CT Life and Health State Exam Simulator
an individual who intentionally violates a Connecticut insurance law may be subject to a MAXIMUM fine of
$5,000
After conducting a hearing, the Commissioner is empowered to issue a cease and desist order. A violation of such an order is punishable by a monetary fine not to exceed
$50,000
Any administrative action taken against a producer MUST be reported to the Commissioner within____days after the final disposition?
30 days
The maximum prison sentence given under federal law for unfair and deceptive insurance practices is
15 years
To be classified as a small employer in Connecticut, an employer must employ how many eligible employees?
1 to 50
How long is individual medical expense insurance normally written for?
1 year.
The free look period provided in a life insurance policy is usually ____days
10
In Connecticut, a producer cannot use his/her license for primarily writing controlled business. In order to conform to this requirement, annual premiums collected on controlled business cannot exceed_____of total premiums.
10%
Staring in 2016, businesses with up to______employees will be defined by the ACA as a "small business"
100
John received a one-time distribution of $50,000 from his modified endowment contract (MEC). Prior to that, the contract's cash value was $150,000, the contract investment amount was $100,000, and the death benefit was $500,000. What percentage of the $50,000 distribution was taxable as ordinary income?
100 %
Under HIPPA, a medical plan late enrollees may be excluded for pre-existing conditions for a maximum of
18 months. The maximum length of a pre-existing condition exclusion period is 12 months after the enrollment date , or 18 months in the case of a "late enrollee"
In Connecticut, a temporary license may be issued for a period of not to exceed_____ days.
180 days
After a life insurance policy has been in force for more than _____ years the policy is considered incontestable.
2 Years
Nonqualified medical expense distributions from a Health Savings Account (HSA) have a tax penalty of
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
A producer must complete_____credit hours of continuing education for each licensing period.
24
A licensee whose name or address changes must notify the Commissioner within_____days
30
Any administrative action taken against a producer MUST be reported to the Commissioner within_______ days
30
How many days notice does the Affordable Care Act require insurers to give before rescinding coverage?
30 days
Social security disability income requirements state that in order to become fully insured on a permanent basis, you must have worked in a covered occupation for
40 quarters
An individual in Connecticut who charges a fee for giving advice on an insurance policy must be licensed as a consultant if the advice is given to
A policyholder
What is the best way to define life insurance replacement?
A transaction in which a new life insurance policy is purchased and an existing life insurance policy is surrendered.
ALREADY KNOW
ALREADY KNOW (age 26)
Which benefit is normally payable to a life insurance policyowner when the insured's life expectancy has been severely limited?
Accelerated (living) benefit
Which of the following is NOT covered by a comprehensive long-term care policy?
Acute care
The highest mortality rate belongs to which group ?
Age 70 males
An individual who purchases a modified life insurance policy expects
An improvement in future income
A television advertisement features a health insurance product that is endorsed by a specific group. In this advertisement
Any control by the insurer over this group must be disclosed
According to HIPPA regulations, which of the following may reduce a medical plan's pre-existing conditions exclusion?
Any period of prior coverage
Julie is in need of assistance with one or two activities of daily living. She may be eligible for a(n)
Assisted living facility
What are the reasonable and customary charges for health insurance primarily based on?
Average charges within a geographic region
A policyowner pays the first annual premium for a $50,000 life insurance policy and dies one month after the policy effective date. Which of these statements is normally true?
Beneficiary receives $50,000 income-tax free
In long-term care insurance, what is the length of time for which claims will be paid?
Benefit period . The benefit period is the length of time for which claims will be paid.
Which of these statements regarding Major Medical Expense insurance is NOT true ?
Benefits are paid on a capitation basis
Pat is covered by 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
Benefits paid under workers compensation
Any agreement that unreasonably restrains the business of insurance is a violation of which Unfair or Prohibited Insurance Practice?
Boycott, coercion and intimidation
Which of the following is considered to be a prosthodontic dental procedure?
Bridgework
A life settlement____________ negotiates a life settlement between a policyowner and a life settlement provider.
Broker
For employees covered in multiple states under a group health plan, jurisdiction rules cannot alter
COBRA laws
Which of these is true regarding the exchange of consideration among parties involved in an insurance contract?
Can be unequal
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 payment is not directly provided to the policyowner
Medical costs in birthing centers are lowered by using
Certified nurse midwives.
What type of employee welfare plans are not subject to ERISA regulations?
Church plans
All of these are considered to be a violation of the Federal Fraud and False Statements Act EXCEPT
Claims reimbursement
A consultant derives their income from which source?
Clients
Prepaid dental plans differ from most other types of dental plans in what way?
Closed panel dentists can only be used
In Connecticut, continuing education courses must be approved by the
Commissioner
The_________________has the ability to examine the records of authorized insurers because of the powers granted through state statutes.
Commissioner
Which benefit supplement added to a life insurance policy insures an entire family?
Family term rider
The insurer's obligation to pay a claim depends on whether the insured or beneficiary has complied with all policy conditions. This makes the policy a(n)
Conditional contract
What must be given to a life insurance applicant when the agent receives an application and the initial premium
Conditional receipt
A producer MUST notify the Commissioner for
Conducting business under an assumed name
The payment of the first premium, the promise to pay a covered loss , and the agreement to abide by policy conditions are all examples of
Consideration
An accident and health insurance policy's premium requirements are set forth in which of the following provisions?
Consideration Clause
A(n)______________is a licensee who charges a fee for contracted insurance advisory services
Consultant
In regards to the Affordable Care Act (ACA), which of these is NOT a role of a health insurance exchange?
Contact the employer if an employee stops coverage under a plan offered in the exchange
Which of the following does NOT involve a life settlement transaction?
Converting term life coverage to whole life insurance
Jerry has an indemnity plan which covers dental expenses. Typically, these type of plans
Cover preventative care once every six months
What does the rehabilitation benefit cover in a disability income policy?
Covers the approved cost of the rehabilitation necessary to help a disabled insured return to work
Which of the following is NOT an intended use of an annuity?
Create new funds upon the death of a wage-earner
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
What type of doctor-ordered care assists an individual with performing basic daily activities such as bathing, dressing, and eating?
Custodial care
What effect does interest income have upon insurance premiums?
Decreases premium. The actuarial formula for a bundled insurance premium is as follows: Mortality costs (based upon age and gender) less assumed interest = Net premium. Please note that assumed interest always lowers the mortality costs and thus, lowers the total premium.
What happens to the purchasing power of benefit payments from a fixed life annuity when the cost of living goes up?
Decreases.
What kind of life policy typically offers mortgage protection?
Decreasing term . As the outstanding loan decreases, so does the amount of term coverage.
Which of the following is generally a form of group credit life insurance?
Decreasing term insurance
Which of these is typically regarded as a major treatment in an indemnity dental plan?
Dentures
Individual's covered with employer-paid group health plans will normally receive tax-free benefits under all of these plans EXCEPT
Disability income
Which statement about group life insurance is INCORRECT?
Each participant requires evidence of insurability.
When using the needs approach for life insurance planning, a lump sum may be created to provide for all of the following EXCEPT
Employee benefits
Which of the following is NOT a duty of the Commissioner ?
Enact legislation dealing with insurance
Which tax cost is normally associated with death ?
Federal estate tax
Death benefits from a life insurance policy are normally considered to be
Exempt from federal income tax
Long Term Care policies will usually pay for eligible benefits using which of the following methods ?
Expense incurred . Most long term care policies pay on a reimbursement (or expense incurred) basis , up to the policy limits.
Which of the following is considered to be a prohibited insurance practice?
Failing to submit premiums to the insurer
Which of the following would be considered a violation of Connecticut Insurance law?
Failure to remit premium in a timely manner
Which of these is NOT considered a preventative service in a dental plan?
Fillings
A producer is meeting with a client to determine whether an annuity will be suitable for purchase. Which of the following topics needs to be discussed with the client ?
Financial status of the client
A(n)__________________insurer writes business in a state other than the one in which it is domiciled
Foreign
John has a criminal record in which he was convicted of a felony that involved dishonesty. Under Federal law, how would John be able to engage in insurance transactions?
Given written consent by the state insurance regulatory agency.
According to the Affordable Care Act(ACA), insurers can no longer deny heath coverage due to pre-existing conditions unless the plan is a(n)
Grandfathered plan .
The administrator for a corporate 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
An accident and health plan that typically covers ONLY the services of approved providers is called a(n)
HMO plan
A life insurance applicant is tested for the Human Immunodeficiency Virus (HIV) . The applicant MUST be informed that the testing
Helps determine the insurability of the applicant
Which of the following is NOT subject to the promise to pay in an insuring clause
How the premium is calculated
When an individual is planning to protect his family with life insurance, one method of doing so is called needs analysis. What exactly does needs analysis involve?
Identifies the needs of an individual and the individual's dependents.
According to the Affordable Care Act , coverage may be rescinded
If intentionally false statements were offered
Which of the following is NOT classified as an "employee" under a group employer insurance plan?
Independent contractors
Which statement regarding whole life insurance is accurate?
Insurance coverage can continue for life
When compared to a fixed annuity , a variable annuity has what distinguishing feature?
Investment risk is assumed by the purchaser
Which of these would NOT be a valid reason to add the waiver of premium rider to a life insurance policy?
It allows a policy loan to cover premium payments if the policyowner becomes totally disabled.
Which of the following regarding hospital pre-admission authorization is NOT true?
It encourages weekend admission
The initial premium for a life insurance policy is typically paid in what way?
It is typically obtained by the producer and forwarded to the insurer
What type of life insurance policy covers two or more persons and pays the face amount upon the death of the first insured?
Joint Life
A life insurance beneficiary died after receiving only six payments under the policy's life income settlement option. What happens with the remaining balance of the death proceeds?
Kept by the insurance company
Which of the following is NOT information needed to determine the suitability of an annuity
Level of education
Laura added a children's rider to her life insurance policy. What type of coverage was added?
Level term
Which of the following financial products creates an instant estate, no matter when the date of death?
Life Insurance
Someone who is licensed to negotiate a life settlement contract is called a (n)
Life settlement broker
Inpatient psychiatric care is covered under Part A Medicare Insurance for 190 days per
Lifetime
How can a group dental insurer discourage adverse selection?
Limit the duration of coverage.
An insurance policy may be issued with a preferred insurance premium in all of these situations EXCEPT
Living in a rural area
The Commissioner is empowered to perform each of the following acts EXCEPT
Make rules that are consistent with those of neighboring states.
Misrepresentation on the application is
Material
Which of the following statements accurately describes the financial impact of total disability?
May be worse than the financial impact of death
Karen is considering replacing her individual accident and health insurance policy with another individual policy. She has had issues in the past with her gall bladder that would be considered a pre-existing condition. How will a pre-existing conditions exclusion affect Karen's new insurance contract?
May reduce her benefits
According to the Affordable Care Act (ACA), the proportion of premium revenues spent on clinical services and quality improvements is called the
Medical loss ratio
A producer's failure to provide title and true nature of a policy upon solicitation is an example of
Misrepresentation
Which of the following is considered to be an unfair claims settlement practice ?
Misrepresenting pertinent policy provisions relating to coverage after a loss.
In Connecticut, the Human Immunodeficiency Virus (HIV) consent form
Must disclose who will be receiving a copy of the test results
James the producer has sold a life insurance contract to a client without using an illustration, even though his insurer offers one. For this particular transaction, the applicant
Must sign a statement that no illustration was provided
How would preventative care be encouraged in a dental plan?
No deductible on routine examinations
Medicare Supplement insurance requires an individual to be at least how old for open enrollment?
No minimum age
Tim is covered by an accident and health insurance policy that may not be changed in any way by the insurer up to a stated age, as long as the premiums are paid. What type of policy is this?
Noncancelable
Jerome is covered by a disability income policy that does NOT provide benefits for losses occurring as the result of his employment. What kind of coverage is this?
Nonoccupational coverage
A(n) _______________ producer lives in another state and transacts insurance from Connecticut.
Nonresident
Which statement is true regarding hospital preadmission certification for emergency situations ?
Notification is required to be given after insured is admitted to the hospital.
Which of these is NOT an Unfair Claims Settlement Practice ?
Offering to settle a claim by arbitration. Refusing to pay persons bringing false or fraudulent claims .
Most prepaid dental plans cover
Oral examinations
Which of the following is a requirement for an individual to receive an insurance license in Connecticut?
Passing the appropriate examination.
Twisting means
Persuading an insured, to the insured's detriment, to switch policies
Which of the following guidelines does NOT apply under the pregnancy provision of the Civil Rights Act?
Post-termination extensions of medical benefits must apply equally to pregnancy.
In most dental plans, a deductible typically is NOT applied to
Preventative and diagnostic services
Karen is a health maintenance organization (HMO) subscriber. Who provides all of her preventative and routine care?
Primary care physician
A pre-existing condition exclusion in an accident and health insurance policy pertains to
Prior health matters
Which of these is NOT a standard provision in qualified long-term care policies sold in Connecticut?
Prior hospitalization
A life insurance producer is required to give a disclosure notice about information practices to an applicant or proposed insured
Prior to or at the time of signing the application
At what point must a producer give notification to the Commissioner about using an assumed name ?
Prior to using the assumed name
When a producer submits an application that discloses personal information regarding the applicant, who supplies the privacy notice?
Producer
Under Federal Law, which of the following actions may result in a producer becoming imprisoned?
Producer embezzling funds from an insurer
A producer has indicated to a potential client that the proposed life insurance is covered by the Connecticut Life and Health Insurance Guaranty Association. This action taken by the producer is
Prohibited by Law
A handicapped child is covered under an individual health policy. If continuation is needed beyond the policy's age limit, which of the following is required?
Proof of incapacity and dependency upon reaching the age limit.
The dental specialty which deals with the replacement of missing teeth is called
Prosthodontics . They use bridgework and or dentures
The main role of accident and health and disability insurance is to
Protect against medical care costs and the loss of earning power
Replacement regulations exist in order to
Protect policyowners from misrepresentations and loss of benefits
The automatic premium loan provision can be accurately described as a
Provision that provides a policy loan to pay any premiums by the end of the grace period
What type of risk involves the potential for loss with no possibility for gain?
Pure risk
Insurance producer Kelly offers insured a $500 shopping card if they purchase an insurance product through her. What is this an example of?
Rebating, which is an unfair trade practice.
Which of the following is NOT a dividend option for a life insurance policy?
Receiving the entire policy cash value
A life insurance policyowner would like a dividend option that results in a limited current outlay of funds. Which dividend option would be chosen?
Reduction of premium payment
Which of the following would prevent a person from obtaining a Connecticut resident producer license?
Residing in a state outside of connecticut
What does a 401(k) plan generally provide its participants?
Salary-deferral option.
A life insurance producer's underwriting duties may include
Seeking additional information
Which of these situations would NOT potentially involve a prison sentence under Federal law?
Selling insurance with a nonresident license
What is a life insurance producer authorized to do?
Solicit, receive and forward applications to the insurer
Kelly purchases a health insurance policy issued on a conditionally renewable basis. The insurance company has a right to refuse renewal of the policy for
Specific reasons stated in the contract.
Which entity is responsible for regulating claims settlement practices of insurers?
State insurance departments
Contributions made by an employee to a qualified retirement plan are required to be
Subject to a vesting schedule
Jonas is covered with disability insurance through his employer. The employer pays 75% of the premium, while Jonas pays the other 25%. What is Jonas' tax liability for any benefits paid from the disability plan?
Taxes must be paid on 75% of the benefits received
Which group is the Do Not Call Registry designed to protect against?
Telemarketers
To secure authority for soliciting insurance products in the State of Connecticut, an insurance company must secure a certificate of authority from
The Connecticut Insurance Commissioner
Which of the following is NOT a valid cause for termination of an employees group health coverage?
The coinsurance limit has been exceeded
If one producer provides a referral to another producer which results in the sale of an insurance contract,who will likely be paid a commission?
The commission will likely be shared between the two producers.
Which of the following is the BEST candidate for a temporary insurance license?
The executor of the estate of a deceased licensed producer
What would be considered an advantage of purchasing term life insurance?
The initial premium is lower compared to an equivalent amount of whole life coverage
Who may terminate coverage under a cancelable health insurance policy?
The insurer or the insured
James is covered with health insurance by two different insurers. The "insurance with other insurers" provision in an individual health insurance policy allows an insurer to pay benefits to the insured on a pro-rata basis when
The insurer was not notified prior to the claim that the insured has other health coverage
Which of the following must clearly be illustrated in ALL sales material for market value adjusted annuities?
The market value adjustment can be either upward or downward.
Under an adjustable life insurance policy, which of the following may NOT be changed without further underwriting?
The person insured.
An advantage of owning a flexible premium life insurance policy would be
The policyowner can make policy changes without difficulty
How is a community rating used for underwriting purposes?
The same rates are changed for individual and group plans in the same geographical area. regardless of their health status
Darrell has a group long-term disability income policy paid by his employer. Which of these statements is true?
The specified benefit amount is a percentage of his wages.
Why were Exchanges implemented by the Affordable Care Act (ACA)?
To create a one-stop market for standardized health insurance plans
Why does Connecticut require insurers to maintain a minimum level of assets?
To demonstrate insurer solvency
Typically, states will permit the grouping of two or more small employers in the same industry for obtaining group health insurance at a favorable rate. This grouping of employers is known as a multiple employer
Trust
Insurance crimes which affect interstate commerce are prosecuted by the
US attorney general
When an individual buys insurance under a threat made by a producer , a violation has occurred under the
Unfair Trade Practice Act
Charging different premiums to policyholders in the same risk classification is referred to as
Unfair discrimination
Laura has an employer-based preventative health care plan that focuses on an enrollee's problems, such as drug abuse or stress. These plans are called
Wellness Programs
When would evidence of insurability be required for a person already covered with a variable universal life policy?
When the death benefit is increased.
When does the producer give a premium receipt for a life insurance application?
When the initial premium has been paid with the application.
An agent's authority to bind an insurer to an insurance contract may be granted in the
agent's contract and the insurance company's appointment.
According to federal fraud and false statements regulation, what is required for a prohibited person to transact insurance business in this state ?
Written consent from the state insurance regulatory agency
Emergency health care coverage for Medicare enrollees traveling abroad is
a Medicare Supplement additional benefit
Before soliciting insurance applications for an insurer , a producer must secure a(n)
appointment
In a qualified retirement plan, the yearly contributions to an employee's account?
are restricted to maximum limits set by the IRS
An order issued by the Commissioner that prohibits a specific practice listed in the order is called a(n)
cease and desist order
A prospective client was intimidated by a producer to purchase an insurance contract. The producer could be found guilty of
coercion
The policy provision that permits an employee to change from group life coverage to an individual life policy is called the
conversion provision
Life settlement proceeds may be subject to the claims of
creditors
A(n)______________insurer is incorporated and formed in Connecticut
domestic
An annuity contract may be returned for a full refund during the
free look period
Insurable interest in one's own life is legally considered as
generally unlimited
With life insurance, the needs approach is used primarily in determining
how much life insurance a client should apply for
The_________is responsible for reporting to the Commissioner any name or address change of the licensee.
licensee
Respite Care coverage is typically found in a(n)
long term care policy
If the Commissioner requests access to a producer's business records, the producer
must provide access to the records upon request
Typically, working individuals age 65 or over must be
offered the same Health benefits as younger employees
A life annuity feature which provides benefit payments for a minimum number of years, no matter when the annuitant dies, is called
period certain
Patrick purchased a long-term care policy. He has a health condition for which medical treatment was recommended by a physician within 6 months prior to the policy's effective date. This condition is called a(n)
pre-existing condition
The law of large numbers enables an insurer to
predict losses
After joining a health maintenance organization (HMO), a subscriber will typically select a(n)
primary care physician
A Keogh plan is a (n)
qualified retirement plan for the self employed
During an annuity's liquidation phase, the annuitant normally
receives benefit payments at regular intervals.
The interest credited to the cash values of personally-owned non-qualified annuities is considered
tax-deferred
The interest paid during an annuity's payout period is considered
taxable as ordinary income
When testing for the Human Immunodeficiency Virus (HIV), Connecticut law requires a consent form
that discloses who may receive a copy of the results
Purchasing insurance is an example of risk
transference
Mentally or physically handicapped dependent children MUST be covered under an individual health insurance policy
until they become self-supporting