NY Life and Health Chapter Quizzes

An employee quits her job where she has a balance of $10,000 in her qualified plan. If she decides to do a direct transfer from her plan to a Traditional IRA, how much will be transferred from one plan administrator to another and what is the tax consequence of a direct transfer? $8,000, no tax consequence $8,000, tax on growth only $10,000, tax on growth only $10,000, no tax consequence

$10,000, no tax consequence

Any New York agent that is found guilty of a violation of insurance licensing laws will be subject to which of the following penalties? $500 fine for each violation Imprisonment for up to one year Automatic license revocation $5,000 fine for each violation

$500 fine for each violation

What percentage of individually-owned disability income benefits is taxable? 0% 50% 100% Amount paid by insured

0%

An insured was involved in an accident and could not perform her current job for 3 years. If the insured could reasonably perform another job utilizing similar skills after 1 month, for how long would she be receiving benefits under an "own occupation" disability plan? 2 years 1 month She would not receive any benefits. 3 years

2 years

When a health insurance policy is purchased in the state of New York, the insured may return the policy to the insurer and receive a premium refund within the maximum period of 10 days. 20 days. 30 days. 90 days.

20 days.

The inflation protection feature in long-term care policies issued in this state must provide protection for inflation at what percent annually? 2% 5% 6% 8%

5%

Under the Affordable Care Act, a special enrollment period allows an individual to enroll in a qualified health plan within how many days of a qualifying event? 10 days 30 days 60 days 90 days

60 days

The equity in an equity index annuity is linked to The annuitant's individual stock portfolio. The insurance company's general account investments. An index like Standard & Poor's 500. The returns from the insurance company's separate account.

An index like Standard & Poor's 500.

Which is the primary source of information used for insurance underwriting? Applicant interviews Medical records Private investigations Application

Application

Which of the following is the basic source of information used by the company in the risk selection process? Warranty Consumer report Application Agent's report

Application

The type of policy that can be changed from one that does not accumulate cash value to the one that does, is a Convertible Term Policy. Renewable Term Policy. Decreasing Term Policy. Whole Life Policy.

Convertible Term Policy.

Which of the following is NOT covered by Medicare? Surgery Doctor bills Cosmetic surgery Outpatient expenses

Cosmetic surgery

An individual is purchasing a permanent life insurance policy with a face value of $25,000. While this is all the insurance that he can afford at this time, he wants to be sure that additional coverage will be available in the future. Which of the following options should be included in the policy? Guaranteed insurability option Dividend options Guaranteed renewable option Nonforfeiture options

Guaranteed insurability option

Annually renewable term policies provide a level death benefit for a premium that Fluctuates. Increases annually. Decreases annually. Remains level.

Increases annually.

What type of insurance would be used for a Return of Premium rider? Decreasing Term Annually Renewable Term Increasing Term Level Term

Increasing Term

Which of the following entities protects policyowners, insureds, and beneficiaries under insurance contracts when insurers fail to perform contractual obligations due to financial impairment? Consumer Protection Agency Insurance Guaranty Association Insurance Consumer Protectorate Insurance Solvency Association

Insurance Guaranty Association

What are the two components of a universal policy? Insurance and investments Mortality cost and interest Separate account and policy loans Insurance and cash account

Insurance and cash account

Who makes up the Medical Information Bureau? Former insured Physicians and paramedics Insurers Hospitals

Insurers

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? Fixed amount option Interest only option Life income with period certain Joint and survivor

Interest only option

Which of the following is true regarding the spendthrift clause in life insurance policies? It is only used when the beneficiary is a minor. It is the same as irrevocable settlement clause. It can protect the policy proceeds from creditors of the beneficiary. It allows the beneficiary to select a different settlement option.

It can protect the policy proceeds from creditors of the beneficiary.

Which of the following is correct about a group health insurance policy issued in New York? It cannot exclude newborn children from coverage. It cannot exclude coverage for VA hospital treatment. It cannot provide coverage for handicapped children. It cannot exclude coverage from an occupational accident.

It cannot exclude newborn children from coverage.

Which is INCORRECT concerning a Section 457 Deferred Compensation plan? It has a vesting requirement. The deferred amount is paid upon death, disability, or retirement. It is a nonqualified plan. It is a means of deferring current income until later when the employee is in a lower tax bracket.

It has a vesting requirement.

Which of the following best describes the MIB? It is a nonprofit organization that maintains underwriting information on applicants for life and health insurance. It is a government agency that collects medical information on the insured from the insurance companies. It is a member organization that protects insured against insolvent insurers. It is a rating organization for health insurance.

It is a nonprofit organization that maintains underwriting information on applicants for life and health insurance.

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? Single life Fixed-amount Life income with period certain Joint and survivor

Life income with period certain

In group insurance, what is the policy called? Certificate of insurance Master policy Entire contract Certificate of authority

Master policy

All of the following are factors that an underwriter could use to select and classify risk EXCEPT Occupation. Avocation. National origin. Morals.

National origin.

On a participating insurance policy issued by a mutual insurance company, dividends paid to policyholders are Paid at a fixed rate every year. Taxable as ordinary income. Guaranteed. Not taxable since the IRS treats them as a return of a portion of the premium paid.

Not taxable since the IRS treats them as a return of a portion of the premium paid.

The dividend option in which the policyowner uses dividends to purchase a term policy for one year is referred to as the Paid-up additions. One-year term option. Paid-up option. Accelerated endowment.

One-year term option.

Which of the following statements is INCORRECT concerning Medicare Part B coverage? Part B coverage is provided free of charge when an individual turns age 65. Participants under Part B are responsible for an annual deductible. Part B will pay 80% of covered expenses, subject to Medicare's standards for reasonable charges. It is a voluntary program designed to provide supplementary medical insurance to cover physician services, medical services and supplies not covered under Part A.

Part B coverage is provided free of charge when an individual turns age 65.

What type of policy contains a coverage that is only activated upon the insured's losses reaching a certain level? Modified coverage Fully-funded plan Modified fully-insured plan Partially-funded plan

Partially-funded plan

Another name for a substandard risk classification is Elevated. Rated. Controlled. Declined.

Rated.

Regarding cost containment in medical plans, what type of review process do employers and insurers use to evaluate the utilization review process and the effectiveness of the professionals involved in large insurance claims? Concurrent review Prospective review Preventive review Retrospective review

Retrospective review

Which of the following dental insurance categories would cover the filling of cavities? This type of work is not covered. Routine and preventative maintenance Routine and major restorative care Orthodontic care

Routine and major restorative care

Which of the following is monitored by ERISA? Stock profit-sharing plans Cash bonus plans Cash profit-sharing plans Severance pay of less than 2 years

Stock profit-sharing plans

In a group life insurance policy, the employer may select all of the following EXCEPT The amount of insurance. The premium payor. The beneficiary. The type of insurance.

The beneficiary.

Which of the following is NOT a characteristic of a group long-term disability plan? The benefit period may be to age 65. The benefit can be up to 66 and 2/3% of one's monthly income. The benefit can be up to 50% of one's yearly income. The elimination period is the same as in the short-term plan's benefit period.

The benefit can be up to 50% of one's yearly income.

Which statement accurately describes group disability income insurance? Short-term plans provide benefits for up to 1 year. The extent of benefits is determined by the insured's income. In long-term plans, monthly benefits are limited to 75% of the insured's income. There are no participation requirements for employees.

The extent of benefits is determined by the insured's income.

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? Nothing, since the insured was killed as a result of a war The full death benefit The policy's cash value A refund of premiums

The full death benefit

Regarding the return of premium option for LTC policies, what happens to the premium if the policy lapses? The insurer will return a percentage of the premiums paid. The insurer will not return any premiums in the case the policy is allowed to lapse. The premium will only be returned if the insured dies. The insurer will return all of the premiums paid.

The insurer will return a percentage of the premiums paid.

Hospice care is intended for The caregiver. The terminally ill. People in need of acute care. Home health visits from a participating home health agency.

The terminally ill.

How are contributions to a tax-sheltered annuity treated with regards to taxation? They are taxed as income for the employee. They are taxed as income for the employee, but are tax free upon withdrawal. They are not included as income for the employee, but are taxable upon distribution. They are never taxed.

They are not included as income for the employee, but are taxable upon distribution.

An insurer offers a policy very similar to Medicare, although it differs slightly. An agent tells an applicant that the policy is Medicare, since the policies are so similar anyway. Which of the following is true? This is legal as long as the applicant understands all the benefits. This is illegal only if the policy is bought by the applicant. This practice is illegal. This is a legal practice.

This practice is illegal.

Which of the following is NOT a goal of risk retention? To fund losses that cannot be insured To minimize the insured's level of liability in the event of loss To reduce expenses and improve cash flow To increase control of claim reserving and claims settlements

To minimize the insured's level of liability in the event of loss

When would a 20-pay whole life policy endow? After 20 payments In 20 years When the insured reaches age 100 At the insured's age 65

When the insured reaches age 100

When is the insurability conditional receipt given? When an insured individual needs to obtain an insurability receipt for tax purposes. If the application is approved before the premium is paid When the premium is paid at the time of application After the application has been approved and the premium has been paid

When the premium is paid at the time of application