Final Exam - Louisiana Life and Health

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

When the recipient pays the premiums

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

Marriage partners

What is the elimination period of an individual disability policy?

Time period a disabled person must wait before benefits are paid

What happens to interest earned if the annuitant dies before the payout start date?

It is taxable

In which of the following situations would the insurer be liable for a loss?

The insured suffered an injury as an innocent bystander during a bank robbery

In what form do disability income policies typically pay benefits?

Periodic income

Which of the following is typically NOT eligible for coverage in a group health policy?

Temporary employee

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

Employer

A Medicare Supplement Policy is

designed to fill in the gaps of Part A and Part B Medicare

Under a Modified Endowment Contract, what are the likely tax consequences?

Pre-death distributions will become taxable

In a Long-Term Care policy, activities of daily living (ADL's) can be each of the following EXCEPT

Talking

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

Equity-indexed annuity

An insurer operating in the U.S. but headquartered outside the U.S. is

an alien insurer

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

adverse selection

All of the following are considered to be fraud EXCEPT

collecting a charge for insurance that is less than the charge applicable to that insurance

A producer's license in Louisiana must be renewed every

Two years

An insured has a health plan that pays established amounts in accordance with a list of injuries, surgical procedures, or other losses. This list is called a

benefit schedule

Under the Consolidated Omnibus Budget Reconciliation Act (COBRA), a terminated employee's benefits must

be the same and the premium cannot exceed 102%

If a producer has been engaged in an administrative action by any governmental agency, within how many days following the final deposition must the producer report the action to the Commissioner?

30

Ownership of a life insurance policy may be temporarily transferred with a(n)

collateral assignment

Under a Traditional IRA, interest earned is taxed

upon distribution

When a Medicare Supplement insurance policy is being replaced, who must sign the notice of replacement?

The producer and the applicant

In Louisiana, regulation for variable insurance contracts are set by all of the following EXCEPT:

State attorney general's office

Which of these factors help determine an insured's life insurance premium?

avocation (hobby)

In general practice, which statement is true of the powers of the Commissioner of Insurance with respect to access to a producer's business records?

Records must be produced upon the request of the Commissioner to the producer

What is an insurer required to do when faced with an error made under the Misstatement of Age provision?

Pay age-corrected benefits

Backdating of life insurance policy applications is allowed if the policies are not backdated earlier than

6 months from the time the policy was applied for

The life insurance and annuity replacement regulation defines replacement as

exchanging an existing policy for a new policy

An example of a presumptive disability would be

deafness

Respite care is able to provide

temporary relief to the patient's primary caregiver

An interest-sensitive life insurance policyowner may be able to withdraw the policy's cash value interest free. The provision that allows this is called

Partial Surrender

Disability Income plans which require that the insurer can NEVER change or alter premium rates are usually considered

Noncancellable

A renewable Term Life insurance policy allows the policyowner the right to renew the policy

without producing proof of insurability

A provision that allows a policyowner to withdraw a policy's cash value interest free is a(n)

partial surrender

An endorsement found in an insurance plan which modifies the provisions of the policy is called a(n)

rider

Select the appropriate response

What is issued to each employee of an employer health plan?

Certificate

What kind of life insurance policy covers two or more people with the death benefit payable upon the last person's death?

Last Survivor Life insurance

A single premium cash value policy can be described as

a policy that is paid up after only one payment

A transaction in which a new life insurance policy is purchased and an existing life insurance policy is surrendered is called

Replacement

In contrast to a guaranteed renewable policy, a noncancellable policy

may never raise premiums

Generally speaking, which three levels of care are Long-Term Care policies provided with?

Skilled nursing, intermediate, and custodial care

Which of the following nursing home options would BEST suit an individual who needs some nursing care and supervision but NOT full-time care?

Assisted living facilities

Fran is currently uninsured. Which of the following would allow Fran to qualify for a special enrollment in his small employer's health benefit plan?

Adoption of a child

Who is the individual paid on a fee-for-service basis?

Provider

Phil is shopping for an annuity that guarantees he CANNOT outlive the benefits. Which of these benefit options would he choose?

Guaranteed lifetime withdrawal benefit

A life insurance policy written on one contract for two people in which it is payable upon the first death is called

Joint

Kathy pays a monthly premium on her health insurance policy. How long is her grace period?

10 days

Which of the following is considered to be an event or condition that increases the probability of an insured's loss?

Hazard

Which of these would limit a company's liability to provide insurance coverage?

Exclusion

Why are dividends from a mutual insurer not subject to taxation?

Because dividends are considered to be a return of premium

Mortality is calculated by using a large risk pool of

people and time

Benefits provided by a Medicare Supplement policy must NOT

duplicate Medicare benefits

The type of multiple protection coverage that pays on the death of the last person is called a(n)

survivorship life policy

One or more necessary or appropriate diagnostic, preventive, therapeutic, rehabilitative, maintenance, or personal care services in a setting other than an acute care unit of a hospital is provided by

long-term care insurance

The "Notice to buyer" on the first page of each long term care policy delivered in Louisiana

explains that some long term care costs may not be covered

A provision in a whole life policy that allows a policyowner to terminate the policy in return for a reduced paid-up policy of the same type is called a(n)

nonforfeiture provision

Key Person Disability Insurance pays benefits to the

employer

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

70% actuarial level of coverage provided

The Commissioner must examine the financial affairs of each admitted insurer operating in Louisiana at least once every how many years?

5

A temporary producer's license is effective for

180 days

Which of the following provides Medicare supplement policies?

Private insurance companies

When an insured has a major medical plan with first dollar coverage, how does this impact the benefits paid?

No deductible payment is required

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

guaranteed renewable policy

Which type of clause describes the following statement: "We have issued the policy in consideration of the representations in your applications and payment of the first-term premium".

Consideration clause

James is the insured on a life insurance policy where his age was misstated on the application. Which of the following is CORRECT regarding the death benefit amount?

The death benefit paid will be what the premium would have purchased at the correct age

All of the following are included as part of a contract in the entire contract provision EXCEPT the

changes made by the producer

Which of these statements regarding the annuitant is CORRECT?

The annuitant's life expectancy determines the annuity payments

Which of these ensures that proceeds of a life insurance policy will be free from attachment or seizure by the beneficiary's creditors?

Spendthrift Clause

Shirley has a Medigap policy, which is designed to pay costs associated with

Medicare Parts A and B

In a health insurance contract, changes may be made:

Only when approved in writing by an officer of the insuring company

When a life insurance policy is replaced, the applicant must sign a notice regarding replacement of life insurance provided by the

Producer at the time of application for the replacement policy

Loans obtained by a policyowner against the cash value of a life insurance policy

would not be treated as taxable income

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

Own occupation clause

In order to act as an insurance producer, a business entity must do which of the following?

Obtain an insurance producer license

David submits a $500 claim for medical expenses. There is a past-due amount owed for insurance premiums of $200. As a result, the insurer only pays $300 for the claim. This deduction came as a result of which provision?

Unpaid provision

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

It would be considered taxable income to the employee

What is the nonforfeiture value of an annuity before annuitization?

All premiums paid, plus interest, minus any withdrawals and surrender charges

Which statement is true regarding Louisiana's continuing education requirements for licensed producers?

A producer must meet specified course requirements within a two-year period

In order to activate the reinstatement clause of a lapsed life insurance policy, the insured MUST

provide evidence of insurability to the insurer

All of the following are unfair claims settlement practices EXCEPT

An attempt to settle a claim by arbitration

Which type of plan would be most appropriate for an individual on Medicare and is concerned that Medicare will NOT pay for charges exceeding the approved amount?

Medicare supplement Plan F

A producer who is licensed in Louisiana but resident in another state is called a

nonresident producer

Before an insurance company may sell insurance in Louisiana, the company must:

Secure a certificate of authority from the Department of Insurance

A rider that assures premiums will be paid on a juvenile policy until the child reaches a specific age is called a(n)

payor rider

Under the Fair Credit Reporting Act, which statement is true?

The consumer who was investigated must be advised that credit, insurance, or employment was denied because of an unfavorable report.

A long-term care policy typically provides all of the following levels of care EXCEPT

acute care

When an insured changes to a more hazardous occupation, which disability policy provision allows an insurer to adjust policy benefits and rates?

Change of occupation provision

Which of the following is considered to be an alternative to a life settlement?

Accelerated death benefit rider

A health insurance policy covers the insured, the insured's spouse, and their child. If additional children are born to the family, the health insurance policy must cover the children

From the date of birth

Ron has a new employer and wishes to enroll in the company's group health plan. In determining whether his pre-existing health condition applies, Ron cannot have more than a ___ day gap without previous health insurance.

63

An insurance producer is one who may do all of the following EXCEPT

Underwrite insurance contracts

Fixed period settlement options are considered to be a form of a(n)

annuity

Which situation accurately describes a reduced paid-up nonforfeiture option?

Policy has a decreased face amount

All of these are valid options for an Adjustable Life Policy EXCEPT

A nonforfeiture option can be used to increase the death benefit

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

Employer

Lisa has recently bought a fixed annuity. Which of these is considered to be a disadvantage of owning this type of annuity?

During periods of inflation, annuitants will experience a decrease in purchasing power of their payments

Maria would like an annuity that provides a guaranteed accumulation or payout. The type of annuity she is seeking is called

annuity certain

Under Louisiana law, the agreement between an insurance producer and insurer under which the insurance producer, for compensation, may sell, solicit, or negotiate policies issued by the insurer is defined as

an appointment

Replacing an existing life insurance policy with a new one may result in

a surrender charge

An annuity becomes incontestable after it has been in force for

2 years