Life Insurance Test 2
Is a person with Medicare A & B eligible for MRMIP? A) No, unless that individual has end state renal disease. B) No, except for one with a disability C) No D) Yes
C) No
Is a person who is eligible for Medicare A & B eligible for MRMIP? A) No, unless that individual has end stage renal disease B) No, except for one with a disability C) No D) Yes
A) No, unless that individual has end stage renal disease
*What are the tax consequences for Roth IRA? A) Non deductible deposits; tax free distribution B) Non deductible deposits; taxed distribution C) Deductible deposits; tax free distribution D) Deductible deposits; taxed distribution
A) Non deductible deposits; tax free distribution
What maximum amount of employer provided group term life insurance is tax free (excluded from an employee's income)? A) $25,000 B) $50,000 C) $75,000 D) $100,000
B) $50,000
*In a life insurance policy issued after 1988, failure to pass the 8 pay test results in: A) Single premium policy B) Endowment policy C) Single premium contract D) Modified endowment contract
D) Modified endowment contract
How many medicare supplement (medigap) plans are there? A) 2 B) 6 C) 8 D) 10, plus 2 high deductible plans
D) 10, plus 2 high deductible plans
* By state law, how many weeks is an employee entitled to for maternity leave after giving birth? A) 2 weeks B) 4 weeks C) 8 weeks D) 12 weeks
D) 12 weeks
*What is the cost of service from the Health Insurance Counseling and Advocacy Program (HOCAP)? A) US $10 per appointment B) US per $25 per appointment C) US per $50 per customer D) No charge
D) No charge
A person has $100,000 life insurance contract. He passed away after having paid $500 in premium. How much tax will the beneficiary need to pay? A) 0% B) 95% C) 100% D) 5%
A) 0%
* A method of selling insurance by using mass media advertising is known as: A) Direct Response B) Direct Writing C) Telemarketing D) Syndication
A) Direct Response
* What is an ESOP? A) Employee Stock Ownership Plan B) Employer Simplified Option Plan C) Employer Security Ownership Pension D) Employee Saving Organization Program
A) Employee Stock Ownership Plan
*The "Vision Care" plan coverage includes all of the following EXCEPT: A) Eye Surgery B) Eyeglass Lenses C) Eyeglass Frame D) Eye Examination
A) Eye Surgery
The following classes of service are all under the jurisdiction of the DOI EXCEPT: A) Lasik B) Chiropractic C) Dental D) Surgery
A) Lasik
*How are MRMIP services delivered? A) Licensed health service B) Qualified health service C) Any health service D) Employer based health service
A) Licensed health service
* The purpose of the state insurance laws include everything EXCEPT: A) Rate determination B) Consumer protection C) Solvency surveillance D) Provision review
A) Rate determination
Can an annual premium for an MRIP policy go up? A) Yes B) No C) Yes, but only by 3% D) Yes, but only by 5%
A) Yes
* What is the most liberal definition of disability? A) Any occupation B) Own occupation C) Occupation for which you can easily qualify D) Occupation you can easily qualify for after minimum education
B) Own occupation
* As used in the California Insurance Code, the work "may" means which of the following? A) Optional B) Permissive C) Mandatory D) Allowable
B) Permissive
Are low income families eligible to participate in the California Health Benefit Exchange program? A) Yes, using a voucher and if the low income family/individual's income is 133-400% of the federal poverty level. B) Yes, using tax credits and if the low income family/ individual's income is between 133-400% of the federal poverty level. C) Yes, using a voucher and if the low income family/individual's income is between 401-1000% of the federal poverty level. D) No, low income families/ individuals are not eligible for Benefit Exchange program.
B) Yes, using tax credits and if the low income family/ individual's income is between 133-400% of the federal poverty level.
* After more than 6 months since an insured received disability benefits under his disability income policy, he makes a claim for the same disability again. This will: A) Start a new benefit B) Require the need to apply for a new policy C) Start another elimination period D) Be denied
C) Start another elimination period
*The California Insurance Code dictates good faith communication in insurance contracts and claims. The parties to the contract include all of the following except: A) The claimant B) The insurer C) The state D) The agent
C) The state
* In group health insurance underwriting, which factor helps determine an employer's stability and persistency rate? A) Size of the group B) Predominant gender C) Type of industry involved D) Type of benefits offered by employer
C) Type of industry involved
*All of the following are under the jurisdiction of the Department of Insurance EXCEPT: A) Medicare B) PPOs C) Insurance D) HMOs
D) HMOs
*In financial planning, what is the Human Life Value concept based on? A) Age B) Education C) Health D) Income
D) Income
Creditors have rights to insurance policy proceeds if the beneficiary is: A) Insured's child B) Insured's spouse C) Insured's business partner D) Insured's estate
D) Insured's estate
When notifying the insured of a policy information change, the California Insurance Code rules that notification must be sent by: A) Fax B) Email C) Telephone D) Mail
D) Mail
*The monthly premium for MRMIP is based on all of the following factors for the individual, EXCEPT: A) Age B) Where the individual lives in CA C) The number of the individual's dependents currently enrolled in MRMIP D) Martial status
D) Martial status
*If a policy has a 90 policy day elimination period when will a check be cut? A) On the 90th day B) On the 91st day C) On the 120th day D) On the 121th day
D) On the 121th day
If an agent has several different licenses, which would be required on all printed material? A) All license number B) Only license numbers on approved designated list C) Only the license numbers for the specific product being marketed D) Only one license number
D) Only one license number
*All of the following are included in mortality tables, EXCEPT: A) Deaths at end of year B) Age at beginning of year C) Probability of death at the end of year D) Probability of living at end of year
D) Probability of living at end of year
*According to the California Insurance Code, if a company's Certificate of Authority is revoked, the Commissioner may do any of the following EXCEPT: A) Take possession of all documents and records B) Use Guarantee Association funds to pay salaries C) Seize control of office facilities D) Specified dollar amount for examination
D) Specified dollar amount for examination
*Vision insurance usually limits in all of the following way EXCEPT for: A) 1 examination per year B) 1 set of lenses per year C) Specified dollar amount for frames D) Specified dollar amount for examination
D) Specified dollar amount for examination
If an applicant completes the PCIP/MRMIP application and qualifies for both the PCIP and MRMIP programs, but does not indicate a preferred program on the application, which course of action will be taken? A) The application will be returned to the applicant marked as incomplete B) The applicant will be required to submit a new application indicating a preferred program C) The applicant will automatically be enrolled into the MRMIP program D) The applicant will automatically be enrolled into the PCIP program
D) The applicant will automatically be enrolled into the PCIP program
A life agent must maintain all of the following information EXCEPT: A) Copies of solicitation letters sent B) Original application for each policy in force C) Application completed but not submitted to an insurer D) Trust account bank statements, if any
D) Trust account bank statements, if any
By government standards, retirements starts: A) At age 60 B) At age 62 C) When reduced benefits are paid D) When unreduced benefits are paid
D) When unreduced benefits are paid
The insurance term used for an insurer who has not complied with the requirement to obtain a certificate of authority from the California Insurance Commissioner is: A) Alien B) Nonadmitted C) Domestic D) Lloyd's
B) Nonadmitted
All of the following health providers are physicians EXCEPT: A) Neurologists B) Optometrists C) Urologists D)Dermatologists
B) Optometrists
When a credit is requested by the insurer, the report is sent directly to: A) The agent B) The insurer C) The applicant D) The applicant's physican
B) The insurer
*A life settlement between a policy owner and a provider most closely resembles which of the following? A) Extended Term B) Viatical Settlement C) Reduced paid up D)Interest only
B) Viatical Settlement
If an employee has term life insurance policy of $60,000 what is the maximum that can be written for his spouse? A) $10,000 B) $25,000 C) $50,000 D) $100,000
C) $50,000
What percentage of employee contributors to a 401(k) plan are vested? A) 75% B) 80% C) 100% D) 50%
C) 100%
In a group insurance policy, acts of war and aviation are considered examples of: A) Rides B) Endorsements C) Exclusions D) Inclusions
C) Exclusions
Which of the following would not be considered a disability under the Americans with Disabilities Act? A) Alzheimer's disease B) AIDS C) Obesity D) Diabetes
C) Obesity
If the owner of an annuity makes a withdrawal from it before age 59 and a half, what will the penalty be? A) 10% B) 15% C) 25% D) 50%
A) 10%
What is the tax rate on money received from a Modified Endowment Contract? A) 10% B) 15% C) 20% D) 25%
A) 10%
* When an agent shows a life illustration to a senior, which of the following can be used in the illustration A) A disciplined current scale interest rate B) His (the agent's) own rate C) A vanishing premium D) None of the above can be used in life illustrations
A) A disciplined current scale interest rate
What is a senior's age as it pertains to life and annuities? A) 59 1/2 B) 60 C) 62 D) 65
B) 60
A "unilateral contract" is the insurance agreement that is: A) An aleatory contract B) A contract issued by the insurer and accepted by the insured C) A binder D) An annuity
B) A contract issued by the insurer and accepted by the insured
If a dependent child covered by a group life plan is incapable of self support, coverage under the plan may continue up to age: A) 24 B) Any age C) 21 D) 19
B) Any age
*The pregnancy Discrimination Act requires: A) Employers to provide both male and female employee 4 weeks of paid maternity leave after the birth of a child B) Any health insurance provided by an employer must cover expenses for pregnancy related conditions on the same basis as cost for other medical conditions. C) Employers to throw a baby showers for pregnant employees. D) All of the above.
B) Any health insurance provided by an employer must cover expenses for pregnancy related conditions on the same basis as cost for other medical conditions.
According to Social Security, when can an individual receive retirement benefits? A) At 60 B) At 62 C) When payments are restricted D) When payments are unrestricted
B) At 62
* An insured has a disability policy and he changes to an occupation with less risks than the previous one. His insurer will: A) Keep the policy the same B) Change the premium to a lesser amount C) Issue a new policy with a lower premium D) Cancel the policy
B) Change the premium to a lesser amount
*Not being able to do any of the following activities would be considered a disability, EXCEPT: A) Hearing B) Driving C) Dressing D) Speaking
B) Driving
What type of annuity has a minimum fixed interest rate and can also achieve stock market like gains? A) Fixed annuity B) Equality Indexed annuity C) Variable Annuity D) Market value Adjustment annuity
B) Equality Indexed annuity
How do most disability plans categorize their benefit? A) Initially any occupation, then own occupation B) Initially own occupation, then any occupation C) Just own occupation D) Just any occupation
B) Initially own occupation, then any occupation
According to the California Insurance Code, a binder is a valid insurance policy for the purpose of proving the insured has insurance coverage specified in the binder for all of the following classes of insurances EXCEPT: A) Auto B) Life C) Marine D) Fire
B) Life
Disability insurance benefits are usually paid: A) Weekly B) Monthly C) Quarterly D) Annually
B) Monthly
*Determination of a worker's insured status for Social Security uses: A) The number of years worked B) The number of quarters worked C) The worker's average annual earnings D)The worker's age
B) The number of quarters worked
Doris, who is 30 years old, misstates her age on a life insurance application as being 25 years old so that she could pay $10/$1,000 as opposed to the 30 years old rate of $12/$1,000. Several years later. when the insurer catches the misstatement of age, how will the difference in premium be adjusted for? A) 10/30 of the value of the benefit B) 25/30 of the value of the benefit C) 10/12 of the value of the benefit D) 10/25 of the value of the benefit
C) 10/12 of the value of the benefit
Which of the following actions would not fall under the definition of execution of a policy? A) Collecting premium B) Signing a binder C) Advertising D) Issuing a policy
C) Advertising
Under ADA all of the following are classified as disabilities except: A) AIDS B) Cancer C) Asthma D) Epilepsy
C) Asthma
An agent's appointment to sell insurance for an insurer is subject to cancellation if: A) The agent fails to maintain a fiduciary trust account B) Another insurer wishes to appoint the agent C) The agent fails to renew his license D) The insurer is under investigation for fraud
C) The agent fails to renew his license
A life settlement broker earns a commission and/or fee for the work he/she does on whose behalf? A)The Provider B) The life insurance company C)The owner D)The insured
C)The owner
* How many days of unpaid leave are allowed in one year (under FMLA)? A) 2 weeks B) 4 weeks C) 8 weeks D) 12 weeks
D) 12 weeks
When applying for health insurance which of the following on the application is NOT an acceptable question to answer? A) What is your age? B) When were you born? C) Last time you saw your doctor? D) How do you think your health is these days?
D) How do you think your health is these days?
The period of time medical benefit payments can be received by a disabled worker is: A) 1 year B) 3 years C) 5 years D) Indefinitely
D) Indefinitely
*Medicare Part A will send a statement to which of the following? A) Physician B) Hospital C) Insurer D) Insured
D) Insured
All of the following are benefit time periods for benefits with social security expect? A) 2 year time frame B) 5 year frame C) Until age 65 D) Lifetime
D) Lifetime
*A distribution made from which of the following plans would be a non taxable distribution? A) Traditional IRA b) Roth IRA C) TSA D) 401K
b) Roth IRA
If an employee elects to continue group health coverage under COBRA after a qualifying event, how long must the employee continue coverage for that employee under COBRA and what percentage of premium can the employee be required to pay? A) 6 months/10% B) 12 months/50% C) 18 months/102% D) 24 months/100%
C) 18 months/102%
Under California State Law, when does an insurance agent considered someone an elder? A) 50 B) 60 C) 65 D) 70
C) 65
*In a 5 year vesting schedule what percentage is vested after 4 years? A) 40% B) 60% C) 80% D) 100%
C) 80%
The following qualify for the Access for infants and Mothers (AIM) public coverage program EXCEPT: A) A pregnant women who qualified for Medical B) A pregnant women with a middle income who makes too much to qualify for Medical C) A pregnant women who has an insurance deductible for $500 D) A pregnant women who has an insurance deductible of $1000
C) A pregnant women who has an insurance deductible for $500
*How does an individual become eligible for MRMIP coverage? A) Have been denied health coverage because of a pre existing condition within the last 12 months B) Have been offered individual (not group) health coverage with premiums that are higher than MRMIP rates within the last 12 months. C) Have been involuntarily terminated from a health plan, insurance company or employer plan for reasons other than fraud or non payments of premiums within the last 12 months D) All of the above are ways to eligible for MRMIP
D) All of the above are ways to eligible for MRMIP
*Any time a long term care policy is replaced, the sales commission paid to the agent by the insurer shall be calculated based on: A) How quickly the agent was able to convince the insured to go through with the replacement B) The premium of the replacement policy only C) The agent's tenure D) The difference between the annual premium of the replacement coverage and that of the original coverage
D) The difference between the annual premium of the replacement coverage and that of the original coverage
*Life insurance policies are: A) Issued in standard form by states B) Issued in standard forms by NAIC C) Insurance companies create their own standard forms D) There are no standard life insurance policies
D) There are no standard life insurance policies
What is the first step in the personal financial planning process? A) Analyze information B) Gather relevant information C) Define objectives D) Track progress
C) Define objectives
The CLHIGA covers all of the following types of insurance, EXCEPT: A) Life B) Health C) Plate glass D) Disabilitiy
C) Plate glass
Which of the following would not be considered a qualify event under Cal-COBRA? A) Covered employee becoming eligible for Medicare B) Death of the covered employee C) Termination (regardless of conduct) D) Medicare contacts medical provider
C) Termination (regardless of conduct)
What would be the least confusing from naming your beneficary? A) My wife B) My wife and children C) All my dependents D) My son Arthur and my Daughter Elena
D) My son Arthur and my Daughter Elena
What type of insurance is sold at the airport? A) Temporary Insurance B) Accidental death and dismemberment insurance C) Group insurance D) Travel accident insurance
D) Travel accident insurance
A commonly used cost containment measure for emergency hospital care under a major medical expense plan is: A) Deductible B) Inpatient fee C) Premium tax D) Pre-admission test
A) Deductible
Under the Americans with Disabilities Act, all of the following would be considered a disability. EXCEPT: A) Wearing glasses B) Loss of eyesight C) Loss of hearing D) Diabetes
A) Wearing glasses
Under the Family & Medical Leave Act (FMLA), all of the following reasons would entitle an eligible employee up to 12 weeks of unpaid leave each years EXCEPT: A) The birth (or adoption) and care of a child of the employee, or the placement of a child with the employee for foster care. B) To care for an immediate family member (spouse, child, or parent) with a serious health condition. C) A woman deciding to take a leave from her job so that she can travel with her husband while he's overseas on a work assignment. D)The employee is unable to work because of a serious health condition.
C) A woman deciding to take a leave from her job so that she can travel with her husband while he's overseas on a work assignment.
Which of the following will be automatically deemed qualified as a life settlement broker as if the person were originally licensed as a life settlement broker or provider? A)Life agents licensed one or more years. B) Anymore licensed as a life agent, regardless of the amount of time licensed. C) Anyone licensed as a Viatical Settlement Broker as of December 31, 2009. D) There is no such thing as being 'automatically deemed qualified as a life settlement broker.'
C) Anyone licensed as a Viatical Settlement Broker as of December 31, 2009.
*Under The Consolidated Omnibus Budget Reconciliation Act (COBRA), how many months of coverage are available? A) Six months B) Twelve months C) Eighteen months D) Twenty four months
C) Eighteen months
* Which of the following is NOT a cost of insurance? A) Income loss B) Operating costs C) Legal requirements D) Occupational costs of insurer
C) Legal requirements
When an insured reports a loss, the agent becomes obligated by the California Code of Regulations to: A) Send a form to the insured for completion B) Refer the client to a repair shop C) Notify the insurer immediately D) Copy the State Insurance Commissioner
C) Notify the insurer immediately
Insurance negatively affects society in all of the following ways EXCEPT: A) Takes qualified labor away from other parts of society B) To earn more money insured inflate claims C) Takes away capital that could be used for other things D) Paid claims do not actually replace the damages as a whole
C) Takes away capital that could be used for other things
As it pertains to life settlement transaction, all of the following are acceptable reasons for the insured's identify and personal financial and medical information to be disclosed, EXCEPT: A) It is necessary to effect a life settlement contract between the owner and a provider. B) It is provided in respose to an investigation or examination by the commissioner or any other governmental office or agency. C) It is necessary to allow the provider or broker to make contract for purposes of determine the insured's health status. D) It is necessary for the issuer for the a policy to be settled to determine if they will allow the life policy to be assigned from the owner to the provider.
D) It is necessary for the issuer for the a policy to be settled to determine if they will allow the life policy to be assigned from the owner to the provider.
Under the ADA. which of the following would not be considered a disability? A) Having HIV or AIDS B) Not being able to see C) Not being able to hear D) Obesity
D) Obesity
What is a typical disability provision for group disability policies? A) Any occupation B) Own occupation C) Any occupation for a short period, then Own occupation D) Own occupation for a short period, then Any Occupation
D) Own occupation for a short period, then Any Occupation
* Life insurance must include all of the following in the Financial Statement EXCEPT: A) Balance Sheet B) Cash Flow Statement C) Summary of Operations D) Policy Summary Description
D) Policy Summary Description
What rider doubles the face amount of the policy? A) Cost of living (COLA) B) Double Indemnity rider C) Payor rider D) Waiver of premium rider
B) Double Indemnity rider
*Which contract provides for the systematic liquidation of a fund? A) Annuity B) Life insurance C) Mortgage redemption insurance D) Disability insurance
A) Annuity
* What is PPACA? A) Federal statue (Patient Protection & Affordable Care Act) involving major reforms to health care B) Federal statue (Premium Prevention & Accelerated Condition Act) that prevents large increases in health insurance premiums C) State statue (Patient Protection & Affordable Care Act) involving major reforms to health care D) A health insurance law (patient Premium And Consideration Act that requires strict notification of increases in health insurance premiums
A) Federal statue (Patient Protection & Affordable Care Act) involving major reforms to health care
* What document informs the insurance applicant about their rights to information privacy? A) Notice of Information Practices B) Policy Conditions C) Policy Summary D) Employee Saving Organization Pension
A) Notice of Information Practices
What is the PCIP? A) PPACA created program to assist people who did not qualify for private insurance because of a pre-existing condition. B) PPACA created program to assist people who do not qualify for social insurance C) California created program to assist people who did not qualify for private insurance because of a pre existing condition D) California created program to assist people who do not qualify for social insurance.
A) PPACA created program to assist people who did not qualify for private insurance because of a pre-existing condition.
*What is MRMIP? A) State program that provides health insurance to individuals with pre existing conditions B) Federal program that provides health insurance to individuals with pre existing conditions C) State program that offers health insurance to individual regardless of where they reside ' D) State program that will provide coverage for individuals residing in the State of California
A) State program that provides health insurance to individuals with pre existing conditions
*PPACA created the Health Benefit Exchange: A) That created entities such as American Health Benefit Exchange for the benefit of small companies, employers and individuals who are unable to obtain health insurance in the insurance market B) So that employer will not have to provide insurance to their employees C) So that poor people who would otherwise not be able to become insured because of pre existing conditions can have access to other insurance
A) That created entities such as American Health Benefit Exchange for the benefit of small companies, employers and individuals who are unable to obtain health insurance in the insurance market
*What is an Aleatory contract? A contract: A) Which the performance of one or both parties to the contract are based upon the occurrence of a particular event B) Where each party has equal expectations of each other C) When one party presents the contract one a "take it or leave it" basis D) All of the above are incorrect!
A) Which the performance of one or both parties to the contract are based upon the occurrence of a particular event
Does MRMIP have a cap on annual and lifetime benefits? A) Yes, $75,000 annual, $750,000 lifetime B) Yes, $50,000 annual, $500,000 lifetime C) Yes, $20,000 annual, $200,000 lifetime D)No
A) Yes, $75,000 annual, $750,000 lifetime
Violating the Federal law that prohibits certain acts in the business of insurance is punishable by imprisonment for up to: A) 8 years B) 10 or 15 years C) 1 year D) 3 years
B) 10 or 15 years
How much continuing education is an agent who holds the life only and/or accident &health license AND property and/or casualty broker agent license required to complete? A) 25 hours per license term for each license B) 24 hours per license term for either license C) 25 hours per license term for either license D) 24 hours per license term for each license
B) 24 hours per license term for either license
*The initial enrollment period for Medicare Plan B ends how many months after the 65th birthday month? A) 1 month B) 3 month C) 5 months D) 7 months
B) 3 month
*An annuitant dies after being paid monthly income for 5 years from an annuity where the settlement option is life income with a 10 year period certain. How many payments are left to the beneficiary? A) 10 payments B) 60 payments C) 120 payments D) No payments will be made to a beneficiary after the annuitant's death
B) 60 payments
*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: A) Online at the Department of Insurance website B) An interview appointment with the agent of record C) A copy free of charge from the insurer D) Written notification from the insurer.
B) An interview appointment with the agent of record
* Which is an example of a third party administrator? A) An employee responsible for negotiating and reviewing policies for the company from unsurer B) An outside company hired by the company to review claims C) An agent's supervisor who will divide the commission D) An employee responsible for reviewing claims.
B) An outside company hired by the company to review claims
The premium loan rider on a life insurance policy kicks in: A) At the end of premium due date B) At the end of grace period C) At the end of elimination period D) At the end of the incontestability period
B) At the end of grace period
*If an individual qualifies for MRMIP but put on a waiting list, what priority will be used as the basis for which individuals are chosen to become enrolled? A) Severity of pre existing condition B) Based on date of completed application C) Geographic residence D) Physician's statement
B) Based on date of completed application
*In financial planning, what is the Needs Approach concept based on ? A) Income B) Family's needs C) Health D) Age
B) Family's needs
If a licensee need to renew his license on the last day of renewal: A) He can walk in a DOI office to get a temporary to continue operating as an agent B) He can apply and pay the renewal fee online and get a receipt so that he can continue operating as an agent C) He is eligible for an automatic 3 months extension for renewal D) By paying the renewal fee and getting a receipt he can continue operating for 6 months even without the renewed license
B) He can apply and pay the renewal fee online and get a receipt so that he can continue operating as an agent
*Which provision best protects an insurer from adverse selection? A) Incontestability B) Illness waiver C) Nonforfeiture D) Probationary period
B) Illness waiver
*In health insurance, the result of a rise in morbidity rates is: A) Decreased claims B) Increased premiums C) Decreased insurance rates D) Increased profitability
B) Increased premiums
*Which organization designs standard insurance policy forms? A) National Association of Insurance Commissioners (NAIC) B) Insurance Services Office (ISO) C) National Council of Compensation Insurers (NCCI) D) Independent Insurance Agents of america (IIAA)
B) Insurance Services Office (ISO)
*How is Medical Loss Ratio used? A) It lets consumers know how much money a health insurer loss as a result of uninsured patients in a hospital B) It lets consumers know how much money an insurer is paying out in claims and how much it uses to cover its administrative costs and profits. C)It lets health insurance executives know how much their company is losing as a result of unnecessary tests ordered by an insured's doctor D)Non of the above are correct
B) It lets consumers know how much money an insurer is paying out in claims and how much it uses to cover its administrative costs and profits.
* What does MRMIP stand for? A) Major Medical Risk Insurance Program B) Major Risk Medical Insurance Program C) Medical Responsibility Insurance Program D) Medical Risk Major Insurance Program
B) Major Risk Medical Insurance Program
What government regulation prevents retirement plans from favoring highly compensated employee? A) Vesting B) Nondiscrimination C) Minimum Distribution Rates D) Early Withdrawal Penalties
B) Nondiscrimination
*Which plan is most likely to pay benefits of 90% for in-network providers and 70% for out of network providers? A) HMO B) PPO C) EPO D) Major Medical
B) PPO
What is ERISA about for group health insurance? A) Family and medical leave B) Reporting and disclosure C) Americans with disabilities D) Continuation of group health insurance
B) Reporting and disclosure
If an insurance company knowingly allow one if its life agents or brokers to guarantee interest income to an insured on one of its policies, the Department of Insurance can do all of the following EXCEPT: A) Seize the records B) Use the Insurance Guarantee Association to pay the salaries of employees C) Fine the company $1,500 D) Shut down the operations of the company
B) Use the Insurance Guarantee Association to pay the salaries of employees
*Does the MRMIP allow participants to include coverage for their dependents? A) No B) Yes C) Yes, children only up to age 5 D) Yes, children only up to age 10
B) Yes
The PCIP has a pre set end date: A) Yes, December 31, 2012, when national health reforms go into effect B) Yes, December 31, 2013, when national health reforms go into effect C) Yes, December 31, 2014, when national health reforms go into effect D) No, it will continue even after the Federal health reforms take effect
B) Yes, December 31, 2013, when national health reforms go into effect
*An insured has a disability income policy that pays $1,500/month with a 30 day elimination period. He is disables for 120 days. His policy has paid benefits totaling: A) $1,500 B) $3,000 C) $4,500 D) $6,000
C) $4,500
*The free look period for life insurance is: A) 10 days B) 30 days C) 10-30 days D) 30-60 days
C) 10-30 days
* In a qulified benefit pan with a 5 year vesting schedule, employer contributions are vested at what percentage at 5 years? A) 60% B) 80% C) 100% D) 0%
C) 100%
*A married couple has a handicapped child that depends on them for caretaking. If one of the parents dies it will not put a significant financial strain on the family. If both parents die, there will be a significant financial problem. Of the following, which is the best insurance product to deal with this situation: A) A juvenile insurance policy B) A first to die policy C) A survivor policy (second to die) A family protection policy
C) A survivor policy (second to die)
*Who must submit a signed statement saying that an illustration is used? A) Agent only B) Applicant only C) Agent and applicant D) Applicant and beneficiary
C) Agent and applicant
*Who runs PCIP? A) Individual States are in charge of PCIP programs B) Federal government is in charge of PCIP C) California is one of the states that runs PCIP D) None of these answer choices is correct
C) California is one of the states that runs PCIP
*Under the ADA, which of the following is an activity of daily living? A) Driving B) Breathing C) Eating D) Speaking
C) Eating
which of the following provision can protect an insurance company from a lawsuit before they have time to investigate a claim? A) Grace period B) Reinstatement C) Incontestability D) Nonforfeiture
C) Incontestability
*Direct Response marketing uses all of the following EXCEPT: A) Television commercials B) Mass mailings C) Phone calls from agents D) Newspaper advertisements
C) Phone calls from agents
If an insurer must have its rates accepted by the Department of Insurance prior to using them, then the insurer would be under which jurisdiction? A) File and use B) Use and file C) Prior approval D) State mandatory
C) Prior approval
*What is the performance of an Equity index annuity based on ? A) Age B) Gender C) S & P 500 D) Index linked interest
C) S & P 500
*An individual wants to submit an application to the MRMIP, but he is not currently eligible. Can he enroll? A) No B) Yes C) Yes, if his employer is in the process of going out of business and he will be eligible after the company becomes insolvent and his employer provided health coverage ends D) Yes, if by the time the application is processed he will not eligible for COBRA.
C) Yes, if his employer is in the process of going out of business and he will be eligible after the company becomes insolvent and his employer provided health coverage ends
*How often MUST life insurance surplus be distributed to policyowners? A) Monthly B) Semi annually C) Quarterly D) Annually
D) Annually
*How does the cost recovery apply to a whole life policy that is surrendered for cash value? A) The insurer contains the cost B) The entire cash value surrendered is taxable C) The insured is given the cost of cash value D) The cost of the cash value is exempted from tax
D) The cost of the cash value is exempted from tax
If the insured intentionally submits a fraudulent claim, what could be charged with? A) Perjury B) Obstruction of justice C) Nothing if the claim is not paid D) None of the above
A) Perjury
As is pertains to which of the following is included in the definition of execution of a policy? A) Signing a binder B) Canceling a policy for somebody C) Giving somebody policy cost information D) Advertising
A) Signing a binder
*When an eligible worker dies, all of the following may be entitled to survivors benefits through social security, EXCEPT: A) The worker's 41 (60) year old window B) The 41 year old widow who cares for the deceased worker's 14 (16) year old son C) Children of the worker who are unmarried and under 18 (up to 19 if in high school full time) D) Parents of deceased worker who were his dependents and are both 74 year old.
A) The worker's 41 (60) year old window
Which of the following is incorrect regarding life insurance benefit settlements? A) They must be decided at the time of application. B) They can be changed anytime during the life of the policy C) If not decided by the policyowner, the beneficiary can decide on a settlement option D) If not chosen by the policyowner, the death benefit goes directly to his estate.
A) They must be decided at the time of application.
Which type of beneficary designation gives the policyowner the right to change the beneficiary designation without requiring the benficiary's consent? A) An incontestable beneficiary designation B) An irrevocable beneficiary designation C) A revocable beneficiary designation D) A class beneficiary designation
C) A revocable beneficiary designation
If a life insurance producer who has not held a life license for at least one year whiches to act as a broker in arranging life settlements, what must she first do? A) Notify the Commissioner within 10 days of first operating as a Life Settlement Broker and submit the application fee to the Department of Insurance. B) Do nothing since life agent are automatically vested with the authority to act as a Life Settlement Broker. C) Complete 15 hours of required education on life settlement transactions and submit an application for a Life Settlement Broker along with the applicable fee. D) The agent can act a Life Settlement Broker as long as she submits proper notification to the Commissioner within 14 days of submitting an application to a Life Settlement Provider on behalf of an Owner.
C) Complete 15 hours of required education on life settlement transactions and submit an application for a Life Settlement Broker along with the applicable fee.
*Which of the following is true regarding an aleatory contract? A) It can be perceived as gambling B) The insured could pay nothing C) If there were a loss, the insurer would pay out considerably more compared to the insured's premium. D) The insured and the insurer pay equal amounts
C) If there were a loss, the insurer would pay out considerably more compared to the insured's premium.
Hospital Indemnity Insurance provides money for all of the following EXCEPT: A) Incidental expenses B) Out of pocket expenses C) Medical expenses D) Non medical expenses
C) Medical expenses
In a life settlement arrangement between a policy owner and a life settlement provider, how would the policy owner typically be paid? A) Interest only payments B) Monthly installments C) Annual installments D) A lump sum payment
D) A lump sum payment
What is the amount of money that an insurance company needs to have on file to be on valid/solvent business? A) $1,000,000 B) $50,000 C) $25,000 D) No requirement
A) $1,000,000
* After the deductible is paid, the Medicare Part B enrollee pays: A) .20 B) .75 C) .5 D) 1
A) .20
All of the following statements apply to a producer acting as an insurance BROKER (as distinguished from an insurance AGENT), EXCEPT: A) A broker acts on behalf of the insurer. B) A broker represents the insured in dealings with the insurer C) A broker is appointed by an insurer to sell insurance D) A broker may collect a fee for service from the insured.
A) A broker acts on behalf of the insurer.
For the following classes of services all are under the jurisdiction of the DOI EXCEPT: A) Acupuncture B) Dental C) Surgery D) Chiropractic
A) Acupuncture
The tendency of a person who has greater than average exposure to loss to seek out insurance is called: A) Adverse selection B) Law of large numbers C) Probability distribution D) Aleatory risk
A) Adverse selection
NAIC reporting frequency for insurer financial statement is: A) Annually B) Semi annually C) Every three month D) Monthly
A) Annually
How does Medicare get started? A) Medical provider contacts Medicare B) Applicant contacts medical provider C) Medicare contacts applicant D) Medicare contacts medical provider
A) Medical provider contacts Medicare
* What uses the law of averages to determine life rates? A) Mortality table B) Morbidity table C) Human life value approach D) Needs approach
A) Mortality table
Under the California Code of Regulations, all of the following would be considered proof of claim EXCEPT: A) Public Adjuster's letter of representation B) Invoice for ambulance services C) Jewelry appraisal D) Estimate for cost to repair vehicle
A) Public Adjuster's letter of representation
*Under Cal-COBRA all of the following would be considered qualifying events/ EXCEPT: A) Termination, regardless of conduct B) Retirement C) Loss of dependent status D) Divorce or legal separation from covered employee
A) Termination, regardless of conduct
*What happens to an employee's group health benefits while he is on leave from work under FMLA? A) The benefits will continue while the employee is on leave. B) The benefit will terminate for good. C) The benefits will restart when their employee returns to work D) None of the above.
A) The benefits will continue while the employee is on leave.
What happens to an agent's licenses after all notice of appointments have been terminated? A) The license is considered to be inactive. B) There's a 60 day period after the appointments have been terminated in which the agent can continue to transact business before the license become inactive C) The license is terminated D) None of the above
A) The license is considered to be inactive.
*Which of the following is incorrect regarding life insurance benefit settlements? A) When the annuity is paid B) The number of annuities paid C) Who the annuity is paid to D) The amount of the annuity
A) When the annuity is paid
If a life insurance producer who has licensed as a life agent (or licensed nonresident producer) in California for one year or longer and wished to act as life settlement broker, he must do which of the following? A) Complete 15 hours of required education on life settlement transactions and submit an application for a Life Settlement Broker license along with the applicable fee. B) Notify the Commissioner within 10 days of first operating as a Life Settlement Broker and submit the applicable fee to the Department of Insurance. C) Do nothing since life agent licensed one year or more are automatically vested with the authority to act as a Life Settlement Broker. D) None of the above are correct.
B) Notify the Commissioner within 10 days of first operating as a Life Settlement Broker and submit the applicable fee to the Department of Insurance.
Which statement best describes how the Return of Premium (ROP) rider work on a term life policy? A) The policyowner will receive all of the premium paid in for the policy if it is cancelled within the first 2 policy years. B) The policyowner will receive all or a portion of the premiums paid in over the life of the policy if the insured is still living at the end of the policy's term C) When the policy lapses due to nonpayment of premiums, this rider will result in the policyowner receiving a check for the total premiums paid in up to the time it lapsed. D) If the insured dies as the result of suicide after the first 2 policy years, this rider will result in all premiums paid in being returned to the policyowner or policyowner's estate.
B) The policyowner will recieve all or a portion of the premiums paid in over the life of the policy if the insured is still living at the end of the policy's term
Collateral assignments on life policies are most often used for: A) Bank loans B) Settlement provision C) Beneficiary changes D) Life settlements
A) Bank loans
*Which government agency would possibly provide coverage if you ran out of coverage under your own health insurance? A) Department of Health Care Services (DHCS) B) Department of Insurance C) Social Security D) Health Insurance Counseling & Advocacy program (HICAP)
A) Department of Health CAre Services (DHCS)
A Washington State resident who is licensed insurance agent in Washington wants to sell insurance in California. How is he able to sell insurance in California? A) File for an out of state (non resident) insurance license in California. B) Complete the pre licensing education requirements C) Take the insurance exam in California D) The agent's Washington license automatically authorized him to transact insurance in all states, including California.
A) File for an out of state (non resident) insurance license in California.
Specified disease insurance covers all of the following EXCEPT: A) Food B) Lodging C) Experimental Treatments D) Travel
A) Food
* The Department of Insurance has jurisdiction over all the following except: A) HMOs B) PPOs C) Medicare Supplement Plans D) Workers Compensation
A) HMOs
When an employee has group term life insurance provided by his employer, how will the policy proceeds paid to the employee's beneficiary be taxed? A) The policy proceeds will be taxed as ordinary income to the beneficiary B) The policy proceeds will generally be tax free to the beneficiary C) The first $50,000 will be receiver employer.ed tax free, with the reminder taxable as ordinary income D) The policy proceeds will be considered taxable income to you
B) The policy proceeds will generally be tax free to the beneficiary
As long as they are representing only the owner and are not being paid directly or indirectly by the Provider, what must attorneys, CPAs and financial planners do to be properly licenesed to negotiable life settlement contracts on behalf of owners? A) Anyone licensed as an attorney, CPA, or financial planner as of December 31, 2009 is considered to have met the licensing requirements for the Life Settlement Broker. B) Complete 15 hours of required education on life settlement transaction and submit an application for a Life Settlement Broker license along with the applicable fee. C) Nothing needs to be done as these professionals are allowed by the insurance code to negotiate life settlement contracts on behalf of owners without having to obtain a license as a broker. D) Notify the Commissioner with 10 days of first operating as a Life Settlement Broker and submit the applicable fee to the Department of Insurance.
C) Nothing needs to be done as these professionals are allowed by the insurance code to negotiate life settlement contracts on behalf of owners without having to obtain a license as a broker.
The correct statement regarding the federal income tax consequences of an insured corporate buy sell agreement is: A) Life insurance death proceeds constitute taxable income to the estate of the deceased shareholder under a cross purchase plan if the deceased shareholder had any incidents of ownership in the policy B) The sale of stock at death pursant to an insured cross purchase buy sell agreement results in nonrecognition of gain or loss on the transaction if the stock was common stock. C) When stock is purchased from a deceased stockholder under a cross purchase plan, there will be an increase in the purchasing shareholder's basis in their stock in the corporation. D) The payments of life insurance premiums is a deductible expense and transfer of the policy comes within an exception to the transfer for value rule.
C) When stock is purchased from a deceased stockholder under a cross purchase plan, there will be an increase in the purchasing shareholder's basis in their stock in the corporation.
*What is the main purpose of HICAP? A) To provide low cost health insurance plans to those who meet specific income guidelines established by the state. B) To serve as an 'industry watchdog' over health insurance companies in regards to their claims practices. C) To provide counseling services at very affordable rates for eldery people who need financial advice regarding their retirement portfolios. D) To provide free counseling to help the elderly and their families understand their Medicare rights and benefits, Medicare supplement insurance and long care insurance.
D) To provide free counseling to help the elderly and their families understand their Medicare rights and benefits, Medicare supplement insurance and long care insurance.
