Kansas Life and Health Exam Misc.
What is the maximum health benefit that the Kansas Life and Health Insurance Guaranty Association will pay for health insurance benefits for any one individual?
$100,000
What is the maximum penalty for habitual willful noncompliance with the Fair Credit Reporting Act?
$2,500
An insured is covered by a partially contributory group disability income plan that pays benefits of $4,000 a month. If the insured pays 25% of the monthly premium, how much of the monthly benefit would be taxable?
$3,000
An insured owns a $50,000 whole life policy. At age 47, the insured decides to cancel his policy and exercise the extended term option for the policy's cash value, which is currently $20,000. What would be the face amount of the new term policy?
$50,000
The sole proprietor of a business makes a total salary of $50,000 a year. This year, his medical expenses have reached a total of $75,000. What amount may the sole proprietor deduct in regards to his medical expenses?
$50,000
Under the Affordable Care Act, what percentage of preventive care must be covered without cost sharing?
100%
How many consecutive months of coverage (other than in an acute care unit of a hospital) does LTC insurance cover?
12
J is trying to become a licensed producer in this state. Unfortunately, he has failed his examination on the first try. How many times can J retake the exam before he has to wait 6 months?
2
COBRA applies to employers with at least
20 employees
What is a penalty tax for nonqualified distributions from a health savings account?
20%
An insurance agent was born in 1978, and became licensed in 2013. What is the closest year by which the agent must complete his continuing education requirements?
2016
The relation of earnings to insurance provision allows the insurance company to limit the insured's benefits to his/her average income over the last
24 months.
If a consumer requests additional information concerning an investigative consumer report, how long does the insurer or reporting agency have to comply?
5 days
A distribution from an employer-sponsored retirement plan or from an IRA is eligible for a tax-free rollover if it is reinvented in an IRA within
60 days
What document describes an insured's medical history, including diagnoses and treatments?
Attending Physician's Statement
If an insurer meets the state's financial requirements and is approved to transact business in the state, it is considered to be
Authorized
Which is TRUE about the cash surrender nonforfeiture option?
Funds exceeding the premium paid are taxable as ordinary income.
The guaranteed purchase option is also referred to as the
Future increase option
Which of the following is another name for a primary care physician?
Gatekeeper
An individ is purchasing a permanent life insurance policy with a face value of $25k. While this is all the insurance he can afford, he wants to make sure that additional coverage will be available. Which option should be included in the policy?
Gauranteed insurability option
Most LTC plans have which of the following features?
Guaranteed renewability
In order for an alumni association to be eligible to purchase group health insurance for its members, all of the following must be true EXCEPT when the association
Has been active for five years minimum
What are the 2 types of Flexible Spending Accounts?
Health Care Accounts and Dependent Care Accounts
An insurer devises an intimidation strategy in order to corner a large portion of the insurance market. Which of the following best describes this practice?
Illegal
Which of the following riders would NOT increase the premium for a policyowner?
Impairment rider
Which of the following would be considered false advertising?
Implying that the agent is the insurer
Life income joint and survivor settlement option guarantees
Income for 2 or more recipients until they die.
The life insurance policy clause that prevents an insurance company from denying payment of a death claim after a specified period of time is known as the
Incontestability clause
What type of insurance would be used for a Return of Premium rider?
Increasing Term
Which type of a hospital policy pays a fixed amount each day that the insured is in a hospital?
Indemnity
The Patient Protection and Affordable Care Act includes all of the following provisions EXCEPT
Individual tax deduction for premiums paid.
Which of the following entities can legally bind coverage?
Insurer
Which of the following statements regarding HIV testing for insurance purposes is NOT true?
Insurers are barred from requesting HIV testing.
The policyowner wants to make sure that upon his death, the life policy will pay a portion of the proceeds annually to his spouse, but that the principal will be paid to their children when they reach a certain age. Which settlement option should the policyowner choose?
Interest only option
In health insurance, if a doctor charges $50 more than what the insurance company considers usual, customary and reasonable, the extra cost
Is not covered
What is the main purpose of the Seven-pay Test?
It determines if the insurance policy is an MEC.
Which of the following is NOT true regarding a flexible spending account?
It does not have limits on contributions.
What is the benefit of choosing extended term as a nonforfeiture option?
It has the highest amount of insurance protection.
Which of the following is TRUE regarding the annuity period?
It may last for the lifetime of the annuitant.
Which of the following statements is TRUE regarding an agent's report during the policy application process?
It provides the agent's personal observations concerning the proposed insured
Which of the following statements about the reinstatement provision is true?
It requires the policyowner to pay all overdue premiums with interest before the policy is reinstated.
If a health care plan has characteristics of an HMO and PPO, what type of plan is it?
POS
An insured has a life insurance policy from a participating company and receives quarterly dividends. He has instructed the company to apply the policy dividends to increase the death benefit. The dividend option that the insured has chosen is called
Paid-up additions.
An insured has had a life insurance policy that he purchased 3 years ago when he was 40 years old. He is killed in an automobile accident and it is discovered that he is actually 45 years old, and not 43, as stated on the application. What will the company do?
Pay a reduced death benefit
Key person insurance can provide protection for all of the following economic losses to a business EXCEPT
Pay the death benefit to the estate of the insured
If an applicant makes a false statement on his/her producer's license application, what is he/she guilty of?
Perjury
Which of the following provides specific information about the products that are being considered and must be left with a prospective insured at the time of application?
Policy Summary
If an immediate annuity is purchased with the face amount at death or with the cash value at surrender, this would be considered a
Settlement option.
What does the application of contract of adhesion mean?
Since the insured does not participate in preparing the contract, any ambiguities would be resolved in favor of the insured
Which benefit is based on the person's Primary Insurance Amount (PIA)?
Social Security disability benefit
Which of the following would help prevent a universal life policy from lapsing?
Target premium
All of the following would be different between qualified and nonqualified retirement plans EXCEPT
Taxation on accumulation
For which of the following is the Life and Health Guaranty Association liable?
The Association is liable, at most, for the lesser of all of the above benefits.
An insurance agent is subject of an administrative hearing by the Commissioner. The costs associated with the hearing included witness fees and fees for reproduction of documents for the record. Which of the following will be responsible for covering the costs?
The agent
Which of the following information will be stated in the consideration clause of a life insurance policy?
The amount of premium payment
All of the following statements about equity index annuities are correct EXCEPT
The annuitant receives a fixed amount of return.
Which of the following is true about the requirements regarding HIV exams?
The applicant must give prior informed written consent.
A husband and wife are insured under group health insurance plans at their own places of employment, and as dependents under their spouse's coverage. If one of them incurs hospital expenses, how will those expenses likely be paid?
The benefits will be coordinated.
The policyowner of an adjustable life policy wants to increase the death benefit. Which of the following statements is correct regarding this change?
The death benefit can be increased by providing evidence of insurability.
All of the following are true about group life insurance EXCEPT
The employer is the beneficiary
What happens to the face amount of a whole life policy if the insured reaches the age of 100?
The face amount is paid to the insured
A life insurance policy does not have a war clause. If the insured is killed during a time of war, what will the beneficiary receive from the policy?
The full death benefit
Which of the following is NOT a feature of a guaranteed renewable provision?
The insurer can increase the policy premium on an individual basis.
Which of the following is NOT a feature of a noncancellable policy?
The insurer may terminate the contract only at renewal for certain conditions.
All of the following are TRUE statements regarding the accumulation at interest option EXCEPT
The interest is not taxable since it remains inside the insurance policy.
Which of the following definitions would make it easier to qualify for total disability benefits?
The more liberal "own occupation"
Which of the following is a requirement for replacement of health policies?
The old policy must stay in force until the new policy is issued
All of the following are true of key person insurance EXCEPT
The plan is funded by permanent insurance only.
All of the following statements concerning the use of life insurance as an Executive Bonus are correct EXCEPT
The policy is owned by the company.
If an insured continually uses the automatic premium loan option to pay the policy premium,
The policy will terminate when the cash value is reduced to nothing
Which of the following is NOT true regarding equity indexed annuinties
They earn lower interest rates than fixed annuities
Which of the following is true regarding compensation for the Life and Health Insurance Guaranty Association's Board of Directors?
They may be reimbursed for the incurred expenses.
Which of the following insurance arrangements will be appropriate for a parent buying a life insurance policy on a child where the parent is the policyowner?
Third-party ownership
Under the mandatory uniform provision "notice of Claim", written notice of a claim must be submitted to the insurer within what time parameters?
Within 20 days
How soon following the occurrence of a covered loss must an insured submit written proof of such loss to the insurance company?
Within 90 days or as soon as reasonably possible, but not to exceed 1 year
Can an individual who belongs to a POS plan use an out-of-network physician?
Yes, and they may use any preferred physician, even if not part of the HMO
The purpose of the fair credit act is to
protect consumers against the circulation of inaccurate or obsolete personal or financial information
Which of the following is NOT a possible punishment for a violation of general provisions of the Kansas Insurance Code?
A maximum fine of $10,000 for a willful violation
According to the Replacement Rule, replacement of life insurance is defined as a process in which
A new policy is bought and an old policy is converted to a Reduced Paid-up policy.
In Kansas, all of the following would be prohibited provisions in a life insurance policy, EXCEPT
A provision stating the policyowner must obtain prior written consent from the insurer before assigning the policy to another person or entity.
All of the following are TRUE of the federal tax advantages of a qualified plan EXCEPT
At distribution, all amounts received by the employee are tax free.
When a whole life policy is surrendered for its nonforfeiture value, what is the automatic option
Extended term
Insurance policies are not drawn up through negotiations, and an insured has little to say about its provisions. What contract characteristic does this describe?
Adhesion
Which of the following is the closest term to an authorized insurer?
Admitted
Which of the following riders pays a beneficiary a death benefit that is double or triple the face amount if the insured's death was caused by an accident as defined in the policy
An Accidental Death Rider
This state provided for a temporary license for all of the following EXCEPT
An agent's retirement.
Which of the following products provides income for a specified period of years or for life, and protects a person against outliving his or her money?
An annuity
An elimination (waiting) period may NOT have to be satisfied for a disability in which of the following?
An insured suffers a relapse of a prior disability within 6-months of the initial covered disability
All the following statements are false regarding licensing EXCEPT
Applicants must pass a state licensing exam.
Which statement below is INCORRECT regarding the type of term insurance that fits best with the applicant's needs?
Applicants who may require a larger death benefit in the future should buy convertible term insurance
What is the maximum period of time during which an insurer may contest fraudulent misstatements made in a health insurance application?
As long as the policy is in force
An agent is ready to deliver a policy to an applicant but has not yet received payment. Upon delivery, the agent collects the applicant's premium check, answers any questions the applicant may have, and then leaves. What did he forget to do?
Ask her to sign a statement of good health
All of the following are TRUE of the federal tax advantages of a qualified plan EXCEPT
At distribution, All amounts recieved by the employee are tax free
Circulating deceptive sales material to the public is what type of Unfair Trade Practice?
False Advertising
Kevin and Nancy are married; Kevin is the primary breadwinner and has a health insurance policy that covers both him and his wife. Nancy has an illness that requires significant medical attention. Kevin and Nancy decide to legally separate, which means that Nancy will no longer be eligible for health insurance coverage under Kevin. Which of the following options would be best for Nancy at this point?
COBRA
Which of the following features of the Indexed Whole Life policy is NOT fixed?
Cash value growth
The purpose of managed care health insurance plans is to
Control health insurance claims expenses.
In a relative value system of determining coverage for a given procedure, what term describes the total amount payable per point?
Conversion factor
What provision is used to reduce over insurance?
Coordination of benefits
Which of the following is not an exclusion in medical expense insurance policies?
Coverage for dependants
This arrangement specifies who will purchase a disabled partner's interest in the event he or she becomes disabled.
Disability buyout
A major medical expense policy would exclude coverage for all of the following treatments except
Drug addiction
Other than for a qualified life event, when can a change be made in benefits for a Flexible Spending Account (FSA)?
During the open enrollment period
All of the following actions can be described as twisting EXCEPT
Explaining to client the advantages of permanent insurance over term and suggesting changing policies
Twin brothers are starting a new business. They know it will take several years to build the business to the point that they can pay off the debt incurred in starting the business. What type of insurance would be the most affordable and still provide a death benefit should one of them die?
Joint Life
A policy will pay the death benefit if the insured dies during the 20-year premium-paying period, and nothing if death occurs after the 20-year period. What type of policy is this?
Level term
Which life insurance settlement option guarantees payments for the lifetime of the recipient, but also specifies a guaranteed period, during which, if the original recipient dies, the payments will continue to a designated beneficiary?
Life income with period certain
If a settlement option is not chosen by the beneficiary or policyowner, which option will be used?
Lump sum
Which of the following is NOT a requirement in order to be a nonresident licensee?
Maintain a physical address in each state the licensee transacts insurance
Following a covered loss, the time payment of claims provision requires that an insurance company pay disability income benefits no less frequently than
Monthly
Under an individual disability policy, the MINIMUM schedule of time in which claim payments must be made to an insured is
Monthly
An applicant for a health insurance policy returns a completed application to her agent, along with a check for the first premium. She receives a conditional receipt two weeks later. Which of the following has the insurer done by this point?
Neither approved the application nor issued the policy
Premium payments for personally-owned disability income policies are
Not tax deductible.
What is the training requirement for producers who want to sell annuities in this state?
One-time 4-hour training course
The dividend option in which the policyowner uses dividends to purchase a term policy for one year is referred to as the
One-year term option.
When may the HIV-related test results be provided to the MIB
Only if the individual is not identified
A guaranteed renewable health insurance policy allows the
Policyholder to renew the policy to a stated age, with the company having the right to increase premiums on the entire class.
When health care insurers negotiate contracts with health care providers or physicians to provide health care services for subscribers at a favorable cost, it is called
Preferred Provider Organization (PPO).
Regarding the taxation of Business Overhead policies,
Premiums are deductible and benefits are taxed.
Under the Accidental Death and Dismemberment (AD&D) coverage, what type of benefit will be paid to the beneficiary in the event of the insured's accidental death?
Principal sum
Which of the following is a provision found in life insurance policies
Reinstatement
Todd has been informed that he has a hernia which requires repair. When Todd researches the cost, he learns that his insurance plan will cover 200 points worth of surgical expenses. Each point represents $10, which means that $2000 of his surgery will be covered by his insurance plan. What system is Todd's insurance company using?
Relative value
Which health insurance provision describes the insured's right to cancel coverage?
Renewal provision
An insured had a heart attack while jogging, but is expected to return to work to in approximately 6 weeks. The insured's disability income policy will
Replace a percentage of his lost income
The primary purpose of disability income insurance is to
Replace income lost due to a disability.
If a policy includes a free-look period of at least 10 days, the Buyer's Guide may be delivered to the applicant
With the policy.
What is the purpose of a disclosure statement in life insurance policies?
To explain features and benefits of a proposed policy to the consumer
The paid-up addition option uses the dividend
To purchase a smaller amount of the same type of insurance as the original policy.
When an insurer issues an individual health insurance policy that is guaranteed renewable, the insurer agrees
To renew the policy until the insured has reached age 65.
Agents who persuade insureds to cancel a policy in favor of another one when it might not be in the insured's best interest are guilty of
Twisting
Which of the following policies would have an IRS required corridor or gap between the cash value and the death benefit?
Universal Life - Option A
Which of the following types of policies allows the policyowner to skip premium payments, provided that there is enough cash value in the policy to cover the premium amount?
Universal life
What is the name for the owner of a life insurance policy who enters into a viatical settlement contract?
Viator
All of the following benefits are available under Social Security EXCEPT
Welfare benefits.
When is the earliest a policy may go into effect?
When the application is signed and a check is given to the agent
When may an insured deduct unreimbursed medical expenses paid under a long-term care policy?
When the expenses exceed a certain percentage of the insured's adjusted gross income
The duty (or duties) of an agent where replacement is involved include
a) Leaving a copy or original of all solicitation material used for presentation to the applicant. b) Submitting to the replacing insurer a copy of all soliciting material. c) Submitting to the replacing insurer a statement signed by the applicant as to whether or not he has existing life insurance. d)------All of the above.
