Exam Q's
Which of the following indicates the person upon whose life the annuity income amount is determined?
Annuitant
A limited health insurance policy that will pay a lump sum to an insured diagnosed with a heart attack, stroke, or renal failure is known as
Critical illness insurance
What are the characteristics of catastrophic plans EXCEPT?
High premiums
What is the taxable portion of each annuity benefit called?
Tax base, the portion that is taxable on interest earned
In a life insurance application, what signature is required?
The agent, insured, and owner if different from insured
What happens to the face amount of a whole life policy if insured reaches age 100?
The face amount is paid to the insured
What is the main difference between franchise and group insurance?
In franchise insurance, underwriting is done for each person
Applicants concerned with increasing cost of living should purchase?
Increasing term
Which of the following is provided by skilled personnel to those who need occasional medical assistance or rehabilitative care?
Intermediate care
What retiree program does not cost the insured?
Medicaid,meant for low income individuals. Part A does not either.
Gross premium for life insurance is determined by adding what components?
Net premium and expenses
Is key person disability benefit taxable to business?
No
Cash value guarantees in a whole life policy are called
Nonforfeiture values
The annual enrollment period for state insurance exchange is
November 1 - January 31
When the owner of a participating whole life policy uses the dividend to provide more life insurance coverage, which of the following dividend options is being used?
Paid-up additions
A core Medicare supplement policy (Plan A) will cover all of the following expenses EXCEPT
Part A deductible. It covers first 3 pints of blood, 20% of part b coinsurance amonts for Medicare approved services, and Part A coinsurance
A married couple purchased a life insurance policy on their newborn baby. They are concerned about what would happen to the policy if either of them were unable to continue making payments due to death or disability. What policy rider should agent reccomend?
Payor benefit
Frequency and amount of premium are known as what?
Premium mode
How many tiers must be included in each treatment category of a medicare prescription drug plan formulary?
2
A medicare supplement policy must have a free-look period of at least
30 days
If insured does not respond to email, you must confirm email or send physical mail within
5 Days
What are the education requirements for agents who market long-term care insurance policies?
8 hours of long-term care specific education included in the regular CE requirements
A life insurance policy that provides coverage to every family member in a single policy, with permanent insurance on the breadwinner and convertible term on the family members is called
A family policy
What information should be included on an application for life insurance?
The agents statement, if applicable, medical information about the applicant, life insurance with other insurers
In life insurance, which of the following is NOT required to have an insurable interest in the insured?
The beneficiary
In a group life policy that gives a 50,000 death benefit
The benefit past 50,000 is taxable as income to the employee
What is true of credit life?
The death benefit cannot exceed the loan, premium payment is included in loan payment, creditor is policyowner
What are the characteristics of group health insurance except?
The parties that hold a group health insurance contract are the employees and the employer
An employee that becomes ineligible for coverage from termination must exercise extension of benefits under COBRA
Within 60 days
A comprehensive medical expense insurance policy covers
basic hospital and surgical with major medical expenses
An underwriter is reviewing an applicant with an extensive medical history. Which of the following would give the underwriter a better understanding of how the applicant has been treated for various illnesses?
Attending Physician's statement
IF a person qualifies for social security disability benefits after the 5 month elimination period, when will benefits begin?
Benefits begin at the beginning of the 6 month and are not retroactive to the beginning of the disability
An employee has a flexible spending account with a $5,000 annual benefit. This year the employee used $3,000, what would be the amount available to the employee next year?
$5,000
In order to be financially solvent, an insurer must accomplish all of the following except
Contribute a specific amount of capital reserves to the state
Darryl is involved in an automobile accident with another motorist. Darryl was at fault. Darryl was injured and hospitalized for 2 months. The other motorist suffered 15,000 of medical expense. Daryls disability income policy will pay
Darryl's loss of income
What are the characteristics of group health insurance?
Employers require employees to contribute to premium payments, benefits are more extensive than those under individual plans, cost of insuring an individual is less costly through groups than individual plans
What are the characteristics of catastrophic plans?
Essential benefits, high deductibles, low premiums, out-of-pocket costs
What is franchise insurance?
It is health coverage for small groups whose numbers are too small to qualify for true group insurance. Individual policies are issued for each participant. Underwriting is done for each participant, and each participant submits his or her own application.
What does an annuity protect the annuitant against?
Living longer than expected
In order to be financially solvent, the insurer must
Maintain an amount at least equal to required min paid-in capital, reinsure any risk in excess of state retention limits, possess enough assets to cover its liabilities
What type of interest rate is guaranteed in universal life insurance?
Nominal
Under HIPAA portability, what is protected under required benefits?
Pregnant women, mentally ill, self-employed, small employers
Once the initial benefit is reached for part D, what happens to the beenficiary?
Responsible for paying a portion of prescription drugs
HMO's are what types of plans?
Service
An individual is approaching retirement age and is concerned about having proper coverage should be placed in a long-term care facility that provide
Skilled, custodial, intermediate NOT acute
If a basic medical insurance plan's benefits are exhausted, what type of plan will then begin covering those losses?
Supplementary Major Medical
What life insurance options would not offer a policy loan option?
Term life, it has no cash value.
What is incorrect about coverage Medicare and Medigap policies?
That they offer long term custodial or nursing home care
What is not true of credit life?
The insured names the beneficiary
All of the following are true regarding the waiver of a cost insurance except
The rider expires when the insured reaches age 60
The agent's statement
is not included in entire contract
How does life insurance create an immediate estate?
the face value of the policy is payable to the beneficiary upon death of the insured
If the annuitant dies before the annuity start date,
the interest is taxable
what is it called when a medicare doctor accepts approved amount?
Assignment
Which of the following term refers to the nontaxable portion of each annuity benefit?
Cost base
An employee dies having 6 quarters of coverage during the previous 13-quarter period. What status of coverage does the employee have under Social Security?
Currently Insured
Which of the following is NOT a standard exclusion in life insurance?
Disability
An employee is covered under COBRA, the premium payment was $100 per month. His employer now collects $102 each month. Why does he collect the extra $2?
To cover employer's administration cost
Considering the principles of liquidity, how would the policyowner use today's cash values in a life insurance policy?
Use it for emergency expenses
If an insured pays a health insurance premium each month how long would the grace period be under the policy?
10 days
What is true of HICAP
It is funded by state department of aging, it works with local areas on aging, it provides consumer counseling
According to metal level classification of health plans, how much of health costs would be covered in gold?
80%, platinum 90%, silver 70%, bronze 60%
FSA
Are subject to a "use-or-lose" rule; unused benefits do not carry over to the next year
What are the standard exclusions in life insurance?
Aviation, hazardous occupation, war, military services
Which of the following is true regarding the taxation of cash values in business life insurance policy?
Cash values grow tax deferred
A whole life policy is surrendered for a reduced paid up policy. The cash value in the new policy will
Continue to increase, and remain in force until insured's death or maturity
Applicants wishing to pay off a mortgage should they suffer a premature death should purchase?
Decreasing term
Under HIPPA portability, what is not protected under required benefits?
Groups of one or more
The guaranteed insurability rider allows the owner to purchase additional amounts of life insurance without proof of insurability at all of the following times
Marriage, Birth, Every 3 years b/w age 25-40
When can HIV tests results be provided to MIB?
Only if the individual is not identified
A stock insurer is defined as an insurer
Owned by its shareholders
A qualifying retiree has access to all parts of the social security medicare program. Which of these parts requires a monthly payment from the insured?
Part B
The needs approach to calculating the amount of life insurance needed is based on
Predicted needs of a family after the premature death of the insured
Employers looking to provide cost effective group life insurance should?
Purchase annual renewable term
An insured purchased a health insurance policy with renewability clause that states the policy is "guaranteed renewable."This means that as long as the premiums are paid, the policy will continue until the insured
Reaches age 65
A statement made by an applicant for insurance that must be true in every respect is considered to be
Representation
An applicant completes an application for a disability and pays the initial premium. The producer gives the applicant a conditional receipt. Insurance coverage for the applicant became effective when
The company accepts the risk, once initial premium is paid when application is submitted, coverage becomes effective when the insurer approves application
A "person" that transacts insurance business may have its operations sieced and the commissioner appointed a conservator if
You're a hazard to the community, public, creditors, failure to provide documention when asked by commissioner, neglect to observe capital and reserve requirements
Under the Affordable Care Act (ACA) pregnancy:
benefits are essential
Business overhead insurance reimburses
the insured for the covered expenses incurred or the max stated in the policy, whichever is less
What is residual benefit for?
Disability income insurance. Proportion of income actually lost due to a business interruption cause by insured's disability
What are the characteristics of a deffered annuity?
Income payments must begin AFTER 1 year, used to accumulate funds, can be purchased in a lump sum
What's true of a noncancellable policy?
Insurer can't cancel policy, guaranteed renewal only lasts until 65, right to renew policy for life of contract but can discontinue paying premiums to cancel it
Medicare Part B covers all of the following EXCEPT
Long-term care services
When agents, brokers, or solicitors handle premiums for an insurer, they are acting in which capacity
As a fiduciary, acting in a position of trust
What advantage does the recurrent disability provision provide to the insured under a disability income policy
It eliminates a second elimination period for same disability
When an insurer tries to discourage a policyholder from replacing an existing policy, it is called
conservation effort
What are the minimum amount of people needed for group life insurance?
10
How many days is the free-look period in most policies?
10 Days
What type of care would be provided at the community center?
Adult day care
J is receiving fixed amount benefit payments from his late wife's insurance policy. He was told that if he dies before all of the benefits are paid, the remaining amount will go to the contingent beneficiary. Which settlement option did J choose?
Fixed amount, payments until principle and interest are exhausted
An insured purchased a health policy with a renewability clause that states the policy is "guaranteed renewable." This means that as long as the premiums are paid, the policy will continue until insured is
Reaches 65
An insured purchased a health insurance policy with a renewability clause that states the policy is "guaranteed renewable." This means that as long as the required premiums are paid, the policy will continue until the insured
Reaches age 65
The insured dies 6 months after the policy issue date. Upon the death of the insured, it is determined that the insured made a material misstatement on the application. What is the course of the insurance?
Rescind policy because the con testability period is still in force
HMO members pay a small fee when hey see their primary physician, called
copay
What best describes life annuity with period certain option?
It guarantees benefit payments for life of annuitant and for a specified period for the beneficiary
Your client wants to provide a retirement income for his elderly parents in case something happens to him. He wants to make sure that both beneficiaries are guaranteed an income for life. What option should the policy owner select?
Joint and Survivor, payments continue until death of last beneficary
What does the waiver of cost insurance rider accompolish?
Known as the waiver of monthly deductions rider, only applicable to universal life policies, waive the cost of insurance, and expenses if you become disabled. Does not accumulate cash values
When assessing needs for life insurance, an individual may use retention, which means
Maintaining assets at death
What type of insurer uses a formal sharing arrangement?
Reciprocal
In some cases, in order for an insurer to legally disclose privileged information to appropriate sources, the insured must sign an authorization form. What is the maximum amount of time that can legally pass between the completion of the form and the disclosure of information? a) 1 month b) 6 months c) 1 year d) 2 year
1 month
According to the life insurance replacement regulations, which of the following would be an example of policy replacement?
A policy reissued with a reduction in cash values
Which of the following additions will increase the death benefit?
Paid-up additions
To qualify for disability income benefits under social security, an individual's disability must be expected to result in death or last for
12 months
Core benefits are covered in all medicare supplemental policies. What percentage of Part B coinsurance is required?
20%
An annuity owner receives the same guaranteed payment every month. What type of annuity is it?
Fixed
All of the following information needs to be included on an application for life insurance except
Health insurance policies in force
In a life insurance application, what signature is not required?
Office underwriter
The guaranteed insurability rider allows the owner to purchase additional amounts of life insurance without proof of insurability except
Purchase of a new home