Final exam-Virginia life and Health

Insurable inter in one's own life is legally considered as

Generally unlimited

Where dose the primary funding for medical part A come from?

Federal payroll and self employment taxes

What would be a valid reason for naming a trust as the beneficiary of a life insurance policy as opposed to naming an individual?

Management of proceeds would be provided

Virginia requires that an agent must complete___ hours of continuing education on the subject of ethics every reporting.

3 hours

According to the needs approach, an emergency reserve fund's primary purpose is to

cover the cost of unexpected expenses

Which of the following provisions allows an insured or the insurer to terminate the policy

Cancelable provision

How much is normally paid to a policyowner in a life (viatical) settlement?

Less than the death benefit

For purposes of disability income insurance, earned income would include all of the following EXCEPT

Dividends

(Salary, commissions, bonus)

Which type of group plan is excluded from HIPAA rules?

Disability Income

How does a continuous premium whole life policy differ from a limited payment while life policy?

The time period in which premiums will be paid

COBRA extends coverage for a surviving spouse but at a rate not more than _____ of the group premium.

102%

Which of the following approves continuing education courses for credit in Virginia?

State Continuing Education Board

Which statement regarding the waiver of premium rider is accurate?

Cash payment is not directly provided to the policyowner

Under a long-term care inflation rider, the benefit levels

periodically increase without proof of insurability

Which typically changes at the re-entry option date found in some term life policies?

Premium

Employees generally receive Worker's Compensation benefits for

Lost wages and medical expenses due to a occupational accident

Which is an accurate description of the premium in a graded premium life insurance policy?

Annual increases in premium for a stated number of years then levels off for the remainder of the contract

A 55 year old recently received a $30,000 distribution from a previous employer's 401k plan, minus $6,000 withholding. Which federal taxes apply if none of the funds were rolled over?

Income taxes plus a 10% penalty tax on $30,000

Sylvia purchased an annuity for $100,000 from the proceeds of an inheritance. No further payments are permitted and the income stream begins in 15 years. This contract is a(n)

Single Premium Deferred Annuity

Medicare will cover a maximum of how many days per benefit period in a skilled nursing facility?

100 days

A domestic insurance company in Virginia MUST

Be formed under Virginia insurance laws

What are premium for group credit life insurance based on?

Flat rate unrelated to the borrower's age

What minimum percentage of all eligible employees must participate in a group life insurance plan if the premiums are completely paid for by the employer?

0%

50%

75%

100%

100%

Where will a life insurance policy's proceeds be directed to if all the beneficiaries die before the insured?

The insured's estate

Under what circumstances does an accident and health insurer have the right to request an autopsy?

When not prohibited by state law

Which of these is NOT an unfair claims settlement practice?

Offering to settle a claim by arbitration

How is an insured's accident and health claim handled by an insurer if it occurs during the policy's grace period?

The unpaid premium may be subtracted from the reimbursement

What is payable to the policyowner if a whole life policy is surrendered prior to its maturity date?

cash value

How is the insured protected if a payor benefit rider is attached to the life insurance policy?

Premium payments are waived in the event the premium payor dies or becomes disabled

After an insurance application has been originated, the producer normally

is the major personal contact to the insured

Which of the following health provisions requires that the application becomes part of the policy?

Entire contract clause

Death proceeds from a life insurance policy are typically included in a deceased insured's gross estate

for federal income tax reasons

Under which circumstance may an insurer discontinue a small employer group medical plan?

Employer fails to pay the premium for it to the end of the grease period

What determines how much an annuitant is paid for a variable annuity?

The market value variations of the securities backing it

Which of the following is covered by a basic dental indemnity plan?

Non-surgical periodontal treatment

Periodic health claim payments MUST be made at least

monthly

James is covered with health insurance by two different insurers. The "insurance with other insurers" provision in an individual health insurance policy allows an insurer to pay benefits to the insured on a pro-rata basis when

The insurer was not notified prior to the claim that the insured has other health coverage

A major medical expense plan typically includes coverage for hospital room and board. Which of the following is normally covered under the category "room and board"?

General nursing care

Which of the following statements is true regarding accident and health insurance claims that reimburse on an indemnity basis?

Claims can be sent directly to the insured

Which of these is NOT used as selection criteria in the underwriting process of a life insurance application?

national origin

When the disclosure of an insured's nonpublic information is involved, what is the insurer obligated to do?

Give notice, explain, and allow opting out

Each of the following will trigger a benefit under the presumptive disability provisions, EXCEPT

Loss of any one limb

A cease and desist order issued against an agent

Suspends the agent's certificate or broker's license

Prevents the agent from receiving commissions

Prohibits a specific practice listed in the order

Terminates the agent's appointment with the insurer

Prohibits a specific practice listed in the order

A long-term care policy in Virginia must be issued on which of the following basis?

Guaranteed renewable

Which is a role of the replacing insurer during a life insurance replacement transaction?

Send notice of the proposed replacement transaction to the existing insurer

An applicant submits a life insurance application where an investigative consumer report is used in the underwriting process. Which of these statements is true?

Applicant has a right to receive a copy of the report

When an applicant applies for a large amount of life insurance coverage, which of the following would likely NOT be an underwriting requirement?

Consumer report

Eye examination

Urine sample

Blood sample

Eye examination

A health insurer MUST provide a proof of loss form

within 15 days of receipt of the notice of loss

When an insurer discovers (during the claim process) that the insured's age was accidentally misstated on the life insurance application, the insurer will likely

Pay an amount the premiums would have purchased at the insured's actual age

Which of these statements is NOT true regarding a cash value loan against a life insurance policy?

Interest payments made by policyowner are deductible

Which of following would prevent a prevent a person from obtaining a Virginia resident agent license?

Residing in a state outside of Virginia

Which of the following does TRI-CARE provide accident and health coverage to?

Military families

Taxable income may be the result from all of these modified endowment contract (MEC) transactions EXCEPT For

The policy is surrendered for less than what was paid into it

Which of these is NOT relevant when determining the amount of personal life insurance needed?

Local unemployment rate

Who must sign a rider attached to a health insurance policy in order for it to be valid?

Insured and producer

To be valid, a rider attached to a health insurance policy must be signed by the insured and the producer.

Who is protected with the "other insurance with this insurance" provision?

Insurance company

A(n)________ insurance company conducts business in a state outside the one in which it is domiciled.

Foreign

If an individual violates a cease and desist order issued by the state corporation commission, the individual will be subject to a fine of

$5,000

If an individual violates a cases and desist order issued by the SCC, the individual will be subject to a find of $5,000

Which of these is NOT considered a type of limited payment whole life insurance?

Endowment at age 70

Which of the following would NOT be appropriate for an immediate annuity?

A parent saving for a child's college

When does a family accident and health policy's coverage for a newborn child begin?

At the moment of birth

When an agent is determining the suitability of an annuity for a client, which of these is NOT usually taken into consideration?

level of education

A trustee-to-trustee transfer of rollover funds in a qualified plan allows a participant to avoid

mandatory income tax withholding on the transfer amount

There is no federal tax withholding involved in a transfer of funds from one qualified plan into another. Rollovers, however, involve a 20% withholding. Once the rollover takes place to the new custodian, the remainder of the distribution is made.

All of these are considered to be a violation of the federal fraud and false statements act EXCEPT

Claims reimbursement

In a long-term care policy issued in Virginia, any provision limiting preexisting conditions may not exceed

6 months

License agents in Virginia are authorized to

Solicit, receive, and forward applications to the insurer

Pat is covered by a disability income insurance policy that covers disabilities arising from a work-related illness or injury. The amount of his disability income payments for an on-the-job injury may be reduced by

Benefits paid under workers compensation

Christopher is issued an insurance policy that contains an attached agreement which alters the terms of the policy. This attached agreement is called a(n)

Endorsement- An endorsement is a written form attached to an insurance policy that alters the policy's coverage, terms, or conditions. Sometimes called a rider.

_____________ is the attempt made by an agent to intimidate or use force

coercion

In Virginia, an insurer must file a written notice of appointment with the state corporation commission within

30 days of the first insurance application submitted by the licensee

What is the primary reason for the state corporation commission's examination of an agent's insurance records?

To determine compliance with state insurance laws and regulations

In regards to health insurance, what is meant by the term "primary policy"?

It is the policy that will pay up to its limit before any other policy pays.

These are all accurate statements regarding universal life insurance EXCEPT

Policy loans are not permitted

An agent who attempts to intimidate is engaging in

coercion

Which of these is NOT an unfair claims settlement practice?

Refusing to pay persons bringing false or Fraudulet claims

Which of the following would provider a reimbursement of some premiums when a long-term care policy is cancelled?

Return of premium rider

What type of premiums are associated with individual mortgage protection life insurance policies?

Level premiums

Flexible premiums

Modified premiums

Decreasing premiums

level premiums

In Virginia, once a life insurance policy has been in force for ______ year(s), it becomes incontestable.

2 years

A life insurance agent is required to give a disclosure notice about information practices to an applicant or proposed insured

Prior to or at the time of signing the application

The change of Occupation provision in a disability income policy states that, in the event the insured changes to a less hazardous occupation, which of the following may apply?

Benefits can be increased in the event of a covered claim

Tim is in need of surgery. Before being hospitalized, he is referred to an outpatient clinic for diagnostic tests. What is this an example of?

pre-admission testing

How often must the commission examine each domestic insurance company?

every 5 years

Medical supplement policies in Virginia may contain

Neither waiting periods nor preexisting conditions exclusions

Defamation can be best defined as

Making a statement that is false or maliciously critical of the financial condition of an insurer

An accident and health insurance policy's premium requirements are set forth in which of the following provisions?

Consideration clause

The Consideration clause sets forth an accident and health insurance policy's premium requirements.

A license who must complete continuing education as a requirement for license renewal must do so every ______ year(s).

2 years

When there is a named beneficiary on a life insurance policy, the death benefits

are paid directly to the beneficiary without interference from the insured's creditors

The Optionally Renewable provision allows what party to cancel the contract?

insurer

An agent has received the first year commission paid on a Medicare supplement policy Renewal commissions must then be provided for at least _____ years after the first year.

5 years

Major Medical policies are typically characterized by which of the following?

Flat deductible

What determines the full amount of social Security retirement benefits a qualified individual is entitled to receive?

The Primary Insurance Amount (PIA) determines the full amount of retirement benefits for an eligible person.

An independent agent may

-represent several insurers

Which life insurance clause prohibits an insurance company from questioning the validity of the contract after a stated period of time has passed?

Incontestable clause

An insurable interest in each other's lives may exist in absence of an economic interest when the individual are

Marriage partners

Misrepresenting pertinent policy provisions relating to coverage after a loss is a(n)

A concealment in insurance application

An unfair claims settlement practice

An unfair discrimination between individuals

A violation of the principle of adhesion

unfair claims settlement practice

In regards to technology and the ACA, which of the following statements is correct?

States which operate with an Exchange must offer an internet-based portal

Viatical Settlement proceeds may be subject to the claims of

Creditors

disability income insurance normally excludes coverage for disabilities that arise from

Active duty military

Mike recently lost sight in both eyes. He has a policy that pays a lump sum benefit for this injury. What type of insurance does Mike have?

Accidental Death and Dismemberment

Which of these statements regarding the extended term insurance nonforfeiture Option in a life policy is accurate?

The premium to purchase the coverage comes from the policy's cash value