SC Life & Health Insurance
Under the uniform required provisions, proof of loss under a health insurance policy normally should be filed within
90 days of a loss
Which authority is NOT stated in an agent's contract but is required for the agent to conduct business?
Implied
What is the tax consequence of amounts received from a Traditional IRA after the money was left in the tax-deferred account by the beneficiary?
Income tax on distributions no penalty
Who is involved in completing the agent's report?
Only the agent
Which document helps ensure that full and fair disclosure is provided to the recipient of a policy
Outline of coverage
A participating insurance policy may do which of the following? a) Pay dividends to the policyowner b) Provide group coverage
Pay dividends to the policyowner
An insured will be allowed to reactivate her lapsed life insurance policy if action is taken within a certain period of time, and proof of insurability is provided. Which policy provision allows this
Reinstatement provision good to know- a lapsed policy may be reinstated within 3 years by paying back premium, with interest, and proving insurability
in underwriting a substandard risk, which of the following is INCORRECT? a) A discounted premium would be charged b) The policy could be modified in the coverage or amount of coverage requested c)The applicant could be rejected for coverage d) Additional exclusions could be included to modify the underlying policy coverage
a) A discounted premium would be charged
Which of the following is NOT covered under a long-term care policy a) Acute care in a hospital b) Adult day care c) Hospice care d) Home health care
a) Acute care in a hospital
The most the Insurance Guaranty Association will pay for net cash surrender values is
$100,000
An employee insured under a group health plan has been paying $25 monthly premium for his group health coverage. The employer has been contributing $75, for the total monthly cost of $100. If the employee leaves the company, what would be his maximum monthly premium for COBRA coverage?
$102-- 2% charge to cover employers administrative cost
an insurer may be fined for non willful or for willful violations of insurance laws with which of the following respective fines
$15,000/$30,000
A licensed producer may be fined for non willful violations of insurance laws with the following respective fines
$2,500/$5,000
Individual who itemize deductions can claim deductions for medical expenses not covered by health insurance that exceed what percent of their adjusted gross income?
10%
Under the Affordable Care Act, what percentage of preventive care must be covered without cost sharing?
100%
Every small employer carrier must actively offer to small employers at least how many health benefit plans?
2 plans
The Director must give a written notice of the time and place for the hearing to the person cited to appear within how many days?
30
At What age may an individual make withdrawals from an HSA for non health purposes without being penalized?
65, although taxed
what are the modes of the grace period?
7 days paid weekly, 10 days paid monthly, 31 days all other modes
What documentation grants express authority to an agent?
Agent's contract with the principal
In reference to the standard Medicare Supplement benefits plans, what does the term standard mean
All providers will have the same coverage options and conditions for each plan
A Universal Life Insurance policy is best described as a/an
Annual renewable term policy with a cash value account
The death protection component of Universal Life Insurance is always
Annually Renewable Term... a universal policy has two components: an insurance component and a cash account. The insurance component (or the death protection) of a universal life policy is always annual renewable term Insurance
All of the following qualify for Medicare Part A EXCEPT a) anyone who is over 65, not covered by SS, and is willing to pay premium b) anyone who is willing to pay a premium c)anyone that qualifies through Social Security d) anyone who is at the end stage of renal disease
B) Anyone who is willing to pay a premium
An insurer neglects to pay a legitimate claim that is covered under the terms of the policy. Which of the following insurance principles has the insurer violated? a) adhesion b) consideration c) good faith
B) Consideration
Which of the following is Not a characteristic or a service of an HMO plan a) Providing care on an outpatient basis b) Contracting with insurance companies c) Providing free annual checkups d) Encouraging early treatment
B) Contracting with insurance companies
Which renewal option does NOT guarantee renewal and allows the insurance company to refuse renewal of a policy at any premium due date? a) Noncancellable b) Optionally renewable c) Conditionally renewable d) Guaranteed renewable
B) Optionally renewable
Which of the following is NOT covered under Plan A Medigap insurance? a) The first three pints of blood each year b) The Medicare Part A deductible c) Approved hospital cost for 365 additional days after Medicare benefits end d) The 20% Part B coinsurance amounts for Medicare approved services
B) The Medicare Part A deductible
Social Security was created to provide all of the following benefits EXCEPT a) Retirement income b) Unemployment income c) Survivor's benefits d) Disability income
B) Unemployment income
Which of the following statements is INCORRECT concerning the Insurance Fraud ACT? a) in addition to any criminal liability, civil penalties may also be imposed for insurance fraud b) anyone found guilty of insurance fraud is charged with a misdemeanor c) Penalties for insurance fraud vary for 1st and 2nd offenses
B) anyone found guilty of insurance fraud is charged with a misdemeanor
An insured is involved in a car accident. In addition to general, less serious injuries, he permanently loses the use of his leg and is rendered completely blind. The blindness improves a month later. To what extent will he receive Presumptive Disability benefits? a) Full benefits until the blindness lifts b) No benefits c) Full benefits d)Partial benefits
B) no benefits- only loss the use in one leg and because the blindness was only temporary
Which of the following is NOT considered to be a basic service, under a nonscheduled plan a) oral surgery b) Fillings c) Dentures d) Endodontics
C) Dentures
All of the following are business uses of life insurance EXCEPT a) Funding against financial loss caused by the death of a key employee b) Funding business continuation agreements c) Funding against company's general financial loss d) Compensating executives
C) Funding against company's general financial loss
Combinations plans are comprised of two types of plan features: basic and
Comprehensive
An insured is admitted to the hospital for surgery on a herniated disk. The insurance company monitors the treatment and progress in order to make sure that everything proceeds according to the insurer's schedule. This is called
Concurrent review
An insured is receiving hospice care. His insurer will pay for painkillers but not for an operation to reduce the size of a tumor. What term best fits this arrangement?
Cost-containment
Which of the following types of insurance policies is most commonly used in credit life insurance a) Increasing term b) Whole life c) Equity indexed life d) Decreasing term
D) decreasing term
Concerning group Medical and Dental insurance, which of the following statements is INCORRECT? a) Employee benefits are tax deductible the year in which they were received b) benefits received by the employee are free from federal income tax c) Premiums paid by the employer are deductible as a business expense d) employee paid premiums may be deducted if certain conditions are met
Employee benefits are tax deductible the year in which they were received
When an insurance agency published an advertising brochure, it emphasized the company's financial stability and sound business practices. In reality, its financial health is terrible, and the company will soon have to file for bankruptcy. Which term best describes this?
False financial statement
A producer is acting in what capacity when he or she is trying to obtain credible information about an applicant for health insurance?
Field underwriter
____ accounts allow roll-over of unused balances at the end of the year at the employer's discretion
HRA
which of the following is true regarding a term health policy? a) it is nonrenewable b) it is conditionally renewable c) it is guaranteed renewable d) it is noncancellable
It is nonrenewable
The provision which prevents the insured from bringing any legal action against the company for at least 60 days after proof of loss is known as
Legal action
Your client wants both protection and savings from the insurance, and is willing to pay premiums until retirement at age 65. What would be the right policy for this client?
Limited pay whole life
It is a state program funded by state and federal taxes that provide medical care for the needy.
Medicaid
On its advertisement, a company that has funds in its possession that are, in fact, not available for the payment of losses or claims. The company is guilty of
Misrepresentation
Under an individual life insurance policy, the MINIMUM schedule of time in which claim payments must be made to an insured is
Monthly
The coverage provided by a disability income policy that does not pay benefits for losses occurring as the result of the insured's employment is called
Nonoccupational coverage
In long-term care insurance, what type of care is provided with intermediate care?
Occasional nursing or rehabilitative care... for stable conditions that require assistance on a less frequent basis than skill care
In major medical insurance policies, when the insured's share of coinsurance reaches a certain amount, the insured is no longer obligated to pay it. The feature is known as
Stop-loss
Who determines the eligibility and contributions limits in a HRA
The employer determines both
The Waiver of Cost of Insurance rider is found in what type of insurance?
Universal Life
Which type of life insurance policy allows the policyowner to pay more or less than the planned premium?
Universal Life
Which of the following is TRUE regarding the annuity period a) It may last for the lifetime of the annuitant b) During the period of time the annuity payments grow interest tax deferred c) It is also referred to as the accumulation period d It is the period of time during which the annuitant makes premium payments into the annuity
a) It may last for the lifetime of the annuitant
Wha is an important feature of a dental expense insurance plan that is NOT typically found in a medical expense insurance plan? a. diagnostic and preventive care b. a broad coverage c. a low monthly premium d. low cost deductibles
a. diagnostic and preventive care
What option allows the insured to periodically increase benefit levels without providing evidence of insurability a. guarantee of insurability b. guarantee renewable c. annual increase d. level premium
a. guarantee of insurability
Based on Human Life Value Approach, which of the following is NOT used to calculate an individual's life value? a. predicted needs of the family after the insured's death b. insured's current and future income c. insured's annual expenses d. effect of inflation on income over time
a. predicted needs of the family after the insured's death-- (predicted needs of the family.. is used in the needs approach)
Partners in a business enter into a buy-sell agreement to purchase life insurance, which states that should one of them die prematurely, the other would be financially able to buy the interest of the deceased partner. What type of insurance policy may be used to fund this agreement?
any form of life insurance
All of the following may be excluded from coverage in a Major Medical Expense policy, EXCEPT a) Coverage provided under workers compensation b) Emergency surgery c) Custodial care d) Cosmetic surgery
b) Emergency surgery
What does "level" refer to in level term insurance? a) Interest rate b) Face amount c) Premium d) Cash Value
b) Face amount
A producer is helping a married couple determine the financial needs of their children in the event one or both should die prematurely. This is a personal use of life insurance known as a) Juvenile protection provision b) Survivor protection c) Life planning d) Survivorship insurance
b) Survivor protection
Which of the following is NOT a characteristic of a group long-term disability plan? a) The benefit can be up to 66 and 2/3% of one's monthly income. b) The benefit can be up to 50% of one's yearly income c) The elimination period is the same as in the short-term plan's benefit period d) The benefit period may be to age 65
b) The benefit can be up to 50% of one's yearly income.. the maximum benefit is based upon monthly income
Which of the following is NOT a goal of risk retention? a) To fund losses that cannot be insured b) To minimize the insured's level of liability in the event of loss c) To reduce expenses and improve cash flow d) To increase control of claim reserving and claims settlements
b) to minimize the insured's level of liability in the event of loss
How is the amount of Social Security disability benefits calculated? a. it is based on age, number of quarters worked in the last 20 years (minimum of 60) and the number of health claims made during that period of time b. it is based upon the worker's Primary Insurance Amount (PIA), which is calculated from their Average Indexed Monthly Earnings over their highest 35 years.
b. (earnings over their highest 35 years and lowest 5 years of income may be deleted from calculation)
When an insurer offers services like pre-admission testing, second opinions regarding surgery, and preventative care, which term would best apply? a. claims discrimination b. case management provision c. cost reduction d. claims reduction
b. Case management provision
An applicant wants to buy a policy that has a cash value element. Which type should she buy? a. term b. permanent c. stock d. investment
b. permanent
In order to become licensed as a nonresident producer in this state, a person must do which of the following a. pass a written examination and pay the required fees b. show proof of a valid license for the same line of authority in the home sate c. be licensed as a resident producer for at least 3 years prior to applying in this state d. spend at least 25% of his or her working time in this state
b. show proof of a valid license for the same line of authority in the home state
Which of the following is true regarding a market value adjusted annuity? a. it provides a level benefit payment b. the owner is guaranteed a fixed interest rate for a specific period of time c. the insurer bears all the market risk of changing interest rates d. there are no penalties for a premature surrender of the annuity
b. the owner is guaranteed a fixed interest rate for a specific period of time
Which of the following disability income policies would have the highest premium? a. 15-day waiting period/ 5-year benefit period b. 15-day waiting period/ 10-year benefit period c. 30-day waiting period/ 10-year benefit period d. 30-day waiting period/ 5-year benefit period
b. the sorter the waiting period, the higher the premium-- the longer the benefit period, the higher the premium
All of the following statements are true regarding installments for a fixed period annuity settlement option EXCEPT a) The payments are not guaranteed for life b) the insurer determined the amount for each payment c) it is a life contingency option d) It will pay the benefit only for a designated period of time.
c) It is a life contingency option
Which of the following riders would NOT cause the Death Benefit to increase a) Cost of Living Rider b) Accidental Death Rider c) Payor Benefit Rider d) Guaranteed Insurability Rider
c) Payor Benefit Rider - the payor benefit only pays the premium if the payor is disabled or dies
An applicant buys a non qualified annuity, but dies before the starting date. For which of the following beneficiaries would the interest accumulated in the annuity NOT be taxable a) Dependents b) Annuitant c) Spouse d) Charitable organization
c) Spouse.. but the tax can be deferred
Which of the following is true about the requirements regarding HIV exams? a) Prior informed oral consent is required from the applicant b) HIV exams may not be used as a basis for underwriting c) The applicant must give prior informed written consent d) Results may be disclosed to the agent and the underwriter
c) The applicant must give prior informed written consent
The policyowner of a Universal Life policy may skip paying the premium and the policy will not lapse as long as a) The policyowner cannot skip premiums without the policy lapsing b) The next month's premium is sufficient to cover both the current premium amount and the skipped amount c) The policy contains sufficient cash value to cover the cost of insurance d) The previous premium payments were high enough to create an excess of premium
c) The policy contains sufficient cash value to cover the cost of insurance
J transferred his life insurance policy to his son two years before his death. Which of the following is true a) The unpaid premiums on the policy will be deducted from J's taxable estate b) Because the policy has been transferred, it will not be included in J's taxable estate c) The entire face value of the policy will be included in J's taxable estate d) The interest portion of the policy will be included in J's taxable estate.
c) the entire face value of the policy will be included in J's taxable estate... if a policy owner transfers or gives away a life insurance policy within 3 years prior to his/her death, the entire face amount of the policy will be included in his or her taxable estate.
All of the following are True statements regarding the accumulation at interest option EXCEPT a) The interest is credited at a rate specified by the poicy b) the policyholder has the right to withdraw the accumulation at any time c) The interest is not taxable since it remains inside the Insurance policy d) the annual dividend is retained by the company
c) the interest is not taxable since it remains inside the Insurance policy
Under HIPPA, which of the following is INCORRECT regarding eligibility requirements for conversion to an individual policy a. an individual who doesn't qualify for Medicare may be eligible b. the gap of coverage for eligibility is a period of 63 or less days c. an individual who was previously covered by group health insurance for 6 months is eligible d. an individual who has used up COBRA continuation coverage is eligible
c. (hippo requires that the individual have a previous continuous creditable health coverage for at least 18 months)
Which of the following is an example of a limited-pay life policy? a. level term life b. straight life c. life paid-up at age 65 d renewable term age 70
c. Life paid up at age 65
Medicaid provides all of the following benefits EXCEPT a. eyeglasses b.family planning services c. income assistances for work-related injury d. home healthcare services
c. income assistance for work-related injury
Which of the following is true regarding single life settlement option a. proceeds are paid out in a lump sum b. it provides income for a specified period of time c. it provides income the beneficiary cannot outlive d. payments continue until the entire principal is exhausted
c. it provides income the beneficiary cannot outlive
An applicant is discussing his options for Medicare supplement coverage with his agent. The applicant is 65 years old and has just enrolled in Medicare Part A and Part B. What is the insurance company obligated to do? a. look at the applicant's medical history to decide what premium to charge b. send the applicant to a doctor for a physical. Nothing can happen until they get the results c. offer the supplement policy on a guaranteed issue basis d. exclude pre-existing conditions from coverage under the supplement policies
c. offer the supplement policy on a guaranteed issue basis
Which of the following policies would be classified as a traditional level premium contract? a. Universal Life b. Variable Universal Life c. Straight Life d. Adjustable Life
c. straight life
Which of the following is true regarding Medicare supplement policies? a. they must contain a minimum of Plans A and B b. They must be available to those aged 60 and over c. they must be guaranteed renewable d. they must have a 15-day free-look period
c. they must be at least guaranteed renewable
In a group prescription drug plan, the insured typically pays what amount of the drug cost
copayment
A man bought an individual health Insurance policy for himself. Which of the following roles does he now legally have a) Broker b) Subscriber only c) insured only d) Both subscriber and insured
d) Both subscriber and insured
If an insured surrenders his life insurance policy, which statement is true regarding the cash value of the policy? a) It is not considered to be taxable b) It is taxable only if it exceeds the amounts paid for premiums by 50% c) It is automatically taxable d) It is only taxable if the cash value exceeds the amount paid for premiums
d) It is only taxable if the cash value exceeds the amount paid for premiums
An individual just borrowed $10,000 from his bank on a 5 year installment loan requiring monthly payments. What type of life insurance policy would be best suited to this situation? a) Variable life b) Universal life c) Whole life d) Decreasing term
d) decreasing term.. A decreasing term policy's face amount decreases as the amount of debt is reduced
An insurance company has published a brochure that inaccurately portrays the advantages of a particular insurance policy. What is this an example of? a) Unfair claims b)Twisting c) Defamation d) False advertising
d) false advertising
what is penalty tax for non qualified distributions for a health savings account? a) 8% b) 10% c) 12% d) 20%
d. 20%
Which of the following is correct concerning the taxation of premiums in a key-person life Insurance policy? a. Premiums are tax deductible as a business expense b. Premiums are tax deductible by the key employee c. Premiums are taxable to the employee d. Premiums are not tax deductible as a business expense
d. Premiums are not tax deductible... however if key employee dies, benefits paid to the business are usually received tax free
which of the following statements about group life is correct? a. the premiums are higher than in an individual policy because there is no medical exam. b. the group sponsor receives a Certificate of insurance c. the policy can be converted to an individual term insurance policy d. the cost of coverage is based on the ration of men and women in the group
d. the cost of coverage is based on the ration of men and women in the group
All of the following are true of key person insurance EXCEPT a. There is no limitation on the number of key employee plans in force at any one time b. the employer is the owner, payor and beneficiary of the policy c. the key employee is the insured d. the plan is funded by permanent insurance only
d. the plan is funded by permanent insurance only.. can be funded by any type of life insurance
what best describes annually renewable term insurance?
it is level term insurance (offers the most insurance at the lowest cost)
Insuring Clause
lists the insured, the insurance company, what kind of losses are covered, and for how much the losses would be compensated
which provision allows an insurer to terminate a policy for any reason, and to increase the premiums for any class of insureds
optionally renewable
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
Events in which a person has both the chance of winning or losing are classified as
speculative risk
The paid-up option uses the dividend
to purchase a smaller amount of the same type of insurance as the original policy
