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223 Cards in this Set
- Front
- Back
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An insured's flexible premium is invested into a separate account. What type of insurance product does the insured have? |
Variable Universal Life |
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the primary eligibility requirement for Medicaid benefits is based upon? |
Need |
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An employee wants to join a group insurance plan. In order to avoid proving insurability, what must the applicant do? |
Join during the enrollment period |
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An insurance company is domiciled in Montana and transacts insurance in Wyoming. Which term best describes the insurer's classification in Wyoming |
Foreign |
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Premium payments for personally-owned disability income policies are |
not tax deductible |
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Under the affordable care act, which classification applies to health plans based on the benefits and the amount of covered costs? |
Metal Level classification: Bronze, silver, gold and premium determined by how much of a person's expected health care costs are covered |
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Is a promise to submit timely claims a consideration or representation? |
Representation. The binding force in any contract is consideration |
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How long is a free-look period for a medicare supplement policy? |
30 days |
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If $100,000 of life insurance proceeds were used in a settlement option that paid $13,000 per year for ten years, how much would be taxable annually? |
$3,000 because $10,000 per year would be income tax free (as principal) and $3,000 per year would be income taxable (as interest) |
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Which of the following is another name for a primary care physician in an HMO plan? |
Gatekeeper |
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In a noncontributory health insurance plan, what percentage of eligible employees must participate in the plan before the plan can become effective? |
100% |
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In a group policy, who receives a certificate of insurance? |
The individual insured |
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A reinstated policy is contestable for how long? |
another 2 years |
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Long term care insurance policies may exclude coverage for many things except what common one? |
Alzheimer's |
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Statements made by the applicants for insurance policies that are true to the best of their knowledge are known as |
Disclosures |
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Representations are statements that the applicant... |
believes to be true but are not guaranteed |
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Which benefit is based on a person's primary insurance amount (PIA) |
Social security disability |
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What is the maximum period of coverage under COBRA? |
36 months |
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For guaranteed renewable provisions, the insurer may increase the policy premium on the policy anniversary date but only on a |
class basis |
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Once a person meets the social security disability benefits requirements, how long is the waiting period before any benefits will be paid |
5 months. Actual benefit payments start with the six month of disability |
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Insurance that would pay for hiring a replacement for an important employee who becomes disabled is called? |
Key person disability |
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An individual has $50,000 convertible term life insurance policy. If he chooses, he can |
Convert to a whole life policy for the same face amount without proof of insurability. Conversion allows a term policy to be changed into a cash value policy. While the premium will increase for the same amount of death benefit, no evidence of insurability is required. |
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Major medical expense policy/contracts are characterized by |
high max limits, blanket coverage, coinsurance and a deductible |
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If the policy premium was not submitted with the application, what should the agent obtain from the insured upon policy delivery? |
A statement of good health |
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Which of the following grants express authority to an agent? |
Agent's contract with the principal |
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An individual owns a participating whole life policy and uses her policy dividends to buy more of the same type of coverage for herself. She has chosen the |
Paid-up additions option |
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How many consecutive months of coverage must long term care insurance policies provide? |
at least 12 consecutive months |
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Medicare covers only... |
skilled care so you can't add LTC coverage to it |
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An individual wants to buy a life insurance policy in which he can count on guaranteed minimum benefits. which of the following types of insurance best suit his needs? |
Fixed |
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Concealment occurs when a person... |
withholds material information that would be critical to an underwriting decision |
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Which of the following includes information regarding a person's credit, character, reputation and habits? |
Consumer report |
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a person must have been entitled to social security benefits for... |
2 years to qualify for medicare |
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The department of insurance will (blank) when it suspects that an insurer or its agents has committed a violation |
Hold a hearing |
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Who can make a fully deductible contribution to a traditional IRA? |
An individual under the age of 70 and 1/2 who has earned income |
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the legal action provision.... |
limits the time during which a claimant may seek recovery from an insurer under a policy |
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The minimum number of credits required for a partially insured status is |
6 credits during the last 13 quarter period |
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Impairment rider.... |
excludes coverage for a specified condition |
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survivorship life is also called |
"second to die policy" |
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A producer is acting in what capacity when he or she is trying to obtain creditable information about an applicant for health insurance |
field underwriter |
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What is meant by "life insurance creates an immediate estate?" |
The face value is payable to the beneficiary upon the death of the insured |
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what are common provisions found within many life insurance policies?
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reinstatement, entire contract, incontestability |
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an insured receives $50,000 from $100,000 accidental death and dismemberment policy as a result of the loss of an arm in an accident. This benefit is considered a/an |
capital sum. capital is usually 50% of the principal sum and paid for a loss of a single body part |
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For medicare, physician and surgeon services are covered under? |
Part B. Part A is hospital insurance |
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Which provision may be added to a permanent life policy, at no cost, that insures that the policy will not lapse as long as there is cash value? |
Automatic premium loan option |
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What is the purpose of COBRA? |
To provide continuation of coverage for terminated employees |
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Which of the following protects consumers against the circulation of inaccurate or obsolete information? |
Fair Credit Reporting Act |
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Which type of authority is based on the actions or words of the agent? |
Apparent authority is the appearance or assumption of authority based on the actions, words, or deeds of the agent |
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If an employee terminates her employment, which of the following provisions would allow her to continue health coverage under an individual policy without proof of insurability, if applied for within a specific amount of time? |
Conversion provision in group policies allows the terminated employees 31 days to convert to individual health coverage without evidence of insurability with some exceptions |
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If a disability policy is rated up, which of the following is true? |
The premium increases |
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Which renewability provision allows an insurer to terminate a policy for any reason, and to increase the premiums for any class of insureds? |
Optionally renewable |
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A policyowner wants to name her husband as the beneficiary on her disability policy. She also wishes to retain all of the rights of ownership. What beneficiary classification is appropriate in this situation? |
Revocable: the policyowner can change the beneficiary at any time |
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An insured may reactivate a lapsed life insurance policy within a specified period of time, with proof of insurability. Which policy provision allows this. |
Reinstatement |
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Medical expense plans usually DO NOT include... |
Diagnostic and preventive care |
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Hazards are... |
conditions or situations that increase the likelihood of loss |
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OBRA requires employer health plans to provide primary coverage for individuals with end-stage disease before Medicare becomes primary for how many months |
30 |
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The Time Limit on Certain Defenses provision is the same as which of the following? |
Incontestability
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An underwriter may reject an application for health insurance based upon which factuors (just give one) |
Prescription drug usage |
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what is the max amount that can be contributed to an MSA of the high-deductible plan for individuals? |
65% |
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if the annuitant dies during the accumulation period, who will receive the annuity benefits? |
Beneficiary |
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What benefit is not available under Social Security |
Welfare |
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What benefits does Social Security provide |
retirement, disability and survivor benefits |
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The premium charged for the guaranteed insurability rider is based upon |
Attained age |
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Which of the following would be responsible for making premium payments in an HMO plan |
subscribers are individuals who sign up for pre-paid health plans, such as HMOs and are responsible for paying the premiums |
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Peril is defined as |
the cause of loss insured against |
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which type of life policy would not offer a loan option? |
level term life. a policy loan option is found only in policies that contain cash value |
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What are two requirements for SIMPLE plans |
a SIMPLE plan is available to small businesses that employ no more than 100 employees receiving at least $5,000 in compensation from the employer during the year |
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How long does an insurer have to contest fraudulent misstatements made in a health insurance application |
as long as the policy is in force |
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If an insured dies during the grace period, what is the insurance company obligated to pay? |
The face amount minus any owed premium |
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Who sets the limits for a Health Reimbursement Account? |
the employer |
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The annuity period is best defined as the time during which the annuitant... |
receives payments |
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a 403 (b) tax-sheltered annuity is available for... |
teachers and nonprofit organizations |
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What is an example of a limited accident and health policy? |
A dread disease policy |
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In what type of a medical insurance plan does the provider receive a scheduled fixed amount for care to the insured and no additional compensation regardless of the services provided |
prepaid |
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The waiver of cost rider is found in what type of life insurance? |
universal life |
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what type of medicare policy requires the insured to use specific healthcare providers and hospitals? |
SELECT |
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What is true regarding taxation of long-term care insurance? |
excessive benefits may be taxed |
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Medical expense premiums are deductible as medical expenses if along with all of the other unreimbursed medical expenses, the total exceeds what percentage of the adjusted gross income of the insured? |
7.5% |
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What is consideration? |
Something of value transferred between the two parties to form a legal contract |
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What is a statement that is guaranteed to be true, and if untrue, may breach an insurance contract? |
Warranty |
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What type of care is NOT covered by Medicare |
Long Term |
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an insurer who deliberately makes a maliciously critical statement about another insurance company is guilty of an illegal trade practice called |
defamation |
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what type of policy shortens the premium paying period but allows the coverage to continue to age 100? |
Limited pay |
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A small hardware store owner is involved in a car accident that renders him totally disabled for half a year. Which type of insurance would help him pay for expenses of the company during the time of his disability |
Business overhead expense policy: BOE insurance is sold to small business owners for the purpose of reimbursing the policyholder for various business overhead expenses during a period of total disability. |
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What qualifies you as a "small employer" |
Applies to any person or entity actively engaged in business or self-employment for at least 3 consecutive months that employs no more than 50 eligible employees on 50% of business days during the preceding 12 months |
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What is a unique benefit life insurance has over other types of insurance |
It may perform the function of cash accumulation |
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What is the purpose of HMOs? |
HMOs seek to identify medical problems early by providing preventive care. |
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Contracts with HMOs are between HMOs and.... |
the insured....not an insurance company |
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Two brothers are starting a new business. They know it will take several years to build the business to the point that they can pay off the debt incurred in starting the business. What type of insurance would be the most affordable and still provide a death benefit should one of them die? |
Joint life since it would be the least expensive and would pay a benefit only at the first death |
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most insurers issue health insurance policies for delivery in many states. Because each state regulates and mandates the requirement for policies delivered to their residents, instead of having a policy form for each state the insurer attaches.... |
conformity with State Statutes provision. By attaching this, an insurer can use a single policy form in many states |
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The Waiver of Cost of Insurance rider is found in what type of insurance? |
Universal Life. If the insured becomes disabled, the rider allows the cost of insurance to be waived, with the exception of premium costs required to accumulate cash value |
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When must an IRA be completely distributed when a beneficiary is not named? |
December 31 of the year that contains the fifth anniversary of the owner's death |
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An insured severely burns her hand, but is not classified as disabled. Which of the following types of coverage would cover at least a portion of the insured's medical expenses |
Medical Reimbursement Benefit. Helps to pay medical costs for accidental injuries that are not considered to be disabling |
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An association could buy group insurance for its members if it meets all of the following requirements (4) |
Holds annual meetings, is contributory, has a constitution and by-laws, and the group must have at least 100 members |
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Medigap plans are designed for what? |
To fill the gap in coverage attributable to Medicare's deductibles, copayment requirements, and benefit periods. |
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In comparison to a policy that uses the accidental means definition, a policy that uses the accidental bodily injury definition would provide a coverage that is.... |
Broader in general. A policy that uses the accidental bodily injury definition will provide broader coverage than a policy that uses the accidental means definition |
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Medicaid is sponsored by what kind of sources? |
Both state and federal |
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Which two terms are associated directly with the way an annuity is funded? |
Single payment or periodic payments. |
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John owns a medical expense policy that he purchased for his family. John's employer purchased a Group Disability Income policy for John and all eligible employees. John subsequently suffered an accident on the job that left him unable to work for four months. If John receives benefits from his disability income policy. How are benefits taxed? |
Group disability income premium payments are considered tax-deductible by the business as an ordinary business expense. In a plan funded entirely by the employer, income benefits are included in the employee's gross income and taxed as ordinary income |
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Which part of an insurance policy describes the terms, benefits, exclusions, limitations and provides an overall summary of the policy? |
Outline of coverage: summarizes the policy and must be presented to the applicant at the time of application |
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The two types of assignments are.... |
Absolute and collateral. Absolute assigns the entire policy. Collateral assigns a part or all of the benfits |
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In which of the following examples would a contract between an insurer and prospective insured be legal? |
The applicant has a prior felony conviction |
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What are the 3 goals of risk retention? |
reduce expenses and improve cash flow, increase control of claim reserving and claims settlements, and fund losses that cannot be insured |
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What term best describe the coverage provided by term policies, as compared to any other form of protection? |
Greatest. Term provide for the greatest amount of coverage for the lowest premium as compared to any other form of protection |
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Under a SIMPLE plan which of the following is true regarding taxation on both contributions and earnings? |
They are tax deferred until withdrawn |
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Beneficiary designations determine the order in which.... |
benefits will be paid. |
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What types of beneficiary designations are there? |
Primary or contingent, which includes secondary and tertiary |
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Cameron is purchasing a permanent life insurance policy with a face value of $25,000. While this is all the insurance that he feels he can afford at this time, he wants to be sure that additional coverage will be available in the future. He should include in this policy a.... |
Guaranteed insurability option which allows the insured to purchase specific amounts of additional insurance at specific times without proving insurability |
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An insurer is helping a married couple determine their children's needs, assets and liabilities, in the event that one or both of the spouses should die. What is the term most closely associated with this? |
Survivor protection |
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An insured has medical insurance coverage through 2 different providers, both covering the same expenses on an expense-incurred basis. Neither company knows in advance that the insured has coverage through any other insurers. The insured submits a claim to both insurers. How should the claim be handled? |
Each insurer should pay a proportionate share of the claim |
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What is excluded in a dental insurance plan? |
Lost dentures |
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What would a physician utilize if he/she wanted to know if a treatment is covered under an insured's plan and at what rate it will be paid? |
Prospective Review. Under the prospective review or precertification provision, the physician can submit claim information prior to providing treatment to know in advance if the procedure is covered under the insured's plan and at what rate it will be paid |
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Within how many days of requesting an Investigative Consumer Report must an insurer notify the consumer in writing that the report will be obtained? |
3 days. |
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If a consumer requests additional information concerning an Investigative Consumer Report, how long does the insurer or reporting agency have to comply? |
5 days |
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Within how many days after the receipt of the proceeds may the owner rescind the life settlement contract? |
15 days |
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When transacting business in this state an insurer formed under the laws of another country is known as a/an |
Alien insurer |
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If an insured surrenders his life insurance policy, which statement is true regarding the cash value of the policy? |
It is only taxable if the cash value exceeds the amount paid for premiums |
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How frequently must producer licenses be renewed |
Every 2 years |
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In a life insurance as an Executive Bonus, the policy is owned by... |
the employee. |
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A Universal Life insurance policy has two types of interest rate that are called... |
Guaranteed and Current |
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How is health coverage for newly-adopted children under a parent's policy different from health coverage for newborns? |
There is no difference |
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An insured was involved in an accident and could not perform her current job for 3 years. If the insured could reasonably perform another job utilizing similar skills after 1 month, for how long would she be receiving benefits under an "own occupation" disability plan? |
2 years. Under this plan, if the insured cannot perform his/her current job for a period of up to two years, disability benefits will be issued, even if the insured would be capable of performing a similar job during that two-year period. After that, if he insured is capable of performing another job utilizing similar skills, benefits will not be paid |
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How many policies are necessary to cover a cross purchase (buy/sell agreement) between 3 people? |
6. Since each person would have a policy on each of other other people, among the 3 owners, the total number of policies would be 6 |
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An insured is admitted to the hospital for surgery on a herniated disk. The insurance company monitors the treatment and progress in order to make sure that everything proceeds according to the insurer's schedule. This is called... |
Concurrent review. Under this, the insurance company will monitor the insured's hospital stay to make sure that everything is proceeding according to schedule and that the insured will be released from the hospital as planned |
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What percentage of individually-owned disability income benefits is taxable? |
0%. Premiums are paid with after tax dollars. Benefits are not income taxable |
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Issue age policy premiums increase in response to which of the following factors? |
Increased Benefits |
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Lisa and Lena own a shop together. They are partners in their business of 2 years. Lisa is a designer; Lena is a seamstress. Lisa worries that if Lena becomes disabled, that would affect their business. She inquires about purchasing disability buy-sell insurance. What does her agent tell her about that type of policy? |
A disability buy-sell plan protects the insured in case of disability. It allows the policy owner to buy out the partner's interest in the business and the benefits are tax free. |
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In the Needs Approach method, need is determined by... |
the predicted needs of the family after the premature death of the insured, which will happen immediately. The policy allows for benefits to be collected upon the insured's death |
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In order to be eligible for group health insurance, an employee must be... |
a full time employee, working in a covered classification, and must be actively at work |
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An insured had a $10,000 term life policy. The annual premium of $200 was due on February 1; however, the insured failed to pay the premium. He died on February 28. How much would the beneficiary receive from the policy? |
$9,800. The death occurred within the mandatory 30-day grace period. Past due premium would be subtracted from the face amount of the policy. |
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Regarding policy loans, money borrowed from the cash value is....(regarding taxes) |
not taxable. Policy loans can be repaid at any time, including surrender and death. An insurer can change interest on outstanding policy loans |
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Between qualified and non qualified retirement plans, what would be the same? |
Taxation on accumulation is deferred in both types of plans |
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Which of the following is true regarding taxation of dividends in participating policies? |
Dividends are not taxable. Dividends are not considered to be income for tax purposes since they are the return of unused premiums. The interest earned on the dividends, however subject to taxation as ordinary income |
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A policyowner cancels his life policy but instructs the insurance company to transfer the cash value of his policy to an annuity. This nontaxable transaction is called... |
1035 exchange. |
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In a life settlement contact, whom does the life settlement broker represent |
The owner. The life settlement broker is a person who, for compensation, solicits, negotiates, or offers to negotiate a life settlement contract. They represent only the policyowners |
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A new employee who meets HIPAA eligibility requirements must be issued health coverage on what basis? |
Guaranteed. |
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In franchise insurance, premiums are usally |
lower than individual policies, but higher than group policies. |
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Which of the following individuals is eligible for a HSA |
Those with a high deductible health plan |
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HIPAA applies to groups of |
2 or more |
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What type of beneficiary designation allows the benefit to pass from a decreased primary beneficiary to the beneficiary's heirs, instead of splitting the benefit among surviving primary beneficiaries? |
Per stripes |
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Which of the following is true regarding a term health policy? |
it is nonrenewable |
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In individual health insurance coverage, the insurer must cover a newborn from the moment of birth and if additional premium payment is required, allow how many days for payment? |
61 days of birth |
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How often must life settlement brokers renew their license |
Annually |
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In order to minimize adverse selection, employer group dental plans may require employees who enroll after they were initially egilible to participate to do all of the following EXCEPT |
increase benefits for a period of one year. This is because expenses are substantially higher the first year since most people will wait until it's free. So insurers to things to lower expenses like evidence of insurability, longer EP, reduce benefits |
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Which of the following statements is true regarding LTC insurance? |
Every policy must offer nonforfeiture benefits to the applicant |
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The state provides for a temporary license for....(3) |
death of a producer, producer's disability, producer's time in the military service. A temporary license is not available for a producer's retirement. |
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the amount of social security disability beenfits is based upon the worker's Primary Insurance Amount (PIA), which is calculated from their Average Indexed Monthly Earnings over which years? Which years of income may be deleted from calculation? |
their highest 35; lowest 5 |
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Regarding the return of premium option for LTC policies, what happens to the premium if the policy lapses? |
The insurer will return a percentage of the premiums paid. |
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Which of the following information about the applicant is NOT included on Part 1 of the application for insurance? |
Medical background. |
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Part 1 of the application for insurance includes what type of questions? |
Part 1 includes general questions including name, age, address, DOB, gender, income, marital status, occupation, etc. |
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Part 2 of the application for insurance includes what type of questions? |
Medical background |
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All of the following may be excluded from coverage in a Major Medical Expense policy, EXCEPT.. |
Emergency surgery. |
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During the accumulation period in a non qualified annuity, what are the tax consequences of a withdrawal? |
Taxable interest will be withdrawn first and the 10% penalty will be imposed if under age 59 1/2 |
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In which of the following cases would an "any occupation" disability income policy pay the benefits? |
the insured is unable to perform any jobs in the field related to the insured's education and experience |
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What is the purpose of the rehabilitation benefit in disability insurance |
To cover the expenses of retraining the insured to return to work |
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What is the maximum penalty for habitual willful noncompliance with the Fair Credit Reporting Act? |
$2,500 |
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The type of dental plan which is incorporated into a major medical expense plan is a |
Integrated dental plan |
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An agent is in the process of replacing the insured's current health insurance policy with a new one. Which of the following would be a proper action? |
The old policy should stay in force until the new policy is issued |
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What is franchise insurance? |
It is health coverage for small groups whose numbers are too small to qualify for true group insurance. Individual policies are issued for each participant and they are individually underwritten |
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The Pregnancy Discrimination Act specifically prohibits pregnancy discrimination by employers with the minimum of how many employees? |
15 |
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Any licensed person whose activites affect interstate commerce and who knowingly makes false material statements related to the business of insurance may be imprisoned for up to |
10 years |
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Which of the following is an example of third-party ownership? |
Group insurance |
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What is "third-party ownership" |
refers to situations when the owner and the insured are not the same person, and the insurance arrangement is between three parties: the company, the owner and the insured. |
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Because of the history of cancer in her family, Julie purchased a policy that specifically covers the expense of treating cancer. Her policy would be classified as what type of policy? |
Dread Disease Policy which is a limited policy that is written to specifically cover cancer expense |
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Amy's insurance premium has decreased slightly, despite the fact that her level of health has remained the same. Which of the following most likely caused the premium decrease? |
Her insurer used interest earned on premiums to lower premium amounts |
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Which of the following hospice expenses would NOT be covered in a cost-containment setting? |
Antibiotics. In cost-containment setting, daily needs and pain relief are provided for hospice patients, but curative measures are not |
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When health care insurers negotiate contracts with health care providers or physicians to provide health care services for subscribers at a favorable cost, it is called |
Preferred Provider Organization (PPO). |
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An agent wants to include an illustration written by his insurance company. Which of the following best describes the conditions under which she may use the illustration? |
The illustration must stay exactly as it is |
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According to the requirements for small employers, an eligible employee may be any of the following EXCEPT |
A part-time, temporary or substitute employee would not be considered eligible. |
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Which of the following will NOT be an appropriate use of deferred annuity? |
Creating an estate. they are best suitable for accumulating retirement income or funds for children's college education. Unlike insurance, annuities do not create an estate, but liquidate it |
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Which of the following is true of a children's rider added to an insured's permanent life insurance policy? |
It is term coverage that is convertible to permanent insurance at or prior to the child reaching the maximum coverage age |
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The Patient Protection and Affordable Care Act includes all of the following provisions EXCEPT |
Individual tax deduction for premiums paid |
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In a group policy, the contract is between |
The employer and the insurance company |
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If a producer is suspected of violating the Insurance Code, who would conduct the legal hearing? |
The Commissioner has the authority to order and conduct a hearing when he/she has reason to believe the insurance code has been or is being violated. |
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Equity indexed annuities |
Seek higher returns. They are not securities but they invest on a relatively aggressive basis to aim for higher returns. Like a fixed annuity the Equity Indexed Annuity has a guaranteed minimum interest rate. The current interest rate that is actually credited is often tied to a familiar index like the Standard and Poor's 500 |
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Can an individual who belongs to a POS plan use an out-of-network physician? |
Yes, and they may use any preferred physician, even if not part of the HMO. |
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When the insured initiates the cancellation of a policy, the unearned premium will be refunded on a |
Short rate basis |
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Sally set up an individual retirement account that her employer is now contributing too. Her employer's contributions are not included in her gross income. What kind of retirement plan does Sally have |
Simplified Employee Pension (SEP). |
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Which of the following statements is true of a Combination Dental Plan? |
It is a combination of a scheduled and nonscheduled dental plan. |
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Which rider, when added to a disability policy, pays income during the 6 month waiting period before Social Security benefits can begin? |
Additional Monthly Benefit |
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Regarding health insurance, all of the following are tax-deductible EXCEPT |
Employee paid group disability income. When the employer pays for the premiums, they are tax deductible to the employer. When the employee pays for a portion of the premiums, they are not tax-deductible to the employee |
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A jumping juvenile policy is unique in that the death benefit automatically |
Increases (usually 5 fold) at a predetermined age (usually 21) |
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Which of the following Medicare parts provides prescription drugs benefit |
Part D (think D for Drugs) |
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All of the following are true about key-person insurance EXCEPT |
The death benefit is taxable to the business |
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The benefits in Medical Expense Insurance are |
received income tax free by the individual |
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All of the following are places where care can be administered for a medical plan EXCEPT |
Eye centers. (Can be: Doctor's office, surgicenters and urgent care centers) |
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Which of the following would NOT be elgible for coverage under key person? |
The owner of a shop. He his a principal, not a key person. (Key person includes: Executive officer, pharmacist in drug store and manager of a small store) |
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J is receiving fixed amount benefit payments from his late wife's insurance policy. He was told that if he dies before all of the benefits are paid, the remaining amount will go to the contingent beneficiary. Which settlement option did J choose? |
Fixed Amount: pays a fixed, specified amount in installments until the proceeds (principal and interest) are exhuasted) |
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In order to reinstate a life insurance policy the insured must do all of the following EXCEPT |
Pay next year's premium in advance (In order to reinstate, the owner must pay: all back premiums, interest due on back premiums, and any outstanding loans and interest) |
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Which of the following best describes the difference between joint life and joint and survivor annuity payment options? |
In joint life option, the benefits stop after the first death |
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An employee is on an extended leave of absence when the employer group health plan changes from one carrier to another. Before the employee returns to work, what might the employee most likely notice? |
Limited Coverage. When coverage is transferred, employees that are not actively at work may be limited to the prior plan's coverage levels until they return to work |
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In group insurance, the primary purpose of the Coordination of Benefits provision is to |
Prevent over-insurance. |
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What is another term for a health insurance policy subscriber? |
Participant |
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How many lives are covered in a multiple life annuity? |
@ or more |
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A subscriber has been treated for a medical condition by his primary care physician for 3 months with experimental remedies without a significant health improvement before being referred to a specialist. Which of the following types of plans does the subscriber have? |
A gatekeeper HMO plan to control the costs. Subscribers are participants in an HMO. In some HMO's the primary care physician incurs a cost to refer patients to a more expensive specialist, and therefore, may try alternative treatments before referring a patient. |
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Who determines if a particular group of employees can be excluded from group health coverage? |
The employer |
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Which of the following employee benefits essentially provides the employee with a wage increase and directs that wage increase to be spent on a life insurance policy? |
Executive Bonus. |
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An employee dies having 6 quarters of coverage during the previous 13 quarter period. What status of coverage does the employee have under Social Security? |
Currently insured (partially insured) |
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According to the life insurance replacement regulations, which of the following would be an example of policy replacement? |
A policy is reissued with a reduction in cash value. |
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Which of the following terms relates to disability income insurance? |
Residual benefit |
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A distribution from an employer-sponsored retirement plan or from an IRA is eligible for a tax-free rollover if it is reinvest in an IRA within... |
60 days |
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Which of the following is NOT a common exclusion found in most health policies? |
Dental procedure due to birth defect |
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Which of the following would be covered as a dependent child by a medical expense policy? |
An 18 year old child who is not a resident of the state |
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Which of the following could potentially find financial help through the ConnPACE program |
a 70 year old requiring heart medication |
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Which of the following would not be a characteristic of a Managed Care Plan |
Risk retention |
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To purchase insurance, the policy owner must face the possibility of losing money or something of value in the event of loss. What is this concept called? |
Insurable interest |
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A graded premium life insurance policy is modified form of |
Whole life. Premiums increase annually over the first 5 to 10 years |
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What is the only difference between blanket insurance and group health insurance |
The insured members are not named |
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If an agent follows the rules and terms of his agent contract, he is exercising his |
Express authority |
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When an annuity is used to provide savings for the education expense, a Last in First out (LIFO) arrangement is used. What is the last money to go into an annuity? |
Interest. |
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What is the purpose of the gatekeeper in an HMO |
Controlling costs |
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A whole life policy is surrendered for a reduced-paid up policy. The cash value in the new policy will |
Continue to increase |
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Bill is appproaching retirment age and is concerned about having proper coverage should he have to be placed in a Long Term Care facility. Bill's agent told him that LTC policies would provide necessary coverage at all of the following levels, EXCEPT |
Acute. Acute care is provided by Medical Insurance. (The levels provided for are: skilled, custodial and intermediate) |
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A producer has completed 18 hours of CE. How many more hours will he need to complete? |
6. Resident producers must complete a minimum of 24 hours of continuing education credits every 2 years, 3 of which must be on Connecticut Insurance regulations or ethics. |
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To be acceptable to insurance companies, what percentage of eligible employees must be enrolled under a contributory group health insurance plan? |
75% |
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Regarding major medical plans |
Higher stop-loss means lower premium. Once insured hits the stop loss, the insurer takes over |
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All of the following are true of the Survivorship Life policy EXCEPT |
The premium is based on the age of each insured. |
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Medicare Part B covers all of the following EXCEPT |
Long-term care services. Medicare does not cover LTC |
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Which distributions from a Modified Endowment Contract would be taxable as income at the time received to the extent that the cash value of the contract immediately before the payment exceeds the investment in the contract? |
Both partial cash surrender and policy loan. to avoid the tax penalty, a policy would need to simultaneously satisfy the cash value or guideline premium/corridor tests as well as the seven-pay test |
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Which of the following meets personal needs such as assistance in eating, dressing, or bathing and is provided under a doctor's orders, but by non medical personnel |
Custodial care |
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An insured recently received his major medical insurance policy. Only 20 days after the policy issue, while recreational rock climbing, the insured suffered a fall that required hospitalization, surgery and physical therapy to repair his broken leg. Which of the following is true? |
Both a deductible and coinsurance payments will be required |
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An individual was denied coverage under Social Security because his disability did not meet the strict definition of total disability used by Social Security. Which of the following would provide disability income coverage? |
SIS Rider. Social Insurance Supplement (SIS) rider are used to supplement or replace benefits that might be payable under Social Security Disability. |
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A new homebuyer wants to purchase a life insurance policy that would protect his family against losing the home, should he die before the mortgage was paid. The most inexpensive type of policy that would accomplish this need would be |
Decreasing term |
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What is it called when a doctor accepts the Medicare approved amount? |
Assignment |
