CA Life and Health Simulated Exam

What is the waiting period on a Waiver of Premium rider in life insurance policies?

6 months

First year commission on a Medicare supplement policy may not exceed

200% on the 2nd year commission on the same policy

An employee group with which of the following number of employees would qualify for a medical savings account?

23

All premiums and policy fees paid for the policy must be refunded by the insured to the owner within______days from the date that the insurer is noted that the insured has canceled the policy

30 days

What is the penalty for IRA distributions that are below the required minimum for the year?

50% If there are no distributions at the required age, or if the distributions are not large enough, the penalty is 50% of the shortfall from the required annual amount.

What is the waiting period?

A period of time the insured has to wait before payments of benefits begin after disability. The waiting or elimination period is a period of time the insured has to wait after disability occurs and before benefit payments begin.

Who is a third-party owner?

A policyowner who is not the insured

When the California insurance code needs to be changed, the legislature must design impossible. Once the bill is passed, it is presented to the governor and becomes law if not return to the legislature within what timeframe?

A specific period of 12 to 30 days

"A physical or mental impairment, which substantially limits one or more major life activities, or a record of such impairment, or being considered as having such an impairment," is the definition of a disability according to

ADA This is the definition of the Americans of Disability Act

What's another term for a pay-in period?

Accumulation period of annuity

What is another term for authorized insurer?

Admitted

In an annuity, the accumulated money is converted into a stream of income during which phase?

Annuitization period

Following hospitalization because of an accident, Bill was confined in a skilled nursing facility. Medicare will pay full benefits in this facility for how many days?

Answer: 20 days following hospitalization for at least three days, if medically necessary, Medicare pays for all covered services during

During the free-look period, the premium for a variable annuity may be invested in....

Answer: Money market funds, mutual funds (only upon the investor's request), fixed income investments

In disability income insurance, if an insured is considered disabled because they cannot perform any job they are suited for by prior education, training or experience, the insured falls under which definition of total disability?

Any occupation

What describes the features of a comprehensive major medical policy

Basic medical expense benefits are provide in a single package

The IRA owner is nearly 75 years old when he decides to collect distributions, why is he penalized 50% of the shortfall from the required annual amount?

Because ♪ When immediate annuities are used to pay IRA benefits, distributions must begin no later than age 70 1/2 in order for the annuitant to avoid penalties.

In terms of Social Security, what is the interval spanning between the day when the youngest child of a family turns 16 and before the surviving spouse may receive retirement benefits?

Blackout period

After being hired to deliver newspapers to his neighbors, the man is provided with $10,000 of life insurance by the newspaper. He would be covered under which kind of life insurance?

Blanket life blanket life insurance is available to newspapers hiring persons as "independent contractors" to deliver newspapers

What is a blanket policy?

Blanket policy covers members of a particular group when they are participating in a particular activity. Some examples are students, campers, passengers on a common carrier, or sports teams.

A tax sheltered annuity is a special tax favored retirement plan available to...

Certain groups of employees only

In order to legally transact insurance what must an insurer obtain?

Certificate of Authority

If an applicant for a life insurance is policy is found to be a substandard risk, the insurance company is most likely to

Charge a higher premium

If an applicant for a health insurance policy is found to be substandard risk, the insurance company is most likely to...

Charge an extra premium

Describe a client who will benefit from Extension of Benefits

Client who is disabled prior to a policy discontinuance and remains disabled

Types of long-term care I provided in an institutional setting?

Custodial care Skilled nursing care Intermediate care

The waiver of cost of insurance rider is found in what type of insurance?

Universal life

Because of the history of cancer in her family Julie purchased a policy that specifically covers the experience of treating cancer. Your policy would be classified as what type of policy?

Dread disease policy

Disability income insurance the time between the onset of an injury or sickness and when benefits begin is known as the...

Elimination period

The insurance policy, together with the policy application and any added riders form what is known as a

Entire contract

In an Executive Bonus plan, who is the owner of the policy, and who pays the premium?

Executive is the owner, and the executive pays the premium

Health coverage becomes effective when....

First premium has been paid and the application has been approved.

What kind of policy issues certificates of insurance to insureds?

Group insurance

Which option allows the insured to purchase specific amounts of additional insurance at specific times without proving insurability?

Guaranteed insurability option

No person can act as an administrator in this state unless he or she

Holds a certificate of registration issued by the commissioner

In term policies, does the owner have rights of renewal?

In term policy as the owner does not have rights of renewal

The life insurance policy clause that prevents an insurance company from denying payment of a death claim after a specified period of time is known as the....

Incontestability clause. If an insurer wishes to contest any statements on an application, they must do so within the first two years.

When determining how material a piece of information is to each property of a contract. The value is not determined by the event is so it's only by....

Influence this information would have informing an estimate of the advantages or disadvantages of the contract

What is own occupation plan?

Insured is unable to perform duties of the occupation for wich they were educated and trained

Who makes up the Medical Information Bureau?

Insurers

Jill has a handicap grown-up child who is chiefly dependent upon her for support and maintenance. How will that affect Jules insurability in the group plan?

Jills dependence condition will not affect her rating or eligibility

A couple receives a set amount of income from their annuity. When the wife dies the husband no longer receives annuity payments. What type of annuity did the couple buy?

Joint life

Who would be affected by the share of cost requirement for Medi-Cal?

Jules his income exceeds the Medi-Cal limit

Juvenile Life Insurance

Juvenile life insures the life of a minor. It does not need to be purchased by a minor

Are physicians and surgeons services covered under both part A and B Medicare?

No not both. Physicians and surgeons services are covered under Medicare part B

Is presuming the applicant is eligible for Medicaid, based on the nature of the policy a goal of a Medicare supplement application?

No, because Medicare supplement policies must ask the applicant if they are eligible for Medicaid.

Is the applicants medical history part of an investigative consumer report during the application?

No. Port is used in the underwriting process in order to assess non-medical respect is related to moral standing and advocations

In long-term care insurance, what type of care is provided with intermediate care?

Occasional nursing or rehabilitative care. intermediate care is nursing and rehabilitative care provided by medical personnel for stable conditions that require assistance on a less frequent basis than skilled care.

What type of individual must have insurable interest in the insured?

Policyowner

When health care insurers negotiate contracts with heath care providers or physicians to provide health care services for subscribers at a favorable cost, it is called?

Preferred Provider Organization (PPO) The insurer negotiates for specific procedures for their subscribers. If the subscriber chooses to go to a provider outside the preferred provider, they will have to pay a part of the cost of service

When may a representation be withdrawn?

Prior to the issuance of the policy

What plan allows small employers who do not offer health insurance to assist in the payment of employee medical expenses and insurance premiums?

Qualified small employer health reimbursement arrangement (QSEHRA)

What part of the International Revenue Code allows an owner of a life insurance policy or annuity to exchange or replace their current contract with another contract without creating adverse tax consequences?

Section 1035 policy exchange

What is health insurance underwriting best defined as?

Selection, classification, and rating of risks.

What are the three goals of risk retention

Siri does expenses and improve cash flow increase control of claim reserving and claim settlements To fund losses that cannot be insured

What are all the types of standard levels of care

Skilled nursing care, intermediate nursing care, custodial care, home health care, home care, and community based care

If a life insurance policy has an irrevocable beneficiary designation

The beneficiary can only be changed with written permission of the beneficiary

A husband and wife are insured under group health insurance plans at their own places of employment, and as dependents under their spouses coverage. If one of them incurs hospital expenses, how will those expenses likely be paid?

The benefits will be coordinated

Who chooses a primary care physician in an HMO?

The individual member. when an individual becomes a member of the HMO, he or she will choose a primary care physician. Once chosen, the primary care physician will be regularly compensated for being responsible for the care of that member.

An insured has $500 left in his Health Reimbursement Account when he quit his job. What happens to that money?

The insured can have access to the $500 at his previous employers discretion Former employees, including retirees, can have continued access to unused HRAs, but this is at the employers discretion.

There are certain requirements that must be met before a risk is a proper subject for insurance. What are these requirements?

The loss must not be catastrophic there must be a sufficient number of homogeneous exposure units to make losses reasonably predictable The loss produced by the risk must be definite

What would provide an underwriter with information concerning an applicant health history

The medical information bureau

What is hospice care intended for?

The terminally ill

Can employees lose their Health Savings accounts (HSA) when the switch jobs?

They do not lose their HSA. HSAs like IRAs are portible and will move with them to their new job since they belong to the individual

The paid-up addition option uses the dividend....

To purchase a smaller amount of the same type of insurance as the original policy. The dividends are used to purchase a single premium policy in addition to the base amount of the permanent policy.

Earned surplus are unassigned funds that are required to be reported on the insurer's annual statement. True or false

True

True or False When applying for larger amounts of insurance the insurer will usually require some sort of medical examination by a professional

True

True or false Key person coverage may be funded by any type of insurance

True

Regarding health insurance premiums all of the following statements are true except a) substandard wrists are not insurable and are always rejected b) rated policies can be issued by standard insurers c) preferred risk may be given a discount rate for being a non-smoker or a non-drinker d) Standard wrist pay the regular premium for their classification

a a) substandard wrists are not insurable and are always rejected

Which of the following is not covered under part B of a Medicare policy? a) routine dental care b) Home healthcare c) Lab services d) Physician expenses

a) Routine dental care

Which statement is not true regarding underwriting group health insurance? a) The group is assessed individually for insurability b) The premiums are reassessed annually c) The cost of the policy is partially determined by the ratio of males to females in the group d) everyone in the group is covered, regardless of their medical history

a) The group is assessed individually for insurability

Which of the following will vary the length of the grace period in health insurance policies? a) The mode of premium payment b) The length of any elimination period c) The length of time the insured has been insured d) The term of the policy

a) The mode of premium payment

All of the following are general requirements of a qualified plan except a) Plan must provide an offset for Social Security benefits b) The plan must be communicated to all employees c) The plan was free for the exclusive benefits of the employees and their beneficiaries d) Play must be permanent written in legally binding

a) The plan must be communicated to all employees

All of the following statements concerning the use of life insurance as an executive bonus are correct except a) The policy is owned by the company b) any type of insurance policy may be used c) The employer pays a bonus to a selected employee to find the policy d) it is considered a non-qualified employee benefit

a) The policy is owned by the company

Most LTC plans have which of the following features? a) Open enrollment b) guaranteed renewability c) elimination period d) Variable premiums

b) Guaranteed renewability

Which of the following policies would have an IRS required corridor or a gap between the cash value and the death benefit? a) Equity indexed universal life b) Variable universal life c) Universal life-option A d) Universal life-option B

c) Universal life-option A

Which of the following is considered a qualifying event under COBRA a) relocation b) promotion c) divorce d) marriage

c) divorce Other qualifying events include the voluntary termination of employment; an employees change from full-time to part time; or the death of the employee

A Medicare supplement plan must have at least which of the following renewal provisions? a) Nonrenewable b) Noncancellable c) guaranteed renewable d) Conditionally renewable

c) guaranteed renewable

A small business owner is the insured under a disability policy that funds a buy-sell agreement, if the owner dies or becomes disabled, the policy would provide....

cash to the owner's business partner to accomplish a buyout

Following is incorrect concerning taxation of disability income benefits? a) if the employer pay the premiums, income benefits are taxable to the insured as ordinary income. b) if the employer paid the premiums, income benefits are taxable to the insured as ordinary income c) if the benefits are for a permanent loss, the benefits paid to the employee are not taxable. d) if paid by the individual, the premiums are tax deductible

d) if paid by the individual, the premiums are tax deductible

An applicant buys a nonqualified annuity. But dies before the starting date. For which of the following beneficiaries would the interest accumulated not be taxable? a) charitable organization b) dependents c) annuitant d) Spouse

d) spouse

Under a accidental death and dismemberment insurance policy, the death benefit will be paid IF....

the accidental death occurs within 9 days of the accident