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Following hospitalization because of an accident, Bill was confined in a skilled nursing facility. Medicare will pay full benefits in this facility for how many days?

20 - Following hospitalization for at least three days, if medically necessary, Medicare pays for all covered services during the first 20 days in a skilled nursing facility. Days 21 through 100 require a daily copayment.

Within how many days of a final disposition must a producer provide all legal documentation to the Director?

30 days - When action is brought against a producer, the producer must provide the Director a copy of the order, consent order, and all other relevant legal documents within 30 days of the disposition.

When a health carrier uses retrospective review procedures, within how many days of receipt of information must the carrier make the determination?

30 working days - For retrospective review determinations, a health carrier must make the determination within 30 working days of receiving all necessary information.

In order to maintain coverage under COBRA, how soon from termination of employment must an employee exercise extension of benefits?

60 days - Under COBRA, terminated employees must exercise extension of benefits within 60 days of separation from employment.

A Straight Life policy has what type of premium?

A level annual premium for the life of the insured - Straight Life policies charge a level annual premium for the lifetime of the insured and provide a level, guaranteed death benefit.

Which of the following is NOT covered under a long-term care policy?

Acute care in a hospital - A long-term care policy may provide coverage for home health care, adult day care, hospice care or respite care. Acute care is not covered under a long-term care policy

Which of the following is true of benefits provided in a health insurance policy for insureds that are diagnosed with diabetes?

Benefits may be subject to deductibles and copayments not greater than those applied to any other covered illness. - The care and treatment of diabetes must be provided, subject to deductibles and copayments that are applied to any other covered illness.

Which of the following components must a life insurance policy have to allow policy loans?

Cash value - The policy loan option is found only in policies that contain cash value.

A tax-sheltered annuity is a special tax-favored retirement plan available to

Certain groups of employees only. - A tax-sheltered annuity is a special tax-favored retirement plan available only to certain groups of employees (nonprofit charitable, educational, religious, and other 501c(3) organizations, including all employees in public education).

Because an insurance policy is a legal contract, it must conform to the state laws governing contracts which require all of the following elements EXCEPT

Conditions. - Conditions are part of the policy structure. Consideration is an essential part of a contract.

Which of the following is NOT an essential element of an insurance contract?

Counteroffer - In order for insurance contracts to be legally binding, they must have four essential elements: agreement (offer and acceptance), consideration, competent parties, and legal purpose. Counteroffer is not required.

A waiver of premium provision may be included with which kind of health insurance policy?

Disability income - A waiver of premium rider generally is included with guaranteed renewable and noncancellable individual disability income policies. It is a valuable provision because it exempts the insured from paying the policy's premium during periods of total disability.

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?

Every company is required to establish marketing procedures. - Every insurer marketing long-term care coverage must establish marketing procedures to assure that any comparison of its policies by its agents is accurate and fair. Companies must also have marketing guidelines to ensure that excessive insurance is not sold or issued to clients.

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?

Fixed period - Under the fixed-period installments option (also called period certain), a specified period of years is selected, and equal installments are paid to the recipient. The payments will continue for the specified period even if the recipient dies before the end of that period.

Which of the following provisions in universal life policies stipulates that a written notice of the termination of coverage must be sent to the policyowner?

Grace period and lapse - Grace period and lapse provisions requires that a written notice of the termination of coverage must be sent to the policyowner at least 30 days prior to the termination. After policy lapse, a grace period of at least 30 days must be provided.

Which of the following is NOT among the lines of authority for which an insurance producer may qualify in the state of Missouri?

Group health insurance - A producer may become licensed in accident and health or sickness insurance; there is no license specific to group insurance.

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

Impairment rider - The impairment rider excludes a specified condition from coverage, therefore, reducing benefits. An insurance company will not charge extra for a rider that reduces benefits.

Which of the following entities can legally bind coverage?

Insurer - Only insurers, not agents, can bind coverage.

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?

Limited pay whole life - Premium payments will cease at her age 65, but coverage will continue to her death or age 100.

A long-term care insurance shopper's guide must be provided in the format developed by which of the following?

NAIC - A long-term care insurance shopper's guide must be provided in the format developed by the National Association of Insurance Commissioners (NAIC). The shopper's guide must be presented to the applicant prior to completing the application.

Life insurers are prohibited from including any of following in advertisements EXCEPT

Policy appraisals and analyses. - Genuine testimonials, appraisals, and analyses are allowed in insurance advertisements, under the condition any testimonial by an individual with financial interest in the insurer is explicitly stated.

All of the following are true regarding rebates EXCEPT

Rebates are allowed if it is in the best interest of the client. - A rebate is an illegal act which involves returning something of value to the client as an inducement to buy, such as the commission. Rebates are only allowed if specifically stated in the policy. Insurance dividends are not considered rebates as the IRS considers it as a return of overpaid premium.

Nonforfeiture values guarantee which of the following for the policyowner?

That the cash value will not be lost - Because permanent life insurance policies have cash values, there are certain guarantees built into the policy that cannot be forfeited by the policyowner. Nonforfeiture values give the insured the right to the cash value even if the policy lapses or is surrendered.

An insured submitted a notice of claim to the insurer, but never received claims forms. He later submits proof of loss, and explains the nature and extent of loss in a hand-written letter to the insurer. Which of the following would be true?

The insured was in compliance with the policy requirements regarding claims. - If claims forms are not furnished to the insured, the claimant is deemed to have complied with the requirements of the policy if he or she submits written proof of the occurrence, nature of the loss, and extent of loss to the insurer.

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?

The insured's premiums will be waived until she is 21. - 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, such as 21.

If a policy includes a free-look period of at least 10 days, the Buyer's Guide may be delivered to the applicant no later than

With the policy. - If a life insurance policy contains a free-look period of at least 10 days, the buyer's guide can be delivered with the policy. If it doesn't, the buyer's guide must be delivered prior to accepting the initial premium.

When can a Long-Term Care policy deny a claim for losses incurred because of a pre-existing condition?

Within 6 months of the effective date of coverage - A long-term care policy cannot deny a claim for losses incurred more than 6 months from the effective date of coverage because of a pre-existing condition.

Which of the following provisions in group life policies prevents the insurer from denying a claim due to statements on the application after a certain period of time?

Incontestability - Incontestability provision prevents an insurer from denying a claim due to statements in the application after the policy has been in force for a period 2 years, except for nonpayment of premium or fraud.

All of the following are TRUE statements regarding the accumulation at interest option EXCEPT

The interest is not taxable since it remains inside the insurance policy. - The interest credited under this option is TAXABLE, whether or not the policyowner receives it.

What must contain a notice of the graded death benefit in a life insurance policy with graded death benefits?

The policy application - The policy application must contain a notice of the graded death benefit.

What is the purpose of coinsurance provisions?

To help the insurance company to prevent overutilization of the policy - The purpose of the coinsurance provision is for the insurance company to control costs and discourage overutilization of the policy.

Insurers usually do not reimburse claimants for 100% of income lost due to disability. What is the reason for insurer limitations on coverage amounts?

To provide an incentive for the insured to return to work - The reason that insurers don't pay benefits that are equal to the insured's prior earnings is to reduce the chance of malingering on the part of the insured. Limiting the amount of coverage provides an incentive for the insured to return to work after a disability, as opposed to collecting benefits when he or she is capable of returning to work.