination Period

An insured is hospitalized with a back injury. Upon checking his disability income policy, he learns that he will not be eligible for benefits for at least 30 days. This would indicate that his policy was probably written with a 30-day

10 days

An insured pays a monthly premium of $100 for her health insurance. What would be the duration of the grace period under her policy?

First-dollar

Another term used to describe "no deductible"

Issuing policies on behalf of the insurer

As an insurer's field underwriter, a producer does NOT have the following responsibilty

Waiver of premium rider

Because of an injury, an insured has been unable to work for 9 months. He paid the policy premium for his life insurance for the first 6 months of his disability, but didn't have to pay anything for the remaining 3 months, yet the policy remained in force. The policy includes

A separate account

For variable products, underlying assets must be kept in

Attending Physician's

Occasional visits by which of the following medical professionals will not be covered under LTC's home health care?

The employer contributions are not included in the individual insured's taxable income

How do employer contributions to an HSA affect the insured's taxes

6 months

How long is an open enrollment period for Medicare supplement policies?

1 month

How long is the grace period for an individual life insurance policy?

12

How many consecutive months of coverage (other than acute care unit of a hospital) does LTC insurance cover?

Fixed-period

If a beneficiary wants a guarantee that benefits paid from principal and interest would be paid for a period of 10 years before being exhausted, what settlement option should the beneficiary select?

A qualified plan for a small business

If a company has a simplified employee pension (SEP) plan, what type of plan is it?

Medical

If a dental plan is integrated, it is combined with what type of plan?

Guaranteed Insurability Rider

If a policy allows a policyowner to make a periodic addition to the face amount at standard rates, without proving insurability, the policy includes a

The balance of the loan will be taken out of the death benefit

If a policy has an automatic premium loan provision, what happens if the insured dies before the loan is paid back?

Replacement regulations will not apply in this situation

If an employer decides to change its life insurance policy to a similar one with a different insurer, which of the following describes the extent that replacement regulations will be exercised?

An applicant submits an application to the insurer

In insurance, an offer is usually made when

Occasional nursing or rehabilitation care

In long-term care insurance, what type of care is provided with intermediate care?

Occasional nursing or rehabilitative care

In long-term care insurance, what type of care is provided with intermediate care?

The insured may carry over the amount of this year's expenses to next year, which will help satisfy next year's deductible

Insured Z's health insurance policy year begins in January. His policy contains a carry-over provision. In November he has a small claim which is less than his deductible

Elimination period

Is a period, expressed in days, not dollars, imposed on the insured from the onset of a disability until benefit payments commence

Survivors protection

Life insurance can provide

A reinstated policy provides immediate coverage for an illness

Regarding the required provisions of a health insurance policy the following is NOT correct

At the end of 20 years the policy's cash will equal $100,000

The following is incorrect regarding a $100,000 20-year level term policy

Establish a maximum amount of out-of-pocket expense that an insured will have to pay for medical expense in a calendar year

The "stop-loss" feature on a major policy is intended to

Present earnings and earnings prior to disability

The following is the main factor taken into account when calculating residual disability benefits?

Gradually increases each year by the amount that the cash value increases

The death benefit under the Universal Life Option B

One year term option

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

The applicant was previously in Kansas, but allowed the license to lapse 3 years ago

The examination requirement may NOT be waived for the following insurance producer license applicants

The applicant was recently license in Kansas, but allowed license to lapse 3 years ago

The examination requirement may be waived for all of the following producer license applicants EXCEPT

Explaining to client the advantages of permanent insurance over term and suggesting changing policies

The following action is NOT described as twisting

Both the principal and interest will be liquidated over a selected period of time.

The following best describes fixed period settlement option

The earnings in a qualified plan accumulate tax deferred

The following best describes the tax advantage of a qualified retirement plan

The earnings in a qualified plan accumulate tax deferred

The following best describes the tax advantage of a qualified retirement plan?

The premiums are not tax deductible, and the benefits are not taxable

The following describes taxation of individual disability income insurance premiums and benefits

Whether the premiums were tax deductible

The following determines whether disability insurance benefits are taxed

A policy summary

The following documents delivered to the policyowner includes information about premium amounts, cash values, surrender values, and death benefits for specific policy years

Insurer

The following does NOT need to sign an application for health insurance

Any one who is willing to pay the premium

The following does NOT qualify for Medicare Part A

A retired person age 50

The following individuals may NOT qualify for Medicare health insurance benefits

Funding against companies general financial loss

The following is NOT a business use of life insurance

The insurer may terminate the contract only at renewal for certain conditions

The following is NOT a feature of a non-cancellable policy

They must be part of the contract

The following is NOT a requirement of life insurance illustrations

The interest is not taxable since it remains inside the insurance policy

The following is NOT a true statement regarding the accumulation at interest option

Funding against company's general financial loss

The following is NOT business use of life insurance

It would not occur in a deferred annuity

The following is NOT true regarding the accumulation period of an annuity?

At distribution, all amounts received by the employee are tax free

The following is NOT true regarding the federal tax advantages of a qualified plan

They are required by state law to be included in the policy

The following is TRUE about nonforfeiture value

It is temporary protection

The following is TRUE of level term insurance

The larger percentage paid by the insured, the lower the required premium will be

The following is TRUE regarding coinsurance

The premium is level

The following is TRUE regarding the premium in term policies

The following statement is INCORRECT

The insurer does not have the right to conduct an autopsy

The method of premium payment

The insuring clause of a disability policy usually does NOT state the following

To purchase a smaller amount of the same type of insurance as the original policy

The paid-up addition option uses the dividend

Individual tax deduction for premiums paid

The patient protection and affordable care act does NOT include the following

Reduction of premium

The policyowner pays for her life insurance annually. Until now, she has collected a nontaxable dividend check each year. She has decided that she would rather use the dividends to help pay for her next premium. What option would allow her to do this?

Attained age

The premium charged for exercising the Guaranteed Insurability Rider is based upon the insured's

Lower

The premium of a survivorship life policy compared with that of a joint life policy would be

Conditional

The proposed insured makes the premium payment on a new insurance policy. If the insured should die, the insurer will pay the death benefit to the beneficiary if the policy is approved. This is an example of what kind of contract?

The state

The regulations of the insurance industry primarily rests with

24 months

The relation of earnings to insurance provision allows the insurance company to limit the insured's benefits to his/her average income over the last

Waiver of Premium

The rider in a whole life policy that allows the company to forgo collecting the premium if the insured is disabled is called

Reduced the death benefit

What effect will the LTC rider have on death benefit of a life insurance policy if LTC benefits were paid to the insured?

Diagnostic preventive care

What is an important feature of a dental expense insurance plan that is NOT typically found in a medical expense insurance plan?

A 27 year old married daughter who is attending college and lives with her parents

Under a group health insurance plan, benefits may NOT be extended to the following dependent

The same face amount as in the whole life policy

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

The same face amount as the whole life policy

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

An employee's group medical benefits are generally exempt from taxation as income

Under which condition would as employee's group medical benefits be exempt from income taxes?

Signed waiver of premium

Upon policy delivery, the producer may be required to obtain any of the following EXCEPT