q data base

jerome' s jazz bar offers group life insurance on a contributory basis, how many employees may participate in the plan

75%

if a group plan is contributory

75% of eligible employees must participate

frank owns and is insured by a participating whole life insurance policy with a death benefit of 85K. his basis in the policy is 30K, if he were to die today, what amount would his policy be valued at

85K- the full death benefit amount

which annuity settlement arrangement guarantee to pay at least a minimum amount equal to the original investment

installment refund annuity

hector's spouse was the primary beneficiary of a 250K life insurance policy. she received payments of 700 per month as long as she lived. what was the settlement option

interest only * because the proceeds were available for distribution means that they were preserved while she received interest payment

modified whole life policy

is a variation of the traditional whole life policy, not an endowment policy. the premiums are lower in the early years and higher in later years

which of the following premium modes is the most expensive

monthly

beth's neighborhood was ravaged by wildfires last summer. as a result, they installed a sprinkler system in their home to minimize damage in case of a fire

risk reduction

by most insurers, partial disability is

the inability of the insured to perform at full capacity due to illness or injury

in insurance transaction, a licensed agent represents

the insurer

insurance agents represent

the insurer

which of the following is the best reason to purchase a vision care policy

to supplement existing major medical * major medical pays only for routine care, not for surgeries etc

for a waiver of premium to become operative, the insured must be

totally disabled

all of the following are duties of the commissioner except

writing the maryland insurance laws

an insurance producer is in a position of financial trust , to both the client and the insurer this is best described as

a fiduciary

which of the following policies pays a fixed hospital benefit directly to the insured, regardless of the actual hospital expenses incurred

hospital indemnity

a grandfathered policy is

one that existed before the affordable care act

information about an applicant's marital status or beneficiaries would be found on

part 1 of the application

insurance policies that pay dividends are referred to as

participating polices

the underwriting classification that is most favorable to the insured

preferred

a group of individuals that agree to shares each other's losses is known as a

reciprocal insurer

which of the following terms indicates the insured's right to change the beneficiary

revocable

HMO

routine physical and diagnostic services are covered expenses HMO's stress preventative care must provide comprehensive health care benefits federal law requires employers with 25 or more to offer enrollment in an HMO as an alternative to traditional forms of insurance

major medical policies that pay 100% of covered expenses above a certain amount contain what type of provision

stop loss

jorge would like to purchase a life insurance policy that offers level premiums from the time the policy is issued until death. he also wants a policy that combines death protection with a savings element that can eventually be used for retirement

straight whole life insurance

qualified retirement plan distributions are said to be premature if the participant's attained age is

59 1/2

how many days must the insured wait to take legal action against a health insurer after submitted written proofs if the insurer refuses to pay

60 days

the typical coinsurance ration for dental insurance plans is

80/20

which of the following private insurance carriers has a contractual relationship with doctors and hospitals

BCBS

why do dental plans encourage insureds to use preventative care

preventative services can eliminate the need for major dental work ( which is more expensive ) in the future

dental expense plans

diagnostic care is covered, a portion of claims can be denied if prior auth is not met. most policies exclude costs for replacement of lost dentures

with regard to insurance, the term consideration means

directly giving something of value

what is credit disability insurance

disability insurance on a debtor

the health insurance portability and accountability act imposes requirements on health care providers with respect to

disclosure of protected health

a policy that covers one specific type of life threatening or serious condition is known as

dread disease policy

annuity payments are taxable to the extent that they represent interest earned rather than capital returned. what method is used to determine the taxable portion of each payment

exclusion ratio

the time limit of the certain defenses provision in a health insurance policy provides that the policy cannot be contested and claims cannot be denied after 2 years except

for fraudulent statements in the application

which of the following statements regarding the disposition of fiduciary funds is correct

funds collected as premiums are to be kept seperate from those used for personal

care that is provided on an intermittent basis is known as

intermediate care

the fair credit reporting act

obligates insures that use a third party source to acquire credit information to inform applicants who have been denied coverage of the identity of that source

which of the following is not one of the requirements for a policy to be considered qualified

policies may include optional coverage for reimbursement of certain medicare expenses * coverage must be for LTC and may not reimburse medicare

policy dividends

policy dividends are not taxable because they are considered a partial return of premiums paid

who are the owners of a mutual insurance company

policy owners

in medicare managed care plan, the role of the gatekeeper is performed by the insured's

primary physician

lawrence signed an application for a life insurance policy on sept 2 and took a required medical exam on sept 4. the policy was issued as applied for , the effective date is

sept 4

when a group disability insurance plan is paid entirely be the employer, benefits paid to disabled employees are

taxable income to the employee

with an optionally renewable policy, the insurance company reserves the right to

terminate coverage at any policy anniversary date or premium due date

the time which funds are being paid into an annuity is called

the accumulation period

the period during which annuity benefits are received is

the annuitization period

what is the best source of information for life insurance underwriting and policy issue

the application

a peril is

the cause of a loss

the calendar year deductible provision of a major medical policy stipulates that

the deductible is applied only once during the calendar year

the period in which an insured must pay for care before policy benefits begin is

the elimination period

a master policy is issued to the sponsoring group and policy holder is

the employer

a misrepresentation or false warranty by an insured will not void the policy unless

there was an intent to deceive or it materially affects acceptance of the risk by the company

long term care policies can exclude coverage for

treatment provided in a government facility intentional self inflicted injury preexisting diseases or conditions ++ not for a family history of heart condition

when is a person convicted of insurance fraud in MD guilty of a felony

when the act of fraud is 300.00 or more

the primary difference between a PPO and and POS

a POS used a gatekeeper, while a PPO does not

what is the definition of fiduciary

a person in a position of financial trust who handles the affairs and funds of others

what is the definition of a fiduciary

a person in a position of trust and confidence who handles the affairs and funds of others

the period of time a new employee will have to wait before she can enroll in group insurance is

a probationary period

refund annuity

a refund annuity guarantees a specific amount of benefits whether or not the annuitant is alive to receive them . it the annuitant dies before receiving the death benefit, the difference is paid to the beneficiary or the estate. it can be in a lump sum or installments

a universal life policy may be surrendered for its cash value

at any time

universal life provisions

- a statement that the policy is based on guaranteed and non values - whether the policy owner has the right to change basic coverage - a description of how cash surrender values are calculated

accelerated death benefits

- an insured may request an accelerated death benefit if death is expected within 24 months due to terminal illness payments range between 25-100% written disclosure give to applicant the inability to perform ADL is considered to be a qualifying event

Darlene owned a 100K whole life insurance policy that had a 75K cash value, when she died, the amount paid by the insurance company was

100K - the face amount upon the death of the insured, a whole life policy pays the face amount

in disability income insurance, an elimination period is

a period of days following the start of a disability during which benefits are not payable

annuity factors

age sex assumed interest rate

a type of policy that covers one specific type of life-threatening or serious illness is known as

dread disease, specified disease or critical illness plan

medicare supplemental policies must be

guaranteed renewable

kurt's medical expense policy states that it will pay him a flat $50 a day for each day he is hospitalized. this benefit pays on which basis

indemnity

group life insurance policies must contain the following provisions

- incontestability - payment of benefits - certificate

all of the following statements regarding the insuring agreement are true except

- the agent or producer must sign * it is the insurer's promise to pay the death benefit to the beneficiary and needs to be signed by an officer of the company

the minimum benefit period for a long term care insurance policy is

12 months

under medicare part B, the participant must pay

20% of covered charges above the deductible

beth is a secondary beneficiary of a life policy, receiving monthly income benefits of 4200 before she died. the original proceeds totaled 22,000. assuming beth lives long enough, she will be paid monthly benefits until she has received

22,000 - 4,200 = 17,800

long term care policies are designed to provide benefits for at least how many months

24

carl age 57, owns a whole life insurance policy with a 750K face amount that was paid for with a single premium of 100K. the current cash value is 125K. if he were to borrow 30K, what is the tax treatment

25K of the loan is subject to income tax plus 10% penalty This is a MEC because it was paid with a single premium all loans above the cost basis ( total paid in ) are taxed and if under 59 1/2 have a 10% tax penalty

the right to examine, or free-look provision in a long term care policy allows for an insured to return a policy with

30 days for a refund

life insurance provisions must include a provision entitling policyholders to a grace period for payment of premium, during which time , the death benefit coverage continues in force. how long must the grace period be

30 days or one month

lee has a social security PIAS of 800.00 at the time of his death. how much is payable to his surviving spouse who is caring for an unmarried child under the age of 16

400 ( 50% up until the child turns 22 )

Brian, a 45 year old contractor, wants financial protection for his family while 300,000 of his assets are tied up in a building project for the next 5 years. which of the following types of life insurance policies would give him that protection at the lowest cost

5 year level term

the required grace period for a weekly premium health insurance policy is

7 days

which of the following qualifies as a high deductible plan

HSA

a trust that is formed by a group of smaller employers in the same or similar industries is known as

a MET

a medicare supplemental policy that contains restricted network provisions is known as

a medicare select policy

a single plan that covers the employees of two or more unrelated employers

a multiple employer welfare arrangement ( MEWA

a deferred compensation plan is

a nonqualified plan funded by the employer

tony, who is 65 wants to buy an annuity with 100K that he recently gained on the sale of his home. he wants to select an income option that will provide him the highest monthly income possible.

a straight life annuity income option

risks that can be insured are assessable ( measurable )

affordable, accidental, calculable, similar and noncatastrophic

which type of policy only covers one life

an ordinary life insurance policy

unlike corporate dividends, insurance polcy dividends

are not considered taxable income

unlike corporate dividends, insurance policy dividends

are not considered taxable income * policy dividends are not taxable income because they are considered a partial return of premiums paid

which of the following statements about executive bonus plans is not correct

at the employee's death, the company receives the death benefit proceeds free of tax * the beneficiary receives the death benefit

to enroll in an employer's qualified retirement plan, employees must

be at least 21 years old and complete

characteristics of insurable risk

calc, affordable, non catastrophic, homogeneous, accidental , measureable

the individuals who are insured under a group life contract are given which of the following as evidence of their coverage

certificate of authority

larry owns a deferred annuity for which his spouse is the designated annuitant and his son is the beneficiary. if larry were to die before the contract is annuitized, who receives the death benefit

chris ( he is the beneficiary )

for situations where no initial premium was paid when the application was taken, meaning that the policy has already been underwritten and issued, the following things still needs to be done

collect any premium due obtain a statement of good health explain the policy, its provisions, any riders etc

which of the following organizations reimburses its insureds for covered medical expenses

commercial insurers

which of the following organizations reimburses its insured for covered medical expenses

commercial insurers * they use the reimbursement approach

an attempt by an existing insurer or its producer to dissuade a policyholder from replacing an existing insurance policy is known as

conservation

which benefit provides for an automatic increase in benefits to offset the effects of inflation

cost of living adjustment rider

individual medical expense polices

cover nursing nursing care in a hospital but usually exclude treatment for drug and alcohol use, custodial care and nursing care at home

which of the following is a mandatory minimum benefit for medicare supplemental policies

coverage of medicare part A- eligible hospital expenses to the extent not covered by medicare from the 61st through the 90th day in any medicare benefit period

a policy that covers one specific type of life-threatening or serious illness is known as

critical illness specified disease dread disease

which of the following statements comparing group and individual life insurance is not true

individual insurance is generally available at lower rates than group insurance

all of the following are common exclusions under a disability contract except

disabilities resulting from accidents

dread disease policies generally cover diseases that

do not occur frequently, but involve significant costs when they do occur

qualified pension

ee contributions are limited by tax laws the employer's contributions become fixed liabilities the employer's contributions on behalf of the employee are tax deductible

what act protects the interests of participants in employee benefit plans

employee retirement income security act

long term care can limit or exclude coverage for all of the following except

family history of a heart condition

delivering polices in person

gives the agent the opportunity to review the policy with the policy owner , including riders and exclusions and answer any questions. an agent cannot make any last minute changes after it has been issued

when credit life or health insurance is required to secure a debt, the debtor must

have the option of getting required coverage from existing coverage or from any authorized insurer

joshua's insurance agent delivered his new term life policy to him. three days later he changed his mind , he no longer wanted the policy and returned it to his agent, under the free look period

he is entitled to receive a full refund of premium

javier purchased a long term care insurance policy with an optional benefit that provides a yearly increase in benefits

his policy offers inflation protection

which of the following statements is correct

hospital and medical expense helps pay doctor and hospital bills

essential health benefits

hospitalization, emergency services and ambulance * not dental

Which of the following statements regarding the tax treatment of distributions from an an individually owned, non qualified , deferred annuity is not correct

if the distribution is the result of the annuity contract owner's death, the cash value payable to the beneficiary is income tax free * there are no tax free benefits associated with annuities, these are only with life insurance

which of the following statements about maryland life and health guaranty corporation is correct

in case of an insurer's insolvency, it provides prompt payment of covered claims and helps avoid financial loss to maryland residents who are claimants

mutual insurers

issue participating policies and are owned by policyholders

which of the following statements about medicare supplemental insurance is true

it cannot be cancelled for any other reason than nonpayment of premiums or as authorized by the commissioner

which of the following statements regarding waiver of premium is not correct

it is frequently used with both individual and group policies

variable insurance

it provides insurance benefits that vary according to the investment experience of separate accounts maintained by the insurer

purpose of the fair credit reporting act

it requires consumer report agencies to adopt reasonable procedures when exchanging credit information

which of the following statements does not describe an annuity

it will produce income benefits that are adjusted to keep up with the price of inflation

Business use of life insurance

key person coverage buy sell funding deferred comp

worker's compensation

laws are designed to return injured persons to work

which of the following dividend options produces a result similar to taking dividends in cash and depositing them into a savings account

leaving dividends to accumulate at interest

david has a 300K nonrenewable 5 year term policy. the premium he pays for this policy would be

less than for a 300K , 5 year renewable policy

life insurance protects people from dying too soon, while annuities protect people from

living too long

mary age 70, recently purchased a non qualified immediate annuity to supplement her retirement income, and though it will receive a lifetime income of 800.00 per month, how will it be taxed

mary will pay income tax each year on a portion of the payments received, and when she has fully recovered her basis, all future payments will be taxable ( exclusion ratio )

money taken out of a MEC

may be subject to unfavorable tax rules

a program that provides federal funds for state medical public assistance

medicaid

medicare part A and B

medicare part A pays for skilled nursing after a hospital stay for at least 3 days. routine preventative items are covered by part B

a deferred compensation plan

non qualified plan funded by the employer

which type of health insurance policy prevents the insurer from changing the premium rate or modifying the coverage in any way

noncancelable policy

disability income policies

not true- benefits may be payable for some disabilities resulting from accidents or sickness but there are no exclusions

when seperate deductibles are required for each illness or accident

per cause

nonqualified annuities and tax treatment

premiums are not tax deductible

which of the following statements regarding health savings accounts is not correct

qualified health care expenses include medicare supplemental polcies * if HSA funds are used, the premiums would be taxable and subject to a 10% penalty

an example of an illiquid asset

real estate

a contract in which one insurer ceded all or part of a risk to another insurer is known as

reinsurance

a contract in which one insurer cedes all or part of a risk to another insurer is known as

reinsurance

which of the following statements regarding long term care insurance is not true

the amount and type of policy benefits are chosen by the individual

if a business entity purchases disability insurance on the lives of the business owners to fund a disability buyout

the business cannot take a deduction for the premiums paid

michelle, age 31 just purchased a 50K variable life insurance policy- which statement is not correct

the death benefit of 50K is not guaranteed * there is no guarantee on the cash value or accumulation bit the DEATH BENEFIT is guaranteed

an accidental death and dismemberment policy rider's principal sum is equal to

the death benefit on the base life insurance policy

which of the following differentiates a variable life product from a conventional life product

the fact that the product has a seperate account which is distinct from the general account

karl, age 61 has owned a Roth IRA for 6 years. he decided to take a large distribution from it to purchase a boat. what are the tax consequences

the interest portion will be taxed as income, but the portions representing his contributions will be received tax free

insured losses are covered immediately after a policy is reinstated when

the losses result from accidental injuries

duties of the insurance commissoner

the maryland legislature write and enacts the insurance laws. the commissioner and the insurance administration enforce them

the payor benefit typically waives premiums on a juvenile policy if

the person who pays the premium dies or becomes disabled before the insured child reaches a certain age

coverage for a health insurance policy that will take effect as if the policy had already been issued if all of the following conditions are met except

the policy has been legally delivered to the applicant

which of the following statements pertaining to key-person life insurance is correct

the policy is a company owned asset

a hospital indemnity insurance policy may be recommended to a client for all of the following reasons except

the policy will pay for the full amount of the hospital stay * it is a fixed dollar amt per day

sally has an accidental and death dismemberment policy through her company, what is the tax treatment on the expenses if her employer pays 100% of the premium

the premiums are deductible for her employer and her benefits are tax free

life insurance proceeds are included in the gross estate if

the proceeds are payable to the insured's estate or the insured had any incidence of ownership in the policy at time of death or transferred ownership within 3 years of death

temporary producers license

the surviving spouse of deceased producer the executor of a deceased producer's estate an applicant who intends to take the exam in 90 days

which of the following statements about blanket insurance is incorrect

they can be issued on a group basis or individual basis * they are issued to special groups such as common carriers and education institutions- they are not issued on a individual basis

annuities are classified by

underlying investment funding method payout start

contracts that provide payments based on the investment return of a segregated asset account are called

variable life insurance and annuities

limited policies

vision, credit life, accident only - ** not vision

under the notice of claims provision, a claimant must notify the insurance company of loss

within 20 days after the loss occurs