Missed Life and Health Questions

Concerning group Medical and Dental insurance, which of the following statements is INCORRECT? a) Employee benefits are tax deductible the year in which they were received. b) Benefits received by the employee are free from federal income tax. c) Premiums paid by the employer are deductible as a business expense. d) Employee paid premiums may be deducted if certain conditions are met.

a) Employee benefits are tax deductible the year in which they were received.

An insurer invests the money it receives from premiums paid by its insureds. Which of the following is TRUE regarding the interest earned on these investments? a) It is used to lower premiums. b) It is paid out as dividends. c) It is used to fund executive bonuses d) It is used to increase the death benefit.

a) It is used to lower premiums.

Which of the following statements is NOT correct concerning the COBRA Act of 1985? a) It requires all employers, regardless of the number or age of employees, to provide extended group health coverage. b) It covers terminated employees and/or their dependents for up to 36 months after a qualifying event. c) It applies only to employers with 20 or more employees that maintain group health insurance plans for employees. d) COBRA stands for Consolidated Omnibus Budget Reconciliation Act.

a) It requires all employers, regardless of the number or age of employees, to provide extended group health coverage.

Which of the following is the most common time for errors and omissions to occur on the part of an insurer? a) Policy delivery b) Policy renewal c) Underwriting d) Application process

a) Policy delivery

An individual purchased a Medicare supplement policy in March and decided to replace it 2 months later. His history of coronary artery disease is considered a pre-existing condition. Which of the following is true? a) The pre-existing condition waiting period fulfilled in the old policy will be transferred to the new policy, the new one picking up where the old one left off. b) Coronary artery disease coverage will be permanently excluded from the new policy. c) In replacement, pre-existing conditions must be waived, so sickness relating to coronary artery disease will be covered upon the policy's effective date. d) Because this is a new policy, the pre-existing condition waiting period starts over.

a) The pre-existing condition waiting period fulfilled in the old policy will be transferred to the new policy, the new one picking up where the old one left off.

Under what condition are group disability income benefits received by an employee NOT taxable as income? a) When the benefits received are equal or less than the employee's percentage of the contribution. b) When the employer makes all the premium payments. c) When the employee is 59 ½. d) When the amount of the benefit is equal or less than the amount of contributed by the employer.

a) When the benefits received are equal or less than the employee's percentage of the contribution.

When is the insurability conditional receipt given? a) When the premium is paid at the time of application b) After the application has been approved and the premium has been paid c) When an insured individual needs to obtain an insurability receipt for tax purposes. d) If the application is approved before the premium is paid

a) When the premium is paid at the time of application

To be eligible under HIPAA regulations, for how long should an individual converting to an individual health plan have been covered under the previous group plan? a) 63 days b) 18 months c) 5 years d) 12 months

b) 18 months

Under the uniform required provisions, proof of loss under a health insurance policy normally should be filed within a) 60 days of a loss. b) 90 days of a loss. c) 20 days of a loss. d) 30 days of a loss.

b) 90 days of a loss.

If an insurance company offers Medicare supplement policies, it must offer which of the following plans? a) A-D b) A c) A & B d) B-N

b) A

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.

What qualifications must an agent hold in order to sell variable life insurance policies? a) State licensing to sell life insurance and variable products b) Both state and federal licensing c) Same certification as fixed life policies d) National Association of Insurance Commissioners (NAIC) registration

b) Both state and federal licensing

A Canadian insurer would like to do business in Connecticut. What must the insurer first obtain? a) Insurer Appointment b) Certificate of Authority c) Nonresident business entity license d) Alien Insurer License

b) Certificate of Authority

As deductible amounts increase, premium amounts change in what way? a) Either increase or decrease. b) Decrease c) Increase d) Remain the same. Changes in premium amounts do not affect deductible amounts.

b) Decrease

The authority granted to an agent through the agent's contract is referred to as a) Absolute authority. b) Express authority. c) Apparent authority. d) Implied authority.

b) Express authority.

Which of the following methods of calculating the amount of life insurance needed takes into account the insured's wages, years until retirement, and inflation? a) Lump-sum approach b) Human life value approach c) Needs approach d) Blackout approach

b) Human life value approach

The insurer may suspect that a moral hazard exists if the policyholder a) Always drives over the speed limit. b) Is not honest about his health on an application for insurance. c) Is prone to depression. d) Is indifferent to activities that may be dangerous.

b) Is not honest about his health on an application for insurance.

Which of the following is NOT true regarding the accumulation period of an annuity? a) It is also known as the pay-in period. b) It would not occur in a deferred annuity. c) It is the period during which the annuity payments earn interest. d) It is the period over which the owner makes payments into an annuity.

b) It would not occur in a deferred annuity.

Which of the following is excluded in a dental insurance plan? a) Replacement of a stolen prosthetic device b) Lost dentures c) Treatment for the surrounding and supporting tissue of the teeth such as for gum disease d) Cosmetic treatment due to an accident

b) Lost dentures

All of the following are characteristics of a Major Medical Expense policy EXCEPT a) Coinsurance. b) Low maximum limits. c) Deductibles d) Blanket coverage.

b) Low maximum limits.

Which of the following statements pertaining to Medicare Part A is correct? a) Each individual covered by Medicare Part A is allowed one 90-day benefit period per year. b) Medicare Part A is automatically provided when an individual qualifies for Social Security benefits at age 65. c) For the first 90 days of hospitalization, Medicare Part A pays 100% of all covered services, except for the initial deductible. d) Individuals with ESRD do not qualify for Part A.

b) Medicare Part A is automatically provided when an individual qualifies for Social Security benefits at age 65.

An insured is covered by a disability income policy that contains an accidental means clause. The insured exits a bus by jumping down the steps and breaks an ankle. What coverage will apply? a) Coverage will apply, but will be reduced by 50%. b) No coverage will apply, since the injury could have been foreseen. c) No coverage will apply, since disability income policies cover sickness only. d) Coverage will apply since the break was accidental.

b) No coverage will apply, since the injury could have been foreseen.

When an insurer combines two periods of disability into one, the insured must have suffered a a) Presumptive disability. b) Recurrent disability. c) Partial disability. d) Residual disability.

b) Recurrent disability.

Which of the following is NOT covered under Plan A in Medigap insurance? a) The first three pints of blood each year b) The Medicare Part A deductible c) Approved hospital costs for 365 additional days after Medicare benefits end d) The 20% Part B coinsurance amounts for Medicare approved services

b) The Medicare Part A deductible

An Adjustable Life policyowner can change which of the following policy features? a) The insured b) The coverage period c) The mortality expense d) The investment account

b) The coverage period

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

b) The extent of benefits is determined by the insured's income.

An annuitant dies before the effective date of a purchased annuity. Assuming that the annuitant's wife is the beneficiary, what will occur? a) The premiums will decrease. b) The interest will continue to accumulate tax deferred. c) The interest will become immediately taxable. d) The premiums will increase.

b) The interest will continue to accumulate tax deferred.

One of the differences between group underwriting and individual underwriting is that there is little or no medical information required regarding plan participants in groups of a) 25 or more. b) Fewer than 50. c) 50 or more. d) 100 or more.

c) 50 or more.

Where would Long-term care services be rendered? a) An acute care unit of a hospital b) A doctor's office c) A nursing home or one's own home d) A surgery center

c) A nursing home or one's own home

An insurer has made all of the decisions regarding the provisions included in the insured's policy. The insured finds an objectionable provision and wants to negotiate it with the insurer but is not allowed to do so. Her only options are to reject the policy or accept it as is. Which contract feature does this describe? a) Conditional b) Personal c) Adhesion d) Unilateral

c) Adhesion

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

c) Benefits are usually limited to six months.

Which of the following options best depicts how the eligibility of members for group health insurance is determined? a) By the physical conditions of the applicants at the time of employment b) In such a manner as to establish individual selection as to the amounts of insurance c) By conditions of employment d) Eligibility is not determined, but simply accepted

c) By conditions of employment

Which of the following provisions requires that any policy language that is in conflict with the state statutes of the state in which the insured resides is automatically amended to conform with those of the state of residence? a) Insurance with Other Insurers b) Legal actions c) Conformity with State Statutes d) Incontestability

c) Conformity with State Statutes

What provision in a life insurance policy would allow the insurer, after the death of the insured, to pay benefits to a person not named in the policy as beneficiary? a) Nonforfeiture clause b) Common disaster clause c) Facility of payment clause d) Spendthrift clause

c) Facility of payment clause

As it pertains to group health insurance, COBRA stipulates that a) Terminated employees must be allowed to convert their group coverage to individual policies. b) Group coverage must be extended for terminated employees up to a certain period of time at the employer's expense. c) Group coverage must be extended for terminated employees up to a certain period of time at the former employee's expense. d) Retiring employees must be allowed to convert their group coverage to individual policies.

c) Group coverage must be extended for terminated employees up to a certain period of time at the former employee's expense.

If a life policy allows the policyowner to make periodic additions to the face amount at standard rates, without proving insurability, the policy includes a a) Cost of living provision. b) Nonforfeiture option. c) Guaranteed insurability rider. d) Paid-up additions option.

c) Guaranteed insurability rider.

Most LTC plans have which of the following features? a) Variable premiums b) Open enrollment c) Guaranteed renewability d) No elimination period

c) Guaranteed renewability

All of the following statements are true of a Combination Dental Plan EXCEPT a) It covers diagnostic and preventive care on the usual, customary, and reasonable basis. b) It uses a fee schedule for other dental services. c) It is also known as the Superimposed Plan. d) It is basically a combination of a scheduled and nonscheduled dental plan.

c) It is also known as the Superimposed Plan.

A policy will pay the death benefit if the insured dies during the 20-year premium-paying period, and nothing if death occurs after the 20-year period. What type of policy is this? a) Ordinary life policy b) Limited pay whole life c) Level term d) Term to specified age

c) Level term

Which renewability provision allows an insurer to terminate a policy for any reason, and to increase the premiums for any class of insureds? a) Cancellable b) Guaranteed renewable c) Optionally renewable d) Conditionally renewable

c) Optionally renewable

All of the following are true regarding key person disability income insurance EXCEPT a) The employer pays the premiums. b) The employee is the insured. c) Premiums are tax deductible as a business expense. d) The employer receives the benefits if the key person is disabled.

c) Premiums are tax deductible as a business expense.

Upon policy delivery, the producer may be required to obtain any of the following EXCEPT a) Payment of premium. b) Delivery receipt. c) Signed waiver of premium. d) Statement of good health.

c) Signed waiver of premium.

Which of the following would be a qualifying event as it relates to COBRA? a) Eligibility for coverage under another group plan b) Eligibility for Medicare c) Termination of employment due to downsizing d) Termination of employment for stealing

c) Termination of employment due to downsizing

The insured had his wife named as the beneficiary of his life insurance policy. To ensure that his wife had income for life after the insured's death, he chose the life income settlement option. The amount of payments will be determined by taking into account all of the following EXCEPT a) Projected interest rates. b) Face amount of the policy. c) The insured's age at death. d) The beneficiary's life expectancy.

c) The insured's age at death.

Which of the following is true regarding benefits paid to disabled employees? a) Tax withholding is required if the employee paid the premium. b) Disability benefits are not taxed. c) They may be subject to taxation if the premium was paid by the employer. d) They are exempt from taxation if any portion of the premium was paid by the employee.

c) They may be subject to taxation if the premium was paid by the employer.

When is the earliest a policy may go into effect? a) When the insurer approves the application b) After the underwriter reviews the policy c) When the application is signed and a check is given to the agent d) When the first premium is paid and the policy has been delivered

c) When the application is signed and a check is given to the agent

Which of the following must the patient pay under Medicare Part B? a) 80% of covered charges above the deductible b) All reasonable charges above the deductible according to Medicare standards c) A per benefit deductible d) 20% of covered charges above the deductible

d) 20% of covered charges above the deductible

Which of the following statements is NOT true concerning insurable interest as it applies to life insurance? a) Business partners have an insurable interest in each other. b) A husband or wife has an insurable interest in their spouse. c) An individual has an insurable interest in his or her own life. d) A debtor has an insurable interest in the life of a lender.

d) A debtor has an insurable interest in the life of a lender.

In which Medicare supplemental policies are the core benefits found? a) Plans A and B only b) Plan A only c) Plans A-D only d) All plans

d) All plans

In reference to the standard Medicare Supplement benefits plans, what does the term standard mean? a) Coverage options and conditions comply with the law, but will vary from provider to provider. b) All plans must include basic benefits A-N. c) Coverage options and conditions are developed for average individuals. d) All providers will have the same coverage options and conditions for each plan.

d) All providers will have the same coverage options and conditions for each plan.

Which of the following types of agent authority is also called "perceived authority"? a) Express b) Implied c) Fiduciary d) Apparent

d) Apparent

Which of the following is the basic source of information used by the company in the risk selection process? a) Agent's report b) Warranty c) Consumer report d) Application

d) Application

Which of the following best describes fixed-period settlement option? a) Only the principal amount will be paid out within a specified period of time. b) The death benefit must be paid out in a lump sum within a certain time period. c) Income is guaranteed for the life of the beneficiary. d) Both the principal and interest will be liquidated over a selected period of time.

d) Both the principal and interest will be liquidated over a selected period of time.

What is the goal of the HMO? a) Providing free health services b) Limiting the deductibles and coinsurance to reduce costs c) Providing health services close to home d) Early detection through regular checkups

d) Early detection through regular checkups

All of the following statements about Medicare Part B are correct EXCEPT a) It covers services and supplies not covered by Part A. b) It is financed by monthly premium c) It is financed by tax revenues. d) It is a compulsory program.

d) It is a compulsory program.

When a reduced-paid up nonforfeiture option is chosen, what happens to the face amount of the policy? a) It is increased when extra premiums are paid. b) It decreases over the term of the policy. c) It remains the same as the original policy, regardless of any differences in value. d) It is reduced to the amount of what the cash value would buy as a single premium.

d) It is reduced to the amount of what the cash value would buy as a single premium.

An insured purchased an insurance policy 5 years ago. Last year, she received a dividend check from the insurance company that was not taxable. This year, she did not receive a check from the insurer. From what type of insurer did the insured purchase the policy? a) Reciprocal b) Nonprofit service organization c) Stock d) Mutual

d) Mutual

An insured has a continuous premium whole life policy. She would like to use the policy dividends to pay off her policy sooner than would have been possible otherwise. What dividend option could she use? a) One-year term b) Reduction of premium c) Accumulation at interest d) Paid-up option

d) Paid-up option

All of the following are considered to be basic benefits of an HMO plan EXCEPT a) Preventive services. b) Out-of-area coverage. c) Diagnostic laboratory services. d) Prescription drugs.

d) Prescription drugs.

Which of the following is NOT one of the three basic types of coverages that are available, based on how the face amount changes during the policy term? a) Decreasing b) Level c) Increasing d) Renewable

d) Renewable

The advantage of qualified plans to employers is a) Tax-free earnings. b) No lump-sum payments. c) Taxable contributions. d) Tax-deductible contributions.

d) Tax-deductible contributions.

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

d) The PPO will pay reduced benefits.

The regulation of the insurance industry primarily rests with a) The NAIC. b) Private insurers. c) The federal government. d) The State.

d) The State.

The Waiver of Cost of Insurance rider is found in what type of insurance? a) Whole Life b) Joint and Survivor c) Juvenile Life d) Universal Life

d) Universal Life

Most scheduled plans provide first-dollar benefits without a) Coinsurance and deductibles. b) Premiums c) Copays. d) Exclusions and conditions.

a) Coinsurance and deductibles.

In a noncontributory health insurance plan, what percentage of eligible employees must participate in the plan before the plan can become effective? a) 100% b) 75% c) 50% d) 25%

a) 100%

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 days

According to the requirements for small employers, an eligible employee may be any of the following EXCEPT a) A part-time employee. b) An inactive employee covered by Workers Compensation. c) A sole proprietor. d) An independent contractor.

a) A part-time employee.

Which of the following is NOT an enrollment period for Medicare Part A applicants? a) Automatic enrollment b) Initial enrollment c) Special enrollment d) General enrollment

a) Automatic enrollment

In order to collect Social Security disability benefits, the claimant must be able to demonstrate that the disability will last at least a) For life. b) 12 months. c) 24 months. d) Until age 65.

b) 12 months.

The sole proprietor of a business makes a total salary of $50,000 a year. This year, his medical expenses have reached a total of $75,000. What amount may the sole proprietor deduct in regards to his medical expenses? a) $10,000 b) $25,000 c) $50,000 d) $75,000

c) $50,000

What is the duration of the free-look period for Medicare supplement policies? a) 10 days b) 15 days c) 30 days d) 60 days

c) 30 days

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

c) 5 days

Which of the following statements is INCORRECT concerning Medicare Part B coverage? a) Participants under Part B are responsible for an annual deductible. b) Part B will pay 80% of covered expenses, subject to Medicare's standards for reasonable charges. c) It is a voluntary program designed to provide supplementary medical insurance to cover physician services, medical services and supplies not covered under Part A. d) Part B coverage is provided free of charge when an individual turns age 65.

d) Part B coverage is provided free of charge when an individual turns age 65.

What is the purpose of a Medicare Carve-out or Supplements? a) They pay deductibles or copayments that are not paid by Medicare. b) They act as replacement insurance for Medicaid. c) They pay for excess expenses not paid by Medicare because of pre-existing conditions. d) They act as excess insurance paying those covered expenses not paid by Medicare because of previous disabilities.

a) They pay deductibles or copayments that are not paid by Medicare.

What is the penalty for IRA distributions that are below the required minimum for the year? a) 10% b) 25% c) 50% d) 60%

c) 50%

What is a penalty tax for nonqualified distributions from a health savings account? a) 8% b) 10% c) 12% d) 20%

d) 20%