State Exam Review

With a scheduled dental policy, how are covered expenses paid?

Benefits are limited to a specific maximum dollar amount per procedure

What makes an insurance policy a unilateral contract?

Only the insurer is legally bound

Matt is applying for life insurance and requests a double indemnity rider. A double indemnity benefit will be payable to Matt's beneficiary if Matt

Dies instantly from a car accident

All of these are standard exclusions found in a life insurance policy EXCEPT

Disability

Which of these statements concerning Traditional IRAs is CORRECT?

Earnings are taxable when withdrawn

After an insured gives notice of loss, what must he/she do if the insurer does not furnish forms?

File written proof of loss

Tom has a rider on his disability income policy that guarantees the right to increase his benefits without a medical exam. What kind of rider is this?

Guaranteed insurability Rider

Which of the following would disqualify a company's retirement plan from receiving favorable tax treatment?

It is temporary

The time limit for filing claim disputes is addressed in which provision of an accident and health policy?

Legal actions

Which of the following is considered to be a point of service (POS) plan?

Managed care plan

What would be an expense factor in an insurance program?

Mortality costs

How does one become eligible for Part D: Prescription Drug coverage?

Must have Medicare coverage

A beneficiary has just received a claim payment for a life insurance policy. Which of the following is TRUE regarding the federal income tax liability owed?

No federal income tax is owed on life insurance proceeds

a field underwriter's main task is

to ensure an applicant's medical information is accurate and complete

Joe has a life insurance policy that has a face amount of $300,000. After a number of years, the policy's cash value accumulates to $50,000 and the face amount becomes $350,000. What kind of policy is this?

Universal Life Policy

Craig submits a $500 claim for medical expenses. With a past due premium of $100, the insurer pays $400. Which of the Uniform Optional Provisions covers this situation?

Unpaid premium

Which type of life insurance offers flexible premiums, a flexible death benefit, and the choice of how the cash value will be invested?

Variable Universal Policy

A life insurance policy which contains cash values that vary according to its investment performance of stocks is called

Variable Whole Life

An individual can enroll in a Part C Medicare Advantage Plan at what time?

When becoming eligible for Medicare

a plan in which an employer pays insurance benefits from a fund derived from the employer's current revenues is called

a self-funded plan

which of the following is considered to be an alternative to a life settlement?

accelerated death benefit rider

Kathy's annuity is currently experiencing tax-deferred growth until she retires. Which phase is this annuity in? Payout period Accumulation period Deferred period Growth period

accumulation period

Fixed period settlement options are considered to be a form of an

annuity

which of these factors is not taken into account when determining an applicant's life insurance needs?

automobile

The purpose of the Coordination of Benefits provision in group accident and health plans is to

avoid overpayment of claims

which type of business insurance is meant to cover the costs of continuing to do business while the owner is disabled?

business overhead expense policy

All of the following are included as part of a contract in the entire contract provision EXCEPT the

changes made by the producer

Field underwriting performed by the producer involves

completing the application and collecting initial premium

Rob has a benefit at work which enables him to defer his current receipt of income and have it paid at a later date, when he will probably be in a lower tax bracket. Which benefit fits this description? Key person IRA Period certain annuity Deferred compensation option Income deferral option

deferred compensation option

All of these are typically sources of underwriting information for life or health insurance EXCEPT

disclosure authorization response

A pharmacy benefit covers prescription drugs derived from a list called a

drug formulary

Key person disability insurance pays benefits to the

employer

A securities license is required for a life insurance producer to sell

variable life insurance

A professional liability for which producers can be sued for mistakes of putting a policy into effect is called

errors and omissions is a professional liability for which producers can be sued for mistakes.

The taxable portion of each annuity payment is calculated using which method?

exclusion ratio

a life insurance policy which contains cash values that vary according to its investment performance of stocks is called

variable whole life

XYZ Company has applied for group health insurance for its employees. what information would the insurer's underwriters likely use to determine the appropriate coverage and final premium rate given to the group?

experience rating

Which of these riders will pay a death benefit if the insured's spouse dies?

family term insurance rider

A life insurance rider that allows an individual to purchase insurance as they grow older, regardless of insurability, is called a

guaranteed insurability rider

Level premium term life insurance policies

have premiums that are averaged over the policy period

what guarantees that the statements supplied by an insurance applicant are true?

warranty

When does a life insurance policy typically become effective?

when initial premium is collected and policy is issued

which of these is considered a major tax advantage of life insurance?

income tax is typically not owed on proceeds paid directly to a beneficiary

Which settlement option involves having the proceeds remain with the insurer and earnings paid on a monthly basis to the beneficiary?

interest only

a medicare supplement policy issued in the state of SC is required to provide each of the following EXCEPT

it must include outpatient prescription drug coverage

which type of life insurance is normally associated with a payor benefit rider?

juvenile insurance

Which type of annuity stops all payments upon the death of the annuitant? Life annuity Period certain annuity Cash refund annuity Joint and survivor annuity

life annuity

which of the following annuity payout options makes no additional payments regardless of when the annuitant dies?

life only

A permanent life insurance policy where the policyowner pays premiums for a specified number of years is called a(n)

limited pay policy

The election of COBRA for continuation of health coverage will

maintain the same coverage and increase premium

An employer is issued a group medical insurance policy. This single contract is known as a

master policy

What is the tax liability for employer contributions in Health Savings Accounts (HSA's)?

no tax payment needed

Richard owns an insurance policy that is renewable only at the option of the insurance company. His policy is considered to be

optionally renewable

What kind of life insurance policy issued by a mutual insurer provides a return of divisible surplus?

participating life insurance policy

The cause of a loss is referred tot as a

peril

Which type of disability would be less than total impairment and equal to permanent impairment?

permanent partial disability

Tia the producer is recommending to a prospect that an existing life insurance policy be replaced with a new one from her insurer. If this transaction moves forward, which of the following does NOT need to be provided to the prospect at or before the policy is delivered?

replacing insurer's financial statements

Under the subrogation clause, legal action can be taken by the insurer against the

responsible third party

Which of these ensures that proceeds of a life insurance policy will be free from attachment or seizure by the beneficiary's creditors?

spendthrift clause

Which of these will have the highest monthly payout upon annuitization?

straight life

An insurer has the right to recover payment made to the insured from the negligent party. these rights are called contributory indemnity estoppel subrogation

subrogation

Respite care is able to provide

temporary relief to the patient's primary caregiver

Which of these is not a characteristic of the accelerated death benefit option?

the benefit can be offered as a rider at a specific extra cost or may be at no cost

In what form do disability income policies typically pay benefits?

Periodic income

During the accumulation period, who can surrender an annuity?

Policyowner

How are survivorship life insurance policies helpful in estate planning?

Provide funds to help pay taxes

A policyowner may exercise which of these dividend options that uses the dividend to pay all or part of the next premium due?

Reduction of premium dividend option

SC residents who are uninsurable may obtain health coverage through the

SC Health insurance pool (SCHIP)

Which of these ensures that proceeds of a life insurance policy will be free from attachment or seizure by the beneficiary's creditors?

Spendthrift Clause

Justin is receiving disability income benefits from a group policy paid for by his employer. How are these benefits treated for tax purposes?

Taxable income

Under the Affordable Care Act, a large employer that does NOT provide health insurance and owes an employer mandate penalty MUST pay an annual penalty, whcih is calculated by multiplying $2,000 by

the number of full time employees minus 30

Jonas has disability insurance through his employer. The employer pays 75% of the premium, and Jonas pays the other 25%. What is Jonas's tax liability for any benefits paid from the disability plan?

Taxes must be paid on 75% of the benefits received

Greg had recently been terminated from his job that covered him for group life insurance. How long does he have to convert his coverage to an individual policy?

31 days

As of January 1, 2014, an employer with up to 25 full time equivalent (FTE's) with average annual wages of less than $50,000 may be eligible for a tax credit of ___ of the premiums paid by the employer. 30% 40% 50% 60%

50%

What percentage of a participant's income are group long-term disability benefit amounts typically limited to?

60%

Proof of loss on a health insurance claim must be submitted to an insurer within __ days after the insured's date of loss.

90

An insured has a stop-loss limit of $5,000, a deductible of $500, and an 80/20 coinsurance. The insured incurs $25,000 of covered losses. How much will the insured have to pay?

$5,000. The insured will pay the stop-loss limit of $5,000

Amy has a group medical policy through her employer with a $500 deductible and a 90% coinsurance provision. She incurs $1,500 in covered health care services. How much will her group insurance carrier pay?

$900 The group insurance carrier will pay 90% of the covered loss after the deductible has been applied. $1,500 - $500 deductible = $1,000 (90% covered) = $900

Written notice for a health claim must be given to the insurer ___ days after the occurrence of the loss.

20

how many employees must an employer have for a terminated employee to be eligible for COBRA?

20