LHIE review questions
all of the following statements concerning the use of life insurance as an executive bonus are correct except
the policy is owned by the company the policy is actually owned by the employee
all of the following statements are correct regarding credit life insurance except
benefits are paid to the borrowers beneficiary the creditor is the beneficiary for the amount of benefit equal to the outstanding balance of the loan
Most HMOs operate through what type of system?
A group enrollment system either at their place of employment or as a member of an association
Using a class designation for beneficiaries means
Naming beneficiaries as a group no names
social security disability definition does not include
Disability expected to last for at least 6 months
which of the following best describes the MIB
It is a nonprofit organization that maintains underwriting information on applicants for life and health insurance.
Medicare advantage is also known as
Medicare Part C. Medicare consists of Hospital Insurance protection (Part A), Medical Insurance protection (Part B), and Medicare Advantage (Part C) (formerly known as Medicare+Choice). Medicare Part D is a "stand alone" drug insurance policy for persons who need the coverage and are eligible for Medicare Part A and/or Part B.
A small hardware store owner is involved in a car accident that renders him totally disabled for half a year. Which type of insurance would help him pay for expenses of the company during the time of his disability?
business overhead expense policy
if a policy owner surrenders his life insurance policy that has been in force for 5 years within 60 days after the premium due date, what will the insurer be required ot pay
a cash surrender value
which of the following is not a possible penalty for a violation of the insurance code
a fine up to $100,000
to which of the following situations does the replacement regulation apply
a whole life policy with reduction in cash value
the two types of assignments are
absolute and collateral
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 insurance, an offer is usually made when
an applicant submits an application to the insurer
a universal life insurance policy is best described as an
annually renewable term policy with a cash value account
Which of the following is a short term annuity that limits the amounts paid to a specific fixed period or until a specific fixed amount is liquidated
annuity certain
which of the following is a short term annuity that limits the amounts paid to a specific fixed period or until a specific fixed amount is liquidated
annuity certain allows the annuitant to select the time period or the amount of benefits to be paid out.
An insured's premium increases as a result of her age. Which type of policy does she have?
attained age
which of the following is not required to be stated in the outline of coverage provided with a long term care policy
basic information about supplementary policies
which is not true about beneficiary designations
beneficiary must have insurable interest in the insured
which entity has the authority to grant a temporary insurance agent's license
comissioner of insurance
The proposed insured makes the premium payment on a new insurance policy. If the insured should die, the insurer will pay the death benefit to the beneficiary if the policy is approved. this is an example of what kind of contract
conditional
When an insured makes truthful statements on the application for insurance and pays the required premium, it is known as which of the following?
consideration
an insured pays an annual premium to his insurer. In return, the insurer promises to pay benefits in accordance with the terms of the contract. this is called
consideration
when an insured makes truthful statements on the application for insurance and pays the required premium, it is known as what
consideration
which of the following reports will provide the underwriter with the information about an insurance applicants credit
consumer report
contracts that are prepared by one party and submitted to the other party on a take-it-or-leave-it basis are classified as
contracts of adhesion
which of the following is the term for the specific dollar amount that must be paid by an HMO member for a service
copayment
which of the following is not allowed in credit life insurance
creditor requiring that a debtor buys insurance from a certain insurance a creditor may require that the debtor have life insurance, but may not require the debtor to purchase insurance from a specific insurer
an individual has just borrowed $10,000 from his bank on a 5 year installment loan requiring monthly payments. What type of life insurance policy would be best suited to this situation
decreasing term
which of the following types of insurance policies is most commonly used in credit life insurance
decreasing term
an individual just borrowed $10,000 from his bank on a 5 year installment loan requiring monthly payments. What type of life insurance policy would be best suited to this situation
decreasing term face amount decreases as the amount of debt is reduced
social security disability definition includes all of the following except
disability expected to last for at least 6 months has to be 12 or death
which of the following statements about occupational vs. nonoccupatoinal coverage is true
disability insurance can be written as occupational or nonoccupational
which of the following is true regarding taxation of dividends in participating policies
dividends are not taxable
which of the following is considered a qualifying event under cobra
divorce
long term care coverage may be available as any of the following options except
endorsement to a health policy long term care insurance policies may be purchased on an individual or group basis, or as an endorsement to a life insurance policy
Which policy component decreases in decreasing term insurance?
face amount decreasing term policies feature a level premium and a death benefit that decreases each year over the duration of the policy term
An applicant is denied insurance because of information found on a consumer report. Which of the following requires that the insurance company supply the applicant with the name and address of the consumer reporting company?
fair credit reporting act governs what information can be collected and how it is used
When possible, what should insurers strive to eliminate from illustrations?
footnotes and caveats
in a direct transfer, how is money transferred from one retirement plan to a traditional IRA
from trustee to trustee
An insured is involved in an accident that renders him permanently deaf, although he does not sustain any other major injuries. The insured is still able to perform his current job. To what extent will he receive Presumptive Disability benefits?
full benefits
which one of the following is an eligibility requirement for social security disability income benefits
fully insured status
an individual is purchasing a permanent life insurance policy with a face value of $25,000. While this is all the insurance that he can afford at this time, he wants to be sure that additional coverage will be available in the future. Which of the following options should be included in the policy
guaranteed insurability option
A lucky individual won the state lottery, so the state will be sending him a check each month for the next 25 years. What type of annuity products are they likely to use to provide these benefits?
immediate annuity
Regarding long-term care coverage, as the elimination period gets shorter, the premium
increases
annually renewable term policies provide a level death benefit for a premium that
increases annually
what is true regarding the differences between individual and group health insurance
individual insurance does not require medical examinations, while group insurance does require medical examination
which of the following operations would not directly help to qualify someone for the office of commissioner of insurance
insurance agent
In the event of loss, after a notice of claim is submitted to the insurer, who is responsible for providing claims forms and to which party?
insurer to insured
in the event of loss, after a notice of claim is submitted to the insurer, who is responsible for providing claims forms and to which party
insurer to insured
which of the following entities has the authority to make changes to an insurance policy
insurer's executive office
The section of a health policy that states the causes of eligible loss under which an insured is assumed to be disabled is the
insuring clause where you find coverage and where it applies
the type of dental plan which is incorporated into a major medical expense plan is an
integrated dental plan when dental coverage is covered under the benefits of a major medical plan, the dental coverage and medical coverage would be an integrated plan. Any deductible amount can be met by either dental or medical expenses
The policyowner wants to make sure that upon his death, the life policy will pay a portion of the proceeds annually to his spouse, but that the principal will be paid to their children when they reach a certain age. Which settlement option should the policyowner choose?
interest only option the insurance company retains the policy proceeds and pays interest on the proceeds to the recipiant (beneficiary) at regular intervals
In health insurance, if a doctor charges $50 more than what the insurance company considers usual, customary and reasonable, the extra cost
is not covered
which of the following statements is not true concerning medicaid
it consists of 3 parts: A, B, and C those are medicare
When a reduced-paid up nonforfeiture option is chosen, what happens to the face amount of the policy?
it is reduced to the amount of what the cash value would buy as a single premium
which of the following is true about the premium on the children's rider in a life insurance policy
it remains the same no matter how many children are added to the policy
A married couple's retirement annuity pays them $250 per month. The husband dies and his wife continues to receive $125.50 per month for as long as she lives. When the wife dies, payments stop. What settlement option did they select?
joint and survivor
The provision which prevents the insured from bringing any legal action against the company for at least 60 days after proof of loss is known as
legal actions
variable whole life insurance is based on what premium
level fixed
What is the other term for the cash payment settlement option?
lump sum
An insured purchased an insurance policy 5 years ago. Last year, she received a dividend check from the insurance company that was not taxable. This year, she did not receive a check from the insurer. From what type of insurer did the insured purchase the policy?
mutual funds not paid out after paying claims and other operating costs are returned to the policy onwers in the form of a dividend. If all funds are paid out, no dividends are paid
an applicant for a health insurance policy returns a completed applicaiton to her agent, along with a check for the first premium. She recives a conditional receipt two weeks later. What has the insurer done at this point
neither approved the application nor issued the policy
which of the following are the main factors taken into account when calculating residual disability benefits
present earnings and earning prior to disability
Insurers may change which of the following on a guaranteed renewable health insurance policy?
rates by class
if an insurer issued a policy based on the application that had unanswered questions, which of the following would happen
the policy willbe interpreted as if the insurer waived its right to have an answer on the application
which of the following is the best reason to purchase life insurance rather than an annuity
to create an estate
When an insurer issues an individual health insurance policy that is guaranteed renewable, the insurer agrees
to renew the policy until the insured has reached age 65
According to the rights of renewability rider for cancellable policies, all of the following are correct about the cancellation of an individual insurance policy EXCEPT
unearned premiums are retained by the insurance company
After filing a claim, an insured tells the insurer that there is more than one insurance policy in force. That insurer sets aside the claim until it hears what the other company will pay. The insurer's action will be classified as
unfair
Which of the following policies would have an IRS required corridor or gap between the cash value and the death benefit
universal life- option A
which of the following is a statement that is guaranteed to be true, and if untrue, may breach an insurance contract
warranty
When is the earliest a policy may go into effect
when the application is signed and a check is given to the agent
What is the timeframe for filing relevant Suspicious Activity Reports?
within 30 days of initial discovery
how soon following the occurrence of a covered loss must an insured submit written proof of such loss to the insurance company
within 90 days or ASAP, but not to exceed one year
how long must producer maintain records of continuing education course completion
4 years
Once the person meets the stringent requirements for disability benefits, how long is the waiting period under Social Security before any benefits will be paid?
5 months payments start the 6th month
Ray has an individual major medical policy that requires a coinsurance payment. Ray very rarely visits his physician and would prefer to pay the lowest premium possible. Which coinsurance arrangement would be best for ray
50/50
How soon from the termination of debt under a credit life insurance policy must a creditor provide notice to the insurer?
60 days
Unreimbursed medical expenses paid for the insured may be claimed as deductions if the expenses exceed what percentage of the adjusted gross income?
7.5%
most policies will pay the accidental death benefits as long as the death is caused by the accident and occurs within
90 days
the insuring clause of a disability policy usually states all of the following except
the method of premium payment
in a life settlement contract, whom does the life insurance broker represent
the owner
in a life settlement contract, whom does the life settlement broker represent
the owner
all of the following are true of key person insurance except
the plan is funded by permanent insurance only
what is the period of coverage for events such as death or divorce under cobra
36
an insured purchased a variable life insurance policy with a face amount of $50,000. over the life of the policy, stock performance declined and the cash value fell to $10,000. If the insured dies, how much will be paid out
$50,000 the cash value of a variable life insurance policy is not guaranteed. However, even if investments devalue significantly, they cannot be lower than the initial guaranteed benefit amount
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?
$50,000 the face of the term policy would be the same as the face amount provided under the whole life policy
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
An insured had a $10,000 term life policy. The annual premium of $200 was due on February 1; however, the insured failed to pay the premium. He died on February 28. How much would the beneficiary receive from the policy?
$9,800
In all health care plans under the Affordable Care Act (ACA), how many essential benefit categories are there?
10
An insured pays a monthly premium of $100 for her health insurance. What would be the duration of the grace period under her policy?
10 days 7 days if weekly, 10 days if monthly, 31 days for all other modes
following hospitialization 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 21-100 require copayment
If an agent has completed 35 hours of continuing education in one renewal period, how many CE hours will the agent have to complete in the next renewal period?
24 hours
When is the earliest a policy may go into effect?
When the application is signed and a check is given to the agent
an applicant for a health insurance policy returns a completed application to her agent, along with a check for the first premium. She receives a conditional receipt two weeks later. Which of the following has the insurer done by the point
neither approved the application or issued the policy
Under a straight life annuity, if the annuitant dies before the principal amount is paid out, the beneficiary will receive
nothing, the payments will cease
During replacement of life insurance, a replacing insurer must do which of the following?
obtain a list of all life insurance policies that will be replaced
Under a pure life annuity, an income is payable by the company
only for the life of the annuitant they cease at the annuitants death and there is no refund or payments to survivors "life only" or "straight life"
Medicare Part A services do NOT include which of the following?
outpatient hospitial treatment
an insured has had a life insurance policy that he purchased 3 years ago when he was 40 years old. he was killed in an automobile accident and it is discovered that he is actually 45 years old, not 43. What will the company do
pay a reduced death benefit
don has both a basic expense and a major medical policy. he is injured in an accident which requires several major surgeries. this quickly exhauses don's basic expense policy. What must Don do before his major medical policy can pick up where the basic expense left off
pay a special deductible on his major medical policy
an insured pays her Major Medical insurance premium annually on march 1. Last march she forgot to mail her premium to the company. On March 19, she had an accident and broke her leg. the insurance company would
pay the claim accident occured during grace period
With respect to the Consideration Clause, which of the following would be considered consideration on the part of the applicant for insurance?
payment of premium
an individual buys a flexible premium deferred life annuity with 20 year period certain. What would his beneficiary receive if he died 5 years after the beginning the annuity phase
payments for 15 years with any period certain, death of the annuitant within the stated period will provide payments to the beneficiary only for the remainder of the period certain
which of the following riders would not cause the death benefit to increase
payor benefit rider it only pays the premium if the payor is disabled or dies
which of the following allows the insurer to relieve a minor insured from premium payments if the minor's parents have died or become disabled
payor benefits
what is not true of key person insurance
plan is funded by permanent insurance only
all of the following are mandatory life insurance policy provisions except
policy backdating
which is not true regarding insurance policy loans
policy loans can be made on policies that do not accumulate cash value
which of the following individuals must have insurable interest in the insured
policy owner
which of the following documents delivered to the policy owner includes information about premium amounts, cash values, surrender values, and death benefits for specific policy years
policy summary
Regarding the taxation of Business Overhead policies,
premiums are deductible and benefits are taxed
Todd has been informed that he has a hernia which requires repair. When Todd researches the cost, he learns that his insurance plan will cover 200 points worth of surgical expenses. Each point represents $10, which means that $2000 of his surgery will be covered by his insurance plan. What system is Todd's insurance company using?
relative value this approach has surgical procedures assigned a set amount of points relative to the maximum coverage allowed for given surgery
disability income policies can provide coverage for a loss of income when returning to work only part time after recovering from total disability. What is the benefit that is based on the insureds loss of earnings after recovery from a disability
residual disability
An insured wants to name her husband as the beneficiary of her health policy. She also wishes to retain all of the rights of ownership. The insured should have her husband named as what type of beneficiary?
revocable the insured would be the policy owner and could make changes to the contract. He would receive the death benefit
The Ownership provision entitles the policyowner to do all of the following EXCEPT
set premium rates
all of the following are considered unfair trade practices in the business of insurance except
sharing commissions
Company Y had 20 employees on staff last year. Which of the following terms most precisely labels the company's group insurance classification?
small employer
workers compensation benefits are regulated by which entity
state government
when an employee covered under a health reimbursement account changes employers, the HRA
stays with the employer
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
which of the following types of annuities will generally provide the highest monthly income
straight life
Your client is planning to retire. She has accumulated $100,000 in a retirement annuity, and now wants to select the benefit option that will pay the largest monthly amount for as long as she lives. As her agent, you should recomment
straight life the annuity payments cease at death. however, because there are no other guarantees that might incur additional charges, this option provides the highest monthly benefits for an individual annuitant
the interest earned on policy dividends is
taxable
which of the following, when attached to a permanent life insurance policy, allows the policyowner to customize the policy to provide an additional amount of temporary insurance on the insured, or allows amounts of temporary insurance to cover other family members
term rider
The initial amount of credit life insurance may NOT exceed
the amount to be repaid under the contract
which of the following is true regarding HIV exams
the applicant must give prior informed written consent
the annuitant dies while the annuity is still in the accumulation stage, what is true of this
the beneficiary will recieve the greater of the money paid into the annuity or the cash value
An insured who has an Accidental Death and Dismemberment policy loses her left arm in an accident. What type of benefit will she most likely receive from this policy?
the capital amount in a lump sum partial disability = lump capital amount
Under a health insurance policy, benefits, other than death benefits, that have not otherwise been assigned, will be paid to
the insured their estate
An insured purchased a 10-year level term life policy that is guaranteed renewable and convertible. What happens at the end of the 10-year term?
the insured may renew the policy for another 10 years, but at a higher premium rate
an insured submitted a notice of claim to the insurer, but never recieved claims forms. He later submits proof of loss, and explains the nature and extent of loss in a hand written letter to the insurer, what would be true
the insured was in compliance with the polilcy requirements regarding claims
What is not covered under plan A in Medigap insurance
the medicare Part A deductible
Which of the following is not covered under Plan A in medigap insurance
the medicare part A deductible
