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An insurer is REQUIRED to offer which of the following to each long-term care applicant at the time of purchase? - ✔✔Inflation protection Which of these riders will pay a death benefit if the insured's spouse dies? - ✔✔Family term insurance rider Disability income plans which require that the insurer can NEVER change or alter premium rates are usually considered - ✔✔Nonconcellable What is the required action to be taken by a South Carolina licensee before operating under an assumed business name? - ✔✔Notify the Director The suicide clause of a life insurance policy states that if an insured commits suicide within a stated period from the policy's inception, the insurer will only be liable for a return of premiums paid - ✔✔minus indebtedness and without interest If an annuitant dies before the annuity start date - ✔✔the premiums paid plus interest will be given to the beneficiary The purpose of the Coordination of Benefits provision in group accident and health plans is to - ✔✔avoid overpayment of claims The typical long-term care insurance policy is designed to provide a minimum of year(s) of coverage - ✔✔ 1
Decreasing term life insurance is often used to - ✔✔provide coverage for a home mortgage Which type of life insurance policy pays the face amount at the end of the specified period if the insured is still alive? - ✔✔Endowment policy A life insurance policy normally contains a provision that restricts coverage in the event of death under all of the following situations EXCEPT - ✔✔fare-paying passenger All policies must be guaranteed renewable. - ✔✔long-term care What type of injury would NOT be covered under a health insurance policy? - ✔✔Work related All of these are common exclusions to a life insurance policy EXCEPT - ✔✔accidental health Which of the following decisions would a Health Savings Account (HSA) owner NOT be able to make? - ✔✔The amount contributed by the employer A whole life insurance policy accumulates cash value that becomes - ✔✔the policy loan value which the insured may borrow against Mike has inherited his father's traditional IRA. As beneficiary, he will pay taxes on any money withdrawn. - ✔✔income
David submits a $500 claim for medical expenses. There is a past-due amount owed for insurance premiums of $200. As a result, the insurer only pays $300 for the claim. This deduction came as a result of which provision? - ✔✔Unpaid provision Which of these is NOT considered to be a purpose of an annuity? - ✔✔Annuities are intended to create an estate Which of the following is NOT a circumstance to which a temporary producer license can be issued? - ✔✔prospective producer who is waiting to take the state licensing examination In what form do disability income policies typically pay benefits? - ✔✔periodic income A renewable Term Life insurance policy allows the policyowner the right to renew the policy - ✔✔without producing proof of insurability Donald is the primary insured of a life insurance policy and adds a children's term rider. What is the advantage of adding this rider? - ✔✔Can be converted to permanent coverage without evidence of insurability A producer has committed an insurance crime that violates US Code 1033 (interstate commerce). Who would be responsible for the persecution of this crime? - ✔✔US attorney general Under a group life policy, the insurer will issue an individual to the policyowner for delivery to each person insured. - ✔✔certificate
Frank is shopping for a disability income policy. Which of the following would have the HIGHEST premium? - ✔✔ 14 day period / 10 year benefit period XYZ Company has applied for a group health insurance for its employees. What information would the insurers underwriters likely use to determine the appropriate coverage and final premium rate given to the group? - ✔✔Experience rating In regards to a life insurance contract, which of the following statements is NOT true regarding the concept of insurable interest? - ✔✔Insurable interest can be established sufficiently by sentimental attachment alone Under a Modified Endowment Contract, what are the likely tax consequences? - ✔✔Pre-death distributions will become taxable Key person Disability Insurance pays benefits to the - ✔✔employer Sonya applied for a health insurance policy on April 1. Her agent submitted the information to the insurance company on April 6. She paid the premium on May 15 with the policy indicating the effective date being May 30. On which date would Sonya have coverage? - ✔✔May 30 What happens to interest earned if the annuitant dies before the payout start date? - ✔✔It is taxable The taxable portion of each annuity payment is calculated using which method? - ✔✔Exclusion Ratio
Tyler purchased a disability policy with a waiver of premium rider on April 1. He is disabled on May 1. On June 1, he receives proof of permanent and total disability, and submits a claim. He begins receiving benefits on June 15. When are his premiums waived? - ✔✔May 1 Sole proprietors are permitted tax deduction for health cost paid from their earnings in the amount of - ✔✔100% of cost Health Insurance will typically cover which of the following perils? - ✔✔Injury due to accident Which of the following policies does NOT build cash value? - ✔✔Term Premiums paid that exceed 7 1/2% of an insured's Adjusted Gross Income (AGI) are tax- deductible when paid for which of the following plans? - ✔✔Qualified Long-Term Care plan Tara the producer is delivering a specified disease insurance policy to a new policyowner. Upon delivery, she may be expected to collect all of the following EXCEPT a(n) - ✔✔modified application with a new signature Of the following dividend options, which of these is taxable? - ✔✔Accumulation of interest Where would policy proceeds be paid if both the insured and primary beneficiary were killed in the same accident? - ✔✔contingent beneficiary All of these are characteristics of a major medical expense policy EXCEPT - ✔✔elimination periods
Upon policy delivery, which of the following must a producer have an applicant sign if no initial premium was collected with the life insurance application? - ✔✔good health statement A health insurance policy where the insurer has the right to terminate the policy for reason other than the insured's health is called - ✔✔conditionally renewable All of the following are qualifications for establishing a health savings account (HSA) EXCEPT - ✔✔Enrolled in a health plan with a prescription drug benefit Which of these is NOT considered to be a nonforfeiture option in a whole life insurance policy?
- ✔✔Interest only Which of the following actions is REQUIRED by a producer who is replacing an existing life insurance policy? - ✔✔Submit to the replacing insurer a list of the policies to be replaced An insured has a health plan that pays established amounts in accordance with a list of injuries, surgical procedures, or other losses. This list is called a - ✔✔benefit schedule Under which circumstance may a commission be shared between two producers? - ✔✔When they are both licensed in the same line of business Which of these is NOT subject to income taxation under a Modified Endowment Contract (MEC)? - ✔✔Death benefit How many days must a Traditional IRA be rolled over to another IRA in order to avoid tax consequences? ✔✔ 60
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? - ✔✔Silver Plan An indemnity plan - ✔✔provides the insured a specific dollar amount for services When are group disability benefits considered to be tax-free to the insured? - ✔✔When the recipient pays the premiums Which of the following is NOT taken into consideration when determining eligibility for Medicare benefits? - ✔✔Income What is the corridor in relation to a Universal Life insurance policy? - ✔✔The gap between total death benefit and the policy's cash value Statements made on an insurance application that are believed to be true to the best of the applicant's knowledge are called - ✔✔representations A life insurance policy that has premiums fully paid up within a stated time period is called - ✔✔limited payment insurance How soon can the benefit payments begin with a deferred annuity? - ✔✔A minimum of 12 months after date of purchase A life insurance rider that allows an individual to purchase insurance as they grow older, regardless of insurability, is called a(n) - ✔✔guaranteed insurability rider
Which of the following does Medicare Part D cover? - ✔✔prescription drugs What types of life insurance are normally used for key employee indemnification? - ✔✔term, whole, and universal life insurance A health care provider claim may be settled using which of the following payment methods? - ✔✔Fee-for-service What is the primary reason for buying an annuity? - ✔✔Provide future economic security Medicare Part B covers - ✔✔doctor's charges Justin is receiving disability income benefits from a group policy paid for by his employer. How are these benefits treated for tax purposes? - ✔✔taxable income All of these are typically sources of underwriting for life or health insurance EXCEPT - ✔✔Disclosure authorization response Which of these is NOT a characteristic of the Accelerate Death Benefit option - ✔✔The benefit can be offered as a rider at a specific exit cost or may be at no cost A producers license MUST be renewed every year(s) - ✔✔ 2
Lorenzo is self employed with an S corporation. He is unmarried and had a net profit for the tax year. What are the tax ramifications of his health insurance premiums paid for the year? - ✔✔100% of his health insurance costs can be deducted from his gross income Distributions from a Health Savings Account (HSA) for qualified medical expenses are - ✔✔tax- free Loans obtained by a policyowner against the cash value of a life insurance policy - ✔✔would not be treated as taxable income How are premiums paid by the insured for personally owned disability income insurance treated for tax purposes? - ✔✔not tax deductible
