Practice exam

7.	All of the following are considered to be supplemental benefits under an HMO plan EXCEPT
a)	Long-term care.
b)	Mental health care.
c)	Prescription drugs.
d)	Preventive services.
	HMOs have the option of providing one or more of the following supplemental benefits: long-term care, nursing services, home health care, prescription drugs, dental care, vision care, mental health care, and substance abuse services.
#9.	Which of the following best defines the owner of a life settlement contract?
a)	An insurance provider
b)	A person who is selling the contract
c)	A person insured under the contract
d)	A fiduciary for the contract
	The term "owner" refers to the owner of the policy who may seek to enter into a life settlement contract. This does not include an insurance provider, a qualified institutional buyer, a financing entity, a special purpose entity, or a related provider trust.
#13.	An insured severely burns her hand, but is not classified as disabled. Which of the following types of coverage would cover at least a portion of the insured’s medical expenses?
a)	Accidental death & dismemberment
b)	Partial disability
c)	Medical reimbursement benefit
d)	Medical expense compensation
	Medical reimbursement benefits help to pay medical costs for accidental injuries that are not considered to be disabling.
#14.	All of the following are beneficiary designations EXCEPT
a)	Specified.
b)	Tertiary.
c)	Contingent.
d)	Primary.
	Beneficiary designations determine the order in which benefits will be paid: primary or contingent, which includes secondary and tertiary.
#19.	A participating insurance policy may do which of the following?
a)	Pay dividends to the policyowner
b)	Provide group coverage
c)	Pay dividends to the stockholder
d)	Require 80% participation
	A participating insurance policy will pay dividends to the owner based upon actual mortality cost, interest earned and costs.
#29.	Which of the following is NOT the consideration in a policy?
a)	The premium amount paid at the time of application
b)	The promise to pay covered losses
c)	The application given to a prospective insured
d)	Something of value exchanged between parties
	Consideration is something of value that is transferred between the two parties to form a legal contract.
#31.	Within how many days of requesting an investigative consumer report must an insurer notify the consumer in writing that the report will be obtained?
a)	3 days
b)	5 days
c)	10 days
d)	14 days
	Investigative consumer reports cannot be made unless the consumer is advised in writing about the report within 3 days of the date the report was requested.
#38.	What type of insurance would be used for a Return of Premium rider?
a)	Annually Renewable Term
b)	Increasing Term
c)	Level Term
d)	Decreasing Term
	The Return of Premium Rider is achieved by using increasing term insurance. When added to a whole life policy it provides that at death prior to a given age, not only is the original face amount payable, but also all premiums previously paid are payable to the beneficiary.
#40.	The death protection component of Universal Life Insurance is always
a)	Increasing Term
b)	Annually Renewable Term
c)	Whole Life
d)	Adjustable Life
	A universal policy has two components: an insurance component and a cash account. The insurance component (or the death protection) of a universal life policy is always annual renewable term insurance.
#41.	All of the following statements concerning Medicaid are correct EXCEPT
a)	Persons, at least 65 years of age, who are blind or disabled and financially unable to pay, may qualify for Medicaid Nursing Home Benefits.
b)	Medicaid is a state funded program that provides health care to persons over age 65, only.
c)	Individual states design and administer the Medicaid program under broad guidelines established by the federal government.
d)	Individuals claiming benefits must prove they do not have the ability or means to pay for their own medical care.
	Medicaid is a government funded (both state and federal) program designed to provide health care to poor people of all ages.
#43.	Under the Affordable Care Act, a special enrollment period allows an individual to enroll in a qualified health plan within how many days of a qualifying event?
a)	10 days
b)	30 days
c)	60 days
d)	90 days
	Unless specifically stated otherwise, individuals or enrollees have 60 days from the date of a triggering event to select a qualified health plan.
#46.	If a change needs to be made to the application for insurance, the agent may do all of the following EXCEPT
a)	Note on the application the reason for the change.
b)	Destroy the application and complete a new one.
c)	Erase the incorrect answer and record the correct answer.
d)	Draw a line through the first answer, record the correct answer, and have the applicant initial the change.
	An agent should not use white-out, erase or obliterate any answers given to a question on an application. It could prevent an insurer from contesting the application, should it be necessary.
#47.	A new employee who meets HIPAA eligibility requirements must be issued health coverage on what basis?
a)	Indemnity
b)	Guaranteed
c)	Noncancellable
d)	Nondiscriminatory
	If a new employee is eligible, under HIPAA regulations, the new employer must offer coverage on a guaranteed issue basis.
#48.	Who can make a fully deductible contribution to a traditional IRA?
a)	A person whose contributions are funded by a return on investment
b)	An individual not covered by an employer-sponsored plan who has earned income
c)	Anybody: all IRA contributions are fully deductible regardless of income level
d)	Someone making contributions to an educational IRA
	Individuals who are not covered by an employer-sponsored plan may deduct the amount of their IRA contributions regardless of their income level.