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XCEL Arizona Life and Health Insurance State
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Under a long-term care inflation rider, the benefit levels ✔✔periodically increase without proof of insurability In order for a health plan to be an "accountable health plan", who has to approve it? ✔✔the director Medicare Part A coinsurance payments are covered by ✔✔Medicare Supplement Plan A Employees generally receive workers compensation benefits for ✔✔lost wages and medical expenses due to occupational accidents What year was the Mental Health Parity and Addiction Equity Act established? ✔✔ 2008 In what situation would disability income insurance premiums be a deductible expense? ✔✔Corporation paying for group disability income coverage for its employees John received a one-time distribution of $50,000 from his modified endowment contract (MEC). Prior to that, the contract's cash value was $150,000, the contract investment amount was $100,000, and the death benefit was $500,000. What percentage of the $50,000 distribution was taxable as ordinary income? ✔✔100%
A survivorship life insurance policy usually covers how many lives? ✔✔ 2 Mentally or physically handicapped dependent children MUST be covered under an individual health insurance policy ✔✔until they become self-supportive ERISA requires that a Summary Plan Description must be provided to a new plan member within how many days following the new member's eligibility date? ✔✔90 days A policyowner suffers an injury that renders him incapable of performing one or more important job duties. Any decrease in income resulting from this injury would make him eligible for benefits under which provision? ✔✔Partial disability What is the maximum number of employees (earning at least $5,000) that an employer can have in order to start a SIMPLE retirement plan? ✔✔100 employees Which of the following health plans pay benefits on a pre-paid service basis? ✔✔HMO 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? ✔✔Social Security Disability Which of the co-annuitants listed below would receive the largest monthly benefit payments in a joint and 100% survivor annuity? ✔✔Ages 71 and 73 Kevin has an existing life insurance policy and assigns it to another insurer for a new contract. How would this transaction be treated for tax purposes? ✔✔As a Section 1035 exchange
James owns a business and purchased a policy that covers the business expense of finding a permanent or temporary employee to replace a disabled one. This type of disability coverage is called ✔✔Key employee coverage Kelly purchases a health insurance policy issued on a conditionally renewable basis. The insurance company has a right to refuse renewal of the policy for ✔✔specific reasons stated in the contract Who is the beneficiary in a life insurance policy? ✔✔The stated person or entity who is designated to receive the death proceeds The guarantee of insurability option provides a long-term care policyowner the ability to ✔✔buy additional coverage at a later date Most prepaid dental plans cover ✔✔Oral examinations A policyowner fell behind on the premium payments of a whole life policy and is now in the grace period. How much will the beneficiary receive if the insured dies during this grace period and the policy also contains an outstanding policy loan? ✔✔Face amount minus the loan balance and past-due premium In regards to the Affordable Care Act (ACA), which of these is NOT a role of a health insurance exchange? ✔✔Contact the employer if an employee stops coverage under a plan offered in the exchange An insurer must keep advertising materials and records for at least how many years? ✔✔3 years
A consumer who has been recently denied insurance, credit, or employment based on an unfavorable consumer report MUST be advised as such. Which of the following does this statute originate from? ✔✔Fair Credit Reporting Act The disability income policy most likely to have been issued on a substandard basis is ✔✔Non- cancelable with a health condition exclusion rider Which of the following situations would a medical exam NOT be required for an individual health insurance applicant? ✔✔Applicant's family members have a history of cancer A Medicare Supplement policy is required to do which of the following? ✔✔Provide a 30 day free-look period A statement MUST be signed by the _________ for any illustrations used in the sale of a life insurance policy. ✔✔producer The policy provision that permits an employee to change from group life coverage to an individual life policy is called the ✔✔conversion provision A physician who accepts assignment on all Medicare claims is called a(n) ✔✔participating provider Straight whole life insurance can be accurately described in all of these statements EXCEPT ✔✔Policy protection normally expires at age 65
Which type of deductible must be satisfied again for each illness or accident in a major medical plan? ✔✔Per-cause How does a continuous premium whole life policy differ from a limited payment whole life policy? ✔✔The time period in which premiums will be paid How is a community rating used for underwriting purposes? ✔✔The same rates are charged for individual and group plans in the same geographical area The application is part of the annuity contract according to the ✔✔Entire Contract clause The Medical Information Bureau consists of members from which group? ✔✔Insurance companies The IRS has a "minimum coverage" rule regarding qualified retirement plans. This rule states that each qualified plan is required to ✔✔benefit a broad cross-section of employees During the liquidation phase of an annuity contract, to whom are the income benefits normally payable to? ✔✔Annuitant A hold-harmless clause is an example of risk ✔✔transfer What kind of life policy typically offers mortgage protection? ✔✔Decreasing term
Health Maintenance Organization (HMO) wellness programs may include each of the following EXCEPT ✔✔Diagnostic testing services Who manages the premiums collected from a group's members for a reciprocal insurer? ✔✔Attorney in fact Which of these individuals may NOT obtain a temporary producer license? ✔✔An employee of a retired licensed producer In Arizona, at least ___ employee(s) are needed for a small employer medical expense plan. ✔✔ 2 Which of the following is excluded in a medical expense plan? ✔✔Military duty How many hours of initial long-term care training must a producer complete before soliciting long-term care products? ✔✔ 8 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? ✔✔Long-term care benefit rider Which of the following statements about the installments for a fixed period settlement option in life insurance policies is NOT true? ✔✔The periodic payment amount is determined by the beneficiary's age Which life insurance settlement option pays a stated monthly benefit until both principal and interest are exhausted? ✔✔Fixed amount installment option
What is the name of the period of time during which a new employee is ineligible for group Health insurance coverage? ✔✔Probationary period An annuity's accumulation period may ✔✔continue after the purchase payments stop What is the guaranteed cash value of a whole life insurance policy when the insured turns 65 years old? ✔✔Less than the policy's face amount To protect information systems, producers, brokers, and insurance companies must implement and maintain a(n): ✔✔cybersecurity policy An advantage of owning a flexible premium life insurance policy would be ✔✔The policyowner can make policy changes without difficulty Which of the following accurately describes a participating insurance policy? ✔✔Policyowners may be entitled to receive dividends Which of the following best describes the presumptive disability provision? ✔✔Waives the typical total disability requirements Emily is disabled. In order to become eligible for Social Security disability income benefits, she must be ✔✔fully insured, according to Social Security
According to HIPAA regulations, which of the following may reduce a medical plan's pre-existing conditions exclusion? ✔✔Any period of prior coverage Tim is covered by Policy A with a $4,000 limit and by Policy B with a $2,000 limit. Policy A is primary. If a $6,000 loss is incurred, what will each policy pay? ✔✔Policy A will pay $4,000 and Policy B will pay $2, A source of supplemental income for a life insurance policyowner can be derived from the ✔✔cash value If a life insurance applicant is shown future premiums are to be paid out of non-guaranteed values, the illustration used in the sales presentation MUST ✔✔disclose that premium payments may need to be resumed depending on actual results Bryce purchased a disability income policy with a rider that guarantees him the option of purchasing additional amounts of coverage at predetermined times without requiring to provide evidence of insurability. What kind of rider is this? ✔✔Guaranteed insurability rider How are qualified Roth IRA distributions normally treated for tax purposes? ✔✔Received income tax- free What is considered a valid reason for small corporations to insure the lives of its major stockholders? ✔✔Fund a buy-sell agreement After an insurance application has been originated, the producer normally ✔✔is the major personal contact to the insured
According to the law of large numbers, how would losses be affected if the number of similar insured units increases? ✔✔Predictability of losses will be improved Which of the following may be considered an act of misrepresentation? ✔✔Misleading or failing to adequately disclose the title and true nature of a policy offered to a client What happens when a policyowner borrows against the cash value of his life insurance policy? ✔✔The policy proceeds would be reduced by the outstanding loan balance A(n) _______ insurer operates in the U.S but is headquartered outside the U.S. ✔✔ The type of health insurance in which underwriting procedures are the most restrictive is ✔✔Individual Which of the following is NOT true of participants in multiple-employer trusts? ✔✔Participants must purchase all coverages the trust offers Which of the following covers the Part A deductible of Medicare? ✔✔Medicare supplement core benefits An individual participant personally received eligible rollover funds from a profit-sharing plan. What is the income tax withholding requirements for this transaction? ✔✔20% is withheld for income taxes A(n) ________ agent is an insurance agent who represents only ONE insurance company. ✔✔captive
Which type of policy can group term life insurance normally be converted to? ✔✔An individual permanent life insurance policy Which statement is INCORRECT concerning a tax-sheltered annuity (TSA)? ✔✔Annual investment gains are included in participant's gross income When does the insured stop making payments under a thirty-payment whole life policy? ✔✔At the time of death or 30 years after the policy's inception, whichever comes first Which of the following situations would an insurance agent need to guard against liability for professional errors and omissions? ✔✔Making a recommendation to a potential insured to replace existing coverage In what way is a life insurance policy affected by an accelerated benefit payment? ✔✔Decreases the death benefit Which life insurance settlement option pays lifetime benefits to two or more people? ✔✔Joint and survivor These are all accurate statements regarding universal life insurance EXCEPT ✔✔Policy loans are not permitted Which of the following is a true statement regarding a Medicare Supplement policy purchased during the open enrollment period? ✔✔The policy will be issued regardless of health
Which of the following is NOT a dividend option for a life insurance policy? ✔✔Receiving the entire policy cash value Which life insurance policy provision allows a policyowner to cancel the policy and receive a full refund within a limited time period after policy delivery? ✔✔Free-look period Which type of life insurance policy allows a policyowner the choice of investments along with flexible premium payments? ✔✔Variable universal life What type of employee welfare plans are not subject to ERISA regulations? ✔✔Church plans First-time homebuyers are able to withdraw up to how much from their qualified IRAs without incurring the 10% early withdrawal penalty? ✔✔$10, Participants of a small group medical plan MUST be given advance notice of at least ___ days prior to the plan's discontinuation. ✔✔ 180 Christine is receiving benefits provided from her disability income insurance. As compared to her previous earnings, the disability benefits should be ✔✔somewhat less The "Use it or Lose it" rule applies to ✔✔Flexible Savings Accounts Dividends from a mutual insurance company are paid to whom? ✔✔Policyholders
For employees covered in multiple states under a group health plan, jurisdiction rules cannot alter ✔✔COBRA laws The owner of a single premium deferred annuity is entitled to do all of these EXCEPT ✔✔make additional payments into the annuity Emergency health care coverage for Medicare enrollees traveling abroad is ✔✔a Medicare Supplement additional benefit Who typically makes the purchase payments in an individual annuity? ✔✔Owner Which of these is true regarding the exchange of consideration among parties involved in an insurance contract? ✔✔Can be unequal What typically changes at the re-entry option date found in some term life policies? ✔✔premium Which of these policies is considered to be a comprehensive health policy? ✔✔Major medical policy Peter, age 50, surrenders his modified endowment contract (MEC). How is the gain treated in terms of federal income taxes? ✔✔The gain is treated as taxable income and a penalty tax is imposed on the gain Which of these statements reflects an accurate portrayal of Medicare SELECT? ✔✔Insured uses preferred providers in exchange for paying lower premiums
Tina is insured under a business overhead expense insurance policy. Which of the following would be covered if she were to become disabled? ✔✔Business property rental expense How are the premiums for an individually-owned disability income policy treated for tax purposes? ✔✔Not tax-deductible at all What is the tax treatment of benefit payments for a non-qualified annuity? ✔✔Benefit payments are always taxable Medicare can be described as ✔✔a supplemental income source for individuals over the age of 65 or permanently disabled A licensee whose name or address changes must notify the Department of Insurance within ___ days. ✔✔ 30 A preferred provider plan and an indemnity plan are similar in what way? ✔✔Both pay on a fee-for- service basis Which of the following is NOT an objective of the National Association of Insurance Commissioners? ✔✔Regulate state insurance commissioners Which of these is NOT considered a Federal punishment for unfair and deceptive insurance practices? ✔✔Community service
All of these are duties that a producer may be required to perform when delivering an insurance policy EXCEPT ✔✔Leave a conditional receipt with client What would be the disadvantage of naming a trust as beneficiary of a life insurance policy? ✔✔Trust administration fees would reduce policy proceeds An accident and health insurer has just received written proof of loss from one of its insureds. The insured must now wait 60 days before ✔✔bringing legal action against the insure A group health insurance policy is a contract between an ✔✔employer and insurance company Which statement regarding universal life insurance is correct? ✔✔Cash value accumulations have a guaranteed minimum interest rate Ambiguities in insurance contracts are typically interpreted in favor of the insured. This rule is referred to as ✔✔Reasonable expectations Under an adjustable life insurance policy, which of the following may NOT be changed without further underwriting? ✔✔The person insured If dividend option choices are offered on a whole life insurance policy, the policy MUST ✔✔contain a statement that dividends are NOT guaranteed What happens to the purchasing power of benefit payments from a fixed life annuity when the cost of living goes up? ✔✔Decreases
