Insurance

Question 1

Social Security waiting period for disability

Answer 1

5 months

Question 2

FSA

Answer 2

No FICA, No FUTA

Question 3

Single Life

Answer 3

(Pure Life)
highest form of payment

Question 4

2 parts to FSA

Answer 4

Medical & Dependent Care

Question 5

HO-6 Loss of Use Coverage

Answer 5

40% Coverage C

Question 6

Premiums on a Split Dollar policy

Answer 6

NOT tax deductible

Question 7

Is Alzheimers excluded from long-term care?

Answer 7

No

Question 8

Commercial property replacement cost %

Answer 8

90%

Question 9

Irrevocable beneficiary on a life insurance policy

Answer 9

The policy owner cannot change the beneficiary’s designation without the beneficiary’s consent

Question 10

Residual Disability

Answer 10

a proportionate benefit is paid to an insured whose earned income is reduced because of a disability

Question 11

Under the Health Insurance Portability and Accountability Act (HIPAA), a chronically ill person is unable to perform _______ activities of daily living (ADLs) for a period of at least ______ days.

Answer 11

2, 90

Question 12

Punitive damages

Answer 12

Punitive damages are designed to punish the negligent party

Question 13

Part B Auto

Answer 13

Medical Payments

Question 14

Part D Auto

Answer 14

Damage to your auto

Question 15

HSA income tax consequences

Answer 15

HSA distributions used to pay for qualified medical expenses are excluded from gross income. Employer contributions to an HSA are excluded from employee gross income. Deductions are taken above the line and do not need to be itemized.

Question 16

long term care free look period

Answer 16

30 days

Question 17

long term care expected loss ratio

Answer 17

60%

Question 18

Which is the most expensive death benefit, A or B?

Answer 18

Option B

Question 19

Coverage F Homeowners

Answer 19

Medical payments to others. Does not cover the insured or family of the insured

Question 20

6 ADL’s

Answer 20

The 6 ADLs are eating, bathing, dressing, transferring from bed to chair, using the toilet, and maintaining continence.

Question 21

Human life value

Answer 21

Human life value is the family’s share of the earnings of the breadwinner. The projected value of the breadwinner’s future earnings is discounted to its present value to determine the human life value.

Question 22

To receive workers’ compensation benefits, two eligibility requirements must be met:

Answer 22

the disabled person must work in a covered occupation and the worker must have a job-related accident or disease.

Question 23

phantom stock plan

Answer 23

The plan pays benefits in cash and has an exercise date that is controlled by the employer. It is based on the value and transactions of an imaginary stock which mirrors the value and transaction of the employer’s stock.

Question 24

Which of the following settlement options offers the greatest flexibility in life insurance policies?

Answer 24

interest only option

Question 25

A PAP with limits of 200/500/50

Answer 25

provides liability coverage of up to $200,000 for bodily injury to one person, coverage of up to $500,000 total for all persons injured in an accident, and $50,000 for property damage, all based on a single accident.

Question 26

When a beneficiary receives the death benefit from a life insurance policy funded within a qualified plan

Answer 26

the taxable portion equals the cash surrender value minus any costs included in the participant’s income during the participant’s life

Question 27

Moral Hazard

Answer 27

A moral hazard occurs when dishonesty causes a loss or causes the amount of the loss to be overstated on a claim. Intentionally causing a loss is an example of a moral hazard.

Question 28

partial disability benefits

Answer 28

are paid at a reduced rate

Question 29

Residual disability benefits

Answer 29

Residual disability benefits are paid on a proportional (e.g., 50%) basis to an insured whose income is reduced because of a disability.

Question 30

what does the traditional net-cost comparison method ignore?

Answer 30

the time value of money

Question 31

Who does Malpractice insurance cover?

Answer 31

Malpractice insurance covers professionals whose negligence primarily causes physical harm, such as physicians, dentists, and physical therapists.

Question 32

Who does Errors and omissions insurance cover?

Answer 32

Errors and omissions insurance covers professionals whose negligence primarily causes financial harm, such as accountants, lawyers, and financial planners.

Question 33

what is the purpose of the grace period?

Answer 33

The purpose of the grace period is to allow the insurance policy to remain in effect even though the premium payments are in arrears.

Question 34

Torts

Answer 34

Torts include all civil wrongs not based on contracts and are a broad residual classification of many private wrongs against another person or organization. Torts occur independently of contractual obligations and can result from intentional acts or omissions, strict liability imposed by law, or negligence. Torts are not considered criminal matters but rather private, civil wrongs.

Question 35

Part time employees for COBRA

Answer 35

Each part-time employee counts as a 1/2 employee for purposes of the 20-employee rule

Question 36

The collateral source rule

Answer 36

The collateral source rule provides that damages assessed against a negligent party will not be reduced simply because the injured party has other sources of recovery available.

Question 37

Who may ISO’s be granted to?

Answer 37

Only employees

Question 38

Who may nonqualified stock options (NQSOs) be granted to?

Answer 38

More broad, family member of employee, independent contractor, a beneficiary of an independent contractor or employee, etc.)