Indiana H&L Insurance Exam Study Guide
Q is hospitalized for 3 days and receives a bill for $10,100. Q has a Major Medical policy with a $100 deductible and 80/20 coinsurance. How much will Q be responsible for paying on this claim?
$10,000 x 20% coinsurance + $100 deductible = $2,100.
What percent of personal life insurance premiums is usually deductible for federal income tax purposes?
0%
What is the minimum grace period for an individual health policy that is paid monthly
10 days
what is the maximum social security disability benefit amount and insured can receive
100% of the insured's Primary Insurance Amount (PIA)
How many days is a temporary producer's license valid?
180 days: issued by Commissioner
An individual life insurance policy sold in Indiana can be contacted by the insurer only in the first how many years of the contract
2 years
An insured must notify an insurer of a medical claim within how many days after an accident?
20
Insurers may request a hearing within how many days if their policy is rejected
20 days
A licensee must notify the Commissioner within how many days of an address change
30 days
A producer must notify the insurance commissioner within
30 days
An insurer that terminates a producer's appointment must inform the Commissioner within how many days?
30 days
Qualified long-term care policies are required by federal and state law to provide a free look period of
30 days
An admitted insurance company at the very least must be examined once every
5 years
Qualified Long-Term Care policies may take into consideration an applicant's pre-existing conditions for a maximum of not more than __ month(s) prior to the effective date of coverage.
6
Eligible employees must be added to the group health coverage no later than blank after their first day of employment
90 days
usual, cutomary, and reasonable (UCR)
A method used by insurance companies to establish their fee schedules in which three fees are considered in calculating payment: (1)the usual fee is the fee typincally submitted by the physician (2)The customary fee falls within the range of usual fees chaged by providers of similar training in a geographic area (3) the reasonable fee feets the aformentioned criteria or is considered justifiable because of special curcumstances.
Credit Life Insurance
A special type of coverage written to pay off the balance of a loan in the event of the death of the debtor. May not exceed amount of loan
When is the face amount of a Whole Life Policy paid?
When the insured dies or on maturity of the policy whichever comes first
A return of premium life insurance policy is
Whole life and Increasing term
Group life insurance policies are generally written as
annually renewable term
Which of the following is NOT included in the policy face?
exclusions
A Universal Life Policy is sometimes referred to as an unbundled Life Policy because the owner can see the interest earned, cost of insurance, and the
expense charges
An underwriter determines that an applicant's risk should be recategorized due to a health issue. This policy may be issued with a(n)
extra premium
All of these are characteristics of an Adjustable Life policy EXCEPT
face amount can be adjusted using policy dividends
What kind of special need would a policyowner require with an Adjustable Life insurance policy?
flexible premiums
A Nonforfeiture clause gives the policy owner
guaranteed values even if the policy has lapsed
Medicare Part B does NOT cover
inpatient hospital services
All of the following statements about the Waiver Premium Provision are correct except:
insured must be eligible for SS disability for claim to be accepted
T is the policy owner for a life insurance policy with an irrevocable beneficiary designation. If T wishes to change the beneficiary, T must obtain permission from the
beneficiary (cannot change beneficiary without their consent if irrevocable)
Whole life insurance (permanent insurance) is also called Straight Life Insurance, what does Straight mean in this sense
duration of premium payments are fixed
Which of these statements is INCORRECT regarding the federal income tax treatment of life insurance?
entire cash surrender value is taxable
Before a life insurance policy is issued, which of these components of the contract is required?
Applicant's signature on the application
Group/voluntary long-term care policy premiums are typically deducted from the employee's income and?
Are less costly as compared to individual long term care coverage
Which type of policy would pay an employee's salary if the employer was injured in a bicycle accident and out of work for six weeks?
Business Overhead Expense.
When a policy owner exchanges a term policy for a whole life policy without providing proof of good health, which of these apply?
Conversion provision
Which statement regarding the Misstatement of Age provision is considered to be true?
Coverage will be adjusted to reflected insured's true age
A contract owner terminates an annuity before the income payment period begins. The owner will then receive
Current contract surrender value
M becomes disabled and is unable to work for six months. M dies soon after from complications arising from this disability. M has a Disability Income policy that pays $2,000 a month. Which of the following statements BEST describes what is owed to her estate?
Earned, but unpaid benefits
Which of the following is an important underwriting principle of group life insurance?
Everyone must be covered in the group.
Long Term Care policies will usually pay for eligible benefits using which of the following methods?
Expense incurred
An example of an Unfair Claims Settlement Practice would be:
Failing to effectuate prompt, fair and equitable settlements of claims (not handling a claim in an accurate/timely manner)
Which Federal law allows an insurer to obtain an inspection report on a potential insured?
Fair Credit Reporting Act of 1970
Taking receipt of premiums and holding them for the insurance company is an example of
Fiduciary responsibility
How long does the coverage normally remain on a limited-pay life policy?
For limited-pay life policy, the policy owner picks a number of years to pay your premiums in exchange for coverage until age 100 or death
Which of these is considered a true statement regarding Medicaid?
Funded by both state and federal governments
A medical care provider which typically delivers health services at its own local medical facility is known as a
HMO
Medicare Part C (Medicare Advantage Plans)
Health coverage option includes part A & part b & operated by private insurance companies that are approved by & under contract w medicare
Waiver-of-Premium Provision
If the insured becomes totally disabled, all premiums coming due during the period of disability are waived
How would a contingent beneficiary receive the policy proceeds in an Accidental Death and Dismemberment (AD&D) policy?
If the primary beneficiary dies before the insured
P is a forty year old woman and would like to purchase an annuity that will provide a lifetime income stream beginning at age sixty. Which of the following did she not buy?
Immediate annuity
The type of annuity that can be purchased with one monetary deposit is called a(n)
Immediate annuity
All of these are powers of the Commissioner EXCEPT:
Incarcerate a producer
At the age of 45, an individual withdraws $50,000 from his Qualified Profit-Sharing Plan and then deposits this amount into a personal savings account. This action would result in
Income tax and a 10% penalty assessed upon funds withdrawn from the Qualified Plan (younger than 59.5)
The first portion of a covered Major Medical insurance expense that the insured is required to pay is called the?
Initial Deductible
What would be an accurate definition of "controlled business"?
Insurance business that is written on the agent's own life, property, or interests.
long-term care insurance
Insurance coverage that provides a daily monetary benefit to people who are chronically ill and who require living assistance either at home or in a residential facility
The blank clause identifies which losses resulting from an accident or sickness are insured by the policy
Insuring clause
How are policyowner dividends treated in regards to income tax?
Interests on the accumulation is taxed
Stranger Originated Life Insurance (STOLI) has been found to be in violation of which of the following contractual elements?
Legal Purpose (Insurable Interest)
Nursing home benefits must be provided for at least 12 consecutive months in which type of policy
Long-Term Care policies
Which of the following types of health coverage frequently uses a deductible
Major Medical Policy
If a retiree on Medicare required five hospital stays in one year, which policy would provide the best insurance for excess hospital expenses?
Medicare Supplement
An applicant must receive an Outline of Coverage when an application is taken for a(n)
Medicare Supplement Policy
Which Unfair Competition Practice involves a producer suggesting that an insurance policy is like a share of stock?
Misrepresentation (not accurately portraying the policy or what it represents)
Which of the following statements is CORRECT about accelerated death benefits?
Must have a terminal illness to qualify
Which of these does NOT constitute policy delivery
Policy issued with a rating (must be mailed to applicant & agent)
On a life insurance policy, who is qualified to change the beneficiary designation?
Policy owner
Who must provide an insured with proper disclosure concerning the replacement of a life insurance policy?
Producer
What is an example of twisting?
Producer misrepresents a policy to induce a policy owner to surrender an existing policy
Rule 13 of Life Insurance Advertising
Producer must make it clear life insurance is the sole subject of the sale
Which of these correctly describes the purpose of the Indiana Comprehensive Health Insurance Plan?
Provides high-risk insurance coverage for people who are uninsurable
Medicare Part A (aka Hospital Insurance or HI)
Provides hospital insurance automatically @ age 65 (if FICA qualified) @ no fee but may have deductible & co-pay.
Insurance Commissioner
Regulatory agency; serves as a liaison between patient/ carrier/ provider, enforces state laws regarding insurance
K failed to pay a renewal premium within the time granted by the insurer. K then sends in a payment which the insurer subsequently accepts. Which policy provision specifies that coverage may be restored in this situation?
Reinstatement
M purchased an Accidental Death and Dismemberment (AD&D) policy and named his son as beneficiary. M has the right to change the beneficiary designation at anytime. What type of beneficiary is his son?
Revocable
Which of the following costs would a Basic Hospital/Surgical policy likely cover?
Surgically removing a facial birthmark.
What type of life insurance are credit policies issued as?
Term
What is the name of the law that requires insurers to disclose information gathering practices and where the information was obtained?
The Fair Credit Reporting Act
Which of the following statements is correct regarding an employer/employee group health plan
The employer receives the master policy and the employees receive certificates
Medicare Part B
The part of the Medicare program that pays for physician services, outpatient hospital services, durable medical equipment, and other services and supplies.
Traditional individual retirement annuity distributions must start by
made by April 1 following the year the participant turns age 70 1/2 or an excise tax will be assessed.
With Optionally Renewable Health policies, the insurer may
may review the policy annually and choose whether or not to renew it
What type of renewability guarantees premium rates and renewability?
noncancellable
J has a Disability Income policy that does NOT provide benefits for losses occurring as the result of his employment. What kind of coverage is this?
nonoccupational coverage.
The Notice of Claims Provision requires a policy owner to
notify an insurer of a claim within a specified time
Foreign Insurance Company
organized under the laws of another state
When a policy pays dividends to its policy holders, it is said to be
participating: the policy holders participate by getting dividends
Who elects the governing body of a mutual insurance company?
policy holders
Which of the following is a requirement for a risk to be considered insurable?
predictability of loss
What does a 401(k) plan generally provide its participants?
salary-deferral contributions
Which of the following services is NOT covered under a hospitalization expense policy?
surgical fees
If a contract of adhesion contains questionable language, to whom would the interpretation be in favor of?
the insured
Life insurance replacement regulation protects the interests of
the policy owner
Who is exempt from the ACA?
those who cannot afford it or have religious objections
Rollover contributions to an individual retirement account are
unlimited by dollar amount
Insurance policies are offered on a "take it or leave it" basis, which make them
Contracts of Adhesion
Which of the following is not included in an annuity contract?
AD&D Rider
Which provision is NOT a requirement in a group life policy?
AD&D provision
Cost of living rider gives the insured
Additional Death benefits
Which of the following statements describes what an Accident and Health policyowner may NOT do?
Adjust the premium payments
Q purchases a $500,000 life insurance policy and pays $900 in premiums over the first six months. Q dies suddenly and the beneficiary is paid $500,000. This exchange of unequal values reflects which of the following insurance contract features?
Aleatory
A company that owns a life insurance policy on one of its key employees may do all of the following except
Change the policy's interest rate
Whose life is covered on a life insurance policy that contains a payor benefit clause?
Child (in the event of death or disability of parent, still insure the juvenile)
Which of the following correctly explains the actions an agent should take if a customer wants to apply for an insurance policy?
Complete application with applicant and review it together, sign the application for the customer and send it to the insurance company
According to Indiana's mammography coverage statute, which of these benefits are considered mandatory in every medical expense policy?
One mammogram every year for women aged 40 and older
K owns a whole life policy. If K wants an Increasing Death Benefit to protect against inflation, which dividend option should she choose?
Paid-up additional Insurance
A group owned insurance company that is formed to assume and spread
Risk Retention Group
Which of the following are equity indexed annuities typically invested in
S&P 500
Which of the following best describes dental care indemnity coverage?
Services are reimbursed after insurer receives invoice
An immediate annuity consists of a
Single Premium
Which mode of payment is NOT used by health insurance policies?
Single premium
The Old-Age, Survivors, and Disability Insurance (OASDI) program is the official name for
Social Security
The Percentage of an individual's Primary Insurance Amount (PIA) determines the benefits paid in which of the following programs?
Social Security Disability Income
Which statement is NOT true about Individual Medical Expense policies sold in Indiana?
They must contain a provision which guarantees reinstatement
A common reinsurance contract between two insurance companies is called
Treaty
What action will an insurer take if an interest payment on a policy loan is not made on time?
Unpaid interest from a policy loan is added to the loan balance if not paid by the due date.
Life insurance immediately creates an estate upon the death of an insured. Which of the following policies is characterized by a guaranteed minimum death benefit?
Variable Life
Which of these types of life insurance allows the policy owner to have level premiums and to also choose from a selection of investment options?
Variable life
An insurance company that has qualified and received a Certificate of Authority From the Department of Insurance in this state is considered to what kind of insurer?
admitted
Under an interest sensitive whole life policy
cash values are determined by interest rates
Major Medical Policies typically
contain a deductible and coinsurance.
Group life policies in Indiana are required to contain a conversion privilege that allows for
conversion of an individual policy within a stated period of time
Which of the following BEST desscribes a Hospital Indemnity policy?
coverage that pays a stated amount per day of a covered hospitalization