Life & Health Exam Flashcards

Questions and Answers

How soon is the insured required to give notice of claim?

20 days

If forms are not furnished, what should the insured do?

Submit written proof of the occurrence, nature of the loss, and extent of loss.

Premium payments for personally-owned disability income policies are tax deductible.

False

How long after a policy's effective date may an insurer cancel the policy?

90 days Signup and view all the answers

Under an individual disability policy, what is the minimum schedule of time in which claim payments must be made to an insured?

Monthly Signup and view all the answers

What is the name of the statement that indicates 'this is a limited policy'?

Limited Policy Notice Signup and view all the answers

Which health insurance provision describes the insured's right to cancel coverage?

Renewal Provision Signup and view all the answers

Which of the following groups may be eligible for benefits under the Healthy New York Program?

Employees not covered by health coverage through their employer Signup and view all the answers

How soon following the occurrence of a covered loss must an insured submit written proof of such loss to the insurance company?

Within 90 days or as soon as reasonably possible but not to exceed 1 year. Signup and view all the answers

In a life settlement transaction, the owner must be made aware of his or her right to rescind the contract within how many days after the receipt of the life settlement proceeds?

15 days Signup and view all the answers

Which of the following is not covered under Basic Hospital Expense coverage?

Surgeons' fees Signup and view all the answers

Optional policy provisions can be changed by an insurer, as long as the changes do not adversely affect the policyholder.

True Signup and view all the answers

Benefits from Business Overhead Expense (BOE) policies are usually limited to 6 months.

False Signup and view all the answers

What is the difference between the Medicare approved amount for a service or supply and the actual charge?

Excess Charge Signup and view all the answers

What is the amount a physician or supplier bills for a particular service or supply?

Actual Charge Signup and view all the answers

What types of services may NOT be provided under long-term care's assisted living care?

Visits by a registered nurse Signup and view all the answers

A policy which covers medical costs related to a specific condition is called what?

Dread Disease Policy Signup and view all the answers

In a replacement situation, all of the following must be considered EXCEPT?

Assets Signup and view all the answers

The Patient Protection and Affordable Care Act mandates that insurers provide coverage for adult children up to the age of?

26 years old Signup and view all the answers

Every authorized domestic insurer and every rate service organization which makes or files rates will be examined at least..?

Once every 5 years Signup and view all the answers

A medical expense policy that establishes the amount of benefit paid based upon the prevailing charges for a specific procedure is known as?

Usual, customary and reasonable Signup and view all the answers

Cassie accumulates medical bills but is not classified as 'disabled'. Which of the following would cover at least a portion of Cassie's medical expenses?

Medical Reimbursement Benefit Signup and view all the answers

How are the three basic charges for medical expense insurance grouped?

Hospital, Surgical and Medical Signup and view all the answers

Which provision concerns the insured's duty to provide the insurer with reasonable notice in the event of a loss?

The Notice of Claim Provision Signup and view all the answers

Health insurance could provide payments for loss of income.

True Signup and view all the answers

An employee insured under a group health policy is injured in a car wreck while performing her duties for her employer. Will the group health plan pay?

No Signup and view all the answers

A reinstated policy provides immediate coverage for illness.

False Signup and view all the answers

Premium payments for personally-owned disability income policies are?

False Signup and view all the answers

What is the maximum amount of co-insurance in New York's major medical plans?

25% Signup and view all the answers

Which of the following would be a covered employment under the NYS Disability Benefit Law?

An advertising executive Signup and view all the answers

Medicare Advantage is known as?

Medicare Part C Signup and view all the answers

Every insurer must file a fraud prevention plan within how many days?

120 days Signup and view all the answers

Which of the following would be entitled to mental health benefits through Timothy's Law?

New York residents covered by group health insurance or a school blanket health insurance policy Signup and view all the answers

Which of the following answers does NOT describe a principal goal of a Preferred Provider Organization?

Provide medical benefits only from physicians in the network Signup and view all the answers

Regarding long-term care coverage, as the elimination period gets shorter, the premium?

Gets higher Signup and view all the answers

An employer offers a short-term disability plan to its employees. How much of a given employee's income would be covered under the plan?

70% Signup and view all the answers

Do benefits stop at the annuitant's death with an annuity certain?

False Signup and view all the answers

What is a Payor Benefit Rider?

Premium is paid if payor becomes disabled or dies. Signup and view all the answers

What does the Guaranteed Insurability Rider allow?

Policyowner can increase the DB for specific ages or events. Signup and view all the answers

What rider increases the death benefit to keep pace with __________?

inflation Signup and view all the answers

What happens under an Accidental Death Rider?

DB is a multiple of the face amount if the insured dies from an accident. Signup and view all the answers

When does the insurer pay the death benefit under a survivorship life policy?

Upon the last death Signup and view all the answers

What type of annuity starts paying benefits immediately after purchase?

Immediate Signup and view all the answers

How many days after a civil penalty ruling can it be enforced as a judgment?

120 days Signup and view all the answers

What is true about the cash value in a Universal Life policy?

The insurer credits the cash value with a current interest rate. Signup and view all the answers

A certificate of appointment is valid until which condition is met?

The agent becomes a nonresident licensee in another state. Signup and view all the answers

What settlement option should a policy owner choose to pay a portion of proceeds to a spouse annually?

Interest-only option Signup and view all the answers

What is the penalty tax for nonqualified distributions to a health savings account?

20% Signup and view all the answers

What can contribute proof of death for insurance benefits payment?

A death certificate and a form provided by the insurance company. Signup and view all the answers

When must proof of loss under a health insurance policy be filed?

90 days of a loss Signup and view all the answers

Which provision must be included on the first page of a Medicare supplement policy?

Continuation Provision Signup and view all the answers

If an insured incurs $4,000 of medical expenses with a $500 deductible and 80/20 coinsurance, how much would the insurer pay?

$2,800 Signup and view all the answers

To sign up for a Medicare prescription drug plan, individuals must first be enrolled in?

Medicare Part A Signup and view all the answers

The One Year Term Option allows the policy owner to purchase a __________ policy for one year.

term Signup and view all the answers

When do health care insurers negotiate contracts with providers?

To establish Preferred Provider Organizations (PPO) Signup and view all the answers

Which option best describes 'first-dollar coverage' in basic medical insurance?

No deductible is required. Signup and view all the answers

What are the three basic types of coverage?

Hospital, surgical and medical Signup and view all the answers

What happens if a policy provision conflicts with state statutes?

The provision may be altered to conform to state statutes. Signup and view all the answers

Which of the following is a feature of a variable annuity?

Benefit payment amounts are not guaranteed. Signup and view all the answers

Which of the following statements about fixed period annuity settlement options is false?

It is a life contingency option. Signup and view all the answers

What should a client consider if planning to retire at age 50?

Annuity Certain Signup and view all the answers

What would be true if John receives benefits from his group disability income policy?

Benefits received that are attributable to employer contributions are fully taxable to the employee as income. Signup and view all the answers

Do benefits stop at the annuitant's death with an annuity certain?

False Signup and view all the answers

What does life contingency mean?

Life contingency is something that can happen, but is generally not anticipated. Signup and view all the answers

Is there a limit on when benefits are paid in a Business Overhead Expense plan?

False Signup and view all the answers

What decreases in a decreasing term policy?

The face amount Signup and view all the answers

What may limit or exclude coverage for sickness in a health insurance policy?

Exemption periods Signup and view all the answers

How long does the insurer have to comply with a request for additional information on an Investigative Consumer Report?

5 days Signup and view all the answers

The insurance principle that limits compensation to the financial loss incurred is called __________.

Indemnity Signup and view all the answers

How long must life settlement brokers keep records of commission disclosures?

3 years Signup and view all the answers

What would cover a portion of Cassie's medical expenses?

Medical Reimbursement Benefit Signup and view all the answers

Which of the following is typically not covered under Basic Hospital Expense coverage?

Surgeon's fees Signup and view all the answers

What document ensures full disclosure to a policy recipient?

Outline of Coverage Signup and view all the answers

How many days of inpatient care for mental or emotional disorders is required under Timothy's Law?

30 days Signup and view all the answers

When will Medicare cover nursing home care?

If it is part of the treatment for a covered illness. Signup and view all the answers

What determines benefits under group disability income insurance?

The insured's income Signup and view all the answers

What are the characteristics of a group long-term disability plan?

Maximum benefit is based upon monthly income. Signup and view all the answers

What is the maximum coinsurance amount in New York's major medical plans?

25% Signup and view all the answers

Under SIMPLE plans, what is the employer contribution limit as a percent of annual wages?

3% Signup and view all the answers

What type of review process evaluates the effectiveness of the utilization review process?

Retrospective review Signup and view all the answers

Using a class designation for beneficiaries involves __________ beneficiaries as a group.

Naming Signup and view all the answers

Does the premium change in a decreasing term policy?

False Signup and view all the answers

What does the guarantee of insurability option in long-term care policies allow?

Increase benefit levels without providing proof of insurability. Signup and view all the answers

What is called when a policy owner instructs the insurance company to transfer cash value to an annuity?

1035 Exchange Signup and view all the answers

How long do benefit periods for individual short-term disability policies usually last?

Six months to two years Signup and view all the answers

Which nonforfeiture option provides coverage for the longest time?

Reduced paid-up Signup and view all the answers

Who can share in the commission from the sale of a life insurance policy?

A licensed life insurance agent of the same insurer involved with the sale of the transaction. Signup and view all the answers

What types of services may NOT be provided under long-term care's assisted living care?

Visits by a registered nurse Signup and view all the answers

What is reinsurance?

An agreement between a ceding insurer and assuming insurer. Signup and view all the answers

Which life insurance settlement option guarantees lifetime payments and specifies a guaranteed period?

Life income with period certain Signup and view all the answers

What concept applies when a court orders payment for an uncovered loss?

Reasonable expectations Signup and view all the answers

What type of annuity has income payments beginning two years after purchase?

Deferred Signup and view all the answers

What is the goal of the New York State Partnership for LTC?

It combines LTC insurance and Medicaid to help people prepare for nursing home care. Signup and view all the answers

What is an example of a peril?

A tornado that destroys property. Signup and view all the answers

Which Medicare supplement plans must be available to a 91-year-old female?

A-N Signup and view all the answers

When may a policy owner sell a life insurance policy for a life settlement contract?

Upon divorce, terminal illness, death, or retirement. Signup and view all the answers

What does the Life Income Joint and Survivor settlement option guarantee?

Income for 2 or more recipients until they die. Signup and view all the answers

What is true for both equity indexed annuities and fixed annuities?

They have a guaranteed minimum interest rate. Signup and view all the answers

Study Notes

Insurance Riders and Provisions

Payor Benefit Rider: Premiums are waived if the payor becomes disabled or dies; death benefit does not increase.
Guaranteed Insurability Rider: Allows policyowner to increase the death benefit (DB) at specified ages or events.
Cost of Living Rider: Adjusts the DB to keep pace with inflation.
Accidental Death Rider: Provides a multiple of the face amount if the insured dies from an accident.
Interest-Only Option: Policy proceeds pay interest regularly to a spouse, with principal paid to children at a designated age.

Annuities

Immediate Annuity: Payments begin within 12 months of the purchase; distribution starts two months after payment.
Deferred Annuity: Income payments start more than one year after the purchase; involves periodic premium payments.

Legal and Policy Guidelines

Civil Liability Judgement: A ruling from a hearing can be entered as judgment after 120 days without court proceedings.
Proof of Loss: Generally must be filed within 90 days under health insurance policies.
Medicare Supplement Policies: Must include a Continuation Provision on the first page, stating the insurer's right to change premiums.

Benefits and Distributions

Universal Life Insurance: Cash value grows with a current interest rate, which is non-guaranteed but backed by a lower guaranteed rate.
Fixed Settlement Option: Liquidates both principal and interest over a selected period; offers uniform installments to recipients.
Major Medical Policy: Deductibles and coinsurance amounts impact how much insurers pay after out-of-pocket expenses.

Health Insurance Specifics

HSA Penalty Tax: Nonqualified distributions from a Health Savings Account incur a 20% penalty tax.
Medicare Drug Plan Enrollment: Requires enrollment in Medicare Part A before signup.
Timothy's Law: Health insurance must cover at least 30 days of inpatient care for mental health disorders.

Tax and Financial Aspects

Disability Income Taxation: Employer-funded disability income premiums are tax-deductible for businesses; benefits received may be taxable.
Reduced Paid-Up Option: Provides the longest coverage period among nonforfeiture options, although the benefit amount is reduced.

Specific Coverage Scenarios

Cross Purchase Plan: Partners protect against the death of each other by buying life insurance policies equaling half the business value.
Long-Term Care Services: Assisted living care does not include visits by a registered nurse, focusing more on non-medical assistance.

Policyholder Rights and Responsibilities

Life Settlement Contracts: The 2-year waiting period does not apply in cases such as divorce or terminal illness.
Claim Notice Requirements: Insured must notify the insurer of a claim within 20 days of loss occurrence.

Additional Definitions and Provisions

Annuity Certain: Provides income for a specific time period without life contingencies; payouts continue regardless of the annuitant's death.
Reinsurance: Agreement between ceding and assuming insurers for risk management.
Equity Indexed Annuities: Offers a guaranteed minimum interest rate similar to fixed annuities while allowing for higher indexed earnings.

These notes summarize essential concepts, aiding students in understanding key components for the Life & Health Exam.### Life Settlement Transactions

Owners can rescind life settlement contracts within 15 days of receiving proceeds.

Insurance Coverage

Basic Hospital Expense coverage excludes surgeons' fees.
Optional policy provisions can be modified by insurers without adversely impacting policyholders.

Business Overhead Expense Policies

Not limited to 6 months; these policies reimburse small business owners for overhead during total disability.
Premiums are tax-deductible, while received premiums are taxable income.
Coverage includes overhead expenses but excludes employer salaries and profits.

Medical Insurance Definitions

Excess Charge refers to the difference between the Medicare approved amount and the actual charge billed.
Actual Charge is the specific amount billed by a physician or supplier.
Usual, customary, and reasonable (UCR) policies base benefits on prevailing local charges for a procedure.

Long-term Care and Health Policies

Assisted living care does not cover visits from registered nurses.
Dread Disease Policies cover medical costs for specific conditions.
Group health policies do not typically cover work-related injuries; workers' compensation is required.

Patient Protection and Affordable Care Act

Mandates coverage for adult children up to age 26 under health insurance plans.

Insurance Regulations

Authorized insurers and rate service organizations undergo examinations every 5 years.
Insurers must file a fraud prevention plan within 120 days.

Health Insurance Benefits

Medical expense insurance covers hospital, surgical, and medical charges.
Health insurance may provide payments for loss of income.

Disability and Annuity Policies

Short-term disability plans generally cover about 70% of an employee's income.
Annuities Certain do not stop benefits at the annuitant's death, paying for a fixed period or amount.

Timothy's Law

New York residents with group health insurance are entitled to mental health benefits under Timothy's Law.

Preferred Provider Organizations

A principal goal of a Preferred Provider Organization is to provide a wide range of medical benefits, not just those from network physicians.

Coverage Considerations

In replacement situations, assets do not need to be reviewed as thoroughly as other factors.
The elimination period affects premium rates; shorter periods lead to higher premiums.

Studying That Suits You

Use AI to generate personalized quizzes and flashcards to suit your learning preferences.

Description

Prepare for your Life and Health insurance exam with these flashcards. Each card features essential terms and their definitions, helping you to understand key concepts like riders and benefits. Perfect for review before the big test!