work exam 4
b
A life insurance policy has a legal purpose if there are both a. Underwriting interest and consent b. insurable interest and consent
b
A life insurance policyowner skips her premium payment, but the policy does not lapse. Instead, the premium amount is deducted from the cash value of the policy. What type of policy is this? a. whole life b. universal life
b
A medical insurance plan in which the health care provider is paid a regular fixed amount for providing care to the insured and does not receive additional amounts of compensation dependent upon the procedure performed is called a. Indemnity plan. b. prepaid plan
b
All of the following are true regarding insurance policy loans EXCEPT a. The policy will terminate if the loan plus interest equals or exceeds the cash value of the policy. b. Policy loan can be made on policies that do not accumulate cash value.
a
All of the following statements about Medicare Part B are correct EXCEPT a. It is a compulsory program. b. It is financed by tax revenues.
b
An IRA uses immediate annuities to pay out benefits; the IRA owner is nearly 75 years old when he decides to collect distributions. What kind of penalty would the IRA owner pay? a. No penalties, since the owner is older than 59 ½ b. 50% tax on the amount not distributed as required
a
An employee quits her job where she has a balance of $10,000 in her qualified plan. If she decides to do a direct transfer from her plan to a Traditional IRA, how much will be transferred from one plan administrator to another and what is the tax consequence of a direct transfer? a. $10,000, no tax consequence b. $8,000, no tax consequence
b
Another name for a substandard risk classification is a. elevated b. rated
b
The death protection component of Universal Life Insurance is always a. Increasing Term b. Annually Renewable Term
b
What is the major difference between a Stock Redemption Plan and a Cross Purchase Plan? a. In a Stock Redemption Plan, the policies are owned by an entity, and in a Cross Purchase Plan, the policies are owned by a corporation. b. In a Stock Redemption Plan, the policies are owned by an entity, and in a Cross Purchase Plan, the policies are owned by individuals.
a
What method do insurers use to protect themselves against catastrophic losses? a. Reinsurance b. risk-management
a
What policy component must decrease in decreasing term insurance? a. face amount b. cash value
b
When both parties to a contract must perform certain duties and follow rules of conduct to make the contract enforceable, the contract is a. Unilateral. b. Conditional.
a
Which of the following determines the length of time that benefits will be received under the Fixed Amount settlement option? a. Size of each installment b. Predetermined length of time stipulated in the contract
a
Which of the following is NOT considered to be a basic service, under a nonscheduled plan? a. dentures b. endodontics
a
Which of the following is NOT the purpose of HIPAA? a. To provide immediate coverage to new employees who had been previously covered for 18 months b. To prohibit discrimination against employees based on their health status
a
Which of the following is a feature of a variable annuity? a. Benefit payment amounts are not guaranteed. b. Payments into the annuity are kept in the company's general account.
a
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. Facility of payment clause b. nonforfeiture clause
b
When Ken purchased his health policy he was a window washer. He has since changed occupations and now manages a library. Upon notifying the insurer of his change of occupation, the insurer should a. Adjust the benefit in accordance with the decreased risk. b. Consider decreasing the premium.
a
Which nonforfeiture option provides coverage for the longest period of time? a. reduced paid- up b. paid-up option
a
An insured submitted a notice of claim to the insurer, but never received claims forms. He later submits proof of loss, and explains the nature and extent of loss in a hand-written letter to the insurer. Which of the following would be true? a. The insured was in compliance with the policy requirements regarding claims. b. The claim most likely will not be paid since the official claims form was not submitted.
b
Existing and replacing life insurers are required to keep copies of all summaries, notices, and statements used in sales transactions until the conclusion of their next examination by the Insurance Department, or for a period of at least a. 2 years b. 5 years
a
How are funds contributed to a tax-sheltered annuity treated for taxation? a. The contributions are not included as income for the employee, but are taxable upon distribution. b. The contributions are never taxed.
a
In comparison to a policy that uses the accidental means definition, a policy that uses the accidental bodily injury definition would provide a coverage that is a. Broader in general. b. More limited in general.
a
Which of the following would NOT be used in preventive care? a. Chemotherapy b. annual physical exam
a
In health underwriting, it would be inappropriate to decline a risk using any of the following factors EXCEPT a. mental illness b. marital status
a
An insured replaced an existing policy with a Medicare Supplement policy. He subsequently decided to cancel the policy, but is unsure whether or not a free look provision applies. He could find this information a. In the "Notice Regarding Replacement." b. In the application.
b
Which of the following best describes the process of policy delivery? a. After the underwriting department approves the application, the prospective insured must sign a statement agreeing to the final terms of the contract. The agent then delivers the policy by certified or express mail only. b. After the insurer receives the application, it is forwarded to the underwriting department. After the application is approved and the policy is issued, the policy is delivered either in person or by mail.
a
Which of the following may NOT be included in an insurance company's advertisement? a. That its policies are covered by a state Guaranty Association b. The name of a specific agent
b
Why should the agent personally deliver the policy when the first premium has already been paid? a. To make sure the policy is not stolen or lost b. To help the insured understand all aspects of the contract
b
All other factors being equal, the least expensive first-year premium payment is found in a. Increasing Term. b. annually renewable term
b
To which of the following policies would the state regulations on life insurance illustrations apply? a. A group annuity b. A whole life policy with a death benefit of $20,000
a
Under HIPAA, which of the following is INCORRECT regarding eligibility requirements for conversion to an individual policy? a.An individual who was previously covered by group health insurance for 6 months is eligible. b. An individual who was previously covered by group health insurance is eligible.
a
An insured has a major medical policy with a $500 deductible and 80/20 coinsurance. The insured is hospitalized and sustains a $2,500 bill. What is the maximum amount that the insured will have to pay? a. $900 b. $500
a
An employer has sponsored a qualified retirement plan for its employees where the employer will contribute money whenever a profit is realized. What is this called? a. profit sharing plan b. 401(k) plan
a
An insured has a Level Term Life Insurance policy that is guaranteed renewable and also includes a reentry provision. The reentry provision would allow the insured to renew the policy and a. Pay a lower renewal premium by proving insurability. b. Pay a lower renewal premium without evidence of insurability.
b
During replacement of life insurance, a replacing insurer must do which of the following? a. Send a copy of the Notice Regarding Replacement to the Department of Insurance b. Obtain a list of all life insurance policies that will be replaced
a
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%
a
In which of the following cases would a credit disability policy be issued? a. If an individual is in debt to a specific creditor, payments will be made for him/her until the return to work. b. A person receiving disability benefits cannot receive a credit disability policy.
b
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
a
The insurer must be able to rely on the statements in the application, and the insured must be able to rely on the insurer to pay valid claims. In the forming of an insurance contract, this is referred to as a. Utmost good faith. b. Reasonable expectations.
a
Which of the following will NOT be an appropriate use of a deferred annuity? a. Creating an estate b. Accumulating retirement funds
b
Which of the following would NOT be an exclusion in a long-term care policy? a. acoholism b. alzheimer's disease
b
Which of the following would help prevent a universal life policy from lapsing? a. Adjustable premium b. target premium
