Guarantee Exam part 2

A 25 year old full time student is living off a trust fund. Why would he NOT be qualify for an IRA?

Does not have earned income

In group insurance, the primary purpose of the Coordination of Benefits provision is to

Prevent overinsurance

An allegory contract is based on what kind of exchange?

Unequal exchange of values

Cash value guarantees in a whole life policy are called

Nonforfeiture values

The frequency and the amount of the premium payment are known as what?

Premium Mode

The entire contract includes all of the following EXCEPT A buyer guide The life insurance policy a copy of the application any rider or amendment

A buyer guide

If the annuitant dies before the annuity start date,

in interest is taxable

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

increased

Under the Affordable, when would pregnancy be considered a pre existing condition?

Never

A statement made by an applicant for insurance that must be true in ever respect is considered to be a

Representation

An employee dies having 6 quarters of coverage during the previous 13-quarter period. What status of coverage does the employee have under Social Security?

Currently Insured

Which of the following meets the insureds personal needs, and its provided by a nonmusical personnel?

Custodial Care

What best describes the relationship between a capital sum and a principal sum?

Capital sums are percentages of principal sums

What element of an insurance contract requires paying premium and providing a statement of good health?

Consideration

An adjustable life policy can assume the form of

Either term insurance or permanent insurance

All of the following are features of catastrophic plans EXCEPT High premiums Out of Pocket cost high deductibles Essential benefits

High premiums

To purchase insurance, the Policyowner must face the possibility of losing money or something of value in the event of loss, What is this concept called?

Insurable Intrest

Which of the following is NOT true regarding an optionally renewable policy? Insurer can only cancel the policy for reason stipulated in the contract Renewability is at the option of the insurer Nonrenewable can happen on the policy anniversary date Policy premiums can increase at renewal

Insurer can only cancel the policy for reasons stipulated in the contact.

How does insurance distribute the financial consequences of individuals losses?

It transfers the risk to all persons insured

Who would be the insured in business disability insurance ?

Key Employees

If a business wants to make sure it will be able to cover losses due to the disability of its top employee, the business should get which type of insurance?

Key person disability

What does an annuity protect the annuitant against?

Living longer than expected

Which of the following statements concerning the Medical Information Bureau is correct?

The Medical Information Bureau assist underwrites in evaluating and classifying risks

In life insurance, which of the following is NOT required to have an insurable interest in the insured? The insured The applicant The beneficiary The Policyowner

The beneficiary

Who does the spendthrift clause in a life insurance policy protect?

The beneficiary

Which of the following would NOT be eligible for coverage under key person? The pharmacist in a drug store The manager of a small store The owner of a shop The Executive officer of a company

The owner of a shop

What is the purpose of the surrender charge in a deferred annuity?

To compensate the company for loss of investment value

Joe, age 63, was disabled and can no longer work. He meets the Social Security definition of total disability. How many credit must Joe have accumulated to have the status of fully injured?

40

To attain fully insured status under Social Security, an Individual must have earned how many credits?

40

#10 how long is the grace period for an individual life insurance policy in California?

60 days

All other factors being equal, which of the following premium modes would result in the lowest overall premium?

Annual

When acting as a field underwriter, a producer is

Seeking credible information about an applicant for health insurance

If an applicants health is poorer than that of an average applicant, the policy may be issued

Substandard

Any person to whom the commissioner has issued a seizure order and who refuses to deliver any books, records, or assets of an insurer faces:

A misdemeanor punishable by a fine up to $1,000, a year in jail, or both.

Which types of care could be provided at a community center?

Adult Day Care

# 11 An underwriter is reviewing an applicant with an extensive medical history. Which of the following would give the underwriter a better understanding of how the applicant has been treated for various illness?

Attending Physicians statement

Under which of the following conditions would life insurance proceeds be taxable by the federal government?

If there is a transfer for value

What defines "own occupation disability" with respect to disability income insurance?

A disability that results in the insured being unable to work at his regular job even though he or she maybe be able to perform duties of another occupation

A core Medicare supplement policy (Plan A) will cover all of the following expenses EXCEPT a) Part A deductible b) The first 3 pints of blood c) 20% if Part B coinsurance amounts for Medicare-approved services d) Part A coinsurance

a) Part A deductible

Regarding the PPACA health care tax credit, which of the following is true? Persons receiving Medicaid are not eligible Tax credits are based upon a taxpayers or family expected annual medical expenses All wages earners who purchase a health care insurance are eligible for the tax credit Tax credits are sent to the tax payer to reduce monthly insurance premiums

Persons receiving Medicaid are not eligible

What specific kind of insurance is often written in conjunction with hospital expenses polices and includes surgeons and anesthesiologist's fees?

Basic Surgical Expense Insurance

A specified disease Policy would cover which of the following?

Cancer

For an insurance contract, the principle of utmost good faith means

Each party relies upon the truthfulness of the other

Which of the following is true regarding a joint life annuity?

Payment stop at the first death

Health Insurance rates may be base upon all of the following EXCEPT Medical History Religion Gender Age

Religion

An individual receives a lump sum inheritance. He'd like to use the money to create a lifetime income since he'll be retiring soon. He purchases in annuity and wishes to receive payments beginning at two months. What did he buy?

Single premium immediate annuity

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

Believed to be true to the best of the applicants knowledge

Difference between blanket life insurance policy and a franchised policy

Blanket insurance does not name individuals insured

During policy solicitation, an insured exaggerate the financial condition of one of its competitors. and makes it sound worse than not is. This is an example of an unfair trade practice of

Defamation

The notice about policy cancellations delivered to senior consumers must include all of the following information EXCEPT To whom to return the policy Possible surrender charges Explanation of where the premium have been invested Time limit for cancelation

Explanation of where the premium have been invested

Which of the following is NOT true regarding a deferred annuity? It is used to accumulate fund for retirement it can be purchased with a single lump sum the annuity grows tax deferred income payments begin within 1 year from the date of purchase

Income payments being with 1 year from the date of purchase

A college student will graduate next year. His studies have limited his ability to work, so he has borrowed funds to pay for his education

Modified Whole Life

If an insured is injured while committing an illegal act and his health policy contains the illegal occupation provision. What percentage of the claim will be paid?

Nothing

What policy would NOT offer a policy loan option?

Term life

If an insured died, and it is discovered that the insured misstated his/her age or gender, the life insurance company will

Adjust the death benefit to what the premium would have purchases at the actual age or gender

In a life insurance application, all of the following signatures will be required EXCEPT The home office underwriter The insured The own (If different from the insured) The agent

the insured

Considering the principles of liquidity, how would the Policyowner use today's cash value in a life insurance policy?

Use it for emergency expenses

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

One party accepts the exact terms of the other parts offer

All of the following statements are true regarding an Ordinary (Straight) life policy EXCEPT It build cash value if the insured lives to age 100, the policy matures, face amount is paid to the insured It does not have a guaranteed death benefit It is funded by a level premium

It does not have a guaranteed death benefit

Underwriters use all of these methods to protect the insurer against adverse selection EXCEPT Accepting certain risk only at a higher rate Restricting coverage Refusing to accept a risk Only accepting a small percentage of applicants

Only accepting a small percentage of applicants

In order to reinstate a life insurance policy the insured must do all of the following EXCEPT Pay next years premium in advance Pay back premiums Pay any interest due on back premiums Repay any outstanding loans and interest

Pay next years premium in advance

Because of an injury, an insured has been unable to work for 7 months. He wasn't able to pay his life insurance policy premium, yet the policy remained in force. The policy includes

Waiver of premium rider

A loss resulting from which of the following would qualify for the accidental death rider coverage?

An automobile accident

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

Cash values grow tax deferred

What policy can be described as a flexible premium adjustable life policy?

Universal life

If an insurer pays a health insurance premium each month, how long would the grace period be under the policy?

10 DAYS

A married couple wants to include the entire family in their whole life policy under one rider. Which rider will help them achieve this goal?

Family term

Which divides option will increase the death benefit?

Paid-up Additions

Life settlement contracts are put into effect by

An Absolute assignment

What type of an interest rate is guaranteed in universal life policies?

Contract Intrest Rate

Gross premium for a life insurance policy is determined by adding which two components?

net premium + expenses

Which provision may be added to a permanent life policy, at no cost, that insures that the policy will not lapse so long as there is cash value?

Automatic Premium Loan Option

Who makes up the Medical Information Bureau?

Insurance Companies

Per the California Insurance Code, the best definition or "shall" and "may" are

Mandatory and Premissive

Which of the following indicates how much of the health coverage premium must go toward actual medical care?

Medical Loss Ratio (MLR)

All of the following statements about agents are true EXCEPT Exclusive agents work for themselves Producers can be a natural persons or corporations Independent agents can be appointed by multiple insurers Managing General Agents are responsible for hiring, training, and supervising other agents

Exclusive agents work for themselves

Which of the following would be an example of an insurer participating in the unfair trade practice of discrimination?

Charging the insured higher premiums based on her race

A jumping juvenile policy is unique in that the death benefit automatically

Increases at a predetermined age

Which of the following term refers to the nontaxable portion of each annuity benefit payment?

Cost Basis

An individual is applying for health insurance, his health history is nearly perfect. He has a healthy weight, and doesn't smoke. What risk classification would this applicant most likely receive?

Preferred

in reinsurance, the insurance company that transfers its loss exposure to another insure is the #4

Primary insurer

An insured decides to surrender his Whole life Insurance policy. The cash value at surrender is higher than the premiums paid into the policy, due to interest. What part of the surrender value would be income taxable?

The difference between the premiums paid and the cash value

Which of the following is NOT true regarding term health coverage The policy could be written as accidental only policy The owner may renew the policy for a specified term The policy is issued for a specified period of time only The policy expires at the end of the term

The owner may renew the policy for a specified term

In order to be financially solvent, an insurer must accomplish all of the following EXCEPT Maintain an amount at least equal to its required minimum paid-in capital Contribute a specific amount of capital reserves to the state Reinsure any risk in excess of state retention limits Possess enough assists to cover its liabilities

Contribute a specific amount of capital reserves to the state.

Which of the following statements is INCORRECT regarding the definition of total disability ? Total disability is the inability to perform partial duties of any occupation for which a person is suited by reason of education, training or experience. Disability is defined differently under certain disability income polices Total disability is the inability to perform ANY occupation for which a person is suited by reason of education, training or experience. Total disability can be the inability to perform the duties of ones own occupation

Total disability is the inability to perform partial duties of any occupation for which a person is suited by reason of education, training or experience.

Which of the following best describes the difference between joint life and survivor annuity payment options?

in joint life option, the benefits stop after the first death