Final Health
What is policy limited to when paying accelerated death benefit
75%
Residual disability benefits
Based on reduction of loss on someones income
what is purpose of benefit schedule
to state what and how much is covered in plan
an illustration used in sale of policy must have label stating
"life insurance illustration"
To be eligible for HSA account
1. must be covered by High deductible plan 2. must not be covered by other health insurance except for disability, dental, LTC 3. can't be eligible for medicare (younger than 65)
Needs approach is determined by
1. predicted needs of family after premature death 2. death will occur immediately
what is minimum number of members required for group life in this state
10
what are consequences of withdrawing funds from a IRA prior to age 59.5
10% penalty
Under Affordable Care Act, what % of preventive care must be covered without cost sharing
100%
what are continuing education requirements for agents who market long-term care insurance poliy
8 hours of education INCLUDED in regular CE requirements
what is maximum amount that can be contributed to an MSA of the high-deductible plan for individuals
65%
If a consumer requests additional info concerning investigative consumer report, how long to comply?
5 days
What is the penalty for IRA distributions that are below the required minimum for the year
50%
how many separate requirements should an insurance policy have
6
Which is true regarding taxation of the accelerated benefits
A portion of the benefit up to a limit is tax free, the rest is taxable income
What elements of adjustable life can be changed by policywoner?
Amount and payment period of premium, face amount, period for protection
Waiver of premium
Allows an insured to have premiums forgiven if insured incurs a disability and can't pay
PPO
Allows insured the ability to see a specialist without getting a referell
When is an employer allowed to cancel the health reimbursement account
Anytime - these funds can also be used as a tax deduction
Accelerated death benefits
Clause in life insurance permits insureds to receive benefits before death if there is a diagnosis of a terminal illness
Guaranteed convertible
Convertible provision provides policyholders the opportunity to change a term policy to a whole life or universal life without need of physical exam
Difference between universal life and variable whole life
Defined guarantees with universal life versus the greater flexibility in variable life With universal, insured pays premiums so that beneficiary will receive benefit upon death - in contrast, variable whole life provide greater discretion allowing insured to establish both premium and death benefit Variable whole life is more expensive because the policyholder can set aside a portion of premium dollars in an investment vehicle
Which of following offers a limited choice of health care providers
EPO - exclusive provider organizations - use specific providors
Non-tax qualified
Income is taxed under non-qualified plans
What is true regarding single life settlement option
It provides income the beneficiary cannot outlive - can provide income for rest of life - upon the death of the beneficiary, the payments stop
medicare part B doesn't cover
LTC services
Return of premium rider
Lets policyholders regain total premiums they paid to insurer over lifetime if they don't pass away during coverage term
All of following are true about MIB except
MIB reports are based upon info supplied by doctors and hospitals - incorrect because they come from underwriting
what type of medicare policy requires insureds to use specific healthcare providers and hospitals and restricted network provisions
Medicare SELECT
Whole life elimination period
Period is two years and applies to this suicide clause
Change of plan provision
Policy provision that allows policyholder to make changes to his policy to keep with with changes
Tax qualified life
Premiums are tax-deductible
Life insurance can be delivered by all EXCEPT
Priority mail
Decreasing term
Rate of death benefit lessens over term of policy
Consideration clause
Sections that states how much her premium payments are and when they are due
Representation
Statements made by applicant that impact insurers decision (date of birth, medical conditions)
The health insurance counseling and advocacy program (HICAP) is administered by
The California department of aging
In an adjustable life, all can be changed by policy owner except
Type of investment
Surrender charge is determined by
a % of cash value and decreases over time
a hospital indemnity policy will pay
a benefit for each day the insured is in a hospital
Where are premiums from fixed annuities invested
a general account
The two types of assignments are
absolute and collateral
what is the amount a physician for a service charges
actual charge
which of following departments is responsible for developing mortality and morbidity tables
actuarial
which of following is NOT covered under LTC policy
acute care in hospital - correct at home health care, adult day care, hospice care
Contract that is only prepared by insurer is known as
adhesion
C receives 50,000 from 100,000 accidental policy - he recieved the
capital amount - this is 50% of the principal, and paid for a loss of a single body part
which describes relationship between capital sum and principal sum
capital sums are percentages of principal sums
An insured receives an annual life insurance dividend check - what term best describes this
cash option
what happens to the cash value when a WHOLE LIFE policy matures
cash value is paid to policy owner
the types of perils which are usually exlucded from coverage and slant the law of large numbers is known as
catastrophic losses
which would be an example of issuer doing unfair trade practice of discrimination
charging the insured higher premiums based on her race
Which is a qualifying event under COBRA
divorce
When can a change be made in benefits for a flexible spending account
during the open enrollment period
What is it when unassigned funds must be reported on a stock insurers' annual statement
earned surplus
at what point does life coverage begin when an agent issues a conditional receipt for life policy
either on date of application or date of medical exam - whichever occurs last
Health provider shares an ssumed risk and encourage preventive care - which system
managed care
in group insurance, what is the policy called
master policy
which is NOT included in general information section of application
medical backbround
an insured who signs a fraudulent claim form may be guilty of
perjury
Family income policy
provides monthly income upon death of insured while maintaining permanent coverage
Legal hazard is
set of legal or regulatory conditions that affect insurer's ability to collect premiums
the ownership provision entitles the policy owner to do all EXCEPT
set premium rates
a fee charged to the insured when a policy or annuity is exchanged for its cash value
surrender charge
tax implications for contributions to HSA are
tax deductible
What is included in presumptive disability
total loss of sight, speech, hearing, or two limbs
HICAP counselors are primarily
trained and registered volunteers
HIPAA aplies to groups of
two or more
What are features of a noncancellable policy
the premiums can't be increased, the guarantee to renew coverage applies until the insured reaches a certain age, the insured has the right to renew the policy for life of contract - the isnruacne company cannot cancel a noncancellable policy
if insured and primary beneficiary are killed in same accident, who dies first
the primary beneficiary died before the insured
How does a member of an HMO see a specialist
the primary care physician refers the member
An agent is a legal person who acts on behalf of
the principal (insurer)
under an extended term nonforfeiture option, the policy cash value is converted to
the same face amount as in the whole life policy
True regarding METs
they allow several small employers purchase less expensive insurance together
what is purpose of rehabilitation benefit in disability insurance
to cover the expenses of retraining the insured to return to work
what is the purpose of medicare supplement plans
to fill in the gaps in medicare coverage
why do group health providers require a certain amount of participation in the plan by employees
to guard against adverse selection and reduce cost
what is purpose of coinsurance provisions
to help the insurance company to prevent overutlization of the polocy
which is NOT a goal of risk retention
to minimize the insureds level of liability in event of loss
what is purpose of insurance guaranty associations
to protect policy owners, insureds and beneficiaries from financial losses caused by insolvent insurers
Entire contract provision
to protect the insured from insurance company makingg changes without their knowledge
what would give underwriter a better understanding of how applicant has been treated for ilnesses
attending physicians statement
creditable coverage includes
coverage under a state health benefits risk pool
Which of following is NOT an appropriate use of a deferred anuity
created an estate
Which of following would be beneficiary in credit life insurance
creditor - the creditor is the owner and beneficiary
if the current interest rate on an annuity is higher than guaranteed rate, which rate will the annuity owner receive as part of the annuity payment
current
which meets the insureds personal needs, and is provided by nonmusical personnel
custodial care - this is eating, dressing, bathing
What LTC is provided in institutional setting
custodial care, skilled nursing care, intermediate care
making false statements about financial condition of any insurer is
defamation
Needs approach is
determining how much insurance you would require based on financial objectives
which is an example of a physical hazard
diabetes
which of the following is an example of a physical hazard
diabetes
a waiver of premium provision may be included with which kind of health insurance policy
disability income
Which of the following best describes an applicants avocations
hobbies and interestes
what are three basic coverages for medical expense insurace
hospital, surgical, medical
Primary beneficiary
identified as individual with the first claims right to the policy upon the insured's death - can be multiple parties
Own occupation
if insured cannot return to work in insured's own specific field
under which conditions would life insurance proceeds be taxable by federal government
if there is a transfer of value
in annually renewable terms, what is annual premium based upon
insureds attained age
which regarding insurable risks is NOT correct
insureds cannot be randomly selected
All of following must sign an application for health insurance EXCEPT the
insurer
who makes up the MIB
insurers
what portion of a non qualified annuity payment would be taxed
interest earned on principal
in health insurance, if a doctor charges $50 more, the extra cost
is not covered
once the initial benefit limit in medicare D is reached, how is beneficiary affected
is then responsible for a portion of prescription drug costs
Which is true about 10-day free look period
it begins when the policy is delivered
What is main purpose of seven-pay test
it determines if insurance policy is a MEC
which of the following insurance coverages would be allowed with an MSA
long-term care
medical is designed for persons who are
low-income and uninsured
a person has history of DUIs - what type of hazard is he
morale
what are the 3 factors that determine the premium for a particular life insurance policy
mortality, interest, and expense
Financial objectives is known as
needs approach
under Affordable care act, when would pregnancy be considered pre-existing condition
never
What does nolo contendere mean
no contest
the classification small employer means
no more than 100 employees
MSA are available to groups of how many employees
no more than 50
Which renewal provisions must be included in long-term care policy
noncancellable and guaranteed renewable
Assisted living offers
nonmedical assistance
what does basic medical expense cover
nonsurgical services a physician provides
an equity indexed annuity will grow based upon
performance of a recognized index
Which renewability provision are you most likely seeing on a travel accident policy
period of time - means policy will only last a certain period of time and cannot be renwewed
what annuity settlement option provides income payments to the annuitant for the duration of his life and ceases at annuitants death
pure life
which best describes a pure life annuity settlement option
pure life provides payments for as long as the annuitant is alive
Insurers may change which of the following on a guaranteed renewable health insurance policy
rates by class
if an insured becomes disabled again because of original injury, it is known as
recurring disability
which nonforfeiture option provides coverage for longest period of time
reduced paid up (provides protection until insured reaches 100)
COBRA applies to employers with at least
20 employes
first-year commission on a medicare supplement may NOT exceed
200% of the 2nd year commission on same policy
how many hours of continuing education must agents complete each licensing term
24
what is education requirements for life-only agents in california
24 hours every 2 years
What % of medicare part d is resposnible
25%
the patient protection and affordable act mandates that insurers provide coverage for adult children to the age of
26
when is initial enrollment period of Medicare part A
3 months before turning 65 and ending 3 months after the 65th birthday
Max age for catastrophic plan
30
what is max age for qualifying for a catastrophic plan
30
a medicare supplement policy must have free look period of at least
30 days
Additional violates of replacement will result in fine of
30,000
what is the period of coverage for events such as death or divorce under COBRA
36 months
an insured owns a 50,000 whole life - he decides to cancel and exercise extended term option for cash value which is 20,000. what would be face amount of new term polocy
50,000
how long is an open enrollment for medicare supplement polocies
6 months
What is waiting period on waiver of premium
6 motnhs
What is the penalty for excessive contributions to an IRA
6%
in social security blackout period, the surviving spouse will not receive benefits until age of
60
at what age may an individual make withdrawals from an HSA without being penalzied
65
How long does enrollment period for medicare B last
7 months
How many eligibly employees in a contributory plan
75%
a disability has a waiting period of 7 days, if insured is disabled for 15 days, how many days of benefit will policy pay
8 days
according to medical loss ration, what is minimum percentage of health coverage premium that must be applied to actual medical care in large group health plan
85%
what are death benefits in universal life
A - level death benefit B - increasing death benefit
Single premium immediate annuity
Gives the annuitant income security after he or she pays one up-front premium Set up to give annuitants immediate income at start of annuity
PPO
Group of contracted doctors, hospitals, and pharmacies who provide services at a negtioted discount - lower fees
HMO
HMO physicians receive a cpaitated monthly rate up from to provide health care to enrolled members Primary care providers also act as gatekeeper providing referrals to HMO specialists
Which is true concerning relationship between medicare and HMO
HMOs may pay for services not covered by Medicare
which of following is available to employers of all sizes
HRAs
Stop-loss coverage
Helps the employer and places a limit the amount the employer is responsible for paying for each employee's medical care
Long-term care riders
If long-term care is needed, the life insurance policy can convert the coverage to provide long-term care benefits Instead of a death benefit pad out to beneficiary, long-term care benefits then become available instead
Revocable vs irrevocable beneficary
If person named as beneficiary is revocable, the insured can change his mind whenever
Contingent beneficiary
If primary beneficiary predeceases the insured, the contingent beneficiary receives the death benefit
Death by suicide
If the insured's death by suicide occurs during a time period specified in the policy, the death benefit paid to the beneficiary is only equal to the amount o premiums paid up to the time of death
Adjustable life
Flexibility is a key attribute - alterations to premiums paid, face amount Adjustable uses ordinary, straight life as their starting point Gives higher premiums due to the flexibility
Limited pay and single premium
For those who only want to pay life insurance premiums for limited time - it delivers lifetime of protection but requires only limited number of premium payments Because of more limited premium payment, policy premiums are higher under this type
Making withdrawals from cash value under life insurance
Insured is invoking his right to take available funds from cash value - can only be made if there is adequate cash value in policy - they are usually made tax-free
3 clauses that make up first page of policy
Insuring clause, free-look clause, consideration clause
Variable universal life
It builds cash value and can be invested It is a permanent life insurance so death benefit will be paid - premium payments are extremely flexible - can choose how the death benefit can be paid to beneficiary
What is health coverage for small groups whose numbers are too small to qualify for true group insurance
franchise insurance
a deceptive act or practice committed by a person with the intent to secure an unfair advantage
fraud
Health reimbursement accounts
funded by employers to help with costs of uncovered medical expenses
which expenses is NOT covered by health insurance polocy
funeral
Medicare part b enrollment
general/annual enrollment
How are HMO territories divided
geographic areas
what provision extends coverage beyond premium due date
grace period
Which rider ensures that owner will receive from an annuity at least the amount paid for the annuity
guaranteed lifetime withdrawl
Which of annuity riders ensures investors will receive a set amount of income annually
guaranteed minimum income benefit
which annuity rider ensures investors will receive a set amount of income annually
guaranteed minimum income benefit
most LTC plans have which of following features
guaranteed renewability
a medicare supplement plan must have provision on
guaranteed renewable
most LTC plans have which features
guaranteed renwability
Which of the following doesn't build cash value
guaranteed universal life -- variable, whole, and universal build cash value
Personal care includues
hands-on services and with daily living
First dollar coverage refers to insurance which
has no deductible - insurer pays full amount, up to policy limit
what are 2 types of flexible spending accounts
health care accounts and dependent care accounts
Any occupation is
if they cannot perform any job they are suited for by prior education training or experience
what type of annuity can be purchased with a single premium
immediate annuity
representations in insurance contracts qualify as
implied warranties
In which location would skilled care most likely be provided
in an institutional setting
what is main difference between franchise and group insurance
in franchise, underwriting is done for each person
Surrender chargers
included by insurance companies to limit the amount of withdrawals an annuitant can take of annuity's first couple years
Life income joint and survivor guarantees
income for 2 or more recipients until they die
what life insurance provision prevents an insurer from disputing or denying a claim due to misstatements on the application after a certain period of time
incontestability
annually renewable term policies provide a death benefit for a premium that
increases annually
Annually renewable term policies provide level death benefit that
increases annually as the insured ages
Death benefit under universal life option B
increases each year by the amount that the cash value increases
Indexed whole life
increases the insureds benefits in proportion to a elected measurement of the economy (CPI) to prevent inflation from decreasing life insurance death benefit
a return of premium term life is what type of term coverage
increasing
a return or premium term life is written as what type of term coverage
increasing
which type of hospital policy pays a fixed amount each day that the insured is in a hospital
indemnity
who will be affected by the share of cost requirement for medi-cal
individuals whose income exceed the medi-cal limit
all of following must be communicated in an insurance contract EXCEPT
information the other party already knows
3 types of enrollment periods for medicare part A
initial, general, special
to purchase insurance, the policy owner must face possibility of losing money or something of value in event of loss - this is called
insurable interest
A contract when one party undertakes to indemnify another against loss is called
insurance
Single premium deferred annuity
insured makes one lump-sum premium payment in exchange for defined income to access in his retirement years With deferred annuity, the insured gets benefit of tax deferral - means annuity value gains interest without being taxed until funds are taken out
Comprehensive major medical plan
is a combination of basic expense and major medical coverage
under a straight life, if annuitant dies before principal amount is paid out, the beneficiary will recieve
nothing - payments will cease
the insured is unsure whether the free-look applies. it is in the
notice regarding replacement
what is annual open enrollment for state insurance exchanges
novermber 1 through jan 31
Intermediate care is
nursing and rehabilitative care
HRA's are open to employees
of companies of all sizes
The dividend option in which the policywoner uses dividends to purchase a term policy for one year is referred as
one-year term option
how long is income paid under a pure life annuity
only for the life of the anniuitant
when may HIV related test results be provided to MIB
only if individual is not identified
Which renewability provision allows insurer to terminate policy for any reason and to increase premiums for any class
optionally renewable
medicare part A doesn't include which
outpatient hospital treatment
a stock insurer is defined as an insurer
owned by its stockholders
which parts requires a monthly payment from insured on the social security medicare program
part B
Insuring clause
part of the policy where you can find how much the insurer will pay in event of the insurers death
Prior to purchasing medigap, a person must be enrolled in
parts A and B of medicare
prior to purchasing a medigap policy, a person must be enrolled in
parts a and b of medicare
which applies to partial disability benefits
payment is limited to a certain period of time
which of following is NOT true about joint and survivor
payments stop after the first death among annuity's
Critical illness policy
pays a lump sum if insured suffers from heart attack or stroke
Benefits required in health plans purchased in marketplace
pediatric vision, hospitalization, maternity
ERISA was designed to protect
plan participants and beneficiaries
What is most common time for errors and omissions to occur on part of insurer
policy delivery
HSA's are
portable - individual is not dependent on a particular employer to enjoy HSA
which of following is NOT allowed under the no-loss/no gain provision
pre existing condition exclusion
when a group coverage replacement sale has occurred, which normal provision of the new police cannot be applied as usual
pre-existing condition
which will be included in a policy summary
premium amounts and surrender values
in a group life policy with a death benefit of more than 50,000
premium cost above 50,000 is taxable as income
all are examples of risk retention EXCEPT
premiums
which do the standard and preferred risk categories share
premiums are not elevated
Taxing individual life insurnace
premiums paid are not tax-deductible - no income tax on death benefits - dividends are not taxed
which instances would the premium be tax deductible
premiums paid by an employer on a 30,000 group term life insurance plan for employees
an HMO provides array of services on a
prepaid basis
an underwrite may reject an application for health insurance if based upon
prescription usage
what are illustrations in a life insurance policy
presentations of non guaranteed elements of the policy
in group insurance the primary purpose of coordination of benefits provision is to
prevent overinsurance
which best describes the type of care provided by HMOs
preventive
Incontestable provision
prevents an insurance company from contesting any claims during period
spendthrift provision purpose
prevents beneficiary's reckless spending of benefits - and protects policy proceeds from creditors of beneficiary
Under Accidental death and dismemberment, what type of benefit will be paid to beneficiary
principal sum
Medicare part A doesn't include
private duty nursing
what benefits are provided by medicare part C
private insurance programs like HMO and PPO
what is initial period of time in a disability income policy that must pass, before a loss can be covered
probationary period
what is initial period of time specified in a disability income policy that must pass, after policy is force, before a loss can be covered
probationary period
Which can an insured submit to the insurer that would provide evidence of a claim and show how severe the loss is
proof of claim
Purpose of errors and omissions insurance
protect agents against charges that they didn't properly serve a client
Term life
provides coverage for a specified period of time and provides largest death benefit at less cost Temporary coverage for a short term that is afordable
Accidental death and dismemberment rider
provides coverage for accidents to a policyholder that cause harm or death - not covered for illnesses
Level term
provides same death benefit whether death occurs on day 500 or day 5,000 The terms "level" and "decreasing" refer to death benefit status
Presumptive disability is a
provision that specifies the conditions that will qualify them for full disability benefits
which will be eligible for a tax sheltered annuity
public school teachers
If a person receives benefits for long term care from Medical, when that recipient dies, the state may
pursue asset recovery against the estate of the recipient
when producers give or promise anything
rebating
the federal fair credit reporting act
regulates consumer reports
what provision allows the policy owner to reactivate a lapsed life insurance policy within a specified period of time with proof of insurability
reinstatement
What type of care is respite care
relief for a major care giver
harry is recovering from long period of disability. Which rider could protect his business from loss of absence
residual rider
All are long-term care coverages to receive at home
respite care, home health care, custodial care in insured hose - NOT SKILLED CARE
if an insured purchases an insurance policy with large deductible, what risk management technique is insured using
retention
Steps taken to prevent losses from occurring are called
risk reduction
adverse selection is a concept best described as
risks with higher probability of loss seeking insurance more often than other risks
which of following dental insurance would cover the filling of cavaties
routine and major restorative care (others are oral surgery, bridges, dentures, cavity)
Which is not covered under medicare part B
routine dental care
health insurance underwriting is best defined as
selection, classification, and rating of risks
Formal arrangement of providing health care benefits without providing financial protection to the principal is what type of plan
self-insurance
If a licensee wants to terminate his license
send the license to the commissioner for termination
Who does HICAP servce
seniors receiving social security or medicare
HMOs are known as what type of plans
service
blue cross and blue shield are
service organizations
Complete disability
she can't work at any job relating to experience
Which two terms are associated with way annuity is funded
single payment or periodic payments
a whole life policy that generates immediate cash value is a
single premium policy
Which is a daily nursing and rehabilitative care that can only be provided by medical personnel
skilled care
all are beneficiary designations EXCEPT
specified
California insurance code is
statutes established by the state legislature
when an employee covered under a HRA changes employers, the HRA
stays with the employer
which terms describes the specified dollar mount beyond which the insured no longer participates in the sharing of expenses
stop loss limit
what type of annuity is suitable for someone who wants to select the benefit option that will pay the largest amount
straight life
Employer contributions made to a qualified plan are
subject to vesting requirements
If a basic medical insurance plans benefits are exhausted, what type of plan will then begin covering the loses
supplementary major medical
Which of following is NOT covered under basic hospital expense coverage
surgeons fees - correct is lab charges, x-ray, hospital room and board
what type of annuity activity will cause immediate taxation of interest earned
surrendering the annuity for cash
taxation on disability benefits are
tax free
during accumulation period in a non qualified annuity, what are tax consequences of a witdrawl
taxable interest will be withdrawn first and 10% penalty if under age 59.5
Upon surrender of a life insurance policy, any cash value accumulated in excess of the premium payments is
taxed as ordinary income
A 403b plan is used by
teachers and non profit organizations
the time period between the issuance of the binder and policy effective date is called
temporary term
what type of life insurance offers pure death portection
term
The annual contribution limit of flexible spending account is set by
the IRS
what is indemnification
the act of one person who agrees to restore an injured person to the condition they enjoyed prior to loss
when a client replaces an existing LTC or medicare supplement policy with another from same company, california law requires that
the agent must advice client about HICAP and its services
whose responsibility is it to ensure application is complete and accurate
the agents
what is purpose of agent's report during application process
the agents report discusses the agents personal observations about the proposed insured that may help in the underwriting process
what is elimination period under a LTC policy
the amount of time during which no benefits will be paid
what happens if a non-member physician is utilized under the POS plan
the attending physician will be paid a fee for service, but member patient will have to pay a higher coinsurance amount
who does the spendthrift clause in a life insurance policy protect
the beneficary
in group life insurance, employer may select all of following EXCEPT
the beneficiary
which is NOT required to have an insurable interest in the insured
the beneficiary
If a life insurance policy has an irrevocable beneficiary,
the beneficiary can only be changed with written permission of the beneficiary
Whole life benefit level
the benefit level is steady over its lifetime, to the age of 100
an insured who has an AD and d policy loses her left arm. what type of benefit will she recieve
the capital amount in a lump sum
which describes the client which will benefit from extension of benefits
the client who was disabled prior to a policy continuance and remains disabled
what is written document called in which insurance coverage is set forth
the contract
When an insured receives a written binder,
the coverage will be effective immediately
In credit life insurance
the creditor is the policy owner/beneficary and the debtor is the insured
what is unique of investigative consumer reports
the customers associates, friends, and neighbors provide the reports data
if an individual is covered by medicare, and is also covered by his employers health plan, which plan would be considered primary
the employer plan
Nonforfeiture values
the insurance policy's cash values is not able to be forfeited
"first dollar coverage"
the insured is not required to pay a deductible
What is difference between blanket and group health insurance
the insured members are not named
If a medicare insured uses a health care provider who doesn't accept medicare payments, which will be true
the insured might need to sign a private contract with the providor
Attending phsycians statement
the insured's medical history, healthcare plan, and how condition came to be
the primrose of policy exclusions to proect
the insurer from claims for losses which were not included in the initial risk assessment
if an annuity has a guaranteed minimum interest rate, this means
the interest rate will never drop below the guaranteed minimum
an annuitant dies before the effective date of a purchased annuity - assuming wife is beneficiary, what will occur
the interest will continue to accumulate tax deferred
which depicts the law of large numbers
the larger the pool of risks under study, the more accurate the predictions will be
which of the following is true regarding elimination periods and cost of coverage
the longer elimination period, lower cost of coverage
which is NOT a characteristic of pure risk
the loss must be catastrophic
The more predictable a loss
the more insurable it is
a warrant may relate to which of following
the past, the present, and future
if a retirement plan is qualified, what does that mean
the plan has a favorable tax treatment
if an insurer issued a policy based on application that had unanswered question, which would be TRUE
the policy will be interpreted as if insurer waived its right to have an answer on the application
If an insured continually uses APL to pay policy premium
the policy will terminate when cash value is reduced to nothing
When an insured incurs medical expenses during the last 90 days of a calendar year, the carry-over provision allows
them to apply such expenses to the new year's deductible
which is true regarding taxation of accelerate benefits paid under a policy
they are received tax free
how is key-person life benefits taxed
they are tax free
which statements regarding conditional receipts is true
they are temporary insuring agreements
Regarding Medicare SELECT, what are restricted network provisions
they condition the payment of benefits
all of following are requirements for life insurance illustrations EXCEPT
they must be part of the contract
which will be appropriate for a parent buying life insurance policy on a child where the parent is policyowner
third party ownership
An insured wants to change from annual to monthly premium, what is true
this change can only be made on policy's anniversery
medicare is a program for all individuals except
those with low income and low assets Medicare is for those over 65, have been on social security for 2 years, and those with permanent kidney failure
How can insurers obtain information on an applicants avocations and the way they will affect a risk
through the use of questionnaire
Waiting period is
time the insured has to wait after a disability occurs before benefit payments begin
what is purpose of annuity riders
to allow investors to obtain additional benefit
The term illustration in life insurance policy refers to
a presentation of non guaranteed elements of a policy
which best describes a rebate
a producer returning part of her commission to her client
Contracts that are prepared by one party and submitted to other on take it or leave it
adhesion - the insured doesn't have any input
which of following types of care could be provided at a community center
adult day care
which LTC benefits would provide coverage for care on a less than 24-hour basis
adult day care - need assistance, but not around the clock
what is it when a doctor accepts the medicare approved amount
assignment
What % of a company's employees must take part in a NONCONTRIBUTORY group life plan
100%
anyone convicted of committing an insurance fraud may be fined up to
150,000
Equity-indexed universal life
Ability to increase cash value with the stock index through interest rate - tax deferred accumulation, tax free proceeds at death
COBRA
giving health care for up to 18 months to individuals have been fired
Whey are HMO insurance plans lower in premium compared to others
Because they have contracts with providers and direct their insureds to those providers
Universal whole life
Blend of term and whole life - offers flexibility to insureds with low-cost premiums (similar to term) as well as savings feature (like whole life)
Medi-cal is
California's medicaid health care program
Guaranteed insurability rider
Can have opportunity to buy additional life insurance with no underwriting or medical screening
Variable whole life
Can span an entire life, includes ability to add cash value, and can be permanent if insured pays each premium on time as required Allows flexibility and discretion to the policyholder in how he makes premium payments
Partial disability
Cant do one or more but is not prevented from doing all
Taxing group life insurance
Employers have a levy on the cost of the first 50,000 - death benefit is tax free
Entire contract provision rider
Entire contract includes both application and policy - once contract is completed and signed, no changes can be made by anyone
Renewable
Feature allows the policy to be renewed for another term without having to show that he or she is still in good health
what are examples of qualified plan
IRA, 401k, Keogh
the automatic premium loan provision s activated at the end of the
grace period
Non-forfeiture option
States that the insured may receive all or some benefits on the premiums that have already been paid - clause is added in case that the insured neglects to make premium payments causing policy to lapse
if annuitant dies during accumulation period, who will receive annuity benefits
beneficary
which of the following is TRUE about class designation
beneficiaries are not identified by name - class designation would be "my children"
which is NOT true regarding an annuity certain
benefits stop at the annuitants death
Which is NOT a temporary insuring agreement
bridge coverage receipt
which of following is NOT an indicator of a competent party
business profession
Services provided by HICAP are paid for
by state and local governments
to legally transact insurance in this state, an insurer must obtain
certificate of authority
when a polocyowner designates a group of individuals as the beneficiary of life insurance without naming individuals, this is called
class designation
What term when medical caregiver provides services to only members of a health organization and isn't allowed to treat other patients
closed panel
What is clause that describes event that insured and beneficiary are both killed in same accident
common disaster clause
What is contract provision that allows insurer to non renew health coverage
conditionally renewable
every expressed warranty made at or before execution of policy must be
contained in and referred to in the policy or other document and signed by insured
every expressed warranty made at or before the execution of a policy must be
contained in and referred to in the policy or other document and signed by insured
a whole life policy is surrendered for a reduce-paid up policy - the cash value in the new policy will remain
continue to increase
an adjustable life policy can assume the form of
either term or permanent insurance
which is NOT covered by HMOs
elective services - correct are well baby care, immunizations, routine physicals
for a retirement plan to be qualified, it must be designed for benefit of
employees
what are income tax benefits of a qualified plan
employer contributions are tax deductible and are tax free to employee - earnings accumulate tax deffered
what type of annuity creates its interest based upon an index such as s & p 500
equity indexed annuity
which provisions requires an insurer to document all correspondence with an insured
errors and omissions
what is main advantage of converting from group life to individual
evidence of insurability is not required
In executive bonus plan, who is owner of policy and who pays premium
executive is owner, and executive pays premium
What type of rating do blue cross and blue shield use as a factor in developing rates
experience rating
Factual statements about the insured or the risk in an insurance policy are considered
express warranty
which covers the whole family in a single contract
family policy
7 which is true regarding taxation of the accelerated benefits
a portion of the benefit up to a limit is tax free- the rest is taxable income
a policy that pays monthly income, plus a lump sum, and combines level term and whole life is a
family maintance
Deductibles that are available are
family, common accident, per cause
A person caught violating provisions regarding misrepresentation is subject to
fine up to 25,000
health coverage becomes effective when the
first premium has been paid and application has been approved
Which option does the annuitant select the amount of each payment, and insurer determines how long they will pay benefits
fixed amount
an applicant for insurance is requesting more information from agent about a claim that is being settled - what time period must agent respond
15 days
how many tiers must be included in each treatment of medicare part d
2
all are divided options EXCEPT
fixed-period installments (that is a settlement option)
What tern refers to listing of approved drugs
formulary
how is emergency care covers for a member of an HMO
a member of an HMO can receive care in or out of the HMO service area, but care is preferred in the service area
if an insured is injured while committing an illegal act, what percentage of claim will be paid
nothing
Which time period is general enrollment for medicare part B
Jan 1 to March 31
Payer benefit provision rider
Most found in children's life insurance - provides that premiums will be suspended if the person responsible for paying the premiums becomes disabled or dies
Contributory and non-contributory group life
Non-contributory -- the full premium is provided by employer with zero contribution from employees - also don't need medical coverage Contributory - both contribute to the plan, but employer can offer better coverage than provided because of enhance funding levels
what universal life option has increasing cash value and level death benefit
Option A
Which organization is on a fee-for-service basis
PPO
which describes the waiting period
a period of time the insured has to wait before payments of benefits begin after a disability
Whole life
Pays a death benefit whenever the insured passes away Three types: traditional whole life, universal life, variable universal life Traditional - covers the life of insured and with stable premiums and guaranteed death benefits, includes an added ability to build cash value on tax-differed basis (provides life insurance protection with added bonus of savings feature) Universal life - low-cost premium structure but also has savings component Variable universal life - direct a portion of premium to a operate investment account
Three time periods in medical expense policies
Probationary period, waiting period, benefit period Prob - prior to beginning of coverage Waiting - after policy is issued by prior to payments Benefit - claim payment period
Return of premium
Provide a return on the premiums paid by the insured if the term ends without a death benefit being paid out - if insured outlives the payment period, the insured will receive premiums back
which would automatically qualify for MEdi-cal benefits
a person receiving supplementary security income assistance
MIB
Used to detemrine an indivudla;s risk and eligibility during underwriting of insurance policies
Grace period
When insured fails to make schedule premium, will enter grace period - the premium payment can be mad without possibility of insurer terminating the coverage (30 days)
Warranty
When the contract is to take effect
when transacting business in this state an insurer formed under the laws of another country is an
alien insurer
HRA's are avaialbe to
all sizes of employers
The purpose of having elimination period is to
allow the client some flexibility in determining their own premium
if annuitant dies before annuitaizaation period starts, what will beneficiary recieve
amount paid into annuity or cash value, whichever is greater
in insurance, an offer is usually made when
an applicant submits an application to the insurer
Group insurance may be issued to everyone EXCEPT
an association of 35 people
which is NOT a personal use of life insurance
an individual buys insurance to fund a buy-sell agreemtn
What is a foreign insurer
an insurer with a home office in another state
The least expensive first-year premium is found in
annually renewable term
Whose life expectancy is taken into consideration in an annuity contract
annuitant
regarding annuity payments, what is difference between annuitant and beneficiary of annuity
annuitant receives payments from annuity during annuiatization period; the beneficiary receives benefits after the annuitants death
which concept is associated with exclusion ratio
annuities payments
which is a short-term annuity that limits amounts paid to a certain fixed period
annuity certain
if an insured is unhappy regarding his or her medicare services, what may he do
appeal the decision
Who must sign notice regarding replacement
applicant and agent
which would NOT be an underwriting consideration for health insurance applicatn
applicants sexual orientation
Nonforfeiture options
are in place to the insurer if he would like to discontinue the policy
Morale hazards
arise from a state of mind that causes indifference to loss, carelessness
what is it called when a doctor accepts the medicare approved amount
assignment
when must the policy summary for life insurance policy be delivered to policyowner
at the time of policy delivery
an insurer that holds a certificate of authority in the state in which it transacts business is an
authorized insurer
what are tax implications for contributions to a HSA by the individual
contributions are tax deductible
Purpose of managed health care insurance plans is to
control health insurance claims expenses
the gatekeeper of an HMO helps
control specialist costs
the type of policy that can be changed from one that doesn't accumulate cash value to the one that
convertible term polciy
According to entire contract provision, what document must be made part of insurance policy
copy of the original application
which term refers to nontaxable portion of each annuity benefit payment
cost base
Long term care insurance
covers a range of services and supports individuals to meet they personal care needs
which is NOT a standard exclusion in life insurance polocies
disability - common exclusions are hazardous, war and military service, aviation
Which of the following statements about occupational vs nonoccupational
disability insurance can be written as occupational or nonoccupational
an applicant is denied because of information found on consumer report, which requires that insurance company supply applicant with name and address
fair credit reporting act
a husband and wife incur expenses that are attributed to a single major medical insurance deductible - what type do they have in their policy
family
which is NOT true regarding a flexible spending account
it does not have limits on contributions
which is NOT true regarding a flexible spending account
it doesn't have limits on contributions
what is an advantage of the temporary insuring agreement to the applicant
it gives the applicant immediate coverage
What is benefit of choosing extender term as a nonforfetirue option
it has the highest amount of insurance protection
which best describes the MIB
it is a nonprofit organization that maintains underwriting information on applicants for life and health insurance
Which is true regarding a term health policy
it is nonrenewable
if an insured surrenders his life insurance polouc, which is true regarding cash value of policy
it is only taxable if cash value exceeds amount paid for premiums
when a reduce-paid up nonforfeiture option is chosen, what happens to face amount of policy
it is reduced to the amount of what the cash value would buy as a single premium
which is true about reinstatement provision
it requires policy owner to pay all overdue premiums with interest before policy is reinstated
In modified life policies, what happens to premium
its level at beginning and increases after first few years
in group health policy, a probationary is intended for people who
join the group after the effective date
If a contract provides income for two or more persons with income stopping upon first death, its called
joint life annuity
if an annuity provides a set amount of income for two or more persons with the income ceasing upon first death, what type of annuity is that
joint life annuity
if a life insurance policy increases significantly in face amount when insured reaches a specified age, what type of policy is this
jumping juvenile policy
who would be the insured in business disability insurance
key employees
Which of following settlement options is known as straight life
life income
what annuity settlement option provides income payments to the annuitant for duration of his life and also guarantees payment for a specified number of years
life income with period certain
Single premium whole life
limited payment whole life with one very large payment due at time of issuance - policy is fully paid up - because of this, the policy at the start has a cash value and loan value from the beginning
A whole life policy that requires policy owner pays a premium for specified number of years is a
limited-pay whole life
A whole life policy that requires policy owner pays premiums for a specified number of years is
limited-pay whole life
In a disability policy, the probationary period refers to time
limits coverage on new policies for certain illness-related conditions
which rider provides the payment of part of policy death benefit if insured is diagnosed with a terminal illness that will result in death within 2 years
living needs rider
the human life value approach to determine life insurance needs is based upon
loss of breadwinner's income (human life value approach is based upon loss of income)
in franchise insurance, premiums are usually
lower than individual policies, but higher than group policies
what is other term for cash payment settlement option
lump sum
High-Deductible health plan
makes insured pay for initial part of expenses - was designed to make policy holders more conscious of the expenses associated with medical care Higher deductibles in turn result in lower premiums
what part of application would contain information regarding cause of death of applicants deceased relatives
medical information
which part of insurance app would contain info regarding cause of death of applicants deceased relatives
medical information
which used to be called medicare + choice plans
medicare advantage
Medicare advantage is also known as
medicare part c
probability of sickness within a given group of people
mobidity
Any cash value that develops cash value faster than a seven-pay is called
modified endowment contract
Disability insurance is paid out on what basis
monthly
credit disability insurance will pay
monthly payments until the insured recovers or loan is paid off
The agent's statement is
not included in the entire contract
Qualified medical expenses paid for participants in MSA are
not taxable
when an insurer issue an individual health insurance policy that is guaranteed renewable, the issuer agrees
to renew policy until insured has reached 65
social security was created to provide all the following except
unemployment income - correct are disability income, retirement income, survivors income
Waiver of cost of insurance rider is found in
universal life
which of following would have an IRS required corridor or gap between cash value
universal life - option A
under a credit disability policy, until what point will payments to the creditor be made for the insured?
until the disability ends or debt is satisfied
joint and survivor will pay
until the last annuitant has die - the surviving annuitant may receive reduced payments
in a survivorship life policy, when does insurer pay death beenfit
upon the last death
FSA's are subject to
use or lose rule - unused benefits don't carry over to next year
STOLI
used when a person applying for life insurance wants to located beneficiary who doesn't have insurable interest
Flexible spending account
way to save money on excessive costs and can save money aside from paycheck
Spendthrift provision
when a life insurance stipulates that beneficiary will receive payments in specified installments or for a specified number of years
Executive bonus
when an employer gives employee a wage increase in amount of premium on new life insurance policy
when would a 20-pay whole life endow
when insured reaches 100
main difference between immediate and deferred annuities is
when the income payments begin
when does an adjustable life policy accumulate cash value
when the premiums paid are more than cost of policy
a graded premium life is modified form of
whole life
which products does the replacement regulation apply
whole life insurance
Ordinary life insurance is often called
whole life or straight life
An employee has been terminated, how long must exercise extension under COBRA
within 60 days
Any occupation
would pay benefits only if the individual cannot perform any job