Life and health Practice exam 2

Traditional IRA contributions are tax deductible based on which of the following?

Owner's income Traditional IRA contributions are tax deductible, but may be limited if the owner's income exceeds a certain level.

A couple owns a life insurance policy with a Children's Term rider. Their daughter is reaching the maximum age of dependent coverage, so she will have to convert to permanent insurance in the near future. Which of the following will she need to provide for proof of insurability?

Proof of insurability is not required. If a Children's Term rider is attached to a life insurance policy, children can be covered under the policy until they reach the maximum age stated in the policy. At that point, they can convert their coverage to a new policy without having to issue proof of insurability.

Who can provide skilled nursing care?

doctor

How many eligible employees must be included in a contributory plan?

75% At least 75% percent of eligible employees can be included in a contributory plan. Both the employees and the employer contribute to premium payments.

According to the telemarketing sales rules, what are the permissible calling hours for telemarketing calls?

8am until 9pm (Permissible calling hours for telemarketers are between 8am and 9pm.)

A Straight Life policy has what type of premium?

A level annual premium for the life of the insured Straight Life policies charge a level annual premium for the lifetime of the insured and provide a level, guaranteed death benefit.

Which of the following statements concerning buy-sell agreements is true?

Buy-sell agreements pay in the event of a medical emergency A buy-sell agreement is simply a contract that establishes what will be done with a business in the event that an owner dies. Buy-sell agreements are normally funded with a life insurance policy.

Which of the following options best depicts how the eligibility of members for group health insurance is determined?

By conditions of employment The individual employer normally must provide insurance coverage to all full-time employees. The employer can specify within some limitations how many hours are considered full time, and whether both salaried and hourly employees will be covered. The employer can also legally exclude a particular group of employees from the eligible class of employees.

Which of the following provides affordable health insurance for Utah residents who are considered uninsurable?

Comprehensive Health Insurance Pool Act Correct! The purpose of the Comprehensive Health Insurance Pool Act, also known as HIPUtah, is to provide low-cost access to health insurance coverage to residents of Utah who are denied adequate health insurance and are considered uninsurable.

Which of the following is NOT a characteristic or a service of an HMO plan?

Contracting with insurance companies Correct! HMOs seek to identify medical problems early by providing preventive care. They encourage early treatment and whenever possible provide care on an outpatient basis rather than admitting the member into the hospital. Contracts are between the insured and the HMO, not an insurance company.

Which of the following is NOT allowed in credit life insurance?

Creditor requiring that a debtor buys insurance from a certain insurer In credit life insurance, a creditor may require that the debtor have life insurance, but may not require the debtor to purchase insurance from a specific insurer.

Which component increases in the increasing term insurance?

Death benefit Increasing term features level annual premiums and a death benefit that increases each year over the duration of the policy term.

Which of the following entities established the Do-Not-Call Registry?

Federal Trade Commission (FTC)

Under the Privacy Rule for HIPAA, protected information includes all individually identifiable health information

Held or transmitted in any form Correct! Under the Privacy Rule for HIPAA, protected information includes all individually identifiable health information held or transmitted by a covered entity or its business associate in any form or media, whether electronic, paper or oral. This is called protected health information (PHI).

In an optionally renewable policy, the insurer has which of the following options?

Increase premiums Correct! Optionally renewable policies allow the insurer to cancel a policy for any reason whatsoever. Policies can only be cancelled by class on the policy anniversary or premium due date (renewal date). If the insurer elects to renew coverage, it can also increase the policy premium.

The advantage of qualified plans to employers is

Tax-deductible contributions. Qualified plans have these tax advantages: Employer contributions are tax deductible and are not taxed as income to the employee; the earnings in the plan accumulate tax deferred; lump sum distributions to employees are eligible for favorable tax treatment.

Which of the following are generally NOT considered when underwriting group insurance?

The insureds' medical history Group life insurance is written on a group, not individual basis. Each individual completes an application that identifies the participant and beneficiary. Then, the group is judged based on its nature and past claim experience. Generally, medical questions are not necessary.

Which of the following is true regarding a market value adjusted annuity?

The owner is guaranteed a fixed interest rate for a specific period of time. Under a market value adjusted (modified guaranteed) annuity, the insurer guarantees a competitive interest rate for a specific period (the longer the period, the better the guaranteed rate). At the end of the period, the owner has the option of taking the accumulated value or reinvesting the values at a new interest rate.

Which of the following is correct about Medicare?

The program is divided into four parts (A-D). Medicare has four parts: Part A covers hospital expenses; Part B covers doctor expenses; Part C allows people to receive all of their health care services through available provider organizations; and Part D for prescription drug coverage.

Under a credit disability policy, until what point will payments to the creditor be made for the insured?

Until the disability ends or the debt is satisfied, whichever is sooner Correct! A credit disability policy is issued only to those in debt to a specific creditor. In case of disability, payments to the creditor will be made for the insured until he or she is able to return to work.

When would life insurance policy proceeds be included in the insured's taxable estate?

When there is an incident of ownership at the time of death If the insured were the owner of the policy at the time of death or possessed any incidents of ownership at the time o death, the value of the policy will be included in the insured's taxable estate. If the insured, as policyowner, assigns or transfers ownership of the policy or makes a gift of the policy within 3 years prior to his or her death, the entire face amount of the policy be included in his or her taxable estate.

A couple receives a set amount of income from their annuity. When the wife dies, the husband no longer receives annuity payments. What type of annuity did the couple buy?

a) Joint and survivor b) Life with period certain c) Joint limited annuity d) Joint life Answer: d) Joint life ~ Joint life annuity settlement option pays benefits to two or more annuitants, but stops upon the death of the first.

Which of the following hospice expenses would NOT be covered in a cost-containment setting?

antibiotics In a cost-containment setting, daily needs and pain relief are provided for hospice patients, but curative measures are

Which of the following expenses is NOT covered by a health insurance policy?

funeral Correct! Health insurance policies cover losses caused by accidents and/or sickness. Funeral expenses are not expressly covered.

Under most dental plans, what limitations are posed for denture replacement?

once every 5 years