Exam #4
Insurers make an adjustment to the cash value of an account of a universal life policy each time a payment is made. They add the premium paid and:
current interest; adjusted for mortality and a general expense charge
which of the following conditions would NOT be included among the chronic illness triggers of a long term care policy
deafness
which government agency would possible provide coverage if you ran out of coverage under your own health insurance
department of health care services (DHCS)
Two of the long-term care chronically ill activities of daily living (ADLs) are
eating and dressings
under the consolidated omnibus budget reconciliation Act (COBRA) how many months of coverage are available?
eighteen months
when referring to an insurance contract when must a representation be made?
either at the time of or before policy insurance
the premium of a proposed disability income policy could be lowered by increasing the
elimination period
death benefits are received by a beneficiary are generally
exempt from federal income tax
the California insurance code requirements regarding the return of life or annuity contracts issued to seniors
gives a senior at least 30 days to return specified life and/or annuity contracts for a full refund
which of the following is not correct about long term care insurance?
has built in upward adjustments for the possible future changes in Medicare long term care coverage
Arnold and Bertha are married and work for different firms. Arnold has group health insurance through his company that also insures bertha.
if bertha files a medical claim Arnolds company is considered secondary
which of the following is true regarding an aleatory contract
if there were a loss, the insurer would pay out considerably more compared to the insureds premium
an individual might purchase LTC protection out of concern for all of the following except:
ineligibility for medigap coverage
what information can a party to a contract of insurance be allowed NOT to communicate according to California Law
information which the other already knows
if an insurer is not able to meet financial obligations when due, the insurer would be considered
insolvent
what factor supports the principle of indemnity
insurable interest
relevant factors in the health insurance principle of morbidity include all of the following except
intelligence
which of the following is true concerning an implied warranty
it doesn't have to be in writing
which of the following is correct about a third party administrator
it is an independent company that provides administrative service for self funded plans
what does the incontestable clause of a lifer insurance policy do?
it keeps the insurer from canceling the policy if, after 2 years, there is a discovery of error, concealment, or misstatement by the policy owner
A disability policy is issued and premiums are paid on an annual basis on the 1st of January.
it will be paid because of the loss occurred within the grace period.
if a premium is overcharged in the early years, and then remains constant throughout the premium paying period, though the risk of dying increases, it is called a ____________ premium
level
which of the following is not legal when determining premium rates for life or disability insurance?
nationality
all of the following statements regarding policy dividends are true except:
non participating policies generally pay large dividends
a policy specifically excludes insurance protection for those hazards occurring while working on the job., the category falls under is
non-occupational policies
the guaranteed insurability rider provides that the policy holder can purchase more insurance
on his own life at certain specifies ages without proof of insurability
what is the most liberal definition of disability?
own occupation
the home care coverage of a LTC policy provides for
part time nursing at home for a custodial care patient
the adult day coverage level of a long term care policy provides for
part-time nursing at a facility for elderly who live at home
which of the following is not correct regarding the disability benefits provided by social security
the payments received from this program are meant to entirely replace a workers lost earnings
While an insurer is paying the premium for a life insurance policy under the waiver of premium rider:
the policy remains in full force in every respect
all of the following statements about mortality tables are true except
the tables track a group of people from the year they were born until they all die
what is covered by part A of medicare
Hospitalization
if the owner of an annuity makes a withdrawal from it before age 59 1/2, what will the penalty be ?
10%
which is the most expensive LTC policy?
14 day elimination period, 5 year benefit period
what maximum amount of employer provided group term life insurance is tax free (excluded from an employees income)
50,000
To reach currently insured status under the Social Security system, an individual must be credited with a MINIMUM of
6 quarters of coverage during the last 13-quarter period
the social security black out period ends when the surviving spouse reaches the age of:
60
what is a senior age as it pertains to life and annuities
60
every licensee must indicate his or her license number on which of the following documents
All of the above
subject to the restrictions of the California insurance code, any person capable of making a contract may be considered
An insurer
from the following, identify that which constitutes the "entire contract" in a life insurance policy. the policy:
And a copy of the application when attached
what is the penalty for unlawfully acting as an agent or broker for, or aiding an insurer without a certificate of authority?
Any penalty for applicable misdemeanor, plus $500 plus $100 per month that the agent continues the violation
according to the definition of an ideally insurable risk, which of the following is nor a requirement?
Loss must be the result of a catastrophic event event
Marvin is involved in a serious car accident. no one is surprised Because Marvin is known to drive too fast identify the hazard here.
Marvin drives too fast
which program is designed to provide medical assistance to people with low incomes ?
Medi-Cal
Oscar owns a whole life policy that he has been paying into for many years.
Continue making the premium payments to keep the contract in force and borrow from cash value
As defined by the California insurance code, "insurance" is a
Contract
HICAP helps to provide to the senior community information on medicare health insurance and retirement planning. what else is true in connection with HICAP
HICAP does not endorse or sell any types of insurance
who submits the claim for medicare part A
Hospital
from lowest to highest, which is the correct order of initial premiums for life insurance policies
Modified premium, ordinary life, single premium
all of the following would be considered an accident as it relates to health insurance except:
Molly intentionally injures herself by falling off her bike.
what is the cost of service from the HICAP?
No Charge
which health plan might apply 90%. coinsurance to network providers and 70% coinsurance to non-network providers?
PPO
if a worker is now earning only $25k a year working part time (35k a year less than he earned a couple of years ago) and is earning less because of a disability, this disability would normally be called
Partial
Which benefits are provided by rep employee insurance?
Payment to a business when an important employee dies
which of there following is true about a service provider as it relates to health insurance?
Payments are made directly to the provider
what is medicare part D
Prescription drug coverage
relative value units use a conversion table to determine benefits for
Surgical procedures
which of the following often acts as a "field underwriter"?
The Agent
which contract provides for the systematic liquidation of a fund?
annuity
long term care coverage can be sold in various ways. which of the following is one of these ways
as part of a life insurance policy through the use of an endorsement
in the business of insurance , concealment is defined by all of the following statements, except
concealment does not occur if no inquiry is made
which of the following applies to social security
contributions are compulsory for most workers
deductibles coinsurance and co payments in a health insurance policy are cost effective choices that have the effect of
cost sharing
in California and insurer organized under the state laws of Nevada is considered
a foreign insurer
all of the following information is gathered during the personal financial planning process except
a listing of a persons civic and professional organization memberships.
assume that in each of the following examples the person is 65 years of age. who has the greatest need for comprehensive long term-care insurance
a person with $50,000 in yearly income and $130,000 in assets
the replacement of life insurance and annuity contracts requires which of the following
a statement to the effect that the policy being applied for is replacing a prior one
which of the following are commonly covered by medical expense policies
accidental injuries
the insured aged 65 owns a $100,000 whole life policy. the policy is paid-up as of today. when would the cash value reach $100,000
age 100
an example of a morale hazard in relation to a life insurance application would be
an individual has an indifferent attitude about participating in activities that may be damaging to his health
which of these is the best way to define the concept of indemnity
an insured cannot receive more than an actual economic loss in the event of a claim
upon notification of a claim, a claimant may have access to the California Fair Claims settlement practices regulations through all of the following means except:
an interview appointment with the agent of record
certain principles apply to business of insurance. one of them is the concept or insurance issued as an "aleatory" contract. what does aleatory mean here?
performance depends on an uncertain future event.
which type of exposure can be best defined as a condition or situation where the exposure to financial loss is presented to an individual or family from causes such as injury disability death sickness or unemployment
personal loss exposure
Health Maintenance Organization (HMO) are required to provide for all of the following services except:
prescription drugs
all of the following are features of a preferred provider organization (PPO) EXCEPT
primary care physicians act as gatekeepers
negotiating an insurance policy means which of the following
promising a commission rebate to an existing insured if she reviews
agents must act on behalf of their clients in such a way that upholds their "fiduciary duty." select the best example of this duty from the choices below.
quickly sending an insureds premium to the home office.
One important method of dealing with risk is to avoid it. all of the following describe risk avoidance except the insured
recognizing that his driving skills are deteriorating and therefore increasing the liability limit on his auto policy
what recourse does an insurer have if a violation of a material warranty on the part of the insured is discovered
rescission of the policy
all of the following would be considered benefits of insurance except
retention of the loss exposure risk by the insured
an agent who sells long-term care insurance owes his policyholders and prospective clients all of the following except:
sincerity
which of the following is a characteristic of non qualified annuities?
tax-deferred earnings
under Cal-Cobra all of the following would be considered qualifying events, except
termination, regardless of conduct
who must sign a statement acknowledging that a life insurance policy is to be replaced by an applicant
the applicant and the agent
a district feature of the alternative funding method known as self-funding is
the benefits are tailored to the needs of the participants
How does the cost recovery rule apply when a life insurance policy is surrendered for its cash value?
the cost basis of the policy is exempt from taxation
An elimination period in a disability income policy serves the same function as
the deductible in a medical expense policy
from the choices listed below, choose the one that best describes insolvency as it relates to insurance
the inability of an insurer to meet financial obligations to policy owners as a result of a deficient amount of paid in capital
gina the beneficiary on a life insurance policy dies before the insured dies. In California when the insured eventually passes away, the death benefit goes to which of the following if the policy is still in effect
the insureds estate
what happens to an agent's license after all notices of appointment have been terminated ?
the license is considered to be inactive
what is the first step in submitting medicare claims?
the medical provider submits expenses to medicare
according to the California insurance code governing advertising standards what must appear on all printed insurance proposals
the word "insurance"
the an eligible worker dies , all of the following may be entitled to survivors benefits through social security, except
the workers 41 year old widow
Which of the following is false about beneficiaries
trusts are only documents and therefore cannot be named as beneficiaries
when does the license of an agent become inactive
when the agent is not currently appointed by an insurer, but renewal fees are paid and continuing education requirements have been met
which of the following statements concerning the usual coordination of benefits provision is correct?
when two plans both have the provision, coverage as an employee is primary to coverage as a dependent
an individual is allowed to enroll in individual health insurance under the following circumstances except
within 30 days of being diagnosed with an illness
