Final exam

A rehabilitation benefit is intended to

A rehabilitation benefit is designed to help prepare the insured to return to employment.

Which of these is considered to be a Living Benefit option in a life insurance policy?

Accelerated death benefit

An insurer has a right to screen applicants for HIV in which of the following ways?

Blood test for HIV

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

Business overhead expense policy

In which of the following relationships would there NOT be an insurable interest?\

Business owner to business customer

What enables applicants to compare different life insurance policies and helps them choose which policy is best for their needs?

Buyer's guide

Which of the following is an example of replacement?

Canceling a whole life policy to purchase a term policy

In which of the following processes will the insurer oversee the insured's hospital stay to confirm everything is going according to schedule and that the insured will be released as planned?

Concurrent review

Susan is insured through her Group Health Insurance plan and changed her coverage to an individual plan with the same insurer after her employment was terminated. This change is called a(n)

Conversion

Which disability policy provision would address any concerns of the value of the benefits decreasing over time?

Cost of living benefit

Which of the following does restorative dental treatment cover?

Crowns

Julie has a $100,000 30-year mortgage on her new home. What type of life insurance could she purchase that is designed to pay off the loan balance if she dies within the 30-year period?

Decreasing term insurance

Mike has inherited his father's traditional IRA. As beneficiary, he will pay ____ taxes on any money withdrawn.

Income

No insurer, producer, broker, solicitor, or person, in connection with an insurance transaction shall offer or promise to buy, sell, give, or allow the prospective insured employment, stock or special favors. This is the definition of

Inducement

All issuers issuing long-term care insurance policies must offer, as an optional benefit a(n) _____ rider.

Inflation

No legal action can be initiated after 5 years from the

Initial time written proof of loss has been provided

What is the purpose for having an accelerated death benefit on a life insurance policy?

It allows for cash advances to be paid against the death benefit if the insured becomes terminally ill

Which of these is NOT considered to be a common life insurance nonforfeiture option?

Life income annuity

James is the insured on a life insurance policy where his age was misstated on the application. Which of the following is CORRECT regarding the death benefit amount?

The death benefit paid will be what the premium would have purchased at the correct age

Krissa purchases a 10-year level term life insurance policy that has a death benefit of $200,000. Which of these statements is true?

The face amount and premium will remain constant over the 10-year period

Pat owns a 20-pay life policy with a paid-up dividend option. Which of the following statements is true?

The policy may be paid up early by using policy dividends

Which of the following does a life insurance policy summary normally include?

The policy's cash value

What is the elimination period of an individual disability policy?\

Time period a disabled person must wait before benefits are paid". The elimination period of an individual disability insurance policy refers to the amount of time a disabled person must wait before benefits are paid.

An example of naming a beneficiary by class would be

To the children born of my union with Ned Jackson

Insurance represents the process of risk

Transference

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

Variable Whole Life

A nonparticipating policy will

When an insurer offers a policy that is nonparticipating, the insurer's policy does not pay dividends.

When can a group health policy renewal be denied according to ​ the Health Insurance Portability and Accountability Act (HIPAA)?

When contribution or participation rules have been violated

How is a health provider reimbursed if they do NOT have an agreement in place with the insurance company?

With a usual, customary, and reasonable fee

A policyholder's unmarried child is incapable of self support due to physical disability. The child is provided medical care coverage under the parent's policy

Written proof of disability and dependency is required to prove a mental or physical handicap for a dependent child.

Proceeds from a life insurance policy are protected from the beneficiary's creditors by which clause?

spendthrift trust clause

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

the number of full time employees minus 30

Notice of a claim must be given within how many days after a covered loss?

"20 days". ​ Notice of a claim must be given within 20 days after a covered loss.

An insurer must submit all policy forms and applications to the Commissioner at least __ days before they can be used.

30

The required grace period for life insurance policies in Washington is

30 days

The Commissioner is REQUIRED to examine admitted insurers AT LEAST every

5 years

A 10% excise tax is normally applied to an early withdrawal from an IRA. According to HIPAA, this tax will not be applied if the withdrawal is used for medical expenses that exceed ____ of the individual's adjusted gross income.

7.5%

As classified by the Affordable Care Act (ACA), a Silver Plan offers

70% actuarial level of coverage provided

Which type of life insurance is normally associated with a Payor Benefit rider?

Juvenile insurance

Which of the following is NOT a common exclusion for a medical expense policy?

Physical therapy

Which of the following would evidence ownership in a participating health insurance contract? ​

Policy ownership

Andy the annuitant dies before the annuity start date. Which of the following is a TRUE statement?

Premiums paid plus interest earned is returned to the beneficiary

Typically, Long-Term Disability benefits are coordinated with which benefit plan?

Social Security

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

Straight life

An individual covered under a Blue Cross Blue Shield plan is called a(n)

Subscriber

In a Long-Term Care policy, activities of daily living (ADL's) can be each of the following EXCEPT

Talking

The IRS states that a taxpayer's medical expenses that exceed 7.5% of their adjusted gross income is tax deductible. Which of the following may be considered a medical expense under this rule? ​ ​ ​ ​

Tax-qualified long-term care premiums are considered a deductible medical expense if the taxpayer's medical expenses exceed 7.5% of their adjusted gross income.

Which of these is considered to be a document that describes the critical segments of a life insurance policy?

policy summary.

According to the principle of Utmost Good Faith, the insured will answer questions on the application to the best of their knowledge and pay the required premium, while the insurer will deal fairly with the insured and it's

promises made

The life insurance buyer's guide includes information about all of the following EXCEPT how to

take civil action against an insurer

The elimination period under a hospital indemnity plan is

the specified number of days an insured must wait before becoming eligible to receive benefits for each hospitalization

An individual insurance producer who allows his or her license to expire may, within ___ months from the expiration date, reinstate the same license without passing a written exam.

twelve (12) months

Credit Accident and Health plans are designed to

help pay off existing loans during periods of disability

Publishing information that is false and maliciously critical to an insurer and intended to cause injury is a prohibited practice known as

Defamation

What does the Consolidated Omnibus Budget Reconciliation Act (COBRA) of 1985 allow an employee to do?

"In the event of employment termination, group health insurance can be kept if the employee pays the premiums". The Consolidated Omnibus Budget Reconciliation Act (COBRA) of 1985 allows an employee to continue group medical insurance by self-paying the premiums after employment has been terminated.

All of the following may be an unfair claims practice EXCEPT

"Refusing to pay persons bringing false or fraudulent claims". Refusing to pay false or fraudulent claims is not an unfair claims practice.

When can an insurer cancel a Medicare supplement plan?

After nonpayment

Insurers do business in Washington only after a thorough financial review. MOST insurance policies written in Washington are protected by the Guaranty Association, established to protect policyowners in the event an admitted company

"becomes financially insolvent". Insurers do business in Washington only after a thorough financial review. MOST insurance policies written in Washington are protected by the Guaranty Association established to protect policyowners in the event an admitted company becomes financially insolvent.\

Life insurance policies will normally pay for losses arising from

"commercial aviation". ​ Life insurance policies routinely cover losses arising from commercial aviation.

The premium for a Modified whole life policy is

"lower than the typical whole life policy during the first few years and then higher than typical for the remainder". Modified whole life policies are distinguished by premiums that are lower than typical whole life premiums during the first few years and then higher than typical thereafter.

An annuity is primarily used to provide

"retirement income". The principal use of an annuity is to provide income for retirement.

Term insurance is appropriate for someone who

"seeks temporary protection and lower premiums". Term insurance is appropriate for individuals seeking temporary protection and lower premiums.

Which of the following is NOT considered advertising?

A rating from a rating service company, such as A.M. Best

The double indemnity provision in a life insurance policy pertains to an insured's death caused by a(n)

Accident

Fixed period settlement options are considered to be a form of a(n)

Annuity

help pay off existing loans during periods of disability

Because all eligible employees are usually covered, noncontributory plans are desirable from an underwriting standpoint because adverse selection is minimized.

What happens if the insurer discovers that the insured's age was accidentally misstated on an application for an individual life insurance policy?

Benefits will be calculated according to how much coverage the premium paid would have purchased for the correct age

In an insurance contract, the element that shows each party is giving something of value is called

Consideration

An example of a presumptive disability would be

Deafness

All of the following are core benefits of Medicare Supplement Plan A EXCEPT

Deductible payments for the first 60 days of hospitalization under Medicare hospitalization insurance

Which of these will typically authorize treatment from a specialist?

Gatekeeper

The Washington Life and Health ______ Association is used to rehabilitate insolvent insurers

Guarantee

Which of the following is considered to be an event or condition that increases the probability of an insured's loss?

Hazard

Who is responsible for assembling the policy forms for insureds?

Insurance carriers

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

Life only

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

Managed care plan

Which of these gaps in Medicare coverage is addressed with Medicare Supplemental Insurance?

Medicare in-hospital deductible

Claims payable to a Disability Income insured, even when the insured can continue to work, are the result of a

Presumptive disability

When are group disability benefits considered to be tax-free to the insured?

When the recipient pays the premiums

When calculating the amount of life insurance needed for an income earner, what has to be determined when using the Needs Approach?

When using the needs approach to determine the amount of life insurance needed for the income earner, it is necessary to determine the family's financial objectives in the event of the death or disability of the income earner.

All of these are valid policy dividend options for a life insurance policyowner EXCEPT

accumulate without interest

Funding for the Washington Life and Disability Guaranty Association is derived from

assessments on member companies

A Renewable Term Life insurance policy can be renewed

at a predetermined date or age, regardless of the insured's health

Newborn coverage for an accident and health (disability) family policy begins

at the moment of birth

Transacting insurance includes any of the following EXCEPT

gathering prospective buyer information

A Medicare Supplement policy must NOT contain benefits which

duplicate Medicare benefits

A group Disability Income plan that pays tax-free benefits to covered employees is considered

fully contributory

The suicide clause of a life insurance policy states that if an insured commits suicide within a stated period from the policy's inception, the insurer will only be liable for a return of premiums paid

minus indebtedness and without interest

Under a Traditional IRA, interest earned is taxed

upon distribution

All of the following are considered appropriate uses of life insurance for business purposes EXCEPT

​ "Protecting the business by covering entry level employees with life insurance". Covering entry level employees with life insurance to protect the business is not an appropriate business use.

Continuous 24-hour care provided by licensed medical professionals under the direct supervision of a physician is called

skilled nursing care

Kathy pays a monthly premium on her health insurance policy. How long is her grace period?

10 days

Long-term care policies sold in Washington must provide coverage for at least

12 consecutive months

An insurer must furnish to a claimant forms for filing proof of loss within ___ days upon receiving a notice of claim. ​ ​

15

An insurer must send a notice of appointment for a producer within __ days from the date of an executed agency contract or after submitting the first application to the insurer.

15

Before the Commissioner will issue a license, a person must be at least

18 years old

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

20

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

31 days

The grace period for an accident and health (disability) policy is no less than ______ for weekly premium policies.

7 days

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

900

Which type of life insurance policy pays the face amount at the end of the specified period if the insured is still alive?

Endowment policy

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

Exclusion Ratio

When a qualified plan starts making payments to its recipient, which portion of the distributions is taxable?

Gains

How is Medicare Part B funded?

General tax revenue and user premiums

The reinstatement provision in a health insurance policy is

Mandatory

A type of policy that would help pay for uncovered Medicare claims is called

Medicare supplement

Falsifying the terms, benefits, advantages, or conditions of an insurance policy is an example of which of the following?

Misrepresentation

When an insured has a major medical plan with first dollar coverage, how does this impact the benefits paid?

No deductible payment is required

States that have "no loss no gain" laws require a replacing policy to

No loss no gain legislation requires that when health insurance is replaced, ongoing claims under the former policy must continue to be paid under the new policy.

Disability Income plans which require that the insurer can NEVER change or alter premium rates are usually considered

Noncancellable ​

When replacing a life insurance policy, a producer must provide the applicant with a

Notice Regarding Replacement

How do interest earnings accumulate in a deferred annuity?

On a tax-deferred basis

What is an insurer required to do when faced with an error made under the Misstatement of Age provision?

Pay age-corrected benefits

Which type of rider will waive the premium on a child's life insurance policy if the parent paying the premium dies?

Payor benefit

What is the primary feature of a viatical settlement?

Reduced death benefit prepayment

Which of the following decisions would a Health Savings Account (HSA) owner NOT be able to make?

The amount contributed by the employer

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

limited pay policy

The Life and Disability Guaranty Association provides funds to carry out its powers and duties by assessing

member insurers

Annuity suitability information specifically includes all of the following EXCEPT

number of dependents

When a producer is replacing an existing ordinary life insurance policy, the producer must take all of the following actions EXCEPT

obtain the beneficiary's signature on a summary of all policies to be replaced

The two major actions required for a policyholder to comply with the Reinstatement Clause are

provide evidence of insurability, pay past due premiums

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

responsible third party

An endorsement found in an insurance plan which modifies the provisions of the policy is called a(n)

rider

An example of endodontic treatment is a

root canal

What will the beneficiary receive if an annuitant dies during the accumulation period?

​ "The greater of the accumulated cash value or the total premium paid". ​ If an annuitant dies during the accumulation period, his or her beneficiary will receive the greater of the accumulated cash value or the total premium paid.

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

​ "When becoming eligible for Medicare". An individual can enroll under a Part C Medicare Advantage Plan when eligible for Medicare.

All of the following are Unfair Claims Settlement Practices EXCEPT

​ "providing claim payments to insureds accompanied by a statement setting forth the coverage under which payment is made". All of these are Unfair Claims Settlement Practices EXCEPT providing claim payments to insureds accompanied by a statement setting forth the coverage under which payment is made.

All of these are characteristics of a universal life insurance policy EXCEPT

​ A fixed surrender value is NOT a characteristic of a universal life insurance policy.

Which of these factors is NOT taken into consideration when determining the cost of a long-term care policy?

​ The cost of a long-term care policy is based on all of these factors EXCEPT personal income.