1135 Life & Health Insurance Exam
All of these settlement options would satisfy the conditions of a spendthrift clause EXCEPT a
lump-sum payment
The owner of a single premium deferred annuity is entitled to do all of these EXCEPT
make multiple premium payments
An employer that offers a qualified retirement plan (as opposed to a non-qualified plan) to its employees is eligible to
make tax-deductible contributions to the plan
An employer that offers a qualified retirement plan to its employees is eligible to
make tax-deductible contributions to the plan
The contract owner in a single premium deferred annuity (SPDA)
makes only one premium payment
A trustee-to-trustee transfer of rollover funds in a qualified plan allows a participant to avoid
mandatory income tax withholding on the transfer amount
Rick recently died and left behind an individual IRA account in his name. His widow was forwarded the balance of the IRA. The widow qualifies for the
marital deduction
An insurance contract may be voided if a misrepresentation found on the application is determined to be
material
The contractual rights that allow the owner of a deferred annuity to surrender the cash value are called
nonforfeiture options
In an individual retirement account (IRA), rollover contributions are
not limited by dollar amount
Dividends from a stock company are paid to stockholders, whereas in a mutual company, dividends are
paid to the policyowners
An insurance company can be liable for a producer's unauthorized acts
when the agency contract is vague concerning the authority given
What type of employee welfare plans are not subject to ERISA regulations?
Church plans
An employer has a group life insurance plan in place for his employees. How would an employee with health problems be treated in this situation?
Eligible for standard coverage on this plan
Which of the following would permit an insurer to delay a covered disability policy claim?
Elimination period
Which of the following statements BEST describes employer contributions for a health insurance policy offered by an employer?
Employer contributions are deductible
Which of the following statements BEST describes employer contributions for employer provided health insurance?
Employer contributions are deductible
Which of the following health insurance provisions requires that the application becomes part of the policy?
Entire Contract clause
Which statement concerning an adjustable life insurance policy is FALSE?
Evidence of insurability is always necessary when there is a change in premium
Group dental insurers typically limit coverage for late enrollees in all of the following ways EXCEPT
Excluding dental expenses which result from an accident
An officer for a corporation takes out numerous unsecured loans from the company's qualified retirement plan. Which of these rules is the plan in violation of?
Exclusive benefit rule
Which life insurance policy option allows the policyowner to have coverage equal to the net death benefit of the lapsed policy?
Extended term nonforfeiture option
Which nonforfeiture option allows the policyowner to have coverage equal to the net death benefit of the lapsed policy?
Extended term nonforfeiture option
Which statement concerning a decreasing term life policy is accurate?
Face amount decreases over the policy period
A policyowner fell behind on the premium payments of a whole life policy and it is now in the grace period. How much will the beneficiary receive if the insured dies during this grace period and the policy also contains an outstanding policy loan?
Face amount minus the loan balance and past-due premium
A life insurance policy that includes a return of premium rider will pay how much upon the insured's death?
Face amount plus total premiums paid
Kim has a life insurance policy which insures all the members of her family. The benefit supplement attached to a life insurance policy which insures all members of a family is called a
Family term rider
Which of these is NOT an allowable deduction made from premium payments of the cash value of a variable life insurance policy?
Federal premium taxes
When an annuity contract has been surrendered, how will the surrender charges affect the final contract settlement?
Final contract settlement will be reduced
In what way are insurance policies said to be aleatory?
Involves the potential for the unequal exchange of value
Premature distributions taken from a modified endowment contract (MEC) will result in a tax penalty of
"10%" 12.5% 15% 20%
The maximum prison sentence given under Federal law for unfair and deceptive insurance practices is
15 years
How many employees must an employer have for the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) to apply?
20 or more
Mary has a Health Savings Account (HSA). Distributions that have been made for anything other than qualified medical expenses are considered taxable and subject to a penalty of
20%
Nonqualified distributions from a health savings account (HSA) have a tax penalty of
20%
The tax penalty for nonqualified withdrawals from a health savings account (HSA) is
20%
An individual participant personally received eligible rollover funds from a profit-sharing plan. What is the income tax withholding requirements for this transaction?
20% is withheld for income taxes
Kate received a group accident and health termination notice. How many days does she have to apply for a converted policy?
31
In Ohio, when family coverage is in place, newborn children are automatically covered under a medical plan for a period of at least
31 days
What is the MAXIMUM number of employees an employer may have to qualify for medical savings accounts?
50
What is the MAXIMUM number of employees an employer may have for qualified medical savings accounts?
50 employees
How long does an individual have to "rollover" funds from an IRA or qualified plan?
60 days
The time limit an individual has to "rollover" funds from an IRA or qualified plan is
60 days
Which of these is NOT an advantage of term life insurance?
A cash benefit is provided if the insured is still alive at the end of the policy period
A universal life insurance policy can be described most accurately as a combination of
A flexible premium deposit fund and a monthly renewable term insurance policy
An insurance company writing business in a state other than the one in which it is domiciled is called
A foreign
Misrepresentation on the application is
Material
Which of these is a type of private insurance that helps pay for the out-of-pocket expenses involved under Medicare?
Medicare Supplement
Medicare Part B excess charges are covered by
Medicare Supplements
The agreement in which hospitals and physician groups in a specific area contract with an insurance company to provide medical care at predetermined costs is
Preferred Provider Organization (PPO)
Medicare Part B is an economical form of accident and health insurance for eligible individuals because
Premium payments are fully deductible from income
How are level term policies able to provide level premiums?
Premiums are averaged over the term of the policy
How do benefit payments fluctuate over time in a variable life annuity?
Reflects changes in the market value of assets in a separate account
All of the following claims settlement practices could initiate a cease and desist order EXCEPT
Refusing to pay a claim without conducting a reasonable investigation of all available information where material facts are in dispute
A person can receive Medicare Part A Hospital benefits, regardless of age, as long as the person has received which of the following benefits for at least 24 months?
Social Security Disability
Which one of these is NOT considered to be an element of an insurable risk?
Speculative risk
Claims settlement practices of insurers are regulated by:
State insurance departments
Which of these annuity features is meant to discourage withdrawals and exchanges?
Surrender charges
How does the cost for a survivorship life policy compare to the cost of combining two separate life insurance policies?
Survivorship life policy is lower
How are monthly life annuity benefit payments treated under a tax sheltered annuity (TSA)?
Taxed as ordinary income in the year received
Which of the following is TRUE if the owner of an IRA names their spouse as beneficiary, but then dies before any distributions are made?
The account can be rolled into the surviving spouse's IRA
What is the end result of an absolute assignment?
The assignee receives all incidents of ownership
What is payable to a policyowner if a whole life policy is surrendered prior to its maturity date?
The cash value
Which one of the following statements about the extended term insurance nonforfeiture option in a life insurance policy is true?
The cash value is used as a premium to purchase the coverage
Under the Fair Credit Reporting Act, which statement is true?
The consumer who was investigated must be advised that credit, insurance, or employment was denied because of an unfavorable report.
Which of these must be disclosed in a company's universal life policy?i
The policy's surrender charges
Inflation protection must be included in all long-term policies delivered in Ohio UNLESS
The policyholder rejects the coverage in writing
What kind of life insurance policy allows the policyowner the choice of investments along with adjustable premiums?
Variable universal life
Dividends from a mutual insurance company are paid to whom?
Policyowners
Which of these statements is true regarding an adjustable life insurance policy?
Policyowners are given the option of alternating between forms of term and whole life insurance
Which of these policies is considered to be a comprehensive health policy?
Major medical policy
Which would be described as a beneficiary designation by class?
Children of the insured
Beth is a surgeon who has an own-occupation disability income policy. She was injured six months ago and has been unable to return to her practice. Her monthly benefit from the policy is $15,000. During this time, Beth has been working part-time at a local boutique and receives $2,000 monthly. What is her ongoing monthly benefit while she is unable to perform her surgical duties?
$15,000
An individual working part-time has an annual income of $25,000. If this individual has an IRA, what is the maximum deductible IRA contribution allowable?
$25,000
Larry has a Major Medical Expense policy for his family with a $1,000 per family/per year deductible and an 80/20 coinsurance provision. If Larry's family files four claims of $400, $800, $100, and $700 in one year, how much will the insurance company pay?
$800
Premature IRA distributions are assessed a penalty tax of
10%
What is the maximum number of employees (earning at least $5,000) that an employer can have in order to start a SIMPLE retirement plan?
100
Medicare will cover a maximum of how many days per benefit period in a skilled nursing facility?
100 days
What minimum percentage of all eligible employees must participate in a group life insurance plan if the premiums are completely paid for by the employer?
100%
Which of these is NOT a reason for a business to buy key person life insurance?
A pension deficiency if the key employee dies
Which of these is an accurate statement regarding a fixed period settlement option on a life insurance policy?
A portion of the payments paid to the beneficiary stems from interest generated from the proceeds
Which of the following must a health insuring corporation (HIC) provide to prospective plan subscribers at or before the point of sale?
A solicitation document
What do Limited accident and health policies normally cover?
A specific illness or event
What do Limited accident and health policies normally cover?
A specific illness or occurrence
A provision in a life insurance policy settlement agreement that prohibits the beneficiary from "... commuting, anticipating, encumbering, alienating, withdrawing, or assigning ..." any portion of the proceeds prior to actual receipt from the company is called
A spendthrift clause
Ohio requires advertisements for accident and health insurance policies covering ONLY a specified illness to prominently display
A statement that the policy is limited
Which of these is NOT considered the responsibility of a producer in the underwriting process?
Choosing the final approval date
Which of these group plans would a claim likely involve the payment of federal estate taxes?
Accidental death
Mike recently lost sight in both eyes. He has a policy that pays a lump sum benefit for this injury. What type of insurance does Mike have?
Accidental death and dismemberment
Which of the following is NOT covered by a comprehensive long-term care policy?
Acute care
A comprehensive long term care policy covers expenses for all of the following EXCEPT
Acute care provided in a hospital
Which statement regarding a single premium whole life insurance policy is NOT correct?
Additional premiums may be charged under certain conditions
What is the reason that insurance companies require a minimum number of employees participating in a group insurance plan?
Adverse selection is minimized
Which statement regarding universal life insurance is correct?
Cash values have a guaranteed minimum interest rate
When an accident and health insurance policy provision is in conflict with the statutes of Ohio, it is
Amended to conform to the minimum statutory requirements
Which of the following is NOT a valid contract exchange?
An annuity exchanged for a life insurance policy
Rick is a disabled worker receiving Social Security benefits. What are his wife and dependent children eligible for?
An income benefit which is a percentage of his primary insurance amount
What type of policy can group term life insurance normally be converted to?
An individual permanent policy
Which of these factors do NOT affect life insurance premium rates?
An insurer's rating
Which statement is INCORRECT concerning a tax-sheltered annuity (TSA)?
Annual investment gains are included in participant's gross income
During the liquidation phase of an annuity contract, to whom are the income benefits normally payable to?
Annuitant
Many deferred annuity contracts waive the surrender charge when the
Annuitant dies or becomes disabled
By reading and signing the insurance application, the applicant should realize that
Any false statements could lead to loss of coverage
Under HIPPA rules, a medical plan's pre-existing conditions exclusion may be reduced by
Any period of treatment in the six months prior to enrollment in the plan
An applicant submits a life insurance application where an investigative consumer report is used in the underwriting process. Which of these statements is true?
Applicant has a right to receive a copy of the report
Which of the following situations would a medical exam NOT be required for an individual health insurance applicant?
Applicant's family members have a history of cancer
In what form can an insurance company provide an accidental death benefit on a life policy?
As an optional policy rider
How is a collateral assignment used in a life insurance contract?
Assigns specific ownership rights to a creditor
How many employees must an employer have for the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) to apply?
At least 20
In the event of premium default, which life insurance provision will utilize the cash value to keep the policy in force?
Automatic premium loan
Which statement regarding the cash value of a whole life insurance policy is correct?
Available to the policyowner when policy has been surrendered
What are reasonable and customary charges for health insurance primarily based on?
Average charges within a geographic region
Which of the following statements BEST describes a double indemnity provision in travel accident insurance?
Benefits are doubled under conditions stated in the policy
Which of these statements regarding Major Medical Expense insurance is NOT true?
Benefits are paid on a capitation basis
Which of the following statements BEST describes disability buy-sell insurance policies?
Benefits are typically tax-free
The Change of Occupation provision in a Disability Income policy states that, in the event the insured changes to a less hazardous occupation, which of the following may apply?
Benefits can be increased in the event of a covered claim
Tim had an on-the-job accident and collects benefits from his individual disability income policy. What factor could possibly reduce these benefits?
Benefits he receives from workers compensation
A producer who makes an agreement that unreasonably restrains the business of insurance may have violated regulations against
Boycott, coercion and intimidation
A disabled business owner who has payroll and business expenses paid for has what kind of insurance policy?
Business overhead expense
Which of the following is NOT an allowable exclusion for long-term care insurance policies?
Care for incurable conditions
Which statement regarding the waiver of premium rider is accurate?
Cash payments are not directly provided to the policyowner
A policyowner suffers a covered accident and health insurance loss on June 30 and submits the proof of loss to the insurer July 10. If the policyowner cancelled the coverage on July 2, how will the insurance company handle the claim?
Claim must be paid after proof of loss is received
Which of the following statements is true regarding accident and health insurance claims that reimburse on an indemnity basis?
Claims can be sent directly to the insured
Prepaid dental plans differ from most other types of dental plans in what way?
Closed panel of dentists can only be used
What must be given to a life insurance applicant when the agent receives an application and the initial premium?
Conditional receipt
An accident and health insurance policy's premium requirements are set forth in which of the following provisions?
Consideration clause
Which report contains information regarding an individual's general reputation and credit standing?
Consumer report
What does a Mandatory Second Surgical Opinion provision provide to an employer-paid health insurance plan?
Containment of the employer's premium cost
What does a Mandatory Second Surgical Opinion provision provide to an employer-paid health insurance plan?
Control of the employer's premium cost
Which term refers to insurance written on the interests of the licensee, the licensee's employer, or the licensee's immediate family?
Controlled business
What does the rehabilitation benefit cover in a disability income policy?
Covers the cost of all out-of-pocket expenses while a disabled worker is unable to work
Which of the following is NOT an intended use of an annuity?
Create new funds upon the death of a wage-earner
In Ohio, a period of accident and health insurance coverage which may be applied to reduce the length of a pre-existing condition exclusion under a new plan is called
Creditable coverage
Proceeds of the viatical settlement contract could be subject to the claims of
Creditors
ABC Partnership is a business with a limited number of partners. Which disability buy-sell agreement is best suited for this business?
Cross purchase agreement
Which of the following disability buy-sell agreements is best suited for businesses with a small number of partners?
Cross-purchase agreement
Linda is covered with long-term care insurance and has early-stage Alzheimer's. She is still able to reside in her home while receiving primary care, as opposed to moving into a nursing home. All of the following long-term benefits encourage this EXCEPT for
Custodial care
Mike applied for life insurance and was issued a conditional receipt. He is later found to be an acceptable risk and is issued a policy. What is considered to be the effective date of this insurance contract?
Date the conditional receipt was issued
All of these are used to prevent adverse selection in a group dental plan EXCEPT
Decreased employee participation
Health providers are compensated by a preferred provider organization (PPO) for normal dental procedures by what means?
Decreased fee schedules
All of these are used to prevent adverse selection in a group dental plan EXCEPT
Decreased participation
In what way is an insurance policy impacted by an accelerated benefit payment?
Decreases the death benefit
Which type of life insurance typically offers mortgage protection?
Decreasing term
Which of these life insurance policies do NOT contain cash value provisions?
Decreasing term life
To which of the following group plans do HIPAA rules NOT apply?
Disability income
What type of group plan is excluded from HIPPAA statutes?
Disability income
Which of these noncontributory group plans would a claim likely result in the payment of federal income taxes?
Disability income
An employee requested that the balance of her 401(k) account be sent directly to her in one lump sum. Upon receipt of the distribution, she immediately had the funds rolled over into an IRA. What is the tax consequence of the distribution sent to this employee?
Distribution is subject to federal income tax withholding
Mutual insurers pay dividends to participating policyowners if the insurer has which of the following?
Divisible surplus
Which of these is usually true of an HIC prescription drug plan?
Drugs are dispensed through participating pharmacies
Which statement about group life insurance is INCORRECT?
Each employee requires evidence of insurability
Which life insurance settlement option pays a stated monthly amount until the proceeds are gone?
Fixed amount option
Major Medical policies are typically characterized by which of the following?
Flat deductible
Which of the following features a guaranteed interest rate, flexible deposits, deferred taxation, and death benefits equal to the cash value?
Flexible premium fixed annuity
Which of these documents is signed by an applicant at policy delivery that certifies no change in health has occurred since the original application date?
Good health statement
The administrator for a company's pension plan bought an accumulation annuity contract for its 2,000 employees. All 2,000 participating employees received certificates of participation. What kind of contract is this?
Group deferred annuity
Which of these is a major difference between a health insuring corporation (HIC) and private commercial insurance companies?
HIC's operate on a prepayment system while private commercial insurers are on a reimbursement system
Which of these statements regarding HIC's is INCORRECT?
HIC's operate on a reimbursement basis
An accident and health plan that typically covers only the services of approved providers is called a(n)
HMO plan
Terry receives long-term physical therapy at her home. What type of insurance would cover this service?
Home health care
Terry receives long-term physical therapy at her residence. What type of insurance would cover this service?
Home health care
Tom has a qualified retirement plan with his employer that is currently considered to be 80% "vested". How can this be interpreted?
If Tom's employment is terminated, 20% of the funds could be forfeited
When compared to a fixed annuity, a variable annuity has what distinguishing feature?
Investment risk is assumed by the purchaser
Medicare Part A covers what type of care?
Skilled nursing facility care
A characteristic of a Preferred Provider Organizations (PPO) is
If service is obtained outside the PPO, benefits are reduced and costs increase
A characteristic of a Preferred Provider Organizations (PPOs) is
If service is obtained outside the PPO, benefits are reduced and costs increase
A single premium deferred annuity sometimes contains a bailout feature. Which statement regarding this feature is correct?
If the interest rate falls below a certain level, the surrender charge is waived
XYZ Insurance Company gives direct authority to its producers to sell insurance through an agency contract, but nothing is stated regarding the collection of premiums. Which authority grants the producer the right to collect premiums?
Implied
Which life insurance clause prohibits an insurance company from challenging the validity of the contract after a stated period of time has passed?
Incontestable
Which statement regarding the certificate of insurance is accurate?
Indicates proof of an employee's insurance coverage
The type of health insurance in which underwriting procedures are the most restrictive is
Individual
Which of these are NOT factors that influence group health insurance underwriting?
Individual physical examinations
All of these are considered features of whole life insurance EXCEPT
Initial cost is lower than for an equivalent amount of term insurance
Which of these procedures is NOT designed for ambulatory care centers?
Inpatient surgery
The Medical Information Bureau consists of members from which group?
Insurance companies
Which of these situations would an accelerated (living) benefit rider provide funds to an insured?
Insured expected to be confined to a nursing home for life
Which statement is correct regarding the waiver of premium rider in a life insurance policy?
Insured is relieved of premium payments in the event of total disability
Which of these occurrences could justify an insurer to reduce premiums?
Interest factor increase
Which of these statements is NOT true regarding a cash value loan against a life insurance policy?
Interest payments made by policyowner are tax-deductible
An applicant for accident and health insurance has a risk factor that is similar to a majority of the insurer's other applicants. What will be the likely outcome of this applicant?
Issued with a standard premium rate
The initial premium for a life insurance policy is typically handled in what way?
It is typically obtained by the producer and sent to the insurer
Which life insurance settlement option pays lifetime benefits to two or more people?
Joint and survivor
Which of these pays an income to two or more annuitants until the death of the last annuitant?
Joint and survivor annuity
All of these are duties of a producer when delivering an insurance policy EXCEPT
Leave a conditional receipt with client
What is the guaranteed cash value of a whole life insurance policy when the insured turns 65 years old?
Less than the policy's face amount
Laura added a children's rider to her life insurance policy. What type of coverage was added?
Level term
Which of these is NOT a typical life insurance nonforfeiture option?
Life income annuity
Which of these do NOT indicate the presence of insurable interest in a life insurance contract?
Lifelong friendship
Which of these is NOT relevant when determining the amount of personal life insurance needed?
Local unemployment rate
Which of these would NOT likely qualify as a presumptive disability?
Loss of sight in one eye
Which of these statements reflect an accurate portrayal of Medicare SELECT?
Lower premiums are normally given in exchange for the insured using preferred providers
Which of these plans is considered to be a comprehensive plan?
Major medical
If an agent misleads or fails to adequately disclose the title and true nature of a policy offered to a potential insured, it may be considered
Misrepresentation
A life policy that has premiums that are lower than normal during the early years is called
Modified life
Which of the following normally pertains to an immediate annuity?
No accumulation period
How would preventative care be encouraged in a dental plan?
No deductible or coinsurance required on teeth cleanings
Medicare Supplement insurance requires an individual to be at least how old for open enrollment?
No minimum age
How are the premiums for an individual disability income policy treated for tax purposes?
No tax deduction
The disability income policy most likely to have been issued on a substandard basis is
Non-cancelable with a health condition exclusion rider
The disability income policy most likely to have been issued on a substandard basis is:
Non-cancelable with an exclusion rider
When funds are shifted straight from one IRA to another IRA, what percentage of the tax is withheld?
None
When funds are transferred directly from one IRA to another IRA, what percentage of the tax is withheld?
None
All of these statements correctly describe an aleatory contract EXCEPT
Only one party makes any kind of legally enforceable promise
All of these are normally covered under most dental plans EXCEPT for
Oral cancer
Most prepaid dental plans cover
Oral exams
Which tax would an IRA participant be subjected to on distributions received prior to age 59 1/2?
Ordinary income tax and a 10% tax penalty for early withdrawal
When a deferred annuity is surrendered, who must sign the authorization to do so?
Owner
Which of the following is NOT a function of accident and health insurance?
Pays a death benefit as a result of natural causes
Twisting means
Persuading an insured, to the insured's detriment, to switch policies
Which of these are NOT factors that influence group health insurance underwriting?
Physical exams of group members
Which of these plans allow a participant to choose either a network or non-network provider at the time when medical care is needed?
Point-of-service
Which of these statements accurately portrays an adjustable life insurance policy?
Policy can alternate between forms of term and whole life insurance
These are all accurate statements regarding universal life insurance EXCEPT
Policy loans are not permitted
Which statement regarding an adjustable life insurance policy is NOT true?
Policy loans are not permitted
Which of the following statements BEST describes disability buy-sell insurance policies?
Policy proceeds are typically received tax-free
Straight whole life insurance can be accurately described in all of these statements EXCEPT
Policy protection normally expires at age 65
The beneficiary of a life insurance policy is normally chosen by whom?
Policyowner
When a producer submits an application that reveals personal information regarding the applicant, who supplies the privacy notice?
Producer
A producer's authority to bind an insurer to an insurance contract may be granted in the:
Producer's appointment with the insurance company
A Medicare Supplement policy is required to do which of the following?
Provide a 30 day free-look period
What is considered interstate travel under the Federal Fraud and False Statements Act?
Puerto Rico
In long-term care insurance, the guarantee of insurability option provides the insured with the ability to
Purchase additional insurance at a later date
What type of risk involves the potential for loss with no possibility for gain?
Pure
Splitting the commission with the buyer on a sale of insurance is known as
Rebating
How are qualified Roth IRA distributions normally treated for tax purposes?
Received income tax-free
An insured covered under a Disability Income policy is disabled and collecting benefits for a period of two months. He returns to work and is again disabled from the same cause, whereupon benefits continue to be paid. This is an example of which of the following?
Recurrent disability
Which of the following statements is INCORRECT about why the government provides insurance?
Reduce fraudulent claims
Which of these would be the likely course of action taken by an insurer when handling a substandard-risk applicant for disability income insurance?
Reduce the benefit period
How do preferred provider organization (PPO) dental plans compensate providers for standard dental procedures?
Reduced fee schedules
An insurer has a contractual agreement which transfers a portion of its risk exposure to another insurer. What kind of contract is this?
Reinsurance
Which of these is NOT a standard underwriting action for accident and health insurance?
Removing a policy's provisions
Which of the following is NOT a basic underwriting action for accident and health insurance?
Removing uniform policy provisions
The marketing of Medicare Supplements is regulated to prevent all of the following EXCEPT
Replacement of any existing coverage
Under Ohio standards for marketing long-term care coverage, all of these are prohibited sales practices EXCEPT
Replacing existing coverage
What is the insurer responsible for when a producer is acting within the scope of authority granted in the agency contract?
Responsible for acts by the producer that are authority only
Which of these factors does NOT influence an applicant's need for life insurance?
Self-maintenance expenses
Long-term care insurance policies may exclude coverage for all of the following EXCEPT
Senile dementia
When an annuity contract has been surrendered, how will the surrender charges affect the final contract settlement?
Settlement will be reduced
Which of these types of policies is considered a whole life policy?
Single-premium life
When would evidence of insurability be required for a person already covered with a variable universal life policy?
The death benefit is increased
What happens when a policyowner borrows against the cash value of his life insurance policy?
The death benefit would be reduced by the outstanding loan balance
Whole life insurance policies guarantee all of the following EXCEPT
The dividend scale
Who is normally considered to be the owner of a 403(b) tax-sheltered annuity?
The employee
Which statement concerning adjustable life insurance is accurate?
The face amount and premiums can be changed simultaneously by the policyowner
All of these statements concerning group credit life insurance are false EXCEPT
The face amount is determined by the outstanding loan balance
Peter, age 50, surrenders his modified endowment contract (MEC). How is the gain treated for federal income tax purposes?
The gain is added to his gross income and a penalty tax is assessed on the gain
Which statement is true if a member suffers a broken leg while outside the insuring corporation (HIC) service area?
The injury will be covered as an emergency health service
Which statement regarding a fixed period settlement option is correct?
The installment payment amount is determined by the total number of installments
Who reports an agent's termination of appointment to the Director?
The insurer
Which statement concerning a deferred annuity is correct?
The owner can be the beneficiary, annuitant, or neither
Who is normally considered to be the owner of a 403(b) tax-sheltered annuity?
The participating employee
All of the following are causes for termination of an employee's group insurance coverage EXCEPT
The plan's coinsurance limit is reached
Which of the following statements about the contestability of a life insurance policy is true?
The policy can be contested by the insurer only during the first two years of the contract
A life insurance illustration showing future premiums being paid out of nonguaranteed values must disclose that
The policyowner may need to resume premium payments depending on actual results
How is a claim handled by a health insurer if it occurs during the policy's grace period?
The unpaid premium is deducted from the benefit payment
How is a claim handled by a health insurer if it occurs during the policy's grace period?
The unpaid premium is deducted from the reimbursement
In accordance with federal fraud and false statements regulation, a prohibited person cannot transact insurance business in without
The written consent of the Commissioner
When does the owner's contractual rights begin under an individual annuity contract?
Time of purchase
Which of these situations would NOT potentially involve a prison sentence under Federal law?
Transacting insurance with a nonresident license
Which of the following BEST describes a "partial disability"?
Unable to perform one or more job duties
At what point must a life insurance applicant be informed of their rights that fall under the Fair Credit Reporting Act?
Upon completion of the application
Under what circumstances must an agent provide his or her business records to the Director of Insurance?
Upon request of the Director
For long-term care insurance, when does Ohio require provision of a written notice of available insurance counseling programs?
When coverage is solicited
When must interest income in a flexible premium deferred annuity be reported for federal income taxes?
When distributions are received from the contract
In which situation could the agent of an insurer be personally liable?
When the agent performs an act which is prohibited in the agency contract
Under which circumstance is the interest rate guaranteed within a market value adjusted annuity?
When the contract has been in force for the period specified in the policy
When does interest income for a flexible premium deferred annuity get reported for federal income taxes?
When the distributions are received from the contract
When does the producer give a premium receipt for a life insurance application?
When the initial premium has been collected with the application
A policyowner is permitted to take out a policy loan on a whole life policy at what point?
When the policy has accrued cash value
Pete is covered by a group health insurance plan which covers employees in multiple states. This plan is governed by the laws of which state?
Where the master contract was issued
Pete is covered by an employer-provided group health insurance plan, which covers employees in multiple states. This plan is governed by the laws of which state?
Where the master contract was issued
Which life insurance policy would be eligible to have an automatic premium loan provision?
Whole life
To resolve written grievances received, each HIC specialty plan must establish
a complaint system
Medicare can be described as
a federal health program for individuals over the age of 65 or permanently disabled
When dealing with single-life annuities, there is only one
annuitant
When there is a named beneficiary on a life insurance policy, the death benefits
are paid directly to the beneficiary without interference from the insured's creditors
In a qualified retirement plan, the yearly contributions to an employee's account
are restricted to maximum levels set by the IRS
In a qualified retirement plan, the yearly contributions to an employee's account
are restricted to maximum limits set by the IRS
A source of supplemental income for a life insurance policyowner can be derived from the policy's
cash value
An employee welfare plan exempt from ERISA regulations would be
church plans
An annuity's accumulation period can usually
continue after the purchase payments stop
Interest is credited to a fixed annuity no lower than the
contract guaranteed rate
The interest rate credited to a fixed annuity does not fall below the
contract guaranteed rate
Al surrenders his life insurance policy for its cash value. The total of the premiums paid into the policy minus total dividends received in cash or used to offset premiums is referred to as the
cost basis
Reductions in coverage are one feature of _______ in Health insurance policies.
cost containment
What action does an insurance company take under the rehabilitation benefit in a disability income policy?
covers the cost of the rehabilitation necessary to help a disabled insured return to work
A qualified profit-sharing plan is designed to
distribute a portion of company earnings to its employees
Non-occupational disability coverage is designed for
employees who suffer non-work related disabilities, since work-related disabilities are covered by Workers' Compensation
A prepaid dental plan has an agreement in place with a network of dentists which
establishes amounts that are considered full payment for services rendered
The difference between a doctor's actual charges and the amount approved by Medicare is called a(n)
excess charge
The powers directly given to a producer in an agency contract are called
express
ABC Company is attempting to minimize the severity of potential losses within its company. The company is engaged in risk
reduction
A health insuring corporation's (HIC) solicitation document is designed to
furnish detailed information regarding the medical plan
When a health insurance policy includes a Mandatory Second Surgical Opinion provision, the insured must
get a second opinion for specified elective surgeries
A life annuity with period certain is characterized as
guaranteeing benefit payments for a stated minimum period of time
In Ohio, when an individual is covered under a small employer's accident and health plan, the pre-existing conditions exlcusion period may be partially or wholly satisfied by
having creditable coverage with a previous employer
In life insurance, the needs approach is used mostly to establish
how much life insurance a client should apply for
Trade association groups that are eligible for group medical benefits normally are
in the same industry
When premiums are calculated, one component would be the expenses of the
insurance company
The insurance coverage in a variable life insurance policy may fluctuate according to
its underlying investments
The insurance coverage in a variable life insurance policy may vary based on the value of
its underlying investments
When the extended term life nonforfeiture option is chosen, the coverage will be
level term for a stated period of time
Inpatient psychiatric care is covered under Part A Medicare for 190 days per
lifetime
An annuity owner has a life annuity which provides benefit payments for a minimum number of years, regardless of when the annuitant dies. The contract feature of this annuity is called
period certain
Which action will trigger a tax penalty on premature distributions from a modified endowment contract (MEC)?
policy loans
The standard provisions of an accident and health insurance policy require that the
policy, attached papers, and endorsements constitute the "entire contract"
Who elects the governing body of a mutual insurance company?
policyholders
Where is the difference between a standard risk and a substandard risk demonstrated?
premium charges
Where is the difference between a standard risk and a substandard risk reflected?
premium charges
Any employee insured under a group life insurance plan is normally
protected by term life insurance
The automatic premium loan provision can be accurately described as a
provision that authorizes a policy loan to pay an overdue premium at the end of the grace period
During an annuity's liquidation phase, the annuitant normally
receives benefit payments at regular intervals
The following are all elements of a legal contract EXCEPT
recorded evidence
When a health insurance policy includes a Mandatory Second Surgical Opinion provision, the insured must
seek a second opinion for specified elective surgeries
When issuing disability income coverage on a substandard risk, an insurance company may
shorten the benefit period
Contributions made by an employee to a qualified retirement plan are required to be
subject to a vesting schedule
The back-end charge typically associated with an annuity that has been cancelled during the early contract years is called a
surrender charge
The premiums paid by an employer for his employee's group life insurance are usually considered to be
tax-deductible to the employer
The State Guaranty Association guarantees
that a claim will be paid if an admitted insurer becomes insolvent
Fee-for-service is an accident and health insurance benefit payment model in which
the cost of each service is scheduled as outlined in the policy
The insured's consideration given for a health insurance policy is
the first premium payment and the application
The insured's consideration given for a health insurance
the initial premium payment and the application
Rick recently died and left behind an individual IRA account in his name. His widow was forwarded the balance of the IRA. The transfer of Rick's IRA account balance to his surviving spouse qualifies for
the marital deduction
When a Medicare supplement policy is purchased during the open enrollment period
the policy must be issued regardless of health status
The reason for backdating a policy is
to obtain a premium rate based on an earlier age
An owner's cost basis for a deferred annuity is typically the same as the
total premiums paid
An insurance policy that can also be classified as a securities product is called
variable life insurance
Pat has a disability income insurance policy that covers disabilities arising from a work-related illness or injury. The amount of his disability income payments for an on-the-job injury may be reduced by
workers compensation benefits already paid
Medicare supplement insurance that provides a preventative medical care benefit will often cover
yearly physical examinations