COMBO Life and Health Cram

An HMO utilization management technique known as "concurrent review" requires:
A) Assignment of a case worker to an ongoing claim
B) Pre-authorization
C) An initial consultation with a primary care physician
D) A second opinion

A client wishing to take cash surrender on a deferred annuity during the accumulation period would be exercising a required contractual provision known as:
A) Right of exchange
B) Nonforfeiture
C) Settlement option
D) Loan privilege

When recommending the purchase or exchange of an annuity, a producer shall have reasonable grounds for believing that the transaction is __________ based upon the customer’s financial status, tax status and investment objectives.
A) Suitable
B) Appropriate
C) Reasonable
D) Compatible

The most an insured can collect on a disability policy is most closely tied to which of the following:
A) His income
B) Two times his income
C) A percentage of the poverty level
D) Average income in state

What starts the free look?
A) Delivery receipt
B) Conditional receipt
C) Policy issue
D) Application date

An employee pays that portion of the group disability premium attributable to Residual Disability benefits and the employer pays the balance. If the employee has a claim for Residual Disability, how will the benefits paid out be taxed to the employee:
A) 100% taxable to the employee, since this is a contributory plan
B) 100% taxable to the employee, since this is a group disability income plan
C) Taxable as ordinary income, based upon a proportionate IRS formula
D) Not taxable, since the employee paid for that portion of the coverage

When a dentist uses mechanical devices to straighten teeth, it is known as:
A) Periodontics
B) Orthodontics
C) Prosthodontics
D) Endodontics

Harold has a disability policy with 90/10 coinsurance and a $200 deductible. If he has a $1,200 claim, how much will the insurer pay?
A) $900
B) $300
C) $200
D) $1,200

All of the following are true about Medicaid EXCEPT:
A) It is not part of Medicare
B) It is subsidized by both state and federal monies
C) It is based upon financial need, regardless of age
D) It is sold by private insurers

If a subscriber goes out of network for PPO (Preferred Provider Organization) services:
A) Coverage is not affected
B) The amount of coverage may be reduced
C) There is no coverage
D) Only emergencies are covered

The exchange of values is known as:
A) Offer
B) Legal capacity
C) Acceptance
D) Consideration

Which life insurance rider allows the insured to purchase additional amounts of insurance at specified intervals in the future without a physical exam:
A) Guaranteed insurability
B) Paid up option
C) Extended term option
D) Accidental death benefit

What type of insurance contract is measured in units?
A) Deferred annuity
B) Immediate annuity
C) Variable annuity
D) Fixed annuity

Disability Income (DI) benefits are not subject to income taxation EXCEPT for:
A) Partnership Buy-Out DI
B) Individual DI
C) Group DI
D) Key Person DI

If an insurer allows an insured to violate one of the conditions of the policy, they cannot at a later time void the policy because the condition was violated, under the doctrine of:
A) Adhesion
B) Evidence
C) Alienation
D) Estoppel

Traditional IRAs have a premature distribution penalty for distributions taken prior to age:
A) 59 1/2
B) 65
C) 70 1/2
D) 58

Premiums paid by self-employed sole proprietors or partners for medical expense insurance are:
A) Not tax deductible
B) Taxable
C) Partially tax deductible
D) Totally tax deductible

All of the following are true about a Multiple Employer Trust (MET) EXCEPT:
A) The trustee is the policyholder
B) They are for small employers in the same type of business
C) Enrollees are given a "Joinder Agreement"
D) Employees must purchase all coverages offered by the trust

nnuities are commonly used for all of the following EXCEPT:
A) To fund deferred compensation plans
B) To supplement retirement income
C) To provide income in the event of total disability
D) To fund structured settlements

Sam has life insurance on his own life with his mother as the beneficiary. When Sam gets married, he assigns the ownership of his policy to his wife, who makes no other changes. When Sam dies, the money will go to:
A) His heirs
B) His mother
C) His wife
D) His estate

A disability income policy is written with a 10-month benefit period, a 30-day elimination period and a 30-day probationary period. If the insured becomes disabled due to sickness 9 days after the effective date, the policy will pay benefits for a maximum of:
A) No coverage applies
B) 21 days
C) 270 days
D) 10 months

A life insurance policy sold to each spouse, rather than a joint life policy, would have all EXCEPT:
A) Coverage for both spouses separately
B) Coverage only for the first spouse to die
C) Two separate premiums
D) A combined higher premium

J buys life insurance and names K as the primary beneficiary. If both die as a result of the same accident and it cannot be determined who died first, the proceeds will go to:
A) J's heirs
B) Heirs of K
C) J's estate
D) K's estate

A Medicare supplement policy shall not exclude or limit benefits for losses incurred _____ from the effective date of coverage because it involved a pre-existing condition.
A) More than 6 months
B) Less than 2 months
C) Less than 3 months
D) Less than 6 months

The possibility of loss with no possibility for gain is known as:
A) Certain risk
B) Speculative risk
C) Uninsurable risk
D) Pure risk

A producer who fails to segregate premium monies from his own personal funds without the express written consent of the insurer is guilty of:
A) Embezzlement
B) Larceny
C) Theft
D) Commingling

All of the following are true about immediate annuities EXCEPT:
A) They are often used in structured settlements
B) There is no beneficiary
C) They pay for the lifetime of the annuitant
D) There is no accumulation period

The 'insurance with other insurers' provision declares that if there is other valid coverage with more than one insurer providing benefits for the same loss, the two insurers would:
A) Both deny coverage in hopes that the other insurer will cover the claim
B) Both cover the same claim in full, therefore paying the insured twice for a single claim
C) Share the claim proportionately
D) Place all claim responsibility on the insurer of the policy that was active first

Part A of Medicare is coverage for ___ and Part B is coverage for ___ .
A) Hospitalization / Physician's services
B) Hospitalization / Prescription drugs
C) Physician's services / Hospitalization
D) Physician's services / Prescription drugs

If a person exiting a streetcar elects to leap down the steps and breaks his ankle:
A) The resulting injury would be covered only by an AD&D policy
B) The broken ankle would be considered intentional and foreseen
C) The leap was intentional, but the injury was unforeseen
D) There would be no coverage, since the leap was intentional

The plan of Permanent Life insurance that offers cash value at the lowest premium is:
A) A Limited-Pay Life policy
B) A Term policy
C) An Annuity contract
D) A Whole Life policy

An annuitant has paid monthly premiums into a deferred annuity over a period of time totaling $20,000. Due to tax deferred earnings in the account, his account balance at age 60 is $30,000. If he now takes a partial withdrawal of $5,000, how much is taxable?
A) $10,000
B) None, since benefits of life insurance products are never taxable
C) None, since he withdrew less than his cost basis
D) $5,000

All of the following are true regarding Key Employee Disability Income insurance EXCEPT:
A) Benefits are payable to the employer to retrain a new person
B) Premiums are not tax deductible for the employer
C) Benefits are taxable to the employer
D) The employer owns the policy

Group life is convertible to:
A) Term
B) Retirement account
C) Annuity
D) Whole life

Which of the following would not be considered an unfair claims settlement practice?
A) Refusing to pay a claim after conducting a proper investigation
B) Requiring a claimant to submit to arbitration
C) Failure to respond promptly to claims communications
D) Offering a claimant a much lower settlement than they are later able to win in court

A customer buys $20,000 life insurance policy with a $20,000 AD&D rider. The rider will pay double if the insured dies of:
A) Heart attack
B) During an operation to remove spleen
C) Cancer
D) Car accident

Which life insurance rider allows policy proceeds to be paid out prior to the insured's death?
A) Cash surrender
B) Accelerated benefits
C) Paid up additions
D) Automatic premium loan

What are the tax implications when an annuitant elects to take cash surrender of a deferred annuity during the accumulation period at age 56?
A) Only the interest is taxable as ordinary income, plus a 10% early withdrawal penalty
B) All of the funds distributed are taxable as a capital gain
C) All the funds distributed are taxable as ordinary income
D) Only the interest is taxable as ordinary income

On health insurance, if your doctor charged $50 more than what is usual, customary and reasonable, the $50:
A) Counts toward deductible
B) Counts toward coinsurance
C) Must be covered by the insurer
D) Is not covered

A dentist is off work for 4 months due to a disability. His dental assistant's salary would be covered by:
A) Business Overhead Insurance
B) Key Employee Disability
C) Disability Income
D) Partnership Disability

A health insurance claim occurs on May 30th, but the policy lapses on June 1st. If the claim is not turned in until June 8th, what will the insurer do?
A) Pay the claim
B) Deny the claim
C) Pay the claim, but subtract the overdue premium
D) Pay the claim, but send a bill for the overdue premium

When an insured purchases a Decreasing Term policy, which of the following decreases each year:
A) The premium
B) The cash value
C) The reserve
D) The face amount

A provision contained in most group medical expense policies that applies when a claim is covered by more than one policy is known as:
A) Case Management
B) Retrospective Review
C) Coordination of Benefits (COB)
D) Utilization Management

Proof of loss required for claims shall be submitted to the insurer within _____ after the date of loss.
A) 90 days
B) 3 years
C) 30 days
D) 2 years

On life insurance, the Misstatement of Age clause permits:
A) The face amount to be paid at death, less any overdue incorrect premiums
B) The face amount to be adjusted to what the correct premium would have purchased
C) The insurer to void a claim during the first 2 years due to misrepresentation
D) The premium to be adjusted to reflect the correct age

All of the following are factors in determining the amount of Key Person life insurance an employer should buy on an employee EXCEPT:
A) The amount it would cost to conduct a job search for a replacement
B) The amount of group life coverage the employee already has
C) The amount it would cost to train a replacement
D) The amount of income lost until the key person can be replaced

Joe gets married and wants to add his new spouse to his policy. He should purchase which rider?
A) Cost of Living rider
B) Waiver of Premium rider
C) Term insurance rider
D) Other insured rider

The penalty for taking a policy loan as a premature distribution on a life insurance policy that has been classified as a Modified Endowment Contract (MEC) is:
A) 5%
B) 10%
C) None, life insurance policies are not subject to early withdrawal penalties
D) 7 1/2%

Medical expense benefits received by a partner or sole proprietor are:
A) Partially taxable
B) Not taxable
C) Proportionately taxable
D) 100% taxable

A(n) _____ provision in a sickness and accident insurance policy states that after two years from the date of issue of a policy, no misstatements made by the applicant shall be used to void the policy or deny a claim for loss incurred or disability after the expiration of that two-year period.
A) Claim guaranteed
B) Entire contract
C) Time limit on certain defenses
D) Invincible

An outline of coverage includes descriptions of all the following EXCEPT:
A) Reductions
B) The insured's health status at the time of application
C) Terms under which the policy will continue in force
D) Limitations

To qualify for disability income benefits from Social Security, you must:
A) Have enrolled in Medicare
B) Be at least age 65
C) Be eligible for Medicaid
D) Have fully insured status

Which of the following statements correctly defines conversion:
A) COBRA
B) Leaving the group and going to an individual policy
C) Staying in the group
D) Buying an individual policy

A client wants cash value life insurance with a flexible premium and an adjustable death benefit that will allow him to self-direct where the cash value is invested. He should buy:
A) Variable annuity
B) Traditional whole life
C) Variable life
D) Variable/Universal life

A 30-year-old planning for retirement at age 60 would not buy:
A) Deferred annuity
B) Immediate annuity
C) 401k
D) IRA

Each individual insured by a group life insurance policy shall receive:
A) A certificate of insurance
B) Casualty insurance
C) Limitations transferring the rights or privileges of policy ownership
D) The same standard provisions required for individual life insurance policies

All of the following are true regarding Universal life insurance policies EXCEPT:
A) They have no minimum guaranteed rate of return
B) They have a flexible premium
C) They are also known as “interest sensitive” whole life
D) Partial surrenders are permitted without paying tax on the earnings

The ____ protects consumers by requiring notifications of consumer reports and establishing the removal of outdated and incorrect information.
A) Privacy of Insurance Consumer Information Act
B) The Consumer Reporting Act
C) Unfair Trade Practices Act
D) The Fair Credit Reporting Act

When a person is permitted to return a sickness and accident policy within 10 days of its delivery to the purchaser because they were unsatisfied with the policy, that person is exercising the rights of what insurance contract provision?
A) Right to examine
B) Free try
C) Free temporary use
D) Right to try

The amount of annuity benefits included in the value of the estate of a deceased "life income only" annuitant is:
A) The interest earned in the annuity account
B) Zero
C) The amount of the premium paid
D) The amount of future benefits to be paid

An insured can change a policy's beneficiary:
A) With the consent of the beneficiary
B) With the consent of the insurer
C) Without the consent of the beneficiary
D) A policy's beneficiary can never be changed

Survivorship life is often purchased to:
A) Provide money for the spouse
B) Provide money for the kids
C) Pay estate taxes
D) Fund a retirement

An insured paid $4,000 in premiums on his whole life policy over a period of time. When his cash value equaled $6,500, he elected to take cash surrender. How much is taxable:
A) $6,500
B) None, life insurance benefits are never taxable
C) $4,000
D) $2,500

When an insurer requires pre-authorization prior to hospitalization, all are true EXCEPT:
A) Pre-authorization is a form of Utilization Management
B) Unnecessary hospitalization may be avoided
C) Overall insurer expenses will probably increase
D) Specifically, pre-authorization is a form of prospective review

The rider that will pay the premium on a child's policy if a parent becomes disabled is:
A) Waiver of premium rider
B) Payor Benefit rider
C) Cost of living rider
D) Guaranteed Insurability rider

An insurer who legally sells insurance in this state, but is domiciled in another country, is considered to be:
A) Foreign
B) Alien
C) Unauthorized
D) Domestic

Each Medicare supplement policy shall _____ renewable.
A) Only partially be
B) Be guaranteed
C) Never be
D) Conditionally be

An insurer incorporated under the laws of another state but doing business in this state is known as a(n) ________ insurer.
A) Foreign
B) Domestic
C) Alien
D) Multi-national

Purchasing insurance is:
A) Avoiding risk
B) Reducing risk
C) Retaining risk
D) Transferring risk

A long-term care policy's payment of benefits is conditioned on the determination of:
A) The insured's ability to perform activities of daily living
B) The insured's gender
C) The insurer's opinion of the insured's financial need
D) The insured's age

On a Major Medical plan, all are true about coinsurance EXCEPT:
A) It prevents overutilization of insurance coverages
B) It requires the insured to pay a portion of the claim, before the deductible
C) It helps hold down the cost of insurance premiums
D) It requires the insured to pay a portion of the claim, after the deductible

The purpose of the suicide exclusion is to:
A) Exclude coverage for those contemplating suicide
B) Always cover suicide
C) Encourage people contemplating suicide to buy insurance
D) Never cover suicide

A self-employed stockbroker buys an individual disability policy that pays her $1,500 a month if she is off work due to a disability for 1 year. How much is taxable?
A) $9,000
B) None
C) $15,000
D) $4,500

An applicant purchased a disability policy on his wife that included an Accidental Death and Dismemberment benefit. He named himself as the beneficiary and specified that the death benefits were to be payable to his son if he, the applicant, were to predecease his wife. In this situation, the applicant’s son would be considered the:
A) Contingent beneficiary
B) Policyholder
C) Primary beneficiary
D) Insured

Anyone may take out a life, annuity or accident and health insurance policy on another individual if the applicant has:
A) Insurance policies for themselves with the same insurer as the one in which they are applying for the new individual's insurance
B) Enough money to pay the premiums
C) Passed the age of 25
D) Insurable interest

Statements made by an applicant for a life insurance policy that are supposed to be true are referred to as:
A) Warranties
B) Information
C) Representations
D) Facts

If a person wishes to purchase a health policy that would pay for hospital bills in case of an accident, they would purchase a:
A) Disability Income policy
B) Accidental Death and Dismemberment policy
C) Hospital Indemnity policy
D) Major Medical policy

Premiums paid by an employer for group health insurance are:
A) Included in the employee's taxable income
B) May be different amount for different employees
C) Tax deductible to employer
D) Tax deductible to employee

Coverage under Medicaid for custodial care in a nursing home is based upon:
A) Age
B) Purchase of a Medicare Supplement or Medi-Gap policy
C) Financial need
D) Enrollment in Medicare

A "cancelable" policy of health insurance may be canceled by:
A) The insured only
B) The agent, insurer or the insured
C) Either the insurer or the insured
D) The insurer only

The policy provision that applies after a policy lapses and the insured wants it back is:
A) Renewability
B) HIPAA
C) Conversion
D) Reinstatement

Generally, coverage under a group health insurance policy is convertible to individual coverage:
A) For 31 days after termination of employment, subject to insurability
B) Up to 18 months after termination of employment, subject to insurability
C) For the primary insured employee only, not dependents
D) For 31 days after termination of employment, without a physical exam

Which of the following insurance doctrines states that ambiguities in a policy will always be construed against the insurer:
A) Alienation
B) Unilateral
C) Adhesion
D) Utmost good faith

Which of the following would NOT be considered to be an Unfair Trade Practice:
A) Requiring a person to buy insurance as a condition to credit approval
B) Charging a premium higher than that filed and approved by the Commissioner
C) Paying dividends out of surplus accumulated on a participating policy
D) Using false or misleading advertising

Mr. Baugh elects to make a direct rollover of his traditional IRA from one trustee to another trustee at age 35. How is this taxed?
A) All is taxed as ordinary income in the year of the rollover
B) There is no current tax implication
C) Income taxes are incurred, but the 10% IRS penalty is waived
D) All is taxed as capital gain in the year of the rollover

Annuities are underwritten by:
A) Insurance companies
B) Insurance Agents
C) Banks
D) Securities firms

If the insurer does not send the insured claim forms within the time period specified, which of the following is correct:
A) The insurer must send claims forms
B) The insured may submit any form which will be considered to satisfy the request
C) The insured is relieved of any further responsibility
D) The insured does not have to submit claims forms

Term conversion is based upon:
A) Age 30
B) Current age
C) Original age
D) Current health

The 'entire contract provision':
A) Must only be included in sickness and accident policies for insureds under the age of 65
B) Must be included in every sickness and accident policy
C) Will not be included in a sickness and accident policy unless requested by the insured and a higher premium will be charged for the provision
D) Is only included in sickness and accident policies at the request of the insured

All of the following could disqualify you from group insurance eligibility EXCEPT:
A) Attaining age 65
B)
C) Labor Union membership
D) Part-time employment
Independent contractor status

An underwriter does all of the following EXCEPT:
A) Evaluate risks
B) Adjust losses
C) Categorize applicants
D) Determine applicants' rate

Which of the following is NOT true regarding employer group life insurance:
A) The employer may require employees to pay the premium for dependents
B) The employees receive Certificates of Insurance
C) The employer is the beneficiary
D) If the employer pays all of the premium, 100% of eligible employees must enroll

A producer or agent could go to jail for all of the following EXCEPT:
A) Writing threatening letters to public officials
B) Embezzlement
C) Fraud
D) Selling insurance in this state with a non-resident insurance license

Making oral or written statements that are false or maliciously critical of or derogatory to the financial condition of an insurer that is calculated to injure any person engaged in the business of insurance is considered to be:
A) False advertising
B) Twisting
C) Coercion
D) Defamation

A rider added to a life policy to create coverage for the entire family is called a:
A) Family maintenance rider
B) Family term rider
C) Family income rider
D) Other insured rider

Clark's credit union refused his application for an auto loan unless he agreed to purchase credit life insurance from them. This is an example of:
A) Defamation
B) Misrepresentation
C) Unfair discrimination
D) Coercion

All of the following are true regarding PPOs EXCEPT:
A) They may be operated by insurance companies
B) They may only be operated by hospitals
C) The amount of coverage is reduced for out-of-network services
D) Employers may offer a PPO as well as a traditional indemnity plan to employees

A 30-year-old wants cash value life insurance that will cover him until he dies but that he can pay up before he retires at age 60. He should buy:
A) 30-year level term
B) 30 pay life
C) Endowment
D) Traditional whole life

Upon continuation of group coverage, the employer must give the employee info regarding all EXCEPT:
A) New premium amount
B) Summary of group coverage
C) Premium payments schedule
D) Where to pay premium

All of the following are true regarding the tax implications of health insurance EXCEPT:
A) Benefits received by an employer from a Key Person disability policy are not taxable
B) Benefits received from an individual Disability Income policy are not taxable
C) Medical expense premiums paid by a sole proprietor are partially tax deductible
D) Premiums paid by the employer for a group health policy are not tax deductible