PSI - NY Life, Accident and Health Practice Exam 17-55 (Graded A)

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Which policy provision permits the policy owner to take a specified number of days to examine the contract, and allows for cancellation and a full refund if the policy owner rejects the terms or costs... ? - ANSWER Free Look When will a policy pay on a UCR basis? - ANSWER When particular benefits are not listed on a payment schedule Which type of rider reimburses health and social service expenses incurred in a convalescent or nursing home facility? - ANSWER long term care rider Which of the following is exempted from the incontestability provision in insurance policies? - ANSWER Fraudulent misstatements What does first dollar coverage mean? - ANSWER As soon as covered medical expenses are incurred, the policy begins to pay What is the waiver of premium provision? - ANSWER In a long term care contract, the premium is waived after the insured has been confined for a specific period of time According to the Time Payment of Claims provision, the insurer must make the payment immediately after receiving proof of loss EXCEPT - ANSWER for claims involving periodic payments Which is a disadvantage to a flexible premium annuity? - ANSWER the actual amount of the annuity benefit cannot be determined in advance When a policy or certificate containing an accelerated benefit provision is applied for or delivered, the producer is responsible for providing that applicant a summary of coverage that includes all of the following EXCEPT - ANSWER a detailed and comprehensive summary of the accelerated benefit which one of the following represents an advantage of obtaining a policy loan versus a withdrawal? - ANSWER the loan is not taxed while a withdrawal is taxed for amounts above the contract cost basis How does a noncancelable policy differ from a guaranteed renewable policy? - ANSWER with the non cancelable policy the insurer may increase premiums only based on the terms of the policy What does it mean if a health policy is conditionally renewable? - ANSWER Insurer may elect NOT to renew only under the conditions specified in the policy When the suicide clause is inserted in a life insurance contract, death by suicide is not covered during the policy's initial: - ANSWER 2 year period What does coinsurance mean? - ANSWER The insurer and the insured share expenses over the deductible. Which of the following must be given to the insurer within 20 days after occurrence or commencement of any loss covered by the policy, or as soon thereafter as is reasonably possible? - ANSWER Notice of claim The right to change the beneficiary or dispose of the policy or its benefits in any manner one chooses is reserved to the policy owner UNLESS which of the following is true? - ANSWER The policy owner has named an irrevocable beneficiary Which of the following refers to how often a premium is paid? - ANSWER Mode All of the following are common exclusions from loss found in disability income policies EXCEPT for that incurred while - ANSWER Committing a misdemeanor At which point are contractual death benefit settlement options determined and by whom are they determined? - ANSWER At the time the policy is purchased by the owner of the policy All of the following are ownership rights EXCEPT - ANSWER Switching the policy from one insured to another All of the following are TRUE regarding incomplete applications EXCEPT - ANSWER The incomplete application can be accepted with the missing information added later A consumer report used to determine eligibility for insurance may include all of the following EXCEPT - ANSWER Medical underwriting exam All of the following are required signatures on a life insurance application EXCEPT - ANSWER The minor in a juvenile policy Why are insurance policies considered conditional contracts? - ANSWER Certain conditions need to be met to make the contract legally enforceable. When does insurable interest come into play in a life insurance policy? - ANSWER when the applicant for the policy is not the insured Which of the following occurs immediately after the application is submitted and the initial premium paid? - ANSWER the underwriting process begins Obtaining consumer information reports under false pretenses is prosecutable by which of the following? - ANSWER Fair Credit Reporting Act What is the purpose of Stranger-originated life insurance (STOLI)? - ANSWER the policy is originated primarily or solely for the purpose of resale All of the following are classifications of risk EXCEPT - ANSWER non-nicotine What specific new procedures does the USA Patriot Act require of insurance companies? - ANSWER Establish an anti-money laundering program What procedure is used by an insurer to protect itself in the event a dispute arises and the applicant and the agent do not recall the changes that were made in a completed application? - ANSWER The applicant and possibly the agent initial any changes made. What is a MIB report? - ANSWER medical information on an applicant for assessing life or health insurance risk How do warranties differ from representations? - ANSWER a warranty is guaranteed to be true, a representation is believed to be true to the best of one's knowledge. If the insurer wishes to share an applicant's HIV status, the applicant must be given full notice of all of the following EXCEPT - ANSWER the treatment procedures that are covered by the policy. Which of the following was specifically designed to address STOLI and IOLI practices? - ANSWER NCOIL Act Why is rehabilitation considered worthy of federal help under workers' compensation? - ANSWER it reduces insurance losses and helps regain the worker's dignity In a case where an individual's health is insured by both their own policy and their spouse's policy, which policy pays in the event of an illness? - ANSWER The individual's policy pays first, the spouse's policy pays the remaining up to coverage amount. The group conversion option is allowed for all of the following EXCEPT - ANSWER during the annual benefits enrollment period. What type of insurance should a company purchase if it wants to insure the life of its CEO? - ANSWER key person insurance All of the following are tax qualified retirement plans EXCEPT - ANSWER Section 529 plan. Why is relying solely on employer group life insurance generally considered inadequate for most individual's needs? - ANSWER It is financially insufficient to cover end of life expenses. For an individual long-term care policy there is an annual dollar limit for tax deductions that is based on which of the following? - ANSWER age When can the premiums of an individually owned health insurance policy be deducted from the individual's income tax? - ANSWER when the taxpayer's medical expenses exceed 7.5% of adjusted gross income during a taxable year In noncontributory plans, which percentage of eligible members must participate? - ANSWER 100% Short term disability insurance generally only covers injuries due to which of the following? - ANSWER Non-occupational injuries Managed care plans increase efficiency by all of the following means EXCEPT - ANSWER transferring the management of costs to the insureds. Under which situation must insurable interest exist between the applicant and insured at the time of application? - ANSWER When a third-party applicant names themselves beneficiary Which of the following is characteristic of a nonqualified plan? - ANSWER plan does not meet federal guidelines for tax benefits In a home healthcare benefit, all of the following are eligible expenses EXCEPT - ANSWER blood transfusions All of the following are requirements to qualify for Social Security disability benefits EXCEPT when - ANSWER unable to work in occupation in which the worker was trained or educated How long after being entitled to disability benefits will an individual be eligible to receive Medicare benefits? - ANSWER 2 years Which of the following amends the Social Security Act to make Medicare secondary to group health plans? - ANSWER TEFRA Which of the following is TRUE of a point of service plan? - ANSWER A patient's care is coordinated by an in-network primary care physician. A group conversion option may be used in all the following instances EXCEPT - ANSWER a life-changing event, such as marriage, divorce, or childbirth Which problem was universal life insurance designed to address? - ANSWER low interest rates during periods of high inflation Compared to basic hospital, medical and surgical policies, which type of insurance provides broader coverage, fewer gaps, higher individual benefits, and higher policy maximums? - ANSWER major medical insurance Current assumption whole life policies are sensitive to which of the following? - ANSWER interest rates Which is the major reason why long term care insurance is becoming increasingly important? - ANSWER As life expectancy increases, the chances of needing long term care also increase Which of the following is defined as the dollar amount beyond which the insured no longer participates in payment of medical expenses? - ANSWER Stop Loss Limit Which is the primary purpose of Health Reimbursement Accounts (HRAs)? - ANSWER To assist covered employees with the payment of medical expenses on a high deductible plan funded through pre-tax contributions. States generally define a true "group" for insurance as requiring a minimum of how many participants? - ANSWER 10 When should a buy-sell agreement include a provision for the buy-out of an owner's business interest in the event of a disability? - ANSWER When there is a buy-sell agreement funded with life insurance to buyout the interest of a deceased owner or partner. Which type of life policy can be continued year after year without a required medical examination but rates are dependent on the insured's current age? - ANSWER renewable term Which of the following is true about a decreasing term life policy? - ANSWER The face amount reaches zero at policy expiration. Which of the following is TRUE of the limited pay whole life policy? - ANSWER Coverage continues after the policy is paid-up. Which of the following is a characteristic of Preferred Provider Organizations (PPOs)? - ANSWER prearranged costs for services rendered All of the following are characteristics of variable whole life EXCEPT - ANSWER there is no guaranteed minimum death benefit. Which of the following policy types is considered double indemnity? - ANSWER accidental death Which of the following lists the three common types of permanent individual life insurance? - ANSWER Variable Life, Whole Life, Universal Life Which of the following is TRUE for a flexible premium annuity? - ANSWER The purchaser has the option to vary the amount of each premium payment falling between a minimum and maximum amount. Which type of annuity covers two or more annuitants and provides monthly income only until the first annuitant dies? - ANSWER Joint Life Annuity Which of the following coverage types pays a monthly cash benefit following the elimination period for total disability due to accident or sickness? - ANSWER Disability income insurance In which of the following does a covered employee agree to a reduction in compensation so the amount can be used to cover medical expenses? - ANSWER Flexible Spending Account (FSA) Which of the following is covered by a dread disease policy? - ANSWER illnesses that do not occur frequently but incur significant costs when they do occur Which insurance plans are commonly offered through the worksite (employer sponsored) EXCEPT? - ANSWER Medica [Show More]

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