Practice Exam 8

What does the phrase "life insurance creates an immediate estate" mean?

A) The total death benefit will be paid to a beneficiary on the death of the insured.

The federal law knows as COBRA does which of the following?

D) Allowing for, and providing protection of ex-employees, as well as their dependents by providing them the same conversion and extension benefits for group health insurance benefits as those given to existing employees

When a corporation ceases to exist entirely, their insurance license:

D) Terminates

Which of the following is NOT excluded by group life?

D) Accidental injury

If an insurer inadvertently is found guilty of unfair trade practices while issuing, renewing and servicing a policy, the insurer could be prosecuted for how many violations?

B) 3

If a dependent child covered by a group life plan is incapable of self-support, coverage under the plan may continue up to age:

B) Any age

If a physician is paid through a Preferred Provider Organization (PPO), the normal way of paying him/her is:

B) By payment directly for each service

An insurer owned by a parent company that provides insurance to cover the parent company's loss exposures is a:

B) Captive insurer

Which of the following could be used to pay off the mortgage on a home, providing a death benefit that equals the amount of an outstanding debt on the home, no more and no less?

B) Decreasing term insurance

All of the following are covered by the CLHIGA, EXCEPT:

B) Employer self-funded plans

In a group life policy with a death benefit of more than $50,000:

B) Premium cost for insurance above $50,000 is taxable as income to the insured

Any insurer that provides claim forms must include which of the following statements?

A) "For your protection California law requires the following to appear on this form: Any person who knowingly presents false or fraudulent claim for the payment of a loss is guilty of a crime and may be subject to fines and confinement in state prison".

A disability income policy covers injuries suffered by an insured on or off the job is called?

A) An occupational policy

Which of the following conditions would NOT be included among the chronic illness triggers of a LTC policy?

A) Deafness

In which of the following qualified pension plans are benefits linked to the employee's years of service and/or amount of compensation?

A) Defined benefit plan

Which two are activities of daily living?

A) Eating and dressing

A waiting period between the onset of disability and the time when benefits begin is the:

A) Elimination period

An ESOP invests in:

A) Employer stocks

The rules regarding life insurance policy illustrations are intended to ensure all of the following, EXCEPT:

A) Ensure that the illustrations specifies that both guaranteed and non-guaranteed elements will continue unchanged for all years shown.

In order to qualify for Social Security retirement benefits the worker must be:

A) Fully insured

Life insurance illustrations showing premiums, values, credits, or charges that are not determined at issues demonstrate:

A) Non-guaranteed elements

Every insurer offering individual life insurance policies or annuities to senior citizens that use non-guaranteed elements in illustrations must provide a statement to that effect. Which of the following is correct regarding this statement?

A) Non-guaranteed elements must be in bold print

If an insurer knowingly allows one of its agents to mislead a member of the public in order to induce the person to change their existing insurance, the Commissioner may:

A) Suspend the insurer's certificate of authority for the class of business involved

The Social Security age of retirement is dependent upon:

A) The individual's date of birth

Which of the following is the definition of morbidity?

A) The likelihood of illness or injury

A parent who lives at home is being cared for by an adult daughter on a full time basis. Which of the following would provide care if the daughter needs a period of separation?

B) Respite care

In a Worker's Compensation contract, Part One provides payments for which of the following?

B) Sums the employer is legally required to pay under State Workers Compensation Laws

Eligibility for Social Security retirement benefits is based on:

B) The number of quarters earned

When an insurer presents an illustration for life insurance, all of the following are prohibited, EXCEPT:

B) Using the insurer's "disciplined current scale" in the illustration

The MINIMUM number of employees for group life insurance in California is:

C) 2

In a group life plan, unmarried children may be covered as dependents until age:

C) 21

In a group life plan, a dependent child attending an educational institution may be covered until age:

C) 24

All of the following apply to an insurance broker (not an insurance agent), EXCEPT:

C) A broker is appointed by an insurer to transact insurance

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:

C) Corridor deductible

Medicare PART B does/is not:

C) Cover the expense of virtually all drugs prescribed by a doctor

Which of the following is not covered by the CLHIGA?

C) Group stop loss plans

The usual amount of death benefit in an industrial life insurance policy is:

C) Less than $2,000

If an insurer indicates that an illustration will be used, they must do which of the following?

C) Send a summary status report to the policy-owner annually

Medicare Part A begins automatically at age:

D) 65

All of the following are required to be included in life insurance illustrations, EXCEPT:

D) A statement that the benefits in the illustration are guaranteed

Which of the following allows employees to share in the financial success of the company?

D) Profit- sharing plan

An insurance company which is owned by individuals who purchase shares of stock in the company, share in profits in proportion to shares owned, and vote for a board of directors is known as what type of insurer?

D) Stock insurer

What does a stop-loss provision in a medical expense insurance plan set a maximum for?

D) The limit of out-of-pocket expense payments covered each year under a policy

Which of the following is NOT true regarding Managing General Agents?

D) They do not collect premium money from producing broker-agents