Life and health final quiz

an insured has Medicare part d coverage. upon reaching the initial benefit limit, what percentage of the prescription drug cost is the insured responsible for paying?

25%

When must an IRA completely distribute when a beneficiary is not named?

December 31 the year that contains the fifth anniversary of the owner's death

When contributions to an immediate annuity are made within before tax dollars, which of the following is true of the distributions?

Distributions are taxable

In which of the following cases would a credit disability policy be issued?

If an individual is in debt to a specific creditor, payments will be made for him/her until the return to work

Every insurer marketing Long-Term Care insurance must establish marketing procedures to ensure all of the following EXCEPT

LTC policies are marketed effectively to prospective insureds

Which of the following describes taxation of individual disability income insurance premiums and benefits?

Premiums are not tax deductible, and benefits are not taxable

Which of the following is not covered under a dental insurance plan?

Respite care

What happens if a deferred annuity is surrendered before the annuitization period?

The owner will receive the surrender value of the annuity

are insurance company underwriters allowed to discriminate?

Yes, but not unfairly

The benefits for individual disability plans are based on

a flat amount

If the insured under a disability income insurance policy changes to a more hazardous occupation after the policy has been issued, and a claim is filed, the insurance company should do which of the following

adjust the benefit in accordance with the increased risk

all of the following apply to short-term disability plans except

both group an individual plans are renewable

which of the following is true regarding inpatient hospital care of HMO members?

care can be provided outside of the service area

Which of the following is not a characteristic or service of an HMO plan?

contracting with insurance companies

group disability income insurance premiums paid by the employer are

deductible by the employer as ordinary business expense

which of the following best describes the aleatory nature of an insurance contract

exchange of unequal values

An insurer devises an intimidation strategy in order to corner a large portion of the insurance market. Which of the following best describes this practice?

illegal

annually renewable term policies provide level death benefit for a premium that

increases annually

Which of the following entities protects policyowners, insureds and beneficiaries under insurance contracts with insurers fail to preform contractual obligations due to financial impairment

life and health guaranty association

which of the following is not true regarding policy loans

money borrowed from the cash value is taxable

Which Universal Life option has a gradually increasing cash value and a level death benefit?

option A

When an individual is covered under two health insurance policies that have duplicate benefits which could make a claim for benefits because of an injury or illness profitable, it is called

over insurance

a participating insurance policy may do which of the following

pay dividends to the policyowner

which of the following is not a ratings classification that denotes the level of risk associated with a given insured

poor

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

which of the following will be included in a policy summary

premium amounts and surrender values

All of the following entities regulate variable life policies EXCEPT

the guaranty association

All of the following are true statements regarding the accumulation at interest option EXCEPT

the interest is not taxable since it remains inside the insurance policy

all of the following statements are true regarding installments for a fixed amount except

the payments will stop when the annuitant dies

An employee becomes insured under a PPO plan provided by his employer. If the insured decides to go to a physician who is not a PPO provider, which of the following will happen?

the ppo will pay reduced benefits

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

If one takes Social Security retirement benefits at age 62, what needs to be done at age 65 to qualify for Medicare?

nothing

An applicant is discussing his options for Medicare supplement coverage with his agent. The applicant is 65 years old and has just enrolled in Medicare Part A and Part B. What is the insurance company obligated to do?

offer supplement policy on a guaranteed issue basis

Which of the following is true about the requirements regarding HIV exams

the applicant must give prior informed written consent

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

How long is the required grace period in life insurance polcies in this state?

1 month

all of the following are ture regarding the guaranteed insurability rider except

this rider is available to all insureds with no additional premium

what is the term used for an applicant's written request to an insurer for the company to issue a contract, based on the information provided?

application

the automatic premium loan provision is activated at the end of

grace period

A new employee who meets HIPAA eligibility requirements must be issued health coverage on what basis?

guaranteed

A group blanket health policy is best suited for which of the following?

a summer camp

which of the following best describes annually renewable term insurance

it is level term insurance

within how many days does a licensee have to inform the commissioner of a change of address

30

An IRA uses immediate annuities to pay out benefits; the IRA owner is nearly 75 years old when he decides to collect distributions. What kind of penalty would the IRA owner pay?

50% tax on the amount not distributed as required

all of the following can qualify as a trust except

an employee insurance at least 5 employees for the benefit of that employer

who can make a fully deductible contribution to a traditional IRA

an individual not covered by an employer-sponsored plan who has earned incomes

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

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

Which of the following is true regarding health insurance?

it could provide payments for loss of income

a health insurance plan which involves financing, managing, and delivery of health care services and involves a group of providers who share in the financial risk of the plan or who have an incentive to deliver cost effective service is called

managed care plan

on its advertisement a company claims that it has funds in its possession that are, in fact, not available for the payment of losses or claims. the company is guilty of

misrepesentation

What type of whole life insurance policy has premiums that are adjusted so that during the first years of the policy, the premiums are lower than those of a straight whole life policy, and in subsequent years the premiums are higher than those of a straight whole life policy

modified life

who is involved in completing the agent report

only the agent

After the elimination period, a totally disabled insured qualified for benefits from a disability income policy that has a waiver of premium rider. What will happen to the premium that was paid into the policy during the elimination period?

premiums will be refunded

Under which provision can a physician submit claim information prior to providing treatment?

prospective review

an insured pays $1,200 annually for her life insurance premium. the insured applies the year's 300 worth of accumulated dividends to the next year's premium. thus reducing it to $900. what option does this describe

reduction of premium

All of the following are considered unfair trade practices in the business of insurance except

sharing commissions

which of the following does not have to be disclosed in a long-term care policy

the aggregate amount of premiums due

all of the following statements about Medicare supplement insurance policies are correct except

the cover the cost of extended nursing home care

An individual applied for an insurance policy and paid the initial premium. the insurer issued a conditional receipt. five days later the applicant had to submit to a medical exam. if the policy is issued, what would be the policy's effective date

the date of medical exam

In an adjustable life policy all of the following can be changed by the policy owner except

the type of investment