EXAMFX Insurance Questions

The automatic premium loan provision is activated at the end of the

Grace period. Provided there is sufficient cash value in the policy, this provision triggers a loan at the end of the grace period to keep a policy in force.

If a life policy allows the policy owner to make periodic additions to the face amount at standard rate, without providing insurability, the policy includes a

Guaranteed insurability rider

When does Medicare cover nursing home care?

Only if it is part of treatment for a covered illness or injury

What is the typical deductible for basic Surgical expense insurance?

$0 As of which the other types of basic medical expense coverage, there is no deductible, but coverage is limited

When an insured incurs Medical expenses during the last 90 days of a calendar year, the carryover provision allows them to

A place such expenses to the new year's deductible

Bob was rendered totally disabled at the time his group health insurance plan was disconnected. Since benefits begin to be paid while the policy was in force which of the following would be required A.A 30 day notice B. A new plan to continue the benefits C. Cobra coverage D. And extension of benefits

An extension of benefits

Which nonforfeiture option has the highest amount of insurance protection?

Extended term

Which of the following best describes annually renewable term insurance

It is level term insurance

And insured by the five-year level premium term policy with a face amount of $10,000. The policy also contains renewability inconvertibility options. When the insured renews the policy in five years, what will happen to the premiums

It will increase because the insured will be five years older than when the policy was originally purchased

ERISA What is designed to establish fiduciary standards that would protect

Plan participants and beneficiaries

The written instrument, in which a contract of insurance is set forth, is known as the

Policy According to the CIC 380

Installing deadbolt locks on the door of a home is an example of what method of handling risk?

Reduction Steps taken to prevent losses from occurring are called risk reduction

Which of the following is an example of payroll covered in an accident and health insurance policy

Sickness (There are two major causes of loss (Or peril) Covered under a health insurance policy: Sickness an accident. Smoking and alcoholism would be considered hazards that may cause loss)

Which of the following is an example of liquidity in a life insurance contract

The cash value available to the policy owner

Medi-Cal may be available to persons over age 65 if

They have Medi-Cal or long-term care claims not paid by Medicare

What is the purpose of the buyers guide

To allow the consumer to compare the costs of different policies

The waiver of cost of insurance rider is found in what type of insurance A Joint and survivor B Juvenile life C universal life D Whole life

Universal life If the insured becomes disabled the writer allows the cost of insurance to be waived, with the exception of premium cost required to accumulate cash value

When a client replaces an existing LTC or Medicare supplement insurance policy with another from the same company, California law requires that .....

Agent must advise the client about HACAP and it's services (This is a requirement under California law)

When transacting Insurance business in this state, an insurer formed under the law of another country is known as What type of insurer

Alien

Most Long-term care (LTC) plans have which of the following features

Guaranteed renewability (The benefit amount payable under most LTC policies is usually a specific amount per day, in some policies pay the actual charge incured per day. Most LTC policies are also guaranteed renewable; however, ensures do have the right to increase the premiums.)

If an insured is not required to pay a deductible, what kind of coverage does he or she have?

First dollar coverage (does not require the insured to pay a deductible)

And disability income insurance, the own occupation definition of disability applies

For the first two years of disability

The insurer may suspect that a moral hazard exist if the policyholder

He's not honest about his health on the application for insurance (Moral hazard to refer to those applicants that may lie on an application for insurance, or in the past, have submitted fraudulent claims against an insurer)

What are the three basic coverage is for medical expense insurance?

Hospital, Surgical, medical

And insured purchase a life insurance policy on his life naming his wife a primary beneficiary, and his daughter a contingent beneficiary. Under what circumstances could the daughter collect the death benefit

If the primary beneficiary predeceases the insured

Representations in insurance contracts qualify as

Implied warranties

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

Individuals whose income exceed the Medi-Cal limit

Which of the following groups would most likely be covered under a blanket accident policy

Students at a public school I get insurance is issued on those groups that have members that are constantly changing

Restoration of benefits is most beneficial to the insured When they

Suffer a large loss Allows the insured to regain their full lifetime benefit level over a period of time after a large or catastrophic loss

Which of the following is not a characteristic of pure risk? A. The loss must be miserable in dollars B. The loss exposure must be large C. The loss must be catastrophic D.The loss must be due to chance

The last must be catastrophic

Not all losses are insurable, and there are certain requirements that must be met before a risk is a proper subject for insurance. These requirements include all of the following EXCEPT

The loss may be intentional

Which of the following was very the length of the grace period In health insurance policies

The mode of the premium payment The grace period is seven days on a policy with the weekly premium mode; 10 days is a monthly premium moment; 31 days on other premium modes

And insured owns a $50,000 whole life policy. At age 47, the insured decides to cancel his policy and exercise the extended term option for the policies cash value, which is currently $20,000. What would the face amount of the new term policy

$50,000 The face Of the term policy would be the same as the face amount provided under the whole life policy

First year commission on a Medicare supplement policy may not exceed

200% of the second year commission on the same policy. An agent or are the representative that is involved in the sale of Medicare supplement policy may receive commissions as long as the first year commission does not exceed 200% of the commission paid for selling or serving the policy in the second year

An IRA uses immediate annuity to pay out benefits; the IRA Owner is nearly 75 years old when he decides to collect distributions. What kind of penalty with the IRA owner pay?

50% tax on the amount not distributed as required. (When immediate annuity's are used to pay IRA benefits, Distributions must begin no later than age 70 1/2 in order for the annuitant to avoid penalties.)

Moral Hazard

A term used to describe a subjective hazard that tends to increase the probable Frequency or severity of loss due to an insured peril

When an annuity is written, whose life expectancy is taken into account?

Annuitant The annuitant receives payment from an annuity and is the person whose life expectancy is considered when writing the contract. The annuitant and annuity owner are often the same person but do not have to be.

How did two contracts with the cash value at no additional charge. This is a special type of loan that prevents the unintentional that of a policy due to nonpayment of Premium

Automatic premium loan

Company a enters into a reinsurance agreement with the company BF, we're company be reinsurers company A's policy. Which of the following is true

Company a is the primary insurer and Company B is the reinsure

And ensure neglects to pay a legitimate claim that is covered under the terms of policy. Which of the following insurance principles has the insured violated

Consideration

And insured pays an annual premium to his insurer. In return, then sure promises to pay benefits in accordance with the terms of the contract. This is called

Consideration The value offered by the insured to the insured, and vice versa. The insured makes accurate statements in the application in at remiya Premium payments. In exchange, the insurance provides benefits as stipulated in the contract

Which of the following terms describes a specific dollar amount of the cost of care that must be paid by the member

Copayment

A long stretch of national economic hardship causes a 7% rate of inflation. The policy owner notices that the face value of her life insurance policy has been read 7% as a result. Which policy writer caused the change?

Cost of living Rider (The cost of living rider and Julia just the The policy is face value in accordance with the national rate of inflation or deflation. This writer or just the face amount of the policy to correspond With the rate of inflation, in order to keep the initial value of the policy constant overtime.

A long stretch of national economic hardship causes a 7% rate of inflation. The policy owner notices that the face value of her life insurance policy has been raised 7% as a result. Which policy rider caused this change

Cost of living rider

All of the following are true about group disability income insurance except

Coverage applies both on and off the job (Employees who are injured on the job are covered by Workers Compensation insurances. Group Disability Income insurance is designed to cover employees only while they are off the job, so the conversation is considered to be nonoccupational in nature.

In which distribution system is the potential client take the initiative to respond to an advertisement through a telephone or meal contact with the insured

Direct response system

The types of policies that are covered under the term of the association includes

Direct, non-group life, health, annuity and supplemental policies (The guarantee association does not provide coverage to employer self funded groups, contract involving reinsurance nor annuity Issued by a charitable organization)

Which of the following is true regarding taxation of dividends in a participating policy? A Dividends are not taxable B Dividends are taxable only after a certain amount is accumulated annual me C Dividends are taxable and some life insurance policies and non-taxable and others D Dividends are considered income for tax purposes

Dividends are not taxable Dividends are not considered to be income for tax purposes, since they are the return of unused premiums. The interest earned on the dividends however is subject to taxation as ordinary income

If and annuitant dies before a new transition occurs, what will the beneficiary receive?

Either the amount paid into the plan or the cash value of the plan, whichever is greater amount

The provision which states that both the policy and a copy of the application form the contract between the policy owner and the insurance is called the

Entire contract (The attached application, constitutes the entire contract. This provision limits the use of evidence other than the contract and the attached application in a test of the contract validity. This is mandatory provision in life insurance

Why is it essential for an insurer to document all correspondence with an insured

Errors and Omissions (Insurers are encouraged to document all conversations in correspondence That occur with the insured, in the event that Crucial error and omission Should occur. The most common times for these errors or during the sales interview in policy delivery. It is essential to have proof of these interactions in the event that an insured with Sue then insure)

Why is it essential for an insurer to document all correspondence with an insured

Errors and Omissions (Insurers are encouraged to document all conversations and correspondence that it's her with an insured, any event that crucial error omission should occur. The most common types of these error during the sales interview and policy delivery. It is a sensual to have proof of these interactions, in the event that the insured would sue the insurer.

How option was to reinsure doing business in California report it's financial conditions to the commissioner?

Every year, on or before March 1

An agent selling variable annuity must be registered with

FINRA (Because variable annuities are considered to be securities, a person must be registered with the FINRA(Formerly NASD) And hold a securities license in addition to a life agents license in order to sell variable annuities)

What term refers to a listing of a prude drugs covered by a Medicare prescription drug plan

Formulary

And insured is involved in an accident that renders in permanently death, although he does not sustain any other major injuries. The insured is still able to perform his current job. What extent will he receive presumptive disability benefits

Full benefits Presumptive disability plans offer for benefits for specific conditions. These policies typically require the laws of at least two limbs(Loss of use does not qualify and some policies) , Total and permanent blindness, or loss of speech and hearing. Benefits are paid even if the insured is able to work.

According to the nonforfeiture law, if the owner decides to surrender a deferred annuity prior to annuitize Asian, the owner is entitled to which of the following

Guaranteed surrender value

Which of the following is true regarding a term health policy? It is non-cancelable It is nonrenewable It is conditionally renewable It is guaranteed renewable

It's non-renewable

Which of the following is true of PPO?

Its goal is to channel patients to providers that discount services. (and shirts are treated by provider who have a greed to discount their charges)

A life insurance policy increases significantly in face amount (death benefits) When the insured reaches a specific age, what type of policy is this

Jumping juvenile policy While many policies provide a level death benefit, jumping juvenile policies provide a little face amount in the early years and the increase usually five times the amount when the insured reaches a specified age in the policy usually age 21

Kayla's husband died in a plane crash. She needs a new source of funds that will help put her child to day care. Which of the following would be The best source?

Life insurance proceeds (There are many legitimate need base expenses That can be paid my life insurance proceeds, from groceries to retirement income. Daycare is considered to be among these expenses)

Insurance Is a contract by which one six to protect another from A exposure B uncertainty C hazard D Loss

Loss (Insurance will protect a person, business or entity from loss)

Under the affordable care act, which classification applies to health plans based on the amount of covered cost

Metal level classification (Plans other than self insured plans will be classified into four levels determined by how much of one's expected healthcare costs are covered. Before plans are bronze, silver, gold, and platinum. This is called metal level classification

A person who does not lock the doors or does not repair a leak shows an indifferent attitude. This person presents what type of Hazzard

Morale (A morale Hazard is someone who has it in a different attitude toward an insurance company. He is careless or irresponsible because he knows his laws will be covered by insurance.)

And insured and his spouse owns a home. When the insured dies then sure pays the remaining balance on his home loan. What type of life insurance for vision writer does this describe

Mortgage redemption

Which of the following is the most common time for Erin a mission to occur on the part of the insurer

Policy delivery

When healthcare and Scherz negotiate contracts with healthcare providers or physicians to provide healthcare services for subscribers at a favorable cost it is called

Preferred provider organization (PPO) (The insurer negotiate the rate for specific Procedures for their subscribers. If the subscriber chooses to go to a provider outside of the preferred provider, they will have to pay a part of the cost of service).

To achieve the profitable distribution of exposures...

Preferred risks or horrors are balanced, with average risk in the middle (Balancing for risks in preferred risk with average risk in the middle create a profitable distribution of exposures)

And underwriter may Reject an application for health insurance if the rejection is based upon which of the following

Prescription usage ( The selection criteria are used in the underwriting process for health insurance policies must be based only on the consideration of age,gender,occupational, physical conditions, (except blindness or deafness), Avocation, or moral in morale hazards, and not on genetic characteristics, marital status or sexual orientation.

Under the accidental death and dismemberment (AD&D) Coverage, what type of benefit will be paid to the beneficiary in the event of the insured's accidental death?

Principal sum Only pays for accidental losses and it is this considered a pure form of accident insurance. The principal some is paid for accidental death. In case of loss of sight or accidental dismemberment, a percentage of the principal son will be paid by the policy, often referred to as the capital sum.

What describes a situation and poor risks or balance with preferred risks, and average risk or in the middle?

Profitable distribution of exposures Is achieved when poor risks are balance with preferred risks, and average risks are in the middle

If a person receives benefits for long-term care from Medi-Cal when the recipient dies the state may

Pursue asset recovery against the state of the recipient

In the event of a loss, business overhead insurance will pay for

Rent Business overhead insurance is designed to pay for ongoing business expenses of a small business owner while they are disabled or unable to work. It does not pay the salary of the business owner or the loss of benefits. However, it will provide the funds needed to pay the salary of employees other than the owners and they're on their ongoing business expenses such as rent

Harry is recovering from a long period of disability. Which writer could protect his business from the loss of income due to his absence, even after he is no longer disabled?

Residual rider (provides benefits for loss of income that occurs after an insured recovers from a period of disability. Although the insured is no longer disabled, the business suffered because of his or her absence. This writer would help protect against that a loss of income)

In case of a loss, the indemnity provision in insurance policies

Restores an insured person to the same financial state as before the loss (Indemnity (sometimes referred to as reimbursement) Is a provision in an insurance policy that states that in the event of a loss, and insured or a beneficiary is permitted to collect only the extent of the financial loss, and is not allowed to gain financially Because of the existence of an insurance contract)

Which of the following components of dental insurance does not require the payment of a deductible?

Routine and preventative maintenance Routine preventative maintenance does not require the payment of an annual premium or coinsurance unlike the other two types which both require deductible payments. Insurers typically do not charge an annual premium or coinsurance in order to write an incentive for a preventative care.

HICAP offers services in the following areas EXCEPT Consumer counseling Consumers advocacy Legal assistance Sales of LTC policies

Sales of LTC policies (The HICAP agencies do not sell or recommend products)

Who can provide skilled nursing care?

Skilled nursing care is daily nursing and rehabilitative care that can only be provided by medical personnel, under the direction of a physician . Skilled care is almost always provided in an institutional setting.

When in employee covered under a health reimbursement account changes employers, the HRA

Stays with the employer HR A's remain with the originating employer and do not follow an employee to new employment

The following are factors in determining premiums charged For group disability income insurance, except

The addresses of the employees (In determining the groups eligibility for a medical expense insurance, insurance will take into consideration the location of the business(City, country, and specific ZIP Code). These factors help the insurer assess risk and possible loss is based on demographics in healthcare costs in the particular area

The policy owner of an address of a life policy wants to increase the guest benefit. Which of the following statements is correct regarding this change?

The death benefit can be increased by providing evidence of insurability

Hospital indemnity/hospital confinement indemnity Policy will provide payment based on

The number of days confined in a hospital (Hospital indemnity/hospital confined indemnity policy provides payment based only on the number of days combined in a hospital)

If an insured continually uses automatic premium loan option to pay the policy premium

The policy will terminate Nguyen the cash value is reduced to nothing (This option, usually elected at the time of application Provide that in case of a possible policy lapse the premium will be automatically paid from the contracts guaranteed cash value. However once the cash value is exhausted the policy will terminate)

Medi-Cal may be available to persons over age 65 if

They have medical or long term care claims not paid by Medicare. Unpaid Medicare claims in long-term care benefits are payable under Medi-Cal provided the individual and his/her spouse meet the required asset tests

Pure Risk

Threat that is beyond human control and has only one possible outcome if it occurs: loss (characteristics of pure risk, the laws must be due to chance, definite, measurable, and predictable)

And insured was involved in an accident and could not perform at her current job for three years. If the insured could not responsibly perform another job utilizing similar skills after one month, for how long would she be receiving benefits under in "own occupation "disability plan?

Two years Under an on occupation plan, if the insured cannot perform his or her current job for a period of up to two years disability benefits will be issued even if the insured would be capable of performing a similar job during the two-year period. After that, if the insured is capable of Performing another job utilizing some of the skills benefits will not be paid

A medical expense policy that is that was shoes that amount of benefits paid based upon the prevailing charges which fall within the standard range of these normally charge for a specific procedure by a doctor of similar training and experience in that geographic area is known as

Usual, customary in reasonable (The usual, customary and reasonable approach for determining insurance benefits that is based upon the fees normally charge for a specific procedures and a geographic location where the services are provided).

During the free look., The premium for a variable annuity may be invested in all of the following except A Money market funds B Mutual funds (only upon the investors request) C value funds D Fixed income investments

Value funds (During the 30 day cancellation free look-period, The premium for a variable annuity may only be invested in fixed income investments in money market funds, unless the investor specifically request that the premiums be invested in the mutual funds)

Which of the following describes the taxation of an annuity when money is withdrawn during the accumulation phase?

With drawn amounts are taxed on a last in first out basis When money is withdrawn from the annuity during accumulation phase the amounts are taxed on the last in first out basis (LIFO). Therefore, all with drawls will be taxable until the honors cost basis is reached. After all of the interest is received and tax to the principal will be received with no additional tax consequences

Can you individual who belongs to a POS plan use an out of network physicians

Yes, and they may use any preferred position, even if not part of the HMO