Life and Health Insurance exam
Which of the following would be probably covered by blanket insurance?
A university sports team
Harry has a disability that prevents him from doing certain kinds of work. Because of his qualifications, he responds to a recruitment ad and is hired for the job. What federal act allows him to apply for the Job?
Americans with Disabilities Act
The proposed insured makes the premium payment on a new insurance policy. If the insured should die, the insurer will pay the death benefit to the beneficiary if the policy is approved. This is an example of what kind of contract.
Conditional
A prospective insured receives a conditional receipt but dies before the policy issued. The insurer will
Pay the policy proceeds only if it would have issued the policy
If an insured return to work following a period of total disability becomes disabled again because of the original injury, this is known as a
Recurring Disability
Restoration of benefits is most beneficial to the insured when they ___
Suffer a large loss
Which of the following is NOT covered under BASIC HOSPITAL EXPENSE COVERAGE?
Surgeons fee
All of the following are true about variable products EXCEPT
The premiums are invested in the insures general account
HICAP counselors are primarily
Trained and registered volunteers
Events in which a person has both the chance of winning and losing are classified as
Speculative risk
An employee will be taxed on the cost of group life insurance paid by the employer if the amount of coverage exceeds.
$50,000
What other term is used to refer to unintentional Torts?
. Negligence
What is the maximum period that an insurer would pay benefits in accordance with Additional Monthly Benefit Rider?
1 year
If a person is disabled at the age of 27 and meets social security definition of total disability, how many work credits must he/ she have earned to receive benefits?
12 credits
In order to collect Social Security's Disability benefits, the claimant must be able to demonstrate that they disability will last at least
12 months
To be eligible under HIPPA regulation, for how long should an individual converting to an individual health plan have been covered under the previous group plan
18 months
What is the maximum period that an insurer would pay benefits in accordance with an additional monthly benefit rider?
1year
An insured was involved in an accident and could not preform her current job for 3 years. If the insured could reasonably perform another job utilizing similar skills after 1 month, for how long would she be receiving benefits under an "Own Occupation" Disability plan?
2 years
Following an injury, a policyowner covered under Medicare Part A&B was treated by her physician on an outpatient basis. How much of her doctor's bill will she eb required to pay out of pocket?
20% of covered charged above the deductible
What is the period of coverage for events such as death or divorce under COBRA?
36 months = 3 years
What is the elimination period of 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 collet distributions. What kind of penalty would the IRA owner Pay?
50% tax on the amount not distributed as required
What is the waiting period on a Waiver of Premium rider in life insurance policies?
6 months
According the medical loss ratio (MLR), what is the minimum percentage of health coverage premium that must be applied to actual medical care in a large group health plan?
85%
An insurer may discriminate against a person through underwriting if that person has
A physical handicap that could result in a predictable loss.
Bob was rendered totally disabled at the time his group health insurance plan was discontinued. Since Benefits began to be paid while the policy was in force, which of the following would be required?
An extension of Benefits
Bob was rendered totally disabled at the time his group health insurance plan was discontinued. Since benefits began to be paid while the policy was in force, which of the following would be required?
An extension of Benefits
Bob was rendered totally disabled at the time his group health insurance plan was discontinued. Since benefits began to be paid while the policy was in force which of the following would be required
An extension of benefits
Bob was rendered totally disabled at the time his groupie health insurance plan was discontinued. Since benefits began to be paid while the policy was in force, which of the following would be required?
An extension of benefits
Under HIPAA, which of the following is INCORRECT regarding eligibility requirements for conversion to an individual policy?
An individual who has previously covered by group health insurance for 6moths is eligible
Which concept is associated with the exclusion "ratio"?
Annuity Payment
Which concept is associated with "exclusion ratio"?
Annuity payments
All of the following are true regarding a qualified annuity EXCEPT
At distribution, all amounts received by the employee are tax free
Which of the following statement regarding Business Overhead Expense policies in NOT true?
Benefits are usually limited to six months
Which of the following is TRUE regarding inpatient hospital care for HMO members?
Car can be provided outside the service area
An insured receives an annual life insurance dividend check. What term best describe this arrangement
Cash option
If an applicant for a health insurance policy is found to be substandard risk, the insurance company is most likely to
Charge an extra premium
The proposed insured makes the premium payment on a new insurance policy. If the insured should die, the insurer will play the death benefit to the beneficiary if the policy is approved. This is an example of what kind of contract.
Conditional
An insurer neglects to pay a legitimate claim that is covered under the terms of the policy. Which of the following insurance principals has the insurer violated?
Consideration
A long stretch of economic hardship causes a 7% rate of inflation. A policyowner noticed that the face value of her life insurance policy has been raised by 7% as a result. Which policy rider caused this change
Cost of living Rider
When twin brothers applied for life insurance from company A, the company found that while neither of them smoked and both had a very similar lifestyle, one of its twins was in a much stronger financial position than the other. Because of this, the company charged him a higher rate for his insurance. This practice is considered
DISCRIMINATIOMN
Which of the following will NOT be considered unfair discrimination by insurers?
Discriminating in benefits and coverages based on the insured's habits and lifestyle
Which of the following is considered to be a morale hazard?
Driving recklessly
Other than for a qualified life event, when can a change be made in benefits for a Flexible Spending Account (FSA)
During the open enrolment period
"A physical or mental impairment which substantially limits one or more major life activities, or record of such impairment, or being considered as having such an impairment" is the definition of a disability according to ___
ERISA
When Term refers to a listing of approved drugs covered by a Medicare prescription drug plan?
Formulary
AS it pertains to the 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
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 expenses
Which of the following annuity riders ensures investors will receive a set of income annually?
Guaranteed Minimum Income Benefit
A Medicare supplement plan must have at least which of the following renewal provisions
Guaranteed renewable
First dollar coverage refers to a type of insurance which
Has no Deductible
What are the three basic coverages for medical expense insurance?
Hospital surgical and medial
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 (HLVA)
Which of the following is true regarding a policy with a face value less than $10,000?
If it returned during the free look period, the agreement will be void
Which of the following is INCORRECT concerning taxation of disability income benefits?
If paid by the individual, the premiums are tax deductible
A Return of Premium Term life Policy is written as what type of term coverage.
Increasing
What is NOT a benefit of a POS plan?
It allows guaranteed acceptance of all applicants.
AN insured buy a 5-year level premium term policy with a face amount of $10000. The policy contains renewability and convertibility options. When the insured renews the policy in 5 years, wat will happen to the premium?
It will increase because the insured will be 5 years older than when the policy was originally purchased
Which of the following is true of PPO?
Its Goal is to Channel Patients to providers that discount services
In a group health policy, a probationary period is intended for people who
Join the group after the effective date
Your client wants both protection and savings from the insurance and is willing to pay premiums until retirement at age 65. What would be the right policy for this client?
Limited pay Whole Life
All of the following are true regarding the issuance of group life insurance to labor union EXCEPT
Members cannot be excluded from coverage on the basis of insurability
Who is involved in completing the agents report?
Only the Agent
All of the following are examples of risk retention EXCEPT
Premiums
All of the following are examples of risk retention EXCEPT?
Premiums
Which of the following do the Standard and Preferred risk categories share?
Premiums are not elevated
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 plans allows small employers who do not offer health insurance to asset in the payment of employee medical expenses and insurance premiums?
Qualifies small employer health reimbursement arrangement (QSEHRA)
Insurers may change which of the following on a guaranteed renewable health insurance policy?
Rates by class
The policy owner pays for her life insurance annually. Until now, she has collected a nontaxable dividend check each year. She has decided that she would rather use the dividends to help pay for her next premium. What option would allow her to do this?
Reduction of premium
In the event of a loss, business overhead insurance will pay
Rent
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
Signing a dating a delivery receipt for a life insurance policy helps to establish all of the following timeframes EXCEPT
The Grace Period
Signing and dating a delivery receipt for a life insurance policy helps to establish all of the following EXCEPT_____
The Grace Period
Which of the following is NOT covered under Plan A in Medigap insurance?
The Medicare Part A deductible
An employee becomes insured under a PPO plan provided by his employer. If the insured decides to go to a physician why is not a PPO provider, which of the following will happen.
The PPO will pay reduced benefits.
Your client has a social Insurance Supplement (SIS) rider on his disability policy. After he becomes disabled, he receives payments from the company. Shortly thereafter, he also begins receiving Social Security Benefit payments. Which of the following will happen?
The SIS payment will be reduced dollar-for-dollar by the Social Security benefit payment
Which of the following is true about the requirements regarding HIV exams?
The applicant must give prior written consent
If the annuitant dies during the accumulation period, who will receive the annuity benefits?
The beneficiary
An individual applied for an insurance policy and paid the initial premium. The insurer issued a conditional receipt. Five days later the applicant had to submit a medical exam. If the policy is issued what would be the policy's effective date?
The date of medical exam
When a fixed annuity owner pays a monthly annuity premium to the insurance company, where is the money placed?
The insurance company's general account
What happens if a deferred annuity is surrendered before the annuitization period?
The owner will receive surrender value of the annuity
Which of the following determines the cash value of a variable life policy?
The performance of the policy portfolio
Medi-Cal may be available to persons over age 65 if
They have medical or long-term care claims not paid by MEDICARE
Which of the following insurance arrangements will be appropriator for a parent buying a life insurance policy on a child where the parent is the policyowner?
Third-party ownership
Which of the following is the best reason to purchase life insurance rather than annuities?
To create an estate
What type of services may NOT be provided under the Long-term Cares assisted living care?
Visits by a registered nurse
What types of service may NOT eb provide under the long-term care's assisted living care?
Visits by a registered nurse
When is the insurability conditional receipt given?
When the premium is paid at the time of application
When is the insurability conditional l receipt given?
When the premium is paid at the time of the application
An insurance agent is planning to give out his business cards to prospective clients to solicit some insurance business. On the business card, the agent's name appears in font size 16, the phone number is in font size 14, and the business address is in font size 10. What font size should be used for the agent's license number?
10
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?
25%
According to the PPACA rules, what percentage of health care costs will be covered under a bronze plan?
60%
How many eligible employees must be included in a contributory plan?
75%
The maximum amount that can be contributed to an MSA is what percentage of the family deductible for those with family coverage
75%
The legal definition of a "person" would NOT include which of the following
A family
Which of the following would automatically qualify for Medi-Cal benefits?
A person receiving SUPPLEMENTARY SECURITY INCOME ASSISTANCE
When an annuity is written, whose life expectancy is taken into account?
Annuitant
Which concept is associated with Exclusion Ratio?
Annuity payments
Employer contributions made to a qualified plan
Are subject to vesting requirements
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
An insured receives an annual life insurance dividend check. What term best describes this arrangement
Cash Option
If an applicant for a health insurance policy is funded to be a substandard risk, the insurance company is most likely to
Charge an extra premium
Concerning AIDS and HIV risk, all of the following acts may subject an insurer to liability or fines EXCEPT
Declining applicant for a positive HIV test result
An insured is hospitalized with a back injury. Upon checking his disability income policy, he learns that he will not be eligible for benefits for at least 30 days. This indicates that his policy is written with a 30-day_____
Elimination Period
If a life policy allows the policy owner to make periodic additions to the face amount at standard rates, without proving insurability, the policy incudes a
GUARNTEED INSURABILITY RIDER
The automatic Premium loan provision is activated at the end of the
Grace Period
A lucky individual won the state lottery, so the state will be sending him a check each month for the next 25 years. What type of annuity products are they likely to use to provide these benefits
Immediate annuity
Which insurance principal states if a policy allows for greater compensation that the financial loss incurred, the insured may only receive benefits for the amount lost?
Indemnity
All of the following statements about Medicare Part B are correct except
It is a compulsory program
How is the amount of social security disability benefits calculated?
It is based upon the worker's PRIMARY INSURANCE AMOUNT (PIA), which is calculated from the average indexed Monthly Earnings over their highest 35 years
Concerning Medicare Part B, which statements is INCORRECT?
It is fully funded by SOCIAL SECURITIES TAXES (FICA)
Which of the following best describes annually renewable term insurance?
It requires proof of insurability ate each renewal
Which of the following best describes the effect the ACCELERATED BENEFIT provision would have on the benefits paid to the beneficiary?
It will decrease the benefits paid to the beneficiary
The growing tendency of individuals to file lawsuits and to claim tremendous amounts for alleged damages is knows as
Legal Hazard
Which of the following settlement options in life insurance is known as straight life?
Life income
Which of the following information regarding an insured is NOT included in an INVESTIGATIVE CONSUMER REPORT, which is requested by an underwriter?
Medical History
An individual's tendency to be dishonest would be indicative of a
Moral Hazard
Which of the following terms most precisely fits the definition of "the incidence or probability of sicknesses or accidents within a given group of people?
Morbidity
In a POS plan, benefits for covered services when self-referring (without having your primary care physician arrange for the service) are generally
More expensive
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
Attempting to determine how much insurance a family would require based upon their financial objectives so know as
Needs Approach
What other term is used to refer to unintentional torts?
Negligence
The part of Medicare that helps pay for inpatient hospital care, inpatient care in a skilled nursing facility, home health care and hospice care is known as
Part A
Though the purpose of health insurance, as with all insurance, is to "indemnify" or restore the client to his/her pre-loss condition, there is a possibility the the insured will not be paid back the entire amount of the health-care expense. This occurs if the amount of the loss exceeds what?
Policy limits
What type of care is Respite Care?
Relief for a major care giver
Upon policy delivery, the producer may be required to obtain any of the following EXCEPT
Signed wavier of Premium
Which two terms are associated with the way an annuity is funded?
Single payment or periodic payments
The annual contribution limit of a dependent care Flexible Spending Account is set by.
THE IRS
An employee becomes insured under PPO plan provider by his employer. If the insured decided to go to a physician who is not a PPO provider which of the following will occur?
The PPO will pay reduced benefits
The annuity owner dies while the annuity is still in the accumulation stage. Which of the following is TRUE?
The beneficiary will receive the greater of the money paid into the annuity or the cash value.
How does employer contribution stop a HEALTH SAVINGS ACCOUNT affect the insureds taxes?
The employer contributions not included in the individual's taxable income
An insured had $500 left in his HEALTH REIMBURSEMENT Account when he quit his job. What happens to the money?
The insured can have access to the $500 at his previous employers' discretion
Which of the following is true regarding a market value adjusted annuity?
The owner is guaranteed a fixed interest's rate for a specific period of time
All of the following are true regarding variable products except
The premiums are invested in the insurers general account
The purpose of having an elimination period in a policy is to accomplish which of the following?
To allow the client some flexibility in determining their own premium
When the insurability conditional receipt is given?
When the premium is paid at the time of the application
Which of the following is true regarding commission for MEDICARE SUPPLEMENT POLICIES?
Which of the following is true regarding commission for MEDICARE SUPPLEMENT POLICIES?
An employee insured under a group health plan has been paying $25 monthly premium for his group health coverage. The employer has been contributing $75, for the total cost of $100. If the employee leaves the company, what would be his maximum monthly premium for COBRA coverage?
$102
In a noncontributory health insurance plan, what percentage of eligible employees must participate in the plan before the plan can become effective
100%
In order to collect Social Security disability benefits, the claimant must be able to demonstrate that the disability will last at least
12 months
What is the maximum age for qualifying for a catastrophic plan?
30
Ray has an individual major medical policy that requires a coinsurance payment. Ray vary rarely visits his physician and would prefer to pay the lowest premium possible. Which coinsurance would be best for Ray?
50/50
Under the AFFORDABEL CARE ACT, a special enrollment period allows an individual to enroll in a qualified health plan with how many days of a qualifying event?
60 days
Qualified long-term care policies covering home care mist provide benefits if the insured is impaired in at least two of six activities of daily living (ADL). The term "impaired" means
Needs substantial hands on or standby with ADLS
The key factor of representation that allows the injured party to rescind the contract is
Of the representation is false in a material point
Which renewal option does NOT guarantee renewal and allows the insurance company to refuse renewal of a policy at any premium due date?
Optionally renewable
A Medicare SELECT policy does all of the following except
Prohibit payment for regularly covered services if provided by non-network providers
When whole life policy lapse 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
Disability income policies can provide coverage for a loss of income when returning to work only Part-time after recovering from total disability. What is the benefit that is based on the insured's loss of earnings after recovery from a disability?
Residual disability
Which of the following dental insurance categories would cover the filling of cavities?
Routine and major restorative care
The clause that protects the proceeds of a life insurance policy from creditors after the death of the insured is known as the
Spendthrift Clause
An employee quits his job on May 15 and doesn't convert his Group Life policy to an individual policy for 2 weeks. He dies in a freak accident on June 1. Which of the following statements best describes what will happen?
The insurer will pay the full death benefit from the group policy to the Beneficiary
What is the purpose of the rehabilitation benefit in disability insurance?
To cover the expenses of retraining the insured to return to work
Which of the following is NOT a goal of risk retention?
To minimize the insured's level of liability in the event of loss
Social security was created to provide all of the following benefits EXCEPT
Unemployment income