Life Insruance Exam

Who is a reinsurance broker?

A person who solicits, negotiates, or places reinsurance cessions on behalf of a ceding insurer.

When must replacement forms be completed during the policy application process?

Prior to submitting an application.

How many weeks does a person have to comply with a restraining order issued by the Commissioner for violating an insurance law?

1 week.

What is a foreign insurer?

An insurer with a home office in another state.

How much of a $1,000 HRA account can an insured roll over if they incurred $750 in medical expenses?

$250.

What is NOT provided by an HMO?

Reimbursement.

What describes the aleatory nature of an insurance contract?

Exchange of unequal values.

What type of dental plan pays on a 'first dollar' basis with no deductible?

Basic or scheduled plan.

What can happen if an insured omits a heart attack from their health insurance application?

The costs related to the heart attack can be denied.

What act protects consumers against incorrect personal or financial information?

The Fair Credit Reporting Act.

What is an insurance producer bound to write insurance for only one company called?

Captive agent.

What power does the Commissioner NOT have?

Administer, interpret and enforce the state insurance laws.

What happens when a long-term care policyholder requests cancellation?

A prorated premium refund will be issued.

What is the maximum penalty for habitual willful noncompliance with the Fair Credit Reporting Act?

$2,500.

What term prevents an insurance company from forcing a policyowner to answer further questions after issuing a policy on an incomplete application?

Estoppel.

Why is it essential for an insurer to document all correspondence with an insured?

Errors and omissions.

How many years can a person be imprisoned for intentionally violating an insurance statute in Wisconsin?

3 1/2 years.

What is the required notice period for proof of loss claims to be provided to the insurer?

12 months.

What renewability provision is likely on a travel accident policy?

Period of time.

What can happen if an insured misstates their health history on a disability policy application?

Coverage for treatment costs can be denied.

What factor does an insurer use most to determine disability benefits?

The insured's income.

What does the Omnibus Budget Reconciliation Act of 1990 require for large group health plans?

Primary coverage for disabled individuals under age 65 who are not retired.

Who is held legally responsible if an agent misrepresents the insurer?

The insurer.

How long does the free look period last for a Medicare supplement policy?

30 days.

How often must insurers offering health benefit plans file a grievance report with the OCI?

Every year.

What is the benefit based on the insured's loss of earnings after recovery from a disability called?

Residual disability.

What is NOT a limited line of insurance?

Life insurance.

How is eligibility for group health insurance determined?

By conditions of employment.

What renewal provisions must be included in a long-term care policy issued to an individual?

Noncancellable and guaranteed renewable.

What is an example of a producer's fiduciary duty?

The trust that a client places in the producer in regard to handling premiums.

How many days of inpatient psychiatric hospital care will Medicare Part A pay for?

190 days.

What risk management technique is exercised when someone purchases insurance?

Transfer.

What term describes an insurance company domiciled in Montana but transacting insurance in Wyoming?

Foreign.

What are the training requirements for insurance producers selling long-term care insurance?

8-hour one-time training course and 4-hour ongoing training every 24 months.

What is NOT covered under Plan A in Medigap insurance?

The Medicare Part A deductible.

Which type of LTC is NOT provided in an institutional setting?

Home health care.

Who can provide skilled nursing care?

Doctor.

What do income replacement contracts agree to do?

To replace the insured's income up to a stated percentage if the insured suffers a loss due to a covered accident or sickness.

How are individual disability income insurance premiums and benefits taxed?

Premiums are not tax deductible, and benefits are not taxable.

What is a group policy that provides accident and health coverage for a group of persons being transported by a common carrier called?

Blanket policy.

Which type of insurer is owned by stockholders?

Stock

What information is NOT included in an Investigative Consumer Report requested by an underwriter?

Medical history

What is the provision that states both the printed contract and a copy of the application form the contract?

Entire contract

What is considered an illegal inducement in the marketing of insurance?

Inviting prospective clients to the grand opening of the company's new office

What is NOT considered a basic benefit of an HMO plan?

Prescription drugs

In which health plan are benefit payments attributed to employer contributions taxable to the employee?

Group Disability Income

What is INCORRECT regarding eligibility requirements for conversion to an individual policy under HIPAA?

An individual who was previously covered by group health insurance for 6 months is eligible

What option does an employee have upon reaching age 65 and eligible for Medicare?

Remain on the group health insurance plan and defer eligibility for Medicare until retirement

Can a group formed solely for obtaining group insurance qualify for group coverage?

No, the group must be formed for a purpose other than obtaining group insurance

How long must pass before an intermediary can reapply for a license after revocation for ignoring an order of restraint?

5 years

What is the unlawful practice of offering inducements not specified in the policy?

Rebating

What does 'any occupation disability' typically mean?

Individuals are unable to perform the duties of the occupation for which they are suited by all of the following EXCEPT Preference

Who may qualify for Medicare health insurance benefits?

All individuals EXCEPT a retired person age 50

What does the free-look provision allow for?

A right to return the policy for a full premium refund

How is adverse selection best described?

Risks with higher probability of loss seeking insurance more often than other risks

What age must a child be for disability insurance to cover hospital or ambulatory surgery center charges?

5

What is NOT true regarding the federal Fair Credit Reporting Act?

Reports may be sent to anyone who requests one

When must a long-term care Shopper's Guide be presented to the applicant?

Prior to the time of application

What are the typical benefit periods for individual short-term disability policies?

6 months to 2 years

What is NOT covered by Health Maintenance Organizations (HMOs)?

Elective services

What is true concerning employer group dental plans?

They seldom contain a conversion privilege

What does the Pregnancy Discrimination Act prohibit?

Pregnancy discrimination by employers with a minimum of 15 employees

What is NOT correct about Medicare Part B?

It is a compulsory program

What must be present in all Medicare supplement plans?

Plan A

How many days must an insurer notify the Office of the Commissioner after terminating an individual agent's appointment?

30 days

What does 'standard' mean in reference to Medicare Supplement benefits plans?

All providers will have the same coverage options and conditions for each plan

What protects insureds' unpaid claims when an insurer is given an order of liquidation?

The Wisconsin Insurance Security Fund

What is NOT considered a supplemental benefit under an HMO plan?

Preventive services

What is NOT required to be stated in the outline of coverage for a long-term care policy?

Basic information about supplementary policies

To whom must insurers report all agent appointments and terminations?

Commissioner

What is NOT true about a MEWA?

MEWAs are groups of at least 3 employers

What constitutes prompt action in claims investigations?

10 consecutive days

What did Doug discover when he applied for Social Security Retirement Benefits at age 62?

Medicare coverage was not available until the month of his 65th birthday

Which group seeking health insurance would represent a bad risk for underwriters?

A group that changes insurance annually

What is true of a PPO?

Its goal is to channel patients to providers that discount services

What advance notice must an insurer provide if they rescind coverage to comply with the Affordable Care Act?

30 days

Which disability income policy would have the highest premium?

15-day waiting period / 10-year benefit period

What type of care is provided with intermediate care in long-term care insurance?

Occasional nursing or rehabilitative care

How long does an intermediary's license remain in effect?

Indefinitely

What must the first notice of injury or sickness under an accident and health policy contain?

A statement sufficiently clear to identify the insured and the nature of the claim

What service is covered by endodontics?

Root canal

What does the amount of disability benefits depend upon?

The insured's income at the time of the application

What are Health Savings Accounts (HSAs) designed to do?

Help individuals save for qualified health expenses

Under which Act may an applicant challenge information from an investigative consumer report?

Fair Credit Reporting Act

What happens if an insurer issues a good faith estimate?

There are no restrictions on how the actual charges must resemble the estimate

In a noncontributory health insurance plan, what percentage of eligible employees must participate for the plan to become effective?

100%

How many days can a person aggrieved by an order request a trial after receiving an order without a hearing?

30 days

What is NOT considered a basic service under a nonscheduled plan?

Dentures

How many days does an aggrieved person have to request a re-hearing after a final order is issued?

20 days

What is NOT a feature of a noncancellable policy?

The insurer may terminate the contract only at renewal for certain conditions

How many days do reservists have to reinstate coverage after discharge?

90 days

What elements must an insurance policy conform to according to state laws?

All EXCEPT Conditions

What notice must be provided prior to cancellation of a policy?

60 days

What is the main purpose of short-term medical policies?

To provide low cost temporary solutions as a safety net in certain situations

Who is the annual Medicare open enrollment period for?

Existing Medicare members who want to change their coverage

What factor can influence premium rates among people in the same class and life expectancy?

Occupation