Life & Health

An insured bought a $150,000 non-participating whole life policy many years ago. He is 100 years old today. He has never borrowed from the policy's cash value and has faithfuly made all the payments when due. The policy's cash value is? A. $150,000 B. $100,000 C. $0 D. $50,000

A. $150,000

Renewable term insurance can be best described as : A. A level death benefit with an increase in premium B. A level death benefit with a decrease in premium C. A decreasing death benefit with a level premium D. An increasing death benefit with a level premium

A. A level death benefit with an increase in premium

The complete transfer by the existing owner of all rights in an insurance policy to another person is? A. Absolute assignment B. Endowment C. Collateral assignment D. Non-forfeiture

A. Absolute assignment

All of the following statements abut qualified pension plans are true, except? A. Employer contributions are taxable to employees in the year they are contributed B. Investment earnings are exempt from income tax until distributed C. Employer contributions are deductible from corporate income taxation D. Employer contributions are taxable to employees in the years they are received as benefits

A. Employer contributions are taxable to employees in the year they are contributed

Common life insurance policy riders include all of the following, except: A. Extended term B. Guaranteed insurability C. Accidental death D. Waiver of premium

A. Extended term

If an insurer is not able to meet financial obligations when due, the insurer would be considered? A. Insolvent B. Unauthorized C. Impaired D. Non-admitted

A. Insolvent

Which settlement option allows only the death benefit earnings to be paid to the beneficiary? A. Interest option B. Cash option C. Fixed period option D. Fixed amount option

A. Interest option

What is the tax treatment for individual disability income policies? A. Non-deductible premiums and tax-free benefits B. Non-deductible premiums and taxable benefits C. Deductible premiums and taxable benefits D. Deductible premiums and tax-free benefits

A. Non-deductible premiums and tax-free benefits

The Employee Retirement Income Security Act of 1974 (ERISA) mandates requiring plan sponsor to provide participants with? A. Plan descriptions and benefit statements B. Reports of tax qualification fulfillment C. Trust and solvency reports D. Annual financial statements

A. Plan descriptions and benefit statements

The basic feature of a managed care indemnity plan is that the participants: A. Select a provider and submit claims to the insurance company B. Select a provider at work and claims processor C. Pre-select a physician and third-party claims administrator D. Pre-select a clinic and submit claims to the insurance company

A. Select a provider and submit claims to the insurance company

Loss retention is an effective risk management technique when all of the following conditions exist except? A. The probability of loss is unknown B. The losses are highly predictable C. The insured chooses to assume the losses involved D. The worst possible loss is not serious

A. The probability of loss is unknown

The social security blackout period ends when the surviving spouse reaches the age of? A. 55 B. 60 C. 62 D. 65

B. 60

Which provision will pay a portion of the death benefit prior to the insured's death due to a serious illness? A. Waiver of premium B. Accelerated death benefit C. Cost of living D. Disability Income

B. Accelerated death benefit

The purpose of laws regarding the replacement of life and annuity contracts includes all of the following, except? A. To protect the interests of life insurers and their agents B. To establish penalties for failure to comply with replacement requirements C. To assure the purchaser receives information to make an informed decision D. To reduce the opportunity for misrepresentation and incomplete disclosures

A. To protect the interests of life insurers and their agents

The probationary period in a group health policy is intended for people? A. Who joined the group after the policy effective date B. Without health coverage after a qualifying event who declined to join the group at the time of eligibility C. With a pre-existing condition when they joined the group

A. Who joined the group after the policy effective date

In order to receive the principal sum benefit for death from a disability policy, the death must occur? A. Within a specified number of days after injury B. Any time during a rehabilitation period C. Any time during a total dismemberment period D. Within the policy period from any cause

A. Within a specified number of days after injury

How do rights of an irrevocable beneficiary differ from those of a revocable beneficiary? A. An irrevocable beneficiary may be changed by the policy owner without the beneficiary's consent B. An irrevocable beneficiary has a vested right that neither the policy owner nor his creditors can impair without the beneficiary's consent C. A revocable beneficiary can become the policy owner at any time by paying the premiums D. An irrevocable beneficiary has the right to name a contingent beneficiary for the policy

B. An irrevocable beneficiary has a vested right that neither the policy owner nor his creditors can impair without the beneficiary's consent

Which non-forfeiture option uses cash surrender values to purchase paid-up term insurance for the full face amount of the policy ? A. Extended paid-up B. Extended term C. Reduced term D. Reduced paid-up

B. Extended term

A person reaches the age of 65 and is currently covered under her employer's health plan. She elects to take Medicare coverage by rejecting her employer's plan. This still keeps the company plan primary? A. True B. False

B. False

Concerning Part B of Medicare, which of the following is incorrect? A. There is an annual deductible and co-payment B. It is paid entirely by FICA (social security) payroll taxes C. An individual must sign a form rejecting Part B or they will be enrolled in it D. It provides some coverage and benefits for most medical expenses not covered by Part A

B. It is paid entirely by FICA (social security) payroll taxes

A group health plan third party administrator might do any of the following, except? A. Receive employee payments B. Pay policy owner premiums C. Track insured eligibility D. Handle member complaints

B. Pay policy owner premiums

Which non-forfeiture option uses an existing policy's cash value to purchase a paid-up policy with a lower face than the original policy? A. Extended paid-up insurance option B. Reduced paid-up insurance option C. Cash surrender value option D. Extended term option

B. Reduced paid-up insurance option

Which retirement plan utilizes non-deductible contributions? A. Simplified employee pension plan B. Roth IRAs C. Profit-sharing plan D. Tax-sheltered annuity

B. Roth IRAs

A hospital confinement indemnity insurance policy pays? A. An indemnity to the insured for all expenses incurrred when the insured is confined to a hospital B. The daily benefit coverage amount stated in the policy for each day the insured is confined in the hospital C. 100% of the covered medical expenses less the deductible and co-insurance percentage D. The amount of the actual hospital expenses

B. The daily benefit coverage amount stated in the policy for each day the insured is confined in the hospital

Which of the following is a correct statement about life insurance policy types? A. Group life insurance is offered only to employees who provide evidence of insurability B. The initial premium for term insurance is lower than the initial premium for whole life insurance C. Limited payment whole life policies stay in effect only for as long as the premium is paid D. Universal life policies have a structured premium payment schedule that must be followed during the entire contract period

B. The initial premium for term insurance is lower than the initial premium for whole life insurance

All of the following statements about the election of a life insurance policy's settlement options are true, except? A. The election is made by the policy owner at the time the application is submitted B. When no settlement option is chosen, the proceeds are automatically paid to the policy owner's state C. The policy owner may change the settlement option after it has been chosen D. The election may be made by the beneficiary if no settlement option is in force at the time of death of the insured.

B. When no settlement option is chosen, the proceeds are automatically paid to the policy owner's state

Under social security, the definition of disability is the inability to engage in? A. An approved occupation B. An activity with a given level of compensation C. Any substantial gainful activity D. The person's chosen career

C. Any substantial gainful activity

Traditional comprehensive major medical plans include all of the following, except? A. Deductibles B. Out-of-pocket maximums C. First-dollar coverage D. Coinsurance

C. First-dollar coverage

Which of the following expenses is never covered by a LTC insurance policy ? A. Home health care B. Adult day care C. Hospital acute care unit D. Alzheimer's disease

C. Hospital acute care unit

In the event of an accidental death, the principal sum in a disability policy will be paid A. Over the course of a set period B. On a sliding schedule C. In one lump sum D. As a monthly indemnity

C. In one lump sum

Which statement is true regarding Medicare Supplement Insurance plans? A. Insurers may offer only broad coverage plans that contain both core benefits and additional benefits B. Insurers may freely offer whatever supplemental coverages they prefer to market C. Insurers may offer policies that contain only the core benefits D. Insurers may create insurance policies for approval by the CA Department of Insurance

C. Insurers may offer policies that contain only the core benefits

People commonly purchase an annuity to protect against the rist of A. Dying before their home mortgage is paid off B. Becoming uninsurable C. Outliving their financial resources D. Dying too soon

C. Outliving their financial resources

A disability income policy social insurance supplement (SIS) benefit rider: A. Pays benefits only if it turns out the insured is eligible for benefits from social insurance B. Pays a benefit if the insured is injured on the job and qualifies for workers compensation benefits C. Provides a payment only when the insured is totally disabled, but not receiving any social insurance benefit plans D. Provides for a bonus payment that will match social security disability income benefits, if they are paid

C. Provides a payment only when the insured is totally disabled, but not receiving any social insurance benefit plans

A return premium rider is a rider that? A. Returns insurance premiums if the insured surrenders the policy at any time after the 3rd policy year B. Waives the policy premium while the inured is totally disabled C. Provides for the periodic return of a percentage of the premiums that have been paid if the insured becomes and remains disabled D. Permits the policy owner to receive a full refund of premium if the policy is returned during the first 90 days after deliver

C. Provides for the periodic return of a percentage of the premiums that have been paid if the insured becomes and remains disabled

A disability policy, described as "guaranteed renewable" is one where the insurance company? A. Surrenders the right to change the premiums B. Reserves the right to change any of its terms C. Reserves the right to change the premiums, but may not change any of its terms D. May not renew the policy if the insured ceases to comply with certain conditions such as continued employment

C. Reserve the right to change the premiums, but may not change any of its terms

A form of rest or relief offered to family members who are caring for a person who requires continual care is? A. Hospice care B. Hospital care C. Respite care D. Intermediate care

C. Respite care

A policy holder stops making payments on a 20-pay life policy and converts the cash surrender value to extended term insurance. All of the following statements are true, except? A. The extended term coverage will stay in force for a specified period of time, and then coverage will cease B. No further premium payments are required C. The term policy will have the same loan value as the original policy D. The extended term insurance will be for the same face amount as the 20-pay life policy

C. The term policy will have the same loan value as the original policy

The adjustments that an insurer makes in a cash value account in a universal life policy each time a payment is made includes all of the following, except? A. Subtract from mortality and general expense charges B. Add the current interest C. Substract the policy surrender charges D. Add the current premium paid

C., Subtract the policy surrender charges

Viatical settlements are accomplished through the use of? A. Non-forfeiture provisions B. Settlement options C. Collateral assignment D. Absolute assignment

D. Absolute assignment

Which of the following are commonly covered by medical expense policies? A. Elective cosmetic surgeries B. Pre-existing conditions C. Expenses covered by a workers compensation policy D. Accidental injuries

D. Accidental injuries

The insured, aged 65, owns a $100,000 non-participating whole life policy. The policy is paid-up as of today. When would the cash value reach $100,000? A. Today B. Age 85 C. Never D. Age 100

D. Age 100

A provision stating that health insured's and their insurers will share covered losses in an agreed proportion is called? A. The stop-loss provision B. Comprehensive insurance C. Percentage insuring D. Co-insurance

D. Co-insurance

Term insurance is typically characterized by? A. Low premiums and high cash value B. High premiums and no cash value C. High premiums and high cash value D. Low premiums and no cash value

D. Low premiums and no cash value

Medicare Part A provides coverage for all of the following, except? A. Home health care B. Hospice C. Hospitalization D. Physicians services

D. Physicians services

The guaranteed insurability option provides the ability to: A. Waive premium payments in the event of disability B. Access a portion of the death benefit in the event of serious illness C. Double the amount of the death benefit in the event of accidental death D. Purchase additional insurance regardless of insurability

D. Purchase additional insurance regardless of insurability

Which type of insurance guarantees the right to renew the policy each year, regardless of health but at an increased premium? A. Convertible term B. Level term C. Decreasing term D. Renewable term

D. Renewable term

An individual with a low income and high insurance needs should buy? A. Whole life insurance B. Universal life insurance C. Endowment insurance D. Term insurance

D. Term insurance

A health insurance deductible is? A. The insured's payment for healthcare that is not considered a covered expense B. The cost of a covered expense minus the office co-payment C. The portion of insurance premium paid for coverage by the insured D. The amount of covered expense that the insured pays before the insurer pays

D. The amount of covered expense that the insured pays before the insurer pays

A $50,000 whole life policy with a cash value of $10,000 has been in force for 11 years. The policy owner is unable to continue the premium payments. Which of the following describes the reduced paid-up non-forfeiture option? A. The policy owner begins to receive $200 monthly payments from the insurer that will continue for life B. The policy is surrendered and the policy owner is paid $10,000 by the insurer C. The cash value is used to purchase a $50,000 term policy that is paid-up for 10 years D. The cash value is used to purchase a $20,000 paid-up policy

D. The cash value is used to purchase a $20,000 paid-up policy

All of the following apply to the life insurance cost-of-living rider, except? A. There is an additional premium for the additional coverage B. No evidence of insurability is required for the annual increases in coverage C. The insured receives an automatic increase in the policy's death benefit when there is an increase in the cost of living index D. The face value of the policy raises or lowers as the cost of living index increases or decreases

D. The face value of the policy raises or lowers as the cost of living index increases or decreases

What is the difference between a defined contribution plan and a defined benefit plan? A. The party receiving the distribution B. The party making the contribution C. The contract period requiring specific payments D. The penalties for early distribution

D. The penalties for early distribution

The insured is totally and permanently disabled. The insured's policy continues in force without the payment of a premium because the policy contains a? A. Grace period provision B. Guaranteed insurability provision C. Reinstatement provision D. Waiver of premium provision

D. Waiver of premium provision