Exam Missed Questions 2
What is the maximum age for qualifying for a catastrophic plan? 26 30 45 62
30. who cannot obtain affordable coverage (have a hardship exemption) may be able to purchase individual catastrophic plans that cover essential benefits.
Your client wants to know what the tax implications are for contributions to a Health Savings Account. You should advise her that the contributions are Subject to capital gains taxes. Tax deductible. Subject to personal income taxes. Post-tax dollars.
Contributions to HSAs by individuals are deductible, even if the taxpayer does not itemize. Contributions by an employer are not included in the individual's taxable income.
Which of the following is NOT provided by an HMO? Reimbursement Services Financing Patient care
Reimbursement
Insurers may change which of the following on a guaranteed renewable health insurance policy? Coverage Individual rates No changes are permitted. Rates by class
On a guaranteed renewable health insurance policy, the insurer may increase premiums on a class basis only and not on an individual policy.
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? Capital sum Double the amount of the death benefit Refund of premiums Principal sum
Principal Sum
An insurer wants to begin underwriting procedures for an applicant. What source will it consult for the majority of its underwriting information? State records Medical records Application Interviews
The application contains most of the information used for underwriting purposes. This is why its completeness and accuracy are so crucial.
An insured pays a monthly premium of $100 for her health insurance. What would be the duration of the grace period under her policy? 7 days 10 days 31 days 60 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.
The coverage provided by a disability income policy that does not pay benefits for losses occurring as the result of the insured's employment is called Nonoccupational coverage. Unemployment coverage. Occupational coverage. Workers compensation.
Most group disability income is nonoccupational coverage, covering insureds only off the job. The employer carries workers compensation for on the job injuries or sickness.
Which of the following do the Standard and Preferred risk categories share? More medical evaluations are required. Possible modifications to include expanded coverage Permanent coverage Premiums are not elevated.
The "standard" rating indicates that an individual represents a similar level of health and lifestyle quality as other members of the same age cohort. These individuals do not need special policy restrictions or are required to pay higher premiums. Those in the "preferred" category often have to pay smaller premiums than those who are in the "standard" category.
All of the following statements concerning the use of life insurance as an Executive Bonus are correct EXCEPT Any type of insurance policy may be used. The employer pays a bonus to a selected employee to fund the policy. It is considered a nonqualified employee benefit. The policy is owned by the company.
The policy is owned by the employee.
An insurer is not allowed to amend or refuse to renew which of the following types of policies? Guaranteed renewable Unalterable Permanent Noncancellable
When a policy is guaranteed renewable, the insured has the right to keep the long-term care insurance in force by making timely payments of premium, and the insurer may not make any change to the policy or decline to renew it.
Which renewability provision allows an insurer to terminate a policy for any reason, and to increase the premiums for any class of insureds? Cancellable Guaranteed renewable Optionally renewable
optionally renewable; The renewability provision in an optionally renewable policy gives the insurer the option to terminate the policy for any reason on the date specified in the contract (usually a renewal date). Furthermore, this provision allows the insurer to increase the premium for any class of optionally renewable insureds
Which of the following is true regarding health insurance? Disability coverage is excluded. It provides death benefit coverage. It only covers expenses related to health care. It could provide payments for loss of income.
Health insurance is a generic term, encompassing several types of insurance contracts, which, though related, are designed to protect against different risks. It provides coverage for expenses related to health care, loss of income, and disability income.
Which of the following is NOT a feature of a guaranteed renewable provision? The insured has a unilateral right to renew the policy for the life of the contract. Coverage is not renewable beyond the insured's age 65. The insured's benefits cannot be reduced. The insurer can increase the policy premium on an individual basis.
The insurer can increase the policy premium on an individual basis;, the premiums can only be increased on a class basis, not on an individual policy.
All of the following are true regarding the Medical Information Bureau (MIB) EXCEPT MIB reports contain previous insurance information. Insurers may not refuse to accept an application solely due to information in an MIB report. MIB reports are based upon information supplied by doctors and hospitals. MIB information is reported to underwriters in coded form.
MIB reports ARE NOT are based upon information supplied by doctors and hospitals.
What is the maximum number of employees that a company can have before it is too large to be labeled as a "small employer"? 20 25 40 50
Small employer" 2-50 means any person, political subdivision, firm, corporation, limited liability company, partnership, or association that is actively engaged in business that, on at least 50% of its working days during the preceding calendar quarter, employed at least 2 and no more than 50 eligible employees, the majority of whom were employed within Nebraska.
In the Executive Bonus plan, who is the owner of the policy, and who pays the premium? Board of directors is the owner, and the board of directors pays the premium. Company is the owner, and the company pays the premium. Executive is the owner, and the executive pays the premium. Company is the owner, but the executive pays the premium.
Executive buys the policy and pays the premium, and the employer reimburses the executive for cost (or pays a bonus in the amount of the premium). Since the executive is receiving compensation, the amount paid by the employer would be considered taxable income.
Using a class designation for beneficiaries means Naming beneficiaries as a group. Not naming beneficiaries. Naming an estate as the beneficiary. Naming each beneficiary by his or her name.
Class designations are used when an insured chooses to distribute benefits among the living beneficiaries and/or their heirs without naming each individual person, such as "all my children."
When a reduced-paid up nonforfeiture option is chosen, what happens to the face amount of the policy? It is increased when extra premiums are paid. It decreases over the term of the policy. It remains the same as the original policy, regardless of any differences in value. It is reduced to the amount of what the cash value would buy as a single premium.
In a reduced paid-up policy, the original policy's cash value is used as single premium to pay for a permanent policy with a reduced face amount from the original, hence the name. The new policy accumulates in cash value until its maturity or the insured's death.
Which act bars agents, brokers, and companies from disclosing health, financial, or other information gathered in the underwriting process about the consumer to any 3rd party without the consent of the consumer? Classified Information Protection Act Consumer Protection of Information Act Privacy of Insurance Consumer Information Act Illegal Disclosure Act
Privacy of Insurance Consumer Information Act bars agents, brokers, and companies from disclosing health, financial, or other information gathered in the underwriting process about the consumer to any 3rd party without the consent of the consumer.
What does "level" refer to in level term insurance? Interest rate Face amount Premium Cash value
Level term policies maintain level death benefit (or face amount) throughout the term of the policy. In level term insurance, the premium also remains consistent over the years, unlike the premiums of many policies, which increase as the policyholder ages.
Which of the following is NOT true of Section 1035 Policy Exchanges? It requires an absolute assignment of the existing policy to the replacing company who surrenders the contract and issues a replacement policy. It is an IRS Code which permits like kind exchanges of property. It is typically used when exchanging or replacing a less competitive life policy with a more competitive life policy. Any exchange made under Section 1035 of the Internal Revenue Code must be completed within 30 days.
Section 1035 of the Internal Revenue Code does not give a specific time limit to complete such an exchange.
Which of the following statements is true regarding LTC insurance? LTC policies may not include any riders. LTC policies must allow a 60-day free-look period. Every policy must offer nonforfeiture benefits to the applicant. Every policy must offer reduced paid-up insurance to the applicant.
Long-term care policies or certificates issued or delivered in this state must offer to the applicant nonforfeiture benefits. Reduced paid-up insurance is one of the possible nonforfeiture options, but it is not necessarily required. LTC policies may contain riders, and must offer a 30-day free-look period.
The term "fixed" in a fixed annuity refers to all of the following EXCEPT Amount and length of payments Death benefit Guaranteed rate of interest Equal annuity payments
Death benefit; A fixed annuity is fixed in the sense that it provides a guaranteed minimum rate of interest and income payments that do not vary from one to the next. The company also guarantees the specified dollar amount for each payment and the length of the payout period. Annuities do not provide a death benefit.
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? Adhesion Consideration Good faith Representation
Consideration
The most the Insurance Guaranty Association will pay for net cash surrender values is $500,000. $1,000,000. $100,000. $250,000.
The Insurance Guaranty Association will not pay more than $100,000 for net cash surrender and net cash withdrawal values.
To attain currently insured status under Social Security, a worker must have earned at least how many credits during the last 13 quarters? 4 credits 6 credits 10 credits 40 credits
To be considered currently (or partially) insured, an individual must have earned 6 credits during the last 13-quarter period.
Which of the following is NOT a goal of risk retention? To fund losses that cannot be insured To minimize the insured's level of liability in the event of loss To reduce expenses and improve cash flow To increase control of claim reserving and claims settlements
To minimize the insured's level of liability in the event of loss; Retention usually results from three basic desires of the insured: to reduce expenses and improve cash flow, to increase control of claim reserving and claims settlements, and to fund losses that cannot be insured.
A patient has severe gingivitis and is seeking treatment from his dentist. Which type of dental treatment is this? Endodontics Periodontics Orthodontics Soft dental
Periodontic treatment addresses the surrounding and supportive tissue of the teeth.
What provision can reduce the disability benefit based upon the insured's current income? Waiver of monthly premium Pro rata provision Rehabilitation benefit Relation of earnings to insurance
The relation of earnings to insurance provision allows the insurance company to limit the insured's benefits to his/her average income over the last 24 months.