L&H STATE EXAM MD 2 QUESTIONS AND ANSWERS
Which is NOT necessary for Medicare Part A to cover the cost of skilled nursing care? - CORRECT
ANSWER✅✅✅Admission to the facility must occur within 30 days of hospital discharge.
Care at the facility must be related to the care at the hospital.
The stay at the skilled nursing facility must be for at least three days.
=>The patient must have supplementary health insurance.
Which of the following statements about universal life insurance (UL) cash value withdrawals is correct?
- CORRECT ANSWER✅✅✅Universal life insurance policy cash value withdrawals are possible either
through policy loans or partial surrenders.
Withdrawals are limited to 50 percent or less of the total cash value.
=>Regardless of withdrawn amounts, a UL policy will continue in force as long as the remaining cash
value can cover the monthly deductions.
Withdrawals can be in any amount, with no minimum amount requirements.
Explanation:
Manny lost both legs in a motorcycle accident. His health insurance policy paid double the normal
benefits due to the accident. Which type of rider does Manny's policy contain? - CORRECT
ANSWER✅✅✅indemnity rider
=>double indemnity rider
accidental death and negligence rider
accidental injury rider
Are group medical expense insurance benefits paid to employees taxable income to the employer who
pays the premium? - CORRECT ANSWER✅✅✅Yes, employers pay income tax on these benefits.
=>No, benefits paid to an employee are not taxable income to the employer.
Yes, both employers and employees pay income tax on these benefits.
No, only employees pay income tax on these benefits.
Joan owns a variable universal life insurance policy that now has a $100,000 cash value and is beyond its
surrender charge period. This year, she plans to withdraw $25,000 from her policy's cash value to buy a
,new car. Which one of the following statements is most correct? - CORRECT ANSWER✅✅✅Joan
must pay a penalty tax for taking an early withdrawal from her cash value.
=>Joan's death benefit will be reduced by $25,000.
Joan can make the withdrawal but will have to pay it back with interest.
Joan can have access to her cash value only through a policy loan or a complete surrender of the policy.
Which of the following is the primary regulator of those who sell variable life insurance? - CORRECT
ANSWER✅✅✅state insurance departments only
Financial Industry Regulatory Authority (FINRA) only
=>state insurance departments and Financial Industry Regulatory Authority (FINRA)
The Securities Exchange Commission (SEC)
What is the main appeal of joint life insurance? - CORRECT ANSWER✅✅✅higher death benefit
=>lower cost
renewal feature
ability to cover an entire family
A person who is insured under a managed care plan is considered a: - CORRECT
ANSWER✅✅✅subject
client
patient
=>member
Written rules for how claims and appeals are handled must be fair and timely in accordance with ERISA's
requirements for: - CORRECT ANSWER✅✅✅information disclosure
accountability
=>claims procedures and appeals
administration
, The Family and Medical Leave Act (FMLA) protects the employment status of certain employees on
unpaid leave for up to how long? - CORRECT ANSWER✅✅✅=>12 weeks per year
12 weeks per employer
24 weeks per year
24 weeks per employer
Which one of the following statements about non-qualified deferred compensation plans is most
correct? - CORRECT ANSWER✅✅✅=>The basic purpose of a deferred compensation plan is to defer
the receipt of compensation until one is in a lower tax bracket and will pay lower taxes.
The executive will receive the deferred compensation when he or she changes jobs.
If the executive dies before retirement, his or her heirs will not receive any of the deferred
compensation.
Life insurance is never used with deferred compensation plans.
Agent Jill received a letter from the Administration asking her to submit verification of having completed
the continuing education requirements for the previous licensing period. Jill did not respond. What
action may the Administration take against her? - CORRECT ANSWER✅✅✅a fine of up to $100 per
day no response is provided
a fine of up to $10,000 total
termination of her agent's appointment
=>nonrenewal of Jill's license
If an applicant submits the first premium payment with an application for life insurance, the agent may
give the applicant a temporary insurance receipt that does which of the following? - CORRECT
ANSWER✅✅✅=>offers interim coverage while the insurer approves the application and formally
issues the policy
issues permanent coverage for the applicant
guarantees that the insurer will accept the application
states the insurer's refund policy
ABC Insurers orders a consumer report on an applicant for an individual health insurance policy. Which
of the following must the applicant receive, according to the Fair Credit Reporting Act? - CORRECT
ANSWER✅✅✅disclosure statement that the applicant must sign
Which is NOT necessary for Medicare Part A to cover the cost of skilled nursing care? - CORRECT
ANSWER✅✅✅Admission to the facility must occur within 30 days of hospital discharge.
Care at the facility must be related to the care at the hospital.
The stay at the skilled nursing facility must be for at least three days.
=>The patient must have supplementary health insurance.
Which of the following statements about universal life insurance (UL) cash value withdrawals is correct?
- CORRECT ANSWER✅✅✅Universal life insurance policy cash value withdrawals are possible either
through policy loans or partial surrenders.
Withdrawals are limited to 50 percent or less of the total cash value.
=>Regardless of withdrawn amounts, a UL policy will continue in force as long as the remaining cash
value can cover the monthly deductions.
Withdrawals can be in any amount, with no minimum amount requirements.
Explanation:
Manny lost both legs in a motorcycle accident. His health insurance policy paid double the normal
benefits due to the accident. Which type of rider does Manny's policy contain? - CORRECT
ANSWER✅✅✅indemnity rider
=>double indemnity rider
accidental death and negligence rider
accidental injury rider
Are group medical expense insurance benefits paid to employees taxable income to the employer who
pays the premium? - CORRECT ANSWER✅✅✅Yes, employers pay income tax on these benefits.
=>No, benefits paid to an employee are not taxable income to the employer.
Yes, both employers and employees pay income tax on these benefits.
No, only employees pay income tax on these benefits.
Joan owns a variable universal life insurance policy that now has a $100,000 cash value and is beyond its
surrender charge period. This year, she plans to withdraw $25,000 from her policy's cash value to buy a
,new car. Which one of the following statements is most correct? - CORRECT ANSWER✅✅✅Joan
must pay a penalty tax for taking an early withdrawal from her cash value.
=>Joan's death benefit will be reduced by $25,000.
Joan can make the withdrawal but will have to pay it back with interest.
Joan can have access to her cash value only through a policy loan or a complete surrender of the policy.
Which of the following is the primary regulator of those who sell variable life insurance? - CORRECT
ANSWER✅✅✅state insurance departments only
Financial Industry Regulatory Authority (FINRA) only
=>state insurance departments and Financial Industry Regulatory Authority (FINRA)
The Securities Exchange Commission (SEC)
What is the main appeal of joint life insurance? - CORRECT ANSWER✅✅✅higher death benefit
=>lower cost
renewal feature
ability to cover an entire family
A person who is insured under a managed care plan is considered a: - CORRECT
ANSWER✅✅✅subject
client
patient
=>member
Written rules for how claims and appeals are handled must be fair and timely in accordance with ERISA's
requirements for: - CORRECT ANSWER✅✅✅information disclosure
accountability
=>claims procedures and appeals
administration
, The Family and Medical Leave Act (FMLA) protects the employment status of certain employees on
unpaid leave for up to how long? - CORRECT ANSWER✅✅✅=>12 weeks per year
12 weeks per employer
24 weeks per year
24 weeks per employer
Which one of the following statements about non-qualified deferred compensation plans is most
correct? - CORRECT ANSWER✅✅✅=>The basic purpose of a deferred compensation plan is to defer
the receipt of compensation until one is in a lower tax bracket and will pay lower taxes.
The executive will receive the deferred compensation when he or she changes jobs.
If the executive dies before retirement, his or her heirs will not receive any of the deferred
compensation.
Life insurance is never used with deferred compensation plans.
Agent Jill received a letter from the Administration asking her to submit verification of having completed
the continuing education requirements for the previous licensing period. Jill did not respond. What
action may the Administration take against her? - CORRECT ANSWER✅✅✅a fine of up to $100 per
day no response is provided
a fine of up to $10,000 total
termination of her agent's appointment
=>nonrenewal of Jill's license
If an applicant submits the first premium payment with an application for life insurance, the agent may
give the applicant a temporary insurance receipt that does which of the following? - CORRECT
ANSWER✅✅✅=>offers interim coverage while the insurer approves the application and formally
issues the policy
issues permanent coverage for the applicant
guarantees that the insurer will accept the application
states the insurer's refund policy
ABC Insurers orders a consumer report on an applicant for an individual health insurance policy. Which
of the following must the applicant receive, according to the Fair Credit Reporting Act? - CORRECT
ANSWER✅✅✅disclosure statement that the applicant must sign
