stimulator
The commissioner has the authority to issue a cease and desist order against any person acting as an insurance agent or broker without being licensed. The Commissioner may also impose a penalty for each day the order is violated in what amount?
$5,000
What is the number of credits required for fully insured status for Social Security disability benefits?
40
An insured pays $1,200 annually for her life insurance premium. The insured applies this year's $300 worth of accumulated dividends to the next year's premium, thus reducing it to $900. What option does this describe?
Accumulation at Interest
In the event of divorce, which of the following would allow a divorcee to continue receiving group health coverage under an insured spouse's plan for an additional 36 months?
COBRA
An insured and his wife are both involved in a head-on-collision. The husband dies instantly, and the wife dies 15 days after. The company pays the death benefit to the estate of the insured. This indicates that the life policy had what provision?
Common disaster
Representations are written or oral statements made by the applicant that are
Considered true to the best of the applicant's knowledge
Creditable coverage include
Coverage under a state health benefits risk pool
What is the term for a sales campaign conducted through the mail?
Direct response
What is the goal of HMO?
Early detection through regular checkups
A producer is acting in what capacity when he or she is trying to obtain credible information about an applicant for health insurance?
Field underwriter
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 employee's expense
Which of the below statements does NOT describe BCBS plan?
Most of the organizations are voluntary and not-for-profit
Under the Accidental Death and Dismemberment (AD&D) coverage, what type of benefit will be paid to the beneficiary in the event of the insured's accidental death?
Principal sum
What part of the Internal revenue code allows an owner of a life insurance policy or annuity to exchange or replace their current contract with another contract without adverse tax consequences?
Section 1035 Policy Exchange
A domestic insurer issuing variable contracts must establish one or more
Separate accounts
If a firm has 80 employees that are actively engaged in business on at least 50% of its working days during the preceding calendar year, what is its classification?
Small employer
When an employee covered under a health reimbursement account changes employers, the HRA0
Stays with the employer
The advantage of qualified plans to employer is
Tax deductible contributions
Which of the following determines the cash value of a variable life policy?
The performance of the policy ratio?
Which of the following would qualify as an implied warranty in an insurance contract
an oral representation by the applicant
All of the following qualify for Medicare Part A EXCEPT a. Anyone who is willing to pay a premium b. Anyone that qualifies through Social security c. anyone how is at the end stage of renal disease d. anyone who is over 65, not covered by social security and is willing to pay premium
anyone who is over 65, not covered by social security and is willing to pay premium
An employer employs 500 workers and contributed to their HSAs. To reduce turnoer, the employer wants to tell employees that they will lose their HSAs if they leave the company. Which of the following is true? a. The employees own the accounts and may take them with them when they leave. The employer will have to find another way to improve retention b. The employer is permitted to retain ownership of the accounts provided they give the employees at least 30 days notice c. The employer owns the accounts but may sell them to the employees upon request d. Employees may retain their accounts when they leave provided that the reimburse the employer for the monies it contributed.
he employer is permitted to retain ownership of the accounts provided they give the employees at least 30 days notice
What is creditable coverage?
health coverage that applies to a waiting period for pre-existing conditions
A life insurance policy has a legal purpose if both of which of the following element exist?
insurable interest and consent
Which of the following information about the applicant is NOT included in the General Information section of the application of the insurance?
medical background
Social Security was created to provide all of the following benefits EXCEPT a. Retirement income b unemployment income c. Survivor's benefits d. Disability income
unemployment income
How long must an insurer keep records of electronic transmissions to customers
years
An agent has how many days in which to receive an appointment after the issuance of an insurance contract?
14 days
Tom owns a home and has no mortgage payments. He earns $100,000 and has $500,000 invested in CDs. His cousin Mark has a mortgage payment of $1,500, and a car payment of $300 every month. He earns $50,000. Both of them became disabled and apply for disability income. All other things being equal, which of the following would most likely be true? a. Tom will receive no benefits since he has no financial obligations b. Tom will be more likely to receive larger benefit since his net-worth is higher c. Mark will be more likely to receive larger benefit since he has more financial obligations d. Tom and mark will receive equal benefits
Mark will be more likely to receive larger benefit since he has more financial obligations
Which option for Universal life allows the beneficiary to collect the death benefit and cash value upon death of the insured?
Option B
If an insurer issued a policy based on the application that had unanswered questions, which of the following will be TRUE?
The policy will be interpreted as if the insurer waived its rights to have an answer on the application
Under a non-contributory group health plan, which of the following is FALSE? a. 100% of all eligible employees must be covered under the plan b. 100% of the premium is paid by the employer c. Eligibility is usually determined by hours worked per week, length of time with the company and age of the employee d. No less than 50% of the eligible employees must elect to participate in the plan
100% of the premium is paid by the employer
What is the penalty tax for nonqualified distributions from a MSA?
20%
If an insurer meets the state's financial requirements and is approved to transact business in the state, it is considered to be
Authorized
An insured owns a $50,000 whole life policy. At age 47, the insured decides to cancel his policy and exercise the extended term option for the policy's cash value, which is currently $20,000. What would be the face amount of the new term policy?
$50,000
The Patient Protection and Affordable Act mandates that insurer provide coverage for adult children of the insured up to the age of
26
How long is an open enrollment period for Medicare supplement policies?
6 months
What is the penalty for excessive contributions in IRA
6%
According to the MLR, what is the minimum % of health coverage premium must be applied to actual medical care in an individual health plan?
80%
The clause that protects the proceeds of a life insurance policy from creditors after the death of the insured is known as the
Incontestability clause
What type of group rating do the BCBS organizations use as a factor in developing the rates to be charged?
Individual rating
Which of the following is NOT true regarding a flexible spending account?
It does not have limits on contributions
Which of the following is TRUE of qualified plan? a. It may allow unlimited contributions b. It has a tax benefit for both employer and employee c. It does not need to have a vesting schedule d. It may discriminate in favor of highly paid employees
It has a tax benefit for both employer and employee
Jill has a handicapped grown-up child who is chiefly dependent upon her for support and maintenance. How will that affect Jill's insurability in the group plan?
Jill's dependent's condition will not affect her rating or eligibility
Variable whole life insurance is based on what type of premium?
Level fixed?
Which of the following information regarding an insured is NOT included in an Investigative Consumer Report, which is requested by an underwriter
Medical History
In health underwriting, it would be inappropriate to decline a risk using any of the following factors EXCEPT a. Blindness b. Mental illness c. Genetic characteristics d. Marital status
Mental illness
Under a pure life annuity, an income is payable by the company
Only for the life of annuitant
Which of the following is the most common way to transfer risk?
Purchase insurance
Which of the following terms describes the specified dollar amount beyond which the insured no longer participates in the sharing of expenses?
Stop-loss limit
Partners in a business enter into a buy-sell agreement to purchase life insurance, which states that should one of the die prematurely, the other would be financially able to buy interest of the deceased partner. What type of insurance policy may be used to fund this agreement?
Term insurance only
Which of the following is NOT true regarding the annuitant? a. The annuitant's life expectancy is taken into consideration for the annuity b. The annuitant receives the annuity benefits c. The annuitant must be a natural person d. The annuitant cannot be the same person as the annuity owner
The annuitant's life expectancy is taken into consideration for the annuity
An agent may satisfy the continuing education requirement by attending any course approved by the Commissioner, as long as
The course satisfies the minimum time requirements for continuing education credit
If a business wants to buy a disability income policy on a key employee, which of the following is considered the beneficiary
The employer
Which of the following statements is NOT true about contributory group life insurance? a. 75% of the eligible members must be covered b. The employer will make a cash contributions to the estate of a deceased employee c. The employer will not contribute the full amount of the premium d. The employee will contribute to the premium payments
The employer will make a cash contributions to the estate of a deceased employee
A man works for Company A and his wife works for Company B. The spouses are covered by health plans through their respective companies that also cover the other spouse. If the husband files a claim,
The insurance through his company is primary
An insured had $500 left in his Health Reimbursement Account when he quit his job. What happens to that money?
The insured can have access to the $500 at his previous employer's discretion
All of the factors are FALSE when used to provide data and statistics to an insurer in order to project losses and the subsequent cost of insuring risks in a group disability policy EXCEPT
The number of group carriers?
An HSA holder who is 65 years old decides to use the money in the account for non-health expense. WHich of the following is true?
There will be a tax
Which of the following is NOT a type of information that needs to be gathered in order to determine the value of someone life when using the needs approach?
Estimated longevity
Which of the following is true about labor unions, fraternal and co-ops?
They may opt for a self-insured medical and disability plan
Which of the following is NOT among the goals of Medicare supplement application? a. Determining whether or not the policy will replace another accident and health policy b. Advising applicants regarding the availability of counseling services c. Presuming the applicant is eligible for Medicaid, based on the nature of the policy d. Determining whether or not an applicant has an existing Medicare supplement policy
Advising applicants regarding the availability of counseling services
What do living benefits riders do?
Allow the insured to obtain an early death benefit to pay medical costs, in the event that the insured is expected to die within one year
Which concept is associated with "exclusion ratio"?
Annuity payments
If a loss occurs, insurance policies pay the proceeds to
Applicant
Which of the following is a term for a person who seeks insurance from an insurer?
Applicant
Which is the primary source of information used for insurance underwriting?
Application
Employer contributions made to qualified a plan
Are subject to vesting requirements?
To comply with Fair Credit Reporting act, when must a producer notify an applicant that a credit report may be requested?
At the time of application
What is the difference between the Medicare approved amount for a service or supply and the actual charge?
Excess charge?
What method is used to determine the taxable portion of each annuity payment?
Exclusion ratio
The factor added to the net premium to cover the costs of the insurer in obtaining and maintaining the business is called
Expenses
Which of the following components must a life insurance policy have to allow policy loans?
Face amount
All of the following are true regarding co-payments, EXCEPT a. The insured pays a specific amount for a claim, regardless of the actual cost of service b. They are expressed as a percentage cost c. They are typically due at the time of receiving the service d. They are arrangements between the insured and insurer
They are expressed as a percentage of the cost
The paid-up addition option used the dividend
To accumulate additional savings for retirement
Which of the following is NOT a goal of risk retention?
To fund losses that cannot be insured
Which of the following policies would have an IRS required corridor or gap between the cash value and death benefit?
Universal life option A
The insurance policy, together with the policy application and any added riders form what is known as
entire contract
What term refers to a listing of approved drugs covered by a Medicare prescription drug plan?
formulary
Which of the following persons is NOT eligible for Medicare? a. A person age 70 b. A person who has turned age 65 and continuous to work c. A person who has a permanent kidney failure d. A person who has been entitled to Social Security disability benefits for the last 6 months
A person who has been entitled to Social Security disability benefits for the last 6 months
Which of the following would NOT be considered a form of direct response marketing?
A sign in an insurer's office
An insured misstates her age at the time the life insurance application is taken. This misstatement may result in
Adjustment in the amount of death benefit
Which rider, when attached to a permanent life insurance policy, provides an amount of insurance on every family member?
Family term rider
Which of the following annuity riders ensures that the owner will receive from an annuity at least the amount paid for the annuity?
Guaranteed Minimum Income
Which of the following annuity riders ensures investors will receive a set amount of income annually?
Guaranteed Minimum Income benefit
Which of the following disability income policy allows an insured;s disability coverage to increase with inflation
Guaranteed insurability option
If a life policy allows the policyowner to make periodic additions to the face amount at standard rates, without proving insurability, the policy includes
Guaranteed insurability rider
Most LTC plans have which of the following features?
Guaranteed renewability
Which of the following plans offers a limited choice of health care providers?
HMO
Which of the following statements is CORRECT concerning the relationship between Medicare and HMOs?
HMOs may pay services not covered by Medicare
Which of the following is available to employers of all sizes?
HRAs
Medicare Part A serviced do NOT include which of the following? a. Hospitalization b. Hospice care c. Outpatient Hosp treatment d. Post Hosp SNF care
Hospice care
Representations in insurance contracts qualify as
Implied warranty
An applicant is discussing his options for Medicare supplement coverage with his agent. The applicant is 65 years old and has just enrolled in Medicare Part A and Part B. What is the insurance company obligated to do?
Offer the supplement policy on a guaranteed issue basis
In disability income insurance, if an insured is considered disabled if they cannot perform any job they are suited for by prior education, training or experience, they fall under which definition of total disability?
Own occupation
Which of the following statements is INCORRECT concerning Medicare Part B coverage?
Part B coverage is provided free of charge when an individual turns age 65
Which nonforfeiture option provides coverage for the longest period of time?
Reduced paid-up
Following a career change, an insured is no longer required to perform many physical activities, so he has implemented a program where he walks and jogs for 45 minutes each morning. The insured has also eliminated most fatty foods from his diet. Which method of dealing with risk does this scenario describe?
Reduction
In case of a loss, the indemnity provision in insurance policies
Restores an insured person to the same financial state as before the loss
