1135 Life & Health Insurance Exam

All of these settlement options would satisfy the conditions of a spendthrift clause EXCEPT a

lump-sum payment

The owner of a single premium deferred annuity is entitled to do all of these EXCEPT

make multiple premium payments

An employer that offers a qualified retirement plan (as opposed to a non-qualified plan) to its employees is eligible to

make tax-deductible contributions to the plan

An employer that offers a qualified retirement plan to its employees is eligible to

make tax-deductible contributions to the plan

The contract owner in a single premium deferred annuity (SPDA)

makes only one premium payment

A trustee-to-trustee transfer of rollover funds in a qualified plan allows a participant to avoid

mandatory income tax withholding on the transfer amount

Rick recently died and left behind an individual IRA account in his name. His widow was forwarded the balance of the IRA. The widow qualifies for the

marital deduction

An insurance contract may be voided if a misrepresentation found on the application is determined to be

material

The contractual rights that allow the owner of a deferred annuity to surrender the cash value are called

nonforfeiture options

In an individual retirement account (IRA), rollover contributions are

not limited by dollar amount

Dividends from a stock company are paid to stockholders, whereas in a mutual company, dividends are

paid to the policyowners

An insurance company can be liable for a producer's unauthorized acts

when the agency contract is vague concerning the authority given

What type of employee welfare plans are not subject to ERISA regulations?

Church plans

An employer has a group life insurance plan in place for his employees. How would an employee with health problems be treated in this situation?

Eligible for standard coverage on this plan

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 a health insurance policy offered by an employer?

Employer contributions are deductible

Which of the following statements BEST describes employer contributions for employer provided health insurance?

Employer contributions are deductible

Which of the following health insurance provisions requires that the application becomes part of the policy?

Entire Contract clause

Which statement concerning an adjustable life insurance policy is FALSE?

Evidence of insurability is always necessary when there is a change in premium

Group dental insurers typically limit coverage for late enrollees in all of the following ways EXCEPT

Excluding dental expenses which result from an accident

An officer for a corporation takes out numerous unsecured loans from the company's qualified retirement plan. Which of these rules is the plan in violation of?

Exclusive benefit rule

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 nonforfeiture option allows the policyowner to have coverage equal to the net death benefit of the lapsed policy?

Extended term nonforfeiture option

Which statement concerning a decreasing term life policy is accurate?

Face amount decreases over the policy period

A policyowner fell behind on the premium payments of a whole life policy and it is now in the grace period. How much will the beneficiary receive if the insured dies during this grace period and the policy also contains an outstanding policy loan?

Face amount minus the loan balance and past-due premium

A life insurance policy that includes a return of premium rider will pay how much upon the insured's death?

Face amount plus total premiums paid

Kim has a life insurance policy which insures all the members of her family. The benefit supplement attached to a life insurance policy which insures all members of a family is called a

Family term rider

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

When an annuity contract has been surrendered, how will the surrender charges affect the final contract settlement?

Final contract settlement will be reduced

In what way are insurance policies said to be aleatory?

Involves the potential for the unequal exchange of value

Premature distributions taken from a modified endowment contract (MEC) will result in a tax penalty of

"10%" 12.5% 15% 20%

The maximum prison sentence given under Federal law for unfair and deceptive insurance practices is

15 years

How many employees must an employer have for the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) to apply?

20 or more

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%

Nonqualified distributions from a health savings account (HSA) have a tax penalty of

20%

The tax penalty for nonqualified withdrawals from a health savings account (HSA) is

20%

An individual participant personally received eligible rollover funds from a profit-sharing plan. What is the income tax withholding requirements for this transaction?

20% is withheld for income taxes

Kate received a group accident and health termination notice. How many days does she have to apply for a converted policy?

31

In Ohio, when family coverage is in place, newborn children are automatically covered under a medical plan for a period of at least

31 days

What is the MAXIMUM number of employees an employer may have to qualify for medical savings accounts?

50

What is the MAXIMUM number of employees an employer may have for qualified medical savings accounts?

50 employees

How long does an individual have to "rollover" funds from an IRA or qualified plan?

60 days

The time limit an individual has to "rollover" funds from an IRA or qualified plan is

60 days

Which of these is NOT an advantage of term life insurance?

A cash benefit is provided if the insured is still alive at the end of the policy period

A universal life insurance policy can be described most accurately as a combination of

A flexible premium deposit fund and a monthly renewable term insurance policy

An insurance company writing business in a state other than the one in which it is domiciled is called

A foreign

Misrepresentation on the application is

Material

Which of these is a type of private insurance that helps pay for the out-of-pocket expenses involved under Medicare?

Medicare Supplement

Medicare Part B excess charges are covered by

Medicare Supplements

The agreement in which hospitals and physician groups in a specific area contract with an insurance company to provide medical care at predetermined costs is

Preferred Provider Organization (PPO)

Medicare Part B is an economical form of accident and health insurance for eligible individuals because

Premium payments are fully deductible from income

How are level term policies able to provide level premiums?

Premiums are averaged over the term of the policy

How do benefit payments fluctuate over time in a variable life annuity?

Reflects changes in the market value of assets in a separate account

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

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

Which one of these is NOT considered to be an element of an insurable risk?

Speculative risk

Claims settlement practices of insurers are regulated by:

State insurance departments

Which of these annuity 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

How are monthly life annuity benefit payments treated under a tax sheltered annuity (TSA)?

Taxed as ordinary income in the year received

Which of the following is TRUE if the owner of an IRA names their spouse as beneficiary, but then dies before any distributions are made?

The account can be rolled into the surviving spouse's IRA

What is the end result of an absolute assignment?

The assignee receives all incidents of ownership

What is payable to a policyowner if a whole life policy is surrendered prior to its maturity date?

The cash value

Which one of the following statements about the extended term insurance nonforfeiture option in a life insurance policy is true?

The cash value is used as a premium to purchase the coverage

Under the Fair Credit Reporting Act, which statement is true?

The consumer who was investigated must be advised that credit, insurance, or employment was denied because of an unfavorable report.

Which of these must be disclosed in a company's universal life policy?i

The policy's surrender charges

Inflation protection must be included in all long-term policies delivered in Ohio UNLESS

The policyholder rejects the coverage in writing

What kind of life insurance policy allows the policyowner the choice of investments along with adjustable premiums?

Variable universal life

Dividends from a mutual insurance company are paid to whom?

Policyowners

Which of these statements is true regarding an adjustable life insurance policy?

Policyowners are given the option of alternating between forms of term and whole life insurance

Which of these policies is considered to be a comprehensive health policy?

Major medical policy

Which would be described as a beneficiary designation by class?

Children of the insured

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 individual working part-time has an annual income of $25,000. If this individual has an IRA, what is the maximum deductible IRA contribution allowable?

$25,000

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

Premature IRA distributions are assessed a penalty tax of

10%

What is the maximum number of employees (earning at least $5,000) that an employer can have in order to start a SIMPLE retirement plan?

100

Medicare will cover a maximum of how many days per benefit period in a skilled nursing facility?

100 days

What minimum percentage of all eligible employees must participate in a group life insurance plan if the premiums are completely paid for by the employer?

100%

Which of these is NOT a reason for a business to buy key person life insurance?

A pension deficiency if the key employee dies

Which of these is an accurate statement regarding a fixed period settlement option on a life insurance policy?

A portion of the payments paid to the beneficiary stems from interest generated from the proceeds

Which of the following must a health insuring corporation (HIC) provide to prospective plan subscribers at or before the point of sale?

A solicitation document

What do Limited accident and health policies normally cover?

A specific illness or event

What do Limited accident and health policies normally cover?

A specific illness or occurrence

A provision in a life insurance policy settlement agreement that prohibits the beneficiary from "... commuting, anticipating, encumbering, alienating, withdrawing, or assigning ..." any portion of the proceeds prior to actual receipt from the company is called

A spendthrift clause

Ohio requires advertisements for accident and health insurance policies covering ONLY a specified illness to prominently display

A statement that the policy is limited

Which of these is NOT considered the responsibility of a producer in the underwriting process?

Choosing the final approval date

Which of these group plans would a claim likely involve the payment of federal estate taxes?

Accidental death

Mike recently lost sight in both eyes. He has a policy that pays a lump sum benefit for this injury. What type of insurance does Mike have?

Accidental death and dismemberment

Which of the following is NOT covered by a comprehensive long-term care policy?

Acute care

A comprehensive long term care policy covers expenses for all of the following EXCEPT

Acute care provided in a hospital

Which statement regarding a single premium whole life insurance policy is NOT correct?

Additional premiums may be charged under certain conditions

What is the reason that insurance companies require a minimum number of employees participating in a group insurance plan?

Adverse selection is minimized

Which statement regarding universal life insurance is correct?

Cash values have a guaranteed minimum interest rate

When an accident and health insurance policy provision is in conflict with the statutes of Ohio, it is

Amended to conform to the minimum statutory requirements

Which of the following is NOT a valid contract exchange?

An annuity exchanged for a life insurance policy

Rick is a disabled worker receiving Social Security benefits. What are his wife and dependent children eligible for?

An income benefit which is a percentage of his primary insurance amount

What type of policy can group term life insurance normally be converted to?

An individual permanent policy

Which of these factors do NOT affect life insurance premium rates?

An insurer's rating

Which statement is INCORRECT concerning a tax-sheltered annuity (TSA)?

Annual investment gains are included in participant's gross income

During the liquidation phase of an annuity contract, to whom are the income benefits normally payable to?

Annuitant

Many deferred annuity contracts waive the surrender charge when the

Annuitant dies or becomes disabled

By reading and signing the insurance application, the applicant should realize that

Any false statements could lead to loss of coverage

Under HIPPA rules, a medical plan's pre-existing conditions exclusion may be reduced by

Any period of treatment in the six months prior to enrollment in the plan

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

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

In what form can an insurance company provide an accidental death benefit on a life policy?

As an optional policy rider

How is a collateral assignment used in a life insurance contract?

Assigns specific ownership rights to a creditor

How many employees must an employer have for the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) to apply?

At least 20

In the event of premium default, which life insurance provision will utilize the cash value to keep the policy in force?

Automatic premium loan

Which statement regarding the cash value of a whole life insurance policy is correct?

Available to the policyowner when policy has been surrendered

What are reasonable and customary charges for health insurance primarily based on?

Average charges within a geographic region

Which of the following statements BEST describes a double indemnity provision in travel accident insurance?

Benefits are doubled under conditions stated in the policy

Which of these statements regarding Major Medical Expense insurance is NOT true?

Benefits are paid on a capitation basis

Which of the following statements BEST describes disability buy-sell insurance policies?

Benefits are typically tax-free

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

Tim had an on-the-job accident and collects benefits from his individual disability income policy. What factor could possibly reduce these benefits?

Benefits he receives from workers compensation

A producer who makes an agreement that unreasonably restrains the business of insurance may have violated regulations against

Boycott, coercion and intimidation

A disabled business owner who has payroll and business expenses paid for has what kind of insurance policy?

Business overhead expense

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 payments are not directly provided to the policyowner

A policyowner suffers a covered accident and health insurance loss on June 30 and submits the proof of loss to the insurer July 10. If the policyowner cancelled the coverage on July 2, how will the insurance company handle the claim?

Claim must be paid after proof of loss is received

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

Prepaid dental plans differ from most other types of dental plans in what way?

Closed panel of dentists can only be used

What must be given to a life insurance applicant when the agent receives an application and the initial premium?

Conditional receipt

An accident and health insurance policy's premium requirements are set forth in which of the following provisions?

Consideration clause

Which report contains information regarding an individual's general reputation and credit standing?

Consumer report

What does a Mandatory Second Surgical Opinion provision provide to an employer-paid health insurance plan?

Containment of the employer's premium cost

What does a Mandatory Second Surgical Opinion provision provide to an employer-paid health insurance plan?

Control 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

What does the rehabilitation benefit cover in a disability income policy?

Covers the cost of all out-of-pocket expenses while a disabled worker is unable to work

Which of the following is NOT an intended use of an annuity?

Create new funds upon the death of a wage-earner

In Ohio, a period of accident and health insurance coverage which may be applied to reduce the length of a pre-existing condition exclusion under a new plan is called

Creditable coverage

Proceeds of the viatical settlement contract could be subject to the claims of

Creditors

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

Which of the following disability buy-sell agreements is best suited for businesses with a small number of partners?

Cross-purchase agreement

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

Mike applied for life insurance and was issued a conditional receipt. He is later found to be an acceptable risk and is issued a policy. What is considered to be the effective date of this insurance contract?

Date the conditional receipt was issued

All of these are used to prevent adverse selection in a group dental plan EXCEPT

Decreased employee participation

Health providers are compensated by a preferred provider organization (PPO) for normal dental procedures by what means?

Decreased fee schedules

All of these are used to prevent adverse selection in a group dental plan EXCEPT

Decreased participation

In what way is an insurance policy impacted by an accelerated benefit payment?

Decreases the death benefit

Which type of life insurance typically offers mortgage protection?

Decreasing term

Which of these life insurance policies do NOT contain cash value provisions?

Decreasing term life

To which of the following group plans do HIPAA rules NOT apply?

Disability income

What type of group plan is excluded from HIPPAA statutes?

Disability income

Which of these noncontributory group plans would a claim likely result in the payment of federal income taxes?

Disability income

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 had the funds rolled over into an IRA. What is the tax consequence of the distribution sent to this employee?

Distribution is subject to federal income tax withholding

Mutual insurers pay dividends to participating policyowners if the insurer has which of the following?

Divisible surplus

Which of these is usually true of an HIC prescription drug plan?

Drugs are dispensed through participating pharmacies

Which statement about group life insurance is INCORRECT?

Each employee requires evidence of insurability

Which life insurance settlement option pays a stated monthly amount until the proceeds are gone?

Fixed amount option

Major Medical policies are typically characterized by which of the following?

Flat deductible

Which of the following features a guaranteed interest rate, flexible deposits, deferred taxation, and death benefits equal to the cash value?

Flexible premium fixed annuity

Which of these documents is signed by an applicant at policy delivery that certifies no change in health has occurred since the original application date?

Good health statement

The administrator for a company's pension plan bought an accumulation annuity contract for its 2,000 employees. All 2,000 participating employees received certificates of participation. What kind of contract is this?

Group deferred annuity

Which of these is a major difference between a health insuring corporation (HIC) and private commercial insurance companies?

HIC's operate on a prepayment system while private commercial insurers are on a reimbursement system

Which of these statements regarding HIC's is INCORRECT?

HIC's operate on a reimbursement basis

An accident and health plan that typically covers only the services of approved providers is called a(n)

HMO plan

Terry receives long-term physical therapy at her home. What type of insurance would cover this service?

Home health care

Terry receives long-term physical therapy at her residence. What type of insurance would cover this service?

Home health care

Tom has a qualified retirement plan with his employer that is currently considered to be 80% "vested". How can this be interpreted?

If Tom's employment is terminated, 20% of the funds could be forfeited

When compared to a fixed annuity, a variable annuity has what distinguishing feature?

Investment risk is assumed by the purchaser

Medicare Part A covers what type of care?

Skilled nursing facility care

A characteristic of a Preferred Provider Organizations (PPO) is

If service is obtained outside the PPO, benefits are reduced and costs increase

A characteristic of a Preferred Provider Organizations (PPOs) is

If service is obtained outside the PPO, benefits are reduced and costs increase

A single premium deferred annuity sometimes contains a bailout feature. Which statement regarding this feature is correct?

If the interest rate falls below a certain level, the surrender charge is waived

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

Which life insurance clause prohibits an insurance company from challenging the validity of the contract after a stated period of time has passed?

Incontestable

Which statement regarding the certificate of insurance is accurate?

Indicates proof of an employee's insurance coverage

The type of health insurance in which underwriting procedures are the most restrictive is

Individual

Which of these are NOT factors that influence group health insurance underwriting?

Individual physical examinations

All of these are considered features of whole life insurance EXCEPT

Initial cost is lower than for an equivalent amount of term insurance

Which of these procedures is NOT designed for ambulatory care centers?

Inpatient surgery

The Medical Information Bureau consists of members from which group?

Insurance companies

Which of these situations would an accelerated (living) benefit rider provide funds to an insured?

Insured expected to be confined to a nursing home for life

Which statement is correct regarding the waiver of premium rider in a life insurance policy?

Insured is relieved of premium payments in the event of total disability

Which of these occurrences could justify an insurer to reduce premiums?

Interest factor increase

Which of these statements is NOT true regarding a cash value loan against a life insurance policy?

Interest payments made by policyowner are tax-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

The initial premium for a life insurance policy is typically handled in what way?

It is typically obtained by the producer and sent to the insurer

Which life insurance settlement option pays lifetime benefits to two or more people?

Joint and survivor

Which of these pays an income to two or more annuitants until the death of the last annuitant?

Joint and survivor annuity

All of these are duties of a producer when delivering an insurance policy EXCEPT

Leave a conditional receipt with client

What is the guaranteed cash value of a whole life insurance policy when the insured turns 65 years old?

Less than the policy's face amount

Laura added a children's rider to her life insurance policy. What type of coverage was added?

Level term

Which of these is NOT a typical life insurance nonforfeiture option?

Life income annuity

Which of these do NOT indicate the presence of insurable interest in a life insurance contract?

Lifelong friendship

Which of these is NOT relevant when determining the amount of personal life insurance needed?

Local unemployment rate

Which of these would NOT likely qualify as a presumptive disability?

Loss of sight in one eye

Which of these statements reflect an accurate portrayal of Medicare SELECT?

Lower premiums are normally given in exchange for the insured using preferred providers

Which of these plans is considered to be a comprehensive plan?

Major medical

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

A life policy that has premiums that are lower than normal during the early years is called

Modified life

Which of the following normally pertains to an immediate annuity?

No accumulation period

How would preventative care be encouraged in a dental plan?

No deductible or coinsurance required on teeth cleanings

Medicare Supplement insurance requires an individual to be at least how old for open enrollment?

No minimum age

How are the premiums for an individual disability income policy treated for tax purposes?

No tax deduction

The disability income policy most likely to have been issued on a substandard basis is

Non-cancelable with a health condition exclusion rider

The disability income policy most likely to have been issued on a substandard basis is:

Non-cancelable with an exclusion rider

When funds are shifted straight from one IRA to another IRA, what percentage of the tax is withheld?

None

When funds are transferred directly from one IRA to another IRA, what percentage of the tax is withheld?

None

All of these statements correctly describe an aleatory contract EXCEPT

Only one party makes any kind of legally enforceable promise

All of these are normally covered under most dental plans EXCEPT for

Oral cancer

Most prepaid dental plans cover

Oral exams

Which tax would an IRA participant be subjected to on distributions received prior to age 59 1/2?

Ordinary income tax and a 10% tax penalty for early withdrawal

When a deferred annuity is surrendered, who must sign the authorization to do so?

Owner

Which of the following is NOT a function of accident and health insurance?

Pays a death benefit as a result of natural causes

Twisting means

Persuading an insured, to the insured's detriment, to switch policies

Which of these are NOT factors that influence group health insurance underwriting?

Physical exams of group members

Which of these plans allow a participant to choose either a network or non-network provider at the time when medical care is needed?

Point-of-service

Which of these statements accurately portrays an adjustable life insurance policy?

Policy can alternate between forms of term and whole life insurance

These are all accurate statements regarding universal life insurance EXCEPT

Policy loans are not permitted

Which statement regarding an adjustable life insurance policy is NOT true?

Policy loans are not permitted

Which of the following statements BEST describes disability buy-sell insurance policies?

Policy proceeds are typically received tax-free

Straight whole life insurance can be accurately described in all of these statements EXCEPT

Policy protection normally expires at age 65

The beneficiary of a life insurance policy is normally chosen by whom?

Policyowner

When a producer submits an application that reveals personal information regarding the applicant, who supplies the privacy notice?

Producer

A producer's authority to bind an insurer to an insurance contract may be granted in the:

Producer's appointment with the insurance company

A Medicare Supplement policy is required to do which of the following?

Provide a 30 day free-look period

What is considered interstate travel under the Federal Fraud and False Statements Act?

Puerto Rico

In long-term care insurance, the guarantee of insurability option provides the insured with the ability to

Purchase additional insurance at a later date

What type of risk involves the potential for loss with no possibility for gain?

Pure

Splitting the commission with the buyer on a sale of insurance is known as

Rebating

How are qualified Roth IRA distributions normally treated for tax purposes?

Received income tax-free

An insured covered under a Disability Income policy is disabled and collecting benefits for a period of two months. He returns to work and is again disabled from the same cause, whereupon benefits continue to be paid. This is an example of which of the following?

Recurrent disability

Which of the following statements is INCORRECT about why the government provides insurance?

Reduce fraudulent claims

Which of these would be the likely course of action taken by an insurer when handling a substandard-risk applicant for disability income insurance?

Reduce the benefit period

How do preferred provider organization (PPO) dental plans compensate providers for standard dental procedures?

Reduced fee schedules

An insurer has a contractual agreement which transfers a portion of its risk exposure to another insurer. What kind of contract is this?

Reinsurance

Which of these is NOT a standard underwriting action for accident and health insurance?

Removing a policy's provisions

Which of the following is NOT a basic underwriting action for accident and health insurance?

Removing uniform policy provisions

The marketing of Medicare Supplements is regulated to prevent all of the following EXCEPT

Replacement of any existing coverage

Under Ohio standards for marketing long-term care coverage, all of these are prohibited sales practices EXCEPT

Replacing existing coverage

What is the insurer responsible for when a producer is acting within the scope of authority granted in the agency contract?

Responsible for acts by the producer that are authority only

Which of these factors does NOT influence an applicant's need for life insurance?

Self-maintenance expenses

Long-term care insurance policies may exclude coverage for all of the following EXCEPT

Senile dementia

When an annuity contract has been surrendered, how will the surrender charges affect the final contract settlement?

Settlement will be reduced

Which of these types of policies is considered a whole life policy?

Single-premium life

When would evidence of insurability be required for a person already covered with a variable universal life policy?

The death benefit is increased

What happens when a policyowner borrows against the cash value of his life insurance policy?

The death benefit would be reduced by the outstanding loan balance

Whole life insurance policies guarantee all of the following EXCEPT

The dividend scale

Who is normally considered to be the owner of a 403(b) tax-sheltered annuity?

The employee

Which statement concerning adjustable life insurance is accurate?

The face amount and premiums can be changed simultaneously by the policyowner

All of these statements concerning group credit life insurance are false EXCEPT

The face amount is determined by the outstanding loan balance

Peter, age 50, surrenders his modified endowment contract (MEC). How is the gain treated for federal income tax purposes?

The gain is added to his gross income and a penalty tax is assessed on the gain

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

Which statement regarding a fixed period settlement option is correct?

The installment payment amount is determined by the total number of installments

Who reports an agent's termination of appointment to the Director?

The insurer

Which statement concerning a deferred annuity is correct?

The owner can be the beneficiary, annuitant, or neither

Who is normally considered to be the owner of a 403(b) tax-sheltered annuity?

The participating employee

All of the following are causes for termination of an employee's group insurance coverage EXCEPT

The plan's coinsurance limit is reached

Which of the following statements about the contestability of a life insurance policy is true?

The policy can be contested by the insurer only during the first two years of the contract

A life insurance illustration showing future premiums being paid out of nonguaranteed values must disclose that

The policyowner may need to resume premium payments depending on actual results

How is a claim handled by a health insurer if it occurs during the policy's grace period?

The unpaid premium is deducted from the benefit payment

How is a claim handled by a health insurer if it occurs during the policy's grace period?

The unpaid premium is deducted from the reimbursement

In accordance with federal fraud and false statements regulation, a prohibited person cannot transact insurance business in without

The written consent of the Commissioner

When does the owner's contractual rights begin under an individual annuity contract?

Time of purchase

Which of these situations would NOT potentially involve a prison sentence under Federal law?

Transacting insurance with a nonresident license

Which of the following BEST describes a "partial disability"?

Unable to perform one or more job duties

At what point must a life insurance applicant be informed of their rights that fall under the Fair Credit Reporting Act?

Upon completion of the application

Under what circumstances must an agent provide his or her business records to the Director of Insurance?

Upon request of the Director

For long-term care insurance, when does Ohio require provision of a written notice of available insurance counseling programs?

When coverage is solicited

When must interest income in a flexible premium deferred annuity be reported for federal income taxes?

When distributions are received from the contract

In which situation could the agent of an insurer be personally liable?

When the agent performs an act which is prohibited in the agency contract

Under which circumstance is the interest rate guaranteed within a market value adjusted annuity?

When the contract has been in force for the period specified in the policy

When does interest income for a flexible premium deferred annuity get reported for federal income taxes?

When the distributions are received from the contract

When does the producer give a premium receipt for a life insurance application?

When the initial premium has been collected 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 accrued cash value

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

Pete is covered by an employer-provided 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

Which life insurance policy would be eligible to have an automatic premium loan provision?

Whole life

To resolve written grievances received, each HIC specialty plan must establish

a complaint system

Medicare can be described as

a federal health program for individuals over the age of 65 or permanently disabled

When dealing with single-life annuities, there is only one

annuitant

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

In a qualified retirement plan, the yearly contributions to an employee's account

are restricted to maximum levels set by the IRS

In a qualified retirement plan, the yearly contributions to an employee's account

are restricted to maximum limits set by the IRS

A source of supplemental income for a life insurance policyowner can be derived from the policy's

cash value

An employee welfare plan exempt from ERISA regulations would be

church plans

An annuity's accumulation period can usually

continue after the purchase payments stop

Interest is credited to a fixed annuity no lower than the

contract guaranteed rate

The interest rate credited to a fixed annuity does not fall below the

contract guaranteed rate

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

Reductions in coverage are one feature of _______ in Health insurance policies.

cost containment

What action does an insurance company take under the rehabilitation benefit in a disability income policy?

covers the cost of the rehabilitation necessary to help a disabled insured return to work

A qualified profit-sharing plan is designed to

distribute a portion of company earnings to its employees

Non-occupational disability coverage is designed for

employees who suffer non-work related disabilities, since work-related disabilities are covered by Workers' Compensation

A prepaid dental plan has an agreement in place with a network of dentists which

establishes amounts that are considered full payment for services rendered

The difference between a doctor's actual charges and the amount approved by Medicare is called a(n)

excess charge

The powers directly given to a producer in an agency contract are called

express

ABC Company is attempting to minimize the severity of potential losses within its company. The company is engaged in risk

reduction

A health insuring corporation's (HIC) solicitation document is designed to

furnish detailed information regarding the medical plan

When a health insurance policy includes a Mandatory Second Surgical Opinion provision, the insured must

get a second opinion for specified elective surgeries

A life annuity with period certain is characterized as

guaranteeing benefit payments for a stated minimum period of time

In Ohio, when an individual is covered under a small employer's accident and health plan, the pre-existing conditions exlcusion period may be partially or wholly satisfied by

having creditable coverage with a previous employer

In life insurance, the needs approach is used mostly to establish

how much life insurance a client should apply for

Trade association groups that are eligible for group medical benefits normally are

in the same industry

When premiums are calculated, one component would be the expenses of the

insurance company

The insurance coverage in a variable life insurance policy may fluctuate according to

its underlying investments

The insurance coverage in a variable life insurance policy may vary based on the value of

its underlying investments

When the extended term life nonforfeiture option is chosen, the coverage will be

level term for a stated period of time

Inpatient psychiatric care is covered under Part A Medicare for 190 days per

lifetime

An annuity owner has a life annuity which provides benefit payments for a minimum number of years, regardless of when the annuitant dies. The contract feature of this annuity is called

period certain

Which action will trigger a tax penalty on premature distributions from a modified endowment contract (MEC)?

policy loans

The standard provisions of an accident and health insurance policy require that the

policy, attached papers, and endorsements constitute the "entire contract"

Who elects the governing body of a mutual insurance company?

policyholders

Where is the difference between a standard risk and a substandard risk demonstrated?

premium charges

Where is the difference between a standard risk and a substandard risk reflected?

premium charges

Any employee insured under a group life insurance plan is normally

protected by term life insurance

The automatic premium loan provision can be accurately described as a

provision that authorizes a policy loan to pay an overdue premium at the end of the grace period

During an annuity's liquidation phase, the annuitant normally

receives benefit payments at regular intervals

The following are all elements of a legal contract EXCEPT

recorded evidence

When a health insurance policy includes a Mandatory Second Surgical Opinion provision, the insured must

seek a second opinion for specified elective surgeries

When issuing disability income coverage on a substandard risk, an insurance company may

shorten the benefit period

Contributions made by an employee to a qualified retirement plan are required to be

subject to a vesting schedule

The back-end charge typically associated with an annuity that has been cancelled during the early contract years is called a

surrender charge

The premiums paid by an employer for his employee's group life insurance are usually considered to be

tax-deductible to the employer

The State Guaranty Association guarantees

that a claim will be paid if an admitted insurer becomes insolvent

Fee-for-service is an accident and health insurance benefit payment model in which

the cost of each service is scheduled as outlined in the policy

The insured's consideration given for a health insurance policy is

the first premium payment and the application

The insured's consideration given for a health insurance

the initial premium payment and the application

Rick recently died and left behind an individual IRA account in his name. His widow was forwarded the balance of the IRA. The transfer of Rick's IRA account balance to his surviving spouse qualifies for

the marital deduction

When a Medicare supplement policy is purchased during the open enrollment period

the policy must be issued regardless of health status

The reason for backdating a policy is

to obtain a premium rate based on an earlier age

An owner's cost basis for a deferred annuity is typically the same as the

total premiums paid

An insurance policy that can also be classified as a securities product is called

variable life insurance

Pat has a disability income insurance policy that covers disabilities arising from a work-related illness or injury. The amount of his disability income payments for an on-the-job injury may be reduced by

workers compensation benefits already paid

Medicare supplement insurance that provides a preventative medical care benefit will often cover

yearly physical examinations