XCEL Final Exam
What is considered the most common type of specified disease unsurance policy?
Cancer
Under a noncancellable health insurance policy, an insurer can
cancel the policy for nonpayment of premium
ABC Insurance Company paid an insured $30,000 in lost wages, $35,000 for hospital costs, and 20,000 for physical therapy treatments. ABC later discovers this was a fraudulent claim. How much may the insured be fined?
$170,000
Emplyee participation in a non contributory group life plan must be
100%
What percentage of eligble employees must participate in a noncontributory group health plan before it can be put in effect?
100%
Any changes in background information that occur after a producer application has been submitted or a license has been issued MUST be reported to the Insurance Commissioner within
30 days
At what age is a surviving spouse without dependents eligble for Social Security survivor benefits?
60
After the annual deductible is met, a Medicare Part B medicare will pay ___ of the remaining covered expenses.
80%
What is an "insurance broker" according to California Insurance Code?
A compenstated for transacting insurance on behalf of another person with an insurer
How is a life insurance policy dividend legally defined?
A return of excess premium and not taxable
According to the California Insurance Code, which of the following is NOT an example of an insurable event? A. An insured suffers a financial loss in the state lottery B. An insured is admitted to the hospital for delivery of a newborn C. A guest is injured by a fall from the insured's driveway D. An insured is sued for unintentional slander of another person
A. An insured suffers a financial loss in the state lottery
Which of the following is NOT a true description of non-medical life insurance? A. Applicants are not required to answer medical questions on the application B. Quicker processing of life insurance application C. Demand on the medical profession reduced D. Less cost involved with underwriting the application
A. Applicants are not required to answer medical questions on the application
Which statment is TRUE regarding Workers' Compensation coverage A. Employer pays the entire premium for workers' compensation coverage B. The amount recieved from workers' compensation is usally greater than the employee might reveive if he or she sued a negligent employer C. Negligence is a factor in determining the employer's liability D. Workers' Compensation benefits are usally received in a lump sum
A. Employer pays the entire premium for workers' compensation coverage
Which of the following is NOT a characteristic of reinsurance? A. Increases the unearned premium reserve B. Enables insurer to meet certain objectives C. Protects against a very large claim D. A specialized branch of the insurance industry
A. Increases the unearned premium reserve
Which of the following is any situation that presents the possibility of a loss? A. Loss exposure B. Risk pooling C. Adverse selection D. Insured loss
A. Loss exposure
Which of these statements is NOT true concerning recurrent disabilites? A. The insurer continues coverage after a new elimination period B. The recurrence of a disability must occur within a specified time period after the prior disability C. The recurrent disability must be caused from the original disability D. A recurrent disability is considered to be a continuation of the prior disability
A. The insurer continues coverage after a new elimination period
An applicant has revealed conditions that require more information. Which of the following is needed next?
Attending physician's statement
In order to be considered "currently insured" under Social Security, an individual must be credited with: A. 30 total quarters of coverage B. 6 quarters of coverage during the last 13 months C. 15 total quarters of coverage D. 12 quarters of coverage during the last 26-quarter period
B. 6 quarters of coverage during the last 13 months To reach currently insured status under the Social Security system, an individual must be credited with a MINIMUM 6 quarters of coverage during the last 13-quarter period
Which of the following is NOT a component of determining policy premiums? A. Mortality B. Dividends C. Expenses D. Interest
B. Dividends
What type of coverage pays a benefit for part time nursing care that can be provided in a patient's home? A. Custodial care B. Home health care C. Respite care D. Rehabilitation care
B. Home health care
Which of the following is NOT a primary objectice of insurance regulation? A. Licensing agents B. Interpret policy provisions C. Protect policyowners D. Insurance Code enforcement
B. Interpret policy provisions
Which of the following would NOT be accomplished with the purchase of an insurance policy? A. Payments made for covered losses B. Risk is elimanted C. Uncertainty is reduced D. Greater peace of mind
B. Risk is elimanted
How is an agent's first year commission calculated for a replacement long-term policy?
Based on the diffrence between the new and original policy annual premiums.
Which of the following would be considered an activity of daily living under a long term care policy?
Bathing
Which of the following is a characteristic of the disability eliminations?
Benefits are not payble
How does a conditional receipt differ from a binding receipt?
Binding receipts always provide insurance which starts from the date of receipt
Who is NOT eligble for Social Security survivor benefits? A. A widow at any age who is caring for children younger than 16 B. A widow at full retirement age C. A deceased worker's dependent parents of any age D. Full-time students under the age of 19
C. A deceased worker's dependent parents of any age
Which of the following is NOT considered to be an unfair claims settlement practice? A. Misrepresenting to insureds pertinent facts or policy provisions relating to coverage at issue B. Faling to provide a reasonable basis for the denial of a claim upon request C. Advising a claimant to hire an attorney D. Failing to adopt and implement reasonable standards for prompt investigation and processing of insured's claims
C. Advising a claimant to hire an attorney
Which of the following is NOT a risk classification that an underwriter would use? A. Substandard risk B. Preferred risk C. Dividend risk D. Standard risk
C. Dividend risk
All of these are common personal uses of life insurance EXCEPT A. Pay final expenses B. Fund a child's education C. Fund a Buy-Sell agreement D. Replace an insured's income
C. Fund a Buy-Sell agreement
Which of following is a life insurance policy that does NOT require a physical exam? A. Substandard B. Graded C. Non-medical D. Noncancelable
C. Non-medical
Which of the following statements do NOT apply to child coverage in a family policy? A. Child coverage is convertible to permanent insurance B. Child coverage comes in the form of term insurance C. Only children born prior to policy's issue date may be included D. Children are covered up to an age stated in the policy
C. Only children born prior to policy's issue date may be included
Which of the following is NOT required in the content of a policy? A. Period to which the coverage exists B. Risk insured against C. Proabilty of loss D. Parties involved in the contract
C. Proabilty of loss
Which of the following is NOT considered a definition of risk? A. Exposure to danger B. The potential for loss C. The cause of a loss D. Uncertaninty
C. The cause of a loss
An annuitant would like to determine the current value of her annuity. To do this, she multiplies the number of "accumulation units" she owns times the unit value of the "separate account". What kind of annuity BEST matches this description? A. Life annuity B. Fixed annuity C. Variable annuity D. Immediate annuity
C. Variable annuity
Which of the following is NOT a common life insurance policy rider? A. accidental death B. waiver of premium C. extended term D. automatic premium loan
C. extended term
Tim was recently terminated from his employment and opted to change his existing group term life insurance to individual permanent life insurance. What is this process called?
Conversion
The problem of overinsurance is addressed in which health insurance provision?
Coordination of benefits
Which statement regarding Medicare is true? A. Medicare is avaiable only to individuals age 60 and older B. Nursing home coverage is covered by Part B C. Benefits for prescription drugs are covered exclusively by Part A D. Benefits for diagnostic tests and X-rays performed on an outpatient basis are provided by Part B
D. Benefits for diagnostic tests and X-rays performed on an outpatient basis are provided by Part B
Which of the following is NOT a life insurance settlement option? A. Lump sum option B. Life income option C. Fixed amount option D. Extended term option
D. Extended term option
Which of the following is NOT typically covered under vision care insurance? A. Examinations B. Contacts C. Eyeglases D. Eye surgery
D. Eye surgery
Which of the following could lower the premium of a propsed disabilty income policy? A. Decreasing the elimination period B. Increasing the benefit period C. Selecting an "own-occupation" clause instead of an "any-occupation" clause D. Increase in the elimination period
D. Increase in the elimination period
Which of the following is NOT a benfit of insurance? A. Reduces the uncertainty of loss exposures B. Makes a loss whole again C. Source of investment funds D. Losses due to fraud are elimanated
D. Losses due to fraud are elimanated
A life insurance policy can be surrendered for its cash value under which policy provision? A. Dividend options B. Settlement options C. Payor options D. Nonforfeiture options
D. Nonforfeiture options
The California Life and Health Insurance Guarantee Association covers all of these types of policies, EXCEPT A. Whole life B. Immediate annuties C. Disability D. Self-funded plans
D. Self-funded plans
Which of the following statements about aletorty contracts is NOT true? A. The insured and the insurer have the potential for unequal contributions B. Insurance contracts are considered aleatory C. Aletory contracts are conditioned upon the occurence of an event D. The insured and the insurer contribute equally to the contract
D. The insured and the insurer contribute equally to the contract
Which of the following types of lide insurance combines a savings element along with a flexible premium option? A. Endowment B. Whole life C. Joint life D. Universal life
D. Universal life
All of the following are considered characteristics of group life insurance, EXCEPT A. conversion privilege B. master policy C. certificates of insurance D. individual polices
D. individual polices
The elimination period in a disability income policy serves the same purpose as a(n) ____ in a medical expense policy.
Deductible
When handling premiums for an insured, an agent is acting in which capacity?
Fiduciary
Victoria owns a life annuity and elects to receive annuity payments monthly for the remainder of her life w "ten years certain". Her annuity will make payments
For a minimum of 120 months and a maximum of the remainder of her life
What time period allows an insured's life insurance policy to remain in force even if the premium was not paid on the due date?
Grace period
In California, the elderly can receive information about health related issues from
Health Insurance Counseling and Advocacy Program (HiCAP)
Under the Payment of Claims provision, when are benefits typcially payable after proof of loss is received?
Immediately
How does rising morbidity rates affect health insurance?
Increased premiums
Which of the following is a contract that involves one party which indemnifies another when a loss arises from an unknown event?
Insurance policy
Who are the parties to the master contract in a group life insurance policy?
Insurer and employer
A beneficiary recives only the death benefit earnings in which settlement option?
Interest option
Buy-sell agreements are typically funded by which two insurance products?
Life insurance and disability insurance
Which of the following is considered to be any situation that has the potential for loss?
Loss exposure
Which of these is the automatic mode of settlement for life
Lump-sum
Most U.S. life insurance companies belong to the
Medical Information Bureau
When calculating life insurance premium rates, which component is affected by an insured's age and gender?
Mortality
Which of the following describes the number of deaths in a year compared to the number of people in a select group?
Mortality rate
A participating company is also referred to as which type of insurer?
Mutual insurer
Which type of health insurance policy cannot be canceled by the insurer nor increase the premiums?
Noncancellable
Retirement plans cannot favor highly compensated employs. The government regulation that prevents this from happening is called
Nondiscrimination
If a healthcare provider is considered to be a "service provider", what does this mean?
Payment for services goes directly to the provider
According to the California Insurance Code, how is the word "may" interpreted?
Permissive
What does the term "illustration" mean when used in the phrase "life insurance policy illustration", according to the California Insurance Code?
Presentation of policy features that include non-guaranteed elements
If a material warranty violation on the part of the insured is found, what recourse does an insurer have?
Rescind the policy
Which course of action is the insurer entitled to when deliberate concealment is committed by the insured?
Rescinding the contract
An insured is protected from the expense of a catastrophic illness by which of the following health insurance provisions?
Stop loss
Why is a life insurance policy's delivery date important?
The free-look period begins on the policy delivery date
An individual covered under a disability income policy may be eligble for a partial disability benefit if
The insured can perform some of their job activities on a part-time basis
When a life insurance policy is surrendered, how does the cost recovery rule apply?
The policy cost basis is exempt from taxation
A life insurance policy's limit of liability would be
The policy's face amount
What type of changes can be made to a guaranteed renewable health insurance policy?
The premium rates of the policyowner
Under the California Insurance Code, a licensee's license number must be printed at what size on all price quotes, business cards, and printed material?
The same size print as the licensee's phone number, fax number or address
Pete is a life agent who has misappropriated fiduciary funds to his own use. What is Pete guilty of?
Theft
What does the term "indemnity" mean as it pertains to insurance?
To make whole
The risk selection process is primarily given to which insurance company department?
Underwritting
Bruce is involved in an accident and becomes totally and permanently disabled. His insurance policy continues in force without payment of further premiums. Which policy provision is responsible for this?
Waiver of premium provision
At what point does a self-insured group qualify for stop-loss coverage?
When claims exceed a specified limit in a set period of time
An employee for XYZ Corp is injured on the job. Where does coverage for the employee's injuries come from?
Workers' Compensation
What determines the Social Security normal retirement age?
Year in which worker was born
Rating an individual's need for long-term care benefits can be measured by
activites of daily living
A contract requires
an offer and acceptance of the contract terms
The misstatement of age provision in health policy states that if an insured gives the wrong age at the time of application, what action can the insurance company take?
benefits can be adjusted
An agent's attempt to stop the replacement of an existing life insurance policy is known as
conservation
Key person insurance is intended to
cover business losses due to the death of a key employee
An eligble individual who would like to obtain group health insurance without providing evidence of insurability must
enroll within a specified eligibilty period
Moral hazard is described as the
increased chance of a loss because of an insured's dishonest tendencies
Jim is the insured on a health insurance policy and holds 2 jobs. If "occupation" is used to classify the risk, the insurer will most likely classify Jim according to the occupation that
is most hazardous Where a person has more than one occupation, they should be rated for the occupation that represents the higher risk.
The cost of services charged by the Health Insurance Counseling Advocacy Program (HiCap) is
no cost
A representation may be altered or withdrawn
only before the insurance is in effect
Minimum participation standards exist for group health insurance plans in order to
prevent adverse selection
Medicare Part A covers what type of care?
skilled nursing facility care
MRMIP is a
state program that offers health coverage to California residents who are not able to obtain coverage due to pre-existing conditions
An annuity which is backed by a life insurer's separate account is called a(n)
variable annuity