Examfx Life and Health Insurance

Upon notification of a claim, a claimant must be given access to the California Fair Claims Settlement Practices Regulations by all of the following means EXCEPT

by interview appointment with the agent of record

Risk can be defined as all of the following EXCEPT

cause of loss

According to the California Insurance Code, an "Insurance broker" is

compensated for transacting insurance on behalf of another person with an insurer.

An attempt by an agent to deter an insured from replacing an existing life insurance policy is called

conservation

As defined in the California Insurance Code, "insurance" is a

contract

A policy owner has the right to change all of the following EXCEPT the

dividend schedule

The additional premium charged by an insurer for adding the accidental death benefit for a whole life policy

does not affect the policy's cash value

When a family policy covers children, all of the following are true EXCEPT

evidence of insurability is required to convert coverage for children to permanent insurance.

Death benefits that are received by a beneficiary are generally

exempt from federal income tax

All of the following are true about term life insurance policies EXCEPT the

face amount is paid if the insured survives to the end of the policy period.

A person owns a life annuity. He elects to receive his annuity payments monthly for the remainder of his life with "ten years certain". The annuity will make payments

for a minimum of 120 months and a maximum of the remainder of his life.

What used in the California Insurance Code, the word "may" is intended to be

permissive

How much employer-provided group term life insurance is exempt from income taxation?

$50,000

Loss retention is an effective risk management technique when all of the following conditions exist EXCEPT the

probability of loss is unknown

Section 1729.2 of the California Insurance Code requires insurance producer applications and licensees to notify the insurance commissioner in writing, within ____ days of changes in background information after an application has been submitted or a license has been issued.

30

How long is the free cancellation period for life insurance policies offered to individuals who are 60 or older?

30 days

A 10-year certain annuity with an installment refund is purchased. The annuitant dies after receiving monthly payments for 5 years. How many remaining payments will the insurer make?

60 payments

Which of the following is a hazard?

A condition that may increase the likelihood of a loss occurring

When a person charges an insured a fee to review the insured's existing life policy, what type of license does that person need?

A life and disability analyst.

Which of the following would be an agent be guilty for misrepresenting the amount of dividends a policy will pay?

A misdemeanor

Which type of insurer is owned by its policyholders?

A mutual insurer

An insurer entitled to transact business by complying with the California Insurance code is known as

Admitted Carrier

Failure to report background changes within 30 days as required under Section 1729.2 of the California Insurance Code could subject a licensee or applicant to

All of the above

How often MUST an insurer file the National Association of Insurance Commissioners (NAIC) financial statement?

Annually

How can partners Guarantee a market for their share of the business in the event of death?

Buy-Sell agreements

Which report of an insurance applicant's creditworthiness and personal characteristics may influence eligibility for life and health insurance?

Consumer report.

your client has just bought a new home which he has financed with a $150,000, 7.5% interest, 30-year bank loan. he would like to be sure that if he dies that the unpaid balance of the mortgage would be paid. He wants a policy that will cover the mortgage balance - no more, no less - anytime during the life of the mortgage. Which policy is designed to meet this need?

Decreasing term policy.

What is the difference between deferred annuities and immediate annuities?

Deferred annuities have longer accumulation periods.

Which policy is a savings instrument designed to first accumulate funds and then systematically to liquidate the funds

Deferred annuity.

If you have been convicted of a misdemeanor and that misdemeanor conviction is later expunged pursuant to California Penal Code Section 1203.4, which of the following is true?

Even though your misdemeanor conviction was expunged, you must still disclose your misdemeanor conviction on your individual application for an insurance license.

Which of the following is NOT an option for the use of the policy dividends?

Fund the distribution of monthly income payments.

What is one difference between group life insurance and individual life underwriting?

Individual life insurance requires the applicant to answer medical questions

Which policy covering two or more individuals pays the face amount only when the first person dies?

Joint Life policy

Who are the members of the Medical Information Bureau?

Life and Health insurers.

Which two insurance products are commonly used to fund buy-sell agreements?

Life insurance and disability insurance.

A person who acts, offers to act, or assumes to act in a capacity where a license is REQUIRED without having a valid license, is guilty of a

Misdemeanor

The increase in the probability of a loss resulting from an insureds dishonest tendencies is known as

Moral hazard

Which type of insurance policy provides a death benefit that matches the projected outstanding debt on an individual's home?

Mortgage redemption

When are parties to a contract REQUIRED to communicate information solely based on personal judgement for a matter in question?

Never`

Which of the following statements regarding risk is TRUE

Only pure risk is insurable

Which type of life insurance policy gives an owner the right to share the insurer's surplus?

Participating

Insurer expenses include all of the following EXCEPT

Policy Premiums

If an insurer must have its raters accepted by the insurance department prior to using them, the insurer would be operating in which of the following types of jurisdictions?

Prior approval

The California Code of Regulations governing claim settlement practices prohibits all of the following acts of unfair discrimination EXCEPT denial of claim based on

Reckless behavior

Which is an agreement in which an insurer contracts with a third party to against losses from insurance policies it issues?

Reinsurance

Which type of insurance guarantees the right to renew the policy each year, regardless of health, but at an increased premium?

Renewable term

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

Rescission of the policy

Policies covered under the California Life and Health Insurance Guarantee Association include all of the following EXCEPT

Self-funded group life.

which policy provision protects the insurer against possible adverse selection?

Suicide clause

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

Tax-deferred earnings.

Which of the following is an express power given to the agent in an agency agreement?

The authority to represent the insurer.

a $50,000 whole life policy with cash value of $10,000 has been in force for eleven years. The policyowner is unable to continue the premium payments. Which of the following describes the reduced paid up nonforfeiture option?

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

Why is the delivery of a life insurance policy important?

The free-look period begins on the policy delivery date

The more times an event is repeated, the more predictable the outcome becomes. This is an example of

The law of large numbers

What rule is used to determine the importance of a representation?

The materiality of concealment

In group life insurance, who is issued a certificate of insurance?

The participant.

Which policy provision allows an insured to continue coverage under a previously lapsed policy.

The reinstatement provision.

What does the statement "Life insurance creates an immediate estate" mean?

The total death benefit is paid whenever the insured dies.

What do we call the process whereby insurers decide which customers to insure and what coverage to offer?

Underwriting

which type of insurance coverage has both a savings element and a flexible premium option?

Universal life

The policyowner, age 50, has been paying the premiums on his whole life policy for fifteen years. He needs the equivalent of one-third of his policy's cash value for two years. He wants to continue to have the same amount of life insurance protection and he can afford to continue to pay the policy's premium. Which of the following would appear to be his BEST course of action?

Use the policy loan provision to borrow money from the policy, but keep making the premium payments to keep the policy in force.

Which of the following contracts provides benefits that fluctuate automatically with investment results?

Variable life insurance

Which of the following would an agent be guilty of her misrepresenting the amount of dividends a policy will pay?

a Misdemeanor

A contract that restores an injured party to the condition that was present before the loss is

a indemnity agreement

All of the following information is gathered during the personal financial planning process EXCEPT

a listing of a person's civic and professional organization memberships

It is considered an unfair method of competition for an agent to advertise that the insurer the agent is appointed with is

a member of the Insurance guarantee Association

A life insurance policy written after 1988 that fails to meet the seven-pay test is known as

a modified endowment contract

According to the California Insurance Code, governing the use of life insurance policy illustrations, the term illustration means

a presentation of policy features that includes non-guaranteed elements.

A contract in which one party promises to indemnify another against loss that arises from an unknown event is

an insurance policy

An insured replaces an existing annuity with a new one and must pay a surrender charge for cancelling the existing annuity. The new policy holds no greater financial benefits to the insured than the existing contract. this is an example of

an unnecessary replacement

An insurance solicitor is a person authorized to

assist a broker or agent in selling insurance

Which of the following is a correct statement about the premium payment modes? the total premium paid by a life policyowner for one policy year is:

greater if the premium is paid semiannually rather than annually.

If a life agent sells a whole life policy to a prospect on behalf of an insurer without an appointment, the

insurer must submit a notice of appointment to the Commissioner.

the payor rider on a juvenile life policy provides that if the payor dies or becomes disabled before the insured juvenile reaches the age specified in the policy that the

insurer will make the payments until the insured juvenile reaches a specified age - usually twenty-one or twenty-five.

The PRIMARY objectives of insurance regulation include all of the following EXCEPT

interpret policy provisions

A life insurance is policy dividend is

legally defined as a return of excess premium and not taxable

A person authorized by on behalf of an insurer who transacts life, disability or life and accident and health insurance is defined as

life agent

An agent who violates the laws governing life insurance policy illustrates is subject to all of the following EXCEPT

mandatory termination of all insurer appointments.

All of the following qualify as background information as defined in Section 1729.2 of the California Insurance Code, EXCEPT

misdemeanor charges

it is a federal offense for a insurance agent to do all of the following EXCEPT

misrepresent facts on an insurance application

Which component of a life insurance premium is based on the insured's age and gender?

mortality

The number of deaths during a year compensated with a total number of persons exposed in the class is known as the

mortality rate

The theory of probability is applied to life insurance through the use of

mortality tables

According to the California Insurance Code, the commissioner can disapprove a licensee's request to use a fictitious name for any of the following reasons EXCEPT that the

name Is the licensee's actual name

Life insurance policies written without a physical examination are called

non-medical

People commonly purchase an annuity to protect against the risk of:

outliving their financial resources

The life insurance grace period allows the insured to

pay the premium after the due date without loss of coverage.

Which benefits are provided by key-employee insurance?

payment to a business when an important employee dies

individual life insurance policies sold to seniors in the State of California must include a prominently placed statement that divulges all of the following information EXCEPT

proof of surrender must be notarized at the agent's principal office.

The direct response distribution of insurance utilizes all of the following to promote the sale of insurance EXCEPT

telephone call from an agent

All of the following statements about contingent beneficiaries are true EXCEPT

the contingent beneficiary shares the death proceeds equally with the primary beneficiary.

The purchase of an insurance policy may accomplish all of the following for the insured EXCEPT

the elimination of risk

What is used to determine the amount of an annuity distribution that is exempt from taxation?

the exlcusion ratio.

All of the following statements. about aleatory contracts are true EXCEPT

the insured and insurer contribute equally to the contract

The required contents of a policy include all of the following EXCEPT

the probability of loss

All of the following are requirements of a contract EXCEPT

there must be equal consideration between the parties.

What is it called when an insurer uses higher rates for an individual solely based on religion, race, or ethnic group?

unfair discrimination

According to the California Insurance Code, if an insurer's certificate of authority is revoked, the Commissioner can proceed with any of the following actions EXCEPT

using Guarantee Funds to pay salaries

The insured bought an annuity ten years ago. He will retire in five years. To determine the value of his annuity, he must multiply the value of the "accumulation units" he owns, times the value of the "separate account". This type of annuity is known as a

variable annuity

the insured is totally and permanently disabled. the insured's policy continues in force without payment of further premiums because the policy contains a

waiver of premium provision