NYS LIFE ACCIDENT AND HEALTH INSURANCE

EXAM 2024 ACTUAL EXAM COMPLETE 400

QUESTIONS WITH DETAILED VERIFIED ANSWERS
/ALREADY GRADED A+

Which type of life insurance policy is best suited for paying off the outstanding balance
of a 30-year mortgage in the event of the insured's death? - ANSWER30-year
decreasing term.

How many days notice does the ACA require insurers to give before rescinding
coverage? - ANSWER30

A signed good health statement may be requested by a life producer at the time of -
ANSWERPolicy Delivery

Carol purchases a whole life policy that provides a choice of dividend options. This
policy is required to include a statement that the dividends are - ANSWERNot
Guaranteeed

Tim is confined to a nursing home but doesn't have a terminal illness. Which life
insurance rider is designed to help pay for this type of expense? - ANSWERLong-term
care benefit rider

An insured is covered under a group long-term disability policy. Under this type of
policy, the definition of disability based on any occupation typically applies -
ANSWERAfter two years of disability

Sylvia purchased an annuity for $100,000 from the proceeds of an inheritance. No

further payments are permitted and the income stream begins in 15 years. This contract
is a(n) - ANSWERSingle premium deferred annuity

Which of these is NOT a factor that influences group health insurance underwriting? -
ANSWERPhysical exams of group members

What is the grace period required for an individual accident and health insurance policy
with monthly premiums? - ANSWER10 days

In regards to technology and the ACA, which of the following statements is correct? -
ANSWERStates which operate with an Exchange must offer an internet-based portal
Insurable interest involves what assumption? - ANSWEROne person benefits from
another person's continued life

Which of these policies is considered a whole life policy? - ANSWERSingle premium life

Which of the following would be considered an unfair claims settlement practice? -

ANSWERMisrepresenting pertinent policy provisions relating to coverage after a loss

A policyowner is permitted to take out a policy loan on a whole life policy at what point?
- ANSWERWhen the policy has a cash value

Which of these is NOT a factor during the health insurance underwriting process? -
ANSWERFormer residence

New York workers compensation laws exclude benefits for disabilities caused by -
ANSWERIntentional, self-inflicted injuries occurring on the job

When premiums are determined, one factor would be the expenses of the -
ANSWERInsurer

Scott has a life insurance policy in which the dividends are left with the insurance
company. This particular policy may be paid up when the cash value plus accumulated
dividends - ANSWERequal the net single premium for the same face amount at the
insured's attained age

During open enrollment for Medicare Supplement coverage, an applicant MUST be at

least - ANSWERThere is no minimum age requirement

What happens to the cash value of a market value adjusted annuity if it's surrendered
prior to the end of the stated guarantee period? - ANSWERSubject to market value
adjustment

Which of the following contracts offer deferred taxation, flexible payments, a guaranteed
interest rate, and death benefits equal to the cash value? - ANSWERFlexible premium
fixed annuity

Tonya has been diagnosed with kidney failure and has group accident and health
insurance through her large employer. Which of these accident and health plans will be
primary during the months following her diagnosis? - ANSWERHer employer's group
accident and health plan

Which statement regarding the certificate of insurance is accurate? - ANSWERIt

indicates evidence of an employee's insurance coverage

According to the ACA, the proportion of premium revenues spent on clinical services
and quality improvements is called the - ANSWERMedical loss ratio
Which of the following statements regarding the Fair Credit Reporting Act is correct? -
ANSWERIf credit, insurance, or employment was denied because of an unfavorable
report, the consumer must be advised

According to the ACA, insurers can no longer deny health coverage due to pre-exsisting
conditions unless that plan is a - ANSWERGrandfathered plan

Which item must be considered by an agent when determining the suitability of an

annuity recommendation? - ANSWERThe client's financial status

An applicant submits a life insurance application where an investigative consumer

report is used in the underwriting process. Which of these statements is true? -
ANSWERApplicant has a right to receive a copy of the report

If group Health benefit levels are too high, what could be the end result? -
ANSWEROverutilization of the plan

A life insurance producer licensed in New York is authorized to - ANSWERSolicit,

receive and forward applications to the insurer

A group-owned insurance company that is formed to assume and spread the liability
risks of its members is known as a - ANSWERRisk retention group

Any employee insured under a group life insurance plan is normally - ANSWERCovered
with term life insurance

A life insurance guaranteed insurability rider gives the insured the right, without proving
insurability, to - ANSWERPeriodically purchase additional insurance

A policy owner has decided to replace an existing life insurance policy with a new one.
The existing life policy should be terminated - ANSWERAfter the new life policy has
been issued and delivered to the policy owner

Which of the following is NOT a function of accident and health insurance? -

ANSWERPays a death benefit as a result of natural causes

What typically changes at the re-entry option date found in some term life policies? -
ANSWERPremium

When an illustration is used in the sale of a life insurance policy, the illustration MUST
contain a statement signed by the - ANSWERAgent

Andy is in need of health care performed by skilled medical practitioners, but only on an
intermittent basis. What level of care will his doctor likely prescribe? -
ANSWERIntermediate care
An individual may receive Medicare Part A Hospital benefits, regardless of age, as long
as the person has received which of the following benefits for at least 24 months? -
ANSWERSocial Security Disability

Field underwriting by a producer - ANSWERmay result in the disclosure of hazardous

activities of the applicant

Emergency health care coverage for Medicare enrollees traveling abroad is -

ANSWERA Medicare Supplement additional benefit

Which of the following statements is true regarding accident and health insurance
claims that reimburse on an indemnity basis? - ANSWERClaims can be sent directly to
the insured

Who may terminate coverage under a cancelable health insurance policy? -

ANSWEREither the insured or the insurer

What is the actuarial value of a bronze level health plan? - ANSWER60

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? -
ANSWERFluctuate with changes in the cash account

With life insurance, the needs approach is used primarily in determining - ANSWERHow
much life insurance a client should apply for

A Health Reimbursement Arrangement MUST be established - ANSWERBy the

employer

Pete the agent made public statements that falsely portrayed Acme Insurance Company
as avoiding claim payments. Pete may be found guilty of - ANSWERDefamation

An insurance company willingly published false information in an insurance policy

advertisement. This is an example of - ANSWERMisrepresentation

Mary has a HSA. Distributions that she has made for anything other than qualified
medical expenses are considered taxable and subject to a penalty of - ANSWER20%

A life insurance policy provision that has the ability to reduce the death benefit is called
the - ANSWERaccelerated (living) benefit

When does the producer give a premium receipt for a life insurance application? -
ANSWERWhen the initial premium has been paid with the application
A group health insurance policy is a contract between an - ANSWEREmployer and
insurance company

What is another name for a Keogh plan? - ANSWERHR 10 plan

A major medical expense plan typically includes coverage for hospital room and board.
Which of the following is normally covered under the category "room and board"? -
ANSWERGeneral nursing care

Which of these life insurance policies does NOT contain a cash value provision? -
ANSWERDecreasing term life

Which of the following statements BEST describes disability buy-sell insurance policies?
- ANSWERPolicy proceeds are typically received income tax-free

Al surrenders his life insurance policy for its cash value. The total of the premiums paid
into the policy minus total dividends received in cash or used to offset premiums is
referred to as the - ANSWERCost basis

An insurance applicant willingly gave false information on the application. This applicant
would likely be found guilty of - ANSWERMisrepresentation

Periodic health claim payments MUST be made at least - ANSWERMonthly

If a disability income policy contains a cost-of-living adjustment rider, benefits must

typically be increased - ANSWERAt least once per year from when benefits begin

A copy of all Medicare Supplement advertisements must be submitted for approval to -

ANSWERThe Superintendent of Insurance

Employees are required to work at least ___ hours per week to become eligible for a
small employer health plan - ANSWER20

How does the cost for a survivorship life policy compare to the cost of combining two
separate life insurance policies? - ANSWERSurvivorship life policy is lower

Which life insurance policy option allows the policy owner to have coverage equal to the
net death benefit of the lapsed policy? - ANSWERExtended term nonforfeiture option

What would be the disadvantage of naming a trust as a beneficiary of a life insurance

policy? - ANSWERTrust administration fees would reduce policy proceeds

What is the elimination period of an individual disability policy? - ANSWERTime period a

disabled person must wait before benefits are paid
Who is protected with the "other insurance with this insurer" provision? -
ANSWERInsurance company

Which annuity allows contributions to an IRA? - ANSWERdeferred

The ACA established "exchanges" in order to - ANSWERAssist individuals and small

business when making their health insurance purchases

What do Limited accident and health policies normally cover? - ANSWERA specific
illness or event

Darrell has a group long-term disability income policy paid by his employer. Which of
these statements is true? - ANSWERThe specified benefit amount is a percentage of
his wages

Which of the following is NOT an example of risk retention? - ANSWERNot doing a

business deal after deciding it would be too risky

A family counseling benefit is typically offered under which of these coverages? -

ANSWERHospice care

When a Medicare Supplement policy is replaced, the policy owner will have a free look
period of ___ days. - ANSWER30

Long Term Care policies will usually pay for eligible benefits using which of the following
methods? - ANSWERExpense incurred

Consumers who decide to exercise their right to "opt out" of the disclosure of their
nonpublic personal information - ANSWERAre given the chance to stop disclosure

John bought a deferred annuity on Mary. John amends the contract years later to name
Tom as the recipient of the proceeds if Mary dies. Who is the annuitant for this contract?
- ANSWERMary

What action can an insurer take to discourage malingering and false disability claims? -
ANSWERLimit the amount of benefits an insured can receive from two disability policies
with the same insurer

Which statement concerning an adjustable life insurance policy is FALSE? -

ANSWEREvidence of insurability is required when there is a change in premium

Qualified long-term care premiums are treated for tax purposes as - ANSWERTax-
deductible to the extent they exceed 7 1/2% AGI

A health plan offered by private insurance companies is - ANSWERA Medicare

Supplement
Bryce purchased a disability income policy with a rider that guarantees him the option of
purchasing additional amounts of coverage at predetermined times without requiring to
provide evidence of insurability. What kind of rider is this? - ANSWERGuaranteed
insurability rider

Which of these would NOT be a valid reason to add the waiver of premium rider to a life
insurance policy? - ANSWERIt allows a policy loan to cover premium payments if the
policy owner becomes totally disabled

What is considered interstate travel under the Federal Fraud and False Statements Act?
- ANSWERPuerto Rico

Which of these statements regarding the extended term insurance nonforfeiture option
in a life policy is accurate? - ANSWERThe premium to purchase the coverage comes
from the policy's cash value

If a group endorses an accident and health insurance product in an advertisement, the

public must be made aware of - ANSWERAny control by the insurer over the group

Insurable interest in one's own life is legally considered as - ANSWERGenerally

unlimited

How do benefit payments fluctuate over time in a variable life annuity? -

ANSWERReflects changes in the market value of assets in a separate account

Switching Life insurance policies without tax consequence is permitted under -

ANSWERSection 1035 rules

When a ten year renewable term life insurance policy issued at age 45 is renewed, the
premium rate will be the current rate for - ANSWERTen year term insurance for a
person aged 55

What is the effect of the market value adjustment in a market value adjustment annuity?
- ANSWERTransfers some of the investment risk to the policy owner

During a stated initial period of coverage, long-term care insurance policies normally
EXCLUDE conditions that - ANSWERWere treated during a specified period preceding
the policy date

Which of these may NOT be deducted from premium payments or the cash value of a
variable life insurance policy? - ANSWERFederal premium taxes

Which element of a contract constitutes a definite and unqualified proposal by one party
to another? - ANSWEROffer
Under which circumstance is the interest rate guaranteed within a market value
adjusted annuity? - ANSWERWhen the contract has been held for the period specified
in the policy

A prepaid dental plan has an agreement in place with a network of dentists which -
ANSWERaccepts an established amount as payment in full for the dental services
rendered

Omar is covered by a disability income policy. He is hurt while performing an occupation

more hazardous than the occupation listed in his policy. The policy's change of
occupation provision will have what effect? - ANSWERReduce the benefit level

Which of the following outlines the authority given to the producer on behalf of the
insurer? - ANSWERProducer contract

Linda is covered with long-term care insurance and has early-stage Alzheimer's. She is
still able to reside in her home while receiving primary care, as opposed to moving into
a nursing home. All of the following long-term benefits encourage this EXCEPT for -
ANSWERCustodial care

The absolute assignment of a life insurance policy results in - ANSWERAll incidents of

ownership transferred to the assignee

A policy owner and a life settlement provider can have a life settlement negotiated
through a - ANSWERlife settlement broker

Which benefit is normally payable to a life insurance policy owner when the insured's life
expectancy has been severely limited? - ANSWERAccelerated (living) benefit

Medicare supplement insurance that provides a preventative medical care benefit will
often cover - ANSWERYearly physical examinations

During an annuity's liquidation phase, the annuitant normally - ANSWERReceives

benefit payments at regular intervals

Jonas is covered with disability insurance through his employer. The employer pays
75% of the premium, while Jonas pays the other 25%. What is Jonas' tax liability for any
benefits paid from the disability plan? - ANSWERTaxes must be paid on 75% of the
benefits received

An insured files for an accident and health insurance policy claim eight days after the
premium due date. The benefit payable is $500 and the overdue premium is $200.
Assuming that the policy pays on a first-dollar basis and contains the unpaid premium
provision, how much will the insurer pay? - ANSWER$300
Which of the following information is NOT needed to determine the suitability of an
annuity recommendation? - ANSWERLevel of education

An individual is insured under a major medical plan with a $1,000,000 lifetime benefit.
The plan has a $500 deductible and an 80% coinsurance. If the insured suffers a
$50,500 medical expense during the calendar year, what is the remaining lifetime
benefit? - ANSWER$960,000

XYZ Insurance Company gives direct authority to its producers to sell insurance through
an agency contract, but nothing is stated regarding the collection of premiums. Which
authority grants the producer the right to collect premiums? - ANSWERImplied Authority

After an applicant reads and signs an insurance application, he/she should be

conscious of the fact that - ANSWERA false statement could lead to loss of coverage

Which of these is NOT relevant when determining the amount of personal life insurance
needed? - ANSWERLocal unemployment rates

Which of the following is NOT an allowable exclusion for long-term care insurance
policies? - ANSWERCare for incurable conditions

Employer-paid qualified long-term care insurance premiums are typically -

ANSWERExcluded from the employee's gross income

How is a collateral assignment used in a life insurance contract? - ANSWERTransfers

specific ownership rights to a creditor

A preferred provider plan and an indemnity plan are similar in what way? -
ANSWERBoth pay on a fee-for-service basis

Which of the following describes the act of insuring risk against possible loss? -
ANSWERRisk transfer

Which factor determines the maximum disability income benefit that can be purchased
by an applicant? - ANSWERThe applicant's income

How long is individual medical expense insurance normally written for? - ANSWER1
year

The beneficiary of a life insurance policy is normally selected by whom? -

ANSWERPolicyowner

Which tax would an IRA participant be subjected to on distributions received prior to age
59 1/2? - ANSWERIncome tax and penalty tax
Some standard Medicare Supplement policies include which benefit? -
ANSWERHospice care

What is a certificate of authority? - ANSWERThe license required for an insurer to

conduct business in the state

How may an insurance company classify an accidental death benefit on a life policy? -
ANSWERAs an optional policy rider

Mary is an employee who is covered with a disability income policy through her
employer. She pays for the portion of the premium attributable to the cost of residual
disability benefits, while her employer pays for the remainder. What are the tax
implications of this policy? - ANSWERResidual benefits will be received income tax-free

Custodial care is normally covered under - ANSWERlong term care insurance

The main purpose of an annuity is to - ANSWERcreate a stream of income

How are qualified Roth IRA distributions normally treated for tax purposes? -
ANSWERReceived income tax-free

When initially issued, a temporary producer license in New York is valid for ___ days. -
ANSWER90

Who signs the notice of replacement when a Medicare Supplement policy is being
replaced? - ANSWERThe agent and the applicant

Which of these is NOT considered to be a cost connected with an individual's death? -

ANSWERBusiness expenses

Which of the following allows an insurer the right to transact insurance business in the
state of New York? - ANSWERDepartment of Financial Services issues the insurer a
certificate of authority

Greg applies for insurance and makes a false statement on the application that will
influence whether or not the insurer will accept the risk. Greg's false statement is called
a(n) - ANSWERmaterial misrepresentation

Which of these is NOT a reason to buy a term life policy? - ANSWERTo accumulate
savings

Elimination periods typically apply to - ANSWERDisability policies

In New York, a group accident and health certificate of insurance must contain -
ANSWERA summary of policy features and benefits
An annuity which starts paying monthly benefits within a month after issuance is called
a(n) - ANSWERImmediate annuity

Which of these must be disclosed in a universal life policy? - ANSWERThe policy's

surrender charges

Which health policy clause specifies the amount of benefits to be paid? -

ANSWERInsuring

The policy provision that permits an employee to change from group life coverage to an
individual life policy is called the - ANSWERconversion provision

An insurable risk requires - ANSWERthat the chance of loss be calculable

Under the New York Disability Benefits Law, cash payments are provided to workers
who are unable to work because of injury or illness that - ANSWEROccurred on the job

ABC Partnership is a business with a limited number of partners. Which disability buy-
sell agreement is best suited for this business? - ANSWERCross purchase agreement

In New York, reducing benefits for a newborn child under an accident and health plan is
- ANSWERProhibited in any form

An insurance policy may be issued with a preferred insurance premium in all of these
situations EXCEPT - ANSWERLiving in a rural area

The maximum amount of life insurance coverage that a parent can initially take out on
their minor child is - ANSWER$50,000

Which life insurance settlement option pays a stated monthly benefit until both principal
and interest are exhausted? - ANSWERFixed amount installment option

Which of the following statements accurately describes the "time limit on certain
defenses"? - ANSWERAfter a stated period of time, claims cannot be denied due to
material misrepresentation on the application

Who is the beneficiary in a life insurance policy? - ANSWERThe stated person or entity
who is designated to receive the death proceeds

What type of life insurance policy covers two or more persons and pays the face
amount upon the death of the first insured? - ANSWERJoint life

What is a juvenile life insurance policy? - ANSWERA life policy that covers the life of a
minor
When an annuity contract has been surrendered, how will the surrender charges affect
the final contract settlement? - ANSWERFinal contract settlement will be reduced

Which statement concerning a decreasing term life policy is accurate? - ANSWERFace

amount decreases over the policy period

Beginning January 1, 2014, the restricted annual limit for plans under the ACA will be -
ANSWERNo limit

Which statement regarding a fixed period settlement option is correct? - ANSWERThe

installment payment amount is determined by the total number of installments

What is the accounting measurement of an insurance company's future obligations to its

policy owners? - ANSWERReserves

Upon meeting company requirements, a lapsed life insurance policy may be reinstated
within ____ year(s) - ANSWER3

A comprehensive group policy also covers expenses related to vision care. Which of the
following is not typically covered under a vision plan? - ANSWERCataract surgery

If an agent is advertising a life insurance policy, the agent MUST disclose the -
ANSWERName of the actual insurer

James is covered with health insurance by two different insurers. The "insurance with
other insurers" provision in an individual health insurance policy allows an insurer to pay
benefits to the insured on a pro-rata basis when - ANSWERThe insurer was not notified
prior to the claim that the insured has other health coverage

According to the ACA, new Health Insurance Marketplaces are established by the -
ANSWERCCIIO

Which of the following statements BEST describes employer contributions for employer
provided health insurance? - ANSWEREmployer contributions are deductible

Which of the following is NOT subject to the promise to pay in an insuring clause? -
ANSWERHow the premium is calculated

Under which circumstance can an insurer cancel a Medicare Supplement insurance

policy without prior approval by the New York Department of Insurance? -
ANSWERNonpayment of premium

All of these are considered features of whole life insurance EXCPET - ANSWERInitial
premium is lower than an equivalent amount of term insurance
New York requires advertisements for accident and health insurance policies covering
ONLY a specified illness to prominently display - ANSWERA statement that the policy is
limited

In the event of premium default, which life insurance provision will use the cash value to
keep the policy in force? - ANSWERAutomatic premium loan

The Superintendent has the ability to examine the business records of insurers and
agencies because - ANSWEROf the powers granted through state statues

John the agent made public statements that falsely portrayed an insurer as insolvent.
John would be likely found guilty of - ANSWERDefamation

Respite Care coverage is typically found in a(n) - ANSWERlong term care policy

The Superintendent may not revoke an insurance producer's license unless -

ANSWERThe producer has been properly noticed and given opportunity for a hearing

Medicare Supplement Insurance requires an individual to be at least how old for open
enrollment? - ANSWERNo minimum age

When a large sum of money is used to structure monthly payments, which product is
typically used? - ANSWERAn immediate annuity

A health insurer MUST provide a proof of loss form - ANSWERwithin 15 days of receipt
of the notice of loss

If a benefit plan is offered on an Exchange, what must the insurance company offer,
with regard to that plan, outside of the Exchange? - ANSWERThe insurance company
must offer the same plan

When group benefits under COBRA have expired, a fully insured group policy can be
converted to a(n) - ANSWERIndividual health policy

What is another term used for a "pure" life annuity? - ANSWERLife income

Which term refers to insurance written on the interests of the licensee, the licensee's
employer, or the licensee's immediate family? - ANSWERControlled business

Prepaid dental plans differ from most other types of dental plans in what way? -
ANSWERClosed panel of dentists can only be used

Disability income policies provide protection for which of the following? -

ANSWEREconomic death
When must a producer provide disclosure about information practices to an applicant? -
ANSWERPrior to or at the time of signing the application

Mike applied for life insurance and was issued a conditional receipt. He is later found to
be insurable and is issued a policy. When does his coverage become effective? -
ANSWERDate of issuance of the conditional receipt

Which type of policy pays benefits to a policyholder covered under a Hospital Expense
policy? - ANSWERReimbursement

Pointing out to a prospective client that the life insurance policy you are presenting is
covered by the New York Life and Health Insurance Guaranty Association is -
ANSWERProhibited by law

Which of these situations would NOT potentially involve a prison sentence under
Federal law? - ANSWERSelling insurance with a nonresident license

Ken is age 65 and has 2 years until he receives Social Security retirement income
benefits. At his current age, which is true about Medicare Part A Hospital Insurance
coverage? - ANSWERIt is available through application to Social Security

The Superintendent has the power to compel any agent to produce business
documents relevant to an inquiry upon - ANSWERRequest of the Superintendent

Joe is a life insurance policyowner who has failed to pay interest on his policy loan.
What will result from this nonpayment? - ANSWERLoan amount is increased to reflect
the amount of interest due

Individuals seeking Social Security disability income benefits must have a disability that
will eventually lead to death, or be expected to last at least - ANSWER12 months

The owner's cost basis for a non-qualified deferred annuity is typically the same as the -
ANSWERTotal premiums paid

Why were Exchanges implemented by the Affordable Care Act (ACA)? - ANSWERTo
create a one-stop market for standardized health insurance plans

Which of these is NOT an underwriting responsibility of a life insurance agent? -

ANSWERDetermining the final rate classification

Dan owns a disability income insurance policy which provides ONLY nonoccupational
coverage. Which of the following circumstances would likely NOT be covered under his
plan? - ANSWERHe falls and breaks his hip at work

Which of these is NOT a common life insurance nonforfeiture option? - ANSWERLife

income annuity
An employer pays the accident and health insurance premiums for its employees. The
premiums paid by the employer are - ANSWERDeductible to the business

An appointed producer's implied authority is derived from - ANSWERExpress authority

Individuals covered with employer-paid group health plans will normally receive tax-free
benefits under all of these plans EXCEPT - ANSWERDisability income

Unless it is regarding fraud, which of the following statements about the contestability of
a life insurance policy is true? - ANSWERThe policy can usually only be contested by
the insurer during the first two years of the contract

If an insured dies during the grace period without having paid the premium, how much
will the insurer pay? - ANSWERPolicy's face amount minus any premiums due

According to the needs approach, an emergency reserve fund's primary purpose is to -

ANSWERCover the cost of unexpected expenses

The annuitant in a single premium deferred annuity (SPDA) - ANSWERmakes only one
premium payment

Taxable income may be the result from all of these modified endowment contract (MEC)
transactions EXCEPT for - ANSWERThe policy is surrendered for less than what was
paid into it

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? - ANSWERMay reduce her benefits

A policy owner suffers an injury that 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? - ANSWERPartial disability

A survivorship life insurance policy usually covers how many lives? - ANSWER2

A material change in a modified endowment contract (MEC) results in - ANSWERThe

seven pay test, adjusted for cash value, applies again

A certificate of coverage for a group health policy is best described as - ANSWERproof

of coverage for the employee

The Healthy New York Program is designed to - ANSWERProvide affordable health

insurance coverage to small employers
In regards to the ACA, which of these is NOT a role of a health insurance exchange? -
ANSWERContact the employer if an employee stops coverage under a plan offered in
the exchange

Which of the following describes coverage for the Medicare Part B coinsurance? -
ANSWERA Medicare Supplement core benefit

A pre-existing condition exclusion in an accident and health insurance policy pertains to

- ANSWERprior health matters

K is an agent who takes an application for individual life insurance and accepts a check
from the client. He submits the application and check to the insurance company,
however the check was never signed by the applicant. If the application is approved,
when will coverage be effective? - ANSWERThe date the agent delivered the policy,
collected the initial premium, and obtained a good health statement from the insured

An employee requested that the balance of her 401(k) account be sent directly to her in
one lump sum. Upon receipt of the distribution, she immediately has the funds rolled
over into an IRA. What is the tax consequence of the distribution sent to this employee?
- ANSWERDistributions is subject to federal income tax withholding

Insurance crimes which affect interstate commerce are prosecuted by the -

ANSWERUS Attorney General

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) - ANSWERpre-existing condition

Mary is the sole proprietor of her business and has a family health plan. She would like
to deduct the premiums from her taxes. What percentage of her premiums are tax
deductible? - ANSWER100%

Which of these is NOT a true statement of the war exclusion? - ANSWERCivil

insurrections apply

Which would be described as a beneficiary designation by class? - ANSWERChildren of

the insured

A life insurance illustration showing future premiums being paid out of nonguaranteed
values must disclose that - ANSWERThe policy owner may need to resume premium
payments depending on actual results

Which of the following can be defined as a cause of a loss? - ANSWERPeril

An attempt to defraud an insurance company is considered - ANSWERA felony

Accident and health insurance claim handling is made more convenient to the insured
by utilizing - ANSWERAssignment of benefits

Terry receives long-term physical therapy at her residence. What type of insurance
would cover this service? - ANSWERHome health care

Alan is an enrollee of a health maintenance organization (HMO) which uses a

gatekeeper system. If there ever comes a time when he needs emergency health
services, what should he do? - ANSWERProceed to the nearest emergency room

Which of the following is a syndicate established by group of insurers to share

underwriting duties - ANSWERLloyd's organization

Jack is a life insurance policy owner who happens to be terminally ill. He would like to
sell his life insurance policy at a discount to help pay for medical bills and other
expenses. What kind of arrangement would best suit his needs? - ANSWERLife
settlement

A major medical expense policy typically does NOT - ANSWERPay surgeon fees on a
first-dollar basis

Which benefit supplement added to a life insurance policy insures an entire family? -
ANSWERFamily term rider

Which provision allows a buyer to return a fixed annuity contract for a full refund within
an established amount of time? - ANSWERFree look

Tim is in need of surgery. Before being hospitalized, he is referred to an outpatient clinic

for diagnostic tests. What is this an example of? - ANSWERPre-admission testing

John the policy owner sells his life insurance policy to help pay for the cost of his
terminal illness. This transaction is called a - ANSWERLife settlement

An applicant for accident and health insurance has a risk factor that is similar to a
majority of the insurer's other applicants. What will be the likely outcome of this
applicant? - ANSWERIssued with a standard premium rate

What does a Mandatory Second Surgical Opinion provision provide to an employer-paid

health insurance plan? - ANSWERContainment of the employer's premium cost

What kind of arrangement gives the policyowner the right to change the beneficiary? -
ANSWERRevocable designation

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? -
ANSWER$5,000
Laura added a children's rider to her life insurance policy. What type of coverage was
added? - ANSWERLevel term

Which of these statements is NOT true regarding a cash value loan against a life
insurance policy? - ANSWERInterest payments made by policy owner are deductible

A large corporation pension plan purchased an accumulation annuity contract where all
of the participating employees received certificates of participation. What is this contract
called? - ANSWERGroup deferred annuity

What type of risk involves the potential for loss AND the possibility for gain? -
ANSWERSpeculative

The premiums paid by an employer for his employee's group life insurance are usually
considered to be - ANSWERTax-deductible to the employer

At the time of application, insurers must provide prospects for Medicare supplement
policies with a copy of - ANSWERThe Medicare supplement buyer's guide

Dividends from a mutual insurance company are paid to whom? -

ANSWERPolicyholders

The insurer's obligation to pay a claim depends on whether the insured or beneficiary
has complied with all policy conditions. This makes the policy a(n) -
ANSWERconditional contract

Starting in 2016, businesses with up to ___ employees will be defined by the ACA as a
"small business". - ANSWER100

The insured's consideration given for a health insurance policy is - ANSWERThe first
premium payment and the application

A reciprocal insurer typically has an administrator who manages the premiums collected
from the group's members. This administrator is called a - ANSWERattorney-in-fact

New York law requires the HIV consent form to - ANSWERDisclose the types of
individuals or organizations that may receive a copy of the test results

Chris has a single major medical contract which covers all medical expenses. His plan
is considered to be - ANSWERComprehensive

XYZ Corp money to an employee to purchase a life insurance policy and allows the
employee to select the beneficiary. What kind of plan is this? - ANSWERSplit-dollar
Which of the following situations would an insurance agent need to guard against
liability for professional errors and omissions? - ANSWERMaking a recommendation to
a potential insured to replace existing coverage

A Medicare Supplement policy is required to do which of the following? -

ANSWERProvide a 30 day free-look period

Typically, states will permit the grouping of two or more small employers in the same
industry for obtaining group health insurance at a favorable rate. This grouping of
employers is known as a multiple employer - ANSWERTrust

An insured has a $25,000 whole life insurance policy with $6,000 cash value available.
Under the extended term nonforfeiture option, what is the amount of insurance available
to the insured? - ANSWER$25,000

Which life insurance policy provision allows a policy owner to cancel the policy and
receive a full refund within a limited time period after policy delivery? - ANSWERFree-
look period

After the extended term life nonforfeiture option is chosen, the available insurance will
be - ANSWERLevel term for a stated period of time

If an agent would like to start using an assumed name, at what point must the
superintendent be notified? - ANSWERBefore using the assumed name

Which of the following is NOT a valid contract exchange? - ANSWERAn annuity

exchanged for a life insurance policy

An association which maintains a facility that displays offers and counteroffers for
purchasers or sellers of life settlement contracts is known as a - ANSWERLife
settlement intermediary

Which of the following health insurance plans charges a premium that cannot be
increased? - ANSWERNoncancelable

When a similarly appointed agent provides another agent with a referral, which results
in a sale, the commissions paid are generally - ANSWERShared between the agents

How can a group dental insurer discourage adverse selection? - ANSWERLimit the
duration of coverage

Why do insurers require a minimum number of employees participate in a group

insurance plan? - ANSWERMinimize adverse selection

According to the ACA, coverage may be rescinded - ANSWERIf intentionally false

statements were offered
Which settlement option makes minimum guaranteed dollar payments over a stated
number of years? - ANSWERFixed-period

For purposes of disability income insurance, earned income would include all of the
following EXCEPT - ANSWERDividends

The "Use it or Lose it" rule applies to - ANSWERFlexible Savings Accounts

Which of the following is NOT true of a preferred provider plan? - ANSWERHospitals...

Why does New York law require an insurance agent to examine the existing Medicare
Supplement policies of a prospective insured? - ANSWERTo determine the suitability of
potential changes

The Change of Occupation provision in a Disability Income policy states that, in the
event the insured changes to a less hazardous occupation, which of the following may
apply? - ANSWERBenefits can be increased in the event of a covered claim

A small employer group is an employer that employs how many? - ANSWER2-50

employees

Whose interests are replacement rules designed to protect? - ANSWERPolicyowner

Kate received a group accident and health termination notice. How many days does she
have to apply for a converted policy? - ANSWER31

Medicaid will pay for nursing home expenses under what condition? - ANSWERMust
have financial need

An insurer operating in the U.S. but headquartered outside the U.S. is - ANSWERan
alien insurer

Which of the following can be defined as "the potential for loss"? - ANSWERRisk

During early years of whole life insurance policy, the cash value will normally be -
ANSWERLess than the total premiums paid

An applicant for life insurance must be informed that testing for HIV infection is used to
help determine - ANSWERThe insurability of the proposed insured

What is the maximum number employees (earning at least $5,000) that an employer
can have in order to start a SIMPLE retirement plan? - ANSWER100

Medicare Part A typically covers - ANSWERinpatient drugs

Ron recently purchased an immediate, straight life fixed annuity. His benefit payments
will - ANSWERRemain a constant dollar amount for the duration of the annuity period

Under a key person disability income policy, benefits will be received as - ANSWERTax-
free income to the business

An accident and health insurance policy's premium requirements are set forth in which
of the following provisions? - ANSWERConsideration clause

In order to contribute to a HSA, - ANSWERThe applicant must be enrolled in a HDHP

A comprehensive major medical health insurance policy contains an Eligible Expenses

provision which identifies the types of health care services that are covered. All of the
following health care services are typically covered EXCEPT for -
ANSWERExperimental and investigative services

What effect can a long-term care benefit rider have on a life insurance policy? -
ANSWERReduced death benefit

Medicare Part B excess charges are covered by - ANSWERMedicare supplemental

insurance

Which statement regarding an adjustable life insurance policy is NOT true? -

ANSWERPolicy loans are not permitted

Nonqualified medical expense distributions from a HSA have tax penalty of -

ANSWER20%

What type of premiums are associated with individual mortgage protection life insurance
policies? - ANSWERLevel premiums

Which of these statements reflects an accurate portrayal of Medicare SELECT? -

ANSWERInsured uses preferred providers in exchange for paying lower premiums

For employees covered in multiple states under a group health plan, jurisdiction rules
cannot alter - ANSWERCOBRA laws

The guarantee of insurability option provides a long-term care policyowner the ability to
- ANSWERBuy additional coverage at a later date

What is considered a valid reason for small corporations to insure the lives of its major
stockholders? - ANSWERFund a buy-sell agreement

A life insurance policy that includes a return of premium rider will pay the beneficiary
how much upon the insured's death? - ANSWERTotal premiums paid plus the policy
face amount
An unmarried child under a family group accident and health policy must be provided
coverage until the age of - ANSWER19

Kelly purchases a health insurance policy issued on a conditionally renewable basis.

The insurance company has a right to refuse renewal of the policy for -
ANSWERSpecific reasons stated in the contract

Where is the difference between a standard risk and a substandard risk reflected? -
ANSWERPremium charges

When determining the accumulation value of a deferred annuity, the total is calculated
by taking the premiums paid plus interest earned minus - ANSWERExpenses and
withdrawals

Which of the following BEST describes a "partial disability"? - ANSWERUnable to

perform one or more job duties

Which type of policy can group term life insurance normally be converted to? -
ANSWERAn individual permanent life insurance policy

Which of the following could be a future use of the cash value that builds in a recently-
purchased whole life insurance policy? - ANSWERProvide supplemental income in 35
years

When there is a named beneficiary on a life insurance policy, the death benefits -
ANSWERAre paid directly to the beneficiary without interference from the insured's
creditors

Under HIPAA, medical plan late enrollees may be excluded for pre-existing conditions
for a maximum of - ANSWER18 months

The inability to perform SOME of the duties of one's own occupation is known as a -
ANSWERResidual disability

The reason for back dating a policy is - ANSWERto obtain a premium based on an
earlier age

When does the insured stop making payments under a thirty-payment whole life policy?
- ANSWERAt the time of death or 30 years after the policy's inception, whichever comes
first

Which individual would be best suited for Medicare Supplement insurance? -

ANSWERMedicare enrollee
A life insurance producer's underwriting duties may include - ANSWERseeking
additional information requested by the insurance company

According to the ACA, dependent children may remain on their parent's plan until what
age? - ANSWER26

Tori has an annuity that pays her a $500 per month income benefit for life or for ten
years, whichever is longer. What kind of annuity is this? - ANSWERFixed life annuity
with period certain

The surrender charge on many deferred annuity contracts are waived when the -
ANSWERAnnuitant dies or becomes disabled

All of the following claims settlement practices could initiate a cease and desist order
EXCEPT - ANSWERRefusing to pay a claim without conducting a reasonable
investigation of all available information where material facts are in dispute

Upon examination of a producer's business records, the Superintendent's primary

purpose is to determine the producer's - ANSWERCompliance with state insurance law
regulations

The law of large numbers enables an insurer to - ANSWERPredict losses

When an applicant applies for a large amount of life insurance coverage, which of the
following would likely NOT be an underwriting requirement - ANSWEREye examination

Which of these would most likely cause permanent disability under workers
compensation? - ANSWERLoss of a foot

An annuity's accumulation period may - ANSWERcontinue after the purchase payments

stop

How is the insured protected if a payor benefit rider is attached to the life insurance
policy? - ANSWERPremium payments are waived in the event the premium payor dies
or becomes disabled

Christine is receiving benefits provided from her disability income insurance. As

compared to her previous earnings, the disability benefits should be -
ANSWERSomewhat less

The application is part of an annuity contract according to which of the following

clauses? - ANSWEREntire Contract

Short term group disability income benefits are - ANSWERa percentage of weekly
earnings up to to a stated maximum
When a lapsed policy's premium has been paid current, it has the potential of being -
ANSWERReinstated

In New York, who is primarily responsible for determining the appropriateness of a

Medicare Supplement policy for a proposed insured? - ANSWERThe agent who solicits
the application

Security laws passed by Congress are enforced by which Federal agency? -

ANSWERSecurity and Exchange Commission

Use of XYZ Insurance Company brochures, business cards, and rating guides is an
example of - ANSWERApparent authority

Which of the following does NOT help determine group health insurance premiums? -
ANSWERIncome level of group members

An individual, age 45, would like to help pay for his daughter's college expenses in 10
years. Which annuity would be appropriate for this individual? - ANSWERDeferred
annuity

Non-occupational disability coverage is designed for - ANSWERemployees who suffer

non-work related disabilities, since work-related disabilities are covered by Workers'
Compensation

A "premature" distribution from a modified endowment contract (MEC) incurs a penalty

tax of - ANSWER10%

Licensed insurance consultants derive their income from - ANSWERClients

The death proceeds of a credit life insurance policy are typically paid to the -
ANSWERLender

How does a continuous premium whole life policy differ from a limited payment whole
life policy? - ANSWERThe time period in which premiums will be paid

Tom the agent replaced a client's insurance policy when it was not in the client's best
interest. Tom could be found guilty of - ANSWERTwisting

A disability income insurance policy was recently issued with a rating. What does this
mean? - ANSWERPolicyowner will be charged an additional premium

Tim is covered by an accident and health insurance policy that may not be changed in
any way by the insurer up to a stated age, as long as the premiums are paid. What type
of policy is this? - ANSWERNoncancelable
A life policy that has premiums that are lower than normal during the early years is
called - ANSWERModified life

Which statement regarding the life insurance premium for a children's rider is true? -
ANSWERPremium remains the same no matter how many children

Which of the following is NOT an intended use of an annuity? - ANSWERCreate new

funds upon the death of a wage-earner

Wyatt is shopping for life insurance and is mainly concerned with the policy's death
benefit. Which index should he be looking at when making comparisons? -
ANSWERNet payment cost index

When a Medicare supplement policy is purchased during the open enrollment period -
ANSWERThe policy must be issued regardless of health status

What might be considered evidence of an unfair claims settlement practice? -

ANSWERFailing to promptly investigate and settle legitimate claims

Under HIPPA requirements, eligibility for the pre-existing conditions exclusion waiver
under new coverage is lost if - ANSWERThere is a break in coverage of more than 63
days

Which of the following does a Medicare Advantage enrollee typically pay for? -
ANSWERSmall co-pay per visit or per service

What happens when a policy owner borrows against the cash value of his life insurance
policy? - ANSWERThe policy proceeds would be reduced by the outstanding loan
balance

An agent's authority to bind an insurer to an insurance contract may be granted in the -

ANSWERAgent's contract and the insurance company's appointment

Which of these annuity contract features is meant to discourage withdrawals and

exchanges? - ANSWERSurrender charges

According to HIPAA regulations, which of the following may reduce a medical plan's
pre-existing conditions exclusion? - ANSWERAny period of prior coverage

Which of the following relationships demonstrates insurable interest in the absence of

economic interest? - ANSWERMarriage partners

Which of the following accurately describes a participating insurance policy? -

ANSWERPolicyowners may be entitled to receive dividends
Major Medical policies are typically characterized by which of the following? -
ANSWERFlat deductible

After joining a health maintenance organization (HMO), a subscriber will typically select
a(n) - ANSWERPrimary care physician

An admitted company is one that is - ANSWERQualified and licensed to do business in

New York

James owns a business and purchased a policy that covers the business expense of
finding a permanent or temporary employee to replace a disabled one. This type of
disability coverage is called - ANSWERKey employee coverage

Which statement regarding the joint and survivor life insurance settlement option is NOT
true? - ANSWERThe amount of each installment is larger than the single life income
option

Accident and health insurance standard provisions require that - ANSWERThe policy,
endorsements, and attached papers constitute the entire contract

Which would NOT be a location where skilled nursing care provided? -

ANSWERPersonal residence

According to the Pregnancy Discrimination Act of 1978, employers must treat

pregnancy in the same manner as - ANSWERAny other medical disability

Which of the following is NOT considered to be an expense for surviving family

members of a deceased wage earner? - ANSWERUnemployment tax expenses

How do birthing centers reduce medical costs? - ANSWERUsing certified nurse

midwives

Which of these pays an income to two or more annuitants until the death of the last
annuitant? - ANSWERJoint and survivor annuity

Under a long-term care inflation rider, the benefit levels - ANSWERPeriodically increase
without proof of insurability

The major medical deductible carryover period normally applies to expenses incurred
during the last ___ months of the plan year. - ANSWERThree

Where does the primary funding for Medicare Part A come from? - ANSWERFederal
payroll and self-employment taxes

Which statement about group life insurance is INCORRECT? - ANSWEREach

participant requires evidence of insurability
Which of these is true regarding the exchange of consideration among parties involved
in an insurance contract? - ANSWERCan be unequal

Julie is an employee with a group health plan that contains the Mandatory Second
Surgical Opinion provision. What is to be expected with this provision in place? -
ANSWEROut-of-pocket expenses are lower when a second surgical option is obtained
as opposed to having only one

A life settlement broker is someone who is - ANSWERLicensed to negotiate a life

settlement contract

John received a one-time distribution of $50,000 from his modified endowment contract
(MEC). Prior to that, the contract's cash value was $150,000, the contract investment
amount was $100,000, and the death benefit was $500,000. What percentage of the
$50,000 distribution was taxable as ordinary income? - ANSWER100%

Larry has a Major Medical Expense policy for his family with a $1,000 per family/per
year deductible and an 80/20 coinsurance provision. If Larry's family files four claims of
$400, $800, $100, and $700 in one year, how much will the insurance company pay? -
ANSWER$800

Kevin has an existing life insurance policy and assigns it to another insurer for a new
contract. How would this transaction be treated for tax purposes? - ANSWERAs a
Section 1035 exchange

Which of the co-annuitants listed below would receive the largest monthly benefit
payments in a joint and 100% survivor annuity? - ANSWER71 and 73

What is considered the collateral on a life insurance policy loan? - ANSWERThe policy's
cash value

ABC Corporation purchases and is beneficiary of an individual disability income

insurance policy on a key employee. Which of the following statements is true? -
ANSWERBenefits are received tax-free by the company.

Beth is a surgeon who has an own-occupation disability income policy. She was injured
six months ago and has been unable to return to her practice. Her monthly benefit from
the policy is $15,000. During this time, Beth has been working part-time at a local
boutique and receives $2,000 monthly. What is her ongoing monthly benefit while she is
unable to perform her surgical duties? - ANSWER$15,000

Who must sign a rider attached to a health insurance policy in order for it to be valid? -
ANSWERInsured and agent
Which of these statements about traditional individual retirement accounts is accurate? -
ANSWER10% penalty is applied to withdrawals prior to age 59 1/2

When advertising a life insurance policy, an agent is required to disclose the -

ANSWERName of the actual insurer

Medicare can be described as - ANSWERa federal health insurance program for

individuals over the age of 65 or permanently disabled

Which statement regarding the waiver of premium rider is accurate? - ANSWERCash

payment is not directly provided to the policyowner

All of the following are covered under most dental plans EXCEPT for - ANSWERMouth
cancer

The amount received for a life insurance policy in a life settlement is ____ than the
death benefit. - ANSWERless

Which of the following activities on the part of the insurer would constitute an unfair
claims settlement? - ANSWEROffering settlements that are less than the fair value to
offset insurer expenses

Tina is insured under a business overhead expense insurance policy. Which of the
following would be covered if she were to become disabled? - ANSWERBusiness
property rental expense

Which of these statements is NOT a characteristic of the law of large numbers? -

ANSWERRates can be calculated to compensate for losses

When issuing disability income coverage on a substandard risk, an insurance company

may - ANSWERshorten the benefit period