Insurance State Exam
a 10% excise tax normally applied to an early with-drawl from an IRA. According to HIPPA, this tax will not be applied if the with-drawl is used for medical expenses that exceed ____ of the individual adjusted gross income
7.5%
an insured MUST submit a proof of loss on a health insurance claim within how many days after the date of loss?
90
which BEST describes a conditional insurance contract?
a contract that requires certain conditions or acts by the insured individual
upon policy delivery, which of the following must a producer have an applicant sign if no initial premium was collected with the life insurance application?
a good health statement
of the following dividend options, which of these is taxable?
accumulation at interest
which dividend option would an insurer invest the policyowners money and add interest earnings as the dividends accrue?
accumulation at interest option
a policyowner may change two policy features on what type of life insurance
adjustable life
a non-contributory health insurance plan helps the insurer avoid
adverse selection
group dental plans will frequently place a limit on annual benefits in order to minimize
adverse selection
the term which describes the fact that both parties of a contract may NOT receive the same value is referred to as
aleatory
what is the nonforfeiture value of an annuity before annuitilization
all premiums pain, plus interest, minus any withdrawals and surrender chargers
fixed period settlement options are considered to be a form of a
annuity
the difference between a long term care partnership plan and a non partnership plan is which of the following?
asset protection
why are dividends from a mutual insurer not subject to taxation?
because dividends are considered to be a return of premium
Which type of business insurance is meant to cover the costs of continuing to do business while the owner is disabled?
business overhead expense policy
an example of replacement is
cancelling a term life policy to buy a whole life policy
which of the following is NOT a required provision in an accident and health insurance policy
change of occupation
_____ is NOT an element of a valid contract
countersignature
which of these is NOT subject to income taxation under a modified endowment contract (MEC)?
death benefit
making a statement that is false of maliciously critical of the financial condition of an insurer is known as
defamation
all of the following are examples of a business continuation plan except
deferred compensation
an example of a tax-qualified retirement plan would be a ****
defined contribution plan
example of a tax qualified retirement plan
defined contribution plan
a nonparticipating policy will not pay _____
dividends
statement concerning traditional IRA is correct
earnings are taxable when withdrawn
a disability elimination period is best described as a
eligibility period
which of the following is NOT a federal requirement of a qualified plan?
employee must be able to make unlimited contributions
level premium permanent insurance accumulates a reserve that will eventually
equal the face amount of the policy
what is created after policy proceeds are obtained in a lump sum and then immediately invested?
estate
the waiting period for a disability insurance policy
excluded payments for a short term illness or injury
which of these would limit a companys liability to provide insurance coverage?
exclusion
an insurance company needs to obtain personal information from a third party concerning an applicant. Which law do all insurers and their producers need to comply?
fair credit reporting act
NOT a characteristic of a universal life insurance policy
fixed surrender value
typically authorize treatment from a specialist?
gatekeeper
considered to be an event or condition that increases the probability of an insured loss?
hazard
fixed annuities provide each of the following except
hedge against inflation
major tax advantage of life insurance?
income tax is typically not owed on proceeds paid directly to a beneficiary
in regards to a life insurance contract which of the following statements is NOT true regarding the concept of insurable interest
insurable interest can be established sufficiently by sentimental attachment alone
ambiguities in an insurance policy are alway resolved in favor of the
insured
signature is not required on an individual insurance application?
insurer
Which settlement options involves having the proceeds remain with the insurer and earning paid on a monthly basis to the beneficiary?
interest only
a life insurance policy written on one contract for two people in which it is payable upon the first death is called
joint
which contract element is insurable interest aa component of?
legal purpose
an insurers ability to make unpredictable payouts to policyowners is called
liquidity
insurance premium is determined by each of the following factors except
liquidity
The IRS states that a taxpayers medical expenses that exceed 7.5% of their adjusted gross income is tax deductible. Which of the following may be considered a medical expense under this rule?
long term care insurance premiums
what is the primary feature of a viatial settlement?
longer contestable period
which of the following is considered to be a point of service (POS) plan?
managed care plan
the suicide clause of a life insurance policy states that if an insured commits suicide within a stated period from the policys inception, the insurer will only be liable for a return of premiums paid
minus indebtedness and without interest
when an insured has a major medical plan with first dollar coverage, how does this impact the benefits paid?
no deductible is required
a beneficiary change can occur
normally at any time during the policy term
The gate keepers role when used by an HMO is ****
obtaining referrals to specialists from primary care physicans
evidence ownership in a participating health insurance contract?
policy ownership
which of these describes the result of a modified endowment contract that failed to meet the seven-pay test
pre-death distributions are typically taxable
under a modified endowment contract, what are the likely tax consequences?
pre-death distributions will become taxable
which of the following is a reinstatement condition?
proof of insurability
in order to activate the reinstatement clause of a lapsed life insurance policy, the insured MUST
provide evidence of insurability to the insurer
in order to activate the reinstatement clause of a lapsed life insurance policy, the insured MUSt
provide evidence of insurability to the insurer
how are survivorship life insurance policies helpful in estate planning?
provide funds to help pay taxes
premiums paid that exceed 7 1/2% of an insureds adjusted gross income (AGI) are tax-deductible when paid for which of the following plans?****
qualified long-term care plan
Dana is an employee who deposits a percentage of her income into her individual annuity. Her company also contributes a percentage into a separate company pension plan. What kind of annuity is this considered?****
qualified retirement annuity
a life insurance company has transferred some of its risks to another insurer. The insurer assuming the risk is called the
reinsurer
under the subrogation clause, legal action can be taken by the insurer against the
responsible third party
an endorsement found in an insurance plan which modifies the provisions of the policy is called a
rider
premium payments for a universal life policy NOT used for?
separate account investments
NOT a type of medicare advantage plan
social security disability income (SSDI)
in order to operate as a domestic insurer, an insurance company MUST have a certificate of authority issued by the
south carolina department of insurance
proceeds from a life insurance policy are protected from the beneficiaries creditors by which clause?
spendthirft
which of these ensures that proceeds of a life insurance policy will be free from attachment or seizure by the beneficarys creditors?
spendthrift clause
In an insurance contract, the applicants "consideration" is the
statements made in the application and the premium
Distributions from a Health Savings Account (SHA) for qualified medical expenses are
tax free
policy that does NOT build cash value
term
signatures for an insurance application must be obtained by the producer from all of the following sources except
the beneficiary
what is a corridor in relation to a universal life insurance policy
the gap between the total death benefit and policy cash value
An insured individual and the policys beneficiary die from the same accident. The common disaster provision states the insurer will continue as if
the insured outlived the beneficiary
who assumes the investment risk with a fixed annuity contract?
the insurer
regarding an examination of an insurers books and records by the director is TRUE?
the insurer must not impede an examination and is required to assist in the examination procedures
which on the following statement regarding an examination of an insurers books and recored by the director is TRUE
the insurer must not impede an examination and is required to assist in the examination procedures
under the affordable care act, how would a grandfathered health plan lose its grandfathered status?
the insurer significantly raises co-insuance charges, deductibles, or co payments charges
a whole life insurance policy accumulates cash value that becomes
the policy loan value which the insured may borrow against
a false written or oral statement made by a producer for the purpose of replacing an existing policy to the detriment of the insured is
twisting
which of the following pertains to the analysis of an applicants personal information and determining whether insurance should be issued or declined
underwriting
all of the following riders can increase the death benefit amount EXCEPT
waiver of premium
Pierre is covered by his employers group major medical plan. His employer pays for 75% of the premium and he pays for 25%. How much would a $10,000 benefit be taxable as income under this plan?
$0
the typical long-term care insurance policy is designed to provide a minimum of ___ years of coverage
1
sole proprietors are permitted tax deductions for health costs paid from their earnings in the amount of***
100% of costs
Lorenzo is self employed with an S corporation. He is unmarried and had a net profit for the tax year. What are the tax ramifications of his health insurance premiums paid for the year?
100% of his health insurance costs can be deducted from his gross income
Frank is shopping for a disability income policy. which of the following would have the HIGHEST premium?
14 day waiting period/ 10 year benefit
an insurer must furnish to a claimant forms for filing proof of loss within _____ days upon receiving a notice of claim
15
an insurer must send a notice of appointment for a producer within _____ days from the date of an executed agency contract or after submitting the first application to the insurer
15
the maximum time period that an eligible employee can be excluded from coverage under a group health policy as a late enrollee
18 months
In the State of South Carolina, the Director may issue a temporary producer license for a MAXIMUM period of
180 days
the director must give a minimum of how many days notice of a disciplinary hearing?
30 days
The legal action provision in a health contract is limited to no more than ____ years
5
if an insurance producer receives compensation for giving advice to a member of the public and properly documents the transaction and amount with a memo signed by the person paying the fee, a copy of the memo or contract MUST be retained by the producer for at least
5 years
in south carolina, what is the maximum length of time an insurer can defer payment of a cash surrender value of an annuity?
6 months
Within how many days must a traditional IRA be rolled over to another IRA in order to avoid tax consequences
60
within how many days must a rollover be completed in order to avoid being taxed as current income
60
a pre-existing condition provision applies to a covered person if the previous creditable coverage was continuous to a date NOT more than how many days prior to the enrollment date of the new coverage
63 days
in health plans, premiums paid less frequent than monthly require a minimum grace period of at least
7 days