Ohio Health & Life Insurance Exam Final
life insurance death proceeds are
aren't includable in gross income and you don't have to report them. However, any interest you receive is taxable and you should report it as interest received
insurer meets the requirements and is approved to transact business
authorized
Hospital indemnity/hospital confinement indemnity policy will provide payment based on A The number of days confined in a hospital. B The type of illness. C The premiums paid into the policy. D The medical expense incurred.
A The number of days confined in a hospital.
An Adjustable Life policyowner can change which of the following policy features? 1. The coverage period 2. The mortality expense 3. The investment account 4. The insured
1. The coverage period
transfer life insurance cash value to annuity
1035 exchange
a cease and desist order must occur
15 days
how long is certificate of pre licensing course completion valid
180 days
the max duration of temporary license in ohio
180 days
The insurance policy, together with the policy application and any added riders form what is known as A Contract of adhesion. B Whole life policy. C Entire contract. D Certificate of coverage.
C Entire contract.
Who is entitled to an evidence of coverage for a health care plan provided by a health insuring corporation? A Only the employer B No one C Every subscriber D Only the policyholder
C Every subscriber
according to the nonforfeiture law of the owner decides to surrender
guaranteed surrender value that is available
warranties
guaranteed to be true
Interest Only Settlement Option
the beneficiary a guaranteed minimum rate of interest, only receive payments of interest
policyowner transfers or gives away a life insurance policy with 3 years prior to his/her death,
the entire face amount of the policy will be included in his/her taxable estate
when a fixed annuity owner pays pays a monthly annuity premium, where is this money
the general account
The validity of coverage under a life insurance policy may not be contested, except for nonpayment of premium, after the policy has been in force for at least how many years? 1. 1 year 2. 2 years 3. 5 years 4. 7 years
2. 2 years
Which of the following is NOT provided by an HMO? A Reimbursement B Services C Financing D Patient care
A Reimbursement
An insolvent insurer is one who is unable to pay its obligations when they are due or has fewer assets than liabilities for a period of 1. 2 years. 2. 3 years. 3. 4 years. 4. 5 years.
2. 3 years.
What is the penalty for IRA distributions that are below the required minimum for the year? 1. 10% 2. 25% 3. 50% 4. 60%
3. 50%
The term "illustration" in a life insurance policy refers to 1. A presentation of nonguaranteed elements of a policy. 2. A depiction of policy benefits and guarantees. 3. Pictures accompanying a policy. 4. Charts and graphs.
1. A presentation of nonguaranteed elements of a policy.
At age 30, an applicant wants to start an insurance program, but realizing that his insurance needs will likely change, he wants a policy that can be modified to accommodate those changes as they occur. Which of the following policies would most likely fit his needs? 1. Adjustable Life 2. Single Premium Whole Life 3. Interest-sensitive Whole Life 4. Decreasing Term
1. Adjustable Life
Which of the following is true about the mandatory free look in a Life Insurance policy? 1. It commences when the policy is delivered. 2. It commences when the application is signed. 3. It applies only to term life insurance policies. 4. It is optional on all life insurance policies.
1. It commences when the policy is delivered.
Which of the following is NOT true regarding a temporary license in this state? 1. It will continue for 180 days even if the owner disposes of the business. 2. It can be issued to a designee when a licensed agent enters active U.S. military service. 3. It can be issued to a spouse of the deceased agent. 4. It does not require a written examination.
1. It will continue for 180 days even if the owner disposes of the business.
Which of the following is NOT true regarding the accumulation period of an annuity? 1. It would not occur in a deferred annuity. 2. It is the period during which the annuity payments earn interest. 3. It is the period over which the owner makes payments into an annuity. 4. It is also known as the pay-in period.
1. It would not occur in a deferred annuity. Accumulations is a period of time where the payments earn interest and grow tax deferred
An applicant wants to buy a policy that has a cash value element. Which type should she buy? 1. Permanent 2. Stock 3. Investment 4. Term
1. Permanent
Which of the following authorities is responsible for assessing the financial ability of insurers? 1. Superintendent 2. Financial Industry Regulatory Authority 3. National Association of Insurance Commissioners 4. Guaranty Association
1. Superintendent
Which of the following is called a "second-to-die" policy? 1. Survivorship life 2. Family income 3. Juvenile life 4. Joint life
1. Survivorship life
When a fixed annuity owner pays pays a monthly annuity premium to the insurance company, where is this money placed? 1. The insurance company's general account 2. Forwarded to an investor 3. Each contract's separate account 4. The annuity owner's account
1. The insurance company's general account
Under what circumstances may a life insurance agent deliver a policy that is dated up to 3 months before the application was taken? (Choose from the following options) 1. To avoid an increase in premium rate for the insured 2. To meet sales quotas established by the insurer 3. To make a policy effective during a period when the agent's appointment was in force 4. To shorten the period of contestability
1. To avoid an increase in premium rate for the insured
An insured receives a monthly summary for his life insurance policy. He notices that the cash value of the policy is significantly lower this month than it was last month. What type of policy does the insured have? (Choose from the following options) 1. Variable 2. Term 3. Securities 4. Stock
1. Variable
The rider in a whole life policy that allows the company to forgo collecting the premium if the insured is disabled is called 1. Waiver of premium. 2. Guaranteed insurability. 3. Waiver of cost of insurance. 4. Payor benefit.
1. Waiver of premium.
.If an applicant for a life insurance policy and person to be insured by the policy are two different people, the underwriter would be concerned about 1. Whether an insurable interest exists between the individuals. 2. The gender of the applicant. 3. The type of policy requested. 4. Which individual will pay the premium.
1. Whether an insurable interest exists between the individuals.
Which of the following describes the taxation of an annuity when money is withdrawn during the accumulation phase? 1. Withdrawn amounts are taxed on a last in, first out basis. 2. Withdrawn amounts are taxed on a first in, last out basis. 3. Taxes are deferred on withdrawn amounts, but a flat penalty is charged. 4. Taxes are deferred on withdrawn amounts.
1. Withdrawn amounts are taxed on a last in, first out basis.
An IRA uses immediate annuities to pay out benefits; the IRA owner is nearly 75 years old when he decides to collect distributions. What kind of penalty would the IRA owner pay? 1. 15% for early withdrawal 2. 50% tax on the amount not distributed as required 3. No penalties, since the owner is older than 59 ½ 4. 10% for early withdrawal
2. 50% tax on the amount not distributed as required
Who must approve viatical settlements? 1. The Superintendent 2. An actuary for the insurer 3. The applicant 4. The Governor
2. An actuary for the insurer
An insurer neglects to pay a legitimate claim that is covered under the terms of the policy. Which of the following insurance principles has the insurer violated? 1. Adhesion 2. Consideration 3. Good faith 4. Representation
2. Consideration
Who assumes control over an insurance company's funds and management if they become insolvent? 1. National Association of Insurance Commissioners 2. Department of Insurance 3. The policyholders or stock owners of the company 4. State attorney general
2. Department of Insurance
Which of the following terms is used to name the nontaxed return of unused premiums? 1. Surrender 2. Dividend 3. Premium return 4. Interest
2. Dividend
The authority granted to an agent through the agent's contract is referred to as 1. Absolute authority. 2. Express authority. 3. Apparent authority. 4. Implied authority.
2. Express authority.
When the policyowner specifies a dollar amount in which installments are to be paid, he/she has chosen which settlement option? (Choose from the following options) 1. Extended term 2. Fixed amount 3. Fixed period 4. Life income period certain
2. Fixed amount
Which of the following statements regarding HIV testing for life insurance purposes is NOT true? 1. HIV testing is regulated at the state level. 2. Insurers are barred from requesting HIV testing. 3. Positive test results will be forwarded to the state's Department of Health if a physician is not selected by the applicant. 4. The testing practices must meet the criteria of the U.S. Department of Health and Human Services.
2. Insurers are barred from requesting HIV testing.
During partial withdrawal from a universal life policy, which portion will be taxed? 1. Loan 2. Interest 3. Cash value 4. Principal
2. Interest
Twin brothers are starting a new business. They know it will take several years to build the business to the point that they can pay off the debt incurred in starting the business. What type of insurance would be the most affordable and still provide a death benefit should one of them die? 1. Ordinary Life 2. Joint Life 3. Decreasing Term 4. Whole Life
2. Joint Life
An insured has a life insurance policy that requires him to only pay premiums for a specified number of years until the policy is paid up. What kind of policy is it? 1. Graded Premium Life 2. Limited-pay Life 3. Variable Life 4. Adjustable Life
2. Limited-pay Life
In Ohio, all life insurance policy illustrations must include all of the following EXCEPT 1. Initial death benefits. 2. Name, age and sex of the insurance producer. 3. Name of the insurer. 4. Generic policy name, company product name, and form number.
2. Name, age and sex of the insurance producer.
Which of the following allows the insurer to relieve a minor insured from premium payments if the minor's parents have died or become disabled? 1. Waiver of Premium 2. Payor Benefit 3. Jumping Juvenile 4. Juvenile Premium Provision
2. Payor Benefit
Which of the following would help prevent a universal life policy from lapsing? 1. Corridor of insurance 2. Target premium 3. Face amount 4. Adjustable premium
2. Target premium
Which of the following best describes taxation during the accumulation period of an annuity? 1. The growth is subject to immediate taxation. 2. Taxes are deferred. 3. The annuity is subject to state taxes only. 4. The annuity is subject to both state and federal taxation.
2. Taxes are deferred.
An annuitant dies before the effective date of a purchased annuity. Assuming that the annuitant's wife is the beneficiary, what will occur? (Choose from the following options) 1. The premiums will decrease. 2. The interest will continue to accumulate tax deferred. 3. The interest will become immediately taxable. 4. The premiums will increase.
2. The interest will continue to accumulate tax deferred.
Which of the following is NOT a goal of risk retention? 1. To fund losses that cannot be insured 2. To minimize the insured's level of liability in the event of loss 3. To reduce expenses and improve cash flow 4. To increase control of claim reserving and claims settlements
2. To minimize the insured's level of liability in the event of loss
how many hours of prelicensing education are required for applicant seeking a resident agent
20 hours
An insured purchased a 15-year level term life insurance policy with a face amount of $100,000. The policy contained an accidental death rider, offering a double indemnity benefit. The insured was severely injured in an auto accident, and after 10 weeks of hospitalization, died from the injuries. What amount would his beneficiary receive as a settlement? (Choose from the following options) 1. $0 2. $100,000 3. $200,000 4. $100,000 plus the total of paid premiums
3. $200,000
An agent changes his residential address. Within how many days must the Superintendent be notified? 1. 10 2. 20 3. 30 4. The Superintendent does not need to be notified. Only changes in business addresses need to be reported.
3. 30
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? 1. Incontestability period 2. Assignment 3. Automatic premium loan 4. Waiver of premium
3. Automatic premium loan
What insurance concept is associated with the names Weiss and Fitch? (Choose from the following options) 1. Types of mutual companies 2. Index used by stock companies 3. Guides describing company financial integrity 4. Policy dividends
3. Guides describing company financial integrity
The life insurance policy clause that prevents an insurance company from denying payment of a death claim after a specified period of time is known as the 1. Insuring clause. 2. Misstatement of Age clause. 3. Incontestability clause. 4. Reinstatement clause.
3. Incontestability clause.
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? 1. Home service insurance 2. Commercial life 3. Ordinary life 4. Industrial life
3. Ordinary life
Which policy component decreases in decreasing term insurance? 1. Cash value 2. Dividend 3. Premium 4. Face amount
3. Premium
A producer is helping a married couple determine the financial needs of their children in the event one or both should die prematurely. This is a personal use of life insurance known as 1. Survivorship insurance 2. Juvenile protection provision 3. Survivor protection 4. Life planning
3. Survivor protection
.A father owns a life insurance policy on his 15-year-old daughter. The policy contains the optional Payor Benefit rider. If the father becomes disabled, what will happen to the life insurance premiums? 1. The insured will have to pay premiums for 6 months. If at the end of this period the father is still disabled, the insured will be refunded the premiums. 2. The insured's premiums will be waived until she is 21. 3. The premiums will become tax deductible until the insured's 18th birthday. 4. Since it is the policyowner, and not the insured, who has become disabled, the life insurance policy will not be affected.
3. The premiums will become tax deductible until the insured's 18th birthday.
In insurance policies, contract ambiguities are automatically ruled in the favor of the insured. What privilege does the insurer have in order to balance this? (Choose from the following options) 1. The right to revoke the policy 2. The right to raise premiums as a result of court rulings 3. The right to determine the wording of a policy 4. The right to refute the rulings
3. The right to determine the wording of a policy
days, change state of residence must notify the superintendent
30 days
what is the waiting period for rate filing before each rate may become effective
30 days
An insurer wants to begin underwriting procedures for an applicant. What source will it consult for the majority of its underwriting information? 1. Interviews 2. State records 3. Medical records 4. Application
4. Application
Which of the following provisions in annuity contracts allow the owner to surrender the annuity if interest rates drop to a specified level? 1. Surrender 2. Nonforfeiture 3. Annuitization 4. Bail-out
4. Bail-out
Which of the following statements concerning buy-sell agreements is true? 1. Premiums paid are deductible as a business expense. 2. Benefits received are considered income taxable. 3. Buy-sell agreements pay in the event of a medical emergency. 4. Buy-sell agreements are normally funded with a life insurance policy.
4. Buy-sell agreements are normally funded with a life insurance policy.
A rider that may be attached to a life insurance policy that will adjust the face amount based upon a specific index, such as the Consumer Price Index, is called 1. Accelerated benefit rider. 2. Living need rider. 3. Payor rider. 4. Cost of living rider.
4. Cost of living rider.
Which of the following is NOT allowed in credit life insurance? 1. Creditor having a collateral assignment on the policy 2. Creditor requiring that a debtor has a life insurance 3. Creditor becoming a policy beneficiary 4. Creditor requiring that a debtor buys insurance from a certain insurer
4. Creditor requiring that a debtor buys insurance from a certain insurer
A couple near retirement is planning for their golden years. They want to make sure that their retirement annuity provides monthly benefits for the rest of their lives. Should one of them die, the other would still like to continue receiving benefits. Which settlement option should they choose? 1. Joint life 2. Life with period certain 3. Straight life 4. Joint and Survivor
4. Joint and Survivor
An insured owns a term policy with a guaranteed renewable option. When the end of the policy draws near, the insured answers medical questions in order to prove insurability and qualifies for a discounted premium rate. Which option best describes this scenario? 1. Preferred premium reduction 2. Contract review 3. Revision of consideration 4. Re-entry
4. Re-entry
Statements made by an applicant for a life insurance policy which are true to the best of one's knowledge are referred to as 1. Facts. 2. Warranties. 3. Information. 4. Representations.
4. Representations.
Annuities can be used to fund which of the following? 1. Variable life insurance 2. Group life insurance 3. Estate creation 4. Retirement plans
4. Retirement plans
The Superintendent issues a cease and desist order. A hearing is held in order to determine whether the order should be continued. After the hearing, the Superintendent decides to continue the order. The agent wants to appeal this decision. Which of the following is true? 1. The order cannot be appealed, but the duration of the order can. 2. There is not enough information to answer this question. 3. The order cannot be appealed at this point, since it is the final order. 4. The order can be appealed.
4. The order can be appealed.
According to the telemarketing sales rules, what are the permissible calling hours for telemarketing calls? A 8am until 9pm B 10am until 10pm C 7am until 7pm D 7am until 9pm
A 8am until 9pm
In Ohio, a temporary license may be issued for any of the following reasons EXCEPT A Agent's retirement. B Agent's death. C Agent's disability. D Agent's military service.
A Agent's retirement.
Who assumes control over an insurance company's funds and management if they become insolvent? A Department of Insurance B The policyholders or stock owners of the company C State attorney general D National Association of Insurance Commissioners
A Department of Insurance
An insurance company assures its new policyholders that their premium costs will not increase for a period of at least five years. However, due to increasing financial strain, they plan to raise premium costs for all insureds by 10% over the next two years. What term best describes this act? A Fraud B Defamation C Unfair discrimination D Errors and omissions
A Fraud
All of the following are required to qualify for a resident license EXCEPT A An applicant that has passed at least one examination. B An applicant that is at least 21 years old. C An applicant that has not committed any act that is a ground for the denial, suspension, or revocation of a license. D An applicant that is of good reputation and character.
B An applicant that is at least 21 years old. --18 yrs
All of the following are regulated areas of the insurance industry EXCEPT A Investments. B Commissions. C Agents. D Trade practices.
B Commissions.
Which of the following is NOT true regarding a temporary license in this state? A It does not require a written examination. B It will continue for 180 days even if the owner disposes of the business. C It can be issued to a designee when a licensed agent enters active U.S. military service. D It can be issued to a spouse of the deceased agent.
B It will continue for 180 days even if the owner disposes of the business.
An insolvent insurer is one who is unable to pay its obligations when they are due or has fewer assets than liabilities for a period of A2 years. B3 years. C4 years. D5 years.
B3 years.
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 A 3 years. B 5 years. C 10 years. D 12 years.
C 10 years.
All of the following violations may result in an agent's imprisonment EXCEPT A Knowingly obtaining information about a consumer under false pretenses. B Engaging in the business of insurance after being convicted of breach of trust. C Failing to report to the department a criminal prosecution taken against the agent in another jurisdiction. D Embezzling funds from the insurer.
C Failing to report to the department a criminal prosecution taken against the agent in another jurisdiction.
Which of the following best describes the unfair trade practice of defamation? A Issuing false advertising material B Refusing to deal with other insurers C Making derogatory oral statements about another insurer's financial condition D Assuming the name and identity of another person
C Making derogatory oral statements about another insurer's financial condition
What is the maximum civil penalty for violating the Superintendent's cease and desist order? A$1,000 B$5,000 C$10,000 D$15,000
C$10,000
Which of the following best describes a misrepresentation? A Making a deceptive or untrue statement about a person engaged in the insurance business B Making a maliciously critical statement that is intended to injure another person C Discriminating among individuals of the same insuring class D Issuing sales material with exaggerated statements about policy benefits
D Issuing sales material with exaggerated statements about policy benefits
To whom does the insurer certify that an appointee is competent, financially responsible, and suitable to represent them? A The Comptroller B The Commissioner C The Governor D The Superintendent
D The Superintendent
the automatic premium loan provision is activated at the end of the
grace period
In a noncontributory health insurance plan, what percentage of eligible employees must participate in the plan before the plan can become effective? (Choose from the following options) 1. 100% 2. 75% 3. 50% 4. 25%
1. 100%
For how long is the certificate of prelicensing course completion valid? 1. 180 calendar days 2. Indefinitely 3. 120 days 4. 2 years
1. 180 calendar days
when will fraud be considered a felony
$ 1000 - $7500
ethics edu
3 hrs
fail to payment term life insurance grace period
30 - 31 days
if a consumer requests additional information concerning an investigative consumer report, how long
5 days
Which type of health care services are provided for unforeseen conditions of a kind that usually requires medical attention without delay but does not pose a threat to the life, limb, or permanent health of the injured or ill person? A Urgent care B Supplemental health care C Priority one care D Emergency care
A Urgent care
An employee is injured in a construction accident, rendering him unable to work for a year. Which of the following plans would provide him with medical expense coverage and income assistance? A Workers Compensation B Major Medical Insurance C Long-term Care D Social Security Disability
A Workers Compensation
a straight life policy has what type of premium
A level annual premium for the life of the insured
Viatical Settlement Provider
A person, other than a viator, that enters into or effectuates a viatical settlement contract.
straight life
A whole life policy under which premiums are paid throughout the life of the insured, and the face value is paid at death
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? AThe amount of the distribution is reduced by the amount of a 20% withholding tax. BNo taxes are due since the plan participant is over age 59 1/2. CThere is a 10% early withdrawal penalty. DThe amount distributed is subject to ordinary income tax.
AThe amount of the distribution is reduced by the amount of a 20% withholding tax.
An insured had $500 left in his Health Reimbursement Account when he quit his job. What happens to that money? A The insured can use up the $500 as long as he has qualified medical expenses. B The insured can have access to the $500 at his previous employer's discretion. C The previous employer must issue a check for $500 payable to the insured. D It may be rolled over into a HRA with his new employer.
B The insured can have access to the $500 at his previous employer's discretion.
Who is the beneficiary in a credit health policy? A The Federal Government B The lending institution C The insurer D The estate of the borrower
B The lending institution
How are employer contributions to Health Reimbursement Accounts treated in regards to taxation? A They are excluded from all taxation. B They are tax deductible. C They are taxed as a regular business expense. D They are treated as income tax for the employer.
B They are tax deductible.
Which provision states that the insurance company must pay Medical Expense claims immediately? A Relation of Earnings to Insurance B Time of Payment of Claims C Payment of Claims D Legal Actions
B Time of Payment of Claims
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 A Gatekeepers. B Usual, customary and reasonable. C Relative-value schedule. D Benefit schedule.
B Usual, customary and reasonable.
Under the Accidental Death and Dismemberment (AD&D) coverage, what type of benefit will be paid to the beneficiary in the event of the insured's accidental death? A Double the amount of the death benefit B Refund of premiums C Principal sum D Capital sum
C Principal sum
What is the purpose of the rehabilitation benefit in disability insurance? A To refund the insured's premium paid during the disability B To help the insured recover from a disability C To cover the expenses of retraining the insured to return to work D To compensate the insured for the lost income
C To cover the expenses of retraining the insured to return to work
Premiums paid by self-employed sole proprietors or partners for medical expense insurance are A Not tax deductible. B Partially tax deductible. C Totally tax deductible. D Taxable.
C Totally tax deductible.
Social Security was created to provide all of the following benefits EXCEPT A Disability income. B Retirement income. C Unemployment income. D Survivor's benefits.
C Unemployment income.
An insurance company receives an application with some information missing and issues the policy anyway. What is this called? A Subrogation B Aleatory C Waiver D Estoppel
C Waiver
Which of the following determines whether disability insurance benefits are taxed? A Contract provisions B If the total of benefits paid meets the minimum state taxation standard C Whether the premiums were tax deductible D State statutes
C Whether the premiums were tax deductible
Which of the following statements regarding the taxation of Modified Endowment Contracts is FALSE? APolicy loans are taxable distributions. BAccumulations are tax deferred. CWithdrawals are not taxable. DDistributions before age 59 1/2 incur a 10% penalty on policy gains.
CWithdrawals are not taxable.
What limits the amount that a policyowner may borrow from a whole life insurance policy?
Cash value
Which of the following is true regarding benefits paid to disabled employees? A They are exempt from taxation if any portion of the premium was paid by the employee. B Tax withholding is required if the employee paid the premium. C Disability benefits are not taxed. D They may be subject to taxation if the premium was paid by the employer.
D They may be subject to taxation if the premium was paid by the employer.
Which of the following statements is true concerning employer group dental plans? A They always contain a conversion privilege. B They are only marketed as stand-alone plans. C They are exempt from COBRA laws. D They seldom contain a conversion privilege.
D They seldom contain a conversion privilege.
All of the following benefits are available under Social Security EXCEPT A Old-age and retirement benefits. B Disability benefits. C Death benefits. D Welfare benefits.
D Welfare benefits.
How soon following the occurrence of a covered loss must an insured submit written proof of such loss to the insurance company? A As soon as possible B Within 20 days C Within 60 days D Within 90 days or as soon as reasonably possible, but not to exceed 1 year
D Within 90 days or as soon as reasonably possible, but not to exceed 1 year
An employee quits her job where she has a balance of $10,000 in her qualified plan. If she decides to do a direct transfer from her plan to a Traditional IRA, how much will be transferred from one plan administrator to another and what is the tax consequence of a direct transfer? A$8,000, no tax consequence B$8,000, tax on growth only C$10,000, tax on growth only D$10,000, no tax consequence
D$10,000, no tax consequence
A policyowner cancels his life policy but instructs the insurance company to transfer the cash value of his policy to an annuity. This nontaxable transaction is called AQualified distribution. BPremature distribution. CRollover. D1035 exchange.
D1035 exchange.
Who can provide skilled nursing care? ASpouse BFamily Member CCommunity volunteer DDoctor
DDoctor
Which of the following may be used when determining Medicare Advantage out-of-pocket costs? AOut-of-pocket costs from the enrollee's previous insurance coverage BPre-existing conditions CThe enrollee's marital status DMedicare Part B premiums paid by the plan
DMedicare Part B premiums paid by the plan
Phone TV ad
Direct response marketing
Life policy allows the policyowner to make periodic additions to the face amount at standard rates
Guaranteed insurability rider
method calculating the amount of LI needed
Human Life Value Approach
adverse selection insurance
In the insurance industry, adverse selection refers to situations in which an insurance company extends insurance coverage to an applicant whose actual risk is substantially higher than the risk known by the insurance company.
Who make up the Medical Information Bureau?
Insurers
Which of the following is true about the mandatory free look in a Life Insurance policy?
It commences when the policy is delivered.
first-to-die life
Joint Life
guarantees an income for 2 or more recipients that none of them can outlive
Joint and Survivor
insurance is a contract by which one seeks to protect another from
Loss
if a life insurance policy develops cash value faster than a seven pay whole life contract
Modified Endowment Contract.
Policy Replacement
Notice Regarding Replacement
method to protect from catastrophic losses
Reinsurance
cash old policy to new policy
Replacement rule
who must approve viatical settlements
Superintendent
taxation of annuity during accumulation period
There is no capital gains tax
what is the purpose of a disclosure statement in life insurance
To explain features and benefits of a proposed policy to the consumer
the insured is not legally bound to any particular action in the insurance contract, the insurer is legally obligated to pay losses covered by the policy
Unilateral
forgo collecting the premium if the insured is disabled is called
Waiver of premium
Which of the following statements regarding the the taxation of Modified Endowment Contracts is FALSE?
Withdrawals are not taxable
be sufficient violation to warrant rejection of insurance agent's license
a denied license in another state
In order to minimize adverse selection, employer group dental plans may require employees who enroll after they were initially eligible to participate to do all of the following EXCEPT a)Increase benefits for a period of one year. b)Submit evidence of insurability. c)Satisfy a longer probationary period. d)Reduce benefits for a period such as one year.
a)Increase benefits for a period of one year.
underwriter selection criteria
age, gender, morals, avocation
what documentation grants express authority to an agent
agent's contract with the principal
What types of services may NOT be provided under the long-term care's assisted living care? a)Reminders regarding medication b)Visits by a registered nurse c)Linens and personal laundry service d)Assistance with dressing and bathing
b)Visits by a registered nurse
when must an ira be completely distributed when a beneficiary is not named
before December 31 of the calendar year that contains the fifth anniversary of the owner's death, unless the owner named a beneficiary.
Credit Life policy
can not pay out more than the balance of the debt
receiver an annual life insurance dividend check
cash option, annual, nontaxable dividend check
Extended Term Nonforfeiture Option
cash value pay = original policy
transfer insurance, need to do?
certificate of authority
applicant hold the info
concealment
a person's credit character reputation and habits
consumer report
Credit life insurance beneficiary
creditor
life insurance vs annuities
death benefit creates an immediate estate
Not fundable by annuities
death benefits
class designation
designates a group of individuals
purpose of seven pay test
determines if the insurance policy is a MEC
two individuals are in the same risk and age class, charge different rates for their insurance policies
discrimination
how often are agents required to renew their insurance license
every 2 years
how often must the superintendent examine financial affairs of domestic insurers
every 3 years
direct rollover how is money transferred
from trustee to trustee
Protect the policyholder against an unintentional lapse of the policy
garce period
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
annuity standard and poor 500 index
indexed annuity
ordinary life
individual with face more than $1000
insurer has fewer assets than liabilities and is unable to pay financial obligations for at least 3 years
insolvent
STOLI (stranger-originated life insurance) violate
insurable interest
Policy Effective Date
it identifies when the coverage is effective, but also it establishes the date by which future annual premiums must be paid. The policy will not be truly effective until it is delivered to the applicant, the first premium is paid, and a statement of continued good health is obtained.
statistical prediction of loss which rates for insurance
law of large numbers
both protection and savings
limited pay whole life
not true regarding policy loans
money borrowed from the cash value is taxable
transfer insurance policy to friend
need written consent of the insurer
Gross Annual Premium
net premium + expense (loading) = gross premium
MIB
nonprofit org, maintains underwriting info on applicants for life and health insurance
Taxation of dividends
not taxable
Inspection report
obtain applicant's hobbies, financial status, habits
Joint life annuity
payment to two or moer annuitants which ceases upon death of either
cause of loss insured against in an insurance policy
peril 危險
Which of the following best describes what the annuity period is?
period during which accumulated money is converted into income
cash value element policy
permanent
specific information about a policy
policy summary
decreasing term policy
premium same, face amount decreases
illustration in insurance
presentation includes nonguaranteed elements of policy
Group Plan
purpose, size, turnover, financial strength of the group
insurance a risk sharing arrangement
receiprocal互惠
the target premium for a universal life policy
recommand amount that should be paid on a policy to cover the cost of insurance protection and keep the policy in force
a statement made by an applicant for insurance is an example of a
representations
annuities can be used to fund which of the following
retirement plans
retain all the rights of ownership for beneficiaries
revocable benediciary
if an immediate annuity is purchased with the face amount
settlement option
traditional level premium contract
straight life
whom the insurer certify that an appointee is competent?
superintendant
taxation of annuity withdrawals during accumulation period
the money will be taxed as income if you purchased the annuity with pre-tax funds
free look provision period
typically 10 days or more, allow policyowner to return the policy for a full refund
who is insurance agent
who licensed to sell, solicit or negotiate insurance
not true regarding the accumulation period of an annuity
would not occur in a deferred annuity
underwriters allowed to discriminate?
yes, but not unfairly
Insurable risks
1. insurable risk needs to be statistically predictable 2. insurable risk must involve a loss definite 3. Insurance can not be mandatory 4. insureds can be randomly selected
Issue age policy premiums increase in response to which of the following factors? AInflation BAge CIncreased benefits DIncreased deductible
CIncreased benefits
In a group policy, who is issued a certificate of insurance? A The health care provider B The insurance company C The employer D The individual insured
D The individual insured
What type of group rating uses the actual experience of the group as a factor in developing the rates to be charged? (Choose from the following options) 1. Individual rating 2. Experience rating 3. District rating 4. Community rating
2. Experience rating
What is the waiting period on a Waiver of Premium rider in life insurance policies? 1. 30 days 2. 3 months 3. 5 months 4. 6 months
4. 6 months
A Health insurance policy lapses but is reinstated within an acceptable timeframe. How soon from the reinstatement date will coverage for accidents become effective? A Immediately B After 14 days C After 21 days D After 31 days
A Immediately
After a back injury, an insured is disabled for a year. His insurance policy carries a Disability Income Benefit rider. Which of the following benefits will he receive? 1. Monthly premium waiver and monthly income 2. Percentage of medical costs paid by the insurer 3. Payments for life 4. Yearly premium waiver and income
1. Monthly premium waiver and monthly income
A person filed a report about an insurance fraud practice. The person could be sued for civil damages by which of the following? (Choose from the following options) 1. No one 2. The Superintendent 3. A law enforcement official 4. The NAIC
1. No one
An employee group with which of the following number of employees would qualify for a medical savings account? (Choose from the following options) 1. 23 employees 2. 51 employees 3. 101 employees 4. Any number of employees
1. 23 employees less then 50
Within how many days of requesting an investigative consumer report must an insurer notify the consumer in writing that the report will be obtained? (Choose from the following options) 1. 3 days 2. 5 days 3. 10 days 4. 14 days
1. 3 days
How long must insurers keep a copy of a basic life policy illustration on file? 1. 3 years after the policy terminated 2. 5 years after the illustration was created 3. Until the next examination by the Department 4. 2 years after first use
1. 3 years after the policy terminated
Which of the following Medicare supplement plans would be available to a reasonably healthy 91-year-old female? (Choose from the following options) 1. A-N 2. K & L only 3. A only 4. A-C only
1. A-N
What limits the amount that a policyowner may borrow from a whole life insurance policy? 1. Cash value 2. Premiums paid 3. Amount stated in the policy 4. Face amount
1. Cash value
Which of the following statements is true regarding Medicare prescription drug coverage tiers? (Choose from the following options) 1. Drugs in a lower tier must cost less to an insured than a higher tier. 2. First tier drugs are typically nonpreferred brand-name. 3. Formularies must contain at least 3 tiers per treatment category. 4. Multiple tiers may have the same drug option.
1. Drugs in a lower tier must cost less to an insured than a higher tier.
Which of the following insurance providers must be nonprofit and sell insurance only to its members? 1. Fraternal 2. Service 3. Mutual 4. Reciprocal
1. Fraternal
If a contract provides a set amount of income for two or more persons with the income stopping upon the first death of the insured, it is called a 1. Joint life annuity. 2. Joint and survivor annuity. 3. Deferred annuity. 4. Pure annuity.
1. Joint life annuity.
Which of the following is an example of a limited-pay life policy? 1. Life Paid-up at Age 65 2. Renewable Term to Age 70 3. Level Term Life 4. Straight Life
1. Life Paid-up at Age 65
Risk Retention
1. fund losses can not be insured 2. Reduce expenses and improve cash flow 3. increase control of claim reserving and claim
On a participating insurance policy issued by a mutual insurance company, dividends paid to policyholders are (Choose from the following options) 1. Not taxable since the IRS treats them as a return of a portion of the premium paid. 2. Paid at a fixed rate every year. 3. Taxable as ordinary income. 4. Guaranteed.
1. Not taxable since the IRS treats them as a return of a portion of the premium paid.
Events in which a person has both the chance of winning or losing are classified as 1. Speculative risk. 2. Insurable. 3. Pure risk. 4. Retained risk.
1. Speculative risk.
.Which of the following insurers are owned by stockholders who have the usual rights of ownership, including the right of voting? (Choose from the following options) 1. Stock 2. Mutual 3. Reciprocal 4. Fraternal
1. Stock
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 (Choose from the following options) 1. Stop-loss. 2. Maximum benefits. 3. Deductible. 4. Coordination of benefits.
1. Stop-loss.
A person steps off a street car and trips and breaks his ankle. This type of injury can be described as (Choose from the following options) 1. Sudden and unforeseen. 2. A recurrent injury. 3. Intentional. 4. Not covered.
1. Sudden and unforeseen.
Which of the following is NOT a characteristic of a group long-term disability plan? (Choose from the following options) 1. The benefit can be up to 50% of one's yearly income. 2. The elimination period is the same as in the short-term plan's benefit period. 3. The benefit period may be to age 65. 4. The benefit can be up to 66 and 2/3% of one's monthly income.
1. The benefit can be up to 50% of one's yearly income.
.Which of the following is NOT a feature of a noncancellable policy? (Choose from the following options) 1. The insurer may terminate the contract only at renewal for certain conditions. 2. The premiums cannot be increased beyond the amount stated in the policy. 3. The guarantee to renew coverage usually applies until the insured reaches certain age. 4. The insured has the right to renew the policy for the life of the contract.
1. The insurer may terminate the contract only at renewal for certain conditions.
A producer who fails to segregate premium monies from his own personal funds is guilty of 1. Theft. 2. Commingling. 3. Larceny. 4. Embezzlement.
1. Theft.
All of the following are true regarding the guaranteed insurability rider EXCEPT 1. This rider is available to all insureds with no additional premium. 2. The insured may purchase additional coverage at the attained age. 3. The insured may purchase additional insurance up to the amount specified in the base policy. 4. It allows the insured to purchase additional amounts of insurance without proving insurability only at specified dates or events.
1. This rider is available to all insureds with no additional premium.
after the policy in force for how many years may not be contested
2 years(Incontestability)
Which authority is NOT stated in an agent's contract but is required for the agent to conduct business? A Implied B Apparent C Assumed D Express
A Implied
An insured pays a monthly premium of $100 for her health insurance. What would be the duration of the grace period under her policy? (Choose from the following options) 1. 7 days 2. 10 days 3. 31 days 4. 60 days
2. 10 days The grace period is 7 days if the premium is paid weekly, 10 days if paid monthly, and 31 days for all other modes.
Under which condition would an employee's group medical benefits be exempt from income taxes? (Choose from the following options) 1. When the premiums and other unreimbursed medical expenses exceed 7.5% of the employee's adjusted gross income 2. An employee's group medical benefits are generally exempt from taxation as income. 3. An employee's group medical benefits are never exempt from taxation as income. 4. When the premiums and other unreimbursed medical expenses exceed 6.5% of the employee's adjusted gross income
2. An employee's group medical benefits are generally exempt from taxation as income.
Because an agent is using stationery with the logo of an insurance company, applicants for insurance assume that the agent is authorized to transact on behalf of that insurer. What type of agent authority does this describe? (Choose from the following options) 1. Assumed 2. Apparent 3. Express 4. Implied
2. Apparent
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? (Choose from the following options) 1. Claims Saving 2. Cost-containment 3. Selective Coverage 4. Limited Coverage
2. Cost-containment
Why is it essential for an insurer to document all correspondence with an insured? (Choose from the following options) 1. Federal law 2. Errors and omissions 3. Statistics gathering 4. State law
2. Errors and omissions
According to the nonforfeiture law, if the owner decides to surrender a deferred annuity prior to annuitization, the owner is entitled to which of the following? 1. Full premium refund without any charges 2. Guaranteed surrender value 3. No payments 4. Annuity dividends
2. Guaranteed surrender value
In which of the following cases would a credit disability policy be issued? (Choose from the following options) 1. If an insured has filed bankruptcy and his premiums are waived, he can be issued a credit disability policy. 2. If an individual is in debt to a specific creditor, payments will be made for him/her until the return to work. 3. If a person receives disability benefits, he or she is eligible for credits on their group policies for future disabilities. 4. A person receiving disability benefits cannot receive a credit disability policy.
2. If an individual is in debt to a specific creditor, payments will be made for him/her until the return to work.
The section of a health policy that states the causes of eligible loss under which an insured is assumed to be disabled is the (Choose from the following options) 1. Probationary period. 2. Insuring clause. 3. Incontestability clause. 4. Consideration clause.
2. Insuring clause.
Insurers may change which of the following on a guaranteed renewable health insurance policy? (Choose from the following options) 1. No changes are permitted. 2. Rates by class 3. Coverage 4. Individual rates
2. Rates by class
Which of the following is NOT covered under Plan A in Medigap insurance? (Choose from the following options) 1. The first three pints of blood each year 2. The Medicare Part A deductible 3. Approved hospital costs for 365 additional days after Medicare benefits end 4. The 20% Part B coinsurance amounts for Medicare approved services
2. The Medicare Part A deductible
An employee becomes insured under a PPO plan provided by his employer. If the insured decides to go to a physician who is not a PPO provider, which of the following will happen? (Choose from the following options) 1. The PPO will pay the same benefits as if the insured had seen a PPO physician. 2. The PPO will pay reduced benefits. 3. The PPO will not pay any benefits at all. 4. The insured will be required to pay a higher deductible.
2. The PPO will pay reduced benefits.
The Superintendent issues a cease and desist order. A hearing is held in order to determine whether the order should be continued. After the hearing, the Superintendent decides to continue the order. The agent wants to appeal this decision. Which of the following is true? (Choose from the following options) 1. The order can be appealed. 2. The order cannot be appealed, but the duration of the order can. 3. There is not enough information to answer this question. 4. The order cannot be appealed at this point, since it is the final order.
2. The order cannot be appealed, but the duration of the order can.
What is the purpose of COBRA? (Choose from the following options) 1. To protect the insureds against insolvent insurers 2. To provide continuation of coverage for terminated employees 3. To provide coverage for the dependents 4. To provide health coverage for people with low income
2. To provide continuation of coverage for terminated employees
Federal law makes it illegal for any individual convicted of a crime involving dishonesty or breach of trust to work in the business of insurance affecting interstate commerce (Choose from the following options) 1. Without receiving written consent from a Federal Judge. 2. Without receiving written consent from an insurance regulatory authority. 3. Under any circumstances. 4. Unless they have served an appropriate prison sentence.
2. Without receiving written consent from an insurance regulatory authority.
Workers compensation insurance covers a worker's medical expenses resulting from work related sickness or injuries and covers loss of income from (Choose from the following options) 1. Temporary job layoffs. 2. Work-related disabilities. 3. Job termination. 4. Plant or office closings.
2. Work-related disabilities.
under a 20 pay whole life policy in order for the policy to pay the death benefit
20 years or death
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? 1. $20,000 2. $25,000 3. $50,000 4. The face amount will be determined by the insurer.
3. $50,000 It would remain the same as when it purchased
What is the maximum period that an insurer would pay benefits in accordance with an Additional Monthly Benefit rider? (Choose from the following options) 1. For the duration of the disability or the contract, depending on which ends first 2. 1 month 3. 1 year 4. 2 years
3. 1 year
In order to collect Social Security disability benefits, the claimant must be able to demonstrate that the disability will last at least (Choose from the following options) 1. Until age 65. 2. For life. 3. 12 months. 4. 24 months.
3. 12 months.
How many hours of continuing education must be completed in ethics? 1. 5 2. 12 3. 2 4. 3
3. 2
If an agent has an administrative action taken against him or her in another jurisdiction, how many days does the agent have to report this to the Superintendent after the final disposition? (Choose from the following options) 1. 7 days 2. 15 days 3. 30 days 4. 45 days
3. 30 days
Employer health plans must provide primary coverage for individuals with end-stage renal disease before Medicare becomes primary for how many months? (Choose from the following options) 1. 12 months 2. 24 months 3. 30 months 4. 36 months
3. 30 months
If an employer provides long-term group disability insurance for its employees, what percentage of monthly wages are lower-paid employees eligible to collect? (Choose from the following options) 1. 33 and 1/3% 2. 50% 3. 66 and 2/3% 4. 90%
3. 66 and 2/3%
.Under the uniform required provisions, proof of loss under a health insurance policy normally should be filed within (Choose from the following options) 1. 30 days of a loss. 2. 60 days of a loss. 3. 90 days of a loss. 4. 20 days of a loss.
3. 90 days of a loss.
A Straight Life policy has what type of premium? 1. A decreasing annual premium for the life of the insured 2. A variable annual premium for the life of the insured 3. A level annual premium for the life of the insured 4. An increasing annual premium for the life of the insured
3. A level annual premium for the life of the insured
An applicant for insurance misstates her age at the time her life insurance application is taken. This misstatement may result in 1. Automatic lapse. 2. Recession of the policy. 3. Adjustment in the death benefit. 4. No change.
3. Adjustment in the death benefit.
Medicaid is sponsored by what kind of sources? (Choose from the following options) 1. Federal only 2. State only 3. Both state and federal 4. Private companies
3. Both state and federal
.When both parties to a contract must perform certain duties and follow rules of conduct to make the contract enforceable, the contract is (Choose from the following options) 1. Personal. 2. Unilateral. 3. Conditional. 4. Aleatory.
3. Conditional.
Which of the following types of insurance policies is most commonly used in credit life insurance? 1. Whole life 2. Equity indexed life 3. Decreasing term 4. Increasing term
3. Decreasing term
Every subscriber of a health insuring corporation is entitled to a/an (Choose from the following options) 1. Certificate of insurance. 2. Buyer's guide. 3. Evidence of coverage. 4. Proof of insurability.
3. Evidence of coverage.
Dental Expense policies generally have a deductible that would apply to all of the following EXCEPT A Preventive care. B Orthodontics. C Prosthodontics. D Endodontics.
A Preventive care.
In insurance transactions, fiduciary responsibility means (Choose from the following options) 1. Being liable with respect to payment of claims. 2. Commingling premiums with agent's personal funds. 3. Handling insurer funds in a trust capacity. 4. Maintaining a good credit record.
3. Handling insurer funds in a trust capacity.
Which of the following is true regarding health insurance? (Choose from the following options) 1. It provides death benefit coverage. 2. It only covers expenses related to health care. 3. It could provide payments for loss of income. 4. Disability coverage is excluded.
3. It could provide payments for loss of income.
Which of the following is INCORRECT concerning Medicaid? (Choose from the following options) 1. It pays for hospital care, outpatient care, and laboratory and X-ray services. 2. The federal government provides about 56 cents for every Medicaid dollar spent. 3. It is solely a federally administered program. 4. It provides medical assistance to low-income people who cannot otherwise provide for themselves.
3. It is solely a federally administered program.
A couple receives a set amount of income from their annuity. When the wife dies, the husband no longer receives annuity payments. What type of annuity did the couple buy? 1. Life with period certain 2. Joint limited annuity 3. Joint life 4. Joint and survivor
3. Joint life
.If a settlement option is not chosen by the beneficiary or policyowner, which option will be used? 1. Fixed period 2. Fixed amount 3. Lump sum 4. Life income
3. Lump sum
All of the following statements describe a MEWA EXCEPT (Choose from the following options) 1. MEWA employers retain full responsibility for any unpaid claims. 2. MEWAs can be self-insured. 3. MEWAs are groups of at least 3 employers. 4. MEWAs can be sponsored by insurance companies.
3. MEWAs are groups of at least 3 employers.
An individual's tendency to be dishonest would be indicative of a 1. Pure hazard. 2. Physical hazard. 3. Moral hazard. 4. Morale hazard.
3. Moral hazard.
A rider attached to a life insurance policy that provides coverage on the insured's family members is called the 1. Juvenile rider. 2. Payor rider. 3. Other-insured rider. 4. Change of insured rider.
3. Other-insured rider.
In Medicare prescription drug plans, step therapy refers to (Choose from the following options) 1. Types of benefits. 2. A type of rehabilitative service. 3. Prior authorization. 4. Formulary tiers.
3. Prior authorization.
In dental insurance, what type of care will cover crowns? (Choose from the following options) 1. Prosthodontics 2. Orthodontics 3. Restorative 4. Preventive
3. Restorative
When an insured under a life insurance policy died, the designated beneficiary received the face amount of the policy as well as a refund of all of the premiums paid. Which rider is attached to the policy? 1. Decreasing term 2. Premature death 3. Return of premium 4. Cost of living
3. Return of premium
During the accumulation period in a nonqualified annuity, what are the tax consequences of a withdrawal? 1. Both interest and principal are taxed; no other penalties are imposed. 2. Neither interest nor principal is taxed, but penalties may be imposed. 3. Taxable interest will be withdrawn first and the 10% penalty will be imposed if under age 59 ½. 4. Nontaxable principal may be withdrawn first, but the 10% penalty will be imposed if under age 59 ½.
3. Taxable interest will be withdrawn first and the 10% penalty will be imposed if under age 59 ½.
A viatical settlement is arranged between a viatical company and a/an 1. Beneficiary. 2. Lender. 3. Terminally ill insured. 4. Insurance producer.
3. Terminally ill insured.
An insurer suspects an agent of fraud and cancels his appointment. Which authority, if any, should be notified? (Choose from the following options) 1. None 2. Federal Insurance Regulation Board 3. The Superintendent 4. NAIC
3. The Superintendent
When Linda suffered a broken hip, she notified her agent, in writing, within 12 days of the loss. However, her agent did not notify the insurance company until 60 days after the loss. Which of the following statements correctly explains how this claim would be handled? (Choose from the following options) 1. The insurer may settle this claim for less than it otherwise would have had the notification been provided in a timely manner. 2. The insurer may deny the claim since it was not notified within the required 20-day time frame. 3. The insurer is considered to be notified since the notification to agent equals notification to the insurer. 4. The insurer may delay the payment of this claim for up to 6 months.
3. The insurer is considered to be notified since the notification to agent equals notification to the insurer.
What must happen when an individual policy or annuity has been personally delivered to the policyowner? 1. The producer must go over the policy with the policyowner. 2. A notary public must witness the exchange. 3. The policyowner must sign a delivery receipt. 4. The policyowner must pay the annual premium in full.
3. The policyowner must sign a delivery receipt.
Under a health insurance policy, benefits, other than death benefits, that have not otherwise been assigned, will be paid to (Choose from the following options) 1. Creditors. 2. Beneficiary of the death benefit. 3. The spouse of the insured. 4. The insured.
3. The spouse of the insured.
Which type of misrepresentation persuades an insured, to his or her detriment, to cancel, lapse, or switch policies from one to another? 1. False advertising 2. Rebating 3. Twisting 4. Switching
3. Twisting
If an applicant intends to replace any existing accident and sickness policy with a Medicare supplement policy, what must the agent furnish to the applicant? (Choose from the following options) 1. A copy of the application 2. A signed copy of the replacement notice 3. Proof of insurance 4. A notice regarding replacement
4. A notice regarding replacement
The insured's health policy only pays for medical costs related to accidents. Which of the following types of policies does the insured have? (Choose from the following options) 1. Restrictive 2. Accidental Death 3. Comprehensive 4. Accident-only
4. Accident-only
Which of the following long-term care benefits would provide coverage for care for functionally impaired adults on a less than 24-hour basis? (Choose from the following options) 1. Residential care 2. Assisted living 3. Home health care 4. Adult day care
4. Adult day care
In reference to the standard Medicare Supplement benefits plans, what does the term standard mean? (Choose from the following options) 1. Coverage options and conditions comply with the law, but will vary from provider to provider. 2. All plans must include basic benefits A-N. 3. Coverage options and conditions are developed for average individuals. 4. All providers will have the same coverage options and conditions for each plan.
4. All providers will have the same coverage options and conditions for each plan.
In insurance, an offer is usually made when (Choose from the following options) 1. The insurer approves the application and receives the initial premium. 2. The agent hands the policy to the policyholder. 3. An agent explains a policy to a potential applicant. 4. An applicant submits an application to the insurer.
4. An applicant submits an application to the insurer.
Which of the following types of agent authority is also called "perceived authority"? 1. Express 2. Implied 3. Fiduciary 4. Apparent
4. Apparent
To comply with Fair Credit Reporting Act, when must a producer notify an applicant that a credit report may be requested? (Choose from the following options) 1. When the applicant's credit is checked 2. When the policy is delivered 3. At the initial interview 4. At the time of application
4. At the time of application
What is the clause that describes the method of paying the death benefit in the event that the insured and beneficiary are both killed in the same accident? 1. Spendthrift Clause 2. Settlement Clause 3. Nonforfeiture Clause 4. Common Disaster Clause
4. Common Disaster Clause
Which of the following methods of calculating the amount of life insurance needed takes into account the insured's wages, years until retirement, and inflation? 1. Needs approach 2. Blackout approach 3. Lump-sum approach 4. Human life value approach
4. Human life value approach
The benefits received by the business in a Disability Buy-Sell policy are (Choose from the following options) 1. Tax deductible. 2. Partially taxable. 3. Fully taxable. 4. Income tax free.
4. Income tax free.
When a beneficiary receives payments consisting of both principal and interest portions, which parts are taxable as income? 1. Both principal and interest 2. Neither principal nor interest 3. Principal only 4. Interest only
4. Interest only
What is the benefit of experience rating? (Choose from the following options) 1. It helps employers with high claims experience to get group coverage. 2. It helps employees with low claims experience to become exempt from group premiums. 3. It allows employers with high claims experience to obtain insurance. 4. It allows employers with low claims experience to get lower premiums.
4. It allows employers with low claims experience to get lower premiums.
Which of the following is true regarding a risk retention group? (Choose from the following options) 1. It provides support for underwriters and is not an insurance company. 2. It is a benefit society formed to provide insurance for members of an affiliated lodge. 3. It is a company owned by the stockholders that provides nonparticipating policies. 4. It is a liability insurance company owned by its members.
4. It is a liability insurance company owned by its members.
Which of the following is TRUE regarding the annuity period? 1. During this period of time the annuity payments grow interest tax deferred. 2. It is also referred to as the accumulation period. 3. It is the period of time during which the annuitant makes premium payments into the annuity. 4. It may last for the lifetime of the annuitant.
4. It may last for the lifetime of the annuitant.
Your client wants both protection and savings from the insurance, and is willing to pay premiums until retirement at age 65. What would be the right policy for this client? 1. Interest-sensitive whole life 2. Life annuity with period certain 3. Increasing term 4. Limited pay whole life
4. Limited pay whole life
What are the 2 types of Flexible Spending Accounts? (Choose from the following options) 1. Medical Savings Accounts and Health Reimbursement Accounts 2. Health Care Accounts and Dependent Care Accounts 3. Health Care Accounts and Health Reimbursement Accounts 4. Medical Savings Accounts and Dependent Care Accounts
4. Medical Savings Accounts and Dependent Care Accounts
Which of the following is NOT true regarding policy loans? 1. Policy loans can be repaid at death. 2. An insurer can charge interest on outstanding policy loans. 3. A policy loan may be repaid after the policy is surrendered. 4. Money borrowed from the cash value is taxable.
4. Money borrowed from the cash value is taxable.
Death benefits payable to a beneficiary under a life insurance policy are generally 1. Subject to income taxation by the Federal Government. 2. Exempt from income taxation if under $10,000. 3. Exempt from income taxation if over $10,000. 4. Not subject to income taxation by the Federal Government.
4. Not subject to income taxation by the Federal Government.
Which of the following insurance options would be considered a risk-sharing arrangement? (Choose from the following options) 1. Stock 2. Mutual 3. Surplus lines 4. Reciprocal
4. Reciprocal
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 1. Secondary beneficiary. 2. Contingent beneficiary. 3. Irrevocable beneficiary. 4. Revocable beneficiary.
4. Revocable beneficiary
If a firm has between 2 and 50 employees that are actively engaged in business during the preceding calendar year, what is its classification? (Choose from the following options) 1. Partnership 2. Participating plan 3. Group 4. Small Employer
4. Small Employer
An applicant buys a nonqualified annuity, but dies before the starting date. For which of the following beneficiaries would the interest accumulated in the annuity NOT be taxable? 1. Charitable organization 2. Dependents 3. Annuitant 4. Spouse
4. Spouse
.Which of the following statements about HRAs is TRUE? (Choose from the following options) 1. The account allows roll-over of unused balances at the end of the year at the employee's discretion 2. The account only allows roll-over of half the unused balances at the end of the year 3. The account does not allow roll-over of unused balances at the end of the year 4. The account allows roll-over of unused balances at the end of the year at the employer's discretion
4. The account allows roll-over of unused balances at the end of the year at the employer's discretion
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 1. The insured's estate. 2. Probate. 3. The state. 4. The beneficiary's estate.
4. The beneficiary's estate.
Which of the following is true regarding a waiver of a surrender charge on an annuity contract? 1. The charge can only be waived if the annuitant needs the funds for medical expenses. 2. The surrender charge will be applied to all premature surrenders. 3. The surrender charge waiver only applies to immediate annuity. 4. The charge may be waived if the annuitant is confined to a long-term care facility for at least 30 days.
4. The charge may be waived if the annuitant is confined to a long-term care facility for at least 30 days.
The period of time immediately following a disability during which benefits are not payable is (Choose from the following options) 1. The probationary period. 2. The grace period. 3. The blackout period. 4. The elimination period.
4. The elimination period.
All of the following are true regarding a decreasing term policy EXCEPT 1. The death benefit is $0 at the end of the policy term. 2. The contract pays only in the event of death during the term and there is no cash value. 3. The face amount steadily declines throughout the duration of the contract. 4. The payable premium amount steadily declines throughout the duration of the contract.
4. The payable premium amount steadily declines throughout the duration of the contract.
cybersecurity, licensees must maintain records of the incident for no less than
5 years
if master contract is terminated, individual need ? years to convert to same coverage
5 yrs
an ira uses immediate annuities to pay out benefits the ira owner is nearly 75
50% tax on the amount not distributed as required.
waiting period on a waiver of premium rider in life insurance policies
6 months
viator
A "viator" is the owner of an individual life insurance policy or a certificate holder under a group policy who enters or seeks to enter into a viatical settlement contract.
What percentage of individually-owned disability income benefits is taxable? A 0% B 50% C 100% D Amount paid by insured
A 0%
The relation of earnings to insurance provision allows the insurance company to limit the insured's benefits to his/her average income over what period of time? A 2 years B 6 months C 1 year D 18 months
A 2 years
COBRA applies to employers with at least A 20 employees. B 80 employees. C 60 employees. D 50 employees.
A 20 employees.
How many hours of continuing education must be completed in ethics? A 3 B 5 C 12 D 2
A 3
How is emergency care covered for a member of an HIC? A A member of an HIC can receive care in or out of the service area, but care is preferred in the service area. B A member of an HIC may receive care at any emergency facility, at the same cost as if in his/her own service area. C HICs have salaried member physicians, but they do not cover emergency care. D An HIC emergency specialist will cover the patient.
A A member of an HIC can receive care in or out of the service area, but care is preferred in the service area.
When transacting business in this state an insurer formed under the laws of another country is known as a/an A Alien insurer. B Domestic insurer. C Foreign insurer. D Admitted insurer.
A Alien insurer.
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? A Amanda is 67 and is covered by a basic medical expense policy B Andy is 55 and is covered under a dental care policy C Jenny is 60 and also has a long-term care insurance plan D Joe is 40 and is not covered by any other health insurance
A Amanda is 67 and is covered by a basic medical expense policy
While a claim is pending, an insurance company may require A An independent examination as often as reasonably required. B The insured to be examined only within the first 30 days. C The insured to be examined only once annually. D An independent examination only once every 45 days.
A An independent examination as often as reasonably required.
Under HIPAA, which of the following is INCORRECT regarding eligibility requirements for conversion to an individual policy? A An individual who was previously covered by group health insurance for 6 months is eligible. B An individual who has used up COBRA continuation coverage is eligible. C An individual who doesn't qualify for Medicare may be eligible. D The gap of coverage for eligibility is a period of 63 or less days.
A An individual who was previously covered by group health insurance for 6 months is eligible. 18 months
Which of the following hospice expenses would NOT be covered in a cost-containment setting? A Antibiotics B Tylenol C Morphine D Special hospital bed
A Antibiotics In a cost-containment setting, daily needs and pain relief are provided for hospice patients, but curative measures are not.
All of the following are true of the Key Person disability income policy EXCEPT A Benefits are considered taxable income to the business. B Premiums are not deductible to the business. C It is typically written to protect the company in the event a key employee becomes disabled and is unable to work. D The income may be used to find a replacement for the key employee.
A Benefits are considered taxable income to the business.
An individual is insured under his employer's group Disability Income policy. The insured suffered an accident while on vacation that left him unable to work for 4 months. If the disability income policy pays the benefit, which of the following would be true? A Benefits that are attributable to employer contributions are fully taxable to the employee as income. B The insured has to wait 2 more months to start receiving the benefits. C For the business, payments are not considered tax deductible as an ordinary business expense. D The insured can deduct his medical expense benefits from his income tax.
A Benefits that are attributable to employer contributions are fully taxable to the employee as income.
To be eligible for tax credits under the ACA, individuals must have income that is what percent of the Federal Poverty Level? A Between 100% and 400% B Higher than 300% C Less than 10% D Between 10% and 100%
A Between 100% and 400%
The First Street Church plans to sponsor a summer camp for the youth of their congregation. They would like to purchase insurance that would pay benefits should one of the youth get injured while participating in the camp activities. The type of policy they would likely need is a/an A Blanket. B Limited Sickness. C Accidental Death and Dismemberment. D Limited Accident.
A Blanket
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? A Both group health and Medicare B Continuation of group health only C Reapplication for group health D Medicare only
A Both group health and Medicare
A small business owner is the insured under a disability policy that funds a buy-sell agreement. If the owner dies or becomes disabled, the policy would provide which of the following? A Cash to the owner's business partner to accomplish a buyout B The rent money for the building C The business manager's salary D Disability insurance for the owner
A Cash to the owner's business partner to accomplish a buyout
Most scheduled plans provide first-dollar benefits without A Coinsurance and deductibles. B Premiums C Copays. D Exclusions and conditions.
A Coinsurance and deductibles.
The proposed insured makes the premium payment on a new insurance policy. If the insured should die, the insurer will pay the death benefit to the beneficiary if the policy is approved. This is an example of what kind of contract? A Conditional B Adhesion C Personal D Unilateral
A Conditional
Which of the following is NOT true of basic medical expense plans? A Coverage for catastrophic medical expenses B No deductibles C First-dollar coverage D Low dollar limits
A Coverage for catastrophic medical expenses
What is the term for the entity that an agent represents regarding contractual agreements with third parties? A Designee B Insured C Principal D Client
A Designee B Insured C Principal D Client C Principal
Which of the following is considered a qualifying event under COBRA? A Divorce B Marriage C Relocation D Promotion
A Divorce
Which of the following best describes an insurance company that has been formed under the laws of this state? A Domestic B Sovereign C Alien D Foreign
A Domestic
What insurance concept is associated with the names Weiss and Fitch? A Guides describing company financial integrity B Policy dividends C Types of mutual companies D Index used by stock companies
A Guides describing company financial integrity
Surplus Lines insurance usually involves insurance for which type of individuals? A High-risk individuals B Standard risk individuals C Low-risk individuals D All of these qualify for surplus lines insurance
A High-risk individuals
Languages: English Español Chapter: Individual Accident and Health Insurance Policy General Provisions Question 14 of 15 In the event of loss, after a notice of claim is submitted to the insurer, who is responsible for providing claims forms and to which party? A Insurer to the insured B Insured to the insurer C Insurer to the Department of Insurance D Insured to the Department of Insurance
A Insurer to the insured
In health insurance, if a doctor charges $50 more than what the insurance company considers usual, customary and reasonable, the extra cost A Is not covered. B Must be covered by the insurer. C Counts toward deductible. D Counts toward coinsurance.
A Is not covered.
What statement best describes the free look provision? A It allows the insured to return the policy within 10 days for a full refund of premiums if dissatisfied for any reason. B It allows the proposed insured to carefully look over the application prior to filling it out. C It allows the company to obtain an inspection and medical examination on the proposed insured prior to issuing the policy. D It allows for the proposed insured to carefully look over the policy before applying for it.
A It allows the insured to return the policy within 10 days for a full refund of premiums if dissatisfied for any reason.
risk intention group A It is a benefit society formed to provide insurance for members of an affiliated lodge. B It is a company owned by the stockholders that provides nonparticipating policies. C It is a liability insurance company owned by its members. D It provides support for underwriters and is not an insurance company.
A It is a benefit society formed to provide insurance for members of an affiliated lodge. B It is a company owned by the stockholders that provides nonparticipating policies. C It is a liability insurance company owned by its members. D It provides support for underwriters and is not an insurance company. C
Which of the following insurance coverages would be allowed with an MSA? A Long-term care B Medicaid C Medicare D Individual health insurance
A Long-term care
All of the following are characteristics of a Major Medical Expense policy EXCEPT A Low maximum limits. B Deductibles C Blanket coverage. D Coinsurance.
A Low maximum limits. high maximum limits, blanket coverage, coinsurance, and a deductible.
All of the following are true regarding the Medical Information Bureau (MIB) EXCEPT A MIB reports are based upon information supplied by doctors and hospitals. B MIB information is reported to underwriters in coded form. C MIB reports contain previous insurance information. D Insurers may not refuse to accept an application solely due to information in an MIB report.
A MIB reports are based upon information supplied by doctors and hospitals.
An insurance company wants to obtain the insurance history of an applicant. Which source releases coded information to insurers regarding information included on previous insurance applications? A Medical Information Bureau B Insurer's Protection Guild C Integrated Insurer's Support D Federal Bureau of Investigation
A Medical Information Bureau
Which of the following may be used when determining Medicare Advantage out-of-pocket costs? A Medicare Part B premiums paid by the plan B Out-of-pocket costs from the enrollee's previous insurance coverage C Pre-existing conditions D The enrollee's marital status
A Medicare Part B premiums paid by the plan
Medicare Advantage is also known as A Medicare Part C. B Medicare Part D. C Medicare Part A. D Medicare Part B.
A Medicare Part C.
When applying for an individual life insurance policy, an applicant states that he went to the doctor for nausea, but fails to mention that he was also having severe chest pains. This is an example of A Misrepresentation. B Fraud. C Warranty. D Concealment.
A Misrepresentation. B Fraud. C Warranty. D Concealment. D
mutual agreement among subscribers A Mutual insurance B Limited liability C Reinsurance D Reciprocal insurance
A Mutual insurance B Limited liability C Reinsurance D Reciprocal insurance D
The primary eligibility requirement for Medicaid benefits is based upon A Need. B Whether the claimant is insurable on the private market. C Age. D Number of dependents.
A Need.
In an individual long-term care insurance plan, the insured is able to deduct the premiums from taxes. What income taxation will be imposed on the benefits received? A No tax B Tax deductible C State income tax D Federal income tax
A No tax Daily benefits from the LTC policy are received income tax free, as long as they do not exceed the daily cost of long-term care. Review Content Next Question
All of the following would be considered an insurance transaction EXCEPT A Obtaining an insurance license. B Soliciting a policy. C Advising a policyholder regarding a claim. D Negotiating coverage.
A Obtaining an insurance license.
When an individual is covered under two health insurance policies that have duplicate benefits which could make a claim for benefits because of an injury or illness profitable, it is called A Overinsurance. B Double indemnity coverage. C Fraternal coverage. D Pro-rata coverage.
A Overinsurance.
Which of the following provisions would prevent an insurance company from paying a reimbursement claim to someone other than the policyowner? A Payment of Claims B Change of beneficiary C Entire Contract Clause D Proof of Loss
A Payment of Claims
Which type of dental treatment addresses the supporting tissue of teeth? A Periodontics B Orthodontics C Soft dental D Endodontics
A Periodontics
Which of the following is the most common time for errors and omissions to occur on the part of an insurer? A Policy delivery B Policy renewal C Underwriting D Application process
A Policy delivery
Regarding the taxation of Business Overhead policies, A Premiums are deductible, and benefits are taxed. B Premiums are not deductible, and benefits are taxed. C Premiums are not deductible, but benefits are deductible. D Premiums are not deductible, but expenses paid are deductible.
A Premiums are deductible, and benefits are taxed.
Which of the following best describes the type of care provided by HICs? A Preventive B Fee for service C Elective D Major medical
A Preventive
Rose bought three policies from the same insurer. Her benefits have exceeded the maximum allowed by the insurer. Which of the following will happen? A Pro rata benefit reduction B Full distribution of each policy's benefit C Termination of two of the policies D Termination of all of the policies
A Pro rata benefit reduction
Which of the following answers does NOT describe the principal goal of a Preferred Provider Organization? A Provide medical services only from physicians in the network B Provide the subscriber a choice of physicians C Provide the subscriber a choice of hospitals D Provide medical services at a reduced cost
A Provide medical services only from physicians in the network
Events or conditions that increase the chances of an insured loss occurring are referred to as
A Risks. B Perils. C Hazards. D Exposures. C Hazards
The legal process that gives the insurer, after payment of a loss, the right to seek recovery from a third party that was responsible for the loss is known as A Subrogation. B Adverse Selection. C Right of Rescission. D Principle of Indemnity.
A Subrogation.
Which of the following entities established the Do-Not-Call Registry? A The Federal Trade Commission B The Better Business Bureau C The NAIC D The Consumer Protection Agency
A The Federal Trade Commission
How are excess funds in an employee's HSA handled? A The funds can be carried forward to the next year. B The funds are forfeited. C The funds are applied toward the next years' deductible. D The funds are not tax deductible.
A The funds can be carried forward to the next year.
to legally transact insurance in this state A) Certificate of Insurance B) Certificate of Authority C) Power of Attorney D) Business entity license
A) Certificate of Insurance B) Certificate of Authority C) Power of Attorney D) Business entity license Answer: B) Certificate of Authority
Each person licensed as an agent or solicitor is required to complete how many hours of approved continuing education instruction every 2 years? A24 B22 C26 D18
A24
Prior to issuance of a Long-Term Care policy to an applicant age 80 or older, the insurer must obtain all of the following EXCEPT ADate of previous doctor visit. BReport of a physical examination or assessment of functional capacity. CAttending physician's report. DCopies of medical records.
ADate of previous doctor visit.
A 70-year-old individual who bought a Part B Medicare policy 2 months ago just began kidney dialysis treatments this week. The individual is now applying for a Medicare supplement policy, which would begin in 8 months. Which of the following could the insurer do to avoid paying for the dialysis? ADeclare a pre-existing condition BPermanently exclude coverage for dialysis CDeny the supplement policy DCharge a higher premium
ADeclare a pre-existing condition
When contributions to an immediate annuity are made with before-tax dollars, which of the following is true of the distributions? ADistributions are taxable. BDistributions are nontaxable. CDistributions cannot begin prior to age 70½. DThere are no distributions.
ADistributions are taxable.
All of the following are covered by Part A of Medicare EXCEPT APhysician's and surgeon's services. BIn-patient hospital services. CPost-hospital nursing care. DHome health services.
APhysician's and surgeon's services.
Which of the following is NOT covered under Plan A in Medigap insurance? AThe Medicare Part A deductible BApproved hospital costs for 365 additional days after Medicare benefits end CThe 20% Part B coinsurance amounts for Medicare approved services DThe first three pints of blood each year
AThe Medicare Part A deductible
An annuitant dies before the effective date of a purchased annuity. Assuming that the annuitant's wife is the beneficiary, what will occur? AThe interest will continue to accumulate tax deferred. BThe interest will become immediately taxable. CThe premiums will increase. DThe premiums will decrease.
AThe interest will continue to accumulate tax deferred.
insurance policies are not drawn up through negotiations
Adhesion
authorized insurer
An authorized insurer is an individual or a company with approval from the responsible authority, as per the state, to conduct the business of issuing insurance coverage in a given state.
As deductible amounts increase, premium amounts change in what way? A Either increase or decrease. B Decrease C Increase D Remain the same. Changes in premium amounts do not affect deductible amounts.
B Decrease
Insurable Interest
Any financial interest in life or property such that, if the life or property were lost or harmed, the insured would suffer financially.
Agent Authority called perceived authority
Apparent
According to OBRA, what is the minimum number of employees required to constitute a large group? A 50 B 100 C 15 D 20
B 100
For how long is the certificate of prelicensing course completion valid? A 2 years B 180 calendar days C Indefinitely D 120 days
B 180 calendar days
The Medicare supplement renewal commissions paid in the third year must be as high as the commission of which year? A 1st B 2nd C 3rd D 4th
B 2nd
What is the maximum age for qualifying for a catastrophic plan? A 26 B 30 C 45 D 62
B 30
Which of the following statements is true concerning the alteration of optional policy provisions? A Once any kind of provision is written, it cannot be changed. B An insurer may change the wording of optional provisions, as long as the change does not adversely affect the policyholder. C An insurer may change the wording of optional provisions, regardless of its effect on the policyholder. D An insurer may change the wording of optional policy provisions that would adversely affect the policyholder but must first receive state permission before the change goes into effect.
B An insurer may change the wording of optional provisions, as long as the change does not adversely affect the policyholder.
An insured purchased a policy to provide coverage on himself, his wife, and their 2 children. All of them would need to prove insurability EXCEPT A The 2 children B Any children born to them after the inception of the contract. C The insured. D The insured's wife.
B Any children born to them after the inception of the contract. New Born No Need Provide it
Under a Key Person disability income policy, premium payments A Are made by the business and are tax-deductible. B Are made by the business and are not tax-deductible. C Are made by the employee and are not tax-deductible. D Are made by the employee and are tax-free.
B Are made by the business and are not tax-deductible.
An insurer that holds a Certificate of Authority in the state in which it transacts business is considered a/an A Self-insurer. B Authorized insurer. C Local insurer. D Certified insurer.
B Authorized insurer.
The agent is known as the "Field Underwriter" because of the information he/she gathers for the insurer. This helps the insurer A Reduce the number of staff underwriters. B Avoid adverse selection. C Comply with State law. D Learn about the underwriting process.
B Avoid adverse selection.
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 A Nonscheduled plan. B Basic or scheduled plan. C Combination plan. D Comprehensive plan.
B Basic or scheduled plan.
Which of the following is not true of Disability Buy-Sell coverage? A The policies provide funds for the business organization to purchase the business interest of a disabled partner. B Benefits are considered taxable income to the business. C It is typically written to cover partners or corporate officers of a closely held business. D Premium payments are not deductible to the business.
B Benefits are considered taxable income to the business.
What is the purpose of the gatekeeper in an HIC A Making sure that services are properly prepaid B Controlling costs C Making sure that patients do not go to physicians outside of the HIC service area D Establishing a solid preventive care system
B Controlling costs
The rider that may be added to a Disability Income policy that allows for an increase in the benefit amount under certain conditions is called A Residual Benefits. B Cost of Living (COLA). C Waiver of Premium. D Double Indemnity.
B Cost of Living (COLA).
An insured has medical insurance coverage through 2 different providers, both covering the same expenses on an expense-incurred basis. Neither company knows in advance that the insured has coverage through any other insurers. The insured submits a claim to both insurers. How should the claim be handled? A The insured should receive full benefits from each insurer. B Each insurer should pay a proportionate share of the claim. C One of the insurers will pay fully, while the other will not pay any benefits. D Once the insurers discover the duplicate coverage, the policies would most likely be cancelled, and no claim paid.
B Each insurer should pay a proportionate share of the claim.
Every subscriber of a health insuring corporation is entitled to a/an A Buyer's guide. B Evidence of coverage. C Proof of insurability. D Certificate of insurance.
B Evidence of coverage.
Which of the following statements is correct concerning taxation of long-term care insurance? A Premiums are not deductible in any case. B Excessive benefits may be taxable. C Benefits may be taxable as ordinary income. D Premiums may be taxable as income.
B Excessive benefits may be taxable.
What phase begins after a new policy is delivered? A Grace period B Free-look period C Insurability period D Elimination period
B Free-look 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? A No benefits B Full benefits C Partial benefits D Full benefits for 2 years
B Full benefits
Which of the following coverages is NOT monitored by the Employee Retirement Income Security Act (ERISA)? A Welfare benefit plans B Golden parachutes C Pension plans D Profit-sharing stock bonus
B Golden parachutes
Guarantee of insurability option in long-term care policies allows the insured to A Secure the policy's nonforfeiture values regardless of the insured's age or health status B Increase benefit levels without providing proof of insurability C Add dependents to the plan without providing proof of their insurability D Replace the existing LTC policy based on the original underwriting
B Increase benefit levels without providing proof of insurability
Which of the following entities protects policyowners, insureds, and beneficiaries under insurance contracts when insurers fail to perform contractual obligations due to financial impairment? A Consumer Protection Agency B Insurance Guaranty Association C Insurance Consumer Protectorate D Insurance Solvency Association
B Insurance Guaranty Association
Which of the following statements is NOT true concerning Medicaid? A It is intended to provide medical assistance for certain categories of people who are needy. B It consists of 3 parts: Part A: hospitalization, Part B: doctor's services, Part C: disability income. C It is a state program. D It is funded by state and federal taxes.
B It consists of 3 parts: Part A: hospitalization, Part B: doctor's services, Part C: disability income.
How is the amount of Social Security disability benefits calculated? A It is based on age, number of quarters worked in the last 20 years (minimum of 60) and the number of health claims made during that period of time. B It is based upon the worker's Primary Insurance Amount (PIA), which is calculated from their Average Indexed Monthly Earnings over their highest 35 years. C It is based upon the worker's Primary Insurance Amount (PIA), which is calculated from their Average Indexed Monthly Earnings over their highest 30 years. D It is based on age, number of quarters worked in the last 25 years (minimum of 80) and the number of health claims made during that period of time.
B It is based upon the worker's Primary Insurance Amount (PIA), which is calculated from their Average Indexed Monthly Earnings over their highest 35 years.
Which of the following is true regarding the taxation of the premium in group accidental death and dismemberment policies? A It is received tax-free by the employees. B It is deductible as an ordinary business expense. C It is deductible by the employees. D It is taxed to the employee as ordinary income.
B It is deductible as an ordinary business expense.
Which of the following is true regarding a term health policy? A It is noncancellable. B It is nonrenewable. C It is conditionally renewable. D It is guaranteed renewable.
B It is nonrenewable.
Which of the following statements is NOT correct regarding Medicare? A Medicare Part B provides physician services. B Medicare Advantage must be provided through HMOs. C Medicare Advantage may include prescription drug coverage at no cost D Medicare Part A provides hospital care.
B Medicare Advantage must be provided through HMOs.
A person who does not lock the doors or does not repair leaks shows an indifferent attitude. This person presents what type of hazard? A Physical B Morale C Moral D Legal
B Morale
What is a definition of a unilateral contract? A If one party makes a condition, the other party can counteroffer. B One-sided: only one party makes an enforceable promise. C Two or more parties go into a contract understanding there may be an unequal exchange of value. D One author: the company wrote the contract; the insured must accept it as written.
B One-sided: only one party makes an enforceable promise.
Which of the following terms requires a health care practitioner to seek approval from an insurer before providing healthcare service? A Outpatient approval B Prior authorization C Preventive care D Grievance procedure
B Prior authorization
Which type of dental treatment involves the replacement of natural teeth with artificial devices? A Orthodontics B Prosthodontics C Replacement D Restorative
B Prosthodontics
In what way can an agent demonstrate a high standard of ethics? A Recommending qualified retirement plans to each client B Putting the client's best interests before their own C Making enough commissions to cover personal expenses D Setting and meeting monthly production goals
B Putting the client's best interests before their own
In the event of a loss, business overhead insurance will pay for A Medical bills of the business owner. B Rent. C Loss of profits. D Salary of the business owner.
B Rent.
Which of the following documents contain all information necessary to enable a consumer to make an informed choice as to whether or not to enroll in the health insuring corporation? A Buyer's guide B Solicitation document C Coverage Specification document D Outline of coverage
B Solicitation document
Which of the following protects consumers against the circulation of inaccurate or obsolete personal or financial information? A Consumer Privacy Act B The Fair Credit Reporting Act C Unfair Trade Practices Law D The Guaranty Association
B The Fair Credit Reporting Act
The annual contribution limit of a Dependent Care Flexible Spending Account is set by A The insured. B The IRS. C The employer. D The insurer.
B The IRS.
In comparison to consumer reports, which of the following describes a unique characteristic of investigative consumer reports? A The customer has no knowledge of this action. B The customer's associates, friends, and neighbors provide the report's data. C They provide additional information from an outside source about a particular risk. D They provide information about a customer's character and reputation.
B The customer's associates, friends, and neighbors provide the report's data.
How do employer contributions to a Health Savings Account affect the insured's taxes? A The employer contributions are deducted from the individual insured's tax calculations. B The employer contributions are not included in the individual insured's taxable income. C The employer contributions are taxed at the same rate as the Social Security tax rate. D The employer contributions are taxed to the individual insured as earned income.
B The employer contributions are not included in the individual insured's taxable income.
Which of the following statements concerning group health insurance is CORRECT? A Under group insurance, the insurer may reject certain individuals from coverage. B The employer is the policyholder. C Only the employer receives a certificate of insurance. D Each employee receives a policy.
B The employer is the policyholder. The employer receives the master policy; each employee receives a certificate of insurance. All employees have the same coverage under the master contract.
The limits of a health reimbursement account are set by A Federal regulation. B The employer. C State statutes. D The insurer.
B The employer.
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? A The group plan will pay depending on the employee's recovery. B The group plan will not pay because the employee was injured at work. C The group plan will pay. D The group plan will pay a portion of the employee's expenses.
B The group plan will not pay because the employee was injured at work.
Who chooses a primary care physician in an HIC? A A referral physician B The individual member C HIC members do not have a primary care physician. D The insurer
B The individual member
What is the main purpose of the total disability plan? A To pay additional monthly benefits to totally disabled individuals B To protect individuals or families against the economic loss after a total disability of the wage earner C To provide comprehensive coverage for disabled individuals D To provide benefits when the insured is unable to perform any of the duties of the occupation for which they are suited by education or training
B To protect individuals or families against the economic loss after a total disability of the wage earner
When does a person qualify to receive disability-related income? A When an insured is hospitalized for more than one week B When the insured is unable to perform his/her job duties C When the disability reaches a designated state of severity D When an injury is severe and the insured is not a dependent
B When the insured is unable to perform his/her job duties
The Omnibus Budget Reconciliation Act of 1990 requires that large group health plans must provide primary coverage for disabled individuals under AAge 59½ who are retired. BAge 65 who are not retired. CAge 59½ who are not retired. DAge 65 who are retired.
BAge 65 who are not retired.
OBRA requires which disease to be covered by an employer for 30 months before Medicare becomes the primary mode of coverage? AEnd-stage heart failure BEnd-stage renal failure CBlack lung DLeukemia
BEnd-stage renal failure
What is the difference between the Medicare approved amount for a service or supply and the actual charge? ACoinsurance BExcess charge CActual charge DLimiting charge
BExcess charge
Which of the following entities must approve all Medicare supplement advertisements? AConsumer Protection Agency BInsurance Commissioner or Director CNAIC DFederal Association of Insurers
BInsurance Commissioner or Director
To sign up for a Medicare prescription drug plan, individuals must first be enrolled in AMedicare Part D. BMedicare Part A. CMedicare Part B and C. DMedicare Parts A and C.
BMedicare Part A.
A Medicare SELECT policy does all of the following EXCEPT AProvide for continuation of coverage in the event that Medicare SELECT policies are discontinued due to the failure of the Medicare SELECT program. BProhibit payment for regularly covered services if provided by non-network providers. CMake full and fair disclosure in writing of the provisions, restrictions, and limitations of the Medicare SELECT policy to each applicant. DProvide payment for full coverage under the policy for covered services not available through network providers.
BProhibit payment for regularly covered services if provided by non-network providers.
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? A She would not receive any benefits. B 3 years C 2 years D 1 month
C 2 years
Under a nonscheduled plan, what portion of the balance could an insured expect to pay for basic services? A 80% B 100% C 20% D 50%
C 20%
The open enrollment for an HIC must last for the minimum of how many days? A 90 B 15 C 30 D 60
C 30
Employer health plans must provide primary coverage for individuals with end-stage renal disease before Medicare becomes primary for how many months? A 12 months B 24 months C 30 months D 36 months
C 30 months
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? A 10 days B 30 days C 60 days D 90 days
C 60 days
When the policy premium wasn't submitted with the application, what should the agent obtain from the insured upon policy delivery? A A conditional contract B A unilateral contract C A statement of good health D A medical report
C A statement of good health
Under the mandatory uniform provision Notice of Claim, the first notice of injury or sickness covered under an accident and health policy must contain A An estimate of the total amount of medical and hospital expense for the loss. B A complete physician's statement. C A statement that is sufficiently clear to identify the insured and the nature of the claim. D A statement from the insured's employer showing that the insured was unable to work.
C A statement that is sufficiently clear to identify the insured and the nature of the claim.
Which of the following produces evaluations of insurers' financial status often used by state departments of insurance? A Consumer's guide B SEC C AM Best D NAIC
C AM Best
All of the following are correct concerning a Medical Savings Account (MSA) EXCEPT A During the year, the employee may deduct from the MSA to cover out of pocket expenses such as deductibles and coinsurance. B If there is a balance left in the MSA, the balance can be carried over to future years. C Amounts deposited for the employee have large taxes. D Amounts deposited for the employee are income tax deductible.
C Amounts deposited for the employee have large taxes.
How often must health insuring corporations, other than specialty health care insurers, provide current company information, providers list, methods of operation and other reports to its insured? A Monthly B Quarterly C Annually D Biennially
C Annually
All of the following qualify for Medicare Part A EXCEPT A Anyone who is at the end stage of renal disease. B Anyone who is over 65, not covered by Social Security, and is willing to pay premium. C Anyone who is willing to pay a premium. D Anyone that qualifies through Social Security.
C Anyone who is willing to pay a premium.
Because an agent is using stationery with the logo of an insurance company, applicants for insurance assume that the agent is authorized to transact on behalf of that insurer. What type of agent authority does this describe? A Implied B Assumed C Apparent D Express
C Apparent
All of the following are requirements of eligibility for Social Security disability income benefits EXCEPT A Fully insured status. B Waiting period of 5 months. C Being age 65. D Inability to perform any gainful work.
C Being age 65. -- under 65
A children's group is planning a summer camp. What kind of accident and health policy could cover all of the participants without requiring individual applications and identifying each of the children attending the camp? A Group accident and sickness policy B Travel policy C Blanket policy D Franchise policy
C Blanket policy
A small hardware store owner is involved in a car accident that renders him totally disabled for half a year. Which type of insurance would help him pay for expenses of the company during the time of his disability? A Disability buy-sell agreement B Business disability policy C Business overhead expense policy D Key person insurance
C Business overhead expense policy
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? A Insurer's rights B Coverage limitations C Continuation provision D Premium provision
C Continuation provision
Prior to issuance of a Long-Term Care policy to an applicant age 80 or older, the insurer must obtain all of the following EXCEPT A Attending physician's report. B Copies of medical records. C Date of previous doctor visit. D Report of a physical examination or assessment of functional capacity.
C Date of previous doctor visit.
Under which of the following employer-provided plans are the benefits taxable to an employee in proportion to the amount of premium paid by the employer? A Dental Expense B Basic Medical Expense C Disability Income D Major Medical
C Disability Income
Other than for a qualified life event, when can a change be made in benefits for a Flexible Spending Account (FSA)? A Within 3 months of the cause of the change B No changes can be made once the policy is issued C During the open enrollment period D At any time as necessary
C During the open enrollment period
OBRA requires which disease to be covered by an employer for 30 months before Medicare becomes the primary mode of coverage? A Leukemia B End-stage heart failure C End-stage renal failure D Black lung
C End-stage renal failure
Under a typical health insurance policy, claims that result from injuries while the insured was intoxicated or under the influence of drugs are generally A Covered, but an extra premium is charged when a claim is filed. B Covered with a 90 days' waiting period. C Excluded. D Covered.
C Excluded.
A producer is acting in what capacity when he or she is trying to obtain credible information about an applicant for health insurance? A General agent B Consumer report investigator C Field underwriter D Office underwriter
C Field underwriter
In disability income insurance, the own occupation definition of disability applies A During the elimination period. B As long as an individual is unable to work. C For the first 2 years of a disability. D During the waiting period.
C For the first 2 years of a disability.
Which of the following is another name for a primary care physician in an HIC? A Tracking physician B Main physician C Gatekeeper D Screener
C Gatekeeper
Which of the following statements is CORRECT concerning the relationship between Medicare and HMOs? A Medicare Advantage is Medicare provided by an approved HMO only. B All HMOs and PPOs charge premiums beyond what is paid by Medicare. C HMOs may pay for services not covered by Medicare. D HMOs do not pay for services covered by Medicare.
C HMOs may pay for services not covered by Medicare.
Which of the following is an eligibility requirement for all Social Security Disability Income benefits? A Have permanent kidney failure B Be at least age 50 C Have attained fully insured status D Be disabled for at least 1 year
C Have attained fully insured status
Which of the following health care plans would most likely provide the insured/subscriber with comprehensive health care coverage? A Medical-surgical expense plan B Basic medical expense plan C Health Maintenance Organization plan D Group dental insurance plan
C Health Maintenance Organization plan HMOs provide a package of comprehensive health care services that include routine physicals, immunizations, well baby care, family planning, etc., as well as the treatment of sickness and injury.
Health Savings Accounts (HSAs) are designed to A Insure against catastrophic losses. B Provide duplicate coverage for health care expenses. C Help individuals save for qualified health expenses. D Increase individual interest income.
C Help individuals save for qualified health expenses.
When would a misrepresentation on the insurance application be considered fraud? A When the application is incomplete B Any misrepresentation is considered fraud. C If it is intentional and material D Never: statements by the applicant are only representations.
C If it is intentional and material
Which of the following is INCORRECT concerning taxation of disability income benefits? A If the insured paid the premiums, any disability income benefits are tax-free. B If the benefits are for a permanent loss, the benefits paid to the employee are not taxable. C If paid by the individual, the premiums are tax deductible. D If the employer paid the premiums, income benefits are taxable to the insured as ordinary income.
C If paid by the individual, the premiums are tax deductible.
The type of dental plan which is incorporated into a major medical expense plan is a/an A Stand-alone dental plan. B Blanket dental plan. C Integrated dental plan. D Supplemental dental plan.
C Integrated dental plan.
All of the following statements are true of a Combination Dental Plan EXCEPT A It covers diagnostic and preventive care on the usual, customary, and reasonable basis. B It uses a fee schedule for other dental services. C It is also known as the Superimposed Plan. D It is basically a combination of a scheduled and nonscheduled dental plan.
C It is also known as the Superimposed Plan.
An insured does not have to pay coinsurance or deductibles on a full-series mouth x-ray, but does have to pay a deductible to get his cavities filled. Which dental plan does he have? A Procedure-based B Scheduled C Nonscheduled D Limited
C Nonscheduled
Under which plan does preventative dental treatment not apply toward the deductible? A Provisional B Limited C Nonscheduled D Focused
C Nonscheduled
Qualified medical expenses paid for participants in a Medical Savings Account (MSA) are A Taxable for up to 50% of benefits paid. B Fully taxable. C Not taxable. D Taxable if they exceed the amount of the deductible.
C Not taxable.
When is the annual open enrollment for state insurance exchanges? A January 1 through February 28 B December 1 through March 1 C November 1 through January 31 D December 1 through December 31
C November 1 through January 31
An insured's health claim internal appeal was denied. The insurer must do all of the following EXCEPT A Complete the appeal in 60 days after service was received. B Notify the insured how to obtain an outside review. C Offer a payment plan. D Notify the insured about the descision in writing.
C Offer a payment plan.
Which type of dental care corrects natural teeth misalignments with dental appliances? A Periodontics B Restorative C Orthodontics D Prosthodontics
C Orthodontics
The causes of loss insured against in an insurance policy are known as A Risks B Hazards C Perils D Losses
C Perils
A guaranteed renewable health insurance policy allows the A Policy to be renewed at time of expiration, but the policy can be canceled for cause during the policy term. B Insurer to renew the policy to a specified age. C Policyholder to renew the policy to a stated age, with the company having the right to increase premiums on the entire class. D Policyholder to renew the policy to a stated age and guarantees the premium for the same period.
C Policyholder to renew the policy to a stated age, with the company having the right to increase premiums on the entire class.
Underwriting is a major consideration when an insured wishes to replace her current policy for all of the following reasons EXCEPT A Pre-existing conditions that were previously covered may not be covered under the replacing policy. B Benefits may change. C Premiums always stay the same. D Due to age or health, the policy may change dramatically.
C Premiums always stay the same.
What would a physician utilize if he/she wanted to know if a treatment is covered under an insured's plan and at what rate it will be paid? A Comprehensive review B Supplementary chart C Prospective review D Concurrent review
C Prospective review
Which health insurance provision describes the insured's right to cancel coverage? A Insuring clause B Cancellation provision C Renewal provision D Policy duration provision
C Renewal provision
Which type of dental care would cover the cost of fillings? A Orthodontics B Oral Surgery C Restorative D Endodontics
C Restorative
Which of the following is NOT covered under Part B of a Medicare policy? A Lab services B Physician expenses C Routine dental care D Home health care
C Routine dental care
The Ohio Public Employees Retirement System (OPERS) replaces which of the following? A Low-Income Subsidies B Medicaid C Social Security D Medicare
C Social Security
Which of the following is one of the supplemental health care services provided by a health insuring corporation on an outpatient-only basis and not in combination with other supplemental health care services? A Preventive care HIC B Outpatient HIC C Specialty HIC D Limited service HIC
C Specialty HIC
During the Medicare Advantage open enrollment period, an individual may do all of the following EXCEPT A Switch to another Medicare Advantage Plan with drug coverage. B Switch to another Medicare Advantage Plan without drug coverage. C Switch from an Original Medicare Plan to a Medicare Advantage Plan. D Disenroll from the current Medicare Advantage Plan and return to Original Medicare.
C Switch from an Original Medicare Plan to a Medicare Advantage Plan.
When a group disability insurance policy is paid entirely by the employer, benefits paid to disabled employees are A Deductible business expense to the employer. B Taxable income to the employer. C Taxable income to the employee. D Deductible income to the employee.
C Taxable income to the employee.
Which of the following is NOT covered under Plan A in Medigap insurance? A The 20% Part B coinsurance amounts for Medicare approved services B The first three pints of blood each year C The Medicare Part A deductible D Approved hospital costs for 365 additional days after Medicare benefits end
C The Medicare Part A deductible
Which of the following is NOT the consideration in a policy? A The premium amount paid at the time of application B The promise to pay covered losses C The application given to a prospective insured D Something of value exchanged between parties
C The application given to a prospective insured
Which of the following is a characteristic of a Reciprocal Insurance Exchange? A Stock holders share in any profits B Issues nonassessable policies C The chief administrator of the insurer is called an "attorney-in-fact". D Normally write all lines of insurance
C The chief administrator of the insurer is called an "attorney-in-fact".
What type of information is NOT included in a certificate of insurance? A The procedures for filing a claim B The length of coverage C The cost the company is paying for monthly premiums D The policy benefits and exclusions
C The cost the company is paying for monthly premiums
Under what condition would a Medicare Medical Savings Account (MSA) pay for dental work? A The insured cannot be covered under Medicare Part B. B Dental coverage is automatically provided by MSAs. C The insured must pay extra. D MSAs do not provide dental coverage.
C The insured must pay extra.
The insuring clause of a disability policy usually states all of the following EXCEPT A That insurance against loss is provided. B The types of losses covered. C The method of premium payment. D The identities of the insurance company and the insured.
C The method of premium payment.
A policy with a 31-day grace period implies A The policy is incontestable after 31 days of delivery. B The policy benefits must be paid within 31 days after a claim is submitted. C The policy will not lapse for 31 days if the premium is not paid when due. D The policyholder may return the policy for a full refund within 31 days.
C The policy will not lapse for 31 days if the premium is not paid when due.
When employees are actively at work on the date coverage can be transferred to another insurance carrier, what happens to coinsurance and deductibles? A Coinsurance carries over, but deductibles are generally higher. B Deductibles carry over, but coinsurance is generally higher. C They carry over from the old plan to the new plan. D They have to be reevaluated.
C They carry over from the old plan to the new plan.
What are the requirements for Health Insurance Marketplace coverage of specific vaccines administered by an in-network provider? A They must be pre-approved. B They are only required to cover Hepatitis A and B and influenza. C They must be covered without a copayment or coinsurance. D They cannot be more than $10 each.
C They must be covered without a copayment or coinsurance.
An insurer offers a policy very similar to Medicare, although it differs slightly. An agent tells an applicant that the policy is Medicare, since the policies are so similar anyway. Which of the following is true? A This is legal as long as the applicant understands all the benefits. B This is illegal only if the policy is bought by the applicant. C This practice is illegal. D This is a legal practice.
C This practice is illegal.
Under what condition are group disability income benefits received by an employee NOT taxable as income? A When the employee is 59 ½. B When the amount of the benefit is equal or less than the amount of contributed by the employer. C When the benefits received are equal or less than the employee's percentage of the contribution. D When the employer makes all the premium payments.
C When the benefits received are equal or less than the employee's percentage of the contribution.
To qualify for a partial Low-Income Subsidy (LIS) under Medicare Part D, an applicant's total income must be what percentage of Federal Poverty Level (FPL)? A100-120% B120-135% C135-150% D150%-165%
C135-150%
Occasional visits by which of the following medical professionals will NOT be covered under LTC's home health care? ALicensed practical nurses BCommunity-based organization professionals CAttending physician DRegistered nurses
CAttending physician
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? AReapplication for group health BMedicare only CBoth group health and Medicare DContinuation of group health only
CBoth group health and Medicare
When must an IRA be completely distributed when a beneficiary is not named? ADecember 31 of the year following the year of the owner's death. BDue date of the deceased owner's final tax return including extensions. CDecember 31 of the year that contains the fifth anniversary of the owner's death. DDue date of beneficiary's tax return including extensions.
CDecember 31 of the year that contains the fifth anniversary of the owner's death.
Which types of insurance companies marketing long-term care insurance coverage must establish procedures to assure that any comparison of policies by its agents will be fair and accurate? AMutual and stock companies. BNo companies are required to establish marketing procedures. CEvery company is required to establish marketing procedures. DAny company that uses any form of media to market policies that yield no less than 20% of its business.
CEvery company is required to establish marketing procedures.
Which of the following statements is INCORRECT concerning Medicare Part B coverage? APart B will pay 80% of covered expenses, subject to Medicare's standards for reasonable charges. BIt is a voluntary program designed to provide supplementary medical insurance to cover physician services, medical services and supplies not covered under Part A. CPart B coverage is provided free of charge when an individual turns age 65. DParticipants under Part B are responsible for an annual deductible.
CPart B coverage is provided free of charge when an individual turns age 65.
An applicant's resources and assets may be used when determining eligibility for a low-income subsidy under Medicare Part D, as long as AThe combined assets are valued at no more than $8,000. BThe accumulation of new assets has ceased for at least 2 years. CThe assets can be readily converted into cash within 20 days. DThe assets are under the supervision of a financial accountant.
CThe assets can be readily converted into cash within 20 days.
J transferred his life insurance policy to his son two years before his death. Which of the following is true? AThe unpaid premiums on the policy will be deducted from J's taxable estate. BBecause the policy has been transferred, it will not be included in J's taxable estate. CThe entire face value of the policy will be included in J's taxable estate. DThe interest portion of the policy will be included in J's taxable estate.
CThe entire face value of the policy will be included in J's taxable estate. If a policyowner transfers or gives away a life insurance policy within 3 years prior to his/her death, the entire face amount of the policy will be included in his or her taxable estate.
an insurance agent is suspected of commit illegal acts what legally ban
Cease and desist order
contracts that are prepared by one party and submitted to the other party on a take it or leave it
Contract of Adhesion
not appropriate use of a deferred annuity
Creating an estate
For group medical and dental expense insurance, what percentage of premium paid by the employer is deductible as a business expense? A 50% B 60% C 90% D 100%
D 100%
Agents who change their state of residence must notify the Superintendent within how many days of any change in address? A 10 B 15 C 20 D 30
D 30
How long is an open enrollment period for Medicare supplement policies? A 1 year B 30 days C 90 days D 6 months
D 6 months
Jason is insured under his employer's group health insurance. He splits the cost of the premiums with his employer. This is an example of A A noncontributory plan. B A half and half plan. C A co-pay plan. D A contributory plan.
D A contributory plan.
Which of the following groups seeking group health insurance would represent a bad risk for underwriters? A A group that pays a low premium B A group that has a noncontributory plan C A group that has a large number of members D A group that changes insurance annually
D A group that changes insurance annually
An insured is covered under a group health insurance plan. When the insured has her first child, who should she notify in order to have coverage for the newborn? A The insurer, on the anniversary date of the plan B The employer, within 10 days C The insurer immediately and provide proof of insurability D The insurer, within 31 days
D The insurer, within 31 days
Which statement best defines a Multiple Employer Welfare Arrangement (MEWA)? A A plan that provides hospice care for terminally ill employees B A government health plan that provides health care for the unemployed C A group health plan that covers medical expenses arising from work related injuries D A joining together by employers to provide health benefits for employee
D A joining together by employers to provide health benefits for employee
All of the following are correct about the required provisions of a health insurance policy EXCEPT A Proof-of-loss forms must be sent to the insured within 15 days of notice of claim. B A grace period of 31 days is found in an annual pay policy. C The entire contract clause means the signed application, policy, endorsements, and attachments constitute the entire contract. D A reinstated policy provides immediate coverage for an illness.
D A reinstated policy provides immediate coverage for an illness. -- 10 days
The Omnibus Budget Reconciliation Act of 1990 requires that large group health plans must provide primary coverage for disabled individuals under A Age 59½ who are not retired. B Age 65 who are retired. C Age 59½ who are retired. D Age 65 who are not retired.
D Age 65 who are not retired.
Which of the following are characteristics of a successful self-funded plan? A A group large enough to reasonably predict future loss experience B A stop-loss contract to assume losses beyond the insured's retention C A third party administrator who services claims D All of the above
D All of the above
Under which condition would an employee's group medical benefits be exempt from income taxes? A An employee's group medical benefits are never exempt from taxation as income. B When the premiums and other unreimbursed medical expenses exceed 6.5% of the employee's adjusted gross income C When the premiums and other unreimbursed medical expenses exceed 7.5% of the employee's adjusted gross income D An employee's group medical benefits are generally exempt from taxation as income.
D An employee's group medical benefits are generally exempt from taxation as income.
Which of the following can be a reason for cancellation or non-renewal of a health policy by a health insuring corporation? A A previous health claim B A disability C Medical history D An intentional misrepresentation of material fact
D An intentional misrepresentation of material fact
An insurance contract must contain all of the following to be considered legally binding EXCEPT A Offer and acceptance. B Consideration. C Competent parties. D Beneficiary's consent.
D Beneficiary's consent.
An insured is the recipient of an Accidental Death and Dismemberment (AD&D) policy purchased by his employer. The policy pays triple indemnity in case of accidental death. If the insured died as a result of an accident stipulated in the policy, how will the benefits paid be taxed? A Benefits received will be taxed as capital losses. B No taxes will be taken because no benefits will be paid. C Benefits will be taxed as ordinary income. D Benefits received are considered income tax free.
D Benefits received are considered income tax free.
A man bought an individual health insurance policy for himself. Which of the following roles does he now legally have? A Broker B Subscriber only C Insured only D Both subscriber and insured
D Both subscriber and insured
Which of the following best describes how eligibility for a Health Insuring Corporation (HIC) is determined? A By household income B By preferred physician availability C By health history D By geographic boundaries
D By geographic boundaries
Which of the following is true regarding inpatient hospital care for HIC members? A Care can only be provided in the service area. B Services for treatment of mental disorders are unlimited. C Inpatient hospital care is not part of HIC services. D Care can be provided outside of the service area.
D Care can be provided outside of the service area.
If an applicant for a health insurance policy is found to be a substandard risk, the insurance company is most likely to A Require a yearly medical examination. B Lower its insurability standards. C Refuse to issue the policy. D Charge an extra premium.
D Charge an extra premium.
A producer who fails to segregate premium monies from his own personal funds is guilty of A Larceny. B Embezzlement. C Theft. D Commingling.
D Commingling.
When both parties to a contract must perform certain duties and follow rules of conduct to make the contract enforceable, the contract is A Aleatory. B Personal. C Unilateral. D Conditional.
D Conditional.
All of the following are true about group disability Income insurance EXCEPT A Benefits are usually short term. B The waiting period starts at the onset of the injury or sickness. C The longer the waiting period, the lower the premium. D Coverage applies both on and off the job.
D Coverage applies both on and off the job.
Which type of insurance provides funds for a business organization to purchase the business interest of a disabled partner? A Disability Interest Buy-out B Corporate Transfer C Corporate Disability D Disability Buy-Sell
D Disability Buy-Sell
A policy which covers medical costs related to a specific condition is called a A Condition-Specific Policy. B Specific Condition Policy. C Limited Coverage Policy. D Dread Disease Policy.
D Dread Disease Policy.
Which of the following is considered to be a morale hazard? A Smoking B Working as a firefighter C Engaging in illegal activities D Driving recklessly
D Driving recklessly
Concerning group Medical and Dental insurance, which of the following statements is INCORRECT? A Benefits received by the employee are free from federal income tax. B Premiums paid by the employer are deductible as a business expense. C Employee paid premiums may be deducted if certain conditions are met. D Employee benefits are tax deductible the year in which they were received.
D Employee benefits are tax deductible the year in which they were received.
Which type of dental treatment involves the dental pulp within the teeth? A Oral surgery B Soft dental C Root canal D Endodontics
D Endodontics
The requirement that agents not commingle insurance monies with their own funds is known as A Premium accountability. B Express authority. C Accepted accounting principal. D Fiduciary responsibility.
D Fiduciary responsibility.
As it pertains to group health insurance, COBRA stipulates that A Retiring employees must be allowed to convert their group coverage to individual policies. B Terminated employees must be allowed to convert their group coverage to individual policies. C Group coverage must be extended for terminated employees up to a certain period of time at the employer's expense. D Group coverage must be extended for terminated employees up to a certain period of time at the former employee's expense.
D Group coverage must be extended for terminated employees up to a certain period of time at the former employee's expense. COBRA requires employers with 20 or more employees to continue group medical insurance for terminated workers and dependents for up to 18 months to 36 months. The employee can be required to pay up to 102% of the coverage's premium.
Medicaid provides all of the following benefits EXCEPT A Home health care services. B Eyeglasses. C Family planning services. D Income assistance for work-related injury.
D Income assistance for work-related injury.
Which of the following entities must approve all Medicare supplement advertisements? A NAIC B Federal Association of Insurers C Consumer Protection Agency D Insurance Commissioner or Director
D Insurance Commissioner or Director
Which of the following entities has the authority to make changes to an insurance policy? A Department of Insurance B Broker C Producer D Insurer's executive officer
D Insurer's executive officer
An insurance organization that does not issue insurance policies but provides a meeting place for underwriters to conduct business is known as a A Fraternal society. B Mutual company. C Capital stock company. D Lloyd's association.
D Lloyd's association.
In franchise insurance, premiums are usually A Lower than individual policies or group policies. B Higher than individual policies or than group policies. C Higher than individual policies, but lower than group policies. D Lower than individual policies, but higher than group policies.
D Lower than individual policies, but higher than group policies.
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 A Preferred care plan. B Limited care plan. C Self-insurer. D Managed care plan.
D Managed care plan.
Which of the following programs is made up of 4 parts, where the first part is paid for by FICA, and the second part is financed by premiums and payroll taxes? A Blue Cross B Blue Shield C Medicaid D Medicare
D Medicare
On a participating insurance policy issued by a mutual insurance company, dividends paid to policyholders are A Paid at a fixed rate every year. B Taxable as ordinary income. C Guaranteed. D Not taxable since the IRS treats them as a return of a portion of the premium paid.
D Not taxable since the IRS treats them as a return of a portion of the premium paid.
If one takes Social Security retirement benefits at age 62, what needs to be done at age 65 to qualify for Medicare? A Apply for coverage through the state B Appear for a physical at the Social Security office C Apply at a local Social Security office D Nothing
D Nothing Nothing needs to be done in this case. Medicare Part A and B will automatically be effective the month you turn 65.
Which renewability provision allows an insurer to terminate a policy for any reason, and to increase the premiums for any class of insureds? A Conditionally renewable B Cancellable C Guaranteed renewable D Optionally renewable
D Optionally renewable
What is the major difference between a stock company and a mutual company? A Amount of death benefit B Number of producers C Types of whole life policies D Ownership
D Ownership
If an individual is covered by a policy that includes an Accidental Death & Dismemberment rider, what term describes the maximum benefits he will receive if he loses sight in both eyes as a result of a fire? A Reciprocal amount B Capital sum C Percentage of full amount D Principal sum
D Principal sum
Which of the following insurance options would be considered a risk-sharing arrangement? A Stock B Mutual C Surplus lines D Reciprocal
D Reciprocal
When an employee is still employed upon reaching age 65 and eligible for Medicare, which of the following is the employee's option? A Enroll in Medicare, while the company must provide additional retirement benefits B Enroll in Medicare when eligible; otherwise, Medicare benefits will be forfeited. C Wait until the next birthday to enroll D Remain on the group health insurance plan and defer eligibility for Medicare until retirement
D Remain on the group health insurance plan and defer eligibility for Medicare until retirement
All of the following refer to specialty health care services EXCEPT A A special category of services approved by the superintendent of insurance B Supplemental health care services such as dental or vision C Services provided on an outpatient-only basis D Services that are provided in combination with other health care services
D Services that are provided in combination with other health care services
Events in which a person has both the chance of winning or losing are classified as A Insurable. B Pure risk. C Retained risk. D Speculative risk.
D Speculative risk.
A provision found in insurance policies which prevents the insured from collecting twice for the same loss is called A Consent to settle loss. B Right of salvage. C Appraisal. D Subrogation.
D Subrogation.
Which state has jurisdiction over a group policy that covers individuals that reside in more than one state? A The state of employer's choice B All states in which covered individuals reside C The state in which the majority of individuals live D The state in which the policy was delivered
D The state in which the policy was delivered
Which of the following is true regarding METs? A They make deals with local hospitals to provide low cost coverage to the needy. B They provide insurance for larger corporations. C They provide insurance companies with medical information on applicants. D They allow several small employers purchase less expensive insurance together.
D They allow several small employers purchase less expensive insurance together.
All of the following statements about Medicare supplement insurance policies are correct EXCEPT A They cover Medicare deductibles and copayments. B They supplement Medicare benefits. C They are issued by private insurers. D They cover the cost of extended nursing home care.
D They cover the cost of extended nursing home care.
An insured has Medicare Part D coverage. Upon reaching the initial benefit limit, what percentage of the prescription drug cost is the insured responsible for paying? A15% B16% C23% D25%
D25%
In reference to the standard Medicare Supplement benefits plans, what does the term standard mean? ACoverage options and conditions comply with the law, but will vary from provider to provider. BAll plans must include basic benefits A-N. CCoverage options and conditions are developed for average individuals. DAll providers will have the same coverage options and conditions for each plan.
DAll providers will have the same coverage options and conditions for each plan.
An insured has a Modified Endowment Contract. He wants to withdraw some money in order to pay medical bills. Which of the following is true? AHe will have to pay a penalty regardless of his age. BHe will not have to pay a penalty, regardless of his age. CHe cannot withdraw money from his MEC before age 59½. DHe will have to pay a penalty if he is younger than 59½.
DHe will have to pay a penalty if he is younger than 59½.
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? AIncome tax on distributions plus 10% penalty. BCapital gains tax on distributions and no penalty. CCapital gains tax on distributions plus 10% penalty. DIncome tax on distributions and no penalty.
DIncome tax on distributions and no penalty.
Guarantee of insurability option in long-term care policies allows the insured to AAdd dependents to the plan without providing proof of their insurability BReplace the existing LTC policy based on the original underwriting CSecure the policy's nonforfeiture values regardless of the insured's age or health status DIncrease benefit levels without providing proof of insurability
DIncrease benefit levels without providing proof of insurability
Which of the following statements pertaining to Medicare Part A is correct? AFor the first 90 days of hospitalization, Medicare Part A pays 100% of all covered services, except for the initial deductible. BIndividuals with ESRD do not qualify for Part A. CEach individual covered by Medicare Part A is allowed one 90-day benefit period per year. DMedicare Part A is automatically provided when an individual qualifies for Social Security benefits at age 65.
DMedicare Part A is automatically provided when an individual qualifies for Social Security benefits at age 65.
If an individual enrolls in a Medicare Advantage Plan on his 65th birthday, when would coverage begin? ADuring the Medicare Advantage open enrollment period BImmediately CThe first day of the month the enrollee turned 65 DThe first day of the following month
DThe first day of the following month
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?a) Life with period certain
Fixed period
A life insurance policy clause that prevents an insurance company from denying payment of a death claim after a specified period of time is known as the?
Incontestability clause
what term of insurance would be used for a return of premium rider
Increasing Term(add whole life policy)
withdrawal nonqualified annuity
LIFO, taxable interest + 10% penalty under 59 1/2
What allows the insurer to relieve a minor insured from premium payments is the minors parents have dies or become disabled?
Payor benefit.. If the payor (usually a parent or guardian) becomes disabled for at least 6 months or dies, the insurer will waive the premiums until the minor reaches a certain age
if an employee wants to enter the group outside of the open enrollment
Require evidence of insurability
interest earned on policy dividends
Taxable
clause both insured and beneficiary are both killed
The Common Disaster clause
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 life insurance policy?
The full death benefit
what happens if a deferred annuity is surrendered before the annuitization period
The owner will receive value of annuity
unequal amounts exchanged between payments and benefits
aleatory contract
Which of the following best describes a bail-out provision?
allows the owner to surrender the annuity without a charge
Who can make a fully deductible contribution to a traditional IRA?
an individual not covered by an employer-sponsored plan who has earned income
foreign insurer
an insurer domiciled in the United States but outside the state in which the insurance is to be written
Liquidity in life insurance
how easily you can get cash from your life insurance policy
the superintendent may examine the books and records of any insurer based in ohio, who pay for the exam?
insurer
What are the 2 types of Flexible Spending Accounts? a)Medical Savings Accounts and Health Reimbursement Accounts b)Health Care Accounts and Dependent Care Accounts c)Health Care Accounts and Health Reimbursement Accounts d)Medical Savings Accounts and Dependent Care Accounts
b)Health Care Accounts and Dependent Care Accounts
In comparison to consumer reports, which of the following describes a unique characteristic of investigative consumer reports? a)The customer has no knowledge of this action. b)The customer's associates, friends, and neighbors provide the report's data. c)They provide additional information from an outside source about a particular risk. d)They provide information about a customer's character and reputation.
b)The customer's associates, friends, and neighbors provide the report's data.
An insured notifies the insurance company that he has become disabled. What provision states that claims must be paid immediately upon written proof of loss? (Choose from the following options) 1. Legal Actions 2. Time of Payment of Claims 3. Incontestability 4. Physical Exam and Autopsy
b)Time of Payment of Claims
adjustable life policyowner
change 1. premium 2. premium-paying period 3. face amount of coverage 4. period protection
Convertible Term Policy
changed from not accumulate cash value to the one does
when contributions to an immediate annuity are made
contributions to this fund are fully taxable. Distributions must begin no later than age 70½ in order for the annuitant to avoid penalties
rider based on index, consumer price index
cost of living rider
If the insured under a disability income insurance policy changes to a more hazardous occupation after the policy has been issued, and a claim is filed, the insurance company should do which of the following?a)Cancel the policy b)Increase the premium c)Exclude coverage for on-the-job injury d)Adjust the benefit in accordance with the increased risk
d)Adjust the benefit in accordance with the increased risk
Which of the following types of LTC is NOT provided in an institutional setting? a)Custodial care b)Skilled nursing care c)Intermediate care d)Home health care
d)Home health care
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? a)Policy Limitation Notice b)Statute of Limitations c)Limited Benefit Statement d)Limited Policy Notice
d)Limited Policy Notice
Under the Affordable Care Act, which classification applies to health plans based on the amount of covered costs? a)Guaranteed and nonguaranteed b)Grandfathered and nongrandfathered c)Risk classification d)Metal level classification
d)Metal level classification
How does a member of an HIC see a specialist? a)The insurer chooses the specialist. b)The member must go out of network. c)The member is allowed to choose his/her own specialist. d)The primary care physician refers the member.
d)The primary care physician refers the member.
what is the purpose of key person insurance
helps protect your small business in case the owner or other key employee dies
If the policy owner makes no specific settlement option election
lump sum option is usually the default.
Stated incorrect health condition
material misrepresentation
misleading life insurance
misrepresentation
How can a contingent beneficiary receive death benefit
primary beneficiary die, predeceases the insured
types of beneficiaries
primary, contingent, secondary, teriary
Automatic Premium Loan
protects the insured from an unintentional policy lapse due to a nonpayment of premium
increase death benefit for adjustable life policy
provide evidence of insurablility
who can issue a cease and desist order
superintendent
Second-to-die policy
survivorship life
corporate owned life insurance benefits
tex free
waiver of cost of insurance rider
universal life
