General Life and Health

1)A life insurance policy sold to each spouse, rather than a joint life policy, would have all EXCEPT:

A: Coverage only for the first spouse to die

B: Coverage for both spouses separately

C: A combined higher premium

D: Two separate premiums

2)A provision contained in most group medical expense policies that applies when a claim is covered by

more than one policy is known as: A: Utilization Management

B: Coordination of Benefits (COB)

C: Case Management D: Retrospective Review

3)What is the main purpose of the State Guaranty Fund or Association:

A: To provide coverage for residents of this state who are uninsurable in the normal market place

B: To protect the customers of insurers who become financially impaired or bankrupt

C: To resolve consumer complaints against insurers D: To examine the business practices of foreign and alien insurers doing business in this state

4)If your insurance agent's license is revoked or suspended by the Commissioner, what happens to the

accounts you have previously written: A: They expire along with your license

B: They are assigned to another insurance company by the Commissioner

C:They must be rewritten by another agent D: They remain in force

5)An insurance company that is incorporated and formed in this state is known as a:

A: Alien company

B: Mutual company

C: Foreign company D: Domestic Company

6)What are the tax implications when an annuitant elects to take cash surrender of a deferred annuity during the accumulation period at age 56:

A: Only the interest is taxable as ordinary income, plus a 10% early withdrawal penalty B: All the funds distributed are taxable as ordinary income

C: All of the funds distributed are taxable as a capital gain

D: Only the interest is taxable as ordinary income

7)Which life insurance rider allows policy proceeds to be paid out prior to the insured's death:

A: Accelerated benefits

B: Cash surrender

C: Paid up additions D: Automatic premium loan

8)An insured paid $4,000 in premiums on his whole life policy over a period of time. When his cash

value equaled $6,500, he elected to take cash surrender. How much is taxable:

A: $2,500

B: $4,000 C: None, life insurance benefits are never taxable

D: 6,500

9)An annuitant has paid monthly premiums into a deferred annuity over a period of time totaling

$20,000. Due to tax deferred earnings in the account, his account balance at age 60 is $30,000. If he now takes a partial withdrawal of $5,000, how much is taxable:

A: $5,000

B: $10,000

C: None, since he withdrew less than his cost basis D: None, since benefits of life insurance products are never taxable

Which of the following is true regarding KEOGH (HR 10) plans:

A: They are non-qualified plans

B: They are for the self-employed or partners only

C: They are for employees of public educational institutions D: There are no maximum contribution limits

11)Premiums paid by self employed sole proprietors or partners for medical expense insurance are:

A: Partially tax deductible

B: Totally tax deductible

C: Not tax deductible

D: Taxable

12)All of the following are true about immediate annuities EXCEPT:

A: They are often used in structured settlements

B: There is no beneficiary

C: They pay for the lifetime of the annuitant

D: There is no accumulation period

13)The penalty for taking a policy loan as a premature distribution on a life insurance policy that has been classified as a Modified Endowment Contract (MEC) is:

A: 10%

B: 7 and 1/2%

C: 5%

D: None, life insurance policies are not subject to early withdrawal penalties

14)A health insurance claim occurs on May 30th, but the policy lapses on June 1st. If the claim is not turned in until June 8th, what will the insurer do:

A: Pay the claim

B: Deny the claim

C: Pay the claim, but subtract the overdue premium

D: Pay the claim, but send a bill for the overdue premium

15)When an insurer requires pre-authorization prior to hospitalization, all are true EXCEPT:

A: Overall insurer expenses will probably increase

B: Unnecessary hospitalization may be avoided

C: Specifically, pre-authorization is a form of prospective review

D: Pre-authorization is a form of Utilization Management

16)All of the following are true regarding the tax implications of health insurance EXCEPT:

A: Premiums paid by the employer for a group health policy are not tax deductible

B: Benefits received from an individual Disability Income policy are not taxable

C: Benefits received by an employer from a Key Person disability policy are not taxable

D: Medical expense premiums paid by a sole proprietor are partially tax deductible

18)Most insurance contracts written by banks are backed by:

A: The Federal government

B: FDIC

C: The State government D: The State Guarantee Association

19)Disability Income (DI) benefits are not subject to income taxation EXCEPT for:

A: Individual DI

B: Partnership Buy Out DI

C: Group DI

D: Key Person DI

20)Mr. Baugh elects to make a direct rollover of his traditional IRA from one trustee to another trustee at age 35. How is this taxed:

A: Income taxes are incurred, but the 10% IRS penalty is waived

B: All is taxed as capital gain in the year of the rollover

C: All is taxed as ordinary income in the year of the rollover

D: There is no current tax implication

21)Writing policies primarily on yourself or on your family members or on employees of a business you own is a violation of state insurance law known as:

A: Compensating an unlicensed agent

B: Controlled business

C: Rebating

D: Misrepresentation

22)A rider added to a life policy to create coverage for the entire family is called a:

A: Family income rider

B: Family term rider

C: Family maintenance rider

D: Other insured rider

23)Giving the customer part of the commission from an insurance sale is:

*A: A prohibited practice known as rebating

B: Acceptable with prior approval of the Insurance Commissioner or Director

C: An acceptable marketing practice D: Acceptable with your manager's prior approval

24)If a subscriber goes out of network for PPO (Preferred Provider Organization) services:

A: Only emergencies are covered

B: There is no coverage

C: Coverage is not affected

D: The amount of coverage may be reduced

25)All of the following are true regarding Key Employee Disability Income insurance, EXCEPT:

A: The employer owns the policy

B: Premiums are not tax deductible for the employer

C: Benefits are taxable to the employer

D: Benefits are payable to the employer to retrain a new person

26)Why would a person consider buying Disability Income coverage that covers on the job injury:

A: Workers Compensation only covers non-occupational injury

B: Most employees are not covered by Workers Compensation

C: Disability Income is primary over Workers Compensation coverage

D: Workers Compensation benefits may be inadequate

27)All are true about agent's appointments in this state EXCEPT:

A: When an appointment is terminated, the insurer must notify the Insurance Department

B: An agent represents the insured

C: An agent must have at least 1 appointment from an authorized insurer

D: An agent may have more than 1 appointment

28)Under the __________ provision of an individual health insurance policy, the insured cannot sue for non-payment of a valid claim until after 60 days in order to give the insurer time to properly investigate.

A: Proof of Loss

B: Time Payment of Claims

C: Time Limit on Certain Defenses

D: Legal Actions

29)Under the __________ provision of an individual health insurance policy, the insured cannot sue for non-payment of a valid claim until after 60 days in order to give the insurer time to properly investigate.

A: Proof of Loss

B: Time Payment of Claims

C: Time Limit on Certain Defenses

D: Legal Actions

30) An HMO utilization management technique known as "concurrent review" requires:

A: A second opinion

B: Assignment of a case worker to an ongoing claim

C: Pre-authorization

D: An initial consultation with a primary care physician

The doctrine that states that an insurer should pay a claim based upon what most people would normally expect to receive is known as:

A: Indemnity

B: Adhesion

C: Utmost good faith

D: Reasonable expectations

30-2)A tax deferred exchange of life insurance policies is permitted when exchanging all EXCEPT:

A: An annuity for a life insurance policy

B: A life insurance policy for an annuity

C: A life insurance policy for another life insurance policy

D: An annuity for another annuity

When a dentist uses mechanical devices to straighten teeth, it is known as:

A: Prosthodontics

B: Orthodontics

C: Periodontics

D: Endodontics

31-Under ERISA rules regarding qualified plans, the term "minimum coverage" refers to:

A: A minimum retirement benefit that must be provided for employees

B: A minimum amount of life insurance that must be provided for employees

C: The exemption of employees who make only minimum wage

D: Retirement plan coverage for a broad cross section of employees

32-How can a beneficiary/spouse of an annuitant who dies during the accumulation period avoid current taxation on the benefits:

A: They can take lump sum now but defer taxes to a later time

B: They may select the tax free death benefit

C: They can continue the contract by selecting a life income or installment pay out option

D: Since annuities are life insurance products, there is no tax due

33-The person responsible for managing the Insurance Department or Division of this state and for administering state insurance laws and regulations is known as the:

A: Governor

B: Commissioner or Director

C: Administrator

D: Attorney General

34-All are true about insurance agencies formed as corporations or partnerships EXCEPT:

A: All individuals transacting insurance must have individual licenses

B: All owners must have individual agent's licenses

C: Individuals transacting insurance must be licensed for the same lines as the agency they represent

D: Appropriate forms and fees