Study Set 1 Life insurance
Which of the following insurance arrangements will be appropriate for a parent buying a life insurance policy on a child where the parent is the policy owner?
Third-party ownership
Which of the following is NOT true regarding partial disability?
This is a form of insurance that covers part-time workers.
An employee quits her job where she has a balance of $10,000 in her qualified plan. If she decides to do a direct transfer from her plan to a Traditional IRA, how much will be transferred from one plan administrator to another and what is the tax consequence of a direct transfer?
$10,000, no tax consequence
What is the maximum number of continuing education hits a producer is permitted to carry over from one renewal period to the next?
12
An insured's long term care policy is scheduled to pay a fixed amount of coverage of $120 a day. The long-term care facility only charged $100 a day. How much will the insurance company pay$
120$
Which of the following is NOT an example of controlled business
A licensee writes policies solely for friends and their families.
A temporary license may be obtained for all of the following situations EXCEPT
A producer's retirement.
If a death benefit from a life insurance policy is not paid out in a timely manner, when does the interest begin to accrue?
After 30 days from the date the benefit is due
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
All of the following statements concerning dividends are true EXCEPT
Dividend amounts are guaranteed in the policy
All of the following could be considered rebates if offered to an insured in the sale of insurance EXCEPT
Dividends from a mutual insurer.
Which of the following is NOT covered by Health Maintenance Organizations (HMOs)?
Elective services
How often must insurance producers in this state complete continuing education requirements?
Every 2 years
A universal life insurance policy is best described as an
annually renewable term policy with a cash value account
The proposed insured makes the premium payment on a new insurance policy. If the insured should die, the insurer will pay the death benefit to the beneficiary if the policy is approved. This is an example of what kind of contract?
conditional
What is the term for how frequently a policy owner is required to pay the policy premium?
mode is the manner or frequency that the policy owner pays the policy premium
What is the initial period of time specified in a disability income policy that must pass, after the policy is in force, before the loss can be covered?
probationary period
Workers Compensation benefits are regulated by which entity
state government
Which of the following is NOT an activity of daily living (ADL)
talking
Under a SIMPLE plan, which of the following is TRUE regarding taxation on both contributions and earnings?
they are tax deferred until withdrawn
In order to get a nonresident license in this state, a producer must
Apply and pay a fee to a nonresident state that reciprocates
A waiver of premium provision may be included with which kind of health insurance policy?
Disability Income
Social security disability definition includes all of the following EXCEPT
Disability expected to last for at least 6 months
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.
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
All of the following actions can be described as twisting EXCEPT
Explaining to client the advantages of permanent insurance over term and suggesting changing policies
If an insured is not required to pay a deductible, what kind of coverage does he/she have?
First dollar
All of the following are dividend options EXCEPT
Fixed period installments
Which of the following limited lines producers license would require a life producers license?
Funeral Director Insurance
What are two types of Flexible Spending Accounts
Health care accounts and dependent care accounts
According to underwriting rules pertaining AIDS and HIV, all of the following questions will be allowed on an application for life and health insurance EXCEPT
Questions directed to determine someone's sexual orientation
Insurers may change which of the following on a guaranteed renewable health insurance policy?
Rates by class
I'm insured wants to name her husband as her beneficiary for her health insurance policy. She also wishes to retain all rights to ownership. The insured should have her husband named as what type of beneficiary?
Revocable
The purpose of managed care health insurance plans is to
To control health insurance claims expenses
The paid-up addition option uses the dividend
To purchase a smaller amount of the same type of insurance as the original policy.
Group disability-income insurance premiums paid by the employer are
deductible by the employer as an ordinary business income
If an insured changes his payment plan from monthly to annually, what happens to the total premium?
It will decrease
What type of care is Respite care?
Relief for a Major Care Giver
When a reduced paid-up nonforfeiture option is chosen, what happens to the face amount of the policy?
It is reduced to the amount of what the cash value would buy as a single premium
Which health insurance provision describes the insured's right to cancel coverage?
Renewal provision
Under the Fair Credit Reporting Act, if the consumer challenges the accuracy of the information contained in his or her report, the reporting agency must
Respond to the consumer's complaint.
Which of the following best describes annually renewable term insurance?
It is level term insurance
Which of the following statements concerning Medicare Part B is true?
It pays for physician services, diagnostic tests, and physical therapy
Which of the following is and IRS qualified retirement program for self employed?
Keogh Plan
In Indiana Controlled business is
Limited to 25% of a producers commission income
Which of the following would provide an underwriter with information concerning an applicants health history?
Medical Information Bureau (MIB)
Under the Affordable Care Act, which classification applies to health plans based on the amount of covered costs?
Metal level classification
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
The primary eligibility requirement for Medicaid is based upon
Need
Which of the following terms describes the specified dollar amount beyond which the insured no longer participated in the sharing of expenses
Stop-loss limit
Which of the following would help prevent a universal policy from lapsing?
Target premium
Which of the following may NOT be included in an insurance company's advertisement?
That the policies are covered by a State Guaranty Association
Which of the following is a legal representative of a specific insurance company?
The Producer
Which of the following information will be stated I the consideration clause of a life insurance policy?
The amount of premium payments
Which of the following is true about the requirements regarding HIV exams?
The applicant must give prior informed written consent
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
You know that your client is currently insured under a life policy, but you are making a sale presentation to that client for a new life policy. You must provide the client with the important notice regarding the replacement of life insurance and a copy of sale proposal under all of the following situations EXCEPT
The client is converting from an existing term policy to whole life.
The insured had his wife named as the beneficiary of his life insurance policy. To ensure that his wife had income for life after the insured's death, he chose the life income settlement option. The amount of payments will be determined by taking into account all of the following EXCEPT
The insured's age at death
Which of the following is NOT a feature of a guaranteed renewable provision?
The insurer can increase the policy premium on an individual basis
Which of the following determines the cash value of a variable life policy?
The performance of the policy portfolio
An insured makes regular contributions to his Health Savings Account. How are those contributions treated in regards to taxation?
They are tax deductible
Insurers usually do not reimburse claimants for 100% of income lost due to disability. What is the reason for insurer limitations on coverage amounts?
To provide an incentive for the insured to return to work
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
Unearned premiums are retained by the insurance company.
Under the Physical Exam and Autopsy provision, how many times can an insurer have the insured examined, at its own expense, while a claim is pending?
Unlimited
Which of the following must an insurer obtain in order to transact insurance withering a given state?
Certificate of authority
In all health care plans under the Affordable Care Act (ACA), how many essential benefit categories are there?
10
Any licensed person whose activities affect interstate commerce and who knowingly makes false material statements related to the business of insurance may be imprisoned for up to
10 years
What percentage of a company's employees must take part in a noncontributory group life plan?
100 %
Every small employer carrier must actively offer to small employers at least how many health benefit plans?
2 plans
What is a penalty tax for non qualified distributions from a health savings account?
20%
In the event an employer wishes to purchase life insurance on en employee, within how many days not receiving a written notice must the employee consent to be insured?
30 days
A producer selling long term care products is renewing his license after 4 years. How many hours of long-term care related continuing education must the product complete in the following 2 years?
5 hours
Insurance producers who willfully violate the Indiana Insurance Code are committing a Class C Misdemeanor. What is the maximum punishment they can be submitted to?
60 days in jail
Which of the following will NOT be a violation of the Unfair Competition Law
A bank requiring a borrower to insure the mortgage property
A person diagnosed with cancer 5 months before the effective date of their Medicare Supplement Policy. When losses were reported by the insured to be covered by the Medicare supplement policy, coverage was denied. This is an example of excluding benefits based on
A pre-existing condition
Which of the following is NOT correct regarding qualifications for a resident producer license in Indiana
Applicants must be at least 21 years old.
The full premium was submitted with the application for life insurance, and the policy was issued two weeks later as requested. When does the policy coverage become effective?
As of the application date
When must an insurance company present an outline of coverage to an applicant for a Medicare supplement policy?
At the time of application
After a person's employment is terminated, it is possible to obtain individual health insurance after losing the group health coverage provided by the employer. Which of the following is NOT true?
By law, the new, individual policy must provide the same benefits as the group insurance policy.
What size companies are eligible for health reimbursement accounts (HRAs)?
Companies of all sizes
A long stretch of national economic hardship causes a 7% rate of inflation. A policyowner notices that the face value of her life insurance policy has been raised 7% as a result. Which policy rider caused this change?
Cost of Living Rider
What happens when a policy is surrendered for its cash value?
Coverage ends and the policy cannot be reinstated
Which of the following is NOT a term for the period of time during which the annuitant or the beneficiary receives income?
Depreciation period
All of the following are differences between individual and group health insurance EXCEPT
Individual insurance does not require medical examinations, while group insurance does require medical examinations.
During partial withdrawal from a universal life policy, which portion will be taxed?
Interest earned on the withdrawn cash value
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. Which settlement option should the policy owner choose?
Interest only option
Shortly after a replacement transaction on a Medicare supplement policy, the insured decided to cancel the policy, but is unsure whether the free-look provision applies. The insured could find that information in the
Notice Regarding Replacement
A rider attached to a life insurance policy that provides coverage on the insured's family members is called the
Other-insured rider
Which of the following determines the cash value of a variable policy?
Performance of the policy portfolio
Which if the following is correct concerning the taxation of premiums in a key-person life insurance policy?
Premiums are not tax deductible as a business expense
Which of the following are main factors taken into account when calculating residual disability benefits?
Present earnings and earnings prior to disability
A man physician submits claim information to his insurer before she actually performs a medical procedure on him. She is doing this to see if the procedure is covered need the patients insurance plan and for how much. This is an example of
Prospective review
Under Rule 24, Life Insurance Solicitation, producer's duties include all of the following EXCEPT
Providing the applicant with a signed copy of the Important Notice Regarding Replacement.
Which of the following is INCORRECT concerning a noncontributory group plan?
The employees receive individual policies
All of the following statements concerning an employer sponsored non qualified retirement plan are true EXCEPT
The employer can receive a current tax deduction for any contributions made to the plan
Which of the following insurance policies allows you to take out a loan from the policy's cash value?
Variable Universal Life
All of the following are true regarding viatical settlement regulations in Indiana EXCEPT
Viatical contracts allow for a 10-day free-look period.
What is the name of someone who enters into viatical settlement
Viator