NYS Life and Health Final exam review

Insurance agent Kelly offers a prospect a $1,000 shopping card if an insurance policy is purchased through her. What illegal activity is this an example of?

1. Rebating

2. Coercion

3. Twisting

4. Defamation

rebating

What happens if the insurer discovers that the insured's age was accidentally misstated on an application for an individual life insurance policy?

1. Benefits are paid as if the misstated age is the insured's real age

2. Benefits will be calculated according to how much coverage the premium paid would have purchased for the correct age

3. The policy will be cancelled

4. The insured must pay a $5,000 fine

Benefits will be calculated according to how much coverage the premium paid would have purchased for the correct age

When replacing a life insurance policy, an agent must provide the applicant with a

1. Notice Regarding Replacement

2. Notice Regarding Reduction

3. Notice Regarding Retention

4. Notice Regarding Reinstatement

Notice Regarding Replacement

An agent has committed an insurance crime that violates US Code 1033 (interstate commerce). Who would be responsible for the prosecution of this crime?

1. US Attorney General

2. Lieutenant Governor

3. Superintendent

4. State Senate

US attorney general

All Medicare Supplement policies MUST contain which provision?

1. Short-term disability must be covered

2. Pre-existing conditions may be excluded from coverage for a maximum of 12 months

3. Pre-existing conditions may be excluded from coverage for a maximum of 6 months

4. Unemployment benefits must be provided

Pre-existing conditions may be excluded from coverage for a maximum of 6 months

An agent's license may only be suspended or revoked if the agent

1. has engaged in replacement of an existing policy

2. filed for bankruptcy

3. did not meet a sales quota

4. has been afforded a right to a hearing

has been afforded a right to a hearing

The open enrollment period for Medicare Part B is

1. January 1 through March 31

2. January 1 through June 30

3. January 1 through May 31

4. January 1 through April 30

January 1 through March 31

An agent's secretary who solicits prospects on the telephone

1. must be bonded through the state

2. is an example of the illegal act called twisting

3. must be licensed as an agent

4. is not required to be licensed as an agen

must be licensed as an agent

Which of the following is required for the renewal of an agent's insurance license?

1. Continuing education

2. Passing an examination

3. Prelicensing education

4. College credits

Continuing education

The role of the federal government was expanded when Medicaid was established by allowing the state to

1. form a large PPO on a statewide level

2. purchase health insurance from the federal government

3. defer all costs to the federal government for public assistance programs

4. receive matching funds to expand public assistance programs

receive matching funds to expand public assistance programs

Long-term care policies sold in New York may exclude coverage related to

1. substance addictions

2. dementia

3. Alzheimer's disease

4. injuries

substance addictions

Employees are required to work at least ___ hours per week to become eligible for a small employer health plan

1. 30

2. 20

3. 15

4. 25

20

The free look period in New York for individual health insurance policies is ___ days.

1. 10

2. 20

3. 5

4. 15

10

During the examination of an insurer's books and records by the Superintendent, the insurer

1. has the right to limit the scope of the examination

2. must not impede the examination

3. may opt out of the examination at anytime

4. is not required to assist in the examination

must not impeded the examination

The Right-to-Examine period is ___ days for all Long-Term Care Policies sold in New York.

1. 10

2. 45

3. 60

4. 30

30

To be classified as a small employer in New York, an employer must employ

1. 1-10 employees

2. 1-100 employees

3. 2-50 employees

4. 2-25 employees

2-50 employees

When a health policy requires payment of an additional premium to provide coverage for a newborn, how many days after the birth is the first payment due?

1. 14 days

2. 30 days

3. 60 days

4. 10 days

30 days

The identity of the ___ must be made clear in every health insurance advertisement.

1. Governor

2. Superintendent

3. insured

4. insurer

insurer

A life insurance policy becomes incontestable after it has been in force for:

1. 4 years

2. 3 years

3. 2 years

4. 1 year

2 years

An agent who sells an individual life insurance policy in New York MUST deliver to the policyowner a(n):

1. Policy Summary and Buyer's Guide

2. financial report from the previous year

3. letter showing NAIC compliance

4. AM Best rating

Policy Summary and Buyer's Guide

An example of replacement is

1. canceling a term life policy to buy a whole life policy

2. canceling disability policy to buy a term life policy

3. canceling a long-term care policy to buy a whole life policy

4. canceling a whole life policy to buy a major medical policy

canceling a term life policy to buy a whole life policy

No insurance company may transact business in New York without a Certificate of _____.

1. Fiduciary

2. Completion

3. Authority

4. Achievement

authority

Which of the following is included in the entire contract according to the entire contract provision?

1. Application

2. Clauses

3. Investigative report

4. Occupational rating

application

A 70-year old insured individual has suffered from kidney failure for the past 24 months. She is covered by her spouse's large-group employer plan. How will Medicare be utilized in this situation?

1. Will be the primary insurer and pay for 100% of covered expenses

2. Will be the secondary insurer and pay for claims not fully covered by the group plan

3. Will be the primary insurer and the group plan will be secondary

4. Will not pay for any of the covered expenses

Will be the secondary insurer and pay for claims not fully covered by the group plan

The Superintendent serves a term of __ years.

1. 2

2. 4

3. 5

4. 3

4

Which of the following is NOT covered by New York workers compensation laws?

1. Work-related illness

2. Fall that occurred on the job

3. On-the-job injury that was both intentional and self-inflicted

4. Work-related stress disorders

On-the-job injury that was both intentional and self-inflicted

Which of the following is NOT covered under Workers' Compensation?

1. Pain and suffering

2. Medical bills

3. Occupation-related sickness

4. Disability

Pain and suffering

Suitability is best described as:

1. properly applying the insurer's underwriting guidelines to an applicant

2. delivering the Buyer's Guide and Policy Summary to the applicant

3. obtaining information from the applicant to determine whether an insurance or annuity product is appropriate

4. converting a term policy to a whole life policy

obtaining information from the applicant to determine whether an insurance or annuity product is appropriate

Which of the following provides affordable health insurance coverage to small employers?

1. Healthy New York Program

2. Medicare

3. New York Health Department

4. New York Small Business Association

Healthy New York Program

A life settlement intermediary is a(n)

1. person who, for a fee, solicits or negotiates a life settlement contract between a policyowner and a life settlement provider

2. association which maintains a facility that displays offers and counteroffers for purchasers or sellers of life settlement contracts

3. person who enters into a life settlement contract with the policyowner

4. policyowner who sells his/her life insurance policy to a third party

association which maintains a facility that displays offers and counteroffers for purchasers or sellers of life settlement contracts

Which of the following is NOT information found in a life insurance buyer's guide?

1. How to compare life insurance policy rates

2. How to take legal action against an insurance company

3. How to determine how much life insurance to purchase

4. How to compare life insurance policy requirements

How to take legal action against an insurance company

An individual life insurance policy becomes incontestable after it has been in force for

1. 2 years

2. 4 years

3. 3 years

4. 1 years

4 years

How is Medicare Part B funded?

1. Payroll taxes

2. Employer taxes

3. User premiums

4. General tax revenue and user premiums

General tax revenue and user premiums

Which of the following statements regarding the Fair Credit Reporting Act is TRUE?

1. An insurer does NOT need to inform the applicant about the scope of an investigation

2. An insurer does NOT need to notify the applicant if an application is denied

3. An insurer does NOT need to inform the applicant that an investigation is being conducted

4. An insurer does NOT need to discuss any credit history inconsistencies with the applicant

An insurer does NOT need to discuss any credit history inconsistencies with the applicant

An insurance consultant is BEST defined as a(n)

1. person who gives motivation seminars to an insurer's sales team

2. agent who charges fees for advice

3. agent who introduces a policyowner to a 3rd party for a potential sale of a life insurance policy

4. individual who underwrites insurance policies

agent who charges fees for advice

If an agent is advertising a life insurance policy, the agent MUST disclose the

1. insurer's Better Business rating

2. name of the parent company

3. insurer's AM Best rating

4. name of the actual insurer

name of the actual insurer

Which of the following unfair trade practices involves an agent who makes public, malicious statements about an insurer's financial condition?

1. Misrepresentation

2. Boycotting

3. Unfair discrimination

4. Defamation

Defamation

Which of these individuals would require continuing education?

1. Nonresident agent

2. Claims administrator

3. Resident agent

4. Head underwriter

Resident agent

Upon meeting company requirements, a lapsed life insurance policy may be reinstated within ___ year(s).

1. 4

2. 3

3. 2

4. 5

3

Which of these is NOT considered to be a purpose of an annuity?

1. Annuities are intended for the tax-free growth of principal

2. Annuities are intended to create an estate

3. Annuities are intended to liquidate an estate

4. Annuities are intended to distribute accumulated principal

Annuities are intended to create an estate

Which type of annuity stops all payments upon the death of the annuitant?

1. Life annuity

2. Joint and survivor annuity

3. Cash refund annuity

4. Period certain annuity

Life annuity

Which of these statements regarding the annuitant is CORRECT?

1. The annuitant is the only individual who can surrender the contract

2. The annuitant must also be the beneficiary

3. The contract can only be assigned by the annuitant

4. The annuitant's life expectancy determines the annuity payments

The annuitant's life expectancy determines the annuity payments

Jonas has disability insurance through his employer. The employer pays 75% of the premium, and Jonas pays the other 25%. What is Jonas's tax liability for any benefits paid from the disability plan?

1. Taxes must be paid on 25% of the benefits received

2. Taxes must be paid on all benefits received

3. No taxes are payable on any benefits received

4. Taxes must be paid on 75% of the benefits received

Taxes must be paid on 75% of the benefits received

An annuitant is guaranteed to NOT outlive their benefits with a(n)

1. Guaranteed minimum accumulation benefit

2. Period certain provision

3. Guaranteed lifetime withdrawal benefit

4. Survivorship clause

Guaranteed lifetime withdrawal benefit

Justin is receiving disability income benefits from a group policy paid for by his employer. How are these benefits treated for tax purposes?

1. Non-taxable income

2. Taxable income

3. Partially taxable income

4. Conditionally taxable income

Taxable income

Kathy's annuity is currently experiencing tax-deferred growth until she retires. Which phase is this annuity in?

1. Growth period

2. Accumulation period

3. Deferred period

4. Payout period

accumulation period

Loss of income insurance provides

1. unlimited income replacement to a disabled person

2. an individual the means to replace wages

3. an individual the ability to continue with medical coverage after a disability

4. an individual the ability to collect workers' compensation

an individual the means to replace wages

According to the Affordable Care Act, any plan in existence prior to which date is considered a grandfathered plan?

1. 23-Mar-12

2. 23-Mar-13

3. 23-Mar-11

4. 23-Mar-10

23-Mar-10

Under the Affordable Care Act, which of these plans is designed to provide coverage that is actuarially equivalent to 80% of the full actuarial value of the benefits provided under the plan?

1. Gold

2. Bronze

3. Platinum

4. Silver

gold

The waiting period for a disability insurance policy

1. excludes payments for a short-term illness or injury

2. helps the insurer determine if the claim is legitimate

3. allows the insurer to collect medical information on the policyowner

4. is the period of time that must elapse following the effective date of the policy before benefits are payable

excludes payments for a short-term illness or injury

Which of the following is NOT an eligible dependent on an Accident and Health policy?

1. 27 year old married child

2. 25 year old married child

3. Unmarried disabled child

4. 19 year old full time student

27 year old married child

Tim is covered under a group plan and would like to change his group coverage to an individual policy with the same insurer because of employment termination. Which of these describes the change that will take place?

1. Conversion

2. Rollover

3. Extension of benefits

4. Coordination of benefits

Conversion

The purpose of the Coordination of Benefits provision in group accident and health plans is to

1. avoid overpayment of claims

2. reduce adverse selection

3. lower the cost of premiums

4. reduce out-of-pocket costs

avoid overpayment of claims

What kind of life insurance policy issued by a mutual insurer provides a return of divisible surplus?

1. straight life insurance policy

2. divisible surplus life insurance policy

3. participating life insurance policy

4. nonparticipating life insurance policy

participating life insurance policy

As classified by the Affordable Care Act (ACA), a Silver Plan offers

1. 90% actuarial level of coverage provided

2. 60% actuarial level of coverage provided

3. 80% actuarial level of coverage provided

4. 70% actuarial level of coverage provided

70% actuarial level of coverage provided

Which clause defines total disability as being unable to perform the major duties of the insured's regular occupation?

1. Any occupation clause

2. Residual clause

3. Presumptive clause

4. Own occupation clause

Own occupation clause

What is the contract called that is issued to an employer for a Group Medical Insurance plan?

1. Document of coverage

2. Master policy

3. Provisional policy

4. Certificate of coverage

Master policy

When are group disability benefits considered to be tax-free to the insured?

1. When both the employer and recipient pay the premiums

2. When the recipient pays the premiums

3. When benefits paid are equal to or lower than the recipient's salary

4. When the employer pays the premiums

When the recipient pays the premiums

Which of the following is an annuity that is linked to a market-related index?

1. Market-related annuity

2. Fixed-amount annuity

3. Deferred-risk annuity

4. Equity-indexed annuity

Equity-indexed annuity

Without a Section 125 Plan in place, what would happen to an employee's payroll contribution to an HSA?

1. The employer would not be allowed to deduct the contribution from the employee's pay

2. It would be considered taxable income to the employee

3. The employee would not be allowed to an HSA

4. The employer would pay payroll tax and FICA on the contribution amount

It would be considered taxable income to the employee

Fixed annuities provide each of the following EXCEPT

1. Tax advantage

2. Hedge against inflation

3. Guaranteed interest

4. Retirement funds

Hedge against inflation

An employer is issued a group medical insurance policy. This single contract is known as a(n)

1. certificate of coverage

2. employer contract

3. entire contract

4. master policy

master policy

All of the following are characteristics of a Group Life Insurance Plan EXCEPT

1. Individual underwriting

2. Probationary period

3. Group underwriting

4. Master contract

Individual underwriting

According to the Affordable Care Act, what is the maximum amount an individual can contribute to a Flexible Savings Account?

1. $3,500

2. $1,500

3. $2,500

4. $500

$2,500

Ken is a producer who has obtained Consumer Information Reports under false pretenses. Under the Fair Credit Reporting Act, what is the maximum penalty that may be imposed on Ken?

1. $7,000

2. $5,000

3. $3,000

4. $1,000

$5,000

All Health Benefit Plans issued after January 1, 2014 must provide

1. long-term care

2. dental care

3. adult vision care

4. preventative health services

preventative health services

A policyowner has the option to change a beneficiary _____.

1. at any time during the policy term

2. only during the first year of the policy

3. only before the policy is approved and issued

4. only upon the request of the revocable beneficiary

at any time during the policy term

A group Disability Income plan that pays tax-free benefits to covered employees is considered

1. fully contributory

2. group contributory

3. non-contributory

4. partially contributory

fully contributory

Julie has a $100,000 30-year mortgage on her new home. What type of life insurance could she purchase that is designed to pay off the loan balance if she dies within the 30-year period?

Decreasing term insurance

An employer may qualify for health care tax credits through SHOP Marketplace if that employer has fewer than how many employees?

1. 10

2. 20

3. 15

4. 25

25

Under the Affordable Care Act, how would a grandfathered health plan lose its grandfathered status?

1. The insurer raises premiums across the board by 50%

2. The insurer does not re-apply for grandfathered status

3. The insurer applies a lifetime dollar limit on essential health benefits

4. The insurer significantly raises co-insurance charges, deductibles, or co-payment charges

The insurer significantly raises co-insurance charges, deductibles, or co-payment charges

Group dental plans will frequently place a limit on annual benefits in order to minimize

1. administrative costs

2. coinsurance

3. enrollment

4. adverse selection

adverse selection

The election of COBRA for continuation of health coverage will

1. increase out-of-pocket costs and lower premium

2. increase the coverage and lower premium

3. decrease out-of-pocket costs and maintain same premium

4. maintain the same coverage and increase premium

maintain the same coverage and increase premium

Who assumes the investment risk with a fixed annuity contract?

1. The beneficiary

2. The annuitant

3. The owner

4. The insurer

The insurer

The policyholder for a group health benefit plan is considered to be the

1. Insurer

2. Employee

3. Employer

4. Liaison

Employer

Coming from an insurance point of view, which of the following is the main risk associated with disability?

1. Loss of limbs

2. Decreased work skills

3. Loss of income

4. Decreased mobility

Loss of income

The type of policy which pays on the death of the last person is called

1. survivorship life

2. shared life

3. dual life

4. joint life

survivorship life

The taxable portion of each annuity payment is calculated using which method?

1. Tax Basis

2. Cost Basis

3. Exclusion Ratio

4. Taxable Ratio

Exclusion Ratio

An indemnity plan limitation that will pay the dental bills after a small amount is paid by the insured is called

1. coinsurance

2. stop loss

3. a managed plan

4. a deductible

coinsurance

HIPAA considers which of the following as "individually identifiable health information"?

1. A person's net income

2. A person's health claim information

3. A person's hire date

4. A person's employment history

A person's health claim information

An example of endodontic treatment is a

1. filling

2. root canal

3. crown

4. bridge

root canal

Which of the following would be considered a possible applicant and contract policyholder for group health benefits?

1. Human resource department

2. Insurance company

3. Insured employee

4. Employer

Employer

Which of the following statements regarding Group Disability Income insurance is TRUE?

1. It pays 100% or more of an insured's income in the event of disability

2. It provides benefits for nonoccupational illnesses and injuries

3. It usually pays for occupation-related disabilities

4. It is generally more expensive than individual policies

It provides benefits for nonoccupational illnesses and injuries

A beneficiary change can occur

1. normally at any time during the policy term

2. only on specified dates within the policy

3. at no time

4. only upon the request of the revocable beneficiary

normally at any time during the policy term

Sonya applied for a health insurance policy on April 1. Her agent submitted the information to the insurance company on April 6. She paid the premium on May 15 with the policy indicating the effective date being May 30. On which date would Sonya have coverage?

1. 1-Apr

2. 6-Apr

3. 30-May

4. 15-May

30-May

Index whole life insurance contains a securities component that acts as a(n)

1. premium stabilizer

2. means to lowering taxes on earnings

3. hedge against inflation

4. incentive to purchase more coverage

hedge against inflation

If the annuitant dies before the annuity start date,

1. the benefits will be given tax-free only to a stated beneficiary

2. nothing is given to the beneficiary

3. the premiums paid will be given to the beneficiary

4. the premiums paid plus interest earned will be given to the beneficiary

the premiums paid plus interest earned will be given to the beneficiary

Joe has a life insurance policy that has a face amount of $300,000. After a number of years, the policy's cash value accumulates to $50,000 and the face amount becomes $350,000. What kind of policy is this?

1. Increasing Term Life policy

2. Universal Life policy

3. Modified Whole Life policy

4. Nonparticipating policy

Universal Life policy

Which of these would be the best example of a limited pay life insurance policy?

1. Whole life policy with premiums paid up after 20 years

2. Whole life policy that pays out its cash value over a 20 year period

3. Term life policy that returns cash value after 20 years

4. Term life policy with premiums paid up after 20 years

Whole life policy with premiums paid up after 20 years

Who is responsible for assembling the policy forms for insureds?

1. Insurance producers

2. Insurance carriers

3. NAIC

4. State Insurance Departments

Insurance carriers

A disability income policy can prevent an insured from earning a higher income than if he/she were working by utilizing

1. benefit limits

2. deductibles

3. probationary periods

4. elimination periods

benefit limits

Which policy feature makes a universal life policy different from a whole life policy?

1. A fixed cash value

2. The ability to take out a policy loan

3. A fixed death benefit

4. A flexible premium schedule

A flexible premium schedule

Shirley has a $500,000 10-year non-renewable level term life policy. If she dies 15 years after the policy's inception date, how much will her beneficiary receive?

1. $250,000

2. $100,000

3. Nothing

4. $500,000

Nothing

After an insured gives notice of loss, what must he/she do if the insurer does not furnish forms?

1. Contact the insurer again requesting forms

2. Nothing

3. File a lawsuit

4. File written proof of loss

File written proof of loss

In contrast to a guaranteed renewable policy, a noncancellable policy

1. may raise premiums at policy renewal

2. may cancel the policy only at renewal

3. may never raise premiums

4. may raise premiums at anytime

may never raise premiums

A health insurance policy that allows an insurer to change the policyowner's premiums, but NOT cancel the policy is called a(n)

1. noncancelable policy

2. conditionally renewable policy

3. guaranteed renewable policy

4. optionally renewable policy

guaranteed renewable policy

In an insurance contract, the insurer is the only party legally obligated to perform. Because of this, an insurance contract is considered

1. aleatory

2. unilateral

3. conditional

4. voidable

unilateral

What types of life insurance are normally used for key employee indemnification?

1. increasing term insurance

2. term, whole, and universal life insurance

3. joint, credit, and group life insurance

4. adjustable, permanent, and limited-pay life insurance

term, whole, and universal life insurance

Purchasing a life insurance policy in order to avoid the forced sale of assets upon death is called

1. estate funding

2. capital gains

3. capital withholding

4. estate conservation

estate conservation

Which type of life insurance is normally associated with a Payor Benefit rider?

1. Spouse insurance

2. Family income insurance

3. Juvenile insurance

4. Term rider

Juvenile insurance