Life Insurance and Health Insurance Regulations in New Jersey, Exams of Sociology of Health and Illness

Download Life Insurance and Health Insurance Regulations in New Jersey and more Exams Sociology of Health and Illness in PDF only on Docsity! New Jersey Life and Health Final Exam Questions with Verified Solutions. 1. Which type of long-term care benefit would be most appropriate for a stroke victim who requires speech therapy administered at her home? - Correct answer Home health care 2. Which of the following is NOT a federal requirement of a qualified plan? - Correct answer Employee must be able to make unlimited contributions 3. Why are dividends from a mutual insurer not subject to taxation? - Correct answer because dividends are considered to be a return of premium 4. The treasurer of XYZ Insurance Company discovers that the treasurer's company is being investigated by the Banking and Insurance Commissioner... - Correct answer making false financial statements 5. Which type of rider will waive the premium on a child's life insurance policy if the parent paying the premium dies? - Correct answer Payer benefit 6. Which of these premium payment frequencies is not typically available to a policy owner? - Correct answer Bi-weekly 7. Maria the agent would like to advertise an annuity product on a highway billboard. Which of the following must be included in the advertisement? - Correct answer her name 8. Which disability policy provision would address any concerns of the value of the benefits decreasing over time? - Correct answer Cost of living benefit 9. Which of these is NOT a characteristic of the Accelerated Death Benefit option? - Correct answer the benefit can be offered as a rider at a specific extra cost or may be at no cost 10. All of the following are included as part of a contract in the entire contract provision EXCEPT the - Correct answer Changes made by the producer 11. The power given to an individual producer that is not specifically addressed in his/her contract is considered what type of authority? - Correct answer Implied 12. Pat is insured with a life insurance policy and Karen is his primary beneficiary. They are both involved in an automobile accident where Pat dies instantly and Karen dies 5 days later... - Correct answer Common disaster clause 13. Key Person Disability Insurance pays benefits to the - Correct answer Employer 14. Under a disability income policy, which provision would be payable if the cause of an injury is unexpected and accidental? - Correct answer Accidental bodily injury provision 15. What will the beneficiary receive if an annuitant dies during the accumulation period? - Correct answer the greater of the accumulated cash value or the total premium paid 16. Written notice for a health claim must be given to the insurer ___ days after the occurrence of the loss. - Correct answer 20 17. Craig submits a $500 claim for medical expenses. With a past due premium of $100, the insurer pays $400. Which of the Uniform Optional Provisions covers this situation? - Correct answer Unpaid premium 18. How many employees must an employer have for a terminated employee to be eligible for COBRA? - Correct answer 20 19. A licensed producer is required to file notice of any change of address within how many days? - Correct answer 30 20. Advertising material for a life insurance policy does NOT need to contain which of the following? - Correct answer Agent's commission rate 21. What is the maximum fine for a producer violating a New Jersey Insurance law for the first time? - Correct answer $5,000 22. How long must an individual be unable to engage in any gainful activity due physical or mental disability in order to qualify for Social Security Total Disability? - Correct answer 12 months 23. Sonya applied for a health insurance policy on April 1. Her agent submitted the information to the insurance company on April 6. She paid the premium on May 15 with the policy indicating the effective date being May 30. On which date would Sonya have coverage? - Correct answer May 30 24. Under a life insurance policy, what does the insuring clause state? - Correct answer the insurer's obligation to pay a death benefit upon an approved death claim 25. 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) - Correct answer deductible 26. How often must an insurance producer's license in New Jersey be renewed? - Correct answer every two years 53. A Buyer's Guide MUST - Correct answer Have its content approved by the Insurance Commissioner 54. A doctor who accepts Medicare Assignment agrees to which of the following? - Correct answer Doctor cannot charge more than Medicare's scheduled coverage 55. Health insurance advertisements that mention statistical information are required by New Jersey law to - Correct answer accurately convey all pertinent facts 56. Which of these may NOT be used in a health insurance advertisement? - Correct answer an insurance company's trademark instead of the company's actual name 57. Twisting is best defined as - Correct answer Using misrepresentation to induce an insured person to terminate an existing policy and purchase a new policy 58. Field underwriting performed by the producer involves - Correct answer Completing the application and collecting initial premium 59. How many months can a life insurance policy normally be backdated from the date of application? - Correct answer 6 60. Loss of income insurance provides - Correct answer an individual the means to replace wages 61. An insurer must furnish to a claimant forms for filing proof of loss within ___ days upon receiving a notice of claim. - Correct answer 15 62. After an insured gives notice of loss, what must he/she do if the insurer does not furnish forms? - Correct answer File written proof of loss 63. Johan the producer charged a fee to a sales prospect for analyzing insurance coverage’s... - Correct answer Substance of the services performed 64. A written statement describing the elements of a policy is called - Correct answer Policy Summary 65. All of the following are considered appropriate uses of life insurance for business purposes EXCEPT - Correct answer protecting the business by covering entry level employees with life insurance 66. An insured individual and the policy's beneficiary die from the same accident. The common disaster provision states the insurer will continue as if - Correct answer the insured outlived the beneficiary 67. Carmen's individual life insurance policy has recently lapsed. She may reinstate her policy within _____ years - Correct answer 3 68. Which type of disability would be less than total impairment and equal to permanent impairment? - Correct answer Permanent partial disability 69. Which of the following describes a person who is NOT acceptable by an insurer at standard rates because of health history, occupation, or hobbies? - Correct answer substandard risk 70. Which of the following is an example of defamation? - Correct answer using derogatory statements about an insurance company's financial condition 71. When calculating the amount of life insurance needed for an income earner, what has to be determined when using him Needs Approach? - Correct answer the family's financial objectives if the income earner were to die or become disabled 72. A beneficiary change can occur: - Correct answer normally at any time during the policy term 73. Loans obtained by a policy owner against the cash value of a life insurance policy - Correct answer would not be treated as taxable income 74. The solicitation of a non-authorized contact in New Jersey violates - Correct answer New Jersey Code 75. Which of the following may be used as continuation education credit? - Correct answer completing a CLU designation course 76. What does the Group Life underwriting risk selection process help protect insurance companies from? - Correct answer adverse selection 77. All of these are valid options for an Adjustable Life Policy EXCEPT - Correct answer a no forfeiture option can be used to increase the death benefit 78. Julie has a $100,000 30-year mortgage on her new home. What type of life insurance could she purchase that is designed to pay off the loan balance if she dies within the 30- year period? - Correct answer decreasing term insurance 79. EXCEPT for fraud, the time after issuance of a policy during which an insurance company may contest a health insurance claim due to the statements on an application is - Correct answer 2 years 80. All of the following are core benefits of Medicare Supplement Plan a EXCEPT - Correct answer Deductible payments for the first 60 days of hospitalization under Medicare hospitalization under Medicare hospitalization insurance 81. Statements made by an insurance applicant on an application are considered to be - Correct answer Representations 82. What is the purpose of having an accelerated death benefit on a life insurance policy? - Correct answer it allows for cash advances to be paid against the death benefit if the insured becomes terminally ill 83. Who assumes the investment risk in a variable insurance contract? - Correct answer the insurer 84. _____ is NOT an element of valid contract - Correct answer Countersignature 85. The automatic premium loan provision authorizes an insurer to withdraw from a policy's cash value at the amount of - Correct answer Past due premiums that have not been paid by the end of the grace period 86. How soon can the benefit payments begin with a deferred annuity? - Correct answer a minimum of 12 months after date of purchase 87. Which of the following MUST contain a "Statement of Policy Cost and Benefit Information"? - Correct answer Policy Summary 88. Which of these is NOT subject to income taxation under a Modified Endowment Contract (MEC)? - Correct answer Death benefit 89. Disability Income plans which require that the insurer can NEVER change or alter premium rates are usually considered - Correct answer No cancellable 90. HIPPA considers which of the following as "individually identifiable health information"? - Correct answer a person's health claim information 91. The policyholder for a group health benefit plan is considered to be the - Correct answer Employer 92. A Medicare Supplement policy can be cancelled by the insurer for - Correct answer Nonpayment 93. As of January 1, 2007, producer's license expires - Correct answer every two years on the last day of the producer's birth month 120. Who is the individual paid on a fee-for-service basis? - Correct answer Provider 121. The New Jersey Life and Health Insurance Guaranty Association is - Correct answer Funded by assessments on member companies 122. Which of these is NOT considered to be a no forfeiture option in a whole life insurance policy? - Correct answer Interest only 123. Replacement regulation is designed to protect the interests of - Correct answer Policy owners 124. A health insurance policy that allows an insurer to change the policy owner’s premiums, but NOT cancel the policy is called - Correct answer Guaranteed renewable policy 125. A debtor may receive Credit Life insurance in which of the following forms? - Correct answer Group Term Life 126. A person who is a nonsmoker, of average weight, and in excellent health would most likely be in which risk classification? - Correct answer Preferred 127. When a qualified plan starts making payments to its recipient, which portion of the distributions is taxable? - Correct answer Gains 128. An example of a primary care physician would be an - Correct answer Internist 129. A fee for service health insurance plan will normally cover - Correct answer A disease 130. Ron has a life insurance policy with a face value of $100,000 and a cost of living rider. If the consumer price index has gone up 4%, how much may Ron increase the face value of the policy? - Correct answer $4,000 131. 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) - Correct answer Guaranteed insurability rider 132. Which of these gaps in Medicare coverage is addressed with Medicare Supplemental Insurance? - Correct answer Medicare in-hospitable deductible 133. Which of the following statements is CORRECT regarding an individual applying for life or health insurance? - Correct answer the applicant's medical history may be analyzed and reported 134. Which of the following MUST contain a "Statement of Policy Cost and Benefit Information" - Correct answer Policy Summary 135. Mark continues working after the age of 65 and is covered through his employer's group health plan. Which of the following statements is TRUE? - Correct answer Medicare is the secondary payer 136. Medicare Part A does not pay for medical benefits provided for treatment in a skilled nursing facility beyond - Correct answer 100 days 137. Which situation accurately describes a reduced paid-up no forfeiture option? - Correct answer Policy has a decreased face amount 138. Before conducting an HIV related test, an insurer is REQUIRED to obtain written authorization from the - Correct answer Proposed insured 139. All Medicare Supplement policies MUST contain which provision? - Correct answer Pre-existing conditions may only be excludes from coverage for a maximum of 6 months 140. The reinstatement provision in a health insurance policy is - Correct answer Mandatory 141. The type of policy where the insurer can send a notice to the insured that the policy has been cancelled in the middle of the term is called - Correct answer Cancelable 142. Naming a contingent beneficiary as "all surviving children" is describing by which term - Correct answer Class designation 143. The entire contract includes the actual policy and the - Correct answer Applicant 144. The taxable portion of each annuity payment is calculated using which method? - Correct answer Exclusion Ratio 145. The coverage, condition, and limitations in the master policy of a group contract can be found in which document? - Correct answer Certificate of coverage benefits 146. How much does Medicare Part B pay for physician fees? - Correct answer 80% 147. In advertisements of life insurance and annuities, all of the following are true EXCEPT - Correct answer Advertisements must include training materials provided to the producer 148. Which entity is responsible for processing insurance advertising in New Jersey? - Correct answer New Jersey Department of Banking Insurance 149. A limited payment whole life policy provides - Correct answer Lifetime protection 150. All advertisements for health insurance shall make clear the identity of the - Correct answer Insurer 151. The double indemnity provisions in a life insurance policy pertains to an insured's death caused by a - Correct answer Accident 152. Mike has inherited his father's traditional IRA. As beneficiary, he will pay ____ taxes on any money withdrawn. - Correct answer Income 153. In what part of insurance policy benefits found? - Correct answer Declarations 154. After passing the state Producer licensing exam, application for the license must be made within - Correct answer 12 months 155. How long must an insurance company keep record on life insurance replacement activity - Correct answer At least five years? 156. An insurance company that is organized or chartered in a country other than the United States is defined as - Correct answer Alien 157. Advertisements of insurance in a local newspaper, must be approved by - Correct answer Commissioner of Insurance 158. Which of the following actions may an insurance company NOT do in a health policy that contains a guaranteed renewable premium benefit - Correct answer Increase the premiums on an individual basis 159. Continued coverage under COBRA would be provided to a (n) - Correct answer a covered employee is terminated for gross misconduct 160. In New Jersey, health insurance advertisements are required to contain the - Correct answer Insurance Company’s trademark 161. The purpose of a coordination-of-benefits provision in group health accident and health plans is to - Correct answer Avoid overpayment of claims 162. The Commissioner may - Correct answer Establish new insurance laws 189. Which of these is affected by the frequency of an insurance policy's premium payments? - Correct answer Cost 190. All of these are standard exclusions found in a life insurance policy EXCEPT - Correct answer Disability 191. Which of the following is typically NOT eligible for coverage in a group health policy? - Correct answer Temporary employee 192. What happens to the total amount of premium paid for an insurance policy when the payment frequency increases? - Correct answer Increases 193. The legal action provision in a health contract is limited to no more than ___ years. - Correct answer 5 194. What does a life insurance policy guarantee to the stated beneficiary upon the death of the insured? - Correct answer Specified amount of money 195. Which scenario would most life insurance policies exclude coverage for? - Correct answer an individual who has a hobby racing cars once a month 196. Who would make the final determination on whether or not an insurance advertisement is misleading? - Correct answer Banking and Insurance Commissioner 197. A life insurance policy which contains cash values that vary according to its investment performance of stocks is called - Correct answer Adjustable Whole Life 198. Which of these riders will pay a death benefit if the insured's spouse dies? - Correct answer Family term insurance rider 199. An applicant's character and personal habits can be obtained for underwriting purposes from which source? - Correct answer Investigate consumer report 200. This MANDATORY health policy provision states that the policy, including endorsements and attached papers, constitutes - Correct answer the entire insurance contract between the parties 201. The entire contract includes the actual policy and the - Correct answer Application 202. All of the following are elements of an insurance policy EXCEPT - Correct answer claims forms 203. What happens to the coverage under a children's term rider when that child reaches a certain specified age? - Correct answer Coverage is eliminated 204. 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? - Correct answer Partial disability 205. A beneficiary has just received a claim payment for a life insurance policy. Which of the following is TRUE regarding the federal income tax? - Correct answer No federal income tax is owed on life insurance proceeds 206. A non-contributory health insurance plan helps the insurer avoid - Correct answer adverse selection 207. States that have "no loss no gain" laws require a replacing policy to - Correct answer Pay for ongoing claims under the policy it replaces 208. How is Medicare Part B funded? - Correct answer General tax revenue and user premiums 209. Which market index is associated with an indexed annuity's rate of return? - Correct answer S&P 500 210. The names of the insurance companies represented by the producer - Correct answer is available to the public 211. The Commissioner must approve - Correct answer Continuing education courses 212. An attending physician's statement would be appropriate for which life insurance purpose? - Correct answer at the request of the insurer to assist in the underwriting decision 213. Maria is a Preferred Provider Organization (PPO) subscriber and received care from an out-of-network provider. Which of the following is the likely result? - Correct answer Care is covered 214. A policy owner may exercise which of these dividend options that uses the dividend to pay all or part of the next premium due? - Correct answer Reduction of premium dividend option 215. In regards to a life insurance contract, which of the following statements is NOT true regarding the concept of insurable interest? - Correct answer Insurable interest can be established sufficiently by sentimental attachment alone 216. A life insurance policy written on one contract for two people in which it is payable upon the first death is called - Correct answer Joint 217. Which of the following is true concerning the proceeds of a life insurance policy? - Correct answer There is protection of proceeds against the insured's and the beneficiary's creditors 218. Susan is insured through her Group Health Insurance plan and changed her coverage to an individual plan with the same insurer after her employment was terminated. This change is called a (n) - Correct answer Conversion 219. Which of the following does Medicare Part D cover? - Correct answer Prescription drugs 220. Which settlement options pays a stated amount to an annuitant but no residual value to a beneficiary? - Correct answer Life income 221. What does the word "level" in Level Term describe? - Correct answer the face amount 222. A Medicare supplement plan can be canceled by the insurer - Correct answer for nonpayment of premiums 223. Small employers who are sponsored by an insurer to provide group benefits to its employees are called - Correct answer MEWA 224. Health insurance involves two perils, accident and _____ - Correct answer Sickness 225. When an insured changes to a more hazardous occupation, which disability policy provision allows an insurer to adjust policy benefits and rates? - Correct answer Change of occupation provision 226. Which of these will typically authorize treatment from a specialist? - Correct answer Gatekeeper 227. A plan in which an employer pays insurance benefits from a fund derived from the employer's current revenues is called - Correct answer A self-funded plan 228. Which of the following enables a life policy to be replaced with another life policy and results in the postponement of the tax consequence? - Correct answer Section 1035 exchange