LA FINAL #1

Any time there is a change in a licensee's residence address, principal business address, and/or mailing address, the licensee must notify the Commissioner electronically:

. immediately.

The functions of a health insurance exchange include all of the following EXCEPT:

. license and regulate the activities of health insurance agents and producers

How do rights of an irrevocable beneficiary differ from those of a revocable beneficiary?

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

An example of a third party administrator is:

An outside organization that processes claims for an employer's self-funded plans

The Employee Retirement Income Security Act of 1974 (ERISA) mandates a plan sponsor to provide participants with:

Annual financial statements

Which of the following requires a reporting company to respond to a consumer's complaint that his file contains inaccurate information about them

Credit Reporting Act

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?

Deny the application without a hearing

The types of policies that are covered under the terms of the Guaranty Association include:

Direct, nongroup life, health, annuity and supplemental policies.

Which is not a major type of social security disability coverage?

Disabled Adult Benefits.

Under COBRA, a qualifying event ensures that an employee who loses coverage can

Elect to continue coverage

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

Pursue asset recovery against the estate of the recipient.

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:

RW and Associates underwriting for BLG Insurance Corporation

Ed has a $100,000 whole life policy with $8,700 of cash value, and a $116 monthly premium. He has been laid off from his job and is concerned how he will make his premium payment. He calls his agent and is informed of his right to continue his permanent coverage without any more premium payments. To which nonforfeiture option is his agent referring?

Reduced paid-up

Todd has been informed that he has a hernia which requires repair. When Todd researches the cost, he learns that his insurance plan will cover 200 points worth of surgical expenses. Each point represents $10, which means that $2000 of his surgery will be covered by his insurance plan. What system is Todd's insurance company using

Relative value

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

Renewable term

An intentional concealment entitles the injured party to which course of action?

Rescission of the contract

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

A disability policy, described as "guaranteed renewable" is one where the insurance company

Reserves 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

Respite care

The basic feature of a managed care indemnity plan is that the participants:

Select a provider and submit claims to the insurance company

Under a non-contributory group health plan, which of the following is false?

Since premiums are paid entirely by the employer, no less than 50% of the eligible employees must elect to participate in the plan.

The adjustments an insurer makes to a cash value account in a universal life policy each time a payment is made includes all of the following, except

Subtract the policy surrender charges

What is the purpose of the Fair Credit Reporting Act

To protect the public from consumer reporting agencies that are unfair and biased in their treatment of consumers.

The guaranteed insurability option provides the ability to:

Purchase additional insurance regardless of insurability

The maximum penalty for failure to print an individual agent's license number on a printed document is:

$1,000.

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 payments when due. The policy's cash value is

$150,000

How much is the one time death benefit from social security?

$255

What is the purpose of "key person" insurance?

. To cover decreased business earnings due to the death of a key employee

The probationary period in a group health policy is intended for people

. Who joined the group after the policy effective date

The premium for Andrea's group disability income policy is $250 per month. Her employer contributes $125 of the premium. If Andrea becomes disabled and receives $350 per week in benefits, she will pay income tax on what amount of her benefit?

. $175

Which of the following must be submitted for approval to the Insurance Commissioner? 1. Advertising; 2. Business forms; 3. Business hours; 4. Company name(s); 5. Office employees' salary range

. 1, 2, and 4

How many pints of blood are covered by Medicare Supplement core benefits?

. 3

Renewable term insurance can be best described as:

. A level death benefit with an increase in premium

Which provision will pay a portion of the death benefit prior to the insured's death due to a serious illness

. Accelerated death benefit

If a HICAP counselor believes that a client has had the terms or effects of any HMO, LTC, or Medicare Supplement insurance policy misrepresented to them, she may refer the incident to which of the following agencies?

. Any of the above.:The local District Attorney's office. B. The California Department of Insurance. C. The California Attorney General's office.

Under social security, the definition of disability is the inability to engage in

. Any substantial gainful activity

All of the following qualify for Medicare Part A EXCEPT

. Anyone who is willing to pay a premium.

The primary regulator(s) of those issuing health care plans includes:

. Both the CDI and Department of Managed Health Care

What type of benefit does a hospital indemnity rider provide?

. Cash directly to the insured

A provision stating that the insured and the insurer will share covered losses in an agreed proportion is called:

. Co-insurance

Which state law was enacted in California in 2002 to protect persons age 65 or older from insurance agent dishonesty?

. Financial Elder Abuse Statutes

shely purchased a $90,000 annuity with a single premium and begins taking payments immediately. What type of annuity does Ashley have?

. Immediate

Which statement is true regarding Medicare Supplement Insurance plans?

. Insurers may offer policies that contain only the core benefits

Analysts are prohibited from charging a fee for which of the following, except

. None of these are exceptions - all are prohibited

In the state of California which statement is true?

. Providing free insurance coverage in connection with the sale of services as an inducement for completing the transaction is not legal

All of the following are not defined as the transaction of insurance except:

. Rental Car service

What does the Insurance Commissioner have the right to do if an agent lacks authority from an insurer named on a binder for coverage?

. Suspend or revoke the license of the agent

All of the following statements about contingent beneficiaries are true, except

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

The gatekeeper concept refers to:

. The doctor referring you to a specialist who can meet your specialized needs.

A licensee shall not be required to comply with continuing education requirements if he or she has been a licensee in good standing for ____ continuous years in the state of California and is _______ years of age or older.

30; 70

The respective time for extension of benefits under COBRA for death of the employee is

36 months of coverage of spouse and dependent children.

In California, the minimum participation requirement for a contributory large group health insurance plan is

75% of eligible employees

All of the following are true about the Cost of Living Rider (COLA) except:

A COLA rider is the best rider because it doesn't have a maximum cap and always increases.

What is the difference between Par and Non-Par insurance policies?

A Non-Par is a nonparticipating life policy

Which of the following is a hazard?

A condition that might increase the likelihood of a loss occurring

Henry has a disability income policy with an AD&D rider. As the result of a traffic accident, Henry lost his left arm. In addition to compensation for his lost time from work, what other benefit will his policy provide?

A portion of the capital sum for the loss of his arm.

A person who is NOT self-employed may deduct the premiums for qualified long-term care insurance as a medical expense

A. only if the person itemizes deductions, and the person's deductible medical expenses exceed 10% of adjusted gross income, seniors 7.5% until 2016

Which of the following are commonly covered by medical expense policies?

Accidental injuries

A measure for rating an individual's need for LTC benefits is called:

Activities of daily living

A guaranteed purchase or guaranteed increase rider could allow an insured to do all of the following EXCEPT

Add a new spouse or child to the policy, without proof of insurability.

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?

Age 100

In addition to other unfair trade practices, which of the following acts and practices are prohibited in the marketing of long-term care insurance?

All of the above: Cold lead advertising, High pressure tactics C. Twisting

What would fall under the definition of Durable Medical Equipment

All of the above: Oxygen equipment B. Wheel chairs C. Hospital bed

The Commissioner regulates insurance rates through detailed rate reviews. The Commissioner will prohibit insurance rates that are

All of the above:Excessive. Inadequate. Unfairly discriminatory.

All of the following statements about survivorship life insurance are true, except

All of the following statements about survivorship life insurance are true, except

Bill, age 40, plans to retire at age 50. He would like to purchase an annuity that would provide income from the time he retires to age 65, when social security and other pension funds become available. He should consider a(n)

Annuity Certain.

All of the following statements about social security disability benefits are true, except

Benefits are designed to replace the entire amount of a worker's earnings

Bill incurs a medical loss of $1,000 due to an accident. He is covered under both his own policy and his wife's policy. He submits a claim for $1,000 to each insurance company with the expection that he will be reimbursed $1,000 from each company. Which of the following will take place?

Bill's policy will pay as the primary policy and his wife's policy will pay as the excess, and they will coordinate the benefits to prevent duplicaton.

he difference between the chronic illness rider and long-term care insurance is:

Both required the insured to incur long-term care expenses

The set of regulations issued by the California Insurance Commissioner that identifies the standards for the insurance code and how it is to be administered is

California Administrative Code of Regulations.

Each of the following terms is an important characteristic of a major medical policy, except

Capitation

Under an individual health guaranteed renewal contract, the insurer has the right to

Change premiums for the same class insured

provision stating that insurers will pay the first part of each loss is called:

Co-insurance

he term 'administrator' under California Insurance Code refers to any person who

Collects any charge or premium from, or who adjusts or settles claims on, life and health insurance policies or annuities.

An A&H agent is entitled to transact insurance coverage for sickness, bodily injury, or accidental health and may include benefits for disability income and:

Complete 3 hours of CE in ethics and code which will be included in the 24 hours of CE required and pay a fee. Rational

When both parties to a contract must perform certain duties and follow rules of conduct to make the contract enforceable, the contract is:

Conditional.

In a basic expense policy, after the limits of the basic policy are exhausted, the insured must pay what kind of deductible?

Corridor

The insured's policy has a deductible that is applied between the exhaustion of basic plan limits and the commencement of excess coverage. This is called a:

Corridor deductible

Pete is hospitalized with a back injury. Upon checking his disability income policy, Pete learns that he will not be eligible for benefits for at least 30 days. This would indicate that his policy was probably written with a 30 day

Elimination period.

Which of the following is eligible for the health care tax credit for small employers

Employers that have fewer than 25 full-time equivalent employees and pay wages averaging less than $50,000 per employee per year

The passage of worker's compensation legislation meant that:

Employers would be held responsible for the cost of their employee's work injuries, regardless of fault

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

Errors and omissions

Life insurance may be used to pay state inheritance taxes and federal estate taxes so it is not necessary to sell off assests from the estate to pay these costs. This is called

Estate Conservacion

Common life insurance policy riders include all of the following, except:

Extended term

Which of the following is a life policy written as a master policy?

Group

Which of the following statements are correct?

Group LTC policies must provide the insured with the right to convert to an individual policy.

HICAP stands for:

Health Insurance Counseling Advocacy Program

hich of the following programs is designed to protect children of low income parents?

Healthy families program

Mary has a group non-occupational health policy and is injured in a car wreck while performing her duties for her employer. This results in a long hospitalization period. Which of the following is true?

Her plan will not pay because Mary was injured at work.

Which of the following expenses is never covered by a LTC insurance policy?

Hospital acute care unit

Standard exclusions in disability insurance include which of the following: I) Loss of benefits for intentionally self-inflicted injuries; II) No payment for injuries suffered as a pilot or co-pilot; III) No coverage for disability due to intoxication; IV) Loss of benefits for sickness caused by a prescribed medication; V) No claim payable due to war or acts or war, unless declared.

I, II, and III

If an agent convinces a client to replace their 'comprehensive' Medicare Supplement policy with a 'comprehensive' Long Term Care policy, a HICAP counselor would do which of the following: I. Tell them it was a wise decision; II. Advise the client that the two policies cover different claims; III Refer the matter to the Department of Insurance for investigation; IV. Tell them they only need the comprehensive Medicare Supplement policy.

II and III

Which of the following statements about the suicide clause is incorrect

If a suicide is committed in the first 2 years then the beneficiary receives nothing.

In the event of an accidental death, the principal sum in a disability policy will be paid

In one lump sum

Which of the following statements about Federal Income Tax is not true?

Income premiums are tax deductible if insured pays the premium.

f a client has purchased a long term care policy that a HICAP counselor determines to be inadequate for the needs of the client, he will

Inform the client of the inadequacies in their policy.

The following information does not need to be communicated except:

Information either party believes to be material.

If an insurer is not able to meet financial obligations, the insurer would be considered

Insolvent

Which of the following describes an insurer who only has enough financial resources to provide for all its liabilities and all reinsurance of all outstanding risks

Insolvent

None of the following concerning a Buy and Sell agreement are true EXCEPT

It pays a death benefit in the event of death of a business owner.

If a contract provides a set amount of income for two or more persons with the income stopping upon the first death of the two or more lives insured, it is called a

Joint life annuity.

If Robert decides to cancel his disability policy and rely on welfare and Medicaid for his support during periods when he is not able to work, how much of the $300 annual premium will be returned to him as unearned premium?

Less than $300

What is the term for preferred risks being balanced with poor risks and average risks in the middle

Profitable Distribution of Exposures

Lindsay owns a fixed annuity. The payments she receives are roughly the same from one time to the next. A national economic crisis results in severe inflation. Which of the following describes the purchasing power of her benefit payment relative to what it had been when the economy was healthier?

Lesser

Term insurance is typically characterized by

Low premiums and no cash value

During the disability elimination period

No benefits are payable

When a long term care policy is replaced after it has been in effect for at least six months, the new policy may

Not exclude preexisting conditions that would have been covered by the original contract.

Which category of LTC services provides the highest level of services?

Nursing Home Care

When are parties to a contract required to communicate information solely based on personal judgment for a matter in question

Only when relevant

What does a social insurance supplement (SIS) benefit rider do?

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

Which of the following statements about the HICAP program is false

Provides assistance for a fee based upon ability to pay

People commonly purchase an annuity to protect against the risk of

Outliving their financial resources

Which of the following statements would not be a reason why people purchase life insurance?

Pay next years IRS income tax liability.

What is the term that most accurately describes the provision designed to relieve minors of life insurance premium payments if the parents have died or become disabled?

Payor Benefit

Which of the following occupations would have the lowest disability insurance premiums?

Personal trainer

Medicare Part A provides coverage for all of the following, except

Physicians' services

According to the CA Insurance Code, all insurers must maintain a department to investigate:

Possible fraudulent claims from insureds

A health maintenance organization (HMO) plan contains costs by promoting

Preventative care

Three time periods are common in medical expense policies. Which of the following is the normal chronological order of their occurrence?

Probationary Period - Elimination Period - Benefit Period

Term insurance is considered:

Temporary with no cash value.

An individual with a low income and high insurance needs should buy

Term insurance

At the time of application, life settlement licensees are required to provide the following disclosures in writing that must be signed by the policyowner except:

That their consent to obtain their personal information needed to complete the transaction and it may be provided to the person who buys the policy or provides the funds for the original purchase.

The Health Insurance Counseling and Advocacy Program is administered by

The California Department of Aging.

When a licensed agent submits a renewal application with applicable fee on or before the expiration date

The agent will be able to operate for up to 60 days after the specified expiration date.

The period of time following the youngest childs 18th birthday until the surviving parent is eligible is called

The blackout period

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

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

The State of CA required financial report includes all of the following information except:

The company's declined policy results.

A hospital confinement indemnity insurance policy pays

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

Which of the following is not a factor in determining rates charged by the California State Compensation Insurance Fund for insurance issued by it?

The extent to which the employees in a particular establishment have (or do not have) persons dependent on them for support.

In the case of The United States vs. Southeastern Underwriters Association, the Supreme Court decided that insurance was to be regulated by

The federal government.

According to the CA Insurance Code, an insured's policy must specify all of the following, except:

The financial rating of the insurer

Why is having a large number of similar exposure units important to insurers?

The greater the number insured, the more accurately the insurer can protect losses and set appropriate premiums

Which of the following is a correct statement about life insurance policy types?

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

Who bears all of the investment risk in a fixed annuity?

The insurance company

In order for an insured under Medicare Part A to receive benefits for care in a skilled nursing facility, what conditions must be met?

The insured must have been hospitalized for three consecutive days and the care must be medically necessary.

Which of the following is NOT a requirement of a tax-qualified, long-term care policy

The insured's physical impairment must be expected to last at least 30 days for benefits to be paid.

he following are guidelines that avoid unfair underwriting for the risk of HIV/AIDS except:

The insurer cannot deny coverage based solely on results from two different medical samples.

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, then:

The insurer will make the payments until the insured juvenile reaches the specified age

Not all losses are insurable, and certain requirements 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.

one of the following is incorrect regarding Part A of Medicare, except:

The monthly premium is free.

What makes up the entire contract in a life insurance policy?

The policy, and when attached, the application

Nick purchases a Medicare supplement policy in March and decides to replace it with another in May. Nick's history of coronary artery disease is considered to be a pre-existing condition. Which of the following is true?

The pre-existing condition waiting period that he served on the old policy will be transferred to the new policy, the new one picking up where the old one left off.

Loss retention is an effective risk management technique when all of the following conditions exist, except:

The probability of loss is unknown

Which of the following is a true statement regarding the social security (OASDHI) program?

The program provides only a minimum floor of income. Individuals are expected to supplement this with their own personal programs.

A group of 15 skydivers meet at a seminar and begin talking about life insurance during a break. Because it is expensive to get individual life insurance, they decide to band together to form a small group so that they will be eligible. They apply for small group life insurance and are rejected. Why?

The purpose of the group was to purchase life insurance.

Which definition of disability is the most difficult for an injured worker to satisfy?

The total disability definition used by the Social Security Administration

Which of the following statements about LTC is correct:

The very poor and the very rich probably do not need LTC coverage

Who would be the most likely candidate for purchasing a LTC policy?

Those who have the resources to pay the premiums

HICAP counselors are primarily

Trained and registered volunteers.

In life insurance policies, the insured is not legally bound to any particular action in the insurance contract, but the insurer is legally obligated to pay losses covered by the policy. What contract element does this describe?

Unilateral

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

Waiver of premium provision

ll of the following statements about the election of a life insurance policy's settlement options are true, except

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

In order to receive the principal sum benefit for death from a disability policy, the death must occur

Within a specified number of days after injury

Which of the following statements about profit sharing plans are incorrect?

Yearly earnings are fully taxable in the year received.

What term is used to refer to the comprehensive set of minimum core benefits that all qualified health plans must provide?

essential health benefits (EHBs)

No benefits are payable

false

A health insurance deductible is:

he amount of coverage expense the insured pays before the insurer pays

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

he policy remains in full force while the insured is disabled

Which statement is true concerning life analysts compensation?

may charge fees only if a written agreement is reached

A peril is:

the actual cause of the loss.