Exam Review Missed Questions Flashcards
When an employee covered under a health reimbursement account changes employers, the HRA
Stays with the employer.
An insured buys a 5-year level premium term policy with a face amount of $10,000. The policy also contains renewability and convertibility options. When the insured renews the policy in 5 years, what will happen to the premium?
It will increase because the insured will be 5 years older than when the policy was originally purchased.
Who assumes control over an insurance company’s funds and management if it becomes insolvent?
Department of Insurance
The full premium was submitted with the application for life insurance, and the policy was issued two weeks later as requested. When does the policy coverage become effective?
As of the application date
A married couple’s retirement annuity pays them $250 per month. The husband dies and his wife continues to receive $125.50 per month for as long as she lives. When the wife dies, payments stop. What settlement option did they select?
Joint and survivor
An insurer receives a report regarding a potential insured that includes the insured’s financial status, hobbies and habits. What type of a report is that?
Inspection Report
Heath insurance premium rates subject to the Small Group Rate and Renewability Act cannot exceed the index rate for any other class of business by more than
20%
Which of the following is the term for the specific dollar amount that must be paid by an HMO member for a service?
Copayment
Which of the following statements concerning buy-sell agreements is true?
Buy-sell agreements are normally funded with a life insurance policy.
Another name for a substandard risk classification is
Rated.
Which of the following policies would have an IRS required corridor or gap between the cash value and the death benefit?
Universal Life – Option A
Which of the following is NOT the purpose of HIPAA?
To provide immediate coverage to new employees who had been previously covered for 18 months
If during the underwriting process an insurer obtains personal information about an applicant from the applicant, when must the insurer provide notice of its information practices?
At the time of policy delivery
Which of the following insurance coverages would be allowed with an MSA?
long term care
If a deferred annuity is surrendered prematurely, a surrender charge is imposed. How is the surrender charge determined?
It is a percentage of the cash value and decreases over time.
Which of the following is true regarding inpatient hospital care for HMO members?
Care can be provided outside of the service area.
Which of the following best describes a bail-out provision?
It allows the owner to surrender the annuity without a charge.
When employees are actively at work on the date coverage can be transferred to another insurance carrier, what happens to coinsurance and deductibles?
They carry over from the old plan to the new plan.
The minimum number of credits required for partially insured status for Social Security disability benefits is
6 credits.
When converting group coverage to individual coverage after termination of employment, the individual policy can be any form of insurance EXCEPT
term insurance
What are the 2 types of Flexible Spending Accounts?
Health Care Accounts and Dependent Care Accounts
What type of benefit helps to pay for accidental injuries that are not severe enough to qualify as disabilities?
Medical Reimbursement Benefit
The Omnibus Budget Reconciliation Act of 1990 (OBRA) requires that large group health plans must provide primary coverage for disabled individuals under
Age 65 who are not retired.
According to the provisions of the Patient Protection and Affordable Care Act, all of the following are required preventive care services EXCEPT
Cervical cancer exams for all women starting at age 40.
Which of the following is TRUE regarding variable annuities?
The annuitant assumes the risks on investment.
Which of the following is NOT true regarding Equity Indexed Annuities?
They earn lower interest rates than fixed annuities.
Which of the following protects the insured from an unintentional policy lapse due to a nonpayment of premium?
Automatic premium loan
To sell variable life insurance policies, an agent must receive all of the following EXCEPT
SEC registration.
The premium of a survivorship life policy compared with that of a joint life policy would be
lower
An insured submitted a notice of claim to the insurer, but never received claims forms. He later submits proof of loss, and explains the nature and extent of loss in a hand-written letter to the insurer. Which of the following would be true?
The insured was in compliance with the policy requirements regarding claims.
Which of the following is available to employers of all sizes?
HRA’s
Which of the following is excluded in a dental insurance plan?
Lost dentures
If during the underwriting process an insurer obtains personal information about an applicant from the applicant, when must the insurer provide notice of its information practices?
At the time of policy delivery
Which type of a hospital policy pays a fixed amount each day that the insured is in a hospital?
Indemnity
The section of a health policy that states the causes of eligible loss under which an insured is assumed to be disabled is the
Insuring clause.
Which of the following is TRUE regarding the insurance amount in a credit life policy?
The creditor can only insure the debtor for the amount owed.
Which of the following is NOT true regarding policy loans?
Money borrowed from the cash value is taxable.
All of the following are considered to be supplemental benefits under an HMO plan EXCEPT
Preventive services.
An individual applies for a life policy. Two years ago he suffered a head injury from an accident, so he cannot remember parts of his past, but is otherwise competent. He has also been hospitalized for drug abuse, but does not remember this when applying for insurance. The insurer issues the policy and learns of his history one year later. What will probably happen?
The policy will not be affected.
An insured’s long-term care policy is scheduled to pay a fixed amount of coverage of $120 per day. The long-term care facility only charged $100 per day. How much will the insurance company pay?
$120 a day
What type of health care plan allows insureds to select a physician or hospital from a list of providers without being required to submit claim forms?
Preferred Provider Organization
What is the advantage of reinstating a policy instead of applying for a new one?
The original age is used for premium determination.
Variable Whole Life insurance is based on what type of premium?
Level fixed
An insurance company assures its new policyholders that their premium costs will not increase for a period of at least five years. However, due to increasing financial strain, they plan to raise premium costs for all insureds by 10% over the next two years. What term best describes this act?
Fraud
If during the underwriting process an insurer obtains personal information about an applicant from the applicant, when must the insurer provide notice of its information practices?
At the time of policy delivery
In a replacement situation, all of the following must be considered EXCEPT
Assets.
All of the following are beneficiary designations EXCEPT
Specified.
All of the following long-term care coverages would allow an insured to receive care at home EXCEPT
Skilled care.
A licensed agent has completed 30 hours of continuing education (CE) in one licensing period. How many hours can be carried over into the next CE period?
0
Which of the following is an eligibility requirement for all Social Security Disability Income benefits?
Have attained fully insured status
Which of the following renewability provisions would be allowable on an individual long-term care policy issued for delivery in New Mexico?
Noncancellable
What is the maximum period that an insurer would pay benefits in accordance with an Additional Monthly Benefit rider?
1 year
Partners in a business enter into a buy-sell agreement to purchase life insurance, which states that should one of them die prematurely, the other would be financially able to buy the interest of the deceased partner. What type of insurance policy may be used to fund this agreement?
Any form of life insurance
All of the following statements describe a MEWA EXCEPT
MEWAs are groups of at least 3 employers.
A producer is helping a married couple determine the financial needs of their children in the event one or both should die prematurely. This is a personal use of life insurance known as
Survivor protection.
A temporary insurance license may last for what time period?
180 days
Which of the following is true regarding a term health policy?
It is nonrenewable.
Health coverage becomes effective when the
First premium has been paid and the application has been approved.
An employee will be taxed on the cost of group life insurance paid by the employer if the amount of coverage exceeds
$50,000
Which of the following is NOT true regarding Equity Indexed Annuities?
They earn lower interest rates than fixed annuities.
Which of the following is available to employers of all sizes?
HRAs
An insured and his wife are both involved in a head-on collision. The husband dies instantly, and the wife dies 15 days later. The company pays the death benefit to the estate of the insured. This indicates that the life insurance policy had what provision?
Common Disaster
Why should the producer personally deliver the policy when the first premium has already been paid?
To help the insured understand all aspects of the contract
An advertisement for a health insurance product was just published in the newspaper. What is the earliest date that this ad may claim its application is due? Within
10 days.
A health insurance policy that pays a lump sum if the insured suffers a heart attack or stroke is known as
Critical illness.
Under the Fair Credit Reporting Act, if a consumer challenges the accuracy of the information contained in a consumer or investigative report, the reporting agency must
Respond to the consumer’s complaint.
Which of the following are the main factors taken into account when calculating residual disability benefits?
Present earnings and earnings prior to disability
What type of tax is associated with death proceeds from a life insurance policy?
Federal estate tax
In disability income insurance, if an insured is considered disabled if they cannot perform any job they are suited for by prior education, training or experience, they fall under which definition of total disability?
Any occupation
Which of the following is a characteristic of a Reciprocal Insurance Exchange?
The chief administrator of the insurer is called an “attorney-in-fact”.
How are contributions to a tax-sheltered annuity treated with regards to taxation?
They are not included as income for the employee, but are taxable upon distribution.
When must producers renew their licenses?
Biennially by the last day of their birth month
An insured has health insurance that covers them at work and at home. This policy was written on what basis?
Occupational
What is the best way to change an application?
Start over with a fresh application
An Adjustable Life policyowner can change which of the following policy features?
The coverage period
The owner of a life insurance policy wishes to name two beneficiaries for the policy proceeds. What will the soliciting insurance producer say?
The policyowner can specify the way proceeds are split in the policy.
How long is the open-enrollment period under an employer group health insurance plan?
30 days
The president of a company is starting an annuity and decides that his corporation will be the annuitant. Which of the following statements is true?
The annuitant must be a natural person.
What is the maximum age for qualifying for a catastrophic plan?
30
In this state, agents must be appointed by an insurer within how many days of obtaining a license?
60 days
When benefits are paid directly to the insured under a health insurance policy, the policy provides benefits on what type of basis?
Reimbursement
All of the following are requirements for life insurance illustrations EXCEPT
They must be part of the contract.
Which of the following provisions would prevent an insurance company from paying a reimbursement claim to someone other than the policyowner?
Payment of Claims
Which of the following is true of a PPO?
Its goal is to channel patients to providers that discount services.
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.
An insured committed suicide one year after his life insurance policy was issued. The insurer will
Refund the premiums paid.
An underwriter is reviewing the medical questions in the application and needs further information due to a medical situation the applicant had in the past. What will the underwriter require?
Attending Physician Statement
an insured had $500 left in his health reimbursement account when he quit his job. What happens to that money?
The insured can have access to the $500 at his previous employers discretion.
which of the following treatments would be covered by endodontics?
root canal.
what annuity guarantees to pay an income to the annuitant each year as long as helives and upon death. The annuity will refund the remaining payments to a beneficiary?
installment refund.
at what age may an individual purchase an insurance contract?
15
under which condition would an employees group medical benefits be exempt from income taxes?
an employees gorup medical benefits are generally exempt from taxiation as income.
the death protection componenet of universal life insurance is always
annually renewable term
Which agreement specifies how a business will transfer hands when one of the owners dies or becomes disabled?
Disability Buy-Sell
Which of the following statements regarding conditional receipts is true?
They are temporary insuring agreements.
A provision found in insurance policies which prevents the insured from collecting twice for the same loss is called
Subrogation.
Which of the following is true of a PPO?
Its goal is to channel patients to providers that discount services.
A couple owns a life insurance policy with a Children’s Term rider. Their daughter is reaching the maximum age of dependent coverage, so she will have to convert to permanent insurance in the near future. Which of the following will she need to provide for proof of insurability?
Proof of insurability is not required.
All of the following apply to short-term disability plans EXCEPT
Both group and individual plans are renewable.
Which of the following is NOT a qualified IRA distribution?
Withdrawing funds to purchase an investment property
