Download LIFE, ACCIDENT AND HEALTH INSUARANCE FINAL EXM WITH QUESTIONS AND WELL VERIDIED ANSWERS and more Exams Medicine in PDF only on Docsity!
LIFE, ACCIDENT AND HEALTH INSUARANCE
FINAL EXM WITH QUESTIONS AND WELL
VERIDIED ANSWERS 2025|| GUARANTEED A+||
BRAND NEW!!!
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? a) $ b) $50,000 (50% of the policy value) c) $100, d) $300,000 (triple the amount of the policy value) c) - ANSWER-c) How often must CE requirements be met? a) 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) - ANSWER-d) When must an IRA be completely distributed when a beneficiary is not named? a) 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tax return including extensions c) - ANSWER-c) Which of the following describe the taxation of an annuity when money is withdrawn during the accumulation phase? a) Withdrawn amounts are taxed on a first in, last out basis b) Taxes are deferred on withdrawn amounts, but a flat penalty is charged c) Taxes are deferred on withdrawn amounts. d) Withdrawn amounts are taxed on a last in, first out basis d) - ANSWER-d) All of the following are characteristics of a Major Medical Expense policy EXEPT a) Low maximum limits b) Deductibles c) Blanket coverage d) Coinsurance a) - ANSWER-a) Partners in a business enter into a buy-sell agreement to purchase life insurance, which states that should one of them die prematurely, the other would be financially able to buy the interest of the deceased partner. What type of insurance policy may be used to fund this agreement? a) Term insurance only b) Permanent insurance only c) Universal life insurance only d) Any form of life insurance
a) 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) - ANSWER-a) Which renewal option does NOT guarantee renewal and allows the insurance company to refuse renewal of a policy at any premium due date? - ANSWER-a) Noncancellable b) Optionally renewable c) Conditionally renewable d) Guaranteed renewable b) - ANSWER-b) Which of the following policies would have an IRS required corridor or gap between the cash value and the death benefit? - ANSWER-a) Equity Indexed Universal Life b) Variable Universal Life c) Universal Life Option A d) Universal Life Option B c) - ANSWER-c) Which of the following is NOT a characteristic of a group long-term disability plan? - ANSWER-a) The benefit can be up to 66 and 2/3% of one's monthly income b) The benefit can be up to 50% of one's yearly income
c) The elimination period is the same as in the short-term plan's benefit period d) The benefit period may be to age 65 b) - ANSWER-b) Which of the following best describes the MIB? - ANSWER-a) It is a nonprofit organization that maintains underwriting information on applicants for life and health insurance b) It is a government agency that collects medical information on the insured from the insurance companies c) It is a member organization that protects insured against insolvent insurers d) It is a rating organization for health insurance a) - ANSWER-a) 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? - ANSWER-a) 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) - ANSWER-c) Which of the following is true about the requirements regarding HIV exams? - ANSWER-a) 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) - ANSWER-c) The death benefit under the Universal Life Option B - ANSWER-a) 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) - ANSWER-d) What is the tax consequence of amounts received from a Traditional IRA after the money was left in the tax deferred account by the beneficiary? - ANSWER- a) Income tax on distributions plus 10% penalty b) Capital gains tax on distributions and no penalty c) Capital gains tax on distributions plus 10% penalty d) Income tax on distributions and no penalty d) - ANSWER-d) A life insurance policy has a legal purpose if both of which of the following elements exist? - ANSWER-a) Policyowners and named beneficiaries b) Insurable interest and consent c) Underwriting and reciprocity d) Offers and counteroffer b) - ANSWER-b) An employee is insured under her employer's group life plan. If she terminates her group coverage, which of the following statements is INCORRECT? - ANSWER-a) The insured would not need to prove insurability for a conversion policy
b) The insured may convert coverage to an individual policy within 31 days c) The premium for individual coverage will be based upon the insured's attained age d) The insured may choose to convert to term or permanent individual coverage d) - ANSWER-d) Which of the following will NOT be covered under an individual health insurance policy? - ANSWER-a) The applicants adopted child b) The applicant c) The applicant's spouse d) The applicant's house help d) - ANSWER-d) When benefits are paid directly to the insured under a health insurance policy, the policy provides the benefits on what type of basis? - ANSWER-a) Reimbursement b) Service c) Limited d) Scheduled a) - ANSWER-a) How are contributions to a tax-sheltered annuity treated with regards to taxation? - ANSWER-a) They are never taxed b) They are taxed as income for the employee c) They are taxed as income for the employee, but are tax free upon withdrawal
b) - ANSWER-b) 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) - ANSWER-d) 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) - ANSWER-d) 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) - ANSWER-c)
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) - ANSWER-a) Guarantee of insurability option in long-term care policies allows the insured to
- ANSWER-a) Replace the existing LTC policy based on the original underwriting b) Secure the policy's non-forfeiture values regardless of the insured's age or health status c) Increase benefit levels without providing proof of insurability d) Add dependents to the plan without providing proof of their insurability c) - ANSWER-c) A prospective insured receives a conditional receipt but dies before the policy is issued. The insurer will - ANSWER-a) Pay the policy proceeds up to an established limit b) Not pay the policy proceeds under any circumstances c) Automatically pay the policy proceeds d) Pay the policy proceeds only if it would have issued the policy d) - ANSWER-d) What provision can reduce the disability benefit based upon the insureds current income? - ANSWER-a) Pro rata provision
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) - ANSWER-b) Premium payments for personally-owned disability income policies are - ANSWER-a) 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) - ANSWER-a) What is the advantage of having a qualified annuity? - ANSWER-a) Receiving a lump-sum settlement tax free b) Higher dividends c) Favorable tax treatment d) No filling with the IRS c) - ANSWER-c) If an insurance company makes a statement that its policies are guaranteed by the existence of the Insurance Guaranty Association - ANSWER-a) A misrepresentation b) An accurate statement c) A legal representation of the Association
d) An unfair trade practice d) - ANSWER-d) The Federal Fair Credit Reporting Act - ANSWER-a) Prevents money laundering b) Regulates consumer reports c) Protects customer privacy d) Regulates telemarketing b) - ANSWER-b) An insured has medical insurance coverage through 2 different providers, both covering the same expenses on an expense-incurred basis. Neither company knows in advance that the insured has coverage through any other insurers. The insured submits a claim to both insurers. How should the claim be handled? - ANSWER-a) Each insurer should pay a proportionate amount of the claim b) One of the insurers will pay fully, while the other will not pay any benefits c) Once the insurers discover the duplicate coverage, the policies would most likely be cancelled, and no claim paid. d) The insured should receive full benefits from each insurer. a) - ANSWER-a) The policyowner wants to make sure that upon his death, the life policy will pay a portion of the proceeds annually to his spouse, but that the principal will be passed to the children when they reach a certain age. Which settlement option should the policyowner choose? - ANSWER-a) Fixed amount option b) Interest only option c) Life income with period certain
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? - ANSWER-a) 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) - ANSWER-c) All of the following are business uses of life insurance EXCEPT - ANSWER-a) 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) - ANSWER-c) When a fixed annuity owner pays his/her insurance company a monthly annuity premium, where is the money placed? - ANSWER-a) Forwarded to an investor b) Each contract's separate account c) The annuity owners account d) The insurance company's general account d) - ANSWER-d) 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? - ANSWER-a) Basic Medical Expense
b) Disability income c) Major Medical d) Dental Expense b) - ANSWER-b) The primary purpose of licensing is to - ANSWER-a) 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) - ANSWER-c) How are contributions to tax-sheltered annuity treated with regards to taxation?
- ANSWER-a) 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) - ANSWER-c) The gatekeeper of an HMO helps - ANSWER-a) 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) Deductibles c) Copayments d) Self-insurance a) - ANSWER-a) When an insurer offers services like preadmission testing, second opinions regarding surgery and preventive care, which term would best apply? - ANSWER-a) Claims reduction b) Claims discrimination c) Case management provision d) Cost reduction c) - ANSWER-c) 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? - ANSWER-a) Limited coverage b) Claims saving c) Cost containment d) Selective coverage c) - ANSWER-c) Who may complete a paramedical report? - ANSWER-a) A nursing assistant b) A registered nurse c) A spouse d) An underwriter
b) - ANSWER-b) 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? - ANSWER-a) The data of medical exam b) The data of policy delivery c) The date of issue d) The date of application a) - ANSWER-a) Which of the following is NOT true regarding Equity Indexed Annuities? - ANSWER-a) 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) - ANSWER-d) On a participating insurance policy issued by a mutual insurance company, dividends paid to policyholders are - ANSWER-a) 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) - ANSWER-d)
