STATE EXAM SIMULATOR - 200
QUESTIONS WITH CORRECT
ANSWERS
Accident and health insurance claim handling is made more convenient to the insured
by utilizing - Correct Answers -Assignment of Benefits
Assignment of benefits to the health provider makes accident and health insurance
claim handling more convenient to the insured.
An arrangement by which a patient requests that their health benefit payments be made
directly to a designated person or facility, such as a physician or hospital.
Which of the following accurately describes a participating insurance policy? - Correct
Answers -policy owners may be entitled to receive dividends
a participating policy is one in which the policyowner receives dividends from the
company's divisible surplus
Which statement is true of trade association groups eligible for group medical benefits?
- Correct Answers -members of the associations are usually in the same industry
trade association groups eligible for group medical benefits are usually in the same
industry
trade associations- organization founded and funded by businesses that operate in a
specific industry. many associations are non-profit organizations governed by bylaws
and directed by many officers who are also members
A life insurance policy that contains an accelerated (living) benefit rider will provide
funds if the - Correct Answers -insured is expected to be confined to a nursing home for
life
an insured may qualify for accelerated benefits if he/she has an illness or physical
condition that can reasonably be expected to result in death within 24 months
James is covered with health insurance by two different insurers. The "insurance with
other insurers" provision in an individual health insurance policy allows an insurer to pay
benefits to the insured on a pro-rata basis when - Correct Answers -the insurer was
NOT notified prior to the claim that the insured has other health coverage
,the Insurance with other insurers provision in an individual health insurance policy
allows an insurer to pay benefits to the insured on a pro-rata basis when the insurer was
NOT notified prior to the claim that the insured has other health coverage
An insured has a $25,000 whole life insurance policy with $6,000 cash value available.
Under the extended term nonforfeiture option, what is the amount of insurance available
to the insured? - Correct Answers -$25,000
the extended term option uses the policy's cash value to purchase the level term
insurance policy in the amount equal to the original policy's face value, for as long a
period as the cash value will purchase
A non-forfeiture provision in a whole life policy that uses cash value to purchase term
insurance equal to the existing amount of life insurance.
life insurance in which a policyholder ceases to pay the premiums but keeps the full
amount of the policy in force for whatever term the cash value permits.
With the extended term insurance the face amount of the policy stays the same, but it
is flipped to an extended term insurance policy. The equity you built is used to purchase
a term policy that equals the number of years you paid premiums.
Which statement regarding whole life insurance is accurate? - Correct Answers -
insurance coverage can continue for life
whole life insurance can provide protection for a lifetime
A life annuity with period certain is characterized as - Correct Answers -guaranteeing
benefit payments for a stated minimum number of years
Both annuities and life insurance should be considered in your long-term financial plan.
While both include death benefits, you buy life insurance in the event you die too soon
and an annuity in case you live too long.
annuities vs life insurance - Correct Answers -Annuities do not offer that same tax
benefit. Annuity death benefits do not pass to your beneficiaries tax free, and are
included as part of your estate from a taxation standpoint. If you remember one thing,
remember that life insurance has tax free death benefits and annuities do not
permanent life insurance policies and annuity contracts have almost polar opposite
goals.
,Life insurance is there to help your family if you die unexpectedly or prematurely.
Meanwhile, annuities act as a safety net, usually for those in their senior years, by
providing a guaranteed stream of income for life.
two main types of annuities & life insurnace - Correct Answers -Deferred annuities
Immediate annuities
Term life insurance
Whole life insurnace
comparing annuities and life insurance - Correct Answers -1. Term life insurance
-provides income for dependents.
-pays out when you die.
-typical form of payment is a single lump sum payment.
-NOT tax deffered
-pays a death beneift
-benefits are NOT taxable income when received
-typically bought anywhere from age 25-50
2. Whole Life Insurance
-provides income for dependents or meet estate planning needs
-pays out when you die, borrow the cash value, or surrender the policy
-typical payment form is a single-lump-sum payment
-typically bought anywhere from age 30-60
-tax deffered and accumulates money
-pays a death benefit
-benefits are NOT taxable income when received unless a cash value withdrawal
exceeds the sum of premiums
3. Deferred annuities
-accumulates money in a tax-deffered product
-pays out when you make withdrawls
-typical payment is a single sum or income
-typically bought anywhere from age 40-65
-accumulates money and tax deferred
-pays a death benefit
-benefits are taxable income when received, but only the part derived from investment
income
4. Immediate annuities
-assures that you won't "outlive your income:
-pays out one period after you buy the annuity, and stops paying when you die
-typical payment form is lifetime income
-buyers age when bought is anywhere from 55-80
-accumulates money and tax deferred ONLY in the early payout years
, -pays a death benefit. payments continue if the annuity has a guaranteed-period option
that has NOT expired at the annuitants death
-benefits are taxable income when received but ONLY the part derived from investment
income
When a deferred annuity is surrendered, who must sign the authorization to do so? -
Correct Answers -owner
contract owner exclusively has the power to surrender the cash value of any annuity
In Arizona, an insurer discontinues offering a particular type of small group medical
coverage. Participants must receive advance notice of at least - Correct Answers -180
days
if an insurer discontinues offering a particular type of small group medical coverage,
participants MUST receive advance notice of at least 180 days
The surrender charge on many deferred annuity contracts are waived when the -
Correct Answers -annuitant dies or becomes disabled
many deferred annuity contracts waive the surrender charge when the annuitant dies or
becomes disabled
Which of the following is NOT a dividend option for a life insurance policy? - Correct
Answers -receiving the entire policy cash value
the following ARE dividend options for a life insurance policy:
-elect to take the dividends in cash
-allow the dividends to accumulate with interest
-use the dividends to pay all or part of the next premium due
Fee-for-service is a method of administering health insurance benefit payments in which
- Correct Answers -the cost of each service is scheudled.
Fee-For-Service (FFS) is a payment model where services are un-bundled and paid for
separately according to a schedule laid out in the policy
In health care, it gives an incentive for physicians to provide more treatments because
payment is dependent on the QUANTITY of care, rather than QUALITY of care.
After an insurance application has been originated, the producer normally - Correct
Answers -is the major personal contact to the insured
A life insurance illustration showing future premiums being paid out of nonguaranteed
values must disclose that - Correct Answers -the policy owner may need to resume
premium payments depending on actual results.
QUESTIONS WITH CORRECT
ANSWERS
Accident and health insurance claim handling is made more convenient to the insured
by utilizing - Correct Answers -Assignment of Benefits
Assignment of benefits to the health provider makes accident and health insurance
claim handling more convenient to the insured.
An arrangement by which a patient requests that their health benefit payments be made
directly to a designated person or facility, such as a physician or hospital.
Which of the following accurately describes a participating insurance policy? - Correct
Answers -policy owners may be entitled to receive dividends
a participating policy is one in which the policyowner receives dividends from the
company's divisible surplus
Which statement is true of trade association groups eligible for group medical benefits?
- Correct Answers -members of the associations are usually in the same industry
trade association groups eligible for group medical benefits are usually in the same
industry
trade associations- organization founded and funded by businesses that operate in a
specific industry. many associations are non-profit organizations governed by bylaws
and directed by many officers who are also members
A life insurance policy that contains an accelerated (living) benefit rider will provide
funds if the - Correct Answers -insured is expected to be confined to a nursing home for
life
an insured may qualify for accelerated benefits if he/she has an illness or physical
condition that can reasonably be expected to result in death within 24 months
James is covered with health insurance by two different insurers. The "insurance with
other insurers" provision in an individual health insurance policy allows an insurer to pay
benefits to the insured on a pro-rata basis when - Correct Answers -the insurer was
NOT notified prior to the claim that the insured has other health coverage
,the Insurance with other insurers provision in an individual health insurance policy
allows an insurer to pay benefits to the insured on a pro-rata basis when the insurer was
NOT notified prior to the claim that the insured has other health coverage
An insured has a $25,000 whole life insurance policy with $6,000 cash value available.
Under the extended term nonforfeiture option, what is the amount of insurance available
to the insured? - Correct Answers -$25,000
the extended term option uses the policy's cash value to purchase the level term
insurance policy in the amount equal to the original policy's face value, for as long a
period as the cash value will purchase
A non-forfeiture provision in a whole life policy that uses cash value to purchase term
insurance equal to the existing amount of life insurance.
life insurance in which a policyholder ceases to pay the premiums but keeps the full
amount of the policy in force for whatever term the cash value permits.
With the extended term insurance the face amount of the policy stays the same, but it
is flipped to an extended term insurance policy. The equity you built is used to purchase
a term policy that equals the number of years you paid premiums.
Which statement regarding whole life insurance is accurate? - Correct Answers -
insurance coverage can continue for life
whole life insurance can provide protection for a lifetime
A life annuity with period certain is characterized as - Correct Answers -guaranteeing
benefit payments for a stated minimum number of years
Both annuities and life insurance should be considered in your long-term financial plan.
While both include death benefits, you buy life insurance in the event you die too soon
and an annuity in case you live too long.
annuities vs life insurance - Correct Answers -Annuities do not offer that same tax
benefit. Annuity death benefits do not pass to your beneficiaries tax free, and are
included as part of your estate from a taxation standpoint. If you remember one thing,
remember that life insurance has tax free death benefits and annuities do not
permanent life insurance policies and annuity contracts have almost polar opposite
goals.
,Life insurance is there to help your family if you die unexpectedly or prematurely.
Meanwhile, annuities act as a safety net, usually for those in their senior years, by
providing a guaranteed stream of income for life.
two main types of annuities & life insurnace - Correct Answers -Deferred annuities
Immediate annuities
Term life insurance
Whole life insurnace
comparing annuities and life insurance - Correct Answers -1. Term life insurance
-provides income for dependents.
-pays out when you die.
-typical form of payment is a single lump sum payment.
-NOT tax deffered
-pays a death beneift
-benefits are NOT taxable income when received
-typically bought anywhere from age 25-50
2. Whole Life Insurance
-provides income for dependents or meet estate planning needs
-pays out when you die, borrow the cash value, or surrender the policy
-typical payment form is a single-lump-sum payment
-typically bought anywhere from age 30-60
-tax deffered and accumulates money
-pays a death benefit
-benefits are NOT taxable income when received unless a cash value withdrawal
exceeds the sum of premiums
3. Deferred annuities
-accumulates money in a tax-deffered product
-pays out when you make withdrawls
-typical payment is a single sum or income
-typically bought anywhere from age 40-65
-accumulates money and tax deferred
-pays a death benefit
-benefits are taxable income when received, but only the part derived from investment
income
4. Immediate annuities
-assures that you won't "outlive your income:
-pays out one period after you buy the annuity, and stops paying when you die
-typical payment form is lifetime income
-buyers age when bought is anywhere from 55-80
-accumulates money and tax deferred ONLY in the early payout years
, -pays a death benefit. payments continue if the annuity has a guaranteed-period option
that has NOT expired at the annuitants death
-benefits are taxable income when received but ONLY the part derived from investment
income
When a deferred annuity is surrendered, who must sign the authorization to do so? -
Correct Answers -owner
contract owner exclusively has the power to surrender the cash value of any annuity
In Arizona, an insurer discontinues offering a particular type of small group medical
coverage. Participants must receive advance notice of at least - Correct Answers -180
days
if an insurer discontinues offering a particular type of small group medical coverage,
participants MUST receive advance notice of at least 180 days
The surrender charge on many deferred annuity contracts are waived when the -
Correct Answers -annuitant dies or becomes disabled
many deferred annuity contracts waive the surrender charge when the annuitant dies or
becomes disabled
Which of the following is NOT a dividend option for a life insurance policy? - Correct
Answers -receiving the entire policy cash value
the following ARE dividend options for a life insurance policy:
-elect to take the dividends in cash
-allow the dividends to accumulate with interest
-use the dividends to pay all or part of the next premium due
Fee-for-service is a method of administering health insurance benefit payments in which
- Correct Answers -the cost of each service is scheudled.
Fee-For-Service (FFS) is a payment model where services are un-bundled and paid for
separately according to a schedule laid out in the policy
In health care, it gives an incentive for physicians to provide more treatments because
payment is dependent on the QUANTITY of care, rather than QUALITY of care.
After an insurance application has been originated, the producer normally - Correct
Answers -is the major personal contact to the insured
A life insurance illustration showing future premiums being paid out of nonguaranteed
values must disclose that - Correct Answers -the policy owner may need to resume
premium payments depending on actual results.
