Health & Life Insurance
Which of the following will have to meet an insurable interest requirement in order for a policy to issue? A)Beneficiary B)Insured C)Insured's dependents D)All of the above E)Both a and b only
A) Beneficiary
The insured party has no part in determining the wording of an insurance contract. In this respect, insurance contracts are considered to be __________. A) Contracts of Adhesion B) Contracts of Forbearance C) Contracts by Regulation D) Contracts by Law
A) Contracts of Adhesion
What type of notice is used to show all of the services or supplies that were billed to Medicare during a 3-month period, what Medicare paid, and what the patient may owe the provider? A) MSN B) CPT C) OPPS D) HCPCS
A) MSN (Medical Summary Notice)
As a professional surgeon, which type of disability coverage would offer the most liberal definition of benefit triggers for the policy holder in terms of benefit receipt if the insured were to break his or her hand? A) Own occupation B) Employer provided C) Social Security D) Business overhead
A) Own Occupation
Which of following is not an exclusion under a health policy? A) Pre-existing conditions B) Accident injury C) Elective surgery D) Intentional self inflicted injury
B) Accident injury
If an employee who has a group policy leaves his job, what type of health insurance is guaranteed to him? A) Portability B) COBRA C) The company continues to pay insurance D) The employee buys an individual plan
B) COBRA
Which of the following describes an insurer who has enough financial resources only to provide for all its liabilities and for all reinsurance of all outstanding risks? A) Guaranteed B) Insolvent C) Solvent D) Non-participanting
B) Insolvent
Which of the following deals with a set of relationships where one person is authorized to act on behalf of another in order to create a legal relationship with a third party. A)Law of principals B)Law of agency C)Law of third parties D)None of the above
B) Law of Agency
Which of the following is a rider that allows a terminally ill person to access at least a portion of the death benefit proceeds prior to death? A) Waiver B) Living benefit C) Supplement D) Addendum
B) Living Benefit
Jack and his wife Lyn just purchased a home with a 15-year mortgage. Wanting to make sure that Lyn would be able to pay off the mortgage balance in the event of Jack's death, Jack had a "temporary" need for life insurance. What type of policy should Jack purchase? A)Whole Life Insurance B)Term Life Insurance C)Variable Life Insurance D)A Viatical Settlement
B) Term Life Insurance
All of the following are parties to a life insurance contract EXCEPT: Insurer A)Underwriter B)Beneficiary C)Owner D)Insured
B, C, and D
Which of these applies to a standard risk classification? A) Uses Mortality table B) Fixes additional charge to premium C) A lien is placed against the policy to reduce amount of insurance D) Rates person on age, health, habit and occupation
D
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
Why is having a large number of similar exposure units important to insurers ? A. The greater the number insured, the more premium is collected to offset fixed costs B. The insurer increases its market share with every insured C. The greater the number insured, the greater the amount of premiums collected to help cover losses D. The greater the number insured, the more accurately the insurer can predict losses and set appropriate premiums
D
What is the purpose of "key person" insurance? A) To provide health insurance benefits to key employees B) To give a key employee the ability to purchase the business C) To give retirement benefits to key employees D) To cover decreased business earnings due to the death of a key employee
D)
According to the CA insurance code, an insured's policy must specify all the of the following, except: A. The risks insured against B. The financial rating of the insurer C. The property or life being insured D. The policy period
N/A
In the state of California A. Twisting is an approved practice B. Providing free insurance coverage in connection with the sale of services as an inducement for completing the transaction is not legal C. Life and health ratings may not be related to the age of the insured D. A life solicitor's license has the same licensing requirements as a life agent's license
N/A
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
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
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
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
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
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 on the policy A. The insurer will make the payments until the insured juvenile reaches the specified age B. The insurer will lend money to keep the policy in force C. The insured's estate will make the premium payments D. The insurer will make all the of the policy payments
A
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
What is a characteristics of term life insurance? A) It is written for a specified period of time B) Permanent protection C) Builds cash value D) Provides lifetime protection
A
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 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)
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 faithfully 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
Short term policies have a benefit period of how long? A) 13 weeks to 104 weeks B) 24 weeks to 120 weeks C) 12 weeks to 52 weeks D) 15 weeks to 130 weeks
A) 13 to 104 weeks
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
A measure for rating an individual's need for LTC benefits is called: A. Case management B. Activities of daily living C. The gatekeeper mechanism D. Co-insurance
B
All of the following statement about contingent beneficiaries are true, except A. They receive remaining payments to be made under a settlement agreement upon the primary beneficiary's death B. The contingent beneficiary shares death proceeds equally with the primary beneficiary C. They receive the death proceeds if the primary beneficiary is deceased at the time of the insured's death D. More than one contingent beneficiary may be named
B
All of the following statements about survivorship life insurance are true, except A. The policy face amounts are usually more than $1,000,000 B. The policy face amount is paid out only upon the death of the first insured to die C. It offers premiums that are quite low compared to what is charged on separate policies D. It is particularly well suited to meet the needs of estate taxes
B
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
RW and Associates is an agency which represents BLG Insurance Corporation. RW and Associates may leave the name BLG Insurance Corporation in its advertisements by clearly stating the relationship between the two businesses in any of the following ways, except: A. RW and Associates who represent BLG Insurance Corporation B. RW and Associates underwriting for BLG Insurance Corporation C. RW and Associates placing business through BLG Insurance Corporation D. RW and Associates using the services of BLG Insurance Corporation
B
What does the Insurance Commissioner have the right to do if an agent lacks authority from an insurer named on a binder for coverage A. Fine the insurance company for non-compliance B. Suspend or revoke the license of the agent C. Authorize the agent with a certificate of convenience D. Request a certificate of authority be issued immediately
B
What is a characteristic of adjustable life? A) Renewable term B) Adjusts the face amount of the policy C) Flexible premium D) Has death benefit options
B
When a licensed agent submits a renewal applications with applicable fee on or before the expiration date A. The agent will be able to operate if a receipt for payment is returned prior to the license expiration date B. The agent will be able to operate for up to 60 days after the specified expiration date C. The agent will be able to operate if the agent goes in person to the insurance department to receive a temporary extension of the license D. The agent will be able to continue to operate after a 30 day extension to operate without receipt if requested and approved
B
Which of the following requires a reporting company to respond to a consumer's complaint that his file contains inaccurate information about them A. Unfair Practices Act B. Fair Credit Reporting Act C. COBRA D. Medical Information Act
B
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
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)
John, who had a life insurance policy with a death benefit, died on August 31st, after a long bout with cancer. He had been hospitalized for a month before his death. His wife contacted the insurance company to file her claim for the death benefit on September 5th, after John's burial, and after she had time to collect her emotions to deal with her personal loss. The insurance agent filed the papers to process the claim with his supervisor, and the death benefit was settled on October 30th. Were any laws violated in this scenario? A) No, the agent filed the paperwork within 30 days of the claim. B) Yes, the claim was not settled within 30 days of the claim. C) No, there are suspicions around the death of John. D) Yes, the claim was not settled
B)
When an insured person receives a health insurance policy he has how many days to review and ask for a return of his/her premium? A) 5 B) 10 C) 20 D) 30
B) 10 days
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
All of the following statements about social security disability benefits are true, except A. Benefits are based on the level of a worker's earnings up to the time of the disability B. Benefits will continue only while the worker cannot work at all C. Benefits are designed to replace the entire amount of a worker's earnings D. Workers must be totally and permanently disabled for at least five months to be eligible for benefits
C
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
People commonly purchase an annuity to protect against the risk of: A. Dying before their home mortgage is paid off B. Becoming uninsurable C. Outliving their financial resources D. Dying too soon
C
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
The passage of worker's compensation legislation meant A. Employees no longer had any legal means of obtaining reimbursement for work injuries B. Employees would have to sue their employers to obtain reimbursement for work injuries C. Employers would be held responsible for the cost of their employee's work injuries regardless of fault D. Employers were no longer responsible for work injuries to employees
C
Under COBRA, a qualifying event ensures that an employee who loses coverage can A. Transfer coverage to another group B. Convert to an individual policy C. Elect to continue coverage D. Request a waiver of premium
C
What is a per capita beneficiary? A) A group beneficiary B) When a person is too young to be a beneficiary C) When the money is divided equally among the beneficiaries D) When the beneficiary dies the proceed goes to heirs
C
Which definition of disability is the most difficult for an injured worker to satisfy? A. The own-occupation definition used by the Social Security Administration B. The typical definition of partial disability used by disability income policies C. The total disability definition used by the Social Security Administration D. The typical definition of temporary disability used by disability income polices
C
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
Which of the following is a hazard ? A. A large number of similar exposure units B. A peril C. A condition that might increase the likelihoold of a loss occurring D. A speculative risk
C
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)
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)
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)
Which of the following needs to have an insurable interest for an underwriter to issue an insurance policy? A)Owner B)Insurer C)Beneficiary D)Insured
C) Beneficiary
What is the most common component in all life insurance policies? A)Living benefits B)Waiver of premium C)Death benefit D)Cost of living rider
C) Death benefit
The "deductible" in a long-term care insurance policy is referred to as the __________. A) Deductible B) Coinsurance C) Elimination period D) Copayment
C) Elimination Period
A(n) __________ in an insurance contract is a statement by the issuing insurance company that sets out the essential element of insurance - to pay for losses covered in the policy. A) Beneficiary designation B) Premium amount C) Insuring clause D) Rider
C) Insuring Clause
The components of a long-term care insurance policy include all of the following EXCEPT: A) Elimination period B) Benefit amount C) Own occupation D) Benefit duration
C) Own Occupation
A health maintenance organization (HMO) plan contains costs by promoting A) After-hours care B) Generic Care C) Preventative Care D) Fee for Service Care
C) Preventative Care
What recourse does an insurer have if a violation of a material warranty on the part of the insured is discovered: A) A hearing by the insurance commissioner to determine the severity of the the misrepresentation and to determine an appropriate course of action B) None, if the policy has been in force for over 12 months C) Rescission of the policy D) A hearing by a court of law to determine an appropriate course of action an insurer may take
C) Recession of the policy
All of the following are reasons to buy term life insurance except: A) Survivor protection B) Estate creation C) Retirement income D) Estate conservation
C) Retirement income
An agent is in need of generating business. He gets an idea of asking his client to let his policy lapse so that the agent can sell him a new similar policy. Is this permissible and, if not, what is this action called? A) No; Rebating B) No; Bait and switch C) No; Twisting D) Yes; it is perfectly acceptable
C) Twisting
What is the type of insurance which pays for workers hurt in the course and scope of duty? A) Medicare B) Medicaid C) Workers Compensation D) Disability Social Security
C) Worker's Compensation
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
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
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
An example of a third party administrator is: A. An agent's supervisor who takes part of his commission B. An employee who handles self-insurance claims C. An employee who is responsible for evaluating for relative quality of competing group health and welfare benefits offered to his employer by insurers D. An outside organization that processes claims for an employers self-funded plans
D
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
Intentional concealment entitles the injured party to which course of action? A) None, due to the fact that the concealment was unintentional B) $250 fine to be paid to the injured party C) Possible imprisonment to the party who concealed the information D) Recession of the contract
D
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
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
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
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
Under an individual health guaranteed renewal contract, the insurer has the right to A. Discontinue coverage on the basis of employment B. Cancel the policy for health reasons C. Make unilateral benefit changes D. Change premiums for the same class insured
D
What would we call a representation which fails to correspond with its stipulations or assertions ? A. Fatal B. Fraud C. Frivolous D. False
D
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
Which of the following statements about the HICAP program is false? A. Stands for Health Insurance Counseling Advocacy Program B. Serves people needing information about Medicare C. Does not sell or endorse any specific types of insurance D. Provides assistance for a fee based upon ability to pay
D
What would be the Insurance Commissioner's most likely course of action if an applicant for an insurance license had a previous application for a professional license denied for cause by any licensing authority within five years of the date of the filing? A) Deny the application probably after a hearing B) As long as it was not insurance related, the application will be granted C) Approve only after a review by a panel of insurance professionals D) Deny the application without a hearing
D)
Which of the following is part of the application? A) Attending physician report B) Consumer investigation C) Medical Information Bureau D) Agent Report
D) Agent Report
Life insurance underwriters look at a variety of factors when determining the acceptance of an applicant. These factors can include: A)Health history B)Occupation C)Hobbies D)All of the above E)Both A and B only
D) All of the above
On a health insurance claim form, the exact procedures that were performed for the insured are represented by standard codes that are referred to as __________. A) RVU codes B) AMA codes C) HCPCS codes D) CPT codes
D) CPT Codes
All of the following can be considered life-changing events that could result in a change in the amount of life insurance coverage needed EXCEPT: A)Birth of a child B)Divorce C)Marriage D)Change in job title
D) Change in job title
A __________ is the amount that an insured person is expected to pay for a medical expense at the time of the visit. A)Deductible B) Reimbursement C) Corridor D) Copayment
D) Copayment
A beneficiary on a life insurance policy will receive what value upon the death of the insured? A) Cash value B) Surrender value C) Investment value D) Death benefit
D) Death Benefit
A business client is looking for ways to decrease its monthly premiums. To get down to the premium level sought after by the company, the agent realizes they have to go to a high deductible health plan. As part of your advice to the business, what should you include in your discussion? A) HMO B) PPO C) POS D) HSA
D) HSA (Health Savings Account)
Permanent life insurance policies always have two components. What are they? I. Death benefit II. Cash value III. Living Benefits IV. Conversion Benefit A) I, II, III and IV B) I, II and III C) II and IV D) I and II
D) I and II
When are parties to a contract required to communicate information solely based on personal judgment for a matter in question: A. Only when asked B. Only when the policy terms require it C. Only when relevant D. Never
D) Never
Which of the following is not a form of health insurance? I. Dental insurance II. Vision insurance III. Disability insurance IV. Long-term care insurance A) I only B) II only C) All of the above D) None of the above
D) None of the above
As a marketing tool, Ted, a health insurance agent, offered to send an applicant and his wife on a weekend vacation to a local resort to induce the applicant to purchase a policy. Is this practice permitted and, if not, what is it called? A) No; Misrepresentation B) No; Twisting C) Yes; it is perfectly acceptable D) No; Rebating
D) Rebating
A type of short term insurance is A) Accident policy B) Catastrophic policy C) Credit disability D) Travel insurance
D) Travel insurance
Which type of life insurance is considered to be more risky based on its investment component? A)Level Term Life Insurance B)Whole Life Insurance C)Decreasing Term Life Insurance D)Variable Life Insurance
D) Variable Life Insurance
When constructing a major medical insurance policy, several criteria must be established, including: A) Policy deductible B) Maximum out-of-pocket amount C) Elimination period D) All of the above E) Both a and b only
E)
Corporate owned life insurance proceeds may be used for the following purposes: A)To find, replace, and train a new employee or executive B)To fund other corporate debt obligations C)To redeem the deceased employee's stock D) A & C only E) All of the above F) None of the above
E) All of the above
Living benefits on a life insurance policy can be typically be accessed via: A) Lump sum B) Regular installments C) Loan D) All of the above E) Both a and b
E) Both A & B
Social Security should be considered one's primary source of disability income coverage. True False
False
Term life insurance should always be used in buy / sell agreements. True False
False