AD Banker Exam
If a policyowner returns a variable life insurance contract during the free look period, he/she is entitled to a refund of account value and policy fee paid for the policy within how many days from the date the insurer is notified of cancellation? A 45 B 90 C 30 D 60
30
A Medicare Supplement or LTC policy's free look period is: A 30 days B 15 days C 45 days D 60 days
30 days
In the event that an organizational license terminates, the organization may continue to transact insurance under the former license if a new application for an organizational license is submitted within: A 90 days B 30 days C 60 days D 45 days
30 days
There is a conversion period of _______ days in which the employee may, upon termination of eligibility and without evidence of insurability, convert group benefits to an individual policy. A 10 B 15 C 31 D 20
31
Nathan is insured under a group disability plan which requires that he pay 1/3 of the premium. Nathan is currently drawing a $6,000 monthly benefit from the plan. How much of the $6,000 is subject to income tax? A $4,000 B $2,000 C Zero D $6,000
4,000 Since the employer pays 2/3 of the monthly premium, then 2/3 of the monthly benefit ($4,000) would be taxable as income to Nathan.
Under most circumstances, within how much time is an insurer expected to affirm or deny a claim? A 20 days B 40 days C 30 days D 10 days
40
The California Insurance Code requires all producers who meet with prospective clients age 65 and older in their homes for the purpose of transacting life insurance, annuities, or disability insurance products to first provide a written notice of the first meeting which producers must retain a copy of in their files for a minimum of ______ years. A 5 B 3 C 2 D 4
5
Medi-Cal expenditures on behalf of persons in institutional settings and all expenditures on behalf of persons age _____ and older are subject to 'asset recovery' under federal Medicaid rules following the death of the individual. A 40 B 50 C 45 D 55
55
If a Medicare Supplement policy replaces another Medicare Supplement policy that has been in force for _____ months or more, the replacing insurer cannot impose an exclusion or limitation based on a preexisting condition. A 5 B 3 C 4 D 6
6
The Legal Actions provision preserves the insured's right to bring suit against his/her own insurer, but the insured must wait at least _____ days after filing a proof of loss before pursuing this action. A 45 B 60 C 30 D 90
60
The PPACA requires the medical loss ratio to be ______% for individual and small group plans. A 75 B 90 C 85 D 80
80 The Patient Protection and Affordable Care Act requires the medical loss ratio to be 85% for large group plans and 80% for individual and small group plans.
The Minimum Benefit Standards under a qualified LTC policy include all of the following, except: An Outline of Coverage must be delivered to an applicant on the initial solicitation and prior to the presentation of the application form B Every LTC policy must be issued as noncancellable C Every LTC policy must include basic policy requirements in the policy provisions D Every LTC policy must offer optional inflation protection to offset the increased costs of care
B
K has a $100,000 traditional whole life policy with $30,000 of cash values and a $10,000 loan outstanding. What is the maximum additional amount she could borrow from the policy at this time?
20,000
First year commissions for the sale of Medicare Supplement insurance cannot exceed ______% of the second and subsequent years' compensation. A 200 B 500 C 400 D 300
200
How much time does a licensee have to respond to the Department of Insurance after receiving an inquiry concerning a claim? A 10 business days B 21 calendar days C 15 calendar days D Not more than 72 hours, excluding weekends and holidays
21 calendar days
A Living Needs Accelerated Benefit Rider allows the early payment of a portion of the face amount of a life insurance policy before death, should the insured become terminally ill with less than how many months to live? A 36 B 24 C 48 D 60
24
Any premium rate adjustments and increases for a Medicare Supplement insurance policy must be provided to the insured in writing by the insurer at least _____ days prior to the effective date of the change.
30
Which of the following annuities does not have a traditional accumulation phase?
Single premium immediate
Which of the following is not true of Medicare Part B? A Provides coverage for outpatient services B All retirees are automatically covered C It is optional coverage for those eligible for Part A D All recipients pay a monthly premium
all retirees are automatically covered
Plans that offer Minimum Essential Coverage include all of the following, except: A Medicare B Medicaid C Individual insurance offered through an exchange, and employer-sponsored health insurance D An employer self-funded plan
an employer self-funded plan
Group life insurance is usually written as: A Whole-life B Annual renewable term C Variable universal life D Universal life
annual renewable term
In California, every person has an insurable interest in the life and health of all of the following, except: A Any person on whom he/she depends wholly or in part for education or support B Himself/herself C Any person under a legal obligation to him for the payment of money or respecting property or services, of which death or illness might delay or prevent the performance D Any person who agrees to be insured
any person who agrees to be insured
Before a licensed agent may transact insurance, the agent must first be _________ by an admitted insurer or a licensed agency which has a marketing agreement with one or more insurers. A Authorized B Appointed C Certified D Licensed
appointed
In Errors and Omissions terms, what does inadequacy mean? A Failing to answer all of the questions on the application B Failing to obtain professional designation C Failing to obtain the lowest premium D Failing to obtain proper type or amount of coverage for a client
failing to obtain proper type or amount of coverage for a client
Favorable tax treatment is given to the benefits received from _________ Long-Term Care contracts that meet the state or federal requirements. A Nonqualified B Partnership C Participating D Qualified
qualified
A retiree elected the Life Income with 10 Year Period Certain. He/she dies the day after receiving 119 monthly payments. The beneficiary will receive _______ more payment(s): A 1 B 10 C 6 D 12
1
Which of the following term life insurance policies would have the lowest 1st-year annual premium, all other factors being equal? A 5-year B 15-year C 10-year D 1-year
1 year The 1-year term life insurance policy would have the lowest first-year premium of the choices provided. In essence, one year of coverage is less risky to the insurer than being locked in to more years.
Anyone refusing to deliver any of the books, records or assets of a person against whom a seizure order has been issued will be guilty of a misdemeanor and punishable by fine of up to what amount? A $1,000 B $25,000 C $10,000 D $5,000
1,000
Any insurer who knowingly violates any of the anti-discriminatory practices will be assessed a civil penalty in the amount of ____________, plus any court costs. A $10,000-$50,000 B $100,000-$500,000 C $1,000-$5,000 D $1,000,000-$5,000,000
1,000-5000
All health plans, group and individual, offered through a Health Insurance Exchange must provide, at a minimum, essential health benefits in ______ categories of care and services. A 5 B 7 C 6 D 10
10
One of your clients just reinstated an Accident and Health policy. When is coverage effective for sickness and accident? A In 10 days for sickness and immediately for accidental injuries B Immediately for both accident and sickness C In 30 days for sickness, immediate coverage for accidents D In 10 days for accident and in 48 hours for sickness
10 days for sickness and immediately for accidental injuries
Failure to enroll in Medicare Part A and pay premiums beginning at the required age may result in a ______% premium penalty for twice the number of months a beneficiary should have been enrolled in Part A. A 15 B 20 C 5 D 10
10%
A Small Employer is defined as any person, firm, corporation, partnership, or association that is actively engaged in business and has ______ employees or less. A 2 B 20 C 50 D 100
100
If an employer offers dependent coverage it must be offered to what percentage of eligible employees? A 100 B 90 C 80 D 70
100
Life insurance will be considered 'incidental' to a qualified plan if the insurance amount is not more than ________ times the expected monthly benefit amount. A 100 B 200 C 250 D 150
100
Until yesterday, J. J. worked for his father's company and was covered by the company's large group health plan. He stopped working to go to college. He is 26 years of age and wants to keep the same coverage until he earns his degree in approximately 24 months. Which of the following statements is true?
A good option for J.J. is to exercise the COBRA option under his father's group plan
When the Code requires a notice to be provided to a policyowner, which of the following would not be an acceptable method of delivery? A By Federal Express, UPS, or other prepaid delivery service B By U.S. Mail to the current address of the policyowner with less than $0.50 additional postage due C By email to a policyowner who had opted in to electronic delivery of notices D By U.S. Mail postage paid to the last known address of record of the policyowner
By U.S. Mail to the current address of the policyowner with less than $0.50 additional postage due
The California Financial Information Privacy Act is sometimes known as: A CA-FCRA B CA-HIPAA C Cal-GLBA D CA-FIPA
Cal-GLBA
Which of the following annuities is known for having the highest surrender charge percentages and the longest surrender charge time periods?
Indexed Annuities
Delivering the policy and explaining it so the insured understands the benefits, provisions, riders, exclusions, and ratings endorsements is the responsibility of the:
Producer
Which of the following risks is protected by insurance?
Pure Risk
If Charlotte wishes to cash out her annuity at age 58 after having it for over 20 years, what should she know about prior to doing it? She will pay surrender charges for failing to annuitize B She will have to pay tax penalties C She will have to pay income taxes D She will face income tax consequences and tax penalties
She will face income tax consequences and tax penalties
______________ are conditions stipulated in the contract for which the insurer will not provide coverage. A Eliminations B Exclusions C Exceptions D Hazards
exclusions
Which of the following is not a natural person? A Tom Thumb, a retired tailor who still owns Tom Thumb Tailors B Tom Thumb, a tailor who is employed by a dry cleaner C Tom Thumb, a self-employed tailor doing business as Tom Thumb Tailors D Tom Thumb Tailors, a business operated by Tom Thumb, a sole proprietor
Tom Thumb Tailors, a business operated by Tom Thumb, a sole proprietor
Ultimately it is up to the _______ to determine if the proposed insured is an acceptable risk.
home office underwriter
Each agent who accepts an application for life insurance or annuity that involves replacement of any existing life or annuity policy must submit to the insurer: A A comparative summary of the two companies and polices involved in the transaction B A Buyer's Guide C All sales literature used during the solicitation D A Notice Regarding Replacement
a notice regarding replacement
Which one of the following applicants is most likely to have an insurable interest in the insured? A An individual applying for insurance on a neighbor B An employee applying for a policy on a co-worker C A spouse applying for coverage on an applicant D An applicant who is applying for coverage on a person he/she is expecting an inheritance from
a spouse applying for coverage on an applicant The policyowner must have a potential for financial hardship in the event of a loss, such as a spouse.
How is a life settlement transaction similar to a viatical settlement transaction? A The policy is about to lapse B The policy is overfunded C The insured is terminally ill D A third party buys a life insurance policy for less than its face amount
a third party buys a life insurance policy for less than its face amount A Life Settlement is similar to a viatical settlement in that it is the sale of an existing life insurance policy to a third party for more than its cash surrender value, but less than its death benefit. There is no requirement for the insured to be terminally ill in order for a life settlement to occur. A policyowner may choose to sell their policy because the premiums are too high or they want to purchase a different policy. Note: If your state has particular Viatical or Life Settlement licensing and solicitation laws, they will be addressed in the state law chapter.
Once the insurer issues a policy as applied for, if premium was submitted with the application, a legal contract has been formed since the policy becomes the: A Counter-offer B Acceptance C Subrogation D Offer
acceptance Once the insurer issues the policy, if premium was submitted with the application, a legal contract has been formed since the issued as applied for policy becomes the acceptance. premium is the offer
Typical exclusions or restrictions found in an accelerated death benefit include all of the following, except: A Suicide B Engaging in illegal occupations or activities C Intentional self-inflicted injury D Accidental injury while at work
accidental injury while at work
Kirk has just reinstated an individual A&H policy that had lapsed and wants to know how soon coverage will be in effect for any accident or sickness. You, the agent, would say: A Accidents immediately, sickness after 30 days B Sickness immediately, accidents after 30 days C Accidents immediately, sickness after 10 days D Sickness immediately, accidents after 10 days
accidents immediately, sickness after 10 days
If a client chooses to pay premiums other than annually, what can he or she expect? A Additional charges to offset lost interest, earnings, and increased administrative costs B Better client service C Lower overall total premium costs D Higher surrender charges on some policies
additional charges to offset lost interest, earnings, and increased administrative costs
An insurer authorized to transact insurance in a particular state by that state's insurance department is known as: A An admitted insurer B A nonadmitted insurer C A resident insurer D A domestic insurer
admitted
Which of the following types of coverage provides custodial care outside the home for individuals not requiring confinement? A Home Health Care B Respite Care C Hospice Care D Adult Day Care
adult day care
Insureds that are less desirable than average risks and tend to seek insurance coverage to a greater extent than better risks is called which of the following? A Estoppel B Law of Large Numbers C Adverse selection D Sharing
adverse selection
The exception to the rule concerning the non-deductibility of life insurance premiums is: A Life insurance to fund a Buy-Sell Agreement B Key Employee Insurance C All employer paid group life insurance premiums D Third-Party Ownership Policies
all employer paid group life insurance premiums
The Patient Protection and Affordable Care Act, referred to as the Affordable Care Act (ACA), consists of all of the following, except: A Subsidized, regulated private insurance B An expansion of coverage through public and private insurance which includes broader Medi-Cal eligibility and Medicare coverage C All employers are required to provide health insurance to their employees D A combination of measures to control healthcare costs
all employers are required to provide health insurance to their employees
What happens if a policyowner exercises the free look? A The policy is cancelled from that period forward and he/she does not owe any amount for breach of contract B He/she will receive the cash values in the policy, if any C All premiums and any policy fee paid for the policy must be refunded to the owner within 30 days from the date that the insurer is notified of the cancellation D He/she will receive a refund of any premiums paid in excess of the cost of underwriting
all premiums and any policy fee paid for the policy must be refunded to the owner within 30 days from the date that the insurer is notified of the cancellation
All of the following are allowed or true regarding a producer or agent, except: A As an incentive to close a sale, they may commit themselves to professional insurance counseling at no charge to the prospective client B As an incentive to close a sale, they may place coverage on a brokerage basis with a company the agent does not represent, to serve a prospective client C As an incentive to close a sale, they may select the lowest priced policy from the companies they represent to offer to a prospective client D As an incentive to close a sale, they may offer discounts of premium to a prospective client
as an incentive to close a sale, they may offer discounts of premium to a prospective client
A client requests a Medical Expense Policy several months after the agent suggested the policy. The underwriter will most likely order which of the following? A Attending Physician's Statement B Consumer Report C Stress Test D Blood Test
attending physicians statement
With equity-indexed life, the interest credited to the policy is: A Based on a percentage of the increase in a stipulated stock index B Established by the full amount of a stock market advance, including dividends C Declared by the insurer's board of directors D Equal to the dividends paid on a stock index's underlying securities
based on a percentage of the increase in a stipulated stock index
All insurers, brokers, agents and others engaged in the business of insurance owe a consumer all of the following duties, except: A Best prices B Honesty C Fair dealing D Good faith
best prices
What do both life insurance and annuities have in common? A Both are primarily designed to pay out a death benefit B Both are primarily purchased to provide greater income at an older age C Both are products based on a mortality table D Both policies require proof of insurability prior to issuance
both are products based on a mortality table
Non-tax qualified plans must meet the eligibility requirements of the: A California Insurance Code B IRS C Federal Insurance Laws D NAIC
california insurance code
Which of the following is enacted by the California legislation? A The Code of Ethics B A cease and desist order C The California Regulatory Code D The California Insurance Code
california insurance code The Insurance Code is the set of statutes enacted by the state legislature (or by the voters through ballot referendum), which regulate the business of insurance in California. Only the state legislature has the authority to write or amend the Insurance Code.
Which of the following terms and definitions do not match? A Noncancellable -- Guaranteed renewable to a specified age or date with a premium that will not increase B Cancellable -- An effective period for the policy is expressed in its provisions and it cannot be renewed C Guaranteed Renewable -- Renewable without proof of insurability, but premiums may increase due to age D Optionally Renewable -- Renewable only at the option of the insurer
cancellable-- an effective period for the policy is expressed in its provisions and it cannot be renewed
If an insurer cancels a contract, written notice must be provided to the insured within a certain period of time. This is a requirement under which of the following provisions? A Entire Contract B Legal Actions C Cancellation D Conformity with State Statutes
cancellation
An insured with a participating life insurance policy receives an annual dividend check in the mail. He must have selected which Dividend Option: A Accumulate at interest B Premium reduction C Dividend reinvestment D Cash
cash
A person will be deemed to be transacting insurance when the person advertises on the internet, and does any of the following, except: A Communicates with a California resident regarding one or more terms of an agreement to provide insurance on an insurance policy B Communicates an invitation to inquire C Accepts an application for coverage from a California resident D Provides an insurance premium quote to a California resident
communicates an invitation to inquire
A Property & Casualty Broker-Agent also licensed as a Life-Only or Accident & Health agent must do all of the following prior to renewing his or her license, except: A Complete all mandatory continuing education required for any line of licensing, regardless of the total hours of CE already credited toward renewal B Complete 3 hours of ethics continuing education C Complete 24 hours of continuing education in any line of licensing D Complete 24 hours of continuing education in each line of licensing
complete 24 hrs of continuing education in each line of licensing
Medicare Plan A provides the ____ benefits that must also be included in all other Medigap plans. A Core B Indemnity C Extended D Comprehensive
core
Care that is nonmedical in nature and provides assistance with activities of daily living in a nursing home facility or in one's own home is considered: A Skilled nursing B Intermediate C Custodial D General
custodial: Custodial (Non-skilled) care is nonmedical care to provide assistance with activities of daily living such as bathing, toileting, eating, dressing, transferring, and continence, may be provided in a nursing home facility or in one's own home, and providers are not required to undergo medical training.
The Insurance Commissioner may examine the records of an insurer in order to: A Assess the insurer's value on behalf of prospective investors B Evaluate an insurer's claims process prior to recommending it to the Chamber of Commerce C Determine whether the insurer's information technology is up to date D Determine the insurer's solvency
determine the insurer's insolvency
An annuity policyowner has all of the following rights, except: A Determine the mortality table to use B Name a beneficiary C Elect or cancel any riders D Select a settlement option
determine the mortality table to use
Even though this rider can pay out upon death, it also pays out a benefit if the insured loses a limb, eyesight, or hearing as a result of an accident. What is this rider benefit called? A Reimbursement B Reattachment C Dismemberment D Indemnity
dismemberment
In a policy summary all of the following must be shown as being guaranteed, except: A Premiums B Interest rates C Cash values D Dividends
dividends dividends are NEVER considered guaranteed
Which of the following is consistent with group health underwriting? A Individual health histories are required B Participants must submit to individual physical exams C Smokers pay a higher rate D Each member of the group is covered regardless of his or her health history
each member of the group is covered regardless of his or her health history group health insurance does not require individual underwriting
A(n) _________ plan calls for the business to purchase life insurance policies on each of the business owners. A Cross Purchase B Entity C Credit Protection D Group
entity
All health plans, group and individual, offered through a Health Insurance Exchange must provide, at a minimum, ___________ health benefits. A Core B Essential C Usual and customary D Basic
essential
What is the name given to causes or conditions listed in the policy that are not covered and for which no benefits are payable? A Waiting periods B Elimination periods C Probationary periods D Exclusions
exclusions
If the premium can fluctuate at the policyowner's discretion, meaning it can be increased, decreased, or even skipped at any premium due date, what premium paying method was used? A Flexible B Adjustable C Special D Modified
flexible
Which of the following statements regarding life insurance policy exclusions is TRUE? A The war clause states coverage is provided if death is the result of war B Generally, aviation is excluded, except for fare-paying passengers on a commercial flight C The status clause states that coverage is provided to individuals with military status D Hazardous occupations are usually covered at a reduced benefit if death is the result of an insured's occupation
generally, aviation is excluded except for fare-paying passengers on a commercial flight
As long as the premium is paid, a Medigap policy is __________ renewable.
guaranteed as long as the premium is paid, a Medigap policy is guaranteed renewable
Every insurer and life agent offering for sale individual life insurance policies, or individual annuity contracts that are issued for delivery to senior citizens in California with the use of non-preprinted illustrations of non-guaranteed values must disclose on those illustrations, or on an attached cover sheet, all of the following, except: A Interest rates, dividends, or values that are set forth in the illustration are not guaranteed, except for those items clearly labeled as guaranteed B An illustration is not intended to predict actual performance C This is an illustration only D Guaranteed values are insured by the California Insurance Guaranty Association
guaranteed values are insured by the California Insurance Guaranty Association
01:04:11 By requiring a minimum medical loss ratio, an insurance company provides greater value to its policyholders when a ________ percentage of premiums is used for healthcare costs versus administrative expenses or profits. A Equal B Higher C Certain D Lower
higher
A copy of an application becomes part of the entire contract: A If the policy is issued as applied for B When it is mailed to the insurer by the producer C If it is attached to the policy D When it is signed by the applicant
if it is attached to the policy
Attaching a(n) ___________ rider excludes coverage for a condition that would otherwise be covered. A Rehabilitation benefit B Lifetime benefit C Waiver D Impairment
impairment
The provision that limits the amount of time an insurer has to challenge a claim and void the contract upon proof of a material misstatement is called the ____________ clause. A Consideration B Entire Contract C Incontestability D Insuring
incontestability
An insurer that experiences the impairment of its financial standing has become: A Unauthorized B Insolvent C Delinquent D Non-admitted
insolvent
Information about an applicant's work behavior or character gathered from neighbors or co-workers would be included on an? A APS B Agent's Report C MIB D Inspection Report
inspection report
An individual faces the risk of economic loss in the event of property damage because of which of the following? A Indemnity B Limit of recovery C Insurable interest D Subrogation
insurable interest
All of the following policies end when an insured dies, except: A Variable Universal Life B Joint Survivorship C Joint Life D Juvenile Life
joint survivorship continue on until the second insured (survivor) dies
Which of the following is not an element of an ideally insurable risk? A Risks must include a large number of homogenous units B The loss must be accidental C The loss must be catastrophic D The loss must be quantifiable
loss must be catastrophic insurers want to avoid catastrophic perils
The annuity product which features fixed interest rate guarantees, combined with an interest rate adjustment factor that can cause the surrender value to fluctuate in response to market conditions, is known as: A Variable B Market Value Adjustment C Indexed D Fixed
market value adjustment annuity
Which of the following is included in Part I of a Life Insurance Application? A Name and Occupation B Present health C Family health history D Hospitalizations and surgeries
name and occupation
What taxes apply to the benefits under an individual Disability Income Policy on which the insured has paid the premiums? A Income tax B Capital gains tax C FICA tax D No tax
no tax benefits recieved from an individual disability income policy are not subject to taxation
An insurer that is not approved by the state Department of Insurance to transact insurance is called a(n) ___________ insurer. A Authorized B Non-admitted C Fraternal D Domestic
non-admitted
Dominic is a physician associated with a closed panel HMO. This means that Dominic can work with: A Only his own private patients B Subscribers of any HMO operating in the area C Both that HMO's subscribers and his own private patients D Only that HMO's subscribers
only that HMO's subscribers
Which provision is an Optional Uniform Provision? A Other Insurance With This Insurer B Claim Forms C Physical Examination D Payment of Claims
other insurance with this insurer all other are mandatory
Managed Health Care attempts to contain costs by controlling the behavior of participants in all of the following ways, except: A Partial Case Management B Copayments and/or coinsurance C Preventive Care D Controlled Provider Access
partial case management
Policies that may pay dividends to the policyowner are known as: A Mutual B Participating C Interactive D Proactive
participating
An insurer has the right to request a physical exam or an autopsy to determine its liability to pay benefits. This request may be made under which provision? A Proof of Loss B Proof of Disability or Death C Physical Exam & Autopsy D Intoxicants and Narcotics
physical exam & autopsy
The Insuring Clause under an individual A&H policy would contain all the following, except: A The name of the insured and insurer B What perils are covered C Premium or rate calculations D The length of the policy period
premium or rate calculations premium or rates would be in the consideration clause
Medicare Advantage plans are offered by ___________ that contract with Medicare to provide both Part A and Part B benefits and typically prescription drugs.
private insurance companies
Under the California Insurance Code, an Insurance Solicitor is employed to aid a property and casualty broker-agent acting as an insurance agent or insurance broker in transacting ____________ insurance. A Health B Life C Property and casualty D Disability
property and casualty
In a replacement sale all of the following are producer responsibilities, except: A Provide copies of the notice regarding replacement and any sales proposals to the applicant and replacing insurer B Reimburse the applicant for any surrender charges that may be incurred as a result of the transaction C Obtain information regarding the in force policies including name and policy numbers D Complete a notice regarding replacement with applicant and producer signatures
reimburse the applicant for any surrender charges that may be incurred as a result of the transaction Reimbursing the applicant for any surrender charges that may be incurred is not permitted, but may indicate an improper replacement.
All of the following are traditional whole life policy nonforfeiture values, except: A Cash surrender values B Reduced paid-up insurance C Renewable and convertible features D Extended term insurance
renewable and convertible features traditional whole life policy builds nonforfeiture values, such as cash surrender values, reduced paid-up insurance, and extended insurance
Guaranteed Renewable means: A Renewable with adjustable premiums, by classification only B Renewable with adjustable premiums determined by frequency of claim C Renewable with guaranteed premium D Renewable only at the option of the insurer
renewable with adjusted premiums by classification only
A(n) ___________ is the likelihood that a loss can occur. A Hazard B Insurable interest C Peril D Risk
risk
Most often, life policies pay death claims in a single lump sum. The options that allow benefits to be paid other than lump sum are called _____________. A Mandatory Options B Statutory Options C Distribution Options D Settlement Options
settlement options
Which measure could an underwriter use to reduce the risk when underwriting a Disability Income Policy? A Shorten the elimination period and increase the amount of the benefit B Shorten the benefit period and increase the elimination period C Increase the benefit period and increase the amount of the benefit D Increase the benefit period and shorten the elimination period
shorten the benefit period and increase the elimination period
The two types of care specifically provided in a licensed facility and maintain a daily medical record of each patient are: A Assisted living and adult day care B Skilled nursing and intermediate C Skilled nursing and custodial D Intermediate and custodial
skilled nursing an intermediate
The __________ enrollment period begins when a person past age 65 who was covered by an employer sponsored group health plan is no longer covered by the plan (whether the person elects COBRA continuation or not). A Initial B Medicare Open C General D Special
special
Under the Entire Contract provision, all of the following may be part of the agreement between the insured and the insurer, except: A A copy of the application B The policy C Any riders or endorsements D Statements made to the applicant by the producer during the application process
statements made to the applicant by the producer during the application process
All of the following are characteristics of a Mutual Insurance Company, except: A Policyholders elect the Board of Directors B Stockholders have ownership C They provide insurance to members D Profits are returned as dividends
stockholders have ownership
A person licensed to write insurance coverage with non-admitted insurers when such coverage cannot be placed with an admitted insurer is a(n):
surplus line broker
Benefits that may be received monthly under Social Security include all of the following, except: A Survivor's benefits for widows and widowers no earlier than age 62 B Retirement benefits for spouses of workers as early as age 62 C Retirement benefits for workers as early as age 62 D Survivor's benefits for dependent children until age 18 (19 if still in school)
survivor's benefits for widows and widowers no earlier than age 62
If an agent permits an unlicensed employee to perform acts for which a license is required, the agent is subject to having his/her license: A Denied B Suspended or revoked C Decertified D Withheld
suspended or revoked
An agent's appointment remains in effect until any of the following takes place, except: A Expiration of the license B The agent attains the age of 65 C Cancellation D Filing of a notice of termination by the appointing insurer
the agent attains the age of 65 Under the California Insurance Code, an agent's appointment remain in effect until cancellation or expiration of the license or the filing of a notice of termination by the appointing insurer.
Which statement is false concerning Credit Disability Insurance? A It is commonly written with installment debt obligations B It is commonly sold as a group plan, although individual contracts may be written C The benefit may exceed the total amount of the debt or the amount of monthly payment D The creditor receives the benefits to pay the debt if the debtor is disabled
the benefit may exceed the total amount of the debt or the amount of monthly payment
All of the following regarding convertible term life insurance is true, except: A The new premium will be higher on the conversion policy compared to the original policy B The conversion can take place at any time C Conversion is without evidence of insurability D Conversion can be based on either the attained or original issue age of the insured
the conversion can take place at any time
Credit life insurance automatically names who as the beneficiary? A The creditor B The debtor's spouse C The debtor D The debtor's estate
the creditor
A good example of Risk Avoidance is which of the following? A The transfer of the risk to an insurance company B Insuring only those risks that threaten the financial stability of the insured C The elimination of the exposure to a specific risk D When one takes action to minimize the severity of a potential loss
the elimination of the exposure to a specified risk
Which of the following is a disadvantage of being covered under a group insurance plan? A Coverage can be made available to spouses and dependents B Cost of coverage can be less than an individual policy C Coverage can be offered without any proof of insurability D The group sponsor can elect to discontinue the plan, and the insurance company can increase the rates it charges
the group sponsor can elect to discontinue the plan, and the insurance company can increase the rates it charges
Which of the following is the least important when it comes to determining the cost of the group life insurance plan? A The group' claims B The health of each member of the group C The nature of the work involved D Size of the group
the health of each member of the group since evidence of insurability is not required, the health of each member of the group is not used when determining premiums of the group
Who enforces the regulations found in the CCR? A The California legislature B The public, via a referendum C The NAIC D The insurance commissioner
the insurance commissioner
When an insured is discharged from the military, what happens to health insurance coverage that was in place prior to being called up for active military service? A The insured will be permitted to resume coverage and premiums without any waiting periods B The insured will have to go through the normal waiting period as if it were a reinstatement C The insured will have to apply for new coverage, but can obtain a military discount D The insured will be subject to service-related pre-existing condition exclusions
the insured will be permitted to resume coverage and premiums without any waiting periods
All of the following statements regarding the Living Needs Rider are true, except: A It allows a partial payment of the face amount before death if the insured becomes terminally ill B The rider is most often added without an additional premium charge C The insurer charges an annual premium for this rider which creates a pool of money from which to pay out the benefit D At death, the early payment is deducted from the beneficiary's benefit
the insurer charges an annual premium for this rider which creates a pool of money from which to pay out the benefit
Who can change the premium on a fixed premium policy? A The agent who sold the policy B The insurer who issued the policy C The policyowner of the policy D The agency the agent who sold the policy works for
the insurer who issued the policy
The Buyer's Guide to Life Insurance provides basic information concerning all of the following, except: A The different types of policies which are sold B The comparative costs of the different types of policies which are sold C Life insurance D The interest rates of the different policies which are sold
the interest rates of the different policies which are sold
Which one of the following statements about occupations, hobbies, and avocations in regards to disability income insurance policies is false? A The more hazardous the occupation the higher the premium B The less hazardous the occupation, hobby, or avocation the more likely a rating or an exclusion will be part of the policy C The less hazardous the hobbies or avocations the lower the premium D The more hazardous the occupation the less benefits will be offered
the less hazardous the occupation, hobby, or avocation the more likely a rating or an exclusion will be part of the policy
The insurance contract is a(n) ___________ contract because only the insurance company makes a promise to pay a future covered claim. A Conditional B Bilateral C Aleatory D Unilateral
unilateral
Which one of the following is not a reason why a license may be suspended or revoked after it has been issued? A The licensee has shown incompetency or untrustworthiness in the conduct of any business B The licensee has by commission of a wrongful act or practice exposed the public to the danger of loss C The licensee has a good business reputation D The licensee is not properly qualified to perform the duties of a person holding the license
the licensee has a good business reputation
Which of the following states the parties to an insurance contract? A The producer/agency and the insurance company B The agent/agency and the insured C The policyowner/insured and the insurance company D The beneficiary and the insurance carrier
the policyowner/insured and the insurance company
Which one of the following life settlement contract applicant disclosures is false? A The proceeds from a life settlement are exempt from the claims of creditors B A change in ownership of the settled policy could limit the insured's ability to purchase insurance in the future on the insured's life because there is a limit to how much coverage insurers will issue on one life C Some or all of the proceeds of a life settlement may be taxable and the policyowner should seek advice from a qualified tax professional D There are possible alternatives to life settlements, including accelerated benefits options that may be offered by the life insurer
the proceeds from a life settlement are exempt from the claims of creditors proceeds from a life settlement could be subject to the claims of creditors
If an applicant is a minor, who signs the application? A The producer B Any adult C A probate court judge D Their guardian
their guardian
All of the following are true regarding changes or modifications to insurance policies, except: A They must be approved by the policyowner B They can be taken care of by the producer C They must be signed-off by an executive officer of the insurer D They must be in writing
they can be taken care of by the producer Changes or modifications must be in writing, signed by an executive officer of the insurer, approved by the policyowner and made part of the entire contract. A producer cannot alter, change, modify or waive any policy provisions.
Which one of the following is a correct statement regarding the premiums dollars collected from a client? A They can be held up to 30 days before being remitted to the carrier B They can be used for whatever purpose the insurance agent deems appropriate C They must be invested in government insured securities D They must be kept separate and not commingled
they must be kept separate and not commingled
If an employee does not enroll during open enrollment and they still want coverage, what happens? A They pay more in premiums than those who enrolled during the open enrollment B They must provide proof of insurability C They cannot obtain as much coverage as those who enrolled during the open enrollment D The forms of insurance are more limited when they do apply for coverage
they must provide proof of insurability
Which of the following is not a reason that insurers limit disability income benefits to 70% or less of the insured's past earnings?
to keep their expenses down
How long would a policyowner have to pay premiums on a term life policy to age 65 that was taken out at age 35? A To the earlier of the insured's death, or to age 65 B To age 65 C 30 years D Whenever the insured dies
to the earlier of the insured's death or to age 65
When an individual's risk of loss is assumed by a larger homogeneous group, it is known as risk _________. A Avoidance B Assumption C Reduction D Transfer
transfer Risk transfer involves assumption of the risk in whole or in part by another party, such as an insurance company, underwriting syndicate, or risk retention group.
Surplus Line Broker must do all of the following, except: A Use only an insurer identified in the List of Approved Nonadmitted Insurers B Not issue a binder for insurance unless prior written approval has been given to the broker by the insurer C Report to the Commissioner the effort made to place business with an admitted carrier within 60 days of placing business with a nonadmitted insurer D Make a diligent search of admitted insurers prior to placing business with a nonadmitted insurer
use only an insurer indentified in the list of approved nonadmitted insurers
When payment under a Medical Expense policy is based on the average fee charged by all doctors in a given geographical area, and the balance of any overcharges or costs of any disallowed services are the insured's responsibility, the payment is known as: A Usual, customary, reasonable (UCR) payment B Scheduled payment C Cash payment D Blanket payment
usual, customary, reasonable (UCR) payment
Which of the following annuities uses unit values rather than dollars to account for its value? A Variable B Indexed C Fixed D Market Value Adjustment
variable
Which of the following is not a Mandatory Uniform Provision of an Accident and Health policy? A Waiver of Premium B Payment of Claims C Proof of Loss D Time Limit on Certain Defenses
waiver of premium all the rest are mandatory
When are Errors and Omissions claims filed? A Within 6 months of premium payment B When producers fail to provide their business card at the time of solicitation or sale C When clients file a report or a complaint D When policies are issued other than at the standard rate
when clients file a report or a complaint
Harry was hospitalized and in a coma for 6 months. When does proof of loss for this claim have to be submitted? A Within 1 year, unless he suffers legal incapacity B An executor would be appointed by the courts to handle the necessary paperwork C Within 2 years, covered under the contestable period D Anytime, since he was in a coma and obviously could not submit a claim
within 1 year unless he suffers legal incapacity
Which of the following risks may not be insured by a non-admitted company? A Marine builders risk B Property and liability insurance for aircraft or spacecraft C Workers' Compensation D International maritime transportation
workers compensation The Insurance Code requires employers to obtain Workers' Compensation insurance only from an admitted insurer.
The Commissioner will prepare a rate guide for Medicare supplement insurance contracts available on or before the date of the fall Medicare annual open enrollment every: A 2 years B Year C 6 months D 18 months
year