Exam Practice Questions
A hospital confinement indemnity insurance policy pays
A daily dollar amount each day the insured is confined in the hospital
All of the following are requirements for life insurance illustrations EXCEPT
a)They must differentiate between guaranteed and projected amounts. *b)They must be part of the contract.* c)They may only be used as approved. d)They must identify nonguaranteed values. An illustration may not be altered by an agent and must clearly state that it is not part of the contract. It is legal to list nonguaranteed values in the contract, but they must be specifically labeled as projected, not guaranteed values.
3 major types of loss exposure
liability loss exposure human and personnel loss exposure property exposure
Regarding Medicare SELECT policies, what are restricted network provisions?
a)They determine who can be insured. b)They determine premium rates. c)They help avoid adverse selection. *d)They condition the payment of benefits.* A Medicare SELECT policy is a Medicare supplement policy that contains restricted network provisions - provisions that condition the payment of benefits, in whole or in part, on the use of network providers.
which of the following is not a feature of a major medical policy
maximum benefit limits coinsurance deductibles *capitation*
What is the typical deductible for basic surgical expense insurance?
*$0* As with the other types of basic medical expense coverage, there is no deductible, but coverage is limited.
To be eligible for a Health Savings Account, an individual must be covered by a
*High-deductible health plan*
On a disability income policy that contains the "own occupation" definition of total disability, the insured will be entitled to benefits if they cannot perform
*their regular job* If a disability income policy contains the own occupation definition, then the insured will be considered disabled if they cannot perform that particular job, regardless of other jobs that they may be able to do.
Vision insurance coverage
Eye exams glasses contact lenses
All of the following are true regarding a policy owner that ceases making premium payments on a 10-pay life policy and selects the extended term insurance option, except:
The face amount will be the same on the new extended term plan as the old 10-pay life policy Premium payments no longer have to be made. the extended term policy will be in force a certain period and then expire. *The extended term policy will reflect the same cash value as the original policy*
Who would be eligible to contribute to an IRA?
a) A 75-year old professional earning income b)A 35-year old receiving monthly unemployment checks c)An 18-year old non-working student *d)A 50-year old school teacher* Anyone with earned income who has not attained age 70 1/2 can have an IRA. Unemployment benefits would not be considered "earned income".
An insured owns a $50,000 whole life policy. At age 47, the insured decides to cancel his policy and exercise the extended term option for the policy's cash value, which is currently $20,000. What would be the face amount of the new term policy?
a)$20,000 b)$25,000 *c)$50,000* d)The face amount will be determined by the insurer. The face of the term policy would be the same as the face amount provided under the whole life policy.
Which of the following persons is NOT eligible for Medicare?
a)A person who has turned age 65 and continues to work b)A person who has a permanent kidney failure *c)A person who has been entitled to Social Security disability benefits for the last 6 months* d)A person age 70 A person must have been entitled to Social Security benefits for 2 years to qualify for Medicare.
What factors would an insurer consider when assessing risk and projecting losses?
a)Geographic area b)Zip code c)Type of industry *d)All the above* Insurers will consider the type of industry as well as the city or county where the business is located.
Which of the following statements about a suicide clause in a life insurance policy is TRUE?
a)Suicide is covered as long as the policy is in force. b)Suicide is excluded as long as the policy is in force. *c)Suicide is excluded for a specific period of years and covered thereafter.* d)Suicide is covered for a specific period of years and excluded thereafter. In most states, if death results from suicide within a certain period, the insurer is not obligated to pay the death benefit.
All of the following statements concerning the use of life insurance as an Executive Bonus are correct EXCEPT
a)The employer pays a bonus to a selected employee to fund the policy. b)It is considered a nonqualified employee benefit. *c)The policy is owned by the company.* d)Any type of insurance policy may be used. The policy is owned by the employee.
All of the following are general requirements of a qualified plan EXCEPT
a)The plan must be communicated to all employees. b)The plan must be for the exclusive benefits of the employees and their beneficiaries. c)The plan must be permanent, written and legally binding. *d)The plan must provide an offset for social security benefits.* Plans must meet the general requirements established by IRS.
Which of the following is *NOT* the purpose of HIPAA?
a)To limit exclusions for pre-existing conditions *b)To provide immediate coverage to new employees who had been previously covered for 18 months* c)To guarantee the right to buy individual policies to eligible individuals d)To prohibit discrimination against employees based on their health status HIPAA does not prohibit employers or providers from establishing waiting periods or pre-existing conditions exclusions, in which case the coverage to new employees would not be immediate.
if a service provider is paid a fixed monthly fee, what is it called?
capitation
Disability income insurance offers various riders to supplement benefits from these policies. The social security rider
pays only if the insured is not entitled to social insurance
in disability insurance, several riders are available for insureds to purchase. The return of premium rider
provides for a return of premiums paid at periodic intervals, provided the insured remains disabled
Provisions in the Uniform Policy Provisions law that regulates health insurance sales in California
reinstatement payment of claims grace period
In which of the following instances would the premium be tax deductible?
*Premiums paid by an employer on a $30,000 group term life insurance plan for employees* As a general rule, premiums paid for life insurance are not tax deductible. The exception to this rule is when an employer buys group term life insurance for his employees since it is considered a business expense.
HIPAA applies to groups of
*2 or more*
Which of the following must the patient pay under Medicare Part B?
*20% covered charges above the deductible*
Following an injury, a policyowner covered under Medicare Parts A & B was treated by her physician on an outpatient basis. How much of her doctor's bill will she be required to pay out-of-pocket?
*20% of covered charges above the deductible* After the deductible, Part B will pay 80% of covered expenses, subject to Medicare's standards for reasonable charges.
What is a penalty tax for nonqualified distributions from a medical savings account?
*20%* If a distribution is made for a reason other than to pay for qualified medical expenses, the amount withdrawn will be subject to an income tax and an additional 20% tax.
Following hospitalization because of an accident, Bill was confined in a skilled nursing facility. Medicare will pay full benefits in this facility for how many days?
*20* Following hospitalization for at least three days, if medically necessary, Medicare pays for all covered services during the first 20 days in a skilled nursing facility. Days 21 through 100 require a daily copayment.
When does the initial enrollment period for Medicare Part B begin?
*3 months before the insured's 65th birthday Initial enrollment period (IEP) is a 7-month period during which an individual may enroll into Medicare Part B program that usually begins 3 months before the month in which the individual turns age 65, and ends 3 months after that after the birthday month.
What is the maximum amount that can be contributed to an MSA of the high-deductible plan for individuals?
*65%* The maximum amount than can be contributed to an MSA is 65% of the high-deductible plan for individuals or 75% of the family deductible for those with family coverage. Nonqualified distributions have a 20% penalty tax.
In reference to the standard Medicare Supplement benefits plans, what does the term standard mean?
*All providers will have the same coverage options and conditions for each plan.* In reference to the standard Medicare Supplement benefits plans, the term "standard" implies that all providers will have the same coverage options and conditions for each plan.
Which concept is associated with "exclusion ratio"?
*Annuities payments* Some parts of an annuities payment are taxable, while others are not. The return of the principal paid in is nontaxable. The portion that is taxable is the actual amount of payment, less the expected return of the principal paid in. This relationship is called the "exclusion ratio".
To be eligible for tax credits under the ACA, individuals must have income that is what percent of the Federal Poverty Level?
*Between 100% and 400%* Legal residents and citizens who have incomes between 100% and 400% of the Federal Poverty Level (FPL) are eligible for the tax credits.
Which of the following is NOT covered under Part B of a Medicare policy?
*a)Routine dental care* b)Home health care c)Lab services d)Physician expenses Medicare Part B covers dental expense resulting from an accident only.
When a policyowner designates a group of individuals as the beneficiary of a life insurance death benefit without specifically naming the individuals, this is called
*Class designation* A designation such as the child of the insured, or all children of the insured, or all current members of a group, is called a "class designation." The individuals need not be specifically named, since each who meet the qualifications of being included in the class will share in the benefit.
What size companies are eligible for health reimbursement accounts (HRAs)?
*Companies of all sizes*
Every expressed warranty made at or before the execution of a policy must be
*Contained in and referred to in the policy or other document and signed by the insured.* According to CIC 443, every express warranty made at or before the execution of a policy must be contained in the policy itself, or in another instrument signed by the insured and referred to in the policy.
According to the entire contract provision, what document must be made part of the insurance policy?
*Copy of the original application*
Factual statements about the insured or the risk in an insurance policy are considered
*Express warranty* Warranties can either be expressed or implied. *Statements in a policy are considered express warranty*. Every express warranty becomes part of the insurance contract. *Implied warranty is an unwritten or unspoken guarantee presumed to be made based on the circumstances of a transaction.*
When can an insurer insert information into an application without first obtaining the consent of the applicant?
*For administrative purposes only, as long as it is clear that the insurer made the note* Insurers may make notes on the application, strictly for administrative purposes. The insurer must also indicate that the remark was not made by the insured. Any other modifications to the application could result in criminal litigation.
The death benefit under the Universal Life Option B
*Gradually increases each year by the amount that the cash value increases.*
Jill has a handicapped grown-up child who is chiefly dependent upon her for support and maintenance. How will that affect Jill's insurability in the group plan?
*Jill's dependent's condition will not affect her rating or eligibility.* There should be no consideration of the disability of a dependent when the group member qualifies for coverage beyond set guidelines which will apply to all dependents of those covered. The dependent's insurability doesn't enter into the group member's rating of eligibility.
In franchise insurance, premiums are usually
*Lower than individual policies, but higher than group policies.*
A woman's health insurance policy dictates which doctors she is allowed to see. Her health providers share an assumed risk for their patients and encourage preventive care. What best describes the health system that the woman is using?
*Managed care* There are 5 distinguishing features of managed care: controlled access to providers, comprehensive case management, risk sharing, preventative care, and high-quality care.
Which of the following information regarding an insured is NOT included in an Investigative Consumer Report, which is requested by an underwriter?
*Medical history* An Investigative Consumer Report is considered to be a part of an insurance application. This report is used in the underwriting process in order to assess non-medical risk factors related to moral standing and avocations. Friends and colleagues are interviewed in order to evaluate the applicant's character, reputation, and habits. The applicant must be informed in writing if the insurer decides to conduct the investigation.
Qualified long-term care policies covering home care must provide benefits if the insured is impaired in at least two of the six activities of daily living (ADL). The term "impaired" means
*Needs hands on or standby assistance with any of the ADLs* To qualify for benefits, the requirement is for "human assistance" (hands on) or "continual substantial supervision" (standby) when performing the ADLs. (CIC 10232.8)
The classification Small Employer means any person actively engaged in a business that on at least 50% of its working days during the preceding year employed
*No more than 50 employees* Classification rules established by the Insurance Code state that Small Employer means any person actively engaged in a business that on at least 50% of its working days during the preceding year employed not more than 50 eligible employees.
In long-term care insurance, what type of care is provided with intermediate care?
*Occasional nursing or rehabilitative care* Intermediate care is nursing and rehabilitative care provided by medical personnel for stable conditions that require assistance on a less frequent basis than skilled care.
What is the official name for the Social Security program?
*Old Age Survivors Disability Insurance*
What is a definition of a unilateral contract?
*Onesided: only one party makes an enforceable promise* An insurance contract is unilateral in that only one of the parties to the contract is legally bound to do anything.
Which option for Universal life allows the beneficiary to collect both the death benefit and cash value upon the death of the insured?
*Option B* Under Option B the death benefit includes the annual increase in cash value so that the death benefit gradually increases each year by the amount that the cash value increases. At any point in time, the total death benefit will always be equal to the face amount of the policy plus the current amount of cash value.
What do living benefit riders do?
*Pay part of the policy death benefit to insureds in order to help fund long-term care or nursing care*
Which renewability provision are you most likely to see on a travel accident policy?
*Period of time* The Period of Time (Term) provision means that the policy will only last a certain period of time and cannot be renewed. It will be cancelled at the end of the term for which it was purchased. A travel accident only policy will only provide coverage during the dates the insured is traveling.
A policyowner who is also the insured wants to name her husband as the beneficiary of her life policy. She also wishes to retain all of the rights of ownership. The policyowner should have her husband named as the
*Revocable beneficiary* The policyowner may change a revocable designation at any time and without the consent of the beneficiary. Irrevocable beneficiaries, on the other hand, have a vested interest in the policy, so the policyowner may not be able to exercise certain rights without their consent.
Which of the following terms describes the specified dollar amount beyond which the insured no longer participates in the sharing of expenses?
*Stop-loss limit* A "stop-loss limit" is a specified dollar amount beyond which the insured no longer participates in the sharing of expenses.
Written binders provide insurance before the policy is actually issued. The time period between the issuance of the binder and the policy's effective date is called
*Temporary term* The "temporary term" is the protection period offered by binding receipts. During this time period, an insurance company is liable for the maximum amount guaranteed under the binding receipt/temporary insurance agreement.
A husband and wife are insured under group health insurance plans at their own places of employment, and as dependents under their spouse's coverage. If one of them incurs hospital expenses, how will those expenses likely be paid?
*The benefits will be coordinated* Benefits will be coordinated when individuals are covered under two or more health plans.
An insured had $500 left in his Health Reimbursement Account when he quit his job. What happens to that money?
*The insured can have access to the $500 at his previous employer's discretion.* Former employees, including retirees, can have continued access to unused HRAs, but this is at the employer's discretion.
An annuitant dies before the effective date of a purchased annuity. Assuming that the annuitant's wife is the beneficiary, what will occur?
*The interest will continue ti accumulate tax deferred* If the contract holder dies before the annuity starting date, the contract's interest becomes taxable. If the beneficiary of the annuity is a spouse, the tax can continue to be deferred.
Which of the following will vary the length of the grace period in health insurance policies?
*The mode of the payment* The grace period is 7 days on a policy with a weekly premium mode; 10 days if a monthly premium mode; 31 days on other premium modes.
An insured stops making payments on a loan taken from his cash value policy. What will most likely happen?
*The policy will terminate when the loan amount with interest equals or exceeds the cash value.* In most policies, failure to pay back a loan will result in termination of the policy if the total amount of the loan and accrued interest equals the cash value.
Which of the following statements regarding conditional receipts is true?
*They are temporary insuring agreements*
Medi-Cal may be available to persons over age 65 if
*They have medical or long-term claims not paid by medicare*
What do living benefit riders do?
*They pay part of the policy death benefit to insureds in order to help them fund long-term care or nursing home care.*
The purpose of having an elimination period in a policy is to accomplish which of the following?
*To allow the client some flexibility in determining their own premium* The clients' choice of the length of their elimination period allows them to make their own value judgment in regard to balancing premium expense and benefits.
What is the purpose of the buyer's guide?
*To allow the consumer to compare the costs of different policies* The buyer's guide provides generic information about life insurance policies and allows the consumer to compare the costs of different policies. The policy summary provides specific information about the issued policy, as well as the insurer's information.
The paid-up addition option uses the dividend
*To purchase a smaller amount of the same type of insurance as the original policy.* The dividends are used to purchase a single premium policy in addition to the face amount of the permanent policy.
A medical expense policy that establishes the amount of benefit paid based upon the prevailing charges which fall within the standard range of fees normally charged for a specific procedure by a doctor of similar training and experience in that geographic area is known as
*Usual, customary, and reasonable* The usual, customary and reasonable approach for determining insurance benefits is based upon the fees normally charged for specific procedures in the geographic location where the services are provided.
When is an insurance license considered inactive?
*When no company appointment is in effect for the license*
When is the insurability conditional receipt given?
*When the premium is paid at the time of application* Under the terms of the insurability conditional receipt, the insurance coverage becomes effective as of the date of the receipt, provided the application is approved. This receipt is generally provided to the applicant when the initial premium is paid at the time of application.
A situation in which a person can only lose or have no change represents
*a pure risk* Pure risk refers to situations that can only result in a loss or no change. Pure risk is the only type insurance companies are willing to accept.
A group blanket health policy is best suited for which of the following?
*a)A summer camp* b)A small employer c)A manufacturer d)A large family Group blanket health insurance policies are meant to cover members of a group or association without evidence of insurability. Coverage is usually limited to loss from specific causes.
Which of the following is NOT a characteristic or a service of an HMO plan?
*a)Contracting with insurance companies* b)Providing free annual checkups c)Encouraging early treatment d)Providing care on an outpatient basis HMOs seek to identify medical problems early by providing preventive care. They encourage early treatment and whenever possible provide care on an outpatient basis rather than admitting the member into the hospital. Contracts are between the insured and the HMO, not an insurance company.
Upon policy delivery, the producer may be required to obtain any of the following EXCEPT
*a)Signed waiver of premium.* b)Statement of good health. c)Payment of premium. d)Delivery receipt. The policy does not go into effect until the premium has been collected. If the premium was not collected at the time of the application, the producer may also be required to get a Statement of Good Health from the applicant at the time of policy delivery. Waiver of premium is a rider that can be added to a life insurance policy, and not something to be obtained from the applicant.
Which of the following is NOT covered under Basic Hospital Expense Coverage?
*a)Surgeons' fees* b)Hospital room and board c)Lab charges d)X-ray charges Hospital expense policies cover hospital room and board, and miscellaneous hospital expenses, such as lab and x-ray charges, medicines, use of operating room and supplies, while the insured is confined in a hospital.
An exclusive agent
*has a contract with one company* The exclusive agent, also known as the captive or career agent, chooses to have a contract with one company.
In a POS plan, benefits for covered services when self-referring (without having your primary care physician arrange for the service) are generally
*more expensive* Benefits for covered services when self-referring (without having your primary care physician arrange for the service) are generally more expensive.
Which of the following is another term for the accumulation period of an annuity?
*pay-in-period* The accumulation period is also known as the pay-in period. It is the period of time over which the annuitant makes payments (premiums) into an annuity.
The paid-up addition option uses the dividend
*to purchase a smaller amount of the same type of insurance as the original policy* The dividends are used to purchase a single premium policy in addition to the face amount of the permanent policy.
Under a non-contributory group health plan, which of the following is FALSE?
a)100% of all eligible employees must be covered under the plan. b)100% of the premium is paid by the employer. c)Eligibility is usually determined by hours worked per week, length of time with the company and age of the employee. *d)No less than 50% of the eligible employees must elect to participate in the plan.* The employees do not elect to participate in the plan and since the employer pays the premium, all eligible employees are covered under the plan.
An applicant buys a nonqualified annuity, but dies before the starting date. For which of the following beneficiaries would the contract's interest NOT be taxable?
a)Annuitant *b)Spouse* c)Charitable Organization d)Dependents If an annuities contract holder dies before the effective starting date, the contract's interest continues to be taxable, unless the beneficiary is a spouse. In that case, this tax can be deferred.
You did not enroll in Medicare Part B when you first became eligible. Which of the following would allow you another opportunity to enroll?
a)Any time b)Initial enrollment period c)Special enrollment period *d)General enrollment period* The individuals who did not sign up for Medicare Part B when they were first eligible, may sign up during the general (or annual) enrollment period.
Which of the following statements is INCORRECT regarding IRAs?
a)Anyone with earned income under the age of 70 ½ may open a traditional IRA. b)Accumulated contributions grow tax deferred. *c)Married couples are required to purchase a jointly owned IRA.* d)A nonworking spouse is eligible to contribute to a separate IRA account. Anyone with earned income who has not attained age 70 1/2 can have an IRA. A married couple could currently contribute up to $11,000 per year to two separate accounts.
Kevin and Nancy are married; Kevin is the primary breadwinner and has a health insurance policy that covers both him and his wife. Nancy has an illness that requires significant medical attention. Kevin and Nancy decide to legally separate, which means that Nancy will no longer be eligible for health insurance coverage under Kevin. Which of the following options would be best for Nancy at this point?
a)Apply for social security benefits b)Apply for coverage under the same group policy that covers Kevin c)Convert to an individual insurance policy with 31 days so she won't have to provide evidence of insurability *d)COBRA* Dependents of employees are eligible to receive group health insurance under the employee's plan. If the employee and the dependent become legally separated or divorced, or if the employee dies, the dependent will be eligible for COBRA benefits for up to 36 months. This is best for Nancy, since she has endured a long-term illness. Otherwise, being approved for individual health insurance would be difficult.
In which of the following locations would skilled care most likely be provided?
a)At a physician's office *b)In an institutional setting* c)At the patient's home d)In an outpatient setting Skilled nursing care is performed under the direction of a physician, usually in an institutional setting.
Which of the following statements concerning buy-sell agreements is true?
a)Buy-sell agreements pay in the event of a medical emergency. *b)Buy-sell agreements are normally funded with a life insurance policy.* c)Premiums paid are deductible as a business expense. d)Benefits received are considered income taxable. A buy-sell agreement is simply a contract that establishes what will be done with a business in the event that an owner dies. Buy-sell agreements are normally funded with a life insurance policy.
Which of the following is true of a PPO?
a)Claim forms are completed by members on each claim. b)No copayment fees are involved. *c)Its goal is to channel patients to providers that discount services.* d)A most common type of PPO is the staff model. Insureds are treated by providers who have agreed to discount their charges.
What is another term for the general enrollment period for Medicare Part B?
a)Eligible enrollment period b)Special enrollment period *c)Annual enrollment period* d)Initial enrollment period General enrollment period, also known as the annual enrollment period, runs from January 1st through March 31st of each year.
All of the following are true of key person insurance EXCEPT
a)There is no limitation on the number of key employee plans in force at any one time. b)The employer is the owner, payor and beneficiary of the policy. c)The key employee is the insured. *d)The plan is funded by permanent insurance only.* Key Person coverage may be funded by any type of life insurance.
All the factors are FALSE when used to provide data and statistics to an insurer in order to project losses and the subsequent cost of insuring risks in a group disability policy, EXCEPT
a)Experience, Expenses and Interest of a particular carrier's premiums. b)The number of eligible participants in the group. c)The number of group carriers. *d)Stability, Price, Longevity with a particular carrier.* Stability, Price and Longevity are all factors used to determine losses and cost of insuring risks in a group (or individual) policy.
Martha claims to have injured her back at work. She tells the doctor that she cannot bend, lift, or even sit comfortably without great pain. Based on Martha's statements, the doctor certifies her disability and she begins to receive disability benefits from the insurer. If it can be shown that Martha did not suffer the injury she has claimed or that she is not suffering the effects she is claiming, she will be charged with
a)Financial abuse of an insurer. b)Unfair claims practices. *c)Insurance fraud.* d)Medical misrepresentation. This is an example of a person seeking an unlawful gain at the expense of an insurer, a fraud. (CIC 1871.4(a)(1))
All of the following are essential benefits required to be included in all health plans purchased in the Marketplace EXCEPT
a)Hospitalization. b)Maternity care. c)Pediatric vision care. *d)Adult dental care.* Adult dental care is not a required benefit.
In which of the following cases would a credit disability policy be issued?
a)If an insured has filed bankruptcy and his premiums are waived, he can be issued a credit disability policy. *b)If an individual is in debt to a specific creditor, payments will be made for him/her until the return to work.* c)If a person receives disability benefits, he or she is eligible for credits on their group policies for future disabilities. d)A person receiving disability benefits cannot receive a credit disability policy. A credit disability policy is issued only to those in debt to a specific creditor. In case of disability, payments to the creditor will be made for them until able to return to work by the definition in the policy.
Which of the following is true regarding inpatient hospital care for HMO members?
a)Inpatient hospital care is not part of HMO services. *b)Care can be provided outside of the service area.* c)Care can only be provided in the service area. d)Services for treatment of mental disorders are unlimited. The HMO provides the member with inpatient hospital care, in or out of the service area. The services may be limited for treatment of mental, emotional or nervous disorders, including alcohol or drug rehabilitation or treatment.
Which of the following levels of care in long-term care policies specifically includes assistance with activities of daily living?
a)Intermediate care *b)Personal care* c)Respite care d)Hospice care Personal Care includes hands-on services to assist an individual with activities of daily living, and can be provided by a skilled or unskilled person.
Which of the following statements about the reinstatement provision is true?
a)It permits reinstatement within 10 years after a policy has lapsed. b)It provides for reinstatement of a policy regardless of the insured's health. c)It guarantees the reinstatement of a policy that has been surrendered for cash. *d)It requires the policyowner to pay all overdue premiums with interest before the policy is reinstated.* Upon policy reinstatement, the policyowner will be required to pay all back premiums plus interest, and may be required to repay any outstanding loans and interest.
Which type of a hospital policy pays a fixed amount each day that the insured is in a hospital?
a)Medigap *b)Indemnity* c)Surgical d)Blanket A Hospital Indemnity policy pays a fixed amount each day the insured is hospitalized, unrelated to medical expenses.
During the free-look period, the premium for a variable annuity may be invested in all of the following EXCEPT
a)Money-market funds. b)Mutual funds (only upon the investor's request). *c)Value funds.* d)Fixed-income investments. During the 30-day cancellation (free-look) period, the premium for a variable annuity may only be invested in fixed-income investments and money-market funds, unless the investor specifically requests that the premiums be invested in the mutual funds.
All of the following are actual deductibles found in medical insurance policies EXCEPT
a)Per cause *b)Replacement* c)Common accident d)Family "Family," "per cause," and "common accident" deductibles are available.
Which of the following is NOT true regarding policy loans?
a)Policy loans can be repaid at death. b)An insurer can charge interest on outstanding policy loans. c)A policy loan may be repaid after the policy is surrendered. *d)Money borrowed from the cash value is taxable.* Money borrowed from the cash value is not taxable. Policy loans can be repaid at any time, including surrender and death. An insurer can charge interest on outstanding policy loans.
If a Medicare insured uses a health care provider who does not accept Medicare payments, which of the following will be true?
a)The provider might need to sign a private contract with Medicare. b)The insured needs to inform his Medicare agency. *c)The insured might need to sign a private contract with the provider.* d)Medicare insured cannot use non-participating providers. If a Medicare insured uses a health care provider who does not accept Medicare payments, the insured may be asked to sign a private contract with the provider. The private contract will only apply to the services that the insured receives from that provider.
If a Medicare insured uses a non-participating in Medicare physician, he or she may be asked to sign a private contract. Which of the following conditions will NOT apply when the insured signs a private contract with the provider?
a)The provider must tell the insured if he/she has opted out of or been excluded from the Medicare program. b)The insured has to pay all the charges. *c)Claims should be submitted to Medicare.* d)Medicare supplement policy will not pay for the services. When an insured uses services of a non-participating in Medicare physician, the insured and the provider might need to sign a private contract. The insured will have to pay whatever the provider charges for the services; Medicare limiting charges will not apply. Therefore, no claims should be submitted to Medicare, and Medicare will not pay if one is submitted.
When a replacement carrier has a question regarding the prior carrier's coverage, from which of the following can they demand a clarification?
a)The servicing agent b)The Department of Insurance *c)The prior carrier* d)The employer Section 10128.3(d) of the CIC requires the prior carrier to provide the clarification.
Which of the following is NOT true regarding Equity Indexed Annuities?
a)They have guaranteed minimum interest rates. b)They are less risky than variable annuities. *c)They earn lower interest rates than fixed annuities.* d)The insurance company keeps a percentage of the returns. Equity Indexed Annuities invest on an aggressive basis in order to yield higher returns. Like a fixed annuity, Equity Indexed Annuities have guaranteed minimum interest rates. The insurance company often keeps a predetermined percentage of the return and pays the rest to the annuity owner. Equity Indexed Annuities are less risky than variable annuities and earn higher interest rates than fixed annuities.
