Download Final Exam-Michigan Life and Health Test Bank Q & A 2025 Graded A and more Exams Health sciences in PDF only on Docsity!
Final Exam-Michigan Life and Health
Test Bank Questions and Verified
Answers 2025 Graded A
"Maximum benefits" refers to the - ANSupper limit of the total lifetime benefits the insurance company will pay a 10% exercise tax is normally applied to an early withdrawal from an IRA. according to HIPAA, this tax will not be applied If the withdrawal is used for medical expenses that exceed__ of the individuals adjusted gross income - ANS7.5% A change in an insurance application requires - ANSan initial made by the applicant A disability income policy can prevent an insured from earning a higher income than if he/she were working by utilization - ANSbenefit limits a dread disease policy is considered to be a type of - ANSlimited health insurance policy a father has a son who is mentally handicapped but not eligible for Medicare. the son is dependent on his father. under which of the following circumstances can the son remain on the fathers coverage after the age of
- ANSwith written proof of disability and dependency
A fee for service health insurance plan will normally cover - ANSa disease a field underwriter's main task is - ANSto ensure an applicants medical information is accurate and complete a form of medical health insurance covering the treatment and care of gum disease is called - ANSdental expense insurance a group disability income plan that pays tax-free benefits to covered employees is considered - ANSfully contributory a health insurance policy that allows an insurer to change the policy owner's premiums, but not cancel the policy is called a(n) - ANSguaranteed renewable policy a health insurance policy will typically cover - ANSpreventative health services a hospital or medical expense policy will typically cover dental treatment expenses under which circumstance - ANSdental treatment is needed to repair an injury A licensee who informs an insured of inaccurate terms, benefits, or advantages of any policy is committing which of the following violations? - ANSMisrepresentation
A partial surrender is allowed in which of the following policies - ANSUniversal life A payment system for health care in which the provider is paid for each service given is called - ANSFee-for-Service a person who is a nonsmoker, of average weight, and excellent health would most likely be in which risk classification? - ANSpreferred A pharmacy benefit covers prescription drugs derived from list called a(n) - ANSDrug Formulary A plan in which an employer pays insurance benefits from a fund derived from the employer's current revenues is called - ANSA self funded plan A policy owner may exercise which of these dividend options that uses the dividend to pay all or part of the next premium due? - ANSReduction of Premium Dividend Option A policy owner suffers an injury the renders him incapable of performing one or more important job duties. Any decrease in income resulting from this injury would make him eligible for benefits under which provision? - ANSPartial Disability A producer's license has been suspended due to the failure of completing required continuing education credits. The license may be activated by
completing the CE requirement within how many days of the renewal date?
- ANS a producers fiduciary responsibility included which of the following - ANSrecording the recipe and distribution of premiums due to an insurer A provision that allows a policy owner to temporarily give up ownership rights to secure a loan is called a(n) - ANScollateral assignment A rehabilitation benefit is intended to - ANSPrepare the insured to return to employment A renewable term life policy can be renewed - ANSat a predetermined date or age, regardless of the insured's health A rider that assures premiums will be paid on a juvenile policy until the child reaches a specific age is called - ANSPayout rider A rollover from a Traditional IRA to another IRA MUST be done within __ days to avoid tax consequences - ANS a securities license is required for a life insurance producer to sell - ANSvariable life insurance A securities license is required for a life insurance producer to sell - ANSvariable life insurance
replacing insurer a list of all Life Insurance policies or annuity contracts proposed to be replaced After an insured gives notice of loss, what must he/she do if the insurer does not furnish forms? - ANSfile a written proof of loss All of the following are considered appropriate uses of life insurance for business purposes EXCEPT - ANSProtecting the business by covering entry level employees with life insurance All of the following are examples of a Business Continuation Plan except - ANSDeferred Compensation all of the following are functions of an insuring clause EXCEPT - ANSPrimarily describes the free-look period all of the following occurrences may result in license revocation EXCEPT - ANSproducing an inadequate amount of a new premium All of these are characteristics of a major medical expense policy EXCEPT
- ANSElimination Periods -The elimination period is the period of time between the onset of a disability, and the time you are eligible for benefits. It is typically a characteristic of disability policies, not major medical expense policies.
all of these are common exclusions to a life insurance policy except - ANSaccidental death All of these are valid policy dividend options for a life insurance policyowner EXCEPT - ANSaccumulate without interest All of these statements concerning whole life insurance are false except - ANSwhen a whole life policy is surrendered, income taxes may be owed An applicant intentionally lying to an insurance company on an application in order to obtain a cheaper premium is an example of rebating coercion fraud twisting - ANSfraud An association wanting to buy an insurance under a group health plan MUST - ANShave a legitimate non-insurance purpose An attending physician's statement would be appropriate for which life insurance purpose? - ANSAt the request of the insurer to assist in the underwriting decision An error was made on Mary's life insurance application. Which of the following areas are errors commonly made on applications for which the incontestable clause does NOT apply? - ANSAge
An insurer, in general business practice, fails to promptly provide a reasonable explanation for the denial of a claim. This is considered to be - ANSan unfair claim settlement practice An underwriter's primary responsibility to an insurer is to protect against - ANSadverse selection Andy the annuitant dies before the annuity start date. Which of the following is a TRUE statement? - ANSpremiums paid plus interest earned is returned to the beneficiary Barbra's policy includes a rider which allows her to purchase additional insurance at specific dates or events without evidence of insurability. This rider is called a(n) - ANSguaranteed insurability rider Benefits provided by a medicare supplement policy must NOT - ANSduplicate medicare benefits Bob and Tom start a business. Since each partner contributes an important element to the success of the business, they decide to take life insurance policies out on each other, and name each other as beneficiaries. Eventually, they retire and dissolve the business. Bob dies 12 months later. The policies continue in force with no change. Both partners are still married at the time of Bob's death. In this situation, who will receive Bob's policy proceeds? - ANSTom
Claims payable to a Disability Income insured, even when the insured can continue to work, are a result of - ANSPresumptive Disability Consumer privacy regulations permit the release of an insured's financial information when? - ANSAn authorized agency makes a written request to the insurer during an insurance fraud investigation Continued coverage under COBRA would be provided to all of the following EXCEPT - ANSa covered employee is terminated for gross misconduct Continuous 24-hour care provided by licensed medical professionals under the direct supervision of a physician is called - ANSskilled nursing care Craig purchased a life insurance policy enabling his heirs to pay estate taxes. What is this called? - ANSEstate Conversion Credit Accident and Health plans are designed to - ANSHelp pay off existing loans during periods of disability disability income plan which require that the insurer can NEVER change or alter premium rates are usually considered - ANSnoncancellable Distribution from a Health Savings Account (HSA) for qualified medical expenses are - ANSTax Free
-full time employees are typically eligible health insurance involves two perils, accident and ______ - ANSsickness Health insurance will typically cover which of the following perils - ANSinjury due to accident HIPAA considers which of the following as "individually identifiable health information"? - ANSa persons health claim information How do interest earnings accumulate in a deferred annuity - ANSOn a tax- deferred basis How is a health provider reimbursed if they do NOT have an agreement in place with the insurance company? - ANSa usual, customary, and reasonable fee How long must an individual be unable to engage in any gainful activity due to physical or mental disability in order to qualify for Social Security Total Disability. - ANS12 months How many employees must an employer have for a terminated employee to be eligible for COBRA - ANS if an employee contributes 50% toward the disability plan premium provided by an employer, what would be considered the taxable income of a $1,000 monthly disability benefit - ANS$
If an insured's age on a life insurance policy has been misstated, what is the insurer's liability if the insured died? - ANSA prorated death benefit based on the amount of insurance the insured's premiums would have been if purchased at the correct age in addition to the actual policy, an entire contract includes which of the following? - ANSthe application in an employer-sponcered group accident and health plan, a master contract is issued to the - ANSemployer in an employer-sponsored contributory group Disability Income Plan, the employer pays 60% of the premium and each employee pays 40% of the premium. any income benefits paid are taxed to the employee at - ANS60% of the benefit In MI, a small employer is comprised of - ANS2-50 employees In MI, legal action can be taken against an insurer for failure to pay HEALTH insurance claims for a period not to exceed - ANS3 years in MI, legal action can be taken against an insurer for failure to pay LIFE insurance claims for a period not to exceed - ANS6 years
Joe is a Medicare participant who receives his benefits through a Managed Health Care Plan. Which Medicare plan does he have? - ANSpart c Jonas is a whole life insurance policy owner and would like to add coverage for his two children. Which of the following products would allow him to accomplish this? - ANSChild Term Rider Kate has a Major Medical Plan with a 75/25 coinsurance and a deductible of $25. How much will she have to pay if she, not having met any of her deductible, visits the doctor and receives a bill for $125? - ANS$ $25 deductible +$25coinsurance Kathy pays a monthly premium on her health insurance policy. How long is her grace period? - ANS10 days Ken is a producer who has obtained Consumer Information Reports under false pretenses. Under the Fair Credit Reporting Act, what is the maximum penalty that may be imposed on Ken? - ANS$5, Key Person Disability insurance pays benefits to the - ANSemployer Level premium permanent insurance accumulates a reserve that will eventually - ANSequal the face amount of the policy loans obtained by a policy owner against the cash value of a life insurance policy - ANSwould not be treated as taxable income
Low frequency diseases can be exclusively covered by what kind of health insurance policies? - ANSLimited Policies Major Medical insurance will typically cover medical expenses that result from - ANSa negative reaction to prescribed medication making a statement that is false or maliciously critical of the financial conditions of an insurer is known as - ANSdefamation Matt is applying for life insurance and requests a double indemnity rider. A double indemnity benefit will be payable to Matt's beneficiary if Matt - ANSdies instantly from a car accident Medical Expense insurance would cover - ANSan injury occurring at the insured's residence Naming a contingent beneficiary as "all surviving children" is described by which term? - ANSclass designation Phil is shopping for an annuity that guarantees he CANNOT outlive the benefits. Which of these benefit options would he choose? - ANSGuaranteed lifetime withdrawal benefit Pierre is covered by his employer's group major medical plan. His employer pays for 75% of the premium and he pays for 25%. How much would a $10,000 benefit be taxable as income under this plan? - ANS0$
Ron has a new employer and wishes to enroll in the company's group health plan. in determining whether his pre-existing health condition applies, Ron cannot have more than a ___ day gap without previous health insurance - ANS Shawn, Mike and Dave are brothers who have a $100,000 "first to die" joint life policy covering all three of their lives. If Mike dies first, the policy proceeds. - ANSWill no longer provide life insurance protection Shirley has a $500,000 10-year non-renewable level term life policy. If she dies 15 years after the policy's inception date, how much will her beneficiary receive? - ANSnothing the policy was only valid for 10 years Susan is insured through her Group Health Insurance plan and changed her coverage to an individual plan with the same insurer after her employment was terminated. This change is called a(n) - ANSConversion Term insurance is appropriate for someone who - ANSseeks temporary protection and lower premiums the acceptance of a credit life application requires the submission of a certificate of insurance to the insured within_____ days - ANS30 days
the act of using misrepresentation to introduce an insured person to terminate an existing policy and purchase a new policy is referred to as - ANStwisting the automatic premium loan provision authorizes an insurer to withdraw from a policy's cash value the amount of - ANSPast due premiums that have not been paid by the end of the grace period the difference between a long term care partnership plan and a non- partnership plan is - ANSasset protection the elimination period under a hospital indemnity plan is - ANSthe specific # of days an insured must wait before becoming eligible to receive benefits for each hospitalization the entity that has the power to revoke a producers insurance license is the
- ANSDepartment of Insurance and Financial Services the factor most often used underwriting a disability income policy is - ANSannual earnings The focus of major medical insurance is providing coverage for - ANSMedical and hospital expenses The gatekeeper's role when used by an HMO is - ANSObtaining referrals to specialists from primary care physicians
