Life & Health Insurance
An insured is covered by a partially contributory group disability income plan that pays benefits of $4000 a month. If the insured pays 25% of the monthly premium, how much of the monthly benefit would be taxable?
$3000
If a new individual long-term care policyholder is not satisfied with a new policy, within how many days can be insured return the policy for a full premium refund?
30 days
Viatical contracts require a free-look period of
30 days from the date of contract execution, or 15 days from the receipt of the first check
In which Medicare supplemental policies are the core benefits found?
all plans
Which of the following statements regarding Business Overhead Expense policies is NOT true?
benefits are usually limited to six months
In disability income insurance, the own occupation definition of disability applies
for the first 2 years of a disability
One of the advantages of a family life insurance policy that provides coverage for children is that it
may be converted to permanent insurance for the children without requiring evidence of insurability
Which of the following is correct regarding the taxation of group medial expense premiums and benefits?
premiums are tax deductible and benefits are not taxed
In the transaction of insurance, which of the following is considered to be representing the client?
the broker
An employee is insured under her employers group life plan. If she terminates her group coverage, which of the following statements is INCORRECT?
the insured may choose to convert to term or permanent individual coverage
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
Under an extended term nonforfeiture option, the policy cash value is converted to
the same face amount as in the whole life policy
An insured has chosen joint and 2/3 survivor as the settlement option. What does this mean to the beneficiaries?
the surviving beneficiary will continue receiving 2/3 of the benefit paid when both beneficiaries were alive
How is health coverage for newly-adopted children under a parent's policy different from health coverage for newborns?
there is no difference
Which of the following is true regarding benefits paid to disable employees?
they may be subject to taxation if the premium was paid by the employer
What is the typical deductible for basic surgical expense insurance?
$0
An insured has a major medical policy with a $500 deductible and 80/20 coinsurance. The insured is hospitalized and sustains a $2500 bill. What is the maximum amount that the insured will have to pay?
$900
How long can a person hold a consultant's license before it expires?
2 years
COBRA applies to employers with at least
20 employees
An Internal Revenue Code provision that specifically provides for an individual retirement plan for public school teachers is a
403(b) Plan (TSA)
What is the elimination period for Social Security disability benefits?
5 months
How long is an open enrollment period for Medicare supplement policies?
6 months
All of the following would NOT be considered eligible expenses under an ICHIA policy EXCEPT
AIDS treatment
A Universal Life Insurance policy is best described as an
Annually Renewable Term policy with a cash value account
An applicant for an individual health policy failed to complete the application properly. Before being able to complete the application and pay the initial premium, she is confined to a hospital. This will not be covered by insurance because she has not met the conditions specified in the
Consideration Clause
_______ are plans specifically for self-employed and their employees
HR-10 (Keogh Plan)
Shortly after a replacement transaction on a Medicare supplement policy, the insured decided to cancel the policy, but is unsure whether the free-look provision applies. The insured could find that information in the
Notice Regarding Replacement
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
Which type of retirement account allows contributions to continue beyond age 70 1/2 and does not force distributions to start at age 70 1/2?
Roth IRA
According to the Life Insurance Replacement Regulation, Rule 16.1, replacement of life insurance is defined as a process in which
a new policy is bought and an old policy is converted to a Reduced Paid-up policy
All of the following individuals may qualify for Medicare health insurance benefits EXCEPT
a retired person age 50
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
Jeff is 45 years old and currently owns life insurance, but is considering purchasing a new Universal Life policy. Which of the following scenarios would NOT involve replacement?
allowing his one-year term policy to expire
All of the following are requirements of eligibility for Social Security disability income benefits EXCEPT
being age 65
Which of the following is NOT specified under Rule 39, AIDS & HIV underwriting?
benefits triggers
When an insurer offers services like preadmission testing, second opinions regarding surgery, and preventative care, which term would best apply?
case management provision
What does "liquidity" refer to in a life insurance policy?
cash values can be borrowed at any time
Which of the following provisions must be included on the first page of a Medicare supplement policy, which states the insurer's right to change premium amounts
continuation provision
Which of the following will NOT be an appropriate use of a deferred annuity?
creating an estate
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
In insurance transactions, fiduciary responsibility means
handling insurer funds in a trust capacity
Which of the following is an eligibility requirement for all Social Security Disability Income benefits?
have attained fully insured status
Which of the following is true about a defined benefit plan?
high-salaried employees with only a few years until retirement receive the highest contribution
Which of the following is INCORRECT concerning taxation of disability income benefits?
if paid by the individual, the premiums are tax deductible
Which of the following riders would NOT increase the premium for a policyowner?
impairment rider
What is the tax consequence of amounts received from a Traditional IRA after the money was left in the tax-deferred account by the beneficiary?
income tax on distributions and no penalty
Concerning Medicare Part B, which statement is INCORRECT
it is fully funded by Social Security taxes (FICA)
Medicare Part A services do NOT include which of the following?
outpatient hospital treatment
For an individual who is NOT covered by an employer-sponsored plan, IRA contributions are
tax deductible
Which of the following does NOT have to be disclosed in a long-term care (LTC) policy?
the aggregate amount of premiums due
A 60 year old participant in a 401(k) plan takes a distribution and rolls it over to an IRA within 60 days. Which of the following is true?
the amount of the distribution is reduced by the amount of a 20% withholding tax
A life insurance policy does not have a war clause. If the insured is killed during a time of war, what will the beneficiary receive from the policy?
the full death benefit
Which of the following are generally NOT considered when underwriting group insurance?
the insureds' medical history
Under a SIMPLE plan, which of the following is TRUE regarding taxation on both contributions and earnings?
they are tax deferred until withdrawn
An insured owes his insurer a premium payment. Since then, he incurs medical expenses. The insurer deducts the unpaid premium amount from the claim amount and pays the insured the difference. What provision allows for this?
unpaid premium
A medical expense policy that establishes the amount of benefit paid based upon the prevailing charges which fall within the standard range of fees normally charged for a specific procedure by a doctor of similar training and experience in that geographic area is known as
usual, customary, and reasonable
Rule 18 governing Accident and Sickness Insurance Advertising includes all of the following EXCEPT
want ads soliciting new agents
Which of the following describes the taxation of an annuity when money is withdrawn during the accumulation phase?
withdrawn amounts are taxed on a last in, first out basis
Which of the following is NOT a factor in determining qualifications for Social Security disability benefits?
worker's occupation
Which of the following represents controlled business?
writing policies for oneself and one's family
A noncontributory group disability income plan has a 30 day waiting period and offers benefits of $2000 a month. If an employee is unable to work for 7 months due to a covered disability, the employee will receive
$12000, all of which is taxable
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
To be eligible under HIPAA regulations, for how long should an individual converting to an individual health plan have been covered under the previous group plan?
18 months
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
What is the maximum age for qualifying for a catastrophic plan?
30
Free look period on LTC policies?
30 days
What is the period of coverage for events such as death or divorce under COBRA?
36 months
One of the differences between group underwriting and individual underwriting is that there is little or no medical information required regarding plan participants in groups of
50 or more
What is the waiting period on a Waiver of Premium rider in life insurance policies?
6 months
Under the uniform required provisions, proof of loss under a health insurance policy normally should be filed within
90 days of a loss
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
A deductible is
a specified dollar amount that the insured must pay first before the insurance company will pay the policy benefits
Which of the following is TRUE about credit life insurance?
creditor is the policyowner
All of the following could be considered rebates if offered to an insured in the sale of insurance EXCEPT
dividends from a mutual insurer
In life insurance policies, cash value increases
grow tax deferred
A father purchases a life insurance policy on his teenage daughter and adds the Payor Benefit rider. In which of the following scenarios will the rider waive the payment of premium?
if the father is disabled for more than 6 months
What type of insurance would be used for a Return of Premium rider?
increasing term
What type of annuity guarantees to pay an income to the annuitant each year as long as he lives, and upon death, the annuity will refund the remaining payments to a beneficiary?
installment refund annuity
When a person applies for Medicare supplement insurance, whose responsibility is it to confirm that the applicant does not already have accident or sickness insurance in force?
insurer
An insurer invests the money it receives from premiums paid by its insureds. Which of the following is TRUE regarding the interest earned on these investments?
it is used to lower premiums
Sue has an HSA and is planning to leave her current job for a new job. When she leaves her job, what will happen to her HSA?
it will continue because it is owned by Sue, not her employer
Variable Life Insurance is based on what kind of premium?
level fixed
Which is the appropriate action by the insurer if a prospective insured submitted an incomplete application?
return the application to the applicant for completion
In major medical insurance policies, when the insured's share of coinsurance reaches a certain amount, the insured is no longer obligated to pay it. This feature is known as
stop-loss
If an Indiana family has a low level of income and cannot afford health insurance, what program could help
the Indiana Children's Health Insurance Program
Which of the following is NOT covered under Plan A in Medigap insurance?
the Medicare Part A deductible
Which of the following is TRUE regarding variable annuities?
the annuitant assumes the risks on investment
All of the following are true regarding the Indiana Comprehensive Health Insurance Plan EXCEPT
the insured can be charged a premium of up to 100% of the average standard premium charged by the state's top 5 insurers
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 from the group policy to the beneficiary
Two people have formed a partnership known as the A & B Insurance Agency. After a serious car accident, one of the partners was deceased and the other became totally disabled. To finish servicing the company's existing accounts, the Commissioner could grant a temporary license to all of the following EXCEPT
the partnership itself
Which of the following best describes what the annuity period is?
the period of time during which accumulated money is converted into income payments
Which of the following employees insured under a group life plan would be allowed to convert to individual insurance of the same coverage once the plan is terminated?
those who have been insured under the plan for at least 5 years
Which of the following is NOT the purpose of HIPAA?
to provide immediate coverage to new employees who had been previously covered for 18 months
Which of the following will NOT qualify for a limited lines producer license?
a person selling endowments
Which option is being utilized when the insurer accumulates dividends at interest and then uses the accumulated dividends, plus interest, and the policy cash value to pay the policy up early?
paid up option
Which of the following applies to partial disability benefits?
payment is limited to a certain period of time
Which of the following provisions is mandatory for health insurance policies?
physical examination and autopsy
A woman obtains a 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
What is a penalty tax for nonqualified distributions from a health savings account?
20%
Under the ACA a special enrollment period allows an individual to enroll in a qualified health plan within how many days of a qualifying event?
60 days