Health and Life Insurance Study Guide
In general, what portion of life insurance premiums are subject to income tax deductions?
0%
T pays a monthly premium of 100 for her health insurance. What would be the duration of the grace period under her policy?
10 days
What percentage of medical expenses are partners allowed to deduct at the end of the year?
100%
How are Social Security Benefits paid in the event a person is disabled?
100% of a person's PIA is paid
What percentage will the administrator hold during a 401k rollover?
20%
How many pints of blood will Medicare not cover?
3
How long does a vested employee have to utilize the conversion privilege?
31 days
C is looking for a comprehensive health policy to cover is occasional sicknesses. Which type of policy did C most likely not purchase?
A Basic Hospital and Surgery policy
All of the following are correct about the required provisions of a health insurance policy EXCEPT:
A reinstated policy provides immediate coverage for an illness.
401k retirement plans state that the employer must contribute how much to an employees account?
A systematic rule must be established
H purchased a 15 year level term policy with a death benefit of $100,000 for $20 per month, which also included a return of premium rider for $5 extra per month. H lived for the full 15 years, which of the following scenarios most likely happened?
H received his full premium + return of premium rider cost in a lump sum
HIPAA may help an insured satisfy pre-existing conditions under all of the following conditions except:
Having a gap larger than 63 days in coverage.
Which would best describe a plan that provides lower out of pocket costs to subscribers while promoting preventative care?
Health Maintenance Organization (HMO)
Medicare Part A will FULLY pay for skilled nursing facilities in which of the following scenarios?
If the stay in the hospital was 72 hours and for a maximum of 20 days.
Which of the following is NOT a managed care plan?
Indemnity Plan.
An insurer is obligated to provide information about fraudulent claims to all of the following EXCEPT:
Insureds
Which of the following statements is true about a Medicare Supplement policy?
It is guaranteed renewable
D is a small entrepreneur of a 15 person company who is shopping for a retirement plan to add as a benefit for her employees. D wishes to remain a sole proprietor and realizes her options are limited due to this fact. Which type of retirement plan should the agent recommend?
Keogh (Unincorporated)
Under which clause would the insured be unable to sue an insurer within the first 60 days of a claim?
Legal Actions Clause
When the cost of care is first analyzed and then a plan is determined to control costs, this is an example of what?
Management
An outline of coverage is required to be given during the sales process of which policies?
Medicare Supplement or Long Term Care
Which of the following BEST describes gross annual premium?
Mortality annual cost + expense loading
An insured submits an application with the premium but has left portions of the application unfilled. What will happen if the insured dies during underwriting?
No benefits are paid and the insurer keeps the premiums
P purchased a new health insurance policy on April 1st and on May 20th his policy lapses due to non-payment. P reinstates the policy on June 10th and visits the doctor on June 18th due to the flu. Which most likely happened in this claim?
No benefits were paid due to the claim being an illness
Which type of dental care would cover operative treatment of the mouth?
Oral surgery
N and G are married whereas N has a life insurance policy and G is named as the primary beneficiary, while naming their son P as the contingent beneficiary. If N and G are involved in an accident that kills both and it is unclear who died first; under the Simultaneous Death clause, who will receive the death benefit?
P
Which of the following may an insured purchase with a return of excess premium?
Paid up Additions.
Which of the following is an option the insured can exercise with a dividend option?
Paid up additions
Which of the following best describes Medicare?
Part A: Hospital Services, Part B: Physician services
Which of the following distributions would be subject to the 10% penalty for surrendering a SIMPLE 401k early?
Participant's bankruptcy
Long Term Care will NOT cover any of the following EXCEPT:
Physical Therapy
D has little or no medical issues and also maintains a healthy lifestyle; when applying for insurance the agent advises him that the underwriter may classify D as which type of risk?
Preferred risks
Medicare Part D covers which of the following?
Prescription Drugs
Which of the following is NOT a description of the Commissioner of Insurance?
Private prosecutor of insurance fraud.
Which of the following IS a required provision?
Proof of Loss
Which of the following best fits Accidental Bodily Means?
The cause and injury were sudden and unexpected
How are funds contributed to a SEP IRA treated for taxation?
The contributions are not included as income for the employee, but are taxable upon distribution.
If a group endorses an insurer, which of the following is true?
The group must state if it is controlled by the insurer.
Which of the following is true regarding conversion from a group life insurance plan?
The insured may convert any time after participating in the plan for 5 years.
What is the reason an insured must wait a specific amount of time to sue an insurer after a claim?
The insurer has a specified number of days to evaluate and reevaluate the claim.
An applicant has given an agent an unsigned check. The agent sends the check in to the insurer alongside with the application. The insurer sends the check back to the agent, when would coverage begin?
The policy begins when the premium is paid and the policy is issued.
Who is the only party that can change the beneficiary?
The policyowner
Which clause specifically applies to Pre-Existing Conditions?
Time Limit on Certain Defenses
What is the primary purpose of the needs analysis?
To determine life insurance death benefit needs
Which of the following products have producers who are regulated by the National Association of Securities Dealers (NASD):
Variable Life
Of the following choices, which could have a vanishing premium?
Variable universal life
Which of the following best describes split-dollar insurance?
When the premiums are split among employer and employee
Can the Commissioner inspect the records of an agent?
Yes, by the powers granted by the state.
Which of the following is not true about Universal Life Insurance?
a tax credit is applied
Which of the following is true about a Traditional Individual Retirement Account (IRA)?
a tax penalty is removed after 59 1/2
Which of the following best describes a contract written on a "take it or leave it" basis?
adhesion
When must an insurable interest exist in life insurance?
at the time of application
Which of the following is CORRECT about the disability guaranteed insurability rider?
benefit may be higher
Under the Affordable Care Act, all of the following are included in the maximum out of pocket cost EXCEPT:
coinsurance deductibles and copay
When an insurance contract requires conditions that must be met before a claim is paid out upon receipt of proof of loss, this is which type of contract?
conditional
Agent Y completes an application on January 8th, while collecting premium at the same time. The insured V has stated they would like to be covered at the time of application regardless of health status, but Agent Y has repeatedly told V the policy will go into effect at the time of medical exam. Which type of receipt will Agent Y give to V on January 8th?
conditional receipt
Which of the following allows for a term policy to be switched for a whole life?
conversion
Which of the following will not require proof of insurability when switching to a different type of policy?
convertible term
Costs paid for by a medical policy are referred to:
eligible expenses
Which of the following is known as the deductible for disability insurance?
elimination period
All of the following may enter into a buy-sell agreement EXCEPT:
employees
A copy of the application plus the policy will constitute which of the following?
entire contract
Which provision states that an insured may NOT change a beneficiary?
entire contract
Long Term Care benefits are paid on which basis?
expense incurred
The non-forfeiture option that provides an insured with coverage for a specified period of time can be best described as?
extended term
Which of the following is not true about a universal life insurance policy?
fixed premiums
Which of the following is true about a newly born child being covered under a parents health insurance policy?
for 31 days after birth and then added onto the policy
Which of the following is true about a producer's duty for collection of premium?
funds may be held in an "escrow" account
Which of the following policies may be used to circumvent the insurable interest clause in a life insurance contract?
investor originated life insurance
A plan with coinsurance would most likely be which plan?
major medical
When an insurer evaluates claims and handles risk appropriately, which method of risk handling is being used?
management
The entire contract clause allows an insured to perform all of the following, except:
modify the contract
An agent must NOT obtain a license for which purpose?
only selling to family
The provision that explains the exclusions and exceptions in a health policy is known as:
outline of coverage
Which of the following must be found on an outline of coverage?
policy coverages and exclusions
The insurer wrote an insurance policy as a contract of adhesion with ambiguous statements, if a policyholder's claim is denied due to the contradiction and they sue the insurer during the Legal Actions clause timeframe, who will most likely win the lawsuit?
policyholder
Under the coordination of benefits clause, when an insured has two insurance plans and one pays, this is known as:
primary insurance
Which of the following provisions notifies the insurer of the exact costs incurred in the event of a claim and must be a sworn statement?
proof of loss
Stranger originated life insurance usually targets whom?
retirees and senior citizens
A woman is ready to retire and has 100,000 in savings. She would like to begin receiving immediate payments that are guaranteed for life. Which annuity would she purchase?
single premium
Which type of annuity is purchased with a large monetary deposit?
single premium
How are benefits received from a Long Term Care policy taxed?
Tax free except for the amount exceeding actual expenses
All of the following would receive an Outline of Coverage except:
Adjustable life
Which person qualifies for an Accelerated Payment?
An insured confined to long term care.
What type of benefit plan is a managed plan that is developed in conjunction with the Health Benefit plan committee?
Basic Coverage Benefit Plan
Who must pay the premiums in a credit life policy?
Borrower
When must an IRA be liquidated if no beneficiary has been selected and the owner is deceased?
By 12/31 of the 5th year after the owners death
When an insurer places applicants into categories for rating purposes, this is known as:
Classification of Risks
A basic hospital policy will pay for which of the following?
Convalescent care for 31 days
Which of the following MUST an agent notify an insured of when purchasing a participating policy?
Dividends are not guaranteed
All of the following are factors during policy replacement EXCEPT:
Experience Rating.
A contributory Major Medical plan will not pay for which of the following services?
Experimental and Investigative procedures
All of the following would be foreign insurers EXCEPT:
France
J submits his application and premium on August 28th, the policy goes through underwriting on September 2nd and is delivered on September 6th. When J returns the policy on September 12th, what will most likely happen?
Full premiums will be refunded
Which provision in a disability policy allows the policy raise or decrease the benefit amount dependent on the insured's income?
Relation to Earnings
Accidental Death and Dismemberment will pay no benefits in which scenario?
Self-Inflicted Injuries
Y is 45 years old and has a large sum of money from a court settlement. Y would like to structure the settlement to receive income payments until he is eligible for Social Security, which type of product would be best suited for Y?
Single Premium Immediate Annuity with a Fixed Period
A universal life guaranteed minimum death benefit does what?
Stays the same.
Which of the following is liable during a lawsuit when dealing with an unauthorized insurer?
the agent and the insurer
