Life & Health Questions pt 2

What maximum amount of employer-provided group-term life insurance is tax-free (excluded from an employee's income)? - $25,000 - $50,000 - $75,000 - $100,000

- $50,000

How many Medicare supplement (Medigap) plans are there? - 2 - 6 - 8 - 10

- 10

The MINIMUM number of employees for group life insurance in California is: - 2 - 10 - 50 - 100

- 2

Medicare Part A begins automatically at age - 55 - 60 - 62 - 65

- 65

A health insurance issuer offering coverage in the individual market must provide premium rebates if its medical loss ratio (MLR) is less than what percentage? - 70% - 75% - 80% - 85%

- 80%

All of the following are required to be included in life insurance illustrations, EXCEPT: - A statement that the benefits in the illustration are guaranteed. - The page number. - The name of the insured. - The page number showing its relationship to the total number of pages in the illustration.

- A statement that the benefits in the illustration are guaranteed.

Which provision will pay a portion of the death benefit prior to the insured's death due to a serious illness? - Disability income - Waiver of premium - Cost of living - Accelerated death benefit

- Accelerated death benefit

What type of annuity has a minimum fixed interest rate and can also achieve stock-market-like gains? - Variable annuity - Equity Indexed annuity - Market Value Adjustment annuity - Fixed annuity

- Equity Indexed annuity

What is PPACA? - State statute (Patient Protection & Affordable Ca re Act) involving major reforms to health care. - Federal statute (Patient Protection & Affordable Care Act) involving major reforms to health care. - A health insurance law (Patient Premiums And Consideration Act) that requires strict notification of increases in health insurance premiums. - Federal statute (Premium Prevention & Accelerated Conditions Act) that prevents large increases in health insurance premiums.

- Federal statute (Patient Protection & Affordable Care Act) involving major reforms to health care.

Who submits the claim for Medicare Part A? - Physician - Pharmacy - Claimant - Hospital

- Hospital

What happens if an insurer violates the Medical Loss Ratio rule and spends too much money on administrative costs? - Insurers that do not meet the Medical Loss Ratio standard will pay a tax penalty to the Health Benefit Exchange. - Insurers that do not meet the Medical Loss Ratio standard will only be required to reduce their spending on administrative costs. - Insurers that do not meet the Medical Loss Ratio standard will be required to provide rebates to their customers and reduce spending on their administrative costs. - Insurers that do not meet the Medical Loss Ratio standard will pay a tax penalty to the Federal government.

- Insurers that do not meet the Medical Loss Ratio standard will be required to provide rebates to their customers and reduce spending on their administrative costs.

Which coverage is available at no cost to persons at age 65? - Medicare Part B - Social Security retirement benefits - Medicare Part A - Long-term care insurance

- Medicare Part A

What does the term non-medical life insurance mean? - The application does not include medical questions. - The results of a previous medical examination can be used. - No physical examination is required. - No medical questions are asked by the medical examiner.

- No physical examination is required.

What is the tax treatment for individual disability income policies? - Non-deductible premiums and tax-free benefits - Deductible premiums and taxable benefits - Deductible premiums and tax-free benefits - Non-deductible premiums and taxable benefits

- Non-deductible premiums and tax-free benefits

An employer allows each employee to choose insurance in addition to the basic insurance plan. Who pays the premium for the voluntary life insurance? - All employees, whether or not they choose to participate - Both the participating employees and the employer - Only the employees who choose to purchase it - Only the employer

- Only the employees who choose to purchase it

Under PPACA, what is a health benefit exchange? - PPACA creates new entities called American Health Benefit Exchanges through which low-income individuals can access public health care programs. - A health benefit exchange is created by health insurers to allow individuals to access benefits in other insurers' plans. - PPACA creates new entities called American Health Benefit Exchanges through which individuals, small businesses, and those who do not have access to affordable employer coverage, can purchase coverage. - A health benefit exchange is created by employers to relieve them of having to provide health benefits to employees.

- PPACA creates new entities called American Health Benefit Exchanges through which individuals, small businesses, and those who do not have access to affordable employer coverage, can purchase coverage.

Which of these statements concerning Medicare is not true? - It is part of the Social Security program. - Part B provides doctors and physicians services. - Part A provides hospital care. - Part C provides long-term care benefits.

- Part C provides long-term care benefits.

According to Employee Retirement Income Security Act of 1974 (ERISA) fiduciary standards, benefit plans are operated for: - Plan participants and employees - Plan sponsors and beneficiaries - Plan sponsors and employees - Plan participants and beneficiaries

- Plan participants and beneficiaries

A disability income policy social insurance supplement (SIS) benefit rider: - Provides a benefit only if the insured is totally disabled and qualifies for social insurance plan benefits - Pays benefits regardless of any social insurance benefits provided - Provides a benefit if the insured does not qualify for social insurance benefits - Pays a benefit if the insured is qualified for workers' compensation benefits

- Provides a benefit if the insured does not qualify for social insurance benefits

To authorize the release of an attending physician's report, the applicant must: - Send a letter to the physician - Furnish the name of the physician - Sign a consent form - Submit to a physical examination

- Sign a consent form

How does the cost recovery rule apply when a life insurance policy is surrendered for its cash value? - The entire cash value surrendered is taxable. - The insurer retains the cost basis. - The insured receives only the cost basis. - The cost basis of the policy is exempt from taxation.

- The cost basis of the policy is exempt from taxation.

Are low-income families eligible to participate in the California Health Benefit Exchange program? -Yes, using a voucher and if the low-income family/individuals income is between 133 - 400% of the federal poverty level - Yes, using tax credits and if the low-income family/individual's income is between 133 - 400% of the federal poverty level - Yes, using a voucher and if the low-income family/individuals income is between 401 - 1000% of the federal poverty level - No, low-income families/individuals are not eligible for the Benefit Exchange program

- Yes, using tax credits and if the low-income family/individual's income is between 133 - 400% of the federal poverty level

The type of health care provider that provides both the health care services and health care coverage is called - a Preferred Provider Organization. - a major medical organization. - an EPO. - a Health Maintenance Organization.

- a Health Maintenance Organization.

All of the following are true of recurrent disabilities EXCEPT - coverage continues after a new elimination period. - they must result from the same injury or illness as the original disability. - they are considered a continuation of a previous period of disability. - there must be a period of recovery between two disability periods.

- coverage continues after a new elimination period.

Common life insurance policy riders include all of the following EXCEPT - extended term. - accidental death. - waiver of premium. - guaranteed insurability.

- extended term.

Vision care insurance usually covers all of the following EXCEPT - eyeglass frames. - eye surgery. - contact lenses. - eye examinations.

- eye surgery.

Part-time nursing care that follows a hospitalization and can be provided in a patient's home is covered under - respite benefits. - home health care benefits. - hospice benefits. - urgent care benefits.

- home health care benefits.

Disability insurance benefits are usually paid: - weekly - monthly - quarterly - annually

- monthly

Medicare Part A provides coverage for all of the following EXCEPT - physicians services. - home health care. - hospice. - hospitalization.

- physicians services.

Medicare Part A will send a statement to which of the following? - Insured - Hospital - Physician - Insurer

- Insured

Which coverage is available at no cost to persons at age 65? - Medicare Part A - Long-term care insurance - Social Security retirement benefits - Medicare Part B

- Medicare Part A

Which of the following is a characteristic of nonqualified annuities? - Tax-deferred earnings. - Limits on contributions. - Mandatory participation. - Tax-deductible contributions.

- Tax-deferred earnings.

The usual elimination (waiting) period for a disability income rider is: - One month - One week - One day - Three to six months

- Three to six months

All of the following are features of a Preferred Provider Organization (PPO) EXCEPT - providers are paid on a fee-for-service basis. - dependents do not need referrals to see a specialist. - primary care physicians act as gatekeepers. - employees have a choice of practitioners.

- primary care physicians act as gatekeepers.

When a credit report is requested by the insurer, the report is sent directly to: - the applicant's physician - the insurer - the agent - the applicant

- the insurer

HMOs are involved in all of the following EXCEPT: - Emphasizing the use of specialty physicians - Providing healthcare services - Providing healthcare financial coverage - Controlling costs by encouraging preventive care

- Emphasizing the use of specialty physicians

What is required of the insured to attain group insurance coverage and not have to provide evidence of insurability? - An affidavit singed by the insured attesting to his good health. - Nothing at all. - Enrollment must occur during an eligibility period. - An attending physician's statement (APS) is needed with the application.

- Enrollment must occur during an eligibility period.

What is used to determine the amount of an annuity distribution that is exempt from taxation? - The exclusion ratio. - The economic benefit. - The incidental limitation. - The seven-pay test.

- The exclusion ratio.

The use of non-medical life insurance accomplishes all of the following EXCEPT: - insureds can avoid answering medical questions on the application. - the processing of life insurance applications is expedited. - there is less demand on the medical profession. - insurer expenses are reduced by the cost of paying for medical examinations.

- insureds can avoid answering medical questions on the application.

All of the following statements about Health Maintenance Organizations (HMOs) are true EXCEPT - members pay fixed monthly fees to the HMO. - members receive care from providers in the HMO network. - members pay higher monthly fees when out-of-network providers are utilized - out-of-pocket expenses are limited as long as the network is utilized.

- members pay higher monthly fees when out-of-network providers are utilized

Individual life insurance policies sold to seniors in the State of California must include a prominently placed statement that divulges all of the following information EXCEPT - a charge might apply if declined after the time allowed for surrender. - proof of surrender must be notarized at the agent's principal office. - the policy can be returned during a free look period for a full refund. - the policy should be returned to the agent or insurer if not wanted.

- proof of surrender must be notarized at the agent's principal office.

A health insurance copayment is: - A percentage of the cost of service shared between the insured and the insurer - A payment paid by the insured to the provider for the service - A percentage of the probable costs of services provided to the insured - A portion of the deductible that the insured pays for the service

- A payment paid by the insured to the provider for the service

Life insurance settlement options include all of the following, EXCEPT: - Fixed amount option - Fixed period option - Interest option - Extended term option

- Extended term option

A group life policy is issued on a contributory basis. This means that the - insured employees will pay part of the premium. - employer will make a contribution whenever an employee dies. - employee group members will each make a contribution whenever an employee dies. - employer will contribute all of the premium.

- insured employees will pay part of the premium.

According to the California Insurance Code governing the use of life insurance policy illustrations, the term "illustration" means - the copy of a policy form included with a proposal. - a presentation of policy features that includes non-guaranteed elements. - a description of the expected coverage of a policy. - any brochure, advertisement, or policy quotation.

- a presentation of policy features that includes non-guaranteed elements.

Vision insurance usually limits coverage in all of the following ways EXCEPT for: - a specific dollar amount for frames. - one set of lenses per year. - a specific dollar amount for examinations. - one examination per year.

- a specific dollar amount for examinations.

The tendency of a person who has greater than average exposure to loss to seek out insurance is called: - probability distribution - aleatory risk - law of large numbers - adverse selection

- adverse selection

If a physician is paid through a Preferred Provider Organization (PPO), the normal way of paying him/her is: - By payment directly for each service (fee-for-service) - A flat amount per subscriber on a monthly basis - By reimbursement - Through a system called 'capitation'

- By payment directly for each service (fee-for-service)

The initial enrollment period for Medicare Part B ends how many months after the 65th birthday month? - 1 month. - 3 months. - 5 months. - 7 months.

- 3 months.

Equally sharing the death benefit among children can be done most effectively by: - Making a child-specific designation - Beneficiaries in succession - Contingent beneficiaries - A class beneficiary designation

- A class beneficiary designation

Which contract promises to pay the owner a guaranteed minimum income for as long as the individual lives? - A whole life policy - An annuity certain - A life annuity - A survivorship policy

- A life annuity

In a life settlement arrangement between a policyowner and a life settlement provider, how would the policyowner typically be paid? - Monthly installments - Annual installments - A lump sum payment - Interest-only payments

- A lump sum payment

What occurs during the accumulation period of an annuity? - Allows the annuity to build on a tax-free basis - Allows the annuity to build on a tax-deferred basis - Payout of the benefits of the annuity - Provides for a guarantee of mutual fund growth

- Allows the annuity to build on a tax-deferred basis

Capitation can be described as: - An HMO concept that pays doctors a predetermined monthly fee - A fee-for-service approach for health ca re - Payment made directly to the subscriber - None of the above fit the definition of capitation

- An HMO concept that pays doctors a predetermined monthly fee

If a dependent child covered by a group life plan is incapable of self-support, coverage under the plan may continue up to age: - 24 - 21 - Any age - 20

- Any age

Who MUST sign a statement acknowledging that a life insurance policy illustration was given to an applicant? - The applicant and the agent. - The applicant and the beneficiary. - The applicant. - The agent.

- The applicant and the agent.

Physicians and surgeons services, whether provided in a hospital, or elsewhere: - Are covered by Medicare Part B. There is a charge for the coverage. - Are covered by Medicare Part A. There is a charge for the coverage. - Are covered by Medicare Part A. There is no charge for the coverage. - Are covered by Medicare Part B. There is no charge for the coverage.

- Are covered by Medicare Part B. There is a charge for the coverage.

The Department of Insurance has jurisdiction over all the following EXCEPT: - Workers' Compensation - Medicare Supplement Plans - HMOs - PPOs

- HMOs

What form of insurance is usually found in Group Life Insurance? - 5 year term - Universal Life - Family policies - 1 year term

- 1 year term

Social Security disability benefits are paid to persons expected to die or be disabled at least: - 3 months - 6 months - 12 months - 24 months

- 12 months

How many days of unpaid leave are allowed in one year under FMLA? - 2 weeks - 4 weeks - 8 weeks - 12 weeks

- 12 weeks

The premium loan rider on a life insurance policy kicks in: - At the premium due date - At the end of the elimination period - At the end of the grace period - At the end of the incontestability period

- At the end of the grace period

Which of the following is not a feature of a major medical insurance policy? - Coinsurance - Maximum benefit limits - Capitation - Deductibles

- Capitation

The policy provision which comes into effect when the insured and primary beneficiary die in a simultaneous (common) accident with no evidence as to who died first is: - Common disaster provision - Joint life provision - Joint and second to die provision - Simultaneous death provision

- Common disaster provision

How is the Medical Loss Ratio used? - It lets health insurance executives know how much their company is losing as a result of unnecessary tests ordered by an insured's doctor. - It lets consumers know how much money an insurer is paying out in claims and how much it uses to cover its administrative costs and profits. - It lets consumers know how much money a health insurer loses as a result of uninsured patients in a hospital. - None of the above are correct.

- It lets consumers know how much money an insurer is paying out in claims and how much it uses to cover its administrative costs and profits.

Which program pays the cost of nursing home care for people who cannot afford it themselves? - Medicare Part B. - Medi-Cal. - Social Security. - Medicare Part A.

- Medi-Cal.

Overall there are three main factors that are used to compute the premiums charged for health insurance. They are: - Policy reserves, interest, expenses - Mortality, interest, expenses - Morbidity, interest, expenses - Morbidity, reserves, expenses

- Morbidity, interest, expenses

In disability insurance, several riders are available for insureds to purchase. The "return of premium" rider: - Allows the insured to return the policy within usually 6 months and receive a full refund of the premiums paid. - Waives a premium retroactively to the beginning of a disability. - Provides for the return of a percentage of premiums paid at periodic intervals, provided the insured has made no claims. - Takes the premiums used to pay for the policy and redirects them to pay for medical expenses.

- Provides for the return of a percentage of premiums paid at periodic intervals, provided the insured has made no claims.

What is the purpose of the rehabilitation provision in a disability income policy? - To encourage disabled insureds to return to their original occupations - To provide increases in disability benefits to keep pace with inflation - To compensate insured's who lose their sight in both eyes - To pay a portion of a workers pre-disability income when the insured returns to work

- To encourage disabled insureds to return to their original occupations

A type of receipt stating that coverage begins on the date of the application as long as the insurer approves the application is a: - Conditional Receipt - Temporary Insurance Agreement - Binding Receipt - Binder

- Conditional Receipt

A commonly used cost containment measure for emergency hospital care under a major medical expense plan is: - Inpatient fee - Pre-admission test - Deductible - Premium tax

- Deductible

What is the difference between deferred annuities and immediate annuities? - Deferred annuities have longer accumulation periods - Deferred annuities have no surrender charges. - Deferred annuities cover more lives. - Deferred annuities have longer liquidation periods.

- Deferred annuities have longer accumulation periods

Under the Consolidated Omnibus Budget Reconciliation Act (COBRA), a qualifying event ensures that an employee who is covered can: - Elect to continue coverage. - Transfer coverage to another group. - Convert to an interim policy. - Request a waiver of premium.

- Elect to continue coverage.

The rules regarding life insurance policy illustrations are intended to ensure all of the following, EXCEPT: - Ensure that illustrations do not mislead purchasers of life insurance and annuities. - Ensure that the disclosures that are required in connection with illustrations are specified. - Ensure that illustrations are understandable by prescribing standard formats to be followed when illustrations are used. - Ensure that the illustration specifies that both guaranteed and non-guaranteed elements will continue unchanged for all years shown.

- Ensure that the illustration specifies that both guaranteed and non-guaranteed elements will continue unchanged for all years shown.

A self-insured group qualifies for stop-loss coverage after claims: - Equal the anticipated loss per month - Meet the out of pocket expense during the policy period - Exceed a specified limit in a set period of time - Average the maximum amount stated on the master policy

- Exceed a specified limit in a set period of time

Retirement benefits under social security are available only for workers who are: - Currently insured - Disability insured - Medicare insured - Fully insured

- Fully insured

Which of the following is NOT an option for the use of the policy dividends? - Fund the distribution of monthly income payments. - Purchase paid-up additions. - Reduce the current premium. - Purchase a 1-year term addition.

- Fund the distribution of monthly income payments.

In managed care, the members' choice of providers is most restrictive in which of the following type of plan? - Point of Service (POS) - HMO - Indemnity - PPO

- HMO

Part A of Medicare covers expenses incurred for: - Home Health Care - Private duty nursing - Charges for a private hospital room - The first three pints of blood in a calendar year

- Home Health Care

Which of the following is true about life insurance beneficiary designations? - The primary and secondary beneficiary share proceeds equally. - If the primary beneficiary dies before the insured, the benefits are paid to the estate of the insured even if there is a contingent beneficiary. - When the insured dies the death benefit is paid to the secondary beneficiary by even if there is a primary beneficiary. - If there is no surviving beneficiary, the death benefit is paid to the insured's estate.

- If there is no surviving beneficiary, the death benefit is paid to the insured's estate.

What is one difference between group life and individual life underwriting? - Only individual life insurance requires the naming of a beneficiary. - Individual life insurance requires the applicant to answer medical questions. - Only group life insurance gives a choice of payment plans. - Group life insurance usually requires a medical examination.

- Individual life insurance requires the applicant to answer medical questions.

Which settlement option allows only the death benefit earnings to be paid to the beneficiary? - Fixed amount option - Fixed period option - Interest option - Cash option

- Interest option

All of the following are examples of the dividend options available on a whole life insurance policy, EXCEPT: - Life income with period certain - Application to reduce premium - Paid-up additions - One-year term option

- Life income with period certain

Most life insurers belong to which of the following industry organizations? - National Association of Insurance Commissioners - Medical Information Bureau - Securities and Exchange Commission - All of the above

- Medical Information Bureau

Under which policy provisions can a policy be surrendered for its net cash value? - Dividend options. - Settlement options. - Beneficiary options. - Nonforfeiture options.

- Nonforfeiture options.

The guaranteed insurability rider provides that the policyholder can purchase more insurance: - On his own life at certain specified ages without proof of insurability. - On his own life at specified ages provided the policy owner is insurable. - On the lives of his dependents at certain specified ages. - Any time during the policy owner's life, on his own life, without proof of insurability.

- On his own life at certain specified ages without proof of insurability.

In life insurance policies, naming beneficiaries is an important part of the application process. Choose from below the best description of a contingent beneficiary. - One with the first right to receive proceeds if there is no surviving primary beneficiary and the insured dies. - One with the right to proceeds only if the primary and secondary beneficiary die in a common disaster. - One with the right to proceeds if the insured dies. - All the above are false

- One with the first right to receive proceeds if there is no surviving primary beneficiary and the insured dies.

What is the difference between a conditional premium receipt and a binding premium receipt? - Premiums must be paid to receive only a conditional receipt. - Only a conditional receipt always provides insurance that is effective from the date the receipt is given. - Only a binding receipt always provides insurance that is effective from the date the receipt is given. - The applicant must be insurable in order to have coverage only under the binding receipt.

- Only a binding receipt always provides insurance that is effective from the date the receipt is given.

Which type of life insurance policy gives the policy owner the right to share in the insurer's surplus? - Level term - Decreasing term - Participating - Non-participating

- Participating

Certain healthcare providers are called "service type providers." This means: - Payments for services are made directly to the provider - They are more service oriented than the average provider - They provide broader services to their insureds - Payments for services are made directly to the insured

- Payments for services are made directly to the provider

Choose the best beneficiary designation for the following case: The children are to receive equal shares of the benefit. If any of the children die before the insured does, the insured wishes the remaining children to receive the deceased child's share equally divided among them. - Each named as primary beneficiary, equal shares - Per stirpes - Per capita - None of the above

- Per capita

Which health plan pays more for care received from a network provider than it pays for care from a non-network provider? - Health Maintenance Organization (HMO). - Major medical. - Exclusive Provider Organization (EPO). - Preferred Provider Organization (PPO).

- Preferred Provider Organization (PPO).

A significant benefit to the insured in group underwriting versus individual is: - Previous claims are not a consideration. - The cost of coverage is lower. - Members are eligible for the entire contract period. - There are no enrollment restrictions.

- Previous claims are not a consideration.

When premium payments on a whole life insurance policy are being waived because the person whose life is insured is totally disabled, the actual effect on the policy's cash value will be to: - Maintain the cash value at a constant amount until the disability ceases - Provide for the continued increase in the cash value during the period of disability - Reduce the tabular cash value each year by the amount of premiums waived on account of disability - Adjust the values to those of life insurance coverage on a reduced paid-up policy

- Provide for the continued increase in the cash value during the period of disability

Which nonforfeiture option uses an existing policy's cash value to purchase a paid-up policy with a lower face value than the original policy? - Extended paid-up insurance option - Extended term option - Cash surrender value option - Reduced paid-up insurance option

- Reduced paid-up insurance option

A disability policy, described as "guaranteed renewable" is one where the insurance company: - Reserves the right to change the premiums, but may not change any of its terms. - Reserves the right to change any of its terms. - May not renew the policy if the insured ceases to comply with certain conditions such as continued employment. - Surrenders the right to change the premiums.

- Reserves the right to change the premiums, but may not change any of its terms.

If an insurer indicates that an illustration will be used, they must do which of the following? - Send a summary status report to the policyowner annually. - Update and revise the policy annually. - Send the form to the Commissioner for approval. - Send a summary status report to the policyowner at least every 6 months.

- Send a summary status report to the policyowner annually.

To authorize release of an attending physician's report, the applicant MUST: - Sign a HIPAA consent form - Submit to a physical examination - Send a letter to the physician - Call and direct the physician to release information

- Sign a HIPAA consent form

Which provision in a life insurance contract prohibits a beneficiary from assigning his or her interest in the policy proceeds? - incontestability clause - Spendthrift clause - Reinstatement provision - Nonforfeiture provision

- Spendthrift clause

What is it called when a health insurer will pay 100% of covered medical expenses once the insured has paid a maximum out-of-pocket amount? - Multiple employer welfare arrangement - A coverage delay provision - Gap insurance - Stop-loss coverage

- Stop-loss coverage

Select the type of annuity payment option that has the least amount of risk for the insurer, and therefore, pays the highest amount of income to the insured over time. - Life with 15 years certain - Life with 20 years certain - Life with 30 years certain - Straight/pure life

- Straight/pure life

An agent who replaces an existing life insurance contract must do all of the following, EXCEPT: - Submit a copy of the replacement notice to the existing insurer. - Obtain a signed statement from the applicant as to whether insurance is to be replaced. - Submit a copy of the replacement notice to the applicant. - Submit a copy of the replacement notice to the replacing insurer.

- Submit a copy of the replacement notice to the existing insurer.

Who must sign a statement acknowledging that a life insurance policy is to be replaced by an applicant? - The applicant and the agent - The applicant and the beneficiary - The agent - The applicant

- The applicant and the agent

A hospital confinement indemnity insurance policy pays: - The daily benefit coverage amount stated in the policy for each day the insured is confined in the hospital. - The amount of the actual hospital expenses. - 100% of the covered medical expenses less the deductible and co-insurance percentage. - An indemnity to the insured for all expenses incurred when the insured is confined to a hospital.

- The daily benefit coverage amount stated in the policy for each day the insured is confined in the hospital.

Who pays the premiums for voluntary group life insurance benefits made available through an employer? - The insurer - The employee - The employer - There is no premium charged for voluntary group life insurance

- The employee

All of the following apply to the life insurance cost-of-living rider, EXCEPT: - No evidence of insurability is required for the annual increases in coverage. - The insured receives an automatic increase in the policy's death benefit when there is an increase in the cost of living index. - The face value of the policy raises or lowers as the cost of living index increases or decreases. - There is an additional premium for the additional coverage.

- The face value of the policy raises or lowers as the cost of living index increases or decreases.

What is the first step in submitting Medicare claims? - Medicare submits expenses to the Medicare supplement provider. - The medical provider submits expenses to Medicare. - The medical provider submits expenses to the patient. - The patient submits expenses to Medicare.

- The medical provider submits expenses to Medicare.

What makes up the entire contract in a life insurance policy? - The policy and any sales literature presented by the agent of the policy holder. - The policy by itself, but never the application. - The policy, the application, and any verbal understandings. - The policy and, when attached, the application.

- The policy and, when attached, the application.

When an employee has group term life insurance provided by his employer, how will the policy proceeds paid to the employee's beneficiary be taxed? - The policy proceeds will be considered taxable income to the employer. - The first $50,000 will be received tax-free, with the remainder taxable as ordinary income. - The policy proceeds will be taxed as ordinary income to the beneficiary. - The policy proceeds will generally be tax-free to the beneficiary.

- The policy proceeds will generally be tax-free to the beneficiary.

Which statement best describes how the Return of Premium (ROP) rider works on a term life policy? - The policyowner will receive all of the premiums paid in for the policy if it is canceled within the first 2 policy years. - The policyowner will receive all or a portion of the premiums paid in over the life of the policy if the insured is still living at the end of the policy's term. - When the policy lapses due to nonpayment of premium, this rider will result in the policyowner receiving a check for the total premiums paid in up to the time it lapsed. - If the insured dies as the result of suicide after the first 2 policy years, this rider will result in all premiums paid in being returned to the policyowner or policyowner's estate.

- The policyowner will receive all or a portion of the premiums paid in over the life of the policy if the insured is still living at the end of the policy's term.

The term "assignment" refers to: - The transfer of the insured's interest in a policy to another party - The insurance policy applying to each insured - The insurer's right to collect damages from a third party - The insured's right to receive broad new coverage from the insurer at no charge

- The transfer of the insured's interest in a policy to another party

What rights do individuals have if they disagree with a decision on the amount Medicare will pay? - They can terminate making premium payments until the claim is resolved. - They can ask the Medicare carrier to review the decision. - They can change Medicare carriers. - They can request a second opinion by the state medical examiner.

- They can ask the Medicare carrier to review the decision.

Which of the following is incorrect regarding life insurance benefit settlements? - They can be changed anytime during the life of the policy. - They must be decided at the time of application. - If not decided by the policyowner, the beneficiary can decide on a settlement option. - If not chosen by the policyowner, the death benefit goes directly to his estate.

- They must be decided at the time of application.

An automatic premium loan, found only in cash value policies: - ls used to pay off consumer loans. - Will pay a premium that is due by using the policy's cash value. - Will pay a premium that is due only one time; the loan must immediately then be paid off. - All of the above statements regarding the automatic premium loan provision are false.

- Will pay a premium that is due by using the policy's cash value.

If one were to receive the principal sum benefit under an Accident Death (AD) rider, the death must occur: - Within the policy period for any cause - Within a specified number of days after injury occurs - Anytime during a rehabilitation period - Any time that total dismemberment falls in the period

- Within a specified number of days after injury occurs

A basic life insurance policy illustration must include all of the following EXCEPT - a definition of key terms used in the illustration. - the impact that riders may have on the policy values. - a statement that the contract is a life insurance policy. - a statement that actual results will be as illustrated.

- a statement that actual results will be as illustrated.

An insured replaces an existing annuity with a new one and must pay a surrender charge for cancelling the existing annuity. The new policy holds no greater financial benefits to the insured than the existing contract. This is an example of: - an unnecessary replacement. - a substandard annuity. - nonforfeiture. - a deferred annuity.

- an unnecessary replacement.

An attempt by an agent to deter an insured from replacing an existing life insurance policy is called - alienation. - conservation. - replacement. - concealment.

- conservation.

The additional premium charged by an insurer for adding the accidental death benefit to a whole life policy - does not affect the policy's cash value. - increases the policy's cash value. - decreases the length of time that premiums are payable. - increases the yearly dividend amount.

- does not affect the policy's cash value.

All of the following are characteristics of adverse selection EXCEPT -people with the greatest probability of loss are the ones most likely to buy insurance. - it normally occurs if the premium is low relative to the loss exposure. - poor underwriting results may occur if too many of the applicants accepted for insurance are those most likely to incur serious losses. - insurance companies can not discriminate against applicants who have a higher probability of loss.

- insurance companies can not discriminate against applicants who have a higher probability of loss.