Insurance Flashcards

Question

What are the two types Professional Liaiblity Insurance and who/what does it cover?

Answer 1

malpractice-bodily injury | errors an omission-monetary damages

Answer 2

``` unlimited medical expenses disability income-TAX FREE death benfit rehab-medical and vocational absolute liability ```

Answer 3

routine foot cre, glass, hearing aid, dental | emergency care out of USA (exception canada, mexice, carribean)

Answer 4

benefits LIMITED-pays all of the first 20 DAYS of SKILLED care and everything over a specified amount per day for the next 80DAYS of CARE THE LIMITED BENFITS IS SUBJECT TO SUBSTAINTIAL RESTRICTION--PAYS ONLY SKILLED CARE 1. admission to a nursing home must follow within 20days of the hospital stay of 3 days or more 2. the patient condition must be expected t improve

Answer 5

``` HMO provider paid monthly fee regardless of services render (Capitation) out of network NOT COVERED PPO provider paid for services rendered out of network covered, usually 70% ```

Answer 6

Must have 20 full time (part time) employees the option to buy continuation Coverage must be offered to-- 1. terminated 18 months-employee and dependents--voluntary or involuntary or change from FT to PT 2.spouses and other dependents--36mos employee death, divorce, legal separation, eligibility for Medicare Children of employee 3. loss of dependent status (marriage) reaching dependency age limit spec by plan

Answer 7

used with High deduct health plan(HDHP) distributions tax free for health care contributions not spent are carried forward and portable unused assets become property of named bene on death distributions for non-med are ordinary income PLUS 20% penalty under 65

Answer 8

``` Own OCcupation-BEST defination Modified Any OCC Split Definition-own then modified ANY Occupation--social security definition loss of income ```

Answer 9

NONCAN_continuous TERM pl=olicy guaranteeing the insured's right to maintain the POLICY AND THE PREMIUM Guaranteed Renewable-Continuous right to maintain the policy, BUT the insurer can RAISE the Premium by class insured

Answer 10

taxation of premium and benfits individual owns and pays prmium--not deductible BUT benefits are TAX FREE employee owns contract and employer pays premium under BONUS arrangement (section 162)--premiums Are deductible to employer and Benefits are TAX FREE to employee employee owns contract and employer pays premium with Salary continuation plan (group Plan) premiums are deductible to employer BUT Employee TAXED on benefits

Answer 11

insurance company controls the investment return assets part of general fund whole life universal life

Answer 12

client controls investment return assets part of separte account variable life varialbe universal life

Answer 13

``` cash reduced premium accumulate with interest paid up additions one year term/5th dividend ```

Answer 14

cash extended term paid up reduced amount

Answer 15

``` Cash pure life/single life refund period certain specified income/period interest only joint and survivor ```

Answer 16

entered into after June 21 1988 fails to meet "7 pay Test"--ALL SIngle Premium policies distributions/withdrawals are TAXED LIFO-interest first Distributions under 59.5 subject to 10% penalty (unless disabled) Death Benefit is still TAX FREE

Answer 17

If death benefit increases by $150 k or less and the insured has guaranteed insurabliity (no proof) the policy WILL NOT lose its grandfather status (non-MEC) If policy increase by ANY amount and insured must PROVE insurablity--policy May lose its grandfathered NON-MEC status

Answer 18

If an interest in a life insurance policy is transferred for valuable consideration (not a gift), the proceeds in excess of the consideration paid, combined with any premiums paid by owner, are taxable as ORDINARY INCOME --like a viatical Exceptions 1 sale or transfer to insured 2 sale or transfer to a partner or partnership in which the insured is a partner 3 a corporation in which the insured is a shareholder or officer 4 divorce

Answer 19

life-life=OK life-annuity=ok annuity -annuity=ok NO annutiy-Life

Answer 20

Stock redemption= NO step up in CB Cross purchase= Sep up in Basis

Answer 21

Endorsement method employer is owner employee is not a shareowner Collateral Assignment method employee is owner employee is shareholder employee assigns the policy