FLORIDA LIFE AND HEALTH INSURANCEAND PRACTICE , Exams of Nursing

Download FLORIDA LIFE AND HEALTH INSURANCEAND PRACTICE and more Exams Nursing in PDF only on Docsity! FLORIDA LIFE AND HEALTH INSURANCE AND PRACTICE EXAMS LATEST 2024 ACTUAL EXAMS WITH CORRECT QUESTIONS AND VERIFIED ANSWERS ALREADY GRADED A+ 100% GUARANTEED PASS N is covered by a Term Life policy and does not make the required premium payment which was due August 1. N dies September 15. What action will the insurer take? Claim will be denied What provision in a life insurance policy states that the application is considered part of the contract? Entire Contract provision B recently died and was insured with a life insurance policy for over five years. During the claims process, the insurer discovered that B had understated his age by 5 years at the time of application. In this situation, the insurer will pay the amount that the premium would have purchased at the correct age K's whole life insurance policy lapsed two months ago due to nonpayment. She would now like to reinstate the policy. All of these statements are correct about the policy's reinstatement EXCEPT K will forfeit the right to use the automatic loan provision upon reinstatement Which of the following provisions guarantees that premiums will be waived if a Juvenile Life policyowner becomes disabled? Payor clause Which of the following is an example of a nonforfeiture option? Reduced paid- up option K owns a Whole Life policy. If K wants an increasing Death Benefit to protect against inflation, which Divided Option should she chose? Paid-Up Additional Insurance A life insurance policy which ensures that the premium will be paid if the insured becomes disabled has what kind of rider attached? waiver of premium A cost of living rider gives the insured additional death benefits B receives yearly dividends and interest from a participating life insurance policy. Which of these should B include as gross income for federal income tax purposes? Interest only All of these statements about the waiver of premium provision are correct, EXCEPT: Insured must be eligible for social security disability of claim to be accepted. Whose life is covered on a life insurance policy that contains a payor benefit clause Child D owns a whole life policy that was purchased 10 years ago. If the premium payments suddenly stop and D takes no additional action, which Nonforfeiture option will the insurer likely proceed with? Extended Term What action can a policyowner take if an application for a bank loan requires collateral? Assign policy ownership to bank M has an insurance policy that also has an outstanding policy loan at the time of M's death. The insurer will deduct the outstanding loan balance from the policy proceeds An insured's inability to perform two or more activities of daily living may trigger which type of life policy rider? Long term care Variable whole life insurance can be described as both an insurance and securities product The Accidental Death and Dismemberment (AD&D) provisions in a life insurance policy would pay additional benefits in the insured is blinded in an accident N is a student pilot with a large life insurance policy. Which of these features would limit the insurer's obligation in the event N was killed while flying as a student pilot? Exclusion S buys a $50,000 whole life policy with a $50,000 Accidental Death and Dismemberment rider. S dies 1 year later of natural causes. How much will the insurer pay the beneficiary? $50,000 Which of the following best describes a contingent beneficiary Person designated by the insured to receive policy proceeds in the event that the primary beneficiary dies before the insured. on January 8, an applicant filled out an application of a life insurance policy but did not include the initial premium. The insurance company approved the application on January 14 and issued the policy January 15. The producer delivered the policy on January 26 and collected the first premium. When did the coverage become effective January 26 Before a life insurance policy is issued, which of these components of the contract is required? Applicant's signature on application Before a life policy is issued, which of these contract elements is necessary? A signed application by the prospect P is a producer who notices 5 questions on a life application were not answered. What actions should P take? Set up meeting with the applicant to answer the remaining questions. An employee of 20 years recently retired at age 59 1/2. This employee's group life contract can be converted to an individual permanent policy at an individual rate Which of the following statements about non contributory employee group life insurance is FALSE? A minimum number of employees is required to participate Under federal tax laws, what is the tax treatment for an employer providing $50,000 of a contributory group Term Life plan to all its eligible employees? Portion of the premiums paid by the employer may be a tax deduction If its employees share in the cost of insurance, what type of group life insurance plan would a corporation have? Contributory Which provision is NOT a requirement in a group life policy? Accidental When an employee is terminated which statement about a group term life is true? Policy will be paid if the employee dies during the conversion period. Which of the following is an important underwriting principle of group life insurance? Everyone must be covered in the group S, while in the process of converting her group life insurance to an individual policy, dies. What happens to the claim her beneficiary submits? full benefits payable under the Master contract What group term life feature permits an individual to depart from the group and continue to be covered without providing evidence of insurability? Conversion what type of group insurance plan involves employees sharing the cost? contributory plan N, age 50, recently bought an annuity that will pay a guaranteed $2,000/month at age 70 for life. What type of annuity did N purchase? Fixed Deffered A contract owner terminates an annuity before the income payment period begins. The owner will the receive current contact surrender value T has an annuity that guarantees an income payment for the rest of his life. The contract also guarantees that if T dies before receiving payments for 20 years, the remaining payments will be paid to his son for the balance of the 20 years. What type of annuity is this? Life Annuity with Period Certain How does an indexed annuity differ from a fixed annuity? Indexed annuity owners may receive credited interest tied to the fluctuations of the linked index P, aged 50, purchased an annuity that P will fund with $500/month for 15 years. The annuity will then pay P retirement payments after the 15 years. Which type of annuity did P purchase? Deffered K has inherited a large sum of money. K purchases an annuity with this sum on July 1, and starts receiving payments August 1. These payments will continue for as long as she and her spouse lives. Which type of annuity did K purchase? Single premium Immediate Joint with Survivor Annuity S recently received a $500,000 lump sum retirement buyout from her employer. She would like to buy an annuity that will immediately furnish her with a guaranteed income for life. What type of annuity is best suited for her situation? Single Premium T purchased a $100,000 single premium, Straight Life annuity 5 years ago. He has received monthly payments since the inception of the annuity. If T dies, the insurance company does NOT have to make any further payments An immediate annuity consists of a Single Premium Variable annuities may invest premiums in each of the following, EXCEPT: Insurer's corporate business account What determines the full amount of Social Security retirement benefits a qualified individual is entitled to receive? Primary Insurance amount (PIA) Q is severely injured in an automobile accident and becomes totally disabled. How many months must Q be disabled before being able to file for social security benefits? 5 To be eligible for social security disability benefits, an employee must be unable to perform Any occupation What is Old Age and Survivors Health Insurance (OASDHI) also known as? Social Security Which of the following does Social Security not provide benefits for? Dismemberment Which tax would an IRA participant be subject to on distributions received prior to age 59 1/2? ordinary income tax and a 10% tax penalty for early withdrawal In a qualified retirement plan, the yearly contributions to an employee's account are restricted to maximum levels set by the IRS Tom has qualified retirement plan with his employer that is currently considered to be 80% "vested". How can this be interpreted? If Toms employment is terminated, 20% of the funds would be forfeited What is the excise tax rate the IRS imposes on individuals aged 70 1/2 or older who do not take the required minimum distributions from their qualified retirement plan? 50% At the age of 45, an individual withdraws $50,000 from his Qualified Profit-Sharing Plan and then deposits this amount into a personal savings account. This action would result in Income tax and a 10% penalty assessed upon funds withdrawn from the Qualified plan. When funds are shifted straight from one IRA to another IRA, what percentage of the tax s withheld? none 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 However, an insurable interest no longer exists. Where will the proceeds from E's life insurance policy be directed to? F The Health Insurance Portability and Accountability Act (HIPAA) gives privacy protection for: health information What do Dread Disease policies cover? A specific disease or illness When an insurance application is taken by a producer, which of these statements is true? Any changes made on the application require the applicant's initials A student pilot can pay regular premium costs for her life insurance policy with the addition of which of the following? Aviation exclusion What is the consideration given by an insurer in the Consideration clause of a life policy? Promise to pay a death benefit to a named beneficiary Which of the following reimburses its insureds for covered medical expenses? Commercial insurers Under Florida law, which of the following provisions is NOT required in a Medicare Supplement policy? Limitation on pre-existing conditions for up to 12 months Which organization was established to provide funds to protect an insured in the event of an insurer's insolvency? Florida Life and Health Insurance Guaranty Association Major Medical policies typically: contain a deductible and coinsurance The Life and Health Insurance Guaranty Association is funded by admitted insurance companies through assessments P and Q are married and have three children. P is the primary beneficiary on Q's Accidental Death and Dismemberment (AD&D) policy and Q's sister R is the contingent beneficiary. P, Q, and R are involved in a car accident and Q and R are killed instantly. The Accidental Death benefits will be paid to: P only Which of the following is considered an accurate statement of an unfair trade practice? Twisting involves an agent using misrepresentation to convince a policyowner to cancel their current policy so that they can purchase a new life insurance policy with another company Which of the following is an example of an Unfair Trade Practice? Coercison The Legal Actions provision of an insurance contract is designed to do all of the following, EXCEPT: protect the producer Which of these actions should a producer take when submitting an insurance application to an insurer? Inform insurer of relevant information not included on the application A Health Reimbursement Arrangement MUST be established: by the employer If an individual has an Accidental Death and Dismemberment policy and dies, and autopsy can be performed in all these situations, EXCEPT: When the state prohibits this by law P is a producer who notices 5 questions on a life application were not answered. What actions should P take? Set up a meeting with the applicant to answer the remaining questions A disability elimination period is best described as a: time deductible Which type of insurance company allows their policyowners to elect a governing body? Mutual Two partners own equal shares in a business worth a total of $1,000,000. If they both commit to the purchase of a life insurance policy that will fund a Buy-Sell Agreement, which of the following is TRUE? Each partner owns a $500,000 policy on their partner's life N is a student pilot with a large life insurance policy. Which of these features would limit the insurer's obligation in the event N was killed while flying as a student pilot? Exclusion A policyowner's rights are limited under which beneficiary designation? Irrecovable What kind of Accidental Death and Dismemberment (AD&D) insurance beneficiary requires his/her consent when a change of beneficiary is made? Irrevocable beneficiary Which type of contract liquidates an estate through recurrent payments? Annuity Under Florida law, a variable annuity policyowner must be notified of the accumulated value of the contract once each year J let her life insurance policy lapse 8 months ago due to nonpayment. She can reestablish coverage under which of the following provisions? Reinstatement provision Which is the purpose of the Life and Health Insurance Guaranty Association? Protects policyowners against insolvent insurance companies Which of the following Dividend options results in taxable income to the policyowner? Accumulation at Interest Accidental Death coverage is provided to commercial airline passengers in which of the following types of policies? Blanket Accident policy A life policy with a death benefit that can fluctuate according to the performance of its underlying investment portfolio is referred to as: Variable Life When replacing or exchanging an annuity, the agent must disclose to the annuitant the possible tax ramifications as a result of the transaction When an insurance company sends a policy to the insured with an attached application, the element that makes the application part of the contract between the insured and the insurer is called the: Entire Contract provision Which of the following health policy provisions states that the producer does NOT have the authority to change the policy or waive any of its provisions? Entire Contract The waiting period for a pre-existing condition under a Medicare Supplement policy may NOT go beyond 6 months Many small business owners worry how their business would survive financially if the owner becomes disabled. The policy which BEST addresses this concern is: Business Overhead Expense From what authority derives the requirement that an insurance application contains a disclosure stating that an investigative consumer report may be obtained on an applicant? Fair Credit Reporting Act S wants to open a tax-exempt Health Savings Account. To qualify for this type of account, Federal law dictates that S must be enrolled in a: High-deductible health plan If an insurance company issues a Disability Income policy that it cannot cancel of for which it cannot increase premiums, the type of renewability that best describes the policy is called: noncancellable A Multiple Employer Welfare Arrangement (MEWA) provides what type of benefits? Insurance T is an employee covered under a Group Life policy. If T's employment is terminated, the conversion privilege gives T the right to convert to an individual policy upon employment termination Which of the following statements describes what an Accident and Health policyowner may NOT do? Adjust the premium payments According to Florida Law, in which of the following situations would a dependent handicapped child NOT be covered under a Family Health policy? The premiums for the handicapped child are not paid K is an agent who made an improper sales of an annuity to a client/ Which of the following corrective actions would the Department of Financial Services likely order K to take Pay a monetary restitution to the client Which of these types of life insurance allows the policyowner to have level premiums and to also choose from a selection of investment options? Variable Life Rick recently died and left behind an individual IRA account in his name. His widow was forwarded the balance of the IRA. The widow qualifies for the: marital deduction What are adjustable rates for the life policy loans in Florida based on? Moody's corporate bond index According to the Time Limit of Certain Defenses provision in an Individual Health Insurance Policy, nonfraudulent misstatements first become incontestable: two years from the date of the policy was issued Which of the following does Social Security NOT provide benefits for? Dismemberment What type of insurance company is domiciled in England, but conducts business in Florida? Alien S buys a $50,000 whole life policy with a $50,000 Accidental Death and Dismemberment rider. S dies 1 year later of natural causes. How much will the insurer pay the beneficiary? $50,000 Which of the following is NOT an unfair claim settlement practice? Needing written documentation of claim details P died five years after purchasing a life policy. While investigating the claim, the insurer discovered material misrepresentations made by P during the application process. Which of these actions will the insurer take? Beneficiary will be paid the Death Benefit Florida's 14-day free-look period for life insurance policies begins at the date of delivery An individual covered under a Group Life insurance policy is considered to be a(n) certificate holder What is considered to be a characteristic of a Conditionally Renewable Health Insurance policy? Premiums may increase at time of renewal Florida requires that coverage for newborns begins "from the moment of birth" and continues for 18 months Company Z has a Cross Purchase Buy-Sell Agreement in place among its three founding partners. If the agreement is funded with individual life insurance, what would it require? Each partner must own a policy on the other partners J is 35-years old and looking to purchase a whole life insurance policy. Which of the following types of policies will provide the most rapid growth of cash value? 20-pay Life Which parts of a life insurance insurance policy are guaranteed to be true? Warranty An individual has a Major Medical policy with a $5,000 deductible and an 80/20 Coinsurance clause. How much will the INSURED have to pay if a total of $15,000 in covered medical expenses are incurred? $7,000 ($5,000 + 20% of the remaining bill = $7,000) Employers with less than __ employees are affected by Florida's Health Insurance Coverage Continuation Act (Mini COBRA) 20 An insurance company incorporated under the laws of the state in which its home office is located is called a(n) ___ company. domestic J, an Accidental Death and Dismemberment (AD&D) policy holder, dies after injuries sustained in an accident. J's age as stated on the application five years ago was found to be understated by ten years. Which of the following actions will the insurance company take? The insurer will adjust the benefit to what the premiums paid would have purchased at the insured's actual age The guarantee of insurability option provides a long-term care policyowner the ability to: buy additional coverage at a later date Group Life policies in Florida are required to contain a conversion privilege that allows for conversion to an individual policy for a stated period of time An agent gives a conditional receipt to a client for an insurance policy after collecting the initial premium. When will the policy become effective? When the conditions of the receipt are met With Disability Income insurance, an insurance company may limit the monthly benefit amount a prospective policy holder may obtain because of the insured's gross income at the time of the purchase Which of these statements accurately describes the Waiver of Premium provision in an Accident and Health policy? Premiums are waived after the insured has been totally disabled for a specified time period A policy that becomes a Modified Endowment Contract (MEC): will lose many of its tax advantages An employee with $25,000 group term life coverage was recently fired. This employee's group coverage may be converted to a: $25,000 individual whole life policy Which of the following documents must an agent submit to the replacing insurance company during the replacement of an existing life insurance policy? Notice to existing and replacing insurers of intention to replace Under the USA Patriot Act, insurers are required to report receipt of cash payments in excess of: $10,000 According to Florida's rules on disclosure, a life insurance applicant is expected to be provided with a Buyer's Guide and Policy Summary The provision that can be used to put an insurance policy back in force after it has lapsed due to nonpayment is called: Reinstatement Which of the following BEST describes how a Preferred Provider Organization (PPO) is less restrictive than a Health Maintenance Organization (HMO)? More physicians to choose from Which health policy clause stipulates that an insurance company must attach a copy of the application to the policy to ensure that it is part of the contract? Entire Contract Credit Life insurance is: issued in an amount not to exceed the amount of the loan S recently received a $500,000 lump sum retirement buyout from her employer. She would like to buy an annuity that will immediately furnish her with a guaranteed income for life. What type of annuity is best suited for her situation? Single Premium What kind of insurance policy supplies an income stream over a set period of time that starts when the insured dies? Family Maintenance Policy The option that provides an additional death benefit for a limited amount of time at the lowest possible cost is called a(n): Accidental Death and Dismemberment rider (AD&D) K applies for a life insurance policy on herself and submits the initial premium with the application. She is given a receipt by the agent stating that coverage begins immediately if the application is approved. What kind of receipt was used? Conditional ABC Insurance Company has accepted a life insurance application which contains unanswered questions. The company then makes the application part of the life contract. In this situation, the insurer has waived one of its legal rights M has an insurance policy that also has an outstanding policy loan at the time of M's death. The insurer will deduct the outstanding loan balance from the: policy proceeds Which of the following actions is NOT possible with a Universal Life policy? Premiums may be applied as a credit against income tax Any changes made on an insurance application requires the initials of whom? Applicant The part of a life insurance policy guaranteed to be true is called a(n): warranty Under an Individual Disability policy in Florida, what is the minimum schedule of time in which claims must be made to an insured? Monthly The act of an insurance company publishing misleading information about its policy's provisions is called false advertising Which type of policy pays benefits to a policyholder covered under a Hospital Expense policy? Reimbursement In a life insurance policy, which provision states who may select policy options, designate and name a beneficiary, and be the recipient of any financial benefits from the policy? Owner's Rights The provision that defines to whom the insurer will pay benefits to is called: Payment of Claims How can an agent-in-charge have more than one location? Only if the agent-in-charge is present when insurance activity occurs On August 6, D submitted an application for a $50,000 Life Insurance policy and did not pay the initial premium, On August 18, D went to his doctor complaining of chest pains and some tests were given by the doctor. The life policy was delivered by the producer on August 20 and D explains what had recently taken place with the doctor. What action should the producers then take? Collect initial premium along with a signed health statement An agent who makes misleading statements that lead to the termination of an existing insurance policy so that a new policy with another insurer can be taken out has committed twisting Which factors are taken into consideration when an insurance company determines the premium rate for a Whole Life policy on an applicant? Risk classification One definition of replacement is "the act of replacing an existing insurance policy with another". Replacement is closely regulated and requires full disclosure In Florida, the underwriting and issuance of a master group health policy requires that all employees are eligible to participate, regardless of their individual history Insured The person covered by the insurance policy. Rider A written modification attached to a policy that increases or decreases coverage and/or premiums. Brainpower Read More What is a unilateral contract? A contract in which only one of the parties is legally bound to fulfill its obligations. What law protects consumers from the circulation of inaccurate or obsolete information? The Fair Credit Reporting Act. What are the three types of agent authority? Implied, Express, and Apparent. Agent An individual who is licensed to sell, negotiate, or effect insurance contracts on behalf of the insurer. What is name of the process that insurance companies use to determine whether or not an applicant is insurable? Underwriting The requirement that agents must account for and promptly remit all insurance funds collected is known as what type of agent responsibility? Agent Who must be notified of the producers change of address? The department of Insurance Certificate of Insurance A document issued to insureds under a group plan that states the coverage being issued, and indicates the coverage type and amounts. Nonrenewal Termination of a policy by an insurer on the anniversary or renewal date. Representation A statement made by the applicant on the insurance application that is believed to be true. What is a warranty? An absolutely true statement that, if breached, may viod an insurance contract. In insurance, when is the offer usually made on a contract? When the insurance application is submitted. When a change needs to be made on the application for insurance, which is the best method for correcting the information? Complete a new application or ask the applicant to initial the correction on the original application. A situation in which a person can only experience a loss and no gain represents what type of risk? Pure Risk Who is responsible for the contents of insurance advertisements? The Insurance Company What is the entire contract in health insurance underwriting? The policy with riders and endorsements, plus a copy of the application. What is the main purpose for requiring a person to be licensed to transact insurance? To protect the general public. Who is an insurance agent? A person authorized to sell, solicit, and negotiate insurance contracts. What illegal act does a producer commit what representing a policy in a more favorable light than the policy really is? Misrepresentation Field Underwriter An insurance agent who conducts an initial policy solicitation and application. (The company's front line of underwriting) Policyowner The person entitled to exercise the rights and privileges in the policy. What is solvency? An insurer's ability to meet its financial obligations of policy owners, insureds, and beneficiaries. What entities make up the medical information bureau (MIB)? Insurers What is the foundation of statistical prediction of loss upon which rate for insurance are calculated? Law of Large Numbers Adverse Selection The tendency of risk with higher probability of loss to purchase and maintain insurance more often than the risks who represent lower probability of loss. Concealment The withholding of known facts that, if material, can void a contract. What is the purpose of a cease and desist order? To prevent a producer or insurer from violating laws for transacting insurance. What is the purpose of the Florida Guaranty Association? To protect policy owners, insureds, and beneficiaries from financial losses caused by insolvent insurers. Who's responsible for paying the cost of a medical examination required in the process of underwriting? The Insurer Which of the two types of policy assignments requires transfer of all ownership rights in the policy to a third-party? Absolute Assignment Who may share in the commissions from the sale of a life insurance policy? Only producers properly licensed for the type of insurance transaction. (Ex. Life insurance agents may share commissions for life insurance transactions) Who must be a member of a state insurance guaranty association? Any authorized insurer within a state. When should an agent obtain a statement of good health from the insured? When the premium was paid upon delivery rather that at the time of application. What is the main responsibility of a company's underwriting unit? Risk Selection Conditions that increase the chance of a loss are known as what? Hazards What is the purpose of the agent's report during the application process? It provides the agent's observation about the proposed insured that may help in the underwriting process. If an underwriter requires extensive information about the applicants medical history, what report will best serve this purpose? Attending Physician's statement. What are agents required to do in order to renew their license? Complete required continuing education hours. Primary Beneficiary A beneficiary who has the first claim to the policy proceeds after the death of the insured. Why are dividends in life insurance polices not taxable? Dividends are not considered income for tax purposes; they are a return of unused premium. How soon can income payments begin in an immediate annuity? No later that one year from the time of annuity purchase. What type of annuity requires an agent to have a securities license? Variable Annuity What are some examples of Life qualified plans? IRA, 401(k), HR 10 (keogh), SEP, SIMPLE Under what non-forfeiture option does the company pay the policy's surrender value and have no further obligations to the policy owner? Cash Surrender What provision in a life insurance policy extends coverage beyond the premium due date? Grace Period. In term policies, what happens to the premium throughout the term of the policy? Universal Life What type of life insurance policy offers pure death protection? Term At what point does coverage begin when an agent issues a conditional insurability receipt for a life insurance policy? Either on the date of the application or the date of the medical exam, whichever occurs last. What are the three main factors that determine the premium for a life insurance policy? Mortality, Interest, and Expense. Qualified Plan A retirement plan that meets the IRS guidelines for receiving favorable tax treatment. Face Amount The amount of benefit stated in the life insurance policy. What is the penalty for excessive contributions to a traditional IRA? 6% What are the two phases of an Annuity? Accumulation and Annuitization (Pay-in and Pay-out) What annuity settlement option provides income payments to the annuitant for the duration of his or his life, and also guarantees payment for a specified number of years? Life income with period certain. For a retirement plan to be qualified, it must be designed for whose benefit? Employees What life policy rider allows the company to forgo collecting the premium if the insured becomes disabled? Waiver of Premium What beneficiary designation has the first claim to the death proceeds of a life insurance policy? Primary Beneficiary What happens to the proceeds of a life insurance policy if there is no named beneficiary? The proceeds are paid to the insured's state. A whole life policy that requires premium payments only for a specified number of years is known as what kind of policy? Limited-Pay Whole Life What are the death benefit options in universal life policies? Option A: Level Death Benefit Option B: Increasing Death Benefit Why are policy loans not available on term insurance? There is no cash value to borrow against. What document must a producer provide to the insured during policy replacement? Notice regarding replacement When must insurable interest exist in a life insurance policy? At the time of application. Participating Policy Insurance in which policy owners share in profits or losses and receive dividends when available. If a settlement option is not chosen by the policy owner or the beneficiary, what option will be used by the insurer? Lump-Sum payment What type of annuity is purchased with multiple payments, and begins income payments no sooner than one year after the purchase? Flexible premium deferred annuity According to the taxation rules of life insurance policies, how are cash value increases taxed? Cash value growth is tax-deferred Who does the common disaster clause protect? The contingent beneficiary Which non-forfeiture option provides coverage for the longest period of time? Reduced paid-up What provision allows the policy owner to reactivate a lapsed life insurance policy within a specified period of time with proof of insurability? Reinstatement What does "level" refer to in level term insurance? Face Amount What elements of an adjustable life policy can be changed by the policy owner? The amount and payment period of the premium, and the period of protection. In variable universal life insurance, to what policy component does the term "variable" refer? Cash value and face amount What portion of a partial withdrawal from a universal life policy will be taxed? Interest earned on the withdrawn cash value In calculating the amount of life insurance needed, on what is the needs approach based? The predicted needs of the family after the premature death of the insured. Settlement Options Methods used to pay the death benefits to a beneficiary upon the insured's death. Insurable Interest A financial interest in the life of another person with the possibility of losing something of value if that person dies. If someone wants to buy a life insurance policy that will provide lifetime protection against premature death, what type of life insurance policy should it be? Permanent What is policy replacement? A new policy is issued while an existing policy is terminated or reissued with reduction in cash value. What type of life insurance is best suited to cover a mortgage? Decreasing Term When the amount of insurance is increased in an adjustable life policy, what will the insurer require from the insured? Evidence of Insurability. What are the "living benefits" of whole life insurance? Cash Value Statements on the application made by an applicant for a life insurance policy are known as what? Representations What dividend option can increase the death benefit of the existing life policy> Paid-up additions What are the most common exclusions in life insurance policies? War and Military service, hazardous occupation, and Aviation. Who qualifies for Medicaid? People with insufficient income and insufficient assets. What type of insurance covers an employee who is hurt on the job? Worker's Compensation Under what employer sponsored plan are the benefits taxable to an employee in proportion to the amount of premium paid by the employer? Disability income When are LTC benefits received tax-free by an individual? LTC benefits are always received tax-free What is the gatekeeper model? An HMO model that uses the insured's primary care physician as the initial contact for the insured for medical care and for referrals. What are the common exclusions in most health insurance policies? War, self-inflicted injuries, elective cosmetic surgeries, injuries caused by participating in illegal activities, and workers compensation benefits. What is the term for a period of time immediately following a disability during which benefits are not payable? Elimination Period How can health insurance policies be delivered to the insured? Personally delivered by the agent or mailed. What is the purpose of respite care in long-term care insurance? To provide relief for a caregiver. In what type of health insurance plans are providers paid for services in advance, regardless of the services provided? Prepaid plans When an individual is covered under two health plans that have duplicate benefits, the benefit will be prorated to avoid what? Overinsurance What is the main difference between coinsurance and co-pay? Co-pay is a set dollar amount; coinsurance is a percentage of the expenses Which policy rider in a health insurance policy allows an insured to purchase additional amounts of disability income coverage without evidence of insurability? Guaranteed Insurablility Rider What Medicare part provides prescription drug benefit? Part D How is Medicaid funded? Medicaid is a federal and state funded program How are individually owned disability income benefits taxed once received by that insured? Disability benefits are not taxed; they are received income tax free How long do short-term disability group plans pay benefits? For a period of less than two years In health insurance, when would an excess plan pay benefits? After the primary plan has paid it's full promised benefit, the excess plan will pay the balance. What is Long-Term Care? Health and social services provided for individuals with chronic disease or disabilities who requires living assistance at home or in a nursing home facility. What type of health insurance plans cover all accidents and sicknesses that are not specifically excluded in the policy? Comprehensive plans What is the purpose of managed care health insurance plans? To control health insurance claims expenses. If an agent makes a correction on the application for health insurance, who must initial the correct answer? The Applicant What is "own occupation" disability? Insured's inability to perform duties of his or her current job or an occupation for which the insured is educated and trained. According to the reinstatement provision, once a lapsed policy is reinstated, how soon will coverage be available for accidents? Immediately If the insured pays a monthly premium for health insurance, how long will the grace period be on the policy? 10 Days What is a deductible in a health insurance policy? A specified dollar amount that the insured must pay before the insurer pays any policy benefits. In which Medicare supplemental plans are the core benefits found? All plans (A-N) When is the initial enrollment period for Medicare part A? When an individual first becomes eligib;e for Medicare, starting three months before turning age 65 and ending three months after the 65th birthday. What part of Medicare is known as medical insurance? Part B What type of disabilities will be covered by occupational coverage? Disabilities that result from accidents or sicknesses on OR off the job How are benefits received by the business from a key person disability insurance? Income tax free What is a service plan? An insurance plan in which benefits are provided to subscribers in the form of services instead of monetary benefits. What is the elimination period? A waiting period imposed on the insured from the onset of disability until benefit payments begin. Who are the parties in a group health contract? The employer and the Insurer A waiver of premium provision may be included with what type of health insurance policies? Disability income and LTC What type of hospital policy pays a fixed amount each day that the insured is in the hospital? Hospital Indemnity How can AD&D coverage be written? As a rider to a health insurance policy, or as a seperate policy. What is a fee-for-service health plan?