PSI Life, Accident, Health Practice Exam Questions and Answers (Graded A)

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Which is an ACCURATE statement regarding benefits of Medicare supplement and Medicare select plans? 1 The insurer is able to cancel, or deny renewal of an existing policy, based solely on the heal... th of the insured. 2 There is no restriction for benefits after the coverage has been in effect for six months when involving a preexisting condition. 3 The coverage for a loss from an illness or disease is treated differently than for a loss resulting from an injury due to an accident. 4 The coverage for a spouse cannot be terminated for any reason, including for nonpayment of premiums. - ANSWER 2 There is no restriction for benefits after the coverage has been in effect for six months when involving a preexisting condition. How is the insurance commissioner chosen? 1 Elected by the people. 2 Appointed by the Governor 3 Selected by a vote in the House and the Senate. 4 Randomly selected from a list of qualified candidates. - ANSWER 1 Elected by the people. An insurance agent is a person who transacts all of the following types of insurance EXCEPT: 1 annuities. 2 homeowners. 3 auto insurance. 4 life insurance. - ANSWER 4 life insurance. The California Legislature declared all of the following when creating the Healthy Families Program EXCEPT: 1 that most uninsured children come from low-income families. 2 lack of educational resources for children and their parents leads to increased medical expenses. 3 that lack of insurance coverage for children results in reduced access to medical services. 4 when a child is seriously ill or injured, the costs of needed medical care can force families into financial ruin. - ANSWER 2 lack of educational resources for children and their parents leads to increased medical expenses. Which of the following BEST defines the general concept of the 24-hour care plan? 1 It integrates workers compensation medical care with the care provided by group health insurance. 2 It provides immediate medical care from any source for injuries on which occur on the job. 3 It permits non job related injuries to be treated through the worker?s compensation program. 4 It pays any medical bill from a job related injury for services within the first 24 hours of the injury. - ANSWER 1 It integrates workers compensation medical care with the care provided by group health insurance. How does an "admitted" person differ from an "nonadmitted" person, as it pertains to insurance? 1 An "admitted" person has admitted to a crime or fraud, while a "nonadmitted" person has not. 2 An "admitted" person has been granted admission to an insurance association, while a "nonadmitted" person has not been accepted. 3 An "admitted" person has been admitted to an accreditation program, while a "nonadmitted" person has yet to earn the credits. 4 An "admitted" person has the right to transact insurance business within the state, while a "nonadmitted" person is not entitled to this action. - ANSWER 4 An "admitted" person has the right to transact insurance business within the state, while a "nonadmitted" person is not entitled to this action. When may a licensee surrender for cancellation any license under which they are permitted to act? 1 upon renewal of the license 2 within 60 days of renewal of their license 3 at any time 4 when they no longer have any clients with policies in force - ANSWER 3 at any time When does a disability policy become incontestable as to the statements contained in the application? 1 After this policy been in force for a period of one year during the lifetime of the insured. 2 After this policy been in force for a period of two years during the lifetime of the insured. 3 When the company has confirmed all of the statements and issued a binding contract. 4 Two years after the date of the application when a conditional receipt has been issued. - ANSWER 2 After this policy been in force for a period of two years during the lifetime of the insured. Which statement describes the intent of the California Financial Information Privacy Act? 1 It enables and authorizes the Gramm-Leach-Bliley Act into California legal system. 2 It permits civil lawsuits against financial institutions who violate the Gramm-Leach-Bliley Act. 3 It provides greater privacy protections than those provided in the federal Gramm-Leach-Bliley Act. 4 It permits greater flexibility to financial institutions than privacy protections enacted in Gramm-Leach-Bliley Act. - ANSWER 3 It provides greater privacy protections than those provided in the federal Gramm-Leach-Bliley Act. All of the following are TRUE about the rules regarding the sale of life insurance and annuities to seniors age 65 or older EXCEPT 1 the senior is entitled to have others present during any presentation by an agent, broker or insurer. 2 all insurance brokers, agents, or insurers owe a prospective insured at 65 years or older a duty of honesty, good faith, and fair dealing. 3 the agent, broker or insurer is required to show a copy of their insurance license with name, address, and phone number when conducting business in the senior's home. 4 advance notice must be provided to the senior disclosing and identifying details of the visit and the agent or broker prior to the scheduled meeting. - ANSWER 3 the agent, broker or insurer is required to show a copy of their insurance license with name, address, and phone number when conducting business in the senior's home. All of the following are a duty of an insurer in regards to claims on file and record documentation EXCEPT 1 maintaining claim data so that an insurer shall be able to provide the claim number, line of coverage, and other pertinent data. 2 recording the date the licensee received, date(s) the licensee processed and date the licensee transmitted or mailed every material and relevant document in the file. 3 maintaining any sales material, which had a material impact on the claims process. 4 maintaining claim files that are accessible, legible, and claim of duplication. - ANSWER 3 maintaining any sales material, which had a material impact on the claims process. "Person" means all of the following EXCEPT 1 an association. 2 a corporation. 3 a business trust. 4 an organizational trust. - ANSWER 4 an organizational trust. Which of the following may be insured against? 1 Disability. 2 Accidental death. 3 Wagering losses. 4 Catastrophic losses. - ANSWER 3 Wagering losses. When is it allowable for a written application for any disability policy to be altered? 1 by the insurer, for administrative purposes only, when it is clear that the applicant has not made the insertions 2 by the agent who notices an error that is in disagreement with written information on file for that applicant 3 by an agent who verbally notifies the insured, for commission adjustments, of the reasons for the suggested alterations 4 by the insurer, to record such changes as to modify the application to meet all requirements of the California Insurance Code - ANSWER 1 by the insurer, for administrative purposes only, when it is clear that the applicant has not made the insertions Which is an ACCURATE statement regarding dependent coverage under a group insurance policy? 1 The coverage lasts from birth until age 18. 2 The coverage must not exceed more than 50 percent of the coverage for the insured employee. 3 The coverage must not exceed more than 100 percent of the coverage for the insured employee. 4 The coverage is not intended to cover preexisting medical conditions for the proposed dependent. - ANSWER 3 The coverage must not exceed more than 100 percent of the coverage for the insured employee. When a replacement policy is being considered, what is required from an insurer? 1 A notarized statement acknowledging reasons for replacement and identification information, signed by the applicant and the agent are required. 2 A price comparison breaking down the cost of the new coverage and the coverage that it will replace, including annual dividend statements is required to avoid penalties. 3 The agent is required to send a replacement notice within 60 days of the application to the insurer for any existing coverage that may be replaced by the new policy. 4 A list of existing policies, replacement notice signed by the applicant and the agent, and a notice sent to any existing insurers that replacement is possible are all requirements. - ANSWER A list of existing policies, replacement notice signed by the applicant and the agent, and a notice sent to any existing insurers that replacement is possible are all requirements. How can a licensee surrender any license for cancellation? 1 By posting a written statement on their website. 2 By calling the Department of Insurance and advising them verbally. 3 By submitting written notice or by delivering the license to the commissioner. 4 By submitting written notice to all contracted insurers and existing policyholders. - ANSWER 3 By submitting written notice or by delivering the license to the commissioner. Which form of negotiation is covered under the definition of "transact" as applied to insurance? 1 Negotiations on contract modifications. 2 Negotiations regarding an agent contract/ 3 Negotiations following execution. 4 Negotiations preliminary to execution. - ANSWER 4 Negotiations preliminary to execution. Which of the following provisions of free insurance offered as an incentive to purchase or rent property is TRUE? 1 It is permitted with no charge. 2 It requires a separate charge or fee. 3 If offered as a guarantee of the performance of goods, it is prohibited. 4 If issued by credit unions or with newspaper subscriptions, it is limited under Statute 777.2. - ANSWER 2 It requires a separate charge or fee. When is a person acting as a licensee allowed to act as an agent of the insurer? 1 when the agent has completed the licensing paperwork and submitted it to the insurer 2 when the insurer has filed with the commissioner a notice of appointment 3 when the insurer has provided the agent with applications 4 when the agent has received oral approval from the insurer to transact business - ANSWER 2 when the insurer has filed with the commissioner a notice of appointment Which is an INACCURATE statement regarding a life settlement contract? 1 The owner receives a guarantee of the future settlement value. 2 It includes a finance loan made for a policy on or before the issuance of the policy. 3 The loan proceeds are used to solely pay premiums for the policy and any expenses incurred. 4 The owner agrees to sell the policy or any portion of the death benefit following the policy issue. - ANSWER 3 The loan proceeds are used to solely pay premiums for the policy and any expenses incurred. What makes a comprehensive long-term care policy unique from other long-term care policies? 1 Provides for both institutional and home care. 2 Provides for all the expenses incurred from long-term care. 3 Provides both life and long-term care for the insured individual. 4 Gives the insured the option of creating a paid up policy by paying in advance. - ANSWER 1 Provides for both institutional and home care. Which are assets that are in excess of an insurer's liability for reported losses, expenses, taxes, and reinsurance of outstanding risks? 1 capital stock 2 capital assets 3 paid-in capital 4 excess investment - ANSWER 3 paid-in capital Which of the following actions is considered part of the insurance sales process? 1 Rescission of the contract. 2 Transaction of unrelated matters that are made by the same parties. 3 Transaction of matters subsequent to execution of the contract and arising out of it. 4 Termination of future sales of the contract. - ANSWER 3 Transaction of matters subsequent to execution of the contract and arising out of it. While both work with an insurer, how does an "Insurance broker" differ from an "insurance agent"? 1 The broker gets paid by commission, but the agent does not. 2 The broker does not transact on behalf of an insurer, while the agent does. 3 The broker has to be licensed, but the agent meets less stringent requirements. 4 The broker is unable to provide the same competitive prices that an agent provides. - ANSWER 2 The broker does not transact on behalf of an insurer, while the agent does. [Show More]

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