L&H new
A producer has indicated to a potential client that the proposed life insurance policy is covered by the Maryland Life and Health Insurance Guaranty Association. This action taken by the producer is
prohibited by law
Ron recently purchased an immediate, straight life fixed annuity. His benefit payments will
remain a constant dollar amount for the duration of the annuity period
A long-term care policyowner is replacing existing coverage with a new policy. Replacement regulations require a(n) ____ notice be signed by the applicant and retained by the replacing insurer
replacement
What is considered a valid reason for small corporations to insure the lives of its major stockholders?
Fund a buy-sell agreement
Straight whole life insurance can be accurately described in all of these statements EXCEPT
Policy protection normally expires at age 65
The law of large numbers enables an insurer to
Predict losses
Omar is covered by a disability income policy. He is hurt while performing an occupation more hazardous than the occupation listed in his policy. The policy's change of occupation provision will have what effect?
Reduce the benefit level
Which of these is not an unfair claims settlement practice?
Refusing to pay persons bringing false or fraudulent claims
Which of these is not an unfair settlement practice?
Refusing to pay persons bringing false or fraudulent claims
A health reimbursement arrangement must be established
by the employer
Which of these is NOT considered to be an activity of daily living (ADL)?
driving
Which of these is not an unfair claim settlement practice?
Denying unsubstantiated claims on a timely basis
Which benefit supplement added to a life insurance policy insures an entire family?
Family term rider
Michelle recently purchased a long-term care policy. Her policy may temporarily exclude health conditions that
Were treated during a specified period preceding the policy date
How long is the constestable period for health insurance policies sold in Maryland?
2 years
Why do insurers require a minimum number of employees participate in a group insurance plan?
Minimize adverse selection
Coordination of benefit regulation applies to all of the following plans EXCEPT
Preferred provider organization plan.
An order issued by the commissioner that prohibits a specific practice listed in the order is called a(n)
Cease and desist order
ABC corporation has a group life insurance policy that covers its employees and their dependents children. Which of the following would be considered a " dependent child"?
Child over the age 18 years who attend an education institution and relies on the insured employee for financial support
A health insurance policy where the insurer has the right to terminate the policy for reasons other than the insured's health is called
Conditionally renewable
Which of the following can be used to avoid the mandatory withholding tax on qualified plan distributions?
Conduit IRA
A change in a licensee's name or address must be provided to the commissioner within ___ days
30
What qualifies as acceptance of an insurance contract offer?
An issued policy
If placement was involved in the sale of an insurance policy, a producer must provide a replacement notice no later than the
Application date
Which of these statements is NOT true regarding a cash value loan against a life insurance policy?
Interest payments made by policyowner are deductible
Which of these is NOT relevant when determining the amount of personal life insurance needed?
Local unemployment rate
What must be disclosed when a producer advertises a life insurance policy?
Name of the actual insurer
Short-term group disability income benefits are
a percentage of weekly earnings up to to a stated maximum
Which of the following is not covered by a comprehensive long-term care policy?
acute care
Under the Maryland Health Insurance Plan, comprehensive health benefits are provided to
medically uninsurable residents
Under a deferred annuity, which contract feature initially charges a 5-10% fee that eventually reduces to $0 after a stated amount of time?
surrender charge
Elimination period typically apply to
Disability policies
Major Medical policies are typically characterized by which of the following?
Flat deductible
A person covered with an individual health plan
is issued a policy
What happened to the purchasing power of benefit payments from a fixed life annuity when the cost of living goes up?
Decrease
All of these are used to prevent adverse selection in a group dental plan EXCEPT
Decreased employee participation
A life policy's spendthrift clause would have no effect if the beneficiary is paid the proceeds as a
Lump-sum payment
Sole proprietors are permitted tax deductions for health costs paid from their earnings in the amount of
100% of costs
Carlos' producer license has been suspended due to non-renewal. He may apply for reinstatement within ____ month period following the date when the license should have been renewed.
12
An individual may sell insurance product in Maryland for an unauthorized insurer only if he/she obtains a(n)
A surplus line license
The Maryland life and health insurance Guaranty Corporation is funded by
Assessments of member insurers
When does the insured stop making payments under a thirty-payment whole life policy?
At the time of death or 30 years after the policy's inception, whichever comes first
The purpose of the coordination of benefit provision in group accident and health plans is to
Avoid overpayment of claims
Which of the following is generally a form of group credit life insurance?
Decreasing term insurance
Individuals covered with employer-paid group health plans will normally receive tax-free benefits under all of these plans EXCEPT
Disability Income
Benefit contained under a Medicare Supplement Policy Cannot
Duplicate Medicare benefits
An example of misrepresentation is
Falsifying the terms, benefits, advantages, or conditions of an insurance policy
When an annuity contract has been fully surrendered, how will the surrender charges affect the final contract settlement?
Final contract settlement will be reduced
When an individual is planning to protect his family with life insurance, one method of doing so is called needs analysis. What exactly does needs analysis involve?
Identifies the needs of an individual and the individual's dependents.
Without a Section 125 Plan in place, what would happen to an employee's payroll contribution to an HSA?
It would be considered taxable income to the employee
Which of the following is associated with an immediate annuity?
Lack of an accumulation period
Laura added a children's rider to her life insurance policy. What type of coverage was added?
Level term
What would be a valid reason for naming a trust as the beneficiary of a life insurance policy as opposed to naming an individual?
Management of proceeds would be provided
Which of the following approves continuing education coursework in the State of Maryland?
Maryland Insurance Administration
What type of deductible must be satisfied again for each illness or accident in a major medical plan?
Per-Cause
Which would not be a location where skilled nursing care is provided?
Personal residence
Which of these is NOT a factor that influences group health insurance underwriting?
Physical exams of group members
If an insured dies during the grace period with no premiums paid
Policy's face amount minus any premiums due
The standard provisions of an accident and health insurance policy require that the
Policy, endorsements, and attached papers constitute the "entire contract"
Which of these action is NOT required to extend a newborn's health plan coverage beyond the initial coverage period?
Policyholders must certify the newborn's insurability.
A disability income insurance policy was recently issued with a rating. What does this mean?
Policyowner will be charged an additional premium
The agreement in which hospitals and physicians groups in a specific area contract with an insurance company to provide medical care at predetermined costs is
Preferred Provider Organization (PPO)
A producers has indicated to a potential client that the proposed life insurance policy is covered by the Maryland Life and Health Insurance Guaranty Corporation. This action taken by the producer is
Prohibited by law
Which of the following is not a circumstance to which a temporary producer license can be issued?
Prospective producer who is waiting to take the state licensing examination
Which of these factors does not influence how much time consumers spend searching for information?
Self-maintenance expenses
Laura is a new employee and will be obtaining non-contributory group Major Medical insurance from her employer. Which of the following actions must she take during the open enrollment period?
Sign an enrollment card
If an individual would like to enroll in Medicare or seek public information about Medicare, which federal agency handles this?
Social Security Administration
In regards to technology and the ACA, which of the following statements is correct?
States which operate with an Exchange must offer an internet-based portal
Which statement concerning the Entire Contract provision in an individual accident and health insurance policy is TRUE?
The agent doesn't have the authority to change the policy or waive its provisions
K is an agent who takes an application for individual life insurance and accepts a check from the client. He submits the application and check to the insurance company, however the check was never signed by the applicant. If the application is approved, when will coverage be effective?
The date the agent delivered the policy, collected the initial premium, and obtained a good health statement from the insured
Which statement regarding a fixed period settlement option is correct?
The installment payment amount is determined by the total number of installments
Where will a life insurance policy's proceeds be directed to if all the beneficiaries die before the insured?
The insured's estate
A life insurance policy that includes a return of premium rider will pay the beneficiary how much upon the insured's death?
Total premiums paid plus the face amount
The absolute assignment of a life insurance policy results in
all incidents of ownership transferred to the assignee
The factor used most often when underwriting a disability income policy is
annual earnings
Accident and Health Insurance claim handling is made more convenient to the insured by utilizing
assignment of benefits
All Medicare supplement policies sold during the open enrollment period must
be issued regardless of health status
Who normally pays the premiums for group credit life insurance?
borrower
An accident and health insurer has just received written proof of loss from one of its insureds. The insured must now wait 60 days before
bringing legal action against the insurer
Linda is covered with long-term care insurance and has early-stage Alzheimer's. She is still able to reside in her home while receiving primary care, as opposed to moving into a nursing home. All of the following long-term benefits encourage this EXCEPT for
custodial care
Christopher is issued an insurance policy that contains an attached agreement which alters the terms of the policy. This attached agreement is called a(n)
endorsement
Notice of information practices must be given to a policyholder at least
every 3 years
Terry suffers an injury at his workplace which is covered by workers compensation. Terry also has a medical expense insurance policy. Under medical expense insurance policies, losses that are covered by workers compensation are typically
excluded from coverage
Employer-paid qualified long-term care insurance premiums are typically
excluded from the employee's gross income
Which of the following types of health insurers is characterized by a limited choice of providers?
health maintenance organization
XYZ Corp has implemented a qualified retirement plan. This plan may NOT discriminate
in favor of highly compensated employees
Which of these procedures is NOT designed for ambulatory care centers?
inpatient surgery
Which of the following provisions permits an insurer to return a portion of the premium and pay benefits on a pro rata basis if it finds that an insured has duplicate coverage?
insurance with other insurers
The insurance coverage in a variable life insurance policy may vary based on the value of
its underlying investments
Which of the following is associated with an immediate annuity?
lack of accumulation period
The death proceeds of a credit life insurance policy are typically paid to the
lender
What action can insurer take to discourage malingering and false disability claims?
limit the amount of benefits an insured can receive from two disability policies with the same insurer
An insurance contract may be voided if a misrepresentation found on the application is determined to be
material
A producer is proposing that a policyowner replace an existing individual health insurance policy with a new one. Under the new contract, a pre-existing conditions exclusion
may reduce the insured's benefits
Which of these is NOT used as selection criteria in the underwriting process of a life insurance application?
national origin
An agent whose actions exceed the authority granted by contract is
not backed by the insurer
A policyowner suffers an injury that renders him incapable of performing one or more important job duties. Any decrease in income resulting from this injury would make him eligible for benefits under which provision?
partial disability
Under a long-term care inflation rider, the benefit levels
periodically increase without proof of insurability
Which action will trigger a penalty tax on premature distribution from a modified endowment contract (MEC)?
policy loans
Where is the difference between a standard risk and a substandard risk reflected?
premium charges
A Guaranteed Renewable provision allows
premiums which can only be increased per rate class
The exclusion ratio determines
the amount of an annuity payment subject to income tax
The reason for backdating a policy is
to obtain a premium rate based on an earlier age
In an individual retirement account (IRA), rollover contributions are
unlimited by dollar amount
Which of the following waiting periods would result in the lowest premium for a disability income policy?
180 days
How many employees must an for the consolidation omnibus budget reconciliation act of 1985 (COBRA) to apply?
20 or more
How many days notice must a producer be given prior to a scheduled hearing?
21 days
Which of the following is INELIGIBLE to participate in a section 125 plan?
An S-Corp Owner with a greater than 2% share
The IRS has a minimum coverage rule regarding qualified retirement plans. This rule states that each qualified plan is required to
Benefit a broad cross-section of employees
Which of the following statements best describes a double indemnity provision in travel accident insurance?
Benefits are doubled under certain circumstances stated in the policy
An accident and health insurance policy defines an injury as "bodily injury by accidental means" For an injury to be covered on this policy, what is required?
Both the cause and resultant injury must be accidental
Which statement regarding the waiver of premium rider is accurate?
Cash payment is not directly provided to the policyowner
Which of the these is NOT a true statement of the war exclusion?
Civil insurrections apply
Which of these may encourage adverse selection in an indemnity dental plan?
Having multiple or periodic open enrollment periods
An officer for a corporation takes out numerous unsecured loans from the company's qualified retirement plan. Which of these rules is the plan in violation of?
Exclusive benefit rule
How are benefits payments from individually-owned medical expenses policies treated for tax purposes?
Exempt from income taxes
When an applicant applies for a large amount of life insurance coverage, which of the following would likely NOT be an underwriting requirement?
Eye examination
A policyowner fell behind on the premium payments of a whole life policy and is now in the grace period. How much will the beneficiary receive if the insured dies during this grace period and the policy also contains an outstanding policy loan?
Face amount minus the loan balance and past-due premium
Which of the following health insurance plans charges a premium that cannot be increased?
Noncancelable
Which of these is NOT an Unfair Claims Settlement Practice?
Offering to settle a claim by arbitration
Which of the following is not true of participants in multiple-employer trusts?
Participants must purchase all coverages the trust offers
Kelly purchases a health insurance policy issued on a conditionally renewable basis. The insurance company has a right to refuse renewal of the policy for
Specific reasons stated in the contract
What happens to the cash value of a market value adjusted annuity if it's surrendered prior to the end of the stated guarantee period?
Subject to market value adjustment
Jonas is covered with disability insurance through his employer. The employer pays 75% of the premium, while Jonas pays the other 25%. What is Jonas' tax liability for any benefits paid from the disability plan?
Taxes must be paid on 75% of the benefits received
Which of the following is a true statement regarding a Medicare Supplement Policy purchased during the open enrollment period?
The policy will be issued regardless of health
Which of these statements regarding the extended term insurance nonforfeiture option in life policy is accurate?
The premium to purchase the coverage comes from the policy's cash value
An appointed producer's implied authority is derived from
express authority
What is the name of the period of time during which a new employee is ineligible for group health insurance coverage?
probationary period
Q is severely injured in an automobile accident and becomes totally disabled. How many months must Q be disabled before being able to apply for Social Security disability benefits?
5 months
How long can insurer legally defer paying the cash value of a surrendered life insurance policy?
6 months
Emergency health care coverage for Medicare enrollees traveling abroad is
A Medicare Supplement additional benefit
In regards to the Affordable Care Act (ACA), which of these is NOT a role of a health insurance exchange?
Contact the employer if an employee stops coverage under a plan offered in the exchange
Most Medicare Supplement information used by an insurer must be approved by the State. Which of the following types of information does NOT require State approval?
Government publications
A 55 year old recently received a $30,000 distribution from a previous employer's 401k plan, minus $6,000 withholding. Which federal taxes apply if none of the funds were rolled over?
Income taxes plus a 10% penalty tax on $30,000
When compared to a fixed annuity, a variable annuity has what distinguishing feature?
Investment risk is assumed by the policyowner
Each of the following will trigger a benefit under the presumptive disability provision, EXCEPT
Loss of any one limb
Which of the following does TRI-CARE provide accident and health coverage to?
Military families
The disability income policy most likely to have been issued on a substandard basis is?
Non-cancelable with a heath condition exclusion rider
The authority to change the beneficiary in an individual annuity lies with the
Owner
Which of these factors does not affect life insurance premium rates?
Producer Certification
Which of these is not considered to be an unfair trade practice?
Reinsurance
Which of the following is not a basic understanding action for accident and health insurance?
Removing uniform policy provisions
T is covered by an Accidental Death and Dismemberment (AD&D) policy that has an irrevocable beneficiary. What action will the insurance company take if T requests a change of beneficiary?
Request of the change will be refused
Under what circumstances does an accident and health insurer have the right to request an autopsy?
When not prohibited by state law
An insurance company can be liable for a producer's unauthorized acts
When the agency contact is unclear concerning the authority given
When would evidence of insurability be required for a person already covered with a variable universal life policy?
When the death benefit is increased
What does a Mandatory Second Surgical Opinion provision provide to an employer-paid health insurance plan?
Containment of the employer's premium cost
Which of the following would permit an insurer to delay a covered disability policy claim?
Elimination period
A group health insurance policy is a contract between an
Employer and insurance company
When a policy loan is requested by a policyowner and it requires the consent of the beneficiary, what kind of beneficiary designation is this?
Irrevocable beneficiary
Tim is covered by an accident and health insurance policy that may not be changed in any way by the insurer up to a stated age, as long as the premiums are paid. What type of policy is this?
Noncancelable