LHA Virginia EXAMFX Practice Exam
What is the maximum penalty for habitual willful noncompliance with the Fair Credit Reporting Act?
$2,500
An insured has a major medical policy with a $500 deductible and a coinsurance clause of 80/20. If he incurs medical expenses of $4,000, the insurer would pay
$2,800 (4,000-500=3,500*.80)
An insured is covered under 2 group health plans - under his own and his spouse's. He had suffered a loss of $2,000. After the insured paid the total of $500 in deductibles and coinsurance, the primary insurer covered $1,500 of medical expenses. What amount, if any, would be paid by the secondary insurer?
$500- once the primary insurer has paid the full available benefit, the secondary insurer will cover what the first company will not pay, such as deductibles and coinsurance
Any licensed person whose activities affect interstate commerce and who knowingly makes false material statements related to the business of insurance may be imprisoned for up to
10 years
According to OBRA, what is the minimum number of employees required to constitute a large group?
100
HIPPA applies to groups of
2 or more
In order to qualify for conversion from a group life policy that has been terminated to an individual policy of the same coverage, a person must have been insured under the group plan for how many years?
5
What is the elimination period for Social Security disability benefits?
5 months
How many employees can a business have and still meet the definition of "small employer"?
50
At what age may an individual make withdrawals from an HSA for nonhealth purposes without being penalized?
59 1/2
A Medicare supplement policy cannot exclude or limit benefits for incurred more than how many months before the effective date of the policy?
6
To attain currently insured status under Social Security, a worker must have earned at least how many credits during the last 13 quarters?
6 credits
US Armed Forces reservists called to active duty after August 21, 1990, who were covered under a disability policy provided by their employers, have a right to reinstate such coverage upon release from active duty if they apply within how many days of discharge?
90 days
When an insurance producer is to charge an administrative fee to an insured, all of the following must be done EXCEPT
A copy of any fee disclosure must be provided to the insured
If the owner of a whole life policy who is also the insured dies at age 80, and there are no outstanding loans on the policy, what portion of the death benefit will be paid to the beneficiary?
A full death benefit
All of the following statements concerning workers compensation are correct EXCEPT
A worker receives benefits only if the work related injury was not his/her fault
Because an agent is using stationery with the logo of an insurance company, applicants for insurance assume that the agent is authorized to transact on behalf of that insurer. What type of agent authority does this describe?
Apparent
SIMPLE Plans require all of the following EXCEPT
At least 1,000 employees
A dental plan that provides coverage based upon a specified maximum scheduled amount for each procedure and pays on a 'first dollar' basis with no deductible or coinsurance is a
Basic or scheduled plan
Which of the following is not true of Disability Buy-Sell coverage?
Benefits are considered taxable income to the business
Which of the following statements regarding Business Overhead Expense policies is NOT true?
Benefits are usually limited to six months
An insured is the recipient of an Accidental Death and Dismemberment (AD&D) policy purchased by his employer. The policy pays triple indemnity in case of accidental death. If the insured died as a result of an accident stipulated in the policy, how will the benefits paid be taxed?
Benefits received are considered income tax free
An annuity owner is funding an annuity that will supplement her retirement. Because she does not know what effect inflation may have on her retirement dollars, she would like a return that will equal the performance of the Standard and Poor's 500 Index. She would likely purchase a(n)
Equity Indexed Annuity
What is the difference between the Medicare approved amount for a service or supply and the actual charge?
Excess charge
All of the following violations may result in an agent's imprisonment EXCEPT
Failing to report to the department a criminal prosecution taken against the agent in another jurisdiction
Which rider, when attached to a permanent life insurance policy, provides an amount of insurance on every family member?
Family term rider
What required provision protects against unintentional lapse of the policy?
Grace period
Which of the following is an eligibility requirement for all Social Security Disability Income benefits?
Have attained fully insured status
A health insurance policy lapses but is reinstated within an acceptable timeframe. How soon from the reinstatement date will coverage for accidents become effective?
Immediateley
Which of the following is NOT true regarding a Certificate of Authority?
It is issued to group insurance participants
Which life insurance settlement option guarantees payments for the lifetime of the recipient, but also specifies a guaranteed period, during which, if the original recipient dies, the payments will continue to a designated beneficiary?
Life income with period certain
In long-term care insurance, what type of care is provided with intermediate care?
Occasional nursing or rehabilitative care
Which Universal Life option has a gradually increasing cash value and a level death benefit?
Option A
Which of the following documents provides a disclosure of a Medicare supplement policy?
Outline of coverage
Don has both a basic expense and a major medical policy. He is injured in an accident, which requires several major surgeries. This quickly exhausts Don's basic expense policy. What must Don do before his major medical policy can pick up where the basic expense policy left off?
Pay a special deductible on his major medical policy
Based on Human Life Value Approach, which of the following is NOT used to calculate an individual's life value?
Predicted needs of the family after the insured's death
Certain conditions, such as dismemberment or total and permanent blindness, will automatically qualify the insured for full disability benefits. Which disability policy provision does this describe?
Presumptive disability
Who is a person, other than a aviator, that enters into a viatical settlement contract?
Provider
All of the following are considered unfair trade practices in the business of insurance EXCEPT
Sharing commissions
During the accumulation period in a nonqualified annuity, what are the tax consequences of a withdrawal?
Taxable interest will be withdrawn first and the 10% penalty will be imposed if under age 59 1/2
In a fixed annuity, which of the following is true regarding the guaranteed interest rate on the investment?
The annuitant will receive the higher of either the guaranteed minimum or current rate
Who determines the eligibility and contribution limits of an HRA?
The employer
Who determines the eligibility and contribution limits in a HRA?
The employer determines both
An employee is insured under her employer's group life plan. If she terminates her group coverage, which of the following statements is INCORRECT?
The insured may choose to convert to term or permanent individual coverage
Which of the following is NOT a feature of a noncancellable policy?
The insurer may terminate the contract only at renewal for certain conditions
The insuring clause of a disability policy usually states all of the following EXCEPT
The method of premium payment
The insuring clause of a disability policy usually states all of the following, EXCEPT
The method of premium payment
What is the advantage of reinstating a policy instead of applying for a new one?
The original age is used for premium determination
All of the following are true of key person insurance EXCEPT
The plan is funded by permanent insurance only
Under a health insurance policy, benefits, other than death benefits, that have not otherwise been assigned, will be paid to
The spouse of the insured
Which state has jurisdiction over a group policy that covers individuals that reside in more than one state?
The state in which the policy was delivered
An insured has chosen joint and 2/3 survivor as the settlement option. What does this mean to the beneficiaries?
The surviving beneficiary will continue receiving 2/3 of the benefit paid when both beneficiaries were alive.
Hospice care is intended for
The terminally ill
Which of the following is true regarding optional benefits with long-term care policies?
They are available for an additional premium
Which of the following employees insured under a group life plan would be allowed to convert to individual insurance of the same coverage once the plan is terminated?
Those who have been insured under the plan for at least 5 years