Insurance exam incorrect answer
Who is beneficiary in a credit disability income policy?
lending institution Creditor group, also called credit life and credit disability income insurance, is a specialized use of group health insurance. It protects the lending institution from losing money as the result of a borrowers death or disability. Generally, the creditor is the wonder and the beneficiary of the policy, and the debtor is the premium.
The minimum number of credits required for partially insured status for social security disability benefits is
6 credits during the last 13-quarter period To be considered partially insured, an individual must have earned 6 credits during the last 13-quarters.
How long is an open enrollment period for Medicare supplement policies?
6 months An open enrollment period is a 6-months period that guarantees the applicants the right to buy Medigap once they first sign up for Medicare Part B
According to the PPACA rules, what percentage of health care costs will be covered under a bronze plan?
60% Under the bronze plan, the health plan is expected to cover 60% of the cost for an average population, and the participants would cover the remaining 40%
The minimum number of persons to be insured under a group health insurance plan is established by
state law State law specifies the minimum number of persons to be covered under a group insurance policy.
Childrens riders attached to whole life policies are usually issued as what type of insurance?
term Childrens term riders provide term insurance with coverage expiring when the minor reaches a certain age
When J. applied for a life insurance policy, the agent informed him that a medical exam would be required. The exam may be completed by
A paramedic or examining physician at the insurer's expense. The applicant may be allowed to select the physician or paramedic facility to perform the examination. The insurer pays the cost of such an examination.
A tornado that destroys property would be an example of which of the following?
A peril A peril is the cause of loss insured against in an insurance policy
Which of the following is NOT considered Business of Life settlement?
A producer discusses the advantages of a universal life policy and how the flexible premium allows the owner to control the cash value and death benefit income. The term Business of Life Settlement refers to any activity relating to the solicitation and sale of an insurance policy to a third party who has no insurance interest in the insured (ie. soliciting, negotiating, effectuating, monitoring or tracking life settlement contracts.)
Which of the following individuals must pass the written examination to be licensed as an insurance agent?
A producer previously licensed in New Jersey who is applying for a New York license 120 days after becoming a resident of this state Each of the above do not need to take the written examination, except for a previously licensed agent in New Jersey who has allowed more than 90 days to lapse since becoming a resident of New York.
Who is included in the definition of an agent?
A producer who owns his own field office
Which of the following long-term care benefits would provide covert for care for functionally impaired adults on a less then 24-hour basis
Adult day care Adult day care is designed for those who require assistance with various ADLs on a daily basis, but not around the clock. Custodial care is usually the only service provided by adult day care facilities.
All of the following are essential benefits required to be included in All health plans purchased in the Marketplace EXCEPT
Adult dental care Adult dental care is not a required benefit
The Omnibus Budget Reconciliation Act of 1990 (OBRA) requires that large group health plans must provide primary coverage for disabled individuals under
Age 65 who are not retired The OBRA requires that large group health plans (100 employees or more) must provide primary coverage for disabled individuals under age 65 who are not retired.
What documentation grants express authority to an agent?
Agent's contract with the principal The principal grants authority to an agent through the agents contract
Who can make a fully deductible contribution to a traditional IRA?
An individual not covered by an employer-sponsored plan who has earned income Individuals who are not covered by an employer-sponsored plan may deduct the amount of their IRA contributions regardless of their income level.
Which of the following is NOT a term for the period of time during which the annuitant or the beneficiary receives income?
Depreciation period The "annuitization period" is the time during which accumulated money is converted into an income stream. It is also referred to as the annuity, liquidation or pay-out period.
Other than for a qualified life event, when can a change be made in benefits for a Flexible Spending Account (FSA)?
During the open enrollment period FSA benefits may be changed during open enrollment, unless the circumstances are deemed a qualified life event.
Shortly after a replacement transaction on a Medicare supplement policy, the insured decided to cancel the policy, but is unaware whether the free-look provision applies. The insured could find that information in the
Notice regarding replacement
When calculating the amount a policy owner may borrow from a variable life policy, what must be subtracted from the policy's cash value
Outstanding loans and interest To calculate the loan value an insured may take out the variable life insurance policy, any unpaid loans and interest must be subtracted from the policy's cash value.
Traditional IRA Contributions are tax deductible based on which of the following?
Owner's income Traditional IRA contributions are tax deductible, but may be limited if the owner's income exceeds a certain level.
Which of the following is the basic source of information used by the company in the risk selection process?
The application is the basic source of information an insurer uses in the risk selection process.
Which of the following is NOT a characteristic of a group long term-disability plan?
The benefit can be up to 50% of one's yearly income The maximum benefit is based upon monthly income.
What type of information is NOT included in a certificate of insurance?
The cost the company is paying for monthly premiums The individuals covered under the insurance contract are issued certificates of insurance. The certificate tells what is covered in the policy, how to file to a claim, how long the coverage will last, and how to convert the policy to an individual policy.
An individual applied for an insurance policy and paid the initial premium. The insurer issued a conditional receipt. Five days later the application had to submit to a medical exam. If the policy is issued, what would be the policy's effective date?
The date of medical exam If the company acknowledges receipt of the premium with a conditional receipt, the policy is in effect on the date of the application or the date of the medical exam, provided that the applicant is found insurance at the rate applied for.
The period of time immediately following a disability during which benefits are not payable is
The elimination period. The elimination period is a waiting period, expressed in days, not dollars, imposed on the insured from the onset of disability until benefit payments commence.
I'm a group policy, the contrast is between
The employer and the insurance company I'm a group policy, the contract is between the insurance company and the group sponsor
An insurance advertisement exaggerates the benefits of an insurance policy, due to human error at the insurer's advertising agency. Who will the Department of Insurance hold responsible for the exaggeration?
The insurer Insurance companies must adhere to strict advertising requirements. The insurer who's policies are depicted is ultimately responsible for its advertisements.
Regarding the return of premium option for LTC policies, what happens to the premium if the policy lapses?
The insurer will return a percentage of the premiums paid. The return of premium optional nonforfeiture type benefit is offered by most insurers writing long term care policies. In the event the insured dies or the policy is lapsed, the insurer will return a certain percentage of the premiums paid.
What happens if a deferred annuity is surrendered before the annuitization period?
The owner will receive the surrender value of the annuity. If a deferred annuity is surrounded prior to annuitization, the surrender value of the annuity is guaranteed according to the no forfeiture provision.
The authority granted to an agent through the agent's contract is referred to as
express authority Express powers are written into the contract between the insurer and the agent.
All of the following are business uses of life insurance EXCEPT
funding against general company financial loss Both life and health insurance can be used for a variety of purposes in a business setting, including the finding of business continuation agreements, compensating executives, and protecting the firm against financial loss resulting from the death or disability of key employees.
The automatic premium loan provision is activated at the end of the
grace period Provided there is sufficient cash value in the policy, this provision triggers a loan at the end of the grace period to keep a policy in force.
Who does the agent represent?
insurer The agent represents the insurer not the insured
In health insurance, if a doctor charges $50 more than what the insurance company considers usual, customary and reasonable, the extra cost
is not covered An insurance company will pay the usual, reasonable, or customary amount for a given procedure based upon the average charge for that procedure.
All of the following statements about Medicare supplement insurance policies are correct except
they cover the cost of extended nursing home care Medicare supplement policies (Medigap) do not cover the cost of extended nursing home care. Medical plans are designed to fill the gap in coverage attributable to Medicare's deductibles, copayment requirements, and benefit periods. These plans are issued by private insurance companies.
According to the entire contract provision, what document must be made part of the insurance policy?
Copy of the original application. An insurance contract must contain a copy of the original application.
An insured's long-term care policy is scheduled to pay a fixed amount of coverage of $120 per day. The long-term care facility only charged $100 per day. How much will the insurance company pay?
$120 a day Most LTC policies will pay the benefit amount in a specific fixed dollar amount per day, regardless of the actual cost of care.
Jack had a $20,000 life insurance policy on himself. He wants to insure the life of his 13 year old daughter. According to New York law, what is the maximum amount of life insurance he can purchase on his daughter?
$50,000 The limits for a minor Under 14 1/2 are $50,000 or 50% of the amount of insurance a person has on him/herself .
The time limit of certain defenses provision prohibits insurers from denying a claim due to misrepresentation, as long as the policy has been in force for at least
2 years After a policy has been in force for more than 2 years, an insurer is prohibited from denying a claim due to misrepresentation on an application. Claims may be denied if the insured is deemed to have committed fraud.
A clients policy lapses in 2012 without being renewed. In what year can the insurance company destroy the file on this policy?
2018 According to New York law, insurers must keep policy records for 6 years after the date the policy is no longer in effect, or until the filing of a review of the record whichever is longer.
The Medicare supplement renewal commission paid in the third year much be as high as the commission of which year?
2nd The commission provided in renewal years much be the same as the commission in the second year and must be provided for no fewer than 5 renewal years.
Within how many days of requesting an investigative consumer report must an insurer notify the consumer in writing that the report will be obtained?
3 days Investigative consumer reports cannot be made unless the consumer is advised in writing about the report within 3 days of the date the report was requested.
In the event a policy lapses due to nonpayment of premium, within how many days would the policy be automatically reinstated once the outstanding premium is paid?
45 days If a policy premium is not paid by the end of the grace period, and the policy lapses, an insured may pay the outstanding premium and have the policy reinstated. If the insurer does not refuse reinstatement within 45 days from the date the conditional receipt was issued, the policy will be automatically reinstated.
To be acceptable to insurance companies, what percentage of eligible employees must be enrolled under a contributory group health insurance plan?
50% State laws establish the minimum number of individuals that constitute a group. Insurers may have a larger number required for certain plans.
When an annuity is written, whose life expectancy is taken into account?
Annuitant The annuitant receives payments from an annuity and is the person who's life expectancy is considered when writing the contract. The annuitant and annuity owner are offer the same person but do not have to be.
If the beneficiary is NOT named for annuity benefits, to which entity will the benefit be paid?
Annuitant's estate If an annuitant dies during the accumulation period, the beneficiary is paid either the cash value of the policy or the amount of premiums paid, whichever is the larger amount. If a beneficiary is not named, the money will be paid to the annuitant's estate
What is the maximum period of time during which an insurer may contest fraudulent misstatements made in a health insurance application?
As long as the policy is in force An insurer can contest a fraudulent misstatement as long as the policy is in force. No other statement or misstatement made in the application at the time of issue will be used to deny a claim after the policy has been in force for 2 years.
When must buyers guide be delivered to the proposed insured?
At the time of application The buyers guide must be provided prior to or at the time of application
Occasional visits by which of the following medical professionals will NOT be covered under LTC's home health care?
Attending physician m Home health care is is care provided in one's home and could include occasional visits to the person's home by registered nurses, licensed practical nurses, licensed vocational nurses, or community-based organizations like hospice. Home health care might include physical therapy and some custodial care such as meal preparation.
When an insurer offers services like preadmission testing, second options regarding surgery, and preventative care, which term would best apply?
Case management provision Cost-saving services, also known as "case management provisions", include the following: controlled access of providers, large claim management, preventive care, hospitalization alternatives, second surgical options, preadmission testing, catastrophic case management, rush sharing, and providing high quality of care.
To legally transact insurance in this state, an insurer must obtain which of the following?
Certificate Authority A certificate of authority is required in order to transact insurance.
When a policy owner designates a group of individuals as the beneficiary of a life insurance death benefit without specifically naming the individuals, this is called
Class designation A designation such as the child of the insured, or all children of the insured l, or all current members of a group, is called a "class designation" The individuals need not be specifically named, since each who meet the qualifications of being included in the class will share in the benefit.
A health insurance plan that covers all accidents and sickness that are not specifically excluded from the policy is referred to as a
Comprehensive plan Comprehensive health plans cover Al accidents and sicknesses, with the exception of those conditions specifically stated in policy exclusion. Limited health insurance covers only only those conditions that are stated in the policy.
An applicant for an individual health policy failed to complete the application properly. Before being able to complete the application and pay the initial premium, she is confined to a hospital. This will not be covered by insurance because she has not met the conditions specified in the
Consideration clause The consideration clause specified that both parties to the contract must give some valuable consideration. The payment of the premium is the consideration given by the applicant. Because the applicant had not paid an initial premium, she is not covered by insurance .
An insurer is involved in an accident that renders him permanently deaf, although he does not sustain any other major injuries. The insured is still able to perform his current job. To what extent will he receive Presumptive Disability benefits?
Full benefits Presumptive Disability plans offer full benefits for specified conditions. These policies typically require the loss of at least two limbs (Loss of use does not qualify in some policies.), total and permanent blindness, or loss of speech or hearing. Benefits are paid, even if the insured is able to work.
Issued age policy premiums increase in response to which of the following factors?
Increased benefits The premium of issue age policies can only increase in benefits.
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 ultimately determines the interest rates paid to the owner of a fixed annuity?
Insurer's guaranteed minimum rate of interest With fixed annuities, the company is required to pay at least a guaranteed minimum rate of interest to the owners. If the company investments perform well, the company will pay a higher interest rate, but since the interest rate can never fall below the guaranteed minimum, that's what ultimately determines what the company will pay.
What is NOT a benefit if a POS plan?
It allows guaranteed acceptance of all applicants. A different choice can be made every time a need arises for medical services.
Which of the following is true regarding health insurance?
It could provide payments for loss of income Health insurance is a generic term, encompassing several types of insurance contracts, which through related, are designed to protect against different risks. It provides coverage for expenses related to health care, loss of income, and disability income.
Which of the following is NOT true regarding the life with Guaranteed Minimum annuity settlement option?
It does not guarantee that the entire principal amount will be paid out. With the Life with Guaranteed Minimum annuity settlement option, if the annuitant does before the principle amount (the amount paid for the annuity) has been paid out, the remainder of the principal amount will be refunded to his/her beneficiary. Pure life provides the highest monthly benefits for an individual annuitant.
All of the following statements are true regarding installments for a fixed period of annuity settlement option EXECPT
It is a life contingency option Under the installments for a fixed period annuity settlement option, the annuitant selects the time period for the benefits; the insurer determines how much each payment will be. This option pays for a specific amount of time only, and there are no life contingencies.
What is the purpose of a conditional receipt?
It is intended to provide coverage on a date earlier than the date of the issuance of the policy. Coverage commended on the date of the application or the date of a medical examination, whichever is later, on the condition that the applicant determined to be insurable at the rate applied for.
Which of the following statements about the reinstatement provisions is true?
It requires the policy owner to pay all overdue premiums with interest before the policy is reinstated. Upon policy reinstatement, the policy owner will be required to pay all back premiums plus interest, and may be required to repay any outstanding loans and interest.
Which of the following is an IRS qualified program for the self-employed
Keogh plan The Keogh or HR-10 plan allow self-employed individuals to establish tax favored retirement plans for themselves and their eligible employees.
life expectancy is used in the calculation of which of the following?
Life Settlement One of the most important issues in calculating the amount. To be paid under a life settlement is life expectancy of the owner of the policy. The insurance company will have to pay premiums for the duration of the contract, thus adding to the cost of the purchase.
Your client wants both protection and savings from the insurance, and is willing to pay premiums until retirement at age 65. What would be the right policy for this client?
Limited pay whole life Premium payments will cease at her age 65, but coverage will continue to her death or age 100.
If an annuitant selects the strait life annuity settlement option, in order to receive all of the money out of the contract, it would be necessary to
Live at least to his life expectancy.
An insured severely burns her hand, but is not classified as disabled. Which of the following types of coverage would cover at least a portion of the insured's medical expenses?
Medical Reimbursement Benefit Medical reimbursement benefits help to pay medical costs for accidental injuries that are not considered to be disabling.
Under the affordable care act, which classification applies to health plans based on the amount of coveted costs?
Metal level classification Plans other than self-insured plans will be classified into four levels determined by how much of one's expected health care costs are covered. The four plans are bronze, silver, gold, and platinum. This is called metal level classification.
Regarding the free-look provision, the insurance company
Must allow the policyowner to return the policy for a full refund. This provision allows the policy owner a specified number of days from receipt to look over the policy and if dissatisfied for any reason, return it for a full refund of premium. The beginning of this free-look period starts when the policy owner receives the policy, not when the insurer issues the policy.
Which of the following statements is INCORRECT concerning Medicare Part B coverage?
Part B coverage is provided free of charge when an individual turns age 65. Those who desire Part B coverage must enroll and pay a monthly premium.
A prospective insured receives a conditional receipt but dies before the policy is issued. The insurer will
Pay the policy proceeds only if it would have issued the policy The conditional receipt says that coverage will be effective on the date of the application or the date of the medical exam, whichever occurs last, as long as the applicant is found to be insurance as a standard risk, and policy is issued exactly as applied for.
Who represents the insured in the investigating of a claim
Public Adjuster A public adjuster is any person, firm, association or corporation, who for a commission, acts on behalf of the insured in negotiating a settlement of a claim for losses for damage to property
The policy owner 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?
Reduction of premium The reduction of premium option allows the policyholder to apply policy dividends toward the next year's premium. The dividend is subtracted from the premium amount, yielding the new premium due for the next year.
Which two terms are associated directly with the way an annuity is funded?
Single payment or periodic payments Annuities are characterized by how they can be paid for: either a single payment (lump sum) or through periodic payments in which the premiums are paid in installments over a period of time. Periodic payment annuities can be either level, in which the annuitant/ owner pays a fixed installment, or the payments can be flexible, which the amount and frequency of each installment varies.
Which of the following policies would be classified as a traditional level premium contrast?
Strait life Strait whole life policies have a level guaranteed face amount and a level premium for the life of the insured.
Which of the following would help prevent a universal life policy from lapsing?
Target premium The target premium is a recommended amount that should be paid on a policy in order to cover of insurance protection and to keep the policy in force.
Twenty-five days after a health insurance policy is delivered, the policy owner decides that she would like to return the policy and receive a refund of premium. Which of the following is true?
The policy owner will not receive a refund because the free-look period is over. The free-look provision allows a policy owner to review a new health policy after it has been delivered. If the policy owner decides to return it within a certain time period, the full premium will be refunded. I'm New York, a free-look period cannot be longer than 20 days.
How must a replacing producer respond to an applicant wishing to replace existing life insurance?
The producer must provide the applicant with a Notice Regarding Replacement In a replacement transaction, a producer must present to the applicant a notice regarding replacement t, signed by both the applicant and the producer.
Which nonforfeiture option provides coverage for the longest period of time?
The reduced paid-up nonforfeiture option would provide protection until the insured reaches 100, but the face amount is reduced to what the cash would buy.
On a disability income policy that contains the "own occupation" definition of total disability l, the insured will be entitled to benefits if they cannot perform
Their regular job If a disability income policy contains the own occupation definition, then the insured will be considered disabled if they cannot perform that particular job, regardless of other jobs that they may be able to do.
Which of the following statements regarding conditional receipts is true?
They are temporary insuring agreements With a conditional receipt, insurance coverage is effective as of the date of the receipt, so long as the application is approved.
I'm a survivorship life policy, when does the insurer pay the death benefit?
Upon the last death Survivorship life pays on the last death rather than upon the first death.
Which of the following CANNOT be included alone with illustrations used to sell life insurance ?
Vanishing premium information Illustrations used to sell life insurance cannot use the term "vanishing premium" -or any similar term- that implies the policy becomes paid up.
An insured is involved in a car accident. In addition to general, less serious injuries, he permanently loses the use of his leg and is rendered completely blind. The blindness improves a month later. To what extent will he receive Presumptive Disability benefits?
no benefits Presumptive disability plans offer full benefits for specified conditions. These policies typically require the loss of use of at least two limbs, total and permanent blindness, or loss of speech or hearing. Benefits are paid even if the insured is able to work. Because the insurers blindness was only temporary and the loss of use only 1 leg, he does not qualify for presumptive disability benefits.
Which of the following riders would NOT cause the Death Benefit to increase?
payor benefit rider
A medical insurance plan in which the health care provider is paid a regular fixed amount for providing care to the insured and does not receive additional amounts of compensation dependent upon the procedure performed is called
prepaid plan Under a prepaid plan, the health care providers are paid for services in advance, whether or not any services are provided. The amount paid to the provider is based upon the projected annual cost as determined by the provider.
Which of the following is an entity that can be hired by an employer to handle all its employee management tasks?
professional employer organization Professional employer organizations (PEOs) handle employer management tasks, including employer benefits and payroll and workers compensation. Because they combine the employees of several companies under once umbrella, they can negotiate better rates on health care and workers compensation coverage.
When benefits are paid directly to the insured under a health insurance policy, the policy provides benefits on what type of basis?
reimbursement The insured is responsible to pay the provider l, and the policy reimburses the insured for covered expenses.
All of the following long-term care coverages would allow an insured to receive care at home EXCEPT
skilled care Custodial care, respite care, home health care, and adult day care are all coverage used to reduce the necessity of admission into a care facility. Skilled care is almost always provided in an institutional setting.
Workers compensation benefits are regulated by which entity?
state government The state government offers and regulated workers compensation benefits, which vary slightly from state to state
