Insurance Study

An underwriter must review an applicant with an extensive medical history. Which document would give the underwriter a better understanding of how the insured was treated for various illnesses?

Attending Physician's Statement

Under the Affordable Care Act, maternity, pregnancy, and preventive care services are considered

Essential

Under HIPPAA portability, which of the following are NOT protected under required benefits?

Groups of one or more

Restoring an insured financially after a claim is known as

Indemnity

Who does the spendthrift clause in a life insurance policy protect?

The beneficiary

Which of the following is true regarding taxation of accelerated benefits paid under a life insurance policy?

They are received tax free.

Which method of dealing with risk is applied when insurance is purchased

Transfer

Answers to questions in an insurance application are called representations and, as such, they are

believe to be true, best knowlegde

Comprehensive Medical Expense Insurance combines which of the following coverage in one policy:

Basic Hospital/Surgical and Major Medical

Insurers CANNOT transact insurance in this state without a

Certificate of Authority

Which of the following is NOT a typical of Long-Term Care coverage?

Child day care

Which of the following losses would likely be covered under the accidental death rider?

Death caused by a head on collision

When the insurance proceeds are used to pay inheritance taxes and federal estate taxes, it is known as what?

Estate conservation

To Purchase insurance, the policyowner must face the possibility of losing money or something of value in the event of loss. What is this concept called

Indemnity

Which of the following best describes pure life annuity?

It provides the highest monthly benefits. The pure life annuity, also known as Life Only or Straight Life, pays the most since it only guarantees to pay for the rest of one's life without a minimum guarantee.

An insured was seriously injured in a skiing accident that required him to be hospitalized for 5 weeks. His medical expense policy covered all of the following EXCEPT

Looks of income while hospitalized

Which of the following best describes the type of care provided by the HMO's

Preventative

With Adjustable Life, the owner can change all of the following EXCEPT

The insured

how does insurance distribute the financial consequences of individual losses

transfers the risk to all persons insured

Which of the following would be true of both the fixed period an fixed amount settlement options ?

Both guarantee that the principal and the interest will be fully paid out

Partners in a business want to make sure that if one of them were to pass away, their surviving family will receive a fair value for their portion in the business. What life insurance arrangement would be most suited for transitioning the business?

Buy and Sell Agreement

The notice about policy cancellation delivered to senior consumers must include all of he following information EXCEPT

Explanation of where the premiums have been invested

Which of the following is not a type of hazard

Exposure

Which of the following is consideration on the part of an insurer?

Paying a claim

An annuity would normally be purchased by an individual who wants to

Provide income for retirment

If an insured purchases an insurance policy with a large deductible, what risk management technique is the insured exercising?

Retention

HMOs are known as what type of plans?

Service

What is the only difference between blanket insurance and group health insurance

The insured members are not named.

All of the following are characteristics of group health insurance plans EXCEPT

The parties that hold a group health insurance contract are the employees and the employer

Whose responsibility is it to ensure that the application for health insurance is complete and accurate.

The underwriter's

Which of the following types of insurance is investment based, has a level fixed premium, and a nonguaranteed cash value?

Variable Whole Life

In Health insurance, the length of the Grace Period varies according to which of the following?

he mode of premium payment

The Affordable Care Act mandates that insurers provide coverage for adult children of the insured up to the age of

26

There is a 10% penalty on the taxable portion of a deferred annuity when it is surrendered prior to what age?

59.5

A person has a history of DUI's To his insurer, this presents what type of hazard?

Morale

Which of the following is not a component of insurance policy premium

Number of beneficiaries

A core Medicare supplement policy (Plan A) will cover all of the following expenses EXCEPT

Part A deductible

A qualifying retiree has access to all parts of the Social Security Medicare program. Which of these parts requires a monthly payment from the insured

Part B

Which of the following Medicare parts provides prescription drugs benefit?

Part D

In a group life policy with a death benefit of more than $50,000:

Premium cost for insurance about $50,000 is taxable as income to the employee

The insured dies 6 months after the policy issue date. Upon death of the insured, it is determined that the applicant made a material misstatement on the application. What is the most likely course of action for the insurer?

Rescind the policy

All of the following are true of credit life EXCEPT

The insured names the beneficiary

Which of the following is NOT true regarding term health coverage?

The owner may renew the policy for a specified term.

Medical claims covered by the program known as Medi-Cal in California are paid for by

The state mostly through federal reimbursements

In which of the following scenarios would a producer be allowed to obtain insurance through an unauthorized insurer?

if there are no authorized insurers for a specific type of coverage in this state

An insured falls down a flight of stairs and sustains a neck in just that renders him severely disabled. The insured owned a while life policy. Is it possible for the policy to include a waiver of cost of insurance rider, if so, what insurance cost would be waived

No, it is not possible for this waiver to be included in a while life policy

Insurance contracts are unilateral in nature. What does that mean?

Only one party makes a promise.

What is it called when a doctor accepts the Medicare approved amount?

Verification

A statement made by an applicant for insurance that must be true in every respect is considered to be a

Warranty

Which of the following is NOT a use of personal life Insurance

An individual buys insurance to fund a buy sell agreement

Per the Code, the best definitions of "shall" and "may" are:

Mandatory & permissive

Which of the following used to be called Medicare + Choice Plans?

Medicare Advantage Plans

Which of the following statements is INCORRECT

Medicare doesnt cover skilled nursing care

Who must participate in a noncontributory group policy?

100% of eligible employees must participate

To qualify as disabled under the provisions of Social Security, your disability must be expected to last at least:

12 months

A policyholder returns the policy to the insurer a week after it is delivered. How much of the premium will be returned to the applicant?

100%

An underwriter is reviewing an applicant with an extensive medical history. Which of the following would give the underwriter a better understanding of how the applicant has been treated for various illnesses?

Attending Physician's Statement

Daryl is involved in an automobile accident with another motorists. Darryl is at fault. Darryl was injured and hospitalized for 2 moths. The other motorists suffered $15,000 of medical expenses as a result of he accident. Darryl's disability income policy with pay

Darryl's loss of income

Which of the following is an example of a physical hazard

Diabetes

All of the following are features of a health insurance plan purchased on the health insurance marketplace EXCEPT

Dollar limits on essential benefits

Which of the following is provided by skilled medical personnel to those who need occasional medical assistance or rehabilitative care?

Intermediate care

What advantage does the "recurrent disability" provision provide to the insured under a disability income policy?

It eliminates the imposition of a second period for the same disability

Dividends received on participating life insurance policies are?

Not taxable because they are a return of unused premiums

An insurer can decide to not renew an Optionally Renewable Policy:

On Premium Due Dates

All of the following are advantages of a qualified retirement plan EXCEPT

The income at retirement is tax free

Which of the following time periods is the general enrollment period for Medicare Part B

January 1 through March 31 each year

All of the following statements about agents are true, except:

Exclusive agents work for themselves

What is the exclusion ratio used to determine?

The untaxed portion of distributions

A life insurance policy illustration may NOT include

Vanishing premiums if the policy becomes paid up with nonguarenteed elements paying future premiums

The renewable provision allows the policyowner to renew the coverage at the expiration date.

Without evidence of insurability

According to the "Common Disaster" clause, if the insured and primary beneficiary are killed in the same accident and it cannot be determined who died first, which of the following will be assumed?

The primary beneficiary died before the insured. According to the "Common Disaster" clause, if it cannot be determined who died first, the insured or the primary beneficiary, it will be assumed the primary beneficiary died first, so the proceeds go to the contingent beneficiary. proceeds will go the insureds estate only if there is no contingent beneficiary.

Concerning the Family Protection Policy, all of the following statements, which one is true

children, upon reaching the age of majority, are permitted to convert to an individual policy with proof of insurability

Which of the following becomes part of the contract, is guaranteed to be true, and if untrue, may be grounds for rescinding the policy?

Warranty

How long is the grace period for an individual life insurance policy in California?

1 month

An agent delivers a policy to an applicant, who pays the initial premium but refuses to submit a Statement of Good Health. Which of the following best describes what the applicant has violated?

Consideration

All of the following are ways to handle risk EXCEPT

Elimination

For which of the following reasons may group coverage NOT be discontinued?

For company's stock value lowers

What is the purpose of a benefit schedule?

To state what and how much is covered in the plan.

What does an annuity protect the contract owner against?

living longer than expected

Gross premium for a life insurance policy is determined by adding which two components

net premium and expenses

cash value guarantees in a whole life policy are called

nonforfeiture values

Which of the following will be eligible for a tax-sheltered annuity?

public school teachers

According to the Medical Loss Ratio (MLR), what is the minimum percentage of health coverage premium that must be applied to actual medical care in a group health plan?

85%

Policy dividends issued by mutual companies can be described as

Refunds

Wagering on a sporting event is known as

Speculative

In group insurance, the primary purpose of the coordination of benefits provision is to

Prevent over-insurance

On an Accidental Death and Dismemberment (AD&D) policy, the death benefit payable is known as the:

Principal sum

Which statement below is INCORRECT regarding the type of term insurance that fits best with the applicant's needs?

Applicants who may require a larger death benefit in the future should buy convertible term insurance

which of the following statements about HICAP is false? HICAP

provides assistance for a fee based upon ability to pay

Which of the following is the best definition of indemnification

to compensate for damage or loss sustained, expense incurred, etc. 2. to guard or secure against anticipated loss; give security against (future damage or liability).

Core benefits are included in all medicare supplemental policies what Percentage of part B coinsurance is required

10%

In a group life insurance plan, children of the employee may be covered as eligible dependents until they reach the age of

26

To be acceptable to insurance companies, what percentage of eligible employees must be enrolled under a contributory health insurance plan?

75%

The "stop loss" feature on a major medical policy is intended to

Establish a maximum amount of out-of-pocket expense that an insured will have to pay for medical expense in a calendar year

Which of the following is not true regarding a noncancellable policy?

Insurer can increase the premium above what is stated in the policy if claims experience is greater than expected

Which of the following statements describes one of the reasons individuals purchase life insurance?

It creates an immediate estate.

Human Life Value approach to determining Life Insurance needs is based upon which of the following ideas?

Loss of breadwinner's income

In order for an alumni association to be eligible to purchase group health insurance for its members, all of these statements must be true EXCEPT when the association

Has been active for five years minimum

Slippery floors, reckless driving, or providing false information are examples of..

Hazards

POS

Hybrid of HMO and PPO

In life insurance, which of the following is NOT required to have an insurable interest in the insured?

beneficiary

When long term care insurance covers care in a person's home or in a skilled or residential facility, the policy may be labeled

Comprehensive

Conrad recieved $50,00 for a $100,000 accidental death and dismemberment policy as a result of the loss of his leafy arm in a n accident. Conrad has received the

Capital amount 50%principal

Which of the following describes relationship between a capital sum and a principal sum?

Capital sums are percentages of principal sums

If an applicant's health is poorer than that of an average applicant, the policy may be issued

Substandard

Medicare Part A services do NOT include which of the following?

rivate Duty Nursing

In a group policy, all of the following can be the policy owner except

the insurance company

Which of the following is true of the taxation of cash values in a business life insurance policy?

Cash values grow tax deferred. The cash value of a business owned life insurance policy or an employer provided policy accumulates on a tax-deferred basis and is taxed in the same manner as an individually owned policy.

What is the purpose of the gatekeeper in an HMO?

Controlling Costs

An individual has a $200,000 convertible term life insurance policy. If he chooses, he can

Convert the whole life policy for the same face amount without proof of insurability

Which of the following is considered a peril.

Driving too fast for conditions

Which of the following terms is used to define the period of time during which an annuitant makes payments into an annuity?

Accumulation period

Which statement about life insurance code and ethics is not true?

Acts of fair and unfair discrimination are prohibited

All of the following are true of a Multiple Employer Trust(MET) Except

The employee has a right of conversion upon leaving the group coverage.

"What is the purpose of a disability buy sell agreement"

To reimubrse the business

All other factors being equal, which of the following premium payment modes will incur the lowest overall payment?

Annual

The policy owner has an option to pledge the life insurance policy as collateral for a bank loan. This is called

collateral assignments

Bill is approaching retirement age and is concerned about having proper coverage should he have to be placed in a LTC facility. Bill's agent told him that LTC policies would provide coverage at all of the following levels EXCEPT

Acute

A limited health insurance policy that will pay a lump-sum to the insured if they are diagnosed with life-threatening cancer, stroke, heart attack or Alzheimer's disease is known as:

critical illness insurance

Which of the following riders provides for the payment of part of the policy death benefit if the insured is diagnosed with a terminal illness that will result in two years?

Living Needs Rider

which of the following riders pays a beneficiary a death benefit that is double or triple the face amount if the insurance death was caused by an accident as defined in the policy

an accidental death rider

A whole life policy is surrendered for a reduced-paid up policy. The cash value in the new policy will?

Continue to increase

Which of the following meets the insured's personal needs, and is provided by nonmedical personnel?

Custodial Care

J is receiving fixed amount benefit payments from his late wife's insurance policy. He was told that if he dies before all of the benefits are paid the remaining amount will go to the contingent beneficiary. What settlement option is this ?

Fixed amount