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230 Cards in this Set
- Front
- Back
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The number of years excluded from the conversion privilege on a convertible term policy: |
Varies among insurance companies- 3.2 |
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Which of the following riders is used to provide an automatic increase in insurance as the Consumer Price Index increases? |
Cost of Living Adjustment 'COLA' rider – 3.6 |
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If an insured's policy includes the waiver of premium rider, what happens when the age is reached where the rider no longer applies? |
The premium for the policy is reduced – 3.6 |
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A payor benefit rider is used to keep what type of policy in force? |
A jumping juvenile policy – 3.5 |
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Premium payments made into a variable universal life policy: |
Are invested in one or more investment portfolios at the policyowners option – 3.4 |
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When the cash value account of a universal life policy reaches zero, the policyowner must make a premium payment or: |
The policy goes into the grace period – 3.4 |
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The death benefit of a variable life policy: |
May go up or down but will never fall below the face amount of the policy – 3.2 |
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To waive an insured's premium, most companies require an individual's disability to be: |
Total and permanent – 3.6 |
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A payor rider is used to keep what type of policy in force? |
A juvenile insurance policy – 3.6 |
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A universal life policy with a back-end load: |
Makes a service charge when the policy is surrendered – 3.4 |
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In a universal life policy, the amount of the death benefit can equal the policy's cash value: |
When the insured reaches age 95 – 3.4 |
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Which of the following riders require the insured being totally and permanently disabled before it becomes effective? |
Waiver of premium rider – 3.6 |
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Which Whole Life policy would require you to put the least amount of premium into the plan over the total life of the plan? |
Single Pay/Premium – 3.3 |
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For the insurance company to pay the accidental death benefit, most companies require that the insured: |
Die within 90 days of the accident – 3.6 |
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If the insured's age has been overstated at the time the policy was purchased, and the error is discovered prior to the death of the insured, the company will: |
Will increase the face amount of insurance to reflect the face amount that the premiums should have purchased -4.1 |
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When Bill, a widower, dies, his sons Fred and Pete share a monthly check of $2,000. Pete dies and Fred continues to receive a check for $1,000 until he dies. This life income settlement option is called: |
Joint and survivor life income option – 4.6 |
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A lapsed policy may usually be reinstated: |
A lapsed policy may usually be reinstated: |
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A policyowner allows a policy to lapse and the insurance company converts the policy to the extended term option. Which of the following from the original policy will automatically carry over into the new policy? |
Face value -4.6 |
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George has named each of his three sons as per capita primary beneficiaries of a $30,000 life insurance policy. If all three sons are living at the time of George's death, which statement best describes the amount each will receive? |
Each son receives $10,000 – 4.5 |
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Which of the following is taxable as income? |
Interest paid on policy dividends – 4.6 |
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The company will normally pay the face amount of the policy to the beneficiary of an insured who commits suicide after the policy has been in effect for: |
2 years – 4.1 |
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Amanda's life insurance policy names her sister Joyce as irrevocable beneficiary of the policy proceeds. This means: |
Amanda can borrow against the policy's cash value, but only with Joyce's permission – 4.5 |
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Eva dies without having paid the $500 premium on her $50,000 policy that was due a week before her death. With no outstanding policy loans, Eva's beneficiary can expect to receive: |
$49,500, which is the face amount less the premium owed – 4.2 |
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The settlement option under which the principal never decreases unless the beneficiary withdraws it is the: |
Interest option – 4.6 |
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. The collateral used in a Collateral Assignment of a policy is the policy's: |
Cash value – 4.1 |
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If Martha has been named as the irrevocable beneficiary of a life insurance policy: |
She cannot be removed as beneficiary without her consent – 4.5 |
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The payment of the proceeds of a policy in other than a lump-sum cash payment is called a: |
Settlement option – 4.6 |
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How are settlement options paid? |
A lump sum or a mode of equivalent value – 4.6 |
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A beneficiary that can be changed is called: |
A revocable beneficiary – 4.5 |
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Fred purchased a $100,000 policy naming his wife, Wilma, as primary beneficiary, and his only child, Pebbles, to receive any proceeds if Wilma dies before Fred, or if she dies after Fred but before receiving all the policy proceeds. Fred elected the interest settlement option for Wilma, with the right of withdrawal after five years. No settlement option was stipulated for Pebbles. Fred dies on May 6th, 1991. Soon after purchasing her new car, Wilma is involved in a fatal car accident. The remaining proceeds of the insurance policy will be paid to: |
Pebbles, in any manner she chooses – 4.6 |
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Once a policy has lapsed, the insured usually can reinstate the policy, provided proof of insurability is shown, if: |
All back premiums due plus interest have been repaid and less than 3 years have elapsed – 4.2 |
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Joe has a policy with a face amount of $50,000 and a policy loan of $2,000. He is also a week late on his $500 premium payment. Joe decides he can no longer make monthly payments, so he chooses the reduced paid up nonforfeiture option. What is the face value on the new policy? |
The amount that the reduced paid up option purchased – 4.6 |
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If Jose names his estate as the beneficiary of his life insurance policy and dies without a will: |
A court will distribute the proceeds strictly according to state law – 4.5 |
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Using the policy dividends as a single premium to buy additional life insurance is called the |
Paid-up additions option 4-6 |
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Under the provisions of the fixed period settlement option, the: |
Principal amount generally decreases to zero 4-6 |
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Which of the following nonforfeiture options provides the longest period of coverage? |
Reduced paid-up 4-6 |
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Which of the following would prevent creditors of beneficiaries from seizing or receiving any death benefit proceeds prior to the beneficiary actually receiving benefits? |
Spendthrift clause 4-5 |
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An insured allows a permanent policy to lapse. Unless otherwise instructed, the insurance company: |
Will automatically institute the extended term option 4-6 |
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Money provided under the automatic premium loan provision: |
Is generally charged interest 4-2 * |
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Curtis names his wife, Amanda, as the primary beneficiary of a $100,000 whole life policy with a common disaster provision. Their son, John is the contingent beneficiary. Curtis and Amanda are involved in a serious private airplane accident. Curtis is killed immediately but Amanda lives for another two months before she, too dies. Which of the following is likely to occur? |
Amanda receives the proceeds of the policy, which in turn are paid to her estate upon her death 4-4 |
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Fred purchased a $100,000 policy naming his wife, Wilma, as primary beneficiary, and his only child, Pebbles, to receive any proceeds if Wilma dies before Fred, or if she dies after Fred, but before receiving all the policy proceeds. Fred elected the interest settlement option for Wilma, with the right of withdrawal after 5 years. No settlement option was stipulated for Pebbles. Fred dies on May 6th, 1991. In November of 1994, Wilma is laid off work. With Christmas approaching, Wilma wants to withdraw $1,500 from the insurance company to cover holiday expenses. Wilma: |
Must look elsewhere for her holiday money 4-6 |
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When a producer is made aware of an insured's death, the first task is to: |
Notify the insurance company 4-1 |
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Joe has a policy with a face amount of $50,000 and a policy loan of $2,000. He is also a week late on his $500 premium payment. Joe decides he can no longer make monthly payments, so he chooses the extended term nonforfeiture option. What is the face value on the new policy? |
$50,000 4-6 |
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With a Collateral Assignment of a life policy to a creditor, which of the following is true? |
You assign a partial amount of the policy values to the creditor 4-1 |
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Ed has a $50,000 policy with cash values of $10,000. A $2,000 loan is outstanding, as well as a past due premium of $1,000. Ed finds he can no longer make premium payments on this policy. If Ed chooses the cash surrender value option, he will receive: |
$8,000 4-6 |
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The provision which states that a policy will stay in force a certain period of time after the premium due is the: |
Grace period provision 4-2 |
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If an insured commits suicide within the time specified by the suicide clause, the insurance company may do all of the following, except: |
Refund to the beneficiary the amount of premiums and interest paid to date 4-1 |
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The extended term nonforfeiture option provides |
Paid-up term coverage equal to that of the original policy 4-6 |
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1. An annuity is a contract that: |
Provides a lifetime income through periodic payments to the annuitant 5.1 |
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2. A level premium annuity is one that: |
Is purchased over the years prior to the date on which the annuity begins 5.2 |
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If an annuitant died during the contribution period, the annuity would pay a: |
Death benefit to the beneficiary 5.2 |
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4. Jack has a variable annuity in a separate account that has a portfolio valued at $5 million. There are 500,000 outstanding accumulation units for the account. What is the value of one unit? |
$10 - 5.4 |
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5. Alicia, age 35, has an annuity that has a guaranteed growth rate of 6%, and that will pay her a specified monthly income beginning at age 65. What kind of annuity does Alicia have? |
A deferred fixed annuity 5.2 |
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The type of annuity in which the values grow according to the performance of the investment medium, and in which benefits may fluctuate according to market performance, is called: |
variable annuity 5.4 |
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7. All of the following are factors used to determine annuity premiums, except: |
Annuitant's occupation 5.1 |
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A flexible premium annuity provides for a flexible: |
Premium payment amount 5.2 |
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A straight life annuity pays a periodic income: |
During the annuitant’s lifetime with no refund upon his or her death 5.3 |
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Camille purchases an immediate monthly annuity on January 1. She will receive her first monthly annuity payment on: |
February 1 5.2 |
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A life annuity with period certain pays the annuitant: |
For a specified minimum number of years, or the rest of his or her life, whichever is longer 5.3 |
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An annuity is a contract that: |
Provides a lifetime income through periodic payments to the annuitant 5.1 |
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If an annuitant died during the contribution period, the annuity would pat a: |
Death benefit to the beneficiary 5.2 |
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With an immediate annuity, payments to the annuitant begin when a period of time has elapsed that is: |
Equal to the period of time between the payments 5.2 |
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Jack has a variable annuity in a separate account that has a portfolio valued at 5 million. There are 500,000 outstanding accumulation units for the account. What is the value on 1 unit? |
$10.00 5.4 |
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Which of the followings would be used to determine the amount of an annuity payout in the Annuitization period? |
The assumed interest rate (AIR) the company expects to earn, The number of installments to be paid out and the settlement option and guarantees offered in the payout, the age, gender, and life expectancy of the annuitant. 5.3 |
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An accounting measure used to determine a contract owner’s interest in the separate account of a variable annuity before payments begin is called a/an: |
Accumulation Unit 5.4 |
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A deferred annuity pays a death benefit to a beneficiary: |
When the annuitant dies before receiving any annuity payments 5.2 |
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All of the follow effect annuity payout payments: |
Older and shorter life expectancy = greater benefits, younger and longer life expectancy = lower benefits, male = greater benefits 5.3 |
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Alicia, age 35, has an annuity that has a guaranteed growth rate of 6%, and that will pay her a specified monthly income beginning at age 65. What kind of annuity does Alicia have? |
A deferred fixed annuity 5.2 |
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The type of annuity in which the values grow according to the performance of the investment medium, and in which benefits may fluctuate according to market performance, is called: |
A variable annuity 5.4 |
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MR. and Mrs. Burden receive annuity payments. Mr. Burden dies, but Mrs. Burden continues to receive payments. The Burden have a: |
Joint life and survivorship annuity 5.3 |
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The principal difference between and entity purchase and a cross purchase buy-sell agreement is: |
The ownership of the policyowner 6.3 |
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The Kalamazoo Stove and Screen Door Company applies for life insurance on its key vice president, Harold. Kalamazoo Stove and Screen Door Company is the premium payer and beneficiary, and controls to the policy. Which of the following is true? |
Harold is the propsed insured; his company is the applicant 6.3 |
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Carol’s husband dies, leaving her with 5 yo daughter to support. Which of the 3 income periods is Carol in currently? |
Family dependency period 6.4 |
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Franchise insurance: |
Is an arrangement that allows very small groups to have some of the benefits of group insurance. 6.1 |
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Who pays the taxes that finance SS benefits? |
Employers and employees, in = contributions 6.5 |
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When a group plan is contributory, what percentage of employees must and want and be willing to pay for coverage? |
75% 6.1 |
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Which is true regarding key person insurance? |
The employer is the policy owner, premium payor, and usually the beneficiary, provides the cost of replacing or training a new employee in the event of the death of the key employee, it is written for the benefit of the employer, not the employee’s family. 6.3 |
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An application for group coverage is signed by the: |
Employer, who then receives and retains a master policy 6.1 |
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A certificate of insurance: |
IS issued to the individual employee covered by the group life insurance 6.1 |
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The primary purpose of Section 303 redemption is: |
To provide liquidity to pay estate taxes and administration and funeral cost. 6.3 |
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The SS program is funded by: |
The SS program is funded by: |
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The Allied Stove company allpies for life insurance on its key vice president, Harold. Allied Stove company is the premium payer and beneficiary, and controls all rights to the policy. Which is true? |
Harold is the proposed insured; his company is the applicant |
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The type of insurance that provides life insurance automatically for federal employers unless that choose not to be included in the plan is: |
FEGLI 6.1 |
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The ABC Corporation decides to take out a key person policy on its CEO. ABC finds out the application, pay the premium, and receive the proceeds if the CEO should die. The corporation will fill all the following roles except: |
Named Insured 6.3 |
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A child may be a dependent beyond the ages of 19 or 21: |
Only if the child is permanently mentally or physically disable before the age 6.1 |
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Paul surrenders a life policy and receives a lump sum of $30,000. Premiums totaled $25,000 on the policy. How is the surrender treated as tax purposed? |
$25,000 is received tax-free, and $5,000 is taxed at ordinary income rates. 7.1 |
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ERISA is: |
Accomplish pension equality by requiring reporting for establishing qualified plans 7.7 |
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Taxes are deferred on cash accumulations in all of the following: |
A deferred annuity, a universal life policy, and a Keogh plan |
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A SIMPLE’ retirement plan: |
Can either be a 401(k) plan or an IRA 7.9 |
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Income payments made from an annuity are: |
Are only partly subject to federal taxation 7.6 |
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With a 401(k) plan, employee contributions to the plan: |
Are made on pre-tax basis 7.9 |
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Money taken out of a modified endowment contract (MEC): |
May be subject to unfavorable tax rules 7.3 |
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A ”rollover” refers to which of the following? |
A transfer of funds from one IRA to another 7.8 |
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A Keogh plan in which a specified amount is invested each year is known as: |
A defined contribution plan 7.9 |
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Keogh Plan are NOT available to: |
Employees of large companies presently participating in a qualified retirement plan which are not self-employed 7.9 |
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Employees of large companies presently participating in a qualified retirement plan which are not self-employed 7.9 |
Self-funded plans 7.1 |
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In which of the following situations will the annuity value be included in the deceased annuitant’s estate? |
If the annuitant dies during the annuity or payout phase with any remaining value 7.6 |
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Joe had $500,000 of life insurance at work. He has an additional $40,000 life insurance policy the company purchased on all the employees. His wife is the primary beneficiary and their 4 children are contingent’s beneficiaries. Upon Joe’s death, what are the tax consequences to his beneficiaries? |
The $540,000 lump sum proceeds will be received income tax-free. 7.1 |
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Employer-paid premiums for employee group term life do not constitute taxable income to the employee for coverage up to |
$50,000 7.2 |
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In any health or disability income policy, there is a period during which no benefits will be paid for illness of any kind. This period usually does not apply to accidents, only to illness. The term that describes this interim is the: |
Probationary Period 8.1 |
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Which of the following describes the possibility of someone becoming disabled at any given age? |
Morbidity 8.1 |
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Katie is receiving intermittent part-time nursing care a few days a week at home as she recovers from chemotherapy. This level of care is known as: |
Home Health Care 8.2 |
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All of the following are alternatives an insurer has when asked to insure a substandard risk: |
Reject the risk, charge a higher standard premium, attach a rider to the policy excluding certain coverage or conditions 8.5 |
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When an Accidental Death and Dismemberment policy, which of the following pays for accidental death? |
Principal amount 8.2 |
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If the insurance company accepts a special class risk: |
The premiums will be higher than for a normal risk 8.5 |
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Converting a family policy to an individual policy: |
Usually, conversion may be made without evidence of insurability if the individual does so within 31 days after the family coverage ends. 8.1 |
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Which would be considered a pre-existing condition? |
Diabetes 8.1 |
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An applicant for accident and health insurance works for two different employers. Which of the applicant’s occupations will be used to underwrite the policy? |
The most hazardous of the two. 8.5 |
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When it comes to underwriting a health insurance policy, and HIV and AIDS: |
The insurer must approach the topic in a way that avoids unfair discrimination 8.5 |
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What factors are not used in underwriting an individual health insurance policy? |
Political affiliation and religious preference 8.5 |
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What health insurance product is designed to provide coverage for necessary diagnostic, preventive, therapeutic, rehabilitative, maintenance, or personal care servies provided in a setting other that an acute care unit of a hospital? |
Long-Term Care 8.2 |
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An applicant determined to have below average risk of loss would be: |
Issued a preferred policy 8.5 |
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The Health Maintenance Organization concept that service providers are paid a fixed monthly fee for each member is called: |
Capitation Fee 9.5 |
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Vision care insurance policies most often cover: |
Cost of lenses and frame 9-11 |
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Many major medical policies include a provision whereby when expenses reach a certain dollar amount, the insured no longer shares in the cost of expenses. The insurer pays 100% of the remaining covered charges. This is referred to as the: |
Stop-loss limit 9-2 |
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Major medical policies may include a type of deductible wherein the insured pays a new deductible amount for each different event that causes medical expenses to be incurred. This is the: |
Per-cause deductible 9-4 |
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Normally, Blue Cross/Blue Shield makes payments for medical expenses: |
Directly to the providers 9-4 |
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Some major medical policies begin with basic first dollar coverage that pays up to its limits, then the insured must pay a certain dollar amount of expenses before the major medical portion steps in. What term applies to the dollar amount the insured must pay between the basic policy and the major medical coverage? |
Corridor deductible 9.9 |
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Michael has a Major Medical policy with a $500 Deductible and an 80% Coinsurance with a $1,000 Stop Loss. Michael had $5,000 in hospital cost and $1,500 in surgical cost. How much does he pay out-of-pocket? |
$1,000 9.9 |
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A Health Maintenance Organization (HMO) in a certain city contracts with an independent medical group to provide services to HMO subscribers. The HMO pays the group organization, rather than paying the individual medical practitioners. What type of HMO structure is this? |
Group model 9.5 |
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In Accidental Death & Dismemberment policies, the Death Benefit is known as the: |
Principal amount 9.12 |
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When major benefits are added to a basic policy rather than combined with basic coverages into a single policy, the policy is said to be: |
Supplemental 9.9 |
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Mammography Coverage provided in medical expense policies must provide mammography screening for eligible women in all of the following frequencies: |
A mammogram for women age 40-49 every 2 years,A mammogram every year for women age 50 and over, A baseline mammogram for women age 35-39 9.10 |
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An HMO is: |
A health insurance company that emphasizes preventive medicine and early treatment 9.5 |
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13. All of the following are types of dental care: |
Endodontics - dental pulp care & root canals Periodontics - treatment of gums problems & disease Prosthodontics - bridgework & dentures Orthodontics - teeth alignment Oral Surgery - surgical treatment of diseases Restorative Care - restore the functional use of natural teeth 9.14 |
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When a Health Maintenance Organization chooses a limited number of health care providers to provide services to its subscribers, this is known as: |
A closed panel 9.5 |
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15. Michael has a Major Medical policy with a $500 Deductible and an 80% Coinsurance. Michael had $2,000 in hospital cost and $1,800 in surgical cost. How much did the insurance company pay? |
$2,640 9.9 – ($2,000 + $1,800 - $500 * 80%) |
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In a Business Key Employee Disability plan, which of the following apply? |
Pays a benefit to the business when a key employee becomes disabled & Can provide a salary continuation benefit to the employee during the period of disability 10.5 |
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Luis and Margarita Rodriguez have a family health policy that includes two riders. One rider excludes coverage for Margarita's existing diabetes. The other rider indicates that the couple may purchase additional disability income coverage at specified dates in the future without proving insurability. What two riders are attached to this policy? |
Impairment and guaranteed insurability riders 10.6 |
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Income benefits, under Workers' Compensation: |
Are subject to an elimination period before benefits begin 10.7 |
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What type of disability plan only provides coverage for 2 years or less? |
Short-Term Disability Income 10.4 |
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A disability that is presumed to result from the same or related cause of prior disability is called a: |
Recurrent disability 10.2 |
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Which of the following qualifies as a compensable injury under Workers' coverage? |
A factory worker fractures an elbow while working overtime 10.7 |
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Which of the following is a requirement for payment of Social Security disability benefits? |
Expected disability of 12 months or longer or ending in death, Total and permanent disability for at least 5 months, Fully insured and disability insured 10.8 |
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Which of the following is NOT a type of optional benefit an individual insured might purchase with a disability income policy? |
Buy-sell agreement 10.6 |
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In disability insurance, if a person is unable to perform their current job duties due to a disability, this definition is known as the: |
Own occupation, less restrictive definition 10.2 |
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How are disability income benefit claims paid? |
Weekly or monthly 10.1 |
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Which of the following waives the elimination period in a disability policy? |
Hospital confinement rider 10.6 |
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A health insurance policy includes an endorsement indicating the insurer will allow the policy to continue in force without further premiums if the insured is totally and permanently disabled. What endorsement is attached to this policy? |
Waiver of Premium Rider 10.2 |
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Which of the following is NOT classified as an occupational disease under Workers' Compensation? |
Michael, an insurance salesperson who gets the flu from one of his clients while visiting the client's home during a service call 10.7 |
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What is the purpose of an 'Income Replacement' Pure Loss of Income Disability Policy? |
Helps the insured maintain their standard of living 10.1 |
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An insured's disability income policy defines total disability as 'the insureds inability to perform the duties of any occupation for which he or she is reasonably qualified by education training or experience.' This definition is known as the: |
Any occupation' definition and is more restrictive than other definitions 10.2 |
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Required Provision 10 'Physical Exam and Autopsy', indicates that if the insurer wants to have an autopsy performed while a claim is pending, the insurer: |
May do so if it is not forbidden by law and if the insurer pays for it 12.1 |
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Health policies are considered incontestable after: |
2 years 12.1 |
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George has a policy that may not be cancelled by the insurer. The insurer also may never raise George's premiums. George's policy is: |
Noncancellable 12.4 |
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What is a cancellable policy? |
A policy the insurer may cancel at any time by returning the unearned premium 12.4 |
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An insured's accident policy uses the phrase 'accidental bodily injury' to define what constitutes accidental injury and/or resulting death. This phrase: |
Is less restrictive than the phrase 'accidental means' 12.3 |
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What is the minimum grace period, provided in the Required Provision, 'Grace Period', for all policies other than monthly or weekly premium policies? |
31 days 12.1 |
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According to Required Provision 'Legal Actions', the insured is prevented from filing suit against the insurer for at least: |
60 days, and not longer than 3 years from the date of proof of loss 12.1 |
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When a policy is reinstated: |
There is a waiting period before sickness coverage becomes effective, but accident coverage becomes effective immediately 12.1 |
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When an insured holds more than one occupation, and occupation is used to classify the risk, the insurer will generally classify the insured according to the occupation: |
That is most hazardous 12.2 |
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The Optional Provision which deals with 'Conformity with State Statutes', provides: |
that policy provisions in conflict with state statutes where the insured resides are automatically amended to conform to the minimum requirements of the law 12.2 |
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Camille changes jobs, from file clerk to firefighter. Shortly thereafter, she is injured. Under the change of occupation provision, what will the insurer pay toward her claim? |
The insurer will pay a partial benefit based on the benefit the policy premium would have purchased for an insured in the more hazardous occupation 12.2 |
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Which of the following is not true concerning the 'Notice of Claim' and 'Claim Forms' Required Provisions? |
There is no specified amount of time in which the insured must provide the notice of claim to the insurer 12.1 |
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When an insurance company cancels a policy, the unearned premium is: |
Returned in full to the insured in a pro rata return 12.2 |
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How many uniform policy provisions are there? |
23 12.2 |
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When an insurance company cancels a policy, the unearned premium is: |
Returned in full to the insured in a pro rata return 12.2 |
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Which of the following IS true regarding COBRA coverage? |
If an employee carried dependent coverage on the group plan, dependent coverage must be made available on the COBRA continuation policy, a n insured must be notified under COBRA when a qualifying event occurs, and Employees must be notified of their right to continue coverage immediately upon termination 13.7 |
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In noncontributory group plans, how many eligible employees must be covered by the plan? |
100% of employees 13.5COBRA protects dependents of employees by mandating for them the same extension and conversion privileges available to employees covered by group plans 13.7 |
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All of the following are characteristics of a Worksite Plan in health insurance: |
Employees can pick and choose among various types of insurance coverages, The plans are portable in that employees can take them with them upon terminating employment, and They are voluntary salary reduction plans 13.10 |
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Employers are obligated to provide notification statements to individuals eligible for COBRA continuation under all of the following circumstances: |
Every time a claim is filed 13.7 |
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Individuals covered by a group plan receive: |
Certificates of insurance 13.3 |
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Group Health Insurance can be either Community or Experience rated. Experience rating is based on the employers claims experience. Community rating is: |
Determined by the cost of medical care particular to the geographical area the insured is located 13.5 |
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Which of the following laws requires similar treatment of physical and mental conditions? |
HIPAA 13.8 |
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Which of the following describes a multiple employer trust (MET)? |
A legal entity that small employers may join to become eligible for group insurance 13.2 |
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For a contributory plan with some insurance companies, if the employee does not apply within the eligibility period he or she: |
May be required to take a medical exam, even for a nonmedical plan 13.5 |
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Legislation that requires that when health insurance is replaced, ongoing claims under the former policy must continue to be paid under the new policy is known as: |
No loss-no gain legislation 13.6 |
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When an individual converts from a group health policy to an individual policy: |
The new plan will not provide the same benefits as the group plan 13.7 |
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The employees of Ace Trucking company must each pay a portion of the premium for their group insurance. This means they are members of a: |
Contributory group plan 13.5 |
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The main benefit of a 501(c)9 trust is that: |
Contributions to these trusts may be deducted immediately, instead of when benefits are distributed 13.2 |
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COBRA requires all of the following, except: |
Employers must offer COBRA benefits to an employee even if he quits his job 13.7 |
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When are disability income benefits received as nontaxable income to the recipient? |
When the employee has paid the premium 14.8 |
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TRICARE provides health care services to: |
Active and retired members of the military uniformed services and their families 14.3 |
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Jane pulled money out of her Medical Savings Account (MSA) at age 62 to be used for something other than a medical expense. The money she pulls out will: |
Be taxed as any other income with an additional 15% penalty 14.2 |
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Which of the following statements is true regarding individual long-term care insurance policies? |
Individual long-term care policies are treated the same for tax purposes as accident and health policies only if the policy is qualified according to federal law 14.8 |
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The health care system operated by the Department of Defense to cover the active and retired military personnel and their families is known as: |
TRICARE 14.3 |
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Which of the following statements IS true regarding the taxation of individual long-term care insurance policies? |
Individual long-term care policies are treated the same for tax purposes as accident and health policies only if the policy is qualified according to federal law 14.8 |
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Employer-paid premiums for employee group health insurance are generally: |
Nontaxable to the employees & tax-deductible to the employer 14.4 |
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The benefits of an individual disability income policy: |
Are received tax-free and generally limited to a percentage of monthly income 14.8 |
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Which of the following is true about MSAs? |
MSAs allow participants to withdraw contributions for purposes other than medical care at the end of the year 14.2 |
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Health Savings Accounts (HSAs) must be accompanied by a: |
High Deductible Health Plan (HDHP) 14.2 |
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What taxes apply to the benefits under an individual Disability Income Policy on which the insured has paid the premiums? |
No tax 14.8 |
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Sharon, age 64 is getting ready to file her taxes. Which of the following statements regarding the deductibility of her various, personally-owned health insurance policies is true? |
If her deductible long-term care insurance premiums, her medical expense premiums, and her after-tax, out-of-pocket expenses total at least 10% of her income, the excess amount is tax deductible 14.8 |
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The 'Appeal Rights' required by the Affordable Care Act apply to: |
Denial or reduction of benefits to insureds for specific claims 14.1 |
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All of the following are used as the primary insurance policy for the insured, except: |
TRICARE for Life 14.3 |
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Which of the following procedures might be covered by an FSA, but not an HRA? |
Eyeglasses 14.2 |
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The Commissioner may do all of the following: |
Manage and supervise the department of insurance, Examine and investigate insurance matters, and Enforce insurance law |
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Eligibility for the payment of benefits under a long-term care insurance policy may require either a deficiency in the ability to perform no more than _______ of the activities of daily living or the presence of cognitive impairment. |
3 |
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Which of the following provided the federal government the right to regulate the insurance industry, regarding fraud and false statements? |
McCarran/Ferguson Act |
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Which of the following may an insurer purchase for its separate account? |
Separate accounts for variable annuities may not acquire: 1) Any securities of the insurer's subsidiary. 2) Over 10% of the total voting securities of any other issuer. This would be considered a conflict of interest and would provide companies an unfair advantage. |
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The Life and Disability Insurance Guaranty Association provides a maximum liability benefit in the event an insurer becomes insolvent. The benefit amount is limited to: |
$100,000 for cash value on one life and $300,000 for all benefits |
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All of the following are true regarding the States Second Injury Fund: |
It is funded by assessments against insurers and those who self insure, It promotes the employment of previously injured or handicapped workers, It limits the employers liability for a previously disabled employees second injury |
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To receive a license as a resident insurance producer, an applicant must be at least: |
18 years old |
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How large must a group plan be for the requirement to include maternity benefits on the same basis as nonmaternity benefits to apply? |
15 members |
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Offering to give a prospect anything of value not specified in the contract to persuade the prospect to purchase the insurance is: |
Rebating |
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A producer must keep complete records pertaining to transactions under the producer's license for at least: |
3 years |
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In Alabama, the Commissioner of insurance is: |
Appointed by the governor |
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An insurance company, upon receiving proof of death, may not delay a death claim settlement beyond a period of: |
2 months |
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Which of the following can be listed on a life insurance illustration? |
Non Guaranteed projections |
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Which of the following describes why Alabama encourages the purchase of Long-Term Care Insurance through its LTC 'Partnership Program'? |
Requires Medicaid to disregard some or all of your assets during estate recovery, Allows Medicaid to disregard some or all of your assets for Medicaid eligibility, Provides you with asset protection |
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Who is Alabama's current Commissioner of Insurance? |
Jim Ridling |
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An annuity or pure endowment contract must provide a grace period of: |
1 month of at least 30 days |
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The maximum liability of the Life and Disability Insurance Guaranty Association for all benefits, including cash values, for any one life is: |
$300,000 |
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In the context of replacement, the term 'conservation' means any attempt by the: |
Existing insurer or its agent to continue existing life insurance in force |
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A licensee must inform the Commissioner of a change of legal name or address within ______ days of the change. |
30 |
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Unless revoked or suspended, an insurance producer license will remain in effect for: |
As long as the license renewal fee is paid and the continuing education requirements are met |
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A temporary insurance producer license may be issued for up to: |
6 months |
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An individual long-term care insurance policy may not be terminated for nonpayment of premium unless the insurer has give notice to the insured and any designated persons at least _____ days before the effective date of the termination. |
30 |
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The Commissioner may do all of the following: |
Enforce insurance law, Examine and investigate insurance matters, Manage and supervise the department of insurance |
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An annuity or pure endowment contract may be reinstated within __________ from the default in premium payments, unless the cash surrender value has been paid. |
1 year |
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Upon written demand by a person aggrieved, the Commissioner must hold a hearing within: |
30 days after receipt of the demand |
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A health benefit plan that provides coverage for surgical services for a mastectomy must provide screening mammography for women age 50 or older at least every: |
Year |
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Assets in a separate account are valued at: |
Their market value on the date of valuation |
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To be able to start operations, a mutual company must have all of the following, except: |
A minimum number of stockholders |
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Which of the following can be listed on an illustration? |
The proposed insured's name, age, gender, and the initial death benefit, The dividend option selected or any nonguaranteed elements, The insurer's name, producers name, address, and the policy generic name |
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A provision in the LTC policy that will cover the cost of replacing the primary care giver for a short period of time is:
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Respite care 11.14 |
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Long-Term Care Insurance is required to provide a benefit period of no less than: |
1 year 11.13 |
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The most important rating factor in a LTC policy is: |
Whether or not an individual can perform activities of daily living 11.13 |
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Nursing and rehabilitative care that is required daily and can only be performed by skilled medical practitioners on a doctor's orders is: |
Skilled nursing care 11.14 |
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Help in performing ADLs which can be performed by someone without medical skills or training, but must be based on a doctor's orders is: |
Custodial or residential care 11.14 |
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Which of the following correctly describes Medicaid? |
Provides medical benefits for certain low income people, for the disabled, and for families with dependent children 11.12 |
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Which of the following is NOT one of the core benefits included in any Medicare supplement policy? |
Part A deductible for each benefit period 11.7 |
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long-term care insurance policy must provide a free look period of: |
30 days 11.15 |
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Select the correct statement about long-term care policies. |
Present policies are more likely to pay benefits regardless of the level of care required by the insured 11.13 |
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All Medicare supplement or (Medigap) policies are required to be standardized. MSPs are required to have all of the following |
Cover the first 3 pints of blood for Medicare Part A and Part B, Part B coinsurance for medical insurance, Have the same core benefits 11.6 |
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All of the following must be offered or provided on a Long-Term Care policy at the time of application: |
Shoppers guide, Outline of coverage, Inflation protection 11.8 |
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Long-Term Care policies EXCLUDE all of the following: |
Nervous or mental disorders, Intentional injuries, Drug and Alcohol dependency 11.15 |
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Which of the following individuals would be eligible for Medicare? |
Brenda, who is age 65 and receives Social Security benefits 11.1 |
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Medicare Part D provides prescription drug coverage that requires the insured to pay all of the following: |
co-payment, An annual deductible, A monthly premium 11.5 |
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Which of the following is NOT covered by Medicare? |
Pain and suffering 11.1 |
