Life and Health
What is a risk retention group?
An insurance organization that most often addresses a commercial casualty concern
If an insurance company makes a statement that its policies are guaranteed by the existence of the Insurance Guaranty Association, that would be considered
An unfair trade practice.
The death protection component of Universal Life Insurance is always
Annually Renewable Term
All of the following can be insurers EXCEPT
Bankers.
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.
Medicare Part B covers dental expense resulting
accident only
higher stop loss
lower premiums
The two types of assignments are
Absolute and collateral.
When must the Medicare Supplement Buyer's Guide be presented?
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
All of the following are requirements of eligibility for Social Security disability income benefits EXCEPT
Being age 65.
What happens when a policy is surrendered for its cash value?
Coverage ends and the policy cannot be reinstated
Variable life insurance producer must register w
FINRA
What does "level" refer to in level term insurance?
Face amount
All of the following are factors that an underwriter could use to select and classify risk EXCEPT
National origin.
Jordan purchased a "core policy" (Plan A) to supplement his Medicare coverage. Following a stay in the hospital, Jordan found that her supplemental coverage paid for all of the following EXCEPT
Part A deductible.
Which type of dental treatment addresses the supporting tissue of teeth?
Periodontics
An insured who has an Accidental Death and Dismemberment policy loses her left arm in an accident. What type of benefit will she most likely receive from this policy?
The capital amount in a lump sum
An individual applied for an insurance policy and paid the initial premium. The insurer issued a conditional receipt. Five days later the applicant 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 (later than application)
Hospital indemnity/hospital confinement indemnity policy will provide payment based on
The number of days confined in a hospital.
Catastrophic plans
low prem., high deductible
Another name for medicare advantage plan
medicare select
bridgework is
prosthodontics dental care
Accumulation at interest is
retained by the company and taxable whether the policy receives it or not
HIPPA portability covers
self-employed, pregnant women, mentally ill
HMO pays w/
services not reimbursement
two major causes of loss (or perils) covered under a health insurance policy
sickness and accident
When a life insurance policy stipulates that the beneficiary will receive payments in specified installments or for a specified number of years, what provision prevents the beneficiary from changing or borrowing from the planned installments?
spendthrift provision
medicaid sponsored by
state and fed
Not a policy replacement
term conversion to whole
An employee will be taxed on the cost of group life insurance paid by the employer if the amount of coverage exceeds
$50,000
An insured owns a $50,000 whole life policy. At age 47, the insured decides to cancel his policy and exercise the extended term option for the policy's cash value, which is currently $20,000. What would be the face amount of the new term policy?
$50,000
An insured was involved in an accident and could not perform her current job for 3 years. If the insured could reasonably perform another job utilizing similar skills after 1 month, for how long would she be receiving benefits under an "own occupation" disability plan?
2 years
would authorize the commingling of premiums with the agent's personal funds?
A letter of consent from the principal
For what time period can coverage be excluded on permissible pre-existing conditions applicable to a Medicare supplement insurance policy?
A policy not purchased during the open enrollment period and which does not replace an existing Medicare supplement policy, can exclude coverage on permissible pre-existing conditions for a period of up to 6 months.
Rider that pays income during 6-month waiting period before SS benefits
Additional Monthly Benefit
A Universal Life Insurance policy is best described as a/an
Annually Renewable Term policy with a cash value account.
Which of the following is NOT true of Section 1035 Policy Exchanges?
Any exchange made under Section 1035 of the Internal Revenue Code must be completed within 30 days.
In disability income insurance, if an insured is considered disabled if they cannot perform any job they are suited for by prior education, training or experience, they fall under which definition of total disability?
Any occupation
When an insurer offers services like preadmission testing, second opinions regarding surgery, and preventative care, which term would best apply?
Case management provision
What is an important feature of a dental expense insurance plan that is NOT typically found in a medical expense insurance plan?
Diagnostic and preventive care
Which of the following terms is used to name the nontaxed return of unused premiums?
Dividend
The provision which states that both the policy and a copy of the application form the contract between the policyowner and the insurer is called the
Entire contract.
Which of the following statements is true regarding LTC insurance?
Every policy must offer nonforfeiture benefits to the applicant.
A man wants to buy a life insurance policy in which he can count on guaranteed minimum benefits. Which type should he buy?
Fixed
In disability income insurance, the own occupation definition of disability applies
For the first 2 years of a disability.
Which of the following health care plans would most likely provide the insured/subscriber with comprehensive health care coverage?
HMO
Issue age policy premiums increase in response to which of the following factors?
Increased benefits
The premium is guaranteed for an initial period and then the insurer can charge up to a maximum premium charge in what type of policy?
Indeterminate Premium
Which of the following entities must approve all Medicare supplement advertisements?
Insurance Commissioner or Director
Provided by skilled medical personnel to those who need occasional medical assistance or rehabilitative care
Intermediate Care
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
Which of the following is true regarding health insurance?
It could provide payments for loss of income.
An applicant is discussing his options for Medicare supplement coverage with his agent. The applicant is 65 years old and has just enrolled in Medicare Part A and Part B. What is the insurance company obligated to do?
Offer the supplement policy on a guaranteed issue basis
Which of the following are responsible for making premium payments in an HMO plan?
Subscribers
Which is NOT true about beneficiary designations?
The beneficiary must have insurable interest in the insured.
A corporation is the owner and beneficiary of the key person life policy. If the corporation collects the policy benefit, then
The benefit is received tax free.
The policyowner of an adjustable life policy wants to increase the death benefit. Which of the following statements is correct regarding this change?
The death benefit can be increased by providing evidence of insurability.
The market value adjustment in modified guaranteed annuities refers to which of the following?
The difference between the contracted interest rate and the rate at surrender
When would a 20-pay whole life policy endow?
When the insured reaches age 100
who determines if particular group can be excluded from group health coverage
employer
Whole life surrendered for forfeiture value automatic option
extended term
A new employee who meets HIPAA eligibility requirements must be issued health coverage on what basis?
guaranteed
Reduce coinsurance on major medical insurance insured can expect
higher monthly prem
Survivorship life based on _______ and has _______ prem. compared to joint life
joint age; lower
Insured in business disability insurance
key employees
rider provides payment of part of DB if terminal illness
living needs
On its advertisement, a company claims that it has funds in its possession that are, in fact, not available for the payment of losses or claims. The company is guilty of
misrepresentation
PPACA health care tax credit excludes
people with public coverage such as Medicaid
Not renew optionally renewable on
premium due dates
Business overhead expense insurance taxation
premiums are tax-deductible and benefits are taxable
The restitution may not exceed
the amount of the actual economic damage, subject to the policy limits.
Which of the following is NOT a feature of a noncancellable policy?
the insurer may terminate the contract only at renewal for certain conditions.
An annuitant dies before the effective date of a purchased annuity. Assuming that the annuitant's wife is the beneficiary, what will occur?
the interest will continue to accumulate tax deferred.
considered a nonmedical insurance application?
the medical information is completed by the applicant and the agent only
For how many days of skilled nursing facility care will Medicare pay benefits?
100
Eligible for tax credits under ACA
100-400% FPL
In order to collect Social Security disability benefits, the claimant must be able to demonstrate that the disability will last at least
12 months.
A temporary agent's license is valid for what time period?
15 months
Max penalty for violating fair credit reporting act
$2,500
Which of the following long-term care benefits would provide coverage for care for functionally impaired adults on a less than 24-hour basis?
Adult day care
Which of the following long-term care benefits would provide coverage for care for functionally impaired adults on a less than 24-hour basis?
Adult day care (need help with ADLs but not around clock)
In reference to the standard Medicare Supplement benefits plans, what does the term standard mean?
All providers will have the same coverage options and conditions for each plan.
When must an IRA be completely distributed when a beneficiary is not named?
December 31 of the year that contains the fifth anniversary of the owner's death.
Which of the following is NOT a cost-saving service in a medical plan?
Denial of coverage
goal of the HMO
Early detection through regular checkups
What are the two components of a universal policy?
Insurance and cash account
General enrollment Medicare part B
Jan 1 to March 31
A married couple's retirement annuity pays them $250 per month. The husband dies and his wife continues to receive $125.50 per month for as long as she lives. When the wife dies, payments stop. What settlement option did they select?
Joint and survivor
NOT covered under Plan A in Medigap insurance?
Medicare Part A deductible
All of the following are examples of risk retention EXCEPT
Premiums.
An underwriter may reject an application for health insurance if the rejection is based upon which of the following?
Prescription usage
Which of the following statements is an accurate comparison between private and government insurers?
Private insurers may be authorized to transact insurance by state insurance departments.
Traditional IRA contributions are
Tax deductible.
What type of insurance can be obtained through SGLI by members of the armed forces?
Term group life insurance
Your client has a Social Insurance Supplement (SIS) rider on his disability policy. After he becomes disabled, he receives payments from the company. Shortly thereafter, he also begins receiving Social Security benefit payments. Which of the following will happen?
The SIS payment will be reduced dollar-for-dollar by the Social Security benefit payment.
What happens if a non-member physician is utilized under the Point-Of-Service plan?
The attending physician will be paid a fee for service, but the member patient will have to pay a higher coinsurance amount.
All of the following are ways in which a Major Medical policy premium is determined EXCEPT
The average age of the group.
An employee insured under a group health policy is injured in a car wreck while performing her duties for her employer. This results in a long hospitalization period. Which of the following is true?
The group plan will not pay because the employee was injured at work.
All of the following would be factors in rating a health insurance policy EXCEPT
The nationality of the applicant.
Which of the following policies would have an IRS required corridor or gap between the cash value and the death benefit?
Universal Life - Option A
Which of the following is a statement that is guaranteed to be true, and if untrue, may breach an insurance contract?
Warranty
Purpose of surrender charge in deferred annuity
compensate company for loss of investment value
managed care plan
comprehensive case management, preventive care, controlled access providers; NOT risk retention
Beneficiary and insured
does not need insurable interest
What type of whole life insurance policy has premiums that are adjusted so that during the first years of the policy, the premiums are lower than those of a straight whole life policy, and in subsequent years the premiums are higher than those of a straight whole life policy?
modified life
The premium is guaranteed for an initial period and then the insurer can charge up to a maximum premium charge in what type of policy?
ndeterminate Premium
Attempting to determine how much insurance an individual would require based upon their financial objectives is known as
needs approach
Reduction of prem. uses dividend to reduce
next years prem
Which of the following is true regarding a term health policy?
nonrenewable.
If an insurance company makes a statement that its policies are guaranteed by the existence of the Insurance Guaranty Association, that would be considered
unfair trade practice
replacement policy free-look
20 days
written notice of claim must be submitted to insurer within
20 days
Under a nonscheduled plan, what portion of the balance could an insured expect to pay for basic services?
20%
Max age for catastrophic plan
30
Free look for LTC
30 days
Licensees inform commissioner of name/address change within
30 days
representative must submit an appropriate application to the Commissioner and the Commissioner will, within _____________ issue a temporary license or reject the application
30 days
Employer health plans must provide primary coverage for individuals with end-stage renal disease before Medicare becomes primary for how many months?
30 months
COBRA covers employees and their dependents for
36 months
For how many years is an insurer required to maintain a complete file of its advertisements?
4 years
What is the elimination period for Social Security disability benefits?
5 months
The minimum number of credits required for partially insured status for Social Security disability benefits is
6 credits during last 13-quarter period
producer's license can be reinstated retroactively it is has been expired
60 days
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 (doesn't cover curative measures)
What is franchise insurance?
It is health coverage for small groups whose numbers are too small to qualify for true group insurance
An insurer invests the money it receives from premiums paid by its insureds. Which of the following is TRUE regarding the interest earned on these investments?
It is used to lower premiums.
Which of the following is NOT true regarding the Life with Guaranteed Minimum annuity settlement option?
It provides a higher monthly benefit than a pure life annuity.
Which renewability provision allows an insurer to terminate a policy for any reason, and to increase the premiums for any class of insureds?
Optionally renewable (insurer can also increase premium for any class)
A rider attached to a life insurance policy that provides coverage on the insured's family members is called the
Other-insured rider.
A participating insurance policy may do which of the following? and based on what
Pay dividends to the policyowner based upon actual mortality cost, interest earned and costs
Which of the following will be included in a policy summary?
Premium amounts, surrender values, DB
Regarding the taxation of Business Overhead policies,
Premiums are deductible and benefits are taxed.
Which of the following is TRUE regarding a policy issued to a labor union insuring members of the organization for the benefit of persons other than the union or organization?
The members eligible for insurance under the policy must be all the members of the union or organization. b) The premiums for the policy must be paid either from funds of the union, or from funds contributed by the insured members specifically for their insurance, or from both. c) An insurer may exclude or limit the coverage on any person who provides unsatisfactory evidence of insurability to the insurer.
What is the advantage of reinstating a policy instead of applying for a new one?
The original age is used for premium determination (need proof of insurability)
What is the waiting period on a Waiver of Premium rider in life insurance policies?
6 months
Employees in a health benefit plan for a small employer may have to pay deductibles and cost-sharing for pre-existing conditions for what period of time?
6 months after becoming eligible for coverage
How long is an open enrollment period for Medicare supplement policies?
6 months
LI can be backdated to affect lower premium for up to
6 months
If a licensee intentionally violates the Insurance Code, what is the maximum monetary penalty that he or she would be required to pay?
$100,000
Which of the following Life Insurance policies would be considered interest sensitive?
) Universal life
Legal amount of time between completing authorization form and disclosure of information
1 year
Any licensed person whose activities affect interstate commerce and who knowingly makes false material statements related to the business of insurance may be imprisoned for up to
10 years, if jeopardizes insurer up to 15 years
According to OBRA, what is the minimum number of employees required to constitute a large group?
100
LTC CE hours
2 hours
Following hospitalization because of an accident, Bill was confined in a skilled nursing facility. Medicare will pay full benefits in this facility for how many days?
20
Existing insurers must provide policyowners with a policy summary for the existing life insurance how soon after receiving the written communication and replacement?
20 days
Treatment in a skilled nursing facility is covered in full for
20 days
How many year(s) after furnishing proof of loss does the insured have to take legal actions against the insurer?
3
Notify consumer in writing of investigative consumer report within
3 days
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
An insurance producer is required to notify the Commissioner of any felony convictions within how many days of the conviction?
30 days
Inform commissioner of name/address change within
30 days
Full time employee
30 hours per week
If a consumer requests additional information concerning an investigative consumer report, how long does the insurer or reporting agency have to comply?
5 days
Currently/partially insured under Social Security if
6 credits/quarters of coverage during previous 13 quarters
must submit proof of loss within
90 days
The term "illustration" in a life insurance policy refers to
A presentation of nonguaranteed elements of a policy.
Most health insurance policies exclude all of the following EXCEPT
Accidental injury.
If an annuitant dies during the accumulation period, what benefit (if any) will be included in the annuitant's estate?
Accumulated cash value
At what point must an Outline of Coverage be delivered?
At the time of application or upon delivery of the policy
A dental plan that provides coverage based upon a specified maximum scheduled amount for each procedure and pays on a 'first dollar' basis with no deductible or coinsurance is a
Basic or scheduled plan.
A man is still employed at age 65 and is now eligible for Medicare. He wants to know what health insurance coverage he is eligible to receive. Which of the following options are available to him?
Both group health and Medicare
After a person's employment is terminated, it is possible to obtain individual health insurance after losing the group health coverage provided by the employer. Which of the following is NOT true?
By law, the new, individual policy must provide the same benefits as the group insurance policy.
When a policyowner designates a group of individuals as the beneficiary of a life insurance death benefit without specifically naming the individuals, this is called
Class designation.
Which of the following provisions must be included on the first page of a Medicare supplement policy, which states the insurer's right to change premium amounts?
Continuation/renewal provision
If a beneficiary wants a guarantee that benefits paid from principal and interest would be paid for a period of 10 years before being exhausted, what settlement option should the beneficiary select?
Fixed period
An insured 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
Which of the following is another name for a primary care physician in an HMO?
Gatekeeper
Which of the following policies is characterized by a provision where the premiums are lower in the early years of the policy and increase over time to a point where they become level for the remainder of the policy?
Graded premium whole life
If a life policy allows the policyowner to make periodic additions to the face amount at standard rates, without proving insurability, the policy includes a
Guaranteed insurability rider.
What is the benefit of choosing extended term as a nonforfeiture option?
It has the highest amount of insurance protection.
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.
A health insurance plan which involves financing, managing, and delivery of health care services and involves a group of providers who share in the financial risk of the plan or who have an incentive to deliver cost effective service, is called
Managed care plan.
medicare policy requires insureds to use specific healthcare providers and hospitals (restricted network provisions)
Medicare SELECT
On its advertisement, a company claims that it has funds in its possession that are, in fact, not available for the payment of losses or claims. The company is guilty of
Misrepresentation.
What type of whole life insurance policy has premiums that are adjusted so that during the first years of the policy, the premiums are lower than those of a straight whole life policy, and in subsequent years the premiums are higher than those of a straight whole life policy?
Modified life
Which of the following is NOT true regarding the needs approach method of determining the value of an individual's life?
Need is predicted using the number of years until the insured's retirement.
Attempting to determine how much insurance an individual would require based upon their financial objectives is known as
Needs approach.
After a brief emergency room visit, an insured discovered that his plan required a larger copayment for an out-of-network provider than for a local, in-network provider. Under the PPACA provisions, this is
Not permitted.
When is the open enrollment period through Maryland Health Connection?
November 1 through January 31
Which option for Universal life allows the beneficiary to collect both the death benefit and cash value upon the death of the insured?
Option B
An insured purchased an individual life insurance policy with a face amount of $15,000. He pays a premium each month. What type of policy is that?
Ordinary life
Which document helps ensure that full and fair disclosure is provided to the recipient of a policy?
Outline of Coverage
Medicare Part A services do NOT include which of the following?
Outpatient Hospital Treatment
Jordan purchased a "core policy" (Plan A) to supplement his Medicare coverage. Following a stay in the hospital, Jordan found that her supplemental coverage paid for all of the following EXCEPT
Part A deductible
Which of the following applies to partial disability benefits?
Payment is limited to a certain period of time.
When health care insurers negotiate contracts with health care providers or physicians to provide health care services for subscribers at a favorable cost, it is called
Preferred Provider Organization (PPO).
Another name for a substandard risk classification is
Rated.
Which of the following insurance options would be considered a risk-sharing arrangement?
Reciprocal
An insured committed suicide one year after his life insurance policy was issued. The insurer will
Refund the premiums paid.
What method do insurers use to protect themselves against catastrophic losses?
Reinsurance
When an employee is still employed upon reaching age 65 and eligibility for Medicare, which of the following is the employee's option?
Remain on the group health insurance plan and defer eligibility for Medicare until retirement
A policyowner who is also the insured wants to name her husband as the beneficiary of her life policy. She also wishes to retain all of the rights of ownership. The policyowner should have her husband named as the
Revocable beneficiary.
Roger has insurance coverage through his company. Who owns the policy?
Roger's employer
If an immediate annuity is purchased with the face amount at death or with the cash value at surrender, this would be considered a
Settlement option.
When a life insurance policy stipulates that the beneficiary will receive payments in specified installments or for a specified number of years, what provision prevents the beneficiary from changing or borrowing from the planned installments?
Spendthrift provision
An applicant buys a nonqualified annuity, but dies before the starting date. For which of the following beneficiaries would the contract's interest NOT be taxable?
Spouse
Which state has jurisdiction over a group policy that covers individuals that reside in more than one state?
The state in which the policy was delivered
When the breadwinner that is insured by a Family Policy dies, what rights are provided to other family members that are covered under the policy?
They can convert their coverage to permanent life insurance without evidence of insurability.
Which of the following is NOT a goal of risk retention?
To minimize the insured's level of liability in the event of loss
Who has the legal title of the property in a trust?
Trustee
Medicare Part B covers dental expense resulting from
accident only
Doctor accepts Medicare approved amount
assignment
Restoring insured financially
indemnity
List of losses covered by insurer
insuring clause
General disability policies do not cover losses caused by
war, military service, intentionally self-inflicted injuries, overseas residence, or injuries suffered while committing or attempting to commit a felony.
If a policyowner transfers or gives away a life insurance policy _______________ prior to his/her death, the entire face amount of the policy will be included in his or her taxable estate.
within 3 years