Ohio Life and Health Insurance
The absolute assignment of a life insurance policy results in
the assignee receives all incidents of ownership
Medicare will cover a maximum of how many days per benefit period in a skilled nursing facility?
100 days
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%
Which of the following best describes the tax treatment of medical expense policies for the self-employed?
100% of medical expense plan premiums are tax deductible
A survivorship life insurance policy usually covers how many lives?
2
What is the minimum number of employees needed for a small employer medical expense plan in Ohio?
2
Mary has a Health Savings Account (HSA). Distributions that have been made for anything other than qualified medical expenses are considered taxable and subject to a penalty of
20%
The major medical deductible carryover period normally applies to expenses incurred during the last ___ months of the plan year.
3
What is the excise tax rate the IRS imposes on individuals aged 70 1/2 or older who do not take the required minimum distributions from their qualified retirement plan?
50%
How long can an insurer legally defer paying the cash value of a surrendered life insurance policy?
6 months
How long do most states allow an insurance company to delay the payment of a cash surrender under the Delayed Payment provision?
6 months
The time limit an individual has to "rollover" funds from an IRA or qualified plan is
60 days
Which of the following combinations best describe a universal life insurance policy?
A flexible premium deposit fund and a monthly renewable term insurance policy
In Ohio, a group accident and health certificate of insurance must contain
A listing of policy features and benefits
What do Limited accident and health policies normally cover?
A specific illness or event
What is the reason that insurance companies require a minimum number of employees participating in a group insurance plan?
Adverse selection is minimized
Which of these would NOT be a valid reason to add the waiver of premium rider to a life insurance policy?
Allows a policyowner to take out a policy loan to cover premium payments in the event of total disability
Which of the following is NOT a valid contract exchange?
An annuity exchanged for a life insurance policy
What type of policy can group term life insurance normally be converted to?
An individual permanent life insurance policy
Which statement is INCORRECT concerning a tax-sheltered annuity (TSA)?
Annual investment gains are included in participant's gross income
Which of the following situations would a medical exam NOT be required for an individual health insurance applicant?
Applicant's family members have a history of cancer
Which of these statements regarding insurance is false?
As the number of insured units increases, the number of losses decreases
In long-term care insurance, what is the length of time for which claims will be paid?
Benefit period
Which of these statements regarding Major Medical Expense insurance is NOT true?
Benefits are paid on a capitation basis
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
All of the following statements about HICs are true EXCEPT:
Benefits are usually provided on a reimbursement basis
A preferred provider plan and an indemnity plan are similar in what way?
Both pay on a fee-for-service basis
An accident and health insurance policy defines an injury as "bodily injury by accidental means". For an injury to be covered on this policy, what is required?
Both the cause and resultant injury must be accidental
Which of these is true regarding the exchange of consideration among parties involved in an insurance contract?
Can be unequal
Which statement regarding the waiver of premium rider is accurate?
Cash payment is not directly provided to the policyowner
What type of employee welfare plans are not subject to ERISA regulations?
Church plans
In regards to the Affordable Care Act (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
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
What kind of life policy typically offers mortgage protection?
Decreasing term
All of the following are examples of unfair claim settlement practices EXCEPT
Denying unsubstantiated claims on a timely basis
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
Which of these noncontributory group plans would a claim likely result in the payment of federal income taxes?
Disability income
Which of the following would permit an insurer to delay a covered disability policy claim?
Elimination period
Which of the following statements BEST describes employer contributions for employer provided health insurance?
Employer contributions are deductible
An agreement is reached when an insurance contract is formed. Which of the following is NOT considered to be an element of an agreement?
Equity
Which statement concerning an adjustable life insurance policy is FALSE?
Evidence of insurability is required when there is a change in premium
How are benefit payments from individually-owned medical expense policies treated for tax purposes?
Exempt from income taxes
Before a policyowner replaces an existing individual health insurance policy, all of the following types of provisions in the new policy need to be reviewed EXCEPT
Experience rating
Which of the following are used by most insurers when determining the premiums for large groups?
Experience rating
Which life insurance policy option allows the policyowner to have coverage equal to the net death benefit of the lapsed policy?
Extended term nonforfeiture option
Which of these is NOT an allowable deduction made from premium payments of the cash value of a variable life insurance policy?
Federal premium taxes
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
What is considered a valid reason for small businesses to insure the lives of its major shareholders?
Fund a buy-sell agreement
Kyle is an insured who disregarded an accident and health insurance policy provision that requires him to seek a second surgical opinion. What will the end result be?
He may be reimbursed for the surgical procedure at a reduced benefit level
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
Terry receives long-term physical therapy at her residence. What type of insurance would cover this service?
Home health care
Some standard Medicare Supplement policies include which benefit?
Hospice care
Which of the following is NOT true of a preferred provider plan?
Hospitals can only initiate preferred provider plans
Which of the following is NOT subject to the promise to pay in an insuring clause?
How the premium is calculated
The Medical Information Bureau consists of members from which group?
Insurance companies
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
When compared to a fixed annuity, a variable annuity has what distinguishing feature?
Investment risk is assumed by the insurer
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 the following statements regarding hospital pre-admission authorization is NOT true?
It encourages weekend admission
The initial premium for a life insurance policy is typically paid in what way?
It is typically obtained by the producer and forwarded to the insurer
Which life insurance settlement option pays lifetime benefits to two or more people?
Joint and survivor
A life insurance beneficiary died after receiving only six payments under the policy's life income settlement option. What happens with the remaining balance of the death proceeds?
Kept by the insurance company
A policyowner has a life insurance policy where she had listed her age on the application as 5 years younger than her actual age. If she dies and the insurer discovers the misstatement of age, how much will the insurance company pay?
Less than the face amount
What is covered under a limited accident and health insurance policy?
Limited perils and amounts
Which of the following is a syndicate established by a group of insurers to share underwriting duties?
Lloyd's organization
Which of these is NOT relevant when determining the amount of personal life insurance needed?
Local unemployment rates
Bert's spouse passed away recently. Bert was covered under his spouse's group family health insurance plan but now is covered under COBRA. How much of the active-employee cost may be passed on to Bert for continued coverage?
Maximum of 102%
Which individual would be best suited for Medicare Supplement insurance?
Medicare enrollee
What is considered a valid reason for an insurer's refusal to pay policy proceeds directly to a minor?
Minors are normally not capable of handling money in a reasonable manner
If an agent misleads or fails to adequately disclose the title and true nature of a policy offered to a potential insured, it may be considered
Misrepresentation
Life insurance premiums are based on what three factors?
Mortality, interest, expenses
The disability income policy most likely to have been issued on a substandard basis is
Non-cancelable with a health condition exclusion rider
Which of the following is NOT a function of accident and health insurance?
Pays a death benefit as a result of natural causes
With whom may the subscriber of an HIC file an appeal regarding the resolution of a complaint concerning services provided?
Peer Review Committee
Which of the following can be defined as a cause of a loss?
Peril
A disability income insurance policy was recently issued with a rating. What does this mean?
Policyowner will be charged an additional premium
According to the law of large numbers, how would losses be affected if the number of similar insured units increases?
Predictability of losses will be improved
Which statement regarding the life insurance premium for a children's term rider is true?
Premium remains the same no matter how many children
What must the claimant do if the proper forms are not provided by the insurer?
Proceed by providing written verification of the loss
How are qualified Roth IRA distributions normally treated for tax purposes?
Received income tax-free
What happens to the death benefit of a life insurance policy if the insured elects a partial payment from the accelerated (living) benefit provision?
Reduced
A life insurance policyowner would like a dividend option that results in a limited current outlay of funds. Which dividend option would be chosen?
Reduction of premium payment
An insurer has a contractual agreement which transfers a portion of its risk exposure to another insurer. What type of contractual arrangement is this?
Reinsurance contract
Which of the following is NOT a basic underwriting action for accident and health insurance?
Removing uniform policy provisions
According to the IRS, a company may NOT do which of the following in regards to funds in a qualified retirement plan?
Repossess the funds for business purposes
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
Which of the following can be defined as "the potential for loss"?
Risk
Which of the following describes the act of insuring a risk against possible loss?
Risk transfer
What does a 401(k) plan generally provide its participants?
Salary-deferral option
Assets that back the non-guaranteed values of variable life insurance products are held in which account?
Separate account set up by the insurer
A person can 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
Who regulates an insurer's claim settlement practices?
State insurance departments
Which of the following is NOT a dividend option for a life insurance policy?
Surrender the policy's cash value
Which group is the Do Not Call Registry designed to protect against?
Telemarketers
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
When an agent engages in unfair practices, all of the following are true EXCEPT
The Director's decision is final
In Ohio, health insuring corporation (HIC) complaint responses must include a notice of the right to appeal the HIC's decision to
The HIC's complaint system administrator
When would evidence of insurability be required for a person already covered with a variable universal life policy?
The death benefit is increased
All of these statements concerning group credit life insurance are false EXCEPT
The face amount is determined by the outstanding loan balance
Which statement is true if a member suffers a broken leg while outside the insuring corporation (HIC) service area?
The injury will be covered as an emergency health service
An insured, age 67, is covered under a disability income policy. What will the insurer require in order for the insured to continue coverage?
The insured must work for a stated number of hours per week
Under an adjustable life insurance policy, which of the following may NOT be changed without further underwriting?
The person insured
Which of the following is a true statement regarding a Medicare Supplement policy purchased during the open enrollment period?
The policy will be issued regardless of health
An advantage of owning a flexible premium life insurance policy would be
The policyowner can make policy changes without difficulty
Who does a viatical settlement broker represent?
The viator
When does the owner's contractual rights begin under an individual annuity contract?
Time of purchase
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
What is the effect of the market value adjustment in a market value adjustment annuity?
Transfers some of the investment risk to the policyowner
Which of the following does medical expense insurance NOT typically cover?
Treatment in a government facility
Which of the following is NOT considered to be an expense for surviving family members of a deceased wage earner?
Unemployment tax expenses
What kind of life insurance policy allows a policyowner the choice of investments along with flexible premium payments?
Variable universal life
What action can an insurer take to discourage malingering and false disability claims?
When an insured has two disability policies with the same insurer, the insurer sets limits on the amount of benefits an insured can collect
For long-term care insurance, when does Ohio require provision of a written notice of available insurance counseling programs?
When coverage is solicited
How does an underwriter take into account an applicant's marital status?
When determining who is eligible for dependent coverage
Under which circumstance is the interest rate guaranteed within a market value adjusted annuity?
When the contract has been held for a stated time period
Which event triggers a deferred annuity to start making benefit payments to the annuitant?
When the contract is annuitized
At what point are death proceeds paid in a joint life insurance policy?
When the first insured dies
When does the agent give a premium receipt for a life insurance application?
When the initial premium has been collected with the application
According to the Affordable Care Act (ACA), under what circumstances would lifetime limits and annual limits be permitted on a health plan or insurance policy?
When the insured not considered essential benefit
Pete is covered by a group health insurance plan which covers employees in multiple states. This plan is governed by the laws of which state?
Where the master contract was issued
To resolve written grievances received, each HIC specialty plan must establish
a complaint system
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
Medicare can be described as
a federal health insurance program for individuals over the age of 65 or permanently disabled
A life insurance policy provision that has the potential to reduce the death benefit is called the
accelerated (living) benefit
In regards to health insurance, employees age 65 or older are typically required to
be offered the same group health benefits offered to the younger employees
An accident and health insurer has just received written proof of loss from one of its insureds. The insured must now wait 60 days before
bringing legal action against the insurer
An employee welfare plan exempt from ERISA regulations would be
church plans
In Ohio, what must an HIC establish and maintain to provide reasonable procedures for the resolution of written complaints initiated by subscribers concerning services provided?
complaint system
The courts will normally interpret a policy in favor of the insured when the meaning of the policy is not clear. This is because an insurance policy is a(n)
contract of adhesion
An employer pays the accident and health insurance premiums for its employees. The premiums paid by the employer are
deductible to the business
Christopher is issued an insurance policy that contains an attached agreement which alters the terms of the policy. This attached agreement is called a(n)
endorsement
An enrollee in an HIC may have her coverage cancelled for all of the following reasons EXCEPT
excessive illnesses
The powers directly given to an agent in an agency contract are called
express
Employers often purchase life insurance on a key employee in order to
help offset the cost of finding and training a replacement if the employee dies
Trade association groups that are eligible for group medical benefits normally are
in the same industry
When group benefits under COBRA have expired, a fully insured group policy can be converted to a(n)
individual health policy
The benefit period of Medicare Part A begins on the first day the insured
is admitted into a hospital
The insurance coverage in a variable life insurance policy may vary based on the value of
its underlying investments
An insurance policy may be issued with a preferred insurance premium in all of these situations EXCEPT
living in a rural area
The contract owner in a single premium deferred annuity (SPDA)
makes only one premium payment
A contingent beneficiary is described as the
person who receives the death benefits if the primary beneficiary dies before the insured
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
Any employee insured under a group life insurance plan is normally
protected by term life insurance
The main purpose of an Ohio health insuring corporation (HIC) solicitation document is to
provide a detailed medical plan description
A Keogh plan is a(n)
qualified retirement plan for the self employed
A group-owned insurance company that is formed to assume and spread the liability risks of its members is known as a(n)
risk retention group
Contributions made by an employee to a qualified retirement plan are required to be
subject to a vesting schedule
