Health and Life Insurance Test Final

What is the purpose of a gatekeeper in an HMO?

Controlling costs

Which of the following is NOT a characteristic of a Manage Care Plan?

Risk retention (controlled access to providers, comprehensive care management, and preventive care ARE characteristics)

Medicare is a health insurance program for all of the following individuals EXCEPT

Those with low income and low assets (have nothing to do with medicare eligibility)

To get a nonresident license in this state, a producer must

Apply and pay a fee to a nonresident state that reciprocates

In a replacement situation, all of the following must be considered except

Assets

Which of the following is true regarding inpatient hospital care for HMO members?

Care can be provided outside of the service area

An insured is receiving hospice care. His insurer will pay for painkillers but not for an operation to reduce the size of a tumor. What term best fits this arrangement?

Cost-containment

Which of the following terms is used to name the nontaxed return of unused premiums?

Dividend

In disability income insurance, the own occupation definition of disability applies

For the first two years of a disability

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

Lower (major difference is that survivorship life pays on the last death rather than upon the first death. Since the DB is not paid until the last death, the joint life expectancy is extended, resulting in a lower premium than that which is typically charged for joint life)

What is a specific requirement regarding the number of employees in a SIMPLE plan?

No more than 100 employees ( available to small businesses that employ not more than 100 employees receiving at least $5,000 in compensation from the employer during the previous year)

In which of the following lines of insurance would a producer be allowed to bind coverage?

Property & Casualty (property and casualty producers can usually bind coverage for their clients. Life and health producers, however, are authorized to solicit, receive, and forward applications for insurance to their companies, but they generally do not have authority to bind coverage or to alter or modify coverage.)

All of the following are characteristics of a self-insurer EXCEPT

The plan may be funded by an insurance company

An insured decides to surrender his $100,000 Whole Life policy. The premiums paid into the policy added up to $15,000. At policy surrender, the cash surrender value was $18,000. What part of the surrender value would be income taxable?

$3,000

What are the two components of a universal policy?

Insurance and cash account

To purchase insurance, the policyowner must face the possibility of losing money or something of value. What is this concept called?

Insurable Interest

If a life insurance company uses HIV testing as a part of its underwriting, when must an applicant be notified of the procedure?

Prior to performance of the test

If an accident and health insurance policy provides coverage for any members of the policyholder's family, the policy must provide benefits on the same basis to an adopted child beginning from the moment of birth, if placement for adoption occurs within

30 days of the child's birth

Under a group medical policy, prescription drugs plans are

Optional benefits

Concerning Medicare Part B, which statement is INCORRECT?

It is fully funded by Social Security Taxes (FICA)

Which of the following are generally NOT considered when underwriting group insurance?

The insured's medical history

Premium payments for personally-owned disability income policies are

not tax deductible

Health coverage becomes effective when the

First premium has been paid and the application has been approved.

Which of the following is true about the premium on the children's rider in a life insurance policy?

It remains the same no matter how many children are added to the policy

Variable Whole Life insurance is based on what type of premium?

Level fixed (it is a level fixed investment-based product)

Because of the imposed blackout period, the surviving spouse will not receive social security benefits until

he or she qualifies for retirement

If an employee wants to enter the group outside of the open enrollment period, the insurer may

require evidence of insurability

To be eligible under HIPAA regulations, for how long should an individual converting to an individual health plan have been covered under the previous group plan?

18 months

A distribution from an employer-sponsored retirement plan or from an IRA is eligible for a tax-free rollover if it is reinvested in an IRA within

60 days

In which of the following situations is it illegal for an insurer to disclose privileged information about an insured?

A researcher for marketing purposes

The main purpose of ERISA is to ensure that

Employees receive the pension and other benefits promised by their employers.

How does insurance distribute the financial consequences of individual losses?

It transfers the risk to all persons insured

An employee is insured under her employer's group life plan. If she terminates her group coverage, which of the following statements is INCORRECT?

The insured may choose to convert to term or permanent individual coverage. (must be permanent)

An employee is covered under COBRA. His previous payment was $100 per month. His employer now collect $102 each month. Why does the employer collect an extra $2?

not*** premium goes up regardless

All of the following are true regarding the MIB except

MIB reports are based upon information supplied by doctors and hospitals (comes from underwriting disclosures made by applicant to MIB member insurers on prior insurance applications)

Which of the following protects consumers against the circulation of inaccurate or obsolete personal or financial information?

The Fair Credit Reporting Act

Which of the following entities established the Do not Call registry?

The Federal Trade Commission

All of the following are ways in which a Major Medical Policy premium is determined except

the average age of the group

When an annuity is written, whose life expectancy is taken into account?

Annuitant

The paid-up addition option uses the dividend

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

All of the following are features of a health insurance plan purchased on the health insurance marketplace EXCEPT

Dollar limits on essential benefits (health plans are restricted from applying a dollar limit on essential benefits, nor can they establish a dollar limit on the amount of benefits paid during the course of an insured's lifetime)

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

15 days (the grace period is 15 days if paid weekly or monthly and 30 days for all other modes)

What is the minimum number of employees that a small employer is required to have?

2

What type of an interest rate is guaranteed in universal life policies?

Contract interest rate

An insured needs ongoing treatment for a diabetic condition. Under the PPACA, which of the following is correct? a) The condition is covered if the insured's plan specifies the condition b) Treatment is subject to pre-existing conditions exclusion c) Treatment is subject to an annual dollar maximum d) The condition must be covered under the insured's plan

The condition must be covered under the insured's plan.

All of the following are characteristics of group health insurance plans EXCEPT

the parties that hold a group health insurance contract are the employees and the employer (the contract for coverage is between the employer and the insurance company)

A long-term shopper's guide must be presented at what point?

Prior to the time of application

Which of the following would not be a violation of state insurance regulations?

Producer C uses her license exclusively to write business other than controlled

Which of the following coverages is NOT monitored by the employee retirement income security act?

golden parachutes (erisa has a complex series off rules that cover pension, profit-sharing stock bonus, and most welfare benefit plans such as health and life insurance

Shortly after a replacement transaction on a Medicare supplement policy, the insured decided to cancel the policy, but is unsure whether the free-look provision applies. The insured could find that information in the

Notice Regarding Replacement

What type of information is NOT included in a certificate of insurance?

the cost the company is paying for monthly premiums

An employee is insured by a group major medical plan that is provided through her employer. The employer contributes 75% of the premium and the employee contributes the remaining 25%. If the insured received a benefit from this policy in the amount of $1,000, how much of this benefit would be taxed as income?

$0

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

Only an executive officer of the company

A person buys an individual long-term care policy and is not satisfied with its provisions. Within how many days will the insured be able to return the policy for a full premium refund?

30 days

A Universal Life insurance policy has two types of interest rates that are called

Guaranteed and Current

the National Do Not Call list was created to regulate

Telemarketers

All of the following are features of a catastrophic plan EXCEPT

High premiums (usually have low premiums and high deductibles)

A couple receives a set amount of income from their annuity. When the wife dies, the husband no longer receives annuity payments. What type of annuity did the couple buy?

Joint life

According to Utah Mini-COBRA, which of the following would NOT qualify for extended coverage of a group health insurance plan?

An employee who became eligible for similar coverage

If an annuitant dies before annuitization occurs, what will the beneficiary receive?

Either the amount paid into the plan or the cash value of the plan, whichever is greater

J is receiving fixed amount benefit payments from his late wife's insurance policy. He was told that if he dies before all of the benefits are paid, the remaining amount will go to the contingent beneficiary. Which settlement option did J choose?

Fixed amount

According to the nonforfeiture law, if the owner decides to surrender a deferred annuity prior to annuitization, the owner is entitled to which of the following?

Guaranteed Surrender Values

The reduction of premium option uses the dividend to reduce

NEXT year's premium

Which of the following statements is true regarding waiver of a surrender charge on an annuity contract?

The charge may be waived if the annuitant is confined to a long-term care facility for at least 30 days

What is the purpose of a benefit schedule?

To state what and how much is covered in the plan

The HMO Act of 1973 required employees to offer an HMO Plan as an alternative to regular health plans if the company had more than 25 employees. How has this plan since changed?

Employers are no longer forced to offer HMO plans

Two attorneys operate their practice as a partnership. They want to start a program through their practice that will provide retirement benefits for themselves and three employees. They would likely choose

HR-10 (Keogh Plan)

The Patient Protection and Affordable Care Act includes all of the following provisions EXCEPT

Individual tax deduction for premiums paid (the act does not offer tax deductions for health insurance premiums. The act does offer a tax credit, which is different from a tax deduction. All the other provisions are included in the Act.)

Which of the following is provided by skilled medical personnel to those who need occasional medical assistance or rehabilitative care?

Intermediate Care

An employee is on an extended leave of absence when the employer group health plan changes from one carrier to another. Before the employee returns to work, what might the employee most likely notice?

Limited Coverage