Life Insurance Exam
In some cases, in order for an insurer to legally disclose privileged information to appropriate sources, the insured must sign an authorization form. What is the maximum amount of time that can legally pass between the completion of the form and the disclosure of information? a) 1 month b) 6 months c) 1 year d) 2 year
1 year
Most vision expense insurance plans restrict benefits to one exam and one pair of glasses in what time period?
12 months
To qualify for disability income benefits under social security, an individuals disability must be expected to result in death or last for at least
12 months
What is the penalty for IRA distributions that are below the required minimum for the year?
50%
An IRA uses immediate annuities to pay out benefits; the IRA owner is nearly 75 years old when he decides to collect distributions. What kind of penalty would the IRA owner pay?
50% tax on the amount not distributed as required
What us the waiting period on a Waiver of Premium rider in life insurance polocies?
6 months
According to the Medical Loss Ratio [MLR], what is the minimum percentage of health coverage premium that must be applied to actual medical care in a large group health plan?
85%
Assume that a policy allows the insurer to terminate coverage for a "class" of clients under stated circumstances. Which of the following classes would it be illegal for the insurer to terminate? a) All insureds living is zip code 90210 b) All insureds over age 65 c) All insureds with a sexual preference which increases the risk of HIV infection d) All truck drivers
All insureds with a sexual preference which increases the risk of HIV infection
What is the maximum loan amount a policyowner may withdrawal from a variable universal life insurance policy?
An amount not exceeding the cash value
When an annuity is written, whose life expectancy is taken into account?
Annuitant
Which concept is associated with "exclusion ratio"
Annuity payments
What specific kind of insurance is often written in conjunction with hospital expense policies and includes surgeon's and anesthesiologists' fees?
Basic surgical expense insurance
Which of the following statements regarding Business Overhead Expense policies is NOT true? a) Premiums paid for BOE are tax deductible b) Any benefits received are taxable to the business c) Leased equipment expenses are covered by the plan d) Benefits are usually limited to six months
Benefits are usually limited to six months
Which of the following best describes the policy nonrenewal? a) Discontinuance of an insurance policy by the insured on the policy anniversary date b) Return of the policy after 10 day free look c) Voiding of a policy due to misrepresentation on the application d) Revocation of one's insurance policy by the insurer
Discontinuance of an insurance policy by the insured on the policy anniversary date
What is the difference between the Medicare approved amount for a service or supply and the actual charge?
Excess charge
The owner of a deferred annuity pays $100 in premium one month, and $130 the next month. Which of the following terms best describes this premium payment arrangement? a) Single premium b) Level premium c) Flexible premium d) Lump sum premium
Flexible premium
An insured's hospital policy states that it will pay him a flat fee of $75 per day for each day he is hospitalized. The policy pays benefits on what basis?
Indemnity
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 interest
When assessing needs for life insurance, an individual may use retention, which means
Maintaining assets at death
Which type of Medicare policy requires insureds to use specific health care providers and hospitals [network providers], EXCEPT in emergency situations?
Medicare SELECT
ERISA was designed to establish fiduciary standards that would protect
Plan participants beneficiaries
Based on human life value approach, which of the following is NOT used to calculate an individuals life value? a) Predicted needs of the family after the insured's death b) insured's current and future income c) Insured's annual expenses d) Effect of inflation on income over time
Predicted needs of the family after the insured's death
In a group life policy with a death benefit more than $50,000
Premium costs above $50,000 is taxable as income to the employee
What describes a situation when poor risks are balanced with preferred risks, and average risks are in the middle?
Profitable distribution of exposers
Which type of beneficiary is changeable at any point?
Revocable
A policyowner who is also the insured wants to name her husband as the beneficiary of her life policy. She also wishes to retain all of the rights of ownership. The policyowner should have her husband named as the
Revocable beneficiary
Which of the following below statements does NOT describe a Blue Cross and Blue Shield Plan? a) Benefits are paid to the hospital and physicians, not the insureds b) Services are paid for at the time of use c) The physicians and hospitals are considered to be the producers d) Most of the organizations are voluntary and not for profit
Services are paid for at the time of use
What is the best way to change an application
Start over with a fresh application
If the annuitant dies during the accumulation period, who will receive the annuity benefits?
The beneficiary
Peril is most easily defined as
The cause of loss insured against
Bob applies for an insurance policy and, because of his medical history, is required to submit an attending physician's statement. He receives the evaluation, and the report is submitted. The underwriting department still has further questions but is unable to get further information from the physician. What will the insurer most likely do?
The insurer can require the insured to visit a different physician at the insurer's expense
If an applicant submits the initial premium with an application, which action constitutes acceptace?
The underwriters approve the application
Regarding Medicare SELECT policies, what are restricted network provisions?
They condition the payment of benefits
Which of the following is NOT a goal of risk retention? a) To minimize the insured's level of liability in the event of loss b) To reduce expenses and improve cash flow c) To increase control of claim reserving and claims settlements d) To fund losses that cannot be insured
To minimize the insured's level of liability in the event of loss
" A physical or mental impairment which substantially limits one or more major life activities, or a record of such impairment, or being considered as having such an impairment," is the definition of a disability according to
ADA [ Americans with Disabilities Act]
The "stop-loss" feature on a major medical policy is intended to
Establish a maximum amount of out of pocket expense that an insured will have to pay for medical expense in a calendar year
Which type of authority is found in the agent's contract?
Express
What does "level" refer to in level term insurance?
Face amount
How many pints of blood will be paid for by Medicare Supplement core benefits?
First 3
If an insured is not required to pay a deductible, what kind of coverage does he/she have?
First dollar
All of the following statements about Medicare Part B are correct EXCEPT a) It covers services and supplies not covered by Part A b) It is financed by monthly premium c) It is financed by tax revenues d) It is a compulsory program
It is a compulsory program
In Modified life policies, what happens to the premium?
It is level at the beginning and increases after the first few years
Who is involved in completing the agent's report
Only the agent
When a discontinued policy contained a death benefit, what term is used in the CIC to describe the length of the applicable extension of benefits?
Reasonable
Which of the following is true regarding elimination period and the cost of coverage? a) The longer the elimination period, the higher the cost of coverage b) Elimination periods have no effect on the cost of coverage c) The longer the elimination period, the lower the cost of coverage d) The shorter the elimination period, the lower the cost of coverage
The longer the elimination period, the lower the cost of coverage
A warranty may relate to which of the following? a) Only the past and present conditions b) The past, the present, and the future c) The past experience only d) Only the time of application
The past, the present, and the future
An applicant is discussing his options for Medicare supplement coverage with his agent. The applicant is 65 years old and has just enrolled in Medicare Part A and Part B. What is the insurance company obligated to do?
Offer the supplement policy on a guaranteed basis
A core Medicare supplement policy (Plan A) will cover all of the following expenses EXCEPT a) The first 3 pints of blood b) 20% of Part B coinsurance amounts for Medicare approved services c) Part A coinsurance d) Part A deductible
Part A deductible
When doing business in this state, an insurance company that is formed under the laws of another state is known as which type of insurer?
Foreign
Life insurance death proceeds are
Generally not taxed as income
Under HIPAA portability, which of the following are NOT protected under required benefits? a) Mentally ill b) Groups of one or more c) Self employed d) Pregnant women
Groups of one or more
Which of the following annuity riders ensures investors will receive a set amount of income annually? a) Guaranteed lifetime earnings b) Guaranteed lifetime withdrawal c) Guaranteed minimum income benefit d) Guaranteed minimum accumulation benefit
Guaranteed minimum income benefit
First dollar coverage refers to a type of insurance which
Has no deductible
Health Savings Accounts (HSA) are designed to
Help individuals save for qualified health expenses
What are the three basic coverages for medical expense insurance
Hospital, surgical, medical
Which of the following is NOT true regarding a noncancelable policy a) Insured has the unilateral right to renew the policy for the life of the contract, and may discontinue paying premiums to cancel it b) Insurer can increase the premium above what us stated in the policy if claims experience is greater than expected c) Insurer cannot cancel the policy d) The guarantee to renew coverage usually only applies until the insured reaches age 65
Insurer can increase the premium above what us stated in the policy if claims experience is greater than expected
Which of the following is provided by skilled medical personnel to those who need occasional medical assistance or rehabilitative care? a) Skilled care b) Intermediate care c) Custodial care d) Home health care
Intermediate care
When a reduced-paid up nonforfeiture option is chosen, what happens to the face amount of the policy?
It is reduced to the amount of what the cash value would buy a single premium
An applicant buys a nonqualified annuity, but dies before the starting date. For which of the following beneficiaries would the interest accumulated in the annuity NOT be taxable? a) Dependents b) Annuitant c) Spouse d) Charitable organization
Spouse
All the factors are FALSE when used to provide data and statistics to an insurer in order to project losses and the subsequent cost of insuring risks in a group disability policy, EXCEPT a) The number of eligible participants in the group b) The number of group carriers c) Stability, price, longevity with a particular carrier d) Experience, expenses and interest of a particular carrier's premiums
Stability, price, longevity with a particular carrier
In a deferred annuity, the difference between the accumulation value and the surrender value is the
Surrender charge
Which of the following is NOT covered under Plan A in Medigap insurance? a) The first three pints of blood b) The Medicare Part A deductible c) Approved hospital costs for 365 additional days after Medicare benefits end d) The 20% Part B coinsurance amounts for medicate approved services
The Medicare Part A deductible
States generally define a true "group" for insurance as requiring a minimum of how many participants?
10
Within how many days are insurers required to respond to write requests for documents or information from the CDI fraud division for all lines except for workers compensation?
30 days
When employees are covered by group insurance, the recieve
A certificate of insurance
The probationary period is
A specified period of time that a person joining a group has to wait before becoming eligible for coverage
California prohibits a risk retention group from engaging in which of the following? a) Contributing to the California Guarantee Association b) Soliciting insurance to a person who is not eligible for membership c) California Joint Underwriters Association d) All of these
All of these
What is reinsurance?
An agreement between a ceding insurer an assuming insurer
What is it called when a doctor accepts the Medicare approved amount?
Assignment
Why are insurance policies considered conditional contracts?
Certain conditions need to be met to make the contract legally enforceable
An insurance contract requires that both the insured and the insurer meet certain conditions in order for the contract to be enforceable. What contract characteristic does this describe?
Conditional
When an insurer tried to discourage a policyholder from replacing an existing policy, this is called
Conservation effort
All of the following are features of catastrophic plans except a) High premiums b) Out of pocket costs c) High deductibles d) Essential benefits
High premiums
During the accumulation phase of a fixed annuity, the annuitant's interest rate is based on a minimum rate as specified in the contract, or the current interest rate, whichever is a) Lower b) Specified in the annuity contract c) More beneficial to the insurer d) Higher
Higher
Under what circumstances will the contingent beneficiary receive the death benefit?
If the primary beneficiary dies before the insured
Restoring an insured financially after a claim is known as
Indemnity
Which of the following represents an ethical responsibility that an independent insurance agent owes to the general public a) Informing the public about insurance products with the highest level or professional integrity b) Commingling personal funds with premium collected from insureds c) Informing clients of the financial situation of competitors d) Giving the same amount of rebates to each potential insured
Informing the public about insurance products with the highest level or professional integrity
To purchase insurance, the policy owner must face the possibility of losing money or something of value in the event of loss. What is this concept called?
Insurable interest
The insurance agent is the direct representative of the
Insurer
The annual open enrollment period for state insurance exchanges runs from November through
January
In which of the following cases are premiums paid by a business NOT tax deductible as a business expense? a) Group disability income coverage for its employees b) Key person disability income insurance c) When benefits received by employees are taxable as income d) Individual disability income coverage for its employees
Key person disability income insurance
For a contract to be enforceable by law, the purpose of the contract must be
Legal and not against public policy
When may HIV-related test results be provided to the MIB?
Only if the individual is not identified
Which of the following must be present in all Medicare supplement plans? a) Plan C coinsurance b) Plan A c) Foreign travel provisions d) Outpatient drugs
Plan A
Which of the following is the most common for errors and omissions to occur on the part of an insurer? a) Policy delivery b) Policy renewal c) Underwriting d) Application process
Policy delivery
Certain conditions, such as dismemberment or total and permanent blindness, will automatically qualify the insured for full disability benefits. Which disability policy provision does this describe?
Presumptive disability
On an Accidental health and dismemberment [AD&D] policy, the death benefit payable is known as the
Principle sum
What does the application of contract adhesion mean?
Since the insured does not participate in preparing the contract, any ambiguities would be resolved in favor of the insured
All of the following long-term care coverages would allow an insured to receive care at home EXCEPT a) Home health care b) Skilled care c) Custodial care in insured's house d) Respite care
Skilled care
Which of the following is a daily nursing and rehabilitative care that can only be provided by medical personnel, under the direction of a physician? a) Skilled care b) Intermediate care c) Custodial care d) Assisted living
Skilled care
If a firm has 80 employees that are actively engaged in business on at least 50% of its working days during the preceding calendar year, what is its classification?
Small employer
In life insurance, which of the following in NOT required to have insurable interest in the insured ? a) The policyowner b) The insured c) The applicant d) The beneficiary
The beneficiary
Who does the spendthrift clause in a life insurance policy protect?
The beneficiary
If a company provides group disability insurance to its employees, which of the following may be tax-deductible? a) The benefits paid to the employee while disabled b) The premiums paid by the employee as a social security tax c) The premiums paid by the company as a business expense d) The benefits paid to the company while the employee is unable to work
The premiums paid by the company as a business expense
What is the education requirement for accident and health agents who want to sell 24-hour care coverage?
The same number of hours of training in workers compensation as required for a property or casualty broker agent on the same subject
An employer is on the verge of bankruptcy. To save money, the employer decides to cancel its workers compensation plan. Which is the following is true ? a) The business is not required to maintain workers compensation insurance, provided that the employees are notified 90 days before policy cancellation b) If the business meets the state's definition of small employer, then workers compensation is coverage is not necessary anyway c) This business may be closed under a cease and desist order issued by the Department of Industrial Relations d) Assuming that the business really is on the verge of bankruptcy, it could appeal to the the State Insurance Department for exempt status
This business may be closed under a cease and desist order issued by the Department of Industrial Relations
Medicare is a health insurance program for all the following individuals EXCEPT a) Those who have been on social security disability for 2 years b) Those with low income and low assets c) Those 65 or over d) Those with permanent kidney failure
Those with low income and low assets
An employee is covered under COBRA. His previous premium payment was $100 per month. His employer now collects $102 each month. Why does the employer collect an extra $2?
To cover the employer's administration costs
What is the purpose of California's State Compensation Insurance Fund (SCIF) ?
To make workers compensation insurance available, especially to smaller companies with more limited payrolls
What is the purpose of a benefit schedule?
To state what and how much is covered in the plan
Which type of policy specifies the value of the insured object in the policy itself?
Valued
Which of the following is NOT considered an insurance fraud red flag? a) Insisting coverage be bound immediately b) Inconsistent answers c) Refusal to allow inspection of collateral d) Wanting liability coverage on an old vehicle
Wanting liability coverage on an old vehicle
Under which situation must insurable interest exist between the applicant and insured at the time of application? a) When a third party applicant names themselves beneficiary b) When the beneficiary is a member of the applicant's immediate family c) When the applicant and the insured are the same person d) When a third party applicant names the insured's company as beneficiary
When a third party applicant names themselves beneficiary
When does insurable interest come into play in a life insurance policy?
When the applicant for the policy is not the insured
When would dependent children's benefits for Social Security disability payments be scaled back?
When they cause the family benefit to exceed the maximum benefit amount
A graded premium life insurance policy is a modified for of
Whole life
"24 hour coverage" includes health insurance and
Workers compensation insurance
Jack and Jill each own 50% interest in a dwelling that is insured under a standard fire policy issued to Jill to cover her interest in the structure. The amount of insurance is $40,000. Following a $10,000 fire loss to the structure, Jill will receive
$5,000
In some cases, in order for an insurer to legally disclose privileged information to appropriate sources, the insured must sign an authorization form. What is the maximum amount of time that can legally pass between the completion of the form and the disclosure of information? a) 1 month b) 6 months c) 1 year d) 2 year
1 year
When an auto insurance policy is cancelled for nonpayment of premium, how many days' notice must the insurer provide to the policy owner
10 days
What is the maximum amount of coverage that might be extended to the insured's dependents under a group life insurance policy?
100% on the insurance on the life of the insured employee
How many operational branches exist in the California Department of Insurance?
11
Within how many days within termination of employment must an employer give notice of the employees right to convert the group policy to an individual policy?
15 days
Core benefits are included in all Medicare supplemental policies. What percentage of Part B coinsurance is required?
20%
Bob works as a forklift driver in a manufacturing plant. When he is at work, he is covered by workers compensation insurance. His employer has also included a major medical plan as apart of his benefit package, so Bob is also covered by insurance outside of working hours, as well. Which insurance term best describes this arrangement?
24 hour coverage
What is the limiting age for dependent children of the insured employee in a group life plan (other than disabled children) ?
26
A medicare supplement policy must have a free look period of at least
30 days
How long is the grace period for an individual life insurance policy in California?
60 days
What is the timeframe that an agent or broker has to provide information on a workers compensation file?
60 days
Within what timeframe must an agent or broker report suspected insurance fraud to the CDI fraud division?
60 days
A life insurance policy qualifies as a modified endowment contract (MEC) if the amount of premium paid exceeds the amount that would have provided paid-up insurance in how many years?
7 years
What are the continuing education requirements for agents who market long term care insurance policies
8 hours of long term care specific education included in the regular CE requirements
Which of the following describes the relationship between the principle sum and a capital sum? a) A capital sum is a percentage of the principle sum b) The principle sum varies, while the capital sum does not c) The capital sum varies, while the principle sum does not d) The principle sum is a percentage of a capital sum
A capital sum is a percentage of the principle sum
Which of the following would be considered a managing general agent? a) An employee of an insurer who generates st least 50% of gross premiums b) An attorney-in-fact acting on behalf of the subscribers of a reciprocal insurer c) A corporation that negotiates ceding reinsurance contracts on behalf of the insurer d) A manager of the U.S. branch of an alien insurer
A corporation that negotiates ceding reinsurance contracts on behalf of the insurer
A life insurance policy that provides coverage to every family member in a single policy, with permanent insurance on the breadwinner and convertible term on other family members is called
A family policy
A group conversion option may be used in all the following instances EXCEPT a) The termination of the master policy b) Loss of coverage due to loss of employment c) A life changing event, such as marriage, divorce, or childbirth d) Loss of eligibility on the part of a class of insureds
A life changing event, such as marriage, divorce, or childbirth
Which of the following is TRUE of a point of service plan? a) Patients must submit claim forms for all services received b) The difference in cost between in network and out of network is relatively small c) A patient may see any provider for any condition for the same cost and does not need to consult a primary care physician d) A patient's care is coordinated by an in network primary care physician
A patient's care is coordinated by an in network primary care physician
Which of the following selections correctly describes the California State Compensation Insurance Fund? a) A state entity that exists to pay compensation if an employee is injured while working for an employer who is uninsured, and the employer fails to pay or post a bond to pay compensation due the employee b) A state entity that exists solely to transact workers compensation insurance on a nonprofit basis c) A state entity that exists to protect policyholders against failure in the performance of workers compensation policies because of the impairment or insolvency of a member insurer that issued the policy d) None of these correctly describe the California State Compensation Insurance Fund
A state entity that exists solely to transact workers compensation insurance on a nonprofit basis
California's Compulsory Financial Responsibility Law requires every driver and every owner of a motor vehicle to maintain financial responsibility (liability coverage) at all times. All of the following are acceptable forms of financial responsibility except a) A DMV issued self insurance certificate b) A motor vehicle liability insurance policy c) A deposit of $35,000 with DMV d) A surety bond for $50,000 obtained from a company licensed to do business in California
A surety bond for $50,000 obtained from a company licensed to do business in California
Which of the following terms is used to define the period of time during which an annuitant makes payments into an annuity? a) Accumulation period b) Premium building period c) Annuity period d) Loading period
Accumulation period
If an insured dies, 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 purchased at the actual age or gender
Which of the following would be exempt from the jurisdiction of the California Department of Insurance? a) Insurer that provides coverage for chiropractic services b) Agent transacting insurance in the state of California c) Health care service plan d) Admitted insurer subject to jurisdiction in Nevada
Admitted insurer subject to jurisdiction in Nevada
Which of the following types of care could be provided at a community center? a) Adult day care b) Respire care c) Intermediate care d) Skilled care
Adult day care
For an individual long term care policy there is an annual dollar limit for tax deductions that is based on which of the following? a) Policy value b) Premium cost c) Age d) Cost of care
Age
In which Medicare supplemental policies are the core benefits found?
All plans
All of the following would be considered unethical or illegal practices except a) An agent is trying to talk a customer out of buying a specific insurance product because it would not service the customer's needs b) An agent is showing a prospect a policy illustration without explaining the difference between guaranteed and non guaranteed benefits c) An agent is introducing himself as a financial planner without having the proper experience or qualification to help a customer make a buying decision d) An agent is using the names of individuals who register for a new home in a supermarket drawing as a list of potential prospects for buying life insurance
An agent is trying to talk a customer out of buying a specific insurance product because it would not service the customer's needs
All of the following could qualify as a group for the purpose of purchasing group health insurance except a) Single employer with 14 employees b) An association of 35 people c) Labour union d) Multiple employer trust
An association of 35 people
Which of the following is NOT a personal use of life insurance? a) An individual buys insurance to help the family pay off the mortgage in case of premature death b) An individual buys insurance to fund a buy-sell agreement c) An individual buys insurance to provide fruit income to a surviving spouse d) An individual buys cash value insurance to fund his children college education
An individual buys insurance to fund a buy-sell agreement
Which of the following is an example of a premium payment mode? a) $200 per policy year b) Payment by check c) Annual premium payment d) Automatic deduction of premium
Annual premium payment
Which of the following is NOT something a client must expect from a professional agent? a) Confidentially and a high standard of service b) Answers to financial questions outside the agent's expertise c) Full disclosure and timely paperwork processing d) Prompt policy delivery
Answers to financial questions outside the agent's expertise
Which one of the following is particularly important for the insurance provider to explain to a client upon delivery of a life insurance policy? a) Premium due dates b) Loan interest rates c) The effective date d) Any exclusions
Any exclusions
For the purpose of a contract, which of the following could be considered a "person"? a) An association b) A business trust c) A limited liability corporation d) Any of these would qualify as a person
Any of these would qualify as a person
Which statement below is INCORRECT regarding the type of term insurance that fits best with the applicant's needs? a) Applicant who may require a larger death benefit in the future should buy convertible term insurance b) Applicants concerned with the increasing cost of living should purchase increasing term c) Applicants wishing to pay off a mortgage should they suffer a premature death might buy a decreasing term plan d) Employers looking to provide cost effective group life insurance for their employees may choose annual renewable term
Applicant who may require a larger death benefit in the future should buy convertible term insurance
For an insurance contract to be valid in the state of California, when must insurable interest exist?
At the time of application for a policy on the insured
An underwriter is reviewing an applicant with an extensive medical history. Which of the following give the underwriter a better understanding of how the applicant has been treated for various illnesses ? a) Policy application b) Medical exam c) Attending Physician's Statement d) MIB report
Attending Physician's Statement
What specific kind of insurance is often written in conjunction with hospital expense policies and includes surgeons' and anesthesiologists' fees?
Basic surgical expense insurance
After being hired to deliver newspapers to his neighbors, a man is provided with $10,000 of life insurance by the newspaper. He would be covered under which kind of life insurance?
Blanket life
In a home healthcare benefit, all of the following are eligible expenses EXCEPT a) Blood transfusions b) Intermittent part time nursing care c) Physical, occupational, or speech therapy d) Medical social services
Blood transfusions
An unincorporated, nonprofit association representing all insurance companies in the State of California licensed to transact workers compensation insurance is known as
California Workers Comp Inspection Rating Bureau (WCIRB)
Conrad receives $50,000 from a $100,000 accidental death % dismemberment policy as a result of the loss of his left arm in an accident. Conrad has received the
Capital amount
An agent who only represents one company is a(n)
Captive agent
A guarantee universal life policy has all of the following features except : a) Lower premiums b) Coverage up to a certain age c) Death benefit d) Cash value
Cash value
Concerning the "Family Protection Policy" all of the following statements are true, except: a) Convertible term riders covers both the spouse and all the children b) Additional children born after the policy is issued are covered automatically at no extra cost c) Children, upon reaching the age of majority, are permitted to covert to an individual policy with proof of insurability d) This type of policy consists of whole life on the base insured and riders on the others
Children, upon reaching the age of majority, are permitted to covert to an individual policy with proof of insurability
From the CDI website, an agent or broker will report suspected insurance fraud via what portal?
Consumer reporting portal
Which whole life policy premium type is the most common?
Continuous premium
In order to be financially solvent, an insurer must accomplish all of the following, EXCEPT a) Maintain an amount at least equal to its required minimum paid in capital b) Contribute a specific amount of capital reserves to the state c) Reinsure any risk in excess of state retention limits d) Possess enough assets to cover its liabilities
Contribute a specific amount of capital reserves to the state
Which of the following is TRUE of the limited pay whole life policy? a) Coverage ends when policy is paid up b) Premium payments increase as the insured ages c) Premium payments are lower than continuous premium whole life d) Coverage continues after the policy is paid up
Coverage continues after the policy is paid up
Small employers in California with fewer than 25 employees may qualify for a tax credit if they purchase health insurance through which of the following? a) Covered California exchange b) Cal-COBRA c) California insurance guaranty association d) Small employer health options program (SHOP)
Covered California Exchange
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
In a level term life policy, which ALWAYS remains constant?
Death benefit
Which of the following coverage types pays a monthly cash benefit following the elimination period for total disability due to accident or sickness? a) Workers compensation disability insurance b) Disability income insurance c) Credit disability insurance d) Recurrent disability insurance
Disability income insurance
All of the following are features of a health insurance plan purchased on the health insurance marketplace except a) Coverage for emergency services b) Coverage for pre existing conditions c) Dollar limits on essential benefits d) Guaranteed renewability
Dollar limits on essential benefits
All of the following may be covered under the Employers Liability policy except a) Losses that occur as a result of dual capacity relationships between the employer and employee b) Employees eligible for 24 hour coverage c) Except employees d) Consequential bodily injuries to a spouse of an employee
Employees eligible for 24 hour coverage
All of the following health insurance disability benefits are income tax free EXCEPT a) Employee paid group disability b) Key person disability benefits c) Personally owned individual disability insurance d) Employer paid group disability
Employer paid group disability
Which of the following is the largest branch within the California Department of Insurance? a) Legal branch b) Licensing branch c) Enforcement branch d) Customer service branch
Enforcement branch
To comply with the Insurance Frauds Prevention Act and the California Regulations, insurance companies must do which of the following ? a) Develop mandatory anti-fraud training for employees b) Establish a special investigative unit c) Always hire a disinterested third party for fraud investigations d) Sign up for FBI's white-collar crime program
Establish a special investigative unit
What specific new procedures does the USA Patriot Act require of insurance companies?
Establish an anti-money laundering program
When life insurance proceeds are used to pay inheritance taxes and federal estate taxes, it is known as
Estate conservation
As it relates to the insurance industry, a set of principles for proper conduct is transacting of insurance is referred to as
Ethics
Paula has a history of severe asthma which caused her to be hospitalized in the past six months. If she discloses this on her application and is approved for her long term care policy, Paula's policy could
Exclude asthma related claims for up to 6 months
A state established program that requires insurers who write property insurance to accept risks in economically depressed areas the same proportion as their other business bears to the total property insurance market called the
Fair Access to Insurance Requirements plan
An applicant may challenge information discovered as a result of an investigative consumer report under which of the following Acts?
Fair Credit Reporting Act
A husband and wife both incur expenses that are attributed to a single major medical insurance deductible. Which type of deductible do they have in their policy?
Family
Which of the following was designed to regulate the operation of risk retention groups and purchasing groups in California?
Federal Liability Risk Retention Act
The Standard Fire Policy would provide coverage in which of these cases ? a) Theft b) Insured's neglect c) Fire d) Acts of war
Fire
Which of the following would be considered a peril? a) Driving too fast for conditions b) Playing golf in a thunderstorm c) Fire d) Smoking
Fire
Why do equity-indexed life insurance policies have an increased premium?
For increased amount of protection
Which of the following is exempted from the incontestability provision in insurance policies? a) Change in health b) Pre existing conditions c) Changes in the insurance code d) Fraudulent misstatements
Fraudulent misstatements
Which federal act defines rules pertaining to protected health information?
HIPAA
All of the following are examples of insurable interest in property insurance except a) Joe who is a partner in a thriving business b) Harry who is waiting for his distant cousin's beach front property as part of his inheritance c) Fred and Ethel's personally owned vacation home d) Sally's own personal automobile
Harry who is waiting for his distant cousin's beach front property as part of his inheritance
Which plan is most commonly paired with a High Deductible Health Plan?
Health Savings Account (HSA)
Which of the following is the primary source of information that an insurer uses to evaluate an insured's risk for life insurance? a) Insurance application b) Risk analysis c) The law of large numbers d) Agent's report
Insurance application
Which of the following must be disclosed on all advertisements and policies on term life insurance for individuals 55 years of age or older? a) Life insurance policy illustrations b) Insurance monetary value index c) Life insurance surrender cost index d) MIB report
Insurance monetary value index
What does it mean if a health policy is conditionally renewable?
Insurer may elect NOT to renew only under conditions specified in the policy
Insurance producers have ethical responsibilities to which of the following? a) Policy owners only b) Insurers only c) The State Department of Insurance only d) Insurers, policy owners, the state, and the public
Insurers, policy owners, the state, and the public
Current assumption whole life policies are sensitive to which of the following? a) Age of the insured b) Current cash value of the policy c) Health of the insured d) Interest rates
Interest rates
Which of the following is provided by skilled medical personnel to those who need occasional medical assistance or rehabilitative care? a) Skilled care b) Intermediate care c) Custodial care d) Home health care
Intermediate care
Which of the following best describes pure life annuity? a) It continues payments to the beneficiary when the annuitant dies b) It is also known as refine life annuity c) It guarantees to pay out all the proceeds d) It provides the highest monthly benefits
Ir provides the highest monthly benefits
Which of the following statements is NOT true regarding HICAP? a) It provides consumer counseling b) It works in conjunction with local area agencies on aging c) It exists to assist seniors who are not qualified to receive social security or Medicare d) It is overseen by the state department of aging
It exists to assist seniors who are not qualified to receive social security or Medicare
Which of the following statements is NOT true regarding HICAP? a) It provides consumer counseling b) It works in conjunction with local area agencies on aging c) It exists to assistant seniors who are not qualified to receive social security or medicare d) It is overseen by the state department of aging
It exists to assistant seniors who are not qualified to receive social security or medicare
Why is relying solely on employer group life insurance generally considered inadequate for most individual's needs?
It is financially insufficient to cover end of life expenses
Which of the following is NOT true of the agents implied authority ? a) It is incidental to express authority b) It is given to an agent by the insurance company that is not specifically communicated c) It is specifically stated in the contract d) It is assumed by the agent in order to transact the business of insurance
It is specifically stated in the contract
What is an impairment rider?
It lists specific conditions in the contract that are excluded from the contract
The growing tendency of individuals to file lawsuits and to claim tremendous amounts for alleged damages is known as
Legal hazard
What does an annuity protect the annuitant against?
Living longer than expected
Which of the following riders provides for the payment of part of the policy death benefit if the insured is diagnosed with a terminal illness that will result in death within 2 years? a) Long term care rider b) Cost of living rider c) Accidental death rider d) Living needs rider
Living needs rider
Which problem was universal life insurance designed to address?
Low interest rates during periods of high inflation
If a new long term care policy is replacing existing coverage, the agent should make sure that the new policy's benefits
Match or exceed the existing policy
What is the primary difference between Medigap and Medicare SELECT policies?
Medicare SELECT policies contain restricted network provisions
In health insurance, the length of the grace period varies according to the
Mode of premium payment
What is it called when a life insurance company pays a multiple of the coverage amount when certain types of accidents occur?
Multiple indemnity
In the event an annuitant dies during the accumulation period, and there is a beneficiary named in the annuity, annuity benefits would be paid to the
Named beneficiary
Gross premium for a life insurance policy is determined by adding which two components
Net premium and expenses
Under the Affordable Care Act, when would pregnancy be considered a pre existing condition?
Never
A person applying for an insurance license in California was previously found guilt in a trail in which he entered a plea of " nolo contedere ". What does " nolo contedere" mean?
No contest
cash value guarantees in a whole life policy are called
Nonforfeiture values
When a long term care policy is replaced after it has been in effect for at least six months, the new policy may
Not exclude pre-existing conditions that would have been covered by the original contract
Joe lit a fire in his fireplace and left it unattended. He had failed to check to see if the flue was open, so the smoke entered the house and discolored the walls, ceiling, and drapes. How also had to hire a company to remove the smoke odor. The total expense of cleaning and repainting was $6,000. How much would Joe's Standard Fire policy pay?
Nothing
An insurer can decide to not renew an optionally renewable policy ...
On premium due dates
Which statement best describes agreement as it relates to insurance contracts a) All parties must be capable of entering into a contract b) Each party must offer something of value c) One party accepts the exact terms of the other party's offer d) The intent of the contract must be legally acceptable to both parties
One party accepts the exact terms of the other party's offer
Which of the following best describes a presumptive disability? a) One that is severe enough that the insured automatically qualifies for full disability benefits b) One that requires the insured to submit physical exams periodically c) One that a doctor predicts may reoccur in the future d) One that the insured will fully recover from in the future
One that is severe enough that the insured automatically qualifies for full disability benefits
The dividend option in which the policyowner uses dividends to purchase a term policy for one year is referred to as the
One-year term option
All of the following are TRUE statements regarding the requirements of an insurer to offer earth movement coverage in California except a) Only authorized agents which hold an "earth movement certificate" through the department of insurance are able to market residential property insurance which provides coverage for earth movement b) No policy of residential property insurance may be issued or delivered or initially renewed in this state by any insurer unless the named insured is offered coverage for loss or damage caused by peril of earthquake c) Coverage may be provided in the policy of residential property insurance which specifically provides coverage for loss or damage caused only by the peril of earthquake by itself d) Coverage may be provided in the policy of residential property insurance which specifically provides coverage for loss of damage caused by peril of earthquake alone or in combination with o
Only authorized agents which hold an "earth movement certificate" through the department of insurance are able to market residential property insurance which provides coverage for earth movement
If an object's value is not specified until a loss occurs, it is insured under a(n)
Open policy
A stock insurer is defined as an insurer
Owned by its stockholders
A qualifying retiree has access to all parts of the Social Security Medicare program. Which of these parts requires a monthly payment from the insured a) Part A b) Part B c) Medicaid d) Medi-Cal
Part B
Which of the following is consideration on the part of insurer? a) Paying the premium b) Underwriting c) Paying a claim d) Decreasing premium amounts
Paying a claim
Which of the following provides for the continuance of life insurance coverage on a juvenile in the event of the death or total disability of the individual responsible for the payment of premiums? a) Payor clause b) Survivor benefits c) Family maintenance d) Waiver of premium
Payor clause
Which of the following is characteristic of a nonqualified plan? a) Employer contributions are deductible business expenses b) Defined vesting schedule c) Plan does not meet federal guidelines for tax benefits d) Plan established by employer
Plan does not meet federal guidelines for tax benefits
Which of the following is considered the major advantage of HIPPA? a) Tax deductibility of certain medical expenses b) Portability c) Increased coverage d) Qualified beneficiaries
Portability
Which of the following is a characteristic of Preferred Provider Organizations (PPOs)? a) Prearranged costs for services rendered b) Providers receive a flat monthly amount for each used c) Emergency treatment is restricted to pre selected hospitals d) Ability to receive care at the same cost from any provider
Prearranged costs for services rendered
Ed is covered under a health plan provided by his employer. He was told that his insurance would pay the majority of the covered expenses if he would choose to see a provider in his plan's list. If Ed chose to be treated by a provider who was not on the list, his portion of the bill would be greater. Ed is covered under a/an
Preferred provider plan
If an insurance company uses HIV testing as part of its underwriting, when must an applicant be notified of the procedure?
Prior to performance of the test
When may a representation be withdrawn?
Prior to the issuance of the policy
Bon surrenders his policy. What return of premium will he recieve?
Prorated premium for the insured days in the future that he has already paid for, minus other deductions related to losses
An annuity would normally be purchased by an individual who wants to
Provide income for retirement
Which of the following will be eligible for a tax sheltered annuity? a) The elderly b) Dependents under the age of 21 c) Public school teachers d) Military personnel
Public school teachers
The Guaranteed Insurability rider allows the owner to purchase additional amounts of life insurance without proof of insurability at all of the following EXCEPT a) Marriage b) Purchase of a new home c) Approximately every 3 years between the ages 25 and 40 d) Birth of a child
Purchase of a new home
An insured purchased a health insurance policy with a renewability clause that states the policy is " guaranteed renewable". This means that as long as the required premiums are paid, the policy will continue until the insured
Reaches age 65
What is an injured part entitled to receive if an intentional concealment is discovered?
Recession of the policy
What type of insurer uses a formal sharing agreement?
Reciprocal insurers
All of the following are actual deductibles found in medical insurance policies EXCEPT a) Replacement b) Common accident c) Family d) Per cause
Replacment
Some states require life insurance policies to include a provision that gives the insurer the right, at its own expense, to do which of the following? a) Require an autopsy b) Perform a medical examination on the beneficiary c) Perform a financial audit of the insured d) Investigate the claims made on the application
Require an autopsy
The insured dies 6 months after the policy issue date. Upon death of the insured, it is determined that the applicant made a material misstatement on the application. What is the most likely course of action for the insurer?
Rescind the policy
Which of the following determines whether a person passes the financial test to qualify for Medicaid? a) The Social Security Administration b) American with Disabilities Act c) Federal guidelines d) State law
State law
What is it called when an insurance company tries to recover from a different insurance policy all or part of its losses resulting from a claim?
Subrogation
What is the order in which beneficiaries receive proceeds from a life insurance policy?
Succession of beneficiaries
If a basic medical insurance plan's benefits are exhausted, what type of plan will then begin covering those losses?
Supplementary major medical
Which of the following has established guidelines to ensure that insurance companies and their agents promote their products properly and accurately, without exaggerating the benefits or minimizing the drawbacks? a) The State Department of Insurance b) The NAIC Model Act c) The Fair Credit Reporting Act d) The Guaranty Association
The NAIC Model Act
Which of the following is the best definition of "indemnification" a) A contract whereby one undertakes to indemnify another against loss, damage, or liability arising from a contingent or unknown event b) The act of one person who agrees to restore an injured person to the condition he/she enjoyed prior to the loss c) A legal entity which acts on behalf of itself, accepting legal and civil responsibility for the actions it preforms and making contracts in its own name d) A contract whereby two parties involved agree to what things of value will be exchanged by the parties to the contract
The act of one person who agrees to restore an injured person to the condition he/she enjoyed prior to the loss
The life insurance policy will not be truly effective until all of the following occur EXCEPT a) The policy is delivered to the applicant b) The agent has explained the policy to the client c) The statement of good health is obtained by the insurer d) The first premium is collected
The agent has explained the policy to the client
What procedure is used by an insurer to protect itself in the event a dispute arises and the applicant and the agent do not recall the changes that were made in a completed application?
The applicant and possibly the agent initial any changes made
in life insurance, which of the following is NOT required to have an insurable interest in the insured? a) The beneficiary b) The policy owner c) The insured d) The applicant
The beneficiary
Once the initial benefit limit in Medicare D is reached, how is beneficiary affected?
The beneficiary is then responsible for a portion of prescription drug costs
Once the initial benefit limit in Medicare Part D is reached, how is the beneficiary affected?
The beneficiary is then responsible for a portion of prescription drug costs
All of the following are consideration in an insurance policy except a) The promise to pay covered losses b) The cash value in the policy c) The statements on the application d) The premium paid at the time of application
The cash value in the policy
Which of the following is TRUE in a key employee life insurance policy? a) The corporation is the insured and the policy holder. The employee is the beneficiary b) The corporation is the beneficiary. The employee us the policy holder and the insured c) The corporation is the applicant and insured. The employee is the policy holder d) The corporation is the applicant and policy holder. The employee is the insured
The corporation is the applicant and policy holder. The employee is the insured
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
Group AD&D policies may be deducted by whom and under which deduction category?
The employer under business expenses
Which of the following is not a factor in determining rates charged by the California State Compensation Insurance Fund for insurance issued by it? a) The manner in which work is conducted b) A reasonable regard for the accident experience and history of each such insured c) The extent to which the employees in a particular establishment have or have not persons dependent on them for support d) A reasonable regard for the insured's means and methods of caring for injured persons
The extent to which the employees in a particular establishment have or have not persons dependent on them for support
Which of the following is true about decreasing life policy? a) The cash value of the policy decreases over time b) The face amount reaches zero at policy expiration c) Premiums decrease over time but the amount of coverage remains constant d) Commonly sold as a rider to another type of policy to provide an additional death benefit
The face amount reaches zero at policy expiration
All of the following are advantages of a qualified retirement plan except a) The contribution is not taxable to the employee when made b) The funds grow tax deferred c) The income at retirement is tax free d) The contribution is deductible to the employer
The income at retirement is tax free
All of the following are advantages of a qualified retirement plan except a) The funds grow tax deferred b) The income at retirement is tax free c) The contribution is deductible to the employer d) The contribution is not taxable to the employee when made
The income at retirement is tax free
If an insured intentionally failed to communicate information related to an implied warranty, which of the following may occur? a) The insurer may increase premiums at anniversary date b) The insurer will cancel the policy and retain the premiums paid c) The insurer may rescind the contract d) The insured will be fined
The insurer may rescind the contract
After an employee was laid off, he was informed of the right to convert the group coverage to an individual policy within 31 days. Twenty days into the conversion period, the employee suffered a heart attack and died before he could obtain individual coverage. What is the group policy insurer required to do?
The insurer must pay the death benefit under the former group coverage
The commissioner may disapprove the use of any name for a license for any of the following except a) The use of a name may mislead the public in any respect b) The licensee already has an approved name c) The name states that the license is an insurer or hospital service plan d) The name implies that the licensee is an underwriter
The licensee already has an approved name
All of the following are disadvantages to an annually renewable term life policy EXCEPT a) The insured may be left with inadequate protection when it is most needed b) The living benefits decreases over time c) It becomes considerably more expensive over time d) It generally is not renewable beyond a certain age
The living benefits decreases over time
All of the following are characteristics of group health insurance plans except a) Employers may require the employees to contribute to the premium payments b) The benefits under a group plan are more extensive than those under individual plans c) The parties that hold a group health insurance contract are the employees and the employer d) The cost of insuring an individual is less than what it would be charges for comparable benefits under an individual plan
The parties that hold a group health insurance contract are the employees and the employer
What is the purpose of Stranger-originated life insurance (STOLI)?
The policy is originated primarily or solely for the purpose of resale
If the insurer wishes to share an applicant's HIV status, the applicant must be given full notice of all of the following EXCEPT a) An opportunity to refuse the dissemination of the information b) The treatment procedures that are covered by the policy c) Insurer's practices with respect to the treatment of this information d) The applicant's rights to maintain privacy
The treatment procedures that are covered by the policy
Which of the following is NOT one of the 3 factors set by state law for determining rates and premiums on automobile insurance policies ? a) The type and model of vehicle b) The insured's driving safety record c) The number of miles he or she drives annually d) The number of years of driving experience the insured has had
The type and model of vehicle
Which of the following occurs immediately after the application is submitted and the initial premium paid? a) The insurance goes into effect b) The underwriting process begins c) The applicant's references are checked d) The beneficiaries are selected
The underwriting process begins
Insurance policy is
The written instrument in which a contract of insurance is set forth
Which of the following best describes the term "24-hour coverage" in relation to workers compensation insurance? a) This is typically the most expensive type of workers compensation, in which any injury, whether occurring at work or at home, is covered by workers compensation insurance b) This represents the idea that workers compensation coverage is not limited to certain hours c) This is a special type of workers compensation insurance used for people who may be on the job 24 hours a day, such as military personnel d) This represents a two pronged coverage; workers compensation during work hours and regular medical coverage outside of work
This represents a two pronged coverage; workers compensation during work hours and regular medical coverage outside of work
Managed care plans increase efficiency by all of the following means EXCEPT a) Controlling inpatient admissions and length of stay b) Selectively contracting with health care providers c) Increasing beneficiary cost sharing d) Transferring the management of costs to the insured
Transferring the management of costs to the insured
An aleatory contract is based on what kind of exchange?
Unequal exchange of values
In which of the following types of contracts is only one party is legally required to do something after the insured has completed the act of paying the premium? a) Conditional b) Warranty c) Personal d) Unilateral
Unilateral
Which is an example of when an immediate annuity would be appropriate? a) Upon receipt of large insurance proceeds b) Upon the death of a beneficiary c) When retirement is many years away d) When an emergency situation arises
Upon receipt of large insurance proceeds
Which of the following lists the three common types of permanent individual life insurance? a) Variable life, Whole life, Universal life b) Whole life, Incidental life, Term life c) Universal life, AD&D, Term life d) Group life, Whole life, Variable life
Variable life, Whole life, Universal life
Which of the following types of insurance is investment based, has a level fixed premium, and a non guaranteed cash value? a) Universal life b) Credit life c) Variable whole life d) Interest based life
Variable whole life
How does a noncancelable policy differ from a guaranteed renewable policy?
With the noncancelable policy the insurer ay increase premiums only based on the terms of the policy
California law permits an insured to return a long term care policy for a full refund of premiums paid for any reason
Within 30 days of receiving the policy
An insured has a life insurance policy in the amount of $250,000 naming his wife as beneficiary. Upon his death, his beneficiary decides not to receive the death benefit for some time. When she finally receives the death benefit check, it's in the amount of $250,530. Is any portion of the proceeds that the beneficiary receives taxable?
Yes, proceeds in excess of face amount are taxable as interest
What is the return of premium rider?
an increasing amount of term insurance that always equals the total of premiums paid up to the current point
California's Compulsory Financial Responsibility Law requires every driver and every owner of a motor vehicle to maintain financial responsibility (liability coverage) at all times. If you don't have acceptable financial responsibility and have an accident, you may lose your driver's license for up to
four years
Concerning Medicare Part B, which statement is INCORRECT? a) It provides partial coverage for medical expenses not fully covered by Part A b) It is fully funded by Social Security taxes [FICA] c) It is known as medical insurance d) It offers limited prescription drug coverage
It is fully funded by Social Security taxes [FICA]
Which of the following is NOT true regarding a Certificate of Authority a) It may be necessary for transacting business in a specific state b) It is equivalent to an insurance license c) It is issued by the state department of insurance d) It is issued to group insurance participants
It is issued to group insurance participants
Which statement is NOT true regarding a Straight Life policy? a) It has the lowest annual premium of the three types of whole life policies b) Its premium steadily decreases over time, in response to its growing cash value c) The face value of the policy is paid to the insured at age 100 d) It usually develops cash value by the end of the third policy year
Its premium steadily decreases over time, in response to its growing cash value
A set of legal or regulatory conditions that affect an insurer's ability to collect premiums commensurate with the level of risk incurred would be considered a(n):
Legal hazard
Insurers may change which of the following on a guaranteed renewable health insurance policy? a) Individual rates b) No changes are permitted c) Rates by class d) Coverage
Rates by class
An insured has a heart attack while jogging, but is expected to return to work in approximately six weeks. The insured's disability income policy will
Replace a percentage of his lost income
Which of the following is NOT covered under Part B of a Medicare policy? a) Physician expenses b) Routine dental care c) Home health care d) Lab services
Routine dental care
All of the following are beneficiary designations EXCEPT a) Contingent b) Primary c) Specified d) Tertiary
Specifed
Which of the following is true about the requirements regarding HIV exams? a) Prior informed oral consent is required from the applicant b) HIV exams may not be used as a basis for underwriting c) The applicant must give prior informed written consent d) Results mat be disclosed to the agent and the underwriter
The applicant must give prior informed written consent
The annuity owner dies during the accumulation period without naming a beneficiary. Annuity's cash value exceeds premiums paid. Which of the following is TRUE? a) The cash value will be paid to the state government b) The cash value will be paid to the annuitant's estate c) The premium value will be paid to the annuitant's estate d) All benefits will be forfeited
The cash value will be paid to the annuitant's estate
life insurance creates an immediate estate. Which of the following best explains this statement? a) The death benefit will always be paid to the estate of the insured b) The face value of the policy is payable to the beneficiary upon the death of the insured c) The policy has cash values and nonforfeiture values d) The policy generates immediate cash value
The face value of the policy is payable to the beneficiary upon the death of the insured
With Adjustable Life, the owner can change all of the following EXCEPT a) The length of time the coverage will last b) The insured c) The death benefit d) The premium
The insured
In order for an alumni association to be eligible to purchase group health insurance for its members, all of these statements must be true EXCEPT when the association a) Has a constitution, by-laws, and must hold at least annual meetings b) Is organized for reasons other than buying insurance c) Has at least 100 members d) Has been active for five years minimum
Has been active for five years minimum
An insured is covered under a Medicare policy that provides a list of network healthcare providers that the insured must use to receive coverage. In exchange for this limitation, the insured is offered a lower premium. Which type of Medicare policy does the insured own?
Medicare SELECT
The proposed insured makes the premium payment on a new insurance policy. If the insured should die, the insurer will pay the death benefit to the beneficiary if the policy is approved. This is an example of what kind of contract?
Conditional
A limited health insurance policy that will pay a lump sum to an insured diagnosed with a heart attack, stroke, or renal failure is known as
Critical illness insurance
Which of the following is another term for the accumulation period of an annuity? a) Pay-in period b) Premium period c) Liquidation period d) Annuity Period
Pay-in period
Under the Accidental Death and Dismemberment (AD&D) coverage, what type of benefit will be paid to the beneficiary in the event of the insured's accidental death?
Principle sum
Which of the following best describes what an annuity period is? a) The period of time from the effective date of the contract to the date of its termination b) The period of time during which accumulated money is converted into income payments c) The period of time from the accumulation period to the annuitization period d) The period of time during which money is accumulated in an annuity
The period of time during which accumulated money is converted into income payments
The purpose of having an elimination period in a policy is to accomplish which of the following? a) To assure that claims are not paid until an investigation can be done to assure the claim is valid and covered by the policy b) To allow the client some flexibility in determining their own premium c) To allow the insured time to save up the initial premium charged when the receive a premium rating d) To allow the insurer to do an in depth background check on ethnic groups which pose an enhanced risk prior to issuing a policy
To allow the client some flexibility in determining their own premium
The benefits for individual disability plans are based on
A flat amount
When a policyowner designates a group of individuals as the beneficiary of a life insurance death benefit without specifically naming the individuals, this is called
Class designation
Decreasing term life insurance is often used to
Cover a mortgage
Of the following, which is NOT considered a general duty or power of State Insurance Commissioners? a) Conduct investigations and examinations of companies and individuals who conduct the business of insurance b) Issue, suspend, and revoke insurance licenses and certificates of authority c) Develop and implement laws to regulate the business of insurance d) Oversee the Department of Insurance
Develop and implement laws to regulate the business of insurance
All of the following are true regarding the Medical Information Bureau [MIB] EXCEPT a) MIB information is reported to underwriters in coded form b) MIB reports contain previous insurance information c) Insurers may not refuse to accept an application solely due to information in an MIB report d) MIB reports are based upon information supplied by doctors and hospitals
MIB reports are based upon information supplied by doctors and hospitals
Which of the following is true regarding the regulation of providers? a) There are no specifications on regulation of providers b) Only health care service plan providers fall under the jurisdiction of the DOI c) Providers must be under the jurisdiction of either the Department of Insurance or other government agencies d) Only the department of Insurance can be the regulator for insurance providers
Providers must be under the jurisdiction of either the Department of Insurance or other government agencies
What form of the annuity settlement options provides payments to an annuitant for the rest of the annuitant's life and ceases at the annuitant's death?
Pure life
