STATE EXAM

The legal action provision in a health contract is limited to no more than ___ years. 2 3 4 5

5

As of January 1, 2014, an employer with up to 25 full time equivalent (FTE's) with average annual wages of less than $50,000 may be eligible for a tax credit of ___ of the premiums paid by the employer. 30% 40% 50% 60%

50%

Within how many days must a Traditional IRA be rolled over to another IRA in order to avoid tax consequences? 30 45 60 90

60

What percentage of a participant's income are group long-term disability benefit amounts typically limited to? 30% 40% 50% 60%

60%

Suitability is converting a term policy to a whole life policy obtaining information from the applicant to determine whether an insurance or annuity product is appropriate properly applying the insurer's underwriting guidelines to an applicant delivering the Buyer's Guide and Policy Summary to the applicant

obtaining information from the applicant to determine whether an insurance or annuity product is appropriate

A securities license is required for a life insurance producer to sell modified life insurance Modified Endowment Contracts (MEC) variable life insurance universal life insurance

variable life insurance

An attending physician's statement would be appropriate for which life insurance purpose? Attending physician's statements are mandatory during the application process At the request of the applicant to assist in the underwriting decision At the request of the producer to assist in the underwriting decision At the request of the insurer to assist in the underwriting decision

At the request of the insurer to assist in the underwriting decision

A disability policyowner is injured and becomes totally disabled. The benefits pay for 2 years, starting from the date of the injury. What is this time period called? Recurrent period Probationary period Benefit period Elimination period

Benefit period

Low frequency diseases can be exclusively covered by what kind of health insurance policies? Limited policies Blanket policies Employer policies Restricted policies

Limited policies

According to the Affordable Care Act, any plan in existence prior to which date is considered a grandfathered plan? March 23, 2010 March 23, 2011 March 23, 2012 March 23, 2013

March 23, 2010

Sonya applied for a health insurance policy on April 1. Her agent submitted the information to the insurance company on April 6. She paid the premium on May 15 with the policy indicating the effective date being May 30. On which date would Sonya have coverage? April 1 April 6 May 15 May 30

May 30

Which of the following is Medicare Part B also known as? Hospital insurance Medical insurance Long-term care insurance Medigap

Medical insurance

Andy the annuitant dies before the annuity start date. Which of the following is a TRUE statement? Principal returned is taxable Benefits are still payable tax-free to the beneficiary Company retains entire cash value Premiums paid plus interest earned is returned to the beneficiary

Premiums paid plus interest earned is returned to the beneficiary

What is the primary factor that determines the benefits paid under a disability income policy? Education level Wages Type of occupation Age

Wages

All of the following riders can increase the death benefit amount EXCEPT Cost of Living Waiver of Premium Accidental Death Rider Guaranteed Insurability

Waiver of Premium

Medicare provides coverage for each of the following EXCEPT hospital room and board doctor and surgeon services prescription drugs custodial care

custodial care

An example of a tax-qualified retirement plan would be a(n) equity compensation plan defined contribution plan executive index plan 1035 exchange plan

defined contribution plan

Medicare Part B covers long-term care hospital room and board doctor's charges prescription drugs

doctor's charges

Kate has a Major Medical Plan with a 75/25 coinsurance and a deductible of $25. How much will she have to pay if she, not having met any of her deductible, visits the doctor and receives a bill for $125? $25.00 $50.00 $75.00 $100.00

$50.00

An immediate annuity has been purchased with a single premium. When does the annuitant typically begin receiving benefit payments? 1 month 6 months 12 months 24 months

1 month

Kathy pays a monthly premium on her health insurance policy. How long is her grace period? 10 days 7 days 31 days 45 days

10 days

With the majority of companies, within how many days does the free-look provision allow the insured the right to return the life insurance policy for full premium? 5 days 10 days 15 days 30 days

10 days

Sole proprietors are permitted tax deductions for health costs paid from their earnings in the amount of costs that exceed 7 1/2 % of AGI costs that exceed 10% of AGI 100% of costs no deduction permitted

100% of costs

Lorenzo is self employed with an S corporation. He is unmarried and had a net profit for the tax year. What are the tax ramifications of his health insurance premiums paid for the year? 50% of his health insurance costs can be deducted from his gross income 75% of his health care costs can be paid with pre-tax income 100% of his health insurance costs can be deducted from his gross income 100% of his health insurance costs can be paid with tax credits

100% of his health insurance costs can be deducted from his gross income

A closed network plan offers a a primary physician copay of $25. If a subscriber chooses a primary care physician outside of the network, the subscriber will likely pay $0 $25 100% of the billed amount 100% of the allowed amount

100% of the billed amount

Under Ohio continuation rules, an employer with fewer than 20 employees must allow terminated employees to continue accident and health coverage for at least 6 months 9 months 12 months 18 months

12 months

An insurer must furnish to a claimant forms for filing proof of loss within ___ days upon receiving a notice of claim. 10 15 20 25

15

An insurer can void an individual health insurance policy and deny claims based on misstatements in the application for how long from the policy's date of issue? 60 days 180 days 1 year 2 years

2 years

When can a policy no longer be cancelled for nonfraudulent misstatements after its date of issue? 1 year 2 years 5 years At any time

2 years

Written notice for a health claim must be given to the insurer ___ days after the occurrence of the loss. 10 20 31 60

20

Written notice of a health insurance claim should be given to the insurer within __ days after the occurrence of any loss covered by the policy. 20 30 45 60

20

Which of the following is NOT an eligible dependent on an Accident and Health policy? 27 year old married child 25 year old married child 19 year old full time student Unmarried disabled child

27 year old married child

Which of the following BEST describes a conditional insurance contract? A contract that requires certain conditions or acts by the insured individual A contract that has the potential for the unequal exchange of consideration for both parties A contract where one party "adheres" to the terms of the contract A contract where only one party makes any kind of enforceable contract

A contract that requires certain conditions or acts by the insured individual

Which of the following is an example of the insured's consideration? Insurer's promise to pay benefits A paid premium Legal purpose Intent

A paid premium

HIPAA considers which of the following as "individually identifiable health information"? A person's employment history A person's net income A person's hire date A person's health claim information

A person's health claim information

Ohio requires advertisements for accident and health insurance policies covering ONLY a specified illness to prominently display The premium guarantee A statement that the policy is limited A schedule of payments The policy exclusions

A statement that the policy is limited

Which of the following is considered to be the period when the accumulated value in an annuity is paid out? Annuitization phase Accumulation phase Principal phase Period certain phase

Annuitization phase

Which of the following is a requirement for ANY change in an insurance application? Change must be initialed by the agent Change must be initialed by the applicant Change must be approved by the insurer Change must be notorized

Change must be initialed by the applicant

What would happen if a life insurance applicant is given a conditional receipt from an insurance agent and then dies the next day? Claim will be denied by insurer Claim will be paid if money was received by the insurance company Claim will be paid if underwriter has received the application Claim will be paid if application is approved

Claim will be paid if application is approved

Which of the following is NOT a federal requirement of a qualified plan? Must benefit a broad cross-section of employees Employee must be able to make unlimited contributions Vesting schedule must be defined Employer establishes the plan

Employee must be able to make unlimited contributions

What is created after policy proceeds are obtained in a lump sum and then immediately invested? Viatical Settlement Emergency Fund Lump Sum Fund Estate

Estate

XYZ Company has applied for group health insurance for its employees. What information would the insurer's underwriters likely use to determine the appropriate coverage and final premium rate given to the group? Experience rating Credit reports Arrest reports AM Best rating

Experience rating

Which of these is NOT a qualifying event for Medicare? On Social Security disability for over 2 years Kidney failure Age 65 or older Falling below the federal poverty level

Falling below the federal poverty level

All of these are characteristics of a universal life insurance policy EXCEPT Flexible death benefit Fixed surrender value Flexible premiums Builds cash value

Fixed surrender value

How is Medicare Part B funded? Employer taxes Payroll taxes User premiums General tax revenue and user premiums

General tax revenue and user premiums

A master contract and certificate of coverage can be found in which type of policy? Long-term Medicaid Group Medicare

Group

An annuitant is guaranteed to NOT outlive their benefits with a(n) Survivorship clause Guaranteed lifetime withdrawal benefit Period certain provision Guaranteed minimum accumulation benefit

Guaranteed lifetime withdrawal benefit

Phil is shopping for an annuity that guarantees he CANNOT outlive the benefits. Which of these benefit options would he choose? Accelerated lifetime benefit Guaranteed lifetime withdrawal benefit Right of income rider Guaranteed minimum accumulation benefit

Guaranteed lifetime withdrawal benefit

Which type of coverage pays an amount per day for hospitalization directly to the insured regardless of the insured's other health insurance? MEWA Mutual Group Hospital indemnity

Hospital indemnity

Without a Section 125 Plan in place, what would happen to an employee's payroll contribution to an HSA? It would be considered taxable income to the employee The employee would not be allowed to an HSA The employer would pay payroll tax and FICA on the contribution amount The employer would not be allowed to deduct the contribution from the employee's pay

It would be considered taxable income to the employee

A life insurance policy written on one contract for two people in which it is payable upon the first death is called Split Shared Joint Survivorship

Joint

What kind of life insurance policy covers two or more people with the death benefit payable upon the last person's death? Dual Life insurance Joint Life insurance Last Survivor Life insurance Shared Life insurance

Last Survivor Life insurance

The time limit for filing claim disputes is addressed in which provision of an accident and health policy? Legal actions Entire contract Time of payment of claims Payment of claims

Legal actions

Which type of annuity guarantees a stated number of income payments, whether or not the annuitant is still alive to receive them? Life annuity certain Secure life annuity Irrevocable survivor annuity Guaranteed life annuity

Life annuity certain

Which settlement option pays a stated amount to an annuitant, but no residual value to a beneficiary? Fixed period Interest only Installment refund Life income

Life income

A beneficiary has just received a claim payment for a life insurance policy. Which of the following is TRUE regarding the federal income tax liability owed? A flat tax of 10% is owed on all proceeds Federal income tax is owed if proceeds exceed $250,000 No federal income tax is owed on life insurance proceeds Tax liability owed depends on the type of life insurance policy

No federal income tax is owed on life insurance proceeds

Shirley has a $500,000 10-year non-renewable level term life policy. If she dies 15 years after the policy's inception date, how much will her beneficiary receive? Nothing $100,000 $250,000 $500,000

Nothing

Which of these is NOT considered to be a risk factor in life insurance underwriting? Number of children Health history Hobbies Occupation

Number of children

How do interest earnings accumulate in a deferred annuity? On a tax credit basis On a tax-deferred basis On a tax-free basis On a taxable basis

On a tax-deferred basis

Joe is a Medicare participant who receives his benefits through a Managed Health Care Plan. Which Medicare plan does he have? Part A Part B Part C Part D

Part B

Who is the individual paid on a fee-for-service basis? Subscriber Administrator Insured Provider

Provider

All of the following are exempt from the 10% tax penalty for early qualified plan withdrawals EXCEPT Qualified college expenses First time home purchase Death of the participant Stock purchase

Stock purchase

In a Long-Term Care policy, activities of daily living (ADL's) can be each of the following EXCEPT Talking Dressing Transferring Feeding oneself

Talking

Which of the following decisions would a Health Savings Account (HSA) owner NOT be able to make? The amount contributed by the employer The amount contributed by the owner The underlying account investments used The medical expenses paid for by the HSA

The amount contributed by the employer

Which of these is NOT a characteristic of the Accelerated Death Benefit option? The face amount and policy premium are not affected by the payment Before payment of the benefit is made, specific conditions must exist, such as suffering from a terminal illness There may be a dollar limit on the maximum benefit The benefit can be offered as a rider at a specific extra cost or may be at no cost

The benefit can be offered as a rider at a specific extra cost or may be at no cost

Bill the producer is collecting the initial premium on a health policy. Which of the following statements is true? The contract is not in force without the initial premium being paid A partial initial premium is acceptable The insured has no advantage to pay the initial premium at the time of application A claim must be honored by the insurer even if an initial premium is not paid

The contract is not in force without the initial premium being paid

James is the insured on a life insurance policy where his age was misstated on the application. Which of the following is CORRECT regarding the death benefit amount? The original face amount will be paid to the beneficiary The policy will be voided with no death benefits paid The death benefit paid will be what the premium would have purchased at the correct age The amount of premiums paid will be returned with interest

The death benefit paid will be what the premium would have purchased at the correct age

What does the word "level" in Level Term describe? The period of coverage The face amount The premium payments The cash value

The face amount

When a preferred provider organization (PPO) insured goes out-of-network, which of the following actions occur? The insured will pay a reduced amount The benefits are taxable The insured has lower out-of-pocket expenses The insurer will pay a reduced amount

The insurer will pay a reduced amount

Which of the following is permitted in an advertisement for an insurance policy? Misleading information Guaranteed benefit amounts That the insurer is endorsed by the State The insurer's name

The insurer's name

What happens when an insurance policy is backdated? The policy's elimination period is waived The time frame for reinstating a lapsed policy is extended The policy's probation period is earlier than the present The policy's effective date is earlier than the present

The policy's effective date is earlier than the present

All of these statements concerning whole life insurance are false EXCEPT Policyowner can take out a policy loan up to the face amount When a whole life policy is surrendered, income taxes may be owed Coverage is normally temporary The death benefit is not affected by outstanding loans

When a whole life policy is surrendered, income taxes may be owed

A 70-year old insured individual has suffered from kidney failure for the past 24 months. She is covered by her spouse's large-group employer plan. How will Medicare be utilized in this situation? Will be the primary insurer and pay for 100% of covered expenses Will be the secondary insurer and pay for claims not fully covered by the group plan Will not pay for any of the covered expenses Will be the primary insurer and the group plan will be secondary

Will be the secondary insurer and pay for claims not fully covered by the group plan

What type of injury would NOT be covered under a health insurance policy? Accidental Work-related Sports-related Recreational

Work-related

A fee for service health insurance plan will normally cover vitamins and natural remedies cosmetic procedures gym membership a disease

a disease

A medical provider that accepts Medicare Assignment must accept payment based upon a defined Medicare schedule and bill the insured for any difference accept payment based upon a defined Medicare schedule and negotiate any excess fees accept payment based upon a defined Medicare schedule and bill no more than 15% of the excess charges accept payment based upon a defined Medicare schedule as payment in full

accept payment based upon a defined Medicare schedule as payment in full

Medical Expense Insurance would cover an injury occurring at the insured's residence an injury occurring at work an injury caused by war elective surgeries

an injury occurring at the insured's residence

In order to transact insurance business in Ohio, an insurance agent must be at least 18 years old hold a consultant's license have been regularly employed by an insurer for at least 2 of the previous 3 years be employed by a broker or solicitor

be at least 18 years old

Insurers do business in Ohio only after a thorough financial review. MOST insurance policies written in Ohio are protected by the Guaranty Association, established to protect policyowners in the event an admitted company merges with a foreign insurer becomes financially insolvent cannot meet its capital surplus requirements depletes its loss reserves

becomes financially insolvent

Ownership of a life insurance policy may be temporarily transferred with a(n) collateral assignment absolute assignment transferable assignment beneficiary assignment

collateral assignment

An Ohio insurance agent solicits a life insurance policy. In the event of a controversy between the insured and the company, the agent is considered to represent the insured beneficiary company policyholder

company

A health insurance policy where the insurer has the right to terminate the policy for reasons other than the insured's health is called limited renewable conditionally renewable guaranteed renewable conditionally cancelable

conditionally renewable

Where would policy proceeds be paid if both the insured and primary beneficiary were killed in the same accident? primary beneficiary's estate contingent beneficiary insured's estate children of the insured

contingent beneficiary

An agent license is renewed by paying the applicable renewal fee and completing professional development designation credit continuing education prelicensing education

continuing education

The purpose of advertising regulations is to assure full and truthful disclosures to the public ensure that the prospect has all the required information to make an informed decision ensure that the insurance company is supervising the agents properly assure that spokespersons are properly compensated

ensure that the prospect has all the required information to make an informed decision

Level premium permanent insurance accumulates a reserve that will eventually equal the face amount of the policy pay a dividend to the policyowner require the policyowner to make periodic withdrawals become larger than the face amount

equal the face amount of the policy

The life insurance and annuity replacement regulation defines replacement as cash surrendering an existing policy reducing the face value of an existing policy accepting a reduced paid-up policy exchanging an existing life/annuity policy for a new policy

exchanging an existing life/annuity policy for a new policy

Each application for long-term care insurance shall contain clear and unambiguous questions to determine the health condition of the applicant EXCEPT applications for excess coverage guaranteed issue secondary coverage primary issue

guaranteed issue

Medicare Part A covers outpatient services doctor's fees inpatient hospital stay prescription drugs

inpatient hospital stay

An example of a primary care physician would be a(n) internist psychologist endocrinologist chiropractor

internist

A permanent life insurance policy where the policyowner pays premiums for a specified number of years is called a(n) adjustable policy limited pay policy level term policy variable universal policy

limited pay policy

A life insurance policy that has premiums fully paid up within a stated time period is called stated payment insurance limited universal insurance stated modified insurance limited payment insurance

limited payment insurance

The premium for a Modified whole life policy is higher than the typical whole life policy during the first few years and then lower than typical for the remainder lower than the typical whole life policy during the first few years and then higher than typical for the remainder normally graded over a period of 20 years level for the first 5 years then decreases for the remainder of the policy

lower than the typical whole life policy during the first few years and then higher than typical for the remainder

States that have "no loss no gain" laws require a replacing policy to keep the same type of coverage as the policy it replaces not charge a different premium from the policy it replaces pay for half of any ongoing claims under the policy it replaces pay for ongoing claims under the policy it replaces

pay for ongoing claims under the policy it replaces

The role of the federal government was expanded when Medicaid was established by allowing the state to form a large PPO on a statewide level purchase health insurance from the federal government receive matching funds to expand public assistance programs defer all costs to the federal government for public assistance programs

receive matching funds to expand public assistance programs

Pre-death distributions from a modified endowment contract (MEC) receive different tax treatment than other life insurance policies because the MEC has tax deductible premiums the MEC is considered an illegal product the MEC tends to be an investment vehicle the MEC does not accumulate cash value

the MEC tends to be an investment vehicle

Converting a group plan to permanent life insurance requires submitting proof of insurability paying a lower premium converting to term life insurance the conversion being applied for within 31 days of termination

the conversion being applied for within 31 days of termination

Dorian exercised a nonforfeiture option by using his life policy's cash value to purchase an extended term insurance option. When the term insurance expires, he has the option of resuming the original policy and paying the same premium the coverage can be extended with a lump sum payment all remaining cash values are paid to the policyowner the protection ends

the protection ends

The free-look provision gives the policyowner the right to return the policy for a partial refund within a specified number of days the right to contest the terms of the policy the right to change a policy provision the right to return the policy for a full refund within a specified number of days

the right to return the policy for a full refund within a specified number of days