PA Life and Health Questions

Susan is receiving continuing disability benefits and will for years to come. Her insurer, according to the Notice of Claims provision, can require her to give notice that the claim is continuing as often as every

6 months

Which of the following would NOT be a primary objective of insurance regulation?

Adopting emergency regulations when necessary

Under what circumstances do major medical policies usually provide for restoration of benefits?

Restoration may occur automatically after a specified dollar amount of benefits has been exhausted.

In the insurance industry, human life value refers to which of the following

The consideration in a life insurance contract

Second surgical opinions, precertification, concurrent and retrospective reviews, and outpatient/ambulatory services are all elements of a cost-containment system commonly known as

case management

All of the following statements about noncancelable health policies are true EXCEPT

the insurer may increase the premium rate after the policy is in effect, provided it does so by classes of insureds

A company may write insurance in excess of its retention limits

by insuring the excess with other companies through a reinsurance agreement or treaty

an insolvent insurer is one that

cannot meet its financial obligations

Riders that modify the life insurance protection that is offered and that permit a company to accept an otherwise unacceptable risk are called

exclusions

A qualified retirement plan distribution caused by the plan participant's death is considered to be

income in respect of a decedent (IRD)

An insurance company's unpaid claim reserve can be defined as

money held for those policyowners who have claims but have not yet filed them

The capital sum in an accident policy is

the amount paid to the insured for dismemberment or loss of sight

An insured who signs a fraudulent claim form

will suffer a premium increase

Zelda dies with the premium still due on her life policy, but before the grace period has expired. Zelda's beneficiary can expect the amount of the past-due premium to be

deducted from the face amount of the policy before the proceeds are paid by the insurer

An insurance policy that provides partial replacement of earnings when the insured is unable to work because of a disabling injury or illness is known as

disability insurance policy

The cash value of a permanent life insurance policy may be used for all of the following EXCEPT

dividends

The Insurance Code is composed of provisions allowing all of the following EXCEPT

enabling the Commissioner to make necessary changes in the Code

When an agent promptly forwards the client's premium to the insurer, the agent is acting in what capacity?

fiduciary

A renewable life insurance policy

gets more and more expensive every time it is renewed

Associations organized to protect claimants, policyholders, annuitants, and creditors of financially impaired insurers are known as

guaranty associations

Ben invests in an annuity that begins making payments of $2,500 a month for as long as Ben lives. Ben's annuity is

immediate and fixed

A self-employed person may deduct the IRS-approved percentage of premiums paid for health coverage if she

is eligible to participate in an employer-sponsored group health plan

All of the following are alternatives an insurer has when asked to insure a substandard risk EXCEPT

issue the policy with a probationary period after which the insurer may continue or cancel the policy

Which life insurance settlement option is considered the default option if no other option is elected?

lump-sum cash

a life insurance trust

may be created while the insurer is till alive or after the insurer's death (inter vivos and testamentary)

Which of the following is NOT a federal requirement that must be satisfied by a Health Maintenance Organization (HMO)?

minimum number of patients

Which of the following is NOT a source of life insurance policy dividends?

more policyowners

When a major medical policy provides first dollar coverage it means

no deductible applies

The advantage of enrolling in a group health insurance program during the eligibility period is that

no medical exam is required

In noncontributory group health plans, how many eligible employees must be covered by the plan?

noncontributory plan

Which health insurance policy provision allows the insurer to pay accrued indemnities that remain unpaid at the insured's death to either a beneficiary or to the insured's estate?

payment of claims

Vanessa's policy on her life names her 3 brothers as beneficiaries to share equally in the proceeds. If any of the brothers predeceases Vanessa, that brother's share will be passed on to his child. Vanessa's beneficiary designation is known as

per stirpes

With respect to life policies, all of the following are subject to federal income tax EXCEPT

policy proceeds paid in lump sum

The purpose of the Guaranty Association is to

protect policyholders against the insurers inability to pay claims

What type of annuity settlement arrangement stops making payments when the annuitant dies?

pure life annuity

The type of annuity that guarantees to pay total income at least equal to the purchase price of the contract is a

refund life annuity

Premiums fully paid by an employer for employee group health insurance are generally

tax-deductible to the employer

The applicant for an insurance policy must sign all of the following EXCEPT

the agent's report

A universal life contract expires when

the cash value equals the death benefit

Collateral for a life policy loan is

the cash value of the policy itself

In the insurance industry, mode of premium payment refers to

the frequency of premium payment

The type of premium for term life insurance that remains the same throughout the policy period is

the level premium and it's used for level and decreasing term policies

Bob wants a life policy that provides his wife Sue payments for life. If Sue dies before 10 years have passed, their daughter Mary will continue to receive the payments until the end of a 10-year period. Bob's choice is

the life income, 10 years certain option

The party normally paying the premiums for the policy and retaining all rights, values, and options is called

the policyonwer

The income period when a surviving spouse does not qualify for Social Security survivor or retirement benefits is called

the preretirement "blackout" period

All of the following statements regarding an insurance producer's fiduciary responsibility are correct EXCEPT

the producer must be knowledgeable about the insurance policies, but need not be concerned with offering how these polices can be used to solve the general public's needs

When either the fixed period or fixed amount option is selected for a life policy,

the total amount paid over the years will be greater than the face amount of the policy (due to interest earned)

An agent speaks disparagingly of a competitor while trying to sell an insurance policy. What unfair marketing practice has the agent committed?

twisting

The term nonforfeiture values refers to the fact that:

when a policyowner stops paying premiums on a permanent policy, its cash value accumulation or equivalent must be made available to the policyowner

Sherwood has no valid will but has named his estate as the beneficiary of his life insurance policy. As a result, he can expect that the policy proceeds

will not be subject to tax

If Desdemona is insured by a life policy with a face amount of $250,000, but which has an outstanding policy loan of $10,000 at her death, the insurer

will subtract the amount of the outstanding loan and pay $240,000 to the beneficiary

A qualified retirement plan distribution is considered to be premature if made before the participant is age

59½

If an application for reinstatement of a policy is filed by a policyholder, but the company takes no action on the reinstatement, the policy is automatically reinstated after how many days?

45

According to the Time Limit on Certain Defenses provision, unless an insured has made fraudulent misstatements, a health policy is incontestable after

2 years

Damon purchased a 10-pay life policy at age 35. He can expect it to be paid up by age

45

In order to obtain group health insurance without providing evidence of insurability, what do eligible individuals generally have to do?

Enroll within a specified eligibility period

Under which of the following circumstances will the payor rider waive premiums and allow a life policy to remain in force?

If the policyowner dies or becomes disabled prior to the insured reaching either age 21 or 25

Which of the following statements about life policy loans is NOT correct?

The loan value of a policy is equal to the current cash value, less the amount of interest determined by the loan interest rate stated in the policy.

a 401(k) plan can be

a defined benefit plan only

Which of the following best defines the annuity period?

The time during which payments are made to the annuitant

What is a life insurance policy dividend?

Interest paid to the policyowner on the cash value accumulation of a permanent insurance policy

What is the purpose of the Fair Credit Reporting Act?

It gives consumers the right to question reports made about them by investigative agencies and get false information corrected.

The usual payment arrangement under a Preferred Provider Organization contract is

a fee for each service

Social Security disability benefits are financed by

a payroll tax paid by employers and employees equally

The fact that Elmo could die after paying just one premium on his life insurance policy and still have the entire face amount paid to his beneficiary is an example of

aleatory contract

All of the following would likely be eligible for group health insurance EXCEPT

all the state's public school teachers

A written agreement in which an insurer authorizes a producer to sell insurance policies for it is called

an appointment

Someone who advises an insured, beneficiary, or anyone with an interest in a life or disability policy and charges a fee for this advice is

an insurance counsultant

A health insurance policy that the insurer may choose not to renew, but only on the premium due date is called

an optionally renewable policy

Transacting insurance includes all of the following EXCEPT

applying for a certificate of authority

With a modified premium whole life contract, premiums

are lower in the first few years

All of the following are dividend options EXCEPT

assigning dividends to pay off a mortgage

An admitted insurer must have which of the following before transacting insurance in the state?

certificate of authority

Bart is interested in purchasing an insurance policy. He has reviewed 5 different policy forms and has found fault with each one. Unfortunately, he is unable to negotiate changes in the basic policy provisions. This is because insurance policies are

contracts of adhesion

Some major medical policies begin with basic first dollar coverage that pays up to its limits, then the insured must pay a certain dollar amount of expenses before the major medical portion steps. What term applies to the dollar amount the insured must pay between the basic policy and the major medical coverage?

corridor deductible

All of the following are characteristics of most long-term care policies EXCEPT

coverage of Alzheimer's Disease