Life, health and accident insurance
Individuals seeking Social Security disability income benefits must have a disability that will eventually lead to death, or be expected to last at least
12 months
(always get wrong) How long is individual medical expense insurance normally written for?
1 year
Premature IRA distributions are subject to a penalty tax of
10%
In Connecticut, a temporary license may be issued for a period not to exceed __ days
180 days
An insured must notify an insurer of a medical claim within how many days after an accident
20 days
How many employees must an employer have for the Consolidated Omnibus Budget Reconciliation ACT of 1985 (COBRA) to apply
20 or more
(always get wrong) Non qualified medical expense distributions from a Health Savings Account (HSA) have a tax penalty of
20%
Social Security disability income requirements state that in order to become fully insured on a permanent basis, you must have worked in a covered occupation for
40 quarters
(always get wrong) A life insurance policy can be backdated before the application date for up to
6 months
What is the actuarial value of a bronze level health plan?`
60
Which of the following is NOT a valid contract exchange?
An annuity exchanged for a life insurance policy
Which of the following situation would allow funds to be deposited into a rollover IRA?
An employee quits her job and receives $50,000 from her qualified plan.
What qualifies as acceptance of an insurance contract offer?
An issued policy
Which is an accurate description of the premium in a graded premium life insurance policy's
Annual increase in premium for a stated number of years then remains level
A description of a qualified plan's insurance contract may be found in which ERISA reporting form
Annual return/report (Form 5500)
During the liquidation phase of an annuity contract, to whom are the income benefits normally payable to?
Annuitant
Kevin has an existing life insurance policy and assigns it to another insurer for a new contract. How would this transaction be treated for tax purposes?
As a section 1035 exchange
Accident and health insurance claim handling is made more convenient to the insured by utilizing
Assignment of benefits
Accident and health insurance claim handling is made more convenient to the insured by utilizing
Assignments of benefits
In the event of premium default, which life insurance provision will use the cash value to keep the policy in force?
Automatic premium loan
(always get wrong) A producer must secure an appointment with an insurer
Before soliciting insurance applications for that insurer
Which of the following statement BEST describes a double indemnity provision in travel accident insurance?
Benefits are doubled under certain circumstances stated in the policy.
Who normally pays the premiums for group credit life insurance
Borrower
A producer recently replaced an existing Medicare Supplement Policy with a new policy. The producer's compensation for the new policy.
CANNOT exceed the renewal commission of the original policy
Which of the following is NOT an allowable exclusion for long-term care insurance policies?
Care for incurable conditions
an accident and health insurance policy's premium requirements are set forth in which of the following provisions?
Consideration clause
An ______ is a licensee who changes a fee for contracted insurance advisory services.
Consultant
The business of life settlements may include all of the following except
Conversion of Term Life insurance contracts
What effect does interest income have upon insurance premiums
Decrease premium
Which annuity allows contributions to an IRA?
Deferred
For purposes of disability income insurance, earned income would include all of the following EXCEPT
Dividends
(always get wrong) An employer has a group life coverage for his employees. How would an employee in poor health be treated in this situation?
Eligible for the same type of coverage as the other employees
Which statement concerning an adjustable life insurance policy is FALSE?
Evidence of insurability is required when there is a change in premium
How are benefits payments from individually-owned medical expense expense policies treated for tax purposes
Except from income taxes
An officer for a corporation takes out numerous unsecured loans from the company's qualified retirement plan. Which of these rules is the plan in violation of? Key employee rule Top heavy rule Vesting rule Exclusive benefit rule
Exclusive benefit rule
Where does the primary funding for Medicare Part A come from
Federal payroll and self-employment taxes
When an annuity contract has been fully surrendered, how will the surrender charges affect the final contract settlement?
Final contact settlement will be reduced
Major medical policies are typically characterized by which of the following?
Flat deductible
The "Use it to lose it" rule applies to
Flexible Savings Account
which of these is Not a factor during the health insurance underwriting process
Former residence
According to the Affordable Care Act (ACA), insurers can no longer deny health coverage due to pre-existing conditions unless that plan is an
Grandfathered plan
(always get wrong) Tom has a qualified retirement plan with his employer that is currently to be 80% "vested". How can this be interpreted?
If Tom's employment is terminated, 20% of the finds could be forfeited
The unwritten authority given to a producer to carry out necessary incidental acts of the agency agreement is called
Implied authority
(always get wrong) Which life insurance clause prohibits an insurance company from questioning the validity of the contract after a stated period of time has passed
Incontestable clause
Which life insurance clause prohibits an insurance company from questioning the validity of the contract after a stated period of time has passed?
Incontestable clause
All of these are considered features of whole life insurance EXCEPT
Initial premium is lower than for an equivalent amount of term insurance
Which health policy clause specifics the amount of benefits to be paid?
Insuring
When a policy loan is requested by a policy owner and it requires the consent of the beneficiary, what kind of beneficiary designation is this?
Irrevocable beneficiary
After the initial enrollment period for Medicare Part B has expired, when may an individual purchase again?
January through March each year
Which of these is NOT a common life insurance nonforfeiture option
Life income annuity
What is covered under a limited accident and health insurance policy?
Limited perils and amounts
A MET third-party administrator may NOT perform which of the following functions?
Marketing the plan
Medicare Part B excess charges are covered by
Medicare supplemental insurance
A life policy that has premiums that one lower than normal during the early years called
Modified life
Specialty care is provided by which of the following health maintenance organization (HMO) providers?
Neurologist
(always get wrong) Which statement best describes a single premium whole policy?
Paid-up policy that offers lifetime protection
Which statement best describes a single premium whole life policy?
Paid-up policy that offers lifetime protection
A policy owner suffers an injury that renders him incapable of performing one or more important job duties. Any decrease in income resulting from this injury would make him eligible for benefits under which provision?
Partial disability
(always get wrong) Which of the following is a TRUE statement regarding universal life insurance?
Policy indicates how much of each premium is used toward company expenses
What happens to a life insurance policy when the policy loan balance exceeds the cash value?
Policy will no longer be in force
(always get wrong) According to the law of large numbers, how would losses be affected if the number of similar insured units increases
Predictability of losses will be improved
(always get wrong) Any of the following may be an unfair claims practice EXCEPT
Refusing to pay persons bringing false or fraudulent claims
Where is the difference between a standard risk and substandard risk reflected
Premium charges
How are level term policies able to provide level premiums?
Premiums are averaged over the term of the policy
(always get wrong) Home health care benefits typically do NOT include coverage for
Prescription medication
(always get wrong) When a producer submits an application that discloses personal information regarding the applicant, who supples the privacy notice?
Producer
A producer's authority to bind an insurer to an insurance contract may be granted in the
Producer's appointment with the insurance company
Splitting the commission with the buyer on a sale of insurance is known as
Rebating
(always get wrong) what could be the potential result of taking out a cash value loan under a life insurance policy?
Reduces the amount receivable upon surrender of the contract.
(always get wrong) Which of the following is NOT included as a hospice benefit under a major medical plan?
Rehabilitation
Which of the following is NOT included as a hospice benefit under a major medical plan?
Rehabilitation
An insurer has a contractual agreement which transfers a portion of its risk exposure to another insurer. What type of contractual arrangement is this?
Reinsurance contract
(always get wrong) Which of the following is NOT a basic underwriting action for accident and health insurance
Removing uniform policy provisions
When an insurer markets its Medicare Supplement products in Connecticut, which method is acceptable
Replacing an existing policy with one that has greater benefits
According to the IRS, a company may NOT do which of the following in regards to funds in a qualified retirement plan?
Repossess the funds for business purposes
The inability to perform SOME of the duties of one's own occupation is known as a
Residual disability
What kind of arrangement gives the policy owners the right to change the beneficiary?
Revocable designation
(always get wrong) Which term describes the elimination of a hazard?
Risk avoidance
Medicare Part A covers which type of care?
Skilled nursing facility care
What would be the disadvantage of naming a trust as beneficiary of a life insurance policy?
Trust administration fees would reduce policy proceeds
Which life insurance policy provision prohibits a beneficiary from "commuting, encumbering, withdrawing, or assigning" any portion of the proceeds prior to actual receipt from the company?
Spendthrift clause
Deductible
The amount you pay for covered health care services before your insurance plan starts to pay.
Why might it be beneficial for an employee to purchase private disability income insurance for workplace injuries when he/she is already covered by worker's compensation
The benefits arising from a workers compensation claim could be inadequate to replace the loss of income
Which item must be considered by a producer when determining the suitability of an annuity recommendation?
The client's financial status
When disability buy-sell insurance benefits exceed a partner's cost basis, which of the following is correct?
The full-amount is non-taxable to the partner
Which of these is a typical result of a concurrent review?
The length of time spent in the hospital is monitored
Taxable income may be the result from all of those modified endowment contract (MEC) transactions EXCEPT for
The policy surrendered for less than what was paid into it
How is a collateral assignment used in a life insurance contract?
Transfer specific ownership rights to a creditor
What is the face amount of a $50,000 graded death benefit life insurance policy when the policy is issued?
Under $50,000 initially, but increases over time
(always get wrong) An agent gives a conditional receipt to a client for an insurance policy after collecting the initial premium. When will the policy become effective?
When the conditions of the receipt are met
Under which circumstance is the interest rate guaranteed within a market value adjusted annuity?
When the contract has been held for the period specified in the policy
(always get wrong) Which event triggers a deferred annuity to start making benefit payments to the annuitant?
When the contract is annualized
If the basic illustration is not provided, an insurer MUST provide a policy summary to a prospective insured at which of the following times?
When the policy is delivered
(always get wrong) Pete is covered by a group health insurance plan which covers employees in multiple states. This plan is governed by the laws of which state?
Where the master contract was issued
(always get wrong) When an insured under a group life insurance plan in Connecticut elects the conversion option, the new policy is issued
Without requiring evidence of insurability
Which of these is NOT an advantage of term life insurance?
a cash benefit will be provided if the insured is alive at the end of the policy period
The absolute assignment of a life insurance policy results in
all incidents of ownership transferred to the assignee
Misrepresenting pertinent policy provision relating to coverage after a loss is
an unfair discrimination between individuals
(always get wrong) If a disability income policy contains a cost-of-living adjustment rider, benefits must typically be increased
at least one per year from when benefits begin
(always get wrong) Pat is covered by a disability income insurance policy that covers disabilities arising from a work related illness or injury. The amount of his disability income payments for an on-the-job injury may be reduced by
benefits paid under workers compensation
Which of the these is NOT a true statement of the war exclusions
civil insurrections apply
A producer who attempts to intimidate is engaging in
coercion
What does a Mandatory Second Surgical Opinion provision provide to an employer-paid health insurance plan?
containment of the employer's premium cost
Reductions in coverage are one feature of ____ in Health insurance policies.
cost containment
(always get wrong) Any employee insured under a group life insurance plan is normally
covered with term life insurance
The amount of a covered loss to be paid by the insured before a major medical expense policy begins to pay is called the
deductible amount
An employer pays the accident and health insurance premiums for its employees. The premiums paid but the employers are
deductible to the business
Making a statement that is false or maliciously critical of the financial condition of an insurer is known as
defamation
(always get wrong) A qualified profit-sharing plan is designed to
distribute a portion of company earnings t its employees
Employer-paid qualified long-term care insurance premiums are typically
excluded from the employee's gross income
Emily is dibbled. In order to become eligible for Social Security Disability income benefits, she must be
fully insured, according to Social Security
(always get wrong) Federally qualified HMO's must offer
family planning services
Insurable interest in one's own life is legally considered as
generally unlimited
(always get wrong) A medical fees schedule shows the amount an insurer will pay for a given procedure. This amount is considered to be the
highest amount payable
(always get wrong) XYZ Corp has implemented a qualified retirement plan. This plan may NOT discriminate.
in favor of highly compensated employees
Incontestable Clause
is a clause in most life insurance policies that prevents the provider from voiding coverage due to a misstatement by the insured after a specific amount of time has passed.
After an insurance application has been originated, the producer normally
is the major personal contact to the insured
the initial premium for a life insurance policy is typically paid in what way?
it is typically obtained by the producers and forwarded to the insurer
(always get wrong) Laura added a children's rider to her life insurance policy. What type of coverage was added?
level term
Field underwriting by a producer
may result in the disclosure of hazardous activities of the applicant
The PRIMARY propose of the replacement rule is to
protect policy owners from misrepresentations and loss of benefits
Waiver of Premium Rider
pays all life insurance premiums due if the insured person becomes disabled.
Mark is covered by a policy that uses the regular occupation (own-occ) definition of total disability. Using this definition, he will be considered disabled if unable to
perform the substantial and material duties of his regular occupation
A life insurance guaranteed insurability rider gives the insured the right, without proving insurability, to
periodically purchase additional insurance
A life insurance policy's contingent beneficiary is the
person who receives the death benefits if the primary beneficiary dies before the insured
A health insurance applicant is notified that a physical examination is required. Which of the following statements is correct?
physical examinations are performed at the expense of the insurer.
A signed good health statement may be requested by a life producer at the time of
policy delivery
Which action will trigger a penalty tax on premature distributions from a modified endowment contract (MEC)?
policy loans
Pointing out to a prospective client that the life insurance policy you are presenting is covered by the Connecticut Life and Health Insurance Guaranty Association is
prohibited by law
(always get wrong) A certificate of coverage for a group health policy is best described as
proof of coverage for the employee
(always get wrong) In the process of obtaining insurance, a statement made by an applicant that becomes part of the contract is considered to a be
representation
(always get wrong) Statements made by an insured on an accident and health insurance application are considered to be
representations
Third-party administration has become fairly common in accident and health insurance due to the growth of
self-funding benefits
When issuing disability income coverage to a substandard risk, an insurance company may
shorten the benefit period
Contributions made by an employee to a qualified retirement plan are required to be
subject to a vesting schedule
The premiums paid by an employer for his employee's group life insurance are usually considered to be
tax-deductible to the employer
Under the key person disability income policy, benefits will be received as
tax-free income to the business
An insurable risk requires
that the loss must be incalculable
Which statement concerning the Entire Contract provision in an individual accident and health insurance is true?
the agent doesn't have the authority to change the policy or waive its provisions
Which factor determines the maximum disability income benefit that can be purchased by an applicant?
the applicant income
In order to contribute to a Health Savings Account (HSA)
the applicant must be enrolled in a High Deductible Health Plan (HDHP)
Fee-for-service is a method of administering health insurance benefits payments in which
the cost of each service is scheduled
(always get wrong) Which of the following is the BEST candidate for a temporary insurance license?
the executor of the estate of a deceased licensed producer
(always get wrong) A life insurance illustration showing future premiums being paid out of non guaranteed values must disclose that
the policy owner may need to resume premium payments depending on actual results
(always get wrong) The reason for backdating a policy is
to obtain a premium rate based on an earlier age
The owners cost basis for a non-qualified deferred annuity is typically the same as the
total premiums paid
(always get wrong) What is the face amount of a $50,000 graded death benefit life insurance policy when the policy is issued?
under $50,000 initially, but increases over time
In an individual retirement account (IRA), rollover contributions are
unlimited by dollar amount
An insurance policy that can also be classified as a securities product is called
variable life
(always get wrong) Which of the following best describes the presumptive disability provision?
waives the typical total disability requirements
During the application process, a statement made by an applicant that becomes part of the contract is considered to be an
warranty