Final Exam California Life, Accident, and Health Insurance 150 Questions with Answers,100% CORRECT

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Final Exam California Life, Accident, and Health Insurance 150 Questions with Answers What is considered the most common type of specified disease insurance policy? - CORRECT ANSWER Cancer Mini... mum participation standards exist for a group health insurance plans in order to - CORRECT ANSWER Prevent Adverse Selection How does underwriting differ between group life and individual life insurance? - CORRECT ANSWER Medical questions must be answered on individual life insurance when handling premiums for an insured an agent is acting in which capacity? - CORRECT ANSWER Fiduciary what is the term used to describe the frequency and severity of certain illnesses and accidents? - CORRECT ANSWER Morbidity Which of the following describes the statement "The more times an event is repeated, the more predictable the outcome becomes"? - CORRECT ANSWER Law of large numbers In order to be considered "currently insured" under Social Security, an individual must be credited with? - CORRECT ANSWER 6 quarters of coverage during the last 13-quarter period How long must a policy be in force before an insurer is prohibited from denying claims based on misstatements made on the health policy application? - CORRECT ANSWER 2 Years Which of the following does the California Insurance Code NOT require an insurance policy to specify? - CORRECT ANSWER Insurer's financial rating Which of the following is NOT required in the content of a policy? - CORRECT ANSWER Probability of loss Which of the following pieces of information is NOT gathered during the personal financial planning process? - CORRECT ANSWER An individual's civic organization memberships Which of the following is not considered to be an unfair claims settlement practice? - CORRECT ANSWER Advising a claimant to hire an attorney When an applicant applies for insurance, the process by which the insurer determines whether to issue a policy is called? - CORRECT ANSWER Underwriting How is a Medicare claim submitted? - CORRECT ANSWER Expenses are submitted to Medicare by the health provider According to the PPACA, the medical enrollment tier that has 80% actuarial value is called: - CORRECT ANSWER Gold Employer contributions to qualified plans are - CORRECT ANSWER Tax-deductible by the employer Employee participation in a noncontributory group life plan must be - CORRECT ANSWER 100% What does the term "illustration" mean when used in the phrase "life insurance policy illustration", according to the California Insurance Code? - CORRECT ANSWER Presentation of policy features that includes non-guaranteed elements Which of the following is NOT a characteristic of a preferred provider organization (PPO)? - CORRECT ANSWER Primary physicians serve as gatekeepers John owns an insurance policy that gives him the right to share in the insurer's surplus. What kind of policy is this? - CORRECT ANSWER Participating a life agent who has misappropriated fiduciary funds to his own use. What is Pete guilty of? - CORRECT ANSWER Theft If an insured dies because of an accident, which type of life insurance rider will provide additional coverage? - CORRECT ANSWER Accidental death rider Tom is shopping for a policy that covers two people and would pay the face amount ONLY when the first person dies. The type of life policy he is looking for is called a - CORRECT ANSWER Joint life policy Which of these statements is NOT true concerning recurrent disabilities? - CORRECT ANSWER The insurer continues coverage after a new elimination period An insurer owned by its policyholders is called a? - CORRECT ANSWER Mutual Insurer Medicare Part B Covers? - CORRECT ANSWER Physician Expenses Which of these is NOT a relevant factor in the health insurance principle of morbidity? - CORRECT ANSWER Intelligence Which of these factors do not affect the rates of medical insurance? - CORRECT ANSWER Race Which of the following types of life insurance is normally associated with a mortgage loan? - CORRECT ANSWER Decreasing term which of the following is not included in comprehensive major medical plans? - CORRECT ANSWER First-Dollar Coverage Moral hazard is described as the - CORRECT ANSWER Increased chance of a loss because of an insured's dishonest tendencies Which principle is accurately described with the statement "Insureds are entitled to recover an amount NOT greater than the amount of their loss"? - CORRECT ANSWER Indemnity What time period allows an insured's life insurance policy to remain in force even if the premium was not paid on the due date? - CORRECT ANSWER Grace Period How long must life agents keep their transaction records? - CORRECT ANSWER 5 Years What does the insurance term indemnity refer to? - CORRECT ANSWER Make whole Individual health insurance coverage typically excludes injuries at an employee's workplace because? - CORRECT ANSWER It's covered by the state Worker's Compensation program which of the following refers to a condition that may increase the chance of a loss? - CORRECT ANSWER Hazard Life insurance surplus must be distributed to policy-owners at what frequency? - CORRECT ANSWER Annually According to PPACA, what is a health benefits exchange? - CORRECT ANSWER An entity to which individuals and small businesses can have access to affordable health coverage According to the California Insurance Code, which of the following is NOT an example of an insurable event? - CORRECT ANSWER An insured suffers a financial loss in the state lottery at what point does a self-insured group qualify for stop-loss coverage? - CORRECT ANSWER When claims exceed a specified limit in a set period of time The conditions, times, and circumstances under which an insured is NOT covered by a health policy are called? - CORRECT ANSWER Exclusions Failure to report background changes within 30 days as required under section 1729.2 of the California insurance code could subject a license or applicant to? - CORRECT ANSWER All of these Why is a life insurance policy's delivery date important? - CORRECT ANSWER The free-look period begins on the policy delivery date The Human Life Value concept is based on? - CORRECT ANSWER Income Which of the following is a characteristic of the disability elimination period? - CORRECT ANSWER Benefits are not payable In California, the elderly can receive information about health related issues from? - CORRECT ANSWER The Health Insurance Counseling and Advocacy Program (HiCAP)" In what situation does a waiver of premium provision keep a health insurance policy in force without premium payments? - CORRECT ANSWER When an insured becomes totally disabled At age 65, which of the following is available at no cost to all individuals? - CORRECT ANSWER Medicare Part A which of these statements correctly describes risk? - CORRECT ANSWER Pure risk is the only insurable risk non-deductible contributions are typically associated with a? - CORRECT ANSWER Roth IRA Which type of worker has Social Security benefits available to them? - CORRECT ANSWER Fully insured Which of the following describes the number of deaths in a year compared to the number of people in a select group? - CORRECT ANSWER Mortality Rate Lynn owns a life policy that guarantees the right to renew the policy each year, regardless of health, but at an increased premium. What kind of policy is this? - CORRECT ANSWER Renewable term An individual covered under a disability income policy may be eligible for a partial disability benefit if? - CORRECT ANSWER the insured can perform some of their job activities on a part-time basis What is a common reason people purchase an annuity? - CORRECT ANSWER To protect against the risk of outliving their financial resources Which of the following is NOT an accurate description of Access for Infants and Mothers Program (AIM)? - CORRECT ANSWER Only women who have private insurance plans with a maternity-only deductible or copayment greater than $1,500 are eligible" When a life insurance policy is surrendered, how does the cost recovery rule apply? - CORRECT ANSWER The policy's cost basis is exempt from taxation Under a long-term care insurance policy, adult day care coverage will provide for? - CORRECT ANSWER Part time care at a facility for elderly individuals who live at home An annuity which is backed by a life insurer's separate account is called a? - CORRECT ANSWER Variable Annuity Who is issued a certificate of insurance with a group insurance policy? - CORRECT ANSWER Participant How are acts of war and aviation treated under a group life insurance policy? - CORRECT ANSWER Policy Exclusion A creditor would be allowed rights to life insurance policy proceeds if which of the following beneficiaries is chosen? - CORRECT ANSWER The insured's estate. According to section 1729.2 of the California Insurance Code, which of these does NOT qualify as "background information"? - CORRECT ANSWER Misdemeanor charges filed, not resulting in a conviction The California Insurance Code allows an individual how many days to cancel a life policy for a full-refund? - CORRECT ANSWER Between 10 to 30 Days The California Insurance Code defines "policy" as a(n)? - CORRECT ANSWER Written Contract According to the California code governing claim settlement practices, which of the following is NOT considered to be an act of unfair discrimination? - CORRECT ANSWER Denial of a claim based on reckless behavior Kimberly is an employee on leave under the Family and Medical Leave Act (FMLA). What will happen to her group health coverage? - CORRECT ANSWER She continues to be enrolled during the leave Which of the following is NOT a feature of equity-indexed annuities? - CORRECT ANSWER Offers a maximum interest rate that increases annually A terminated employee that has exercised the conversion privilege is able to convert? - CORRECT ANSWER Term insurance into permanent insurance What area of group health insurance is regulated under the Employee Retirement Security Act of 1974 (ERISA)? - CORRECT ANSWER Disclosure and reporting after the annual deductible is met a medicare part b patient will pay ____ of the remaining covered expenses. - CORRECT ANSWER 20% How does a conditional receipt differ from a binding receipt? - CORRECT ANSWER Binding receipts always provide insurance which starts from the date of receipt The reason for social insurance is to? - CORRECT ANSWER Protect certain vulnerable segments of the population Bruce is involved in an accident and becomes totally and permanently disabled. His insurance policy continues in force without payment of further premiums. Which policy provision is responsible for this? - CORRECT ANSWER Waiver of premium provision Who would be most likely to submit a Medicare Part A claim? - CORRECT ANSWER Hospital Which of the following actions is NOT allowed by Health Insurance Counseling and Advocacy Program (HiCAP) counselors? - CORRECT ANSWER Charge a fee An insurer that has been found using higher rates based on race, religion, or ethnicity is said to be engaging in? - CORRECT ANSWER Unfair discrimination Which policy provision protects the policyowner from unintentional lapse of the contract? - CORRECT ANSWER Grace period Under the misstatement of age provision in a health insurance policy, what can a company do if it discovers that an insured gave a wrong age at the time of application? - CORRECT ANSWER Benefits can be adjusted which of the following is not covered by the family and medical leave act (fmla)? - CORRECT ANSWER Traveling overseas with a spouse An insurer enters into a contract with a third party to insure itself against losses from insurance policies it issues. What is this agreement called? - CORRECT ANSWER Reinsurance What does a Hospital Confinement indemnity policy pay for? - CORRECT ANSWER Pays a specified daily amount while the insured is confined to a hospital Allen has a disability income policy with a $2,500 monthly benefit and a 30-day elimination period. He is unable to work 90 days following an automobile accident. What will the policy pay? - CORRECT ANSWER 90 days - 30 day elimination period is 60 days (2 months). 2 months X $2,500/month benefit = $5,000 total benefit paid. Which of the following would be considered an activity of daily living under a long term care policy? - CORRECT ANSWER Bathing the elimination period in a disability income policy serves the same purpose as a? - CORRECT ANSWER Deductible All of the following circumstances must be met for loss retention to be an effective risk management technique, EXCEPT: - CORRECT ANSWER Probability of loss is unknown Which of the following is NOT true regarding a family policy that covers children? - CORRECT ANSWER Conversion of child's coverage to permanent insurance requires evidence of insurability. Which of the following is NOT an important reason for a life insurance application? - CORRECT ANSWER The beneficiary must sign the application before the insurer will issue the policy Paul has an existing annuity and is sold a new one, in which the new policy holds no greater financial benefit to him than the existing contract. This is considered a(n)? - CORRECT ANSWER Unnecessary replacement What distinguishes a deferred annuity from an immediate annuity? - CORRECT ANSWER The time at which benefit payments start Buy-sell plans are typically funded by which two types of insurance? - CORRECT ANSWER Life insurance and disability insurance. Which of the following does specified disease insurance NOT cover? - CORRECT ANSWER Costs covered by medical expense insurance When calculating life insurance premium rates, which component would an agent's commission fall under? - CORRECT ANSWER Insurer's Expenses Which of the following is NOT a requirement of a contract? - CORRECT ANSWER Equal consideration is required between the involved parties Which of the following does the California Department of Insurance (CDI) have NO jurisdiction over? - CORRECT ANSWER Medicare Which provision will pay a portion of the death benefit prior to the insured's death due to a serious illness? - CORRECT ANSWER Accelerated death benefit Under the California Insurance Code, a licensee's license number must be printed at what size on all price quotes, business cards, and printed material? - CORRECT ANSWER The same size print as the licensee's phone number, fax number or address How are Roth IRA's treated for tax purposes? - CORRECT ANSWER Non-deductible contributions and tax-free distributions An insurance company entitled to transact business in California is called a(n)? - CORRECT ANSWER Admitted carrier Which of the following contracts is defined as "one that restores an injured party to the condition that was present before the loss"? - CORRECT ANSWER Indemnity Contract Which word implies permissiveness according to the California Insurance Code? - CORRECT ANSWER May Which of the following statements do NOT apply to child coverage in a family policy? - CORRECT ANSWER Only children born prior to policy's issue date may be included What does the guaranteed insurability option allow an insured to do? - CORRECT ANSWER Purchase additional coverage with no evidence of insurability required What is the purpose of the Pre-Existing Condition Insurance Plan (PCIP)? - CORRECT ANSWER PCIP was created by the PPACA for people rejected by private health insurers due to pre-existing conditions Which of the following types of information is NOT required for a life insurance application? - CORRECT ANSWER Ethnicity What must an applicant do in order to authorize the release of an attending physician report? - CORRECT ANSWER Sign a consent form A situation in which there is ONLY a chance of loss or no loss is a? - CORRECT ANSWER Pure risk Reasonably necessary acts that an agent must perform for carrying out his/her expressly authorized duties are covered by an agent's - CORRECT ANSWER Implied authority What percentage of eligible employees must participate in a noncontributory group health plan before it can be put in effect? - CORRECT ANSWER 100% The free-look period for life insurance policy-owners age 60 or older is? - CORRECT ANSWER 30 Days Pam is the primary beneficiary of a life insurance policy and wants to let the death benefit accumulate and receive only the monthly investment proceeds. Which settlement option should she choose? - CORRECT ANSWER Interest Option What is the proper order of initial life insurance premiums, from lowest to highest? - CORRECT ANSWER Modified premium, ordinary life, single premium Which of the following services are health maintenance organizations (HMO's) NOT required to provide? - CORRECT ANSWER Prescription Drugs Life insurance creates an immediate estate". This phrase means? - CORRECT ANSWER When the insured dies, a death benefit is paid. Which statement is true regarding policy dividends? - CORRECT ANSWER A Dividend Option is selected by the Insured at the time of Policy purchase Which of the following is considered to be a situation that has the potential for loss? - CORRECT ANSWER Loss exposure A person who asserts a right of recovery under an insurance policy is called? - CORRECT ANSWER Claimant All of the following are considered characteristics of group life insurance EXCEPT? - CORRECT ANSWER Individual policies An annuitant would like to determine the current value of her annuity. To do this, she multiplies the number of "accumulation units" she owns times the unit value of the "separate account". What kind of annuity BEST matches this description? - CORRECT ANSWER Variable Annuity A life insurance policy where the insured can choose where the cash value can be invested is called? - CORRECT ANSWER Variable Life In a Life Insurance Policy, the entire contract consists of the? - CORRECT ANSWER Policy and Attached Application When a mutual insurer becomes a stock company, the process is called - CORRECT ANSWER Demutualization In California, an insurer organized under the state laws of Oregon is called a(n)? - CORRECT ANSWER Foreign Insurer All of the these are examples of cost sharing in a health insurance policy EXCEPT? - CORRECT ANSWER Coordination Premiums are best described as? - CORRECT ANSWER The amount an insured pays per unit of coverage which of the following is not typically covered under vision care insurance? - CORRECT ANSWER Eye Surgery Which of the following terms is NOT associated with a Major Medical policy? - CORRECT ANSWER Capitation All of these statements concerning Medicare are true EXCEPT? - CORRECT ANSWER Long-term care is covered by Medicare Part C Medicare Part A covers what type of care? - CORRECT ANSWER Skilled nursing facility care In regards to a group health insurance plan, which statement is CORRECT? - CORRECT ANSWER A non-contributory group health plan must cover all eligible members What is a participating life insurance policy? - CORRECT ANSWER Contract that allows the policy-owner to "receive a share of "surplus" in the form of policy dividends An agent's attempt to stop the replacement of an existing life insurance policy is known as? - CORRECT ANSWER Conservation Periodic increases in policy benefits are allowed in which long-term care policy provision? - CORRECT ANSWER Inflation protection What is considered to be the definition of disability, according to Social Security? - CORRECT ANSWER Inability to engage in any substantial gainful activity Mike and Ike are 30 year old identical twins. Both are in excellent health. each brother purchases a life policy that has a $750 annual premium. Mike buys a 10-year renewable term policy. Ike purchases a whole life policy. all of the following statements are true EXCEPT? - CORRECT ANSWER Mike has option of using his cash value to purchase a reduced amount paid-up whole life insurance What are members of the Medical Information Bureau (MIB) required to report? - CORRECT ANSWER Medical aliments discovered during the underwriting process How long is a person expected to be disabled in order to receive Social Security disability benefits? - CORRECT ANSWER 12 months Under a health insurance policy, the provision that states the kind of benefits provided and the circumstances under which they will be paid is called the? - CORRECT ANSWER Insuring clause Individuals age 65 or older are exclusively eligible for which optional program? - CORRECT ANSWER Medicare Part B Which of the following does NOT have to be included on life insurance policy illustrations? - CORRECT ANSWER Statement that all values and benefits are guaranteed The "blackout period" affects whose benefits? - CORRECT ANSWER Surviving Souse An insurer having a large number of similar exposure units is consider important because - CORRECT ANSWER The greater the number insured, the more accurately the insurer can predict losses and set up "appropriate premiums" Which of the following risk classification charges the lowest premiums? - CORRECT ANSWER Preferred When calculating life insurance premium rates, which component is affected by an insured's age and gender? - CORRECT ANSWER Mortality A life insurance policy that pays the face amount if the insured survives to a specified? - CORRECT ANSWER Endowment insurance What type of license is required for an individual who charges a fee to review an insured's existing life insurance policy? - CORRECT ANSWER Life and disability "analyst" Under the Payment of Claims provision, when are benefits typically payable after proof of loss is received? - CORRECT ANSWER Immediately Which statement about Health Maintenance Organizations is NOT true? - CORRECT ANSWER When a member uses "out-of-network" providers, a higher monthly fee is charged How many "activities of daily living" must an insured be UNABLE to perform in order to meet the chronically ill requirement of a Long-Term Care policy? - CORRECT ANSWER Minimum of "two" activities of daily living [Show More]

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