SERIES 6 EXAM
f an employee terminates her employment, which of the following provisions would allow her to continue health coverage under an individual policy, if requested within 31 days?
Grace period
A universal life insurance policy has two types of interest rates that are called
Guaranteed and current
Premiums
not deductible
nonrenewal
policy termination at its expiration date
Guarantee of insurability option in long-term care policies allows the insured to
with the ability to purchase additional insurance at a later date without evidence of insurability
medicare
the united states federal government plan for paying certain hospital and medical expenses for persons who qualify
All of the following are characteristics of a group life insurance plan EXCEPT
there is a requirement to prove insurability on the part of the participants
Which of the following is true regarding METs?
they allow several small employers purchase less expensive insurance together
in order to collect social security disability, the claimant must be able to demonstrate that the disability will last at least
12 months
What is the minimum age for obtaining an insurance producer's license in this state?
18
To be eligible under HIPAA regulations, for how long should an individual converting to an individual health plan have been covered under the previous group plan?
18 months
Under which of the following annuity options does the annuitant select the time period for the benefits, and the insurer determines how much each payment will be?
3. Installments for a fixed period
Adopting parents must inform their insurer that a child has been added to the family within
31 days
How much inpatient care must be provided, following a vaginal delivery, by health insurance policies that provide maternity benefits?
48 hrs
How long is an open enrollment period for Medicare supplement policies?
6 months
Under the bronze plan, how much coverage
60%
f an employer provides long-term group disability insurance for its employees, what percentage of monthly wages are lower-paid employees eligible to collect?
66 and 2/3%
week grace period
7
How many eligible employees must be included in a contributory plan?
75%
Which of the following would be considered a peril
fire
if taken as a lump sum, life insurance proceeds to beneficiaries are passed
free of federal income taxation
in a long term care policy, pre existing condition limiations
must appear as a separate paragrah and be clearly labled - more than 6 months
using a class designation for beneficiaries means
naming beneficiaries as a group
dividends
not taxable, interest is taxable
SEP
qualified plan for small employer
full contributory
the employee pays the entire cost
All of the following are ture regarding accumulation interest option except
the interest is not taxable since it remains inside the insurance policy
Which of the following is not the purpose of HIPAA
to provide immediate coverage to new employees who had been previously covered for 18 months
warrantry
validity of the insurance
Which of the following individuals must have insurable interest in the insured?
Policyowner
Underlying assets for variable annuity contracts must be maintained in what type of account?
Securities account
Which of the following will NOT be an appropriate use of a deferred annuity?
Creating an estate
A situation in which a person can only lose or have no change represents
A Pure risk Pure risk refers to situations that can only result in a loss or no change. Pure risk is the only type insurance companies are willing to accept.
What is a foreign insurer
An insurer with a home office in another state
Which of the following is TRUE about a class designation?
Beneficiaries are not identified by name
which of the following meets the insureds personal needs, and is provided bt nonmedical personnel
CUSTODIAL CARE
Term values
DO NOT DEVELOP CASH VALUES
3. Which component increases in the increasing term insurance?
Death benefit
endodontics
Dental specialty that diagnoses and treats diseases of the pulp
The requirement that agents not commingle insurance monies with their own funds is known as
Fiduciary responsibility.
In which of the following locations would skilled care most likely be provided?
In an institutional setting
The type of term insurance that provides increasing death benefits as the insured ages is called
Increasing term
which is true regarding HMO coverage
It is divided into geographic territories
what is the purpose of a conditional receipt
It is intended to provide coverage on a date earlier than the date of the issuance of the policy.
The type of settlement option which pays throughout the lifetimes of two or more beneficiaries is called
Joint and survivor
If a contract provides a set amount of income for two or more persons with the income stopping upon the first death of the insured, it is called a
Joint life annuity.
Every insurer marketing Long-Term Care insurance must establish marketing procedures to ensure all of the following EXCEPT
LTC policies are marketed effectively to prospective insureds
Which of the following insurers are owned by stockholders who have the usual rights of ownership, including the right of voting?
Stock
Which of the following statements about a suicide clause in a life insurance policy is TRUE?
Suicide is excluded for a specific period of years and covered thereafter.
The Affordable Care Act requires all U.S. citizens and legal residents to have qualifying health care coverage. This is known as
The individual mandate.
'When a fixed annuity owner pays pays a monthly annuity premium to the insurance company, where is this money placed?
The insurance company's general account
. What must happen when an individual policy or annuity has been personally delivered to the policyowner?
The policyowner must sign a delivery receipt.
how does a member of an HMO see a specialist
The primary care physician refers the member
solvency
ability to meet financial obligations
Trust
an arrangement in which funds or property are held by a person or corporation for the benefits of another perosn
which of the following is not applied toward the deductible under a nonscheduled plan
annual dental exam
a viatical settlement provider must have certian docs before completing the contract. whic is NOT
birth certifate
what is the contract provision that allows the insurer to nonrenew health coverage if certain events occur
conditionally renewable - can be cancelled - does not specifiy condition or reason
When an insuer offers services like preadmission testing, second opinions regarding surgery, and preventitive care, which term would best apply
case managment provision
Which of the following is not a characteristic or service of an HMO plan
contracting with insurance companies
In insurance transactions, fiduciary responsibility means
handling insurer funds in a trust capacity
During partial withdrawal from a universal life policy, which portion will be taxed
interest
accumulations
interest taxable
common disaster provision
primary beneficiary dies first in a common disaster as long as the beneficiary dies within this specified period of time following the death of the insured (30 dyas)
taxable
subject to taxation
what is the purpose of insurance guaranty association
to protect policyowners against insurer insolvency
insolvent
unable to meet financial obligations
Pertaining to insurance, what is the definition of a fiduciary responsibility?
A legal obligation of one party to act in the best interest of another. The obligated party is typically a fiduciary, that is, someone entrusted with the care of money or property. Also called fiduciary obligation
participating
a term used to refer to any insurance policy that distributes its dividends by cash payments, reduced premiums, units of paid up life insurance, a savings program, or by the puchase of term insurance
which of the following is true regarding taxation of the accelerated benefits
a portion of the benefit up to a limit is tax free, the rest is taxable income
producer
agent or broker
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.
In order to qualify for conversion from a group life policy that has been terminated to an individual policy of the same coverage, a person must have been insured under the group pan for how many years
5
In order to qualify for conversion from a group life policy that has been terminated to an individual policy of the same coverage, a person must have been insured under the group plan for how many years?
5
Which policy component decreases in decreasing term insurance?
Face amount
All of the following violations may result in an agent's imprisonment EXCEPT
Failing to report to the department a criminal prosecution taken against the agent in another jurisdiction.
Which of the following health care plans would most likely provide the insured/subscriber with comprehensive health care coverage?
Health Maintenance Organization plan HMO's provide a package of comprehensive health care services that include routine physicals, immunizations, well baby care, family planning, etc. as well as the treatment of sickness and injury
Medicare Part A services do NOT include which of the following?
Outpatient Hospital Treatment
. Which of the following do the Standard and Preferred risk categories share?
Premiums are not elevated.
Hospital indemnity/hospital confinement indemnity policy will provide payment based on
The number of days confined in a hospital.
Residual Disability
Type of disability income policy that provides benefits for loss of income when a person returns to work after a total disability, but is still not able to perform at the same level as before becoming disabled.
Which of the following policies would have an IRS required corridor or gap between the cash value and the death benefit
Universial life- option A
what are two components of a universail policy
insurance and cash account - always annual renewable term insurance
if a life insurance policy increases significantly in the face amount when the insured reaches a specified age, what type of policy is this
jumping juvenile policy - jumpes 5X
short term disability
less than2 years
Which Universal Life option has a gradually increasing cash value and a level death benefit?
option a
the reason for paying a benefit amount that is less than the insureds income is to
prevent overutilization and malingering
all of the following are considered to be supplemental benefits under an HMO plan except
preventitive services
Concurrent review
review for medical necessity of tests and procedures ordered during an inpatient hospitalization - monitor the stay
life contingency
dependent upon whether or not the insured is alive
all of the following are features and requirements of the living needs rider except
diagnosis must indicare that death is expected within 3 years
which settlement option provides a single beneficiary with income for the rest of their life
single life
Which of the following is excluded in a dental insurance plan?
Lost Dentures
What is the other term for the cash payment settlement option?
Lump sum
All of the following would be considered an insurance transaction EXCEPT
Obtaining an insurance license
How often may a viatical settlement provider contact an insured regarding the insured's health status if the insured's life expectancy is more than one year?
Once every 3 months
Which rider, when attached to a permanent life insurance policy, provides an amount of insurance on every family member?
Other insured rider
grace period
Period of time after the premium due date during which premiums may still be paid, and the policy and its riders remain in force.
In the executive bonus plan, who is the owner of the policy and who pays the premium
executive is the owner and the executive pays the premium
The patient protection and affordable care act includes all of the following provisions except
individual tax deduction for premiums paid
the patient protection and affordable care act includes all of the following provision except
individual tax deduction for premiums paid - does not offer tax deductions for health insurance premiums
policy endowment
maturity date
once a main order solicitation has been filed, how long may it be used
2 years
A producer's license must be renewed
Biennially.
What term is used to describe when the medical caregiver provides services to only members or subscribers of a health organization, and contractually is not allowed to treat other patients?
Closed panel
The gatekeeper of an HMO helps
Control specialist costs
What is an important feature of a dental expense insurance plan that is NOT typically found in a medical expense insurance plan?
Diagnostic and preventive care
After three years of making payments into a flexible premium deferred annuity, the owner decides to surrender the annuity. The insurer returns all the premium payments to the owner, except for a predetermined percentage. What is this percentage called?
Surrender charge
With regards to premium rates, which of the following statements is NOT true?
The Commissioner sets all insurance premium rates used in Pennsylvania.
An insurance advertisement exaggerates the benefits of an insurance policy, due to human error at the insurer's advertising agency. Who will the Department of Insurance hold responsible for the exaggeration?
The insurer
riders
aded to the basic insurance polic, to add, modify, or delete policy provisions
in comparison to accidentl, a policy that used the accidental bodily injury definition would provide coverage that is
broader in general - provide broader coverage than a policy that uses the accidental means definition
how are state insurance guaranty associations funded
by their members- authorized insurers
if an insurance company offers medicare supplement policies, it must offer which of the following plans
A
a prospective insured receives a conditional receipt but dies before the policy is issued. the insurer will
Pay the policy proceeds only if it would have issued the policy - conditional receipt states that coverage will be effective either on the date of the application or the date of the medical exam, whichever occurs last, as only as the applicant is found to be insurable as a standard risk, and policy is issued exactly as applied for.
Buy- sell
any form of life insurance may be used to fund a buy sell agreement
employer contributions made to a qualified plan
are subject to vesting requirements
which of the following is considered to be a morale hazard
driving recklessly
Which of the following is NOT a metal level of coverage offered under the Patient Protection and Affordable Care Act?
iron
An employee is covered under COBRA. His previous premium payment was $100 per month. His employer now collects $102 each month. Why does the employer collect an extra $2?
to cover employer administation costs
why purchase life insurance over annuities
to create an estate
Why should the producer personally deliver the policy when the first premium has already been paid
to help the insured understand all aspects of the contract
when must insurable interst exist in a life insurance policy
at time of application
Which authority is Not stated in an agents contract buy is required for the agent to conduct business
implied
On participating insurance policy issued by a mutual insurance company, dividends paid to policyholders are
not taxable since the IRS treats them as a return of a portion of the premium paid
which of the following docs must be provided to the policyowner or applicant during policy replacement
notice regarding replacement - signed by producer and applicant
in long term care insurance, what type of care is provided with intermediate care
occasional nursing or rehavilitative care
an inureds health claim internal appeal was denied. the insurer must do all of the following except
offer a payment plan
presumptive disability
offers full benefits for specified condition - two limbs, permanent blindness, loss of speech of hearing
Pertaining to insurance, what is the definition of a fiduciary responsibility
promptly forwarding premiums to the insurance company - position of trust
a licensee who has moved to pa from out of state must provide which of the following before becoming licensed as a resident in that state
proof of licensing or a letter of clearence from the previous home state
Under which provision can a physician submit claim information prior to providing treatment
prospective review
which is not true about beneficiary designations
the beneficiary must have insurable interest in the insured
If an annuitant dies before annuitization occurs, what will the beneficiary receive
the beneficiary will receive either the amount paid into the plan or the cash value of the plan, whichever is greater.)
Which of the following is not a characteristic of a group long term disability plan
the benefit can be up to 50% of one yearly income - max benefit is based upon monthly income
partial contributory
the cost is paid partially by employer and employee
n the event of loss, after a notice of claim is submitted to the insurer, who is responsible for providing claims forms and to which party?
insurer to the insured
indemnity
referred to as reimbursement
an insurance policy that only requires a payment of premium at its inception, provides insurance protection for the life of the insured and matures at age 100 is
single premium whole life - paid in one lump sum
all of the following are true regarding the covertability option under a term life life policy except
upon conversion, the death benefit of the permanent policy will be reduced by 50%
what is included in a policy summary
Premium amounts and surrender values - also producers name address, insurance company home office, generic name of policy issued, premium, cash value, surrender, death benefit
an insurer that holds a certificate of authority in the state in which it transacts business is considered a
authorized insurer
Enrollment of medicare PArt A
intial enrollment- starting 3 months before turning 65 and ending after 65th birthday general enrollment- between jan 1 and march 31 special enrollment- at any time - 10% fee if not enrolled at right time
Following a covered loss, the time payment of claims provision requires that an insurance company pay disability income benefits no less frequently than
monthly
which of the following describes gross annual premium
net premium plus expenses
Medicare Part D provides
Prescription drug benefit.
Part d
Prescription drug coverage
primary source of info used for insurance underwriting
application
qualified retirement plan
approved by IRS -exclusive benefit of employees and their beneficiaries - permanent
the full premium was submitted with the application for life insurance, and the policy was issued two weeks later as requested. when does the policy coverage become effective
as of the application date
Part a
hospital insurance - nursing facility, home health care, hospice care -- original medicare
Medicaid
A federal and state assistance program that pays for health care services for people who cannot afford them.
The interest earned on policy dividends is
taxable
Multiple Employer Trust (MET)
A group of small employers who do not qualify for group insurance individually, formed to establish a group health plan or self-funded plan.
9. Which of the following must the patient pay under Medicare Part B?
20% of covered charges above deductibles
Terminally ill patients are expected to survive how many months
24
To attain fully insured status under Social security. an individual must have earned how many credits
40
A tornado that destroys property would be an example of which of the following?
A peril
Which of the following persons is required to hold a producer license?
A person who negotiates insurance contracts
Which of the following would be required to be licensed as an insurance producer?
A salaried employee who advertises and solicits insurance
who might receive dividends from mutual insurer
policyholders - NOT taxable
Which of the following does not describe the principal goal of a preferred provider organization
provide medical services only from physicians in the network
second to die policy
survivorship
cash value gains
taxed surrender
7. What does "level" refer to in level term insurance?
. Face amount
What is the shortest possible elimination period for group short term disability benefits provided by an employer
0 days
which of the following would be a typical maximum benefit offered by major medical plans
1 million
HIPAA applies to groups of
2 or more
Within how many days must a producer respond to an inquiry from the Commissioner?
30
what is the elimination period for social secutiry disability benefit
5 months
Benefit periods for individual short-term disability policies will usually continue from
6 mon to 2 years
Which of the following ultimately determines the interest rates paid to the owner of a fixed annuity?
Insurer's guaranteed minimum rate of interest
The mode of premium payment
Is defined as the frequency and the amount of the premium payment.
Bob decides to sell his life insurance policy to a viatical settlement company. which of the following is true
It is the viatical settlement providers responsibility to inform his insurance company that the policy has been viaticated - written notice to the insurer - within 20 days
Which of the following is true regarding a single life settlement option?
It provides income the beneficiary cannot outlive.
Part C
Medicare Advantage
All of the following are true regarding rebates EXCEPT
Rebates are allowed if it's in the best interest of the client. TRUE Dividends are not considered to be rebates. Rebates are only allowed if specifically stated in the policy d) Rebating can be anything of economic value, given as an inducement to buy.
In which of the following cases would an "any occupation" disability income policy pay the benefits?
The insured is unable to perform any jobs in the field related to the insured's education and experience.
An insured notifies the insurance company that he has become disabled. What provision states that claims must be paid immediately upon written proof of loss?
Time of payment claims
Why should the producer personally deliver the policy when the first premium has already been paid?
To help the insured understand all aspects of the contract
When an individual purchases insurance, what risk management technique is he or she practicing?
Transfer
If the owner of a whole life policy who is also the insured dies at age 80, and there are no outstanding loans on the policy, what portion of the death benefit will be paid to the beneficiary?
a full death benefit
PPO
a group of physicians and hospitals that contract with employers, insurers, or third party organizations to provide medical care services ata reduced fee
How is emergency care covered for a member of an HMO?
a member of an HMO can receive care in or out of the HMO service area, but care is preferred in the service area
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 - daily needs, pain releif
false about group disability income insurance
coverage applies both on and off the job
What characteristic makes whole life permanent protection
coverage until death or age 100
orthodontics
dental practice of straightening teeth
the death benefit in a variable universial life policy
depends on the performance of a separate account - is not fixed
which is true about the cash surrender nonforfeiture option
funds exceeding the premium paid are taxable as ordinary income
Under which of the following disability income plans would the benfits be subject to income tax
group
as it pertains to group health insurance, COBRA stipulates that
group coverage must be extended for terminated employees up to a certain period of time at the former employees expense
policy proceeds
in life insurance, the death benefit
ROTH IRA
individual retirement acount funded with after tax contributions -can contribute 100% of earned income - grows tax free as long as the account is open for 5 years
an insurer receives a report regarding potential insured that includes financial status, hobbies, and habits
inspection report
When the fixed annuity owner pay a monthly annuity premium to the insurance company, where is this money placed
insurance companys general account
all of the following statments about medicare part B are correct except
it is compulsory program
incorrect about medicaid
it is solely a federally administered program
not true concerning whole life insurance
lump sum death benefits are not taxable
Which of the following groups would most likely be covered under a blanket accident policy?
students at a public school
which of the following statements about a suicide clause in a life insurance policy is trye
suicide is excluded for a specific period of years and covered thereafter
best interest of the insured
suitability
surrenders
surrender value- past premium= amount taxable
accelerated benefits
tax free to terminally ill
nonforfeiture values guarantee which of the following for the policyowner
that cash value will not be lost
which of the following determines the cash value of a variable life policy
the performance of the policy portfolio - variable fluctuates and is not guaranteed
general requitements of a qualified plan except
the plan must provide an offset for social security benefits
All of the following are true concerning the use of life insurance as an executive bonus except
the policy is owned by the company ACUTALLY OWNED BY THE EMPLOYEE
an insured stops making payments on a loan taken from his cash value policy. what will most likely happen
the policy will terminate when the loan amount with interest equals or exceeds the cash balue
all of the following statements about medicare supplement insurance policcies are correct except
they cover the cost of extended nursing home care
all of the following are requirements for life insurance illustrations except
they must be part of the contract
which of the following statements is true concerning employer group dental plans
they seldom contain a conversion privilege
Which option for universial life allows the beneficiary to collect both the death benefit and cash value upon the death of the insured
under option B the death benefit includes the annual increase in cash value so that the death benefit gradually increases each year by the amount that the cash value increases. - at any point the total death will ALWAYS be equal to the face amount plus the current amount of cash value.
a person who gives money as considereation for life insurance
viatical settlement purchaser
viatical settlement brokers represent
viators
the main difference between immediate and deferred annuities is
when the income payments begin
rollover
withdrawal of money from one qualified plan and placing it into another plann
Rebating is an unfair trade practice and is regulated by law. All of the following would be considered to be rebating EXCEPT
An agent misrepresents policy benefits to convince a policyowner to replace policies.
an underwriter is reviewing an applicant with an extensive medical history. which of the following would give the underwritier a better understanding of treated illness
Attending phyisican statment
A man is still employed at age 65 and is now eligible for Medicare. He wants to know what health insurance coverage he is eligible to receive. Which of the following options are available to him?
Continuation of group health only
If an insurer appoints a producer, which authority must be notified?
Department of Insurance
What is not a benefit of a POS plan
It allows guaranteed acceptance of all applicants.
What statement best describes the free look provision?
It allows the insured to return the policy within 10 days for a full refund or premiums if dissatisfied for any reason
Which of the following is TRUE regarding the annuity period?
It may last for the lifetime of the annuitant.
Prosthodontics
Replacement of natural teeth with artificial teeth or dentures
. Which of the following is a risk classification used by underwriters for life insurance?
Standard
Which of the following is TRUE about nonforfeiture values?
They are required by state law to be included in the policy.
Accidental bodily injury
Unplanned, unforeseen traumatic injury to the body.
estate
a person's net worth
Which of the following documents used in the underwriting process contains specific medical details about an applicant
attending physicians statement APS
which component increases in increasing term insurance
death benefit
life insurance death proceeds are
generally not taxed as income
buyers guide
generic consumer publication that explains life insurance in general terms in order to assist applicant in decision making
medicare part b covers all except
long term care
Which of the following is NOT true regarding the regulation of variable annuities? CHARACTERISTICS
1) Underlying Investment - the payments that annuitant makes into the varibe annuity are invested in the insurers separate account not their general account. 2)Interest Rates - issuing insurance company does not guarantee a minimum interest rate. 3) License Requirements - a variable annuity is considered a security and is regulated by the securities exchange commission in addition to state insurance regulations.
What is the civil penalty for violating a cease and desist order of the Commissioner?
1000
A producer licensed in Pennsylvania must notify the Insurance Department of any change of address in his or her residence or business address within how many days?
30
Which of the following provisions requires that any policy language that is in conflict with the state statutes of the state in which the insured resides is automatically amended to conform with those of the state of residence?
? Conformity with state statutes
All other factors being equal, what would the premium be like in a survivorship life policy as compared to the premium in a joint life policy?
?Lower
If an insured withdraws a portion of the face amount in the form of accelerated benefits because of a terminal illness, how will that affect the payable death benefit from the policy?
Accelerated benefits are life insurance death benefits that are paid before the death of an insured if he is suffering from a terminal illness."
Two individuals are in the same risk and age class; yet, they are charged different rates for their insurance policies due to an insignificant factor. What is this called?
Discrimination
Which provision allows the policyholder a period of time, while coverage is in force, to examine a health insurance policy and determine whether or not to keep it?
Free look period
Which of the following expenses is NOT covered by a health insurance policy?
Funeral
Which o the following is true about the premium on the children's rider in a life insurance policy?
It remains the same no matter how many children are added to the policy: it is based on an average number of children.
All of the following statements describe a MEWA EXCEPT
MEWAs are groups of at least 3 employers
In group insurance, what is the policy called?
Master policy
Prior to purchasing a Medigap policy, a person must be enrolled in which of the following?
Parts A and B of Medicare
When an employee is still employed upon reaching age 65 and eligible for Medicare, which of the following is the employee's option?
Remain on the group health insurance plan and defer eligibility for medicare until retirement.
Which rule would apply if an agent knows an applicant is going to cash in an old policy and use the funds to purchase new insurance?
Replacement rule
Which of the following is an example of a peril covered in an accident and health insurance policy?
Sickness
How soon after the due date should the insurer pay the agent appointment fees?
Within 30 days
What is the amount a physician or supplier bills for a particular service or supply?
actual charge
When must insurable interest exist in a life insurance policy?
at the time of the loss
A policyowner fails to pay the premium due on his whole life policy after the grace period passes, but the policy remains in force. This is due to what provision?
automatic premium loan
All of the following are true regarding insurance policy loans EXCEPT
employer contributions are not tax deductible TRUE tax accumulation is deferred 2. they must be approved by the IRS 3. withdraws are taxed
Forcing a client to buy insurance from a particular lender as a condition of granting a loan is defined as
Coercion
Accelerated Benefits
Riders attached to life insurance policies which allow death benefits to be used to cover nursing or convalescent home expenses.
In individual health insurance coverage, the insurer must cover a newborn from the moment of birth, and if additional premium payment is required, allow how many days for payment?
Within 31 days of birth
the type of policy that can be changed from one that does not accumulate cash value to one that does is
convertible term policy - can convert to permanent insurance
Which statement regarding insurable risks is not correct
insureds cannot be randomly selected
concealment
intentional withholding of information of a material fact
Medicare Advantage
is not provided through HMO
which provision allows a person to return a medicare supplement policy within 30 days for a full premium refund
right to examine
Which of the following best details the underwriting process for life insurance
selection, classificaation, and rating of risks
A domestic insurer issuing variable contracts must establish one or more
separate accounts -
Beneficiary
the person who receives the proceeds from the policy when the insured dies.
cash value
the policy's savings element or living benefit
which of the following statements is correct regarding whole life policy
the policyowner is entitled to policy loans -
What happens when an individual policy or annuity has been personally delivered to the policyowner
the policyowner must sign a delivery receipt
deductible
the portion of the loss that is to be paid by the insured before any claim may be paid
Which of the following is true regarding optional benefits with long-term care policies
they are available for an addiional premium
in order for an insurer to legally transact insurance, it must obtain which of the following
certificate of authority
Taxable benefits
hsa- 20% penalty under 65, no penality over 65 for nonmedical use MSA- when taken out at the end of the year Business over head expense Group disability income
When would a misrepresentation on the insurance application be considered fraud
if it is intentional and material
total disability
inability of the insured to perform any occupation for which he or she is reasonabily suited by reason of education training or experience
A typical Accidental Death & Dismemberment policy covers all of the following losses EXCEPT
income
The type of settlemet option which pays throughout the lifetimes of two or more beneficiaries is called
joint and survivor option -beneficiaries are still living
determine how much insurance someone needs based on financial objectives
needs approach
enrollle
a person enrolled in a health insurance plan, an insured
Gatekeeper
a primary care physician in an HMO plan
a man is an attorney when he applies for a ehalth policy. he decides to become a professional bungee jumper. he flies a claim. what should happen?
the insurance company will pay the claim according to the benefits available if the correct premium had been paid
Which of the following would NOT be considered an exception to the National Do Not Call List?
-Calls based from outside of the United States Calls from outside the United States are not an exception to the National Do Not Call List.
n insurer publishes intimidating brochures that portray the insurer's competition as financially and professionally unstable. Which of the following best describes this act?
-Illegal under any circumstances When a company criticizes the financial situation of another company, with the intention of injuring that company, it has committed an illegal trade practice called "defamation."
Insurers must notify the Commissioner's office as to whether or not a life insurance policy will be marketed with illustrations. Certification of that notification must be provided annually within how many days of the anniversary of the original certification?
30 days
. According to the Entire Contract provision, a policy must contain
A copy of the original application for insurance
cease and desist order
A demand of a person to stop committing an action that is in violation of a provision.
All of the following are personal uses of life insurance EXCEPT
buy-sell agreement - business uses of life insurance
All of the following statments concerning dividends are true except
dividend amounts are guaranteed in the policy
defined contribution plans
focus on contrubutions rather than on the benefits promised to the employee
what type of insurance would be used for a return of premium rider
increasing term
Joint life with term certain
pays to two or more until the first one dies
Which clause allows both the insured and dentist to know in advance which benefits will be paid?
precertification
what is the purpose of the buyers guide
to allow the consumer to compare the costs of different policies
endow
to have the cash value of a whole life policy reach the contractual face amount
periodontics
treatment and prevention of diseases of the gums, bone, and structures supporting the teeth
At the time of initial licensing, what fee must a viatical settlement provider pay?
$300
what fee must a viatical settlement provider pay
$300
Under which nonforfeiture option does the company pay the surrender value and have no further obligations to the policyowner
cash surrender
What limits the amount that a policyowner may borrow from a whole life insurance policy
cash value
What is an important feature of a dental expense insurance plan that is not typically found in a medical expense insurance plan
diagnostic and preventive care - covers treatment, care, and prevention of dental disease
nontaxed return of unused premiums
dividend
all of the following may be excluded from coverage in major medical expense policy, except
emergency surgery
What required provision protects against unintentional lapse of the policy
grace period
what required provision protects against unintentional lapse of the policy
grace period
Which of the following is true regarding the childhood immunization benefit in medical plans issued in this state?
its mandatory
Which statement is not true regarding a Straight Life policy
its premium steadily decreases over time, in response to its growing cash value
which statement is NOT true regarding a Straight Life policy?
its premium steadily decreases over time, in response to its growing cash value
during replacement of life insurance, a replacing insurer must do which of the following
obtain a list of all insurance policies that will be replaced - send to existing insurnce company
how often may a viatical provider contact an insured regarding the health status of insured
once every 3 months
the dividend option in which the policyowner used dividends to purchase a term policy for one year is referred to as the
one year term option
with respect to the entire contract clause in health policies, who has the authority to make changes to existing policy?
only an executive officer of the company
All of the following are true of an annuity owner EXCEPT
owner must be a party
when the owner of a participating whole life policy uses the dividend to provide more life insurance coverage, which of the following options is being used
paid- up additions
which of the following is another term for the accumulation period of an annuity
pay in period
Medicare select does not
prohibit payment for regularly covered services if provided by non network providors
When a life insurance policy stipulates that the beneficiary will receive payments in specified installments or for a specified number of years, what provisions prevents the beneficiary from changing or borrowing from the planned installments
spendthrift provision
Which of the following policies would be classified as a traditional level premium contract?
striaght life
In which of the following situations is it legal to limit coverage based on marital status?
t is never legal to limit coverage based on marital status.
which of the following would help prevent a universial life policy from lapsing
target premium
Qualified plans
tax deductible -approved by IRS -Cannot discriminate -earnings grow tax defrred -withdrawals are taxed
Which of the following is an example of liquidity in a life insurance contract
the cash value available to the policyowner - availability of cash to the insured.
profit sharing plan
where the employer will contribute monies into an employees retirement plan when the company shows a profit
buyer guide is given
with the policy
HMO
A group plan offering prepaid medical care to its members -must have 25 employees
Medicare SELECT policy
A medicare supplement policy or certificate that contains restricted network provisions conditioning the payment of benefits on the use of network providers.
extension of benefits
A provision that allows coverage to continue beyond the policy's expiration date for employees who are not actively at work due to disability or who have dependents hospitalized on that date. This coverage continues only until the employee returns to work or the dependent leaves the hospital.
accidental death and dismemberment
An insurance policy which pays a specified amount or a specified multiple of the insured's benefit if the insured dies, loses his/her sight, or loses two limbs due to an accident.
. In an annuity, the accumulated money is converted into a stream of income during which time period?
Annuitization period
Which of the following is not true of Disability Buy-Sell coverage?
Benefits are considered taxable income to the business.
Which of the following options best depicts how the eligibility of members for group health insurance is determined?
By conditions of employment
A man is injured while robbing a convenience store. How does his major medical policy handle the payment of his claim?
Claim is denied if his policy contains the Illegal Occupation provision
Combination plans are comprised of two types of plan features: basic and
Comprehensive.
Which of the following would be considered an illegal inducement to purchase insurance?
Confirming future dividends in a life insurance proposal
According to the Fair Credit Reporting Act, all of the following would be considered negative information about a consumer EXCEPT
Disputes regarding consumer report information
. All of the following statements concerning dividends are true EXCEPT
Dividend amounts are guaranteed in the policy.
Which of the following is true regarding taxation of dividends in participating policies?
Dividends are not taxable.
Which of the following is considered a qualifying event under COBRA
Divorce
what is the goal of the hmo
Early detection through regular checkups
Under which installments option does the annuitant select the amount of each payment, and the insurer determines how long they will pay benefits?
Fixed amount
If a settlement option is not chosen by the beneficiary or policyowner, which option will be used?
Lump sum
All of the following statements concerning Medicaid are correct EXCEPT
Medicaid is a state funded program that provides health care to persons over age 65, only
Which of the following is considered to be a morale hazard?
Morale hazard describes indifference to unintentional risk.
a long-term care insurance shopper's guide must be provided in the format developed by which of the following
NAIC
What is the initial period of time specified in a disability income policy that must pass, after the policy is in force, before a loss can be covered?
Probationary period
. When a life insurance policy was issued, the policyowner designated a primary and a contingent beneficiary. Several years later, both the insured and the primary beneficiary died in the same car accident, and it was impossible to determine who died first. Which of the following would receive the death benefit?
The insured's contingent beneficiary
In forming an insurance contract, when does acceptance usually occur?
When an insurer's underwriter approves coverage
If an applicant for a life insurance policy and person to be insured by the policy are two different people, the underwriter would be concerned about
Whether an insurable interest exists between the individuals.
irrevocable beneficiary
a beneficiary who has a vested interest in the policy and therefore, the policyowner may not exercise certain rights with out the consent of the beneficiary
capital sum
a portion of the principal sum of a health insurance policy; paid for accidental dismemberment or loss of sight in one eye
Which of the following is another term for the accumulation period of an annuity?
pay - in period
an insured committed suicide one year after his life insurance policy was issured. The insurer will
refund the premiums paid
Accident
An unplanned, unforeseen event which occurs suddenly and at an unspecified place.
Which document helps ensure that full and fair disclosure is provided to the recipient of a policy?
Outline of coverage- relesed at the ime of application or upon delivery of the policy
When an individual is covered under two health insurance policies that have duplicate benefits which could make a claim for benefits because of an injury or illness profitable, it is called
Overinsurance
An employee has group life insurance through her employer. After 5 years, she decides to leave the company and work independently. How can she obtain an individual policy?
She can convert her group policy to an individual policy without proof of insurability within 31 days of leaving the group plan.
If a deferred annuity is surrendered prematurely, a surrender charge is imposed. How is the surrender charge determined?
The surrender charge is a percentage of the cash value and decreases over time.
A guaranteed renewable health insurance policy allows the
insurance policy feature that obligates the insurer to continue coverage as long as premiums are paid on the policy
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
In a direct rollover, how is the money transferred from one plan to the new one?
directly from the trustee of the first plan to the trustee or administrator/custodian of the new IRA plan.
Individual long term
PREM Deductible for employer BEN NOT TAX
To avoid violations of unfair claims settlement regulations, insurers are required to acknowledge the receipt of a claim within how many days?
10 days
An insured pays a monthly premium of $100 for her health insurance. What would be the duration of the grace period under her policy?
10 days The grace period is 7 days if the premium is paid weekly, 10 days if paid monthly, and 31 days for all other modes.
According to OBRA, what is the minimum number of employees required to constitute a large group?
100
which of the following is not a cost saving service in medical plan
denial of coverage
lump-sum
payment of the entire benefit in one sum
hazard is best defined as
something that increases the risk of loss
Which of the following are the authorities that an agent can hold?
express or implied
An insured purchased an insurance policy 5 years ago. Last year, she received a dividend check from the insurance company that was not taxable. This year, she did not receive a check from the insurer. From what type of insurer did the insured purchase the policy?
Mutual: Funds not paid out after paying cliams and other operating costs are returned to the p olicowners in the form of a dividend
The primary eligibility requirement for Medicaid benefits is based upon
Need ( Medicaid is a program operated by the state with some federal funding to provide medical care for those in need)
A long-term care shopper's guide must be presented at what point?
Prior to the time of application
The annuity owner dies during the accumulation period without naming a beneficiary. Annuity's cash value exceeds premiums paid. Which of the following is TRUE?
The cash value will be paid to the annuitant's estate.
Which is NOT true regarding an insured who is considered to be a standard risk?
The insured may have to pay slightly higher premiums.
tax-sheltered annuity is a special tax-favored retirement plan available to
certain group of employees only - nonprofit charitable, educational, religious
Which of the following insurance options would be considered a risk sharing arrangement
reciprocal
month grace period
10
Which of the following disability income policies would have the highest premium
15 day waiting period, 10 year benefit period - longer the benefit, higher the premium
How long does a temporary producer's license last for the surviving spouse of a deceased producer?
180
A producer has successfully completed 52 hours of CE. How many hours can the producer apply to her current reporting period, and how many hours can she carry forward to the next reporting period?
24 hours will be applied to the current reporting period, and 24 can be applied to the period immediately following. The excess 4 hours may not be carried over.
if an individual willfully violates provisions of the fair credit reporting act, what is the max civil penalty
2500
For how long must a company maintain a complete file of all advertisements used?
4 years
Limited Pay Whole Life
A variation of whole life insurance that charges a level annual premium and provides a level, guaranteed death benefit to the insured's age 100 and will endow for the face amount if the insured lives to age 100. Limited-pay life is designed so that the premiums for coverage will be completely paid-up well before age 100.
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. A children's term rider is attached to a life insurance policy, children can be covered under the policy until they reach the max age stated in the policy. At that point, they can convert their coverage to a new policy without having to issue proof of insurability.
What form of the annuity settlement options provides payments to an annuitant for the rest of the annuitant's life and ceases at the annuitant's death?
Pure life
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
Who negotiates viatical settlement contracts on behalf of a viator
Viatical broker
Which of the following employees insured under a group life plan would be allowed to convert to individual insurance of the same coverage once the plan is terminated?
b) Those who have been insured under the plan for at least 5 years If the master contract is terminated, every individual who has been on the plan for at least 5 years will be allowed to convert to individual insurance of the same coverage.
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 - based on an average age - would pay death benefit only at the first death
what are the licensing requirements for someone who sells variable universial life insurance
life insurance and securities
death benefit
not income Taxable - except for interest
if a court ordered payment for a loss that was not covered in the policy even if it was clearly worded, it would be an example of which legal concept
reasonable expectations - advertising or sales literature or statements by an agent, an insured could reasonably expect coverage, the courts have held that the insurer must provide that coverage
What type of insurer uses a formal sharing agreement
reciprocal insurers
An insured committed suicide one year after his life insurance policy was issued. The insurer will
refund the premium paid
What type of information is not included in a certificate of insurance
the cost the company is paying for monthly premiums
A group of 15 skydivers meet at a seminar and begin talking about life insurance during a break. Because it is expensive to get individual life insurance, they decide to band together to form a small group so that they will be eligible. They apply for small group life insurance and are rejected. Why?
the purpose of the group was to purchase life insurance
IRS
responsible for collecting of taxes and enforcement of the internal revenue code
An insured misstated her age on an application for an individual health insurance policy. The insurance company found the mistake after the contestable period had expired. The insurance company will take which of the following actions regarding any claim that has been issued?
Adjust the claim benefit to reflect the insured's true age
Level term insurance provides a level death benefit and a level premium during the policy term. If the policy renews at the end of a specified period of time, the policy premium will be
Adjusted to the insured's age at the time of renewal.
coinsurance
An agreement between an insurer and insured in which both parties are expected to pay a certain portion of the potential loss and other expenses.
Accidental death insurance
An insurance policy that provides payment if the insured's death is the result of an accident.
all of the following qualify for medicare PArt a except
Anyone who is willing to pay a premium
an underwritier is reviewing medical questions in the app and needs more info due to medical situation the app had in the past. What does he require
Attending physician statment - details about specific condition
Which of the following statements concerning buy-sell agreements is true?
Buy-sell agreements are normally funded with a life insurance policy
Concerning group Medical and Dental insurance, which of the following statements is INCORRECT?
Employee benefits are tax deductible the year in which they were received CORRECT Premiums paid by the employer are deductible as a business expense Benefits received by the employee are free from federal income tax D. Employee paid premiums may be deducted if certain conditions are met
Which statement regarding insurable risks is NOT correct?
Insureds cannot be randomly selected.
Which of the following best describes the MIB
It's a nonprofit organization that maintains underwriting information on applicants for life and health insurance.
Which of the following programs expands individual public assistance programs for people with insufficient income and resources?
Medicaid
describes gross annual premium
net premium plus expenses
Group Medical
premiums deductible for employer benefits not taxable
Where would the underwriter find relevant information not presented by the applicant but communicated by the producer?
application
Which of the following is the most common time for errors and omissions to occur on the part of an insurer?
application
A rider that may be attached to a life insurance policy that will adjust the face amount based upon a specific index, such as the Consumer Price Index, is called
Cost of living rider.
Which of the following types of agent authority is also called perceived authority
apparent - appearance/ assumption of authority based on actions, words, or deeds of the principle or because of circumstances the principal created
a producer in another state wants to become a produceer in pa. the other state gives the same privileges to pa producers wanting to be licensed in that state as it does its own producers. PA therefore extends the privileges of its producers to the prospective producer of the other state. What is this called
RECIPROCITY
Under the Fair Credit Reporting Act, if the consumer challenges the accuracy of the information contained in his or her report, the reporting agency must
Respond to the consumer's complaint.
In terms of parties to a contract, which of the following does not describe a competent party?
THe person must have at least completed secondary education
If a beneficiary is NOT named for annuity benefits, to which entity will the benefit be paid?
The annuitant's estate
Which of the following is NOT the consideration in a policy?
The application given to a prospective insured
All of the following are TRUE statements regarding the accumulation at interest option EXCEPT
The interest credited under this option is TAXABLE, whether or not the policyowner receives it. TRUE The annual dividend is retained by the company. BThe interest is credited at a rate specified by the policy. CThe policyholder has the right to withdraw the accumulations at any time.
annuity
a contract that provides income for a specified period of years or for life.
capitation
a payment arrangement that pays a phusician or group of physiscians a set amount for each enrolled preson assigned to them, per period of time, whehter or not that person seeks care.
benefit period
a period of time during which benefits are paid under the policy
during replacement, procedures must provide a list of insurance policies still in force. In addition, they must list policies sold during the past
5 years
If someone wants to buy a life insurance policy that will provide lifetime protection against premature death, what type of life insurance policy should that person buy
Permanent - provides lifetime death protection, and savings or investment option
guaranteed renewable
a policy that is written on a noncancellable basis with the right to renew
Underwriting for disability insurance is unique due to the type of risk involved. Which of the following situations illustrates this?
A construction worker pays a higher premium and receives a poorer classification of disability.
All of the following could own group life insurance EXCEPT
A group needing low-cost life insurance.
Which of the following best describes a misrepresentation?
A statement intended to distract, mislead, or deceive a party to a contract
All of the following qualify for Medicare Part A EXCEPT
Anyone who is willing to pay a premium Medicare was not designed for a specific class of society but primarily for citizens age 65 and over.
Which of the following does a producer NOT have the authority to do?
Bind an insurance company to a contract
All of the following are characteristics of a Major Medical Expense policy EXCEPT
Blanket coverage
Which of the following best describes fixed-period settlement option?
Both the principal and interest will be liquidated over a selected period Of time
Which of the following reports will provide the underwriter with the information about an insurance applicant's credit?
Consumer report
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
An insured has medical insurance coverage through 2 different providers, both covering the same expenses on an expense-incurred basis. Neither company knows in advance that the insured has coverage through any other insurers. The insured submits a claim to both insurers. How should the claim be handled?
Each insurer should pay a proportionate share of the claim
If an insurer becomes insolvent, which of the following would pay benefits to policyholders?
Guaranty association
Who must pay for the cost of a medical examination required in the process of underwriting?
Insurer
Which of the following statements about the reinstatement provision is true?
It requires the policy owner to pay, with interest, all premiums that are in arrears in order for the policy to be reinstated
Which of the following statements is TRUE about a policy assignment?
It transfers the ownership rights under the policy to the extent expressed in the assignment form
Which of the following is correct concerning the taxation of premiums in a key-person life insurance policy?
Premiums are not tax-deductible as a business expense
Which of the following are the main factors taken into account when calculating residual disability benefits?
Present earnings and earnings prior to disability. Residual disability will help pay for loss of earnings by making up the difference between the employee's present earnings and what they were earning prior to disability.
What would a physician utilize if he/she wanted to know if a treatment is covered under an insured's plan and at what rate it will be paid?
Prospective Review
Nonforfeiture values guarantee which of the following for the policyowner?
That the cash value will not be lost. Because permanent life insurance policies have cash values, there are certain guarantees built into the policy that cannot be forfeited by the policyowner. Nonforfeiture values give the insured the right to the cash value even if the policy lapses or is surrendered.
Which of the following is correct about Medicare?
The program is divided into four parts(A-D)
Which of the following named beneficiaries would NOT be able to receive the death benefit directly from the insurer in the event of the insureds' death?
William, Jr., minor son of the insured
Insurance producers that do not have company appointments are considered a/an
representative of the consumer
An insured receives a monthly summary for his life insurance policy. He notices that the cash value of the policy is significantly lower this month than it was last month. What type of policy does the insured have?
variable- life policies vary in value, as the name suggests, because the value is based on the stocks that support the policy. If a policyholder wants a more stable, reliable value, he/she should invest in a fixed policy.
waiting period
a period of time that must pass after a loss occurs before th insurer starts paying
all of the following are examples of risk rentention except
premiums - planned assumption of risk or acceptance of the loss
level term
premiums and death benefits stay the same for the life of the policy
regarding the taxation of business overhead policies
premiums are deductible, and benefits are taxed
medicare
A federal program of health insurance for persons 65 years of age and older available to social security disability income for 2 years or has permanent kidnet failure or ALS
Who is the owner and who is the benefiicary on a key person life insurance policy
the employer is the owner and beneficiary
All of the following are true of an annuity owner EXCEPT
The owner must be the party to receive benefits.
accumulation period
The time over which the annuitant makes payments or investments in an annuity, and when those payments earn interest tax deferred.
Prior to purchasing a Medigap policy, a person must be enrolled in which of the following?
a and b
Contingent beneficiary
a beneficiary who has second claim to the policy proceeds after the death of the insured
a provision in a life insurance policy that provides for the early payment of some portion of the policy face amount should the insured suffer from a terminal illness
accelerated benefit provision -given without an increase in premium -will deduct an interest charge from proceeds paid out to make up for their loss earnings
limited policies
accident only accidental and death dismemberment travel accident specified disease (dread) hospital indemnity (income) critical illness blanket insurance perscription durgs vision and health care dental
which of the following provisions must be included on the first page of a medicare supplement policy, which states the insureres right to change premium amount
continuation provision
Which of the following is true concerning creditors of the deceased insured
creditors have rights to the proceeds if they can show evidence of valid assignment
a health insurance policy that pays a lump sum if the insured suffers a heart attack or stroke is
critical illness
an agents is filling out an insurance applicantion for a client. the applicant realizes she should have answered an earlier question differently. Which of the following methods should the agents use to change the problem
cross out in incorrect info and write the correct answer, and have the applicant initial the changeW
When a person applies for Medicare supplement insurance, whose responsibility is it to confirm that the applicant does not already have accident or sickness insurance already in force? a) Federal government b) Agent c) Insurer d) State government
insurer
All the following are characteristics of group life insurance except
premiums are determined by the age, sex, and occupation of each individual - Determined of the entire group, not each individual
Which of the following is not provided by an HMO
reimburesement
An insured purchased a 10-year level term life policy that is guaranteed renewable and convertible. What happens at the end of the 10-year term?
the insured may renew the policy for another 10 years, but at a higher premium rate - do not need evidence of insurability
The insured under a $100,000 life insurance policy with a triple indemnity rider for accidental death was killed in a car accident. It was determined that the accident was his fault. The triple indemnity rider in the policy specifies that the death must not be contributed to by the insured in any manner. In this case, what will the policy beneficiary receive?
$100,000 (not the triple amount - the triple indemnity rider was voided bc he caused the accident)
An insurance company forwards fixed annuity premiums to their general account, where the money is invested. The guaranteed minimum interest is set at 2.5%. During an economic downswing, the investments only drew 2%. What interest rate will the insurer pay to its policyholders?
2.5%
According to the telemarketing sales rules, what are the permissible calling hours for telemarketing calls?
8am- 9 pm
If a licensed person is moving to Pennsylvania, he or she may become licensed as a resident if they submit a completed application within how many days of establishing residence in Pennsylvania with proof of licensing from their prior home state?
90
An insured has chosen joint and 2/3 survivor as the settlement option. What does this mean to the beneficiaries?
The surviving beneficiary will continue receiving 2/3 of the benefit paid when both beneficiaries were alive. When the reduced option is written as "joint and 2/3 survivor," the surviving beneficiary receives 2/3 of what was received when both beneficiaries were alive.
The insurer must be able to rely on the statements in the application, and the insured must be able to rely on the insurer to pay valid claims. In the forming of an insurance contract, this is referred to as
Utmost good faith
In a replacement situation, all of the following must be considered EXCEPT
asssets
Which statement accurately describes group disability income insurance?
The extent of benefits is determined by the insured's income
accidental death benefits
A policy rider that states that the cause of death will be analyzed to determine if it complies with the policy description of accidental death.
accident insurance
A type of insurance that protects the insured against loss due to accidental bodily injury.
An insured does not have to pay co-insurance or deductibles on a full-series mouth x-ray, but does have to pay a deductible to get his cavities filled. Which dental plan does he have?
nonscheduled
death benefits payable to a beneficiary under a life insurance policy are generally
not subject to income taxation by the federal government
Nonqualified
not tax deductible -does not need IRS approval -plan cannot discriminate earnings grow tax deferred excess over cost basis is TAXED
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
when the insured initiates the cancellation of a policy, the unearned premium will be refunded on a
short rate basis
Upon policy delivery, the producer may be required to obtain any of the following EXCEPT
signed waiver of premium
if the policy is rated-up, which of the following is true
the premium increases
Level premium
the premium that does not change throughout the life of a policy
one an insurer receives a claim, within how many days must the insurer provide claim forms to the insured
10 working days
For how many days of skilled nursing facility care will Medicare pay benefits?
100
in a noncontributory health insurance plan, what percentage of eligible employees must participate in the plan before the plan can become effective
100%
an agent receive some inaccurate inf and as a result he publicly misstated te financial condition of another entity 12 times over a period of 3 months. this is fact is revealed, the agent may face a fine up to
10000
n order to collect Social Security disability benefits, the claimant must be able to demonstrate that the disability will last at least
12 months.
According to the 2001 CSO table, at what age will the terminal reserves be reached?
120
once a viatical contract has been established, how long does the viator have to rescind the contract
15 calendar days
if a viatical settlement provider transfers ownership of an insurance policy, how long does the insurer have to infrom the insured of the change?
20 days
If a consumer requests additional information concerning an investigative consumer report, how long does the insurer or reporting agency have to comply?
5 days
An insurer may provide commissions to an agent for the sale of a long term care policy only if the first year commission is not greater than what percentage of the first year premium
50 %
To attain currently insured status under Social Security, a worker must have earned at least how many credits during the last 13 quarters?
6
What is the waiting period on a Waiver of Premium rider in life insurance policies?
6 month
Under the affordable care act, a special enrollment period allows an individual to enroll in a qualified health plan within how many days of qualifiying event
60
Chronically ill
90 days
Jason is insured under his employer's group health insurance. He splits the cost of the premiums with his employer. This is an example of
A contributory plan.
Part b
medical insurance - original medicare
Under which nonforfeiture option does the company pay the surrender value and have no further obligations to the policyowner?
Cash surrender
When must an IRA be completely distributed when a beneficiary is not named?
December 31 of the year that contains the fifth anniversary of the owner's death
which of the following is correct about medicare
the program is dividd into four parts
All of the following are penalties a producer may face for violating the insurance laws of this state EXCEPT
Fines of up to $1,000 for each act.
what type of benefit helps to pay for accidental injuries that are not severe enough to qualify as diabilities
medical reimbursement benefit
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
Under the Fair Credit Reporting Act, individuals rejected for insurance due to information contained in a consumer report
Must be informed of the source of the report
Who is involved in completing the agent's report?
Only the agent
under the affordable care act, which classificiation applies to health plans based on the amount of covered costs
metal level classification
The insured had his wife named as the beneficiary of his life insurance policy. To ensure that his wife had income for life after the insured's death, he chose the life income settlement option. The amount of payments will be determined by taking into account all of the following EXCEPT
The insured's age at death.
. An agent is in the process of replacing the insured's current health insurance policy with a new one. Which of the following would be a proper action
The old policy should stay in force until the new policy is issued.
Which of the following statement is true concerning irrevocable beneficiaries
They can be changed only with written consent of that beneficiary
When is the earliest a policy may go into effect?
When the application is signed and a check is given to the agent
an insurance agent visits potential client and expalins various types of policies. The customer displays a lack of interes, so the agent guarantees higher dividends than he knows would be possible.
misrepresentation
guaranteeing future dividends is considered to be an unfair or deceptive act known as
misrepresentation
Which of the following hospice expenses would not be covered in cost containment settng
`antibiotics
When J. applied for a life insurance policy, the agent informed him that a medical exam would be required. The exam may be completed by
a paramedic or examining physican at the insurers expense
Medigap
a private insurance policy that pays the difference between the medical charge and the amount that Medicare pays
tax deductible
a qualified expense that may reduce the amount of income subject to taxation
Two types of assignments are
absolute and collateral =entire and parts
Two major causes of loss under health insurance
accidental sickness
at age 30, an applicant want to start an insurance program, but realizing that his insurance needs will likely change, he wants a policy that can be modified to accommodate those changes as they occur. Which of the following policies would most likely fit his needs.
adjustable life - allow for increase or decreases in the face amount/ premium
an insured misstates her age at the time of the life insurance application is taken. this misstatment may result in
adjustment in the amount of the death benefit
Which of the following is the closest term to an authorized insurer
admitted
obra requires large group health plans must provide primary coverage for disabled individual under
age 65 who are not retired
What documentation grants express authority to an agent
agents contract with the principal
when transacting business in this state an insurer formed under the laws of another country is known as
alien insurer
if a life insurance policy develops cash value faster than a 7 pay whole life contract it become
modified endowment contract
which is not true regarding needs approach method of determing the value of individuals life
need is predicted using the number of years until retirement
In which Medicare supplemental policies are the core benefits found?
all plans
scheduled plan
also known as basic pays benefits from a list of procedures up to the amount shown in the schedule
nonscheduled
also known as comprehensive benefits paid on a reasonable and customary basis and are subject to deductibles and coinsurance -diagnostic, preventive, basic 80/20, major (50%)
Who can make a fully deductible contribution to a traditional IRA
an individual not covered by an employer sponsored plan who has earned income
If an insurance company makes a statement that its policies are guaranteed by the existence of the Insurance Guaranty Association, that would be considered
an unfair trade practice
the death protection component of universal life insurance is always
annually renewable term - Two components 1. insurance component 2. cash account
All other factors being equal, the least expensive first-year premium payment is found in
annually renewable term - death remains level, but premium increases each year with age
in disability income insurance, if an insured is considered disabled if they cannot perform any job they are suited for the prior education, training or experience, they fall under which definition
any occupation
which statement below is incorrect regarding the type of term insurance that fits best with the applicants needs
applicants who may require a larger death benefit in the future should buyt convertible term insurance
all of the following are true of federal tax advantages of a qualified plan except
at distribution, all amounts received by the employee are tax free
Health insurance policies providing maternity benefits must also provide coverage for postpartum inpatient hospital care. how much coverage must be provided for delivery by c section
at least 96 hours
not tru of key person disability income policy
benefits are considered taxable income to the business
not true about business overhead expense policies
benefits are usually limited to 6 months - insurance sold to small businesses for the purpose of reimbursing the policyholder for business overhead expenses during aperiod of total disability - tax deductible - benefits received are taxable as income
non forfeiture values
benefits in a life insurance policy that the policy owner cannot lose even if the policy is surrendered or lapses
who must sign the notice regarding replacement
both the agent and the applicant must sign
Which of the following would describe a legal doc which would dictate wo can buy a deceased partners share of busienss
buy sell
After a person's employment is terminated, it is possible to obtain individual health insurance after losing the group health coverage provided by the employer. Which of the following is NOT true?
by law, the new, individual policy must provide the same benefits as the group insurance policy
insurers cannot transact insurance in this state without a
certificate of authority
Which of the following would be an example of an insurer participating in the unfair trade practice of discrimination
charging the insured higher premiums based on her race
Which of the following children related to the insured are not eligible for a health insurance plan
children of an insureds sibling
An insured and his wife are both involved in a head-on collision. The husband dies instantly, and the wife dies 15 days later. The company pays the death benefit to the estate of the insured. This indicates that the life insurance policy had what provision?
common disaster
an insurer neglects to pay a legitmate claim that is covered under the terms of the policy. which of the following insurance principles has the insurer violated
consideration - binding force in any contract - promise to pay in the event of loss
when an insured makes truthful statements on the application for insurance and pays the required premium, it is known as which of the following
consideration - something of value that each party gives to the other.
in an individual long term care insurance plan, the insured is able to deduct the premiums from taxes. What income taxation will be imposed on the benefits received
no tax
An insured is hospitalized with a back injury. Upon checking his disability income policy, he learns that he will not be eligible for benefits for at least 30 days. This indicates that his policy is written with a 30-day
d) Elimination period. The elimination period is the time immediately following the start of a disability when benefits are not payable. This is used to reduce the cost of providing coverage and eliminates the filing of many claims.
an individual applied for an insurance policy and paid the inital premium. the insurer issued a conditional receipt. 5 days later the applicant had to submit a medical exam. if the policy is issued, what would be the policys effective date?
date of medical exam -
If an insured withdraws a portion of the face amount in the form of accelerated benefits because of a terminal illness, how will that affect the payable death benefit from the policy?
death benefit will be smaller
insured changes his payment from monthly to annually, what happens to the total premium
decreases - because the insurer would have the entire premium to invest for a full year, they would reduce the premium amount
on a major medical insurance policy, the amount that an insured must pay on a claim before the unsurer will pay is known as
deductible
Group disability income
deductible PREM TAXABLE BEN
When a producer holding a certificate or a broker's license has a change in his/her residence or business address, he/she must notify the Department of Insurance and any company for which the producer holds an appointment within
defamation
General diability policy
do not cover losses caused by war, military, intentionally, oversears or injuries during crime
which of the following best describes an insurance company that has been formed under the laws of this state
domestic
if the annuitant dies before annuitization occurs, what will the benefiicary receive
either the amount paid into the plan or the cash value of the plan, whichever is greater
SIMPLE
employ no more than 100 employees who receive at least 5000 in compensation from the employer during the previous year. - 3%
flexible spending account
employees are allowed to deposit a certain amount of their paycheck into an account before paying income taxes
which of the following statements is correct concerning taxation of long term care insurance
excessive benefits may be taxable
when an employer offers to give an employee a wage increase in the amount of the premium on a new life insurance policy. this is called
executive bonus
In the Executive Bonus plan, who is the owner of the policy, and who pays the premium?
executive is the owner and pays the premium
which nonforfeiture option has the highest amount of insurance protection
extended term
partial surrenders
fIFO
decreasing term
face amount gradually declines each year, but premiums are level
securities
financial instruments that may trade for value (stocks, bonds, options)
violation of unfair discrimination law may result in all of the following except
fines of up to $1000 for each - fines up to $500
how many pints of blood will be paid for by medicare supplement core benefits
first 3
All of the following are dividend options except
fixed period installments
when an employee terminates coverge under a group insurance policy, coverage continues in force
for 31 days
An insurance company assures its new policyholders that their premium costs will not increase for a period of at least five years. However, due to increasing financial strain, they plan to raise premium costs for all insureds by 10% over the next two years. What term best describes this act?
fraud
does not hold proper certification to conduct business
fraudulent viatical settlement act
What phase begins after a new policy is delivered?
free look
Which of the following statements concering buy-sell agreements is true?
funded with a life insurance policy - simple contract that establishes what will be done with a business in the event that an owner dies.
all of the following are business uses of life insurance except
funding against general company financial loss
In which of the following health plans are benefit payments attributed to employer contributions taxable to the employee
group disability income
Prem deductible for employer
group disability income group medical group long term care group medicare supplement Business overhead expense
What option allows the insured to periodically increase benefit levels without providing evidence of insurability
guarantee of insurability
Which of the following health care plans would most likely provide the insured/ subscriber with comprehensie health care coverage
hMO -routine physicals, immunizations, family planning, sickness, injurt
events or conditions that increase the chances of an insured loss occurring are
hazards
2 types of flexible spending accounts
health care accounts and dependent care accounts
comprehensive coverage
health insurance that provides coverage for most types of medical expenses
twisting
high-pressure tactics and misleading advertising
medicaid does not cover
income assistance for work related injurt
life income joint and survivor settlement option guarantees
income for 2 or more recipients until they die
what is the tax consequences of amounts received from a traditional IRA after the money was left in the tax-deferred account by the beneficiary
income tax on distributions and no penalty - attain age 70 1/2 subject to tax
Issue age policy premiums increase in response to which of the following factors?
increased benefits
a return of premium term life policy is written as what type of term coverage
increasing -pays an additional death benefit to the beneficiary equal to the amount of the premiums paid
Not deductible premiums
individual disability income individual medical individual long term care individual medicare supplement buy sell key person FSA
Who makes up the MIB
insurers
uring partial withdrawal from a universal life policy, which portion will be taxed?
interest
when a beneficiary receives payments consisting of both principal and interest portions, which parts are taxable as income
interest only
the insurer may suspect that a moral hazard exists if the policyholder
is not honest about his health on an application for insurance - fraudulant claims
the mode of premium payment
is the frequency and the amount of the premium payment
When Y applied for insurance and paid the initial premium on August 14, he was issued a conditional receipt. During the underwriting process, the insurance company found no reason to reject the risk or classify it other than as standard. Y was killed in an automobile accident on August 22, before the policy was issued. In this case, the insurance company will
issue the policy and pay the face value to the beneficiary
which of the following is true about the mandatory 10 day free look in life insurance policy
it commences when the policy is delivered
True of a qualified plan
it has a tax benefit for both employer and employee
which of the following is not true regarding a certificate of authority
it is issued to group insurance participants
Which of the following best describes annually renewable term insurance
it is level term insurance - offers the most insurance at the lowest cost
which of the following best describes the effect the accelerated benefit provision would have on the benefits paid to the beneficiary
it will decrease the benefits paid to the beneficiary - allows for early payments - face amount is reduced
An insured buys a 5-year level premium term policy with a face amount of $100,000. The policy also contains renewability and convertibility options. When the insured renews the policy in five years
it will increase because the insured will be 5 years older when the policy was originally purchased
Multiple Employer Welfare Association (MEWA)
its a method for small employers to band together with other similar groups to buy group insurance - must have common affiliation (ie chamber of commerce) - at least two employeers
which of the following 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 contine to a designated beneficiary
life income with period certain
example of a limitied pay life policy
life paid up at age 65
all of the following are used to keep costs down for dental insurance except
limination on the number of teeth that may be treated in a given yeat
which of the following riders provides for the payment of part of the policy death benefit if the insured is diagnosed with a terminal illness that will result in 2 years
living need rider
Two types of loss and benefits
loss of income from disability medical expense dental expense long-term care expense
what would the premium be like in a survivorship life policy as compared to the premium in a joint life policy
lower - insures two or more lives - pays on the last death
Which of the following is usually true of a participating life insurance policy?
may be converted to a term life policy
which of the following info about the applicant is not included on part 1 of the application for insurance
medical background - part 1 is general questions part 2 is medical
Which renewability provision allows an insurer to terminate a policy for any reason, and o increase the premiums for an class of insureds
optionally renewable -allows to increase the premium for any class of optionally renewable insureds
a participating insurance policy may do which of the following
pay dividends to the polciyowner
Which of the following allows the insurer to relieve a minor insured from premium payments if the minors parents have died or become disabled
payor benefit
Which of the following is true of participating life insurance policy
pays dividends to policyowers
indemnity plan
pays health policy benefits to the insured based on a predetermined, fixed rate, regardless of the actual expense incurred
buy a policy that has a cash value element
permanent - provides lifetime death protection and savings or cash value option
part a does not cover
physician and surgeon survices
not true of key person insurance
plan is funded by permanent insurance only = can be funded by any type
Which of the following is the most common time for errors and omissions to occur on the part of an insurer
policy delivery - insurers must document all conversations - errors occur duing sales interview and policy delivery - important to have proof of interactions
based on human life value approach, which of the following is not used to calculate an individuals life value
predicted needs of the family after insureds death - determines the value of an individuals life requires the calculation of future earnings, wages, expenses, inflation, amount of time until retirement, and the time value of money.
Which of the following will be included in a policy summary
premium amount and surrender values
Which of the following is true regarding insureds who have been classified as preferred risk
premiums are lower
which of the following is correct concering the taxation of premiums in a key person life insurance policy
premiums are not tax deductible as a business expense if key employee dies, the benefits paid to the business are usually received tax free
Which of the following is correct regarding taxaation of group medical expense premiums
premiums are tax deductibl and benefits are not taxed
all of the following are cosndiered to be basic benefits of an HMO plan except
prescription drugs
What is the term for the entity that an agent represents regarding contractual agreements with third parties.
principal
What is the initial period of time specifed in a disability income policy that must pass, after the policy is in force, before a loss can be covered
probationary
info concerning personal activities and character of an applicant
producers report] - agents observations
when a whole life policy lapses or is surrendered prior to maturity, the cash value can be used to
purchase a single premium policy for a reduced face amount.
what form of the annuity settlement options provides payments to an annuitant for the rest of the annuitants life and ceases at the annuitants death
pure life
a situation in which a person can only lose or have no change represents
pure risk only type of insurance companies are willing to accept
another name for a substandard risk classification
rated "rated-u[" - higher premium
Which nonforfeiture option provides coverage for the longest period of time
reduced paid- up -protection until 100, but the face amount is reduced to what the cash would buy
when benefits are paid directly to the insured under a health insurance policy, the policy provides benefits on what type of basis
reimbursement
Which of the following is a provision found in life insurance policies
reinstatement
in the event of loss, a business overheard insurance will pay for
rent
claim
request filled with an insurance company asking for payment according to the terms of an insurance policy
COBRA (Consolidated Omnibus Budget Reconciliation Act)
requires any employer with 20 or more employees to extend group health coverage to terminated employees and their families after a qualifying event - voluntary termination of employment - termination of employment for reasons other than gross misconduct - employment status change: full to part time - extended up to 18 months - exercise benefits within 60 days of termination
Which of the following statements about the reinstatment provision is true
requires the policyowner to pay all overdue premiums with interest before the policy is reinstated
in dental insurance, what type of care will cover crowns
restorative
which type of care re-establishes functional use to natural teeth
restorative
a policyowner who is also insured wants to name her husband as the beneficiary of her life policy. She also wishes to retain all of the rights of ownership. the policyowner should have her husband named as the
revocable beneficiary - may change at any time and without consent
insurance is the transfer of
risk
FSA
salary reduction and employer contibution; annual maximum and use or lose rule
an individaul receives a lump sum inheritance. hed like to use the money to create a lifetime income since he will be retiring soon. he purchases an annuity and wishes to reseive payments beginning in 2 months. what did he buy
single premium immediate annuity
An insurance policy that only requires a payment of premium at its inception, provides insurance protection fro the life of the insured, and matures at the insureds age 100 is
single premium whole life - the entire premium to be paid in one lump sum at the policys inception
which of the following determines the length of time that benefits will be received under the fixed amount settlement option
size of each installment
Events in which a person has both the chance of winning or losing are classified as
speculative risk
life income
stright ife -income that she cannot outlive - payments stop at the beneficiarys death
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
survivor protection
When a group disability insurance policy is paid entirely by the employer, benefits paid to disabled employees are
taxable income to the employee
The interest earned on policy dividends is
taxable-dividends are a return of unused premiums on which the insured has already paid taxes any interest earned is taxable as ordinary income
childrens riders attached to whole life policies are usually issued as what type of insurance
term
Which of the following is true regarding the childhood immunization benefit in medical plans issued in this state?
thats a mandatory benefit
principal sum
the amount of coverage paid for an accidental death under a health insurance policy
stop loss
the amount that the insured pays out of pocket during the year
in fixed annuity, which of the following is true regarding the guaranteed interest rate on the investment
the annuitant will receive the higher of either the guaranteed minimum rate or current rate
in insurance, an offer is usually made when
the applicant submits an application to the insurer - acceptance takes place when an insurer underwriter approves the app and issues a policy
Which of the following is not the consideration in a policy
the application given to a propective insured
all of the following are ways in which a major medical policy premium is determined except
the average age of the group
If a policy has an automatic premium loan provision, what happens if the insured dies before the loan is paid back?
the balance of the loan will be taken out of the death benefit
peril
the cause of a possible loss
the policyowner of an adjustable life policy wants to increase the death benefit. Which of the following statement is correct regarding this change<
the death benefit can be increased by providing evidence of insurability
noncontributory
the employer pay the entire cost
Which statement accurately describes group disability income insurance
the extent of benefits is determined by the insureds income
Principal amount
the face value of the policy proceeds after the death of the insured
IRA direct transfer
the full amount gets reinvested from one plan to the other
how are excess funds in an employees HSA handled
the funds can be carried foreard to the next year
the affordable care act requires all US citizens and legal residents to have qualifying health care coverage. this is known as
the individual mandate
in order to become license to become viatical settlement provider, an application must be made with
the insurance department
an applicant is considered to be a high risk, but not so much that the insurer wants to deny coverage. Which of the following is not true
the insurer will issue a conditional coverage
all of the following are true statments regarding the accumulation at interest option except
the interest is not taxable since it remains inside the insurance policy
Which of the following is not a characteristic of an insurable risk
the loss must be catastrophic
an agent is in the process of replacing the insureds current health insurance policy with a new one. what is the porper action
the old policy should stay in force until the new policy is issued - must make sure that the current policy is not cancelled
What is the advanatage of reinstating a policy instead of applying for a new one
the original age is used for premium determination
An employee becomes insured under a PPO plan provided by his employer. If the insured decides to go to a physician who is not a PPO provider, which of the following will happen?
the ppo will pay reduced benefits
how are contributions to a tax sheltered annuity treated with regards to taxation
they are not included as income for the employee, but are taxable upon distribution -taxable with withdrawal
which of the following is true about nonforfeiture values
they are required by state law to be included in the policy - table must be included for the next 20 years
true regarding conditional receipts
they are temporary insuring agreements - effective of the date of the receipts
which of the following is true regarding medicare supplement policies
they must be guaranteed renewable
nonforfiture values
those guaranteed values in a life insurance policy that cannot be taken from the insured, even if he ceases to pay premiums
Elimination period
time between the disabling event and the beginning of payments in your disability coverage
an insured owns a life insurance policy. To be able to pay some of her medical bills, she withdraws a potion of the policy's cash value. there is a limit for a withdrawal and the insurer charges a fee. What type of policy does the insured most likely have
universial life
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
universial life - flexible - can increase the amount of premium going into the policy and to later decrease it again. - may skip premium payments and will not lapse
Under the Physical Exam and Autopsy provision, how many times can an insurer have the insured examined, at its own expense, while a claim is pending?
unlimited
an insured owes this insurer a premium payment. Since then, he incurs medical expenses. The insurer deducts the unpaid premium amount from the claim amount and pays the insured the difference. What provision allows this
unpaid premium - if the premium is past due and the insurer owes claim payment, the amount of the premium will be deducted from the amount of the claim
how long will the beneficary receive payments under the single life settlement option
until the beneficiarys death
how long will the beneficiary receive payments under the single life settlement option
until the beneficiarys death
Which of the following is not true regarding the regulation of variable annuities
variable annuities are regulated solely by the state department of insurance - regulated by state department, securities and exchange commission, fIRA
in forming an insurance contract, when does acceptance occur
when an insurers underwriter approves coverage
An agent and an applicant for a life insurance policy fill out and sign the application. However, the applicant does not wish to give the agent the initial premium, and no conditional receipt is issued. When will coverage begin?
when the agent delivers the policy
if an applicant for a life insurance policy and person to be insured by the policy are two different people, the underwriter would be concerned about
whether an insurable interest exists between them - spouses, parents, children, certain business relationships
Which of the following types of policies will provide permanent protection
whole life -PERMANENT Protection
If a policy includes a free-look period of at least 10 days, the Buyer's Guide must be delivered to the applicant
with the policy
which of the following about taxation of modified endowment contracts is false
withdrawals are not taxable
Deferred
withheld or postponed until a specified time or event in the future
Rollovers
within first 60 days - paid directly to the participant-20% of the distribution must be withheld by the payor
Federal law makes it illegal for any individual convicted of a crime involving dishonesty or breach of trust to work in the business of insurance affecting interstate commerce
without receiving written consent from an insurance regulatory authority
Are insurance company underwriters allowed to discriminate?
yes, but not unfairly
For the purpose of examination by the department, insurers must keep a record of all financial files for at least
3 years