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Latest Accident, Life, and Health Insurance
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Premiums paid by self-employed sole proprietors or partners for medical expense insurance are – a) Not tax deductible b) Partially tax deductible c) Totally tax deductible d) Taxable c) Totally tax deductible - answerc) What is the purpose of a conditional receipt – answer a) It is given by the agent only to applicants who fully prepay all scheduled premiums in advance of policy issue b) It is intended to provide coverage on a date earlier than the date of the issuance of the policy c) It guarantees the applicant that the policy will be issued in the amount applied for in the application d) It serves as proof that the agent has determined the applicant to be fully insurable for coverage by the insurance company b) - answerb) What method is used to determine the taxable portion of each annuity payment? – answer a) The excise ratio b) The annuity ratio c) The marginal tax formula d) The exclusion ratio d) - answerd)
An insurance producer is also the instructor of a 3 - hour ethics course held once a year. To maintain certification, the producer – answer a) Must take 24 hours of continuing education courses b) Is not required to take any continuing education courses c) May apply for a continuing education waiver from the Insurance Commissioner d) Must take 18 hours of continuing education courses d) - answerd) What is the tax consequence of amounts received from a Traditional IRA after the money was left in the tax-deferred accounts by the beneficiary? – answer a) Capital gains tax on distributions and no penalty b) Capital gains tax on distributions plus 10% penalty c) Income tax on distributions and no penalty d) Income tax on distributions plus 10% penalty c) - answerc) Which of the following is true regarding health insurance underwriting for a person with HIV? – answer a) The person may not be declined for medical coverage solely based on HIV status b) A person may be declined for HIV but not AIDS c) The person may be declined d) The person may only be declined if he/she has symptoms a) - answera) Guarantee of insurability option in long-term care policies allows the insured to – answer
d) The insurer can rate-up the policy a) - answera) As it pertains to group health insurance, COBRA stipulates that – answer a) Retiring employees must be allowed to convert their group coverage to individual policies b) Terminated employees must be allowed to convert their group coverage to individual policies c) Group coverage must be extended for terminated employees up to a certain period of time at the employers expense d) Group coverage must be extended for terminated employees up to a certain period of time at the former employees expense d) - answerd) In comparison to consumer reports, which of the following describes a unique characteristic of investigative consumer reports? – answer a) The customer has no knowledge of this action b) The customer's associates, friends, and neighbors provide the reports data c) They provide additional information from an outside source about a particular risk d) They provide information about a customer's character and reputation b) - answerb) Premium payments for personally-owned disability income policies are - answera) Not tax deductible b) Eligible for tax credits c) Tax deductible d) Tax deductible to the extent that they exceed 10% of the adjusted gross income of those itemizing deductions
a) - answera) What is the advantage of having a qualified annuity? - answera) Receiving a lump-sum settlement tax free b) Higher dividends c) Favorable tax treatment d) No filling with the IRS c) - answerc) If an insurance company makes a statement that its policies are guaranteed by the existence of the Insurance Guaranty Association - answera) A misrepresentation b) An accurate statement c) A legal representation of the Association d) An unfair trade practice d) - answerd) The Federal Fair Credit Reporting Act - answera) Prevents money laundering b) Regulates consumer reports c) Protects customer privacy d) Regulates telemarketing b) - answerb) An insured has medical insurance coverage through 2 different providers, both covering the same
answera) Is planning on working only for that insurer b) An appointed agent of that insurer c) Signs a temporary statement guarantying cooperation and honesty d) Is licensed for that line of insurance b) - answerb) For an individual who is NOT covered by an employer-sponsored plan, IRA contributions are - answera) Never tax deductible b) Partially tax deductible depending on the income level c) Tax deductible d) Deducted based on the income level c) - answerc) An insured loses her left arm in an accident that is cover by her Accident Death and Dismemberment policy. What benefit will she most likely receive from this policy? - answera) The capital amount in monthly installments b) The principal amount in monthly installments c) The capital amount in lump sum d) The principal amount in lump sum c) - answerc) All of the following are business uses of life insurance EXCEPT - answera) Funding against financial loss caused by the death of a key employee b) Funding business continuation agreements c) Funding against general company financial loss
d) Compensating excecutives c) - answerc) The insured under a $100,000 life insurance policy with a triple indemnity rider for accidental death was killed in a car accident. It was determined that the accident was his fault. The triple indemnity rider in the policy specifies that the death must not be contributed to by the insured in any manner. In this case, what will the policy beneficiary receive? - answera) $ b) $50,000 (50% of the policy value) c) $100, d) $300,000 (triple the amount of the policy value) c) - answerc) An insured has a Modified Endowment Contract. He wants to withdraw some money in order to pay medical bills. Which of the following is true? - answera) He will not have to pay a penalty, regardless of his age b) He cannot withdraw money from his MEC before age 59 1/ c) He will have to pay a penalty if he is younger than 59 1/ d) He will have to pay a penalty regardless of his age c) - answerc) Which of the following is true about the requirements regarding HIV exams? - answera) HIV exams may not be used as a basis for underwriting b) The applicant must give prior informed written consent c) Results may be disclosed to the agent and the underwriter d) Prior informed oral consent is required from the applicant
c) - answerc) The death benefit under the Universal Life Option B - answera) Decreases by the amount that the cash value increases b) Increases for the first few years of the policy and then levels off c) Remains level d) Gradually increases each year by the amount that the cash value increases d) - answerd) When a fixed annuity owner pays his/her insurance company a monthly annuity premium, where is the money placed? - answera) Forwarded to an investor b) Each contract's separate account c) The annuity owners account d) The insurance company's general account d) - answerd) Under which of the following employer-provided plans are the benefits taxable to an employee in proportion to the amount of premium paid by the employer? - answera) Basic Medical Expense b) Disability income c) Major Medical d) Dental Expense b) - answerb) The primary purpose of licensing is to - answera) Generate income for the insurance department
b) Satisfy a federal requirement that all person involved in insurance to be licensed c) Ensure high standards to the insuring public d) None of the above c) - answerc) How are contributions to tax-sheltered annuity treated with regards to taxation? - answera) They are taxed as income for the employee b) They are taxed as income for the employee, but are tax free upon withdrawal c) They are not included as income for the employee but are taxable upon distribution d) They are never taxed c) - answerc) The gatekeeper of an HMO helps - answera) Determine which doctors can participate in an HMO plan b) Control specialist costs c) Determine who will be allowed to enroll in an HMO program d) Prevent double coverage b) - answerb) What is the shortest possible elimination period for group short-term disability benefits provided by an employer? - answera) 0 days b) 30 days c) 60 days d) 90 days
b) Claims discrimination c) Case management provision d) Cost reduction c) - answerc) An insured is receiving hospice care. His insurer will pay for painkillers but not for an operation to reduce the size of a tumor. What term best fits this arrangement? - answera) Limited coverage b) Claims saving c) Cost containment d) Selective coverage c) - answerc) Who may complete a paramedical report? - answera) A nursing assistant b) A registered nurse c) A spouse d) An underwriter b) - answerb) An individual applied for an insurance policy and paid the initial premium. The insurer issued a conditional receipt. Five days later the applicant had to submit to a medical exam. If the policy is issued, what would be the policy's effective date? - answera) The data of medical exam b) The data of policy delivery c) The date of issue d) The date of application
a) - answera) Which of the following is NOT true regarding Equity Indexed Annuities? - answera) The insurance company keeps a percentage of the returns b) They have guaranteed minimum interest rates c) They are less risky than variable annuities d) They earn lower interest rates than fixed annuities d) - answerd) On a participating insurance policy issued by a mutual insurance company, dividends paid to policyholders are - answera) Paid at a fixed rate every year b) Taxable as ordinary income c) Guaranteed d) Not taxable since the IRS treats them as a return of a portion of the premium paid d) - answerd) The accelerated benefits provision will provide for an early payment of the death benefit when the insured - answera) Needs to borrow money b) Has earned enough credits c) Becomes disabled d) Becomes terminally ill d) - answerd)
b) - answerb) What is surplus lines insurance? - answera) Insurance placed with an unauthorized insurer b) Additional insurance placed on itemized risks c) Any insurance on items worth more than $25, d) Insurance in excess of a standard policy's coverage a) - answera) Which of the following is TRUE about a class designation? - answera) Beneficiaries must be part of the insured's immediate family b) It is not allowed c) It determines the succession of beneficiaries d) Beneficiaries are not identified by name d) - answerd) Every small employer carrier must actively offer to small employers at least how many health benefit plans? - answera) One plan b) 2 plans c) 3 plans d) There is no minimum b) - answerb) How often must CE requirements be met? - answera) Every year for the first three years and then every 2 years thereafter
b) Every year for the first five years and then every 2 years thereafter c) Every year d) Every 2 years d) - answerd) When must an IRA be completely distributed when a beneficiary is not named? - answera) December 31 of the year following the year of the owner's death b) Due date of the deceased owner's final tax return including extensions c) December 31 of the year that contains the fifth anniversary of the owner's death d) Due date of beneficiary's tax return including extensions c) - answerc) Which of the following may NOT be included in an insurance company's advertisement? - answera) That its policies are covered by a state Guaranty Association b) Their policies' limitations or exclusions c) The name of a specific agent d) An identification of a limited policy as a limited policy a) - answera) Which renewal option does NOT guarantee renewal and allows the insurance company to refuse renewal of a policy at any premium due date? - answera) Noncancellable b) Optionally renewable c) Conditionally renewable d) Guaranteed renewable
A domestic insurer issuing variable contracts must establish one or more - answera) General accounts b) Separate accounts c) Liability accounts d) Annuity accounts b) - answerb) How often will the Commissioner examine a company in the state of New Hampshire? - answera) Every 3 years b) Annually c) Every other year d) Every 5 years d) - answerd) Which policy component decreases in decreasing term insurance? - answera) Dividend b) Premium c) Face amount d) Cash value c) - answerc) Most scheduled plans provide first dollar benefits without - answera) Exclusions and conditions b) Coinsurance and deductibles c) Premiums d) Copays
b) - answerb) All of the following are true of the Key Person disability income policy EXCEPT - answera) The income may be used to find a replacement for the key employee b) Benefits are considered taxable income to the business c) Premiums are not deductible to the business d) It is typically written to cover key employees in the event they become disabled and are unable to work b) - answerb) How does a member of an HMO see a specialist? - answera) HMOs do not cover specialists b) The member is allowed to choose his or her own specialist c) The primary care physician refers the member d) The insurer chooses the specialist c) - answerc) Which concept is associated with exclusion ratio? - answera) Dividend distribution b) How exclusion riders affect an insurance premium c) Policy provisions d) Annuity payments d) - answerd) The relation of earnings to insurance provision allows the insurance company to limit the
