13-33 Missed Test Questions
An insured owns a term policy with guaranteed renewable option. When the end of the policy draws near, the insured answers medical questions in order to prove insurability and qualifies for a discounted premium rate. which option best describes this scenario?
Re-entry (preferred premium reduction sounds correct but is false)
Which type of insurance is based on mutual agreements among subscribers?
Reciprocal Insurance
After an annuity contract is delivered, a contract holder has a free look period of...
10 days
Gold plan covers...
80 percent
In which medicare supplement policies are the core benefits found?
All plans
Which of the following entities is automatically qualified to enroll in a health insurer's mandatory guaranteed issue policy
All small employers
In order to qualify for group coverage in this state, associations must insure...
At least 25 members
In the executive bonus plan, who is the owner of the policy and who pays the premiums?
Executive is the owner, and the executive pays the premium
A medicare supplement plan must have at least which of the following renewal provisions?
Guaranteed renewable
To sell variable life insurance policies, an agent must receive all of the following EXCEPT a. securities license b. life insurance license c. FINRA registration d. SEC registration
SEC registration
A contract holder is 67 when applying for annuity? how long is free look period? a. 30 days b. 15 days c. 20 days d. 10 days
a. 30 days 65 or older you get 30 days
Variable annuities are kept in the.........account, while fixed annuities are kept in the........account
separate, general
In a noncontributory health plan, what percentage of eligible employees must participate before the plan becomes effective?
100% of eligible employees
Accountable Health plans cannot impose pre-existing condition exclusions on children adopted...
Before age 18
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 of the date the report was requested
A policy available to business owners that provides payment for normal business expenses in the event that the owner is disabled is called... a. Business Overhead Expense b. Credit Accident and Health Coverage c. Partial Disability d. Recurrent disability
a. BOE tax deductible; taxable
Part A is financed through a. FICA b. monthly premiums c. state tax
a. FICA part B is monthly premiums
Under the installments for a fixed period annuity settlement option, the annuitant selects the time period for the benefits and the insurer determines a. amount for each payment b. premium c. coverage period d. amount of benefits received by beneficiary
a. amount for each payment (payments are not guaranteed for life, is not a life contingency policy)
regarding annuitants, which of the following statements is true? a. the annuitant must be a natural person b. a corporation can be an annuitant as long as it is also the owner c. a corporation can be an annuitant as long as the beneficiary is a natural person d. the contract can be issued without and annuitant
a. annuitant must be a natural person
Which of the following is a short term annuity that limits the amount paid to a certain period or until a certain fixed amount is liquidated? a. annuity certain b. fixed annuity c. refund life d. variable annuity
a. annuity certain
In Arizona, the Director of Insurance serves... a. at the pleasure of the Governor b. as long as elected by general public c. a term of 4 years d. a term of 8 years
a. at the pleasure of the governor
Occasional visits by which of the following medical professionals will NOT be covered under LTC's home health care? a. attending physician b. registered nurse c. licensed practical nurse d. community based professionals
a. attending physicians
The purpose of managed care health insurance plans is to... a. control health insurance claims and expenses b. provide for the continuation of coverage when an employee leaves the plan c. provide access to the largest number of physicians as possible d. coordinate benefits
a. control health insurance claims expenses
Which of the following is true about credit life insurance? a. creditor is the policy owner b. debtor is the annuitant c. creditor is the insured d. debtor is the policy beneficiary
a. creditor is the policy owner
what is the goal of the HMO? a. early detection through regular checkups b. providing free health services c. limiting the deductibles and coinsurance to reduce costs d. providing health services close to home
a. early detection through regular checkups
In which of the following health plans are benefit payments attributed to employer contributions taxable to the employee? a. group disability income b. AD&D c. Disability buy out d. medical expense
a. group disability income contributions from employer are taxable but employee contributions are NOT taxable
which of the following does the Insuring Clause NOT specify? a. a list of available doctors b. covered perils c. the insurance company d. the name of the insured
a. list of available doctors insuring clause lists the.. 1. insured 2. insurance company 3. losses covered 4. compensation for losses
which type of care is NOT covered by Medicare? a. long term care b. hospice c. respite d. hospital
a. long term care respite care is included in hospital care
Under an individual disability policy, the minimum schedule of time in which claim payments must be made to an insured is.. a. monthly b. within 45 days c. weekly d. biweekly
a. monthly
Underwriting for disability insurance is unique. What is a critical factor in underwriting? a. occupation b. income c. years until retirement d. physical condition
a. occupation
All of the following are covered by Part A of medicare EXCEPT... a. physicians and surgeon's services b. in-patient hospital care c. post-hospital nursing care d. home health services
a. physicians and surgeon's services these are covered under part B
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 (LTC shopper guide is developed by the NAIC)
Which of the following answers does NOT describe the principal goal of a PPO? a. provide medical services only from physicians in the network b. provide the subscriber a choice of physicians c. provide the subscriber a choice of hospitals d. provide medical services at a reduced cost
a. provide medical services only from physicians in the network
which of the following answers does NOT describe the principal goal of a Preferred Provider Organization a. provide medical services only from physicians in the network b. provide the subscriber a choice of physicians c. provide the subscriber a choice of hospitals d. provide medical services at a reduced cost
a. provide medical services only from physicians in the network
An insured purchased a noncancellable health insurance policy 1 year ago. Which of the following circumstances would NOT be a reason for the insurance company to cancel the policy? a. the insured is in an accident and incurs a large claim b. the insured does not pay a premium c. the insured reaches the maximum age limit specified in the policy d. within two years of the application, the insurer discovers a misrepresentation
a. the insured is in an accident and incurs a large claim all the rest are reasons for an insurer to terminate coverage
Payor benefit rider is included in a life insurance policy. what will happen? a. the insured's premiums will be waived until age 21 b. the premiums will become tax deductible c. life insurance policy will not be affected d. the insured will have to pay for premiums for 6 months
a. the insured's premiums will be waived until age 21 (if payor of premium becomes disabled for at least 6 months or dies)
In order to solicit or issue insurance through a vending machine, producers must display evidence of their authority nearby. Which of the following does NOT need to be included in this notice? a. the insurer's phone number b. the insurer's name c. the producer's license d. the machine's identification number
a. the insurer's phone number evidence of authority must specify the names and address of the insurer and producer, as well as type of policy being sold and machines ID number
What must happen when an individual policy or annuity has been personally delivered to the policy owner? a. policy owner must sign a delivery receipt b. the policy owner must pay the annual premium in full c. the producer must go over the policy with the policy owner d. a notary must witness the exchange
a. the policy owner must sign a delivery receipt states the date the contract was received
If insured decides to go to a physician who is not a PPO provider, which of the following will happen a. the ppo will pay reduced benefits b. the ppo will not pay any benefits c. insured will be required to pay higher premium
a. the ppo will pay reduced benefits
which provision states that the insurance company must pay medical expense claims immediately? a. time of payment of claims b. payment of claims c. legal actions d. relation of earnings to insurance
a. time of payment of claims
Which of the following determines whether disability benefits are taxed? a. whether the premiums were tax deductible b. state statutes c. contract provisions d. if the total of benefits paid meets the minimum state taxation standard
a. whether the premiums were tax deductible
Which of the following is NOT an allowable 1035 exchange? a. whole life insurance policy is exchanged for a term policy b. whole life policy is exchanged for a universal life polocy c. an annuity is exchanged for another annuity d. a life insurance policy is exchanged for an annuity
a. whole life insurance policy is exchanged for a term insurance policy
Which of the following is NOT true of basic medical expense plans? a. low dollar limits b. coverage for catastrophic medical expenses c. no deductibles d. first-dollar coverage
b coverage for catastrophic medical expenses 1. low dollar limits 2. no deductibles 3. first dollar coverage
If insured is younger than 65 the annuity free look period is how long? a. 30 days b. 10 days c. 15 days d. 31 days
b. 10 days
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
Which of the following disability income policies would have the highest premium? a. 15 day waiting period/ 5 year benefit period b. 15 day waiting period/ 10 year benefit period c. 30 day waiting period/ 10 year benefit period d. 30 day waiting period/ 5 year benefit period
b. 15 day waiting period/ 10 year benefit period shorter the waiting period, higher premium longer the benefit period, higher premium
The notice of replacement must inform applicant of the free look period of the replacing policy that is.... a. 10 days b. 30 days c. 31 days d. 60 days
b. 30 days
The Director will provide the insurer with a written notice before issuing an order. How many days? a. 30 b. 5 c. 10 d. 60
b. 5
Within how many days must an applicant for an annuity contract receive the disclosure document and the buyer's guide if the application was not taken in a face to face meeting? a. 10 days b. 5 days c. 15 days d. 3 days
b. 5 days (business days)
An insured is covered under 2 group health plans. Under his own and his spouse. He had suffered a loss of 2000 dollars. After the insured paid the total of 500 in deductibles and coinsurance, the primary insurer covered 1500 of medical expenses. What amount if any would be paid by the secondary insurer? a. 0 b. 500 c. 1000
b. 500 (covers cost of coinsurance and deductibles)
The minimum number of credits required for partially insured status for Social Security disability benefits is.. a. 4 credits b. 6 credits c. 10 credits d. 40 credits
b. 6 credits must have earned 6 credits during the last 13 quarter period
Benefit periods for an individual short term disability policies will usually continue from... a. 3 months to 3 years b. 6 months to 2 years c. 2 years to age 65 d. 1 to 4 weeks
b. 6 months to 2 years Short term disability is defined as a disability lasting not more than 2 years
Which of the following must be provided in all medicare supplement plans? a. plan C coinsurance b. plan A c. Foreign travel provisions d. outpatient drugs
b. Plan A
All of the following are essential benefits required to be included in all health plans purchased in the Marketplace EXCEPT... a. pediatric vision care b. adult dental care c. hospitalization d. maternity care
b. adult dental care
While a claim is pending, an insurance company may require.. a. an independent examination only once every 45 days b. an independent examination as often as reasonably required c. the insured to be examined only within the first 30 days
b. an independent examination as often as reasonably required
Which of the following is not an enrollment period for Medicare Part A applicants? a. general b. automatic c. initial d. special
b. automatic
which of the following provisions in annuity contracts allow the owner to surrender the annuity if interest rates drop to a specified level? a. Annuitization b. Bail out c. Surrender d. Nonforfeiture
b. bail-out
In life insurance, producers are permitted to share or split commissions, providing that... a. there is a written agreement between the producers b. both are properly licensed for the line of insurance c. the insured knows and agrees to the arrangement d. the insurance department knowns of the arrangement
b. both are properly licensed for the line of insurance
An insured who has an AD&D policy loses her left arm. what type of benefit will she receive? a. principal amount in monthly installments b. capital amount in a lump sum c. principal amount in a lump sum d. capital amount in monthly installments
b. capital amount in a lump sum
Which of the following is true regarding credit life insurance? a. debtor is the policy beneficiary b. creditor is the policy owner c. debtor is the annuitant d. creditor is the insured
b. creditor is the policy owner creditor is the policy owner and beneficiary debtor is the insured
In which of the following health plans are benefit payments attributed to employer contributions taxable to the employee? a. medical expense b. group disability income c. AD%D d. disability buy out
b. group disability income
Which of the following entities has the authority to make changes to an insurance policy? a. producer b. insurer's executive officer c. department of insurance d. broker
b. insurer's executive officer
Which of the following is true regarding a term health policy? a. it is noncancellable b. it is nonrenewable c. it is conditionally renewable d. it is guaranteed renewable
b. it is nonrenewable
The provision which prevents the insured from bringing any legal actions against the company for at least 60 days after proof of loss is known as.. a. proof of loss b. legal actions c. time limit on certain defenses d. payment of claims
b. legal actions
Under workers compensation, which of the following benefits are NOT included? a. death benefits b. legal actions c. rehabilitation benefits
b. legal actions
By what date each year are insurers required to report information concerning their long term care policies? a. april 1st b. march 31 c. January 1 d. October 1
b. march 31
An insured is covered under a Medicare policy that provides a list of network healthcare providers that the insured must use to receive coverage. In exchange for this limitation, the insured is offered a lower premium. Which type of medicare policy does the insured own? a. medicare advantage b. medicare select c. medicare part A d. medicare supplement
b. medicare select require insured's to use specific healthcare providers and hospitals, except in emergency situations. In return the insured pays lower premiums
According to the PPACA metal levels classification, if a health plan is expected to cover 90% of the cost for an average population and the participants would cover the remaining 10%, is called what type of plan a. gold b. platinum c. bronze d. silver
b. platinum bronze pays 60% silver pays 70% gold pays 80%
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. grace period b. probationary period c. contestable period d. elimination period
b. probationary period is the time after a policy is in effect before claims arising out of an illness are covered in order to prevent adverse selection: persons waiting until they have been exposed to a cause of loss before purchasing coverage
Which nonforfeiture option provides coverage for the longest period of time? a. accumulated at interest b. reduced paid-up c. extended term d. paid-up option
b. reduced paid-up provides protection until insured reaches age 100, but the face amount is reduced to what the cash value would buy
To protect personally identifiable information, state exchanges must establish safeguards that include all the following EXCEPT... a. disclosing such information only to authorized individuals b. returning copies of paperwork featuring such information to individuals c. destroying such information in an appropriate manner d. protecting such info from reasonably anticipated threats
b. returning copies of paperwork featuring such information to individuals
which of the following is NOT covered under part B of Medicare policy? a. physician expenses b. routine dental care c. home health care d. lab services
b. routine dental care
which of the following is a peril covered in an accident and health insurance policy? a. death b. sickness c. alcoholsim d. smoking
b. sickness
All of the following long term care coverages would allow for an insured to receive care at home EXCEPT.. a. home health care b. skilled care c. custodial care in insured's house d. respite care
b. skilled care (institutional setting, the rest are home care)
J transferred his life policy to his son two years before his death. Which of the following is true? a. because the policy has been transferred, it will not be included in J's taxable estate b. the entire face value of the policy will be included in J's taxable estate c. the interest portion of the policy will be included in J's taxable estate d. the unpaid premium on the policy will be deducted from J's taxable estate
b. the entire face value of the policy will be included in J's taxable estate if a policy owner transfers a life insurance policy within 3 years prior to death, the entire face amount of the policy will be included in policy owner's taxable estate
An insured purchased a noncancellable health insurance policy 1 year ago. Which of the following circumstances would NOT be a reason for the insurance company to cancel the policy? a. within two years of the application, the insurer discovers a misrepresentation b. the insured is in an accident and incurs a large claim c. the insured does not pay the premium d. the insured reaches the maximum age limit specified in the policy
b. the insured is in an accident and incurs a large claim
An applicant is considered to be high risk, but not so much that the insurer wants to deny coverage. Which of the following is NOT true? a. the insurer can rate up the policy b. the insurer will issue a conditional coverage c. the insurer can increase the premium d. the insurer can add exclusions to the policy
b. the insurer will issue a conditional coverage
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 interest would be taxable if beneficiary not spouse
On a disability income policy that contains the "own occupation" definition, the insured will be entitled to benefits if they cannot perform... a. any job that they are suited for by prior experience b. their regular job c. any job that they are suited for by prior education d. any job they are suited for by prior training
b. their regular job
which of the following is the best reason to purchase life insurance rather than annuities? a. to liquidate a sum of money over a lifetime b. to create an estate c. to liquidate a sum of money over a period of years d. to create regular income payments
b. to create an estate
Are insurance company underwriters allowed to discriminate? a. yes but only for gender b. yes but not unfairly c. no higher risks pay higher premium d. no discrimination is an unfair practice
b. yes but not unfairly
What is the maximum period that an insurer would pay benefits in accordance with the additional monthly benefit rider? a. 1 month b. 2 years c. 1 year
c. 1 year
How many days of notice must insurers provide when canceling accident and health policies? a. 90 b. 5 c. 30 d. 60
c. 30
How long is the free look period for annuities if the contract holder is older than 65? a. 15 days b. 10 days c. 30 days d. 2 weeks
c. 30 days
How many days to convert a group health policy to an individual policy without proof of insurability? a. 10 days b. 30 days c. 31 days d. 60 days
c. 31 days
Within how many days to send disclosure document and buyers guide? a. 10 days b. 3 days c. 5 days
c. 5 days
What is the elimination period for S.S disability benefits? a. 12 months b. 3 months c. 5 months d. 6 months
c. 5 months
During replacement, producers must list any other health policies sold during the past.. a. year b. 6 months c. 5 years d. 10 years
c. 5 years
One of the difference between group underwriting and individual underwriting is that there is little or no medical information required regarding plan participation in groups of a. 25 or more b. fewer than 50 c. 50 or more d. 100 or more
c. 50 or more
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%
Under the ACA a special enrollment period allows for 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 enrollees have 60 days from the date of a triggering event to select a qualified health plan
If an employer provides long term group disability insurance for its employees, what percentages of monthly wages are lower-paid employees eligible to collect? a. 33 and 1/3% b. 50% c. 66 and 2/3% d. 90%
c. 66 and 2/3% (50% of monthly wages would be for higher-paid employees)
How many eligible employees must be included in a contributory plan? a. 100% b. 50% c. 75% d. 90%
c. 75%
Most policies will pay the accidental death benefits as long as the death is caused by the accident and occurs within a. 30 days b. 60 days c. 90 days d. 120 days
c. 90 days
The term "uninsured small business" means a small employer that does not provide health benefits for at least... a. 25% of its employees b. 6 months prior to the effective date of coverage c. 90 days prior to the effective date of coverage d. half of its employees
c. 90 days prior to the date of coverage
When is the annual open enrollment for state insurance exchanges? a. Jan 1 through Feb 28 b. Dec 1 through march 1 c. Nov 1 through Jan 31 d. Dec 1 through dec 31
c. Nov 1 through Jan 31
Prior to purchasing a medigap policy, a person must be enrolled in which of the following? a. any private insurance policy b. only parts A of medicare c. Part A and B of medicare d. All four parts of medicare
c. Part A and B of medicare
The annual contribution limit of a Dependent Care Flexible Spending Account is set by.. a. the insurer b. the insured c. the IRS d. the employer
c. The IRS
All of the following statements concerning workers compensation are correct EXCEPT.. a. all states have workers compensation b. benefits include medical, disability income, and rehabilitation coverage c. a worker receives benefits only if the work related injury was not their fault d. workers comp laws are established by each state
c. a worker receives benefits only if the work related injury was not their fault workers comp pays regardless of fault or negligence
In insurance, an offer is usually made when... a. the agent hands the policy to the policy holder b. an agent explains a policy to a potential applicant c. an applicant submits an application to the insurer d. the insurer approves the application and receives the initial premium
c. an applicant submits an application to the insurer acceptance takes place when an insurer's underwriter approves the application and issues a policy
under which of the following circumstances would an insurer pay accelerated benefits? a. an insured is looking for a way to put her daughter through college b. a couple wants to build a house and would like to make a down payment c. an insured is diagnosed with cancer and needs help paying for her medical treatment d. a couple is nearing retirement and needs a steady stream of income
c. an insured is diagnosed with cancer and needs help paying for her medical treatment
All of the following are requirements of eligibility for social security disability income benefits EXCEPT.. a. fully insured status b. waiting period of 5 months c. being age 65 d. inability to perform any gainful work
c. being age 65 fully insured status means earning 40 quarters of coverage which is equivalent to 10 years of work
After a person's employment is terminated, it is possible to obtain individual health insurance after losing the group health coverage provided by the employer. Which of the following is NOT true? a. the employee can convert from group to individual insurance within 31 days of termination b. the premium on the individual health insurance policy can be higher than the original policy c. by law, the new, individual policy must provide the same benefits as the group insurance policy d. continuation of group coverage need not to include dental, vision, or prescription drug benefits
c. by law, the new individual policy must provide the same benefits as the group insurance policy
Which of the following provisions requires that any policy language that is in conflict with state statutes is automatically amended to conform with the state of residence? a. insurance with Other insurers b. legal actions c. conformity with state statutes
c. conformity with state statutes
All of the following may be excluded from coverage in a Major Medical Expense policy, EXCEPT... a. cosmetic surgery b. coverage provided under workers comp c. emergency surgery d. custodial care
c. emergency surgery they rest are all standard exclusions
which of the following are the authorities that an agent can hold? a. authorized and admitted b. primary and secondary c. express and implied d. apparent and allowed
c. express and implied
Intentionally misrepresenting or concealing a material fact to induce an insurance company to make a contract is known as.. a. misrepresentation b. concealment c. fraud d. avoidance
c. fraud
If a life policy allows the policy-owner 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
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
In insurance transactions, fiduciary responsibility means.. a. being liable with respect to payment of claims b. commingling premiums with agent's personal funds c. handling insurer funds in a trust capacity d. maintaining a good credit record
c. handling insurer funds in a trust capacity
What are the two components of a universal policy? a. mortality cost and interest b. separate account and policy loans c. Insurance and cash account d. insurance and investments
c. insurance and cash account 1. insurance component is always ART 2. cash grows on a tax deferred basis and earns either the guaranteed contract rate or the current rate, whichever is higher
Which of the following entities must approve all Medicare supplement advertisements? a. federal association of insurers b. consumer protection agency c. insurance commissioner or director d. NAIC
c. insurance commissioner or director
what statement best describes the free-look provision? a. it allows the company to obtain an inspection and medical examination on the proposed insured b. it allows the proposed insured to carefully look over the policy before applying for it c. it allows the insured to return the policy within 10 days for a full refund of premiums if dissatisfied for any reason d. it allows the insured to carefully look over the application prior to filling it out
c. it allows the insured to return the policy within 10 days for a full refund of premiums if dissatisfied for any reason
how is the amount of social security disability benefits calculated? a. based on age, number of quarters worked in the last 25 years b. based on age, number of quarters worked in the last 20 years c. it is based upon the worker's primary insurance amount (PIA), which is calculated from the average indexed monthly earnings over their highest 35 years d. based upon the worker's primary insurance amount (PIA), which is calculated from the average indexed monthly earnings over their highest 30 years
c. it is based upon the worker's primary insurance amount (PIA), which is calculated form the average indexed monthly earnings over their highest 35 years
Which of the following is true regarding a single life settlement option? a. proceeds are paid out in a lump sum b. it provides income for a specified period of time c. it provides income the beneficiary cannot out live d. payments continue until the entire principal is exhausted
c. it provides income the beneficiary cannot outlive payments stop upon the death of the beneficiary
Which of the following is true of a PPO? a. claim forms are completed by members on each claim b. no copayment fees are involved c. its goal is to channel patients to providers that discount services d. the most common type of PPO is the staff model
c. its goal is to channel patients to providers that discount services
What type of benefit helps to pay for accidental injuries that are not severe enough to qualify as disabilities? a. basic accidental injury b. accidental death and dismemberment c. medical reimbursement benefit d. partial disability
c. medical reimbursement benefit
Which of the following is NOT true about a joint and survivor annuity benefit option? a. this option guarantees income for two or more recipients b. the surviving annuitant may receive reduced payments c. payments stop after the first death among the annuitants d. a period certain option may be included
c. payments stop after the first death among the annuitants a joint and survivor annuity will pay until the last annuitant has died
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. reimbursement plan b. fee-for-service plan c. prepaid plan d. indemnity plan
c. prepaid plan health care providers are paid for services in advance, wether or not any services are provided
J bought three policies from the same insurer and his benefits have exceeded the maximum allowed by insurer, what happens? a. termination of two policies b. termination of all policies c. Pro rate benefit reduction
c. pro rata benefit production
In respect for the consideration clause, which of the following is consideration on part of the insurer? a. offering an unconditional contract b. explaining the policy to applicant c. promising to pay in accordance with the contract terms d. offering a secondary policy to the applicant
c. promising to pay in accordance with the contract terms
When a replacement is involved, a replacing insurance company is responsible for all the following EXCEPT a. include a policy summary b. obtain from the producer a list of applicant's life insurance or annuity contracts to be replaced c. provide a copy of the important notice regarding replacement of life insurance to applicant d. send the existing insurance company a written notice of replacement
c. provide a copy of the important notice regarding replacement of life insurance to applicant (this is the producer's responsibility)
All of the followings are business entities EXCEPT... a. limited liability companies b. corporations c. sole proprietorships d. limited liability partnerships
c. sole props
which of the following would an accident-only policy NOT cover? a. death from car accident b. amputation of leg burned in house fire c. surgery to repair a wrist damaged by tendonitis d. hospitalization from boating accident
c. surgery to repair wrist damaged by tendonitis accident only policies cover medical costs caused by accidents not sickness like tendonitis
All of the following entities regulate variable life policies EXCEPT a. the SEC b. the insurance department c. the guaranty association d. federal government
c. the guaranty association
Which of the following statements is correct regarding a whole life policy? a. the policy premium is based on the attained age b. the death benefit may increase or decrease during the policy period c. the policy owner is entitled to policy loans d. cash values are not guaranteed
c. the policy owner is entitled to policy loans Whole Life 4 elements are.... 1. level premium based on issue age 2. guaranteed and level death benefit 3. cash value is equal to face amount at insured's age 100 4. included living benefits such as policy loans
who is required to inform applicants about information gathering practices? a. the insurer b. no one c. the producer d. the state government
c. the producer
which of the following is true regarding MET's a. they provide insurance for larger corporations b. they provide insurance companies with medical information on applicants c. they allow several small employers to purchase less expensive insurance together d. they make deals with local hospitals to provide low cost coverage to the needy
c. they allow several small employers to purchase less expensive insurance together
Which of the following is NOT the purpose of HIPAA a. to prohibit discrimination against employees based on their health status b. to limit exclusions for pre-existing conditions c. to provide immediate coverage to new employees who had been previously covered for 18 months d. to guarantee the right to buy individual policies to eligible individuals
c. to provide immediate coverage to new employees who had been previously covered for 18 months HIPAA does not prohibit employers from establishing waiting periods, which means coverage would not be immediate
Social Security was created to provide all of the following benefits EXCEPT... a. disability income b. retirement income c. unemployment income d. survivor's benefits
c. unemployment provides financial loss due to old age (survivor benefits), disability, death, retirement
What is the penalty tax for non-qualified distributions from a health savings account? a. 8% b. 10% c. 12% d. 20%
d. 20%
what is the free look period for individual LTC a. 10 days b. 15 days c. 20 days d. 30 days
d. 30 days
What is the waiting period on a waiver of premium rider in life insurance policies? a. 30 days b. 3 months c. 5 months d. 6 months
d. 6 months
what is the waiting period on a Waiver of Premium rider in a life insurance policy? a. 30 days b. 3 months c. 5 months d. 6 months
d. 6 months
According to the PPACA rules, what percentage of health care costs will be covered under a bronze plan? a. 10 % b. 30% c. 40% d. 60%
d. 60%
In insurance, an offer is usually made when? a the insurer approves the application and receives the initial premium b. the agent hands the policy to the policy holder c. an agent explains aa policy to a potential applicant d. an applicant submits an application to the insurer
d. an applicant submits an application to the insurer
A universal life insurance policy is best described as a. variable life with a cash value account b. whole life policy with two premiums: target and minimum c. flexible premium variable life policy d. annually renewable term policy with a cash value account
d. annually renewable term policy with a cash value account
In order to qualify for group coverage in this state, associations must insure... a. at least 2 members b. more than 2 and fewer than 50 members c. more than 2 and fewer than 25 members d. at least 25 members
d. at least 25 members
When an insurer offers services like pre-admissions testing, second opinions, and preventive care which term would best apply? a.cost reduction b. claims reduction c. claims discrimination d. case management provision
d. case management provision
A waiver of premium provision may be included in which kind of health insurance policy? a. basic medical b. hospital indemnity c. dread disease d. disability income
d. disability income usually included with guaranteed renewable and noncancellable individual disability income policies.
If a beneficiary wants a guarantee that benefits paid from principal and interest would be paid for a period of 10 years before being exhausted. what settlement option should the beneficiary select? a. life with period certain b. fixed amount c. interest only d. fixed period
d. fixed period (also called period certain)
In an optionally renewable policy, the insurer has which of the following options a. increase the grace period b. alter the due date so the policy can be cancelled sooner c. shorten the notice that the insured receives d. increase the premium
d. increase the premium (if insurer elects to renew coverage) insurer can cancel a policy for any reason but policies can only be cancelled on policy anniversary or premium due date (renewal date)
All of the following are Nonforfeiture option EXCEPT a. cash surrender b. extended term c. reduced paid-up d. interest only
d. interest only this is a settlement option
Which of the following is true regarding health insurance? a. disability coverage is excluded b. it provides death benefit coverage c. it only covers expenses related to health care d. it could provide payments for loss of income
d. it could provide payments for loss of income
All of the following statements are true regarding installments for a fixed period annuity settlement option EXCEPT.. a. it will pay the benefit only for a designated period of time b. the payments are not guaranteed for life c. the insurer determines the amount for each payment d. it is a life contingency option
d. it is a life contingency option
In a disability income policy, all of the following are considered presumptive disabilities EXCEPT... a. loss of hearing b. loss of two limbs c. loss of speech d. loss of one eye
d. loss of one eye total loss of sight, speech, hearing, or the use of any two limbs is considered presumptive
Which of the following statements is nOT correct regarding medicare? a. medicare advantage may include prescription drug coverage at no cost b. medicare part A provides hospital care c. Medicare part B provides physician services d. Medicare Advantage must be provided through HMO's
d. medicare advantage must be provided by HMO's medicare advantage offers expanded benefits for a fee through private health insurance programs such as HMO's or PPO's
Under the fair credit reporting act, individuals rejected for insurance due to information contained in a consumer report... a. are entitled to obtain a copy of the report from the party who ordered it b. must be advised that a copy of the report is available to anyone who requests it c. may sue the reporting agency in order to het inaccurate data corrected d. must be informed of the source of the report
d. must be informed of the source of the report (name and address of reporting agency)
premium payments for personally owned disability income policies are... a. eligible for tax credits b. tax deductible c. tax deductible to the extent that they exceed 10% of the adjusted gross income of those itemizing their deductions d. not tax deductible
d. not tax deductible
A 55 year old employee has worked part time for his new employer for 3 months now, but has not been offered health insurance. What factor has limited the employee's eligibility? a. the total amount of time worked for the company b. age c. income d. number of hours worker per week
d. number of hours worker per week to be eligible for group insurance an employee must work full-time and have devoted 1 to 3 months of service.
An insured's health claim internal appeal was denied. The insurer must do all of the following EXCEPT.. a. notify the insured about the decision in writing b. complete the appeal in 60 days after service was received c. notify the insured how to obtain an outside review d. offer a payment plan
d. offer a payment plan
which renewability provision allows an insurer to terminate a policy for any reason and to increase the premiums for any class of insureds? a conditionally renewable b. cancellable c. guaranteed renewable d. optionally renewable
d. optionally renewable insurer can terminate policy for any reason on date specified in contract (usually a renewal date or premium due date)
Which of the following applies to partial disability benefits? a. an insured is entitled to a principal sum benefit for the partial loss of a limb b. payment is based on termination of employment c. benefits are reduced once an insured is no longer under a doctor's care d. payment is limited to a certain period of time
d. payment is limited to a certain period of time the partial disability benefit is typically 50% of the total disability benefit and is limited to a certain period of time
Which of the following is true of participating life insurance policy a. may be converted to a term life policy b. pays dividends to stockholders c. assesses premiums against stockholders d. pays dividends to policy-owners
d. pays dividends to policy owners
Which of the following statements is an accurate comparison between private and government insurers a. private insurers offer fewer lines of insurance than government insurers b. insurance provided by the government is called federal insurance c. private insurers provide insurance in areas where the government will not d. private insurers may be authorized to transact insurance by state insurance departments
d. private insurers may be authorized to transact insurance by state insurance departments
A policy owner has collected nontaxable dividend check each year. She has decided that she would rather use the dividends to help pay for her next premium. what option would allow her to do this? a. paid-up addition b. accumulation at interest c. cash option d. reduction of premium
d. reduction of premium
what method do insurers use to protect against catastrophic losses? a. indemnity b. pro rata liability c. risk management d. reinsurance
d. reinsurance
Which of the following statements is correct about group life? a. the premiums are higher than in an individual policy b. the group sponsor receives a certificate of insurance c. the policy can be converted to an individual term insurance policy d. the cost of the coverage is based on the ratio of men and women in the group
d. the cost of coverage is based on the ratio of men and women in the group
An adjustable life policy owner can change which of the following policy features? a. mortality expense b. investment account c. the insured d. the coverage period
d. the coverage period
Income replacement contracts agree... a. to replace income if the head of the household is the primary insured and is laid off b. to cover an accident on the job but not accidents outside of his job c. to replace the insured for his company, including hiring and training d. to replace the insured's income up to a stated percentage if the insured suffers a loss due to a covered accident or sickness
d. to replace the insured's income up to a stated percentage if the insured suffers a loss due to a covered accident or sickness
Which of the following types of policies allows the policy owner to skip premium payments, provided that there is enough cash value? a. flexible life b. variable life c. adjustable life d. universal life
d. universal life
In group insurance the contract is between? a. employer and insurance company b. employer and employee
employer and insurance company
What is the grace period for health insurance?
week; 7 days month; 10 days year; 31 days
Long term care policies outlines' of coverage should include graphics comparing benefit levels over at least...
20 years
Employer health plans must provide primary coverage for end stage renal disease before medicare becomes primary for how many months?
30 months
what is the period of coverage for events such as death or divorce under COBRA
36 months
An IRA uses immediate annuities to pay out benefits; the IRA owner is 75 when he decides to collect distributions. What kind of penalty would the IRA owner pay?
50% tax on the amount not distributed as required (When immediate annuities are used to pay IRA benefits, distributions must begin no later than age 70 1/2 in order for the annuitant to avoid penalties. The penalty is 50% of the shortfall from the required annual amount)
An insured carries health insurance with two different providers and is covered on an expense incurred basis. He has surgery and files claims for both insurers but neither company is notified in advance that insurer has other coverage. What should each insurer pay?
A proportionate amount
Insurance policies are not drawn up through negotiations, and an insured has little to say about its provisions. What contract characteristic does this describe?
Adhesion (insured can only accept or reject the policy as insurance company rights it)
All of the following could qualify as a group for the purpose of purchasing group health insurance EXCEPT...
An association of 35 people
All of the following information about a customer must be used in determining annuity suitability EXCEPT?
Beneficiary's age (consumer's age, income, financial status and experience are suitable)
An insured received his major medical insurance policy. Only 20 days after the policy issue, while recreational rock climbing, the insured suffered a fall that required surgery and physical therapy for his broken leg. Which of the following is true?
Both a deductible and coinsurance will be required (major medical plans have blanket coverage and high maximum limits, no elimination or waiting period)
According to the provisions of the Patient Protection and Affordable Care Act, all of the following are required preventive care services EXCEPT...
Cervical cancer exams for all women starting at age 40 (only available for women at higher risk)
which of the following is NOT a characteristic or a service of an HMO plan?
Contracting with insurance companies (encourage outpatient care rather than admitting to hospitals for cost concerns)
what happens when a policy is surrendered for its cash value?
Coverage ends and the policy can not be reinstated
Which of the following is NOT fundable by annuities?
Death benefit (this benefit is provided by life insurance)
An individual has been making periodic premium payments on an annuity. The annuity income payments are scheduled to begin after 1 year since the annuity was purchased. What type of annuity is it?
Deferred (these annuities begin after 1 year and may be purchased with either single lump sum or periodic payments)
Which of the following statements about occupational vs. nonoccupational coverage is TRUE?
Disability insurance can be written as occupational or nonoccupational
Which of the following is true regarding taxation of dividends in (mutual) participating policies?
Dividends are not taxable (participating have higher premiums than non)
The uniform provision law that prevents an insurance company from altering its agreement with a policyholder by referring to documents not contained in the policy is called the...
Entire Contract Provision
Which of the following is a correct statement about annuities?
Fixed annuities do not provide protection against inflation (fixed products provide protection against the risks of investing, since company bears those risks)
An insured was in an accident and could not perform her current job for 3 years. If the insured could reasonably perform another job utilizing similar skills after 1 month, for how long would she be receiving benefits under an "own occupation" disability plan?
For 2 years even though she can perform a similar job during that two year period. (After that if insured is capable for performing another job, benefits will not be paid)
At what point is a newborn covered under a health insurance policy, and how long will this coverage last before the insurer needs to be notified of the birth?
From the moment of birth, and the insurer must be notified within 31 days
Issue age policy premiums increase in response to which of the following factors?
Increased Benefits
The omnibus budget reconciliation act of 1990 requires...
Large group health plans must provide primary coverage for disabled individuals under age 65 who are not retired
All of the following statements describe MEWA except?
MEWA's are groups of at least 3 employers (MEWA's are groups of at least 2 employers, can be self-insured, retain full responsibility for any unpaid claims, and can be sponsored by insurance companies)
Which of the following statements concerning the MIB is correct?
MIB assists underwriters in evaluating and classifying risks (focused on applicant medical history and supported by member insurance companies)
An insurer wishes to compare the information given in an insurance application with previous insurance applications by the same applicant but for different companies. What organization can help the insurer accomplish this?
Medical Information Bureau
What was created to keep telemarketers from calling consumers who do not wish to be contacted?
National DO Not Call Registry
The full premium was submitted with the application for life insurance and the policy was issued two weeks later. When does the policy coverage become effective?
On the application date
Which of the following is a provision found in life insurance policies?
Reinstatement
Upon policy delivery, the producer may be required to obtain any of the following except
Signed waiver of premium (policy does not go into effect until the premium has been collected)
Which of the following types of annuities will generally provide the highest monthly income
Straight life (bc it only pays until the death of annuitant) (any period certain option will reduce monthly payout bc it pays beyond life of annuitant)
A person steps off a street car and trips and breaks his ankle. This type of injury can be described as?
Sudden and unforeseen (accidental bodily injury is an unforeseen and unintended injury that results from accident not sickness)
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....
Tax Deductible (contributions to HSA by individual are deductible even if not itemized. Contributions by an employer are not received income tax free)
Which of the following is an example of a producer being involved in an unfair trade practice of rebating?
Telling a client that his first premium will be waived if he purchases the insurance today
Insurable Interest can best be described by...
The applicant must experience a financial loss due to an accident or sickness that befalls the insured
Which of the following statements about group life is correct?
The cost of coverage is based on the ratio of men and women in the group (Group life can be converted to an individual whole life, not a term policy) (premiums are lower than individual policy)
What happens to the face amount of a whole life policy if the insured reaches the age of 100?
The face amount is paid to the insured (cash value is not paid to insured)
what are the disclosure requirements if the application for annuity has been received as a result of a direct mail solicitation?
The requirement is met if the disclosure document and the buyers guide were included in the mailing
Under an extended term nonforfeiture option, the policy's cash value is converted to
The same face amount as the whole life policy
What is the purpose of COBRA?
To provide continuation of coverage for terminated employees
Which of the following types of insurance is investment based, has a level fixed premium, and a non-guaranteed cash value?
Variable whole life (is a level fixed premium investment based product) (combo of decreasing term and an investment fund)
In individual health insurance coverage, the insurer must cover a newborn from the moment of birth and if additional premium payment is required how many days should be allowed for payment?
Within 31 days of birth
All of the following could own group life insurance EXCEPT...
a group needing low-cost life insurance
How long is the free-look-period for medicare supplement policy? a. 30 days b. 60 days c. 10 days d. 20 days
a. 30 days
The responsibility of making certain that an application for insurance is filled out completely, correctly, and to the best of their knowledge is the responsibility of the
agent/ producer
When an insured purchased her disability income policy, she misstated her age and said she was 30 when she was actually 37. If the policy contains the optional misstatement of age provision...
amounts payable under the policy will reflect the insured's correct age
All of the following are reasons for group insurance termination for dependents EXCEPT... a. the overall maximum benefit for major medical benefits is received b. the dependent reaches age 21 c. the dependent fails to meet the definition of a dependent d. the end of the last period for which the employee has made the required premium for dependent coverage passes
b. the dependent reaches age 21
Which of the following services will not be provided by an HMO? a. inpatient hospital care outside the service area b. unlimited coverage for treatment for drug rehabilitation c. treatment of mental disorders d. emergency care
b. unlimited coverage for treatment for drug rehabilitation
No more than how many years may pass between the time the insured signs the authorization form in order for an insurer to legally disclose privileged information and the time when the insurer discloses that information a. 1 month b. 6 months c. 1 year d. 2 years
c. 1 year
who makes up the MIB a. former insureds b. hospitals c. insurance companies d. physicians
c. insurance companies
What is an example of a "gene product"
gene fragments or DNA sequence information
All of the following must sign an application for health insurance EXCEPT the
insurer (producer, applicant, proposed insured, and policy owner if different than insured required)
Which of the following is provided by skilled medical personnel to those who need occasional medical assistance or rehabilitative care?
intermediate care (is occasional nursing)
A fraternal society....
is operated for the benefit of its members
Which of the following is true regarding health insurance...
it could provide payments for loss of income (coverage for expenses related to health care, loss of income, and disability income)
Which of the following statements is NOT correct concerning COBRA
it requires all employers, regardless of the number or age of employees to provide extended group health coverage (act requires only employers with 20 or more employees)
Premium for survivorship life compared to joint life would be....
lower
Which of the following is true regarding policy loans?
money borrowed from the cash value is taxable
All of the following are true of the Survivorship life policy EXCEPT..
premiums are based on the age of each insured (instead based on joint age)
Which of the following is correct regarding the taxation of group medical expense premiums and benefits...
premiums are tax deductible by employer as business expense and benefits are income tax free to employee (Group Medical is deductible; not taxable)
In group insurance, the primary purpose of the Coordination of Benefits Provision is to..
prevent overinsurance
The paid up addition option uses dividends to...
purchase a smaller amount of the same type of insurance as the original policy
Group medical and dental expense benefits are.....
received income tax free by employee
insurer returns all annuity premiums to the owner except for a predetermined percentage after owner surrenders annuity. What is this percentage called?
surrender charge
An insurer receives a report regarding a potential insured that includes the insured's financial status, hobbies and habits. What type of report is that?
Inspection Report done by private investigators or credit agencies, regulated by Fair Credit Reporting Act
A policy owner no longer needs life insurance policy and agrees to sell it to a third party for more than its cash value. This type of insurance is called a. 1035 exchange b. investor-originated life insurance c. life settlement d. viatical statement
c. life settlement
What is the purpose of a benefit schedule? a. to provide the dates for payment of benefits b. to list the insured's copayments and deductibles c. to state what and how much is covered in the plan
c. to state what and how much is covered in the plan
What is it called when a doctor accepts the medicare approved amount? a. consent b. verification c. acceptance d. assignment
d. assignment
Which of the following describes the relationship between the principal and capital sum? a. principal sums vary, while capital sums do not b. capital sums vary, while principal sums do not c. principal sums are percentages of capital sums d. capital sums are percentages of principal sums
d. capital sums are percentages of principal sums
which statement is required to be printed on the first page of a health insurance policy, which signals to the insured that the policy's benefits are limited? a. benefit notice b. statute of limitations c. limited benefit statement d. limited policy notice
d. limited policy notice
A core medicare supplement policy (plan A) will cover all of the following EXCEPT.. a. the first 3 pints of blood b. 20% of part B coinsurance amounts for approved services c. part A coinsurance d. part A deductible
d. part A deductibles
An applicant completes an application for a disability policy and pays the initial premium. The producer gives the applicant a conditional receipt. Insurance coverage for the applicant will become effective when.. a. the insurance company requests a medical examination b. the applicant signs the conditional receipt c. the producer delivers the policy d. the insurance company accepts the risk
d. the insurance company accepts the risk (if the initial premium is paid when the application is submitted, coverage begins when the insurer approves the application by accepting the risk)
every medicare supplement policy must have a Notice to Buyer on the front page that states which of the following a. this policy does not always change with medicare provisions b. you may not own more than three medicare supplement policies c. the premium of the policy may increase on a class basis d. this policy may not cover all your medical expenses
d. this policy may not cover all your medical expenses
Which of the following employees insured under a group plan would be allowed to convert to individual insurance once the plan is terminated?
those who have been insured for at least 5 years
in an adjustable life policy all of the following can be changed by the policy owner EXCEPT
type of investment
Under the mandatory uniform provision "notice of claim", written notice of a claim must be submitted to the insurer within what time parameters?
within 20 days
How soon following the occurrence of a covered loss must an insured submit written proof of such loss to the insurance company?
within 90 days or as soon as possible, but not to exceed 1 year
When must an insurance company present an outline of coverage to an applicant for a medicare supplement policy?
At the time of application (not when policy is delivered)
Which of the following is NOT a crucial factor in health insurance underwriting?
Income (morale hazards, occupation, and physical condition are factored in)
All of the following are true regarding the guaranteed insurability rider EXCEPT...
The rider is available to the insured for no additional premium
Critical illness coverage pays the insured..........., unlike dread disease coverage which only pays.........
a lump sum, a specified amount per day
Which of the following could be used to prove that a person applying for a license is in the U.S legally? a. social security card b. certificate of identification signed by governor c. a bureau of indian affairs affidavit of birth d. a credit card
c. a bureau of indian affairs affidavit of birth
Which of the following riders pays the beneficiary a death benefit that is double or triple the face amount if the insured's death was caused by an accident as defined in the policy? a. guaranteed insurability rider b. covered peril rider c. an accident death rider d. a double indemnity rider
c. an accident death rider
An employee dies having 6 quarters of coverage during the previous 13-quarter period. What status of coverage does the employee have under Social Security? a. uninsured b. conditionally insured c. currently insured d. fully insured
c. currently insured (also known as partially insured)
An individual covered under a group dental expense plan needs to have bridgework done. Bridgework is covered as a. periodontics b. orthodontics c. prosthodontics d. endodontics
c. prosthodontics
All of the following statements about indexed whole life insurance are correct EXCEPT a. there is a guaranteed minimum interest rate b. the cash value depends on the performance of the equity index c. the death benefit is not guaranteed d. the premium is fixed
c. the death benefit is not guaranteed
Which of the following is NOT an example of an insurable interest?
debtor in creditor
All of the following are TRUE statements regarding the accumulation at interest option EXCEPT...
the interest is not taxable since it remains inside the policy (the interest is taxable)
Insurance institutions and producers must provide notice of their information gathering practices to applicants and policyholders no later than...
the time the policy is delivered
