test

Who assumes control over an insurance company's funds and management if they become insolvent?

Department of Insurance

Which of the following best describes the aleatory nature of an insurance contract?

Exchange of unequal values

Individuals who itemize deductions can claim deductions for medical expenses not covered by health insurance that exceed what percent of their adjusted gross income?

10%

For how many days of skilled nursing facility care will Medicare pay benefits?

100

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

30

If a consumer requests additional information concerning an investigative consumer report, how long does the insurer or reporting agency have to comply?

5 days

The Omnibus Budget Reconciliation Act of 1990 requires that large group health plans must provide primary coverage for disabled individuals under

Age 65 who are not retired.

In reference to the standard Medicare Supplement benefits plans, what does the term standard mean?

All providers will have the same coverage options and conditions for each plan.

All of the following are differences between individual and group health insurance EXCEPT

Individual insurance does not require medical examinations, while group insurance does require medical examinations.

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

Insurer

All of the following statements about Medicare Part B are correct EXCEPT

It is a compulsory program.

A nonadmitted insurer who provides insurance coverages that are not available from an admitted insurer is called

Surplus lines insurer.

Which of the following may NOT be included in an insurance company's advertisement?

That its policies are covered by a state Guaranty Association

A policy with a 31-day grace period implies

The policy will not lapse for 31 days if the premium is not paid when due.

Which of the following is true regarding limited health insurance policies?

They only cover specific accidents or diseases.

Premiums paid by self-employed sole proprietors or partners for medical expense insurance are

Totally tax deductible.

When an individual purchases insurance, what risk management technique is he or she practicing?

Transfer

All of the following cases show when a Small Employer Medical plan cannot be renewable EXCEPT

When the employer chooses to renew the plan.

A business wants to make sure that if a key employee becomes disabled, the business will be protected from any resulting loss. Which kind of insurance will protect the business?

Business Disability

In a group policy, the contract is between

The employer and the insurance company.

The most the Insurance Guaranty Association will pay for net cash surrender values is

$100,000.

An insured has a major medical policy with a $500 deductible and a coinsurance clause of 80/20. If he incurs medical expenses of $4,000, the insurer would pay

$2,800.

An insurance company sells an insurance policy over the phone in response to a TV ad. Which of the following best describes this act?

An independent examination as often as reasonably required.

An applicant for an individual health policy failed to complete the application properly. Before being able to complete the application and pay the initial premium, she is confined to a hospital. This will not be covered by insurance because she has not met the conditions specified in the

Consideration Clause.

Which of the following includes information regarding a person's credit, character, reputation, and habits?

Consumer report

Which of the following will NOT be considered unfair discrimination by insurers?

Discriminating in benefits and coverages based on the insured's habits and lifestyle

As it pertains to group health insurance, COBRA stipulates that

Group coverage must be extended for terminated employees up to a certain period of time at the former employee's expense.

In which of the following locations would skilled care most likely be provided?

In an institutional setting

An insured stated on her application for life insurance that she had never had a heart attack, when in fact she had a series of minor heart attacks last year for which she sought medical attention. Which of the following will explain the reason a death benefit claim is denied?

Material misrepresentation

An insured has been injured in an accident. Although he is still receiving benefits from his disability income policy, he does not have to pay premiums. This means that the policy includes

Waiver of premium feature.

Which of the following determines whether disability insurance benefits are taxed?

Whether the premiums were tax deductible

What is the contract provision that allows the insurer to nonrenew health coverage if certain events occur?

conditionally renewable

A producer who fails to segregate premium monies from his own personal funds is guilty of

commingling

A financial institution requires the purchase of a particular life insurance policy in connection with a customer's low-interest loan. According to insurance regulations, this practice is

illegal

When compared with the administrative cost found in individual coverage, the per capita administrative cost in group health insurance is

lower

An individual's tendency to be dishonest would be indicative of a

moral hazard

The classification Small Employer means any person actively engaged in a business that on at least 50% of its working days during the preceding year employed

no more than 50 employees

Under which of the following organizations are the practicing providers compensated on a fee-for-service basis?

ppo

An applicant for health insurance has not had a medical claim in 5 years. He exercises daily and does not smoke or drink. What classification do you assume the applicant would receive from his insurer?

preferred

Which of the following statements is NOT true concerning Medicaid?

t consists of 3 parts: Part A: hospitalization, Part B: doctor's services, Part C: disability income.

S is a sole business proprietor who owns a medical expense plan. What percentage of the cost of the plan may he deduct?

100%

If an employer provides long-term group disability insurance for its employees, what percentage of monthly wages are lower-paid employees eligible to collect?

66 and 2/3%

An insurance producer is also the instructor of a 3-hour ethics course held once a year. To maintain certification, the producer

Must take 18 hours of continuing education courses.

On a participating insurance policy issued by a mutual insurance company, dividends paid to policyholders are

Not taxable since the IRS treats them as a return of a portion of the premium paid.

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

Notice Regarding Replacement.

All of the following are true regarding key person disability income insurance EXCEPT

Premiums are tax deductible as a business expense.

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?

apparent

Which agreement specifies how a business will transfer hands when one of the owners dies or becomes disabled?

disability buy-sell

All of the following are regulated areas of the insurance industry EXCEPT

commissions

If only one party to an insurance contract has made a legally enforceable promise, what kind of contract is it?

unilateral