FL 2-15 Chapter 9 Practice Questions

What type of insurance is sold to small business owners that must meet overhead expenses such as rent or utilities following a disability?

Business overhead expense

Alexander has a policy with his ex-wife as its beneficiary. What provision allows him to change the beneficiary to his new wife?

Change of beneficiary

The purpose of managed care health insurance plans is to

Control health insurance claims expenses.

If an insured changes the premium payment mode from monthly to annually, what happens to the total premium?

Decreases

Group disability income insurance premiums paid by the employer are

Deductible by the employer as an ordinary business expense.

An employee insured under a group health policy is injured in a car wreck while performing her duties for her employer. This results in a long hospitalization period. Which of the following is true?

The group plan will not pay because the employee was injured at work.

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

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

A policyowner names his five children as primary beneficiaries and his wife as a contingent beneficiary. If the policyowner and one of his children die, who would receive policy benefits?

The remaining 4 primary beneficiaries

Which of the following is NOT true regarding partial disability?

This is a form of insurance that covers part-time workers.

When an insurer combines two periods of disability into one, the insured must have suffered a

Recurrent disability.

An individual is insured under his employer's group Disability Income policy. The insured suffered an accident while on vacation that left him unable to work for 4 months. If the disability income policy pays the benefit, which of the following would be true?

Benefits that are attributable to employer contributions are fully taxable to the employee as income.

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

Which of the following is CORRECT regarding Business Overhead Expense?

Premiums are tax deductible

An insured has a primary group health plan and an excess plan, each covering losses up to $10,000. The insured suffered a loss of $15,000. Disregarding any copayments or deductibles, how much will the excess plan pay?

$5,000

In all health care plans under the Affordable Care Act (ACA), how many essential benefit categories are there?

10

Under the Affordable Care Act, what percentage of preventive care must be covered without cost sharing?

100%

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

26

What is the maximum age for qualifying for a catastrophic plan?

30

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

According to the PPACA rules, what percentage of health care costs will be covered under a bronze plan?

60%

Individuals who itemize deductions can claim deductions for medical expenses not covered by health insurance that exceed what percent of their adjusted gross income?

7.5%

Which of the following individuals will be eligible for coverage on the Health Insurance Marketplace?

A permanent resident lawfully present in the U.S.

Which of the following would best describe total disability?

A person's ability to work is significantly reduced or eliminated for the rest of his/her life.

Under which condition would an employee's group medical benefits be exempt from income taxes?

An employee's group medical benefits are generally exempt from taxation as income.

Which statement accurately describes the Change of Beneficiary provision?

Any policy that has a death benefit must also have a Change of Beneficiary provision.

All of the following are true of the Key Person disability income policy EXCEPT

Benefits are considered taxable income to the business.

Which of the following is not true of Disability Buy-Sell coverage?

Benefits are considered taxable income to the business.

Which of the following is correct regarding the taxation of group medical expense premiums and benefits?

Premiums are tax deductible and benefits are not taxed.

Which type of insurance provides funds for a business organization to purchase the business interest of a disabled partner?

Disability Buy-Sell

Under which of the following employer-provided plans are the benefits taxable to an employee in proportion to the amount of premium paid by the employer?

Disability Income

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.

Which of the following is CORRECT concerning taxation of disability income benefits?

If all premiums are paid by the insured employee, benefits are received income tax-free.

The benefits received by the business in a Disability Buy-Sell policy are

Income tax free.

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

Individual tax deduction for premiums paid.

Which of the following is NOT a metal level of coverage offered under the Patient Protection and Affordable Care Act?

Iron

The mode of premium payment

Is defined as the frequency and the amount of the premium payment.

Under workers compensation, which of the following benefits are NOT included?

Legal Benefits

A woman's health insurance policy dictates which doctors she is allowed to see. Her health providers share an assumed risk for their patients and encourage preventive care. What best describes the health system that the woman is using?

Managed care

Which of the following premium modes would result in the highest annual cost for an insurance policy?

Monthly

In an individual long-term care insurance plan, the insured is able to deduct the premiums from taxes. What income taxation will be imposed on the benefits received?

No tax

Which of the following applies to partial disability benefits?

Payment is limited to a certain period of time.

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%, what type of plan is that?

Platinum

A woman obtains health coverage through the Marketplace on October 1. Two weeks later she finds out that she is 3 months pregnant. Which of the following is true about coverage for pregnancy?

Pregnancy will be covered immediately.