Attempt 2

Regarding the taxation of Business Overhead policies,

Premiums are deductible, benefits are taxed.

In a replacement situation, all of the following must be considered EXCEPT

assets

If an insurer meets the state's financial requirements and is approved to transact business in the state, it is considered to be

authorized

An individual purchased a $100,000 Joint Life policy on himself and his wife. Eight years later, he died in an automobile accident. How much will his wife receive from the policy?

$100,000

What is the maximum monetary fine for a nonwillful violation of insurance statutes regarding unfair trade practices?

10,000

Which of the following is INCORRECT concerning Medicaid

It is solely a federally administered program

Which of the following statements concerning Medicare Part B is correct?

It pays for physician services, diagnostic tests, and physical therapy.

To sign up for a Medicare prescription drug plan, individuals must first be enrolled in

Medicare Part A

Which of the following describes taxation of individual disability income insurance premiums and benefits?

Premiums are not tax deductible, and benefits are not taxable.

Which health insurance provision describes the insured's right to cancel coverage?

Renewal provision

Which of the following is TRUE about nonforfeiture values?

They are required by state law to be included in the policy.

What is the maximum health benefit that the Kansas Life and Health Insurance Guaranty Association will pay for health insurance benefits for any one individual?

$100,000

Following hospitalization because of an accident, Bill was confined in a skilled nursing facility. Medicare will pay full benefits in this facility for how many days?

20

All health policies issued in this state must provide all of the following benefits related to adopted children EXCEPT

Coverage for adopted children may be excluded at the discretion of the insurer.

All of the following are dividend options EXCEPT

Fixed period installments

All of the following statements about Medicare Part B are correct EXCEPT

It is a compulsory program.

Which of the following statements is NOT correct concerning the COBRA Act of 1985?

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

Medicare Advantage is also known as

Medicare Part C

An employee quits his job on May 15 and doesn't convert his Group Life policy to an individual policy for 2 weeks. He dies in a freak accident on June 1. Which of the following statements best describes what will happen?

The insurer will pay the full Death Benefit to the beneficiary.

The insuring clause of a disability policy usually states all of the following EXCEPT

The method of premium payment

Which of the following statements regarding the Change of Beneficiaries Provision is false?

The policyowner has the right to change beneficiaries in any case.

The Patient Protection and Affordable Care Act mandates that insurers provide coverage for adult children of the insured up to the age of

26

An insured is covered by a partially contributory group disability income plan that pays benefits of $4,000 a month. If the insured pays 25% of the monthly premium, how much of the monthly benefit would be taxable?

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

Which of the following disability income policies would have the highest premium?

15-day waiting period / 10-year benefit period

The maximum duration of a temporary license is

180 days

Which of the following is INCORRECT regarding a $100,000 20-year level term policy?

At the end of 20 years, the policy's cash value will equal $100,000.

What document describes an insured's medical history, including diagnoses and treatments?

Attending Physician's Statement

An insurer that holds a Certificate of Authority in the state in which it transacts business is considered a/an

Authorized insurer

Which of the following best describes fixed-period settlement option?

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

Concerning group Medical and Dental insurance, which of the following statements is INCORRECT?

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

All of the following are true about group disability Income insurance

Employees who are injured on the job are covered by Workers Compensation insurance. Group Disability Income insurance is designed to cover employees only while they are off the job, so the coverage is considered to be nonoccupational in nature.

When the insured selects the extended term nonforfeiture option, the cash value will be used to purchase term insurance with what face amount?

Equal to the original policy for as long as the cash values will purchase.

A Medicare supplement plan must have at least which of the following renewal provisions?

Guaranteed renewable

An insured becomes disabled at age 22 and can no longer work. She meets the definition of total disability under Social Security. What other requirement must the insured have met to receive Social Security disability benefits?

Have accumulated 6 work credits in the past 3 years

Which of the following riders would NOT increase the premium for a policyowner?

Impairment Rider

Medicare Part A services do NOT include which of the following?

Outpatient Hospital Treatment

The part of Medicare that helps pay for inpatient hospital care, inpatient care in a skilled nursing facility, home health care and hospice care, is known as

Part A

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

Residual disability

Which of the following special policies covers unusual risks that are NOT normally included under Accidental Death and Dismemberment coverage?

Special Risk Policy

Which of the following is NOT a feature of a guaranteed renewable provision?

The insurer can increase the policy premium on an individual basis

The paid-up addition option uses the dividend

To purchase a smaller amount of the same type of insurance as the original policy.

Premiums paid by self-employed sole proprietors or partners for medical expense insurance are

Totally tax deductible

All of the following are TRUE regarding the convertibility option under a term life insurance policy EXCEPT

Upon conversion the death benefit of the permanent policy will be reduced by 50%.

Which of the following terms is used to describe a person, other than a viator, that enters into or effectuates a viatical settlement contract?

Viatical settlement provider

Which of the following determines whether disability insurance benefits are taxed?

Whether the premiums were tax deductible

Which of the following entities is not an insurer but an organization formed to provide insurance benefits for members of an affiliated lodge or religious organization?

fraternal benefit society

Under an individual disability policy, the MINIMUM schedule of time in which claim payments must be made to an insured is

monthly

A brain surgeon has an accident and develops tremors in her right arm. Which disability income policy definition of total disability will cover her for all losses?

own occupation - less restrictive than other definitions

A Medicare supplement policy must have a free-look period of at least

30 days

In the event a policy lapses due to nonpayment of premium, within how many days would the policy be automatically reinstated once the outstanding premium is paid?

45 days

Under the uniform required provisions, proof of loss under a health insurance policy normally should be filed within

90 days of a loss

To sell variable life insurance policies, an agent must receive all of the following EXCEPT

A SEC registration

A hospital indemnity policy will pay

A benefit for each day the insured is in a hospital.

While a claim is pending, an insurance company may require

An independent examination as often as reasonably required

The full premium was submitted with the application for life insurance, and the policy was issued two weeks later as requested. When does the policy coverage become effective?

As of the application date

All of the following are TRUE of the federal tax advantages of a qualified plan EXCEPT

At distribution, all amounts received by the employee are free of taxes.

Which of the following is a generic consumer publication that explains life insurance in general terms in order to assist the applicant in the decision-making process?

Buyer's Guide

As it pertains to group health insurance, COBRA stipulates that

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

The Patient Protection and Affordable Care Act includes all of the following provisions EXCEPT

Individual tax deduction for premiums paid

A guaranteed renewable disability insurance policy

Is renewable at the insureds option to a specified age

The policyowner pays for her life insurance annually. Until now, she has collected a 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?

Reduction of Premium

An employee has group life insurance through her employer. After 5 years, she decides to leave the company and work independently. How can she obtain an individual policy?

She can convert her group policy to an individual policy without proof of insurability within 31 days of leaving the group plan.

Which two terms are associated directly with the way an annuity is funded?

Single payment or periodic payments

In order for an insured under Medicare Part A to receive benefits for care in a skilled nursing facility, which of the following conditions must be met?

The insured must have first been hospitalized for 3 consecutive days.

According to the rights of renewability rider for cancellable policies, all of the following are correct about the cancellation of an individual insurance policy EXCEPT

Unearned premiums are retained by the insurance company.

In forming an insurance contract, when does acceptance usually occur?

When an insurer's underwriter approves coverage

A deductible is

a specified amount of money that the insured must pay before an insurance company will pay the policy benefits

Which of the following entities can legally bind coverage?

insurer

Which statement is NOT true regarding underwriting group health insurance?

the group is assessed individually for insurability

An employee is injured in a construction accident, rendering him unable to work for a year. Which of the following plans would provide him with medical expense coverage and income assistance?

workers compensation

Which of the following will vary the length of the grace period in health insurance policies?

The grace period is 7 days on a policy with a weekly premium mode; 10 days if a monthly premium mode; 31 days on other premium modes.

When a disabled dependent child reaches the age limit for coverage, how long does the policyowner have to provide proof of dependency in order for the dependent to remain covered under the policy?

31 days

An Internal Revenue Code provision that specifically provides for an individual retirement plan for public school teachers is a(n)

403(b) Plan (TSA)

An agent is unable to meet the continuing education requirement to renew his license due to military service. Which of the following is true?

The agent may request a waiver from the Commissioner.

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?

probationary period

All of the following are correct about the required provisions of a health insurance policy EXCEPT

A reinstated policy provides immediate coverage for an illness.

All of the following are correct about the required provisions of a health insurance policy

Accidental injury is covered immediately, but to protect the insurer against adverse selection, losses resulting from sickness are covered only if the sickness occurs at least 10 days after the reinstatement date.

An applicant is discussing his options for Medicare supplement coverage with his agent. The applicant is 65 years old and has just enrolled in Medicare Part A and Part B. What is the insurance company obligated to do?

Offer the supplement policy on a guaranteed issue basis

Which of the following is NOT true regarding the annuitant?

The annuitant cannot be the same person as the annuity owner.

The annuity owner dies while the annuity is still in the accumulation stage. Which of the following is TRUE?

The beneficiary will receive the greater of the money paid into the annuity or the cash value.

Which of the following is INCORRECT concerning a noncontributory group plan?

The employees receive individual policies

Which of the following is NOT true regarding Equity Indexed Annuities?

They earn lower interest rates than fixed annuities.

A noncontributory group disability income plan has a 30-day elimination period and offers benefits of $2,000 a month. If an employee is unable to work for 7 months due to a covered disability, the employee will receive

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

An insured is covered under 2 group health plans - under his own and his spouse's. He had suffered a loss of $2,000. After the insured paid the total of $500 in deductibles and coinsurance, the primary insurer covered $1,500 of medical expenses. What amount, if any, would be paid by the secondary insurer?

$500 Once the primary insurer has paid the full available benefit, the secondary insurer will cover what the first company will not pay, such as deductibles and coinsurance. The insured will, then, be reimbursed for out-of-pocket costs.

Which statement regarding qualifications for Social Security disability benefits is NOT true?

The individual must be at least 65 years old.