Which is these is NOT an Unfair Claims Settlement Practice?
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Terms in this set (294)
Which of these statements regarding a managing general agent is NOT true?a managing general agent generally represents the insuredan example of misrepresentation isfalsifying the terms, benefits, advantages, or conditions of an insurance policyWhich of the following must clearly be illustrated in ALL sales material for market value adjusted annuitiesthe market value adjustment can be either upward or downwardAn order issued by the commissioner that prohibits a specific practice listed in the order is called a(n)cease and desist orderwhich of the following is NOT information found in a life insurance buyers guide?how to take legal action against an insurance companywhich of the following is an example of defamationa producer who publicly and erroneously announces that an insurance company is insolventThe Maryland life and health insurance Guaranty Corporation is funded byAssessments of members insurersall individual longterm care policies delivered in Maryland MUST befor lifeCarlos's producer license has been suspended due to non-renewal. He may apply for reinstatement within the ____ month period following the date when the license should have been renewed12Group life plans sold in Maryland typically contain a conversion option. If the insured elects this option, the new policydoes NOT require evidence of insurabilityIf replacement was involved in the sale of an insurance policy, a producer must provide a replacement notice no later than theapplication dateExchanging a new policy for one already in force is calledreplacementWhat does "SHOP" stand for in SHOP exchange?Small Business Health Options ProgramWhich of the following has the power to examine the books and records of Maryland insurers?Maryland Insurance AdministrationWhat is the purpose of the Life and Health Insurance Guaranty Corporation?Provides benefits in the event of an insurers impairment or insolvencyWhat is the actuarial value of a bronze level health plan?60Insurance crimes which affect interestate commerce are prosecuted by theUS attorney generalA producer must maintain customer records for ___ year(s) following the completion of the insurance transactionfiveAccording to the Affordable Care Act (ACA), insurers can no longer deny health coverage due to pre-existing conditions unless the plan is a(n)Grandfathered PlanWhich of these is NOT considered a Federal punishment for unfair and deceptive insurance practices?Community ServiceBefore soliciting insurance applications for an insurer, a producer must secure a(n)appointmentWho eligible for health coverage under a group policy issued to a labor union?Every member of that unionMisrepresenting pertinent policy provisions relating to coverage after a loss is a(n)unfair claims settlement practiceA separate converted policy may, at the option of the insurance company, be issued to cover a(n)dependentA pre-existing conditions limitation may NOT exceed______ month(s) in all Medicare Supplement practices6Which of the following is a producer prohibited from doing?Allowing an applicant to sign a bank or incomplete applicationA drug which is used for a medical condition that it is not approved to treat according to the Food and Drug Administration is calledOff-label useWho is required to notify the Commissioner in the event of a producer's appointment termination?InsurerWhich of the following is an example of defamation?Making a statement that is false or maliciously critical of the financial condition of an insurerTerminally-ill life insurance policy owners may sell their policy at a discount to a third party. This type of agreement is called a(n)Viatical SettlementWhich of the following entities is the Marlyand Insurance Administration associated with?County GovernmentA longterm care policy owner is replacing existing coverage with a new policy. Replacement regulations require a(n)____notice be signed by the applicant and retained by replacing the insurerreplacementDependent children can typically be covered under an individual or group health insurance policy up to age25interest on death benefits are NOT required to be paid by an insurance company as long as proceeds are paid within ____ after the date of the death of the insured30 daysWhich of the following is NOT a valid reason for a producers license to be revoked?Sharing commissions with licensed agentsStarting in 2016, businesses with up to ____ employees will be defined by the ACA as a "small business"100The Maryland Life and Health Guaranty Corporation protects the _____ in the event of insurer insolvencyinsuredMost medicare supplement information used by an insurer must be approved by the state. Which of the following types of information does NOT require State approval?Government publicationsA vatical settlement broker may NOTmake any transactions before being approved for a licenseJim recently sold this whole life insurance policy under a viatical settlement contract. the proceeds of this contract could be subject to the claims ofcreditorsWhich statement is incorrect concerning a tax-sheltered annuity?annual investment gains are included in participants group incomeThe guarantee of insurability option provides a long-term care policyowner the ability tobuy additional coverage at a later dateWhich of the following is an example of illegal iducementpublishing guaranteed dividend rates on an insurance policyWhich of the following can be defined as a cause of a loss?PerilAndy is in need of a health care performed by skilled medical practitioners, but only on an intermittent basis. What level of care will his doctor likely prescribe?intermediate careWhich statement is INCORRECT about the interest-only settlement option in a life insurance policy?interest on proceeds must be paid by the beneficiaryHow may an insurance company classify an accidental death benefit on a life policy?as an optional policy riderWhich of the following is NOT an objective of the National Association of Insurance Commisioners?Regulate state insurance commisioneresThe IRS has a "minimum coverage" rule regarding qualified retirement plans. This rule states that each qualified plan is required tobenefit a broad cross=section of employeesIn a staff model HMO, enrollees normally have which of the following pharmacy options available to them?in-house pharmacyK 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?The date the agent delivered the policy, collected the initial premium, and obtained a good health statement from the insuredDependent children can typically be covered under an individual or group health insurance policy up to age26Rick 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?Fluctuate with changes in cash amountThe amount of a covered loss to be paid by the insured before a major medical expense policy begins to pay is called thedeductible amountThese are all accurate statements regarding universal life insurance EXCEPTPolicy loans are not permittedHealth insurance applicant is notified that a physical examination is required . Which of the following statements in correct?Physical examinations are performed at the expense of the insurerSylvia 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)Single premium deferred annuityAn insured, age 67, is covered under a disability income policy. What will the insurer normally require in order for the insured to continue coverage?the insured must be actively at work for a specified number of hours per weekWhich of the following would NOT be appropriate for an immediate annuity?a parent saving for a childs collegeWhich of the following is NOT a mandatory health benefit that is required for individual health insurance policies issued in Maryland?weight reduction programsInsurance crimes which affect interstate commerce are prosecuted by theUS attorney generalThe unwritten authority given to a producer to carry out necessary incidental ats of the agency agreement is calledimplied authorityWhat is the federal income tax liability of a death benefit paid from a health insurance policy to a named beneficiary?Benefits are not taxableAccording to the needs approach, an emergency reserve fund's primary purpose is tocover the cost of unexpected expensesWhat is the minimum age required for open enrollment in Medicare supplement insurance?no minimum age requiredWhat is the eligibility requirement for Medicare Part B?Must be eligible for Part AWhich of these actions is NOT required to extend a newborn's health plan coverage beyond the initial coverage period?Policyholder must certify the newborn's insurabilityWhen a health insurance policy includes a Mandatory Second Surgical Opinion provision, the insured mustSeek a second opinion for specified elective surgeriesRisk _____ is the process of analyzing exposures that create risk and designing programs to handle themmanagementA medical fee schedule shows the amount an insurer will pay for a given procedure. This amount is considered to be thehighest amount payableAn officer for a corporation takes out numerous unsecured loans from the company's qualified retirement plan. Which of these rules is the plan in violation of?Exclusive benefit ruleWhich life insurance settlement option pays lifetime benefits to two or more people?Joint and survivorChuck and Shaquille are both licensed producers in the same line of insurance. Chuck provides Shaquille with a referral that results in a sale. Commissions on this sale will likely beshared by both producersAll Medicare supplement policies sold during the open enrollment period MUSTbe issued regardless of health statusWhat are premiums for group credit life insurance based on?Flat rate unrelated to borrowers ageWhich of these is typically regarded as a major treatment in an indemnity dental plan?DenturesLarry wants to purchase an individual disability income policy to provide continuous income while disabled. He is also covered by a two-month wage continuation benefit from his employer. What should the policy elimination period be for his individual policy?60 daysJill has a group health plan with an employer that covers employees in more than one state. Which of the following is NOT affected by the state regulatory jurisdiction established for this plan?Continuation of coverage under COBRAThe Commissioner has reason to believe a producer is in violation of Maryland insurance law. Which of the following may be issued against the producer?Cease and desist orderInpatient psychiatric care is covered under Part A Medicare Insurance for 190 days perlifetimeWhat is considered interstate travel under the Federal Fraud and False Statements Act?Puerto RicoThe conversion option for group term insurance may be exercised by an employeeWithin 31 days of terminated employmentXYZ 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?Implied authorityCustodial care is normally covered underlong term care insuranceUnder the Maryland Health Insurance Plan, comprehensive health benefits are provided tomedically uninsurableWhich statement regarding a single premium life insurance policy is NOT correct?Additional premiums may be required under certain conditionsMedicare part B excess charges are covered byMedicare supplemental insuranceWhich health policy clause specifies the amount of benefits to be paid?InsuringThe benefit period of Medicare Part A begins on the first day the insuredenters a hospitalWhich of the following combinations best describe a universal life insurance policy?A flexible premium deposit fund and monthly renewable term insurance policyWhich report contains information regarding an individual's general reputation and credit standing?consumer reportRick is a disabled worker receiving Social Security benefits. What are his wife and dependent children eligible for?An income benefit which is a percentage of his primary insurnace amountWhich statement regarding whole life insurance is accurate?insurance coverage can continue for lifeAfter an applicant reads and signs an insurance application, he/she should be conscious of the fact thata false statement could lead to loss of coverageWhen determining the accumulation value of a deferred annuity, the total is calculated by taking the premiums paid plus interest earned minusexpenses and withdrawalsThe main role of accident and health and disability insurance is toprotect against medical care costs and the loss of earning powerIn a disability income contract, an insured is considered to be totally disabled under the presumptive disability provision if he/sheloses the ability to speakWhy might is be beneficial for an employee to purchase private disability income insurance for workplace injuries when he/she is already covered by workers compensation?the benefits arising from a workers compensation claim could be inadequate to replace the loss of incomeWhich statement regarding the cash value of a whole life insurance policy is correct?available to the policyowner when the policy has been surrenderedAn example of endodontic treatment is aroot canalWhat effect can a long-term care benefit rider have on a life insurance policy?reduced death benefitKate received a group accident and health termination notice. How many days does she have to apply for a converted policy?31What happens when a policyowner borrows against cash value of his life insurance policy?the policy proceeds would be reduced by the outstanding loan balanceIn regards to health insurance, employees age 65 or older are typically required toBe offered the same group health benefits offered to the younger employeesThe Maryland Life and Health Guaranty Corporation protects the ______ in the event of insurer insolvencyinsuredWhich of these occurrences could improve an insurers ability to reduce premiums?rate of earnings on investments increaseWhat is the maximum Social Security Disability benefit amount an insured can recieve?100% of the insureds Primary Insurance amountCOBRA extends coverage for a surviving spouse but at a rate not more than ______ of the group premium102%Why were Exchanges implemented by the Affordable Care Act (ACA)?To create a one-stop market for standardized health insurance plansBenefits contained under a Medicare Supplement policy CANNOTduplicate Medical BenefitsWhat is a life insurance producer authorized to do?solicit, receive, and forward applications to the insurerHow is an insured's accident and health claim handled by an insurer if it occurs during the policy's grace period?The unpaid premium may be subtracted from the reimbursementWhich type of life insurance policy allows a policyowners the choice of investments along with flexible premium payments?variable universal lifeWhich reinsurance contract between two insurers involves an automatic sharing of the risks assumed?treaty reinsuranceWhat is considered a valid reason for an insurer's refusal to pay policy proceeds directly to a minor?Minors are normally not capable of handling money in a reasonable mannerAlan 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?proceed to the nearest emergency roomAt what point are death proceeds paid in a joint life insurance policy?When the first insured diesBryce 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?Guaranteed insurability rider______________ can be defined as "replacing a policy when it is NOT in the best interest of the client"TwistingWhere does the primary funding for Medicare Part A come from?Federal payroll and self-employment taxesWhat is the insurer responsible for when a producer is acting within the scope of authority granted in the agency contract?Responsible for acts by the producer that are authority onlyWhat is "functional assessment" for long-term care benefits?a review of the insured's ability to perform the activities of daily livingWhich of these is NOT an underwriting responsibility of a life insurance agent?determining the final rate classificationWhich event triggers a deferred annuity to start making benefit payments to the annuitant?When the contract is annuitizedIn regards to health insurance, what is meant by the term "primary policy"?it is the policy that will pay up to its limit before any other policy paysContributions made by an employee to a qualified retirement plan are required to besubject to a vesting scheduleShort-term group disability income benefits area percentage of weekly earnings up to to a stated maximumThe health insurance premiums paid for by each partner in a partnership is considered to be100% tax deductibleChris has a single major medical contract which covers all medical expenses. His plan is considered to becomprehensiveJim is covered under a disability income policy. He is hurt while engaged in an occupation that is more hazardous than the occupation he specified in the policy. What action will the insurer likely take?Reduce the benefit levelWhich of the following must clearly be illustrated in ALL sales material for market value adjusted annuitiesThe market value adjustment can be either upward or downwardAn 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?$25,000Which life insurance policy option allows the policyowner to have coverage equal to the net death benefit of the lapsed policy?extended term nonforfeiture optionAn applicant submits a life insurance application where an investigative consumer report is used in the underwriting process. Which of these statements is true?Applicant has right to receive a copy of the reportField underwriting by a producermay result in the disclosure of hazardous activities of the applicantWhich of the following could be a future use of the cash value that builds in a recently-purchased whole life insurance policy/?provide supplemental income in 35 yearsWhich of the following is a true statement regarding a Medicare Supplement policy purchased during the open enrollment period?The policy will be issued regardless of healthWhen an individual is planning to protect his family with life insurance, one method of doing so is called needs analysis. What exactly does needs analysis involve?identifies the needs of an individual an the individuals dependentsAn insurer's life insurance premium rate must be the same for all individualsin the same risk class with an equal life expectancyWho typically makes the purchase payments in an individual annuity?OwnerHow are benefit payments from individually-owned medical expense policies treated for tax purposes?exempt from income taxesWhich of these is NOT an Unfair Claims Settlement Practice?Denying unsubstantiated claims on a timely basisIn what situation would disability income insurance premiums be a deductible expense?Corporation paying for group disability income coverage for its employees."What happens to a life insurance policy when the policy loan balance exceeds the cash value?Policy will no longer be in forcePurchasing insurance is an example of risktransferenceThe automatic premium loan provision can be accurately described as aprovision that provides a policy loan to pay an premiums by the end of the grace periodWhich of the following reduces the opportunity for overinsurane?Coordination of benefits provisionAccording to the Affordable Care Act (ACA), the proportion of premium revenues spent on clinical services and quality improvements is called themedical loss ratiosInsurance is NOT characterized as which of the following?as the number of insureds increase, the number of losses decreaseWhich renewal provision must ALL Medicare Supplement policies contain?Guaranteed renewableThe type of health insurance in which underwriting procedures are the most restrictive isindividualWhich statement concerning a deferred annuity contract is correct?the owner can be the beneficiary, annuitant, or neitherA characteristic of preferred provider organizations (PPO) isif services is obtained outside the PPO, benefits are reduced and costs increaseAn accident and health insurance policy's premium requirements are set forth in which of the following provisions?consideration clauseWhich of the following best describes the purpose of HIPPAAto reduce a pre-existing condition waiting period when coverage is sought for a new medical planScott 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 dividendsequal the net single premium for the same face amount at the insured's attained ageWhich of these is NOT relevant when determining the amount of personal life insurance needed?Local unemployment ratesWho is required to notify the commissioner in the event of a producer's appointment termination?insurerThe contractual rights which allow the owner of a deferred annuity to surrender the cash value several years before the annuity date are callednonforfeiture optionsFee-for-service is a method of administering health insurance benefit payments in whichthe cost of each service is scheduledThe powers directly given to a producer in an agency contract are calledexpressIn the event of premium default, which life insurance provision will use the cash value to keep the policy in force?automatic premium loanWhich of the following relationships demonstrates insurable interest in the absence of economic interest?Marriage partnersA life insurance company just paid a $100,000 death benefit to a beneficiary. When the insured died, the cash value was $15,000 and the total premiums-paid equaled $10,000. How much of the proceeds will be added to the beneficiary's gross income for federal income tax purposes?NothingAll of these statements concerning group credit life insurance are false EXCEPTthe face amount is based on the outstanding loan balanceJonas 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?Taxes must be paid on 75% of the benefits recievedA life insurance policy's contingent beneficiary is theperson who receives the death benefits if the primary beneficiary dies before the insuredA producer recently replaced an existing Medicare Supplement policy with a new policy. The producer's compensation for the new policyCANNOT exceed the renewal commission of the original policyWhich of these NOT a common life insurance nonforfeiture option?life income annuityWhich of these is NOT considered to be an unfair trade practice?reinsuranceWhen the disclosure of an insured's nonpublic information is involved, what is the insurer obligated to do?give notice, explain, and allow opting outWhich of the following covers the Part A deductible of Medicare?Medicare supplemental core benefitsCarlos' producer license has been suspended due to non-renewal. He may apply for reinstatement within the _____ month period following the date when the license should have been revnewed12In regards to technology and the ACA, which of the following statements is correct?States which operate with an Exchange must offer an internet based portalA long-term care policyowner is replacing existing coverage with a new policy. Replacement regulations require a _________notice be signed by the applicant and retained by the replacing insurerreplacementTerry recieves long-term physical therapy at her residence. What type of insurance would cover this service?Home health careAn order issued by the Commissioner that prohibits a specific practice listed in the order is called a(n)cease and desist orderWhich of the following statements regarding hospital pre-admission authorization is NOT true?it encourages weekend admissionDeath proceeds from a life insurance policy are typically included in a deceased insured's gross estatefor federal income tax purposesAccording to the Affordable Care Act, coverage may be rescindedif intentionally false statements were offeredWhich of the following statements accurately describes the "time limit on certain defenses"?After a stated period of time, claims cannot be denied due to material misrepresentation on the applicationWhen a lapsed policy's premium has been paid current, it has the potential of beingreinstatedAl 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 thecost basisAn arrangement where an individual is authorized to act on behalf of another person or company is established throughthe law of agencySwitching Life insurance policies without tax consequence is permitted undersection 1035 rulesA life insurance policyowner would like a dividend option that results in a limited current outlay of funds. Which dividend option would be chosen?reduction of premium paymentA producer working for an insurance company may be personally liable foracts performed which are prohibited in the agency contractWhich of the following is NOT an intended use of an annuitycreate new funds upon the death of a wage earnerHow can an insurance company minimize exposure to loss?reinsuring riskEmergency health care coverage for medicare enrollees traveling abroad isa medicare supplement additional benefitAn 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?$300If an insured dies during the grace period without having paid the premium, how much will the insurer pay?Policy's face amount minus any premiums dueThe insurance coverage in a variable life insurance policy may vary based on the value ofits underlying investmentsWhich of these factors does NOT affect life insurance premium rates?Producer certificationA material change in a modified endowment contract (MEC) results inthe seven pay test, adjusted for cash value, applies againindividual and group health insurance typically exclude coverage for which of the following?cosmetic surgeryWhat is the accounting measurement of an insurance company's future obligations to its policyowners?reservesAn individual appointed by an insurance company that represents the company and presents policies on its behalf is a(n)producerAn accident and health plan that typically covers ONLY the services of approved providers is called a(n)HMO planIn regards to the Affordable Care Act (ACA), which of these is NOT a role of a health insurance exchange?contact the employer if an employee stopsa life annuity feature which provides benefit payments for a minimum number of years, no matter when the annuitant dies, is calledperiod certainPat is covered by a disability income insurance policy that covers disabilities arising from a work-related illness or injury. The amount of his disability income payments for an on-the-job injury may be reduced bybenefits paid under workers compensationAn accident and health insurance policy defines an injury as "bodily injury by accidental means." For an injury to be covered on this policy, what is required?both the cause and resultant injury must be accidentalaccording to federal fraud and false statements regulation, what is required for a prohibited person to transact insurance business in this state?Written consent from the state insurance regulatory agencyThe policy provision that permits an employee to change from a group plan to an individual plan is called theconversion provisionAn HMO prescription drug plan is generally characterized bydrugs dispensed through participating pharmaciesPremature IRA distributions are subject to a penalty tax of10%How can a group dental insurer discourage adverse selection?limit the duration of coverageWhat happens when an initial offer is answered with a counteroffer?the initial offer is voidWhich of the following is a syndicate established by a group of insurers to share underwriting duties?Lloyd's organizatoinWhich actionWhich of the following is a syndicate established by a group of insurers to share underwriting duties?Lloyd's organizationWhich action will trigger a penalty tax on premature distributions from a modified endowment contract (MEC)?policy loansWhich of these statements regarding insurance is false?As the number insured units increasesA teacher recently retired at age 63 and has a tax sheltered annuity (TSA). Periodic deposits total $120,000 and the value of the contract is now worth $200,000. How much is taxed if the current value is surrendered today?$200,000Mark is covered by a policy that uses the regular occupation (own-occ) definition of total disability. Using this definition, he will be considered disabled if unable toperform the substantial duties of his regular occupationWhich of the following is NOT a basic underwriting action for accident and health insurance?removing uniform policy provisionsSome standard Medicare Supplement policies include which benefit?Hospice careA family counseling benefit is typically offered under which of these coverages?Hospice careWhich of the following statements is true regarding accident and health insurance claims that reimburse on indemnity basis?claims can be sent directly to the insuredSkilled nursing facility expenses are sometimes covered by_______, but ONLY if the insured was hospitalized prior to entering the facilityMedicareInsurable Interest in one's own life is legally considered asgenerally umlimitedWhich of the following is NOT a valid reason for revoking a Maryland producer's license?Having no insurance appointment in effect for 10 daysHow do benefit payments fluctuate over time in a variable life annuity?Reflects changes in the market value of assets in a separate accountWhich of the following disability buy-sell agreements is best suited for businesses with a limited number of partners?Cross-purchase agreementA policyowner has just borrowed from a life insurance policy's cash value. Which of these statements is true?in the event of death, the loan amount is deducted from the policy proceedsKelly purchases a health insurance policy issued on a conditionally renewable basis. The insurance company has a right to refuse renewal of the policy forspecific reasons stated in the contractA producer has indicated to a potential client that has the proposed life insurance policy is covered by the Maryland Health Insurance Guaranty Corporation. This action taken by the producer isprohibited by lawWhat is payable to the policyowner if a whole life policy is surrendered prior to its maturity date?the cash valueHow is a collateral assignment used in a life insurance contract?Transfers specific ownership rights to a creditorWhat must be given to a life insurance applicant when the agent receives an application and the initial premium?conditional receiptMost Medicare Supplement information used by an insurer must be approved by the State. Which of the following types of information does NOT require State approval?Government publicationsWhat is the excise tax rate the IRS imposes on individuals aged 70 1/2 or older who do not take the required minimum distributions from their qualified retirement plan?50%Which tax is normally associated with an individuals death?Federal estate taxWhat typically changes at the re-entry option date found in some term life policies?premiumMary 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?Premiums paid by Mary are tax-deductibleAA preferred provider plan and an indemnity plan are similar in what way?ERISA requires that a Summary Plan Description must be provided to a new plan member within how many days following the new member's eligibility date?90Which factor determines the maximum disability income benefit that can be purchased by an applicantthe applicant's incomeIf group Health benefit levels are too high, what could be the end result?Over utilization of the planA nonparticipating whole life insurance policy was surrendered for it's $20,000 cash value. The total premiums paid had totaled $16,000. What were the federal income tax consequences to the policyowner on receipt of the cash value?$16,000 was received tax-free and $4,000 as ordinary incomeThe disability income policy most likely to have been issued on a substandard basis isNon-cancelable with a health condition exclusion riderWhich benefit is normally payable to a life insurance policy owner when the insured's life expectancy has been severely limited?accelerated (living) benefitWhich of the following is considered a Limited accident and health plan?Cancer planAssets that back the non-guaranteed values of variable life insurance products are held in which account?separate account set up up by insurerWhich of the following is an example of illegal inducement?Publishing guaranteed dividend rates on an insurance policyWhich of the following waiting periods would result in the lowest premium for a disability income policy?180 daysWhich of the following is NOT a key reason for a business to buy key person life insurance?an increased pension liability if the key employee diesmedicare can be described asa federal health insurance program for individuals over the age of 65 or permanentlywhat would be the disadvantage of naming a trust beneficiary of a life insurance policy?trust administration fees would reduce policy proceedsAn annuitant is paid $495 per month until the contract value is exhausted at some undetermined date in the future. Which type of annuity payout option is this?Fixed amountWho must sign a rider attached to a health insurance policy in order for it to be valid?Insured and producerIn a disability buy-sell agreement, the policies funding the agreement are owned by thebusiness entityWhich of these life insurance policies does NOT contain a cash value provision?Decreasing term lifeAn accident and health insurer has just received written proof of loss from one of its insureds. The insured must now wait 60 days beforebringing legal action against the insurerWhich statement regarding the joint and survivor life insurance settlement option is NOT true?The amount of each installment is larger than the single life income optionThe initial premium for a life insurance policy is typically paid in what way?it is typically obtained by the producer and forwarded to the insurerA disability income insurance policy was recently issued with a rating. What does this mean?policyowner will be charged an additional premiumA policyowner pays the first annual premium for a $50,000 life insurance policy and dies one month after the policy effective date. Which of these statements is normally true?Beneficiary recieves $50,000 income tax-freeA health reimbursement Arrangement must be establishedby the employerIf an individual would like to enroll in Medicare or seek public information about Medicare, which federal agency handles this?Social Security AdministrationWhich of the following is NOT guaranteed in a whole life policy?Dividend scaleWhich statement concerning a decreasing term life policy is accurate?Face amount decreases over the policy periodWhich statement about group life insurance is INCORRECT?Each participant requires evidence of insurabilityA group Medicare Supplement policy was terminated and not replaced by the insurer. In this situation, the insurer MUSTprovide an offer of conversion to individual coverageWhen a producer submits an application that discloses personal information regarding the applicant, who supplies the privacy notice?ProducerThe affordable Care ACt (ACA) established "exchanges" in order toassist individuals and small businesses when making their health insurance purchasesWhich of the these is NOT a true statement of war exclusion?it applies to civil insurrectionsJose recently had his long-term care policy replaced with a new policy. The new long-term care policy may NOT impose a(n)new pre-existing conditions exclusionThe owner of a single premium deferred annuity is entitled to do all of these EXCEPTmake additional payments into the annuityWhich of the following is an example of defamationMaking a statement that is false or maliciously critical of the financial condition of an insurerABC corporation purchases and is beneficiary of an individual disability income insurance policy on a key employee. Which of the following statements is true?Benefits are received tax-free by the companyAll long-term care policies sold in Maryland MUST contain a(n)nonforfeiture clauseWhich statement regarding a fixed period settlement option is correct?The installment payment amount is determined by the total number of installmentsMedicaid will pay for nursing home expenses under what condition?must have financial needWhich of these is NOT common life insurance nonforfeiture option?Life income annuityChristine is receiving benefits provided from her disability income insurance. As compared to her previous earnings, the disability benefits should besomewhat lessWhich of the following accurately describes a participating insurance policy?Policyowners may be entitled to receive dividendsAn insured may be required to sign which document at policy delivery to ensure there has not been any adverse medical conditions since the time of the application?good health statementUnder an adjustable life insurance policy, which of the following may NOT be changed without further underwriting?The person insuredThe highest mortality rate belongs to which group?Age 70 malesQualified long-term care premiums are treated for tax purposes astax-deductible to the extent they exceed 7 1/2% AGIWhich of these is NOT considered to be a cost connected with an individuals death?Business expensesWhich of these policies is considered a whole life policy?single premium life