Insurance

Question 1

While away at college, a child is still considered a resident of the parents home ( dependent ) for car insurance. After taking a job and residing in another state, what must you do?

Answer 1

The child must license and ensure the car in another state

Question 2

Are MEC withdrawals FIFO or LIFO?

Answer 2

LIFO

Question 3

Group health insurance allows for conversion to what?

Answer 3

Individual health policies

Question 4

A group life policy must be converted to what?

Answer 4

A permanent plan

Question 5

In a business overhead expense (BOE) policy

The premiums to the company are…

The benefits are received by the company…

Answer 5

Not deductible

Received tax-free

Question 6

Are group life insurance benefits and workers compensation taxable?

Answer 6

No received tax-free

Question 7

Are sick pay benefits taxable?

Answer 7

Yes, they are like salary

Question 8

To be eligible for cobra how many employees must you have?

Answer 8

20 or more part-time count as a fraction

Question 9

What is BI / PD on a personal auto policy (PAP)?

Answer 9

Liability coverage

Bodily injury and property damage

Question 10

Difference between ordinary income and compensation income?

Answer 10

Ordinary income: not subject to FICA or self-employment taxes

Compensation income : subject to FICA or self-employment tax (W-2 income)

Question 11

How long is the waiting Period for Social Security disability benefits?

Answer 11

Benefits payable at the beginning of the sixth month, reflects a five month waiting Period.

Question 12

When using the retention method to figure out how much insurance you need what must you add to the final calculation?

Answer 12

The first years income

Question 13

What are the parts of an insurance contract?

Answer 13

1. Declarations; person, property, activities, insured, and parties.
2. Definitions
3. Insuring agreements; basic promise of the insurance company.
4. Conditions.; duties and rights of both parties.
5. Exclusions; circumstances ensure will not pay.

Question 14

Perils (basic form)

WHARVVES / FLT

Answer 14

W - windstorm
H - hail
A - aircraft
R - riot
V - vehicle
V - vandalism
E - explosion
S - smoke
F - fire
L - lightning
T - theft

Question 15

Broad form

Answer 15

Basic perils plus broad

Everything basic plus RAFF

R - rupture of a system

A - artificially generated electric electricity

F - falling objects

F - freezing of plumbing

Question 16

Exclusions that apply to all homeowners policies

OPEN WIF

Answer 16

O - ordinance by law
P - power failure
E - earthquake
N - neglect, nuclear hazard
W - war
I - intentional loss
F - flood

Question 17

If umbrella liability insurance is given as an answer on the exam it is…

Answer 17

Always correct

Question 18

Errors and omissions insurance covers who?

Answer 18

Lawyers

Insurance agents

Stock brokers

Financial planner

Question 19

Who does malpractice insurance cover?

Answer 19

Physicians and dentist

Question 20

The beneficiary to a variable universal life policy receives what

Answer 20

The death benefit plus cash value

Question 21

What is the one year term option when it comes to dividends?

Answer 21

Dividends by one years worth of insurance equal to the cash value

Question 22

What describes a modified endowment contract (MEC)

Answer 22

Meets requirements of a life insurance contract

Was entered into on or after June 21, 1988

Fails to meet the 7 pay test

Question 23

What are some of the most important criteria when selecting an insurance company?

Answer 23

Policy types offered

A rating service

Question 24

Facts about participating insurance policies

Answer 24

May pay an annual dividend

Larger premium

Extra premium not needed it is returned to the policyholder , tax free if still has principle in contract

Question 25

What is respondent superior?

Answer 25

A superior can be held responsible for the actions of a subordinate

Question 26

Is a cost benefit analysis used in the underwriting process? What is used?

Answer 26

No What is used is Application Information from the agent or broker Investigations Information bureaus Physical examinations or inspections

Question 27

What is a BOP?

Answer 27

Business owners policy

Question 28

Workers compensation and unemployment insurance are taxed or not taxed?

Answer 28

Workers compensation is income tax-free Unemployment is gross income and is taxable

Question 29

What is an HO-15 endorsement?

Answer 29

Ads open pay coverage to personal property on an HO-3 policy, basically making it HO-5 policy

Question 30

What is usually the best answer on the exam when it comes to disability insurance?

Answer 30

Own occupation

Question 31

What transfers are not jeopardized by the transfer for value rules?

Answer 31

Transfers to the insured Transfers, to a partner of the in (partnerships) Transfers to a corporation in which the insured is a shareholder or an officer Transfer pursuant to a divorce

Question 32

1035 exchange Life insurance for

Answer 32

Insurance policy Annuity policy Qualified, long-term care policies

Question 33

1035 Exchange Annuity contract for

Answer 33

Annuity contract Qualified, long-term care policy

Question 34

Who is eligible for Medicare Part A?

Answer 34

All persons age 65 and over who are entitled to, but not necessarily receiving monthly Social Security, cash, benefits, or benefits under railroad retirement programs Regardless of age, disabled beneficiaries receiving benefits for at least two years are eligible

Question 35

What are the benefits of Medicare Part A (hospital insurance)?

Answer 35

Hospital stays: deductible for 60 days, second deductible for the next 30 days, and third deductible for another 60 days. Inpatient hospital care is limited to 150 days for one stay Post hospital skilled nursing home up to 100 days Unlimited number of post hospital home health services Hospice care for terminally ill patients Patient pays for first 3 pints of blood or donates them, Medicare A covers additional blood

Question 36

What is Medicare Part B (medical insurance)?

Answer 36

Is voluntary Eligible under part A Monthly premiums are paid by those who enroll Patient pays a deductible first Medicare pays 80% of approved charges No stop loss applies. It is 20% of an unlimited amount, this leaves a client with significant financial exposure

Question 37

What are the benefits of Medicare Part A?

Answer 37

Doctors services, including house, calls, office visits, and doctor services are covered Also covered: diagnostic test, radiology and pathology, treatment for mental illness, transfusion of blood, physical and occupational therapy, drugs, and biological that cannot be self administered Outpatient services Unlimited number of home health services Free preventive care services Depression screening, counseling for alcohol misuse, obesity, behavioral therapy for cardiovascular disease.

Question 38

What is excluded from Medicare Part B?

Answer 38

Dentures and dental care Eyeglasses or hearing aids Immunizations , does cover one free flu shot per year Prescription drugs

Question 39

What is Medicare Part D?

Answer 39

Plans run by an insurance companies approved by Medicare Drug manufacturers must generally provide a 50% discount Must have Medicare part A and B Beneficiaries who are already receiving Medicaid benefits, will receive prescription drug coverage through Medicare It is the prescription drug coverage

Question 40

What is Medicare part C?

Answer 40

Also known as as a Medicare advantage Is an alternative to original Medicare parts A and B It is offered by private companies approved by Medicare Plans are bundled together and often include additional benefits, such as vision, hearing, dental, and prescription drug coverage Can vary in terms of cost and rules for how you get services