Life and Health Review #2
Which of the following is not a standard life insurance policy nonforfeiture option
1 year term insurance
Which of the following statements regarding a traditional IRA is not correct
10% penalty is assessed on any distribution from an IRA before age 59 1/2
A notice to application must be issued to the consumer no later than
3 days after the report was requested
Which of the following statements pertaining to life insurance policy application is correct
An agent must be very specific when listing an applicant's occupation on an application
Ted is disabled and is eligible to receive $1,200 in benefits through his disability policy. He is also covered for benefits under Social Security, with a primary insurance amount (PIA) of $750. Under which circumstances will he receive a total of $1,950 a month?
If he is unable to do any work of any kind
What is not covered by Medicare Part A
an outpatient medical facility
Which of the following statements regarding 1035 exchanges is not correct
annuity life insurance transfers are tax free
Which is not a life insurance policy provision
cancellation
Under the relation of earnings to insurance provision, the insured's benefit
cannot exceed earnings
Lisa is in the hospital awaiting surgery. The doctors meet in the morning to discuss the best way to proceed as a routine procedure in their PPO. This is an example of:
concurrent view
Beth's health insurance policy contains a provision that allows her to renew coverage up to age 65. However, the policy also states that should Beth lose her job, the insurance company will cancel the policy, regardless of Beth's age. In terms of renewability, what type of policy does Beth have? A. cancelable B. optionally renewable C. guaranteed renewable D. conditionally renewable
conditionally renewable
All individual health insurance policies must include a notice of claim provision requiring that a written notice of claim must be given to the insurer within how long after the occurrence of the loss
days
The premiums and benefits in a business overhead expense plan are
deductible and taxable
Which of the following statements regarding PPO's is true
health care services offered by in network providers are contracted between the PPO and the providers
Rick purchased an annuity, making a single lump-sum payment on September 1, 2007. His benefits began on October 1, 2007. What kind of annuity did Rick buy?
immediate
Thomas, an insured, submits a claim and proof of loss for medical expenses covered by his major medical policy. According to the time of payment of claims provision, how soon must the company pay the claim?
immediately
Equity index life insurance policy values are determined by a specified participation rate and
indirect links to a stock market indecx
Care that is provided on an intermittent basis by licensed nurses is known as
intermediate care
All of the following are annuity premium factors except
medical history
Which of the following statements best describes the general tax treatment of life insurance pre and post death distributions
most distributions from a life insurance policy at the insured's death are income tax free, but pre death distributions may be subject to income taxation if the withdrawal exceeds premiums paid
A policy that covers one specific type of life threatening or serious condition is know by all of the following names except
obscure disease policy
What is not a supplemental health care service
outpatient care
Floods, heart attacks, and choking are all examples of
perils
Basic hospital expense insurance provides coverage for all of the following except
physician services
Basic hospital expense insurance provides coverage for all of the following except
physicians services
The scope of the entire contract does not include
premium computations
As a cost-containment method in medical plans, all of the following are examples of case management provisions EXCEPT:
reduction provision
Which of the following uses life insurance death benefits to provide financial support for dependents when the primary wage earner dies
survivor protection
If there are changes to an insurance app due to an error in info, who must initial the corrections
the applicant
Which of the following factors is not used to calculate each payment with the fixed period option
the chosen payment amount
Which of the following statements regarding group life insurance is false
the converted policy must be a term insurance policy, not permanent
ERISA requires certain info concerning group insurance plans be made available to all of the following except
the department of commerce
Which of the following statements regarding deferred compensation plans is not correct
the employee may convert the funds to another plan if he leaves the company
Which of the following is not a characteristic of group health insurance plans
the parties to a group health plan are the employer and employees
Who owns the life insurance policy cash value
the policyowner
Which of the following statements regarding the lifetime reserve of hospital coverage for meidcare patients is correct
the reserve does not renew with a new benefit period
For a waiver of premium rider to become operative, the insured must be
totally disabled
A contract agreement between a ceding insurer and reinsurer to underwrite certain classes of risks known as
treaty reinusrance
An example of a state administrated disability program is
workers comp
Which of the following is not a standard life insurance policy nonforfeiture option
1-year term insurance option
Assume there are 4 different mortality tables. Of these, the most reliable would be the mortality table covering
10 million lives
What is the max number of days of skilled nursing facility care for which medicare will pay benefits
100 days
Alice has a major medical policy with a $500 deductible and an 80/20 coinsurance provision. If she receives a hospital bill for $7,500 of covered expenses, how much of that bill will she have to pay? A. $1,400 B. $1,900 C. $2,000 D. $2,400
1900
All individual health insurance policies must include a notice of claim provision requiring that a written notice of claim must be given to the insurer within how long after the occurrence of the loss
20 days
Which of the following $50000 limited pay life policies will have the highest premium for an applicant who is age 30
20 pay life
Identify the number of days the insured or insurer must do the following in this order. Notice of claims, claims form, proof of loss, waiting period for sickness claims
20, 15, 90, 10
For long term care policies to be considered qualified, a health professional must certify that a chronic illness will last for a min of
3 months
After how many days is coverage automatically reinstated if the insurer has not disapproved the application and notified the insured
45 days
After how many days is coverage automatically reinstated if the insurer has not disapproved the application and notified the insurer
45 days
Interest earned distributions made are tax free if a roth IRA is maintained for at least how many years
5 years
Which of the following period certain income options would call for the highest payment rate per $1000 of life policy proceeds
5- year period certain
Benefit periods for short term disability income policies typically range from
6 months to 2 years
Written notice of claim must be given to the insurer within how many days after loss
60 days
Prior to the Affordable Care Act, according to HIPAA, a newly hired worker was not subject to a waiting period if she had less than how many days between jobs with no health insurance coverage
63 days
Medicare part a covers
80% of the cost of durable medical equipment
Who must sign endorsements, modifications, or any other changes to a life insurance contract
an executive officer of the company
Which of the following statements regarding 1035 exchange is not correct
annuity to life insurance transfer are tax free
Unlike corporate dividends, insurance policy dividends
are not considered taxable income
All of the following are directly related to ERISA except
assistance with medicare
What type of annuity payment option provides a guaranteed income to the annuitant for life and, the annuitant dies before the annuity is depleted, a lump sum cash payment to the annuitant's beneficiary?
cash refund
The Time Payment of Claims provision requires that
claims must be paid after the insurer is notified and receives the proof of loss
The fact that an insurance contract promises to pay benefits contingent on a future uncertainty makes it what type of contract
conditional
What disability policy can be used to fund a buy sell agreement between partners and stockholders in a closely held corporation
disability buyout option
Which of the following statements regarding the conversion privilege in group health insurance is correct
during the period when the insured is converting from the group to the individual plan, she is still insured
All of the following are considered to be a viable medical plan cost saving options except
emergency room preadmission testing
Which of the following statements regarding employee eligibility for group benefits is true
employees must be actively at work
Which of the following best describes the basic purpose for the facility of payment clause found in some life insurance policies
it authorizes the insurer to designate the payee of the life insurance death benefits if the designated beneficiary cannot be located
Which of the following statements best describes the nature of a cash value loan
it is a financial section in which the insurer loans the money and attaches a comparable portion of the cash value as collateral
Which one of the following statements about medicare supplement policies is correct
it is designed to reimburse individuals eligible for medicare for medical, hospital, and surgical expenses
Which of the following statements regarding the mortality rate is not correct
it is used in the determination of health insurance rates
Debbie concerned that her health insurance coverage is inadequate. Which of the following is the best reason for her to purchase an indemnity type medical expense policy
it will pay a specified per day benefit
The core policy plan A developed by NAIC as a standard medicare supplement policy includes all of the following except
long term care insurance
Comprehensive medical expense insurance covers all of the following except
loss of income resulting from sickness
Nicole plans to take out a $200000 mortgage for a vacation home. Her bank. however; requires her to provide some sort of collateral for the loan. If Nicole owns a $500000 whole life insurance policy, the policy
may be used as collateral for the loan
All of the following elements of an application of an adjustable life policy are adjustable except
a policy loan rate
In most states, all of the following are optional provisions in an accident and health insurance contract except
a reinstatement period
All of the following are elements of a contract except
acknowledgement
Lee, who is a CPA would like to open a traditional IRA. He will be 62. He's not employed Which of the following are true
Lee is not eligible to open an IRA because he does not have earned income
Mary, age 70, recently purchased a nonqualified immediate annuity to supplement her retirement income and through it will receive a lifetime income of $800 per month. Which of the following statements most correctly describes how this income will be taxed?
Mary will pay income tax each year on just a portion of the payments received, and when she has fully recovered her basis, all future payments will be taxable
Megan is a sole prop of a bookstore and paid $5000 last year in premiums for medical expense coverage. She incurred $6000 in medical expenses and was reimbursed for these costs under her health plan. Which of the following statements is correct
Megan can take a deduction for the entire amount of premiums paid
Susan, the beneficiary on John's $500000 life policy, choose life only as her settlement option. Susan received 5 years of settlement checks from the insurance company, totaling $150000. How much will Susan's beneficiary receive upon her death
Nothing, because life only states that when the beneficiary dies, any remaining death benefit is kept by the insurance company
The primary difference between a preferred provider organization (PPO) and a point of service (POS) plan is that
a POS utilizes a gatekeeper, while PPO does not
All of the following are considered service providers except
a commercial insurance company
Which of the following statements regarding 1035 exchanges are not correct
a life insurance policy that is a modified endowment contract may be exchanged for a new life insurance policy and provided that premiums are paid for at least 7 years thereafter, no linger be considered a ME
An attending physician's statement requested by the UW dept will normally contain all of the following applicant information except
a medical information bureau report
All of the following are basic factors used to compute life insurance premiums except
a morbidity factor that covers the risk of becoming disabled and triggering the waiver of premiums provision
Lawrence signed an application for a life insurance policy on September 2, and took a required medical exam on September 4. He gave the agent a check for the initial premium and received a conditional receipt at the time of application. The policy was issued as originally applied for and the agent delivered the policy to him on October 15. The earliest effective date for Lawrence's insurance policy would be:
September 4
Eric works for J&G Corp and is recently divorced. His 56 year old ex spouse Sophie, wants to know if she can maintain coverage under Eric's group medical insurance plan. Which of the following statements best describes how this situation might be treated
Sophie would be able to continue coverage for up to 3 years paying up to 102% of the premium required for the group coverage
After a family's breadwinner dies, the "blackout period" generally can be defined as the period A. during which children are living at home B. that begins when the youngest child turns 16 and ends when the surviving parent reaches age 60 C. during which children are in school D. from the surviving parent's retirement to death
that begins when the youngest child turns 16 and ends when the surviving parent reaches age 60
Which of the following statements regarding group life insurance is false
the converted policy must be a term insurance policy, not permanent insurance
The calendar year deductible provision of a major medical policy stipulates
the deductible is applied once during the calendar year
Which of the following statements regarding persons participating in an HMO is correct
they pay fixed periodic fee whether or not health care services are used
Which of the following statements regarding a spousal rider to a life insurance policy is nor correct
this rider usually provides coverage that lasts as long as the coverage that is provided through the base policy
Which of the following is a promise in exchange for an action
unilateral contract
Cost saving measures of managed care include all of the following except
unlimited mental and nervous benefits
During the underwriting process, an insurer may do all of the following EXCEPT:
verify the applicant's military records, if any