Life & Health Insurance

An insured is covered by a partially contributory group disability income plan that pays benefits of $4000 a month. If the insured pays 25% of the monthly premium, how much of the monthly benefit would be taxable?

$3000

If a new individual long-term care policyholder is not satisfied with a new policy, within how many days can be insured return the policy for a full premium refund?

30 days

Viatical contracts require a free-look period of

30 days from the date of contract execution, or 15 days from the receipt of the first check

In which Medicare supplemental policies are the core benefits found?

all plans

Which of the following statements regarding Business Overhead Expense policies is NOT true?

benefits are usually limited to six months

In disability income insurance, the own occupation definition of disability applies

for the first 2 years of a disability

One of the advantages of a family life insurance policy that provides coverage for children is that it

may be converted to permanent insurance for the children without requiring evidence of insurability

Which of the following is correct regarding the taxation of group medial expense premiums and benefits?

premiums are tax deductible and benefits are not taxed

In the transaction of insurance, which of the following is considered to be representing the client?

the broker

An employee is insured under her employers group life plan. If she terminates her group coverage, which of the following statements is INCORRECT?

the insured may choose to convert to term or permanent individual coverage

In order for an insured under Medicare Part A to receive benefits for care in a skilled nursing facility, which of the following conditions must be met?

the insured must have first been hospitalized for 3 consecutive days

Under an extended term nonforfeiture option, the policy cash value is converted to

the same face amount as in the whole life policy

An insured has chosen joint and 2/3 survivor as the settlement option. What does this mean to the beneficiaries?

the surviving beneficiary will continue receiving 2/3 of the benefit paid when both beneficiaries were alive

How is health coverage for newly-adopted children under a parent's policy different from health coverage for newborns?

there is no difference

Which of the following is true regarding benefits paid to disable employees?

they may be subject to taxation if the premium was paid by the employer

What is the typical deductible for basic surgical expense insurance?

$0

An insured has a major medical policy with a $500 deductible and 80/20 coinsurance. The insured is hospitalized and sustains a $2500 bill. What is the maximum amount that the insured will have to pay?

$900

How long can a person hold a consultant's license before it expires?

2 years

COBRA applies to employers with at least

20 employees

An Internal Revenue Code provision that specifically provides for an individual retirement plan for public school teachers is a

403(b) Plan (TSA)

What is the elimination period for Social Security disability benefits?

5 months

How long is an open enrollment period for Medicare supplement policies?

6 months

All of the following would NOT be considered eligible expenses under an ICHIA policy EXCEPT

AIDS treatment

A Universal Life Insurance policy is best described as an

Annually Renewable Term policy with a cash value account

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

_______ are plans specifically for self-employed and their employees

HR-10 (Keogh Plan)

Shortly after a replacement transaction on a Medicare supplement policy, the insured decided to cancel the policy, but is unsure whether the free-look provision applies. The insured could find that information in the

Notice Regarding Replacement

The part of Medicare that helps pay for inpatient hospital care, inpatient care in a skilled nursing facility, home health care and hospice care, is known as

Part A

Which type of retirement account allows contributions to continue beyond age 70 1/2 and does not force distributions to start at age 70 1/2?

Roth IRA

According to the Life Insurance Replacement Regulation, Rule 16.1, replacement of life insurance is defined as a process in which

a new policy is bought and an old policy is converted to a Reduced Paid-up policy

All of the following individuals may qualify for Medicare health insurance benefits EXCEPT

a retired person age 50

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

Jeff is 45 years old and currently owns life insurance, but is considering purchasing a new Universal Life policy. Which of the following scenarios would NOT involve replacement?

allowing his one-year term policy to expire

All of the following are requirements of eligibility for Social Security disability income benefits EXCEPT

being age 65

Which of the following is NOT specified under Rule 39, AIDS & HIV underwriting?

benefits triggers

When an insurer offers services like preadmission testing, second opinions regarding surgery, and preventative care, which term would best apply?

case management provision

What does "liquidity" refer to in a life insurance policy?

cash values can be borrowed at any time

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 provision

Which of the following will NOT be an appropriate use of a deferred annuity?

creating an estate

Concerning group Medical and Dental insurance, which of the following statements is INCORRECT?

employee benefits are tax deductible the year in which they were received

In insurance transactions, fiduciary responsibility means

handling insurer funds in a trust capacity

Which of the following is an eligibility requirement for all Social Security Disability Income benefits?

have attained fully insured status

Which of the following is true about a defined benefit plan?

high-salaried employees with only a few years until retirement receive the highest contribution

Which of the following is INCORRECT concerning taxation of disability income benefits?

if paid by the individual, the premiums are tax deductible

Which of the following riders would NOT increase the premium for a policyowner?

impairment rider

What is the tax consequence of amounts received from a Traditional IRA after the money was left in the tax-deferred account by the beneficiary?

income tax on distributions and no penalty

Concerning Medicare Part B, which statement is INCORRECT

it is fully funded by Social Security taxes (FICA)

Medicare Part A services do NOT include which of the following?

outpatient hospital treatment

For an individual who is NOT covered by an employer-sponsored plan, IRA contributions are

tax deductible

Which of the following does NOT have to be disclosed in a long-term care (LTC) policy?

the aggregate amount of premiums due

A 60 year old participant in a 401(k) plan takes a distribution and rolls it over to an IRA within 60 days. Which of the following is true?

the amount of the distribution is reduced by the amount of a 20% withholding tax

A life insurance policy does not have a war clause. If the insured is killed during a time of war, what will the beneficiary receive from the policy?

the full death benefit

Which of the following are generally NOT considered when underwriting group insurance?

the insureds' medical history

Under a SIMPLE plan, which of the following is TRUE regarding taxation on both contributions and earnings?

they are tax deferred until withdrawn

An insured owes his insurer a premium payment. Since then, he incurs medical expenses. The insurer deducts the unpaid premium amount from the claim amount and pays the insured the difference. What provision allows for this?

unpaid premium

A medical expense policy that establishes the amount of benefit paid based upon the prevailing charges which fall within the standard range of fees normally charged for a specific procedure by a doctor of similar training and experience in that geographic area is known as

usual, customary, and reasonable

Rule 18 governing Accident and Sickness Insurance Advertising includes all of the following EXCEPT

want ads soliciting new agents

Which of the following describes the taxation of an annuity when money is withdrawn during the accumulation phase?

withdrawn amounts are taxed on a last in, first out basis

Which of the following is NOT a factor in determining qualifications for Social Security disability benefits?

worker's occupation

Which of the following represents controlled business?

writing policies for oneself and one's family

A noncontributory group disability income plan has a 30 day waiting period and offers benefits of $2000 a month. If an employee is unable to work for 7 months due to a covered disability, the employee will receive

$12000, all of which is taxable

An insured pays a monthly premium of $100 for her health insurance. What would be the duration of the grace period under her policy?

10 days

To be eligible under HIPAA regulations, for how long should an individual converting to an individual health plan have been covered under the previous group plan?

18 months

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

What is the maximum age for qualifying for a catastrophic plan?

30

Free look period on LTC policies?

30 days

What is the period of coverage for events such as death or divorce under COBRA?

36 months

One of the differences between group underwriting and individual underwriting is that there is little or no medical information required regarding plan participants in groups of

50 or more

What is the waiting period on a Waiver of Premium rider in life insurance policies?

6 months

Under the uniform required provisions, proof of loss under a health insurance policy normally should be filed within

90 days of a loss

All of the following are correct about the required provisions of a health insurance policy EXCEPT

a reinstated policy provides immediate coverage for an illness

A deductible is

a specified dollar amount that the insured must pay first before the insurance company will pay the policy benefits

Which of the following is TRUE about credit life insurance?

creditor is the policyowner

All of the following could be considered rebates if offered to an insured in the sale of insurance EXCEPT

dividends from a mutual insurer

In life insurance policies, cash value increases

grow tax deferred

A father purchases a life insurance policy on his teenage daughter and adds the Payor Benefit rider. In which of the following scenarios will the rider waive the payment of premium?

if the father is disabled for more than 6 months

What type of insurance would be used for a Return of Premium rider?

increasing term

What type of annuity guarantees to pay an income to the annuitant each year as long as he lives, and upon death, the annuity will refund the remaining payments to a beneficiary?

installment refund annuity

When a person applies for Medicare supplement insurance, whose responsibility is it to confirm that the applicant does not already have accident or sickness insurance in force?

insurer

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

Sue has an HSA and is planning to leave her current job for a new job. When she leaves her job, what will happen to her HSA?

it will continue because it is owned by Sue, not her employer

Variable Life Insurance is based on what kind of premium?

level fixed

Which is the appropriate action by the insurer if a prospective insured submitted an incomplete application?

return the application to the applicant for completion

In major medical insurance policies, when the insured's share of coinsurance reaches a certain amount, the insured is no longer obligated to pay it. This feature is known as

stop-loss

If an Indiana family has a low level of income and cannot afford health insurance, what program could help

the Indiana Children's Health Insurance Program

Which of the following is NOT covered under Plan A in Medigap insurance?

the Medicare Part A deductible

Which of the following is TRUE regarding variable annuities?

the annuitant assumes the risks on investment

All of the following are true regarding the Indiana Comprehensive Health Insurance Plan EXCEPT

the insured can be charged a premium of up to 100% of the average standard premium charged by the state's top 5 insurers

An employee quits his job on May 15 and doesn't convert his Group Life policy to an individual policy for 2 weeks. He dies in a freak accident on June 1. Which of the following statements best describes what will happen?

the insurer will pay the full death benefit from the group policy to the beneficiary

Two people have formed a partnership known as the A & B Insurance Agency. After a serious car accident, one of the partners was deceased and the other became totally disabled. To finish servicing the company's existing accounts, the Commissioner could grant a temporary license to all of the following EXCEPT

the partnership itself

Which of the following best describes what the annuity period is?

the period of time during which accumulated money is converted into income payments

Which of the following employees insured under a group life plan would be allowed to convert to individual insurance of the same coverage once the plan is terminated?

those who have been insured under the plan for at least 5 years

Which of the following is NOT the purpose of HIPAA?

to provide immediate coverage to new employees who had been previously covered for 18 months

Which of the following will NOT qualify for a limited lines producer license?

a person selling endowments

Which option is being utilized when the insurer accumulates dividends at interest and then uses the accumulated dividends, plus interest, and the policy cash value to pay the policy up early?

paid up option

Which of the following applies to partial disability benefits?

payment is limited to a certain period of time

Which of the following provisions is mandatory for health insurance policies?

physical examination and autopsy

A woman obtains a health coverage through the Marketplace on October 1. Two weeks later she finds out that she is 3 months pregnant. Which of the following is true about coverage for pregnancy?

pregnancy will be covered immediately

What is a penalty tax for nonqualified distributions from a health savings account?

20%

Under the ACA a special enrollment period allows an individual to enroll in a qualified health plan within how many days of a qualifying event?

60 days