Insurance exam review
What does the rehabilitation benefit cover in a disability income policy?
Covers the approved cost of the rehabilitation necessary to help a disabled insured return to work
which of these is NOT considered a type of limited payment whole life insurance
Endowment at age 70
which of the following are used by most insurers when determining the premiums for large groups?
Experience rating
which statement concerning a decrease in term life policy is accurate
Face amount decreases over the policy period.
what is an insurance contract that identifies individual by relationship to a specific organization
Group Insurance.
Tonya has been diagnosed with kidney failure and is covered by group accident and health insurance through her large employer. Which of these accident and health plans will be primary during the months immediately following her diagnosis?
Her employer's group accident and health plan
In regards to health insurance, employees age 65 or older are typically required to
Offered the same health benefits as the younger employees
which of the following statements BEST describes disability buy/sell insurance policy?
Policy proceeds are typically received income tax-free
A certificate of coverage for a group health policy is best described as
Proof of coverage for the employee
the dental specialty which deals with the replacement of missing teeth is called
Prosthodontics
which term describes the elimination of hazard?
Risk Avoidance
which life insurance policy provision prohibits a beneficiary from "commuting, encumbering, withdrawing, or assigning" any portion of the proceeds prior to actual receipt from the company?
Spendthrift clause
Jonas is covered with disability insurance through his employer. The employer pays 75% of the premium, while Jonas pays the other 25%. What is Jonas' tax liability for any benefits paid from the disability plan?
Taxes must be paid on 75% of the benefits received.
Peter, age 50, surrenders his modified endowment contract (MEC). How is the gain treated in terms of federal income taxes?
The gain is treated as taxable income and a penalty tax is imposed on the gain
under which circumstance can an insurance company offer group health insurance
The sponsoring group provides an employer-employee relationship
An agent gives a conditional receipt to a client for an insurance policy after collecting the initial premium. When will the policy become effective?
When the conditions of the receipt are met.
disability income insurance normally excludes coverage for disabilities the arise from
active military duty
the absolute assignment of life insurance policy results in ...
all incidents of ownership transfers to the assignee
which type of policy in group term life would insurance normally be converted to?
an individual permanent life insurance policy
if replacement was involved in the sale of an insurance policy, a producer must provide a replacement notice no later than the ...
application date
Reductions in coverage are one feature of _______ in Health insurance policies.
cost containment
long term care policies will usually pay for eligible benefits using which of the following methods?
expense incurred
When an applicant applies for a large amount of life insurance coverage, which of the following would likely NOT be an underwriting requirement?
eye exam
federally qualified HMOs must offer
family planning services
Which benefit supplement added to a life insurance policy insures an entire family?
family term rider
Which life insurance settlement option pays a stated monthly payment until both principal and interest are exhausted?
fixed amount settlement
Major medical policies are typically characterized by which of the following?
flat deductible
all individual long-term policies delivered in Maryland MUST be renewable ...
for life
According to the Affordable care act, coverage may be rescinded
if intentionally false statements were offered
An annuity which starts paying monthly benefits within a month after issuance is called a(n)
immediate
When must insurable interest exist for a life insurance contract to be valid?
inception of the contract
Medicare Part A typically covers
inpatient drugs
the maryland life and health guarantee corporation protects the ..... in the event of insurer insolvency
insured
what is another term used for a "pure life annuity"?
life income
Respite Care coverage is typically found in a(n)
long term care policy
which of the following options does tricare provides accident care
military families
life insurance premiums are computed on what 3 factors?
mortality, interest, and expenses
What must be disclosed when a producer advertises a life insurance policy?
name of the actual insurer
a drug which is used for a medical condition that is not approved to treat according to the food and drug administration is called
off label use
a life insurance guarantees insurability rider gives the insured the right, without proving insurability, to..
periodically purchase additional insurance
assigned good health assignment maybe requested by a life producer at the time of?
policy delivery
what is the name of the period of time during which a new employee is ineligible for group health insurance coverage
probationary period
which of the following in NOT required to be reported by a producer?
producers change in financial status
the commissioner is empowered to perform each of the following acts except:
prosecute producers who violate state insurance laws
Medicare supplement policy is required to which of the following?
provide a 30 day free look period
which of the following actions will result in a producer's licenses being suspended
rebating part of a commission to the applicant
An insurer will typically assess a back-end load on a deferred annuity that is cancelled during the early contract years. What is this back-end load referred to as?
surrender charge
Qualified long-term care premiums are treated for tax purposes as
tax-deductible to the extent they exceed 7 1/2% of an individual's AGI (Adjusted Gross Income).
Medicare Part A does NOT provide coverage for
the first 3 pints of blood
what would be considered an advantage of purchasing life insurance?
the initial premium in lower
the reason for back dating a policy is
to obtain a premium based on an earlier age
which of the following best describes the purpose of HIPA
to reduce a pre-existing condition waiting period when coverage is sought for a new medical plan
Mentally or physically handicapped dependent children MUST be covered under an individual health insurance policy...
until they become self supportive
an insurance company failure to enforce a contracts provision is called a (an)
waiver
during the application process, a statement made by the applicate that becomes part of the contract in considered to be a
warranty representation
a non participating whole life insurance policy was surrendered for its 20,000$ cash value. The total premiums paid had totaled 16,000$. what were the federal income tax consequences to the policy owner on receipt of the cash value?
$16,000 was received tax-free and $4,000 as ordinary income
which of the following statements accurately describes the financial impact of total disability?
--financial impact may be worse than that of death
how many days notice must a producer be given prior to a scheduled hearing?
10 days
what is the maximum number of employees (earning at least 5,000$) that an employee can have in order to start a SIMPLE retirement plan?
100
the health insurance premiums paid for by each partner in a partnership is considered to be?
100% tax deductible
COBRA extends coverage for an existing spouse but at a rate not more than ____ of the group premium
102%
Individuals seeking Social Security disability income benefits must have a disability that will eventually lead to death, or be expected to last at least
12 months
the maximum prison sentence given under federal law for unfair and deceptive insurance practice is
15 years
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%
what is the MAXIMUM number of employees an employer have for qualified medical savings accounts
50 employees
a preexisting conditions limitation must not exceed ___ months in all medicare supplement policies sold in Maryland
6 months
which of the following best describes a point-of-service (POS) plan?
A plan which combines indemnity plan features with those of an HMO
what is a "functional assessment" for long-term care benefits?
A review of the insured's ability to perform the activities of daily living
A single-life annuity only has ONE
Annuitant
If a disability income policy contains a cost-of-living adjustment rider, benefits must typically be increased
At least once per year from when benefits began
when does an individual or group health policies coverage for a new born child begin?
At the moment of birth
A producer recently replaced an existing Medicare Supplement policy with a new policy. the producers compensation for the new policy...
CANNOT exceed the renewal commission of the original policy
An employee welfare plan exempt from ERISA regulations would be
Church plans
A producer MUST notify the Commissioner for
Conducting business under an assumed name
in what situation would disability income insurance premiums be deductible expense?
Corporation paying for group disability income coverage for its employees
Bryce purchased a disability income policy with a rider that guarantees him the option of purchasing additional amounts of coverage at predetermined times without requiring to provide evidence of insurability. What kind of rider is this?
Guaranteed insurability rider
A policy owner has just borrowed from a life insurance policy's cash value. Which of these statements is true?
In the event of death, the loan amount is deducted from the policy proceeds
What would be a valid reason for naming a trust as the beneficiary of a life insurance policy as opposed to naming an individual?
Management of proceeds would be provided
which of the following has the power to examine the books and required of Maryland insurers
Maryland insurance administration
Medicare Part A (co insurance payments) are covered by
Medicare Supplement Plan A
a life insurance policy owner would like a dividend option that results in a limited current outlay of funds. which dividend option would be chosen?
Reduction of premium payment
Security laws passed by Congress are enforced by which Federal agency?
Security and Exchange commission
in regards to technology and the ACA, which of the following statements are correct?
States which operate with an Exchange must offer an internet-based portal
which of the following must clearly be illustrated in ALL sales material for market value adjusted annuities?
The market value adjustment can be either upward or downward
which statement concerning a deferred an annuity contract is correct?
The owner can be the beneficiary, annuitant, or neither
what happens when a policy owner borrows against the cash value of his life insurance policy?
The policy proceeds would be reduced by the outstanding loan balance
After an applicant reads and signs an insurance application, he/she should be conscious of the fact that
a false statement could result in the loss of coverage
medicare can be described as
a federal health insurance program for individuals over the age of 65 or permanently disabled
according to the Afforable care act (ACA), dependent children may remain on their parents plan until what age?
age 26
An agent's authority to bind an insurer to an insurance contract may be granted in the
agent's contract and the insurance company's appointment.
According to the Pregnancy Discrimination Act of 1978, employers must treat pregnancy in the same manner as
any other medical disability
Omar is covered by a disability income policy. He is hurt while performing an occupation more hazardous than the occupation listed in his policy. The policy's change of occupation provision will have what effect?
benefit level is reduced.
according to the needs approach, an emergency funds purpose is to ...
cover the cost of unexpected expenses
the main purpose of an annuity is to
create a stream of income
a separate covered policy may, at the option of the insurance company, be issued to cover a/an
dependent
group life plan sold in Maryland typically contain a conversion option. if the insured elects the option, the new policy ....
doe not require evidence of insurability
which statement is INCORRECT about the interest-only settlement option in a life insurance policy
interest on proceeds must be paid by the beneficiary
Policy owner has a life insurance policy where she had listed her age on the application as 5 years younger than her actual age. if she dies and the insurer discovers the misstatement of age, how much will the insurance company cover
less than the face amount
inpatient psychiatric care is covered under part A medicare for 190 days per ...
lifetime
an insurance policy may be issued with a preferred insurance premium in all of these situations EXCEPT
living in a rural area
Custodial care is normally covered under
long term care insurance
Employees generally receive workers compensation benefits for
lost wages and expenses due to occupational accidents
which of the following is NOT an unfair claims settlement practice?
refusing to pay persons bringing false or fraudulent claims
which of the following situations would an insurance agent need to guard against liability for professional error or omissions
making a recommendation to a potential insured to replace existing coverage
Beginning January 1, 2014, the restricted annual limit for plans under the Affordable Care Act will be
no limit
Tim is in need of surgery. Before being hospitalized, he is referred to an outpatient clinic for diagnostic tests. What is this an example of?
pre-admission testing
ABC Company is attempting to minimize the severity of potential losses within its company. The company is engaged in risk
reduction
long-term care policies sold in Maryland may NOT exclude coverage for
senile dementia
assets the non-guaranteed values of variable life insurance are held in which account
separate account set up by the insurer
A stock insurance company is owned by it's
shareholders
If an individual would like to enroll in medicare or search for info on medicare, what agency would you tell them to look into?
social security administration
a producer may NOT advertise an insurance product if he/she
uses a policy title to misrepresent the coverage
Before a Medicare Supplement advertisement is released to the public, it must first be approved by the
Insurance Commissioner
which of these statements is not true regarding a cash value loan against a life insurance policy
Interest payments made by policyowner are deductible
which of the following doe NOT fall under hospital care in typical health maitainance organization (HMO) plan
Private duty nursing
What is considered a valid reason for a small corporation to insure the lives of its major stock owners?
Fund a buy-sell agreement
An employer pays the accident and health insurance premiums for its employees. The premiums paid by the employer are
Deductible to the business
which life insurance policy option allows for the policy owner to have coverage equal to the net death benefit of the last policy?
Extended term nonforfeiture option
Tori has an annuity that pays her a $500 per month income benefit for life or for ten years, whichever is longer. What kind of annuity is this?
Fixed life annuity with period certain
which of these is NOT used as selection criteria in the underwriting process of a life insurance?
National origin
which of the following health insurance plans charges a premium that cannot be increased
Noncancelable
which statement regarding a life insurance premium for a children's rider is true?
Premium remains the same no matter how many children.
An insured is entitled to coverage under a policy that a prudent person would expect it to provide. This principle is called
Reasonable expectations
which of these must be disclosed in a universal life policy?
The surrender charges
which of the following involves sharing an uncertain risk with another similar group?
Transfer
which of the following BEST describes a "partial disability"?
Unable to perform one or more job duties
which of the following is NOT considered to be an expense for surviving family members of a deceased wage earner?
Unemployment tax liabilities
all of the following are typically covered under dental insurance EXCEPT
treatments done before the eligibility date
which of these policies is considered to be comprehensive life policy?
major medical policy