Life & Health Insurance Academic Essay

Pros and Cons of Light Drug Legalization
July 15, 2021
Lou employs Patty as a paralegal. Patty is a former lawyer who was disbarred years ago. Lou asks Patty to distribute these brochures at local hospitals, doctors offices, and other public locations. At a local hospital, Patty hands one of these brochures to Christy. Christy takes the brochure and later calls Patty. Christy tells Patty that Dr. Don has mistreated her terribly and that she needs help. Patty obtains from Christy the facts of Christys case and tells Christy that Patty will research the law and get back to her regarding whether or not Patty will agree to represent her.
July 15, 2021

Life & Health Insurance

1) A provision contained in most group medical expense policies that applies when a claim is covered by more than one policy is known as:

A:Utilization Management
B: Coordination of Benefits(COB)
C: Case Management
D: Retrospective Review

2) What are the tax implications when an annuitant elects to take cash surrender of a deferred annuity during the accumulation period at age 56:

A: Only the interest is taxable as ordinary income, plus a 10% early withdrawal penalty
B: All the funds distributed are taxable as ordinary income
C: All of the funds distributed are taxable as a capital gain
D: Only the interest is taxable as ordinary income

3) Which life insurance rider allows policy proceeds to be paid out prior to the insured’s death:

A: Accelerated benefits
B: Cash surrender
C: Paid up aIDitions
D: Automactic premium loan

4) An insured paid $4,000 in premiums on his whole life policy over a period of time. When his cash value equaled $6,500, he elected to take cash surrender. How much is taxable:

A: $2,500
B: $4,000
C: None, life insurance benefits are never taxable
D: $6,500

5)An annuitant has paid monthly premiums into a deferred annuity over a period of time totaling $20,000. Due to tax deferred earnings in the account, his account balance at age 60 is $30,000. If he now takes a partial withdrawal of

$5,000, how much is taxable:
C:None, since he withdrew less than his cost basis
D: None, since benefits of life insurance products are never taxable

6)Premiums paid by self employed sole proprietors or partners for medical expense insurance are:

A: Partially tax deductible
B: Totally tax deductible
C: Not tax deductible
D: Taxable

7) All of the following are true about immediate annuities EXCEPT:

A: They are often used in structured settlements
B: There is no beneficiary
C: They pay for the lifetime of the annuitant
D: There is no accumulation period

8) The penalty for taking a policy loan as a premature distribution on a life insurance policy that has been classified as a Modified Endowment Contract (MEC) is:

A: 10%
B: 7 and 1/2%
C: 5%
D: None, life insurance policies are not subject to early withdrawal penalties

9) A health insurance claim occurs on May 30th, but the policy lapses on June 1st. If the claim is not turned in until June 8th, what will the insurer do:

A: Pay the claim
B: Deny the claim
C: Pay the claim, but subtract the overdue premium
D: Pay the claim, but send a bill for the overdue premium

10) When an insurer requires pre-authorization prior to hospitalization, all are true EXCEPT:

A: Overall insurer expenses will probably increase
B: Unnecessary hospitalization may be avoided
C: Specifically, pre-authorization is a form of prospective review
D: Pre-authorization is a form of Utilization Management

11) All of the following are true regarding the tax implications of health insurance EXCEPT:

A: Premiums paid by the employer for a group health policy are not tax deductible
B: Benefits received from an individual Disability Income policy are not taxable
C: Benefits received by an employer from a Key Person disability policy are not taxable
D: Medical expense premiums paid by a sole proprietor are partially tax deductible

12) Disability Income (DI) benefits are not subject to income taxation EXCEPT for:

A: Individual DI
B: Partnership Buy Out DI
C: Group DI
D: Key Person D

13) Mr. Baugh elects to make a direct rollover of his traditional IRA from one trustee to another trustee at age 35. How is this taxed:

A: Income taxes are incurred, but the 10% IRS penalty is waived
B: All is taxed as capital gain in the year of the rollover
C: All is taxed as ordinary income in the year of the rollover
D: There is no current tax implication

14) A rider aIDed to a life policy to create coverage for the entire family is called a:

A: Family income rider
B: Family term rider
C: Family maintenance rider
D: Other insured rider

15) If a subscriber goes out of network for PPO (Preferred Provider Organization) services:

A: Only emergencies are covered
B: There is no coverage
C: Coverage is not affected
D: The amount of coverage may be reduced

16) All of the following are true regarding Key Employee Disability Income insurance, EXCEPT:

A: The employer owns the policy
B: Premiums are not tax deductible for the employer
C: Benefits are taxable to the employer
D: Benefits are payable to the employer to retrain a new person

17) An HMO utilization management technique known as “concurrent review” requires:

A: A second opinion
B: Assignment of a case worker to an ongoing claim
C: Pre-authorization
D: An initial consultation with a primary care physician

18) Annuities are underwritten by:

A: Securities firms
B: Insurance companies
C: Banks
D:Insurance Agents

19) All of the following are true about Medicaid EXCEPT:

A: It is based upon financial need, regardless of age
B: It is subsidized by both state and federal monies
C: It is sold by private insurers
D: It is not part of Medicare

20) All of the following are true regarding PPOs EXCEPT:

A: The amount of coverage is reduced for out of network services
B: Employers may offer a PPO as well as a traditional indemnity plan to employees
C: They may only be operated by hospitals
D: They may be operated by insurance companies

21) If an insurer allows an insured to violate one of the conditions of the policy, they cannot at a later time void the policy because the condition was violated, under the doctrine of:

A: Alienation
B: Adhesion
C: Estoppel
D: Evidence

22) Medical expense benefits received by a partner or sole proprietor are:

A: Partially taxable
B: Proportionately taxable
C: 100% taxable
D: Not taxable

23) An employee pays that portion of the group disability premium attributable to Residual Disability benefits and the employer pays the balance. If the employee has a claim for Residual Disability, how will the benefits paid out be taxed to the employee:

A: 100% taxable to the employee, since this is a contributory plan
B: 100% taxable to the employee, since this is a group disability income plan
C: Taxable as ordinary income, based upon a proportionate IRS formula
D: Not taxable, since the employee paid for that portion of the coverage

24) A “cancelable” policy of health insurance may be cancelled by:

A: The insurer only
B: The insured only
C: Either the insurer or the insured
D: The agent, insurer or the insured

25) A client wishing to take cash surrender on a deferred annuity during the accumulation period would be exercising a required contractual provision known as:

A: Right of exchange
B: Non-forfeiture
C: Settlement option
D: Loan privilege

26) Which life insurance rider allows the insured to purchase aIDitional amounts of insurance at specified intervals in the future without a physical exam:

A: Paid up option
B: Accidental death benefit
C: Guaranteed insurability
D: Extended term option

27) All of the following could disqualify you from group insurance eligibility EXCEPT:

A: Attaining age 65
B: Labor Union membership
C: Independent contractor status
D: Part time employment

28) If a person exiting a streetcar elects to leap down the steps and breaks his ankle:

A: The broken ankle would be considered intentional and foreseen
B: The leap was intentional, but the injury was unforeseen
C: The resulting injury would be covered only by an A/D and D policy
D: The would be no coverage, since the leap was intentional

29) On life insurance, the Misstatement of Age clause permits:

A: The premium to be adjusted to reflect the correct age
B: The insurer to void a claim during the first 2 years due to misrepresentation
C: The face amount to be paid at death, less any overdue incorrect premiums
D: The face amount to be adjusted to what the correct premium would have purchased

30) The amount of annuity benefits included in the value of the estate of a deceased “life income only” annuitant is:

A: Zero
B: The amount of future benefits to be paid
C: The interest earned in the annuity account
D: The amount of the premium paid

31) On a Major Medical plan, all are true about co-insurance EXCEPT:

A: It helps hold down the cost of insurance premiums
B: It prevents over utilization of insurance coverages
C: It requires the insured to pay a portion of the claim, after the deductible
D: It requires the insured to pay a portion of the claim, before the deductible

32) All of the following are true about a Multiple Employer Trust (MET) EXCEPT:

A: The trustee is the policyholder
B: Enrollees are given a “Joinder Agreement”
C: Employees must purchase all coverages offered by the trust
D: They are for small employers in the same type of business

33) Annuities are commonly used for all of the following EXCEPT:

A: To provide income in the event of total disability
B: To fund structured settlements
C: To supplement retirement income
D: To fund deferred compensation plans

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Posted on May 9, 2016Author TutorCategories Question, Questions



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