State Exam
Vickie decided to purchase an equity-indexed annuity (EIA). Which of the following statements applies to the equity-indexed annuity? Equity-linked rate of return All of the above The interest is guaranteed The principal is guaranteed
All of the above
A variety of types of care are provided under a long-term care policy. All of the following are types of care generally provided EXCEPT: Intensive care Custodial care Skilled care Home health care
Intensive care
On an Accident only policy, the wording "Accident Only Plan" must be prominently displayed where? It must be in bold type in the time limit for certain defenses section It must be in bold type on the front page of the policy It must be in bold type on a special insert before delivery It must be in bold type in the exclusions section
It must be in bold type on the front page of the policy
Deferring of taxes is a prime advantage of annuities. All of the following are true about annuities and taxes EXCEPT: Taxes are imposed during the accumulation phase. How taxes are figured is consistent with type of income. Deferred annuities accrue interest on a tax-deferred basis. Benefit payments that represent return of principal are not taxed as ordinary income
Taxes are imposed during the accumulation phase
What is described as life insurance that strictly provides a death benefit within a specified time period? Minimum death benefits Whole life insurance Maximum death benefits Term life insurance
Term life insurance
A hazard is best defined as: a legal hazard. a loss. something that increases the chance of loss. a peril.
something that increases the chance of loss.
How much is the maximum annual benefit for a defined benefit plan in 2015? $49,000 $100,000 $210,000 There is no limit
$210,000
Yvonne has been hospitalized and is presented with a bill for $19,500. She is covered by a major medical play that imposes a $500 deductible and pays 80% thereafter. Yvonne is limited to $2,500 for out-of-pocket expense. What will Yvonne have to pay for her part of the bill? $4,400 $3,000 $2,500 $3,900
$3,000
How much is the maximum contribution for a defined contribution plan in 2015? $100,000 $195,000 There is no limit $53,000
$53,000
An employer offers group insurance to his employees on a non-contributory basis. How many of his employees must be offered coverage under the group? 90% 100% 75% 80%
100%
If a consumer requests by phone removal of their name from credit reporting agencies, for how much time is the request valid? 5 years 3 years 2 years Until the request is withdrawn
2 years
To an attempt to prevent individuals intending to commit suicide from purchasing life insurance, insurance companies now include a suicide clause in all policies. What is the length of time that the suicide clause is in effect? 6 months 2 years 2 months 1 year
2 years
A person that is disabled under Social Security is eligible for Medicare benefits after how long? 29 months (870 days) 5 months (150 days) Determined by a Medicare formula 24 months (720 days)
29 months (870 days)
If Alexander buys a Medicare supplemental policy, what is the traditional probationary (waiting) period for coverage to be in effect? 90 days 30 days 60 days Immediately
30 days
An underwriter will consider which of the following conditions in making his/her decision to approve an application for health insurance? A childhood disease A condition that occurs after the policy is issued A condition that occurs prior to making an application for health insurance A condition that is contracted after the first premium is paid
A condition that occurs prior to making an application for health insurance
Horace owns a health insurance policy that will not pay benefits unless he is confined to the hospital. This type of contract is known as a: A conditional contract A unilateral contract Non-cancellable contract A contract of adhesion
A conditional contract
A unilateral contract is: Allows the "little guy" some rights over the person writing the contract. Insures that both parties are bound to perform A contract that makes a promise or promises in exchange for a performance Implies inequality of bargaining power
A contract that makes a promise or promises in exchange for a performance
William Nash, an agent, has just completed an application for health insurance on Jennifer Washington. Jennifer has given William the first premium and William has provided Jennifer with a conditional receipt. At that time it would be appropriate for William to explain all of the following EXCEPT: All reports ordered must comply with the Fair Credit Reporting Standards Act A copy of the Medical Information Bureau report which is sent to Jennifer when it is received. An investigation report may be ordered by the underwriter No insurance will be in effect until the medical examination is comple
A copy of the Medical Information Bureau report which is sent to Jennifer when it is received.
A business may be the beneficiary on any of the following policies EXCEPT: A group insurance policy of one of the employees A policy used to fund a buy/sell agreement A key man life insurance policy A policy used to fund an executive bonus plan
A group insurance policy of one of the employees
Joseph hurt his back and was on disability for an accident he suffered on the manufacturing floor. He was out for two months - and then returned to work. After a few days at work, it was determined that his back had not complete healed. This is known as: A recurrent disability A residual disability A partial disability A key employee disability
A recurrent disability
The definition of third party ownership is when someone other than the insured is the owner of a policy. Which of the following is not an example of a plausible third party ownership situation? A parent who is the owner of a policy on their child A corporation that owns the policy of an officer of the corporation. A woman that owns a policy on an ex-boyfriend A husband who owns a policy on his wife
A woman that owns a policy on an ex-boyfriend
Short-term disability riders called ____________are available and provide benefits during the first 6-12 months of a claim. Hospital confinement rider Additional monthly benefit rider Social insurance supplement rider Impairment rider
Additional monthly benefit rider
A covered benefit of long-term care policies, _____________ is medical or nonmedical care on a less than 24-hour basis that allows an individual's primary caregiver to continue working while the individual receives medical care and assistance in daily needs Home health care Personal care Homemaker services Adult day care
Adult day care
Which of the following classification of employees is not used for the purpose of determining group insurance eligibility? Age or gender Salaried or hourly Union or non-union Full-time or part-time/seasonal
Age or gender
Who of the following is eligible for Medi-Cal? Anne who is blind Nena who is on refugee status Maria who is in a foster care program All of the Above
All of the Above
For which of the following reasons can the Commissioner deny an application for an insurance license? The applicant is not of good business reputation The applicant has previously been convicted of a felony It would be against public interest All of the above
All of the above
Medicare Part C - also called Medicare Advantage Plans - came about as part of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003. Which of the following is available under the Medicare Advantage program? Private fee-for-service plans Managed care plans Preferred Provider plans All of the above
All of the above
Retirement plans that meet the requirements of the Internal Revenue Code Section 401(a) and ERISA (Employee Retirement Income Security Act) are tax qualified, thus they are eligible for favorable tax treatment. Which of the following is a benefit of a qualified retirement plan? Employers can deduct contributions for each participant. Contributions, and earning on the contributions are tax deferred until withdrawn Transferring the contributions into a different IRA can further defer taxes All of the above
All of the above
There are different classes of health insurance. Individual and group are classes that are distinctly different. Which of the following is a difference between individual and group policies? Individual policies are generally more expensive Group policies provide coverage for 2 or more people Group policies cover everyone regardless of risk All of the above
All of the above
When presented with life insurance options, Jonathan opted for a variable life policy. Which of the following is a major difference between a variable life policy and a universal policy? The cash values of a variable life policy are not guaranteed A variable life contract is regulated as a security. The insurer is required to establish a separate account for variable products. All of the above
All of the above
Whole life insurance is designed to provide coverage for the entire life of the policyholder. Which of the following statements is true about whole life policies? Also called permanent insurance Builds cash value Policy endows at age 100 All of the Above
All of the above
Term insurance is the least expensive form of life insurance. Because it is less expensive, term insurance has which of the following drawbacks? It has no living benefits It is an expensive tool if looked at for the long term. The nature of the policy could leave the insured with no life insurance protection when he/she needs it the most. All of the above.
All of the above.
All of the following are true regarding alterations made to a disability application EXCEPT: Alterations can be made by an agent who sees that the applicant has omitted information in filling out the application Alterations can be made by the insurer for administrative purposes in order to add insertions not ascribed to the applicant Alterations can be made by an officer of the insurer with the insurer's knowledge or consent The making of any other alteration without the consent of the applicant is a misdemeanor
Alterations can be made by an agent who sees that the applicant has omitted information in filling out the application
Long-term care policies have a variety of exclusions. All of the following are currently excluded EXCEPT: Alzheimer's Alcohol dependency Self-inflicted injury Drug dependency
Alzheimer's
Fixed annuities that provide a guaranteed minimum interest rate are called ______________. An equity-indexed annuity A variable annuity A flexible annuity A structured annuity
An equity-indexed annuity
Which of the following best completes the following statement: The California Insurance Code defines a person as ________________________________. An individual, an organization, or other business entity An individual An organization A business entity
An individual, an organization, or other business entity
The Fair Credit Reporting Act states that generally, consumer reports cannot contain the following information EXCEPT: An individual's criminal history An individual's character Tax liens older than seven years Adverse information about an individual that dates back over seven years
An individuals character
Bruce is concerned that the insurance company will "keep his money" if he dies before the income from his annuity has equaled the funds he deposited. Bruce feels that this is unfair. In this case he should consider which of the following options? A 10 year certain and life payment An installment refund annuity Choose the maximum income option Make minimum withdrawals without annuitizing
An installment refund annuity
Jack and Jill have been granted a divorce. The court has ordered that Jack name Jill beneficiary of his insurance. He may not change this, even if he re-maries unless Jill gives her permission. Jill is: A court ordered beneficiary A primary beneficiary A special class of beneficiary An irrevocable beneficiary
An irrevocable beneficiary
When compared to a traditional IRA, a Roth has all of the following features EXCEPT: The contributions to a Roth IRA are limited annually Withdrawals from a Roth IRA are tax free if the owner follows certain rules. Any person can open a Roth IRA account The assets in a Roth IRA account accumulate tax free
Any person can open a Roth IA account
Coverage for a newborn will generally begin at what time in either an individual or group policy? Within two weeks Within six months At birth Within 24 hours
At birth
All of the following are true about a Medical Expense policy EXCEPT: Covers both inpatient and out patient expenses Pays benefits outlined in the policy Covers both accidental and sickness losses Available on a group basis only
Available on a group basis only
A Section 1035 Exchange serves what purpose? Allows for certain exchanges without recognizing gain for tax purposes. Allows for certain exchanges without recognizing loss for tax purposes. Both of the above Neither of the above
Both of the above
Universal life policies are similar to whole life in that they ___________________. Both treat cash withdrawals as a partial surrender Both provide flexibility Both provide death protection and cash value Both provide fixed and guaranteed benefits.
Both provide death protection and cash value
Which of the following is the method for rating group insurance premiums based on the actual or projected costs of insureds in a particular geographic location based on the age, gender, and occupation of the insureds? Claims rating Experience rating Community rating Group rating
Community rating
Carla has just completed her application for health insurance. She reads the comments in her conditional receipt and it refers to her statements being "representations". Which of the following is correct? Carla has guaranteed that everything she has put in the application is exactly correct without exception. Carla should not be concerned, since she can change her mind about what she said at any time. Carla has represented that the information she has furnished is true to the best of her knowledge. Carla should be very careful, since she could be fined if any of the statements she made prove to be fraudulent
Carla has represented that the information she has furnished is true to the best of her knowledge.
Whole life policies have Nonforfeiture value. Which of the following is not an element of the Nonforfeiture value? The policyowner owns the cash value in the policy. Cash withdrawn does not reduce the face value of the policy. The policyowner can withdraw some or all of the cash value from the policy. Cash withdrawn reduces the cash value of the policy.
Cash withdrawn does not reduce the face value of the policy.
The person who files the request for a claim payment is the ___________. Claimant Insured Dependent Claimee
Claimant
All of the following provisions are mandatory under the uniform NAIC law EXCEPT: Grace period provision Reinstatement Provision Time payment of claims provision Coinsurance Provision
Coinsurance Provision
Life-only agents who have service contracts with a licensed corporation, may use the name of such a corporation on any stationery provided that they - Get the permission of the corporation Pay a fee to the Commissioner Designate that they are acting as an insurance agent All of the above
Designate that they are acting as an insurance agent
If in the solicitation of a ________ sale, an insurer does not propose the replacement, and a replacement is involved, the insurer must send to the applicant with the policy a replacement. Insurance Indirect response Annuity Direct response
Direct response
Karl has become permanently disabled. Under his policy, the insurer is going to make periodic income payments to Karl. What kind of rider or provision does Karl have that results in this benefit? Waiver of premium rider Disability Income Benefit Payor rider Accelerated Benefit Rider
Disability Income Benefit
Marci has a disabling illness. She is recuperating at home. She has a policy that is providing her income during her recuperation. What type of policy does she most likely have? Blanket insurance policy Disability income policy Dread disease policy Long-term care policy
Disability income policy
James is gathering his tax information for his tax preparer. James is aware that certain medical expenses may qualify for a tax deduction, depending on his individual situation. James can use all of the following out of pocket expenses to see if he qualifies for a medical deduction EXCEPT Disability insurance premium Prescription Drugs Dental Expense Diabetic supplies
Disability insurance premium
There is a business disability insurance policy that will pay off a business' loan if the owner becomes disabled. This policy is called: Key person disability Disability buy-sell Business overhead expense Disability reducing term
Disability reducing term
When an insured purchases a life policy, he/she can decide how the proceeds of the policy will be paid. The policyowner can select all of the following settlement options EXCEPT: Interest only Life income option Lump sum payment Dividend option
Dividend option
What cannot be used against applicants for insurance coverage? Dangerous past and current occupations Age Existence of AIDS or HIV All of the above
Existence of AIDS or HIV
In the process of underwriting an application for health insurance, an underwriter may request a report from an investigative agency. The law that requires the applicant be notified is: Freedom of information Act Uniform Provision Law Medical Information Bureau Disclosure Act Fair Credit Reporting Act
Fair Credit Reporting Act
Combinations plans are intended to be representative of the needs of the insured. One such plan is called the ___________________________. It combines ordinary life and level term insurance. It provides monthly income for a stated period of 10, 15, or 20 years, or to an age - as selected by the insured. Family income policy Endowment policy Family protection policy Family maintenance policy
Family maintenance policy
Evelyn is looking at her options for health insurance. She has decided on a plan that has good flexibility on choice of doctors. She has chosen a: PPO Fee for service HMO POS
Fee for service
A participating life policy pays dividends to the policyholder. The insurer offers the policyholder options on how to receive the dividends. All of the following are dividend options EXCEPT: Reduce premium dividend option Paid-up addition option Fixed period option Cash dividend option
Fixed period option
Agent Peterson completes and application for health insurance on the Adams family. Mr. Adams writes a check for the initial premium and Agent Peterson provides Mr. Adams with a conditional receipt. Mr. Adams should understand which of the following? He has made an offer to the insurance company and no insurance is in effect until all requirements for underwriting his policy are received and the policy is approved. The policy is bound and he and his family are insured His warranty about the facts of his and his family's health conditions will make it easier for the insurance company to issue a standard policy. Since he paid the first premium, the company will look at his application more favorably.
He has made an offer to the insurance company and no insurance is in effect until all requirements for underwriting his policy are received and the policy is approved.
Herman has been disabled in an accident. His period of disability has lasted for 9 months and he returns to work. After three months, Herman finds that he is unable to work due to complications from the same accident. The claims will most likely be handled on which of the following bases? The company will require a physical from the company doctor in all cases to determine the extent of the disability. Herman will resume benefits with no interruption, since this will be considered a continuation of the same disability. Herman will receive partial disability benefits, since he was able to return to work for a period of time. Herman has a 90-day elimination period in his policy and he will have to serve a new elimination period to qualify for benefits.
Herman will resume benefits with no interruption, since this will be considered a continuation of the same disability.
Horace provides fraudulent answers to the questions on his application for health insurance. Under what situation will the terms of his policy be honored? His policy will be cancelled when fraud is discovered. There is no time limit on fraud His agent can rewrite the policy once the company discovers the fraudulent information He will only be covered for accidents He must keep the policy until the time for certain defenses expires
His policy will be cancelled when fraud is discovered.
Which of the following is usually sold as a cost-of-living rider to another policy? Reentry Term Increasing Term Interim Term Renewable Term
Increasing Term
What is the annual out-of-pocket maximum for and individual and for households covered by MRMIP? Individuals - $2,500, households - $5,000 Individuals - $2,500, households - $4,000 Individuals - $1,000, households - $2,000 Individuals - $1,500, households - $3,000
Individuals - $2,500, households - $4,000
There are advantages and disadvantages related to the various types of policies. Which of the following is not a type of whole life policy? Limited-Payment Industrial Economatic Continuous Premium
Industrial
Which of the following best describes spreading uncertainty of loss over a group of many individuals, and the law of large numbers? Risk Exposure unit Insurance None of the Above
Insurance
Medicaid is a needs tested program. It provides medical benefits for the poor and indigent. It is funded as follows: Employer taxes based on payroll Payroll taxes from the employed Jointly funded by individual states and the federal government Part of Medicare
Jointly funded by individual states and the federal government
Jonathan has submitted notice of loss for a medical bill to his insurance company. The insurance company has not responded to Jonathan's request in a timely fashion. Under these circumstances Jonathan's best course of action is: Jonathan is bound to wait until the proper claim form arrives before he can proceed. Jonathan may submit the proof of loss in any form and the insurance company is required to accept that and consider the claim. Jonathan can demand a full refund of premium paid including reasonable interest Jonathan can report this to the insurance commissioner's office as a breach of contract and request their intervention
Jonathan may submit the proof of loss in any form and the insurance company is required to accept that and consider the claim.
Who of the following is not considered eligible as a dependent of Mary, an insured employee under a group life insurance policy? Farah; Mary's 23-year-old daughter attending college Adam; Mary's 65-year-old husband Keith; Mary's 25-year-old married son, who is incapable of self-sustaining employment because of his handicap Gabrielle; Mary's 19-year-old daughter who is not in school
Keith; Mary's 25-year-old married son, who is incapable of self-sustaining employment because of his handicap
Fraternals typically sell what type of insurance? Life, accident and health insurance. Property insurance. Liability insurance. Accident and health insurance only.
Life, accident and health insurance.
The total amount an insurer will pay for an insured risk is the definition of: Premium. Limit of liability. Coinsurance. Deductible
Limit of liability
Another type of universal life policy is called the equity indexed life policy. This policy is: Tied to a traditional life policy Combined with a term policy Linked to something like the S&P 500 All of the above.
Linked to something like the S&P 500
Which of the following is considered a reimbursement contract? Major medical contract Life insurance contract Disability income contract Accidental Death & Dismemberment contract
Major medical contract
Which of the following will trigger a taxable event in regard to a 1035 transfer? Repayment of a loan Changing the beneficiary Changing the ownership of a plan Making a policy loan
Making a policy loan
Matthew is insured under his union plan. He develops End Stage Renal Disease, which culminates, with his need for dialysis. Mathew is eligible for Medicare at that point, but how long must his employer group be primary if he continues on dialysis? Medicare will be primary after 90 days and the union plan is secondary. Matthew may only be eligible in he has a kidney transplant. Group coverage terminates immediately when Matthew is approved for Medicare. Matthew's union plan must be primary for 30 months before Medicare will become primary or sooner if group coverage expires.
Matthew's union plan must be primary for 30 months before Medicare will become primary or sooner if group coverage expires.
All of the following are true concerning taxation of medical benefits EXCEPT: Disability income may be taxable depending on who pays the premium Benefits paid from a hospital indemnity plan are not taxable. Medical reimbursement benefits are not taxable. Medical expenses deducted from income tax become taxable in the next year if they are reimbursed after the deduction is taken.
Medical expenses deducted from income tax become taxable in the next year if they are reimbursed after the deduction is taken.
Herman and Velma are trying to find a plan that will provide home health care, assisted living and custodial benefits as they become older. All of the following plans may provide the benefits they require EXCEPT: A long term care policy with the appropriate options Medicare Part A & B A life insurance policy with a long term care rider An annuity with long term care waivers
Medicare Part A & B
An actuary is the individual who calculates what premium should be charged for a specific risk. In determining life premiums, the actuary uses all of the following factors EXCEPT: Mortality Morbidity Expense ratios Investment returns
Morbidity
Participating life insurance policies pay dividends to policyholders. Which of the following is not a factor in determining the amount of the dividend? Mortality Morbidity Assumed interest Operating expense
Morbidity
When an insurer is determining how much premium to charge for a life insurance policy, the insurer considers all of the following EXCEPT: Expenses Earnings Morbidity Mortality
Morbidity
Jeff has a disability income policy. He also has a Medicare supplement policy. How are the premiums for these policies treated on a tax basis? Medicare supplement premiums are deductible, disability income premiums are not. Neither is deductible Disability income premiums are deductible, Medicare supplement are not. Both are deductible
Medicare supplement premiums are deductible, disability income premiums are not.
In addition to the Waiver of Premium Rider, Melvin's life policy also includes a Disability Income Benefit. Under what conditions will the insurer pay Melvin under the disability income benefit? Melvin has broken both of his legs Melvin has an injury that has rendered him permanently and totally disabled. Melvin's injuries will keep him in the hospital for at least 2 months. Melvin needs the money to pay his bills.
Melvin has an injury that has rendered him permanently and totally disabled.
The NAIC has developed uniform contract provision. These are known as the model health insurance policy provision. Of these provisions, some are mandatory and some are optional. Which of the following is not a mandatory provision? Misstatement of age Grace period Entire contract Incontestability
Misstatement of age
A group health plan's rates may be affected by any of the following EXCEPT: Experience of the group (Claims vs. Premium) Mortality tables Stability of the group Morbidity tables
Mortality tables
The accumulation period of an annuity is when funds are put in and growth occurs. All of the following are true about the accumulation period EXCEPT: The annuitant can earn interest on their interest. The principal earns interest Once the contract is made, the owner cannot make changes The interest earned by an annuity is not taxed as with other types investments
Once the contract is made, the owner cannot make changes
In any life insurance policy transaction, the agent must ask the applicant if the policy is replacing another policy. The applicant must sign a written statement indicating if a replacement is involved - or not. If a replacement is involved, the agent must do all of the following EXCEPT: Provide the applicant with a policy comparison statement Notify the insurer of the policy being replaced - of any policies to be replaced. List any and all of applicant's existing policies/annuities to be replaced. Provide the insurer with the signed statement from the applicant pertaining to replacement.
Notify the insurer of the policy being replaced - of any policies to be replaced.
Gloria did not opt out of Medicare Part B so she automatically pays a premium and has the coverage. Which of the following is not part of the Medicare Part B coverage? Home health care (if not covered under Part A) Doctor's services Nursing home Outpatient medical services
Nursing home
All of the following factors cannot be used to underwrite risk classification in a health insurance policy EXCEPT: Sexual orientation. Marital status. Deafness. Occupation.
Occupation
Timothy notices that the wording "Cancellable at the Option of Mutual Life". Timothy most likely has a: Optionally renewable policy Conditionally renewable policy Non-cancellable policy Non-renewable policy
Optionally renewable policy
When determining whether an insured qualifies for disability income payments, the insurer must determine if the insured is disabled or not. Amy, a pianist, is involved in an accident and loses two fingers on her right hand. It is the ________________ classification that would determine Amy's disability. Loss of income Own occupation Physician care requirement Any occupation
Own occupation
Your disability policy defines your eligibility for disability benefits as your inability, due to sickness or accident, to perform the essential duties of your occupation. That definition is known as: Residual Disability Own occupation for disability Any occupation for disability Both own occupation and any occupation
Own occupation for disability
Which plan is most likely to have a pre-negotiated discount with various medical providers? ASO PPO TPA HMO
PPO
Which of the following statements is not true about the tax liabilities for individual life insurance policies? Accelerated benefits are tax free if they are qualified. Policy premiums are not deductible for an individual life insurance policy If a policy is surrendered for its cash value some of the cash value may be subject to ordinary income tax Policy loans are taxable as income.
Policy loans are taxable as income.
What is meant by the term fully contributory? Premiums are paid entirely by the policyowner Premiums are paid the insured in an employer based group policy Premiums are paid entirely by the member in a non-employer group policy Premiums are paid by the group in non-employer group policies
Premiums are paid entirely by the member in a non-employer group policy
Gloria chose the prescription drug coverage as one of the options on her group policy. Which of the following is a benefit of a prescription drug policy? Prescriptions are for a set price Prescriptions can be refilled at any time Prescriptions are usually free Prescriptions are for a set, lower price
Prescriptions are for a set, lower price
The coordination of benefits provision in a group contract is designed to: Require that extra diagnostic tests are completed to confirm a diagnosis. Prevent the possibility of over insurance Assure that both policies involved pay maximum benefits Limit the amount to be paid on a child when two policies are involved
Prevent the possibility of over insurance
Which of the following is not one of the tax benefits of a qualified retirement plan? Employer contributions are not taxable income to the employee. Interest earned is tax deferred. Employee contributions are made with pre-tax dollars. Proceeds of a qualified plan are not taxed.
Proceeds of a qualified plan are not taxed.
What lines of insurance are represented by insurance solicitors? Life Accident and Health Property and casualty All of the above
Property and casualty
Possible reasons for owning personal life insurance can be any of the following EXCEPT: Providing income for surviving family members Creating an immediate estate for ones heirs Providing liquidity to pay estate taxes Providing funds for a pyramid activity
Providing funds for a pyramid activity
Quinterra has a schedule surgery plan that states " Basic Surgical Benefits up to $5,000" All of the following would not apply in this case EXCEPT: Quinterra will be reimbursed up to $5,000 for any surgical procedure. If an assistant surgeon is involved he will be reimbursed at a lower level than the primary surgeon. Quinterra will be reimbursed a percentage of $5,000 for non-scheduled surgery. Heart and cancer surgery will receive the same value
Quinterra will be reimbursed a percentage of $5,000 for non-scheduled surgery.
What type of contract is described as variable annuities, investment annuities, variable life insurance under which the death benefits and cash values vary in accordance with unit values of investments held in a separate account? Non-registered contract Renewable contract Carry-over contract Registered contract
Registered contract
Insurers that offer insurance to people through the individual market are called private insurers. Which of the following does not fall in the private insurer category? Mutual companies Self-insurers Noncommercial organizations Stock companies
Self-insurers
Various riders and provisions affect how, when and how much the insured received in benefits. The _____________ limits income benefits based on the insured's income for the past two years. Cost of living adjustment (COLA) Impairment rider Future increase option (FIO) Relation of earnings
Relation of earnings
A provision in a disability policy that relates specifically to the insured's earnings before the disability is called: Residual disability Recurrent disability Temporary disability Partial disability
Residual disability
Which of the following is not a pure risk? Risk of loss caused by destruction or theft of property. Risk of losing earning power caused by premature death or accident and sickness. Risk of losing or winning money while playing slots in a casino. Risk of financial loss caused by bodily injury or property damage to others'.
Risk of losing or winning money while playing slots in a casino.
The government is one of three primary types of insurers. Government insurance provides protections against fundamental risks. Which of the following is an example of a government insurance program? Social Security Blue Cross Lloyd's Associations All of the above
Social Security
Which of the following statements regarding de-mutualization is false? The California Insurance Code defines de-mutualization as a process whereby a stock company becomes a mutual insurer Transformation of a stock insurer into a mutual insurer is termed mutualization, and the reverse is termed demutualization Because mutual insurers do not have capital stock, the funds required to start the company must be obtained from an individual or group of people It is fairly common for mutual insurers to start out as stock insurers to gain the necessary funds before becoming a mutual insurer
The California Insurance Code defines de-mutualization as a process whereby a stock company becomes a mutual insurer
Annuities are not life insurance. Life insurance is protection against the risk of premature death. Annuities, on the other hand, are to protect against the risk of living too long. _____________ is the time between when the annuity is purchased and the time when benefits begin. A deferred annuity The annuity period The accumulation period A fixed annuity
The accumulation period
Someone that represents the insured and offers options from several different companies is called: All of the above The insurer The broker The agent
The boker
Simon is a drug dealer most of the time. He is injured while engaging in that occupation. His health insurance policy will pay which of the following benefits for his loss? The company will pay the claim as it would for any other loss The policy is cancelled for fraud The company is required to notify the appropriate law enforcement agency when they discover the illegal activity The company is not liable under the illegal occupation provision
The company is not liable under the illegal occupation provision
Manny, Moe and Jack are partners in an auto parts business. They have had their business valued at $600,000 by an independent firm. None of them want to be in business with their partner's family in the event that one dies prematurely. Their business is incorporated. What should they do? The company should buy $200,000 life insurance on each partner and have their attorney draft a buy/sell document. The partners should just pay the surviving heirs out of company profits if one dies. Each partner should have their wives/relatives purchase life insurance on each partner Each partner should buy $200,000 life insurance on the other two partners
The company should buy $200,000 life insurance on each partner and have their attorney draft a buy/sell document.
The suicide clause is in most every policy. All of the following statements are not true about the suicide clause EXCEPT: The premiums are never refunded The death benefit is always paid. The death benefit is never paid. The death benefit is paid if the suicide occurs more than two years after the policy inception.
The death benefit is paid if the suicide occurs more than two years after the policy inception.
Which of the following is true about immediate annuities? They have annuity periods that are sometime (defined in the contract) in the future They cannot be purchased with one payment. They can begin payouts within two years of the first premium payment. The do not have an accumulation period.
The do have an accumulation period
There are generally two kinds of group insurance policies - contributory and noncontributory. In a noncontributory plan, all of the following are true EXCEPT: The employer pays all of the premiums Noncontributory plans have enrollment periods where the employees can enroll without proof of insurability. The employer and employee each pay part of the premium The contract for a noncontributory plan must cover 100% of the employees.
The employer and employee each pay part of the premium
Jason, an agent, tells a prospect that he has the authority to change provisions in the contract if there is something he is not satisfied with later on. Which provision prevents Jason or the company from changing the contract after it is issued? The legal actions clause The entire contract clause Time limit for certain defenses The insuring clause
The entire contract clause
Claire's husband died during the grace period of his life insurance policy. Which of the following does NOT occur because an insured died during the grace period of a policy? The face amount of the policy is paid to the beneficiary The insurance company is relieved of any responsibility to pay a benefit. The interest due on the overdue premium is deducted from the benefit The overdue premium is deducted from the paid benefit
The insurance company is relieved of any responsibility to pay a benefit.
All of the following are true regarding the Insurance Information and Privacy Protection Act EXCEPT: The insured must allow any insurer to seek information concerning any previous adverse underwriting decision experienced by an individual Insurers must provide a notice of information practices to all applicants If the insured submits a written request to the insurer to access recorded personal information, which is reasonably retrievable, the insurer must respond to the individual within 30 days Personal information may only be collected from the policyholder, an insured under the policy, or from public records
The insured must allow any insurer to seek information concerning any previous adverse underwriting decision experienced by an individual
All of the following are true regarding the Free Look period of long-term care insurance EXCEPT: The free look period lasts for 30 days during which the insured can return the policy The insured will need to return the policy and pay only the initial policy consultation fee if the applicant is not satisfied The applicant is entitled to a full refund of any premiums paid for the policy within 30 days after the policy is returned The free look period allows an insured to look over the policy and decide if coverage is suitable
The insured will need to return the policy and pay only the initial policy consultation fee if the applicant is not satisfied
Annie's uncle died before the start of his annuity payments. Which of the following is not a possible handling of the proceeds of the annuity? The insurer could deduct expenses incurred from the premiums paid. The insurer could pay the beneficiaries the interest only earned by the annuity. The insurer could pay death benefits to the beneficiary. The insurer could return the premiums paid by the purchases of the annuity.
The insurer could pay the beneficiaries the interest only earned be the annuity
Marsha left her company and died during the period allowed for her to convert her life insurance to an individual policy. What happens to the benefits of the policy? The insurer is no longer liable. The insurer discounts the death benefit because she had left the company. Her beneficiaries sue the insurance company for the benefits. The insurer pays the death benefit in full.
The insurer pays the death benefit in full.
Margaret took out a whole life policy in 1999. In 2005 she committed suicide. What was the obligation of the insurer regarding the benefits of the policy? The insurer would pay ½ of the face value of the policy. Nothing - virtually all policies include a suicide exemption. The insurer would refund the premiums paid on the policy - to the beneficiary. The insurer would pay for full face amount of the policy.
The insurer would pay for full face amount of the policy.
Margaret is considering replacement of her health insurance policy. There are significant considerations that the she must take into account. Which of the following is not a consideration in replacing a health policy? Coverage and benefits New waiting periods The location of the insurer Preexisting conditions
The location of the insurer
Wendy was a beneficiary on her great-grandfather's life policy. After her great-grandfather died, it was discovered that on his original life policy, his age had been misstated on the application. He was actually 8 years younger than what was stated on the policy. Her grandfather was 96 years old, and the policy had been in force for over 50 years. Did the misstatement of age have any affect on the policy benefits? The misstatement of age would result in a premium increase. The misstatement of age would void the policy altogether. The misstatement of age would result in an increase in the death benefit. The misstatement of age would result in a decrease in the death benefit.
The misstatement of age would result in an increase in the death benefit.
A policy is issued on a non-cancellable basis. This means: The policy may not be cancelled by the insurance company, but the premiums may increase The policy may only be cancelled by the insurance company if they cancel the entire block of policies of this type. The policy may not be cancelled by the insurance company, and the premiums are guaranteed for the term of the policy. The insured may make changes in the policy without regard to current insurability rules.
The policy may not be cancelled by the insurance company, and the premiums are guaranteed for the term of the policy.
There are several different kinds of beneficiaries in a life policy. Based on the following, which of the statements is true? When John dies, the death benefit will be paid to Sherrie. If Sherrie dies before John, the benefit would go to Collin. Which of the following statements is true? The primary beneficiary is Sherrie, and the Collin is the contingent beneficiary Sherrie is the primary as the policyholder, and Walter is the contingent beneficiary. Collin is the contingent beneficiary The tertiary beneficiary is Sherrie and Collin is the secondary beneficiary.
The primary beneficiary is Sherrie, and Collin is the contingent beneficiary
In an HMO a member may be required to have a primary physician to be the focal point for all treatment and service. All of the following are true about the primary care physician relationship EXECPT: The primary care physician is usually an internal medicine or general Practice doctor. The primary care physician will have records from all physicians and other providers in the HMO to coordinate the patient's treatment. The primary care physician will provide referrals to specialists and other providers when required. The primary care physician can decide what is covered and what is not for the member.
The primary care physician can decide what is covered and what is not for the member.
Max and Janet were in a plane crash and were killed simultaneously. Max had a life policy and Janet was designated as the primary beneficiary. Because they both died in the same crash, how will the proceeds from the policy be disbursed? The proceeds were disbursed to their children. The proceeds were disbursed to Max's estate The proceeds were disbursed to the contingent beneficiary The proceeds went back to the insurance company
The proceeds were disbursed to the contingent beneficiary
Which of the following is not a condition that would render a license inoperative? The reactivation of a license without correction of deficiencies. The removal of all but one natural licensed person in a business entity The death of the person to whom the license was issued. The termination or removal of the last natural person named on a license
The removal of all but one natural licensed person in a business entity
What consequences does an insurer's or producer's use of unfair marketing or unfair claims habits have for the company or agent? The state Insurance Commission can reprimand the company and/or producer. The insurer and the producer can be sued in a civil court of neglect of ethical duty. The state Commissioner of Insurance can issue a Cease and Desist order They can be sued in criminal court for malfeasance
The state Commissioner of Insurance can issue a Cease and Desist order
When soliciting insurance, agents and insurers must abide by the rules and regulations pertaining how solicitations are conducted. Which of the following is not a requirement of an advertisement to sell insurance? If a person offering a testimonial is paid, the advertisement must indicate that it is a paid endorsement. The advertisement must include the intent and the nature of the product being advertised. The name of the insurer must be stated in the advertisement. The trade name of the insurer must be included in the advertisement.
The trade name of the insurer must be included in the advertisement.
As mandated in the Patient Protection and Affordable Care Act, what will be the annual dollar limit for health insurance plans after January 1, 2015? $10,000,000 $5,000,000 $3,000,000 There will be no annual dollar limits.
There will be no annual dollar limits.
Variable universal life is universal life insurance with a separate account. A variable universal life offers flexibility and choices. Which of the following is not true about variable universal life policies? They have flexible premiums They have no provision for policy loans and withdrawals The death protection is deducted from the cash value. The cash value is based on investment in a separate account
They have no provision for policy loans and withdrawals
What is required of any accident and health agent who wishes to sell 24-hour care coverage? They must have at least 2 years insurance sales experience They must complete a program of instruction equal to the amount of hours required for prelicensing continuing education requirements They must pass an examination on 24-hour care coverage They demonstrate an expert level of knowledge on 24-hour care coverage to the Commissioner
They must complete a program of instruction equal to the amount of hours required for prelicensing continuing education requirements
Anthony knowingly made misleading comparisons of a competing insurance company to get Mary to convert to a policy offered by his company. What prohibited business practice is he guilty of? Cold lead advertising Misrepresentation High Pressure Tactics Twisting
Twisting
Zanubia has a medical plan that reimburses based on general costs in her geographical area. This schedule is known as: URC (Usual, reasonable and customary) Scheduled benefits Pre-authorization plan Indemnity plan
URC (Usual, reasonable and customary)
Universal life was developed from whole life and they have the same two components - cash value and death protection. All of the statements are true about universal life policies EXCEPT: Universal life policies are only subject to the interest rates stated in the contract. The actual cost of the insurance is based on annually renewable term life insurance. The interest earned by the cash accounts has a guaranteed minimum. The policyowner can increase or decrease the death benefit during the policy term.
Universal life policies are only subject to the interest rates stated in the contract.
If a consumer requests in writing removal of their name from credit reporting agencies, for how much time is the request valid? 3 years 5 years 2 years Until the request is withdrawn
Until the request is withdrawn
A beneficiary may choose any of the following methods to receive life insurance proceeds EXCEPT: Life income installments Fixed amount installments Variable installments based on a specific stock index Single payment in cash
Variable installments based on a specific stock index
Insurable interest for life insurance must exist: When the policy is issued At any time there is no insurable interest, the policy must be cancelled. When family circumstances change When death occurs
When the policy is issued
For some insureds, the limited payment option works best for them. Which of the following are not true about the limited payment option insurance option? With the limited payment option, the policy is paid up prior to the age of 100. With the limited payment option, there is immediate cash value. With the limited payment option, the premium-paying period is shorter than continuous premium. With the limited payment option, the premiums tend to be a bit higher.
With the limited payment option, there is immediate cash value.
When Mr. Baker reached age 65, he started to receive Social Security benefits. He continued to work at his regular job. Did he have tax liability on his Social Security benefit payments?
Yes if his income is greater than 25,000$
Clarice is enrolling in the MRMIP program. She is concerned about the premiums and wants to know if the premiums will increase. Which of the following best explains whether the premiums will go up and under what circumstances? Yes, they increase 3 percent a year. No, the premiums do not increase. Yes, they increase 5 percent a year Yes, based on age, location and board decisions.
Yes, based on age, location and board decisions.
Are deductions taken into consideration when determining the net monthly income of an applicant for the Healthy Family Program? No, deductions are not a consideration Yes, child support, alimony, work-related expenses, and child care Yes, but only child care expenses Yes, but only child support or alimony
Yes, child support, alimony, work-related expenses, and child care
Circulation of a maliciously critical statement about any insurer's financial condition to injure the insurer is called: coercion. defamation. conservation. unfair discrimination.
defamation.
Most insurers do not generally sell individual dental coverage. It is usually included in a group plan. Which of the following is not a common benefit in a dental plan? X-rays Fillings Cleaning Implants
implants
In discussing a potentially lucrative group policy with a business owner who had purchased a business and just moved into the community, an established producer jokingly remarked, "Well, would it sweeten the pot if I could assure you membership in the country club?" He added, "I'm on the membership committee and while we're not accepting new application right now, I'm sure something could be worked out." These remarks constituted: misrepresentation. nothing more than an effort to establish a warm relationship with the potential client. rebating intimidation
rebating
All of the following acts are considered unfair trade practices EXCEPT: misrepresentation rebating. coercion. replacement.
replacement