NYS Health and Life Insurance
Under normal circumstances, how long is a temporary license in this state valid for
90 days
If a person, firm, association or corporation conducts insurance business in New York without a certificate of authority the penalty of the first violation is
$1,000
All other factors being equal, which of the following premium modes would result in the lowest overall premium
Annual
an employee is covered under cobra. his previous premium payment was $100 per month. his employer now collects $102 each month. why does he pay the extra $2
to cover the employer's administrative costs
which of the following time periods is the general enrollment period for medicare part b
1/1-3/31 each year
The inflation protection feature in long-term care policies issued in this state must provide protection for inflation at what percent annually? -2% -5% -6% -8%
5% In the state of New York, insurers must offer each policyholder an inflation protection feature that provides, at minimum, an increase of 5% for the annual benefit level.
Which of the following individuals must pass a written examination to be licensed as agents? -An applicant who has a Chartered Life Underwriter (CLU) designation -A resident of New York wishing to transact business in New York -A nonresident licensee -A licensee who was licensed on July 1, 1987, to represent any assessment corporation
A resident of New York wishing to transact business in New York None of the above listed individuals must take and pass a written examination in New York to be licensed as an agent, except a New York resident wishing to act as an agent.
in an employer group health insurance plan, the covered employee receives
certificate of insurance
Joe, Larry, and Curly own a small business. They have made a legal arrangement which states that if one of them dies or becomes disabled, the other two will be able to buy the partner's shares. Which term best describes this arrangement? Buy-up Distribution Business Continuation Shares Distribution Business Partner Disability Provision
Business Continuation In a Business Continuation arrangement, the partners of a business can buy shares belonging to a recently deceased or disabled partner.
After issuing a policy, an insurance company discovers that the policyholder concealed information on the application. The insurance company wants to cancel the policy and give back the money the policyholder has paid. This is an example of Refund. Contestability. Renewal. Rescission.
Rescission. Rescission is when a company wants to cancel a policy and returns funds paid.
All of the following are beneficiary designations EXCEPT Specified. Tertiary. Contingent. Primary.
Specified Beneficiary designations determine the order in which benefits will be paid: primary or contingent, which includes secondary and tertiary.
Which of the following is NOT a feature of a guaranteed renewable provision? -The insured has a unilateral right to renew the policy for the life of the contract. -Coverage is not renewable beyond the insured's age 65. -The insured's benefits cannot be reduced. -The insurer can increase the policy premium on an individual basis.
The insurer can increase the policy premium on an individual basis. Guaranteed renewable provision has all the same features that the noncancellable provision does, with the exception that the insurer can increase the policy premium on the policy anniversary date. However, the premiums can only be increased on a class basis, not on an individual policy.
What is the purpose of establishing the target premium for a universal life policy? To accumulate cash value faster To pay up the policy faster To cover all policy expenses To keep the policy in force
To keep the policy in force The target premium is a recommended amount that should be paid on a policy in order to cover the cost of insurance protection and to keep the policy in force throughout its lifetime.
which of the following would be required to become licensed as an insurance producer
a customer service representative who solicits no more than one policy a year
which of the following is true of level term insurance
it is temporary protection
Employer health plans must provide primary coverage for individuals with end-stage renal disease before Medicare becomes primary for how many months? 12 months 24 months 30 months 36 months
30 months The Omnibus Budget Reconciliation Act of 1990 as amended by the Balanced Budget Act of 1997 requires the employer health plan to provide primary coverage for 30 months for individuals with end-stage renal (kidney) disease before Medicare becomes primary.
which of the following statements describes one of the reasons individuals purchase life insurance
it creates an immediate estate
the guaranteed insurability rider allows the owner to purchase additional amounts of life insurance without proof of insurability at all of the following except
purchase of a new home
what is the cost of coverage based based on for group life insurance
the average age and the ratio of men to women
who does the spendthrift clause in a life insurance policy protect
the beneficiary
a life producer applying for a life settlement broker license may be exempt from the prelicensing education and examination requirement if the producer has held an active life license for at least how many years
1 year
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 5 years 12 months 63 days
18 months Under HIPAA regulations, to be eligible to convert health insurance coverage from a group plan to an individual policy, the insured must have 18 months of continuous creditable health coverage.
The Superintendent can examine an authorized fraternal benefit society and property/casualty insurance company once every 12 months. 18 months. 3 years. 5 years.
3 years The Superintendent will make an examination of every authorized fraternal benefit society and property/casualty insurance company at least once every 3 years. Every domestic life insurer must be examined at least once every 5 years.
If payment of a premium is required to provide health insurance coverage for a child of the insured, the insured may be required to notify the company of the child's birth and pay the premium within 30 days. 60 days. 90 days. 180 days.
30 days New York law specifies that the insurer be notified within 30 days of the birth of a newborn.
Under the Affordable Care Act, a special enrollment period allows an individual to enroll in a qualified health plan within how many days of a qualifying event? -10 days -30 days -60 days -90 days
60 days Unless specifically stated otherwise, individuals or enrollees have 60 days from the date of a triggering event to select a qualified health plan.
At what age may an individual make withdrawals from an HSA for nonhealth purposes without being penalized? -55 -59 1/2 -62 -65
65 After age 65, a withdrawal from an HSA used for a nonhealth purposes will be without a penalty, although taxed.
If an individual's license has been revoked, how soon can he or she obtain a new license? -After 1 year of the revocation -Within 12 months, based on the original violation -After 60 days of the revocation -Never; once revoked, the license cannot be reinstated
After 1 year of the revocation No individual, corporation, firm or association whose license has been revoked will be entitled to obtain any license for a period of one year after such revocation, or, if such revocation be judicially reviewed, for one year after the final judgment.
In reference to the standard Medicare Supplement benefits plans, what does the term standard mean? -Coverage options and conditions are developed for average individuals. -All providers will have the same coverage options and conditions for each plan. -Coverage options and conditions comply with the law, but will vary from provider to provider. =All plans must include basic benefits A-N.
All providers will have the same coverage options and conditions for each plan. In reference to the standard Medicare Supplement benefits plans, the term "standard" implies that all providers will have the same coverage options and conditions for each plan.
Your client plans to retire at age 50. He would like to purchase an annuity that would provide income from the time he retires to the age when social security and other pension funds become available. What settlement option should he consider? Annuity certain Fixed annuity Refund Life Variable annuity
Annuity certain Annuity Certain option allows the annuitant to select the time period or the amount for the benefits. Under the installments for a fixed period, distribution begins on a specific date and stops on a specific date.
In a replacement situation, all of the following must be considered EXCEPT -Exclusions. -Assets. -Benefits. -Limitations.
Assets In a replacement situation the agent must be careful to compare the benefits, limitations and exclusions found in the current and the proposed replacement policy.
Which of the following is NOT a prerequisite for an insurance license in New York? Be a state resident on the date of application Pass the required examination Be at least 21 years of age Complete prelicensing education
Be at least 21 years of age The Insurance Code states the minimum age for obtaining an insurance license is age 18.
If the Superintendent finds a licensee in violation of an unfair method or unfair practice he or she will issue a Cease and desist order. Rebate. Revocation of license. Complaint record.
Cease and desist order A cease and desist order means the licensee must stop the violation he or she is suspected of doing.
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? Coverage limitations Continuation provision Premium provision Insurer's rights
Continuation Provision The renewal provision, also known as a continuation provision, must be included on the first page of Medicare supplement policies. This provision explains the right of the insurer to alter premium amounts.
What happens when a policy is surrendered for its cash value? -The policy can be converted to term coverage. -Coverage ends and the policy cannot be reinstated. -Coverage ends but the policy can be reinstated at any time. -The policy can be reinstated by paying back all policy loans and premiums.
Coverage ends and the policy cannot be reinstated Once the cash surrender value option is selected, the coverage is terminated and the policy cannot be reinstated.
Which of the following is true regarding taxation of dividends in participating policies? -Dividends are not taxable. -Dividends are taxable only after a certain amount is accumulated annually. -Dividends are taxable in some life insurance policies and nontaxable in others. -Dividends are considered income for tax purposes.
Dividends are not taxable Dividends are not considered to be income for tax purposes, since they are the return of unused premiums. The interest earned on the dividends, however, is subject to taxation as ordinary income
Which of the following statements is true regarding LTC insurance? -LTC policies must allow a 60-day free-look period. -Every policy must offer nonforfeiture benefits to the applicant. -Every policy must offer reduced paid-up insurance to the applicant. -LTC policies may not include any riders.
Every policy must offer nonforfeiture benefits to the applicant. Long-term care policies or certificates issued or delivered in this state must offer to the applicant nonforfeiture benefits. Reduced paid-up insurance is one of the possible nonforfeiture options, but it is not necessarily required. LTC policies may contain riders, and must offer a 30-day free-look period.
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? Agent Insurer State government Active physician
Insurer Although it is illegal for an applicant to intentionally misrepresent himself in an insurance application, it is the insurer's ultimate responsibility to make sure that the applicant does not already have another accident or sickness policy in force.
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. -It decreases when the oldest child reaches the age of 21. -It increases when a newborn baby is added to the policy. -It decreases when an adopted child is added to the policy.
It remains the same no matter how many children are added to the policy The premium does not change on the inclusion of additional children; it is based on an average number of children.
Which of the following statements about the reinstatement provision is true? -It requires the policyowner to pay all overdue premiums with interest before the policy is reinstated. -It permits reinstatement within 10 years after a policy has lapsed. -It provides for reinstatement of a policy regardless of the insured's health. -It guarantees the reinstatement of a policy that has been surrendered for cash.
It requires the policyowner to pay all overdue premiums with interest before the policy is reinstated. Upon policy reinstatement, the policyowner 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 statements is TRUE about a policy assignment? -It authorizes an agent to modify the policy. -It transfers rights of ownership from the owner to another person. -It is the same as a beneficiary designation. -It permits the beneficiary to designate the person to receive the benefits.
It transfers rights of ownership from the owner to another person. The policyowner may assign a part of the policy (collateral assignment) or the entire policy (absolute assignment).
Which of the following is an example of a limited-pay life policy? Level Term Life Straight Life Life Paid-up at Age 65 Renewable Term to Age 70
Life Paid-up at Age 65 Limited Pay Whole Life premiums are all paid by the time the insured reaches age 65. The policy endows when the insured turns 100. It is the premium paying period that is limited, not the maturity.
A policyowner is reading a statement on the first page of his health insurance policy, which says "this is a limited policy." What is the name of this statement? Policy Limitation Notice Statute of Limitations Limited Benefit Statement Limited Policy Notice
Limited Policy Notice It is required by law that a Limited Policy Notice must be printed on the first page of insurance policies. The statement reads "this is a limited policy," which means that the benefits offered by the policy are limited.
If a settlement option is not chosen by the beneficiary or policyowner, which option will be used? Life income Fixed period Fixed amount Lump sum
Lump sum Upon the death of the insured, or endowment, the contract is designed to pay the proceeds in cash, called a lump sum, unless the recipient chooses an optional mode of settlement.
Which of the following can surrender a deferred annuity contract? -A deferred annuity cannot be surrendered. -Only the annuity owner -Only the insurance company for nonpayment of premiums -The beneficiary after the owner's death
Only the annuity owner If the need arises, a deferred annuity contract may be surrendered only by the annuity owner. At surrender the owner receives the value of the annuity minus a surrender charge.
Which of the following is NOT correct regarding false statements by a person engaged in the business of insurance? -False statements about financial condition of an insurer are unlawful. -Statements made with the intent to deceive are unlawful. -Only written statements can be considered fraud. -Omissions of material fact on insurance application are fraud.
Only written statements can be considered fraud. According to Title 18, Sections 1033 & 1034 of the US Code, any oral or written statements by any person engaged in the business of insurance that are false or any omissions of material fact are considered unlawful insurance fraud.
According to New York law, hearings ordered by the Superintendent must be -Attended by at least 2 insurance company representatives. -Held before a quorum consisting of 10 people. -Open to the public. -Held at least once a month.
Open to the public Hearings must be open to the public unless the Superintendent feels a private hearing is in the best interest of the public.
Which of the following explains the policyowner's right to change beneficiaries, choose options, and receive proceeds of a policy? The Entire Contract Provision The Consideration Clause Assignment Rights Owner's Rights
Owner's rights Policyowners can learn about their ownership rights by referring to the policy.
A participating insurance policy may do which of the following? Require 80% participation Pay dividends to the policyowner Provide group coverage Pay dividends to the stockholder
Pay dividends to the policyowner A participating insurance policy will pay dividends to the owner based upon actual mortality cost, interest earned and costs.
A prospective insured receives a conditional receipt but dies before the policy is issued. The insurer will -Automatically pay the policy proceeds. -Pay the policy proceeds only if it would have issued the policy. -Pay the policy proceeds up to an established limit. -Not pay the policy proceeds under any circumstances.
Pay the policy proceeds only if it would have issued the policy. The conditional receipt says that coverage will be effective either 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 insurable as a standard risk, and policy is issued exactly as applied for.
Which of the following is correct concerning the taxation of premiums in a key-person life insurance policy? -Premiums are taxable to the employee. -Premiums are not tax deductible as a business expense. -Premiums are tax deductible by the key employee. -Premiums are tax deductible as a business expense.
Premiums are not tax deductible as a business expense The business cannot take a tax deduction for the expense of the premium. However, if the key employee dies, the benefits paid to the business are usually received tax free.
Which nonforfeiture option provides coverage for the longest period of time? Extended term Paid-up option Accumulated at interest Reduced paid-up
Reduced paid-up 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.
If an immediate annuity is purchased with the face amount at death or with the cash value at surrender, this would be considered a Rollover. Settlement option. Nontaxable exchange. Nonforfeiture option.
Settlement Option A settlement option is exercised when an immediate annuity is purchased with the face amount at death or with the cash value at surrender.
Which of the following protects consumers against the circulation of inaccurate or obsolete personal or financial information? The Guaranty Association Consumer Privacy Act The Fair Credit Reporting Act Unfair Trade Practices Law
The Fair Credit Reporting Act The purpose of the Fair Credit Reporting Act is to protect consumers against the circulation of inaccurate or obsolete information and to ensure that consumer reporting agencies are fair and equitable in their treatment of consumers.
An individual wants to purchase a life insurance policy. His agent asks if the transaction will involve replacing any existing life insurance policies. If the customer replies, "Yes," which of the following best describes the agent's next step? -The agent must provide a replacement notice to the applicant. -The agent must collect the existing policies and turn them over to the replacing insurer. -The agent must get his supervisor involved in the transaction. -The agent has no further duties.
The agent must provide a replacement notice to the applicant. In a replacement transaction, an agent must present to the applicant a Notice Regarding Replacement that is signed by both the applicant and the agent.
Which of the following is NOT true regarding the annuitant? The annuitant must be a natural person. The annuitant cannot be the same person as the annuity owner. The annuitant's life expectancy is taken into consideration for the annuity. The annuitant receives the annuity benefits.
The annuitant cannot be the same person as the annuity owner. While they don't have to be, the annuitant and annuity owner are often the same person. The annuitant is the person who receives benefits or payments from the annuity and for whom the annuity is written. Since the annuitant's life expectancy is taken into consideration, the annuitant must be a natural person.
The sole beneficiary of a life insurance policy dies before the insured. If the policyowner fails to change the beneficiary before the insured's death, the proceeds of the policy will go to Probate. The state. The beneficiary's estate. The insured's estate.
The insured's estate. In the absence of a viable beneficiary, proceeds will be paid to the estate of the insured.
An individual purchased a Medicare supplement policy in March and decided to replace it 2 months later. His history of coronary artery disease is considered a pre-existing condition. Which of the following is true? -Coronary artery disease coverage will be permanently excluded from the new policy. -In replacement, pre-existing conditions must be waived, so sickness relating to coronary artery disease will be covered upon the policy's effective date. -Because this is a new policy, the pre-existing condition waiting period starts over. -The pre-existing condition waiting period fulfilled in the old policy will be transferred to the new policy, the new one picking up where the old one left off.
The pre-existing condition waiting period fulfilled in the old policy will be transferred to the new policy, the new one picking up where the old one left off. When an insured replaces one Medicare supplement policy with another, the pre-existing conditions waiting period does not start over. All types of waiting and elimination periods are carried over, not restarted, since that time was served with the original policy.
All of the following are characteristics of a group life insurance plan EXCEPT -The cost of the plan is determined by the average age of the group. -There is a requirement to prove insurability on the part of the participants. -The participants receive a Certificate of Insurance as their proof of insurance. -A minimum number of participants is required in order to underwrite the plan.
There is a requirement to prove insurability on the part of the participants. There is no individual underwriting for group life insurance
Which of the following types of insurance policies would perform the function of cash accumulation? -Credit life -Increasing term -Whole life -Term life
Whole Life Life insurance is unique from other types of insurance in that it could perform the function of cash accumulation. Cash values are available in whole life policies. (Owning a house vs. renting an apartments, cash accumulation)
what guarantees that the information explained in the insurance contract is true
a warranty
an elimination (waiting) period may not have to be satisfied for a disability in which of the following
an insured suffers a relapse of a prior disability within 6-months of the initial covered disability
In order to get a nonresident license in this state, an agent must
apply and pay a fee to a nonresident state that reciprocates
which of the following documents used in the underwritting process contains specific medical details about an applicant
attending physician's statement (aps)
In credit life insurance, who is responsible for paying the policy premiums
borrower only
all of the followign are true about key person insurance except
death benefit is taxable to the business
which of the following is not a standard exclusion in life insurance policies
disability
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. Which settlement option did J choose?
fixed amount
which of the following is a correct statement about annuities
fixed annuities do not provide protection against inflation
all of the following information needs to be included on an application for life insurance except
health insurance policies in force.
during the accumulation phase of a fixed annuity phase of a fixed annuity, the annuitant's interest rate is based on a minimum rate as specified in the contract, or the current interest rate, whichever is
higher
an insurance agent who represents multiple companies on a nonexclusive basis and earns commissions on personal sales is working of marketing system
independent agency system
all of the following are benefits that must be provided by core policies issued by the new york partnership for long-term care except
inflation protection option of 10% compounded annually
according to agency law, the agent always represents the
insurance company
which of the following is not true regarding a noncancellable polciy
insurer can increase the premium above what is the the stated policy if claims experience is greater than expected
which of the following statements is incorrect
medicare and medigap policies provide coverage for long-term custodial or nursing home care
with respect to the entire contract clause in health policies , who has the authority to make change to an existing policy
only a executive officer of the company
which of the following medicare parts provides prescription drug benefit
part d
what is another term for a health insurance policy subscriber
participant
according to the ppaca health care tax credit, which of the following is true
persons receiving medicaid are not eligible
what is the difference between a straight life policy and a 20-pay whole life policy
premium payment period
which of the following does not need to be included on the first page of a medicare supplement plan
premium rates
An insurance want to cancel her insurance policy. Which portion of the contract would explain the cancellation rights
renewability provisions
carlo's health insurance policy pays benefits according to a list which indicates the amount that is payable under each type of covered treatment or procedure. carlo's policy provides benefits on a
scheduled basis
what must states do after the death of a person who receive medicaid benefits, according to the medicaid recovery act
seek repayment of the funds that were paid
an individual was denied coverage under social security because his disability did not meet the strict definition of total disability used by social security. which of the following would provide disability income coverage
sis rider
who determines if a particular group of employees can be excluded from group health coverage
the employer
life insurance creates an immediate estate. which of the following best explains this statement
the face value of the policy is payable to the beneficiary upon death of the insured
In a group policy, who is issued a certificate of insurance? The insurance company The employer The individual insured The health care provider
the individual insured The individuals covered under a group insurance contract are issued certificates of insurance. The certificate tells what is covered in the policy, how to file a claim, how long the coverage will last, and how to convert the policy to an individual policy.
an applicant completes an application for a disability policy and pays the initial premium. the producer gives the applicant a conditional receipt. insurance coverage for the applicant will become effective when
the insurance company assumes the risk
all of the following are true of credit life except
the insured names of the beneficiary
which of the following statements concerning the medical information bureau is correct
the medical information bureau assists underwritters in evaluating and classifying risks
a life settlement broker represents
the policyowner
every medicare supplement policy must have a notice to buyer on the front page that states which of the following
this policy may not cover all of your medical expenses
an employee has a flexible spending account (fsa) with a $5,000 annual benefit. this year the employee used $3,000. what would the amount of the benefit available to the employee next year
$5,000
Which of the following would NOT be considered an insurance producer? A reinsurance intermediary An insurance agent An insurer's officer An insurance broker
An insurer's office Insurance producer means any person required to be licensed to sell, solicit or negotiate insurance - including agents, brokers and intermediaries. Officers are not required to be licensed.
Employer contributions made to a qualified plan May discriminate in favor of highly paid employees. Are after-tax contributions. Are taxed annually as salary. Are subject to vesting requirements.
Are subject to vesting requirements. Qualified plans must have a vesting requirement.
All of the following are requirements of eligibility for Social Security disability income benefits EXCEPT Fully insured status. Waiting period of 5 months. Being age 65. Inability to perform any gainful work.
Being age 65 The term fully insured refers to someone who has earned 40 quarters of coverage (the equivalent of 10 years of work), and is therefore entitled to receive Social Security retirement, Medicare, and survivor benefits. The waiting, or elimination period for Social Security disability benefits is 5 months.
All of the following statements are correct regarding Credit Life Insurance EXCEPT Benefits are paid to the borrower's beneficiary. The amount of insurance permissible is limited per borrower. Premiums are usually paid by the borrower. Benefits are paid to the creditor.
Benefits are paid to the borrower's beneficiary. In Credit Life Insurance, the creditor is the beneficiary for the amount of benefit equal to the outstanding balance of the loan.
Which of the following types of insurance policies is most commonly used in credit life insurance? Increasing term Whole life Equity indexed life Decreasing term
Decreasing term Credit insurance is a special type of coverage written to insure the life of the debtor and pay off the balance of a loan in the event of the death of the debtor. It is usually written as decreasing term insurance.
An individual has been making periodic premium payments on an annuity. The annuity income payments are scheduled to begin after 1 year since the annuity was purchased. What type of annuity is it? Deferred Fixed Flexible premium Immediate
Deferred Deferred annuities may be purchased with either a single lump sum or periodic payments, but they do not begin the income payments until sometime after 1 year from the date of purchase.
all of the following are reasons for group insurance termination for dependents EXCEPT
Dependent reaches 21
Which of the following is NOT a term for the period of time during which the annuitant or the beneficiary receives income? Liquidation period Depreciation period Annuitization period Pay-out period
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
In a direct rollover, how is the money transferred from one plan to the new one? -From the participant to the new plan -From the original plan to the original custodian -From trustee to trustee -From trustee to the participant
From trustee to trustee In a direct rollover, the distribution is made directly from the trustee of the first plan to the trustee or administrator/custodian of the new IRA plan.
Credit Life insurance -Has a maximum term for insurance of 20 years. -Insures the life of a debtor. -Is purchased on an installment basis. -Insures the life of a creditor.
Insurers the life of a debtor Credit insurance is a special type of coverage written to insure the life of the debtor and pay off the balance of a loan in the event of the death of the debtor.
all of the following statements are true regarding an ordinary (straight) life policy except
It does not have a guaranteed death benefit
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? Straight life Joint and survivor Joint annuity Cash refund annuity
Joint and Survivor Under a joint settlement option, payments would stop at the first death, but under the joint and survivor, payment would continue until both recipients die. Usually, the surviving beneficiary receives 1/2 or 2/3 of the amount received when both beneficiaries were alive.
When does Medicare cover nursing home care? -Only for those age 80 and olderMedicare covers all nursing home care for eligible policyholders -Only if it is part of treatment for a covered illness or injury -Only if the deductible has been met
Medicare covers all nursing home care for eligible policyholders Medicare will not cover long-term care or nursing home care unless it is part of the treatment for a covered illness or injury.
Equity indexed annuities Are more risky than variable annuities. Are security instruments. Invest conservatively. Seek higher returns.
Seek higher returns. Equity Indexed Annuities are not securities, but they invest on a relatively aggressive basis to aim for higher returns. Like a fixed annuity the Equity Indexed Annuity has a guaranteed minimum interest rate. The current interest rate that is actually credited is often tied to a familiar index like the Standard and Poor's 500.
An insured makes regular contributions to his Health Savings Account. How are those contributions treated in regards to taxation? They are taxed as income. They are tax deductible. They are considered after-tax contributions. They are not deductible.
They are tax deductible An individual covered by a high deductible health plan can make a tax-deductible contribution to an HSA and use it to pay for out-of-pocket medical expenses.
Which of the following statements regarding conditional receipts is true? -They purchase temporary insurance, up to 6 months. -They become part of the policy. -They are temporary insuring agreements. -They guarantee the insurer will approve the application.
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
All of the following statements about Medicare supplement insurance policies are correct EXCEPT -They cover Medicare deductibles and copayments. -They supplement Medicare benefits. -They are issued by private insurers. -They cover the cost of extended nursing home care.
They cover the cost of extended nursing home care. Medicare supplement policies (Medigap) do not cover the cost of extended nursing home care. Medigap 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.
The paid-up addition option uses the dividend -To reduce the next year's premium. -To accumulate additional savings for retirement. -To purchase a smaller amount of the same type of insurance as the original policy. -To purchase a one-year term insurance in the amount of the cash value.
To purchase a smaller amount of the same type of insurance as the original policy The dividends are used to purchase a single premium policy in addition to the face amount of the permanent policy.
For which of the following reasons can a temporary license be issued? -To negotiate new insurance contracts -To provide temporary help to a licensed producer -To service the existing business -To solicit new business
To service the existing business A temporary license may only be used to service existing business, not to solicit, negotiate or procure new business.
A health insurance policy may cover all of the following risks EXCEPT -War-related injuries. -Dental expenses. -Loss of income due to disability. -Medical expenses.
War-related injuries Health insurance policies will not cover war-related sickness or injury.
When is the insurability conditional receipt given? -When an insured individual needs to obtain an insurability receipt for tax purposes. -If the application is approved before the premium is paid -When the premium is paid at the time of application -After the application has been approved and the premium has been paid
When the premium is paid at the time of application Under the terms of the insurability conditional receipt, the insurance coverage becomes effective as of the date of the receipt, provided the application is approved. This receipt is generally provided to the applicant when the initial premium is paid at the time of application.
Which of the following programs expands individual public assistance programs for people with insufficient income and resources? -Medicare -Social Security -Unemployment compensation -Medicaid
Medicaid Medicaid is a "needs" tested program administered by the states to provide assistance to persons who are not able to provide for themselves.
An employee quits her job where she has a balance of $10,000 in her qualified plan. The balance was paid out directly to the employee in order for her to move the funds to a new account. If she decides to rollover her plan to a Traditional IRA, how much will she receive from the plan administrator and how long does she have to complete the tax-free rollover? $8,000, 30 days $10,000, 60 days $10,000, 30 days $8,000, 60 days
$8,000, 60 days Generally, IRA rollovers must be completed within 60 days from the time the money is taken out of the first plan. If the distribution from the first plan is paid directly to the participant, 20% of the distribution must be withheld by the payor.
Which of the following best defines the owner of a life settlement contract? -A person insured under the contract -A fiduciary for the contract -An insurance provider -A person who is selling the contract
A person who is selling the contract The term "owner" refers to the owner of the policy who may seek to enter into a life settlement contract. This does not include an insurance provider, a qualified institutional buyer, a financing entity, a special purpose entity, or a related provider trust.
Which of the following individuals must pass the written examination to be licensed as an agent? -An individual seeking to be a representative of a fraternal benefit society as its 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. -A licensee who was licensed on July 1, 1987, to represent any assessment corporation. -A ticket-selling airline representative for one-time issuance of baggage or accident insurance.
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.
The Omnibus Budget Reconciliation Act of 1990 requires that large group health plans must provide primary coverage for disabled individuals under Age 59½ who are retired. Age 65 who are not retired. Age 59½ who are not retired. Age 65 who are retired.
Age 65 who are not retired The Omnibus Budget Reconciliation Act of 1990 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 license or licenses are required to sell variable annuities? -Only a securities license -No license is required -Both a life insurance license and a securities license -Only a life insurance license
Agents are required to have both a life insurance license and a securities license to sell variable annuities.
Long-term care policies MUST cover A pre-existing condition. Alzheimer's disease. Treatment payable by Medicare. Alcoholism.
Alzheimer's disease While normally mental and nervous disorders or disease are excluded in long-term care policies, Alzheimer's disease is not. The rest are all possible exclusions.
All other factors being equal, the least expensive first-year premium payment is found in -Level Term. -Annually Renewable Term. -Increasing Term. -Decreasing Term.
Annually renewable term Annually renewable term is the purest form of term insurance. The death benefit remains level, but the premium increases each year with the insured's attained age. In decreasing policies, while the face amount decreases, the premium remains constant throughout the life of the contracts. In level term and increasing term policies, the premium also remains level for the term of the policy. Therefore, in the other types of level policies, the first-year premium would not be different from any other year.
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? Typical Statutory Own occupation Any occupation
Any Occupation For disability income benefits to be paid, the insured must whatever definition of total disability is stated in the policy, which varies. The "any occupation" definition states that an insured is disabled if they cannot perform any job that they are suited for by prior education, training or experience. The "own occupation" definition states that an insured is disabled if they cannot perform their own job, whatever that may be.
When must insurable interest exist in a life insurance policy? -At the time of policy delivery -When there is a change of the beneficiary -At the time of loss -At the time of application
At the time of application In life insurance, insurable interest must exist at the time of application.
A policyowner fails to pay the premium due on his whole life policy after the grace period passes, but the policy remains in force. This is due to what provision? -Waiver of premium -Incontestability period -Assignment -Automatic premium loan
Automatic premium loan This provision is not required, but is commonly added to contracts with a cash value at no additional charge. This is a special type of loan that prevents the unintentional lapse of a policy due to nonpayment of the premium.
Which of the following statements concerning buy-sell agreements is true? -Premiums paid are deductible as a business expense. -Benefits received are considered income taxable. -Buy-sell agreements pay in the event of a medical emergency. -Buy-sell agreements are normally funded with a life insurance policy.
Buy-sell agreements are normally funded with a life insurance policy. A buy-sell agreement is simply a contract that establishes what will be done with a business in the event that an owner dies. Buy-sell agreements are normally funded with a life insurance policy.
Which of the following is NOT allowed in credit life insurance? -Creditor becoming a policy beneficiary -Creditor requiring that a debtor buys insurance from a certain insurer -Creditor having a collateral assignment on the policy -Creditor requiring that a debtor has a life insurance
Creditor requiring that a debtor buys insurance from a certain insurer In credit life insurance, creditor may require that the debtor has a life insurance, but they cannot tell you who to buy the insurance from
In disability income insurance, the own occupation definition of disability applies -During the elimination period. -As long as an individual is unable to work. -For the first 2 years of a disability. -During the waiting period.
For the first 2 years of a disability. The own occupation definition of disability usually applies to the first 24 months after a loss.
Attempting to determine how much insurance an individual would require based upon their financial objectives is known as Human life value approach. Estate planning. Viatical approach. Needs approach.
Needs approach Needs method determines how much benefit would be necessary to replace the loss income and increased expense should the insured die prematurely.
When a health insurance policy is purchased in the state of New York, the insured may return the policy to the insurer and receive a premium refund within the maximum period of -10 days. -20 days. -30 days. -90 days.
20 days The free-look provision allows for an insured to review his/her policy once it has been delivered; if the insured decides to return it within a certain time period, the premium will be refunded. In New York, the insured can review the policy from anywhere between 10 and 20 days.
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 an individual health plan? 25% 50% 80% 90%
80% MLR requires insurance companies to spend at least 80% (for individual and small group markets) or 85% (for large group markets) of premium dollars on medical care and health care quality improvement, rather than on administrative costs.
Which of the following is NOT true regarding the accumulation period of an annuity? -It would not occur in a deferred annuity. -It is the period during which the annuity payments earn interest. -It is the period over which the owner makes payments into an annuity. -It is also known as the pay-in period.
It would not occur in a deferred annuity The "accumulation period" is the period of time over which the annuity owner makes payments (premiums) into an annuity. This is the period of time during which the payments earn interest and grow tax deferred (which would be the case in a deferred annuity).
Which of the following is NOT specifically prohibited by state law as an unfair trade practice? -Reducing the premiums paid by employers for group insurance based on loss experience -Using misleading representations to induce uncalled-for action by the insured -Using incomplete comparisons of policies to induce uncalled-for action by the insured -Failing to disclose that the solicitations of an insurance contract are the result of a marketing method
Reducing the premiums paid by employers for group insurance based on loss experience Insurers are permitted to lower the premiums of employers' group insurance because of loss experience. This is called experience rating. All the other practices would be considered unfair trade practices.
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 Secondary beneficiary. Primary beneficiary. Irrevocable beneficiary. Revocable beneficiary.
Revocable beneficiary The policyowner may change a revocable designation at any time and without the consent of the beneficiary. Irrevocable beneficiaries, on the other hand, have a vested interest in the policy, so the policyowner may not be able to exercise certain rights without their consent.
When an insurer issues an individual health insurance policy that is guaranteed renewable, the insurer agrees -To renew the policy until the insured has reached age 65. -To charge a lower premium every year the policy is renewed. -Not to change the premium rate for any reason. -To renew the policy indefinitely.
to renew the policy until the insured has reached age 65 The guaranteed renewable provision is similar to the noncancellable provision, with the exception that the insurer can increase the policy premium on the policy anniversary date. As with the noncancellable policy, coverage is generally not renewable beyond the insured's age 65.
An investor buys a life policy on an elderly person in order to sell it for a life settlement. This is an example of -A STOLI policy. -A prearranged funeral plan. -A viatical settlement. -Third-party ownership.
A STOLI Policy Stranger-originated life insurance (STOLI) policies are usually purchased by people who have no relationship with the insured with the intention of selling them for life settlements.
The provision that states that both the printed contract and a copy of the application form the contract between the policyowner and the insurer is called the -Entire contract. -Certificate of insurance. -Aleatory contract. -Master policy.
Entire Contract The policy, together with the attached application, constitutes the entire contract. This provision limits the use of evidence other than the contract and the attached application in a test of the contract's validity. This is a mandatory provision in life insurance.
Which is TRUE about the cash surrender nonforfeiture option? -After the cash surrender, the insured is covered for a grace period of 1 month. -The policy remains active for some time after the policyholder opts for cash surrender. -The policyholder receives the original cash value of the policy. -Funds exceeding the premium paid are taxable as ordinary income.
Funds exceeding the premium paid are taxable as ordinary income. The insurers surrender the policy at its current cash value. Only any excess of value is taxable as income. Once the policyholder opts for cash surrender, the policy is immediately inactive.
When a life insurance policy is cancelled and the insured has selected the extended term nonforfeiture option, the cash value will be used to purchase term insurance that has a face amount -The same as the original policy minus the cash value. -Equal to the original policy for as long a period of time that the cash values will purchase. -In lesser amounts for the remaining policy term of age 100. -Equal to the cash value surrendered from the policy.
Equal to the original policy for as long a period of time that the cash values will purchase. With this option, the cash value is used as a single premium to purchase the SAME face amount as the original policy for as long a period of time as the cash will buy at the insured's current age.
An association could buy group insurance for its members if it meets all of the following requirements EXCEPT -Holds annual meetings. -Is contributory. -Has at least 50 members. -Has a constitution and by-laws.
Has at least 50 members All of the above characteristics would make an association group eligible for buying group insurance, except the group must have at least 100 members.
Welfare benefits include all of the following EXCEPT -Holiday pay. -Day care benefits. -Health care benefits. -Workers compensation.
Holiday Pay All forms of health care, life insurance, prepaid legal services, and disability insurance (both long- and short-term) are considered "employee welfare benefit" plans. Unfunded benefits or payroll practices, such as vacation, holidays, overtime premiums, holiday gifts, and compensation paid for time not worked are not included.
Which of the following is NOT true regarding a disclosure statement for Medicare supplement policies? -It must be issued in at least 12-point type. -It must outline all the benefit plans used in the policy. -It must be provided to the applicant within 30 days of the application. -It must include premium information.
It must be provided to the applicant within 30 days of the application. Insurers that issue Medicare supplement insurance policies are required to provide the disclosure statement to the applicant along with the application.
A married couple owns a permanent policy which covers both of their lives and pays the death benefit only upon the death of the first insured. Which policy is that? Second-to-Die Family Income Policy Joint Life Policy Survivorship Life Policy
Joint Life Policy Joint life policies cover the lives of two insureds; rates are blended. Upon the death of the first insured, the policy ends.
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. -Coverage is based on the predicted needs of that family. -The death of an insured must be premature. -It must be assumed that the death of the insured will occur immediately.
Need is predicted using the number of years until the insured's retirement. In the needs approach method, need is determined by the predicted needs of the family after the premature death of the insured, which must be assumed will happen immediately. The policy allows for benefits to be collected upon the insured's death.
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? -Look at the applicant's medical history to decide what premium to charge -Send the applicant to a doctor for a physical. Nothing can happen until they get the results. -Offer the supplement policy on a guaranteed issue basis -Exclude pre-existing conditions from coverage under the supplement policies
Offer the supplement policy on a guaranteed issue basis Once a person becomes eligible for Medicare supplement plans, and during the open enrollment period, coverage must be offered on a guaranteed issue basis.
An insured has a life insurance policy from a participating company and receives quarterly dividends. He has instructed the company to apply the policy dividends to increase the death benefit. The dividend option that the insured has chosen is called Paid-up additions. One-year term purchase. Accumulation at interest. Reduction of premiums.
Paid-up additions When this option is selected, the annual dividend acts as a single premium each year to buy additional amounts of insurance, based on the insured's currently attained age.
When a group disability insurance policy is paid entirely by the employer, benefits paid to disabled employees are -Deductible income to the employee. -Deductible business expense to the employer. -Taxable income to the employer. -Taxable income to the employee.
Taxable income to the employee. Disability benefit payments that are attributed to employee contributions are not taxable, but benefits payments that are attributed to employer contributions are taxable.
Which of the following is NOT covered under Plan A in Medigap insurance? -The Medicare Part A deductible -Approved hospital costs for 365 additional days after Medicare benefits end -The 20% Part B coinsurance amounts for Medicare approved services -The first three pints of blood each year
The Medicare Part A deductible Medicare Supplement Plan A provides the core, or basic, benefits established by law. All of the above are part of the basic benefits, except for the Medicare Part A deductible, which is a benefit offered through nine other plans.
The annuity owner dies while the annuity is still in the accumulation stage. Which of the following is TRUE? -The money will continue to grow tax-deferred until the liquidation period, and then will be paid to the beneficiary. -The beneficiary will receive the greater of the money paid into the annuity or the cash value. -Because the annuitization period has not started, the owner's estate will receive the money paid into the annuity. -The insurance company will retain the cash value and pay back the premiums to the owner's estate.
The beneficiary will receive the greater of the money paid into the annuity or the cash value. If the annuitant dies during the accumulation period, the beneficiary receives benefits from the annuity: either the amount paid into the plan or the cash value, whichever is greater.
The New York Superintendent has the responsibility to make sure each entity transacting insurance in this state remains solvent. Insurers are required to file a statement with the Superintendent -Semiannually on or before January and June 1st. -Every 2 years by the renewal date. -Annually on or before March 1st. -Biannually on or before April 1st.
Annually on or before March 1st Each entity must file a statement with the Superintendent annually on or before March 1st.
Why is an equity indexed annuity considered to be a fixed annuity? It has modest investment potential. It has a fixed rate of return. It is not tied to an index like the S&P 500. It has a guaranteed minimum interest rate.
It has a guaranteed minimum interest rate. While equity indexed annuities earn higher interest rates than fixed annuities, both types of annuities guarantee a specific minimum interest rate.
What type of information is NOT included in a certificate of insurance? -The procedures for filing a claim -The length of coverage -The cost the company is paying for monthly premiums -The policy benefits and exclusions
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 a claim, how long the coverage will last, and how to convert the policy to an individual policy.
Which statement accurately describes group disability income insurance? -Short-term plans provide benefits for up to 1 year. -The extent of benefits is determined by the insured's income. -In long-term plans, monthly benefits are limited to 75% of the insured's income. -There are no participation requirements for employees.
The extent of the benefits is determined by the insured's income Group plans usually specify the benefits based on a percentage of the worker's income. Group long-term plans provide monthly benefits usually limited to 60% of the individual's income.
Assuming that all of the following people are covered by a High Deductible Health Plan and are not claimed as dependents on anyone's tax returns, which would NOT be eligible for a Health Savings Account? -Andy is 55 and is covered under a dental care policy -Jenny is 60 and also has a long-term care insurance plan -Joe is 40 and is not covered by any other health insurance -Amanda is 67 and is covered by a basic medical expense policy
Amanda is 67 and is covered by a basic medical expense policy To be eligible for a Health Savings Account, an individual must be covered by a High Deductible Health Plan (HDHP), must not be covered by other health insurance except for specific injury, accident, disability, dental care, vision care, or long-term care insurance, must not be eligible for Medicare (usually age 65), and can't be claimed as a dependent on someone else's tax return.
Which of the following is NOT a term for the period of time during which the annuitant or the beneficiary receives income? -Liquidation period -Depreciation period -Annuitization period -Pay-out period
Annuitization 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.
Which of the following is correct about a group health insurance policy issued in New York? It cannot exclude coverage for VA hospital treatment. It cannot provide coverage for handicapped children. It cannot exclude coverage from an occupational accident. It cannot exclude newborn children from coverage.
It cannot exclude newborn children from coverage. All individual and group health insurance policies and contracts that provide coverage for a child of the insured must provide coverage for newborn children from the moment of birth.
Which of the following best describes annually renewable term insurance? -Neither the premium nor the death benefit is affected by the insured's age. -It provides an annually increasing death benefit. -It is level term insurance. -It requires proof of insurability at each renewal
It is a level term insurance Annually renewable term is a form of level term insurance that offers the most insurance at the lowest cost.
Which statement is NOT true regarding a Straight Life policy? -It has the lowest annual premium of the three types of Whole Life policies. -Its premium steadily decreases over time, in response to its growing cash value. -The face value of the policy is paid to the insured at age 100. -It usually develops cash value by the end of the third policy year.
Its premium steadily decreases over time, in response to its growing cash value Straight Life policies charge a level annual premium throughout the insured's lifetime and provide a level, guaranteed death benefit.
According to the Coordination of Benefits (COB) provision in health insurance in this state, if insurer overpaid on a claim, the insurer may recover the excess from all of the following EXCEPT The person to whom the benefit has been paid. The Insurance Guaranty Association. The other insurer. Another organization involved in the claim.
The insurance Guaranty Association If the amount of the payment made by an insurer is more than it should have paid under its COB provision, the insurer may recover the excess from any or all of the following: the person to whom the benefit has been paid, insurance companies, or other organizations.
An insured has a continuous premium whole life policy. She would like to use the policy dividends to pay off her policy sooner than would have been possible otherwise. What dividend option could she use? One-year term Reduction of premium Accumulation at interest Paid-up option
Paid-up option With the paid-up option, the insurer can accumulate dividends at interest and then use them, in addition to interest and the policy's cash value, to pay the policy earlier than planned. This is different from paid-up additions, in which the dividends are used to buy additional policies that increase the face amount of the original policy.
A prospective deferred annuity owner is concerned about what would happen if he surrendered the annuity before the annuitization period. The agent most likely explained which of the following? -The owner will receive some of the money back, which will depend on the surrender value established by the insurer at the time that the contract is terminated. -The insurance company will apply the money to another annuity or a life insurance policy, but the money cannot be returned. -It is not possible to surrender an annuity before the annuitization period. -Nonforfeiture option guarantees that the owner will receive a surrender value of the contract.
Nonforfeiture option guarantees that the owner will receive a surrender value of the contract. If a deferred annuity is surrendered prior to annuitization, the surrender value of the annuity is guaranteed (e.g. 100% of the premium paid, less any prior withdrawals and related surrender charges) due to the nonforfeiture provision.
During replacement of life insurance, a replacing insurer must do which of the following? -Guarantee a replacement for each existing policy -Designate a new producer for a replaced policy -Send a copy of the Notice Regarding Replacement to the Department of Insurance -Obtain a list of all life insurance policies that will be replaced
Obtain a list of all life insurance policies that will be replaced The replacing insurance company must require from the producer a list of the applicant's life insurance or annuity contracts to be replaced and a copy of the replacement notice provided to the applicant, and send each existing insurance company a written communication advising of the proposed replacement.
The clause that protects the proceeds of a life insurance policy from creditors after the death of the insured is known as the -Incontestability clause. -Beneficiary protection clause. -Spendthrift clause. -Benefit protection clause.
Spendthrift clause The spendthrift clause protects the policy proceeds from creditors of the policyowner or beneficiary.
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? 1 month She would not receive any benefits. 3 years 2 years
2 years Under an Own Occupation plan, if the insured cannot perform his/her current job for a period of up to two years, disability benefits will be issued, even if the insured would be capable of performing a similar job during that two-year period. After that, if the insured is capable of performing another job utilizing similar skills, benefits will not be paid
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 5 days 10 days 14 days
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.
If an employer provides long-term group disability insurance for its employees, what percentage of monthly wages are lower-paid employees eligible to collect? 33 and 1/3% 50% 66 and 2/3% 90%
66 and 2/3% If an employer provides long-term group disability insurance for its employees, the benefit period may be limited to age 65, and benefits will be limited to 50% of the monthly wages for higher-paid employees and 66 and 2/3% of the monthly wages for lower-paid employees.
Janie is on bed rest for a brain injury. She is finally released to return to some of her normal activities but is only allowed to work on a part-time basis. Which of the following could help Janie recover the portion of income lost by working only part-time? Income Compensation Disability Income Differential Recovering Worker's Compensation Residual Disability Benefit
Residual Disability Benefit A Residual Policy Benefit is written for those individuals who are returning to work after a period of disability but are only able to work on a part-time basis. The benefit compensates the insured for the amount of monthly income lost by the reduced number of working hours. For instance, if Janie earns $2500 per month but, because of her reduced hours, only earns $1500 per month, she will receive a $1000 benefit payment.
Who can make a fully deductible contribution to a traditional IRA? -A person whose contributions are funded by a return on investment -An individual not covered by an employer-sponsored plan who has earned income -Anybody: all IRA contributions are fully deductible regardless of income level -Someone making contributions to an educational 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 TRUE regarding variable annuities? -The funds are invested in the company's general account. -The company guarantees a minimum interest rate. -A person selling variable annuities is required to have only a life agent's license. -The annuitant assumes the risks on investment.
The annuitant assumes the risks on investment. The payments that the annuitant invests into the variable annuity are invested in the insurer's separate account. The separate account under many annuities provides the annuitant with a dozen or more investment options ranging from "money market funds" to "growth stock funds" to "precious metal funds". Therefore, the annuitant assumes the risk of the investment.
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 The date of policy delivery The date of issue The date of application
The date of the 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 (whichever is later), provided that the applicant is found insurable at the rate applied for.
How long is an open enrollment period for Medicare supplement policies? -6 months -1 year -30 days -90 days
6 months An open enrollment period is a 6-month period that guarantees the applicants the right to buy Medigap once they first sign up for Medicare Part B.
Which of the following is NOT considered Business of Life Settlement? -A producer tracks the progress of a life settlement contract he has submitted to a life settlement provider. -A producer discusses the advantages and disadvantages of a life settlement contract for a client. -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. -A producer mails life settlement advertising to a client outside of the state.
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 insurable interest in the insured (i.e. soliciting, negotiating, effectuating, monitoring or tracking life settlement contracts).
What provision in an insurance policy extends coverage beyond the premium due date? Free look Automatic premium loan Waiver of premium Grace period
Grace Period Grace period is a mandatory provision found in all life and health insurance policies that provides coverage for a period of time after the premium becomes past due.
A Universal Life insurance policy has two types of interest rates that are called -Fixed and Variable. -Minimum and Target. -Guaranteed and Current. -Option A and Option B.
Guaranteed and Current The insurer credits the cash value in the policy with a current (nonguaranteed) interest rate and backs the cash value with a contract (lower guaranteed) rate of interest.
In insurance transactions, fiduciary responsibility means -Handling insurer funds in a trust capacity. -Maintaining a good credit record. -Being liable with respect to payment of claims. -Commingling premiums with agent's personal funds.
Handling insurer funds in a trust capacity An agent's fiduciary responsibility includes handling insurer funds in a trust capacity.
Which of the following is NOT true regarding a flexible spending account? It does not have limits on contributions. It operates on "use-or-lose" basis. It provides an opportunity to receive benefits on a pretax basis. It is a cafeteria plan.
It does not have limits on contributions A Flexible Spending Account (FSA) is a form of cafeteria plan benefit funded by salary reduction. The employees are allowed to deposit a certain amount of their paycheck into an account before paying income taxes. FSA benefits are subject to annual maximum and "use-or-lose" rule
An insurance agent was born in 1973. He obtained his New York insurance license in 2008. When will the agent's license expire? -On the agent's birthday every odd-numbered year -January 1st every even-numbered year -Every year on the license issue date -Every 2 years on the license issue date
On the agent's birthday every odd-numbered year Agent licenses last for 2 years. The licenses of all insurance agents born in odd-numbered years will expire on their birthdays in odd-numbered years. The licenses of all insurance agents born in even-numbered years will expire on their birthdays in even-numbered years.
An employer has sponsored a qualified retirement plan for its employees where the employer will contribute money whenever a profit is realized. What is this called? 401(k) plan Tax-sheltered account plan HR 10 plan Profit sharing plan
Profit sharing plan A profit sharing plan is one where the employer will contribute monies into an employee's retirement plan when the company shows a profit. The others are all qualified plans, but company profit isn't an issue with them.
When an employee is still employed upon reaching age 65 and eligibility for Medicare, which of the following is the employee's option? -Enroll in Medicare when eligible; otherwise, Medicare benefits will be forfeited. -Wait until the next birthday to enroll -Remain on the group health insurance plan and defer eligibility for Medicare until retirement -Enroll in Medicare, while the company must provide additional retirement benefits
Remain on the group health insurance plan and defer eligibility for Medicare until retirement If an employee is still employed upon reaching age 65, federal laws require keeping the employee on the group health insurance rolls and deferring their eligibility for Medicare until retirement. The employee has the right to reject the company's plan and elect Medicare but the company can offer no incentives for switching to Medicare.
All of the following entities regulate variable life policies EXCEPT -The Insurance Department. -The Guaranty Association. -Federal government. -The SEC.
The Guaranty Association. Variable life insurance is regulated by both the state and federal government, as well as the Insurance Department, and the SEC.
Can the Superintendent investigate fraudulent claims if they occurred outside of the resident's state according to the Insurance Fraud Prevention Act? -Yes. The Superintendent has the power to make an investigation within this state or outside of the state. -Yes, but only if it is a violation of another state's insurance law. -No. Because insurance is regulated by the state, all claims must occur within state boundaries. -No. If fraudulent acts are believed to have been committed, the Superintendent must notify the state's Superintendent or Commissioner. It will then become a federal matter.
Yes. The Superintendent has the power to make an investigation within this state or outside of the state. If the insurance frauds bureau has reason to believe that a person is engaged or is about to engage in a fraudulent act, the Superintendent has the power to make an investigation within this state or outside of the state.