Missed Licensing Questions

Types of health policies: Hospital Services and Emergency Care Health Maintenance Organizations (HMOs) High Deductible Health Plans (HDHPs) and Related Health Savings Accounts (HSAs) Group Disability Income Policy Individual Disability Income Policy Business Overhead Expense Policy Levels of Care Preferred Provider Organizations (PPOs) Accident Group Insurance Individual vs. Group Contracts Health Policy Provisions, Clauses, and Riders: Guaranteed Insurability Rider Relation of Earnings to Insurance Probationary Period Noncancellable Social Insurance Part A Other Health Insurance Concepts: Employer Provided Health Insurance Total, Partial, Recurrent, and Residual Disability Indiana Laws and Departmental Rules Common to All Lines: Defamation Producer Licensing Law Violations Hearings Rebating Health Regulations: Outline of Coverage Appropriateness of Recommended Purchase Indiana Health Coverage Programs (IHCP) Shopper's Guide Standards for Marketing Newborn and Adopted Children Enrollment Licensing Replacement

finish these

HMOs are known as what type of plans?

service the hmo provides benefits in the for of services rather than in the form of reimbursement

what is the max age for social security disability?

65

Within how many days of requesting an investigative consumer report must an insurer notify the consumer in writing that the report will be obtained? a) 3 days b) 5 days c) 10 days d) 14 days

a) 3 day Investigative consumer reports cannot be made unless the consumer is advised in writing about the report within 3 days of the report was requested

If a consumer requests additional information concerning an investigative consumer report, how long does the insurer or reporting agency have to comply? a)5 days b)7 days c)10 days d)3 days

a) 5 days Consumers must be advised that they have a right to request additional information concerning investigative consumer reports, and the insurer or reporting agency has 5 days to provide the consumer with the additional information.

Under the LTC marketing regulations which of the following questions would a producer NOT have to ask the applicant in order to determine if the purchase is suitable? a) How much are you able to pay in premiums? b) Do you currently have any Medicare supplement policies? c) Are you planning to replace existing health insurance? d) What is the amount of your existing health or LTC?

a) How much are you able to pay in premiums? Every insurer marketing LTC insurance coverage must establish marketing procedures to ensure that any comparison of policies will be fair and accurate, excessive insurance will not be sold, and every reasonable effort is made to identify whether a prospective applicant for LTC insurance already has accident and health or LTC, and the types and amounts of such insurance.

All of the following are differences between individual and group health insurance EXCEPT: a) Individual insurance does not require medical examinations, while group insurance does require medical examinations. b) In individual policies, the individual selects coverage options, while in a group plan all employees are covered for the same coverage which is chosen by the employer. c) Individual coverage can be written on an occupational or nonoccupational basis; group plans cover only nonoccupational. d) Individual policies are renewable at the option of the insured, while group usually terminates when the individual leaves the group.

a) Individual insurance does not require medical examinations, while group insurance does require medical examinations. In individual coverage, policies are issued based upon individual underwriting. In group plan, everyone is covered for the same coverage and there is no individual underwriting selection.

A long-term care shopper's guide must be presented at what point? a) Prior to the time of application b) At the time of application c) Between the completion of the application and the delivery of the policy d) At the time of policy delivery

a) Prior to the time of application A long-term care insurance shopper's guide must be provided in the format developed by the National Association of Insurance Commissioners (NAIC). The shopper's guide must be presented to the applicant prior to completing the application.

An insured was diagnosed two years ago with kidney cancer. She also has a 30 year smoking history. Th insured is now healthy enough to work and has just started a full time job. What described the health insurance that she's most likely to receive? a) She would be covered under her employer's group health insurance plan, without higher premiums. b)She would be covered under her employer's group health insurance plan, but she would pay higher premiums than the other employees c) she would be denied coverage due to risk posed by prior medical history d) she would be accepted provided that a rider excluding cancer related conditions is attached.

a) She would be covered under her employer's group health insurance plan, without higher premiums. Because the insured was hired for a full-time job, she would be eligible for her employer's group health insurance plan. Group plans cover employees equally regardless of their age, gender, and past medical history.

An insured was pregnant when she applied for an individual accident and health sickness insurance policy. When will her insurance benefits extend to the newborn? a) The child may not be covered b) At the moment of birth c) Within 30 days of filing the appropriate application d) Within 48 hours of filing the appropriate application

a) The child may not be covered In Indiana, insurers are not required to cover a newborn if the insured's individual accident and sickness policy was issued while they were pregnant with that child.

In addition to participation requirements, how does an insurer guard against adverse selection when underwriting group health? a) by requiring that the insurance be incidental to the group b) by having each enrollee undergo a paramedical examination c) by obtaining MIB reports on each enrollee d) by imposing case management provisions

a) by requiring that the insurance be incidental to the group The group must be formed for a reason other than buying group insurance

Which of the following is NOT a Medicaid qualifier? a) Insurability b) Income level c) Age d) Residency

a) insurability Medicaid is a program operated by the State with some Federal funding, to provide medical care for those in need. To qualify for Medicaid, a person must be poor or become poor, be a U.S citizen or permanent alien, and must meet other qualifiers, some of which are blind, disabled, pregnant, over 65, or caring for children receiving welfare benefits.

An insured had a heart attack while jogging but is expected to return to work in approximately 6 weeks. the Insured Disability policy will a) Replace a percentage of his lost income b) Cover injuries only c) not pay d) pay a lump sum benefit

a) replace a percentage of his lost income Disability Income Insurance covers income only, not medical expenses.

How is emergency care covered for a member of an HMO? a) A member of an HMO can receive care in or out of the HMO service area, but care is preferred in the service area. b) A member of an HMO may receive care at any emergency facility, at the same cost as if in his or her own service area. c) HMOs have salaried member physicians, but they do not cover emergency care. d) An HMO emergency specialist will cover the patient.

a)A member of an HMO can receive care in or out of the HMO service area, but care is preferred in the service area. Emergency care must be provided for the member in or out of the HMO's service area. If emergency care is being provided for a member outside the service area, the HMO will be eager to get the member back into the service area so that care can be provided by salaried member physicians.

Group health insurance is characterized by all of the following EXCEPT a)Adverse selection. b)A master contract. c)Lower administrative costs. d)Conversion privilege.

a)Adverse selection. If an insurer issues a group health insurance policy, they must cover everyone in the group under the master contract. Group underwriting process is designed to avoid adverse selection.

Assuming that all of the following people are covered by a High Deductible Health Plan and are not claimed as dependents on anyone's tax returns, which would NOT be eligible for a Health Savings Account? a)Amanda is 67 and is covered by a basic medical expense policy b)Andy is 55 and is covered under a dental care policy c)Jenny is 60 and also has a long-term care insurance plan d)Joe is 40 and is not covered by any other health insurance

a)Amanda is 67 and is covered by a basic medical expense policy To be eligible for a Health Savings Account, an individual must be covered by a High Deductible Health Plan (HDHP), must not be covered by other health insurance except for specific injury, accident, disability, dental care, vision care, or long-term care insurance, must not be eligible for Medicare (usually age 65), and can't be claimed as a dependent on someone else's tax return.

Which of the following statements regarding Business Overhead Expense policies is NOT true? a)Benefits are usually limited to six months. b)Premiums paid for BOE are tax-deductible. c)Any benefits received are taxable to the business. d)Leased equipment expenses are covered by the plan.

a)Benefits are usually limited to six months. Business Overhead Expense (BOE) insurance is sold to small business owners for the purpose of reimbursing the policyholder for business overhead expenses during a period of total disability. Premiums are tax-deductible for a business, but any benefits received are taxable as income. Overhead expenses, including equipment and employee salaries, are covered by the plan. Salaries and profits of the employer are not protected.

Which of the following state-sponsored programs provides health benefits to state residents who are aged, disabled or blind? a)The Indiana Health Coverage Programs b)Medicaid c)Medicare d)The Indiana Health Insurance Guaranty Association

a)The Indiana Health Coverage Programs The Indiana Health Coverage Programs (IHCP) are state-sponsored programs and services for Indiana residents who are aged, disabled, blind, pregnant, or meet other eligibility requirements.

How do employer contributions to a Health Savings Account affect the insured's taxes? a)The employer contributions are not included in the individual insured's taxable income. b)The employer contributions are taxed at the same rate as the Social Security tax rate. c)The employer contributions are taxed to the individual insured as earned income. d)The employer contributions are deducted from the individual insured's tax calculations.

a)The employer contributions are not included in the individual insured's taxable income. HSA contributions made by an employer are not included in the determination of an individual's taxable income.

A producer selling long-term care products is renewing his license after the first 4 years. How many hours of long-term care-related continuing education must the producer complete in the following 2 years? a) 4 hours b) 5 hours c) 8 hours d) 10 hours

b) 5 hours After the initial licensing period, producers are required to complete 5 hours of CE in long-term care insurance every 2 years (for a total of 10 hours in every 4-year license renewal period).

All of the following could be considered rebates if offered to an insured in the sale of insurance EXCEPT a) An offer to share in commissions generated by the sale. b) Dividends from a mutual insurer. c) An offer of employment. d) Stocks, securities, or bonds.

b) Dividends from a mutual insurer. Dividends paid to policyholders of a mutual insurer are not considered to be a rebate because the policy specifies that they might be paid.

A major medical expense policy would exclude coverage for all of the following treatments EXCEPT a) Cosmetic Surgery b) Drug Addiction c) Eye refractions d) Dental Care

b) Drug Addiction Treatment for drug and alcohol addiction is provided on a limited basis.

The HMO Act of 1973 required employers to offer an HMO plan as an alternative to regular health plans if the company had more than 25 employees. How has this plan since changed? a)The minimum number of employees has increased. b)Employers are no longer forced to offer HMO plans. c)The source of funding has changed. d)The minimum number of employees has decreased.

b) Employers are no longer forced to offer HMO plans. The HMO Act of 1973 forced employers with more than 25 employees to offer an HMO plan as an alternative to their regular health plans. The part of the act requiring dual choice has expired and has not been reinstated.

The guaranteed purchase option is also referred to as the a) Evidence of insurability rider b) Future increase option c) Multiple indemnity rider d) impairment rider

b) Future increase option The guaranteed purchase option is also referred to as the future increase option

What are two types of Flexible Spending Accounts? a) Medical Savings Accounts and Health reimbursement Accounts b) Health Care Accounts and Dependent Care Accounts c) Health Care accounts and Health Reimbursement Accounts d) Medical savings Accounts and Dependent Care Accounts

b) Health Care Accounts and Dependent Care Accounts There are 2 types of FSAs: a Health Care Account for out- of pocket health care expenses, and Dependent Care Account to help pay for dependent care expenses which can make it possible for an employee ad their spouse if applicable to work

When a person applies for Medicare supplement insurance, whose responsibility is it to confirm that the applicant does not already have accident or sickness insurance in force? a) Agent b) Insurer c) State government d) Active physician

b) Insurer Although it is illegal for an applicant to intentionally misrepresent himself in an insurance application, it is the insurer's ultimate responsibility to make sure that the applicant does not already have another accident or sickness policy in force.

Disability income policies can provide coverage for a loss of income when returning to work only part-time after recovering from total disability. What is the benefit that is based on the insured's loss of earnings after recovery from a disability? a) Income replacement b) Residual disability c) Recurrent disability d) Partial disability

b) Residual disability A residual disability will pay an amount to make up the difference between what the insured would have earned before the loss.

How do employer contributions to a Health Savings Account affect the insured's taxes? a) The employer contributions are deducted from the individual insured's tax calculations. b) The employer contributions are not included in the individual insured's taxable income. c) The employer contributions are taxed at the same rate as the Social Security tax rate. d) The employer contributions are taxed to the individual insured as earned income.

b) The employer contributions are not included in the individual insured's taxable income. HSA contributions made by an employer are not included in the determination of an individual's taxable income.

When may an insurer disclose an individual's genetic information? a) Never, except for law investigation purposes b) When the affected party provides written consent c) Under the conditions deemed reasonable by the Commissioner d) At any point, as long as it does not do so for financial gain

b) When the affected party provides written consent No insurer may use an individual's or a family member's genetic information to deny or limit any coverage or establish eligibility, continuation, enrollment or premium payments. An insurer cannot request or require collection or disclosure of an individual's or family member's genetic information. In order to disclose an individual's or family member's genetic information, written consent must be provided by the affected party.

Social Security Supplement (SIS) or Social Security Riders would provide for the payment of income benefits in each of the situations below except a) If the insured has been denied coverage under SS b) When the amount payable under SS is more than the amount payable under the rider c) when used to replace or supplement benefits payable under other social insurance programs d) when the insured is eligible for SS benefits but before the benefits begin

b) When the amount payable under SS is more than the amount payable under the rider These riders provide benefits when the amount payable under SS is less than the amount payable under the ride (in this case only the difference is paid)

Which of the following is not true of a major medical health insurance policy? a) The benefits are subject to deductibles b) it is designed on a first-dollar basis c) it is designed to cover hospital and medical expenses of a catastrophic nature d) it usually has a maximum benefit amount

b) it is designed on a first dollar basis a major medical policy usually has deductibles and a copayment requirement. Basic medical, but not major medical, expense policies pay on a first dollar basis

How is emergency care covered for a member of an HMO? a)An HMO emergency specialist will cover the patient. b)A member of an HMO can receive care in or out of the HMO service area, but care is preferred in the service area. c)A member of an HMO may receive care at any emergency facility, at the same cost as if in his or her own service area. d)HMOs have salaried member physicians, but they do not cover emergency care.

b)A member of an HMO can receive care in or out of the HMO service area, but care is preferred in the service area. Emergency care must be provided for the member in or out of the HMO's service area. If emergency care is being provided for a member outside the service area, the HMO will be eager to get the member back into the service area so that care can be provided by salaried member physicians.

When must an insurance company present an outline of coverage to an applicant for a Medicare supplement policy? a)Only upon the applicant's request b)At the time of application c)When the policy is delivered d)Within 30 days of policy delivery

b)At the time of application For Medicare supplement policies, the insurance company must present an Outline of Coverage to all applicants at the time of the application.

Occasional visits by which of the following medical professionals will NOT be covered under LTC's home health care? a) Community-based organization professionals b) Attending physician c) Registered nurses d) Licensed practical nurses

b)Attending physician Home health care is care provided in one's home and could include occasional visits to the person's home by registered nurses, licensed practical nurses, licensed vocational nurses, or community-based organizations like hospice. Home health care might include physical therapy and some custodial care such as meal preparations.

Which of the following statements is correct concerning taxation of long-term care insurance? a)Premiums are not deductible in any case. b)Excessive benefits may be taxable. c)Benefits may be taxable as ordinary income. d)Premiums may be taxable as income.

b)Excessive benefits may be taxable. Regardless of whether or not the insured can deduct individual long-term care premiums, the benefits are received income tax free by the individual. Excessive benefits as determined by statute are taxable as ordinary income.

An association could buy group insurance for its members if it meets all of the following requirements EXCEPT: a) Is contributory. b) Has at least 50 members. c) Has a constitution and by-laws. d) Holds annual meetings.

b)Has at least 50 members. All of the above characteristics would make an association group eligible for buying group insurance, except the group must have at least 100 members.

A typical Accidental Death & Dismemberment policy covers all of the following losses EXCEPT a)Life. b)Income. c)Eyesight. d)Limb.

b)Income. Accidental Death & Dismemberment policies cover loss of body parts or life only.

A guaranteed renewable disability insurance policy a)Cannot be cancelled by the insured before age 65. b)Is renewable at the insured's option to a specified age. c)Is renewable at the option of the insurer to a specified age of the insured. d)Is guaranteed to have a level premium for the life of the policy.

b)Is renewable at the insured's option to a specified age. Guaranteed renewable means that the insured has the right to keep the policy until a specific age; however, while the insurer cannot increase the rates on an individual basis, the insurer can increase the rates for all insureds by class.

Which of the following best describes the unfair trade practice of defamation? a)Refusing to deal with other insurers b)Making derogatory oral statements about another insurer's financial condition c)Assuming the name and identity of another person d)Issuing false advertising material

b)Making derogatory oral statements about another insurer's financial conditionMaking oral or written statements directly or indirectly which are derogatory or maliciously critical of another insurer would be an example of the unfair trade practice of defamation.

If you are found guilty of violating the Producer Licensing Law, you may be subject to any of the following penalties EXCEPT: a) The Commissioner may order you to make monetary restitution. b) The Commissioner may send you to jail for up to 1 year. c) The Commissioner may fine you for up to $10,000. d) The Commissioner may revoke your license.

b)The Commissioner may send you to jail for up to 1 year. If a producer is found guilty of violating the Producer Licensing Law, he/she may be order to make monetary restitution or pay a civil fine between $50 and $10,000. The producer's license may also be revoked or suspended. The Commissioner, however, cannot send producers to jail; that would be up to a judge.

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? a)The PPO will pay the same benefits as if the insured had seen a PPO physician b)The PPO will pay reduced benefits. c)The PPO will not pay any benefits at all. d)The insured will be required to pay a higher deductible.

b)The PPO will pay reduced benefits. The group health plan will not pay the full amount charged by the non-PPO doctor.

Which of the following is NOT a feature of a noncancellable policy? a)The insured has the right to renew the policy for the life of the contract. b)The insurer may terminate the contract only at renewal for certain conditions. c)The premiums cannot be increased beyond the amount stated in the policy. d)The guarantee to renew coverage usually applies until the insured reaches certain age.

b)The insurer may terminate the contract only at renewal for certain conditions. The insurance company cannot cancel a noncancellable policy, nor can the premium be increased beyond what is stated in the policy. The insured has the right to renew the policy for the life of the contract; however, the guarantee to renew coverage usually only applies until the insured reaches age 65.

An insured is covered by a partially contributory group disability income plan that pays benefits of $4000 a month. if the insured pays 25% of the monthly premium, how much of the monthly benefit would be taxable? a) None b) 1,000 c) 3,000 d) 4999

c) 3,000 On a partially contributory group disability income insurance, only that portion of the benefits that are related to the premium paid by the employer is taxable to the employee. In this case, because the employer pays 75% of the premium, the employee will be taxed on 75% of the benefits

Under the Affordable Care Act, a special enrollment period allows an individual to enroll in a qualified health plan within how many days of a qualifying event? a) 10 days b) 30 days c) 60 days d) 90 days

c) 60 days Unless specifically stated otherwise, individuals or enrollees have 60 days from the date of a triggering event to select a qualified health plan.

In a group health policy, a probationary period is intended for people who a) Have additional coverage through a spouse. b) Want lower premiums. c) Join the group after the effective date. d) Have a pre-existing condition at the time they join the group.

c) Join the group after the effective date. The probationary period is the waiting period new employees must satisfy before becoming eligible for benefits.

Every insurer marketing Long-Term Care insurance must establish marketing procedures to ensure all of the following EXCEPT a) Excessive insurance will not be sold. b) Every reasonable effort is made to identify an applicant's other insurance. c) LTC policies are marketed effectively to prospective insureds. d) Comparisons of policies are fair and accurate.

c) LTC policies are marketed effectively to prospective insureds. All insurers marketing long-term care policies must establish these procedures. Additionally, companies must have marketing guidelines to insure that excessive insurance is not sold or issued.

If one takes Social Security retirement benefits at age 62, what needs to be done at age 65 to qualify for Medicare? a) Appear for a physical at the Social Security office b) Apply at a local Social Security office c) Nothing d) Apply for coverage through the state

c) Nothing Nothing needs to be done in this case. Medicare Part A and B will automatically be effective the month you turn 65.

Which of the following would an accident-only policy NOT cover? a) Death from a motorcycle accident b) Amputation of a leg that was burned during a house fire c) Surgery to repair a wrist damaged by tendonitis. d) Hospitalization costs due to a boating accident

c) Surgery to repair a wrist damaged by tendonitis. Accident-only policies cover medical costs caused by accidents, not sickness. Because the wrist was damaged by a sickness, not an accident, the policy would not cover any medical claims relating to the surgery or the condition itself.

Your client wants to know what the tax implications are for contributions to a Health Savings Account. You should advise her that the contributions are a) Post-tax dollars. b) Subject to capital gains taxes. c) Tax deductible. d) Subject to personal income taxes.

c) Tax Deductible Contributions to HSAs by individuals are deductible, even if the taxpayer does not itemize. Contributions by an employer are not included in the individual's taxable income.

A noncontributory group disability income plan has a 30-day waiting period and offers benefits of $2,000 a month. If an employee is unable to work for 7 months due to a covered disability, the employee will receive a) $14,000, all of which is taxable. b) $12,000, none of which is taxable. c) $12,000, all of which is taxable. d) $14,000, none of which is taxable.

c)$12,000, all of which is taxable. In noncontributory group health plans, the employer pays the entire cost, so the income benefits are included in the employee's gross income and taxed as ordinary income.

An insured is involved in a car accident. In addition to general, less serious injuries, he permanently loses the use of his leg and is rendered completely blind. The blindness improves a month later. To what extent will he receive Presumptive Disability benefits? a) Partial benefits b) Full benefits until the blindness lifts c) No benefits d) Full benefits

c)No benefits Presumptive Disability plans offer full benefits for specified conditions. These policies typically require the loss of use of at least two limbs, total and permanent blindness, or loss of speech or hearing. Benefits are paid, even if the insured is able to work. Because the insured's blindness was only temporary and the loss of use in only 1 leg, he does not qualify for presumptive disability benefits.

All of the following are covered by Part A of Medicare EXCEPT a) Post-hospital nursing care. b) Home health services. c) Physician's and surgeon's services. d) In-patient hospital services.

c)Physician's and surgeon's services. Physician's and surgeon's services are covered under Part B.

Which of the following is correct regarding the taxation of group medical expense premiums and benefits? a)Premiums are not tax deductible and benefits are not taxed. b)Premiums are tax deductible and benefits are taxed. c)Premiums are tax deductible and benefits are not taxed. d)Premiums are not tax deductible and benefits are taxed.

c)Premiums are tax deductible and benefits are not taxed. Premiums paid by employers for Group Medical Expense insurance are tax deductible for the employer as a business expense. Also, policy benefits paid out to employees are not taxable as income to the employee.

If you are found guilty of violating the Producer Licensing Law, you may be subject to any of the following penalties EXCEPT: a)The Commissioner may revoke your license. b)The Commissioner may order you to make monetary restitution. c)The Commissioner may send you to jail for up to 1 year. d)The Commissioner may fine you for up to $10,000.

c)The Commissioner may send you to jail for up to 1 year. If a producer is found guilty of violating the Producer Licensing Law, he/she may be order to make monetary restitution or pay a civil fine between $50 and $10,000. The producer's license may also be revoked or suspended. The Commissioner, however, cannot send producers to jail; that would be up to a judge.

Which statement accurately describes group disability income insurance? a) There are no participation requirements for employees. b) Short-term plans provide benefits for up to 1 year. c) The extent of benefits is determined by the insured's income. d) In long-term plans, monthly benefits are limited to 75% of the insured's income.

c)The extent of benefits is determined by the insured's income. Group plans usually specify the benefits based on a percentage of the worker's income. Group long-term plans provide monthly benefits usually limited to 60% of the individual's income.

Which of the following is true regarding a hearing upon the nonrenewal of a producer's license? a) A hearing guarantees renewal of the license. b) The Commissioner may request a hearing within 63 days of the nonrenewal date. c) The hearing must be held within 30 days of the written demand. d) After the hearing, the Commissioner may impose a criminal penalty on the applicant.

c)The hearing must be held within 30 days of the written demand. Once the Commissioner notifies an applicant or a producer of a license denial or nonrenewal, the applicant or producer has the right to make a written demand for a hearing (within 63 days after the denial/nonrenewal notice is mailed). The hearing mush be held within 30 days of the written demand.

Your client is sole proprietor and wishes to include his family on a medical expense plan. ow much of the cost of the medical expense plan can be deducted (since he is considered self employed)? a) 0% b) 85% c) 90% d)100%

d) 100% Sole proprietors and partners may deduct 100% of the cost of a medical expense plan provided to them and their families because they are considered self employed.

Under which condition would an employee's group medical benefits be exempt from income taxes? a) An employee's group medical benefits are never exempt from taxation as income. b) When the premiums and other unreimbursed medical expenses exceed 5% of the employee's adjusted gross income c) When the premiums and other unreimbursed medical expenses exceed 10% of the employee's adjusted gross incomed d) An employee's group medical benefits are generally exempt from taxation as income.

d) An employee's group medical benefits are generally exempt from taxation as income. Group medical and dental benefits are received tax-free to employees. Also, premiums paid by the employer are deductible as business expenses.

A dentist is off work for 4 months due to a disability. His dental assistant's salary would be covered by a) Disability Income b) Key Employee Disability c) Partnership Disability d) Business Overhead Insurance

d) Business Overhead Insurance Business overhead insurance is designed to pay the ongoing business expenses of a small business owner while they are disabled and unable to work. It will provide the funds needed to pay the salary of employees other than the owners and their other ongoing business expenses such as rent.

Underwriting a group health insurance plan that is paid for by the employer requires all of the following EXCEPT a) The plan is based on other than individual selection b) All eligible employees must be covered c) coverage for plan participants is uniform d) Individual members of the group may select the level of benefits for their own coverage

d) Individual members of the group may select the level of benefits for their own coverage In group health insurance, all individuals are covered under the master policy for same coverages.

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 a) Policy application. b) Buyer's Guide. c) Certificate of Coverage. d) Notice Regarding Replacement.

d) Notice Regarding Replacement. The Notice Regarding Replacement must inform the applicant of the 30-day free-look provision of the replacing policy.

What is the initial period of time specified in a disability income policy that must pass, after the policy is in force before a loss can be covered? a) Contestable period b) Elimination period c) Grace period d) Probationary period

d) Probationary period Probationary period is the period of time after a policy is in effect before claims arising out of an illness are covered. This is to prevent adverse selection, persons waiting until they have been exposed to a cause of loss before purchasing coverage.

How do employer contributions to a Health Savings Account affect the insured's taxes? a) The employer contributions are taxed at the same rate as the Social Security tax rate. b) The employer contributions are taxed to the individual insured as earned income. c) The employer contributions are deducted from the individual insured's tax calculations. d) The employer contributions are not included in the individual insured's taxable income

d) The employer contributions are not included in the individual insured's taxable income. HSA contributions made by an employer are not included in the determination of an individual's taxable income.

Which of the following is NOT true regarding the requirements for resident producers in Indiana? a) Someone who has a place of business in Indiana may become a resident producer b) a resident producer does not have to live in Indiana c) a candidate must complete relicensing education and exam requirements d) a licensed resident producer in good standing in another state may also be a resident producer in Indiana

d) a licensed resident producer in good standing in another state may also be a resident producer in Indiana a candidate may obtain an Indiana resident producer license if they either live in Indiana, have primary place of business in Indiana, and if they have met relicensing education examination requirements. However Indiana resident producer may only hold a license in ONE state.

Which of the following individuals may act as a producer without a license? a) A new recruit who gives insurance sales presentations to company clients but does not sign any contracts b) a consultant who offers insurance to a prospective purchaser c) a producer secretary who answers the phones and solicits insurance products to potential clients d) an insurance company president who is solely responsible for the administration of the company

d) an insurance company president who is solely responsible for administration of the company Anybody who participates in selling, solicitation or negation of insurance must be properly licensed. In this particular example, the insurance company president does not sell, solicit, or negotiate insurance, and therefore, doesn't need to be licensed

Which of the following best describes a Major Medical Expense Policy? a) provides surgical coverage to an insured with a schedule indicating charges for each procedure b) provides coverage for in hospital doctor visits that are of a nonsurgical nature c) provides coverage to an insured who is confined to a hospital with a daily benefit amount and a specified benefit period d) provides catastrophic medical coverage beyond basic benefits on a usual, customary, and reasonable basis

d) provides catastrophic medical coverage beyond basic benefits on a usual, customary, and reasonable basis provides coverage either on a inpatient or outpatient basis on a reimbursement basis

An insured makes regular contributions to his Health Savings Account. How are those contributions treated in regards to taxation? a) They are considered after-tax contributions b) they are not deductible c) they are taxed as income d) they are tax-deductible

d) they are tax deductible An individual covered by a HDHP can make tax-deductible contributions to HSA and use it to pay for out of pocket medical expenses

The relation of earnings to insurance provision allows the insurance company to limit the insured's benefits to his/her average income over the last a) 6 months. b) 12 months. c) 18 months. d) 24 months.

d)24 months. The relation of earnings to insurance provision allows the insurance company to limit the insured's benefits to his/her average income over the last 24 months.

Which of the following statements regarding Business Overhead Expense policies is NOT true? a)Premiums paid for BOE are tax-deductible. b)Any benefits received are taxable to the business. c)Leased equipment expenses are covered by the plan. d)Benefits are usually limited to six months.

d)Benefits are usually limited to six months. Business Overhead Expense (BOE) insurance is sold to small business owners for the purpose of reimbursing the policyholder for business overhead expenses during a period of total disability. Premiums are tax-deductible for a business, but any benefits received are taxable as income. Overhead expenses, including equipment and employee salaries, are covered by the plan. Salaries and profits of the employer are not protected.

Which of the following special policies covers unusual risks that are NOT normally included under Accidental Death and Dismemberment coverage? a)Limited Risk Policy b)Specified Disease Policy c)Credit Disability d)Special Risk Policy

d)Special Risk Policy The Special Risk Policy will cover unusual types of risks that are not normally covered under AD&D policies. It covers only the specific hazard or risk identified in the policy, such as a racecar driver test-driving a new car.