Nebraska Life and Health
Which of the following is NOT a cost-saving service in a medical plan? Risk sharing Denial of coverage Preventive care Second surgical opinions
Denial of coverage
Who can provide skilled nursing care? Spouse Family Member Community volunteer Doctor
Doctor
Which of the following is NOT covered under Part B of a Medicare policy? Physician expenses Routine dental care Home health care Lab services
Routine dental care
What is the elimination period for Social Security disability benefits? 6 months 12 months 3 months 5 months
5 months
In group insurance, what is the policy called? Master policy Entire contract Certificate of authority Certificate of insurance
master policy
Which of the following premium modes would result in the highest annual cost for an insurance policy? Monthly Quarterly Semi-annual Annual
monthly
An insurer invests the money it receives from premiums paid by its insureds. Which of the following is TRUE regarding the interest earned on these investments? It is used to lower premiums. It is paid out as dividends. It is used to fund executive bonuses It is used to increase the death benefit.
It is used to lower premiums.
Variable Life insurance is based on what kind of premium? Graded Level fixed Increasing Decreasing
Level fixed
Under a pure life annuity, an income is payable by the company For as long as either the annuitant or a named beneficiary is alive. Only for the life of the annuitant. Until the principal and interest are exhausted. For a guaranteed period of time, whether or not the annuitant survives to the end of that period.
Only for the life of the annuitant.
In respect to the consideration clause, which of the following is consideration on the part of the insurer?
Promising to pay in accordance with the contract terms
The act that sets the standards for advice given by insurance producers regarding annuities is known as the Nebraska
Protection in annuity transaction act
After three years of making payments into a flexible premium deferred annuity, the owner decides to surrender the annuity. The insurer returns all the premium payments to the owner, except for a predetermined percentage. What is this percentage called? Termination penalty Bail-out charge Inflation adjustment Surrender charge
Surrender change
All of the following would be different between qualified and nonqualified retirement plans EXCEPT Taxation of withdrawals Taxation of contributions IRS approval requirements Taxation on accumulation
Taxation on accumulation
An annuitant dies before the effective date of a purchased annuity. Assuming that the annuitant's wife is the beneficiary, what will occur? The interest will continue to accumulate tax deferred. The interest will become immediately taxable. The premiums will increase. The premiums will decrease.
The interest will continue to accumulate tax deferred.
A policy with 31 day grace period Implies?
The policy will not lapse for 31 days if the premium is not paid when due
Which of the following is called a "second-to-die" policy? Survivorship life Family income Juvenile life Joint life
survivorship life
An insured has a life insurance policy that requires him to only pay premiums for a specified number of years until the policy is paid up. What kind of policy is it? Variable Life Adjustable Life Graded Premium Life Limited-pay Life
Limited-Pay life
Who would be the insured under a COLI policy? The employer Only key employees All employees Creditors
All employees
Which of the following information regarding an insured is NOT included in an Investigative Consumer Report, which is requested by an underwriter? Medical History Applicant's character Personal habits General reputation
Medical History
Which of the following are generally NOT considered when underwriting group insurance? The size of the group The insureds' medical history The nature of the group The group's past claim experience
The insureds' medical history
Which of the following individuals will be eligible for coverage on the Health Insurance Marketplace?
A permanent resident lawfully present in the U.S.
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
50
Which of the following has an Insurance Fraud Prevention Division? Department of Insurance Director CPA FBI
Department of Insurance
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 to a medical exam. If the policy is issued, what would be the policy's effective date? The date of policy delivery The date of issue The date of application The date of medical exam
The date of medical exam
If a settlement option is not chosen by the beneficiary or policyowner, which option will be used? Fixed period Fixed amount Lump sum Life income
lump sum
If a producer allows his license to lapse, within what maximum time period may the same license be reinstated?
12 months
Employer health plans must provide primary coverage for individuals with end-stage renal disease before Medicare becomes primary for how many months
30 months
How long is the pre-existing condition period under CHIP? 6 months 9 months 12 months There is no pre-existing condition period.
6 months
If an employer provides long-term group disability insurance for its employees, what percentage of monthly wages are lower-paid employees eligible to collect? a) 33 and 1/3% b) 50% c) 66 and 2/3% d) 90%
66 and 2/3%
Assuming that all of the following people are covered by a High Deductible Health Plan and are not claimed as dependents on anyone's tax returns, which would NOT be eligible for a Health Savings Account? Amanda is 67 and is covered by a basic medical expense policy Andy is 55 and is covered under a dental care policy Jenny is 60 and also has a long-term care insurance plan Joe is 40 and is not covered by any other health insurance
Amanda is 67 and is covered by a basic medical expense policy
All of the following are duties and responsibilities of producers at the time of application EXCEPT Check to make sure that there are no unanswered questions on the application. Change any incorrect statement on the application by personally initialing next to the corrected statement. Explain the nature and type of any receipt the producer is giving to the applicant. Probe beyond the stated questions if the producer feels the applicant is misrepresenting or concealing information.
Change any incorrect statement on the application by personally initialing next to the corrected statement.
What is the advantage of having a qualified annuity?
Favorable tax treatment
What is the advantage of having a qualified annuity? Receiving a lump-sum settlement tax free Higher dividends Favorable tax treatment No filing with the IRS
Favorable tax treatment
Insurance that would pay for hiring a replacement for an important employee who becomes disabled is called Key employee disability insurance. Blanket disability insurance. Long-term disability. Business overhead expense disability insurance.
Key employee disability insurance.
If a policy has an automatic premium loan provision, what happens if the insured dies before the loan is paid back? The policy beneficiary takes over the loan payments. The policy is rendered null and void. The balance of the loan will be taken out of the death benefit. The policy beneficiary receives the full death benefit.
The balance of the loan will be taken out of the death benefit.
When Linda suffered a broken hip, she notified her agent, in writing, within 12 days of the loss. However, her agent did not notify the insurance company until 60 days after the loss. Which of the following statements correctly explains how this claim would be handled? The insurer may delay the payment of this claim for up to 6 months. The insurer may settle this claim for less than it otherwise would have had the notification been provided in a timely manner. The insurer may deny the claim since it was not notified within the required 20-day time frame. The insurer is considered to be notified since the notification to agent equals notification to the insurer.
The insurer is considered to be notified since the notification to agent equals notification to the insurer.
All of the following statements are true regarding installments for a fixed amount EXCEPT Value of the account and future earnings will determine the time period for the benefits. This option pays a specific amount until the funds are exhausted. The annuitant may select how big the payments will be. The payments will stop when the annuitant dies.
The payments will stop when the annuitant dies.
Income replacement contracts agree To replace the insured's income up to a stated percentage if the insured suffers a loss due to a covered accident or sickness. To replace income if the head of the household is the primary insured, and he/she loses income due to a lay-off. To cover any accident on the job, but not accidents outside of his/her job. To replace the insured for his/her company, including hiring and training wages.
To replace the insured's income up to a stated percentage if the insured suffers a loss due to a covered accident or sickness.
An employee quits his job and converts his group policy to an individual policy; the premium for the individual policy will be based on his Experience Rating. Group rate. Insurer's scheduled rate. Attained age.
attained age
In terms of Social Security, what is the name for the time period after the youngest child of a family turns 16 and before the surviving spouse may start receiving retirement benefits? Benefit reduction Accumulation period Blackout period Nonpayment interval
blackout period
When both parties to a contract must perform certain duties and follow rules of conduct to make the contract enforceable, the contact is?
conditional
Which of the following provisions must be included on the first page of a Medicare supplement policy, which states the insurer's right to change premium amounts? Insurer's rights Coverage limitations Continuation provision Premium provision
continuation provision
Events or conditions that increase the chances of an insured loss occurring are referred to as Hazards. Exposures. Risks. Perils.
hazards
A woman obtains health coverage through the Marketplace on October 1. Two weeks later she finds out that she is 3 months pregnant. Which of the following is true about coverage for pregnancy? Pregnancy may be covered with the insurer's special approval. Pregnancy will be covered immediately. Pregnancy will only be covered if additional premium is paid. Pregnancy will not be covered as a pre-existing condition.
pregnancy will be covered immediately
What type of care is Respite care? Institutional care 24-hour care Relief for a major care giver Daily medical care, given by medical personnel
relief for a major caregiver
Which of the following best describes taxation during the accumulation period of an annuity?
taxes are deferred
In addition to any applicable denial, suspension, probation, or revocation of a license, a person who violates the Insurance Producers Licensing Act may receive a fine of up to $1,000. $2,000. $3,000. $5,000.
1,000
An insured was involved in an accident and could not perform 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? 1 month She would not receive any benefits. 3 years 2 years
2 years
One of the differences between group underwriting and individual underwriting is that there is little or no medical information required regarding plan participants in groups of 25 or more. Fewer than 50. 50 or more. 100 or more.
50 or more
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 No penalties, since the owner is older than 59 ½ 10% for early withdrawal 15% for early withdrawal
50% tax on the amount not distributed as required
At age 30, an applicant wants to start an insurance program, but realizing that his insurance needs will likely change, he wants a policy that can be modified to accommodate those changes as they occur. Which of the following policies would most likely fit his needs?
Adjustable Life
A 63-year-old man is planning to be employed until age 68. When will he be eligible for Medicare? Age 70, if still employed Age 69 ½ if no longer employed Age 65, regardless of his employment status As soon as he retires at age 68
Age 65, regardless of his employment status
When transacting business in this state an insurer formed under the laws of another country is known as a/an Domestic insurer. Foreign insurer. Admitted insurer. Alien insurer.
Alien Insurer
While a claim is pending, an insurance company may require An independent examination as often as reasonably required. The insured to be examined only within the first 30 days. The insured to be examined only once annually. An independent examination only once every 45 days.
An independent examination as often as reasonably required.
Which of the following statements concerning buy-sell agreements is true? Premiums paid are deductible as a business expense. Benefits received are considered income taxable. Buy-sell agreements pay in the event of a medical emergency. Buy-sell agreements are normally funded with a life insurance policy.
Buy-sell agreements are normally funded with a life insurance policy.
Your client owns a Market Value Adjusted Annuity. In order to pay for a series of large, unexpected medical bills, he decides to surrender his policy prematurely. Which of the following will determine the penalty that the annuity owner will have to pay? Flat fee determined by an index of interest gains, combined with the amount of time the annuity would take to mature There are no penalties imposed for surrendering annuities prematurely. Guaranteed minimum interest rate stipulated in the contract Current interest rate at the time of surrender
Current interest rate at the time of surrender
An applicant has a history of heart disease in his family, so he would like to buy a health insurance policy that strictly covers heart disease. What type of policy is this? Scheduled benefit coverage Dread disease coverage Single indemnity protection Term health coverage
Dread disease coverage
Which of the following best describes the aleatory nature of an insurance contract? Only one of the parties being legally bound by the contract Ambiguities are interpreted in favor of the insured Policies are submitted to the insurer on a take-it-or-leave-it basis Exchange of unequal values
Exchange of unequal values
The authority granted to an agent through the agent's contract is referred to as
Express Authority
What is the benefit of choosing extended term as a nonforfeiture option? It can be converted to a fixed annuity. It has the highest amount of insurance protection. It matures at age 100. It allows for coverage to continue beyond maturity date.
It has the highest amount of insurance protection.
Which of the following programs is made up of 4 parts, where the first part is paid for by FICA, and the second part is financed by premiums and payroll taxes? Blue Cross Blue Shield Medicaid Medicare
Medicare
A long-term care insurance shopper's guide must be provided in the format developed by which of the following? Director Medical Information Bureau NAIC Office of Insurance Regulation
NAIC
A guaranteed renewable health insurance policy allows the Policyholder to renew the policy to a stated age, with the company having the right to increase premiums on the entire class. Policyholder to renew the policy to a stated age and guarantees the premium for the same period. Policy to be renewed at time of expiration, but the policy can be canceled for cause during the policy term. Insurer to renew the policy to a specified age.
Policyholder to renew the policy to a stated age, with the company having the right to increase premiums on the entire class.
When must insurable interest exist in a life insurance policy? At the time of loss At the time of application At the time of policy delivery When there is a change of the beneficiary
at the time of application
Which policy component decreases in decreasing term insurance? Dividend Premium Face amount Cash value
face amount
Which renewal option does NOT guarantee renewal and allows the insurance company to refuse renewal of a policy at any premium due date? Noncancellable Optionally renewable Conditionally renewable Guaranteed renewable
optionally renewable
Which type of retirement account allows contributions to continue beyond age 70½ and does not force distributions to start at age 70½? Traditional IRA Roth IRA Flexible IRA Standard IRA
roth ira
According to OBRA, what is the minimum number of employees required to constitute a large group? 50 100 15 20
100
Which of the following does the Insuring Clause NOT specify? The name of the insured A list of available doctors Covered perils The insurance company
A list of available doctors
In which of the following situations is it illegal for an insurer to disclose privileged information about an insured? A researcher for marketing purposes The Department of Insurance to assess legal compliance Law enforcement authorities for law-oriented purposes An auditor for auditing purposes
A researcher for marketing purposes
Who can make a fully deductible contribution to a traditional IRA? Someone making contributions to an educational IRA A person whose contributions are funded by a return on investment An individual not covered by an employer-sponsored plan who has earned income Anybody: all IRA contributions are fully deductible regardless of income level
An individual not covered by an employer-sponsored plan who has earned income
All other factors being equal, the least expensive first-year premium payment is found in Increasing Term. Decreasing Term. Level Term. Annually Renewable Term.
Annually Renewable Term.
A small business owner is the insured under a disability policy that funds a buy-sell agreement. If the owner dies or becomes disabled, the policy would provide which of the following? Disability insurance for the owner Cash to the owner's business partner to accomplish a buyout The rent money for the building The business manager's salary
Cash to the owner's business partner to accomplish a buyout
Which is TRUE about the cash surrender nonforfeiture option? After the cash surrender, the insured is covered for a grace period of 1 month. The policy remains active for some time after the policyholder opts for cash surrender. The policyholder receives the original cash value of the policy. Funds exceeding the premium paid are taxable as ordinary income.
Funds exceeding the premium paid are taxable as ordinary income.
All of the following statements are true of a Combination Dental Plan EXCEPT It covers diagnostic and preventive care on the usual, customary, and reasonable basis. It uses a fee schedule for other dental services. It is also known as the Superimposed Plan. It is basically a combination of a scheduled and nonscheduled dental plan.
It is also known as the Superimposed Plan.
If an insured surrenders his life insurance policy, which statement is true regarding the cash value of the policy? It is not considered to be taxable. It is taxable only if it exceeds the amounts paid for premiums by 50%. It is automatically taxable. It is only taxable if the cash value exceeds the amount paid for premiums.
It is only taxable if the cash value exceeds the amount paid for premiums.
How does the cost of a basic coverage benefit plan compare with the cost of a standard benefit plan? Equal It fluctuates more. Higher Lower
Lower
When health care insurers negotiate contracts with health care providers or physicians to provide health care services for subscribers at a favorable cost, it is called Indemnity plans. Point of Service Plans (POS). Preferred Provider Organization (PPO). Managed care.
Preferred Provider Organization (PPO).
The act that sets the standards for advice given by insurance producers regarding annuities is known as the Nebraska Procedures in Annuity Transaction Act Advice in Annuity Transaction Act Protection in Annuity Transaction Act Standards in Annuity Transaction Act
Protection in annuity transaction act
Upon policy delivery, the producer may be required to obtain any of the following EXCEPT Signed waiver of premium. Statement of good health. Payment of premium. Delivery receipt.
Signed waiver of premium.
The period of time immediately following a disability during which benefits are not payable is The grace period. The residual period. The elimination period. The probationary period.
The elimination period
A deferred annuity is surrendered prior to annuitization. Which of the following best describes the nonforfeiture value of the annuity? The surrender value should be equal to 100% of the premium paid, minus any prior withdrawals and surrender charges. A deferred annuity cannot be surrendered prior to annuitization. The owner must wait until the annuitization period begins to receive any payments. The surrender value will be based on current interest rates. The surrender value will not be more than 80% of the cash value in the annuity at the time of surrender.
The surrender value should be equal to 100% of the premium paid, minus any prior withdrawals and surrender charges.
What kind of policy allows withdrawals or partial surrenders? Variable whole life Universal life 20-pay life Term policy
Universal life
Which of the following Life Insurance policies would be considered interest sensitive? Adjustable life Whole life Increasing term Universal life
Universal life
What types of services may NOT be provided under the long term cares assisted living care?
Visits by a registered nurse
Federal law makes it illegal for any individual convicted of a crime involving dishonesty or breach of trust to work in the business of insurance affecting interstate commerce Without receiving written consent from a Federal Judge. Without receiving written consent from an insurance regulatory authority. Under any circumstances. Unless they have served an appropriate prison sentence.
Without receiving written consent from an insurance regulatory authority.
Who bears all of the investment risk in a fixed annuity? The annuitant The insurance company The owner The beneficiary
the insurance company
If an applicant for a health insurance policy is found to be a substandard risk, the insurance company is most likely to Require a yearly medical examination. Lower its insurability standards. Refuse to issue the policy. Charge an extra premium.
Charge an extra premium.
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? Consideration Good faith Representation Adhesion
Consideration
A rider that may be attached to a life insurance policy that will adjust the face amount based upon a specific index, such as the Consumer Price Index, is called Living need rider. Payor rider. Cost of living rider. Accelerated benefit rider.
cost of living rider
Which two terms are associated directly with the way an annuity is funded? Immediate or deferred Renewable or convertible Single payment or periodic payments Increasing or decreasing
single or Periodic Payments
Children's rider attached to whole life policies are usually issued as what type of insurance?
term
Children's riders attached to whole life policies are usually issued as what type of insurance? Adjustable life Whole life Term Variable life
term
In a group policy, who is issued a certificate of insurance? The health care provider The insurance company The employer The individual insured
the individual insured
A man works for Company A and his wife works for Company B. The spouses are covered by health plans through their respective companies that also cover the other spouse. If the husband files a claim, The insurance plans will split the coverage evenly. Both plans will pay the full amount of the claim. The insurance through his company is primary. The insurance through his wife's company is primary.
the insurance through his company is primary
All of the following statements concerning workers compensation are correct EXCEPT Benefits include medical, disability income, and rehabilitation coverage. A worker receives benefits only if the work related injury was not his/her fault. Workers compensation laws are established by each state. All states have workers compensation.
A worker receives benefits only if the work related injury was not his/her fault.
When an insured purchased her disability income policy, she misstated her age to the agent. She told the agent that she was 30 years old, when in fact, she was 37. If the policy contains the optional misstatement of age provision Because the misstatement occurred more than 2 years ago, it has no effect. Amounts payable under the policy will reflect the insured's correct age. The contract will be deemed void because of the misstatement of age. The elimination period will be extended 6 months for each year of age misstatement.
Amounts payable under the policy will reflect the insured's correct age.
A policyowner fails to pay the premium due on his whole life policy after the grace period passes, but the policy remains in force. This is due to what provision? Assignment Automatic premium loan Waiver of premium Incontestability period
Automatic premium loan
All of the following are true regarding Key Employee Disability Income insurance EXCEPT Premiums are not tax deductible for the employer. Benefits are taxable to the employer. The employer owns the policy. Benefits are paid to the employer to retrain a new person.
Benefits are taxable to the employer
When an employer offers to give an employee a wage increase in the amount of the premium on a new life insurance policy, this is called a(n) Key person policy. Fraternal association. Aleatory contract. Executive bonus.
Executive Bonus
Which of the following expenses is NOT covered by a health insurance policy? Funeral Hospital Disability
Funeral
The mode of premium payment Does not affect the amount of premium paid. Is defined as the frequency and the amount of the premium payment. Is the factor that determines the amount of dividends in a policy. Is the method used to compute the cash surrender value of the policy.
Is defined as the frequency and the amount of the premium payment.
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.
It is reduced to the amount of what the cash value would buy as a single premium.
Which of the following is TRUE regarding the annuity period? It is also referred to as the accumulation period. It is the period of time during which the annuitant makes premium payments into the annuity. It may last for the lifetime of the annuitant. During this period of time the annuity payments grow interest tax deferred.
It may last for the lifetime of the annuitant.
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? Policy Limitation Notice Statute of Limitations Limited Benefit Statement Limited Policy Notice
Limited Policy Notice
An employer has sponsored a qualified retirement plan for its employees where the employer will contribute money whenever a profit is realized. What is this called? 401(k) plan Tax-sheltered account plan HR 10 plan Profit sharing plan
Profit sharing plan
What is the purpose of establishing the target premium for a universal life policy? To cover all policy expenses To keep the policy in force To accumulate cash value faster To pay up the policy faster
To keep the policy in force