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198 Cards in this Set
- Front
- Back
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Barbara's policy includes a rider which allows her to purchase additional insurance at specific dates or events without evidence of instability. The rider is called a(n) |
Guaranteed insurability rider |
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All if these are valid options for an adjustable life policy except |
A non forfeiture option can be used to increase the death benefit |
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What is the primary purpose of a rating service company such as A.M. Best? |
Determine financial strength of an insurance company |
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As classified by the Adorable Care Act (ACA), a silver plan offers |
70% actuarial level of coverage provided |
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Loss of income insurance provides |
An individual the means to replace wages. |
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Which of the following is NOT a common exclusion for a medical expense policy? |
Physical Therapy |
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What is involved when a life insurance policy has been backdated? |
Making the policy effective on an earlier date than the present |
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A master contract and certificate of coverage can be found in which type of policy? A) Long-term B) Medicaid C) Group D) Medicare |
C) Group |
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A producer may begin to solicit insurance ONLY |
Appointed by an insurer |
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What does the consolidated Omnibus Budget Reconciliation ACT (COBRA) of 1985 allow an employee to do? A. In the event of employment termination, group health insurance can be kept if the employee pays the premiums B. Recieve a tax credit to help offset the cost of health insurance C. Remain of their current coverage for 30 months D.In the event of employment termination, group health insurance can be kept if the employer pays the premium. |
A. In the event of employment termination, group health insurance can be kept if the employee pays the premiums |
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A participating policy will... |
Not pay dividends |
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The statement which best describes the relationship between the relationship between the premiums of a whole life policy and the premium payment period is |
The shorter the payment period, the higher the premium |
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Reggie purchased a life insurance policy with a face amount of $500,000. After 15 years, the cash value has accumulated to $100,000 and the police's face amount has become $600,000. Which type of life insurance policy is this? |
Adjustable life |
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James is the insured on a life insurance policy where his age was misstated on the application. Which of the following is CORRECT regarding the death benefit amount |
The death benefit paid will be what the premium would have purchased at the correct age. |
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How is a health provider reimbursed if they do NOT have an agreement in place with the insurance company? |
With a usual, customary, and reasonable fee |
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Which of these is NOT a qualifying event for Medicare A. On Social Security disability for over two years B. Kidney failure C.Age 65 or older D.Falling below the federal poverty level |
D. Falling below the federal poverty level |
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Field underwriting performed by the producer involves |
Completing the application and collecting initial premium |
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A provision that allows a policy owner to withdraw a policy's cash value interest free is a(n) A. Partial Surrender B. Waiver of Premium C. Automatic Premium loan D. Grace period |
A. Partial Surrender |
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XZY company has applied for group health insurance for its employees. What information would the insurer's underwriters likely use to determine the appropriate coverage and final premium rate given to the group? A.Experience rating B. Credit reports C. Arrest reports D. AM best rating |
A. Experience rating |
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Which of the following is a reinstatement condition? |
Proof of insurability |
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What would be an expense factor in a insurance program? A. Premiums collected B. Mortality costs C. Opportunity costs D. Investment interest |
B. Mortality costs |
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The waiting period for a disability insurance policy |
Excludes payments for a short term illness or injury |
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Erica is 35 years old and owns an IRA. At what age can she begin to receive distributions without a tax penalty? |
59 1/2 |
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What does the Consolidated Omnibus Budget Reconciliation Act (COBRA) OF 1985 allow an employee to do? |
In the event of employment termination, group insurance can be kept if the employee pays the premiums |
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Which of the following enables a life policy to be replaced with another life policy and results in the postponement of the tax consequence? A. Section 1040 exchange B. Section 1035 exchange C. Nonforfeiture option D. Spendthrift option |
B. Section 1035 exchange |
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What happens to coverage under a children's term rider when that child reaches a certain specified age? |
Coverage is eliminated. |
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What is the purpose of a disability income benefit? |
Provide money for living expenses |
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An annuitant is guaranteed to NOT outlive their benefits will a(n) |
Guaranteed lifetime withdrawal benefit |
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Maria would like an annuity that provides a guaranteed accumulation or payout. The type of annuity she is seeking is called? |
Annuity Certain |
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Shirley has a $500,000 10-year non-renewable level term life policy. If she dies 15 years after the policy's inception date, how much will her beneficiary receive? |
Nothing |
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An insurance producer who replaces an existing policy by making false written or oral statements is committing the act of A) twisting B)inducement C)coercion D)intimidation |
A)Twisting |
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A license MUST notify the Commissioner of an address change with ___ Days of the change A)10 B)20 C)30 D)40 |
C)30 |
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How long must a life insurance policy be in effect before the policy owner may use the non forfeiture provision? A) 1 years B) 2 years C) 3 years D) 4 years |
C) 3 years |
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The ____ is responsible for determining the appropriateness of a Medicare Supplement policy for an applicant A)Producer B)underwriter C)applicant D)Insurer |
A)Producer |
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How long is the Contestable period for health insurance policies sold in Maryland? A) 2 years B) 3 years C) 4 years D) 5 years |
A) 2 Years |
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What is the required action to be taken by a Maryland licensee before operating under an assumed business name? A) Notify the Commissioner B) Notify Governor C) Notify the insurer where employed D)Obtain a permit |
A) Notify Commissioner |
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The commissioner must examine the financial affairs of each admitted insurer operating in Maryland at least once every how many years? A) 1 B) 3 C) 5 D) 7 |
C) 5 |
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Producers must complete a total of ____ continuing education credits for each two-year licensing period. A)12 B)24 C)36 D)48 |
B)24 |
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Insurance producer Kelly offers an insured a $500 shopping card if an insurance product is purchased through her. What is this an example of? A)Defamation B)Coercion C)Rebating D)Intimidation |
C) Rebating |
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The act of using misrepresentation to induce an insured person to terminate an existing policy and purchase a new policy is referred to asA)twistingB)subrogationC)a life settlementD) coercion |
A) Twisting |
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An error was made on Erica's life insurance application. Which of the following areas do error commonly occur on applications and for which the incontestable clause does NOT apply? A)Martial Status B)Age C) Address D) Income |
B) Age |
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A life insurance policyowner does NOT have the right to A)change a beneficiary B)Select a beneficiary C) take out a policy loan D) revoke an absolute assignment |
D) Revoke an absolute assignment |
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A Guaranteed issue insurance policy has no A) initial premium requirement B)Incontestable period C)Waiting period D) Medical underwriting |
D) Medical underwriting |
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Life insurance policies will. Normally pay for losses arising from: A)Commercial aviation B)War C)Suicide D) Hazardous jobs |
A)Commercial Aviation |
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Which of these would an insurer consider when determining whether to accept a group life plan? A) Number of dependents B) incontestable period C)Average age D) Grace period |
C) Average age |
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A non-contributory health insurance plan helps the insurer avoid A) Adverse selection B) State compliance C) the underwriting process D) tax deductions |
A) Adverse Selection |
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An employee under a group insurance policy has the right to name a beneficiary and the right to A) remain on the group in the event of employment termination B) Cash surrender the existing policy C) Change the policy provisions D) Convert to an individual policy in the event of employment termination |
D) Convert to an individual policy in the event of employment termination |
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All of the following are Characteristics of a group life insurance plan EXCEPT A) GROUP UNDERWRITING B) MASTER CONTRACT C) INDIVIDUAL UNDERWRITING D) PROBATIONARY PERIOD |
C) INDIVIDUAL UNDERWRITING |
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Tim is covered under a group plan and would like to change his group coverage to an individual policy with the same insurer because of employment termination. Which of these describes the change that will take place?A) Coordination of benefitsB) ConversionC) Extension of benefitsD) Rollover |
B) Conversion |
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Under a group life policy, the insurer will issue an individual _____ to the policyowner for delivery to each person insured.A) policyB) certificateC) applicationD) rider |
B) certificate |
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Which of the following is not a reason for the Commissioner to deny or refuse a producer license application? A.) Recently convicted of a felony. B.) Engaged in a fraudulent insurance practices. C.) Unintentionally misrepresented a material fact on the application. D.) Intentionally violated state insurance laws. |
C) Unintentionally misrepresented a material fact on the application |
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A life insurance policy is hallowed ___ days upon policy delivery to return the policy for a full premium refund.. A.) 10 B.) 31 C.) 45 D.) 60 |
A.) 10 |
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An order issued by the commissioner that prohibits a specific practice listed in the order is called a (n) A.) Suspension order B.) Interdiction order C.)Subrogation order D.) Crease and desist order |
D.) Crease and Desist order |
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Upon receiving a producer complaint, the Commissioner may immediately... A.)issue a cease and desist order B.) Revoke the license C.) Impose a fine D.) Issue a warrant for arrest |
A.)issue a cease and desist order |
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A producer may begin to solicit insurance ONLY when A.) Registered for the state insurance examination B.) Licensed by the state C.) Appointed by the insurer D.) None of these |
C.) Appointed by the insurer |
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Twisting is illegal act which involves A.) Intimidation B.) Rebating C.) Misrepresentation D.) Defamation |
C.) Misrepresentation |
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In Maryland, a full-time employee of a small employer MUST work an average of at least ___ per week. A.) 10 hours B.) 20 hours C.) 30 hours D.)40 hours |
C.) 30 hours |
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The right-to-examine period in Maryland for long-Term Care polices is ___ days. A.) 20 B.) 30 C.) 40 D.) 50 |
B.) 30 |
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In Maryland, a producer may have his/her license revoked for which of the following acts? A.) Loss of insurer appointment B.) Failing to renew license on timely basics C.) Sharing Commissioners with another licensed Producer D.) Signing a prospect's name without thier knowledge or presence |
D.) Signing a prospect's name without thier knowledge or presence |
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The Fair Credit Reporting Act Protects consumers A.) From insolvent insurers B.) by recommending insurers with good AM Best ratings C.) With guidelines regarding credit reporting and distribution D.) By providing consumer credit counseling. |
C.) With guidelines regarding credit reporting and distribution |
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What is the MINIMUM benefit period that must be offered by a Long-Term Care policy? A.) 6 Months B.) 12 months C.) 18 months D.) 24 months |
B.) 12 months |
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At minimum, a carrier is required to offer which of the following health benefit plans to small employers? A.) The subsidized plan B.) The preferred plan C.) The substandard plan D.) The Standard Plan |
D.) The Standard Plan |
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A separate converted policy may, at the option of the insurance company, be issued to cover a (n) A.) Dependent B.) Associate C.) Friend D.) Neighbor |
A.) Dependent |
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A producer has committed an insurance crime that violates US code 1033 (interstate commerce). Who would be responsible for the prosecution of this crime? A.) US attorney general B.) Commissioner C.) Lieutenant Governor D.) State Senate |
A.) US attorney general |
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As of January 1, 2014, small group health insurance can be rated on the basis of A.) claims experience B.) Tabacco Use C.) Gender D.) Health |
B.) Tobacco Use |
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A Medicare supplement policy can be cancelled by the insurer for: A.)Excessive filing of cla5 B.) Poor health C.)smoking D.)Nonpayment |
D.)Nonpayment |
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Maria the insurance producer completes a sale by collecting the required signatures on the application and obtaining the initial premium. Afterwards, she deposits the check into her personal account. Maria has committed what crime? A.) Coercion B.) Twisting C.) Fruad D.) Defamation |
C.) Fruad |
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How often must an insurance producer's license in Maryland be renewed? A.)Every year B.) Every two years C.) Every three years D.) Every five years |
B.) Every two years |
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Jim recently sold his whole life insurance policy under a critical settlement contract. The proceeds of this contract could be subject to the claims of A.) Creditors B.) Debtors C.)Beneficiaries D.) The insurer |
A.) Creditors |
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The Food and Drug Administrationapproved prescription drugs for treatment as stated on the drug’s labeling. Theprescription of a drug for treatments other than what’s labeled is known as(Blank) use A) Illegal B) Trial C) Generic D) Off-Label |
D.) Off-Label
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A type of group that has a constitution and bylaws andhas been organized for purposes other than obtaining insurance is called awhat? A) Employer Group B) Employee Group C) Association or labor group D) MultipleCoalition |
C.) Association or Labor Group
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Maryland requires that a licensee completes___ hours of continuing education on the subject of ethics every reportingperiod. A.) 1 B.) 2 C.) 3 D.) 4 |
c.) 3
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Within how many days must a producerreport to the commissioner any administrative actions made against him/her? A. 20 B. 30 C. 40 D. 60 |
B.) 30
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A producer who sells an individuallife insurance policy in Maryland MUST deliver to the policy owner a(n) a. AM Best Rating b. Financial report from the previous year c. Policy Summary and buyer’s guide d. Letter showing NAIC Compliance |
C. Policy Summary and Buyer's guide
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Which of the followingunfair trade practices involves an agent who makes malicious statements aboutanother person's financial condition? A. Boycotting B. Defamation C. Unfairdiscrimination D. Misrepresentation |
B.) Defamation
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To be eligible for small employer group coverage, anemployee must work a MINIMUM of __ hoursI a typical week. A. 15 B. 20 C. 25 D. 30 |
C.) 25
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To be classified as a small employer, an employer mustNOT have more than__ eligible employees A. 20 B. 30 C. 40 D. 50 |
D.) 50
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Which of the following is NOT considered to be an actof fraud? A. Collectinga premium for insurance that is not provided. B. Collectinga charge for insurance that is less than the charge applicable to thatinsurance C. Misappropriateor unreasonably withhold premiums or returned premiums D. Willfullycollecting a premium that exceeds the amount of the actual premium. |
B. Collecting a chargefor insurance that is less than the charge applicable to that insurance |
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Long-term care insurance and Medicare Supplementplan have a free-look period of__ days. a. 10 b. 20 c. 30 d. 40 |
C.) 30
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1. AMaryland insurance producer solicits an insurance policy. In event of acontroversy between the insured and the company, the producer is considered to representthe a. Insured b. Beneficiary c. Company d. Policyholder |
C. Company
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Long-term care insurance provides: a. Oneor more diagnostic, preventive, therapeutic, rehabilitative, maintenance orpersonal care services in a setting other than an acute care unit of ahospital. b. Incomeif an insured is unable to work for a period of over six months c. Coveragefor excess charges not paid for under Medicare d. Alump sum payment upon first diagnosis of cancer, heart attack, or stroke. |
A. One or morediagnostic, preventive, therapeutic, rehabilitative, maintenance or personalcare services in a setting other than an acute care unit of a hospital. |
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A Medicare Supplement policy may exclude coverage fora preexisting condition for up to __months. a. 6 b. 12 c. 18 d. 24 |
A. 6
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Producer commissioners may NOT be paid to: A. Licensedand appointed producer B. Licensedand appointed producers who are sharing commissions C. Non-residentproducers D. Licensedproducers not appointed by an insurer. |
d.. Licensed producers not appointed by an insurer.
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A life policy loan in Maryland cannot charge a fixed rate of interest higher than: A.)6% B.)7% C.) 8% D.)9% |
C.) 8%
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A producer's secretary who solicits prospects on the telephone: a) is an example of the illegal act called twisting b.) Must be bonded through the state c.)Must be licensed as a producer d.) Is not required to be licensed as a producer |
c.)Must be licensed as a producer
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When is an existing health insurance policy required to provide coverage for a new born child? a)When the policy owner notifies the insurance company b.) Immediately c.)When the required additional premium is paid d.) No more than 10 days after date of birth |
b.) Immediately
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The double indemnity provision in a life insurance policy pertains to an insured's death caused by a(n) A.) Sickness B.) Suicide C.) Accident D.) War |
C.) Accident |
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A life insurance policyowner was injured in an automobile accident which results in a total and permanent disability. Which rider would pay a monthly amount because of this disability?
A) Long-term care rider B) Disability income rider C) Annuity rider D) Waiver of premium |
B) Disability income rider
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Kurt is an active duty serviceman who was recently killed in an accident while home on leave. Which military service exclusion clause would pay upon his death?
A) Active B) Status C) Results D) Leave |
C) Results
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A whole life policy option where extended term insurance is selected is called a(n)
A) dividend option B) settlement option C) nonforfeiture option D) interest-only option |
C) nonforfeiture option
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Ron has a life insurance policy with a face value of $100,000 and a cost of living rider. If the consumer price index has gone up 4%, how much may Ron increase the face value of the policy?
A) $400 B) $800 C)$2,000 D) $4,000 |
D) $4,000
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If an insured dies during the grace period with no premiums paid
A) the policy would be payable, minus the premium amount B) the policy would be payable only after the beneficiary makes past due premium payment C) all past premiums will be refunded with interest D) the claim would be denied |
A) the policy would be payable, minus the premium amount
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Which of the following is NOT part of an insurance contract?
A) Policy B) Application C) Riders D) Certificate of Authority |
D) Certificate of Authority
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An insurance producer agrees to pay the first monthly premium for an insurance applicant. This is called a A. Incentive B. Rebate C. Gift D.Offer |
B. Rebate
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One role of the Commissioner is to A. Set sales quotas B. Enforce State insurance laws C. Arbitrate Claims D. Establish new insurance laws |
B.Enforce State insurance laws
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A minor may receive a life insurance policy's death benefit ONLY A. If the minor is at least 12 years old B. When the minor has been approved by the Commissioner C. If the Minor is a blood relative D. If the minor has a appointed guardian |
D. If the minor has a appointed guardian
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When collection insurance premiums from a client, a producer MUST A. Temporarily Deposit the funds in a personal account b. Pat the client interest on any monies held. c. Send receipt of payment to the commissioner d. Forward Premiums to the insurer on a timely basics |
d. Forward Premiums to the insurer on a timely basics
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The ____of coverage describes policy features, benefits, exclusions and riders in a long-term care policy. a. Description b. Outline C. Proof d. Summary |
B. Outline
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Terminally - ill life insurance policy owners may sell their policy at a discount to the third party. This type of agreement is called an A. Annuitized settlement b. Vertical settlement c. Accelerated benefit d. Nonforfeiture value |
b. Vertical settlement
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Focus of Major medical insurance is providingcoverage for: A. Critical Illness only B. Preventative care C. Medical and Hospitalization expenses D. Doctor’s visits |
C. Medicaland Hospitalization expenses.
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What is created after policy proceeds areobtained in a lump sum and then immediately invested? A. Vertical Settlement B. Emergency fund C. Lump Sum fund D. Estate |
D. Estate
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Converting a group plan to permanent lifeinsurance requires: A. Submitting proof of insurability B. Paying a lower premium C. Converting to term life insurance D. The conversion being applied for within 31 daysof termination. |
D. Theconversion being applied for within 31 days of termination.
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The Premium for a Modified whole life policy is: A. Higher than the typical whole life policy duringthe first few years and then lower than typical for the remainder. B. Lower than the typical whole life policy duringthe first few years and then higher than typical for the remainder. C. Normally graded over a period of 20 years. D. Level for the first 5 years then decreases forthe remainder of the policy. |
B. Lowerthan the typical whole life policy during the first few years and then higherthan typical for the remainder.
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The IRS allows a taxpayer to deduct medicalexpenses of that exceed 7.5% of their adjusted grossincome. Which of the following is considered a tax-deductible medical expenseunder this rule? a. Long Term Care insurance premiums b. Dread Disease insurance premiums c. Travel accidental insurance premiums d. Individual disability income insurance premiums. |
A.Long term Care insurance Premiums.
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What is issued to each employee of an employerhealth plan? A. Provision B. Receipt C. Policy D. Certificate |
D.Certificate
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Premium mode is term used to describe the: A. Premium past due B. Method of payment C. Frequency of the premium payment D. Premium Paid |
C. Frequency of the premium payment |
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The Fair Credit and Reporting Act’s main purposeis to: A. Assist in the underwriting of insurance policies. B. Protects insurers from an applicant’sMisrepresentation C. Protect consumers with guidelines regardingcredit reporting and distribution D. Assist an insurer in determine an applicant’screditworthiness. |
C. Protects consumers with guidelines regarding creditreporting and distribution. |
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Mike has inherited his father’s traditional IRA.As beneficiary, he will pay __Taxes on any money withdrawn. A. Estate B. Probate C. No D. Income |
D.Income.
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Krissa purchases a 10-year level term lifeinsurance policy that has a death benefit of $200,000. Which of thesestatements is true? A. The policy automatically converts to whole lifeafter the 10-year period B. The face amount will remain constant and thepremium will increase over the 10-year period C. The Premium will remain constant and the faceamount will increase over the 10-year period D. The face amount and premium will remain constantover the 10-year period.
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D. The face amount and premiumwill remain constant over the 10-year period. |
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Medicaid is intended for: A. People with kidney failure B. People aged 65 and older C. Unemployed people D. Poverty stricken people |
D.POVERTY STICKEN PEOPLE.
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Continued coverage under COBRA would be providedto all of the following EXCEPT: a. Former dependent of employee no longer ofdependent status b. Terminated employee c. Divorced spouse of employee d. A covered employee if terminated for grossmisconduct. |
D.A covered employee is terminated for gross misconduct.
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Which of the following statements is TRUE about Medicaid? A. It is health insurance for the elderly. B. It is administrated by the federal government C. It is funded by federal, state, and local taxes D. Coverage includes compulsory hospital andvoluntary supplementary medical insurance. |
C. Itis funded by federal, state, and local taxes
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1. Which settlement option pays a stated amount toan annuitant, but no residual value to a beneficiary? A. Fixed period B. Interest period C. Installment refund D. Life Income |
D. LifeIncome.
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What types of life insurance are normally usedfor key employee indemnification? A. Term, Whole, and universal life insurance B. Increasing term insurance C. Joint, credit, and group life insurance D. Adjustable, permanent, and limited-pay lifeinsurance. |
A. Term, Whole, and universal lifeinsurance. |
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Which of these statements about Medicaid iscorrect? A. Pay for Medicare charges exceeding the approvedamount. B. Intended for senior citizens C. Funded by federal, state, and local taxes. D. Administered by the federal government. |
C. Fundedby federal, state, and local taxes
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A Whole life policy option where extended terminsurance is selected is called a(n) A. Dividend option B. Settlement Option C. Nonforfeiture option D. Interest-only option |
C. Non forfeiture option. |
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A provision in a whole life policy that allows apolicy owner to terminate the policy in return for a reduced paid-up policy ofthe same type is called a(N) A. Insuring clause B. Payor provision C. Reinstatement provision D. Nonforeiture provision |
D. Nonforeitureprovision.
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Whatwould be an expense factor in an insurance program? A. Premiumscollected B. Mortalitycosts C. OpportunityCosts D. Investmentinterest |
B. Mortality Costs.
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1. Whatis created after policy proceeds are obtained in a lump sum and thenimmediately invested? A. VerticalSettlement B. Emergencyfund C. LumpSum Fund D. Estate |
D. Estate
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Atax-free 1035 Exchange of a life insurance policy to a different policy ispermitted if it occurs… A. Inthe same state as the original transaction B. Withina 12 month period C. Frominsurer to insurer and no cash is received by the policy owner D. Fromagent to agent as long as the agents are licensed in the same line |
C. From insurer to insurer and no cash is received by the policy owner
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Whoassumes the investment risk with a fixed annuity contract? A. Theowner B. Theannuitant C. Theinsurer D. Thebeneficiary |
C. The Insurer
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Howdo interest earnings accumulate in a deferred annuity? A. Ona tax credit basis B. Ona tax- deferred basis C. Ona tax-free basis D. Ona taxable basis |
B. On a tax-deferred basis.
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Phil’sshopping for an annuity that guarantees he CANNOT outlive the benefits. Whichof these benefit options would he choose? A. Acceleratedlifetime benefit B. Guaranteedlifetime withdrawal benefit C. Right of income rider D. Guaranteedminimum accumulation benefit |
B.Guaranteed lifetime withdrawal benefit |
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Whichof these will have the highest monthly payout upon annuitization? A. Lifewith period certain B. Jointand survivor life C. Straightlife D. JointLife |
C. Straight Life
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Whichmarket index is normally associated with an indexed annuity’s rate of return? A. NAIC B. SEC C. S&P500 D. A&P300 |
C. S&P 500
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Howsoon can the benefit payments begin with a deferred annuity? A. Anytimeafter date of purchase B. Anytimewithin 12 months after date of purchase C. Aminimum of 6 months after date of purchase D. Aminimum of 12 months after date of purchase |
D. A minimum of 12 months after the date of purchase
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Kathy’sannuity is currently experiencing tax-deferred growth until she retires. Whichphase is this annuity in? A. Payoutperiod B. Accumulationperiod C. Deferredperiod D. Growthperiod |
B. Accumulation period
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Whatis the primary reason for buying an annuity? A. Providetax-free income B. Providea risky, yet high return investment C. Providean instant estate D. Providefuture economic security |
D. Provide future economic security
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Fixedannuities provide each of the following EXCEPT A. Guaranteedinterest B. Retirementfund C. Hedgeagainst inflation D. TaxAdvantage. |
C. Hedge against Inflation
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Duringthe accumulation period, who can surrender an annuity? A. Payor B. Annuitant C. Beneficiary D. Policyowner |
D. Policy owner
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Under a Traditional IRA, Interest earned istaxed A. Onlyif withdrawn prior to age 59 ½ B. Accordingto the capital gain rate C. Upondistribution D. Duringthe accumulation phase |
C. Upon distribution
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Whena qualified plan starts making payments to its recipient, which portion of thedistributions is taxable? A. Principal B. Contributionsmade by employee C. Contributionsmade by employer D. Gains. |
D. Gains
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Arollover from a Traditional IRA to another IRA must be done within __ days toavoid tax consequences. A. 15 B. 30 C. 60 D. 90 |
C. 60
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Mikehas inherited his father’s traditional IRA. As beneficiary, he will pay__taxeson any money withdrawn. A. Estate B. Probate C. No D. Income |
D. Income |
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ARoth IRA owner must be a least what age in order to make tax-free withdrawals? A. 59½ and owned account for a minimum of 10 years B. 59½ and owned account for a minimum of 5 years C. 70½ and owned account for a minimum of 10 years D. 70½ and owned account for a minimum of 5 years |
B. 59 ½ and owned account for a minimum of 5 years
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Anexample of replacement is A. Cancelingdisability policy to buy a term life policy B. Cancelinga term life policy to buy a whole life policy C. Cancelinga long-term care policy to buy a whole life policy D. Cancelinga whole life policy to buy a major medical policy |
B.Canceling a term life policy to buy a whole life policy. |
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Whoregulates the quality of care provided by a health maintenance organization(HMO) a. Secretaryof department of health and mental hygiene b. NationalAssociation of insurance commissioners c. Marylandinsurance Commissioner d. Governorof Maryland |
A.Secretary of the department of health and mental hygiene |
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Whichtype of life insurance is normally associated with a payor benefit rider? A. Juvenileinsurance B. Familyincome insurance C. Spouseinsurance D. TermRider |
A. Juvenile Insurance.
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Underthe Maryland health insurance plan, comprehensive health benefits are providedto A. Childrenof disabled residents B. Seniorcitizen residents C. Medicallyuninsurable residents D. Lowincome residents |
C. Medically uninsurable residents.
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Ifan insurer refuses to pay a claim, how many days must the insured wait to takelegal action against a health insurer after submitting written proof of loss? A. 30 B. 40 C. 50 D. 60 |
D. 60
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Intereston death benefits are NOT required to be paid by an insurance company as longas proceeds are paid within __ after the date of the death of the insured. A. 30days B. 40days C. 50days D. 60days |
a. 30
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Failingto promptly provide a reasonable explanation for the denial of a claim isconsidered to be a (n) A. Fiduciaryact B. Unfairclaim settlement practice C. Fraudulentact D. ClaimLiability |
B. Unfair claim settlement practice
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Adoctor who accepts Medicare Assignment agree to which of the following ? A. Doctormay charge up to a maximum of 15% more than Medicare pays for the service B. Doctoris not bound by Medicare limitations on charge C. Doctorcannot charge more than Medicare’s scheduled coverage D. Doctor bills the Medicare beneficiary directlyfor services performed |
C. Doctor cannot charge more than Medicare’s scheduled coverage
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Whencomparing an HMO to a PPO, the PPO A. Alwaysrequires service in a network B. Providesa greater choice of providers C. Alwaysrequires a referral to specialists D. Isa prepaid medical service plan |
B. Provide a greater choice of providers
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AnIndividual can enroll in a part C Medicare Advantage Plan at what time? A. Whenbecoming eligible for Medicaid B. Atage of retirement C. Age59 ½ D. Whenbecoming eligible for Medicare |
D. when becoming eligible for Medicare
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MedicarePart B covers A. Long-termcare B. Hospitalroom and board C. Doctor’sCharges D. Prescriptiondrugs |
C. Doctor’s Charges
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MedicarePart A does not pay for medical benefits provided for treatment in a skillednursing facility beyond A. 30Days B. 60Days C. 100Days D. 120Days |
C. 100 Days |
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MedicarePart A covers A. Outpatientservices B. Doctor’sfees C. Inpatienthospital stay D. Prescriptiondrugs |
C. Inpatient hospital Stay
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Mariais a preferred provider organization (PPO) subscriber and received care from anout-of-network provider. Which of the following is the likely result? A. Careis covered B. Careis not covered C. Careis only covered in a government facility D. Careis only covered if primary care physician gives a referral |
A. Care is covered
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Theopen enrollment period for Medicare part B is A. January1 through March 31 B. January1 through April 30 C. January1 through May 31 d. January1 through June 30 |
A. January 1 through March 31
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Howis Medicare Part B funded? A. Employertaxes B. Payrolltaxes C. Userpremiums D. Generaltax revenue and user premiums |
D. General tax revenue and user premiums
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Ahealth care provider claim may be settled using which of the following paymentmethods? A. Litigation B. UnfairClaim settlement C. Fee-for-service D. Prepaidexpense |
C. Fee-for-service
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PartA Hospital expense coverage provided under Medicare is automatically madeavailable to each of the following EXCEPT A. A50-year-old individual who has qualified for SSDI in the last 24 months B. A70-year-old NOT Eligible for Social Security C. A55-year-old suffering from kidney failure D. A65-year old retiree |
B. A 70-year-old NOT Eligible for Social Security
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Whatis Medicare Part B also known as? A. MedicareSupplement B. Supplementarymedical insurance C. Comprehensiveinsurance D. Medicaid |
B. Supplementary medical insurance
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1. Donnaand Mary were racing bicycles in a store parking lot while being cheered on by fellowemployees. Mary ran into John, another employee, who happened to be taking outthe garbage. Both May and John are injured. Who would most likely be coveredunder Worker’s Compensation? A. John B. Mary C. Johnand Mary D. Noneof them. |
A. John
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Fundingfor Medicare Part B is Partially provided by a. Municipalbonds b. Statebonds c. Privateinsurers d. UserPremiums |
D. User Premiums
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Whichof the following is Medicare Part B also known as? A. HospitalInsurance B. MedicalInsurance C. Long-termcare insurance D. Medigap |
B. Medical Insurance
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Anindividual covered under a Blue Cross Blue shield is called a(n) A. Participant B. Subscriber C. Policyowner D. Insured |
B. Subscriber
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Aclosed network plan offers a primary physician copay $25. If a subscriberchooses a primary care physician outside of the network, the subscriber willlikely pay a. $0 b. $25 c. 100%of the billed amount d. 100%of the allowed amount |
C. 100% Of the billed amount |
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Medicareprovides coverage for each of the following EXCEPT A. Hospitalroom and board B. Doctorand surgeon services C. Prescriptiondrugs D. D.Custodial care |
D. Custodial Care |
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1. Whichtype of injury would NOT be covered under a health insurance policy? A. Accidental B. Work-related C. Sport-related D. Recreational |
B. Work-Related
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Therole of the federal government was expanded when Medicaid was establish byallowing the state to A. Froma large PPO on a statewide level B. Purchasehealth insurance from the federal government C. Receivematching funds to expand public assistance programs D. Deferall costs to the federal government for public assistance program |
c. Receive matching funds to expand public assistance programs
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Anaccident and Health policy that Provides reimbursement benefits makes them payable to the A. Provider B. Facilityproviding service C. Insured D. Insured’sspouse |
C. Insured
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Paulis an employee who caught a disease unique to the trade in which he was exposedto. Paul has a (n) a. GeneticPredisposition b. Worksitemalady c. Contagiousdisease d. OccupationalDisease |
D. Occupational Disease
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Whencomparing an HMO to a PPO, the PPO A. Alwaysrequires service in a network B. Providesa greater choice of providers C. Alwaysrequires a referral to specialists D. Isa prepaid medical service plan |
B. Provides a greater choice of providers
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Failingto Promptly provide a reasonable explanation for the denial of a claim is conservedto be a(n) A. Fiduciaryact B. Unfairclaim settlement practice C. Fraudulentact D. Claimliability |
B.Unfair Claim settlement practice |
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AnHMO that involves a partnership of physicians and other providers who practiceout of a central facility is called a(n) a. GroupHMO b. FederalHMO c. CentralHMO d. ManagedHMO |
A.Group HMO |
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Smallemployers who are spooned by an insurer to provider group benefits to itsemployees are called A. FraternalBenefits society B. SurplusLines brokers C. Lloydof London D. MEWA |
D. MEWA
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Howdoes one become eligible for part D: Prescription Drug Coverage? a. Mustmeet certain underwriting guidelines b. Musthave a valid prescription c. Must have Medicare coverage d. Musthave Medicaid coverage |
C.Must have Medicare coverage |
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How much does Medicare Part B pay forphysician fees? A. 40% B. 60% C. 80% D. 100% |
C. 80%
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Tarathe producer is delivering a specified disease insurance policy to a new policyowner. Upon delivery, she may be expected to collected all of the followingEXCEPT a(n) A. InitialPremium B. Signedimpairment rider acknowledgement C. Modifiedapplication with a new signature D. Goodhealth statement |
C. Modified application with a new signature
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Oneof the most important considerations when replacing health insurance would bethe a. Ageof the insured b. Exclusionson a new policy c. Occupationof the insured d. Cost |
B. Exclusions on new policy
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Whathappens when an insurance policy is backdated? A. Thepolicy’s elimination period is waived B. Thetime frame for reinstating a lapsed policy is extended C. Thepolicy’s probation period is earlier than the present D. Thepolicy effective date is earlier than the present |
D. The policy effective date is earlier than thepresent
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Premiummode is a term used to describe the A. Premiumpast due B. Methodof payment C. Frequencyof the premium payment D. Premiumpaid |
C. Frequency of the premium payment
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Whichof the following is a requirement for ANY change in an insurance application? A. Changemust be initialed by the agent B. Changemust be initialed by the applicant C. Changemust be approved by the insurer D. Changesmust be notarized |
B.Change must be initialed by the applicant. |
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Whowere Keogh Plans designed to provide pension benefits for? a. Corporateofficers b. Publicschool employees c. Theself-employed d. Governmentemployees |
C. The self-employed
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Whattype of beneficiary should be named if the insured wants to give explicitdirections on how the policy proceeds should be paid? A. Individual B. Group C. Class D. Estate |
A. Individual
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Wherewould policy proceeds be paid if both the insured and primary beneficiary werekilled in the same accident? A. Primarybeneficiary estate B. Contingentbeneficiary C. Insured’sestate D. Childrenof the insured |
B. Contingent beneficiary |
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Elizabethis the beneficiary of a life insurance policy. She is receiving the deathbenefit in payments of $10,000 per month until the principal and interest hasbeen paid out. Which option was chosen? A. Fixedperiod B. Fixedamount C. Lifeincome D. Interestonly |
B. Fixed amount
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Whichscenario would most life insurance policies exclude coverage for? A. Atourist traveling abroad on a major airline carrier B. Anindividual who has a hobby racing cars once a month C. Anairline pilot who flies for a commercial carrier D. Asoldier on leave at home |
B. AnIndividual who has a hobby racing cars once a month |
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Whichof these is considered to be a document that describes the critical segments ofa life insurance policy? A. Buyer’sguide B. Policysummary C. Consumerreport D. Buyer’ssummary |
B. Policy summary
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Allof these are considered key factor in underwriting life insurance EXCEPT A. Tobaccouse B. Healthhistory C. Age D. MaritalStatus |
D. Marital Status
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Anapplicant intentionally lying to an insurance company on an application inorder to obtain a cheaper premium is an example of A. Rebating B. Coercion C. Fraud D. Twisting |
C. Fraud
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Whendoes a life insurance policy typically become effective? A. Whenthe policy is issued B. Whenthe application is collected and policy is issued C. Whenthe application is completed and signed D. Whenthe completed application is signed and initial premium is collected |
B. When the application is collected and policy is issued.
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Whatis the purpose of the medical information Bureau (MIB)? A. Toaccept or decline insurance applicants B. Toset the premium rates for insurers C. Tohelp underwriters evaluate risk D. Toperform physical examination on applicants |
C.To help underwriters evaluate risk |
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Howare annuities given favorable tax treatment? A. Gainsare tax deductible B. Gainsare tax exempt at distribution C. Gainsare taxed at distribution D. Gainsare converted to tax credits |
C. Gains are taxed at distribution
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Whatis the elimination period of an individual disability policy? A. Timeperiod an insured must wait before coverage begins B. Timeperiod a disabled person must wait before benefits are paid C. Timeperiod after the policy issue date in which the provisions are stillcontestable The point in timewhen benefits are no longer payable. |
B. Time period a disabled person must wait before benefits are paid
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Inan insurance contract, the element that shows each party is giving something ofvalue is called A. Offer B. Acceptance C. Consideration D. Purpose |
C. Consideration
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Inwhich of the following situations would the insurer be liable for a loss? a. Theinsured skipped a payment beyond the 31 day grace period b. Theinsured was injured while participating in an illegal occupation c. Theinsured was given a notice of cancellation from the insurer d. Theinsured suffered an injury as an innocent bystander during a bank robbery |
Answer D.
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Whichof these will have the highest monthly payout upon Annuitization? A. Lifewith period certain B. Jointand survivor life C. Straightlife D. Jointlife |
C. Straight life
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Whatdoes the word “Level” in level term describe? A. Theperiod of coverage B. Theface amount C. Thepremium amount D. Thecash value |
B. The face amount
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Anapplicant’s character and personal habits can be obtained for underwritingpurposes from which source? A. Investigativeconsumer report B. Attendingphysician’s statement C. Medicalinformation Bureau (MIB) D. Creditreport |
A. Investigative consumer report
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Aninsured’s status under social security can be described as A. Partiallyinsured B. Activelyinsured C. Fullyinsured D. Completelyinsured |
C. Fully Insured
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Along-term care policy typically provides all of the following levels of careEXCEPT A. Skilledcare B. Intermediatecare C. Acutecare D. Custodialcare |
C.Acute care |
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1. Duringthe accumulation period, who can surrender an annuity? A. Payor B. Annuitant C. Beneficiary D. Policyowner |
D. Policyowner
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1. Healthinsurance will typically cover which of the following perils? A. Deathdue to illness B. Injurydue to accident C. Deathdue to accident D. Dismemberment |
B.
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Alimited payment whole life policy provides A. Protectionfor 20 years B. Lifetimeprotection C. Protectionfor more than one person D. Discountedpremiums |
B.Lifetime protection |
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Bob and Tom start a business. Since each partner contributes an important element to the success of the business, they decide to take life insurance policies out on each other, and name each other as beneficiaries. Eventually, they retire and dissolve the business. Bob dies 12 months later. The policies continue in force with no change. Both partners are still married at the time of Bob's death. In this situation, who will receive Bob's policy proceeds? |
Tom |
