Insurance Study
An underwriter must review an applicant with an extensive medical history. Which document would give the underwriter a better understanding of how the insured was treated for various illnesses?
Attending Physician's Statement
Under the Affordable Care Act, maternity, pregnancy, and preventive care services are considered
Essential
Under HIPPAA portability, which of the following are NOT protected under required benefits?
Groups of one or more
Restoring an insured financially after a claim is known as
Indemnity
Who does the spendthrift clause in a life insurance policy protect?
The beneficiary
Which of the following is true regarding taxation of accelerated benefits paid under a life insurance policy?
They are received tax free.
Which method of dealing with risk is applied when insurance is purchased
Transfer
Answers to questions in an insurance application are called representations and, as such, they are
believe to be true, best knowlegde
Comprehensive Medical Expense Insurance combines which of the following coverage in one policy:
Basic Hospital/Surgical and Major Medical
Insurers CANNOT transact insurance in this state without a
Certificate of Authority
Which of the following is NOT a typical of Long-Term Care coverage?
Child day care
Which of the following losses would likely be covered under the accidental death rider?
Death caused by a head on collision
When the insurance proceeds are used to pay inheritance taxes and federal estate taxes, it is known as what?
Estate conservation
To Purchase insurance, the policyowner must face the possibility of losing money or something of value in the event of loss. What is this concept called
Indemnity
Which of the following best describes pure life annuity?
It provides the highest monthly benefits. The pure life annuity, also known as Life Only or Straight Life, pays the most since it only guarantees to pay for the rest of one's life without a minimum guarantee.
An insured was seriously injured in a skiing accident that required him to be hospitalized for 5 weeks. His medical expense policy covered all of the following EXCEPT
Looks of income while hospitalized
Which of the following best describes the type of care provided by the HMO's
Preventative
With Adjustable Life, the owner can change all of the following EXCEPT
The insured
how does insurance distribute the financial consequences of individual losses
transfers the risk to all persons insured
Which of the following would be true of both the fixed period an fixed amount settlement options ?
Both guarantee that the principal and the interest will be fully paid out
Partners in a business want to make sure that if one of them were to pass away, their surviving family will receive a fair value for their portion in the business. What life insurance arrangement would be most suited for transitioning the business?
Buy and Sell Agreement
The notice about policy cancellation delivered to senior consumers must include all of he following information EXCEPT
Explanation of where the premiums have been invested
Which of the following is not a type of hazard
Exposure
Which of the following is consideration on the part of an insurer?
Paying a claim
An annuity would normally be purchased by an individual who wants to
Provide income for retirment
If an insured purchases an insurance policy with a large deductible, what risk management technique is the insured exercising?
Retention
HMOs are known as what type of plans?
Service
What is the only difference between blanket insurance and group health insurance
The insured members are not named.
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
Whose responsibility is it to ensure that the application for health insurance is complete and accurate.
The underwriter's
Which of the following types of insurance is investment based, has a level fixed premium, and a nonguaranteed cash value?
Variable Whole Life
In Health insurance, the length of the Grace Period varies according to which of the following?
he mode of premium payment
The Affordable Care Act mandates that insurers provide coverage for adult children of the insured up to the age of
26
There is a 10% penalty on the taxable portion of a deferred annuity when it is surrendered prior to what age?
59.5
A person has a history of DUI's To his insurer, this presents what type of hazard?
Morale
Which of the following is not a component of insurance policy premium
Number of beneficiaries
A core Medicare supplement policy (Plan A) will cover all of the following expenses EXCEPT
Part A deductible
A qualifying retiree has access to all parts of the Social Security Medicare program. Which of these parts requires a monthly payment from the insured
Part B
Which of the following Medicare parts provides prescription drugs benefit?
Part D
In a group life policy with a death benefit of more than $50,000:
Premium cost for insurance about $50,000 is taxable as income to the employee
The insured dies 6 months after the policy issue date. Upon death of the insured, it is determined that the applicant made a material misstatement on the application. What is the most likely course of action for the insurer?
Rescind the policy
All of the following are true of credit life EXCEPT
The insured names the beneficiary
Which of the following is NOT true regarding term health coverage?
The owner may renew the policy for a specified term.
Medical claims covered by the program known as Medi-Cal in California are paid for by
The state mostly through federal reimbursements
In which of the following scenarios would a producer be allowed to obtain insurance through an unauthorized insurer?
if there are no authorized insurers for a specific type of coverage in this state
An insured falls down a flight of stairs and sustains a neck in just that renders him severely disabled. The insured owned a while life policy. Is it possible for the policy to include a waiver of cost of insurance rider, if so, what insurance cost would be waived
No, it is not possible for this waiver to be included in a while life policy
Insurance contracts are unilateral in nature. What does that mean?
Only one party makes a promise.
What is it called when a doctor accepts the Medicare approved amount?
Verification
A statement made by an applicant for insurance that must be true in every respect is considered to be a
Warranty
Which of the following is NOT a use of personal life Insurance
An individual buys insurance to fund a buy sell agreement
Per the Code, the best definitions of "shall" and "may" are:
Mandatory & permissive
Which of the following used to be called Medicare + Choice Plans?
Medicare Advantage Plans
Which of the following statements is INCORRECT
Medicare doesnt cover skilled nursing care
Who must participate in a noncontributory group policy?
100% of eligible employees must participate
To qualify as disabled under the provisions of Social Security, your disability must be expected to last at least:
12 months
A policyholder returns the policy to the insurer a week after it is delivered. How much of the premium will be returned to the applicant?
100%
An underwriter is reviewing an applicant with an extensive medical history. Which of the following would give the underwriter a better understanding of how the applicant has been treated for various illnesses?
Attending Physician's Statement
Daryl is involved in an automobile accident with another motorists. Darryl is at fault. Darryl was injured and hospitalized for 2 moths. The other motorists suffered $15,000 of medical expenses as a result of he accident. Darryl's disability income policy with pay
Darryl's loss of income
Which of the following is an example of a physical hazard
Diabetes
All of the following are features of a health insurance plan purchased on the health insurance marketplace EXCEPT
Dollar limits on essential benefits
Which of the following is provided by skilled medical personnel to those who need occasional medical assistance or rehabilitative care?
Intermediate care
What advantage does the "recurrent disability" provision provide to the insured under a disability income policy?
It eliminates the imposition of a second period for the same disability
Dividends received on participating life insurance policies are?
Not taxable because they are a return of unused premiums
An insurer can decide to not renew an Optionally Renewable Policy:
On Premium Due Dates
All of the following are advantages of a qualified retirement plan EXCEPT
The income at retirement is tax free
Which of the following time periods is the general enrollment period for Medicare Part B
January 1 through March 31 each year
All of the following statements about agents are true, except:
Exclusive agents work for themselves
What is the exclusion ratio used to determine?
The untaxed portion of distributions
A life insurance policy illustration may NOT include
Vanishing premiums if the policy becomes paid up with nonguarenteed elements paying future premiums
The renewable provision allows the policyowner to renew the coverage at the expiration date.
Without evidence of insurability
According to the "Common Disaster" clause, if the insured and primary beneficiary are killed in the same accident and it cannot be determined who died first, which of the following will be assumed?
The primary beneficiary died before the insured. According to the "Common Disaster" clause, if it cannot be determined who died first, the insured or the primary beneficiary, it will be assumed the primary beneficiary died first, so the proceeds go to the contingent beneficiary. proceeds will go the insureds estate only if there is no contingent beneficiary.
Concerning the Family Protection Policy, all of the following statements, which one is true
children, upon reaching the age of majority, are permitted to convert to an individual policy with proof of insurability
Which of the following becomes part of the contract, is guaranteed to be true, and if untrue, may be grounds for rescinding the policy?
Warranty
How long is the grace period for an individual life insurance policy in California?
1 month
An agent delivers a policy to an applicant, who pays the initial premium but refuses to submit a Statement of Good Health. Which of the following best describes what the applicant has violated?
Consideration
All of the following are ways to handle risk EXCEPT
Elimination
For which of the following reasons may group coverage NOT be discontinued?
For company's stock value lowers
What is the purpose of a benefit schedule?
To state what and how much is covered in the plan.
What does an annuity protect the contract owner against?
living longer than expected
Gross premium for a life insurance policy is determined by adding which two components
net premium and expenses
cash value guarantees in a whole life policy are called
nonforfeiture values
Which of the following will be eligible for a tax-sheltered annuity?
public school teachers
According to the Medical Loss Ratio (MLR), what is the minimum percentage of health coverage premium that must be applied to actual medical care in a group health plan?
85%
Policy dividends issued by mutual companies can be described as
Refunds
Wagering on a sporting event is known as
Speculative
In group insurance, the primary purpose of the coordination of benefits provision is to
Prevent over-insurance
On an Accidental Death and Dismemberment (AD&D) policy, the death benefit payable is known as the:
Principal sum
Which statement below is INCORRECT regarding the type of term insurance that fits best with the applicant's needs?
Applicants who may require a larger death benefit in the future should buy convertible term insurance
which of the following statements about HICAP is false? HICAP
provides assistance for a fee based upon ability to pay
Which of the following is the best definition of indemnification
to compensate for damage or loss sustained, expense incurred, etc. 2. to guard or secure against anticipated loss; give security against (future damage or liability).
Core benefits are included in all medicare supplemental policies what Percentage of part B coinsurance is required
10%
In a group life insurance plan, children of the employee may be covered as eligible dependents until they reach the age of
26
To be acceptable to insurance companies, what percentage of eligible employees must be enrolled under a contributory health insurance plan?
75%
The "stop loss" feature on a major medical policy is intended to
Establish a maximum amount of out-of-pocket expense that an insured will have to pay for medical expense in a calendar year
Which of the following is not true regarding a noncancellable policy?
Insurer can increase the premium above what is stated in the policy if claims experience is greater than expected
Which of the following statements describes one of the reasons individuals purchase life insurance?
It creates an immediate estate.
Human Life Value approach to determining Life Insurance needs is based upon which of the following ideas?
Loss of breadwinner's income
In order for an alumni association to be eligible to purchase group health insurance for its members, all of these statements must be true EXCEPT when the association
Has been active for five years minimum
Slippery floors, reckless driving, or providing false information are examples of..
Hazards
POS
Hybrid of HMO and PPO
In life insurance, which of the following is NOT required to have an insurable interest in the insured?
beneficiary
When long term care insurance covers care in a person's home or in a skilled or residential facility, the policy may be labeled
Comprehensive
Conrad recieved $50,00 for a $100,000 accidental death and dismemberment policy as a result of the loss of his leafy arm in a n accident. Conrad has received the
Capital amount 50%principal
Which of the following describes relationship between a capital sum and a principal sum?
Capital sums are percentages of principal sums
If an applicant's health is poorer than that of an average applicant, the policy may be issued
Substandard
Medicare Part A services do NOT include which of the following?
rivate Duty Nursing
In a group policy, all of the following can be the policy owner except
the insurance company
Which of the following is true of the taxation of cash values in a business life insurance policy?
Cash values grow tax deferred. The cash value of a business owned life insurance policy or an employer provided policy accumulates on a tax-deferred basis and is taxed in the same manner as an individually owned policy.
What is the purpose of the gatekeeper in an HMO?
Controlling Costs
An individual has a $200,000 convertible term life insurance policy. If he chooses, he can
Convert the whole life policy for the same face amount without proof of insurability
Which of the following is considered a peril.
Driving too fast for conditions
Which of the following terms is used to define the period of time during which an annuitant makes payments into an annuity?
Accumulation period
Which statement about life insurance code and ethics is not true?
Acts of fair and unfair discrimination are prohibited
All of the following are true of a Multiple Employer Trust(MET) Except
The employee has a right of conversion upon leaving the group coverage.
"What is the purpose of a disability buy sell agreement"
To reimubrse the business
All other factors being equal, which of the following premium payment modes will incur the lowest overall payment?
Annual
The policy owner has an option to pledge the life insurance policy as collateral for a bank loan. This is called
collateral assignments
Bill is approaching retirement age and is concerned about having proper coverage should he have to be placed in a LTC facility. Bill's agent told him that LTC policies would provide coverage at all of the following levels EXCEPT
Acute
A limited health insurance policy that will pay a lump-sum to the insured if they are diagnosed with life-threatening cancer, stroke, heart attack or Alzheimer's disease is known as:
critical illness insurance
Which of the following riders provides for the payment of part of the policy death benefit if the insured is diagnosed with a terminal illness that will result in two years?
Living Needs Rider
which of the following riders pays a beneficiary a death benefit that is double or triple the face amount if the insurance death was caused by an accident as defined in the policy
an accidental death rider
A whole life policy is surrendered for a reduced-paid up policy. The cash value in the new policy will?
Continue to increase
Which of the following meets the insured's personal needs, and is provided by nonmedical personnel?
Custodial Care
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. What settlement option is this ?
Fixed amount
