Insurance

Brian's required minimum distribution from his traditional IRA was $6,000 this year. However, he only took a $2,000 distribution. What tax penalty will Brian have to pay?

$2000

By statute, a Louisiana resident who loses eligibility for coverage under a group health insurance policy or plan is guaranteed the right to maintain coverage for at least how long?

12 months

A producer's commission for the sale of a Medicare supplement policy in the first year following its effective date cannot exceed what percentage of the commission paid for servicing the policy in the second year?

200 percent

Suzanne's group health insurance policy terminated on December 31. Within how many days must she apply for a conversion policy?

31

What is a typical life insurance policy's grace period?

31 days

For how many days does a written authorization to disclose the results of a genetic test remain valid?

60

Acme Insurers recently started an advertising campaign in Louisiana for its new life insurance policies. Which of the following statements is TRUE?

Acme cannot compare its products to competitors' products unless such comparisons are fair and complete.

If a policyowner lets an insurance policy lapse, within how many years may the policy be reinstated?

three years of the date on which it lapsed

Which statement is correct about the taxation of a flexible spending account in a group health plan?

Contributions are made on a pre-tax basis.

Warren is insured by a disability income policy and paid $2,500 each year in premiums until he is disabled. He now receives a $1,200 monthly disability benefit. Which statement is correct?

He cannot deduct the premium he paid but can exclude the benefits from taxable income

Delta Insurers sells health insurance policies to small employers. Kappa Company, a small employer, applies for a policy with Delta. Which statement is NOT correct?

Delta must use experience rating when setting the premium.

Which is an example of formal caregiving in the context of long-term care?

Dennis performs homemaker chores through an agency.

Life and health insurance companies regulate themselves through each of the following entities or organizations EXCEPT:

Financial Industry Regulatory Authority

Which federal law prevents a health insurer from refusing to insure a member of a small group?

HIPAA

What is the purpose of paying deductibles and coinsurance for the HMO point-of-service (POS) option?

It discourages members from going outside the network to receive health care.

Which of the following options best describes the basis upon which a fixed annuity's income payment amount is determined?

It is based on the annuitant's annuity purchase rate (APR) at the time of annuitization, which is the amount of periodic income provided for every $1,000 of annuitized principal.

Which of the following statements about Medicare Part A's home health care services benefit is correct?

Medicare Part A's home health care benefit covers part-time and intermittent skilled care.

A person who wants a Medicare supplement policy with a high deductible option and a low premium payment should buy:

Plan K or L

Which of the following statements about the renewability of small employer health plans is not true?

Plans can be canceled only after the insurer provides 180 days' prior notice.

In applying a pre-existing condition provision, under what circumstance will a replacing insurer credit an employee with the time covered under his or her former plan?

Prior coverage was continuous to a date not more than 63 days before the effective date of the new plan.

Which of the following will happen if a traditional IRA owner dies before all of the tax-deducted funds in his or her account have been paid out?

The funds will be paid and taxed to the beneficiary.

Which of the following statements about the interest-only life settlement option is NOT correct?

The interest rate paid by the insurer is the lesser of current rate or guaranteed rate.

Which of the following statements regarding Keogh (HR-10) qualified plans is correct?

The plan must comply with the same maximum contribution and benefit limits applicable to other qualified plans.

All the following statements regarding the tax benefits of qualified retirement plans are correct EXCEPT:

Upon distribution, employees are required to pay taxes only on the interest earned on plan contributions but not on the contribution amount itself.

Which of the following entities would be eligible to set up a Keogh (HR-10) qualified plan?

a three-person law partnership

When completing an application for life insurance, Andrew states that he is 39 years old, though he is actually 45. When the insurer discovers this, it will probably

adjust the benefits.

A life insurance policy's automatic premium loan provision is which of the following

an optional benefit

If the owner of a lapsed whole life insurance policy that was issued on a standard basis does not choose a nonforfeiture option, which of the following will the insurer do?

automatically apply the extended term option

Sandy's insurance company has assigned a price or dollar amount to a surgical procedure that she will undergo. The insurer will pay Sandy a percentage of this assigned price. Coverage is based on the:

benefits schedule

An insurable risk is not:

catastrophic

To confirm that an individual was insured for a stated period, which of the following must a health insurer issue to an insured individual?

certificate of creditable coverage

Which of the following is a benefit trigger under a long-term care insurance policy?

cognitive impairment

In which clause of a health insurance policy is the entire amount of money stated?

consideration clause

Annuity settlement options can be based on which of the following?

fixed number of years or the annuitant's life

Belinda's health insurance policy offers a $1 million lifetime benefit limit and covers hospital, surgical, and physician expenses. Each year, she pays a $500 deductible before benefits begin and 20 percent of all covered costs. What type of policy is Belinda covered by?

major medical policy

What was the forerunner to the health savings account (HSA)?

medical savings account (MSA)

May the personal representative of an insured individual take action when the beneficiary of a life insurance policy of that insured individual does not have an insurable interest?

only against any individual who received the benefits

For how long must an insurer keep a receipt for delivering an insurance policy?

two years

Which is considered a pre-paid health plan?

preferred provider organization

Robin falls while snow skiing and breaks a leg. She decides to never again attempt this activity. What method is she using to manage this risk of falling?

risk avoidance

According to the laws of agency, an insurance agent appointed by an insurance company acts on behalf of:

the appointing insurer

What does the entire contract clause in a life insurance policy refer to?

the fact that the policy and a copy of the application, if endorsed or attached to the policy, make up the entire contract

George purchased an annuity in which his wife will receive income for as long as she lives. In this scenario, what is George most correctly called?

the owner

After the deductible is paid, Medicare Part A pays full benefits for the first 60 days of hospitalization as well as for:

the rest of the benefit period from the 61st day to the 90th day