PSI NY Life, Accident and Health Practice Exam 17-55 (TEST STUDY SET)

PSI NY Life, Accident and Health Practice Exam 17-55 (TEST STUDY SET) 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? - CORRECT ANSWER-Free Look When will a policy pay on a UCR basis? - CORRECT 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? - CORRECT ANSWER-long term care rider Which of the following is exempted from the incontestability provision in insurance policies? - CORRECT ANSWER-Fraudulent misstatements What does first dollar coverage mean? - CORRECT ANSWER-As soon as covered medical expenses are incurred, the policy begins to pay What is the waiver of premium provision? - CORRECT 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 - CORRECT ANSWER-for claims involving periodic payments Which is a disadvantage to a flexible premium annuity? - CORRECT 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 - CORRECT 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? - CORRECT 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? - CORRECT 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? - CORRECT ANSWERInsurer 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: - CORRECT ANSWER-2 year period What does coinsurance mean? - CORRECT 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? - CORRECT 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? - CORRECT ANSWER-The policy owner has named an irrevocable beneficiary Which of the following refers to how often a premium is paid? - CORRECT ANSWERMode All of the following are common exclusions from loss found in disability income policies EXCEPT for that incurred while - CORRECT ANSWER-Committing a misdemeanor At which point are contractual death benefit settlement options determined and by whom are they determined? - CORRECT ANSWER-At the time the policy is purchased by the owner of the policy All of the following are ownership rights EXCEPT - CORRECT ANSWER-Switching the policy from one insured to another All of the following are TRUE regarding incomplete applications EXCEPT - CORRECT 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 - CORRECT ANSWER-Medical underwriting exam All of the following are required signatures on a life insurance application EXCEPT - CORRECT ANSWER-The minor in a juvenile policy Why are insurance policies considered conditional contracts? - CORRECT ANSWERCertain conditions need to be met to make the contract legally enforceable. When does insurable interest come into play in a life insurance policy? - CORRECT 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? - CORRECT ANSWER-the underwriting process begins Obtaining consumer information reports under false pretenses is prosecutable by which of the following? - CORRECT ANSWER-Fair Credit Reporting Act What is the purpose of Stranger-originated life insurance (STOLI)? - CORRECT ANSWER-the policy is originated primarily or solely for the purpose of resale All of the following are classifications of risk EXCEPT - CORRECT ANSWER-nonnicotine What specific new procedures does the USA Patriot Act require of insurance companies? - CORRECT 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? - CORRECT ANSWER-The applicant and possibly the agent initial any changes made. What is a MIB report? - CORRECT ANSWER-medical information on an applicant for assessing life or health insurance risk How do warranties differ from representations? - CORRECT 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 - CORRECT ANSWER-the treatment procedures that are covered by the policy. Which of the following was specifically designed to address STOLI and IOLI practices? - CORRECT ANSWER-NCOIL Act Why is rehabilitation considered worthy of federal help under workers' compensation? - CORRECT 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? - CORRECT ANSWERThe 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 - CORRECT 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? - CORRECT ANSWER-key person insurance All of the following are tax qualified retirement plans EXCEPT - CORRECT ANSWERSection 529 plan. Why is relying solely on employer group life insurance generally considered inadequate for most individual's needs? - CORRECT 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? - CORRECT ANSWER-age When can the premiums of an individually owned health insurance policy be deducted from the individual's income tax? - CORRECT 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? - CORRECT ANSWER-100% Short term disability insurance generally only covers injuries due to which of the following? - CORRECT ANSWER-Non-occupational injuries Managed care plans increase efficiency by all of the following means EXCEPT - CORRECT 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? - CORRECT ANSWER-When a third-party applicant names themselves beneficiary Which of the following is characteristic of a nonqualified plan? - CORRECT ANSWERplan does not meet federal guidelines for tax benefits In a home healthcare benefit, all of the following are eligible expenses EXCEPT - CORRECT ANSWER-blood transfusions All of the following are requirements to qualify for Social Security disability benefits EXCEPT when - CORRECT 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? - CORRECT ANSWER-2 years Which of the following amends the Social Security Act to make Medicare secondary to group health plans? - CORRECT ANSWER-TEFRA