When a disabled dependent child reaches the age limit for coverage, how long does the policyowner have to provide prrof of dependency in order for the dependent to remain covered under the policy?
A) 10 days
B) 15 days
C) 31 days
D) 60 days
C) 31 days
All other factors being equal, which of the following premium modes would result in the lowest overall premium?
A) Annual
B) Quarterly
C) Semi-Annual
D) Monthly
A) Annual
Paying the premium one time a year would be the least expensive because of fewer billing and loading charges
Which of the following premium modes would result in the highest annual cost for a Life Insurance Policy?
A) Monthly
B) Quarterly
C) Semi-annual
D) Annual
A) Monthly
If the policyowner chooses to pay the premium more frequently than annually, there will be an additional charge (loading) because the company will not have the premium to invest for a full year, and the company will have the additional expenses
A family medical expense policy must generally do all of the following EXCEPT
A) Cover any newborn children as long as proper identification has been given.
B) Continue to cover any children after age 19 who are still dependent upon their parents because
C) Continue to cover any children who are remain living at home after they reach the maximum age stipulated by the policy.
Once children turn 19 ( 23 for full-time students), those children cannot remain on the family plan, but they do have the right to c
A husband and wife are insured under group health insurance plans at their places of employment. Because their employers pay for their plans, each is covered as a dependent under their spouse's coverage. If the husband is hospitalized, how are medical exp
C) The benefits will be coordinated.
Benefits will be coordinated when individuals are covered under two or more health plans.
If an insured changes his payment plan from monthly to annually, what happens to the total premium?
A) Increases
B) Decreases
C) Stays the same
D) Doubles.
B) Decreases
Because the insurer would have the entire premium to invest for a full year, they would reduce the premium amount.
Premium payments for personally-owned disability income policies are
A) Tax deductible
B) Tax deductilbe to the extent that they exceed 7.5% of the adjusted gross income of those itemizing deductions.
C) Not for tax deductible
D) Eligible for tax credits
C) Not for tax deductible
A man works for company A and his wife works for Company B. The spouses are covererd by health plans through their respective companies that also cover the other spouse. If the husband files a claim,
A) The insurance through his company is primary.
B) The
A) The insurance through his company is primary.
Medical expense premiums are deductible as medical expenses, provided that when the premiums are added to all of the other unreimbursed medical expenses, the total exceeds what percentage of the adjusted gross income?
A) 7.5%
B) 8.5%
C) 9.5%
D) 10.5%
A) 7.5%
In an idividual long-term care insurance plan, the insured is able to deduct the premiums from taxes. What income taxation will be imposed on the benefits received?
A) Federal income tax
B) State income tax
C) No tax
D) Policy tax
C) No tax
Disability income benefits, including those for medical expense and LTC policies, are received income tax free by the individual.
Concerning group Medical and Dental insurance, which of the following statements is INCORRECT?
A) Premiums paid by the employer are deductible as a business expense
B) Employee paid premiums may be deducted if certain conditions are met
C) Employee benefi
C) Employee benefits are tax deductible the year in which they were received.
For group medical and dental expense insurance any premium paid by the employer is deductible as a business expense. However, any premiums provided by the employee are only dedu
Under a Key Person disability income policy, premium payments
A) Are made by the employee and are tax-free
B) Are made by the business and are tax-deductible
C) Are made by the business and are not tax-deductible
D) Are made by the employee and are not ta
C) Are made by the business and are not tax-deductible
Premiums are nondeductible to the business; however, benefits are received tax-free by the business
Which of the following is not true of Disability Buy-Sell Coverage?
A) Premium payments are not deductible to the business
B) The policies provide funds for the business organization to purchase the business interest of a disabled partner.
C) Benefits are
C) Benefits are considered taxable income to business.
The buy-sell coverage benefits are tax free.
For group medical and dental expense insurance, what percentage of premium paid by the employer is deductible as a business expense?
A) 50%
B) 60%
C) 90%
D) 100%
D) 100%
For group medical and dental expense insurance any premium paid by the employer is deductible as a business expense.
Under which condition would an employee's group medical benefits be exempt from income taxes?
A) When the premiums and other unreimbursed medical expenses exceed 6.5% of the employee's adjusted gross income.
B) When the premiums and other unreimbursed med
C) An employee's group medical benefits are generally exempt from taxation as income
Group medical and dental benefits are receive tax-free to employees. Also, premiums paid by the employer are deductible as business expenses.
Which of the following is NOT true of the tax deductibility of medical expense coverage for sole proprietors and partners?
A) The deduction is permitted only if the sole proprietor or partner is covered under another medical expense plan
B) Sole proprieto
A) The deduction is permitted only if the sole proprietor or partner is covered under another medical expense plan
Sole proprietors and partners may decduct 100% of the cost of a medical expense plan, but the plan may not exceed the taxpayers earned incom
Under what condition are group disability income benefits received by an employee NOT taxable as income?
A) When the amount of the benefit is equal or less than the amount of contributed by the employer
B) When the benefits received are equal or less than
B) When the benefits received are equal or less than the employee's percentage of the contribution
Benefits received by the employee that are attributable to his or her portion of the contribution are not taxable as income
Which of the following is INCORRECT concerning taxation of disability income benefits?
A) If the benefits are for a permanent loss, the benefits paid to the employee are not taxable.
B) If paid by the individual, the premium are tax deductible.
C) If the
B) If paid by the individual, the premium are tax deductible.
If an individual purchases his or her own disability insurance with before-tax dollars, any benefits paid are tax free, but the premium is not tax deductible. If an employer pays the premium, t
Which of the following definitions would make it easier to qualify for total disability benefits?
A) The more strict "any occupation"
B) The more liberal "any occupation"
C) The more strict "own occupation"
D) The more liberal "own occupation
D) The more liberal "own occupation"
Total disability is defined differently under some disability income policies. The more liberal "own occupation" definition of disability makes it easier to qualify for benefits.
Lisa and Lena own a shop together. They are partners in their business of 2 years. Lisa is a designer; Lena is seamstress. Lisa worries that if Lena becomes disabled, that would affect their business. She inquires about purchasing disability buy-sell insu
C) A disability buy-sell plan protects the insured in case of disability. It allows the policyowner to buy out the partner's interest in the business, and the benefits are tax free.
Disability buy-sell insurance is typically written to cover partners or c
A brain surgeon has an accident and develops tremors in her right arm. Which disability income policy definition of total disability will cover her for all losses?
A) "Own occupation" - less restrictive than other definitions
B) "Own occupation" - more re
A) "Own occupation" - less restrictive than other definitions
In theory, the brain surgeon could find other work, but because her disability income policy specifies that she is covered for her own occupation, she would be wholly covered.
A woman's health insurance policy dictates which doctors she is allowed to see. Her health providers share an assumed risk for their patients and encourage preventative care. What best describes the health system that the woman is using?
A) Major medical
C) Managed Care
There are 5 distinguishing features of manged care: controlled access to providers, comprehensive case management, risk sharing, preventative care, and high-quality care.
Disability income policies can provide coverage for a loss of income when returning to work only part-time after recovering from total disability. What is the benefit that is based on the insured's loss of earnings after recovery from a disability?
A) Res
A) Residual disability
A residual disability will pay an amount to make up the difference between what the insured would have earned before the loss.
Which characteristic does NOT describe managed care?
A) High-quality care
B) Shared risk
C) Preventive care
D) Unlimited access to providers
D) Unlimited access to providers
Which of the following would best describe total disability?
A) A person's ability to work is significantly reduced or eliminated for the rest of his/her life.
B) A person's inability to perform one of the regular duties of his/her occupation
C) A person'
A) A person's ability to work is significantly reduced or eliminated for the rest of his/her life.
While different policies might define "total disability" differently, any definition would imply that under a total disability a person's ability to work is
Workers compensation insurance covers a worker's medical expenses resulting from work related sickness or injuries and covers loss of income from
A) Work-related disabilities
B) Job termination
C) Plant or office closings
D) Temporary job layoffs
A) Work-related disabilities
All states have workers compensation laws, which were enacted to provide mandatory benefits for employee's work related injuries, illnesses, or death
Which of the following are the main factors taken into account when calculating residual disability benefits?
A) Earnings prior to disability and the length of disability.
B) Employee's full-time status and length of disability.
C) Present earnings and st
D) Present earnings and earnings prior to disability.
Residual disability will help pay for loss of earnings by making up the difference between the employee's present earnings and what they were earning prior to disability.
Which of the following would best describe total disability?
A) A person's ability to work is significantly reduce or eliminated for the rest of his/her life.
B) A person's inability to perform one of the regular duties of his/ her occupation
C) A person'
A) A person's ability to work is significantly reduce or eliminated for the rest of his/her life.
While different policies might define "total disability" differently, any definition would imply that under a total disability a person's ability to work is
Which of the following is NOT true regarding Workers Compensation?
A) Benefits vary from state to state
B) Benefits are regulated by the state government.
C) Benefits are offered by the insurer.
D) Benefits are not regulated by the federal government
C) Benefits are offered by the insurer.
The state government regulates Workers Compensation benefits, which vary slightly from state to state.
Dave is injured in a construction accident, rendering him unable to work for a year. Which of the following plans would provide him with medical cost and income assistance?
A) Worker's Injury Insurance
B) Workers Compensation
C) Employee Disability
D) Fed
B) Workers Compensation
Workers Compensation provides employees with medical, income, death and rehabilitation benefits in the event of work-related injury.
Workers Compensation benefits are regulated by which entity?
A) Federal Government
B) State Government
C) Employer
D) Insurer
B) State Government
The legal process that gives the insurer, after payment of a loss, the right to seek recovery from a third party that was responsible for the loss is known as
A) Principle of Indemnity.
B) Subrogation.
C) Adverse Selection.
D) Right of Rescission
B) Subrogation.
Subrogation is a provision found in most insurance policies that gives the insurer, after payment of a loss cause by a third party, the insured's rights to recovery against that third party. The insurer's rights are only to the extent of t
All of the following statements concerning workers compensation are correct EXCEPT
A) Workers compensation laws are establish by each state.
B) All states have workers compensation.
C) Benefits include medical, disability income, and rehabilitation covera
D) A worker receives benefits only if the work related injury was not his/her fault.
Workers Compensation benefits are payable when a worker is injured by a work-related injury, regardless of fault or negligence.
The Patient Protection and Affordable Care Act includes all of the following provisions EXCEPT
A) No lifetime dollar limits
B) Coverage for preventive benefits
C) Individual tax deductions for premiums paid.
D) Right to appeal.
C) Individual tax deductions for premiums paid.
The act does not offer tax deductions for health insurance premiums. The Act does offer a tax credit, which is different from a tax deduction. All the other provisions are included in the Act.
Under workers compensation, which of the following benefits are NOT included?
A) Medical and rehabilitation benefits
B) Income benefits
C) Death benefits
D) Legal benefits
D) Legal benefits
The transfer of an insured's right to seek damages from a negligent party to the insurer is found in which of the following clauses?
A) Arbitration
B) Salvage
C) Appraisal
D) Subrogation
D) Subrogation
After the insured accept payment from the insurer, they have been indemnified. Insurance policies require the insured to transfer any right to recovery to the insurer so that they may seek recovery up to the amount they paid as loss.
According to the PPACA rules, what percentage of health care costs will be covered under a bronze plan?
A) 10%
B) 30%
C) 40%
D) 60%
D) 60%
Under the bronze plan, the health plan is expected to cover 60% of the cost of an average population, and the participants would cover the remaining 40%.
The Patient Protection and Affordable Care Act mandates that insurers provide coverage for adult children of the insured up to the age of
A) 19
B) 21
C) 26
D) 30
C) 26
The laws extends coverage for children to age 26 if the child is not eligible for other group coverage.
According to the PPACA Metal Levels classification, if a health plan is expected to cover 90% of the cost for an average population, and the participants would cover the remaining 10%, what type of plan is that?
A) Bronze
B) Silver
C) Gold
D) Platinum
D) Platinum
Bronze level benefit plans pay 60% of expected health care costs; silver level plans pay 70%; gold level plans pay 80%; and platinum level plans pay 90%.
The mode of premium payment
A) Is the factor which determines the amount of dividends in a policy.
B) Is the method used to compute the cash surrender value of the policy.
C) Does not affect the amount of premium paid.
D) Is defined as the frequency and t
D) Is defined as the frequency and the amount of premium payment.
The mode refers to the frequency the policyowner pays the premium: monthly, quarterly, semiannually, or annually. The amount of premium will change accordingly.
An employee insured under a group health policy is injured in a car wreck while performing her duties for her employer. This results in a long hospitalization period. Which of the following is true?
A) The group plan will pay depending on the employee's r
B) The group plan will not pay because the employee was injured at work.
Because the employee's injuries were work related, the group health policy would not respond. The insured would have to rely on worker's compensation for coverage.
Which statement accurately describe the Change of Beneficiary provision?
A) Changing beneficiaries requires the consent of the original beneficiary?
B) Any policy that has a death benefit must also have a Change of Beneficiary provision
C) Spouses are aut
B) Any policy that has a death benefit must also have a Change of Beneficiary provision
Any policy that has a death benefit must also have a Change of Beneficiary provision. This allows the policyowner to change the beneficiaries without the original bene
A provision found in insurance policies which prevents the insured from collecting twice for the same loss is called
A) Consent to settle loss
B) Right of Salvage
C) Appraisal
D) Subrogation
D) Subrogation
When the insureds accept loss payment from the insurance company, they must transfer their rights to recovery to the insurer. This prevents the insured from collecting twice for the same loss, and allows the insurer to indemnify the insuran
Disability income coverage specifies that the policy covers the insured if he is unable to performany jobs for which he is qualified. In this case, total disability is defined as
A) Any occupation- less restrictive than other definitions
B) Own occupation
D) Any occupation- more restrictive than other definitions
If total disability is defined as any occupation, it means the coverage will apply only if the insured cannot find any means of income whatsoever. This is more strict than own occupation, where a