Life and Health Insurance 3

Which statement regarding the joint and survivor life insurance settlement option is NOT true?

a. Age of the beneficiaries plays a factor when determining the payment amounts

b. Income continues until the last beneficiary dies

c. Two or more beneficiaries can be paid

d. The amount of each installment is larger than the single life income option

An agreement is reached when an insurance contract is formed. Which of the following is NOT considered to be an element of an agreement?

a. Meeting of the minds 

b. Offer 

c. Acceptance 

d. Equity

How long is individual medical expense insurance normally written for?

a. 1 year 

b. 2 years 

c. 3 years 

d. 4 years

The _______ is responsible for determining the appropriateness of a Medicare Supplement policy for an applicant.

a. producer 

b. underwriter 

c. applicant 

d. insurer

These are all accurate statements regarding universal life insurance EXCEPT

a. Mortality charge is deducted from the policy's cash value each month

b. Policy loans are not permitted

c. Flexible premiums as long as the cost of insurance protection is covered

d. Policy states what percentage of the premium is contributed to the cash value and which pays for the cost of insurance

All of these statements concerning group credit life insurance are false EXCEPT

a. Cash value loans are allowable

b. Dividends can reduce the premium payments

c. The face amount and premiums are flexible

d. The face amount is based on the outstanding loan balance

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

a. Return of premium rider

b. Return of cash value rider

c. Reimbursement rider

d. Cost of living rider

The Arizona Life and Disability Insurance Guaranty Fund protects an insured in the event of

a. high inflation

b. disability

c. unemployment

d. the insurer's insolvency

Which of the following best describes the presumptive disability provision?

a. Reduces the incontestability period

b. Increases the monthly benefits stated in the policy

c. Waives the typical total disability requirements

d. Assumes all injuries result in total disability

An insurer will typically assess a back-end load on a deferred annuity that is cancelled during the early contract years. What is this back-end load referred to as?

a. Back-end assessment

b. Cancellation fee

c. Surrender charge

d. Tax penalty

A client applies for an individual accident and health policy in Arizona. If the insurer collects personal information from any source other than public records or the applicant, a notice of application practices MUST be given to the applicant no later than the

a. application date

b. policy issue date

c. policy delivery date

d. presentation date

A business may purchase an annuity for all of the following reasons EXCEPT

a. Structuring a liability settlement payment

b. informally funding a non-qualified deferred compensation plan

c. Accumulating assets on a tax-deferred basis

d. Providing a pension to employees

A life insurance policy that contains an accelerated (living) benefit rider will provide funds if the

a. insured is expected to be confined to a nursing home for life

b. insured recently had a minor heart attack

c. insured has lost use of one arm

d. insured is having dire financial problems

After an annuity has been in force for ___ year(s), it becomes incontestable.

a. 1 

b. 2 

c. 3 

d. 4

Which of the following health insurance plans charges a premium that cannot be increased?

a. Guaranteed renewable 

b. Cancelable 

c. Noncancelable 

d. Conditionally renewable

What qualifies as acceptance of an insurance contract offer?

a. A declined policy

b. An issued policy

c. The application and initial premium

d. The initial premium only

If a producer surrenders their license, how long must they wait to re-apply for the same license?

a. 90 days

b. 6 months

c. One year

d. Two years

Which of the following is NOT a condition that must be met for an accidental death benefit to be paid?

a. Injury must have been suffered prior to a stated age

b. Accidental bodily injury must have been the cause of death

c. Cause of death must be from a job-related injury

d. Death must occur within a stated number of days after the accident

Which of the following disability income provisions allows two periods of disability to be counted as one?

a. Residual disability 

b. Rehabilitative disability 

c. Recurrent disability 

d. Repetitive disability

An individual is seeking coverage for nursing home (custodial) care that does NOT require any previous period of hospitalization. Which program offers these specifications?

a. AHCCCS

b. Medicare Advantage

c. Medicare supplements

d. Medicare Part B

T is covered by an Accidental Death and Dismemberment (AD&D) policy that contains an irrevocable beneficiary. What action will the insurance company take if T requests a change of beneficiary?

A. Request will be accepted only if in writing by the insured

b. Change will be made only if premiums are paid current

c. Change will be made immediately

d. Request of the change will be refused

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?

a. Pre-admission testing

b. Capitation

c. Mandatory second opinion

d. Concurrent review

Which statement regarding the cash value of a whole life insurance policy is correct?

a. Can be borrowed against, starting in the policy's fifth year

b. Cash value accumulation is based on the performance of a separate investment account

c. Available to the policyowner when policy has been surrendered

d. Starts growing with the initial premium

A nonparticipating whole life insurance policy was surrendered for its $20,000 cash value. The total premiums paid had totaled $16,000. What were the federal income tax consequences to the policyowner on receipt of the cash value?

a. $16,000 was received as ordinary income and $4,000 as tax-free

b. $20,000 was received as a capital gain

c. $20,000 was received as ordinary income

d. $16,000 was received tax-free and $4,000 as ordinary income

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

a. Insurance clause

b. Entire Contract clause

c. Consideration clause

d. Premium mode

What is a major difference between private commercial insurers and HMO's?

a. An HMO pays claims on a fee-for-service basis

b. A private commercial insurer typically has fewer health provider choices

c. An HMO combines medical care delivery and funding in one organization

d. A private commercial insurer only offers individual coverage

Emergency health care coverage for Medicare enrollees traveling abroad is

a. excluded from a Medicare Supplement

b. a core benefit under a Medicare Supplement

c. a Medicare Supplement additional benefit

d. a Medicare Part D benefit

When would evidence of insurability be required for a person already covered with a variable universal life policy?

a. When the premium is increased

b. When the policy has renewed

c. When the death benefit is increased

d. When policy is being converted to permanent coverage

A description of a qualified plan's insurance contract may be found in which ERISA reporting form?

a. Annual return/report (Form 5500)

b. Shareholder's report

c. IRS Form 1040

d. Summary report (Form 6500)

A life insurance policyowner would like a dividend option that results in a limited current outlay of funds. Which dividend option would be chosen?

a. Paid-up additions

b. Accumulation at interest

c. 1-year term

d. Reduction of premium payment

The inability to perform SOME of the duties of one's own occupation is known as a

a. Recurrent disability

b. Total and permanent disability

c. Residual disability

d. Presumptive disability

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

a. the policy's maximum lifetime benefit level has been paid

b. the policy is beyond the incontestable period

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

d. the policy is beyond the free-look period

Which type of group plan is excluded from HIPAA rules?

a. PPOs

b. Disability income

c. HMOs

d. Major medical

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

a. periodically increase without proof of insurability

b. periodically decrease without proof of insurability

c. periodically increase with proof of insurability

d. periodically decrease with proof of insurability

A contract is considered void in all of the following situations EXCEPT

a. When one party is a minor

b. When consideration is unequal

c. When consideration is incomplete

d. When agreement cannot be reached between parties

Why do insurers require a minimum number of employees participate in a group insurance plan?

a. Efficiency is maximized

b. Minimize adverse selection

c. Profits are maximized

d. Claims are minimized