Download 2025 Maryland Life and Health Insurance Licensing Final Exam: 250 Questions and Answers and more Exams Public Health in PDF only on Docsity!
2025 MARYLAND LIFE AND HEALTH INSURANCE
LICENSING FINAL EXAM|250Qs&As|LATEST
UPDATE|A+GRADE
The difference between a Long Term Care Partnership Plan and a Non- Partnership Plan is which of the following? - ANS:->>> - Asset Protection All of the following are considered appropriate uses of life insurance for business purposes EXCEPT - ANS:->>> - Protecting the business by covering entrylevel employees with life insurance Susan is insured through her Group Health Insurance plan and changed her coverage to an individual plan with the same insurer after her employment wasterminated. This change is called a(n) - ANS:->>> - conversion Maria is a Preferred Provider Organization (PPO) subscriber and received care from an out-of-network provider. Which of the following is the likely result? - ANS:->>> - Care is covered Which of these statements concerning Traditional IRAs is CORRECT? - **ANS:-
** - Earnings are taxable when withdrawn Under the Consolidated Omnibus Budget Reconciliation Act (COBRA), a terminated employee's benefits must - ANS:->>> - be the same and the premiumcannot exceed 102% A life insurance policy normally contains a provision that restricts coverage in the event of death under all of the following situations EXCEPT - ANS:->>>- fare-paying passenger According to the Health Insurance Portability and Accountability Act (HIPAA), when can a group health policy renewal be denied? - ANS:->>>-
Participation orcontribution rules have been violated Who regulates the quality of care provided by a heath maintenance organization (HMO)? - ANS:->>> - Secretary of the Department of Health and Mental Hygiene Under a disability income policy, which provision would be payable if the causeof an injury is unexpected and accidental? - ANS:->>> - Accidental bodily injury provision Shirley has a $500,000 10 - year non-renewable level term life policy. If she dies15 years after the policy's inception date, how much will her beneficiary receive? - ANS:->>> - Nothing Tom has a rider on his disability income policy that guarantees the right toincrease his benefits without a medical exam. What kind of rider is this? - ANS:->>> - Guaranteed insurability rider The deeds and actions of a producer indicate what kind of authority? - ANS:->>> - Apparent Jennifer is required to pay a specific sum out of pocket before any benefits arepaid in a year. Her health policy most likely contains a(n) - ANS:->>>- deductible An individual most likely will have an insurable interest in insuring a person's life if - ANS:->>> - an economic interest exists for the continuance of the insured's life According to life insurance contract law, insurable interest exists - ANS:->>> - atthe time of application
Key Person Disability Insurance pays benefits to the - ANS:->>>- employer What happens when an insurance policy is backdated? - ANS:->>> - The policy'seffective date is earlier than the present According to the Affordable Care Act, what metal tier is required to have an actuarial value of 70% with covered individuals paying 30% through deductibles, co-pays, and other cost sharing features? - ANS:->>> - Silver Plan Which of the following is an annuity that is linked to a market-related index? - ANS:->>>- Equity-indexed annuity Which of these factors is NOT taken into consideration when determining thecost of a long-term care policy? - ANS:->>> - Personal income A person who, for a fee, gives advice or recommendations on benefits providedby an insurance contract is called - ANS:->>> - an advisor What type of policy would only provide coverage for specific types of illnesses(cancer, stroke, etc)? - ANS:->>>- Dread disease insurance When does a life insurance policy typically become effective? - ANS:->>>- Wheninitial premium is collected and policy is issued Claims payable to a Disability Income insured, even when the insured can continue to work, are the result of a - ANS:->>>-Presumptive disability If an employee contributes 50% toward the disability plan premium providedby an employer, what would be considered the taxable income of a $1,000 monthly disability benefit? - ANS:->>>-$ Which of the following basics is a producer's fiduciary responsibility? -
ANS:->>>-Collecting premiums and paying them to the insurance company Shawn, Mike, and Dave are brothers who have a $100,000 "first to die" joint lifepolicy covering all three of their lives. If Mike dies first, the policy proceeds - ANS:->>>-will no longer provide insurance protection All of the following actions are considered rebating EXCEPT - ANS:->>>- sharingcommissions with other licensed and appointed agents Joe has a life insurance policy that has a face amount of $300,000. After a number of years, the policy's cash value accumulates to $50,000 and the faceamount becomes $350,000. What kind of policy is this? - ANS:->>>- Universal Life policy The IRS states that a taxpayer's medical expenses that exceed 7.5% of their adjusted gross income is tax deductible. Which of the following may be considered a medical expense under this rule? - ANS:->>>-Long Term Care Insurance premiums Any advertisement that mentions a dollar amount, period of time for which anybenefit is payable, cost of policy, policy benefit, or the loss for which the benefit is payable MUST disclose - ANS:->>>-the exceptions, reductions, and limitations affecting the basic provisions of the policy The Fair Credit and Reporting Act's main purpose is to - ANS:->>>-protect consumers with guidelines regarding credit reporting and distribution Which of the following typically does NOT provide a form of managed care? - ANS:->>>-Major medical indemnity plan Dorian exercised a nonforfeiture option by using his life policy's cash value
What kind of life insurance policy covers two or more people with the death benefit payable upon the last person's death? - ANS:->>>-Last Survivor Life insurance What may be the result of replacing an existing life insurance policy with a newone? - ANS:->>>-Surrender charge HIPAA considers which of the following as "individually identifiable health information"? - ANS:->>>-A person's health claim information Term insurance is appropriate for someone who - ANS:->>>-seeks temporary protection and lower premiums Funding for Medicare Part B is partially provided by - ANS:->>>-user premiums ABC Corporation has a group life insurance policy that covers its employees andtheir dependent children. Which of the following would be considered a "dependent child"? - ANS:->>>-Child over the age of 18 years who attends an educational institution and relies on the insured employee for financial support Which of these ensures that proceeds of a life insurance policy will be free from attachment or seizure by the beneficiary's creditors? - ANS:->>>- Spendthrift Clause Which of these is NOT considered to be a risk factor in life insurance underwriting? - ANS:->>>-Number of children Failing to promptly provide a reasonable explanation for the denial of a claim isconsidered to be a(n) - ANS:->>>-unfair claim settlement practice Which type of annuity stops all payments upon the death of the
annuitant? - ANS:->>>-Life annuity Which of these gaps in Medicare coverage is addressed with Medicare Supplemental Insurance? - ANS:->>>-Medicare in-hospital deductible Which type of disability would be less than total impairment and equal to permanent impairment? - ANS:->>>-Permanent partial disability Which of the following statements is TRUE about Medicaid? - ANS:->>>-It is funded by federal, state, and local taxes
If a producer has been engaged in an administrative action by any governmental agency, within how many days following the final deposition must the producer report the action to the Commissioner? - ANS:->>>- 30 Which of these is NOT considered to be a common life insurance nonforfeitureoption? - ANS:->>>-Life income annuity What are an applicant's statements concerning occupation, hobbies, and personal health history regarded as? - ANS:->>>-representation Matt is applying for life insurance and requests a double indemnity rider. Adouble indemnity benefit will be payable to Matt's beneficiary if Matt
- ANS:->>>-dies instantly from a car accident A life insurance claim which involves a per capita distribution of policy proceeds would be payable to the - ANS:->>>-named living primary beneficiaries A waiver of premium rider allows an insured to waive premium payments if theinsured is - ANS:->>>-completely and permanently disabled When a producer is replacing an existing ordinary life insurance policy, the producer must take all of the following actions EXCEPT - ANS:->>>-obtain the beneficiary's signature on a summary of all policies to be replaced The type of policy which pays on the death of the last person is called - ANS:->>>-survivorship life
Which of the following does Medicare Part D cover? - ANS:->>>-Prescription drugs Which of the following is NOT taken into consideration when determining eligibility for Medicare benefits? - ANS:->>>-Income A producer who is licensed in Maryland but resident in another state is called a
- ANS:->>>-nonresident producer An insurance producer agrees to pay the first monthly premium for an insurance applicant. This is called a(n) - ANS:->>>-rebate Which of the following is NOT information found in a life insurance buyer's guide? - ANS:->>>-How to take legal action against an insurance company An insurer must furnish to a claimant forms for filing proof of loss within days upon receiving a notice of claim. - ANS:->>>- 15 At minimum, a carrier is required to offer which of the following health benefitplans to small employers? - ANS:->>>-The standard plan A producer may begin to solicit insurance ONLY when - ANS:->>>-appointed byan insurer An example of risk sharing would be - ANS:->>>-Doctors pooling their money tocover malpractice exposures
An error was made on Mary's life insurance application. Which of the followingareas do errors commonly occur on applications and for which the incontestable clause does NOT apply? - ANS:->>>-Age Which of the following is NOT a requirement for soliciting insurance in Maryland? - ANS:->>>-At least 21 years old What happens to the coverage under a children's term rider when that child reaches a certain specified age? - ANS:->>>-Coverage is eliminated A health insurance policy where the insurer has the right to terminate thepolicy for reasons other than the insured's health is called - ANS:-
- conditionally renewable Typically, Long-Term Disability benefits are coordinated with which benefit plan? - ANS:->>>-Social Security What is the purpose for having an accelerated death benefit on a life insurancepolicy? - ANS:->>>-It allows for cash advances to be paid against the death benefit if the insured becomes terminally ill A non-contributory health insurance plan helps the insurer avoid - ANS:->>>- adverse selection Pat owns a 20-pay life policy with a paid-up dividend option. Which of the following statements is true? - ANS:->>>-The policy may be paid up early by using policy dividends
The limited period of time given to all members to sign up for a group health plan is called the - ANS:->>>-enrollment period Ron has a new employer and wishes to enroll in the company's group healthplan. In determining whether his pre-existing health condition applies, Ron cannot have more than a day gap without previous health insurance. - ANS:->>>- 63 An example of replacement is - ANS:->>>-canceling a term life policy to buy a whole life policy What is a corridor in relation to a Universal Life insurance policy? - ANS:->>>- The gap between the total death benefit and the policy's cash value When calculating the amount of life insurance needed for an income earner, what has to be determined when using the Needs Approach? - ANS:->>>-The family's financial objectives if the income earner were to die or become disabled Under a group life policy, the insurer will issue an individual to thepolicyowner for delivery to each person insured. - ANS:->>>- certificate What is the elimination period of an individual disability policy? - ANS:->>>- Time period a disabled person must wait before benefits are paid How long must an individual be unable to engage in any gainful activity due tophysical or mental disability in order to qualify for Social Security Total Disability? - ANS:->>>-12 months
Which type of long-term care benefit would be most appropriate for a stroke victim who requires speech therapy administered at her home? - ANS:->>>- Home health care Written notice of a health insurance claim should be given to the insurer within days after the occurrence of any loss covered by the policy. - ANS:->>>- 20 A tax-free Section 1035 Exchange of a life insurance policy to a different policyis permitted if it occurs - ANS:->>>-from insurer to insurer and no cash is received by the policyowner In what part of an insurance policy are policy benefits found? - ANS:->>>- Declarations A doctor who accepts Medicare Assignment agrees to which of the following? - ANS:->>>-Doctor cannot charge more than Medicare's scheduled coverage Which of the following actions may an insurance company NOT do in a healthpolicy that contains a guaranteed renewable premium benefit? - ANS:-
- Increase the premiums on an individual basis Which of the following does restorative dental treatment cover? - ANS:->>>- Crowns Under the Health Insurance Portability and Accountability Act (HIPAA), the employee's new Group Health Plan will verify Creditable Coverage so that the - ANS:->>>-employee's waiting period for coverage of a preexisting condition canbe reduced under the new employer's health plan
What is an insurer required to do when faced with an error made under the Misstatement of Age provision? - ANS:->>>-Pay age-corrected benefits Maria would like an annuity that provides a guaranteed accumulation or payout. The type of annuity she is seeking is called - ANS:->>>-annuity certain In most dental plans, a deductible typically is NOT applied to - ANS:->>>- preventative and diagnostic services According to the Affordable Care Act, what is the maximum amount an individual can contribute to a Flexible Savings Account? - ANS:->>>-$2, Which type of life insurance is normally associated with a Payor Benefit rider? - ANS:->>>-Juvenile insurance Level premium permanent insurance accumulates a reserve that will eventually
- ANS:->>>-equal the face amount of the policy An immediate annuity has been purchased with a single premium. When doesthe annuitant typically begin receiving benefit payments? - ANS:->>>- 1 month What is the primary purpose of a rating service company such as A.M Best? - ANS:->>>-Determine financial strength of an insurance company "Maximum benefits" refers to the - ANS:->>>-upper limit of the total lifetime benefits the insurance company will pay
Ron has a life insurance policy with a face value of $100,000 and a cost of living rider. If the consumer price index has gone up 4%, how much may Ron increasethe face value of the policy? - ANS:->>>-$4, An insurance producer who replaces an existing policy by making false writtenor oral statements is committing the act of - ANS:->>>-twisting What is the nonforfeiture value of an annuity before annuitization? - ANS:-
- All premiums paid, plus interest, minus any withdrawals and surrender charges
Which of these is considered a major tax advantage of life insurance?
- ANS:->>>-Income tax is typically not owed on proceeds paid directly to abeneficiary A life insurance policy that contains a guaranteed interest rate with the chanceto earn a rate that is higher than the guaranteed rate is called - ANS:-
- universal life How does one qualify as a fully-insured individual under Social Security disability coverage? - ANS:->>>-Individual has been credited with the appropriate number of quarters of coverage Which of the following would evidence ownership in a participating health insurance contract? - ANS:->>>-Policy ownership Which of the following is NOT a federal requirement of a qualified plan? - ANS:->>>-Employee must be able to make unlimited contributions
Which of these is a method of determining the level of funds required for ongoing support in the event of the breadwinner's death? - ANS:->>>-Human life value The monthly benefit for an individual disability income policy is usually limitedto a percentage of the insured's income in order to avoid - ANS:->>>- over insurance Kathy pays a monthly premium on her health insurance policy. How long is hergrace period? - ANS:->>>- 10 days hich of these is NOT considered to be a nonforfeiture option in a whole life insurance policy? - ANS:->>>-Interest only In contrast to a guaranteed renewable policy, a noncancellable policy - ANS:->>>-may never raise premiums The Maryland Insurance Commissioner - ANS:->>>-counsels and advises the Governor on all matters assigned to the Maryland Insurance Administration The renewability provision for an individual long-term care insurance policy must be located on the policy form's - ANS:->>>-first page A group Disability Income plan that pays tax-free benefits to covered employees is considered - ANS:->>>-fully contributory What kind of insurance provides coverage for one or more necessary or appropriate diagnostic, preventive, therapeutic, rehabilitative, maintenance, or
