Download NYS Life, Accident, and Health Insurance Exam (2025) || Questions & Answers (Graded A+) and more Exams Insurance law in PDF only on Docsity!
NYS Life, Accident, and Health
Insurance Exam (2025) || Questions &
Answers (Graded A+)
Which of these policies is considered a whole life policy? - ANSWER - Single premium life Which of the following would be considered an unfair claims settlement practice? - ANSWER - Misrepresenting pertinent policy provisions relating to coverage after a loss A policyowner is permitted to take out a policy loan on a whole life policy at what point?
- ANSWER - When the policy has a cash value Which of these is NOT a factor during the health insurance underwriting process? - ANSWER - Former residence New York workers compensation laws exclude benefits for disabilities caused by - ANSWER - Intentional, self-inflicted injuries occurring on the job When premiums are determined, one factor would be the expenses of the - ANSWER - Insurer Scott has a life insurance policy in which the dividends are left with the insurance company. This particular policy may be paid up when the cash value plus accumulated dividends - ANSWER - equal the net single premium for the same face amount at the insured's attained age During open enrollment for Medicare Supplement coverage, an applicant MUST be at least - ANSWER - There is no minimum age requirement What happens to the cash value of a market value adjusted annuity if it's surrendered prior to the end of the stated guarantee period? - ANSWER - Subject to market value adjustment Which of the following contracts offer deferred taxation, flexible payments, a guaranteed interest rate, and death benefits equal to the cash value? - ANSWER - Flexible premium fixed annuity Tonya has been diagnosed with kidney failure and has group accident and health insurance through her large employer. Which of these accident and health plans will be primary during the months following her diagnosis? - ANSWER - Her employer's group accident and health plan
Which statement regarding the certificate of insurance is accurate? - ANSWER - It indicates evidence of an employee's insurance coverage According to the ACA, the proportion of premium revenues spent on clinical services and quality improvements is called the - ANSWER - Medical loss ratio Which of the following statements regarding the Fair Credit Reporting Act is correct? - ANSWER - If credit, insurance, or employment was denied because of an unfavorable report, the consumer must be advised According to the ACA, insurers can no longer deny health coverage due to pre-exsisting conditions unless that plan is a - ANSWER - Grandfathered plan Which item must be considered by an agent when determining the suitability of an annuity recommendation? - ANSWER - The client's financial status Which type of life insurance policy is best suited for paying off the outstanding balance of a 30-year mortgage in the event of the insured's death? - ANSWER - 30-year decreasing term. How many days notice does the ACA require insurers to give before rescinding coverage? - ANSWER - 30 A signed good health statement may be requested by a life producer at the time of - ANSWER - Policy Delivery Carol purchases a whole life policy that provides a choice of dividend options. This policy is required to include a statement that the dividends are - ANSWER - Not Guaranteeed Tim is confined to a nursing home but doesn't have a terminal illness. Which life insurance rider is designed to help pay for this type of expense? - ANSWER - Long- term care benefit rider An insured is covered under a group long-term disability policy. Under this type of policy, the definition of disability based on any occupation typically applies - ANSWER - After two years of disability Sylvia purchased an annuity for $100,000 from the proceeds of an inheritance. No further payments are permitted and the income stream begins in 15 years. This contract is a(n) - ANSWER - Single premium deferred annuity Which of these is NOT a factor that influences group health insurance underwriting? - ANSWER - Physical exams of group members
An individual may 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? - ANSWER - Social Security Disability Field underwriting by a producer - ANSWER - may result in the disclosure of hazardous activities of the applicant Emergency health care coverage for Medicare enrollees traveling abroad is - ANSWER
- A Medicare Supplement additional benefit Which of the following statements is true regarding accident and health insurance claims that reimburse on an indemnity basis? - ANSWER - Claims can be sent directly to the insured Who may terminate coverage under a cancelable health insurance policy? - ANSWER - Either the insured or the insurer What is the actuarial value of a bronze level health plan? - ANSWER - 60 Rick owns a variable universal life policy and chooses a variable death benefit option. What will typically happen to the death benefit as a result of this selection? - ANSWER - Fluctuate with changes in the cash account With life insurance, the needs approach is used primarily in determining - ANSWER - How much life insurance a client should apply for A Health Reimbursement Arrangement MUST be established - ANSWER - By the employer Pete the agent made public statements that falsely portrayed Acme Insurance Company as avoiding claim payments. Pete may be found guilty of - ANSWER - Defamation An insurance company willingly published false information in an insurance policy advertisement. This is an example of - ANSWER - Misrepresentation Mary has a HSA. Distributions that she has made for anything other than qualified medical expenses are considered taxable and subject to a penalty of - ANSWER - 20% A life insurance policy provision that has the ability to reduce the death benefit is called the - ANSWER - accelerated (living) benefit When does the producer give a premium receipt for a life insurance application? - ANSWER - When the initial premium has been paid with the application A group health insurance policy is a contract between an - ANSWER - Employer and insurance company
What is another name for a Keogh plan? - ANSWER - HR 10 plan A major medical expense plan typically includes coverage for hospital room and board. Which of the following is normally covered under the category "room and board"? - ANSWER - General nursing care Which of these life insurance policies does NOT contain a cash value provision? - ANSWER - Decreasing term life Which of the following statements BEST describes disability buy-sell insurance policies?
- ANSWER - Policy proceeds are typically received income tax-free Al surrenders his life insurance policy for its cash value. The total of the premiums paid into the policy minus total dividends received in cash or used to offset premiums is referred to as the - ANSWER - Cost basis An insurance applicant willingly gave false information on the application. This applicant would likely be found guilty of - ANSWER - Misrepresentation Periodic health claim payments MUST be made at least - ANSWER - Monthly If a disability income policy contains a cost-of-living adjustment rider, benefits must typically be increased - ANSWER - At least once per year from when benefits begin A copy of all Medicare Supplement advertisements must be submitted for approval to - ANSWER - The Superintendent of Insurance Employees are required to work at least ___ hours per week to become eligible for a small employer health plan - ANSWER - 20 How does the cost for a survivorship life policy compare to the cost of combining two separate life insurance policies? - ANSWER - Survivorship life policy is lower Which life insurance policy option allows the policy owner to have coverage equal to the net death benefit of the lapsed policy? - ANSWER - Extended term nonforfeiture option What would be the disadvantage of naming a trust as a beneficiary of a life insurance policy? - ANSWER - Trust administration fees would reduce policy proceeds What is the elimination period of an individual disability policy? - ANSWER - Time period a disabled person must wait before benefits are paid Who is protected with the "other insurance with this insurer" provision? - ANSWER - Insurance company
provide evidence of insurability. What kind of rider is this? - ANSWER - Guaranteed insurability rider Which of these would NOT be a valid reason to add the waiver of premium rider to a life insurance policy? - ANSWER - It allows a policy loan to cover premium payments if the policy owner becomes totally disabled What is considered interstate travel under the Federal Fraud and False Statements Act?
- ANSWER - Puerto Rico Which of these statements regarding the extended term insurance nonforfeiture option in a life policy is accurate? - ANSWER - The premium to purchase the coverage comes from the policy's cash value If a group endorses an accident and health insurance product in an advertisement, the public must be made aware of - ANSWER - Any control by the insurer over the group Insurable interest in one's own life is legally considered as - ANSWER - Generally unlimited How do benefit payments fluctuate over time in a variable life annuity? - ANSWER - Reflects changes in the market value of assets in a separate account Switching Life insurance policies without tax consequence is permitted under - ANSWER - Section 1035 rules When a ten year renewable term life insurance policy issued at age 45 is renewed, the premium rate will be the current rate for - ANSWER - Ten year term insurance for a person aged 55 What is the effect of the market value adjustment in a market value adjustment annuity?
- ANSWER - Transfers some of the investment risk to the policy owner During a stated initial period of coverage, long-term care insurance policies normally EXCLUDE conditions that - ANSWER - Were treated during a specified period preceding the policy date Which of these may NOT be deducted from premium payments or the cash value of a variable life insurance policy? - ANSWER - Federal premium taxes Which element of a contract constitutes a definite and unqualified proposal by one party to another? - ANSWER - Offer Under which circumstance is the interest rate guaranteed within a market value adjusted annuity? - ANSWER - When the contract has been held for the period specified in the policy
A prepaid dental plan has an agreement in place with a network of dentists which - ANSWER - accepts an established amount as payment in full for the dental services rendered Omar is covered by a disability income policy. He is hurt while performing an occupation more hazardous than the occupation listed in his policy. The policy's change of occupation provision will have what effect? - ANSWER - Reduce the benefit level Which of the following outlines the authority given to the producer on behalf of the insurer? - ANSWER - Producer contract Linda is covered with long-term care insurance and has early-stage Alzheimer's. She is still able to reside in her home while receiving primary care, as opposed to moving into a nursing home. All of the following long-term benefits encourage this EXCEPT for - ANSWER - Custodial care The absolute assignment of a life insurance policy results in - ANSWER - All incidents of ownership transferred to the assignee A policy owner and a life settlement provider can have a life settlement negotiated through a - ANSWER - life settlement broker Which benefit is normally payable to a life insurance policy owner when the insured's life expectancy has been severely limited? - ANSWER - Accelerated (living) benefit Medicare supplement insurance that provides a preventative medical care benefit will often cover - ANSWER - Yearly physical examinations During an annuity's liquidation phase, the annuitant normally - ANSWER - Receives benefit payments at regular intervals Jonas is covered with disability insurance through his employer. The employer pays 75% of the premium, while Jonas pays the other 25%. What is Jonas' tax liability for any benefits paid from the disability plan? - ANSWER - Taxes must be paid on 75% of the benefits received An insured files for an accident and health insurance policy claim eight days after the premium due date. The benefit payable is $500 and the overdue premium is $200. Assuming that the policy pays on a first-dollar basis and contains the unpaid premium provision, how much will the insurer pay? - ANSWER - $ Which of the following information is NOT needed to determine the suitability of an annuity recommendation? - ANSWER - Level of education
What is a certificate of authority? - ANSWER - The license required for an insurer to conduct business in the state How may an insurance company classify an accidental death benefit on a life policy? - ANSWER - As an optional policy rider Mary is an employee who is covered with a disability income policy through her employer. 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? - ANSWER - Residual benefits will be received income tax- free Custodial care is normally covered under - ANSWER - long term care insurance The main purpose of an annuity is to - ANSWER - create a stream of income How are qualified Roth IRA distributions normally treated for tax purposes? - ANSWER
- Received income tax-free When initially issued, a temporary producer license in New York is valid for ___ days. - ANSWER - 90 Who signs the notice of replacement when a Medicare Supplement policy is being replaced? - ANSWER - The agent and the applicant Which of these is NOT considered to be a cost connected with an individual's death? - ANSWER - Business expenses Which of the following allows an insurer the right to transact insurance business in the state of New York? - ANSWER - Department of Financial Services issues the insurer a certificate of authority Greg applies for insurance and makes a false statement on the application that will influence whether or not the insurer will accept the risk. Greg's false statement is called a(n) - ANSWER - material misrepresentation Which of these is NOT a reason to buy a term life policy? - ANSWER - To accumulate savings Elimination periods typically apply to - ANSWER - Disability policies In New York, a group accident and health certificate of insurance must contain - ANSWER - A summary of policy features and benefits An annuity which starts paying monthly benefits within a month after issuance is called a(n) - ANSWER - Immediate annuity
Which of these must be disclosed in a universal life policy? - ANSWER - The policy's surrender charges Which health policy clause specifies the amount of benefits to be paid? - ANSWER - Insuring The policy provision that permits an employee to change from group life coverage to an individual life policy is called the - ANSWER - conversion provision An insurable risk requires - ANSWER - that the chance of loss be calculable Under the New York Disability Benefits Law, cash payments are provided to workers who are unable to work because of injury or illness that - ANSWER - Occurred on the job ABC Partnership is a business with a limited number of partners. Which disability buy- sell agreement is best suited for this business? - ANSWER - Cross purchase agreement In New York, reducing benefits for a newborn child under an accident and health plan is
- ANSWER - Prohibited in any form An insurance policy may be issued with a preferred insurance premium in all of these situations EXCEPT - ANSWER - Living in a rural area The maximum amount of life insurance coverage that a parent can initially take out on their minor child is - ANSWER - $50, Which life insurance settlement option pays a stated monthly benefit until both principal and interest are exhausted? - ANSWER - Fixed amount installment option Which of the following statements accurately describes the "time limit on certain defenses"? - ANSWER - After a stated period of time, claims cannot be denied due to material misrepresentation on the application Who is the beneficiary in a life insurance policy? - ANSWER - The stated person or entity who is designated to receive the death proceeds What type of life insurance policy covers two or more persons and pays the face amount upon the death of the first insured? - ANSWER - Joint life What is a juvenile life insurance policy? - ANSWER - A life policy that covers the life of a minor When an annuity contract has been surrendered, how will the surrender charges affect the final contract settlement? - ANSWER - Final contract settlement will be reduced
In the event of premium default, which life insurance provision will use the cash value to keep the policy in force? - ANSWER - Automatic premium loan The Superintendent has the ability to examine the business records of insurers and agencies because - ANSWER - Of the powers granted through state statues John the agent made public statements that falsely portrayed an insurer as insolvent. John would be likely found guilty of - ANSWER - Defamation Respite Care coverage is typically found in a(n) - ANSWER - long term care policy The Superintendent may not revoke an insurance producer's license unless - ANSWER
- The producer has been properly noticed and given opportunity for a hearing Medicare Supplement Insurance requires an individual to be at least how old for open enrollment? - ANSWER - No minimum age When a large sum of money is used to structure monthly payments, which product is typically used? - ANSWER - An immediate annuity A health insurer MUST provide a proof of loss form - ANSWER - within 15 days of receipt of the notice of loss If a benefit plan is offered on an Exchange, what must the insurance company offer, with regard to that plan, outside of the Exchange? - ANSWER - The insurance company must offer the same plan When group benefits under COBRA have expired, a fully insured group policy can be converted to a(n) - ANSWER - Individual health policy What is another term used for a "pure" life annuity? - ANSWER - Life income Which term refers to insurance written on the interests of the licensee, the licensee's employer, or the licensee's immediate family? - ANSWER - Controlled business Prepaid dental plans differ from most other types of dental plans in what way? - ANSWER - Closed panel of dentists can only be used Disability income policies provide protection for which of the following? - ANSWER - Economic death When must a producer provide disclosure about information practices to an applicant? - ANSWER - Prior to or at the time of signing the application
Mike applied for life insurance and was issued a conditional receipt. He is later found to be insurable and is issued a policy. When does his coverage become effective? - ANSWER - Date of issuance of the conditional receipt Which type of policy pays benefits to a policyholder covered under a Hospital Expense policy? - ANSWER - Reimbursement Pointing out to a prospective client that the life insurance policy you are presenting is covered by the New York Life and Health Insurance Guaranty Association is - ANSWER
- Prohibited by law Which of these situations would NOT potentially involve a prison sentence under Federal law? - ANSWER - Selling insurance with a nonresident license Ken is age 65 and has 2 years until he receives Social Security retirement income benefits. At his current age, which is true about Medicare Part A Hospital Insurance coverage? - ANSWER - It is available through application to Social Security The Superintendent has the power to compel any agent to produce business documents relevant to an inquiry upon - ANSWER - Request of the Superintendent Joe is a life insurance policyowner who has failed to pay interest on his policy loan. What will result from this nonpayment? - ANSWER - Loan amount is increased to reflect the amount of interest due Individuals seeking Social Security disability income benefits must have a disability that will eventually lead to death, or be expected to last at least - ANSWER - 12 months The owner's cost basis for a non-qualified deferred annuity is typically the same as the - ANSWER - Total premiums paid Why were Exchanges implemented by the Affordable Care Act (ACA)? - ANSWER - To create a one-stop market for standardized health insurance plans Which of these is NOT an underwriting responsibility of a life insurance agent? - ANSWER - Determining the final rate classification Dan owns a disability income insurance policy which provides ONLY nonoccupational coverage. Which of the following circumstances would likely NOT be covered under his plan? - ANSWER - He falls and breaks his hip at work Which of these is NOT a common life insurance nonforfeiture option? - ANSWER - Life income annuity An employer pays the accident and health insurance premiums for its employees. The premiums paid by the employer are - ANSWER - Deductible to the business
In regards to the ACA, which of these is NOT a role of a health insurance exchange? - ANSWER - Contact the employer if an employee stops coverage under a plan offered in the exchange Which of the following describes coverage for the Medicare Part B coinsurance? - ANSWER - A Medicare Supplement core benefit A pre-existing condition exclusion in an accident and health insurance policy pertains to
- ANSWER - prior health matters K is an agent who takes an application for individual life insurance and accepts a check from the client. He submits the application and check to the insurance company, however the check was never signed by the applicant. If the application is approved, when will coverage be effective? - ANSWER - The date the agent delivered the policy, collected the initial premium, and obtained a good health statement from the insured An employee requested that the balance of her 401(k) account be sent directly to her in one lump sum. Upon receipt of the distribution, she immediately has the funds rolled over into an IRA. What is the tax consequence of the distribution sent to this employee?
- ANSWER - Distributions is subject to federal income tax withholding Insurance crimes which affect interstate commerce are prosecuted by the - ANSWER - US Attorney General Patrick purchased a long-term care policy. He has a health condition for which medical treatment was recommended by a physician within 6 months prior to the policy's effective date. This condition is called a(n) - ANSWER - pre-existing condition 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 percentage of her premiums are tax deductible? - ANSWER - 100% Which of these is NOT a true statement of the war exclusion? - ANSWER - Civil insurrections apply Which would be described as a beneficiary designation by class? - ANSWER - Children of the insured A life insurance illustration showing future premiums being paid out of nonguaranteed values must disclose that - ANSWER - The policy owner may need to resume premium payments depending on actual results Which of the following can be defined as a cause of a loss? - ANSWER - Peril An attempt to defraud an insurance company is considered - ANSWER - A felony
Accident and health insurance claim handling is made more convenient to the insured by utilizing - ANSWER - Assignment of benefits Terry receives long-term physical therapy at her residence. What type of insurance would cover this service? - ANSWER - Home health care Alan is an enrollee of a health maintenance organization (HMO) which uses a gatekeeper system. If there ever comes a time when he needs emergency health services, what should he do? - ANSWER - Proceed to the nearest emergency room Which of the following is a syndicate established by group of insurers to share underwriting duties - ANSWER - Lloyd's organization Jack is a life insurance policy owner who happens to be terminally ill. He would like to sell his life insurance policy at a discount to help pay for medical bills and other expenses. What kind of arrangement would best suit his needs? - ANSWER - Life settlement A major medical expense policy typically does NOT - ANSWER - Pay surgeon fees on a first-dollar basis Which benefit supplement added to a life insurance policy insures an entire family? - ANSWER - Family term rider Which provision allows a buyer to return a fixed annuity contract for a full refund within an established amount of time? - ANSWER - Free look 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? - ANSWER - Pre-admission testing John the policy owner sells his life insurance policy to help pay for the cost of his terminal illness. This transaction is called a - ANSWER - Life settlement An applicant for accident and health insurance has a risk factor that is similar to a majority of the insurer's other applicants. What will be the likely outcome of this applicant? - ANSWER - Issued with a standard premium rate What does a Mandatory Second Surgical Opinion provision provide to an employer-paid health insurance plan? - ANSWER - Containment of the employer's premium cost What kind of arrangement gives the policyowner the right to change the beneficiary? - ANSWER - Revocable designation An individual working part-time has a gross income of $5,000 for the year. If this individual has an IRA, what is the maximum deductible IRA contribution allowable? - ANSWER - $5,
Which of the following situations would an insurance agent need to guard against liability for professional errors and omissions? - ANSWER - Making a recommendation to a potential insured to replace existing coverage A Medicare Supplement policy is required to do which of the following? - ANSWER - Provide a 30 day free-look period Typically, states will permit the grouping of two or more small employers in the same industry for obtaining group health insurance at a favorable rate. This grouping of employers is known as a multiple employer - ANSWER - Trust An insured has a $25,000 whole life insurance policy with $6,000 cash value available. Under the extended term nonforfeiture option, what is the amount of insurance available to the insured? - ANSWER - $25, Which life insurance policy provision allows a policy owner to cancel the policy and receive a full refund within a limited time period after policy delivery? - ANSWER - Free- look period After the extended term life nonforfeiture option is chosen, the available insurance will be - ANSWER - Level term for a stated period of time If an agent would like to start using an assumed name, at what point must the superintendent be notified? - ANSWER - Before using the assumed name Which of the following is NOT a valid contract exchange? - ANSWER - An annuity exchanged for a life insurance policy An association which maintains a facility that displays offers and counteroffers for purchasers or sellers of life settlement contracts is known as a - ANSWER - Life settlement intermediary Which of the following health insurance plans charges a premium that cannot be increased? - ANSWER - Noncancelable When a similarly appointed agent provides another agent with a referral, which results in a sale, the commissions paid are generally - ANSWER - Shared between the agents How can a group dental insurer discourage adverse selection? - ANSWER - Limit the duration of coverage Why do insurers require a minimum number of employees participate in a group insurance plan? - ANSWER - Minimize adverse selection According to the ACA, coverage may be rescinded - ANSWER - If intentionally false statements were offered
Which settlement option makes minimum guaranteed dollar payments over a stated number of years? - ANSWER - Fixed-period For purposes of disability income insurance, earned income would include all of the following EXCEPT - ANSWER - Dividends The "Use it or Lose it" rule applies to - ANSWER - Flexible Savings Accounts Which of the following is NOT true of a preferred provider plan? - ANSWER - Hospitals... Why does New York law require an insurance agent to examine the existing Medicare Supplement policies of a prospective insured? - ANSWER - To determine the suitability of potential changes The Change of Occupation provision in a Disability Income policy states that, in the event the insured changes to a less hazardous occupation, which of the following may apply? - ANSWER - Benefits can be increased in the event of a covered claim A small employer group is an employer that employs how many? - ANSWER - 2- employees Whose interests are replacement rules designed to protect? - ANSWER - Policyowner Kate received a group accident and health termination notice. How many days does she have to apply for a converted policy? - ANSWER - 31 Medicaid will pay for nursing home expenses under what condition? - ANSWER - Must have financial need An insurer operating in the U.S. but headquartered outside the U.S. is - ANSWER - an alien insurer Which of the following can be defined as "the potential for loss"? - ANSWER - Risk During early years of whole life insurance policy, the cash value will normally be - ANSWER - Less than the total premiums paid An applicant for life insurance must be informed that testing for HIV infection is used to help determine - ANSWER - The insurability of the proposed insured What is the maximum number employees (earning at least $5,000) that an employer can have in order to start a SIMPLE retirement plan? - ANSWER - 100 Medicare Part A typically covers - ANSWER - inpatient drugs
