Insurance Concepts and Terminology, Exams of Nursing

Download Insurance Concepts and Terminology and more Exams Nursing in PDF only on Docsity! NEBRASKA INSURANCE EXAM 2024/2025 WITH 100% ACCURATE SOLUTIONS Who is protected with the "other insurance with this insurer" provision? - Precise Answer ✔✔Insurance company A nonparticipating whole life insurance policy was surrendered for its $20,000 cash value. The total premiums paid had totaled $16,000. What were the federal income tax consequences to the policyowner on receipt of the cash value? - Precise Answer ✔✔$16,000 was received tax-free and $4,000 as ordinary income After the extended term life nonforfeiture option is chosen, the available insurance will be - Precise Answer ✔✔level term for a stated period of time What is considered the collateral on a life insurance policy loan? - Precise Answer ✔✔The policy's cash value Each of the following will trigger a benefit under the Presumptive Disability provision, EXCEPT - Precise Answer ✔✔loss of any one limb In Nebraska, a long-term care policy which lapses may be reinstated within five months if - Precise Answer ✔✔the covered individual was mentally incapacitated A reciprocal insurer typically has an administrator who manages the premiums collected from the group's members. This administrator is called a(n) - Precise Answer ✔✔attorney-in-fact Which of the following outlines the authority given to the Producer on behalf of the insurer? - Precise Answer ✔✔Producer contract An accident and health plan that typically covers only the services of approved providers is called a(n) - Precise Answer ✔✔HMO plan Which of the following statements BEST describes the HIPAA portability rules for an individual who changes from one group medical plan to another? - Precise Answer ✔✔Reduces or eliminates any pre- existing conditions excluded under the new plan How do benefit payments fluctuate over time in a variable life annuity? - Precise Answer ✔✔Reflects changes in the market value of assets in a separate account Twisting means - Precise Answer ✔✔Persuading an insured, to the insured's detriment, to switch policies Which of the following would NOT have a restricted ability to enter into a contract? - Precise Answer ✔✔Small employer Which of the following does NOT help determine group health insurance premiums? - Precise Answer ✔✔Income level of group members The coinsurance for skilled nursing facility services covered by Medicare after the 100% Medicare coverage ends is - Precise Answer ✔✔Flat dollar amount per day Mary has a Health Savings Account (HSA). Distributions that she has made for anything other than qualified medical expenses are considered taxable and subject to a penalty of - Precise Answer ✔✔20% An employer has a group life insurance plan in place for his employees. How would an employee in poor health be treated in this situation? - Precise Answer ✔✔Eligible for the same type of coverage as the other employees Which of the following does NOT fall under "hospital care" in a typical health maintenance organization (HMO) plan? - Precise Answer ✔✔Private duty nursing In Nebraska, a group sickness and accident certificate of insurance must contain - Precise Answer ✔✔A summary of policy features and benefits Which statement regarding a single premium life insurance policy is NOT correct? - Precise Answer ✔✔Additional premiums may be required under certain conditions Which of these is NOT an advantage of term life insurance? - Precise Answer ✔✔A cash benefit will be provided if the insured is alive at the end of the policy period ABC Company is attempting to minimize the severity of potential losses within its company. The company is engaged in risk - Precise Answer ✔✔Reduction Which life insurance clause prohibits an insurance company from questioning the validity of the contract after a stated period of time has passed? - Precise Answer ✔✔Incontestable Clause Individuals who participate in an HMO plan are called - Precise Answer ✔✔Subscribers Which of the following is NOT a condition that must be met for an accidental death benefit to be paid? - Precise Answer ✔✔Cause of death must be from a job-related injury Which term describes the elimination of a hazard? - Precise Answer ✔✔Risk Avoidance Who is protected with the "other insurance with this insurer" provision? - Precise Answer ✔✔Insurance Company In Nebraska, small group sickness & accident coverage can be terminated in each of the following circumstances EXCEPT - Precise Answer ✔✔Timely payment of premium All parts of the Medicare program (except for public information and enrollment) are administered by which federal agency? - Precise Answer ✔✔The Centers for Medicare and Medicaid Services A policyowner pays the first annual premium for a $50,000 life insurance policy and dies one month after the policy effective date. Which of these statements is normally true? - Precise Answer ✔✔Beneficiary receives $50,000 income tax-free The grace period for a life insurance policy with an annual premium is usually - Precise Answer ✔✔1 month Which life insurance policy would be eligible to include an automatic premium loan provision? - Precise Answer ✔✔Whole Life Which of these do NOT indicate the presence of insurable interest in a life insurance contract? - Precise Answer ✔✔Life long friendship Karen is considering replacing her individual accident and health insurance policy with another individual policy. She has had issues in the past with her gall bladder that would be considered a pre-existing condition. How will a pre-existing conditions exclusion affect Karen's new insurance contract? - Precise Answer ✔✔May reduce her benefits An individual working part-time has a gross income of $5,000 for the year. If this individual has an IRA, what is the maximum deductible IRA contribution allowable? - Precise Answer ✔✔$5,000 Which of the following accurately describes the "time limit on certain defenses"? - Precise Answer ✔✔After a stated period of time, claims cannot be denied due to material misrepresentation on the application A health insurance applicant is notified that a physical examination is required. Which of the following statements is correct? - Precise Answer ✔✔Physical examinations are performed at the expense of the insurer For group health plans covering employees in more than one state, the state regulatory jurisdiction established for the plan may affect any of the following aspects EXCEPT - Precise Answer ✔✔COBRA continuation of coverage Emergency health care coverage for Medicare enrollees traveling abroad is - Precise Answer ✔✔a Medicare Supplement additional benefit How are the premiums for an individually-owned disability income policy treated for tax purposes? - Precise Answer ✔✔No tax deduction What is the elimination period of an individual disability policy? - Precise Answer ✔✔Time period a disabled person must wait before benefits are paid Based on age criteria only, which of the co-annuitants listed below would receive the largest monthly benefit payments in a joint and 100% survivor annuity? - Precise Answer ✔✔71 and 73 Which action will trigger a penalty tax on premature distributions from a modified endowment contract (MEC)? - Precise Answer ✔✔policy loans All of these statements concerning group credit life insurance are false EXCEPT - Precise Answer ✔✔The face amount is determined by the outstanding loan balance When a sum of money undergoes capital liquidation, that sum will - Precise Answer ✔✔decrease in size When compared to a fixed annuity, a variable annuity has what distinguishing feature? - Precise Answer ✔✔Investment risk is assumed by the purchaser When a health insurance policy includes a Mandatory Second Surgical Opinion provision, the insured must - Precise Answer ✔✔seek a second opinion for specified elective surgeries Individuals covered with employer-paid group health plans will normally receive tax-free benefits under all of these plans EXCEPT - Precise Answer ✔✔Disability Income A pre-existing condition exclusion in an accident and health insurance policy pertains to - Precise Answer ✔✔Prior Health Matters What could be the potential result of taking out a cash value loan on a life insurance policy? - Precise Answer ✔✔Cash surrender value will be reduced if policy is forfeited In Nebraska, Continuing Education credits are approved by - Precise Answer ✔✔Director of Insurance The owner of a single premium deferred annuity is entitled to do all of these EXCEPT - Precise Answer ✔✔make multiple premium payments Kyle is an insured who disregarded an accident and health insurance policy provision that requires him to seek a second surgical opinion. What will the end result be? - Precise Answer ✔✔He may be reimbursed for the surgical procedure at a reduced benefit level Which of these is NOT an underwriting responsibility of a life insurance agent? - Precise Answer ✔✔Determining rate classification The Law of Large numbers enables an insurer to - Precise Answer ✔✔Predict loses Which of these statements regarding insurance is false? - Precise Answer ✔✔As the number of insured units increases, the number of losses decreases A policyowner suffers a covered accident and health insurance loss on June 30 and submits the proof of loss to the insurer July 10. If the policyowner cancelled the coverage on July 2, how will the insurance company handle the claim? - Precise Answer ✔✔Claim must be paid after proof of loss is received How long is individual medical expense insurance normally written for? - Precise Answer ✔✔1 year The following are all elements of a valid contract EXCEPT - Precise Answer ✔✔written evidence Which of the following best describes the tax treatment of medical expense policies for the self-employed? - Precise Answer ✔✔100% of medical expense plan premiums are tax deductible Who typically makes the purchase payments in an individual annuity? - Precise Answer ✔✔owner In what way is a life insurance policy affected by an accelerated benefit payment? - Precise Answer ✔✔Decrease the death benefit During the first two years a life insurance policy is in force, the insurer may contest a policy for all of the following reasons EXCEPT - Precise Answer ✔✔Misstatement of age on application Which of the following does NOT meet the requirements of "skilled nursing care"? - Precise Answer ✔✔Must be provided exclusively in a hospital Who regulates an insurer's claim settlement practices? - Precise Answer ✔✔State insurance department Which of these is NOT considered to be a cost connected with an individual's death? - Precise Answer ✔✔Business Expense What minimum percentage of all eligible employees must participate in a group life insurance plan if the premiums are completely paid for by the employer? - Precise Answer ✔✔100% Which of these is NOT considered a Federal punishment for unfair and deceptive insurance practices? - Precise Answer ✔✔Community Service Which would be described as a beneficiary designation by class? - Precise Answer ✔✔Children of the insured Laura is a new employee and will be obtaining non-contributory group Major Medical insurance from her employer. Which of the following actions must she take during the open enrollment period? - Precise Answer ✔✔Sign an enrollment card In Nebraska, qualified long-term care plans require each of the following EXCEPT - Precise Answer ✔✔At least 3 days of prior hospitalization When premiums are calculated, one factor would be the expenses of the - Precise Answer ✔✔insurance company An insurable risk requires - Precise Answer ✔✔that the chance of loss be calculable An advantage of owning a flexible premium life insurance policy would be - Precise Answer ✔✔The policyowner can make policy changes without difficulty Which of the following statements accurately describes the financial impact of total disability? - Precise Answer ✔✔The financial impact may be worse than that of death What happens when an initial offer is answered with a counteroffer? - Precise Answer ✔✔Initial offer is void Darrell has a group long-term disability income policy paid by his employer. Which of these statements is true? - Precise Answer ✔✔The specified benefit amount is a percentage of his wages Which of the following relationships demonstrates insurable interest in the absence of economic interest? - Precise Answer ✔✔Marriage Partners Which of the following is NOT true of a preferred provider plan? - Precise Answer ✔✔Hospitals can only initiate preferred provider plans In regards to health insurance, employees age 65 or older are typically required to - Precise Answer ✔✔be offered the same group health benefits offered to the younger employees Patrick purchased a long-term care policy. He has a health condition for which medical treatment was recommended by a physician within 6 months prior to the policy's effective date. This condition is called a(n) - Precise Answer ✔✔pre-existing condition In Nebraska, a long-term care policy may offer coverage - Precise Answer ✔✔In which benefits are based on an individual's ability to perform the activities of daily living Which of the following situations would allow funds to be deposited into a rollover IRA? - Precise Answer ✔✔An employee quits her job and receives $50,000 from her qualified plan Which of these is NOT used as selection criteria in the underwriting process of a life insurance application? - Precise Answer ✔✔National Origin A policyowner has a life insurance policy where she had listed her age on the application as 5 years younger than her actual age. If she dies and the insurer discovers the misstatement of age, how much will the insurance company pay? - Precise Answer ✔✔Less than face amount The maximum prison sentence given under federal law for unfair and deceptive insurance practices is - Precise Answer ✔✔15 years An insurance company can be liable for a producer's unauthorized acts - Precise Answer ✔✔when the agency contract is unclear concerning the authority given Anyone who violates a cease and desist order may be penalized with - Precise Answer ✔✔suspension or revocation of license Select the appropriate response What is the eligibility requirement for Medicare Part B? - Precise Answer ✔✔Must be eligible for Medicare Part A Which of these statements is NOT true regarding a cash value loan against a life insurance policy? - Precise Answer ✔✔Interest payments made by policyowner are deductible A terminally ill policyowner decides to sell his life insurance policy to help support his family. This sale is called a(n) - Precise Answer ✔✔viatical settlement What is the reason that insurance companies require a minimum number of employees participating in a group insurance plan? - Precise Answer ✔✔Adverse selection is minimized Qualified long-term care policies must include all of the following provisions EXCEPT - Precise Answer ✔✔Inflation protection When underwriting an application for insurance, all of the following are considered unfair except - Precise Answer ✔✔discriminating against applicants of DIFFERENT risk classes Terry receives long-term physical therapy at her residence. What type of insurance would cover this service? - Precise Answer ✔✔Home Health Care Elimination periods normally apply to - Precise Answer ✔✔Disability policies Which of the following statements is INCORRECT about why the government provides insurance? - Precise Answer ✔✔Reduce fraudulent claims How does the cost for a survivorship life policy compare to the cost of combining two separate individual life insurance policies? - Precise Answer ✔✔Survivorship life policy is lower Select the appropriate response Rick owns a variable universal life policy and chooses a variable death benefit option. What will typically happen to the death benefit as a result of this selection? - Precise Answer ✔✔Fluctuate with changes in the cash account When issuing disability income coverage on a substandard risk, an insurance company may - Precise Answer ✔✔shorten the benefit period When an individual is planning to protect his family with life insurance, one method of doing so is called needs analysis. What exactly does needs analysis involve? - Precise Answer ✔✔Identifies the needs of the individual and his/her dependents An insurance policy may be issued with a preferred insurance premium in all of these situations EXCEPT - Precise Answer ✔✔living in a rural area Upon the direct request of a consumer, who asserts in good faith that he/she has been a victim of fraud, a consumer reporting agency must include a fraud alert in the file of the consumer for no less than - Precise Answer ✔✔90 days Individuals seeking Social Security disability income benefits must have a disability that will eventually lead to death, or be expected to last at least - Precise Answer ✔✔12 months After the initial enrollment period for Medicare Part B has expired, when may an individual purchase again? - Precise Answer ✔✔January through March of each year How much is normally paid to a policyowner in a life (viatical) settlement? - Precise Answer ✔✔less than death benefit First-time homebuyers are able to withdraw up to how much from their qualified IRAs without incurring the 10% early withdrawal penalty? - Precise Answer ✔✔10,000 Which of the following is considered to be a prosthodontic dental procedure? - Precise Answer ✔✔bridgework Non-occupational disability coverage is designed for - Precise Answer ✔✔employees who suffer non-work related disabilities, since work- related disabilities are covered by Workers' Compensation The Director may suspend a producer's license when the producer - Precise Answer ✔✔Rebates a portion of the commission to the insured Switching Life insurance policies without tax consequence is permitted under - Precise Answer ✔✔Sectio 1035 rules Proceeds of the viatical settlement contract could be subject to the claims of - Precise Answer ✔✔creditors If a sickness and accident insurance claim form is NOT supplied to the insured within 15 days after the notice of claim, the insured may comply with the proof of loss provision by submitting - Precise Answer ✔✔Written proof of the occurrence and extent of loss Specialty care is provided by which of these health maintenance organization (HMO) providers? - Precise Answer ✔✔Neurologist Steve has a group disability income policy where the premiums are paid by his employer. He elected to pay for additional residual disability coverage. Which of the following statements is true? - Precise Answer ✔✔Steve will pay taxes on the disability benefit received from his employer, but will receive any residual disability benefits tax-free How are level term policies able to provide level premiums? - Precise Answer ✔✔Premiums are averaged over the term of the policy