Louisiana Life and Health Insurance

When a group health insurance plan is terminated, how long is an extension of benefits provided for any totally disabled employee or dependent?

12 months

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

How long must an insurer keep the receipt of policy delivery to the policyowner if the delivery was by mail?

2 years

What is the maximum amount of time that could pass before an insurer's financial stability would be examined?

5 years

If the annuitant dies during the accumulation period, who will receive the annuity benefits?

Beneficiary

Something of value exchanged between the insurer and the insured is considered an

Consideration

Which of the following is true regarding the spendthift clause in life insurance policies? a. It allows the beneficiary to select a different settlement option b. It is only used when the beneficiary is a minor c. It is the same as irrevocable settlement clause d. It can protect the policy proceeds from creditors of the beneficiary

D

Which of the following types of insurance policies is most commonly used in credit life insurance? a. Increasing term b. Whole Life c. Equity indexed life d. Decreasing term

D

An insurance company assures its new policyholders that their premium costs will not increase for a period of at least five years. However, due to increasing financial strain, they plan to raise premium costs for all insureds by 10% over the next two years. What term describes this act?

Fraud

Which settlement option allows the insurer to retain the face amount but pay some income based on gain on the proceeds to the beneficiary at regular intervals?

Interest only

How is the amount of Social Security disability benefits calculated?

It is based upon the Primary Insurance Amount (PIA), which is calculated from their Average Monthly Earnings over their highest 35 years

A couple receives a set amount of income from their annuity. When the wife dies, the husband no longer receives annuity payments. What type of annuity did the couple buy?

Joint Life

The type of settlement option which pays throughput the lifetimes of two or more beneficiaries is called

Joint and Survivor

A Louisiana insurance company ran an advertisement in June 2008. When could the company discard the file on this advertisement?

June 2012

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

A policy owner is reading a statement on the first page of his health insurance policy, which says "this is a limited policy." What is the name of this statement?

Limited Policy Notice

An individual wants to purchase a life insurance policy. His agent asks if the transcription will involve replacing any existing insurance policies. If the customer replies, "Yes," what is the agent's next step?

The agent must provide a replacement notice to the applicant

The Affordable Care Act requires all U.S. citizens and legal residents to have qualifying health care coverage. This is known as

The individual Mandate

How are contributions to a tax-sheltered annuity treated with regards to taxation?

They are not included as income for the employee, but are taxable upon distribution

What is the purpose of the rehabilitation benefit in disability insurance?

To cover the expenses of retaining the insured to return to work

An agent offers his client free tickets to a sporting event in exchange for the purchase of an insurance policy. The agent is guilty of

rebating

Which of the following is NOT a goal risk retention? a. To minimize the insured's level of liability in the event of loss b. To reduce expenses and improve cash flow c. To increase control of claim reserving and claims settlements d. To fund losses that cannot be insured

A

Which of the following policies would have an IRS required corridor or gap between the cash value and the death benefit? a. Universal Life - Option A b. Universal Life - Option B c. Equity Indexed Universal Life d. Variable Universal Life

A

Which of the following statements is NOT correct concerning the COBRA Act of 1985? a. It requires all employers, regardless of the number or age of employees, to provide extended group health coverage. b. It covers terminated employees and/or their dependents for up to 36 months after a qualifying event. c. It applies only to employers with 20 or more employees that maintain group health insurance plans for employees. d. COBRA stands for Consolidated Omnibus Budget Reconciliation Act

A

All other factors being equal, the least expensive first-year premium payment is found in

Annually Renewable Term

All of the following are Nonforfeiture options EXCEPT a. Reduced paid-up b. Interest only c. Cash surrender d. Extended term

B

An insurer conducts business in Louisiana without a certificate of authority. Hundreds of policies are sold, and claims start rolling in. Which of the following is true? a. Because the insurer is not authorized, it is not required to pay the claims b. The insurer will have to pay the claims anyway c. The insurer will void all the policies d. Because the insurer is not authorized, the Guaranty Association will pay the claims

B

Assuming that all of the following people are covered by a High Deductible Health Plan and are not claimed as dependents on anyone's tax returns, which would NOT be eligible for a Health Savings Account? a. Joe is 40 and is not covered by any other health insurance b. Amanda is 67 and is covered by a basic medical expense policy c. Andy is 55 and is covered under a dental care policy d. Jenny is 60 and also has a long-term care insurance plan

B

During replacement of life insurance, a replacing insurer must do which of the following? a. send a copy of the Notice Regarding Replacement to the Department of Insurance b. Obtain a list of all life insurance policies that will be replace c. Guarantee a replacement for each existing policy d. Designate a new producer for a replaced policy

B

When an insurance agent published an advertising brochure, it emphasized the company's financial stability and sound business practices. In reality, its financial health is terrible, and the company will soon have to file for bankruptcy. Which of the following terms best describes the advertisement? a. rebating b. False financial statement c. Defamation d. Twisting

B

Which of the following is NOT true of basic medical expense plans? a. Low dollar limits b. Coverage for catastrophic medical expenses c. No deductibles d. First-dollar coverage

B

Which of the following is true about the premium on the children's rider in a life insurance policy? a. It decrease when an adopted child is added to the policy b. It remains the same no matter how many children are added to the policy c. It decreases when the oldest child reaches the age of 21 d. It increases when a newborn baby is added to the policy

B

Which of the following ultimately determines the interest rates paid to the owner of a fixed annuity? a. Statewide predetermined annual interest rate b. Insurer's guaranteed minimum rate of interest c. Investment performance of the company d. investment performance of the insured

B

Which of the following is not true of Disability Buy-Sell coverage ? a. it is typically written to cover partners or corporate officers of a closely held business b. Premium payments are not deductible to the business c. the policies provide funds for the business organization to purchase the business interest of a disabled partner d. Benefits are considered taxable income to the business

Benefits are considered taxable income to the business

A health insurance company can refuse coverage solely for which of the following reasons? a. Gender of applicant b. Marital status of applicant c. Applicant's past medical history d. Sickle-cell trait in applicant

C

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 a. Claims incurred before cancellation must be honored b. An insurance company may cancel the policy at any time c. Unearned premiums are retained by the insurance company d. The insurer must provide the insured a written notice of the cancellation

C

All of the following statemets about equity index annuities are correct EXCEPT a. The interest rate is tied to an index such as the Standard & Poor's 500 b. They invest on a more aggressive basis aiming for higher returns c. The annuitant receives a fixed amount of return d. They have a guaranteed minimum interest rate

C

In which of the following locations would skilled care most likely be provided? a. In an outpatient setting b. At a physician's office c. In an institutional setting d. At a patient's home

C

The insuring clause of a disability policy usually states all of the following EXCEPT a. That insurance against loss is provided b. The types of losses covered c. The method of premium payment d. The identities of the insurance company and the insured

C

Which of the following is NOT correct regarding false statements by a person engaged in the business of insurance? a. False statements about financial condition of an insurer are unlawful b. Statements made with the intent to deceive are unlawful c. Only written statements can be considered fraud d. Omissions of material fact on insurance application are fraud

C

Which of the following is NOT the consideration in a policy? a. The premium amount paid at the time of application b. The promise to pay covered losses c. The applicant given to a prospective insured d. Something of value exchanged between parties

C

Which of the following producers will be required to complete continuing education hours to renew his license? a. A nonresident producer who only completed continuing education in his own state b. A producer who is serving a term as a member of the legislature c. A producer licensed 4 years ago who holds only one line of authority d. A 67-year-old producer who sells life insurance policies for a licensed insurer

C

Which of the following statements regarding Business Overhead Expense policies is NOT true? a. Any benefits received are taxable to the business b. Leased equipment expenses are covered by the plan c. Benefits are usually limited to six months d. Premiums paid for BOE are tax-deductible

C

Which of the following would NOT be considered a misrepresentation on the part of the insurer? a. Embellishing the benefits provided in the policy b. Overstating returns on policy dividends c. Backdating policies to secure a lower premium for the insured d. Implying that term insurance has cash value

C

Which of the following would be considered false advertising? a. Stating that a policy has limitations and exclusions b. Failing to include premiums in sales materials c. Implying that the agent is the insurer d. Stating the differences in benefits between Whole Life Insurance and Term Insurance

C

which of the following producers will be required to complete continuing education hours to renew his license? a. a nonresident producer who only completed continuing education in his own state b. A producer who is serving a term as a member of the legislature c. A producer licensed 4 years ago who holds only one line of authority d. a 67-year-old who sells life insurance policies for a licensed insurer

C

All of the following are penalties for violating the statutes pertaining to sharing commissions EXCEPT a. Additional continuing education in ethics b. Fine up to $5,000 c. imprisonment for up to 2 years d. License revocation

C.

Forcing a client to buy insurance from a particular lender as a condition of granting a loan is defined as

Coercion

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 because she had not met the conditions specified in the

Consideration Clause

A man bought an individual health insurance policy for himself. Which of the following roles does he now legally have? a. Broker b. Subscriber only c. Insured only d. Both subscriber and insured

D

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? a. The insurer will pay a reduced death benefit to the beneficiary b. The insurer will pay the death benefit minus one month's premium c. The insurer pay nothing because the employee has terminated his group insurance and hasn't stated the individual one d. The insurer will pay the full death benefit from the group policy to the beneficairy

D

An individual purchased a Medicare supplement policy in March and decided to replace it 2 months later. His history of coronary artery disease is considered a pre-existing condition. Which of the following is true? a. Coronary artery disease coverage will be permanently excluded from the new policy b. In replacement, pre-existing conditions must be waived, so sickness relating to coronary artery disease will be covered upon the policy's effective date c. Because this is a new policy, the pre-existing condition waiting period starts over d. The pre-existing condition waiting period is fulfilled in the old policy will be transferred to the new policy, the new one picking up where the old one left off

D

An insured loses her left arm in and accident that is covered by her Accidental Death and Dismemberment policy. What kind of benefit will she most likely receive from this policy? a. The principal amount in a lump sum b. The capital amount in monthly installments c. The principal in monthly installments d. The capital amount in a lump sum

D

In an optionally renewable policy, the insurer has which of the following options? a. Increase the grace period b. Alter the due date so the policy can be cancelled sooner c. Shorten the notice that the insured receives d. Increase premiums

D

Naming a "trust" as the beneficiary of a life insurance policy can accomplish all of the following for the policyowner, EXCEPT a. Establish an account to fund the insured's children's education b. Give the policyowner flexibility in disbursing the proceeds of a death benefit c. Receive death benefits on behalf of beneficiaries who are minor children d. Allow the trustee to transfer the assets of the trust to their personal account

D

Which of the following is NOT true regarding the accumulation period of an annuity? a. Is it the period during which the annuity payments earn interest b. It is the period over which the annuitant makes payments into an annuity. c. It is also known as the pay-in period d. It would not occur in a deferred annuity

D

Which of the following is TRUE for both equity indexed annuities and fixed annuities? a. They are both tied to an equity index b. Both are considered to be more risky than variable annuities c. They invest on a conservative basis d. They have a guaranteed minimum interest rate

D

Which of the following is not true of Disability Buy-Sell coverage? a. It is typically written to cover partners or corporate officers of a closely held business b. Premium payments are not deductible to the business c. The policies provide funds for the business organization to purchase the business interest of a disabled partner d. Benefits are considered taxable income to the business

D

When an employer offers to give an employee a wage increase in the amount of the premium on a new life insurance policy, this is called a(n)

Executive bonus

Which nonforfeiture option has the highest amount of insurance protection?

Extended term

Which type of care is NOT covered by Medicare?

Long-term care

Al other factors being equal, what would the premium be like in a survivorship life policy as compared to the premium in a joint life policy?

Lower

All other factors being equal, what would the premium be like in a survivorship as compared to the premium in a joint life policy?

Lower

An insured has a Level Term Life insurance policy that is guaranteed renewable and also includes a re-entry provision. The re-entry provisions would allow the insured to renew the policy and

Pay a lower renewal premium by proving insurability

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

Pay a reduced death benefit

A medical insurance plan in which the health care provider is paid a regular fixed amount for providing care to the insured and does not receive additional amounts of compensation dependent upon the procedure performed is called

Prepaid plan

Which nonforfeiture option provides coverage for the longest period of time?

Reduced paid-up

Under the Fair Credit Reporting Act, if the consumer challenges the accuracy of the information contained in his or her report, the reporting agent must

Respond to the consumer's complaint

Which settlement option provides a single beneficiary with income for the rest of his/her life?

Single Life

A producer is helping a married couple determine the financial needs of their children in the event one or both should die prematurely. This is a personal use of life insurance known as

Survivor protection

In comparison to consumer reports, which of the following describes a unique characteristic of investigative consumer reports?

The customer's associates, friends, and neighbors provide the report's data

With the cash refund option, when the annuitant dies, what would the beneficiary receive?

The refund of the original amount minus the payments already made

What is a major problem with naming a trust as the beneficiary of a life insurance policy?

They are expensive to administer

What is the purpose of establishing the target premium for a universal life policy?

To keep the policy in force

What is the purpose of a suicide provision within a life insurance policy?

To protect the insurer from persons who purchase life insurance with the intention of committing suicide

In insurance policies, the insured is not legally bound to any particular action in the insurance contract, but the insurer is legally obligated to pay losses covered by the policy. what contract element does this describe?

Unilateral

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 as soon as reasonably possible, but not exceed 1 year

All of the following long-term care coverages would allow an insured to receive care at home EXCEPT a. Skilled Care b. Custodial care in insured's house c. Respite care d. Home health care

a.

If an insurance company makes a statement that its policies are guaranteed by the existence of the Insurance Guaranty Association, that would be considered

an unfair trade practice

Under a Key Person disability income policy, premium payments

are made by the business and are not tax deductible

All of the following statements about equity index annuities are correct EXCEPT a. They invest on a more aggressive basis aiming for higher returns b. The annuitant receives a fixed amount of return c. They have a guaranteed minimum interest rate d. The interest rate is tied to an index such as the Standard & Poor's 500

b

Which of the following would not be a violation of Louisiana insurance regulations? a. Producer D collects premiums due on policies and deposits the funds in his own personal account b. Producer A uses er license to write only insurance for herself and her immediate family c. Producer B changes his clients, in addition to the premium, a consulting fee d. Producer C uses her license to write uncontrolled business

d

In disability income insurance, the own occupation definition of disability applies

for the first 2 years of a disability

Guarantee of insurability option in long-term care policies allows the insured to

increase benefit levels without providing proof of insurability

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

The policy owner 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. What settlement option should the policy owner choose?

interest only option

The purpose of insurance regulation is to

promote the public welfare

Under an extended term nonforfeiture option, the policy cash value is converted to

the same face as in whole life policy