missed practice exam questions

What is the purpose of a conditional receipt?

It is intended to provide coverage on a date prior to the policy issue.

It is given only to applicants who fully prepay the premium.

It serves as proof that the applicant has been determined insurable.

It guarantees that a policy will be issued in the amount applied for.

It is intended to provide coverage on a date prior to the policy issue.

What happens when a policy is surrendered for its cash value?

The policy can be converted to term coverage.

The policy can be reinstated by paying back all policy loans and premiums.

Coverage ends but the policy can be reinstated at any time.

Coverage ends and the policy cannot be reinstated.

Coverage ends and the policy cannot be reinstated.

Which of the following is true regarding a market value adjusted annuity?

The insurer bears all the market risk of changing interest rates.

There are no penalties for a premature surrender of the annuity.

It provides a level benefit payment.

The owner is guaranteed a fixed interest rate for a specific period of time.

The owner is guaranteed a fixed interest rate for a specific period of time.

The Commissioner finds that a producer is violating the Insurance Code by frequently using rebates as an incentive for clients to purchase policies. What may the Commissioner issue after a hearing confirms the producer's guilt?

Stop action order

Notice of noncompliance

Cease and desist order

Arrest warrant

Cease and desist order

Prior to his death, an annuitant had received $12,500 in monthly benefits from the $25,000 straight life annuity. The annuitant was also the insured under a $50,000 paid-up whole life policy that named their spouse as primary beneficiary. Considering both contracts, how much will the annuitant's spouse receive in benefits?

Nothing

$62,500

$50,000

$75,000

$50,000

because of the settlement option selected on the annuity, payments would cease upon the annuitant's death. Straight life annuity payments stop at death of the annuitant regardless of the principal left in the account.

A child of the insured is incapable of self-support because of a physical handicap. The child has reached the limiting age for dependents. When can coverage continue under the health insurance policy?

Coverage will continue after an elimination period of 30 days.

If the child does not qualify for their own individual policy.

If premium is paid, and proof of the dependent's handicap is provided within a specified period of time.

Coverage will continue automatically with premium paid.

If premium is paid (w/in 31 days), and proof of the dependent's handicap is provided within a specified period of time.

During a rollover, if a distribution from an IRA is made directly to the plan participant, what is the mandatory withholding rate?

25%

5%

20%

10%

20%

How are state Insurance Guaranty Associations funded?

By the Department of Insurance

By NAIC

By the Government

By their members - authorized insurers

By their members - authorized insurers

What required provision protects against unintentional lapse of the policy?

Reinstatement

Payment of premiums

Grace period

Assignment

Grace period

A group policy used to provide accident and health coverage on a group of persons being transported by a common carrier, without naming the insured persons individually is called

Universal policy.

Comprehensive policy.

Blanket policy.

Limited benefit policy.

Blanket policy.

A single policy covering several certificate holders without naming the insureds individually is a blanket policy.

B just bought a new car, which he anticipates will be paid for 4 years from now. He also wants to buy a life insurance policy, but is financially limited until the car is paid off. Which of the following types of policies would be best for B?

Modified Life

Limited Term

Interest-sensitive Whole Life

Limited Pay

Modified Life

developed to make the purchase of whole life insurance more attractive for individuals who have limited financial resources but will be able to afford higher premiums in the near future.

When a producer was reviewing a potential customer’s coverage written by another company, the producer made several remarks that were maliciously critical of that other insurer. The producer could be found guilty of

Discrimination.

Misrepresentation.

Nothing, unless the remarks were in writing

Defamation.

Defamation.

An individual is insured under his employer's group Disability Income policy. The insured suffered an accident while on vacation that left him unable to work for 4 months. If the disability income policy pays the benefit, which of the following would be true?

For the business, payments are not considered tax deductible as an ordinary business expense.

The insured can deduct his medical expense benefits from his income tax.

Benefits that are attributable to employer contributions are fully taxable to the employee as income.

The insured has to wait 2 more months to start receiving the benefits.

Benefits that are attributable to employer contributions are fully taxable to the employee as income.

group health plan funded entirely by the employer, income benefits are taxed as what for EE?

income benefits are included in the employee's gross income, taxed as ordinary income.

Group disability income premium payments, what are the tax implications?

tax deductible by the business as an ordinary business expense.

Which of the following is NOT provided by an HMO?

Patient care

Reimbursement

Financing

Services

Reimbursement

HMO provides benefits in the form of services rather than in the form of reimbursement

How is the Insurance Guaranty Association funded?

By the Department of Insurance

By its members - authorized insurers

By the Government

By NAIC

By its members - authorized insurers

In the case of producer solicitation, at what point must a long-term care Shopper's Guide must be presented to the applicant?

At the time of policy delivery

At the time of application

Between the completion of the application and the delivery of the policy

Prior to the time of application

Prior to the time of application

LTC shopper’s guide, from NAIC, must be there prior to app if solicited by producer/agent

Which of the following is true regarding inpatient hospital care for HMO members?

Services for treatment of mental disorders are unlimited.

Inpatient hospital care is not part of HMO services.

Emergency care may be provided outside of a service area.

All forms of care must be provided in a service area.

Emergency care may be provided outside of a service area.

Which of the following is an additional benefit covered in Medicare supplement Plans B through N?

Foreign travel emergency benefit

Medicare Part A deductible

Skilled nursing facility coinsurance

Medicare Part B deductible

Medicare Part A deductible

B-N must cover core benefits + medicare pt A deductible

A father owns a life insurance policy on his 15-year-old daughter. The policy contains the optional Payor Benefit rider. If the father becomes disabled, what will happen to the life insurance premiums?

The insured's premiums will be waived until she is 21.

Since it is the policyowner, and not the insured, who has become disabled, the life insurance policy will not be affected.

The premiums will become tax deductible until the insured's 18th birthday.

The insured will have to pay premiums for 6 months. If at the end of this period the father is still disabled, the insured will be refunded the premiums.

The insured's premiums will be waived until she is 21.

payor is disabled for at least 6 months or dies, the insurer will waive the premiums until the minor reaches a certain age, such as 21.

Premium payments for personally-owned disability income policies are

Tax deductible.

Tax deductible to the extent that they exceed 10% of the adjusted gross income of those itemizing deductions.

Eligible for tax credits.

Not tax deductible.

Not tax deductible.

A prospective insured receives a conditional receipt but dies before the policy is issued. The insurer will

Not pay the policy proceeds under any circumstances.

Automatically pay the policy proceeds.

Pay the policy proceeds only if it would have issued the policy.

Pay the policy proceeds up to an established limit.

Pay the policy proceeds only if it would have issued the policy.

conditional receipt says that coverage will be effective either on the date of the application or the date of the medical exam, whichever occurs last

Which of the following statements is NOT correct concerning the COBRA Act of 1985?

It applies only to employers with 20 or more employees that maintain group health insurance plans for employees.

It requires all employers, regardless of the number or age of employees, to provide extended group health coverage.

It covers terminated employees and/or their dependents for up to 36 months after a qualifying event.

COBRA stands for Consolidated Omnibus Budget Reconciliation Act.

WRONG STATEMENT: It requires all employers, regardless of the number or age of employees, to provide extended group health coverage.

you HAVE to have 20 or more EEs

An insured is involved in a car accident. In addition to less serious injuries, he permanently loses the use of his leg and is rendered completely blind. The blindness improves a month later. To what extent will the insured receive Presumptive Disability benefits?

No benefits

Full benefits until the blindness lifts

Partial benefits

Full benefits

No benefits

Presumptive Disability plans offer full benefits for specified conditions. These policies typically require “2 eyes, 2 ears, 2 mouth, 2 limbs”. BECAUSE BLIND WAS TEMPORARY and not expected to last 12 MONTHS, and only 1 leg, he does NOT qualify for presumptive

Which health insurance provision describes the insured’s right to cancel coverage?

Renewal provision

Policy duration provision

Cancellation provision

Insuring clause

Renewal provision

n a group prescription drug plan, the insured typically pays what amount of the drug cost?

Copayment

Full amount until a deductible is met, then nothing for the rest of the year

None

Full amount until a deductible is met, then a small copay

Copayment

Employer contributions made to a qualified plan

Are taxed annually as salary.

Are after-tax contributions.

May discriminate in favor of highly paid employees.

Are subject to vesting requirements.

Are subject to vesting requirements.

Which of the following is not covered under a dental insurance plan?

Orthodontics

Endodontics

Restoration Care

Respite Care

Respite Care

Which of the following is true regarding benefits paid to disabled employees?

Tax withholding is required if the employee paid the premium.

They may be subject to taxation if the premium was paid by the employer.

Disability benefits are not taxed.

They are exempt from taxation if any portion of the premium was paid by the employee.

They may be subject to taxation if the premium was paid by the employer.

any paid/deducted by ER is taxable income to EE

How long is an open enrollment period for Medicare Supplement policies?

30 days

1 year

90 days

6 months

6 months

has right to buy medigap once first sign up for pt B

Which of the following is NOT the purpose of HIPAA?

To guarantee the right to buy individual policies to eligible individuals

To prohibit discrimination against employees based on their health status

To provide immediate coverage to new employees who had been previously covered for 18 months

To limit exclusions for pre-existing conditions

To provide immediate coverage to new employees who had been previously covered for 18 months

after which medicare part does it grant applicants the right to buy medigap

once they first sign up for medicare pt B

The primary purpose of disability income insurance is to

Reimburse the insured's family for loss of income due to the death of the insured.

Reimburse medical expenses and loss income due to work-related accidents.

Reimburse the insured for lost income while in the hospital.

Replace the lost income due to an insured's disability.

Replace the lost income due to an insured's disability.

Which of the following is NOT considered to be a basic service, under a nonscheduled plan?

Dentures

Endodontics

Oral surgery

Fillings

Dentures

basic: filings, oral surgery, periodontics, endodontics

types of major services for major dental plan

inlays, crowns, dentures and orthodontics.

Under the Affordable Care Act, what percentage of preventive care must be covered without cost sharing?

100%

50%

25%

80%

100%

Which of the following statements is correct regarding a whole life policy?

The policyowner is entitled to policy loans.

Cash values are not guaranteed.

The policy premium is based on the attained age.

The death benefit may increase or decrease during the policy period.

The policyowner is entitled to policy loans.

elements of a whole life policy

Whole life policies offer level premium based on the issue age, guaranteed, level death benefit, cash value that is scheduled to equal the face amount at the insured’s age 100, and living benefits, which include policy loans.

Under the uniform required provisions, proof of loss under a health insurance policy normally should be filed within

30 days of a loss.

20 days of a loss.

90 days of a loss.

60 days of a loss.

90 days of a loss.

All of the following can qualify as a trust EXCEPT

An employer insuring at least 5 employees for the benefit of that employer.

A group that has the Commissioner's permission to issue a group health insurance policy.

A labor union that insures at least 25 members.

A group formed by two or more employers in the same field.

An employer insuring at least 5 employees for the benefit of that employer.

CANNOT benefit ER

A producer misrepresents the details of an insured's new insurance contract that will be replacing the current contract. Which of the following is the producer violating?

Errors and omissions liability

Implied authority

Entire contract

Underwriting regulations

Errors and omissions liability

In comparison to a policy that uses the accidental means definition, a policy that uses the accidental bodily injury definition would provide a coverage that is

Broader in general.

More limited in duration.

Broader in duration.

More limited in general.

Broader in general.

Children's riders attached to whole life policies are usually issued as what type of insurance?

Term

Adjustable life

Whole life

Variable life

term. expiring when reachign certain age

All of the following are differences between individual and group health insurance EXCEPT

Individual coverage can be written on an occupational or nonoccupational basis, while group plans cover only nonoccupational.

In individual policies, the individual selects coverage options, while in a group plan all employees are covered for the same coverage which is chosen by the employer.

Individual policies are renewable at the option of the insured, while group usually terminates when the individual leaves the group.

Individual insurance does not require medical examinations, while group insurance does require medical examinations.

WRONG ANSWER is: Individual insurance does not require medical examinations, while group insurance does require medical examinations.

How many eligible employees must be included in a contributory plan?

100%

50%

75%

90%

75%

both ER and EE contribute to prem.s

Which of the following statements is TRUE concerning the Accidental Death Rider?

It will pay double or triple the face amount.

This rider is only available to insureds over the age of 65.

It is only available in group insurance.

It is also known as a triple indemnity rider.

It will pay double or triple the face amount.

death occurs within 90 days of accident.

Every insurer marketing Long-Term Care insurance must establish marketing procedures to ensure all of the following EXCEPT

Excessive insurance will not be sold.

Every reasonable efforts is made to identify an applicant’s other insurance.

LTC policies are marketed effectively to prospective insureds.

Comparisons of policies are fair and accurate.

LTC policies are marketed effectively to prospective insureds.

doesnt have to be effective

Which health insurance provision allows for the deduction of a past due premium from a claim payment?

Payment of claims

Legal action

Unpaid premium

Proof of loss

Unpaid premium

if an insured submits a claim for $500, but has unpaid policy premium of $200, the insurer will pay

300$