Stimulation Test #5
What is the main purpose of the seven-pay test?
It determines if the insurance policy is an MEC.
COBRA applies to employers with at least
20 employees
What is the penalty for IRA distributions that are below the required minimum for the year?
50%
The minimum number of credits required for partially insured status for Social Security disability benefits is
6 credits
Level term insurance provides a level death benefit and a level premium during the policy term. If the policy renews at the end of a specified period of time, the policy premium will be
Adjusted to the insured's age at the time of renewal
A rider that may be attached to a life insurance policy that will adjust the face amount based upon a specific index, such as the Consumer Price Index, is called
Cost of living rider
Which of the following is considered a qualifying event under COBRA?
Divorce
All of the following would fall under the definition of durable medical equipment EXCEPT
Hospital blankets
What do individuals use to transfer their risk of loss to a larger group?
Insurance
If a contract provides a set amount of income for two or more persons with the income stopping upon the first death of the insured, it is called a
Joint life annuity
If a life insurance policy increases significantly in the face amount (death benefit) when the insured reaches a specified age, what type of policy is this?
Jumping juvenile policy
Issuance of health policies to insureds with chronic or ongoing conditions could result in all of the following EXCEPT
Lower overall costs and premiums.
In which Medicare supplemental policies are the core benefits found?
all plans
The act of revoking or terminating an insurance policy is called
cancellation
How long will the beneficiary receive payments under the single life settlement option?
until the beneficiary's death
If a policy holder contacts an insurance company about a claim and expects a response to the inquiry, within what span of time must the agent respond?
15 days
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?
18 months
Who can provide skilled nursing care?
Doctor
Because of the history of cancer in her family, Julie purchased a policy that specifically covers the expense of treating cancer. Her policy would be classified as what type of policy?
Dread Disease Policy
In a situation when a Medicare insured uses the services of a nonparticipating provider, which of the following is NOT true?
Medicare pays its share of the bill directly to the provider
Applications for insurance may contain information about a person's race, religion, ancestry or color
Never
Which of the following is NOT allowed under the no loss/no gain provision?
Pre-existing Condition exclusion
Which of the following information will be stated in the consideration clause of a life insurance policy?
The amount of premium payment
The title page of the policy provides a summary of the benefits and coverages provided by the policy. All of the following information is included in the title page EXCEPT
The insureds beneficiaries
The purpose of policy exclusions is to protect
The insurer from claims for losses which were not included in the initial risk assessment
Which of the following is true regarding a market value adjusted annuity?
The owner is guaranteed a fixed interest rate for a specific period of time
Which of the following types of policies allows for a flexible premium and a variable investment component?
Variable universal life insurance
All of the following are examples of risk retention EXCEPT
premiums
Applicants for insurance who are blind may be rated substandard for life insurance
Only on the basis of information unrelated to their blindness
Through the purpose of health insurance, as with all insurance, is to indemnify or restore the client to his/her pre loss condition, there is a possibility that the insured will not be paid back the entire amount of the health care expense. This occurs if the amount of the loss exceeds what?
Policy limits
Which of the following can an insured submit to the insurer that would provide evidence of a claim and illustrate how severe the loss is?
Proof of claim
An employee group with which of the following number of employees would qualify for a medical savings account?
23 employees
What is the waiting period on a Waiver of Premium rider in life insurance policies?
6 months
As part of the continuing education requirement, what is the minimum number of hours of continuing education specific to long term care insurance to be completed prior to each license renewal?
8
In underwriting a substandard risk, which of the following is INCORRECT ?
A discounted premium would be charged
Which of the following protects the insured from an unintentional policy lapse due to nonpayment of premium?
Automatic premium loan
Which two terms are associated directly with the way an annuity is funded?
Single payment or periodic payments
Which of the following statements is correct about a standard risk classification in the same group and with similar lifestyles?
Standard risk is representative of the majority of people
A formal arrangement of providing health care benefits without providing any financial protection to the principal is referred to as what type of plan?
Self-insurance
Under HIPAA, which of the following is INCORRECT regarding eligibility requirements for conversion to an individual policy?
An individual who was previously covered by group health insurance for 6 months is eligible
Which of the following is a short term annuity that limits the amounts paid to a certain fixed period or until a certain fixed amount is liquidated?
Annuity certain
All of the following are true about group disability Income insurance EXCEPT
Coverage applies both on and off the job
A policy which covers medical costs related to a specific condition is called a
Dread Disease Policy
An insured is involved in an accident that renders him permanently deaf, although he does not sustain any other major injuries. The insured is still able to perform his current job. To what extent will he receive Presumptive Disability benefits?
Full benefits
An individual is purchasing a permanent life insurance policy with a face value of $25,000. While this is all the insurance that he can afford at this time, he wants to be sure that additional coverage will be available in the future. Which of the following options should be included in the policy?
Guaranteed insurability option
Which renewal option does NOT guarantee renewal and allows the insurance company to refuse renewal of a policy at any premium due date?
Optionally renewable
Regarding the taxation of Business Overhead policies,
Premiums are deductible, benefits are taxed
Regarding the taxation of Business Overhead policies,
Premiums are deductible, benefits are taxed.
When a whole life policy lapses or is surrendered prior to maturity, the cash value can be used to
Purchase a single premium policy for a reduced face amount
Who does HICAP serve?
Seniors receiving Social Security
Which of the following statements about a suicide clause in a life insurance policy is TRUE?
Suicide is excluded for a specific period of years and covered thereafter.
An employer offers group life insurance to its employees for the amount of $10,000. Which of the following is true?
The cost of coverage is a deductible expense by the employer
The commissioner performs all of the duties dictated by the CIC and
Enforces the execution of all provisions and laws
If $100,000 of life insurance proceeds were used in a settlement option, which paid $13,000 per year for ten years, which of the following would be taxable annually?
$3,000
Which of the following will vary the length of the grace period in health insurance policies?
The mode of the premium payment
Regarding Medicare SELECT policies, what are restricted network provisions?
They condition the payment of benefits.
What do living benefit riders do?
They pay part of the policy death benefit to insureds in order to help them fund long-term care or nursing home care.
The growing tendency of individuals to file lawsuits and to claim tremendous amounts for alleged damages is known as
legal hazard
Which of the following terms means a result of a calculation based on the average number of months the insured is projected to live due to medical history and mortality factors?
life expectancy
Regarding health insurance premiums, all of the following statements are true EXCEPT
substandard risks are not insurable and are always rejected