Exam #4

Insurers make an adjustment to the cash value of an account of a universal life policy each time a payment is made. They add the premium paid and:

current interest; adjusted for mortality and a general expense charge

which of the following conditions would NOT be included among the chronic illness triggers of a long term care policy

deafness

which government agency would possible provide coverage if you ran out of coverage under your own health insurance

department of health care services (DHCS)

Two of the long-term care chronically ill activities of daily living (ADLs) are

eating and dressings

under the consolidated omnibus budget reconciliation Act (COBRA) how many months of coverage are available?

eighteen months

when referring to an insurance contract when must a representation be made?

either at the time of or before policy insurance

the premium of a proposed disability income policy could be lowered by increasing the

elimination period

death benefits are received by a beneficiary are generally

exempt from federal income tax

the California insurance code requirements regarding the return of life or annuity contracts issued to seniors

gives a senior at least 30 days to return specified life and/or annuity contracts for a full refund

which of the following is not correct about long term care insurance?

has built in upward adjustments for the possible future changes in Medicare long term care coverage

Arnold and Bertha are married and work for different firms. Arnold has group health insurance through his company that also insures bertha.

if bertha files a medical claim Arnolds company is considered secondary

which of the following is true regarding an aleatory contract

if there were a loss, the insurer would pay out considerably more compared to the insureds premium

an individual might purchase LTC protection out of concern for all of the following except:

ineligibility for medigap coverage

what information can a party to a contract of insurance be allowed NOT to communicate according to California Law

information which the other already knows

if an insurer is not able to meet financial obligations when due, the insurer would be considered

insolvent

what factor supports the principle of indemnity

insurable interest

relevant factors in the health insurance principle of morbidity include all of the following except

intelligence

which of the following is true concerning an implied warranty

it doesn't have to be in writing

which of the following is correct about a third party administrator

it is an independent company that provides administrative service for self funded plans

what does the incontestable clause of a lifer insurance policy do?

it keeps the insurer from canceling the policy if, after 2 years, there is a discovery of error, concealment, or misstatement by the policy owner

A disability policy is issued and premiums are paid on an annual basis on the 1st of January.

it will be paid because of the loss occurred within the grace period.

if a premium is overcharged in the early years, and then remains constant throughout the premium paying period, though the risk of dying increases, it is called a ____________ premium

level

which of the following is not legal when determining premium rates for life or disability insurance?

nationality

all of the following statements regarding policy dividends are true except:

non participating policies generally pay large dividends

a policy specifically excludes insurance protection for those hazards occurring while working on the job., the category falls under is

non-occupational policies

the guaranteed insurability rider provides that the policy holder can purchase more insurance

on his own life at certain specifies ages without proof of insurability

what is the most liberal definition of disability?

own occupation

the home care coverage of a LTC policy provides for

part time nursing at home for a custodial care patient

the adult day coverage level of a long term care policy provides for

part-time nursing at a facility for elderly who live at home

which of the following is not correct regarding the disability benefits provided by social security

the payments received from this program are meant to entirely replace a workers lost earnings

While an insurer is paying the premium for a life insurance policy under the waiver of premium rider:

the policy remains in full force in every respect

all of the following statements about mortality tables are true except

the tables track a group of people from the year they were born until they all die

what is covered by part A of medicare

Hospitalization

if the owner of an annuity makes a withdrawal from it before age 59 1/2, what will the penalty be ?

10%

which is the most expensive LTC policy?

14 day elimination period, 5 year benefit period

what maximum amount of employer provided group term life insurance is tax free (excluded from an employees income)

50,000

To reach currently insured status under the Social Security system, an individual must be credited with a MINIMUM of

6 quarters of coverage during the last 13-quarter period

the social security black out period ends when the surviving spouse reaches the age of:

60

what is a senior age as it pertains to life and annuities

60

every licensee must indicate his or her license number on which of the following documents

All of the above

subject to the restrictions of the California insurance code, any person capable of making a contract may be considered

An insurer

from the following, identify that which constitutes the "entire contract" in a life insurance policy. the policy:

And a copy of the application when attached

what is the penalty for unlawfully acting as an agent or broker for, or aiding an insurer without a certificate of authority?

Any penalty for applicable misdemeanor, plus $500 plus $100 per month that the agent continues the violation

according to the definition of an ideally insurable risk, which of the following is nor a requirement?

Loss must be the result of a catastrophic event event

Marvin is involved in a serious car accident. no one is surprised Because Marvin is known to drive too fast identify the hazard here.

Marvin drives too fast

which program is designed to provide medical assistance to people with low incomes ?

Medi-Cal

Oscar owns a whole life policy that he has been paying into for many years.

Continue making the premium payments to keep the contract in force and borrow from cash value

As defined by the California insurance code, "insurance" is a

Contract

HICAP helps to provide to the senior community information on medicare health insurance and retirement planning. what else is true in connection with HICAP

HICAP does not endorse or sell any types of insurance

who submits the claim for medicare part A

Hospital

from lowest to highest, which is the correct order of initial premiums for life insurance policies

Modified premium, ordinary life, single premium

all of the following would be considered an accident as it relates to health insurance except:

Molly intentionally injures herself by falling off her bike.

what is the cost of service from the HICAP?

No Charge

which health plan might apply 90%. coinsurance to network providers and 70% coinsurance to non-network providers?

PPO

if a worker is now earning only $25k a year working part time (35k a year less than he earned a couple of years ago) and is earning less because of a disability, this disability would normally be called

Partial

Which benefits are provided by rep employee insurance?

Payment to a business when an important employee dies

which of there following is true about a service provider as it relates to health insurance?

Payments are made directly to the provider

what is medicare part D

Prescription drug coverage

relative value units use a conversion table to determine benefits for

Surgical procedures

which of the following often acts as a "field underwriter"?

The Agent

which contract provides for the systematic liquidation of a fund?

annuity

long term care coverage can be sold in various ways. which of the following is one of these ways

as part of a life insurance policy through the use of an endorsement

in the business of insurance , concealment is defined by all of the following statements, except

concealment does not occur if no inquiry is made

which of the following applies to social security

contributions are compulsory for most workers

deductibles coinsurance and co payments in a health insurance policy are cost effective choices that have the effect of

cost sharing

in California and insurer organized under the state laws of Nevada is considered

a foreign insurer

all of the following information is gathered during the personal financial planning process except

a listing of a persons civic and professional organization memberships.

assume that in each of the following examples the person is 65 years of age. who has the greatest need for comprehensive long term-care insurance

a person with $50,000 in yearly income and $130,000 in assets

the replacement of life insurance and annuity contracts requires which of the following

a statement to the effect that the policy being applied for is replacing a prior one

which of the following are commonly covered by medical expense policies

accidental injuries

the insured aged 65 owns a $100,000 whole life policy. the policy is paid-up as of today. when would the cash value reach $100,000

age 100

an example of a morale hazard in relation to a life insurance application would be

an individual has an indifferent attitude about participating in activities that may be damaging to his health

which of these is the best way to define the concept of indemnity

an insured cannot receive more than an actual economic loss in the event of a claim

upon notification of a claim, a claimant may have access to the California Fair Claims settlement practices regulations through all of the following means except:

an interview appointment with the agent of record

certain principles apply to business of insurance. one of them is the concept or insurance issued as an "aleatory" contract. what does aleatory mean here?

performance depends on an uncertain future event.

which type of exposure can be best defined as a condition or situation where the exposure to financial loss is presented to an individual or family from causes such as injury disability death sickness or unemployment

personal loss exposure

Health Maintenance Organization (HMO) are required to provide for all of the following services except:

prescription drugs

all of the following are features of a preferred provider organization (PPO) EXCEPT

primary care physicians act as gatekeepers

negotiating an insurance policy means which of the following

promising a commission rebate to an existing insured if she reviews

agents must act on behalf of their clients in such a way that upholds their "fiduciary duty." select the best example of this duty from the choices below.

quickly sending an insureds premium to the home office.

One important method of dealing with risk is to avoid it. all of the following describe risk avoidance except the insured

recognizing that his driving skills are deteriorating and therefore increasing the liability limit on his auto policy

what recourse does an insurer have if a violation of a material warranty on the part of the insured is discovered

rescission of the policy

all of the following would be considered benefits of insurance except

retention of the loss exposure risk by the insured

an agent who sells long-term care insurance owes his policyholders and prospective clients all of the following except:

sincerity

which of the following is a characteristic of non qualified annuities?

tax-deferred earnings

under Cal-Cobra all of the following would be considered qualifying events, except

termination, regardless of conduct

who must sign a statement acknowledging that a life insurance policy is to be replaced by an applicant

the applicant and the agent

a district feature of the alternative funding method known as self-funding is

the benefits are tailored to the needs of the participants

How does the cost recovery rule apply when a life insurance policy is surrendered for its cash value?

the cost basis of the policy is exempt from taxation

An elimination period in a disability income policy serves the same function as

the deductible in a medical expense policy

from the choices listed below, choose the one that best describes insolvency as it relates to insurance

the inability of an insurer to meet financial obligations to policy owners as a result of a deficient amount of paid in capital

gina the beneficiary on a life insurance policy dies before the insured dies. In California when the insured eventually passes away, the death benefit goes to which of the following if the policy is still in effect

the insureds estate

what happens to an agent's license after all notices of appointment have been terminated ?

the license is considered to be inactive

what is the first step in submitting medicare claims?

the medical provider submits expenses to medicare

according to the California insurance code governing advertising standards what must appear on all printed insurance proposals

the word "insurance"

the an eligible worker dies , all of the following may be entitled to survivors benefits through social security, except

the workers 41 year old widow

Which of the following is false about beneficiaries

trusts are only documents and therefore cannot be named as beneficiaries

when does the license of an agent become inactive

when the agent is not currently appointed by an insurer, but renewal fees are paid and continuing education requirements have been met

which of the following statements concerning the usual coordination of benefits provision is correct?

when two plans both have the provision, coverage as an employee is primary to coverage as a dependent

an individual is allowed to enroll in individual health insurance under the following circumstances except

within 30 days of being diagnosed with an illness