Attempt 3 on guarantee exam
In order for costs to be covered under a dental plan, what is the minimum interval that must pass between routine dental exams?
6 months
What is the waiting period on a Waiver of Premium rider in life insurance policies?
6 months
The terminated employee must exercise extension of benefits under COBRA within how many days of separation from employment?
60 days
An applicant knowingly fails to communicate information that would help an underwriter make a sound decision regarding coverage. This is an example of
Concealment.
Which of the following is TRUE regarding the annuity period?
It may last for the lifetime of the annuitant.
An agent represents the
insurer; not the insured
One of the differences between group underwriting and individual underwriting is that there is little or no medical information required regarding plan participants in groups of
50 or more
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?
60 days
On its advertisement, a company claims that it has funds in its possession that are, in fact, not available for the payment of losses or claims. The company is guilty of
misrepresentation
conditional receipt
most common type of receipt used when only applicant submits a prepaid application
Level term insurance
most common type of temporary protection DB & premium remains level
Most agents try to collect the initial premium for submission with the application. When an agent collects the initial premium from the applicant, the agent should issue the applicant a
Premium receipt.
BOE features:
Premiums paid for BOE are tax-deductible. c)Any benefits received are taxable to the business. d)Leased equipment expenses are covered by the plan.
Bethany studies in England for a semester. While she is there, she is involved in a train accident that leaves her disabled. If Bethany owns a general disability policy, what will be the extent of benefits that she receives?
none
Which of the following is true regarding a term health policy?
nonrenewable; owner has no rights of renewal
conditional receipt will start effective coverage when:
on the date of application OR date of medical exam (whichever occurs last)
Which option for Universal life allows the beneficiary to collect both the death benefit and cash value upon the death of the insured?
option b
fixed period installments also known as
period certain
accelerated benefit known as
living benefits rider
f a business owner becomes totally disabled, a Business Overhead Expense policy will pay all of the following EXCEPT
loss of owner's income
To avoid violations of unfair claims settlement regulations, insurers are required to acknowledge the receipt of a claim within how many days?
10 days
What happens when a policy is surrendered for its cash value?
Coverage ends and the policy cannot be reinstated.
Employer health plans must provide primary coverage for individuals with end-stage renal disease before Medicare becomes primary for how many months?
30 months
The OBRA requires employer health plan to provide primary coverage for:
30 months before Medicare becomes primary
the size of fixed period installments determined by:
amount of principal guaranteed interest length of period selected
An insured covered by a dread disease policy is confined to a hospital for 2 years as the result of a covered loss. In this situation, what is the minimum amount that the policy must pay?
$50,000 Specified (dread) disease policies must pay for hospital confinement in amounts of at least $100 per day, for at least 500 days.
An insured is covered under 2 group health plans - under his own and his spouse's. He had suffered a loss of $2,000. After the insured paid the total of $500 in deductibles and coinsurance, the primary insurer covered $1,500 of medical expenses. What amount, if any, would be paid by the secondary
$500 Once the primary insurer has paid the full available benefit, the secondary insurer will cover what the first company will not pay, such as deductibles and coinsurance. The insured will, then, be reimbursed for out-of-pocket costs.
Field underwriter's responsbilities:
1. proper solicitation of applicants 2. helping prevent adverse selection 3. complete the application 4. obtain required signatures 5. collect initial premium and issue the receipt 6. deliver the policy
How long is the right to examine period for new individual annuities issued in this state?
10 days
Most vision expense insurance plans restrict benefits to one exam and one pair of glasses in what time period?
12 months
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?
2 years; 24 months
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?
25%
According to the Time Limit on Certain Defenses provision, the insurer cannot void the policy for any misstatements on the application (except for fraud) if the policy was in force for what time period?
3 years
Licensees must make a report of any action taken against them in another jurisdiction or by another governmental agency in Pennsylvania within how many days of the final disposition of the matter?
30
How long is the open-enrollment period under an employer group health insurance plan?
30 days
What is the duration of the free-look period for Medicare supplement policies?
30 days
Within how many days must a producer respond to an inquiry from the Commissioner?
30 days
Under COBRA, for events such as death of employee, divorce, or legal separation, the period is ______ for the dependents:
36 months
A hospital indemnity policy will pay
A benefit for each day the insured is in a hospital.
All of the following are correct about the required provisions of a health insurance policy EXCEPT
A reinstated policy provides immediate coverage for an illness.
Which of the following is NOT the consideration in a policy?
The application given to a prospective insured
Which of the following would be considered an unfair claims settlement practice?
Advising the insured that if the claim goes to arbitration, the insured would probably receive less than what is currently being offered
Which of the following is true regarding Medicare supplement policies?
They must be guaranteed renewable.
While a claim is pending, an insurance company may require
An independent examination as often as reasonably required.
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
When must the Medicare supplement policy issued provide the applicant the Guide to Health Insurance for People with Medicare?
At the time of application
Combination plans are comprised of two types of plan features: basic and
Comprehensive. Combination plans combine features of the two main types of dental plans: scheduled (basic) and nonscheduled (comprehensive).
If an insurer appoints a producer, which authority must be notified?
Department of Insurance
When the insured selects the extended term nonforfeiture option, the cash value will be used to purchase term insurance with what face amount?
Equal to the original policy for as long as the cash values will purchase.
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.
What are the 2 types of Flexible Spending Accounts?
Health Care Accounts and Dependent Care Accounts a Health Care Account for out-of-pocket health care expenses, and a Dependent Care Account to help pay for dependent care expenses which make it possible for an employee and his or her spouse, if applicable, to work.
Which of the following is INCORRECT concerning taxation of disability income benefits?
If paid by the individual, the premiums are tax deductible.
A man purchased a $90,000 annuity with a single premium, and began receiving payments 2 months after that. What type of annuity is it?
Immediate With an immediate annuity, distribution starts within 1 year of purchase.
The type of dental plan which is incorporated into a major medical expense plan is a/an
Integrated dental plan.
Which of the following is NOT true regarding the Life with Guaranteed Minimum annuity settlement option?
It does not guarantee that the entire principal amount will be paid out.
Which life insurance settlement option guarantees payments for the lifetime of the recipient, but also specifies a guaranteed period, during which, if the original recipient dies, the payments will continue to a designated beneficiary?
Life income with period certain
Which of the following statements pertaining to Medicare Part A is correct?
Medicare Part A is automatically provided when an individual qualifies for Social Security benefits at age 65.
Under the Fair Credit Reporting Act, individuals rejected for insurance due to information contained in a consumer report
Must be informed of the source of the report the consumer must be advised and provided with the name and address of the reporting agency.
Which of the following is NOT a characteristic of a group long-term disability plan?
Offer the supplement policy on a guaranteed issue basis
Which document helps ensure that full and fair disclosure is provided to the recipient of a policy?
Outline of Coverage
Medicare Part A services do NOT include which of the following?
Outpatient Hospital Treatment Outpatient treatment is covered under Part B.
An insured has had a life insurance policy that he purchased 3 years ago when he was 40 years old. He is killed in an automobile accident and it is discovered that he is actually 45 years old, and not 43, as stated on the application. What will the company do?
Pay a reduced death benefit
An insured has had a life insurance policy that he purchased 3 years ago when he was 40 years old. He is killed in an automobile accident and it is discovered that he is actually 45 years old, and not 43, as stated on the application. What will the company do?
Pay a reduced death benefit The incontestability clause prevents an insurer from denying a claim due to statements in an application after the policy has been in force for 2 years. However, it does not apply to statements relating to age, sex and identity
A Medicare SELECT policy does all of the following EXCEPT
Prohibit payment for regularly covered services if provided by non-network providers.
When a whole life policy lapses or is surrendered prior to maturity, the cash value can be used to
Purchase a single premium policy for a reduced face amount.
Which nonforfeiture option provides coverage for the longest period of time?
Reduced paid-up
When benefits are paid directly to the insured under a health insurance policy, the policy provides benefits on what type of basis?
Reimbursement
Which of the following dental insurance categories would cover the filling of cavities?
Routine and major restorative care covers the costs of dental work, such as oral surgery, bridges, dentures, and cavity treatment.
If an immediate annuity is purchased with the face amount at death or with the cash value at surrender, this would be considered a
Settlement option.
Which of the following statements about a suicide clause in a life insurance policy is TRUE?
Suicide is excluded for a specific period of years and covered thereafter.
With regards to premium rates, which of the following statements is NOT true?
The Commissioner sets all insurance premium rates used in Pennsylvania.
Which of the following is NOT true regarding a Variable Universal Life policy?
The death benefit is fixed. *In a variable universal life policy, the death benefit is adjustable, and the cash values are not guaranteed. While the death benefit may decrease and increase, it cannot go below a guaranteed minimum face amount.
Which statement accurately describes group disability income insurance?
The extent of benefits is determined by the insured's income.
all of the following statements are true regarding installments for a fixed amount EXCEPT
The payments will stop when the annuitant dies.
Which of the following determines the cash value of a variable life policy?
The performance of the policy portfolio
Which of the following statements is correct regarding a whole life policy?
The policyowner is entitled to policy loans.
Which of the following is true regarding taxation of accelerated benefits under a life insurance policy?
They are tax free to terminally ill insured.
Which provision states that the insurance company must pay Medical Expense claims immediately?
Time of Payment of Claims
Which of the following is NOT a goal of risk retention?
To minimize the insured's level of liability in the event of loss
What is the purpose of a suicide provision within a life insurance policy?
To protect the insurer from persons who purchase life insurance with the intention of committing suicide
What is the purpose of a fixed-period settlement option?
To provide a guaranteed income for a certain amount of time
. All of the following are TRUE regarding the convertibility option under a term life insurance policy EXCEPT
Upon conversion, the death benefit of the permanent policy will be reduced by 50%.
The insurer must be able to rely on the statements in the application, and the insured must be able to rely on the insurer to pay valid claims. In the forming of an insurance contract, this is referred to as
Utmost good faith.
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.
How soon following the occurrence of a covered loss must an insured submit written proof of such loss to the insurance company?
Within 90 days or as soon as reasonably possible, but not to exceed 1 year
the benefits for individual disability plans are based on
a flat amount
fixed period installments
a specified of years is selected and equal installments are paid to recipient payments continue even if recipient dies before end of period does not guarantee income for life of beneficiary; BUT does guarantee entire principal will be distributed
Straight Life policy:
a)It has the lowest annual premium of the three types of Whole Life policies. b)The face value of the policy is paid to the insured at age 100. c)It usually develops cash value by the end of the third policy year.
Needs approach method:
a)It must be assumed that the death of the insured will occur immediately. b))Coverage is based on the predicted needs of that family. d)The death of an insured must be premature.
installments for a fixed amount
a)Value of the account and future earnings will determine the time period for the benefits. b)This option pays a specific amount until the funds are exhausted. c)The annuitant may select how big the payments will be.
features of a noncancellable policy:
b)The premiums cannot be increased beyond the amount stated in the policy. c)The guarantee to renew coverage usually applies until the insured reaches certain age. d)The insured has the right to renew the policy for the life of the contract.
required signatures:
both the agent and proposed insured (usually the applicant) must sign the application
Which component increases in the increasing term insurance?
death benefit
Accidental Death Rider
death must occur within 90 days rider expires at insured's age 65 benefits only apply to face amount
Other than for a qualified life event, when can a change be made in benefits for a Flexible Spending Account (FSA)?
during the open enrollment period
all of the following may be excluded from coverage in a Major Medical Expense policy, EXCEPT
emergency surgery
Which nonforfeiture option has the highest amount of insurance protection?
extended term
Which nonforfeiture option has the highest amount of insurance protection?
extended term The Extended Term nonforfeiture option has the same face amount as the original policy, but for a shorter period of time.
What does "level" refer to in level term insurance?
face amount
With the Life with Guaranteed Minimum annuity settlement option,
if the annuitant dies before the principal amount (the amount paid for the annuity) has been paid out, the remainder of the principal amount will be refunded to his/her beneficiary. Pure life provides the highest monthly benefits for an individual annuitant.
Issue age policy premiums increase in response to which of the following factors?
increased benefits
Which of the following is NOT true regarding a Certificate of Authority?
it is issued to group insurance participants Before insurers may transact business in a specific state, they must apply for a license or Certificate of Authority from the state department of insurance and meet any financial (capital and surplus) requirements set down by the state.
The provision which prevents the insured from bringing any legal action against the company for at least 60 days after proof of loss is known as
legal actions This mandatory provision requires that no legal action to collect benefits may be started sooner than 60 days after the proof of loss is filed with the insurer. This gives the insurer time to evaluate the claim.
Affordable Care Act eliminates
pre-existing conditions restrictions in health insurance plans
Limited Payment
premiums paid-up before age 100 shorter premium-paying period than straight life ....so annual premium is HIGHER
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?
principal sum
Which of the following is true regarding a single life settlement option?
provides income the beneficiary cannot outlive
HIPAA
regulates protection for both group health insurance plans (for employers with 2 or more employees) & for individual insurance policies sold by insurance companies
Presumptive Disability plans
require the loss of at least two limbs (Loss of use does not qualify in some policies.), total and permanent blindness, or loss of speech or hearing. Benefits are paid, even if the insured is able to work.
underwriting is the:
risk selection and classification process
Which of the following components of dental insurance does NOT require the payment of a deductible?
routine and preventive maintence
Routine and preventative maintenance covers
routine dental check-ups only.
proof of loss provision states:
the claimant must submit a proof of loss within 90 days; however, if it is not possible to comply, the time parameter is extended to 1 year. The one-year limit does not apply if the claimant is not legally competent to comply with this provision.
the insured's considetation:
the premium & statements on application
the longer the fixed period installments, ....
the smaller each installment
All of the following statements about Medicare supplement insurance policies are correct EXCEPT
they cover cost of extended nursing home care
how soon after the due date should an insurer pay the agent appointment fees?
within 30 days
Convertible term insurance is convertible
without proof of insurability up to the full term death benefit. However, upon conversion, the premium for the permanent policy will be based on the insured's attained age.
To be eligible under HIPAA regulations to convert health insurance coverage from group to individual policy must meet:
-18 months of continuous creditable health coverage -covered under group plan in most recent insurance -used up any COBRA or state continuation coverage -not eligible for Medicare or Medicaid -not apply for any other health insurance -apply for individual health insurance within 63 days of losing prior coverage
In PA, violations of unfair discrimination law may result in any of following penalties:
-suspended or revoked licenses -refusal to renew licenses for up to 1 year - fines of up to $500 for each violation
Violation of unfair discrimination law may result in all of the following penalties EXCEPT
Fines of up to $1,000 for each act. These violations may result in suspended or revoked licenses, refusal to renew licenses, and fines of up to $500 for each act. true: a)Refusal to renew licenses. b)Imprisonment. c).Suspended licenses. d). fine up to $500 for each act
Which of the following types of policies allows the policyowner to skip premium payments, provided that there is enough cash value in the policy to cover the premium amount?
Universal life
If an insurance company makes a statement that its policies are guaranteed by the existence of the Insurance Guaranty Association, that would be considered
an unfair trade practice
When an annuity is written, whose life expectancy is taken into account?
annuitant
POS plan
combination of HMO & PPO an individual can visit an in-network provider at their discretion if decide to use an out-of-network physician, the member will higher copays, coinsurance, deductible if non-member is using POS plan, then attending physician will be paid a fee fore service members do not have to use only in-network providers for their care
closed panel
doctors are considered employees of health organization medical caregiver provides services to only members or subscribers of a health organization, & not allowed to treat other patients
open panel
doctors not considered to be employees of health organization medical caregiver contracts with a health organization to provide services to its members or subscribers, but retain right to treat patients who are not subscribers
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?
full benefits
HIPAA includes protection for coverage for Individual Health Plans:
guarantee access to individual policies for qualifying individuals guarantee renewability of individual policies
Annually Renewable Term
the purest form of term insurance DB remains level Premium increases annually according to attamed age as probability of death increases guaranteed to be renewable each year without proof of insurability
Regarding health insurance premiums, all of the following statements are true EXCEPT
Substandard risks are not insurable and are always rejected.
Which of the following is NOT the purpose of HIPAA?
To provide immediate coverage to new employees who had been previously covered for 18 months True: b)To guarantee the right to buy individual policies to eligible individuals c)To prohibit discrimination against employees based on their health status d)To limit exclusions for pre-existing conditions
reinstatement protects from insurer from
adverse selection
Which of the following is NOT true regarding the needs approach method of determining the value of an individual's life?
need is predicted using the number of years until the insured's retirement
POS plans are referred to as:
open-ended HMOS point of service
the insurer's consideration is the:
promise to pay the losses
purpose of the Accelerated Benefits rider
provide insured with the necessary funds to take of necessary medical and nursing home expenses from illness
When is the insurability conditional receipt given?
When the premium is paid at the time of application
Disabiity, under Social Security defintion:
inability in any gainful activity by reason of a medically determinable physical or mental impairment last 12 months or early death
The insured under a $100,000 life insurance policy with a triple indemnity rider for accidental death was killed in a car accident. It was determined that the accident was his fault. The triple indemnity rider in the policy specifies that the death must not be contributed to by the insured in any manner. In this case, what will the policy beneficiary receive?
$100,000 In this case, since the insured contributed to his own death, the triple indemnity rider is void, but the beneficiary will still receive the policy's death benefit.
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?
Disability Income
The applicant usually makes an offer when:
submitting the application
Settlement option:
when an immediate annuity is purchased with the face amount at death or with the cash value at surrender.
What is the civil penalty for the first violation of the Pennsylvania Insurance Fraud Prevention Act?
$5,000
If a consumer requests additional information concerning an investigative consumer report, how long does the insurer or reporting agency have to comply?
5 days
For the purpose of examination by the department, insurers must keep a record of all financial files for at least
5 years
According to the privacy of consumer financial information regulation, if a consumer decides to opt out, this means
The consumer directs the licensee not to disclose the consumer's nonpublic personal financial information to a third party.
Which of the following statements concerning group health insurance is CORRECT?
The employer is the policyholder.
Presumptive Disability plans offer:
full benefits for specified conditions.
Upon receipt of the cash surrender value, if the CV exceeds premium paid, the excess is:
taxable as ordinary income
The triple indemnity accidental death rider obligates:
the company to pay three times the face amount of the policy if the insured dies as a result of an accident. The death must be accidental and not contributed to by any other factors and must occur within 90 days of the accident.
option b
universal life death benefit increasing death benefit option
option a
universal life death benefit level death benefit & increasing CV there must be specified "corridor" or gap maintained between the CV & DB the % that apply to corridor are est by IRS and vary as to age of insured and amount of coverage
Accelerated Benefits
provides for early payment of death benefit if insured is diagnosed with terminal illness that result in death within 2 years remainder of policy proceeds are payable to the beneficiary at time of insured's death
Which of the following provisions in annuity contracts allow the owner to surrender the annuity if interest rates drop to a specified level?
Bail-out This provision allows the owner to surrender the annuity without charge if interest rates drop a specified amount within a certain timeframe.
Which of the following statements regarding Business Overhead Expense policies is NOT true?
Benefits are usually limited to six months.
All of the following are features and requirements of the Living Needs Rider EXCEPT
Diagnosis must indicate that death is expected within 3 years. **The Living Needs Rider provides for the payment of part of the policy death benefit if the insured is diagnosed with a terminal illness that will result in death within 2 years. True: a).The remainder of the policy proceeds is payable to the beneficiary at the insured's death. b)It provides funds for medical and nursing home expenses to a terminally ill insured. c)It is usually available at no additional charge.
Which of the following is NOT a feature of a noncancellable policy?
The insurer may terminate the contract only at renewal for certain conditions.
Adjustable Life
both term and permanent coverage need proof of insurability if converting from whole to term only adjust DB and add premiums to accumulate greater CV
legal purpose must have:
insurable interest and consent
To be eligible under HIPAA regulations, for how long should an individual converting to an individual health plan have been covered under the previous group plan?
18 months
annual open enrollment
30 days available once a year to employees who reject coverage during initial enrollment period and later wish to have coverage or to add dependent coverage evidence of insurability is not required
Increasing Term
Level premiums and a death benefit that increases each year over the duration of the policy term refund of premiums ideal in inflation and increasing cost of living
Attempting to determine how much insurance a family would require based upon their financial objectives is known as
Needs approach.
acceptance takes place when:
insurer's underwriter approves the application and issues a policy
According to OBRA, what is the minimum number of employees required to constitute a large group?
100
What is NOT a benefit of a POS plan?
It allows guaranteed acceptance of all applicants. true benefits: a)It allows the employee to use a doctor not covered under the HMO. b)With the Point-Of-Service plan the employees do not have to make a decision between the HMO or PPO plans that lock them in. c)It allows the employee to use an HMO provided doctor.
premium rate facts:
a)If a premium rate is disapproved, the Commissioner must hold a hearing if requested by the insurer. b)Pennsylvania is a "prior approval" state in that premiums rates must be filed with the Insurance Department and approved by the Commissioner. d)After a premium rate is filed, the insurer must wait 30 days or until approval is received from the Commissioner before using the new rate.
under COBRA, qualifying events are considered:
-voluntary termination of employment - termination of employment for reason other than gross misconduct -employment status change: from full time to part time
An insured's disability income policy includes an additional monthly benefit rider. For how many years can the insured expect to receive payment from the insurer before Social Security benefits begin?
1 year
An insurer may provide commissions to an agent for the sale of a long-term care policy only if the first year commission is NOT greater than what percentage of the first year premium?
50 %
HIPAA includes protection for coverage for Group Health Plans:
prohibiting discrimination against employees and dependents based on health condition allows opportunities to enroll in a new plan to individuals in special circumstances
option B
the death benefit includes the annual increase in cash value so that the death benefit gradually increases each year by the amount that the cash value increases. At any point in time, the total death benefit will always be equal to the face amount of the policy plus the current amount of cash value.
Decreasing Term
level premium & DB decreases purchased to insure payment of mortgage or other debts convertible, but not renewable
A policy will pay the death benefit if the insured dies during the 20-year premium-paying period, and nothing if death occurs after the 20-year period. What type of policy is this?
level term
