Health and Life Insurance 4

Which of the following best describes the difference between Pure Life and Life with Guaranteed Minimum settlement options?

Life with Guaranteed Minimum will pay the remaining principal to the beneficiary.

In franchise insurance, premiums are usually

Lower than individual policies, but higher than group policies.

What type of group insurance plan has benefits that are a result of a collective bargaining agreement between a labor organization and an employer?

Modified fully-insured plan

Which Universal Life option has a gradually increasing cash value and a level death benefit?

Option A

What happens if a non-member physician is utilized under the Point-Of-Service plan?

The attending physician will be paid a fee for service, but the member patient will have to pay a higher coinsurance amount

An insured is covered by a partially contributory group disability income plan that pays benefits of $4,000 a month. If the insured pays 25% of the monthly premium, how much of the monthly benefit would be taxable?

$3,000

COBRA applies to employers with at least

20 employees

How can a new physician be added to the PPO's approved list?

Agree to follow the PPO standards and charge the appropriate fees.

An agent accepts the premium payment 35 days after it is due, telling the insured that there will not be a problem keeping the policy in force. This is an example of what type of agent authority?

Apparent

All of the following are true about Group Disability Income insurance EXCEPT

Coverage applies both on and off the job.

Under which installments option does the annuitant select the amount of each payment, and the insurer determines how long they will pay benefits?

Fixed amount

Most LTC plans have which of the following features?

Guaranteed renewability

Guarantee of insurability option in long-term care policies allows the insured to

Increase benefit levels without providing proof of insurability

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

The insurer may suspect that a moral hazard exists if the policyholder

Is not honest about his health on an application for insurance.

A policyowner is reading a statement on the first page of his health insurance policy, which says "this is a limited policy." What is the name of this statement?

Limited Policy Notice

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

NAIC

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.

Which of the following statements is an accurate comparison between private and government insurers?

Private insurers may be authorized to transact insurance by state insurance departments.

Equity indexed annuities

Seek higher returns.

What authority issues a Cease and Desist Order?

The Director of the Department of Consumer and Business Services

All of the following statements concerning the use of life insurance as an Executive Bonus are correct EXCEPT

The policy is owned by the company.

What is the main purpose of the regulation on life insurance policy illustrations?

To help customers make educated decisions in buying life insurance

When would a 20-pay whole life policy endow?

When the insured reaches age 100

If a life insurance policy develops cash value faster than a seven-pay whole life contract, it is

A Modified Endowment Contract.

This state provides for a temporary license for all of the following EXCEPT

A producer's retirement.

Under which condition would an employee's group medical benefits be exempt from income taxes?

An employee's group medical benefits are generally exempt from taxation as income

Your client plans to retire at age 50. He would like to purchase an annuity that would provide income from the time he retires to the age when social security and other pension funds become available. What settlement option should he consider?

Annuity certain

Which is TRUE about the cash surrender nonforfeiture option?

Funds exceeding the premium paid are taxable as ordinary income.

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

If a life policy allows the policyowner to make periodic additions to the face amount at standard rates, without proving insurability, the policy includes a

Guaranteed insurability rider.

Which of the following methods of calculating the amount of life insurance needed takes into account the insured's wages, years until retirement, and inflation?

Human life value approach

What is the tax consequence of amounts received from a Traditional IRA after the money was left in the tax-deferred account by the beneficiary?

Income tax on distributions and no penalty.

Annually renewable term policies provide a level death benefit for a premium that

Increases annually.

Your client's employer does not offer a company-wide annuity contract. What type of annuity contract could your client obtain?

Individual

Which law was passed to authorize the NAIC to develop a standardized model for Medicare supplement policies?

OBRA

Under a pure life annuity, an income is payable by the company

Only for the life of the annuitant.

What type of policy contains a coverage that is only activated upon the insured's losses reaching a certain level?

Partially-funded plan

In a group policy, who is issued a certificate of insurance?

The individual insured

A medical expense policy that establishes the amount of benefit paid based upon the prevailing charges which fall within the standard range of fees normally charged for a specific procedure by a doctor of similar training and experience in that geographic area is known as

Usual, customary and reasonable.

In forming an insurance contract, when does acceptance usually occur?

When an insurer's underwriter approves coverage

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

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

Bob purchased a policy to provide coverage on himself, his wife Linda, and their two children, John and Kristen. All of them would need to prove insurability EXCEPT

Any children born to them after the inception of the contract.