Life and Health Insurance 5
If an insured receives accelerated death benefits, what is the least amount of the original death benefit that the beneficiary would receive after the insured's death?
0%
The Medicare supplement renewal commissions paid in the third year must be as high as the commission of which year?
2nd
What is the elimination period for Social Security disability benefits?
5 months
An IRA uses immediate annuities to pay out benefits; the IRA owner is nearly 75 years old when he decides to collect distributions. What kind of penalty would the IRA owner pay?
50% tax on the amount not distributed as required
Which of the following is NOT an allowable 1035 exchange?
A whole life insurance policy is exchanged for a term insurance policy.
All of the following statements concerning workers compensation are correct EXCEPT
A worker receives benefits only if the work related injury was not his/her fault.
Which of the following would be considered a nonmedical insurance application?
An application on which the medical information is completed by the applicant and the agent only
All of the following are TRUE of the federal tax advantages of a qualified plan EXCEPT
At distribution, all amounts received by the employee are tax free.
When must an insurance company present an outline of coverage to an applicant for a Medicare supplement policy?
At the time of application
Which of the following is NOT a characteristic or a service of an HMO plan?
Contracting with insurance companies
Bob the insurance producer just sold an insurance policy to his sister. What kind of business is this?
Controlled
Which of the following is NOT an advantage of an HRA for an employer?
HRAs are defined benefit programs
All of the following statements about Medicare Part B are correct EXCEPT
It is a compulsory program.
If a life insurance policy increases significantly in face amount (death benefit) when the insured reaches a specified age, what type of policy is this?
Jumping juvenile policy
Premium payments for personally-owned disability income policies are
Not tax deductible.
Under a straight life annuity, if the annuitant dies before the principal amount is paid out, the beneficiary will receive
Nothing; the payments will cease.
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
An applicant wants to buy a policy that has a cash value element. Which type should she buy?
Permanent
An underwriter may reject an application for health insurance if the rejection is based upon which of the following?
Prescription usage
Another name for a substandard risk classification is
Rated
A producer is helping a married couple determine the financial needs of their children in the event one or both should die prematurely. This is a personal use of life insurance known as
Survivor protection
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.
Which of the following is NOT a feature of a noncancellable policy?
The insurer may terminate the contract only at renewal for certain conditions.
Which of the following is NOT a goal of risk retention?
To minimize the insured's level of liability in the event of loss
When is the earliest a policy may go into effect?
When the application is signed and a check is given to the agent
Who can make a fully deductible contribution to a traditional IRA?
An individual not covered by an employer-sponsored plan who has earned income
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
Before he died, an annuitant had received $12,500 in monthly benefits from his $25,000 straight life annuity. He was also the insured under a $50,000 paid-up whole life policy that named his wife as primary beneficiary. Considering both contracts, how much will the annuitant's spouse receive in benefits?
$50,000
An insured's premium increases as a result of her age. Which type of policy does she have?
Attained age
Which of the following would be exempt from the policy replacement regulations for insurers?
Credit life insurance
Which of the following is an example of a peril covered in an accident and health insurance policy?
Sickness
An employee becomes insured under a PPO plan provided by his employer. If the insured decides to go to a physician who is not a PPO provider, which of the following will happen?
The PPO will pay reduced benefits.
Which of the following is TRUE regarding variable annuities?
The annuitant assumes the risks on investment.
Which of the following is the best reason to purchase life insurance rather than annuities?
To create an estate
Which of the following is the closest term to an authorized insurer?
Admitted
Which policy component decreases in decreasing term insurance?
Face Amount
Which of the following is NOT true regarding the accumulation period of an annuity?
It would not occur in a deferred annuity.
Which of the following describes self-insurance?
A business engages in the same types of activities as a commercial insurer and deals with its own risks.
Which of the following is NOT true regarding an annuity certain?
Benefits stop at the annuitant's death.
Which of the following best describes fixed-period settlement option?
Both the principal and interest will be liquidated over a selected period of time.
All of the following would be different between qualified and nonqualified retirement plans EXCEPT
Taxation on accumulation
Which of the following is NOT true regarding the annuitant?
The annuitant cannot be the same person as the annuity owner.
In a fixed annuity, which of the following is true regarding the guaranteed interest rate on the investment?
The annuitant will receive the higher of either the guaranteed minimum rate or current rate.
A corporation is the owner and beneficiary of the key person life policy. If the corporation collects the policy benefit, then
The benefit is received tax free.
In insurance, an offer is usually made when
The completed application is submitted.
