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Generally, IRA rollovers must be completed within 60 days from the time the money is taken out of the first plan. If the distribution from the first plan is paid directly to the participant, 20% of the distribution must be withheld by the payor.
Basic medical expense coverage offers a wide range of limited benefits that typically result in high out-of-pocket costs. Basic medical expense coverage provides coverage for nonsurgical services a physician provides and can be used for emergency accident benefits, maternity benefits, mental and nervous disorders, hospice care, home health care, outpatient care, and nurses' expenses.
MSA participants cannot have Medicare or any other health coverage that is not an HDHP. The following are exceptions: workers compensation, specific disease or illness, a fixed amount per day of hospitalization, accidents and/or disability, dental care, vision care, and long-term care.
How long does an insurer have to contest fraudulent misstatements made in a health insurance application?
L’s insurer has made all of the decisions regarding the provisions included in her policy. L finds an objectionable provision and wants to negotiate it with the insurer but is not allowed to do so. Her only options are to reject the policy or accept it as is. Which contract feature does this describe?
The gatekeeper of an HMO helps to
Which of the following is not true of a major-medical health insurance policy?
What is the typical deductible for basic surgical expense insurance?
Joint Life Policy
Joint life policies cover the lives of two insureds; rates are blended. Upon the death of the first insured, the policy ends.
Which of the following is NOT a feature of a noncancellable policy?
The date of medical exam
If the company acknowledges receipt of the premium with a conditional receipt, the policy is in effect on the date of the application or the date of the medical exam (whichever is later), provided that the applicant is found insurable at the rate applied for.
A limited-pay policy
Typically, the owner of an adjustable life policy has the following privileges: increasing or decreasing the premium; changing the premium-paying period; increasing or decreasing the face amount of coverage; or changing the period of protection.
The maximum amount than can be contributed to an MSA is 65% of the high-deductible plan for individuals or 75% of the family deductible for those with family coverage. Nonqualified distributions have a 15% penalty tax.
Which of the following best details the underwriting process for life insurance?
Distributions are tax-free if an account has been open five years.
Roth IRA contributions are not tax-deductible; should a taxpayer make an excess contribution to a Roth IRA, there is a 6% tax penalty. Distributions from a Roth IRA are not included in taxable income.
Which of the following is NOT a characteristic or a service of an HMO?
L has a major medical policy with a $500 deductible and 80/20 coinsurance. L is hospitalized and sustains a $2,500 loss. What is the maximum amount that L will have to pay?
Pay the death benefit
The incontestability clause prevents an insurer from denying a claim due to statements in an application after the policy has been in force for 2 years, even on the basis of a material misstatement of facts or concealment of a material fact.
Claim is denied if his policy contains the Illegal Occupation provision.
If an insurer issued a policy based on the application that had unanswered questions, which of the following will be true?
The policy will be interpreted as if the insurer waived its right to have an answer on the application.
Which of the following entities established the Do-Not-Call Registry?
Which of the following is true regarding statistics used in an advertisement?
What is a penalty tax for nonqualified distributions from a health savings account?
Which of the following is true about the premium on the children’s rider in a life insurance policy?
Which of the following best describes the MIB?
It is a nonprofit organization that maintains underwriting information on applicants for life and health insurance.
An insured receives an annual life insurance dividend check. What term best describes this arrangement?
An insured owns a $50,000 whole life policy. At age 47, the insured decides to cancel his policy and exercise the extended term option for the policy's cash value, which is currently $20,000. What would be the face amount of the new term policy?
Which is true about a spouse term rider?
The rider is level term insurance.
The spouse term rider allows a spouse to be added for coverage. It is available for a limited amount of time, typically expiring at age 65. A spouse term rider (just like any other insured rider) is usually level term insurance.
Under what condition are group disability income benefits received by an employee NOT taxable as income?
Universal Life – Option A
Universal Life Option A (Level Death Benefit option) policy must maintain a specified "corridor" or gap between the cash value and the death benefit, as required by the IRS. If this corridor is not maintained, the policy is no longer defined as life insurance for tax purposes, and consequently loses most of the tax advantages that have been associated with life insurance.
If an insurance company makes a statement that its policies are guaranteed by the existence of the Insurance Guaranty Association, that would be considered
All of the following are characteristics of a Universal Life policy EXCEPT
The planned premium pays for mortality charges and expenses and any excess is returned to the policyowner.
Which of the following terms describes making false statements about the financial condition of any insurer that are intended to injure any person engaged in the business of insurance?
Defamation is making statements which are false as to the financial condition of any insurer and which are calculated to injure any person engaged in the business of insurance.
Which of the following is NOT an example of insurable interest?
The Medical Information Bureau
Members of the Medical Information Bureau (MIB) can request a report on an applicant and receive coded information from any other applications for insurance submitted to other MIB members
Which types of policies must provide for newborns, from the moment of birth, with all health insurance benefits applicable to children until 31 days?
Both individual and group accident and sickness
In an Adjustable Life policy all of the following can be changed by the policy owner EXCEPT
When a reduced-paid up nonforfeiture option is chosen, what happens to the face amount of the policy?
It is reduced to the amount of what the cash value would buy as a single premium.
In a reduced paid-up policy, the original policy’s cash value is used as single premium to pay for a permanent policy with a reduced face amount from the original, hence the name. The new policy accumulates in cash value until its maturity or the insured’s death.
With variable whole life policies, the policyowner may allocate the premium into a sub-account that is held by the insurance company, called the
At what age may an individual make withdrawals from an HSA for nonhealth purposes without being penalized?
If the insured under a disability income insurance policy changes to a more hazardous occupation after the policy has been issued, and a claim is filed, the insurance company should do which of the following?
Adjust the benefit in accordance with the increased risk.
Which provision of a life insurance policy states the insurer's duty to pay benefits upon the death of the insured, and to whom the benefits will be paid?
Insurance is the transfer of
Because an insurance policy is a legal contract, it must conform to the state laws governing contracts which require all of the following elements EXCEPT
All of the following statements concerning an employer sponsored non-qualified retirement plan are true EXCEPT
The employer can receive a current tax deduction for any contributions made to the plan.
Employers do not receive a current tax deduction for any contributions made to a non-qualified plan. The plans are legal; however, they do not qualify for any favorable tax treatment under the IRS rules.
The purpose of managed care health insurance plans is to
Control health insurance claims expenses.
When a policy is replaced, replacing insurers must maintain a replacement register regarding that policy for
An underwriter must review an applicant with an extensive medical history. Which document would give the underwriter a better understanding of how the insured was treated for various illnesses?
Attending Physician’s Statement
A husband and wife both incur expenses that are attributed to a single major medical insurance deductible. Which type of policy do they have?
What is the function of a certificate of authority?
It allows an insurer to transact insurance in Georgia.
An insured has a continuous premium whole life policy. She would like to use the policy dividends to pay off her policy sooner than would have been possible otherwise. What dividend option could she use?
An insured wants to name her husband as the beneficiary of her health policy. She also wishes to retain all of the rights of ownership. The insured should have her husband named as what type of beneficiary?
Concerning insurance, the definition of a fiduciary responsibility is
Handling insurer funds in a trust capacity.
Which of the following insurers are owned by stockholders who have the usual rights of ownership, including the right of voting?
Which renewability provision are you most likely to see on a travel accident policy?
How many hours of continuing education in ethics must the agents complete each licensing period?
What is reinsurance?
An agreement between a ceding insurer and assuming insurer
Brandon owns a small hardware store. He is involved in a car accident that renders him totally disabled for half a year. Which type of insurance would help him pay for expenses of the company during the time of his disability?
Business overhead expense policy
The duty (or duties) of an agent where replacement is involved include
***Submitting to the replacing insurer a copy of all soliciting material.
***Submitting to the replacing insurer a statement signed by the applicant as to whether or not he has existing life insurance.
*******All of the above************
If an insured is not required to pay a deductible, what kind of coverage does he/she have?
Cameron is purchasing a permanent life insurance policy with a face value of $25,000. While this is all the insurance that he feels he can afford at this time, he wants to be sure that additional coverage will be available in the future. He should include in this policy a
Which renewability provision allows an insurer to terminate a policy for any reason, and to increase the premiums for any class of insureds?
Which of the following is NOT covered under a "core" policy, Plan A in Medigap insurance?
The Medicare Part A deductible.
An employee quits her job where she has a balance of $10,000 in her qualified plan. If she decides to do a direct transfer from her plan to a Traditional IRA, how much will be transferred from one plan administrator to another and what is the tax consequence of a direct transfer?
Which of the following is true about the mandatory 10-day free look in a Life Insurance policy?
It commences when the policy is delivered.
Sally purchases an individual health insurance policy on September 1. On September 7 her doctor informs her that she is four months pregnant. Her coverage will most likely pay
All expenses except those related to the pregnancy.
The provision in a health insurance policy that ensures that the insurer cannot refer to any document that is not contained in the contract is the
Entire contract clause.
Which of the following would NOT be taxable?
A)Death benefit included in the insured’s estate
B)Interest on death benefit proceeds
C)A policy loan borrowed by the policyowner
D)Cash value in excess of premiums paid upon policy surrender
A policy loan borrowed by the policyowner
Long-term care insurance does NOT provide coverage for
Services provided in an acute care unit of a hospital.
A child is born to a mother whose insurance covers health-related losses of family members. How long with the newborn be automatically covered under the mother's plan?
An agent accepts the premium payment 35 days after it is due, telling the insured that there will not be a problem keeping the policy in force. This is an example of what type of agent authority?
An insurance contract requires that both the insured and the insurer meet certain conditions in order for the contract to be enforceable. What contract characteristic does this describe?
According to the PPACA rules, what percentage of the health care costs will be covered under a bronze plan?
What is the purpose of a disclosure statement in life insurance policies?
To explain features and benefits of a proposed policy to the consumer
What is the term that most accurately describes the provision designed to relieve life insurance premium payment for minors whose parents have died or become disabled?
The provision which states that both the printed contract and a copy of the application for the contract between the policyowner and the insurer is called the
What is the main difference between coinsurance and copayments?
Copayment is a set dollar amount.
Which of the following would be an example of a limited accident and health insurance policy?
A dread disease policy
Which of the following is NOT true regarding uniform mandatory provisions concerning claims?
An insured must notify the insurer of a claim on forms prescribed by the insurer.
Within how many days of requesting an Investigative Consumer Report must an insurer notify the consumer in writing that the report will take place?
Which of the following is true regarding a term health policy?
It is nonrenewable.
Changes in FSA benefits, if not a Qualified Life Event, can be made when?
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