Life and health - Exam mode
Under Utah Mini-COBRA, eligible employees may extend their group coverage for
1 year
Teresa pays a monthly premium of $100 for her health insurance. What would be the duration of the grace period under her policy?
10 days
Following hospitalization 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 days
Long-term care policies' outlines of coverage should include graphics comparing benefit levels over at least
20 years
Within how many days of requesting an investigative consumer report must an insurer notify the consumer in writing that the report will be obtained?
3 days Investigative consumer reports cannot be made unless the consumer is advised in writing about the report within 3 days of the date the report was requested.
Replacing insurers that use producers must provide applicants with the right to return their policy within a few days of its delivery. How many days?
30
A person buys an individual long-term care policy and is not satisfied with the provisions. Within how many days will the insured be able to return the policy for a full premium refund?
30 days
What is the penalty for IRA distributions that are below the required minimum for the year?
50% If there are no distributions at the required age, or if the distributions are not large enough, the penalty is 50% of the shortfall from the required annual amount.)
A hospital indemnity policy will pay
A benefit for each day the insured is in a hospital.
All of the following could own group life insurance EXCEPT
A group needing low cost life insurance.
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
Long-term care policies MUST cover
Alzheimer's disease
Partners in a business enter into a buy-sell agreement to purchase life insurance, which states that should one of them die prematurely, the other would be financially able to buy the interest of the deceased partner. What type of insurance policy may be used to fund this agreement?
Any form of life insurance
Under the Age Discrimination in Employment Act, retiree health benefits offered to employees under the age of 65 must value
At least the same benefit amount offered by Social Security.
The agent is known as the "Field Underwriter" because of the information he/she gathers for the insurer. This helps the insurer
Avoid adverse selection
A man is still employed at age 65 and is now eligible for Medicare. He wants to know what health insurance coverage he is eligible to receive. Which of the following options are available to him?
Both group health and Medicare
Which of the following is a generic consumer publication that explains life insurance in general terms in order to assist the applicant in the decision-making process?
Buyer's Guide
Which of the following options best depicts how the eligibility of members for group health insurance is determined?
By conditions of employment
What size companies are eligible for health reimbursement accounts (HRAs)?
Companies of all sizes
Which of the following is NOT true of basic medical expense
Coverage for catastrophic medical
Which of the following would be the beneficiary in credit life insurance?
Creditor The creditor is the owner and the beneficiary of the policy.
When contributions to an immediate annuity are made with before-tax dollars, which of the following is true of the distributions?
Distributions are taxable
The main purpose of ERISA is to ensure that
Employees receive the pension and other benefits promised by their employers.
An insurance company is domiciled in Montana and transacts insurance in Wyoming. Which term best describes the insurer's classification in Wyoming?
Foreign A foreign insurer is domiciled in one state and transacts insurance in another. A domestic insurer transacts insurance in the domicile state (in this case, Montana). An alien insurer is domiciled in one country and transacts insurance in another.
In a direct transfer, how is money transferred from one retirement plan to a traditional IRA?
From trustee to trustee
In life insurance policies, cash value increases
Grow tax deferred.
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
In which of the following locations would skilled care most likely be provided?
In an institutional setting
The benefits received by the business in a Disability Buy-Sell policy are
Income tax free
The type of term insurance that provides increasing death benefits as the insured ages is called
Increasing Term
Which of the following is TRUE about the 10-day free-look period in a Life Insurance policy?
It begins when the policy is delivered
An association could buy group insurance for its members if it meets all of the following requirements EXCEPT
It has 50 members. It must have at least 100 members)
All of the following statements are true regarding installments for a fixed period annuity settlement option EXCEPT
It is a life contingency option.
If a deferred annuity is surrendered prematurely, a surrender charge is imposed. How is the surrender charge determined?
It is a percentage of the cash value and decreases over time
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 it as a single premium.
If a settlement option is not chosen by the policyowner or the beneficiary, which option will be used?
Lump sum Upon the death of the insured, or endowment, the contract is designed to pay the proceeds in cash, called a lump sum, unless the recipient chooses an optional mode of settlement.
Medicare Advantage is also known as
Medicare Part C
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.
Shortly after a replacement transaction on a Medicare supplement policy, the insured decided to cancel the policy, but is unsure whether the free-look provision applies. The insured could find that information in the
Notice Regarding Replacement
Who is involved in completing the agent's report?
Only the agent
Which of the following can surrender a deferred annuity contract?
Only the annuity owner
Which option for Universal life allows the beneficiary to collect both the death benefit and cash value upon the death of the insured?
Option B
A woman obtains health coverage through the Marketplace on October 1. Two weeks later she finds out that she is 3 months pregnant. Which of the following is true about coverage for pregnancy?
Pregnancy will be covered immediately
Which of the following would be a violation of life policy illustration regulation in Oregon?
Providing a customer with a incomplete illustration
An agent offers his client free tickets to a sporting event in exchange for the purchase of an insurance policy. The agent is guilty of
Rebating
A policyowner who is also the insured wants to name her husband as the beneficiary of her life policy. She also wishes to retain all of the rights of ownership. The policyowner should have her husband named as the
Revocable beneficiary
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 recommend
Straight life
Which of the following statements about HRAs is TRUE?
The account allows roll-over of unused balances at the end of the year at the employer's discretion
All of the following statements about equity index annuities are correct EXCEPT
The annuitant receives a fixed amount of return
An applicant signs an application for a $25,000 life insurance policy, pays the initial premium, and receives a conditional receipt. If the applicant dies the following day, which of the following is TRUE?
The beneficiary will receive the full death benefit if it is determined that the applicant qualified for the policy.
Which of the following is true regarding reinstatement of insurance coverage that lapsed due to the insured's being on active duty in the U.S. armed forces?
The coverage will be reinstated if applied for within 6 months of release from active duty.
How do employer contributions to a Health Savings Account affect the insured's taxes?
The employer contributions are not included in the individual insured's taxable income
J transferred his life insurance policy to his son two years before his death. Which of the following is true?
The entire face value of the policy will be included in J's taxable estate.
Which statement accurately describes group disability income insurance?
The extent of benefits is determined by the insured's income.
Twins brother and sister each purchased a retirement annuity. When they retired at the same time, each selected the life income option. Both have similar life styles and are in good health. Which of the following is true with respect to their monthly annuity payments?
The man's payments will be larger
Which of the following is true regarding a market value adjusted annuity?
The owner is guaranteed a fixed interest rate for a specific period of time.
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 really owned by the employee
All of the following would be eligible to establish a Keogh retirement plan EXCEPT
The president and employee of a family corporation
Which of the following is correct about Medicare?
The program is divided into four parts (A-D).
Which of the following best defines target premium in a universal life policy?
The recommended amount to keep the policy in force throughout its lifetime
Which of the following is true regarding METs?
They allow several small employers purchase less expensive insurance together.
Which of the following statements is TRUE concerning irrevocable beneficiaries?
They can be changed only with the written consent of that beneficiary.
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
Which of the following is NOT the purpose of HIPAA?
To provide immediate coverage to new employees who had been previously covered for 18 months
The paid-up addition option uses the dividend
To purchase a smaller amount of the same type of insurance as the original policy.
An insured owes his insurer a premium payment. Since then, he incurs medical expenses. The insurer deducts the unpaid premium amount from the claim amount and pays the insured the difference. What provision allows for this?
Unpaid premium
A health insurance policy may cover all of the following risks EXCEPT
War-related injuries
Which of the following statements regarding the taxation of Modified Endowment Contracts is FALSE?
Withdrawals are not taxable
A group policy used to provide accident and health coverage on a group of persons being transported by a common carrier, without naming the insured persons individually is called
a blanket policy
Which term describes a situation in which people who are the most likely to have claims are also the most likely to seek insurance?
adverse selection
The First Street Church plans to sponsor a summer camp for the youth of their congregation. They would like to purchase insurance that would pay benefits should one of the youth get injured while participating in the camp activities. The type of policy they would likely need is a/an
blanket
For the reported losses of an insured group to become more likely to equal the statistical probability of loss for that particular class, the insured group must become
larger
Premium payments for personally-owned disability income policies are
not tax deductible
An insured died by suicide one year after the life insurance policy was issued. The insurer will
refund the premiums paid
What is it called when a company engages in the same types of activities as a commercial insurer in dealing with its own risks?
self-insurance
Hospice care is intended for
terminally ill
On a health insurance application, a signature is required from all of the following individuals EXCEPT
the spouse of the policyowner
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.
What is the maximum penalty for habitual willful noncompliance with the Fair Credit Reporting Act?
$2,500
If $100,000 of life insurance proceeds were used in a settlement option, which paid $13,000 per year for ten years, which of the following would be taxable annually?
$3,000
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. The first insurer has paid the full available benefit, the second insurer pays anything the first did not cover
Which of the following named beneficiaries would NOT be able to receive the death benefit directly from the insurer in the event of the insureds' death?
A minor son of the insured
Which of the following named beneficiaries would NOT be able to receive the death benefit directly from the insurer in the event of the insureds' death?
A minor son of the insured Because a minor does not have the legal capacity to release the insurer from further obligation, benefits normally have to be passed through a guardian or trustee.
Where would long-term care services be provided?
A nursing home or the insured's own home
What process will the insurance company use to monitor the insured's hospital stay to make sure that everything is proceeding according to schedule?
Concurrent review
When both parties to a contract must perform certain duties and follow rules of conduct to make the contract enforceable, the contract is
Conditional. The contract is formed on the basis that certain conditions are met.
The provision in a health insurance policy that ensures that the insurer cannot refer to any document that is not contained in the contract is the
Entire contract clause
Which of the following protects consumers against the circulation of inaccurate or obsolete personal or financial information?
Fair Credit Reporting Act
J applied for a life insurance policy on January 10. The policy was issued on January 31. J's agent was vacationing at the time the policy was issued, so J did not receive the policy until February 18. J decides that he does not want the policy. When would J need to return the policy to the insurer in order to receive a full refund of premium paid?
February 28th, or 10 days after the time the policy is delivered
Under which installments option does the annuitant select the amount of each payment, and the insurer determines how long they will pay benefits?
Fixed amount Under the installments for a fixed amount option, the annuitant selects the amount of each payment, and the insurer determines how long they will pay benefits. This option pays a specific amount until the funds are exhausted. There are no life contingencies.
Under a 20-pay whole life policy, in order for the policy to pay the death benefit to a beneficiary, the premiums must be paid
For 20 years or until death, whichever occurs first.
Which type of Medicare policy requires insureds to use specific healthcare providers and hospitals (network providers), EXCEPT in emergency situations?
Medicare SELECT
An insured is covered under a Medicare policy that provides a list of network healthcare providers that the insured must use to receive coverage. In exchange for this limitation, the insured A is offered a lower premium. Which type of Medicare policy does the insured own?
Medicare SELECT - Medicare SELECT policies require insureds to use specific healthcare providers and hospitals, except in emergency situations. In return, the insured pays lower premium amounts.
Which of the following applies to partial disability benefits?
Payment is limited to a certain period of time
Which of the following is an example of a peril covered in an accident and health insurance policy?
sickness
An applicant buys a nonqualified annuity, but dies before the starting date. For which of the following beneficiaries would the interest accumulated in the annuity NOT be taxable?
spouse
Insurance producers must ensure that contracts they recommend are in the best interest of the insured. This is called
suitability
