LHIE review questions

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all of the following statements concerning the use of life insurance as an executive bonus are correct except

the policy is owned by the company the policy is actually owned by the employee

all of the following statements are correct regarding credit life insurance except

benefits are paid to the borrowers beneficiary the creditor is the beneficiary for the amount of benefit equal to the outstanding balance of the loan

Most HMOs operate through what type of system?

A group enrollment system either at their place of employment or as a member of an association

Using a class designation for beneficiaries means

Naming beneficiaries as a group no names

social security disability definition does not include

Disability expected to last for at least 6 months

which of the following best describes the MIB

It is a nonprofit organization that maintains underwriting information on applicants for life and health insurance.

Medicare advantage is also known as

Medicare Part C. Medicare consists of Hospital Insurance protection (Part A), Medical Insurance protection (Part B), and Medicare Advantage (Part C) (formerly known as Medicare+Choice). Medicare Part D is a "stand alone" drug insurance policy for persons who need the coverage and are eligible for Medicare Part A and/or Part B.

A small hardware store owner is involved in a car accident that renders him totally disabled for half a year. Which type of insurance would help him pay for expenses of the company during the time of his disability?

business overhead expense policy

if a policy owner surrenders his life insurance policy that has been in force for 5 years within 60 days after the premium due date, what will the insurer be required ot pay

a cash surrender value

which of the following is not a possible penalty for a violation of the insurance code

a fine up to $100,000

to which of the following situations does the replacement regulation apply

a whole life policy with reduction in cash value

the two types of assignments are

absolute and collateral

In reference to the standard Medicare Supplement benefits plans, what does the term standard mean?

all providers will have the same coverage options and conditions for each plan

in insurance, an offer is usually made when

an applicant submits an application to the insurer

a universal life insurance policy is best described as an

annually renewable term policy with a cash value account

Which of the following is a short term annuity that limits the amounts paid to a specific fixed period or until a specific fixed amount is liquidated

annuity certain

which of the following is a short term annuity that limits the amounts paid to a specific fixed period or until a specific fixed amount is liquidated

annuity certain allows the annuitant to select the time period or the amount of benefits to be paid out.

An insured's premium increases as a result of her age. Which type of policy does she have?

attained age

which of the following is not required to be stated in the outline of coverage provided with a long term care policy

basic information about supplementary policies

which is not true about beneficiary designations

beneficiary must have insurable interest in the insured

which entity has the authority to grant a temporary insurance agent's license

comissioner of insurance

The proposed insured makes the premium payment on a new insurance policy. If the insured should die, the insurer will pay the death benefit to the beneficiary if the policy is approved. this is an example of what kind of contract

conditional

When an insured makes truthful statements on the application for insurance and pays the required premium, it is known as which of the following?

consideration

an insured pays an annual premium to his insurer. In return, the insurer promises to pay benefits in accordance with the terms of the contract. this is called

consideration

when an insured makes truthful statements on the application for insurance and pays the required premium, it is known as what

consideration

which of the following reports will provide the underwriter with the information about an insurance applicants credit

consumer report

contracts that are prepared by one party and submitted to the other party on a take-it-or-leave-it basis are classified as

contracts of adhesion

which of the following is the term for the specific dollar amount that must be paid by an HMO member for a service

copayment

which of the following is not allowed in credit life insurance

creditor requiring that a debtor buys insurance from a certain insurance a creditor may require that the debtor have life insurance, but may not require the debtor to purchase insurance from a specific insurer

an individual has just borrowed $10,000 from his bank on a 5 year installment loan requiring monthly payments. What type of life insurance policy would be best suited to this situation

decreasing term

which of the following types of insurance policies is most commonly used in credit life insurance

decreasing term

an individual just borrowed $10,000 from his bank on a 5 year installment loan requiring monthly payments. What type of life insurance policy would be best suited to this situation

decreasing term face amount decreases as the amount of debt is reduced

social security disability definition includes all of the following except

disability expected to last for at least 6 months has to be 12 or death

which of the following statements about occupational vs. nonoccupatoinal coverage is true

disability insurance can be written as occupational or nonoccupational

which of the following is true regarding taxation of dividends in participating policies

dividends are not taxable

which of the following is considered a qualifying event under cobra

divorce

long term care coverage may be available as any of the following options except

endorsement to a health policy long term care insurance policies may be purchased on an individual or group basis, or as an endorsement to a life insurance policy

Which policy component decreases in decreasing term insurance?

face amount decreasing term policies feature a level premium and a death benefit that decreases each year over the duration of the policy term

An applicant is denied insurance because of information found on a consumer report. Which of the following requires that the insurance company supply the applicant with the name and address of the consumer reporting company?

fair credit reporting act governs what information can be collected and how it is used

When possible, what should insurers strive to eliminate from illustrations?

footnotes and caveats

in a direct transfer, how is money transferred from one retirement plan to a traditional IRA

from trustee to trustee

An insured is involved in an accident that renders him permanently deaf, although he does not sustain any other major injuries. The insured is still able to perform his current job. To what extent will he receive Presumptive Disability benefits?

full benefits

which one of the following is an eligibility requirement for social security disability income benefits

fully insured status

an individual is purchasing a permanent life insurance policy with a face value of $25,000. While this is all the insurance that he can afford at this time, he wants to be sure that additional coverage will be available in the future. Which of the following options should be included in the policy

guaranteed insurability option

A lucky individual won the state lottery, so the state will be sending him a check each month for the next 25 years. What type of annuity products are they likely to use to provide these benefits?

immediate annuity

Regarding long-term care coverage, as the elimination period gets shorter, the premium

increases

annually renewable term policies provide a level death benefit for a premium that

increases annually

what is true regarding the differences between individual and group health insurance

individual insurance does not require medical examinations, while group insurance does require medical examination

which of the following operations would not directly help to qualify someone for the office of commissioner of insurance

insurance agent

In the event of loss, after a notice of claim is submitted to the insurer, who is responsible for providing claims forms and to which party?

insurer to insured

in the event of loss, after a notice of claim is submitted to the insurer, who is responsible for providing claims forms and to which party

insurer to insured

which of the following entities has the authority to make changes to an insurance policy

insurer's executive office

The section of a health policy that states the causes of eligible loss under which an insured is assumed to be disabled is the

insuring clause where you find coverage and where it applies

the type of dental plan which is incorporated into a major medical expense plan is an

integrated dental plan when dental coverage is covered under the benefits of a major medical plan, the dental coverage and medical coverage would be an integrated plan. Any deductible amount can be met by either dental or medical expenses

The policyowner wants to make sure that upon his death, the life policy will pay a portion of the proceeds annually to his spouse, but that the principal will be paid to their children when they reach a certain age. Which settlement option should the policyowner choose?

interest only option the insurance company retains the policy proceeds and pays interest on the proceeds to the recipiant (beneficiary) at regular intervals

In health insurance, if a doctor charges $50 more than what the insurance company considers usual, customary and reasonable, the extra cost

is not covered

which of the following statements is not true concerning medicaid

it consists of 3 parts: A, B, and C those are medicare

When a reduced-paid up nonforfeiture option is chosen, what happens to the face amount of the policy?

it is reduced to the amount of what the cash value would buy as a single premium

which of the following is true about the premium on the children's rider in a life insurance policy

it remains the same no matter how many children are added to the policy

A married couple's retirement annuity pays them $250 per month. The husband dies and his wife continues to receive $125.50 per month for as long as she lives. When the wife dies, payments stop. What settlement option did they select?

joint and survivor

The provision which prevents the insured from bringing any legal action against the company for at least 60 days after proof of loss is known as

legal actions

variable whole life insurance is based on what premium

level fixed

What is the other term for the cash payment settlement option?

lump sum

An insured purchased an insurance policy 5 years ago. Last year, she received a dividend check from the insurance company that was not taxable. This year, she did not receive a check from the insurer. From what type of insurer did the insured purchase the policy?

mutual funds not paid out after paying claims and other operating costs are returned to the policy onwers in the form of a dividend. If all funds are paid out, no dividends are paid

an applicant for a health insurance policy returns a completed applicaiton to her agent, along with a check for the first premium. She recives a conditional receipt two weeks later. What has the insurer done at this point

neither approved the application nor issued the policy

which of the following are the main factors taken into account when calculating residual disability benefits

present earnings and earning prior to disability

Insurers may change which of the following on a guaranteed renewable health insurance policy?

rates by class

if an insurer issued a policy based on the application that had unanswered questions, which of the following would happen

the policy willbe interpreted as if the insurer waived its right to have an answer on the application

which of the following is the best reason to purchase life insurance rather than an annuity

to create an estate

When an insurer issues an individual health insurance policy that is guaranteed renewable, the insurer agrees

to renew the policy until the insured has reached age 65

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

After filing a claim, an insured tells the insurer that there is more than one insurance policy in force. That insurer sets aside the claim until it hears what the other company will pay. The insurer's action will be classified as

unfair

Which of the following policies would have an IRS required corridor or gap between the cash value and the death benefit

universal life- option A

which of the following is a statement that is guaranteed to be true, and if untrue, may breach an insurance contract

warranty

When is the earliest a policy may go into effect

when the application is signed and a check is given to the agent

What is the timeframe for filing relevant Suspicious Activity Reports?

within 30 days of initial discovery

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 ASAP, but not to exceed one year

how long must producer maintain records of continuing education course completion

4 years

Once the person meets the stringent requirements for disability benefits, how long is the waiting period under Social Security before any benefits will be paid?

5 months payments start the 6th month

Ray has an individual major medical policy that requires a coinsurance payment. Ray very rarely visits his physician and would prefer to pay the lowest premium possible. Which coinsurance arrangement would be best for ray

50/50

How soon from the termination of debt under a credit life insurance policy must a creditor provide notice to the insurer?

60 days

Unreimbursed medical expenses paid for the insured may be claimed as deductions if the expenses exceed what percentage of the adjusted gross income?

7.5%

most policies will pay the accidental death benefits as long as the death is caused by the accident and occurs within

90 days

the insuring clause of a disability policy usually states all of the following except

the method of premium payment

in a life settlement contract, whom does the life insurance broker represent

the owner

in a life settlement contract, whom does the life settlement broker represent

the owner

all of the following are true of key person insurance except

the plan is funded by permanent insurance only

what is the period of coverage for events such as death or divorce under cobra

36

an insured purchased a variable life insurance policy with a face amount of $50,000. over the life of the policy, stock performance declined and the cash value fell to $10,000. If the insured dies, how much will be paid out

$50,000 the cash value of a variable life insurance policy is not guaranteed. However, even if investments devalue significantly, they cannot be lower than the initial guaranteed benefit amount

An insured owns a $50,000 whole life policy. At age 47, the insured decides to cancel his policy and exercise the extended term option for the policy's cash value, which is currently $20,000. What would be the face amount of the new term policy?

$50,000 the face of the term policy would be the same as the face amount provided under the whole life policy

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

An insured had a $10,000 term life policy. The annual premium of $200 was due on February 1; however, the insured failed to pay the premium. He died on February 28. How much would the beneficiary receive from the policy?

$9,800

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

10

An insured pays a monthly premium of $100 for her health insurance. What would be the duration of the grace period under her policy?

10 days 7 days if weekly, 10 days if monthly, 31 days for all other modes

following hospitialization 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 21-100 require copayment

If an agent has completed 35 hours of continuing education in one renewal period, how many CE hours will the agent have to complete in the next renewal period?

24 hours

When is the earliest a policy may go into effect?

When the application is signed and a check is given to the agent

an applicant for a health insurance policy returns a completed application to her agent, along with a check for the first premium. She receives a conditional receipt two weeks later. Which of the following has the insurer done by the point

neither approved the application or issued the policy

Under a straight life annuity, if the annuitant dies before the principal amount is paid out, the beneficiary will receive

nothing, the payments will cease

During replacement of life insurance, a replacing insurer must do which of the following?

obtain a list of all life insurance policies that will be replaced

Under a pure life annuity, an income is payable by the company

only for the life of the annuitant they cease at the annuitants death and there is no refund or payments to survivors "life only" or "straight life"

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

outpatient hospitial treatment

an insured has had a life insurance policy that he purchased 3 years ago when he was 40 years old. he was killed in an automobile accident and it is discovered that he is actually 45 years old, not 43. What will the company do

pay a reduced death benefit

don has both a basic expense and a major medical policy. he is injured in an accident which requires several major surgeries. this quickly exhauses don's basic expense policy. What must Don do before his major medical policy can pick up where the basic expense left off

pay a special deductible on his major medical policy

an insured pays her Major Medical insurance premium annually on march 1. Last march she forgot to mail her premium to the company. On March 19, she had an accident and broke her leg. the insurance company would

pay the claim accident occured during grace period

With respect to the Consideration Clause, which of the following would be considered consideration on the part of the applicant for insurance?

payment of premium

an individual buys a flexible premium deferred life annuity with 20 year period certain. What would his beneficiary receive if he died 5 years after the beginning the annuity phase

payments for 15 years with any period certain, death of the annuitant within the stated period will provide payments to the beneficiary only for the remainder of the period certain

which of the following riders would not cause the death benefit to increase

payor benefit rider it only pays the premium if the payor is disabled or dies

which of the following allows the insurer to relieve a minor insured from premium payments if the minor's parents have died or become disabled

payor benefits

what is not true of key person insurance

plan is funded by permanent insurance only

all of the following are mandatory life insurance policy provisions except

policy backdating

which is not true regarding insurance policy loans

policy loans can be made on policies that do not accumulate cash value

which of the following individuals must have insurable interest in the insured

policy owner

which of the following documents delivered to the policy owner includes information about premium amounts, cash values, surrender values, and death benefits for specific policy years

policy summary

Regarding the taxation of Business Overhead policies,

premiums are deductible and benefits are taxed

Todd has been informed that he has a hernia which requires repair. When Todd researches the cost, he learns that his insurance plan will cover 200 points worth of surgical expenses. Each point represents $10, which means that $2000 of his surgery will be covered by his insurance plan. What system is Todd's insurance company using?

relative value this approach has surgical procedures assigned a set amount of points relative to the maximum coverage allowed for given surgery

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 insureds loss of earnings after recovery from a disability

residual disability

An insured wants to name her husband as the beneficiary of her health policy. She also wishes to retain all of the rights of ownership. The insured should have her husband named as what type of beneficiary?

revocable the insured would be the policy owner and could make changes to the contract. He would receive the death benefit

The Ownership provision entitles the policyowner to do all of the following EXCEPT

set premium rates

all of the following are considered unfair trade practices in the business of insurance except

sharing commissions

Company Y had 20 employees on staff last year. Which of the following terms most precisely labels the company's group insurance classification?

small employer

workers compensation benefits are regulated by which entity

state government

when an employee covered under a health reimbursement account changes employers, the HRA

stays with the employer

which of the following terms describes the specified dollar amount beyond which the insured no longer participates in the sharing of expenses

stop loss limit

which of the following types of annuities will generally provide the highest monthly income

straight life

Your client is planning to retire. She has accumulated $100,000 in a retirement annuity, and now wants to select the benefit option that will pay the largest monthly amount for as long as she lives. As her agent, you should recomment

straight life the annuity payments cease at death. however, because there are no other guarantees that might incur additional charges, this option provides the highest monthly benefits for an individual annuitant

the interest earned on policy dividends is

taxable

which of the following, when attached to a permanent life insurance policy, allows the policyowner to customize the policy to provide an additional amount of temporary insurance on the insured, or allows amounts of temporary insurance to cover other family members

term rider

The initial amount of credit life insurance may NOT exceed

the amount to be repaid under the contract

which of the following is true regarding HIV exams

the applicant must give prior informed written consent

the annuitant dies while the annuity is still in the accumulation stage, what is true of this

the beneficiary will recieve the greater of the money paid into the annuity or the cash value

An insured who has an Accidental Death and Dismemberment policy loses her left arm in an accident. What type of benefit will she most likely receive from this policy?

the capital amount in a lump sum partial disability = lump capital amount

Under a health insurance policy, benefits, other than death benefits, that have not otherwise been assigned, will be paid to

the insured their estate

An insured purchased a 10-year level term life policy that is guaranteed renewable and convertible. What happens at the end of the 10-year term?

the insured may renew the policy for another 10 years, but at a higher premium rate

an insured submitted a notice of claim to the insurer, but never recieved claims forms. He later submits proof of loss, and explains the nature and extent of loss in a hand written letter to the insurer, what would be true

the insured was in compliance with the polilcy requirements regarding claims

What is not covered under plan A in Medigap insurance

the medicare Part A deductible

Which of the following is not covered under Plan A in medigap insurance

the medicare part A deductible


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