Life and Health Insurance: Policies, Benefits, and Coverage Rules

Insurance Exam Question When can a life insurance policy be issued WITHOUT the insured's consent? What benefit is payable to a life insurance policyowner who has contracted a terminal illness? When a life annuitant outlives life expectancy, the funds for additional benefit payments will be derived primarily from funds that were Specialty care is provided by which of these health maintenance organization (HMO) providers? Long-term care policies normally cover expenses associated with An accident and health insurance policy covers the insured, the insured's spouse, and their child. If additional children are born to the family, the accident and health insurance policy must cover the children A contingent beneficiary is described as the Which of the following would permit an insurer to delay a covered disability policy claim? When an individual is covered under a small employer's accident and health plan, the pre-existing conditions exlcusion period may be partially or wholly satisfied by Which statement is correct regarding accident and health insurance provided by a partnership for its partners? A disability buy-sell agreement best suited for businesses with a limited number of partners is called Answer When a parent purchases a policy on the life of a minor child Accelerated (living) benefit Not distributed to life annuitants who died before life expectancy Neurologist Nursing homes From the date of birth person who receives the death benefits if the primary beneficiary dies before the insured Elimination period having creditable coverage with a previous employer Benefits are received income tax-free by the partners A cross purchase agreement a federal health program for individuals over the age of 65 or permanently disabled Which dental specialty deals with the replacement of missing teeth? Prosthodontics Who would be the most likely party for legally entering into a Small employer contract? Which action will trigger a tax penalty on premature distributions policy loans from a modified endowment contract (MEC)? Covers preventative care for adults and Generally, an indemnity plan which covers dental expenses children once every six months The process of analyzing exposures that create risk and designing management programs to handle them is called risk What is a condition for which medical advice or treatment was recommended by or received from a provider of health care service Pre-existing condition within six months preceding the effective date of an individual longterm care policy? In Arizona, continuation of accident and health insurance plan and dependency upon reaching coverage for a handicapped child beyond the age limit stated in the Incapacity the age limit policy may require proof of the child's Which of these is typically regarded as a major treatment in an Dentures indemnity dental plan? Tonya has been diagnosed with kidney failure and has group accident and health insurance through her large employer. Which of Her employer's group accident and health these accident and health plans will be primary during the months plan following her diagnosis? An insurer may refuse to renew individual accident and health The insured developed a critical health insurance coverage in all of the following circumstances EXCEPT condition Premiums for an individually-owned disability income policy are Not tax-deductible at all An individual currently owns a long-term care policy. At the time of application for similar coverage, which item must be signed by the A replacement notice applicant and retained by the insurer? Medicare can be described as Disability income insurance normally excludes coverage for disabilities that arise from The back-end charge typically associated with an annuity that has been cancelled too early is called a Prepaid dental plans differ from most other types of dental plans in what way? Which of these would be the likely course of action taken by an insurer when handling a substandard-risk applicant for disability income insurance? What action does an insurance company take under the rehabilitation benefit in a disability income policy? Claims settlement practices of insurers are regulated by: Arizona law requires the Human Immunodeficiency Virus (HIV) consent form to In what way is an insured preferred provider plan similar to an indemnity plan? Which would NOT be a location where skilled nursing care is provided? All of the following are unfair claims settlement practices EXCEPT Ambiguities in insurance contracts are typically interpreted in favor of the insured. This rule is referred to as When dealing with long-term care coverage, which of the following are classified as ADLs? Kim has a life insurance policy which insures all the members of her family. The benefit supplement attached to a life insurance policy which insures all members of a family is called a Which of these is true regarding the exchange of consideration among parties involved in an insurance contract? An accident and health insurance policy's premium requirements are set forth in which of the following provisions? A prepaid dental plan has an agreement in place with a network of dentists which An individual participant personally received eligible rollover funds from a profit-sharing plan. What is the income tax withholding requirements for this transaction? Under Arizona workers' compensation laws, which of the following situations would be excluded from disability benefits? What can be expected when a preferred provider organization (PPO) patient decides to use a non-PPO? When does the producer give a premium receipt for a life insurance application? An accident and health plan that typically covers only the services of approved providers is called a(n) An annuity owner has a life annuity which provides benefit payments for a minimum number of years, regardless of when the annuitant dies. The contract feature of this annuity is called All of these are common limiting factors with dental insurance EXCEPT for How long may an insurer legally defer paying the cash value of a surrendered life insurance policy? Which statement concerning a decreasing term life policy is accurate? A policyowner suffers a covered accident and health insurance loss on June 30 and submits the proof of loss to the insurer July 10. If the policyowner cancelled the coverage on July 2, how will the insurance company handle the claim? The Do Not Call Registry was designed to prevent calls from Tom has a qualified retirement plan with his employer that is currently considered to be 80% "vested". How can this be active military duty surrender charge Closed panel of dentists can only be used Reduce the benefit period covers the cost of the rehabilitation necessary to help a disabled insured return to work State insurance departments Disclose the types of individuals or organizations that may receive a copy of the test results Both pay providers on a fee-for-service basis Personal residence An attempt to settle a claim by arbitration Reasonable expectations Eating, bathing, dressing Family term rider Can be unequal Consideration clause accepts an established amount as payment in full for the dental services rendered 20% is withheld for income taxes Intentional self-inflicted injuries at the workplace Higher out-of-pocket expenses When the initial premium has been collected with the application HMO plan period certain Limit placed number of teeth that may be treated annually 6 months Face amount decreases over the policy period Claim must be paid after proof of loss is received Telemarketers If Tom's employment is terminated, 20% of the funds would be forfeited interpreted? In Arizona, when personal information is collected from a source other than the accident and health insurance applicant or public records, a notice of information practices must be given to the applicant no later than the date of Under the Affordable Care Act, all plans that offer coverage to children under the child's parents plan, will continue to provide coverage until those children reach what age? When the employer pays the premium, covered individuals normally receive tax-free benefits under all of the following group health plans EXCEPT In Arizona, an attempt to defraud an insurance company is considered All of these are duties that a producer may be required to perform when delivering an insurance policy EXCEPT How long is a person covered for under a limited pay whole life policy? The difference between a doctor's actual charges and the amount approved by Medicare is called a(n) In Arizona, an insurer providing small employer group medical plans may discontinue an employer's coverage if What is the name of the rider that provides an additional purchase option in a life insurance policy? A transaction in which a new life insurance policy is purchased and an existing life insurance policy is surrendered is called The insurance coverage in a variable life insurance policy may fluctuate according to Medicare supplement insurance that provides a preventative medical care benefit will often cover An insurer has a contractual agreement which transfers a portion of its risk exposure to another insurer. What kind of contract is this? In accident and health insurance, 60 days must pass after written proof of loss has been received by an insurer before the insured may Misrepresenting pertinent policy provisions relating to coverage after a loss is Which statement regarding the waiver of premium rider is accurate? Group dental insurers can discourage adverse selection by A person can receive Medicare Part A Hospital benefits, regardless of age, as long as the person has received which of the following benefits for at least 24 months? Death benefits from a life insurance policy are normally considered to be A producer must maintain customer records for how many years following the completion date of the insurance transaction? When a Medicare Supplement insurance policy is being replaced, who must sign the notice of replacement? Bert’s spouse passed away recently. Bert was covered under his spouse’s group family health insurance plan but now is covered under COBRA. How much of the active-employee cost may be passed on to Bert for continued coverage? The administrator of a reciprocal insurer who manages the premiums collected from the group's members is called All of the following may obtain a temporary's producer's license EXCEPT When using the needs approach to life insurance planning, lump sums may be created for all of the following reasons EXCEPT Which of these is NOT a factor in the underwriting process of a life insurance application? Under which plan does an employer give money to an employee to purchase a life insurance policy and allow the employee to choose Application 26 Disability income A felony Leave a conditional receipt with client Until age 100 excess charge The insurer no longer offers the plan to any employer Guaranteed insurability rider Replacement its underlying investments yearly physical examinations Reinsurance Bring legal action against the insurer An unfair claims settlement practice Cash payments are not directly provided to the policyowner Limiting benefits for late enrollees Social Security Disability exempt from federal income tax Three The producer and the applicant Maximum of 102% An attorney in fact An employee of a licensed producer who is retired Employee benefits National origin Split-dollar the beneficiary? According to the needs approach, an emergency reserve fund's primary purpose is to The death of an annuity contract owner will generally trigger a payout to the beneficiary. How may the spouse as beneficiary of the annuity owner avoid the income tax burden? When a $50,000 life insurance policy is issued as a substandard risk on a graded death benefit basis, the amount of the policy's death benefit is What is considered the collateral on a policy loan? All of these statements concerning group credit life insurance are false EXCEPT EXCEPT for fraud, the time after issuance of a policy during which an insurance company may contest a health insurance claim due to the statements on an application is Which statement is true of trade association groups eligible for group medical benefits? Which of these life insurance policies do NOT contain cash value provisions? An arrangement where an individual is authorized to act on behalf of another person or company is sanctioned through She pays for the portion of the premium attributable to the cost of residual disability benefits, while her employer pays for the remainder. What are the tax implications of this policy? What is Arizona's REQUIRED grace period for a life insurance policy? An annuity becomes incontestable after it has been in force for A rating on a disability income insurance policy means that Fee-for-service is an accident and health insurance benefit payment model in which Under the uniform mandatory provisions, an accident and health insurer has the right to request an autopsy When determining the premiums for a large group, most insurance companies use A disability income insurance policy was recently issued with a rating. What does this mean? During an annuity's liquidation phase, the annuitant normally Based on age criteria only, which of the co-annuitants listed below would receive the largest monthly benefit payments in a joint and survivor annuity? John has a criminal record in which he was convicted of a felony that involved dishonesty. Under Federal law, how would John be able to engage in insurance transactions? How long does one premium payment cover in a single premium whole life policy? Pay for unexpected expenses The spouse as beneficiary may continue the contract with deferred taxation as contingent owner initially less than $50,000 and increases over time The policy's cash value The face amount is determined by the outstanding loan balance 2 years Members of the associations are usually in the industry Decreasing term life the law of agency Residual benefits will be received income tax-free 30 days 2 years An additional premium will be charged the cost of each service is scheduled as outlined in the policy Only where not prohibited by law Experience rating Policyowner will be charged an additional premium receives benefit payments at regular intervals Age 71 and 73 Given written consent by the state insurance regulatory agency Entire length of the policy Which statement concerning a deferred annuity is correct? The owner can be the beneficiary, annuitant, or neither An insurance company's voluntary refusal to enforce a contract's provision is called a(n) Which of these is NOT considered a preventative service in a dental plan? Which of these is NOT considered to be a cost connected with an individual's death? What type of reinsurance contract involves two companies automatically sharing their risk exposure? Employers will frequently purchase life insurance on a key employee in order to waiver Insurable interest involves what assumption? Fillings Business expenses Treaty help offset the cost of finding and training a replacement One person benefits from the continuation of another's life Under which circumstance is the interest rate guaranteed within a market value adjusted annuity? The stated amount or percent of liquid assets that an insurer must have on hand that will satisfy future obligations to its policyholders is called An insured is entitled to coverage under a policy that a prudent person would expect it to provide. This principle is called An employer has a group life insurance plan in place for his employees. How would an employee with health problems be treated in this situation? False advertising of an insurance policy is considered Who would be most qualified for Medicare Supplement insurance? Which of the following statements is true regarding accident and health insurance claims that reimburse on an indemnity basis? When there is a named beneficiary on a life insurance policy, the death benefits All of these are used to prevent adverse selection in a group dental plan EXCEPT Which of the following statements regarding hospital pre-admission authorization is NOT true? An insurance contract may be voided if a misrepresentation found on the application is determined to be Which one of the following encourages preventative care in dental insurance? Which of these situations would NOT potentially involve a prison sentence under Federal law? Which type of Medicare Supplement information can be used without prior state approval? When must interest income in a flexible premium deferred annuity be reported for federal income taxes? What would be a valid reason for naming a trust as the beneficiary of a life insurance policy as opposed to naming an individual? Pete is covered by an employer-provided group health insurance plan, which covers employees in multiple states. This plan is governed by the laws of which state? Health providers are compensated by a preferred provider organization (PPO) for normal dental procedures by what means? All of the following are covered under most dental plans EXCEPT for What is the minimum number of employees needed for a small employer medical expense plan in Arizona? In Arizona, an insurer discontinues offering a particular type of small group medical coverage. Participants must receive advance notice of at least Under which circumstance can an insurer cancel a Medicare Supplement insurance policy without prior approval by the Arizona Department of Insurance? Which of the following health insurance provisions requires that the application becomes part of the policy? In Arizona, a group accident and health certificate of insurance must contain Which of the following is NOT a dividend option for a life insurance policy? In Arizona, a long-term care policy may offer coverage When the contract has been in force for the period specified in the policy reserves Reasonable expectations Eligible for standard coverage on this plan Misrepresentation Medicare enrollee Claims can be sent directly to the insured are paid directly to the beneficiary without interference from the insured's creditors Decreased employee participation It encourages weekend admission material The absence of deductibles on routine examinations Transacting insurance with a nonresident license Government publications When distributions are received from the contract Management of proceeds would be provided Where the master contract was issued Decreased fee schedules Oral cancer 2 180 days Nonpayment of premium Entire Contract clause A summary of policy features and benefits Surrender the policy's cash value In which benefits are based on an individual's ability to perform the activities of daily living Andy is in need of health care performed by skilled medical practitioners, but only on an intermittent basis. What level of care Intermediate care will his doctor likely prescribe? When an individual purchases insurance as a result of threats made Unfair trade practice laws by the producer, there has been a violation of A policyowner is permitted to take out a policy loan on a whole life policy at what point? How does an underwriter take into account an applicant's marital status? Under the IRS "minimum coverage" rules, a qualified retirement plan must What happens to the cash value of a market value adjusted annuity if it's surrendered early? When would evidence of insurability be required for a person insured with a variable universal life policy? Which statement is true regarding hospital preadmission certification for emergency situations? When the policy has accrued cash value When determining who is eligible for dependent coverage Benefit a broad cross-section of employees Market value adjustment is applied The face amount is increased Notification is required to be given after insured is admitted to the hospital policyowner may need to resume A life insurance illustration showing future premiums being paid out The premium payments depending on actual of nonguaranteed values must disclose that results An insurer that confines or largely limits the exposures it writes to Captive those of its owners is called When an annuity contract has been surrendered, how will the Final contract settlement will be reduced surrender charges affect the final contract settlement? A producer's license may be suspended For misappropriation of premiums Which statement regarding whole life insurance is accurate? Insurance coverage can continue for life Mary is the sole proprietor of her business and has a family health plan. She would like to deduct the premiums from her taxes. What 100% percentage of her premiums are tax deductible? Which of these are NOT factors that influence group health Individual physical examinations insurance underwriting? Group credit life insurance is typically a form of Decreasing term insurance James has individual health insurance with two different insurers. no notification was given to the insurer The "insurance with other insurers" provision states that an insurer concerning the existence of other health can pay benefits on a pro-rata basis if coverage When an insured under a group life insurance plan in Arizona elects without requiring evidence of insurability the conversion option, the new policy is issued When a company is licensed by the Department of Insurance to do An authorized company business in this state, it becomes Which settlement option makes minimum guaranteed dollar Fixed-Period payments over a stated number of years? Individuals seeking Social Security disability income benefits must have a disability that will eventually lead to death or be expected to 12 months last at least Which of the following features a guaranteed interest rate, flexible deposits, deferred taxation, and death benefits equal to the cash Flexible premium fixed annuity value? A producer working for an insurance company may be personally acts performed which are prohibited in the liable for agency contract Which of these pharmacy options is typically available to enrollees An in-house pharmacy in a staff model HMO? During the early years of a whole life insurance policy, the cash less than the total premiums paid value will normally be Beginning January 1, 2014, the restricted annual limit for plans No Limit under the Affordable Care Act will be Proceeds of the viatical settlement contract could be subject to the Creditors claims of Solicit, receive and forward applications to A life insurance producer licensed in Arizona is authorized to the insurer An insurance company can be liable for a producer's unauthorized when the agency contract is vague acts concerning the authority given Taking a sum of money and decreasing it in size would fit the capital liquidation description of Kate received a group accident and health termination notice. How 31 many days does she have to apply for a converted policy? Under HIPAA, medical plan late enrollees may be excluded for preexisting conditions for a maximum of If a producer chooses to conduct business under an assumed name, when must notification be given to the Director? In the event of premium default, which life insurance provision will utilize the cash value to keep the policy in force? A whole life policy that provides a choice of dividend options must include the following statement about dividends Who regulates an insurer's claim settlement practices? At what point must a life insurance applicant be informed of their rights that fall under the Fair Credit Reporting Act? Most prepaid dental plans cover What situation requires all eligible employees be covered under a group life insurance plan? Which of the following is another name for individuals who participate in an HMO plan? What happens when an initial offer is answered with a counteroffer? The "Notice to buyer" on the first page of each long term care policy delivered in Arizona What must the insurer provide to certificate holders when a group Medicare Supplement insurance policy is terminated and not replaced? What is the minimum number of employees needed for a small employer medical expense plan in Arizona? How many employees must an employer have for the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) to apply? 18 months The reason for backdating a policy is to obtain a premium rate based on an earlier age He receives benefits from a qualified retirement plan through his former employer. The plan's trustee has decided to split these benefit payments between Tim and his estranged wife. This decision is likely in violation of which IRS rule? In what form can an insurance company provide an accidental death benefit on a life policy? How does a continuous premium whole life policy differ from a limited pay whole life policy? The Medical Information Bureau consists of members from which group? Which of the following statements BEST describes employer contributions for a health insurance policy offered by an employer? If a group endorses an accident and health insurance product in an advertisement, the public must be made aware of In regards to health insurance, employees age 65 or older are typically required to Who normally pays the premiums for group credit life insurance? Prior to using the assumed name Automatic premium loan They are not guaranteed State insurance departments Upon completion of the application Oral exams Entire premium paid by the employer Subscribers Initial offer is void explains that some long term care costs may not be covered An offer of conversion to individual coverage 2 At least 20 Alienation of benefits As an optional policy rider The time period in which premiums will be paid Insurance companies Employer contributions are deductible Any control by the insurer over the group be offered the same group medical coverage offered to the younger employees Borrower Refusing to pay a claim without conducting a All of the following claims settlement practices could initiate a cease reasonable investigation of all available and desist order EXCEPT information where material facts are in dispute What does a Mandatory Second Surgical Opinion provision provide Control of the employer's premium cost to an employer-paid health insurance plan? The health insurance premiums paid for by each partner in a 100% tax deductible partnership is considered to be protect against medical care costs and the The main role of accident and health and disability insurance is to loss of earning power How are the premiums for an individual disability income policy No tax deduction treated for tax purposes? Splitting the commission with the buyer on a sale of insurance is Rebating known as Which of these is NOT a reason to buy a term life policy? What is the guaranteed cash value of a whole life insurance policy when the insured turns 65 years old? A large corporation purchased an accumulation annuity contract for its corporate pension. If all the employees participate and receive certificates of participation, what is this contract called? The Affordable Care Act requires insurance companies to give how many days of notice before rescinding coverage? To accumulate savings How would preventative care be encouraged in a dental plan? No deductible or coinsurance on oral examinations annuitant Less than the policy's face amount Group deferred annuity 30 When dealing with single-life annuities, there is only one Trade association groups that are eligible for group medical benefits in the same industry normally are