Life and Health Insurance 4

How is an insured's accident and health claim handled by an insurer if it occurs during the policy's grace period?

a. The claim has to be approved by an officer of the insurer

b. No claim will be paid until premium is paid current

c. The claim is paid in full and the unpaid premium will be waived by the insurer

d. The unpaid premium may be subtracted from the reimbursement

The "Use it or Lose it" rule applies to

a. Medical Savings Accounts 

b. Health Savings Accounts 

c. Health Reimbursement Accounts 

d. Flexible Savings Accounts

An annuitant is paid $495 per month until the contract value is exhausted at some undetermined date in the future. Which type of annuity payout option is this?

a. Fixed amount 

b. Straight life 

c. Period certain 

d. Installment refund

A long-term care policyowner is replacing existing coverage with a new policy. Replacement regulations require a(n) ________ notice be signed by the applicant and retained by the replacing insurer.

a. exchange 

b. cancellation 

c. replacement 

d. replication

What kind of life policy typically offers mortgage protection?

a. Whole life 

b. Decreasing term 

c. Increasing term 

d. Level term

A teacher recently retired at age 63 and has a tax sheltered annuity (TSA). Periodic deposits total $120,000 and the value of the contract is now worth $200,000. How much is taxed if the current value is surrendered today?

a. $200,000 

b. $80,000 

c. $120,000 

d. $0

Which event triggers a deferred annuity to start making benefit payments to the annuitant?

a. When the owner dies

b. When the contract's cash value exceeds the cost basis

c. When the contract is annuitized

d. Cash surrender of the annuity

An insurance application requires an applicant to make a full, accurate disclosure of the risk factor involved. Using this criteria, an insurance policy is considered what type of contract?

a. Aleatory contract 

b. Estoppel contract 

c. Contract of utmost good faith 

d. Unilateral contract

A Guaranteed Renewable provision allows

a. discrimination of individuals who have an increased loss experience

b. premiums that may not be increased beyond contractual requirements

c. premiums which can only be increased per rate class

d. cancellation of the policy at the insurer's discretion

Under HIPAA requirements, eligibility for the pre-existing conditions exclusion waiver under new coverage is lost if

a. there is a break in coverage of more than 33 days

b. there is a break in coverage of more than 43 days

c. there is a break in coverage of more than 53 days

d. there is a break in coverage of more than 63 days

Which of the following statements is TRUE if the owner of an IRA names their spouse as beneficiary, but then dies before any distributions are made?

a. Surrender charge is applied

b. The account can be rolled into the surviving spouse's IRA

c. Distributions will be received tax-free if surviving spouse is over age 59 1/2

d. Future distributions are payable to the owner's estate

According to HIPAA regulations, which of the following may reduce a medical plan's pre-existing conditions exclusion?

a. An improvement in health over the previous three months

b. Any period of prior coverage

c. Any period of treatment in the twelve months prior to enrollment

d. Passing a physical examination

Which of the following best describes the purpose of HIPAA?

a. To eliminate current policy limitations and reductions

b. To reduce a pre-existing condition waiting period when coverage is sought for a new medical plan

c. To reduce the elimination periods in individual and group disability income plans

d. To provide benefits for a person’s loss of income

What type of premiums are associated with individual mortgage protection life insurance policies?

a. Level premiums

b. Flexible premiums

c. Modified premiums

d. Decreasing premiums

Death proceeds from a life insurance policy are typically included in a deceased insured's gross estate

a. for federal income tax reasons

b. for federal and state income tax purposes

c. only if the insured's estate is listed as beneficiary

d. only if the policy is owned by the beneficiary

Which would NOT be a location where skilled nursing care is provided?

a. Hospital

b. Custodial care facility

c. Nursing home

d. Personal residence

What is the face amount of a $50,000 graded death benefit life insurance policy when the policy is issued?

a. $0

b. $50,000

c. Under $50,000 initially, but decreases annually over time

d. Under $50,000 initially, but increases over time

Which annuity allows contributions to an IRA?

a. Single Premium Immediate Annuity (SPIA)

b. Annuity certain

c. Deferred

d. Life with period certain

Which statement concerning a decreasing term life policy is accurate?

a. Cash value decreases over the policy period

b. Premium decreases over the policy period

c. Face amount decreases over the policy period

d. Face amount stays the same over the policy period

How long does protection normally extend to under a limited pay whole life policy?

a. It depends on the performance of the underlying investment account

b. When premiums are no longer required as stated in the contract

c. Until age 65

d. Until age 100

The interest paid during an annuity's payout period is considered

a. nontaxable

b. taxable as ordinary income

c. taxable as capital gains

d. tax-deductible

In long-term care insurance, what is the length of time for which claims will be paid?

a. Benefit period

b. Free-look period

c. Grace period

d. Elimination period

In what situation could an insurance policy's coverage be modified?

a. Applicant is a preferred risk

b. Applicant is a substandard risk

c. Applicant is a standard risk

d. Applicant is uninsurable

What is the effect of the market value adjustment in a market value adjustment annuity?

a. Transfers the tax liability to the owner

b. Allows owner to periodically adjust the investment risk

c. Transfers some of the investment risk to the policyowner

d. No effect

An insured must notify an insurer of a medical claim within how many days after an accident?

a. 10 

b. 20 

c. 30 

d. 40

Which of the following BEST describes a "partial disability"?

a. Becoming deaf in one ear

b. Unable to perform all job duties due to a short-term disability

c. Unable to perform one or more job duties

d. When a disability recurs from a previous illness or accident

Which of these is NOT considered a type of limited payment whole life insurance?

a. Life paid-up at 65

b. 20 payment life

c. 15 payment life

d. Endowment at age 70

A Medicare Supplement policy is required to do which of the following?

a. Provide a 10 day free-look period

b. Provide a 20 day free-look period

c. Provide a 30 day free-look period

d. Provide a 60 day free-look period

XYZ Insurance Company gives direct authority to its producers to sell insurance through an agency contract, but nothing is stated regarding the collection of premiums. Which authority grants the producer the right to collect premiums?

a. Implied authority

b. Apparent authority

c. Express authority

d. Assumed authority

In regards to the Affordable Care Act (ACA), which of these is NOT a role of a health insurance exchange?

a. Offer individual, unique formats for consumers to evaluate different health plan options

b. Certify that a health plan is qualified to be offered on the exchange

c. Contact the employer if an employee stops coverage under a plan offered in the exchange

d. Resolve and verify an applicant's inconsistent or incomplete information

Which life insurance policy provision prohibits a beneficiary from "commuting, encumbering, withdrawing, or assigning" any portion of the proceeds prior to actual receipt from the company?

a. Insuring clause

b. Spendthrift clause

c. Nonforfeiture provision

d. Collateral Provision

A life policy's spendthrift clause would have no effect if the beneficiary is paid the proceeds as a

a. fixed-period installment

b. life income option

c. fixed-amount installment

d. lump-sum payment