LAH Practice exam #2

In an HMO policy, one of the main responsibilities of the primary care physician (PCP) as a gatekeeper is to do which of the following?

Help control costs

A notice regarding replacement on Medicare supplement policies must inform the applicant about a free-look period of how many days?

30 days

What is the grace period for a health insurance policy with premium payment mode of: 1. Annual premium 2. Monthly premium 3. Weekly premium

31 days - Annual Premium 10 days - Monthly Premium 7 days - Weekly Premiums

Limited services policies must specify all of the following EXCEPT

Which physicians operate under this specific insurance policy.

An insured covered by a life insurance policy with an accidental death rider was injured in an accident and died 120 days later. The policy had $50,000 coverage with triple indemnity. What will the beneficiary receive?

$150,000

An insured owns a life policy for $100,000. Due to a terminal illness, the insured had to withdraw $20,000 from the policy 2 years before his death. Since the amount was withdrawn, the insurance company lost $200 in interest. Upon the insured's death, what amount will the beneficiary receive?

$79,800

The loan value of a whole life policy is limited to the policy's

Cash value.

How does the premium in a survivorship life policy compare to the premium in a joint life policy?

Lower

HMOs help reduce the cost of health care by providing

Preventive care

When an insured dies. who has first claim to the death proceeds of the insured's life insurance policy?

Primary beneficiary

What are the terms used to define the amount of benefit paid in a disability policy that contains an Accidental Death and Dismemberment (AD&D) rider?

Principal sum and capital sum

The chance of loss without any possibility for gain is known as a/an...

Pure risk

Which type of life insurance policy generates immediate cash value?

Single Premium Whole Life

What is a modified endowment contract?

defines a life insurance contract for Income Tax Purposes

What is the minimum required annual benefit level increase in long-term care policies to protect the insured from inflation?

5%

Which of the following is a requirement for standard Medicare supplement plans?

All plans must offer the core benefits

Which of the following actions would be considered an offer?

An applicant submitting the application

Who has the authority to make changes to an insurance contract?

An executive officer of the company

An insured has a policy in which the death benefit remains level while the premium increases, and is renewable without proof of insurability. What kind of policy is this?

Annually renewable term

To be eligible for coverage under the Health Insurance Marketplace, an applicant must meet all of the following qualifications EXCEPT

Have been previously insured by a private insurer.

Which of the following is TRUE regarding a joint life policy?

Premium is based on the average age of the insureds.

What is the purpose of Medigap policies?

To cover expenses for Medicare deductibles and coinsurance

What is Stranger-originated life arrangement (STOLI)

is a way to try and bypass the insurable-interest requirement of purchasing life insurance....NOT Legal

When an annuity is surrendered early, the annuitant will receive...

the annuity value minus the surrender charge

Which of the following is true regarding Guaranteed Renewable health insurance policies?

- They must be renewed if the insured pays the premium. - Premiums normally increase at time of renewal - A Guaranteed Renewable Health Insurance policy can have increasing premiums at time of renewal.

According to the Family Medical Leave Act (FMLA), employees are entitled to how many workweeks of leave per year for an eligible condition?

12

Social Security disability is defined as the inability to engage in any substantially gainful activity by reason of a physical or mental impairment that will last for at least

12 months

To be eligible for group insurance for its members, an association group must have at least how many members?

50

How long is a temporary license valid in New York?

90 Days

Adults younger than 30 and individuals who have hardship exemption may cover essential benefits by purchasing

A catastrophic plan.

All of the following features of a medical plan are expressed as a set dollar amount EXCEPT

Coinsurance.

An individual borrowed money at the bank to send his daughter to college. Instead of purchasing Credit Life insurance, he used an existing life insurance policy to secure the debt. This would be considered a/an...

Collateral assignment

Which of the following types of health insurance options will generally cover any sickness or accidents?

Comprehensive policy

Which of the following is NOT an IRS requirement for a qualified retirement plan?

The plan must favor shareholders.

In insurance policies, the entire contract is made up of which of the following?

The policy and a copy of the application, stapled together

What type of consideration does the proposed insured offer to an insurance company?

The premium plus the statements in the application

Of $10,000 in premiums a producer wrote over the past year, $3,000 came from sales to a business which employs the producer's spouse. This is considered....

A legal practice

After an insured's death, the insurer determined that the insured misstated his age on the application for life insurance. What action will the insurer likely take in this case?

Adjust the death benefit to the amount that the premium at the correct age would have purchased

The benefit amount under a long-term care (LTC) policy is usually expressed as a fixed dollar amount per

Day

In a group policy, the contract is between the insurance company and the

Employer.

Under which installment option does the annuitant select the amount of each payment, and the insurer determines how long they will pay benefits?

Fixed amount

Which of the following types of policies are issued by stock companies?

Participating

Health plans offered through health insurance exchanges are considered

Qualified.

Unlike the dividend itself, the interest earned on dividends is

Taxable.

When an insured chooses the indemnity method of benefit payment, the insurer will pay

The fixed benefit amount, regardless of the actual charge.

When delivering a policy to an insured, an agent collects both the premium and a document verifying that the insured has not been injured or suffered any illnesses since completing the application. This is called

A Statement of Good Health

Disclosure statements issued to an applicant for a Medicare Supplement policy in this state must include or prominently display all of the following information EXCEPT

A commission payable to the producer

In order to reduce the premium to the lowest monthly amount on his disability income policy, the insured could choose

A longer elimination period and a shorter benefit period.

A rating method in which the premium is the same for all covered persons, regardless of age, sex, or health status is referred to as

Community rating.

When assessing needs for life insurance, an individual may use retention, which means

Maintaining assets at death.

Due to a large inheritance, a policy owner no longer needs a life insurance policy and agrees to sell it to a third party for more than its cash value. This type of transaction is called a

Life settlement.

The term "subscriber" is most commonly associated with which type of medical plan?

Managed care

An annuity pays a monthly amount for the remainder of the annuitant's life. If death occurs before the principal is exhausted, the remaining amount will be paid to a designated beneficiary. Which payment option has this annuitant selected?

Refund life

Which of the following practices would be allowed in regards to life settlements?

Sharing commissions with more than one licensed life settlement brokers

What is a primary difference between an HMO and a traditional insurance company?

The HMO provides both the financing and patient care for its members, while traditional companies provide the financing only.

When a fixed annuity owner pays his/her insurance company a monthly annuity premium, where is this money placed?

The insurance company's general account

An agent who solicits and files applications for the sale of life insurance represents

The insurer.

Under what circumstances will the Superintendent issue a replacement life settlement broker's license?

The license is active, but has been lost or destroyed.

The assignment provision in a life insurance policy allows the policyowner to change

The ownership of the policy.

The General Information section of the life insurance application includes all of the following information about the applicant EXCEPT

Income.

Which of the following types of health policies cover medical and hospital expenses, and have deductibles, coinsurance and high maximum limits?

Major medical policies

All of the following characteristics of a group are considered in group underwriting EXCEPT

Medical conditions.

Which of the following riders provides for a waiver of premium when the policyowner and the insured are NOT the same person?

Payor benefit

An individual decides that since he is going to die someday anyway, and since he will be covered by insurance until then, he might as well drink and smoke. From the underwriter's perspective, this is an example of

Morale hazard

Regular premium payments made to purchase an individual nonqualified annuity are

Nondeductible.

Denying insurance coverage on the basis of a person's marital status is

Considered unfair discrimination.

In which of the following types of temporary insurance protection does the death benefit NOT change throughout the life of the policy?

Level term

An employee is insured for vision care under the employer's group health insurance. The employee had an exam and purchased a new pair of glasses 9 months ago. When will the employee be able to get another pair of glasses under this coverage?

In 3 months (1 pair every 12 months)

When dividends are available to the owner of a participating policy, which of the following dividend options can the policy owner exercise?

Apply the dividends to reduce the next year's premiums

Who maintains the rights in an annuity?

The owner

If an insurer pays compensation to an agent for the sale of a Medicare supplement policy, the first-year commission CANNOT exceed what percentage of the renewal commission for servicing the policy in the second policy year?

200%

The maximum period of time an employee may be entitled to benefits through the New York State Disability Program is

26 weeks during 52 consecutive calendar weeks

What standards are used to determine premium rates under the Affordable Care Act (ACA)?

- Family composition - Age - Tobacco use - Geographic area

If an annuitant selects the straight life annuity settlement option, in order to receive all of the money out of the contract, the annuitant would need to

Live at least to the age of life expectancy.

Under a key person policy, the key employee is the

Insured.

All of the following statements regarding Medicare Supplement insurance are true EXCEPT

Insurers use the traditional risk rating of preferred, standard, and substandard in underwriting.

Which of the following is true about Medicaid?

It is funded by the state and the federal government

Which of the following is known as a business continuation agreement?

Key person policy

Under a universal life insurance policy, policyowners have a choice between what two types of premiums?

Minimum premium and target premium

What Medicare Advantage Plan is offered through private insurance companies?

Private fee-for-service

Which of the following premium payment modes would result in the highest overall premium for a year's worth of life insurance?

Monthly

In insurance, the persistency rate compares...

the number of policies in force as of the current premium due date to those in force as of the preceding due date In other words: the proportion of policyholders who continue to pay their renewal premium - high persistency rate = good & shows customer satisfaction - low persistency rate = bad & shows inability to retain customers

An insured owns a disability policy and is in an accident which leaves him permanently blind. Which of the following provisions in a disability policy would qualify the insured for benefits, even if the insured is able to resume working?

Presumptive Disability

To qualify for waiver of premium benefit, an insured must meet the policy's definition of

Total disability.

Which of the following types of policies allows the policy owner to skip premium payments, provided that there is enough cash value in the policy to cover the premium amount?

Universal life