All Flashcards
Cross purchase agreement
Best suited for businesses with a limited number of partners
Comprehensive plan
A single major medical contract which covers all medical expenses
Replacing existing coverage with a new policy
Not a prohibited sales practice but highly regulated
New pre existing conditions exclusion
When new long term care insurance is replaced, the insurer issuing the new policy cannot impose a new pre existing conditions exclusion
Cancel health insurance policy
The insured must notify the insurer in writing
HMO Plan
An accident and health plan that typically covers only the services of approved providers
Individual retirement account (IRA) rollover contributions are
Unlimited by dollar amount
Newborn children
Automatically covered under an existing family medical plan at the moment of birth for a period of atleast 31 days
Extended term non forfeiture
Provides coverage equal to the death benefit of the lapsed policy
Mandatory second surgical opinion provision
Out of pocket expenses are lower when a second surgical opinion is obtained as opposed to having only one
Will not pay for first 3 pints of blood
Medicare Part A
Free look period for a Medicare supplement policy sold in Maryland
30 days upon policy delivery
A producer may be found guilty of misrepresentation for
Failing to disclose a policy’s exclusions
Example of rebating
Splitting the commission with the buyer on a sale of insurance
SHOP Exchange
Small Business Health Options Program
An agent gives a conditional receipt to a client for an insurance policy after collecting the initial premium, when will the policy become effective
When the conditions of the receipt are met
Short Term Group disability income benefits are
A percentage of weekly earnings up to a state maximum
Health Savings account
Applicant must be enrolled in a high deductible health plan (HDHP)
How can a group dental insurer discourage adverse selection
Limit the duration of coverage
Fixed life annuity
Offers protection against savings depletion due to longevity. A guaranteed income is paid for the annuitants life
Medicare Part A coinsurance payments are covered by
Medicare supplement plan A
Medical fee schedule
Highest amount payable
Irrevocable beneficiary
Cannot be changed without written consent of the beneficiary
At what age do most people become eligible for Medicare
65
Conditional receipt
Normally given prior to a policy being issued
Replacement regulations
Primary purpose is to protect policy owners from misrepresentations and loss of benefits
Disability buy-sell agreement
Owners by the business entity
Managing general agent
Represents the insurer
Scheduled hearing
Producer must be given notice 10 days prior
Medical information bureau
Consists of members from insurance companies
Residual disability
Inability to perform some of the duties of one’s own occupation
A pre existing conditions limitation may not exceed ___ months in all Medicare supplement policies sold in Maryland
6
What must be disclosed when a producer advertises a life insurance policy
Name of the actual insurer
Which health policy clause specifies the amount of benefits to be paid
Insuring
A producer recently replaced an existing Medicare supplement policy with a new policy
The producers compensation for the new policy
Cannot exceed the renewal commission of the original policy.
During the early years of a whole life insurance policy, the cash value will normally be
Less than the total premiums paid
ERISA requires that a summary plan description must be provided to a new plan member within how many days following the new members eligibility date
90 days
How are the premiums for an individually owned disability income policy treated for tax purposes
Not tax deductible at all
Group deferred annuity
Employer holds a master contract and certificates of participation are given to the persons covered by the plan
A group Medicare supplement policy was terminated and not replaced by the insurer
The insurer must provide an offer of conversation to individual coverage
Employer paid qualified long term care insurance premiums are typically
Excluded from the employees gross income
A health insurance applicant is notified that a physical examination is required.
Physical exams are performed at the expense of the insurer
The contractual rights which allow the owner of a deferred annuity to surrender the cash value several years before the annuity date are called
Nonforfeiture options
Surplus lines license
Required to sell insurance products for an unauthorized insurer in Maryland
Martial deduction
Exempts the transfer from estate taxes
What would be a valid reason for naming a trust as the beneficiary of a life insurance policy as opposed to naming an individual
Management of proceeds would be provided
What does a 402k plan generally provided it’s participants
Salary-deferral option
Elimination period
The time immediately following the start of a disability when benefits are not payable
Major medical policy
A comprehensive health policy
A non qualified medical expense distributions from a health savings account have a tax penalty of
20%
A teacher recently retired at age 63 and has a tax sheltered annuity. Periodic deposits total $120,000 and the value of the contract is now worth $200,000. How much is taxed if the current value is surrendered today?
$200,000
A tax sheltered annuity is funded with pre tax dollars so the entire current value is taxed when surrender. No additional tax penalties are imposed if the owner surrenders the annuity at age 59 1/2 or older
What is considered the collateral on a life insurance policy loan
The policy’s cash value
The owners cost basis for a non qualified deferred annuity is typically the same as the
Total premiums paid
MEC modified endowment contract
If an MEC is surrendered prior to age 59 1/2, the gain is taxable as well as a 10% penalty imposed on that gain
Social security disability income requirements state that in order to become fully insured on a permanent basis, you must have worked in a covered occupation for
40 quarters
Insuring a risk against a possible loss
An example of risk transfer
Life income settlement option
Beneficiary is able to have the benefits converted into an annuity which is based upon the individual’s life expectancy and payable as long as the beneficiary is still alive
Entire contract provision
Agent doesn’t have the authority to change the policy or waive its provisions
Interest income
Decreases premiums
Cost of living adjustment rider
Benefits will go up once per year from when benefits begin
A change in a licensees name or address must be provided to the commissioner within
30 days
Under hipaa requirements eligibility for the pre existing conditions exclusion waiver under new coverage is lost if
There is a break in coverage of more than 63 days
The life and health insurance guaranty corporation
Exists to protect an insured in the event of an insurers impairment or insolvency
Pre existing conditions exclusion period
12 months after the enrollment date, or 18 months for a late enrollee
Noncancelable
A noncancelable health policy may not be changed in any way by the insurer up to a specified age as long as the premiums are paid
IRS minimum coverage rules
A qualified retirement plan must benefit a broad cross-selection of employees
Securities product
Variable life policy
Viatical settlement
Sell life insurance policy while terminally ill
Qualified retirement plan
All withdrawals are taxable as current income. Withdrawals made before age 59 1/2 are hit with a 10% penalty tax
Trustee to trustee
There is no federal tax withholding involved in a transfer of funds from one qualified plan into another except rollovers with a 20% withholding
Cancer plan
A limited accident and health plan
Elimination period of an individual disability policy
The Amount of time a disabled person must wait before benefits are paid
Back end load
Surrender charge
Bailout feature
Some annuity contracts allow the owner to withdraw fund without a withdrawal charge if the interest rate falls below a certain level
Hold harmless clause
Risk transfer
Medicare SELECT
a type of Medicare supplement insurance where the insured agrees to use preferred providers in exchange for paying a lower premium
Nonqualified HSA withdrawals
Subject to income taxes and a 20% penalty
Cost basis
The total of the premiums paid into the policy minus total dividends received in cash or used to offset premiums is referred to as the cost basis
Financial records of domestic company
Must be inspected every 5 years by commissioner
Medicare Part A funding
Comes from federal payroll and self employment taxes
Medical loss ratio
The percent of premium an insurer spends on claims and expenses that improve health care quality
First time homebuyers
Able to withdraw up to 10,000 from their qualified IRAs without incurring the 10% early withdrawal penalty
A health insurer must provide a proof of loss form
Within 15 days of receipt of the notice of loss
Surplus’s lines license
Required to sell for an unauthorized insurer
Extended term insurance nonforfeiture option
The cash value is used as a premium to purchase the coverage
Coinsurance for skilled nursing facilities
A flat dollar amount per day after the 100% Medicare coverage ends
Fixed period settlement option
The dollar amount of each installment depends upon the total number of installments
Credit life insurance policy
Borrower pays the premiums on any credit life insurance policy
Viator
The policy owner who sells his life policy to a third party for a reduced face amount is the viator in a viatical settlement
Minimum benefit period that must be be offered by a long term care policy
12 months
Fee for service FFS
a payment model where services are unbundled and paid for separately according to a schedule laid out in the policy
Employees need for COBRA to apply
20 or more
Reserves
The accounting measurement of an insurers future obligations to its policyholders
Maryland life and health insurance guaranty corporation
Funded by assessments of member insurers
When must a claim on a life insurance policy be paid after proof of loss has been received by the insurer
Promptly
Medicare Part b
Open enrollment period is January through March of each year
Medicare part b Coinsurance
A Medicare supplement core benefit
Backdating
To obtain a premium rate based on an earlier age
Church plans
Exempt from ERISA regulations
A Medicare supplement policy is required to do which of the following
Provide a 30 day free look period
When issuing disability income coverage to a substandard risk, an insurance company may
Shorten the benefit period
Kate received a group accident and health termination notice. How many days does she have to apply for a converted policy
31 days
Flexible premium fixed annuity
Offer deferred taxation, flexible payments, a guaranteed, interest rate, and death benefits equal to the cash value
Own-occupation definition of total disability
The insured will be considered disabled if unable to perform the substantial and material duties of the insureds regular occupation
What would be a valid reason for naming a trust as the beneficiary of a life insurance policy as opposed to naming an individual
Management of proceeds would be provided
The restricted annual limit for plans under the affordable care act is
No limit
Change of occupation provision
If an individual covered under a disability income policy is injured while engaged in an occupation that is more hazardous than the occupation stated in the policy, the result will be the benefit level is reduced
Who must sign a rider attached to a health insurance policy in order for it to be valid
Insured and producer
Custodial care
Doctor ordered care that assists an individual with basis daily activity such as bathing dressing and eating
An annuity exchanged for a life insurance policy
The 1035 exchange does not allow for an annuity to be exchanged for a life insurance policy. This is not considered an equal exchange and will be taxed
Hospital pre admission
Requires notification be given after the patient is admitted to the hospital for an emergency situation
For non emergency situations, notification is to be given before admission
Reinsurance contract
Accept a portion of the risk underwritten by another insurer who was contracted for the entire coverage amount
Highest mortality rate
Age 70 males
A producer must maintain customer records
For 5 years following the completion date of the insurance transaction
Life annuitant outlives life expectancy
The funds for additional benefit payments will be derived primarily from funds that were not distributed to life annuitants who died before life expectancy
Delayed payment provision
Most states allow 6 months
