Insurance Contracts and Policies: Key Concepts and Requirements, Exams of Medicine

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Final Exam - South Carolina Life and Health graded A+ 2024 The branch of dentistry which deals with the replacement of missing parts is called Endodontics Periodontics Orthodontics Prosthodontics - ANS>> Prosthodontics How many months can a life insurance policy normally be backdated from the date of application? 3 6 9 12 - ANS>> 6 HIPAA considers which of the following as "individually identifiable health information"? - ANS>> A person's health claim information Which of the following is NOT taken into consideration when determining eligibility for Medicare benefits? - ANS>> Income What is the primary factor that determines the benefits paid under a disability income policy? - ANS>> wages All of the following are functions of an insuring clause EXCEPT - ANS>> Primarily describes the free-look period The Fair Credit and Reporting Act's main purpose is to - ANS>> protect consumers with guidelines regarding credit reporting and distribution What is known as the immediate specific event causing loss and giving rise to risk? - ANS>> Peril Mary is issued an initial producer's license on April 29, 2012. Her birthdate is March 14, 1980. When does her license renew? - ANS>> March 31, 2014 Which approach predicts a person's earning potential and determines how much of that amount would be devoted to dependents? - ANS>> Human life value approach In South Carolina, which of the following statements is TRUE regarding a licensed individual changing his or her legal name? - ANS>> The producer must notify the Department upon changing his or her legal name Which settlement option involves having the proceeds remain with the insurer and earnings paid on a monthly basis to the beneficiary? - ANS>> interest only What would happen if a life insurance applicant is given a conditional receipt from an insurance agent and then dies the next day? - ANS>> Claim will be paid if application is approved In South Carolina, what is the MAXIMUM length of time an insurer can defer payment of a cash surrender value of an annuity? - ANS>> 6 months Which of these is affected by the frequency of an insurance policy's premium payments? - ANS>> Cost In an insurance contract, the insurer is the only party legally obligated to perform. Because of this, an insurance contract is considered - ANS>> unilateral Which of these licensees MUST be appointed in order to conduct insurance business? - ANS>> Producer A master contract and certificate of coverage can be found in which type of policy? - ANS>> Group Jonas is a whole life insurance policyowner and would like to add coverage for his two children. Which of the following products would allow him to accomplish this? - ANS>> Child term rider The MAXIMUM time period that an eligible employee can be excluded from coverage under a group health policy as a late enrollee is - ANS>> 18 months A Medicare Supplement policy must NOT contain benefits which - ANS>> duplicate Medicare benefits In what form do disability income policies typically pay benefits? - ANS>> Periodic income How long can an insurer exclude coverage for a preexisting condition on a Medicare Supplement Policy? - ANS>> 6 months All of the following are elements of an insurance policy EXCEPT - ANS>> Claim Forms The licensing period for a producer's license is a - ANS>> 2-year term An employer may qualify for health care tax credits through SHOP Marketplace if that employer has fewer than how many employees? - ANS>> 25 Which of the following statements is TRUE about Medicaid? - ANS>> It is funded by federal, state, and local taxes Donna and Mary were racing bicycles in a store parking lot while being cheered on by fellow employees. Mary ran into John, another employee, who happened to be taking out the garbage. Both Mary and John are injured. Who would most likely be covered under Workers' Compensation? - ANS>> John Tim is covered under a group plan and would like to change his group coverage to an individual policy with the same insurer because of employment termination. Which of these describes the change that will take place? - ANS>> Conversion With respect to small group health benefit plans, a carrier may discontinue coverage or may refuse to renew such a plan if the employer - ANS>> fails to pay the premium prior to the end of the grace period Continuous 24-hour care provided by licensed medical professionals under the direct supervision of a physician is called - ANS>> skilled nursing care Justin is receiving disability income benefits from a group policy paid for by his employer. How are these benefits treated for tax purposes? - ANS>> Taxable Income Which of these factors is NOT taken into account when determining an applicant's life insurance needs? - ANS>> automobile The Director MUST give a MINIMUM of how many days' notice of a disciplinary hearing? - ANS>> 30 days Which of the following does Coordination of Benefits allow? - ANS>> Allows the secondary payor to reduce their benefit payments so no more than 100% of the claim is paid When an insured has a major medical plan with first dollar coverage, how does this impact the benefits paid? - ANS>> No deductible payment is required What is the name of the provision which states that a copy of the application must be attached to the policy when issued? - ANS>> Entire Contract The responsibility for regulating the insurance continuing education requirements and approving insurance continuing education courses belongs to the - ANS>> Department of Insurance Which of the following would disqualify a company's retirement plan from receiving favorable tax treatment? - ANS>> It is temporary An applicant intentionally lying to an insurance company on an application in order to obtain a cheaper premium is an example of - ANS>> fraud What guarantees that the statements supplied by an insurance applicant are true? - ANS>> Warranty What is involved when a life insurance policy has been backdated? - ANS>> Making the policy effective on an earlier date than the present Krissa purchases a 10-year level term life insurance policy that has a death benefit of $200,000. Which of these statements is true? - ANS>> The face amount and premium will remain constant over the 10-year period Which of the following is NOT covered under long-term care insurance in South Carolina? - ANS>> Alcohol and drug addiction Under a non-qualified annuity, interest is taxed after the - ANS>> exclusion ratio has been calculated Which type of plan would be most appropriate for an individual on Medicare and is concerned that Medicare will NOT pay for charges exceeding the approved amount? - ANS>> Medicare supplement Plan F Fixed period settlement options are considered to be a form of a(n) - ANS>> annuity An indemnity plan - ANS>> provides the insured a specific dollar amount for services A provision that allows a policyowner to temporarily give up ownership rights to secure a loan is called a(n) - ANS>> collateral assignment The factor used most often when underwriting a disability income policy is - ANS>> annual earnings Which of these factors is NOT taken into consideration when determining the cost of a long-term care policy? - ANS>> Personal income Under the Time Limit on Certain Defenses Provision, a disability policy is incontestable after it has been in force for a period of - ANS>> the right to return the policy for a full refund within a specified number of days The typical long-term care insurance policy is designed to provide a minimum of __ year(s) of coverage. - ANS>> 1 n South Carolina, within how many days does the free-look provision allow the insured the right to return an individual insurance policy for full premium? - ANS>> 10 days The free-look provision gives the policyowner - ANS>> the right to return the policy for a full refund within a specified number of days The waiver of premium does NOT include which provision? - ANS>> All future premiums are waived if the insured recovers from the disability A whole life policy option where extended term insurance is selected is called a(n) - ANS>> nonforfeiture option Which of the following is NOT part of an insurance contract? - ANS>> Certificate of Authority Premiums paid that exceed 7 1/2% of an insured's Adjusted Gross Income (AGI) are tax-deductible when paid for which of the following plans? - ANS>> Qualified Long- Term Care plan Replacement forms MUST be kept on file by the insurer for a MINIMUM of how many years? - ANS>> 5 years Which of the following decisions would a Health Savings Account (HSA) owner NOT be able to make? - ANS>> The amount contributed by the employer Barbara's policy includes a rider which allows her to purchase additional insurance at specific dates or events without evidence of insurability. This rider is called a(n) - ANS>> Guaranteed insurability rider Signatures for an insurance application MUST be obtained by the producer from all of the following sources EXCEPT - ANS>> the beneficiary 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? - ANS>> Guaranteed insurability rider Which of the following nursing home options would BEST suit an individual who needs some nursing care and supervision but NOT full-time care? - ANS>> Assisted living facilities If the Director determines that an individual has engaged in an act violating state insurance laws, the Director may issue an order requiring the violator to - ANS>> stop engaging in those acts A policy illustration given at time of sale does NOT typically include the - ANS>> names of the beneficiary An annuity is primarily used to provide - ANS>> retirement income Other than for fraud, under the Time Limit on Certain Defenses Provision, a health insurance policy is incontestable after it has been in force for a period of - ANS>> 2 years When a life insurance policy is issued to replace another life insurance policy, which of the following does NOT need to be provided to the purchaser at or before the time the policy is delivered? - ANS>> The replacing insurer's financial statements When can a policy no longer be cancelled for nonfraudulent misstatements after its date of issue? - ANS>> 2 years Which of these is NOT considered to be a common life insurance nonforfeiture option? - ANS>> Life income annuity Which of the following is considered to be an alternative to a life settlement? - ANS>> Accelerated death benefit rider A disability elimination period is best described as a - ANS>> time deductible An insurer must furnish to a claimant forms for filing proof of loss within ___ days upon receiving a notice of claim. - ANS>> 15 The difference between a Long Term Care Partnership Plan and a Non-Partnership Plan is which of the following? - ANS>> Asset Protection Which type of policy combines the flexibility of a universal life policy with investment choices? - ANS>> Variable universal life policy The IRS states that a taxpayer's medical expenses that exceed 7.5% of their adjusted gross income is tax deductible. Which of the following may be considered a medical expense under this rule? - ANS>> Long Term Care Insurance premiums The election of COBRA for continuation of health coverage will - ANS>> maintain the same coverage and increase premium Jennifer is required to pay a specific sum out of pocket before any benefits are paid in a year. Her health policy most likely contains a(n) - ANS>> deductible A common exclusion or limitation on a dental policy is - ANS>> Endodontics Which situation accurately describes a reduced paid-up nonforfeiture option? - ANS>> Policy has a decreased face amount Disability Income plans which require that the insurer can NEVER change or alter premium rates are usually considered - ANS>> Noncancellable A type of group that has a constitution and bylaws and has been organized for purposes other than obtaining insurance is called a(n) - ANS>> association or labor group Claims payable to a Disability Income insured, even when the insured can continue to work, are the result of a - ANS>> Presumptive disability The automatic premium loan provision authorizes an insurer to withdraw from a policy's cash value the amount of - ANS>> past due premiums that have not been paid by the end of the grace period In Health plans, premiums paid less frequent than monthly require a minimum Grace period of at least - ANS>> 7 days In South Carolina, within how many days does the free-look provision allow the insured the right to return an individual insurance policy for full premium? - ANS>> 10 days Lorenzo is self employed with an S corporation. He is unmarried and had a net profit for the tax year. What are the tax ramifications of his health insurance premiums paid for the year? - ANS>> 100% of his health insurance costs can be deducted from his gross income Distributions from a Health Savings Account (HSA) for qualified medical expenses are - ANS>> tax free Which of the following employers is required to follow ERISA regulations? - ANS>>