NYS Life, accident, and health insurance Exam
Beth is a surgeon who has an own-occupation disability income policy. She was injured six months ago and has been unable to return to her practice. Her monthly benefit from the policy is $15,000. During this time, Beth has been working part-time at a local boutique and receives $2,000 monthly. What is her ongoing monthly benefit while she is unable to perform her surgical duties?
$15,000
An insured has a $25,000 whole life insurance policy with $6,000 cash value available. Under the extended term nonforfeiture option, what is the amount of insurance available to the insured?
$25,000
An insured files for an accident and health insurance policy claim eight days after the premium due date. The benefit payable is $500 and the overdue premium is $200. Assuming that the policy pays on a first-dollar basis and contains the unpaid premium provision, how much will the insurer pay?
$300
An individual working part-time has a gross income of $5,000 for the year. If this individual has an IRA, what is the maximum deductible IRA contribution allowable?
$5,000
The maximum amount of life insurance coverage that a parent can initially take out on their minor child is
$50,000
Larry has a Major Medical Expense policy for his family with a $1,000 per family/per year deductible and an 80/20 coinsurance provision. If Larry's family files four claims of $400, $800, $100, and $700 in one year, how much will the insurance company pay?
$800
An individual is insured under a major medical plan with a $1,000,000 lifetime benefit. The plan has a $500 deductible and an 80% coinsurance. If the insured suffers a $50,500 medical expense during the calendar year, what is the remaining lifetime benefit?
$960,000
How long is individual medical expense insurance normally written for?
1 year
A "premature" distribution from a modified endowment contract (MEC) incurs a penalty tax of
10%
Which of these statements about traditional individual retirement accounts is accurate?
10% penalty is applied to withdrawals prior to age 59 1/2
Starting in 2016, businesses with up to ___ employees will be defined by the ACA as a "small business".
100
What is the maximum number employees (earning at least $5,000) that an employer can have in order to start a SIMPLE retirement plan?
100
John received a one-time distribution of $50,000 from his modified endowment contract (MEC). Prior to that, the contract's cash value was $150,000, the contract investment amount was $100,000, and the death benefit was $500,000. What percentage of the $50,000 distribution was taxable as ordinary income?
100%
Mary is the sole proprietor of her business and has a family health plan. She would like to deduct the premiums from her taxes. What percentage of her premiums are tax deductible?
100%
Individuals seeking Social Security disability income benefits must have a disability that will eventually lead to death, or be expected to last at least
12 months
Under HIPAA, medical plan late enrollees may be excluded for pre-existing conditions for a maximum of
18 months
An unmarried child under a family group accident and health policy must be provided coverage until the age of
19
A survivorship life insurance policy usually covers how many lives?
2
A small employer group is an employer that employs how many?
2-50 employees
Nonqualified medical expense distributions from a HSA have tax penalty of
20%
According to the ACA, dependent children may remain on their parent's plan until what age?
26
Upon meeting company requirements, a lapsed life insurance policy may be reinstated within ____ year(s)
3
Kate received a group accident and health termination notice. How many days does she have to apply for a converted policy?
31
Which of the co-annuitants listed below would receive the largest monthly benefit payments in a joint and 100% survivor annuity?
71 and 73
When initially issued, a temporary producer license in New York is valid for ___ days.
90
Which of the following describes coverage for the Medicare Part B coinsurance?
A Medicare Supplement core benefit
After an applicant reads and signs an insurance application, he/she should be conscious of the fact that
A false statement could lead to loss of coverage
An attempt to defraud an insurance company is considered
A felony
What is a juvenile life insurance policy?
A life policy that covers the life of a minor
What do Limited accident and health policies normally cover?
A specific illness or event
New York requires advertisements for accident and health insurance policies covering ONLY a specified illness to prominently display
A statement that the policy is limited
In New York, a group accident and health certificate of insurance must contain
A summary of policy features and benefits
Which benefit is normally payable to a life insurance policy owner when the insured's life expectancy has been severely limited?
Accelerated (living) benefit
Which of the following statements accurately describes the "time limit on certain defenses"?
After a stated period of time, claims cannot be denied due to material misrepresentation on the application
An agent's authority to bind an insurer to an insurance contract may be granted in the
Agent's contract and the insurance company's appointment
The absolute assignment of a life insurance policy results in
All incidents of ownership transferred to the assignee
Which of the following is NOT a valid contract exchange?
An annuity exchanged for a life insurance policy
When a large sum of money is used to structure monthly payments, which product is typically used?
An immediate annuity
Which type of policy can group term life insurance normally be converted to?
An individual permanent life insurance policy
The surrender charge on many deferred annuity contracts are waived when the
Annuitant dies or becomes disabled
According to the Pregnancy Discrimination Act of 1978, employers must treat pregnancy in the same manner as
Any other medical disability
According to HIPAA regulations, which of the following may reduce a medical plan's pre-existing conditions exclusion?
Any period of prior coverage
Use of XYZ Insurance Company brochures, business cards, and rating guides is an example of
Apparent authority
An applicant submits a life insurance application where an investigative consumer report is used in the underwriting process. Which of these statements is true?
Applicant has a right to receive a copy of the report
Consumers who decide to exercise their right to "opt out" of the disclosure of their nonpublic personal information
Are given the chance to stop disclosure
When there is a named beneficiary on a life insurance policy, the death benefits
Are paid directly to the beneficiary without interference from the insured's creditors
Kevin has an existing life insurance policy and assigns it to another insurer for a new contract. How would this transaction be treated for tax purposes?
As a Section 1035 exchange
How may an insurance company classify an accidental death benefit on a life policy?
As an optional policy rider
Accident and health insurance claim handling is made more convenient to the insured by utilizing
Assignment of benefits
When does the insured stop making payments under a thirty-payment whole life policy?
At the time of death or 30 years after the policy's inception, whichever comes first
In the event of premium default, which life insurance provision will use the cash value to keep the policy in force?
Automatic premium loan
If an agent would like to start using an assumed name, at what point must the superintendent be notified?
Before using the assumed name
ABC Corporation purchases and is beneficiary of an individual disability income insurance policy on a key employee. Which of the following statements is true?
Benefits are received tax-free by the company.
The Change of Occupation provision in a Disability Income policy states that, in the event the insured changes to a less hazardous occupation, which of the following may apply?
Benefits can be increased in the event of a covered claim
A preferred provider plan and an indemnity plan are similar in what way?
Both pay on a fee-for-service basis
Which of these is NOT considered to be a cost connected with an individual's death?
Business expenses
Tina is insured under a business overhead expense insurance policy. Which of the following would be covered if she were to become disabled?
Business property rental expense
The guarantee of insurability option provides a long-term care policyowner the ability to
Buy additional coverage at a later date
A Health Reimbursement Arrangement MUST be established
By the employer
According to the ACA, new Health Insurance Marketplaces are established by the
CCIIO
For employees covered in multiple states under a group health plan, jurisdiction rules cannot alter
COBRA laws
Which of these is true regarding the exchange of consideration among parties involved in an insurance contract?
Can be unequal
Which of the following is NOT an allowable exclusion for long-term care insurance policies?
Care for incurable conditions
Which statement regarding the waiver of premium rider is accurate?
Cash payment is not directly provided to the policyowner
A comprehensive group policy also covers expenses related to vision care. Which of the following is not typically covered under a vision plan?
Cataract surgery
Which would be described as a beneficiary designation by class?
Children of the insured
Which of these is NOT a true statement of the war exclusion?
Civil insurrections apply
Which of the following statements is true regarding accident and health insurance claims that reimburse on an indemnity basis?
Claims can be sent directly to the insured
Licensed insurance consultants derive their income from
Clients
Prepaid dental plans differ from most other types of dental plans in what way?
Closed panel of dentists can only be used
Upon examination of a producer's business records, the Superintendent's primary purpose is to determine the producer's
Compliance with state insurance law regulations
Chris has a single major medical contract which covers all medical expenses. His plan is considered to be
Comprehensive
An accident and health insurance policy's premium requirements are set forth in which of the following provisions?
Consideration clause
In regards to the ACA, which of these is NOT a role of a health insurance exchange?
Contact the employer if an employee stops coverage under a plan offered in the exchange
What does a Mandatory Second Surgical Opinion provision provide to an employer-paid health insurance plan?
Containment of the employer's premium cost
Which term refers to insurance written on the interests of the licensee, the licensee's employer, or the licensee's immediate family?
Controlled business
According to the needs approach, an emergency reserve fund's primary purpose is to
Cover the cost of unexpected expenses
Any employee insured under a group life insurance plan is normally
Covered with term life insurance
Which of the following is NOT an intended use of an annuity?
Create new funds upon the death of a wage-earner
ABC Partnership is a business with a limited number of partners. Which disability buy-sell agreement is best suited for this business?
Cross purchase agreement
Mike applied for life insurance and was issued a conditional receipt. He is later found to be insurable and is issued a policy. When does his coverage become effective?
Date of issuance of the conditional receipt
Which of these life insurance policies does NOT contain a cash value provision?
Decreasing term life
An employer pays the accident and health insurance premiums for its employees. The premiums paid by the employer are
Deductible to the business
John the agent made public statements that falsely portrayed an insurer as insolvent. John would be likely found guilty of
Defamation
An individual, age 45, would like to help pay for his daughter's college expenses in 10 years. Which annuity would be appropriate for this individual?
Deferred annuity
Which of the following allows an insurer the right to transact insurance business in the state of New York?
Department of Financial Services issues the insurer a certificate of authority
Which of these is NOT an underwriting responsibility of a life insurance agent?
Determining the final rate classification
Individuals covered with employer-paid group health plans will normally receive tax-free benefits under all of these plans EXCEPT
Disability income
Elimination periods typically apply to
Disability policies
New York law requires the HIV consent form to
Disclose the types of individuals or organizations that may receive a copy of the test results
An employee requested that the balance of her 401(k) account be sent directly to her in one lump sum. Upon receipt of the distribution, she immediately has the funds rolled over into an IRA. What is the tax consequence of the distribution sent to this employee?
Distributions is subject to federal income tax withholding
For purposes of disability income insurance, earned income would include all of the following EXCEPT
Dividends
Which statement about group life insurance is INCORRECT?
Each participant requires evidence of insurability
Disability income policies provide protection for which of the following?
Economic death
Who may terminate coverage under a cancelable health insurance policy?
Either the insured or the insurer
Which of the following statements BEST describes employer contributions for employer provided health insurance?
Employer contributions are deductible
The application is part of an annuity contract according to which of the following clauses?
Entire Contract
Employer-paid qualified long-term care insurance premiums are typically
Excluded from the employee's gross income
When determining the accumulation value of a deferred annuity, the total is calculated by taking the premiums paid plus interest earned minus
Expenses and withdrawals
A comprehensive major medical health insurance policy contains an Eligible Expenses provision which identifies the types of health care services that are covered. All of the following health care services are typically covered EXCEPT for
Experimental and investigative services
An appointed producer's implied authority is derived from
Express authority
When an applicant applies for a large amount of life insurance coverage, which of the following would likely NOT be an underwriting requirement
Eye examination
Which statement concerning a decreasing term life policy is accurate?
Face amount decreases over the policy period
What might be considered evidence of an unfair claims settlement practice?
Failing to promptly investigate and settle legitimate claims
Which benefit supplement added to a life insurance policy insures an entire family?
Family term rider
Where does the primary funding for Medicare Part A come from?
Federal payroll and self-employment taxes
Which of these may NOT be deducted from premium payments or the cash value of a variable life insurance policy?
Federal premium taxes
When an annuity contract has been surrendered, how will the surrender charges affect the final contract settlement?
Final contract settlement will be reduced
Which life insurance settlement option pays a stated monthly benefit until both principal and interest are exhausted?
Fixed amount installment option
Tori has an annuity that pays her a $500 per month income benefit for life or for ten years, whichever is longer. What kind of annuity is this?
Fixed life annuity with period certain
Which settlement option makes minimum guaranteed dollar payments over a stated number of years?
Fixed-period
Major Medical policies are typically characterized by which of the following?
Flat deductible
The "Use it or Lose it" rule applies to
Flexible Savings Accounts
Which of these is NOT a factor during the health insurance underwriting process?
Former residence
Which provision allows a buyer to return a fixed annuity contract for a full refund within an established amount of time?
Free look
Which life insurance policy provision allows a policy owner to cancel the policy and receive a full refund within a limited time period after policy delivery?
Free-look period
What is considered a valid reason for small corporations to insure the lives of its major stockholders?
Fund a buy-sell agreement
A large corporation pension plan purchased an accumulation annuity contract where all of the participating employees received certificates of participation. What is this contract called?
Group deferred annuity
Bryce purchased a disability income policy with a rider that guarantees him the option of purchasing additional amounts of coverage at predetermined times without requiring to provide evidence of insurability. What kind of rider is this?
Guaranteed insurability rider
What is another name for a Keogh plan?
HR 10 plan
Dan owns a disability income insurance policy which provides ONLY nonoccupational coverage. Which of the following circumstances would likely NOT be covered under his plan?
He falls and breaks his hip at work
Terry receives long-term physical therapy at her residence. What type of insurance would cover this service?
Home health care
A family counseling benefit is typically offered under which of these coverages?
Hospice care
Some standard Medicare Supplement policies include which benefit?
Hospice care
Which of the following is NOT true of a preferred provider plan?
Hospitals...
Which of the following is NOT subject to the promise to pay in an insuring clause?
How the premium is calculated
Which of the following statements regarding the Fair Credit Reporting Act is correct?
If credit, insurance, or employment was denied because of an unfavorable report, the consumer must be advised
According to the ACA, coverage may be rescinded
If intentionally false statements were offered
An annuity which starts paying monthly benefits within a month after issuance is called a(n)
Immediate annuity
XYZ Insurance Company gives direct authority to its producers to sell insurance through an agency contract, but nothing is stated regarding the collection of premiums. Which authority grants the producer the right to collect premiums?
Implied Authority
Which of the following does NOT help determine group health insurance premiums?
Income level of group members
Which tax would an IRA participant be subjected to on distributions received prior to age 59 1/2?
Income tax and penalty tax
When group benefits under COBRA have expired, a fully insured group policy can be converted to a(n)
Individual health policy
All of these are considered features of whole life insurance EXCPET
Initial premium is lower than an equivalent amount of term insurance
Who must sign a rider attached to a health insurance policy in order for it to be valid?
Insured and agent
Which of these statements reflects an accurate portrayal of Medicare SELECT?
Insured uses preferred providers in exchange for paying lower premiums
Which health policy clause specifies the amount of benefits to be paid?
Insuring
Which of these statements is NOT true regarding a cash value loan against a life insurance policy?
Interest payments made by policy owner are deductible
An applicant for accident and health insurance has a risk factor that is similar to a majority of the insurer's other applicants. What will be the likely outcome of this applicant?
Issued with a standard premium rate
Which of these would NOT be a valid reason to add the waiver of premium rider to a life insurance policy?
It allows a policy loan to cover premium payments if the policy owner becomes totally disabled
Which statement regarding the certificate of insurance is accurate?
It indicates evidence of an employee's insurance coverage
Ken is age 65 and has 2 years until he receives Social Security retirement income benefits. At his current age, which is true about Medicare Part A Hospital Insurance coverage?
It is available through application to Social Security
Which of these pays an income to two or more annuitants until the death of the last annuitant?
Joint and survivor annuity
What type of life insurance policy covers two or more persons and pays the face amount upon the death of the first insured?
Joint life
James owns a business and purchased a policy that covers the business expense of finding a permanent or temporary employee to replace a disabled one. This type of disability coverage is called
Key employee coverage
The death proceeds of a credit life insurance policy are typically paid to the
Lender
During early years of whole life insurance policy, the cash value will normally be
Less than the total premiums paid
Which of the following information is NOT needed to determine the suitability of an annuity recommendation?
Level of education
What type of premiums are associated with individual mortgage protection life insurance policies?
Level premiums
Laura added a children's rider to her life insurance policy. What type of coverage was added?
Level term
After the extended term life nonforfeiture option is chosen, the available insurance will be
Level term for a stated period of time
A life settlement broker is someone who is
Licensed to negotiate a life settlement contract
What is another term used for a "pure" life annuity?
Life income
Which of these is NOT a common life insurance nonforfeiture option?
Life income annuity
Jack is a life insurance policy owner who happens to be terminally ill. He would like to sell his life insurance policy at a discount to help pay for medical bills and other expenses. What kind of arrangement would best suit his needs?
Life settlement
John the policy owner sells his life insurance policy to help pay for the cost of his terminal illness. This transaction is called a
Life settlement
An association which maintains a facility that displays offers and counteroffers for purchasers or sellers of life settlement contracts is known as a
Life settlement intermediary
What action can an insurer take to discourage malingering and false disability claims?
Limit the amount of benefits an insured can receive from two disability policies with the same insurer
How can a group dental insurer discourage adverse selection?
Limit the duration of coverage
An insurance policy may be issued with a preferred insurance premium in all of these situations EXCEPT
Living in a rural area
Which of the following is a syndicate established by group of insurers to share underwriting duties
Lloyd's organization
Joe is a life insurance policyowner who has failed to pay interest on his policy loan. What will result from this nonpayment?
Loan amount is increased to reflect the amount of interest due
Which of these is NOT relevant when determining the amount of personal life insurance needed?
Local unemployment rates
Tim is confined to a nursing home but doesn't have a terminal illness. Which life insurance rider is designed to help pay for this type of expense?
Long-term care benefit rider
Which of these would most likely cause permanent disability under workers compensation?
Loss of a foot
Which of the following situations would an insurance agent need to guard against liability for professional errors and omissions?
Making a recommendation to a potential insured to replace existing coverage
Which of the following relationships demonstrates insurable interest in the absence of economic interest?
Marriage partners
John bought a deferred annuity on Mary. John amends the contract years later to name Tom as the recipient of the proceeds if Mary dies. Who is the annuitant for this contract?
Mary
Karen is considering replacing her individual accident and health insurance policy with another individual policy. She has had issues in the past with her gall bladder that would be considered a pre-existing condition. How will a pre-existing conditions exclusion affect Karen's new insurance contract?
May reduce her benefits
Which individual would be best suited for Medicare Supplement insurance?
Medicare enrollee
Medicare Part B excess charges are covered by
Medicare supplemental insurance
Why do insurers require a minimum number of employees participate in a group insurance plan?
Minimize adverse selection
A life policy that has premiums that are lower than normal during the early years is called
Modified life
All of the following are covered under most dental plans EXCEPT for
Mouth cancer
Medicaid will pay for nursing home expenses under what condition?
Must have financial need
If an agent is advertising a life insurance policy, the agent MUST disclose the
Name of the actual insurer
When advertising a life insurance policy, an agent is required to disclose the
Name of the actual insurer
Wyatt is shopping for life insurance and is mainly concerned with the policy's death benefit. Which index should he be looking at when making comparisons?
Net payment cost index
Beginning January 1, 2014, the restricted annual limit for plans under the ACA will be
No limit
Medicare Supplement Insurance requires an individual to be at least how old for open enrollment?
No minimum age
Tim is covered by an accident and health insurance policy that may not be changed in any way by the insurer up to a stated age, as long as the premiums are paid. What type of policy is this?
Noncancelable
Which of the following health insurance plans charges a premium that cannot be increased?
Noncancelable
Under which circumstance can an insurer cancel a Medicare Supplement insurance policy without prior approval by the New York Department of Insurance?
Nonpayment of premium
Under the New York Disability Benefits Law, cash payments are provided to workers who are unable to work because of injury or illness that
Occurred on the job
The Superintendent has the ability to examine the business records of insurers and agencies because
Of the powers granted through state statues
Which of the following activities on the part of the insurer would constitute an unfair claims settlement?
Offering settlements that are less than the fair value to offset insurer expenses
Julie is an employee with a group health plan that contains the Mandatory Second Surgical Opinion provision. What is to be expected with this provision in place?
Out-of-pocket expenses are lower when a second surgical option is obtained as opposed to having only one
A policy owner suffers an injury that renders him incapable of performing one or more important job duties. Any decrease in income resulting from this injury would make him eligible for benefits under which provision?
Partial disability
A major medical expense policy typically does NOT
Pay surgeon fees on a first-dollar basis
Which of the following is NOT a function of accident and health insurance?
Pays a death benefit as a result of natural causes
Which of the following can be defined as a cause of a loss?
Peril
Under a long-term care inflation rider, the benefit levels
Periodically increase without proof of insurability
A life insurance guaranteed insurability rider gives the insured the right, without proving insurability, to
Periodically purchase additional insurance
Which would NOT be a location where skilled nursing care provided?
Personal residence
Which of these is NOT a factor that influences group health insurance underwriting?
Physical exams of group members
A signed good health statement may be requested by a life producer at the time of
Policy Delivery
Which statement regarding an adjustable life insurance policy is NOT true?
Policy loans are not permitted
If an insured dies during the grace period without having paid the premium, how much will the insurer pay?
Policy's face amount minus any premiums due
Dividends from a mutual insurance company are paid to whom?
Policyholders
The beneficiary of a life insurance policy is normally selected by whom?
Policyowner
Whose interests are replacement rules designed to protect?
Policyowner
A disability income insurance policy was recently issued with a rating. What does this mean?
Policyowner will be charged an additional premium
Which of the following accurately describes a participating insurance policy?
Policyowners may be entitled to receive dividends
Tim is in need of surgery. Before being hospitalized, he is referred to an outpatient clinic for diagnostic tests. What is this an example of?
Pre-admission testing
The law of large numbers enables an insurer to
Predict losses
Where is the difference between a standard risk and a substandard risk reflected?
Premium charges
How is the insured protected if a payor benefit rider is attached to the life insurance policy?
Premium payments are waived in the event the premium payor dies or becomes disabled
Which statement regarding the life insurance premium for a children's rider is true?
Premium remains the same no matter how many children
After joining a health maintenance organization (HMO), a subscriber will typically select a(n)
Primary care physician
When must a producer provide disclosure about information practices to an applicant?
Prior to or at the time of signing the application
Alan is an enrollee of a health maintenance organization (HMO) which uses a gatekeeper system. If there ever comes a time when he needs emergency health services, what should he do?
Proceed to the nearest emergency room
Which of the following outlines the authority given to the producer on behalf of the insurer?
Producer contract
Pointing out to a prospective client that the life insurance policy you are presenting is covered by the New York Life and Health Insurance Guaranty Association is
Prohibited by law
In New York, reducing benefits for a newborn child under an accident and health plan is
Prohibited in any form
A Medicare Supplement policy is required to do which of the following?
Provide a 30 day free-look period
The Healthy New York Program is designed to
Provide affordable health insurance coverage to small employers
Which of the following could be a future use of the cash value that builds in a recently-purchased whole life insurance policy?
Provide supplemental income in 35 years
An admitted company is one that is
Qualified and licensed to do business in New York
Which of these statements is NOT a characteristic of the law of large numbers?
Rates can be calculated to compensate for losses
How are qualified Roth IRA distributions normally treated for tax purposes?
Received income tax-free
During an annuity's liquidation phase, the annuitant normally
Receives benefit payments at regular intervals
What effect can a long-term care benefit rider have on a life insurance policy?
Reduced death benefit
All of the following claims settlement practices could initiate a cease and desist order EXCEPT
Refusing to pay a claim without conducting a reasonable investigation of all available information where material facts are in dispute
Which type of policy pays benefits to a policyholder covered under a Hospital Expense policy?
Reimbursement
When a lapsed policy's premium has been paid current, it has the potential of being
Reinstated
Ron recently purchased an immediate, straight life fixed annuity. His benefit payments will
Remain a constant dollar amount for the duration of the annuity period
The Superintendent has the power to compel any agent to produce business documents relevant to an inquiry upon
Request of the Superintendent
What is the accounting measurement of an insurance company's future obligations to its policy owners?
Reserves
Mary is an employee who is covered with a disability income policy through her employer. She pays for the portion of the premium attributable to the cost of residual disability benefits, while her employer pays for the remainder. What are the tax implications of this policy?
Residual benefits will be received income tax-free
The inability to perform SOME of the duties of one's own occupation is known as a
Residual disability
What kind of arrangement gives the policyowner the right to change the beneficiary?
Revocable designation
Which of the following can be defined as "the potential for loss"?
Risk
Which of the following describes the act of insuring risk against possible loss?
Risk transfer
Switching Life insurance policies without tax consequence is permitted under
Section 1035 rules
Security laws passed by Congress are enforced by which Federal agency?
Security and Exchange Commission
Which of these situations would NOT potentially involve a prison sentence under Federal law?
Selling insurance with a nonresident license
When a similarly appointed agent provides another agent with a referral, which results in a sale, the commissions paid are generally
Shared between the agents
Which of the following does a Medicare Advantage enrollee typically pay for?
Small co-pay per visit or per service
Christine is receiving benefits provided from her disability income insurance. As compared to her previous earnings, the disability benefits should be
Somewhat less
Kelly purchases a health insurance policy issued on a conditionally renewable basis. The insurance company has a right to refuse renewal of the policy for
Specific reasons stated in the contract
What type of risk involves the potential for loss AND the possibility for gain?
Speculative
XYZ Corp money to an employee to purchase a life insurance policy and allows the employee to select the beneficiary. What kind of plan is this?
Split-dollar
In regards to technology and the ACA, which of the following statements is correct?
States which operate with an Exchange must offer an internet-based portal
What happens to the cash value of a market value adjusted annuity if it's surrendered prior to the end of the stated guarantee period?
Subject to market value adjustment
Which of these annuity contract features is meant to discourage withdrawals and exchanges?
Surrender charges
How does the cost for a survivorship life policy compare to the cost of combining two separate life insurance policies?
Survivorship life policy is lower
The premiums paid by an employer for his employee's group life insurance are usually considered to be
Tax-deductible to the employer
Qualified long-term care premiums are treated for tax purposes as
Tax-deductible to the extent they exceed 7 1/2% AGI
Under a key person disability income policy, benefits will be received as
Tax-free income to the business
Jonas is covered with disability insurance through his employer. The employer pays 75% of the premium, while Jonas pays the other 25%. What is Jonas' tax liability for any benefits paid from the disability plan?
Taxes must be paid on 75% of the benefits received
When a ten year renewable term life insurance policy issued at age 45 is renewed, the premium rate will be the current rate for
Ten year term insurance for a person aged 55
At the time of application, insurers must provide prospects for Medicare supplement policies with a copy of
The Medicare supplement buyer's guide
A copy of all Medicare Supplement advertisements must be submitted for approval to
The Superintendent of Insurance
Who signs the notice of replacement when a Medicare Supplement policy is being replaced?
The agent and the applicant
In New York, who is primarily responsible for determining the appropriateness of a Medicare Supplement policy for a proposed insured?
The agent who solicits the application
Which statement regarding the joint and survivor life insurance settlement option is NOT true?
The amount of each installment is larger than the single life income option
In order to contribute to a HSA,
The applicant must be enrolled in a HDHP
Which factor determines the maximum disability income benefit that can be purchased by an applicant?
The applicant's income
K is an agent who takes an application for individual life insurance and accepts a check from the client. He submits the application and check to the insurance company, however the check was never signed by the applicant. If the application is approved, when will coverage be effective?
The date the agent delivered the policy, collected the initial premium, and obtained a good health statement from the insured
The insured's consideration given for a health insurance policy is
The first premium payment and the application
Which statement regarding a fixed period settlement option is correct?
The installment payment amount is determined by the total number of installments
An applicant for life insurance must be informed that testing for HIV infection is used to help determine
The insurability of the proposed insured
If a benefit plan is offered on an Exchange, what must the insurance company offer, with regard to that plan, outside of the Exchange?
The insurance company must offer the same plan
James is covered with health insurance by two different insurers. The "insurance with other insurers" provision in an individual health insurance policy allows an insurer to pay benefits to the insured on a pro-rata basis when
The insurer was not notified prior to the claim that the insured has other health coverage
What is a certificate of authority?
The license required for an insurer to conduct business in the state
Unless it is regarding fraud, which of the following statements about the contestability of a life insurance policy is true?
The policy can usually only be contested by the insurer during the first two years of the contract
Taxable income may be the result from all of these modified endowment contract (MEC) transactions EXCEPT for
The policy is surrendered for less than what was paid into it
When a Medicare supplement policy is purchased during the open enrollment period
The policy must be issued regardless of health status
A life insurance illustration showing future premiums being paid out of nonguaranteed values must disclose that
The policy owner may need to resume premium payments depending on actual results
What happens when a policy owner borrows against the cash value of his life insurance policy?
The policy proceeds would be reduced by the outstanding loan balance
What is considered the collateral on a life insurance policy loan?
The policy's cash value
Which of these must be disclosed in a universal life policy?
The policy's surrender charges
Accident and health insurance standard provisions require that
The policy, endorsements, and attached papers constitute the entire contract
Which of these statements regarding the extended term insurance nonforfeiture option in a life policy is accurate?
The premium to purchase the coverage comes from the policy's cash value
The Superintendent may not revoke an insurance producer's license unless
The producer has been properly noticed and given opportunity for a hearing
A material change in a modified endowment contract (MEC) results in
The seven pay test, adjusted for cash value, applies again
Who is the beneficiary in a life insurance policy?
The stated person or entity who is designated to receive the death proceeds
How does a continuous premium whole life policy differ from a limited payment whole life policy?
The time period in which premiums will be paid
Under HIPPA requirements, eligibility for the pre-existing conditions exclusion waiver under new coverage is lost if
There is a break in coverage of more than 63 days
During open enrollment for Medicare Supplement coverage, an applicant MUST be at least
There is no minimum age requirement
The major medical deductible carryover period normally applies to expenses incurred during the last ___ months of the plan year.
Three
What is the elimination period of an individual disability policy?
Time period a disabled person must wait before benefits are paid
Which of these is NOT a reason to buy a term life policy?
To accumulate savings
Why were Exchanges implemented by the Affordable Care Act (ACA)?
To create a one-stop market for standardized health insurance plans
Why does New York law require an insurance agent to examine the existing Medicare Supplement policies of a prospective insured?
To determine the suitability of potential changes
The owner's cost basis for a non-qualified deferred annuity is typically the same as the
Total premiums paid
A life insurance policy that includes a return of premium rider will pay the beneficiary how much upon the insured's death?
Total premiums paid plus the policy face amount
How is a collateral assignment used in a life insurance contract?
Transfers specific ownership rights to a creditor
Typically, states will permit the grouping of two or more small employers in the same industry for obtaining group health insurance at a favorable rate. This grouping of employers is known as a multiple employer
Trust
Tom the agent replaced a client's insurance policy when it was not in the client's best interest. Tom could be found guilty of
Twisting
Insurance crimes which affect interstate commerce are prosecuted by the
US Attorney General
Which of the following BEST describes a "partial disability"?
Unable to perform one or more job duties
Which of the following is NOT considered to be an expense for surviving family members of a deceased wage earner?
Unemployment tax expenses
How do birthing centers reduce medical costs?
Using certified nurse midwives
During a stated initial period of coverage, long-term care insurance policies normally EXCLUDE conditions that
Were treated during a specified period preceding the policy date
Medicare supplement insurance that provides a preventative medical care benefit will often cover
Yearly physical examinations
Medicare can be described as
a federal health insurance program for individuals over the age of 65 or permanently disabled
Short term group disability income benefits are
a percentage of weekly earnings up to to a stated maximum
An insurer operating in the U.S. but headquartered outside the U.S. is
an alien insurer
A reciprocal insurer typically has an administrator who manages the premiums collected from the group's members. This administrator is called a
attorney-in-fact
The insurer's obligation to pay a claim depends on whether the insured or beneficiary has complied with all policy conditions. This makes the policy a(n)
conditional contract
An annuity's accumulation period may
continue after the purchase payments stop
The policy provision that permits an employee to change from group life coverage to an individual life policy is called the
conversion provision
The main purpose of an annuity is to
create a stream of income
Non-occupational disability coverage is designed for
employees who suffer non-work related disabilities, since work-related disabilities are covered by Workers' Compensation
Medicare Part A typically covers
inpatient drugs
The amount received for a life insurance policy in a life settlement is ____ than the death benefit.
less
A policy owner and a life settlement provider can have a life settlement negotiated through a
life settlement broker
Custodial care is normally covered under
long term care insurance
Respite Care coverage is typically found in a(n)
long term care policy
The annuitant in a single premium deferred annuity (SPDA)
makes only one premium payment
Greg applies for insurance and makes a false statement on the application that will influence whether or not the insurer will accept the risk. Greg's false statement is called a(n)
material misrepresentation
Patrick purchased a long-term care policy. He has a health condition for which medical treatment was recommended by a physician within 6 months prior to the policy's effective date. This condition is called a(n)
pre-existing condition
A pre-existing condition exclusion in an accident and health insurance policy pertains to
prior health matters
A certificate of coverage for a group health policy is best described as
proof of coverage for the employee
A life insurance producer's underwriting duties may include
seeking additional information requested by the insurance company
When issuing disability income coverage on a substandard risk, an insurance company may
shorten the benefit period
An insurable risk requires
that the chance of loss be calculable
The reason for back dating a policy is
to obtain a premium based on an earlier age
A health insurer MUST provide a proof of loss form
within 15 days of receipt of the notice of loss
New York workers compensation laws exclude benefits for disabilities caused by
Intentional, self-inflicted injuries occurring on the job
Andy is in need of health care performed by skilled medical practitioners, but only on an intermittent basis. What level of care will his doctor likely prescribe?
Intermediate care
According to the ACA, the proportion of premium revenues spent on clinical services and quality improvements is called the
Medical loss ratio
An insurance applicant willingly gave false information on the application. This applicant would likely be found guilty of
Misrepresentation
An insurance company willingly published false information in an insurance policy advertisement. This is an example of
Misrepresentation
Which of the following would be considered an unfair claims settlement practice?
Misrepresenting pertinent policy provisions relating to coverage after a loss
Periodic health claim payments MUST be made at least
Monthly
Carol purchases a whole life policy that provides a choice of dividend options. This policy is required to include a statement that the dividends are
Not Guaranteeed
Which of the following is NOT an example of risk retention?
Not doing a business deal after deciding it would be too risky
Which element of a contract constitutes a definite and unqualified proposal by one party to another?
Offer
Insurable interest involves what assumption?
One person benefits from another person's continued life
If group Health benefit levels are too high, what could be the end result?
Overutilization of the plan
Which of the following statements BEST describes disability buy-sell insurance policies?
Policy proceeds are typically received income tax-free
What typically changes at the re-entry option date found in some term life policies?
Premium
What is considered interstate travel under the Federal Fraud and False Statements Act?
Puerto Rico
Omar is covered by a disability income policy. He is hurt while performing an occupation more hazardous than the occupation listed in his policy. The policy's change of occupation provision will have what effect?
Reduce the benefit level
How do benefit payments fluctuate over time in a variable life annuity?
Reflects changes in the market value of assets in a separate account
A group-owned insurance company that is formed to assume and spread the liability risks of its members is known as a
Risk retention group
Sylvia purchased an annuity for $100,000 from the proceeds of an inheritance. No further payments are permitted and the income stream begins in 15 years. This contract is a(n)
Single premium deferred annuity
Which of these policies is considered a whole life policy?
Single premium life
An individual may receive Medicare Part A Hospital benefits, regardless of age, as long as the person has received which of the following benefits for at least 24 months?
Social Security Disability
A life insurance producer licensed in New York is authorized to
Solicit, receive and forward applications to the insurer
Which item must be considered by an agent when determining the suitability of an annuity recommendation?
The client's financial status
Darrell has a group long-term disability income policy paid by his employer. Which of these statements is true?
The specified benefit amount is a percentage of his wages
What is the effect of the market value adjustment in a market value adjustment annuity?
Transfers some of the investment risk to the policy owner
What would be the disadvantage of naming a trust as a beneficiary of a life insurance policy?
Trust administration fees would reduce policy proceeds
Under which circumstance is the interest rate guaranteed within a market value adjusted annuity?
When the contract has been held for the period specified in the policy
When does the producer give a premium receipt for a life insurance application?
When the initial premium has been paid with the application
A policyowner is permitted to take out a policy loan on a whole life policy at what point?
When the policy has a cash value
A life insurance policy provision that has the ability to reduce the death benefit is called the
accelerated (living) benefit
A prepaid dental plan has an agreement in place with a network of dentists which
accepts an established amount as payment in full for the dental services rendered
Which annuity allows contributions to an IRA?
deferred
Scott has a life insurance policy in which the dividends are left with the insurance company. This particular policy may be paid up when the cash value plus accumulated dividends
equal the net single premium for the same face amount at the insured's attained age
Field underwriting by a producer
may result in the disclosure of hazardous activities of the applicant
What is the grace period required for an individual accident and health insurance policy with monthly premiums?
10 days
Employees are required to work at least ___ hours per week to become eligible for a small employer health plan
20
Mary has a HSA. Distributions that she has made for anything other than qualified medical expenses are considered taxable and subject to a penalty of
20%
How many days notice does the ACA require insurers to give before rescinding coverage?
30
When a Medicare Supplement policy is replaced, the policy owner will have a free look period of ___ days.
30
Which type of life insurance policy is best suited for paying off the outstanding balance of a 30-year mortgage in the event of the insured's death?
30-year decreasing term.
What is the actuarial value of a bronze level health plan?
60
A health plan offered by private insurance companies is
A Medicare Supplement
Emergency health care coverage for Medicare enrollees traveling abroad is
A Medicare Supplement additional benefit
A policy owner has decided to replace an existing life insurance policy with a new one. The existing life policy should be terminated
After the new life policy has been issued and delivered to the policy owner
An insured is covered under a group long-term disability policy. Under this type of policy, the definition of disability based on any occupation typically applies
After two years of disability
When an illustration is used in the sale of a life insurance policy, the illustration MUST contain a statement signed by the
Agent
If a group endorses an accident and health insurance product in an advertisement, the public must be made aware of
Any control by the insurer over the group
The ACA established "exchanges" in order to
Assist individuals and small business when making their health insurance purchases
If a disability income policy contains a cost-of-living adjustment rider, benefits must typically be increased
At least once per year from when benefits begin
Al surrenders his life insurance policy for its cash value. The total of the premiums paid into the policy minus total dividends received in cash or used to offset premiums is referred to as the
Cost basis
Linda is covered with long-term care insurance and has early-stage Alzheimer's. She is still able to reside in her home while receiving primary care, as opposed to moving into a nursing home. All of the following long-term benefits encourage this EXCEPT for
Custodial care
Pete the agent made public statements that falsely portrayed Acme Insurance Company as avoiding claim payments. Pete may be found guilty of
Defamation
A group health insurance policy is a contract between an
Employer and insurance company
Which statement concerning an adjustable life insurance policy is FALSE?
Evidence of insurability is required when there is a change in premium
Long Term Care policies will usually pay for eligible benefits using which of the following methods?
Expense incurred
Which life insurance policy option allows the policy owner to have coverage equal to the net death benefit of the lapsed policy?
Extended term nonforfeiture option
Which of the following contracts offer deferred taxation, flexible payments, a guaranteed interest rate, and death benefits equal to the cash value?
Flexible premium fixed annuity
Rick owns a variable universal life policy and chooses a variable death benefit option. What will typically happen to the death benefit as a result of this selection?
Fluctuate with changes in the cash account
A major medical expense plan typically includes coverage for hospital room and board. Which of the following is normally covered under the category "room and board"?
General nursing care
Insurable interest in one's own life is legally considered as
Generally unlimited
According to the ACA, insurers can no longer deny health coverage due to pre-exsisting conditions unless that plan is a
Grandfathered plan
Tonya has been diagnosed with kidney failure and has group accident and health insurance through her large employer. Which of these accident and health plans will be primary during the months following her diagnosis?
Her employer's group accident and health plan
With life insurance, the needs approach is used primarily in determining
How much life insurance a client should apply for
Who is protected with the "other insurance with this insurer" provision?
Insurance company
When premiums are determined, one factor would be the expenses of the
Insurer
