Review Qs

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Federal tax advantages of a qualified plan

1. accumulate on a tax deferred basis 2. employee and employer contributions are not counted as income to the employee for income tax purposes 3. employer contributions are tax deductible as ordinary business expense

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

COBRA applies to employers with at least

20 employees

Following in injury, a policyowner covered under Medicare part A&B was treated by her physician required to pay OOP

20% covered charges above the deductible

What must the patient pay under Medicare part b

20% of covered charges above the deductible

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

36 months

In the event a policy lapses due to nonpayment of premium, within how many days would the policy be automatically reinstated once the outstanding premium is paid?

45 days

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

Before he died, an annuitant had received $12,500 in monthly benefits from his $25,000 straight life annuity. He was also the insured under a $50,000 paid-up whole life policy that named his wife as primary beneficiary. Considering both contracts, how much will the annuitant's spouse receive in benefits?

50k (straight life annuity stop at death of annuitant)

Under the uniform required provisions, proof of loss under a health insurance policy normally should be filed within

90 days of loss

All of the following are correct about the required provisions of health insurance policy EXCEPT

A reinstated policy provides immediate coverage for an illness

Least expensive first year premium is in which policies

ART

Group health insurance is characterized by all of the following except

Adverse selection

An insured pays a $100 premium every month for his insurance coverage, yet the insurer promises to pay $10,000 for a covered loss. What characteristic of an insurance contract does this describe?

Aleatory

Buyer's Guide

Allow consumer ti compare costs of different policies

An agent makes a mistake on the app and corrects his mistakes by physically enter the neccesary info. Who must then initial that change?

Applicant

What document describes an insured's medical history, diagnoses and treatments

Attending physician's statements

The annuitant dies while the annuity in accumulation

Beneficiary receive greater of the money paid into annuity (premiums) or cash value

Feature of variable annuity

Benefit payment amounts are not guaranteed (interest rate not guaranteed)

Statements regarding Business Overhead Expense policies

Benefits are NOT limited to 6 months; Premiums tax deductible; Benefits are taxable; Leased equipment are covered

Inpatient hospial care for HMO memebrs

Care can be provided outside of service area

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

Longterm care coverages allow an insured to receive care at home

Custodial care Respite care Home health

The policyowner of an adjustable life policy wants to increase the death benefit. Which of the following statements is correct regarding this change?

Db can increase by providing evidence of insurability

An insured is hospitalized with a back injury. Upon checking his disability income policy, he learns that he will not be eligible for benefits for at least 30 days. This indicates that his policy is written with a 30-day

Elimination period

Taxation if longterm care insurance

Excessive benefits taxable

Which nonforfeiture option has the highest amount of insurance protection

Extended

Which component decreasesin decreasing term insurance

Face amount

Group health insurance, COBRA stipulates that

Group coverage must be extended for terminated employees up to a certain period of time at the former insurance

Which of the following is true regarding Medicare supplement policies

Guaraneed renewable

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. The guaranteed insurability option allows the insured to purchase specific amounts of additional insurance at specific times without proving insurability.

Purpose if life insurance guaranty association

Help protect policyowners and beneficiary bc of insolvency of company

Which ride would not increase prem for policy owners

Impairment

What type of insurance would be used for a Return of Premium rider?

Increasing Term

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?

Insured must have first been hospitalized for 3 consecutive days

Life insurance where the policyowner designated primary and contingent beneficiary. Both died in accident and impossible to determine who died first. Who would receive the death benefit?

Insured's contingent benefiacry (estate if not designated)

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

Keep the policy in force

Which two terms associated with premiums

Level or flexibl

The corridor deductible derives its name from the fact that its applied between the basic coverage and

Major medical coverage

An insurer advertises a health policy that is covered by the Life and Health Insurance Guaranty Association. The advertisement includes a short list of benefits and approximate rates. The end of the advertisement includes statement that protection is provided by the Guaranty Association. Which of the following is true?

Mentioning the Guaranty Association in advertisements is considered to be unfair trade practice.

What vary the length of grace period in health insurance policies

Mode of the premium payment

The primary eligibility requirement for medicaid benefits is based upon

Need ( Medicaid is a program operated by the state with some federal funding to provide medical care for those in need)

An applicant for a health insurance policy returns a completed application to her agent, along with conidtional receipt. Insurer

Netiehr approved the app nor issued the policy

An insured is involved in a car accident. In addition to general, less serious injuries, he permanently loses the use of his leg and is rendered completely blind. The blindness improves a month later. To what extent will he receive Presumptive Disability benefits?

No benefit (only for total loss)

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

in LTC, which care is provided with intermediate care

Occasional nursnig or rehabilitative care

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

Only for the life of the annuitant

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 DB (Incontestibility clause prevent insurer denying a claim due to statements regarding age, sex, identity)

Which provisions prevent insurance company from paying a reimbursement

Payment of claims

What is mandatory for health insurance policies

Physical examination and autopsy

Requirements of a qualified plan except

Plan must provide an offset for social security benefits (must meet requirements by IRS)

All of the following are mandatory life insurance policy provisions except

Policy backdating (Incontestability, grace period, misstatement age)

Use of life insurance as an executive bonus

Policy owner = employee Employer pays bonus to a selected employee to fund Non qualified employee benefit

What document describes the specific information about a policy?

Policy summary

A guaranteed renewable health insurance policy allows the

Policyholder to renew the policy to a stated age, with the company having the right to increase premiums on the entire class.

What included in policy summary

Prem amounts and surrender values

Most agents try to collect the initial premium for submission with the application. When an agent collects the initial premium from the applicant, the agent should issue the applicant a

Premium receipt

Taxation of Business Overhead

Premiums are deductible, benefits are taxed

Taxation of premiums in a key-person life

Premiums are not tax deductible as a business expense

Characteristics of group life insurance

Prems are determined by age, sex and occupation of the entire group; Individuals receive a cert of insurance; amount of coverage is determined nondiscrimnitaroy; certificate holders may convert coverage to an indiciual policy wihtout evidence of insurability

When a whole life polocy lapses or is surrendered prior to maturity, the cash value can be used to

Purchase a single premium policy for a reduced face amount

Any inducement offered to the insured in the sale of an insurance policy that is not specified in the policy is an unlawful practice known as

Rebating

Reinstatement povision

Requires the policyowner to pay all overdue premiums with interest before the policy is resintated

Which is not covered under part b of medicare polocy

Routine dental

What license must agent have for variable policies

Securities

Regarding LTC policies, which not included in ALS

Sleeping

Worker Compensation benefits regulated by which entity

State govermenet

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

The Medicare Part A deductible (Covers 20%B coinsurance, 3 pints if blood, approved hospital cost)

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

If an insured withdraws a portion of the face amount in the form of accelerated benefits because of a terminal illness, how will that affect the payable death benefit from the policy?

The death benefit will be smaller

An employee insured under a group health policy is injured in a car wreck while performing her duties for her employer. This results in a long hospitalization period. Which of the following is true?

The group plan will not pay because the employee insured at work

Reduction of premium

The insurer uses the dividend to reduce the next year's premium

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.

Decreasing term policy except

The payable premium amount steadily declines throughout the duration of contract

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

The same face amount as in the whole life policy

The purpose of managed care health insurance plans is to

To control health insurance claims expenses

Purpose if coinsurance provision

To help the insurance company to prevent overutilization

According to the rights of renewability rider for cancellable policies, all of the following are correct about the cancellation of an individual insurance policy

Unearned premiums are returned by the insurance company. ()

Which policy allow withdrawlas or partial surrenders

Universial life

Which statement accurately descrbes the change of benefiary provision

any policy that has DB must have change of benefiacry provision

A husband and wife are insured under group health insurance plans at their own places of employment, and as dependents under their spouse's coverage. If one of them incurs hospital expenses, how will those expenses likely be paid?

benefits will be coordinated

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 coverage

Which of the following reports will provide the underwriter with the information about an insurance applicant's credit?

consumer report

Taxations of dividends in participating policies

dividends are not taxable

In disability policy, the probationary period refers to the time

during which illness-related disabilities are excluded from coverage

Who bears all of the investment risk in a fixed annuity?

insurance company

Purpose of conditional receipt

intended to provide coverage on a date prior to policy issue

A guaranteed reneable disability insurance policy

is renewable at the insured's otpion to a specified age

decreasing term policy

level premium and a death benefit that decreases each year of the policy till 0 Pay in event of death during term No cash value

Which is true about a spouse term rider

level term

Primar eligibility requirement for medicaid benefits is based upon

need

Best describe MIB

nonprofit organization that maintains underwriting information on applicants

The dividend option in which the policyowner uses dividends to purchase a term policy for one year is referred to as the

one-year term option

Accumulation period of annuity

pay in period

An isnured pays her major medical insurance premium annually on Mar 1. Last march she broke her leg. Insurance company would

pay the caim

Which two terms are associated directly w the way annuity funded

single or periodic

Which of the following policies would be classified as a traditional level premium contract

straight life (build cash value, guaranteed DB, level premium)(

The interest earned on policy dividends is

taxable

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

term rider

When would a 20-pay whole life policy endow

when insured reach 100


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