CA LIFE HEALTH INSURANCE - GUARANTEE EXAM

J is receiving fixed amount benefit payments from his late wife's insurance policy. He was told that if he dies before all of the benefits are paid, the remaining amount will go to the contingent beneficiary. Which settlement option did J choose?

Fixed amount

Key person insurance taxes

Death benefit is not taxable to the business and the premiums are not deductible by the business

Medical Loss Ratio

How much of the health coverage premium must go toward actual medical care

What is the most common name for a single policy that is designed to insure two or more with a standard premium, and pays death benefit upon first death

Joint life

Underwriters use all of these methods to protect the insurer against adverse selection EXCEPT?

Only accepting a small percentage of applicants

When may HIV related test results be provided to the MIB?

Only if the individual is not identified

When the owner of a participating whole life policy uses the dividend to provide more life insurance coverage, which of the following dividend options is being used?

Paid-up additions

Which dividend option will increase the death benefit?

Paid-up additions

Regarding the PPACA health care tax credit, which is true?

Persons receiving Medicaid are not eligible

What is the difference between a straight life policy and a 20 pay whole life policy?

Premium payment period

An annuity would normally be purchased by an individual who wants to

Provide income for retirement

What is the only diff between blanket and group insurance?

The insured members are not named

The purpose of the California insurance guarantee association is to protect interest of policyholders from insolvent insurers. All are covered EXCEPT

The insurers within the last 10 years held a license in the states in which the persons reside

An individual is approaching retirement age and is concerned about having proper coverage in an LTC facility, agent tells him LTC policies cover all EXCEPT

Acute care (covers intermediate, skilled, and custodial)

If the annuitant dies before the annuity start date, the interest is

the interest is taxable

Who would be insured in business disability insurance?

Key employees

When a whole life policy is surrendered for its nonforfeiture value, what is the automatic option?

Extended term

In order for an alum association to purchase group health, all must be true EXCEPT

Has been active for 5 years minimum (it can be a brand new association and doesn't have to wait 5 years duh) Req: 100 members, constitution, organized for reasons other than insurance

What are annuity contracts designed to do?

Liquidate an estate and to protect a person against outliving his or her money

What would someone purchase for skilled nursing care?

Medicare and medicare supplements, but it is limited

Guaranteeing future dividends is considered to be an unfair or deceptive act known as

Misrepresentation

Under the ACA, would pregnancy be considered a pre-existing condition?

Never

Which statement best describes agreement as it relates to insurance contracts?

One party accepts the exact terms of the other party's offer

An applicant completes an app for disab and pays the premium. The producer gives conditional receipt. Coverage becomes effective when

The insurance company accepts the risk

If the annuitant dies before the annuity start date, which of the following is true?

The interest is tax free if the beneficiary is a spouse

In some cases, in order for an insurer to legally disclose privileged information to appropriate sources, the insured must sign an auth form. What is the max amt of time that can legally pass between the completion of the form and the disclosure of the info?

1 year (They have one year of consent basically)

Family Protection Policy

1. Add children born are already covered 2. Consists of whole life on base insured and riders on others 3. Convertible term riders cover both spouse and children

Features of a health insurance plan from marketplace:

1. Coverage for pre-existing conditions 2. Guaranteed renewability 3. Coverage for emergency services

What is the minimum # of members in a group for life insurance in CA?

10

What is it called when doctor approves Medicare amount?

Assignment

In whole life insurance, when is the policy cash value scheduled to equal the face amount?

At the insured's age 100

Which of the following would be TRUE of both the fixed period and fixed amount settlement options?

Both guarantee that the principal and interest will be fully paid out

A specified disease policy would cover which of the following?

Cancer (specified in contract such as cancer or heart disease)

Which of the following is NOT normally an excluded cause of disability in an individual disability income policy?

Complications from a pregnancy

Which is NOT a type of hazard?

Exposure

What is survivorship life?

Pays out at second death, also called second to die or last survivor

Which of the following is the cause of loss?

Peril

If an insured purchases an insurance policy with a large deductible, what risk management technique is the insured exercising?

Retention

An individual was denied coverage under SS because disability did not meet the strict definition. Which of the following would provide disability income coverage?

SIS rider

Who is the annuity owner?

The person who purchases the annuity

Which of the following is true regarding taxation of accelerated benefits paid under a life insurance policy?

They are received tax free (if for someone terminally ill)

A graded premium life insurance policy is a modified form of

Whole Life

A guarantee universal life policy has all of the following features EXCEPT

cash value

Slippery floors, reckless driving, or providing false information are examples of

hazards

With a conditionally renewable policy, the premiums are more like to be

increased

An insurance company that is owned by the policyholders is called a

mutual insurer

To qualify for disability income benefits under SS, the disability must be expected to result in death or last for at least

12 months

Core benefits are included in all Medicare supplement policies. What percentage of Part B coinsurance is required?

20%

A medicare supplement policy must have a free look period of at least

30 days (SUPPLEMENT KEY WORD)

An ee that becomes ineligible for group coverage because of termination of employment must exercise COBRA within __ days.

60

How long is the grace period for an individual life insurance policy in CA?

60 days

Answers to questions in an insurance application are called representations and they are

believed to be true to the best of the applicant's knowledge

What does an annuity protect the annuitant against?

Living longer than expected

What are the continuing education req for agents who market LTC policies?

8 hours of LTC specific education included in the regular CE requirements

Under what circumstances will the contingent beneficiary receive the death benefit?

If the primary beneficiary dies before the insured

What are exclusions for cause of disability in an individual disability income policy?

Injury resulting from illegal activity, suicide, and war

Annual enrollment period for state insurance exchanges runs November through

January

Which time period is general enrollment for Medicare Part B?

January 1 through March 31

What does the application of contract of adhesion mean?

Since the insured does not participate in preparing the contract, any ambiguities would be resolved in favor of the insured

If a basic medical insurance plan's benefits are exhausted, what type of plan will then begin covering those losses?

Supplementary major medical

All of the following are true about key person insurance except

The death benefit is taxable to the business (EE must give consent)

All of the following are features of a health insurance plan purchased on the health insurance marketplace EXCEPT

Dollar limits on essential benefits (YOU CAN'T PUT A LIMIT ON ESSENTIALS)

Which of the following is true of the taxation of cash values in a business life insurance policy?

Cash values grow tax deferred

Concerning the Family Protection Policy, all of the following are true EXCEPT

Children upon reaching age of majority, are permitted to convert to an individual policy without proof of insurability

In order to be financially solvent, an insurer must accomplish all of the following EXCEPT

Contribute a specific amount of capital reserves to the state

A new homebuyer wants to purchase a life insurance policy that would protect his family against losing the home, should he die before the mortgage was paid. The most inexpensive type of policy that would accomplish this need would be

Decreasing term

If an agent follows the rules and terms of his agent contract, he is exercising his

Express authority (expressed in contract)

Does medicaid pay for nursing home care?

Yes, but it provides coverage only for those who qualify with low income and low assests

ALL of the following could qualify as a group for the purpose of purchasing group health insurance EXCEPT

an association of 35 years (would qualify= multiple er trust, single employer with 14 ee's, labor union)

Credit disability insurance will pay

Monthly payments until the insured recovers or the loan is paid off

If an insurance company issues a policy even though some questions on the app were unanswered, when can the insurer get the answers?

Never! The insurer has waived its right to those answers by issuing the policy

A whole life policy is surrendered for a reduced paid up policy. The cash value in the new policy will

Continue to increase (it will build its own cash value and remains in force until death or maturity)

Do medicare and medicap policies provide covers for long term custodial or nursing home care?

No. Medicare will cover nursing home care if it is part of the treatment for a covered injury or illness.