Insurance Flashcards
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?
The child must license and ensure the car in another state
Are MEC withdrawals FIFO or LIFO?
LIFO
Group health insurance allows for conversion to what?
Individual health policies
A group life policy must be converted to what?
A permanent plan
In a business overhead expense (BOE) policy
The premiums to the company are…
The benefits are received by the company…
Not deductible
Received tax-free
Are group life insurance benefits and workers compensation taxable?
No received tax-free
Are sick pay benefits taxable?
Yes, they are like salary
To be eligible for cobra how many employees must you have?
20 or more part-time count as a fraction
What is BI / PD on a personal auto policy (PAP)?
Liability coverage
Bodily injury and property damage
Difference between ordinary income and compensation income?
Ordinary income: not subject to FICA or self-employment taxes
Compensation income : subject to FICA or self-employment tax (W-2 income)
How long is the waiting Period for Social Security disability benefits?
Benefits payable at the beginning of the sixth month, reflects a five month waiting Period.
When using the retention method to figure out how much insurance you need what must you add to the final calculation?
The first years income
What are the parts of an insurance contract?
- Declarations; person, property, activities, insured, and parties.
- Definitions
- Insuring agreements; basic promise of the insurance company.
- Conditions.; duties and rights of both parties.
- Exclusions; circumstances ensure will not pay.
Perils (basic form)
WHARVVES / FLT
W - windstorm
H - hail
A - aircraft
R - riot
V - vehicle
V - vandalism
E - explosion
S - smoke
F - fire
L - lightning
T - theft
Broad form
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
Exclusions that apply to all homeowners policies
OPEN WIF
O - ordinance by law
P - power failure
E - earthquake
N - neglect, nuclear hazard
W - war
I - intentional loss
F - flood
If umbrella liability insurance is given as an answer on the exam it is…
Always correct
Errors and omissions insurance covers who?
Lawyers
Insurance agents
Stock brokers
Financial planner
Who does malpractice insurance cover?
Physicians and dentist
The beneficiary to a variable universal life policy receives what
The death benefit plus cash value
What is the one year term option when it comes to dividends?
Dividends by one years worth of insurance equal to the cash value
What describes a modified endowment contract (MEC)
Meets requirements of a life insurance contract
Was entered into on or after June 21, 1988
Fails to meet the 7 pay test
What are some of the most important criteria when selecting an insurance company?
Policy types offered
A rating service
Facts about participating insurance policies
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
What is respondent superior?
A superior can be held responsible for the actions of a subordinate
Is a cost benefit analysis used in the underwriting process?
What is used?
No
What is used is
Application
Information from the agent or broker
Investigations
Information bureaus
Physical examinations or inspections
What is a BOP?
Business owners policy
Workers compensation and unemployment insurance are taxed or not taxed?
Workers compensation is income tax-free
Unemployment is gross income and is taxable
What is an HO-15 endorsement?
Ads open pay coverage to personal property on an HO-3 policy, basically making it HO-5 policy
What is usually the best answer on the exam when it comes to disability insurance?
Own occupation
What transfers are not jeopardized by the transfer for value rules?
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
1035 exchange
Life insurance for
Insurance policy
Annuity policy
Qualified, long-term care policies
1035 Exchange
Annuity contract for
Annuity contract
Qualified, long-term care policy
Who is eligible for Medicare Part A?
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
What are the benefits of Medicare Part A (hospital insurance)?
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
What is Medicare Part B (medical insurance)?
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
What are the benefits of Medicare Part A?
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.
What is excluded from Medicare Part B?
Dentures and dental care
Eyeglasses or hearing aids
Immunizations , does cover one free flu shot per year
Prescription drugs
What is Medicare Part D?
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
What is Medicare part C?
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
