#3 - Arizona Life Insurance Exam Prep Flashcards
(269 cards)
1
Q
If an insured legally adopts a baby within ___ month(s) of birth, the maternity coverage for the child’s birth is covered.
A
12
2
Q
How many hours of initial long-term care training must a producer complete before soliciting long-term care products?
A
8
3
Q
The purpose of the ‘No-loss No-gain’ provision is to avoid duplication of __________ and ___________ when an individual is covered under multiple group health insurance plans:
A
benefit payments and over insurance
4
Q
Notice of information practices must be given to a policyholder
A
at least once a year
5
Q
A consumer who has been recently denied insurance, credit, or employment based on an unfavorable consumer report MUST be advised as such. Which of the following does this statute originate from?
A
Fair Credit Reporting Act
6
Q
A(n) _______ insurer operates in the U.S but is headquartered outside the U.S.
A
alien
7
Q
Which of the following causes of disability is NOT covered under Arizona workers compensation laws?
A
Intentional, self-inflicted injuries that occur at the worksite
8
Q
An insurer markets its products by soliciting customers by mass media advertising and mail WITHOUT using the services of a producer. Which of these marketing systems does the insurer utilize?
A
Direct response
9
Q
Which of the following is NOT a valid reason for an insurer to refuse renewal of an individual accident and health insurance policy?
A
The insured is currently in poor health
10
Q
How long must a producer maintain customer records for an insurance transaction?
A
Three years
11
Q
In Arizona, the Human Immunodeficiency Virus (HIV) consent form
A
must disclose who will be receiving a copy of the test results
12
Q
A policyowner decides to surrender the cash value of a whole life insurance policy. The insurer has up to ___ month(s) to delay this payment.
A
6
13
Q
A statement MUST be signed by the _________ for any illustrations used in the sale of a life insurance policy.
A
Producer
14
Q
The Arizona Life and Disability Insurance Guaranty Fund protects an insured in the event of
A
the insurer’s insolvency
15
Q
If a life insurance applicant is shown future premiums are to be paid out of non-guaranteed values, the illustration used in the sales presentation MUST
A
disclose that premium payments may need to be resumed depending on actual results
16
Q
If a producer replaces a client’s existing life insurance policy with a new one, which of these actions is advisable?
A
Wait until the new policy is issued and delivered before surrendering existing policy
17
Q
If dividend option choices are offered on a whole life insurance policy, the policy MUST
A
contain a statement that dividends are NOT guaranteed
18
Q
Which of these actions is considered to be an Unfair Claims Settlement Practice?
A
Misrepresenting pertinent policy provisions relating to coverage after a loss
19
Q
The application is part of the annuity contract according to the
A
Entire Contract clause
20
Q
Which of these individuals may NOT obtain a temporary producer license?
A
An employee of a retired licensed producer
21
Q
Which of the following entities does NOT establish regulations for variable insurance products?
A
State attorney general
22
Q
Who manages the premiums collected from a group’s members for a reciprocal insurer?
A
Attorney in fact
23
Q
Which of the following is NOT a valid reason for an insurer to contest a life insurance policy during the policy’s first two years of existence?
A
Misstatement of age
24
Q
A trade association group is seeking coverage for group medical benefits. The members of this association
A
are probably in the same industry
25
A licensee or applicant who is ordered into active military service may request that the license or application be placed on inactive status by sending the department a:
written statement
26
An insurer must keep advertising materials and records for at least how many years?
3 years
27
If a producer surrenders their license, how long must they wait to re-apply for the same license?
One year
28
To protect information systems, producers, brokers, and insurance companies must implement and maintain a(n):
cybersecurity policy
29
The health insurance premiums paid for by each partner in a partnership is considered to be:
100% tax deductible
30
Under the Affordable Care Act, all plans that offer coverage to children under the child's parents plan continue to provide coverage until those children reach what age?
26
31
Mark is covered by a policy that uses the regular occupation (own-occ) definition of total disability. Using this definition, he will be considered disabled if unable to
perform the substantial and material duties of his regular occupation
32
According to the Affordable Care Act, new Health Insurance Marketplaces are established by the
CCIIO - The Center for Consumer Information and Insurance Oversight
33
Which of the following statements accurately describes the financial impact of total disability?
May be worse than the financial impact of death
34
Which statement concerning a deferred annuity contract is correct?
The owner can be the beneficiary, annuitant, or neither
35
Jerry has an indemnity plan which covers dental expenses. Typically, these type of plans
cover preventative care once every six months
36
Beginning January 1, 2014, the restricted annual limit for plans under the Affordable Care Act will be
$1,000,000
## Footnote
No Limit
37
How many days notice does the Affordable Care Act require insurers to give before rescinding coverage?
30
38
An insured, age 67, is covered under a disability income policy. What will the insurer normally require in order for the insured to continue coverage?
The insured must be actively at work for a specified number of hours per week
39
Health providers are compensated by a preferred provider organization (PPO) for normal dental procedures by what means?
Decreased fee schedules
40
Medicare Part A typically covers
inpatient drugs
41
Terry suffers an injury at his workplace which is covered by workers compensation. Terry also has a medical expense insurance policy. Under medical expense insurance policies, losses that are covered by workers compensation are typically
excluded from coverage
42
Insurance crimes which affect interstate commerce are prosecuted by the
US Attorney General
43
Typically, states will permit the grouping of two or more small employers in the same industry for obtaining group health insurance at a favorable rate. This grouping of employers is known as a multiple employer
trust
44
Individuals covered with employer-paid group health plans will normally receive tax-free benefits under all of these plans EXCEPT
Disability income
45
Which of the following best describes the purpose of HIPAA?
To reduce a pre-existing condition waiting period when coverage is sought for a new medical plan
46
Mary is an employee who is covered with a disability income policy through her employer. She pays for the portion of the premium attributable to the cost of residual disability benefits, while her employer pays for the remainder. What are the tax implications of this policy?
Residual benefits will be received income tax-free
47
All of these are used to prevent adverse selection in a group dental plan EXCEPT
Decreased employee participation
48
Which of the following statements accurately describes the 'time limit on certain defenses'?
After a stated period of time, claims cannot be denied due to material misrepresentation on the application
49
Which of these procedures is NOT designed for ambulatory care centers?
Inpatient surgery
50
Christine is receiving benefits provided from her disability income insurance. As compared to her previous earnings, the disability benefits should be
somewhat less
51
A certificate of coverage for a group health policy is best described as
proof of coverage for the employee
52
The surrender charge on many deferred annuity contracts are waived when the
annuitant dies or becomes disabled
53
When determining the accumulation value of a deferred annuity, the total is calculated by taking the premiums paid plus interest earned minus
expenses and withdrawals
54
John has a criminal record in which he was convicted of a felony that involved dishonesty. Under Federal law, how would John be able to engage in insurance transactions?
Given written consent by the state insurance regulatory agency
55
Which of the following is NOT a basic underwriting action for accident and health insurance?
Removing uniform policy provisions
56
What is taken into consideration when defining 'total disability' in a disability income insurance policy?
The insured's education, training, and experience
57
When a policy loan is requested by a policyowner and it requires the consent of the beneficiary, what kind of beneficiary designation is this?
Irrevocable beneficiary
58
Which of the following would NOT be appropriate for an immediate annuity?
A parent saving for a child's college
59
An accident and health insurance policy defines an injury as 'bodily injury by accidental means'. What is required for an injury to be covered?
Both the cause and resultant injury must be accidental
60
Which of the following statements regarding hospital pre-admission authorization is NOT true?
It encourages weekend admission
61
How much of the proceeds from a life insurance policy will be added to the beneficiary's gross income for federal income tax purposes if the cash value was $15,000 and total premiums paid equaled $10,000?
Nothing
62
What is the back-end load assessed on a deferred annuity that is cancelled during the early contract years referred to as?
Surrender charge
63
What effect does a change of occupation provision have on a disability income policy if the insured is hurt while performing a more hazardous occupation?
Reduce the benefit level
64
Accident and health policies exclude loss as a result of?
War
65
What type of policy is Tim covered by if it may not be changed in any way by the insurer up to a stated age, as long as the premiums are paid?
Noncancelable
66
What will be the end result if Kyle disregards an accident and health insurance policy provision that requires him to seek a second surgical opinion?
He may be reimbursed for the surgical procedure at a reduced benefit level
67
Which of these is NOT used as selection criteria in the underwriting process of an accident and health insurance application?
National origin
68
What type of contractual arrangement transfers a portion of an insurer's risk exposure to another insurer?
Reinsurance contract
69
When does the benefit period of Medicare Part A begin?
On the first day the insured enters a hospital
70
Which statement about the installments for a fixed period settlement option in life insurance policies is NOT true?
The periodic payment amount is determined by the beneficiary's age
71
What could be the potential result of taking out a cash value loan under a life insurance policy?
Reduces the amount receivable upon surrender of the contract
72
When does Mike's life insurance coverage become effective after being issued a conditional receipt?
Date of issuance of the conditional receipt
73
For insurance purposes, similar objects exposed to the same group of perils are referred to as?
Homogeneous exposure units
74
Which statement regarding a fixed period settlement option is correct?
The installment payment amount is determined by the total number of installments
75
How do birthing centers reduce medical costs?
Using certified nurse midwives
76
What effect can a long-term care benefit rider have on a life insurance policy?
Reduced death benefit
77
Which tax would an IRA participant be subjected to on distributions received prior to age 59 1/2?
Income tax and penalty tax
78
Under HIPAA requirements, when is eligibility for the pre-existing conditions exclusion waiver lost?
If there is a break in coverage of more than 63 days
79
What has led to the growth of third-party administration in accident and health insurance?
Self-funding of benefits
80
When disability buy-sell insurance benefits exceed a partner's cost basis, what is correct?
The full amount is non-taxable to the partner
81
Employer-paid qualified long-term care insurance premiums are typically?
Excluded from the employee's gross income
82
What is a Pap test designed to detect?
Cervical cancer
83
Who is the contingent beneficiary in a life insurance policy?
The person who receives the death benefits if the primary beneficiary dies before the insured
84
What do home health care benefits typically NOT include coverage for?
Prescription medication
85
Why do employers often purchase life insurance on a key employee?
To pay for finding and training a replacement if the employee dies prematurely
86
What action must Laura take during the open enrollment period for non-contributory group Major Medical insurance?
Sign an enrollment card
87
When must insurable interest exist for a life insurance contract to be valid?
Inception of the contract
88
What is the eligibility requirement for Medicare Part B?
Must be eligible for Medicare Part A
89
What is a life policy that has premiums lower than normal during the early years called?
Modified life
90
What assumption does insurable interest involve?
One person benefits from another person's continued life
91
Which of the following is NOT true of participants in multiple-employer trusts?
Participants must purchase all coverages the trust offers
92
How are qualified long-term care premiums treated for tax purposes?
Tax-deductible to the extent they exceed 7 1/2% AGI
93
Where does the primary funding for Medicare Part A come from?
Federal payroll and self-employment taxes
94
How can health care costs be better controlled?
By utilizing preadmission testing
95
What are statements made by an insured on an accident and health insurance APPLICATION considered?
Representations
96
Which situation allows funds to be deposited into a rollover IRA?
An employee quits her job and receives $50,000 from her qualified plan
97
When does the producer give a premium receipt for a life insurance application?
When the initial premium has been paid with the application
98
Who is legally responsible when a producer acts within the scope of his/her contractual authority?
The insurer
99
What is the disadvantage of naming a trust as beneficiary of a life insurance policy?
Trust administration fees would reduce policy proceeds
100
Why might it be beneficial for an employee to purchase private disability income insurance for workplace injuries?
The benefits arising from a worker's compensation claim could be inadequate to replace the loss of income
101
What does a major medical expense policy typically NOT pay?
Surgeon fees on a first-dollar basis
102
What is an insurance policy that can also be classified as a securities product called?
Variable life
103
What percentage of a $50,000 distribution from a modified endowment contract (MEC) is taxable as ordinary income?
100% - Modified Endowment Contracts (MECs) are subject to last-in, first-out (LIFO) tax treatment.
104
What must be disclosed in a universal life policy?
The policy's surrender charges
105
Which of these policies is considered a whole life policy?
Single premium life
106
What is the tax consequence of a distribution sent directly to an employee from her 401(k) account?
Distribution is subject to federal income tax withholding
107
What do long-term care policies normally cover?
Expenses associated with nursing homes
108
Who may terminate coverage under a cancelable health insurance policy?
The insurer or the insured
109
How does a continuous premium whole life policy differ from a limited payment whole life policy?
The time period in which premiums will be paid
110
Which statement concerning adjustable life insurance is accurate?
The face amount and premiums can be changed simultaneously by the policyowner
111
What does the IRS's 'minimum coverage' rule state regarding qualified retirement plans?
Each qualified plan is required to benefit a broad cross-section of employees
112
What type of contract is an insurance policy where the insurer's obligation to pay a claim depends on compliance with policy conditions?
Conditional contract
113
What must contributions made by an employee to a qualified retirement plan be subject to?
A vesting schedule
114
Which type of deductible must be satisfied again for each illness or accident in a major medical plan?
Per-cause
115
Which statement concerning an adjustable life insurance policy is FALSE?
Evidence of insurability is required when there is a change in premium
116
What is voluntarily terminating an insurance policy also known as?
Cancellation
117
What happens to the death benefit of a life insurance policy if the insured elects a partial payment from the accelerated (living) benefit provision?
Reduced
118
What must a policyowner do if they suffer a covered accident and health insurance loss and submit proof of loss after cancelling coverage?
Claim must be paid after proof of loss is received
119
What must be given to an accident and health insurance applicant when the producer receives an application and the initial premium?
Conditional receipt
120
What must the insured do when a health insurance policy includes a Mandatory Second Surgical Opinion provision?
Seek a second opinion for specified elective surgeries
121
What is the insurer obligated to do when the disclosure of an insured's nonpublic information is involved?
Give notice, explain, and allow opting out
122
Who is the major personal contact to the insured after an insurance application has been originated?
The producer
123
What is a qualified profit-sharing plan designed to do?
Distribute a portion of company earnings to its employees
124
Which of these is NOT relevant when determining the amount of personal life insurance needed?
Local unemployment rates
125
What involves sharing an uncertain risk with another similar group?
Transfer
126
According to the needs approach, what is the primary purpose of an emergency reserve fund?
To cover the cost of unexpected expenses
127
What is it called when a terminally ill policyowner decides to sell his life insurance policy at a discount?
Viatical settlement
128
Which one of these is NOT considered to be an element of an insurable risk?
Speculative risk
129
What happens to Scott's life insurance policy if the dividends are left with the insurance company?
It may be paid up when the cash value plus accumulated dividends equal the net single premium for the same face amount at the insured's attained age
130
What is true when an applicant submits a life insurance application where an investigative consumer report is used?
Applicant has a right to receive a copy of the report
131
What is an accident and health plan that typically covers ONLY the services of approved providers called?
HMO plan
132
How often must notice of information practices be given to a policyholder?
At least every three years
133
What is one feature of cost containment in health insurance policies?
Reductions in coverage
134
What is a typical result of a concurrent review?
The length of time spent in the hospital is monitored
135
Which parties are directly involved in a group accident and health insurance contract?
Employer and insurer
136
Who is required to sign the notice of replacement if an existing Medicare Supplement policy is being replaced?
Producer and applicant
137
What does a loss of minimum essential coverage usually count as?
A qualifying event that triggers a special enrollment period
138
Who must approve a health plan for it to be an 'accountable health plan'?
The director
139
How long are newborn children automatically covered under an existing family medical plan at the moment of birth?
For a period of at least 31 days
140
What best defines what a Policy Title means on an insurance policy?
Every policy must have a title on the face and on the back of the policy, briefly describing the policy
141
How many days' advance notice must participants of a small group medical plan be given prior to the plan's discontinuation?
At least 180 days
142
How many days does a licensee have to notify the Department of Insurance of a name or address change?
30 days
143
According to the Telemarketing Sales Rule, what is the earliest time of the day that telemarketing calls may be received?
8:00 AM
144
How long can a life insurance policy usually be contested by the insurer?
During the first two years of the contract
145
When may telemarketing calls be received?
Between the hours of 8:00 AM and 9:00 PM
146
What must be signed by the producer for any illustrations used in the sale of a life insurance policy?
A statement
147
After how many years does an annuity become incontestable?
2 years
148
During what period may an annuity contract be returned for a full refund?
The free look period
149
How long does Greg have to convert his group life insurance coverage to an individual policy after termination?
31 days
150
What is considered an unfair trade practice?
A producer who sells insurance to an individual by means of threat
151
What action would be considered a felony in the State of Arizona?
Attempting to defraud an insurer
152
What may be considered an act of misrepresentation?
Misleading or failing to adequately disclose the title and true nature of a policy offered to a client
153
Which of these is NOT an Unfair Claims Settlement Practice?
Offering to settle a claim by arbitration
154
What must a group health certificate for coverage issued in Arizona contain?
A summary of policy features and benefits
155
What notice must a long-term care policyowner sign when replacing existing coverage with a new policy?
Replacement notice
156
What does the Genetic Information Nondiscrimination Act of 2008 bar?
The use of genetic information in health insurance, unless the applicant signs a waiver
157
What year was the Mental Health Parity and Addiction Equity Act established?
2008
158
What circumstance does NOT require prior approval by the Arizona Department of Insurance if a Medicare Supplement policy is cancelled by the insurer?
Nonpayment of premium
159
When is it acceptable to charge or receive a fee or service charge in addition to the premium in connection with the transaction of insurance?
If the amount of the fee or service charge is reasonably related to the cost of the service
160
According to the Affordable Care Act (ACA), what can insurers no longer do regarding health coverage?
Deny health coverage due to pre-existing conditions unless that plan is a Grandfathered plan
161
What is correct regarding technology and the ACA?
States which operate with an Exchange must offer an internet-based portal
162
When do the owner's contractual rights begin under an individual annuity contract?
At the time of purchase
163
Where may an agent's authority to bind an insurer to an insurance contract be granted?
In the agency agreement
164
What is reasonably related to the cost of the service?
The cost of the service itself.
165
According to the Affordable Care Act (ACA), when can insurers deny health coverage due to pre-existing conditions?
Insurers can no longer deny health coverage due to pre-existing conditions unless that plan is a Grandfathered plan.
166
In regards to technology and the ACA, what must states that operate with an Exchange offer?
States which operate with an Exchange must offer an internet-based portal.
167
When do the owner's contractual rights begin under an individual annuity contract?
At the time of purchase.
168
Where may an agent's authority to bind an insurer to an insurance contract be granted?
In the agent's contract and the insurance company's appointment.
169
Which type of annuity allows contributions to an IRA?
Deferred annuity.
170
How is group life insurance typically issued?
As level term insurance.
171
In regards to the Affordable Care Act (ACA), which of these is NOT a role of a health insurance exchange?
Contact the employer if an employee stops coverage under a plan offered in the exchange
172
At what point must a life insurance applicant be informed of their rights that fall under the Fair Credit Reporting Act?
Upon completion of the application
173
In regards to health insurance, what is meant by the term 'primary policy'?
It is the policy that will pay up to its limit before any other policy pays
174
A group-owned insurance company that is formed to assume and spread the liability risks of its members is known as a
risk retention group
175
Which of these would NOT likely qualify as a presumptive disability?
Loss of sight in one eye
176
Jerome is covered by a disability income policy that does NOT provide benefits for losses occurring as the result of his employment. What kind of coverage is this?
Nonoccupational coverage
177
A life annuity with period certain is characterized as
guaranteeing benefit payments for a stated minimum number of years
178
Interest is credited to a fixed annuity no lower than the
contract guaranteed rate
179
Prepaid dental plans differ from most other types of dental plans in what way?
Closed panel of dentists can only be used
180
Mike recently lost sight in both eyes. He has a policy that pays a lump sum benefit for this injury. What type of insurance does Mike have?
Accidental death and dismemberment
181
John bought a deferred annuity on Mary. John amends the contract years later to name Tom as the recipient of the proceeds if Mary dies. Who is the annuitant for this contract?
Mary - The annuitant is the individual whose life determines the timing and amount of the annuity payments.
182
A single premium deferred annuity sometimes contains a bailout feature. Which statement regarding this feature is correct?
If the interest rate falls below a specified level, the surrender charge is waived
183
Specialty care is provided by which of the following health maintenance organization (HMO) providers?
Neurologist
184
The maximum prison sentence given under federal law for unfair and deceptive insurance practices is
15 years
185
Which health policy clause specifies the amount of benefits to be paid?
Insuring
186
An example of endodontic treatment is a
root canal
## Footnote
Endodontic treatment refers to procedures that treat the inside of the tooth, specifically the root and pulp.
187
Periodic health claim payments MUST be made at least
monthly
188
What does the rehabilitation benefit cover in a disability income policy?
Covers the approved cost of the rehabilitation necessary to help a disabled insured return to work
189
According to the Federal Fraud and False Statements Act, which of these is considered to be an intentional violation?
Making false entries in a company's books
190
Which type of policy pays benefits to a policyholder covered under a Hospital Expense policy?
Reimbursement
191
Medicare Part A does NOT provide coverage for
first 3 pints of blood
192
How can a group dental insurer discourage adverse selection?
Limit the duration of coverage
193
Security laws passed by Congress are enforced by which Federal agency?
Security and Exchange Commission
194
When does the producer give a premium receipt for an accident and health insurance application?
When the initial premium has been collected with the application
195
A disabled business owner who has payroll and business expenses paid for has what kind of insurance policy?
Business overhead expense
196
What is a major difference between private commercial insurers and HMO's?
An HMO combines medical care delivery and funding in one organization
197
All of these are considered to be a violation of the Federal Fraud and False Statements Act EXCEPT
Claims reimbursement
198
An insured must notify an insurer of a medical claim within how many days after an accident?
20
199
Kelly purchases a health insurance policy issued on a conditionally renewable basis. The insurance company has a right to refuse renewal of the policy for
specific reasons stated in the contract
200
An individual may receive Medicare Part A Hospital benefits, regardless of age, as long as the person has received which of the following benefits for at least 24 months?
Social Security Disability
201
A policyowner suffers an injury that renders him incapable of performing one or more important job duties. Any decrease in income resulting from this injury would make him eligible for benefits under which provision?
Partial disability
202
In what way is a life insurance policy affected by an accelerated benefit payment?
Decreases the death benefit
203
How are monthly life annuity benefit payments treated under a tax sheltered annuity (TSA)?
Taxed as ordinary income in the year received
204
Who elects the governing body of a mutual insurance company?
policyholders
205
Which of the following disability income provisions allows two periods of disability to be counted as one?
Recurrent disability
206
Which of these is a typical result of a concurrent review?
The length of time spent in the hospital is monitored
207
Which of the following would permit an insurer to delay a covered disability policy claim?
Elimination period
208
What is an insurance contract that identifies individuals by relationship to a specific organization?
Group insurance
209
Kim is covered under two medical expense plans. Plan A pays up to $5,000. Plan B pays up to $4,000. If she incurs $7,000 in expenses, the coordination of benefits provision dictates that
Plan A pays up to $5,000 and Plan B pays up to $2,000
210
Which of the following statements is NOT true concerning the relationship between group health insurance plans and Medicare? (assuming the business has more than 20 employees)
Group health coverage is NOT available for workers over the age of 65
211
Which of these is NOT considered the responsibility of a producer during the underwriting process?
Selecting the final approval date
212
Which statement best describes a single premium whole life policy?
Paid-up policy that offers lifetime protection
213
A health insurance underwriter will most likely view alcohol abuse as a(n)
increased exposure to risk
214
Which of the following statements about universal life insurance is NOT true?
Universal life insurance normally has a minimum guaranteed cash value for duration of the policy
215
The guarantee of insurability option provides a long-term care policyowner the ability to
buy additional coverage at a later date
216
Which statement regarding the certificate of insurance is accurate?
It indicates evidence of an employee's insurance coverage
217
What is the maximum number of employees (earning at least $5,000) that an employer can have in order to start a SIMPLE retirement plan?
100
218
The main role of accident and health and disability insurance is to
protect against medical care costs and the loss of earning power
219
An insured files for an accident and health insurance policy claim eight days after the premium due date. The benefit payable is $500 and the overdue premium is $200. Assuming that the policy pays on a first-dollar basis and contains the unpaid premium provision, how much will the insurer pay?
$300 - Under the unpaid premium provision, if the premium is overdue, the insurer may deduct the unpaid premium amount from the claim payment.
220
An employer has a group life coverage for his employees. How would an employee in poor health be treated in this situation?
Eligible for the same type of coverage as the other employees
221
A 55 year old recently received a $30,000 distribution from a previous employer's 401k plan, minus $6,000 for income tax withholding. Which federal taxes apply if none of the funds were rolled over?
Income taxes plus a 10% penalty tax on $30,000 - When funds are withdrawn from a 401(k) plan before the age of 59½, the individual is subject to income taxes on the entire distribution. In addition to the income taxes, a 10% early withdrawal penalty is typically applied to the full $30,000 unless the withdrawal qualifies for an exception (such as for a disability or certain medical expenses).
222
For employees covered in multiple states under a group health plan, jurisdiction rules cannot alter
COBRA laws
223
Which statement is NOT true regarding health insurance policies that provide limited benefits?
Only persons under the age of 65 are eligible
224
Which type of policy can group term life insurance normally be converted to?
An individual permanent life insurance policy
225
Giving up a known right on a voluntary basis is called a(n)
Waiver - Waiver refers to the voluntary relinquishment or giving up of a known right or claim.
226
What is normally the consequence for NOT obtaining preadmission certification prior to receiving inpatient medical care?
A reduction in benefits
227
Which of the following is NOT a reason the government provides insurance?
Reduce fraudulent claims
228
According to ERISA regulations, a Summary Plan Description must be provided to a new plan member within ___ days of the member's eligibility date.
90
229
Which of the following is NOT a dividend option for a life insurance policy?
Receiving the entire policy cash value
230
How long do most states allow an insurance company to delay the payment of a cash surrender under the Delayed Payment provision?
6 months
231
After the initial enrollment period for Medicare Part B has expired, when may an individual purchase again?
January through March of each year
232
A disability income insurance policy was recently issued with a rating. What does this mean?
Policyowner will be charged an additional premium
233
What effect does interest income have upon insurance premiums?
Decreases premium
234
Which of the following is NOT a reason for a business to buy key person life insurance?
An increased pension liability if the key employee dies
235
Assets that back the non-guaranteed values of variable life insurance products are held in which account?
Separate account set up by the insurer
236
How much is normally paid to a policyowner in a life (viatical) settlement?
Less than the death benefit
237
What happens when an initial offer is answered with a counteroffer?
Initial offer is void
238
Which of the following types of health insurers is characterized by a limited choice of providers?
Health maintenance organization
239
Which statement regarding the life insurance premium for a children's rider is true?
Premium remains the same no matter how many children
240
The unwritten authority given to a producer to carry out necessary incidental acts of the agency agreement is called
implied authority
241
A policyowner has a life insurance policy where she had listed her age on the application as 5 years younger than her actual age. If she dies and the insurer discovers the misstatement of age, how much will the insurance company pay?
Less than the face amount
242
Dan has a major medical expense policy with a $200 deductible and an 80/20 coinsurance provision. He incurs covered medical expenses of $100 in November and $400 in January. Under the carryover provision, what will the insurer pay?
$240 - Under the carryover provision, if an insured incurs medical expenses near the end of the year, the deductible for those expenses can carry over into the new year.
243
How is a collateral assignment used in a life insurance contract?
Transfers specific ownership rights to a creditor
244
The initial premium for an accident and health insurance policy is typically paid in what way?
It is typically obtained by the agent and forwarded to the insurer
245
Which life insurance policy provision prohibits a beneficiary from 'commuting, encumbering, withdrawing, or assigning' any portion of the proceeds prior to actual receipt from the company?
Spendthrift clause
246
An officer for a corporation takes out numerous unsecured loans from the company's qualified retirement plan. Which of these rules is the plan in violation of?
Exclusive benefit rule
247
The following are all elements of a valid contract EXCEPT
written evidence
248
What is covered under a limited accident and health insurance policy?
Limited perils and amounts
249
How are qualified Roth IRA distributions normally treated for tax purposes?
Received income tax-free
250
An arrangement where an individual is authorized to act on behalf of another person or company is established through
the law of agency
251
Purchasing insurance is an example of risk
transference
252
A pre-existing condition exclusion in an accident and health insurance policy pertains to
prior health matters
253
Which is an accurate description of the premium in a graded premium life insurance policy?
Annual increases in premium for a stated number of years then remains level
254
Which of the following combinations best describe a universal life insurance policy?
A flexible premium deposit fund and a monthly renewable term insurance policy
255
What type of premiums are associated with individual mortgage protection life insurance policies?
Level premiums
256
Taxable income may be the result from all of these modified endowment contract (MEC) transactions EXCEPT for
The policy is surrendered for less than what was paid into it
257
Which life insurance policy option allows the policyowner to have coverage equal to the net death benefit of the lapsed policy?
Accelerated benefits option
B. Extended term nonforfeiture option
258
With life insurance, the needs approach is used primarily in determining
how much life insurance a client should apply for
259
Some standard Medicare Supplement policies include which benefit?
Hospice care
260
Which of the following is NOT a condition that must be met for an accidental death benefit to be paid?
Cause of death must be from a job-related injury
261
Which of the following is considered a Limited accident and health plan?
Cancer plan - limited accident and health plan typically provides coverage for a specific condition or type of treatment. A cancer plan is a limited plan because it specifically covers only cancer-related expenses.
262
Which of the following is NOT guaranteed in a whole life policy?
Dividend scale
263
Which of these may NOT be deducted from premium payments or the cash value of a variable life insurance policy?
Federal premium taxes
264
Which of these statements regarding the extended term insurance nonforfeiture option in a life policy is accurate?
The premium to purchase the coverage comes from the policy's cash value
265
A health plan offered by private insurance companies is
a Medicare Supplement
266
A MET third-party administrator may NOT perform which of the following functions?
Marketing the plan
267
Health Maintenance Organization (HMO) wellness programs may include each of the following EXCEPT
Routine physicals
B. Diagnostic testing services
268
What is the name of the period of time during which a new employee is ineligible for group Health insurance coverage?
Probationary period
269
Which of these plans allow a participant to choose either a network or non-network provider at the time when medical care is needed?
Point-of-service - A Point-of-Service (POS) plan allows a participant to choose either a network provider or a non-network provider at the time medical care is needed. POS plans combine features of both HMO and PPO plans.
