LIFE INSURANCE
What is the maximum penalty for habitual willful noncompliance with the Fair Credit Reporting Act?
$2,500
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
If a consumer requests additional information concerning an investigative consumer report, how long does the insurer or reporting agency have to comply?
5 days
The minimum interest rate on an equity indexed annuity is often based on
An index like Standard & Poor's 500.
Which of the following products will protect an individual from outliving their money?
Annuity
Which of the following is a short-term annuity that limits the amounts paid to a certain fixed period or until a certain fixed amount is liquidated?
Annuity certain
Long-term care coverage may be available as any of the following options EXCEPT
Endorsement to a health policy.
n which of the following locations would skilled care most likely be provided?
In an institutional setting
All of the following statements about Medicare Part B are correct EXCEPT
It is a compulsory program.
Which of the following is NOT true regarding a nonqualified retirement plan?
It needs IRS approval.
Which of the following is an example of a limited-pay life policy?
Life Paid-up at Age 65
All of the following statements about equity index annuities are correct EXCEPT
The annuitant receives a fixed amount of return.
Who bears all of the investment risk in a fixed annuity?
The insurance company
Which of the following will vary the length of the grace period in health insurance policies?
The mode of the premium payment
All of the following are true about variable products EXCEPT
The premiums are invested in the insurer's general account.
Which of the following is a key distinction between variable whole life and variable universal life products?
Variable whole life has a guaranteed death benefit.
hich 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.
An insured purchased a 15-year level term life insurance policy with a face amount of $100,000. The policy contained an accidental death rider, offering a double indemnity benefit. The insured was severely injured in an auto accident, and after 10 weeks of hospitalization, died from the injuries. What amount would his beneficiary receive as a settlement?
$200,000
An insurer must acknowledge receipt of a Notice of Claim within how many days?
15
Group health insurance is characterized by all of the following EXCEPT
Adverse selection.
Which of the following will NOT be considered unfair discrimination by insurers?
Discriminating in benefits and coverages based on the insured's habits and lifestyle
Which of the following terms is used to name the nontaxed return of unused premiums?
Dividend
Which policy component decreases in decreasing term insurance?
Face amount
Which of the following would NOT be considered rebating?
Giving a client a $25 pen with the insurer's logo during the insurance application process
When a beneficiary receives payments consisting of both principal and interest portions, which parts are taxable as income?
Interest only
Certain conditions, such as dismemberment or total and permanent blindness, will automatically qualify the insured for full disability benefits. Which disability policy provision does this describe?
Presumptive disability
An employer has sponsored a qualified retirement plan for its employees where the employer will contribute money whenever a profit is realized. What is this called?
Profit sharing plan
An insured submitted a notice of claim to the insurer, but never received claims forms. He later submits proof of loss, and explains the nature and extent of loss in a hand-written letter to the insurer. Which of the following would be true?
The insured was in compliance with the policy requirements regarding claims.
The sole beneficiary of a life insurance policy dies before the insured. If the policyowner fails to change the beneficiary before the insured's death, the proceeds of the policy will go to
The insured's estate.
How many consecutive months of coverage (other than in an acute care unit of a hospital) must LTC insurance provide in this state?
12
Viatical settlements may be rescinding within what time period after the viator receives the proceeds?
15 days
The validity of coverage under a life insurance policy may not be contested, except for nonpayment of premium, after the policy has been in force for at least how many years?
2 years
Which of the following must the patient pay under Medicare Part B?
20% of covered charges above the deductible
What is the maximum allowed value of a gift that an agent can give to an insured without violating the regulation on rebating?
25 dollars
Premiums paid by self-employed sole proprietors or partners for medical expense insurance are
Totally tax deductible.
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.
Which of the following statements concerning Medicare Part B is correct?
It pays for physician services, diagnostic tests, and physical therapy.
Which of the following statements is TRUE concerning the Accidental Death Rider?
It will pay double or triple the face amount.
Your client wants both protection and savings from the insurance, and is willing to pay premiums until retirement at age 65. What would be the right policy for this client?
Limited pay whole life
An insured has a life insurance policy that requires him to only pay premiums for a specified number of years until the policy is paid up. What kind of policy is it?
Limited-pay Life
The corridor deductible derives its name from the fact that it is applied between the basic coverage and the
Major medical coverage.
Under the Fair Credit Reporting Act, individuals rejected for insurance due to information contained in a consumer report
Must be informed of the source of the report.
An insured has a continuous premium whole life policy. She would like to use the policy dividends to pay off her policy sooner than would have been possible otherwise. What dividend option could she use?
Paid-up option
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 Benefit
Regarding the taxation of Business Overhead policies,
Premiums are deductible, and benefits are taxed.
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 the insured
An insured has a $1,000 HRA account through his employer. He incurred $750 in medical expenses the first year of the plan. How much, if anything, will the insured be able to roll over toward the next year's expenses?
$250
What is the goal of the HMO?
Early detection through regular checkups
Which of the following best describes a misrepresentation?
Issuing sales material with exaggerated statements about policy benefits
he annual contribution limit of a Dependent Care Flexible Spending Account is set by
The IRS.
Which of the following statements regarding the taxation of Modified Endowment Contracts is FALSE?
Withdrawals are not taxable.
An insured receives an annual life insurance dividend check. What term best describes this arrangement?
cash option
Which of the following is TRUE about credit life insurance?
creditor is policyholder
n life insurance policies, cash value increases
grow tax deffered
edicare Advantage is also known as
medicare part c
Which of the following is NOT required on an illustration used in the sale of a life insurance policy?
name of primary and secondary beneficiary
he Medical Information Bureau (MIB) was created to protect
nsurance companies from adverse selection by high risk persons.
Which Universal Life option has a gradually increasing cash value and a level death benefit?
option a
Insurers may change which of the following on a guaranteed renewable health insurance policy?
rates by class
All of the following statements concerning workers compensation are correct EXCEPT
A worker receives benefits only if the work related injury was not his/her fault.
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.
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
issue age policy premiums increase in response to which of the following factors?
Increased benefits
Which of the following is correct about a group health insurance policy?
It cannot exclude newborn children from coverage.
ll of the following statements concerning Medicaid are correct EXCEPT
Medicaid is a state funded program that provides health care to persons over age 65, only. Medicaid is a government funded (both state and federal) program designed to provide health care to poor people of all ages.
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
For how long is an insurance company allowed to defer policy loan requests?
6 months
The Commissioner of Insurance issues a Cease and Desist Order to an agent. If the agent wishes to contest the charges in court, how many days after the order was issued does the agent have to make the request?
60 days
If a policyowner 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 to pay?
A cash surrender value
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.
An agent makes a mistake on the application and then corrects his mistake by physically entering the necessary information. Who must then initial that change?
Applicant
Employer contributions made to a qualified plan
Are subject to vesting requirements.
Which of the following protects the insured from an unintentional policy lapse due to a nonpayment of premium?
Automatic premium loan
Upon the death of the insured, the primary beneficiary discovers that the insured chose the interest only settlement option. What does this mean?
The beneficiary will only receive payments of the interest earned on the death benefit.
What is a penalty tax for nonqualified distributions from a health savings account?
20%
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.
Which of the following is true regarding Medicare supplement policies?
They must be at least guaranteed renewable.
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%.
In comparison to a policy that uses the accidental means definition, a policy that uses the accidental bodily injury definition would provide a coverage that is
Broader in general.
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 life insurance settlement option guarantees payments for the lifetime of the recipient, but also specifies a guaranteed period, during which, if the original recipient dies, the payments will continue to a designated beneficiary?
Life income with period certain
What is the term for how frequently a policyowner is required to pay the policy premium?
Mode
Which of the following provisions would prevent an insurance company from paying a reimbursement claim to someone other than the policyowner?
Payment of Claims
If an insurer issued a policy based on the application that had unanswered questions, which of the following will be TRUE?
The policy will be interpreted as if the insurer waived its right to have an answer on the application.
Under an extended term nonforfeiture option, the policy cash value is converted to
The same face amount as in the whole life policy.
What is the timeframe for filing relevant Suspicious Activity Reports?
Within 30 days of initial discovery
hat is the advantage of reinstating a policy instead of applying for a new one?
original age used
