ALAHI - Arizona Life Accident and Health Insurance Exam

Question 21: A beneficiary leaves life insurance proceeds with the insurer under a settlement option and receives periodic payments that include interest the insurer credits on the retained principal. Which of the following describes the tax treatment of those payments?

The interest portion is taxable

Only the principal portion is taxable

The entire payment is tax free

Both principal and interest are taxable

Question 22: An individual who owns a personal life insurance policy asks whether the premiums may be claimed as a deduction on a federal income tax return. Which of the following describes the deductibility of premiums on personal life insurance?

Deductible only for permanent policies

Fully deductible in every case

Deductible only above a threshold

Not deductible as a personal expense

Question 23: A participating whole life policyowner receives annual policy dividends in cash and wonders whether those payments must be reported as income on a federal tax return. Which of the following describes the usual federal tax treatment of such dividends?

Taxable only if reinvested in additions

Taxable as ordinary income when received

Not taxable until they exceed premiums paid

Taxable as long term capital gain

Question 24: A policyowner funds a new permanent policy so rapidly that cumulative premiums during the first seven years exceed the federal limit, and the policy is reclassified for tax purposes. Which of the following describes what the policy has become?

An endowment at maturity

A single premium term policy

A variable universal contract

A modified endowment contract

Question 25: A policyowner wants to move the accumulated value of an existing life policy into a new annuity contract without triggering current federal income tax on the gain that has built up. Which of the following provisions permits this?

An installment sale election

A tax free exchange provision

A rollover under the pension rules

A charitable remainder transfer

Question 26: A newly eligible beneficiary is told that one part of Medicare covers inpatient hospital stays, skilled nursing facility care following a qualifying hospital stay, home health services and hospice care. Which of the following parts of Medicare provides those benefits?

Part A

Part D

Part B

Part C

Question 27: A Medicare beneficiary needs coverage for physician visits, outpatient hospital services, laboratory tests and durable medical equipment, and pays a monthly premium to the program for that protection. Which of the following parts of Medicare provides these benefits?

Part A

Part D

Part B

Part C

Question 28: A Medicare beneficiary enrolls with a private plan that delivers all hospital and medical benefits through a managed care network, and that plan often adds prescription drug coverage in the same contract. Which of the following describes this arrangement?

Medicare Part C

Medicaid coverage

Medicare Part A

A Medicare supplement policy

Question 29: A Medicare beneficiary enrolls in a stand alone plan offered by a private insurer that covers outpatient prescription medications filled at a retail pharmacy near home each month. Which of the following parts of Medicare does this plan represent?

Part A

Part D

Part C

Part B

Question 30: A candidate is asked which groups qualify for Medicare besides people who have simply reached the program's ordinary entry age, since program eligibility is broader than age alone. Which of the following identifies an additional qualifying group for coverage?

Anyone retired from full time work

People enrolled in an employer retiree plan

Anyone with limited income and resources

Disability beneficiaries after a qualifying period

Question 31: A retiree enrolled in original Medicare buys a private policy that is designed to pay the deductibles, copayments and coinsurance amounts that Medicare itself leaves to the beneficiary. Which of the following describes the policy this retiree purchased?

A Medicaid spend down plan

A Medicare supplement policy

A long term care policy

A Medicare Advantage plan

Question 32: A newly enrolled Medicare beneficiary is told that during one limited window an insurer must sell a Medicare supplement policy without regard to the applicant's health history. Which of the following describes the significance of that open enrollment window?

It bars medical underwriting for applicants

It allows unlimited policy switching for life

It guarantees the lowest available premium

It permits enrollment in Part D only

Question 33: A shopper comparing Medicare supplement policies from three different insurers discovers that a plan carrying a given letter provides identical benefits no matter which company happens to issue it. Which of the following explains this uniformity across insurers?

The federal government issues the policies

Each insurer files its own unique benefits

The plans are standardized by model regulation

State law fixes each letter's premium

Question 34: An insurer wants to market a Medicare supplement policy in Arizona whose premium increases each year as the insured grows older. A compliance officer flags the design. Which of the following describes Arizona's position on that rating method?

Arizona permits it with prior approval

Arizona requires attained age rating

Arizona permits it for standardized plans only

Arizona prohibits attained age rating

Question 35: An Arizona rule adopts an external model regulation for Medicare supplement insurance rather than writing out the standards itself, and it specifies a frozen edition with no future editions included. Which of the following describes what Arizona has done?

Repealed all Medicare supplement regulation

Adopted the model by incorporation with modifications

Deferred entirely to federal agency rules

Delegated rulemaking to private insurers

Question 36: A candidate must identify the program that is jointly funded by the federal and state governments and that pays for medical care for people whose income and resources fall below stated limits. Which of the following programs is described?

Medicare

Social Security disability insurance

Medicaid

A Medicare supplement policy

Question 37: A long term care policy begins paying benefits when the insured can no longer perform a stated number of basic self care tasks such as bathing, dressing, eating, toileting, transferring and continence. Which of the following describes these tasks?

Activities of daily living

Instrumental activities

Cognitive impairment measures

Custodial care services

Question 38: A long term care policy distinguishes among daily nursing services ordered by a physician, occasional therapy or nursing supervision, and help with basic personal tasks requiring no medical training. Which of the following lists those three levels in order?

Acute, subacute, residential

Intermediate, custodial, skilled

Custodial, skilled, intermediate

Skilled, intermediate, custodial

Question 39: A long term care policyowner learns that benefits will not begin until care has been received for a stated number of days following the first qualifying day of service. Which of the following provisions creates this waiting requirement?

The free look period

The elimination period

The probationary period

The benefit period

Question 40: A family assumes Medicare will pay indefinitely for a parent's custodial nursing home stay in Prescott, and a producer explains why that assumption is mistaken. Which of the following best describes Medicare's coverage of long term custodial care?

It covers custodial care for life

It covers custodial care after a deductible

It covers custodial home care only

It does not cover purely custodial care

ALAHI Arizona Life Accident and Health Insurance Exam - Set 4 - Part 2

Question 21: A beneficiary leaves life insurance proceeds with the insurer under a settlement option and receives periodic payments that include interest the insurer credits on the retained principal. Which of the following describes the tax treatment of those payments?

Question 22: An individual who owns a personal life insurance policy asks whether the premiums may be claimed as a deduction on a federal income tax return. Which of the following describes the deductibility of premiums on personal life insurance?

Question 23: A participating whole life policyowner receives annual policy dividends in cash and wonders whether those payments must be reported as income on a federal tax return. Which of the following describes the usual federal tax treatment of such dividends?

Question 24: A policyowner funds a new permanent policy so rapidly that cumulative premiums during the first seven years exceed the federal limit, and the policy is reclassified for tax purposes. Which of the following describes what the policy has become?

Question 25: A policyowner wants to move the accumulated value of an existing life policy into a new annuity contract without triggering current federal income tax on the gain that has built up. Which of the following provisions permits this?

Question 26: A newly eligible beneficiary is told that one part of Medicare covers inpatient hospital stays, skilled nursing facility care following a qualifying hospital stay, home health services and hospice care. Which of the following parts of Medicare provides those benefits?

Question 27: A Medicare beneficiary needs coverage for physician visits, outpatient hospital services, laboratory tests and durable medical equipment, and pays a monthly premium to the program for that protection. Which of the following parts of Medicare provides these benefits?

Question 28: A Medicare beneficiary enrolls with a private plan that delivers all hospital and medical benefits through a managed care network, and that plan often adds prescription drug coverage in the same contract. Which of the following describes this arrangement?

Question 29: A Medicare beneficiary enrolls in a stand alone plan offered by a private insurer that covers outpatient prescription medications filled at a retail pharmacy near home each month. Which of the following parts of Medicare does this plan represent?

Question 30: A candidate is asked which groups qualify for Medicare besides people who have simply reached the program's ordinary entry age, since program eligibility is broader than age alone. Which of the following identifies an additional qualifying group for coverage?

Question 31: A retiree enrolled in original Medicare buys a private policy that is designed to pay the deductibles, copayments and coinsurance amounts that Medicare itself leaves to the beneficiary. Which of the following describes the policy this retiree purchased?

Question 32: A newly enrolled Medicare beneficiary is told that during one limited window an insurer must sell a Medicare supplement policy without regard to the applicant's health history. Which of the following describes the significance of that open enrollment window?

Question 33: A shopper comparing Medicare supplement policies from three different insurers discovers that a plan carrying a given letter provides identical benefits no matter which company happens to issue it. Which of the following explains this uniformity across insurers?

Question 34: An insurer wants to market a Medicare supplement policy in Arizona whose premium increases each year as the insured grows older. A compliance officer flags the design. Which of the following describes Arizona's position on that rating method?

Question 35: An Arizona rule adopts an external model regulation for Medicare supplement insurance rather than writing out the standards itself, and it specifies a frozen edition with no future editions included. Which of the following describes what Arizona has done?

Question 36: A candidate must identify the program that is jointly funded by the federal and state governments and that pays for medical care for people whose income and resources fall below stated limits. Which of the following programs is described?

Question 37: A long term care policy begins paying benefits when the insured can no longer perform a stated number of basic self care tasks such as bathing, dressing, eating, toileting, transferring and continence. Which of the following describes these tasks?

Question 38: A long term care policy distinguishes among daily nursing services ordered by a physician, occasional therapy or nursing supervision, and help with basic personal tasks requiring no medical training. Which of the following lists those three levels in order?

Question 39: A long term care policyowner learns that benefits will not begin until care has been received for a stated number of days following the first qualifying day of service. Which of the following provisions creates this waiting requirement?

Question 40: A family assumes Medicare will pay indefinitely for a parent's custodial nursing home stay in Prescott, and a producer explains why that assumption is mistaken. Which of the following best describes Medicare's coverage of long term custodial care?

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