WebCE Practice Exams

The Family and Medical Leave Act (FMLA) protects the employment status of certain employees on unpaid leave for up to how long? 12 weeks per year 12 weeks per employer 24 weeks per year 24 weeks per employer

12 weeks per year

The Texas Department of Insurance has found that ABT Insurance has consistently failed to promptly respond to policyholder communications regarding claims. This means that it typically fails to respond within: 15 days 30 days 60 days 90 days

15 days

In Texas, newborn children must be covered under their parent's accident and health insurance policy for how many days following birth, even if the policyowner has not reported the birth or made any required premium payments for the coverage? 7 days 14 days 31 days 90 days

31 days

All the following statements about ordinary whole life insurance are correct EXCEPT: Its death benefits are level. The premium level is higher than the actual mortality costs during the early years of the policy. The insured pays level premiums until he or she dies or reaches age 120, whichever comes first. The cash value decreases as the insured gets older.

The cash value decreases as the insured gets older. The most basic type of whole life insurance is ordinary whole life (also called straight whole life). With ordinary whole life, benefits and premiums remain level and payable through the insured's entire life (think: whole life).

With respect to life insurance settlement options, the term 'without life contingency' means: The death benefit payout is based on a specified period or amount, not on the life of the beneficiary. The beneficiary is a non-human entity. The benefit is paid out for as long as the beneficiary lives, however long that may be. The beneficiary is not permitted to choose the settlement option under any circumstances.

The death benefit payout is based on a specified period or amount, not on the life of the beneficiary.

To be eligible for participation in an employer's Simplified Employee Pension (SEP) plan, an employee must meet all the following requirements EXCEPT: The employee must have worked for the employer during at least three of the previous five years. The employee must have received a minimum specified amount in annual compensation. The employee must be 21 or older. The employee must own at least 5 percent or more of the business or be recognized as a key employee.

The employee must own at least 5 percent or more of the business or be recognized as a key employee.

Melina paid $7,000 for medical care this year. If her adjusted gross income is $50,000 this year, how much of these expenses can she deduct from her income taxes, if any? $5,000 $0 $2,300 $2,000

$2,000 A person can deduct unreimbursed medical expenses that exceed 10 percent of adjusted gross income (AGI). In this case, Melina can deduct $2,000 ($7,000 - $5,000), the amount by which her expenses exceed 10 percent of her AGI.

Cathy took out a $100,000 decreasing 20-year term life insurance policy. In the middle of year ten, when the death benefit on her policy equals $50,000, Cathy dies. What will Cathy's beneficiary get? nothing $50,000 $50,000 plus any cash value that has accrued $100,000

$50,000

Dana is covered by her employer's group long-term disability income insurance. The employer pays 80 percent of the premium and Dana pays the remainder. She is disabled and receives a weekly benefit payment of $1,000 for four weeks. How much of each benefit payment is taxable income to Dana? $1,000 $800 $4,000 $3,200

$800

The Patient Protection and Affordable Care Act (PPACA) , also called the Affordable Care Act (ACA), recognizes how many 'metal levels' of coverage? 1 2 4 6

4 Medical expense insurers must offer benchmark plans that provide coverage at one of four "metal levels": bronze, silver, gold, and platinum. Each level corresponds to the percentage of essential health benefit (EHB) costs that the plan pays, with the insured paying the remaining costs.

What is the minimum age at which Gary can withdraw funds from his deferred market value adjusted annuity (MVA) without incurring a tax penalty? 55 59' 62 70

59'

If a person receives funds directly from a qualified pension plan and intends to roll them over to an IRA, within how many days must the rollover be completed? 30 days 60 days 120 days 180 days

60 days

Medicare Part A provides reasonable and medically necessary hospital care for how long? 21 days 60 days 30 days Inpatient hospital care is not covered.

60 days For a Medicare Part A beneficiary, a benefit period begins on the day of admittance to the hospital. That benefit period ends 60 days after release from the hospital.

For how many days in each benefit period does Medicare pay for hospitalization? 30 days 60 days 90 days 180 days

90 days Medicare Part A pays for hospital services for up to 90 days in each benefit period. However, the recipient must pay a hospital coinsurance or co-payment per day for the 61st to 90th day.

What is NOT correct about the reinstatement of a health insurance policy? The insured must pay all back premiums plus interest and prove insurability. If the insurer does not act upon the application for reinstatement within 45 days, the policy will be automatically reinstated. After reinstatement, accidents are covered immediately, but a ten-day waiting period is imposed before sickness is covered. A policy may be reinstated for up to five years after it lapsed.

A policy may be reinstated for up to five years after it lapsed. The normal reinstatement period is up to three years from the date of lapse.

Which one of the following statements most correctly describes a universal life insurance feature that is NOT available with traditional whole life insurance? The policyowner cannot withdraw money from the policy's cash value. The policyowner can surrender the policy early without penalty. Accessing the cash value must be done through a partial surrender, not a loan. The policyowner can take loans from the policy.

Accessing the cash value must be done through a partial surrender, not a loan. Traditional whole life policies provide access to cash values through policy loans. Policy loans are not possible with universal life insurance policies. Instead, policyowners who want to access some of their policy's cash value do so through a withdrawal (called a partial surrender).

Which of the following statements regarding adjustable life insurance policy cash value withdrawals is correct? An adjustable life partial surrender works exactly the same as a universal life insurance (UL) partial surrender. An adjustable life partial surrender is the same thing as a policy loan. Under an adjustable life partial surrender, the death benefit is not affected by the amount of the surrender. Adjustable life insurance cash values are accessible either through a traditional policy loan or through a partial surrender.

Adjustable life insurance cash values are accessible either through a traditional policy loan or through a partial surrender. Because it is a form of whole life insurance with UL features, adjustable life policyowners can access their policy's cash value either through a policy loan or through a partial surrender.

Alpha Corporation pays the premiums for its group medical, dental, disability, and long-term care insurance plans. Which statement is correct about the income tax consequences? The premiums for all of the policies are taxable income to the employees. The premiums are deductible income to the employees. Alpha can take an income tax deduction for all of the premiums it pays for all of the policies. Alpha can take an income tax deduction only for the premiums it pays for its medical plans.

Alpha can take an income tax deduction for all of the premiums it pays for all of the policies.

On June 1, Sandra submitted proof of her uncle's death and her right as beneficiary to receive the proceeds of his life insurance policy. A life insurance policy settlement must take place by: July 1 June 15 August 1 December 31

August 1 A policy settlement must take place no later than two months after the date of receipt of proof of the insured's death and the right of the claimant to the policy proceeds.

When received in a lump sum, how are life insurance death benefits commonly taxed to the beneficiary? Death benefits from a life insurance policy are generally taxable to the beneficiary. Fifty percent of death benefits from a life insurance are taxable to the beneficiary. Death benefits from a life insurance policy are generally not taxable to the beneficiary. Death benefits from a life insurance policy are received tax deferred.

Death benefits from a life insurance policy are generally not taxable to the beneficiary. When received in a lump sum, the death benefits from a life insurance policy are generally not taxable to the beneficiary.

Ella is an agent for State Industry Insurance Company in Texas. After meeting with several family members, she learns that they would like to buy some life and health insurance contracts from her company. Which of the following statements is correct? Ella can sell insurance to her family members provided at least 25 percent of the total volume of her premiums comes from non-family members. Another agent from her company must be involved in the sale in order to prevent it from being considered controlled business. Ella will not be engaged in controlled business if she gets at least 50 percent of her total business from non-family members. Ella cannot sell any policies to her own family because it is considered controlled business.

Ella can sell insurance to her family members provided at least 25 percent of the total volume of her premiums comes from non-family members.

Who is the contingent beneficiary, second level, in the following beneficiary designation: "Sally Grant, wife of the insured, if she survives the insured; otherwise in equal shares to surviving children of the insured, if any; otherwise to Frank Grant, brother of the insured." Sally Grant the surviving children Frank Grant the insured's estate

Frank Grant The surviving children are contingent beneficiaries, first level.

Which statement does NOT describe the conditions, limitations, and restrictions imposed upon the care received through an HMO? The HMO controls when, where, and how the member can receive treatment. Hospitalization and surgery must be pre-approved by the HMO if it is to cover the cost of the stay or surgery. If a member is outside the HMO's service area, the member must contact the HMO within one hour of receiving treatment. In an emergency, a member may be excused from getting prior approval for treatment.

If a member is outside the HMO's service area, the member must contact the HMO within one hour of receiving treatment. All hospital stays and surgeries must be pre-approved by the HMO if it is to cover the cost of the stay or surgery.

Which of the following is not true about decreasing term insurance? It is used to cover needs that decrease over time. It is often used to provide for payment of mortgage balances. It can be converted to permanent insurance. It can be renewed.

It can be renewed. Decreasing term insurance provides coverage for decreasing needs, such as payment to survivors who would pay down a declining mortgage balance. It can be converted to a permanent policy, but it cannot be renewed.

If Dale decides not to exercise his guaranteed insurability rider on an option date, what becomes of that option date? It can be extended for 12 months. It expires and cannot be used later. It does not change anything; Dale can buy additional coverage at any time. It can be extended for six weeks.

It expires and cannot be used later.

Which one of the following most illustrates the biggest drawback to the human life value approach to determining insurance needs? It fails to consider a family's unique financial needs. It does not consider a family's typical expenses. It does not consider how much will be needed to replace lost income if the breadwinner dies before retirement. It does not consider how much a person is likely to earn in his or her career.

It fails to consider a family's unique financial needs.

For estate tax purposes, what is the value of any life insurance policy a person owns at his or her death? It is generally includible in the valuation of his or her estate. It is fully deductible from the insured's estate. It is subject to estate taxes at the beneficiary's death. It is includible in the beneficiary's estate.

It is generally includible in the valuation of his or her estate.

Which of the following statements about increasing term insurance is correct? It is normally sold as a rider on a permanent life policy. Premiums are generally lower than level term or decreasing term life insurance. The premium increases during the policy term as the death benefit increases. The cash value increases during the policy term.

It is normally sold as a rider on a permanent life policy. With this type of insurance, the death benefit increases over the term to a preset amount or at a preset rate. The premium normally remains level, though at a higher level than either level term or decreasing term.

When a deferred annuity is annuitized, which one of the following most correctly describes the tax treatment of the contract's "gain" (i.e., accrued interest) portion of each payment? It is tax exempt. It is taxable as ordinary income. It is taxable as capital gains. A 10 percent tax is applied.

It is taxable as ordinary income.

Martha was covered by a $50,000 group life insurance policy through her employer. After losing her job and deciding to take an early retirement, she talked to her agent about converting the group policy to individual coverage. Her agent informs her correctly that she can convert the policy to a term policy. Martha can be issued a conversion policy with no more than $50,000 in coverage. to convert to an individual policy, Martha must first provide evidence of insurability. the premium for the individual policy will be the same as the premium paid for group coverage.

Martha can be issued a conversion policy with no more than $50,000 in coverage.

Janet has been continuously licensed as an agent in Texas for the past 25 years. Her friend, Steven, is a nonresident licensee in Texas and every year completes his state's continuing education requirements. When they ask you for advice on meeting the Texas continuing education requirements, you inform them that Neither Steven nor Janet needs to comply with Texas's continuing education requirements. Both Steven and Janet must comply with Texas's continuing education requirements. Only Steven must complete Texas's continuing education requirements. Only Janet must complete Texas's continuing education requirements.

Neither Steven nor Janet needs to comply with Texas's continuing education requirements. Because Janet has continuously held a Texas insurance license for at least 20 years, she is exempt from the state's continuing education requirements.

Which of the following statements regarding the Texas Life, Accident, Health and Hospital Service Insurance Guaranty Association is correct? A producer may tell applicants their purchase of a life insurance policy will be protected even if the insurer becomes insolvent. Neither a producer nor an insurer may use the existence of the guaranty association to sell insurance covered by the association. A producer may not use the existence of the guaranty association to sell insurance, but insurers are permitted to do so in their advertising. An insurer may not use the existence of the guaranty association to market insurance, but producers are permitted to do so when meeting with an applicant for insurance.

Neither a producer nor an insurer may use the existence of the guaranty association to sell insurance covered by the association.

Larry has health insurance coverage with Company A and Company B. He has not notified either insurer of the duplicate coverage. If Larry has a claim, what recourse do these insurers have under the Other Insurance with Other Insurer provision? Both carriers can determine by mutual agreement which one will pay the claim. Both carriers will pay equal amounts of Larry's claim. One of the insurers can prorate the amount of benefit it will pay for an expense-covered loss if the other insurer is covering losses from the same event, which keeps Larry from receiving benefits in excess of his loss. One of the insurers can add a predetermined additional amount to the benefit it will pay to the amount the other insurer is covering.

One of the insurers can prorate the amount of benefit it will pay for an expense-covered loss if the other insurer is covering losses from the same event, which keeps Larry from receiving benefits in excess of his loss.

Premier Health Company is an HMO that is operating in several states. It wants to offer coverage in Texas but is not sure what is required under Texas law, and has asked you for advice. You inform Premier that it must meet all of the following requirements before it can operate in Texas EXCEPT: Obtain a fidelity bond of at least $100,000 on its officers and employees. Obtain a certificate of authority from the Texas Department of Insurance. Maintain a minimum net worth of $1.5 million. Receive at least $1 million annually in premiums.

Receive at least $1 million annually in premiums.

Which of the following best describes how group life insurance premiums are treated for tax purposes? The employer can deduct its premiums as a business expense, but employees cannot deduct their premium contributions. The employer can deduct its premiums as a business expense, and employees can deduct their premium contributions on their tax returns. Employees can deduct their premium contributions on their tax returns, but the employer cannot deduct its premiums. Neither employees nor their employers can deduct group life premiums on their tax returns.

The employer can deduct its premiums as a business expense, but employees cannot deduct their premium contributions. While employer contributions are deductible as a business expense, employee contributions are not tax deductible, though they can help reduce the tax impact of employer contributions.

All the following statements about family term riders with life insurance are correct, EXCEPT: A family term rider is an alternative to either a separate spousal rider or separate children's rider. The family term rider covers multiple family members (spouse plus children) with term insurance based on their ages. The policyowner can add or drop insureds on this type of policy at any time but must prove insurability if adding insureds. Children covered by this rider can convert their coverage to permanent coverage at age 21 without proof of insurability.

The family term rider covers multiple family members (spouse plus children) with term insurance based on their ages.

As a collateral assignee, Ned has first claim on the policy for the amount of the assignment. In these cases, what happens to the death benefit if the policyowner dies? The insurer pays the assignee the balance of the loan still owed out of the death benefit, and the rest of the death benefit goes to the beneficiary. The insurer pays the assignee the entire death benefit. The assignee and beneficiary split the death benefit. The policyowner decides at the time of the assignment how to divide up the death benefit.

The insurer pays the assignee the balance of the loan still owed out of the death benefit, and the rest of the death benefit goes to the beneficiary.

All the following statements about the paid-up dividend option with participating life insurance are correct, EXCEPT: The paid-up insurance option lets the policyowner use the dividends to pay up the life insurance policy early. A policyowner who chooses this option could pay up a whole life policy several years early, depending on the policy. After the policy is paid up, the policyowner does not owe any more premiums. The policy benefits will continue in force only until the policyholder reaches age 65.

The policy benefits will continue in force only until the policyholder reaches age 65.

All the following statements about increasing term insurance policies are correct EXCEPT: The premium is higher than that for a level term policy starting out with the same face amount. The premium increases over the term of the policy. The death benefit increases over the term of the policy. The increasing term coverage is typically provided by a rider on a base policy.

The premium increases over the term of the policy.

With respect to the duties of a producer in the sale of a health insurance policy, which of the following statements is correct? It is the producer's responsibility to determine the premium rate to be charged for a policy. The producer must give clear instructions to the applicant on how to complete the application and mail it to the insurance company. If the application requires a medical exam, the producer must explain to the applicant how to schedule the exam. The producer must determine the suitability of the recommended product for the applicant's needs and circumstances.

The producer must determine the suitability of the recommended product for the applicant's needs and circumstances. A producer sells, signs, and delivers health insurance policies to prospects and buyers. He or she must ensure that insurance applications are completed accurately and must submit them to the insurer.

Jim owns an individual disability income policy. He is also covered by a group disability income policy. If he suffers a disabling injury and his personal disability income policy contains a relation-to-earnings provision, what will happen? The total amount he can receive from both policies cannot exceed the benefit payable through his group policy. The total amount he can receive from both policies cannot exceed his current wages. The individual policy will pay benefits only after the group policy pays its maximum amount. The individual policy will pay benefits without taking into account what the group policy pays.

The total amount he can receive from both policies cannot exceed his current wages. A relation to earnings provision limits the total amount of disability benefits from all DI policies the insured owns to no more than a specified percentage of the insured's total wages.

For tax purposes, the term "self-employed person" includes all of the following, EXCEPT: a sole proprietor a C corporation's officers a partner an S corporation owner who owns more than 2 percent of the outstanding shares

a C corporation's officers

All of the following statements about future increase option riders in individual disability income policies are correct, EXCEPT: They allow the insured to buy additional coverage under the policy without providing evidence of insurability. The option to buy additional insurance under this rider typically must be chosen by a specified age. This type of rider is also called a guaranteed insurability rider. They allow the insured to buy additional coverage under the policy at no additional charge.

They allow the insured to buy additional coverage under the policy at no additional charge. A future increase option rider allows the insured to buy additional coverage under the policy without providing evidence of insurability. However, the insured must still pay for the coverage.

Which of the following best illustrates the difference between a life settlement and a viatical settlement? A life settlement requires a terminal illness for transfer to occur; a viatical settlement has no such requirement. To effect a viatical settlement, the policyowner must be diagnosed with a terminal illness; a life settlement does not require the diagnosis of a terminal illness for transfer to occur. A life settlement occurs before a life insurance policy matures; a viatical settlement occurs after the policy has matured. A life settlement pays the policy's cash value; a viatical settlement pays the amount of premiums paid into the policy.

To effect a viatical settlement, the policyowner must be diagnosed with a terminal illness; a life settlement does not require the diagnosis of a terminal illness for transfer to occur.

Which of the following statements about cash value withdrawals from a universal life insurance (UL) policy is correct? Total withdrawals cannot reduce the cash value to anything less than 50 percent of its full value. Withdrawals must be repaid. Withdrawals incur interest charges. Withdrawals reduce the death benefit dollar-for-dollar.

Withdrawals reduce the death benefit dollar-for-dollar.

A pregnant woman marries and is covered by her spouse's employer's group health plan. Will the plan cover the child? Yes, after the woman applies for coverage on behalf of the child. Yes, from the moment of birth. No, because the pregnancy was a pre-existing condition. No, because dependents must be covered under a separate policy.

Yes, from the moment of birth.

May one person qualify as a group and be eligible for group health insurance coverage? Yes, in some states a business group of one can qualify as a small group. Yes, if the coverage includes dependents. Yes, if the business is not a sole proprietorship. No, one person never constitutes a business group.

Yes, in some states a business group of one can qualify as a small group.

HMOs must provide their subscribers (enrollees) with evidence of coverage, which must include all the following EXCEPT the HMO's contact information a list of all approved medical care providers in the HMO's network a description of the coverage provided by the plan an explanation of the capitation arrangement the HMO has with providers in its network

a list of all approved medical care providers in the HMO's network

Unlike those who own a non-tax-qualified long-term care insurance (LTC) policy, people who own a tax-qualified LTC plan can: buy additional benefits unavailable to those who buy non-qualified policies deduct their premiums from their gross income receive an income tax credit for the premiums they pay add their premium (within limits) to other out-of-pocket medical expenses in qualifying for a medical expense deduction

add their premium (within limits) to other out-of-pocket medical expenses in qualifying for a medical expense deduction

Frank is a PPO member and just received information from his insurer which lists all of the covered services and benefits under his plan. As a PPO member, Frank is also entitled to all of the following information EXCEPT a current list of preferred providers each year. an explanation of his financial responsibility for paying premiums, deductibles and copayments. an explanation of his legal remedies if he disagrees with the insurer's decision, including his right to arbitration and mediation. a description of emergency care services provided.

an explanation of his legal remedies if he disagrees with the insurer's decision, including his right to arbitration and mediation As a PPO member, Frank must receive a current list of preferred providers at least annually.

As the policyowner, Mark can pledge or transfer ownership of his life insurance policy through which of the following means? assignment surrender disbursement withdrawal

assignment

Regardless of unique differences, every state's workers' compensation program offers all of the following, EXCEPT: compensation to a worker's spouse and dependents if the worker is killed in an industrial accident employer funding for the plan employer liability for work-related disabilities a worker may suffer benefits that are payable even if an injured worker sues for additional compensation

benefits that are payable even if an injured worker sues for additional compensation

An insured fears that his medical expense insurance policy will not provide enough coverage if he sustains a catastrophic illness. What is his best course of action? buy more than one policy buy an extended stay rider qualify for Medicaid buy a disability income rider

buy an extended stay rider An extended stay rider extends the number of days the policy will cover when the insured is hospitalized. The rider may extend coverage 30 days or longer, depending on the premium the insured is willing to pay.

A cancellable health insurance policy gives the insurer the right to do which of the following? cancel the policy or increase the premium only on the policy's anniversary date cancel the policy only on the policy's anniversary date but increase the premium at any time cancel the policy or increase the premium at any time by giving written notice require the insured to furnish evidence of insurability to renew the policy

cancel the policy or increase the premium at any time by giving written notice

Which medical plan covers doctor visits while the insured is in the hospital and physical therapy treatments following release from the hospital? limited medical policy basic hospital expense policy comprehensive major medical insurance supplementary major medical insurance

comprehensive major medical insurance A comprehensive major medical plan covers hospital expenses and doctor and surgeon fees. A basic hospital expense policy covers the cost of hospitalization, but not physician's fees.

Bill's health policy provides coverage for routine doctor visits, hospital expenses, surgical care, and medical treatment. Which of the following types of plans does Bill have? any provider plan limited choice of providers plan specified plan comprehensive plan

comprehensive plan

Which type of health plan covers a variety of conditions or medical services? any provider plan limited choice of providers plan specified plan comprehensive plan

comprehensive plan

Frank is insured by his employer's group health plan, as well as by his wife's health plan. Which provision prevents him from receiving duplicate benefits from both plans? double indemnity provision coordination of benefits provision portability provision spousal benefits provision

coordination of benefits provision The coordination of benefits provision avoids the duplication of benefits when a group participant is covered by more than one plan.

The purpose of utilization review in a managed care plan is to: monitor doctor behavior negotiate rates paid to doctors restrict a member's use of medical services develop managed care standards for providers

develop managed care standards for providers Managed care plans use utilization review to assess the need and appropriateness of health-care services for members. It controls over-utilization and reduces costs. Standards for coverage and treatment are developed.

Self-employed persons can deduct the premiums paid for insurance that covers them, their spouses, and their dependents for all the following types of insurance EXCEPT: dental insurance long-term care insurance disability income insurance medical expense insurance

disability income insurance

Jerry's life insurance policy instructs him to pay the premium to the insurer's home office. However, he has sent his payments to his agent for many years, and the agent has forwarded them to the insurer. What legal principal will prevent the insurer from now requiring that Jerry send the premiums to the home office? estoppel waiver misrepresentation fraud

estoppel

Jim's policy expired due to nonpayment of premium. His agent sends him a statement the following month without noting the lapse. If Jim pays the premium and later suffers a loss for which he files a claim, what will prevent the insurer from denying the claim? estoppel utmost good faith reasonable expectations waiver

estoppel

An insurer sends a premium statement to a former policyowner. However, the policy has lapsed for non-payment of premiums. Believing that the policy is still in effect, the policyowner pays the premium, which the insurer accepts. The insured then suffers a loss and makes a claim on the policy. What legal doctrine prevents the insurer from denying the claim? twisting discrimination materiality estoppel

estoppel Estoppel compels a party to relinquish a right it had no intention to relinquish when through its words, actions, or inactions, another party was reasonably led to act in a manner such that to allow the first party to enforce its right would be unfair to the relying party.

After Bob and Ellen's first child is born, the couple wants to add the baby to their policy, while increasing Ellen's coverage. They would probably buy which of the following? spouse/other insured term rider children's term rider family term rider living benefits rider

family term rider A family term rider covers multiple family members (spouse plus children) equally with term insurance. The policyowner can add or drop insureds on this type of policy at any time but must prove insurability if adding insureds.

To qualify for Social Security disability benefits, a worker must satisfy a waiting period of how many months? 90 days five months nine months one year

five months

Which of the following holds an insurance company's undivided investment account and the funds that support the contractual obligations of the insurer's fixed and guaranteed products? separate account funded account special account general account

general account The general account is the company's undivided investment account. It holds the funds that support the contractual obligations of the insurer's fixed and guaranteed products, such as whole life insurance policies and fixed annuities.

Which kind of health insurance policy gives the insurer the right, at the time of policy renewal, to change the premium rate on a class basis? noncancellable guaranteed renewable nonforfeitable adjustable premium policy

guaranteed renewable

ERISA protects enrollees in an employer-sponsored health care plan in each of these ways EXCEPT: ensuring access to information about the plan guaranteeing immediate processing of claims permitting temporary continuation of terminated group coverage. review of a coverage dispute

guaranteeing immediate processing of claims

The Texas Department of Insurance regulates the state's insurance industry. Which of the following is NOT one of its responsibilities? issuing certificates of authority to insurers overseeing the marketing practices of insurers imposing civil and criminal penalties on producers who violate the state's insurance laws licensing producers

imposing civil and criminal penalties on producers who violate the state's insurance laws

When Kendra applied for coverage through the Texas Health Insurance Risk Pool, she was being treated for complications from diabetes. If she is issued a policy, the earliest that it will begin paying for expenses that she incurs to treat her diabetes will be immediately. in 12 months. in six months. in three months.

in 12 months. If Kendra receives a policy through the Pool, the exclusion period for pre-existing conditions is longer than six months.

An employer's plan has a two-month waiting period. It also has 'grandfather' status under the Affordable Care Act and a pre-existing condition exclusion period. How many months after the waiting period ends will benefits begin? two months three months four months insufficient information

insufficient information The question cannot be answered without knowing the length of the pre-existing condition exclusion period.

An employer establishes flexible spending accounts for its employees. Which expenses will the accounts NOT cover? prescription medicines and medical supplies insurance policy premiums non-prescription medicines and medical supplies durable medical equipment

insurance policy premiums

All of the following are acceptable reasons for a producer to deliver a new life insurance policy in person to a client, EXCEPT: it is an opportunity to sell the client some additional life insurance. It is the producer's responsibility to fully explain the policy. It is an opportunity to reaffirm the customer's reasons for purchasing the policy. It is an opportunity to strengthen the client relationship.

it is an opportunity to sell the client some additional life insurance.

The type of life insurance policy delivery that requires delivery to the client in-person by the producer and an explanation of the conditions to be met is called: legal delivery personal delivery constructive delivery free-look delivery

legal delivery If any conditions are attached to delivery of a new life insurance policy, then legal delivery is required. Legal delivery of a policy requires personal delivery to the client and an explanation of the conditions to be met.

Which of the following types of health insurance covers specific conditions or provides benefits for specific health services? disability income policies long-term care policies limited benefits policies medical expense policies

limited benefits policies Limited benefits policies cover specific conditions or provide benefits for specific health services.

Which of the following types of health insurance covers the cost of medical care and medical services? disability income insurance medical expense insurance accidental death and dismemberment (AD&D) insurance Medicare supplement insurance

medical expense insurance Medicare supplement policies offer private insurance coverage that supports and enhances the care and services Medicare covers.

The USA PATRIOT Act strengthens federal enforcement in the fight on terror by, among other things, requiring that all financial institutions create, execute, and maintain training programs regarding: racketeering money laundering embezzlement fraud

money laundering

Juan went to the emergency room in the middle of the night because he was having a heart attack. If a non-network physician provides emergency care, then Juan's HMO can deny coverage. must pay for the care at its usual and customary rate or at an agreed rate, regardless of whether the physician is in the network or not. can apply all of the charges to Juan's out-of-network deductible. can pay only part of the emergency room expenses because the doctor was out of network.

must pay for the care at its usual and customary rate or at an agreed rate, regardless of whether the physician is in the network or not.

Bob was reading an advertisement for a long-term care policy which stated that the policy had a level premium, which means the policy is: noncancellable guaranteed renewable qualified cancellable

noncancellable Guaranteed renewable means that the insured has the right to continue the policy in force by timely paying premiums and the insurer cannot change any provision of the policy or rider while the insurance is in force.

Upon the lapse or surrender of a permanent life insurance policy, the cash value is available to the policyowner in the form of: distribution options nonforfeiture options surrender options settlement options

nonforfeiture options Nonforfeiture options give policyowners several ways to receive a policy's cash value upon lapse or surrender of the policy.

Which of the following is NOT a method used for providing accelerated benefits? additional premium or cost of insurance charge method percentage of death benefit method actuarial discount method lien method

percentage of death benefit method Where no additional premium or cost of insurance charge is payable in advance by the policy holder, and the acceleration-of-life-insurance benefit is not reduced by a present value actuarial discount, the insurer may consider the acceleration-of-life-insurance benefit, any administrative expense charges, any due and unpaid premiums and any accrued interest as a lien against the death benefit of the life insurance contract.

Which of the following statements regarding the tax treatment of medical expense insurance premiums and benefits is correct? premiums are not deductible and benefits are taxable premiums are not deductible and benefits are not taxable premiums may be deductible as an unreimbursed medical expense and benefits are taxable premiums may be deductible as an unreimbursed medical expense and benefits are not taxable

premiums may be deductible as an unreimbursed medical expense and benefits are not taxable Premiums paid for medical expense insurance may be added to other unreimbursed medical expenses. These may be deducted from taxable income to the extent they exceed a certain percentage of an individual's adjusted gross income (AGI). Benefits are not taxed.

Which of the following is NOT a standard category of life insurance? individual insurance industrial insurance qualified insurance participating insurance

qualified insurance

All the following are common forms of split-dollar plan EXCEPT: classic split-dollar reverse split dollar equity split-dollar qualified split-dollar

qualified split-dollar

Jack, an insurance agent, offers free season football tickets to anyone who buys a life insurance policy from him. This sales practice is called: replacement twisting disparagement rebating

rebating Twisting occurs when an agent makes a misrepresentation to a policyholder in order to induce the policyholder to lapse, forfeit, or surrender an existing policy and replace it with another.

Beth is a senior vice president at Acme Insurers. While reviewing some health insurance claims, she discovers that one of the company's agents has been filing illegal claims for financial gain. After discovering the fraudulent insurance act, Beth must notify the Texas Attorney General within 60 days to begin criminal proceedings against the agent. report the information in writing to the Texas Department of Insurance within 30 days notify the Texas Insurance Fraud Unit in writing within the next six months notify the insurance agent and revoke his or her license

report the information in writing to the Texas Department of Insurance within 30 days

Emily postpones buying a life insurance policy, believing that her family will use its savings to pay her final expenses if she dies prematurely. Which method is she using to deal with risk? retention avoidance reduction transfer

retention Rather than taking measures to reduce the risk to her family, such as buying life insurance, Emily has chosen to accept the exposure to the risk. This method of handling risk is known as risk retention.

Gracie has a Medicare Advantage policy and needs emergency care while traveling. However, there are no network providers nearby. What should she do? delay treatment until she locates a provider within the network see any suitable provider even if outside the network seek a provider in another network submit her expenses to her insurer for reimbursement

see any suitable provider even if outside the network A Medicare Advantage policy or certificate will cover emergency services that are not available through network providers.

What kind of policy only covers cancer, stroke, heart attack, and Parkinson's disease? medical surgical expense policy catastrophic medical policy limited disability policy specified disease policy

specified disease policy Specified disease policies only cover hospital or dental expenses, or they can cover a specific disease or condition.

Congress amended the Medicaid spend-down rules to eliminate: spousal abuse spousal participation spousal impoverishment spousal abandonment

spousal impoverishment At one time, requiring Medicaid applicants to reduce their assets often resulted in the impoverishment of the spouse. Today, spouses are protected from this unintended consequence.

Jim applied for a health insurance policy, which was issued with a waiver excluding any loss associated with cardiac illness. From a risk perspective, how has Jim been classified? preferred substandard standard declined

substandard Jim's application has been classified as substandard, which means that he falls below the insurer's standard guidelines. The insurer may attach a waiver to the policy that excludes from coverage any loss associated with a specified condition, or the insurer may charge an added premium.

All of the following are standard permanent exclusions found in life insurance policies EXCEPT: war aviation hazardous occupations and hobbies suicide

suicide A risk that is excluded from coverage means that it is not covered and that the policy's benefit will not be paid if death results from that risk. A suicide clause only restricts coverage until after a certain amount of time has passed, typically two years, and then death by suicide is covered.

Gina submitted a written notice of claim to her insurance company after she was injured in a skiing accident. After receiving the notice, Gina's insurance company must then supply a claims form to her within 15 days. pay the claim within two weeks. submit a proof of loss form to Gina within 30 days. pay benefits directly to the medical providers who provided services within 30 days.

supply a claims form to her within 15 days.

In a collateral assignment, current policyowners may (or must) do all the following, EXCEPT: change beneficiaries borrow against the cash value above the amount provided as security pay the premiums surrender the policy

surrender the policy Under a collateral assignment, the policyowner keeps most of the rights in the policy, including the right to borrow against the rest of the cash value above the amount provided as security.

Jason is a new agent and will be meeting with a potential client to discuss life insurance policies. He is not sure what type of questions he can ask the applicant about his sexual orientation or exposure to HIV, and has come to you for advice. You advise Jason correctly that he can never ask questions about whether the applicant has been diagnosed with AIDS. he can ask questions to determine the applicant's sexual orientation. the insurer can require the applicant to take an HIV-related test. he can ask questions about who the applicant lives with to determine whether he is at higher risk for HIV.

the insurer can require the applicant to take an HIV-related test.

What is the purpose of a disability reducing term insurance policy? to cover any outstanding loans a business might have if the business owner becomes disabled to reimburse a business for overhead expenses it incurs if the business owner becomes disabled to provide funds to a business when a key employee becomes disabled to provide funds to buy the interest of a business owner if he or she becomes disabled

to cover any outstanding loans a business might have if the business owner becomes disabled A business overhead expense policy reimburses a business for certain overhead costs if the owner becomes disabled.

With respect to annuity taxation, what purpose does the exclusion ratio serve? to determine the portion of each annuity payment that is taxable to determine the portion of each annuity payment that is excluded from tax to determine the portion of each annuity payment that is subject to a penalty tax to determine the portion of each annuity payment that is exempt from a penalty tax

to determine the portion of each annuity payment that is excluded from tax

For those who are not disabled, the Medicare Part A enrollment period is: any time after they turn age 62 the month they turn age 65 up to three months before or up to three months after the month they turn age 65 up to three months before or up to three months after their Social Security full retirement age (FRA)

up to three months before or up to three months after the month they turn age 65

In a viatical settlement arrangement, the party who enters into the arrangement with the policyowner is called a: viatical settlement provider viator viatical settlement broker viatical settlement purchaser

viatical settlement provider The viator is the insured policyowner who sells his or her policy to a viatical settlement provider.

When a life insurance policy is being replaced, the replacing insurer must notify the current policy's insurer of that fact before the replacing insurer can accept the application within 24 hours of receiving a completed application within five business days of receiving a completed application within 10 business days after issuing the replacement policy

within five business days of receiving a completed application