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Ohio life and Health Insurance Final Practice
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Premiums paid that exceed 7 1/2% of an insured's Adjusted Gross Income (AGI) are tax- deductible when paid for which of the following plans? - ✔✔Qualified Long-Term Care plan All policies must be guaranteed renewable. - ✔✔long-term care An attending physician's statement would be appropriate for which life insurance purpose? - ✔✔At the request of the insurer to assist in the underwriting decision Craig submits a $500 claim for medical expenses. With a past due premium of $100, the insurer pays $400. Which of the Uniform Optional Provisions covers this situation? - ✔✔Unpaid premium Of the following dividend options, which of these is taxable? - ✔✔Accumulation at interest An endorsement found in an insurance plan which modifies the provisions of the policy is called a(n) - ✔✔Rider Which of the following statements is CORRECT regarding an individual applying for life or health insurance? - ✔✔The applicant's medical history may be analyzed and reported Sole proprietors are permitted tax deductions for health costs paid from their earnings in the amount of - ✔✔100% of costs
Kate has a Major Medical Plan with a 75/25 coinsurance and a deductible of $25. How much will she have to pay if she, not having met any of her deductible, visits the doctor and receives a bill for $125? - ✔✔$50. When calculating the amount of life insurance needed for an income earner, what has to be determined when using the Needs Approach? - ✔✔The family's financial objectives if the income earner were to die or become disabled A plan in which an employer pays insurance benefits from a fund derived from the employer's current revenues is called - ✔✔A self-funded plan If an insured's age on a life insurance policy has been misstated, what is the insurer's liability if the insured dies? - ✔✔A prorated death benefit based on the amount of insurance the insured's premiums would have been if purchased at the correct age Which of the following is permitted in an advertisement for an insurance policy? - ✔✔The insurer's name Which type of rider will waive the premium on a child's life insurance policy if the parent paying the premium dies? - ✔✔Payor benefit A type of insurer that is owned by its policyowners is called - ✔✔mutual An annuitant dies during the distribution period. What kind of annuity will return to a beneficiary the difference between the annuity value and the income payments already made?
The open enrollment period for Medicare Supplements begins at age - ✔✔ 65 All of the following are considered appropriate uses of life insurance for business purposes EXCEPT - ✔✔Protecting the business by covering key employees with life insurance Which type of life insurance policy pays the face amount at the end of the specified period if the insured is still alive? - ✔✔Endowment policy A licensed agent who lives in another state and transacts insurance in Ohio is called - ✔✔a nonresident agent The IRS states that a taxpayer's medical expenses that exceed 7.5% of their adjusted gross income is tax deductible. Which of the following may be considered a medical expense under this rule? - ✔✔Long Term Care Insurance premiums What is the primary factor that determines the benefits paid under a disability income policy? - ✔✔Wages A licensee who is required to take continuing education must include how many ethics coursework hours? - ✔✔ 3 Julie has a $100,000 30 - year mortgage on her new home. What type of life insurance could she purchase that is designed to pay off the loan balance if she dies within the 30-year period? - ✔✔Decreasing term insurance
Which approach predicts a person's earning potential and determines how much of that amount would be devoted to dependents? - ✔✔Human life value approach The premium for a Modified whole life policy is - ✔✔lower than the typical whole life policy during the first few years and then higher than typical for the remainder In Ohio, when an advertisement for accident and health insurance refers to dollar amount benefits, the advertisement must also disclose - ✔✔Any applicable benefit reduction Medical Expense Insurance would cover - ✔✔an injury occurring at the insured's residence What is issued to each employee of an employer health plan? - ✔✔Certificate Matt is applying for life insurance and requests a double indemnity rider. A double indemnity benefit will be payable to Matt's beneficiary if Matt - ✔✔dies instantly from a car accident Which of the following statements is TRUE about an insurer's right to screen applicants for HIV?
- ✔✔An insurer can require a blood test for HIV If the annuitant dies before the annuity start date, - ✔✔the premiums paid plus interest earned will be given to the beneficiary A life insurance policy normally contains a provision that restricts coverage in the event of death under all of the following situations EXCEPT - ✔✔fare-paying passenger
Which of these is NOT considered to be a purpose of an annuity? - ✔✔Annuities are intended to create an estate Continued coverage under COBRA would be provided to a(n) - ✔✔terminated employee Falsifying the terms, benefits, advantages, or conditions of an insurance policy is an example of which of the following? - ✔✔Misrepresentation How do insurers predict the increase of individual risks? - ✔✔Law of large numbers What is implied authority defined as? - ✔✔Authority that is not specifically given to an agent in the agency contract, but that an agent can reasonably assume to carry out his/her duties Under a Modified Endowment Contract, what are the likely tax consequences? - ✔✔Pre-death distributions will become taxable All of these statements concerning whole life insurance are false EXCEPT - ✔✔When a whole life policy is surrendered, income taxes may be owed Which of the following is a requirement for ANY change in an insurance application? - ✔✔Change must be initialed by the applicant Which of the following signatures is not required on an individual insurance application? - ✔✔Insured
Kristi purchases an annuity that will pay her husband an income for 15 years. If he dies, this income will become payable to their children for the remainder of the period. Kristi has what kind of annuity? - ✔✔Temporary annuity certain A provision in a whole life policy that allows a policyowner to terminate the policy in return for a reduced paid-up policy of the same type is called a(n) - ✔✔nonforfeiture provision Who is the individual paid on a fee-for-service basis? - ✔✔Provider What is the contract called that is issued to an employer for a Group Medical Insurance plan? - ✔✔Master policy Which type of multiple protection policy pays on the death of the last person? - ✔✔Survivorship life policy What is the purpose of a Disability Income Benefit? - ✔✔Provide money for living expenses How are annuities given favorable tax treatment? - ✔✔Gains are taxed at distribution Under the Affordable Care Act, a large employer that does NOT provide health insurance and owes an employer mandate penalty MUST pay an annual penalty, which is calculated by multiplying $2,000 by - ✔✔the number of full time employees minus 30 The superintendent is NOT responsible for - ✔✔endorsing insurers
Which of the following is NOT considered advertising? - ✔✔An AM Best company rating Chris is an insured bricklayer who severed his left hand in an automobile accident. Although his primary duty cannot be performed, Chris is also a substitute high school teacher. He collects a full disability income check every month. How does his policy define total disability? - ✔✔Own occupation No existing agent's license will be revoked until - ✔✔the agent has been afforded a right to a hearing on the charges How are survivorship life insurance policies helpful in estate planning? - ✔✔Provide funds to help pay taxes A disability elimination period is best described as a - ✔✔time deductible All of the following plans allow for employee contributions to be taken on a pre-tax basis EXCEPT - ✔✔Health Reimbursement Arrangement Plan Written notice for a health claim must be given to the insurer days after the occurrence of the loss. - ✔✔ 20 With a scheduled dental policy, how are covered expenses paid? - ✔✔Benefits are limited to a specific maximum dollar amount per procedure How many employees must an employer have for a terminated employee to be eligible for COBRA? - ✔✔ 20
All of the following statements about HIC's are true EXCEPT - ✔✔Benefits usually are provided on a reimbursement basis Under the subrogation clause, legal action can be taken by the insurer against the - ✔✔responsible third party A health insurance policy that allows an insurer to change the policyowner's premiums, but NOT cancel the policy is called a(n) - ✔✔guaranteed renewable policy With the majority of companies, within how many days does the free-look provision allow the insured the right to return the life insurance policy for full premium? - ✔✔10 days When an insured changes to a more hazardous occupation, which disability policy provision allows an insurer to adjust policy benefits and rates? - ✔✔Change of occupation provision No insurer, agent, broker, solicitor, or person, in connection with an insurance transaction shall offer or promise to buy, sell, give, or allow the prospective insured employment, stock or special favors. This is the definition of - ✔✔inducement The automatic premium loan provision authorizes an insurer to withdraw from a policy's cash value the amount of - ✔✔past due premiums that have not been paid by the end of the grace period Lisa has recently bought a fixed annuity. Which of these is considered to be a disadvantage of owning this type of annuity? - ✔✔During periods of inflation, annuitants will experience a decrease in purchasing power of their payments
The taxable portion of each annuity payment is calculated using which method? - ✔✔Exclusion Ratio What is the renewal date of a resident insurance agent's license? - ✔✔On or before the last day of the licensee's birth month Health insurance will typically cover which of the following perils? - ✔✔Injury due to accident How long can an insurer exclude coverage for a preexisting condition on a Medicare Supplement Policy? - ✔✔6 months A securities license is required for a life insurance producer to sell - ✔✔variable life insurance When the insured gives birth, coverage for eligible newly born children consists of coverage for injury or sickness including - ✔✔birth abnormalities A change in an insurance application requires - ✔✔an initial made by the applicantv Which disability policy provision would address any concerns of the value of the benefits decreasing over time? - ✔✔Cost of living benefit A health insuring corporation (HIC) member receives all preventative and routine medical care from the - ✔✔Primary care physician
An insured individual and the policy's beneficiary die from the same accident. The common disaster provision states the insurer will continue as if - ✔✔the insured outlived the beneficiary All of these are standard exclusions found in a life insurance policy EXCEPT - ✔✔disability A common exclusion with Vision plans is - ✔✔lasik surgery Under US Code 1033, crimes by or affecting persons engaged in the business of insurance which affect interstate commerce are prosecuted by the - ✔✔US Attorney General Tonya has replaced her whole life policy with an annuity without incurring a tax penalty. This transaction is called a(n) - ✔✔1035 Exchange Disability Income plans which require that the insurer can NEVER change or alter premium rates are usually considered - ✔✔Noncancellable Who may terminate an agent's appointment? - ✔✔the insurer An insurer MUST offer a Long-Term Care Policy or certificate that - ✔✔has a nonforfeiture value Underwriters can acquire information from all of the following sources EXCEPT - ✔✔genetic testing
A policyowner is prohibited from making any changes to the policy without the beneficiary's written consent under which beneficiary designation? - ✔✔Irrevocable beneficiary The typical long-term care insurance policy is designed to provide a minimum of year(s) of coverage. - ✔✔ 1 Level premium term life insurance policies - ✔✔have premiums that are averaged over the policy period After the date of marriage, an insurer is REQUIRED to provide what MINIMUM period of time for an employee to add a new spouse to a small group health plan? - ✔✔30 days All of the following doctors provide primary care to health insuring corporation (HIC) members EXCEPT - ✔✔Surgeons Which of the following would be considered a possible applicant and contract policyholder for group health benefits? - ✔✔Employer Which type of business insurance is meant to cover the costs of continuing to do business while the owner is disabled? - ✔✔Business overhead expense policy A rehabilitation benefit is intended to - ✔✔prepare the insured to return to employment Coordination of Benefits regulation applies to all of the following plans EXCEPT - ✔✔Preferred Provider Organization plan
Which situation accurately describes a reduced paid-up nonforfeiture option? - ✔✔Policy has a decreased face amount The election of COBRA for continuation of health coverage will - ✔✔maintain the same coverage and increase premium All of these are considered sources of information that can assist an underwriter in determining whether or not to accept a risk EXCEPT - ✔✔National Association of Insurance Underwriters Which of these statements about Medicaid is CORRECT? - ✔✔Funded by federal, state, and local taxes An insurer must furnish to a claimant forms for filing proof of loss within days upon receiving a notice of claim. - ✔✔ 15 The entire contract includes the actual policy and the - ✔✔application Health insurance involves two perils, accident and. - ✔✔sickness A policyholder's unmarried child is incapable of self support and has proof of incapacity. The child is provided medical care coverage under the parent's policy - ✔✔until policy termination Which of the following provides Medicare supplement policies? - ✔✔Private insurance companies
