Life & Health - Practice Exam 3

150 Questions  I  By Pchinna on January 26, 2010
Life & Health - Practice Exam 3

  
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1.  Frank is an eligible employee who wishes to participate in group insurance.  To get this coverage without having to provide the insurer with evidence of insurability, Frank must:
A.
B.
C.
D.
2.  Which of the following is not an acceptable risk to the underwriting department of an insurance company ?
A.
B.
C.
D.
3.  Choose the best beneficiary designation for the following case: The children are to receive equal shares of the benefit.  If any of the children die before the insured does, the insured wishes the remaining children receive the deceased child's share equally divided among them.
A.
B.
C.
D.
4.  Which of the following is not an example of what an insurance policy can provide an insured ?
A.
B.
C.
D.
5.  An annuity which may be used to help fund retirement in a few years maintains a "separate account".  the owner purchases "accumulation units". This is called a ____ annuity.
A.
B.
C.
D.
6.  Which of the following is true in regard to health insurance issued on a group basis ?
A.
B.
C.
D.
7.  When the public purchases annuities, they are attempting to address the risk of:
A.
B.
C.
D.
8.  From the following, identify that which applies to an applicant's misstatement on an application for insurance. 1. Should the misstatement be made with express intent to mislead the insurer it is considered fraud. 2. Should the misstatement not be material to the Company's decision it may not affect the application.
A.
B.
C.
9.  Choose from the following selections the best description of a premium.
A.
B.
C.
D.
10.  Jerry is using a new time management technique in his insurance sales presentation.  In order to cut the amount of time he spends at each appointment he no longer answers questions when they are first asked.  Instead he answers them only if they are asked twice.  He feels this will allow him to get to his next meeting quicker.  Most insurance professionals would consider this:
A.
B.
11.  Insurance companies have several departments handling various responsibilities in the issuance of polices.  Which department is primarily involved with the selection of risks ?
A.
B.
C.
D.
12.  Agents must act on behalf of their clients in such a way that uphold their "fiduciary duty".  Select the best emple of this duty from the choices below.
A.
B.
C.
D.
1 comment
13.  All of the following are examples of the dividend options available on a whole life insurance policy, except:
A.
B.
C.
D.
14.  Can the applications for disability insurance be altered--and if so, by whom?
A.
B.
C.
D.
15.  Which of the following supports the Medical Information Bureau ?
A.
B.
C.
D.
16.  In life insurance policies, naming beneficiaries is an important part of the application process.  Choose from below the best description of a contingent beneficiary.
A.
B.
C.
D.
1 comment
17.  Choose the correct answer.  The California Insurance Code: 1. includes laws and regulations the Commissioner has issued. 2. is basically the body of laws governing insurance business in this state. 3. is broken into five sections.  They are: life, health, personal lines, commercial property and commercial liability insurance.
A.
B.
C.
D.
18.  An agent makes a misleading comparison of a policy he is selling in order to convince a prospect to lapse an old insurance policy.  What is this called ?
A.
B.
C.
D.
19.  From the descriptions below, identify which one is a term policy
A.
B.
C.
D.
20.  Intentionally submitting false information on a life application is an example of a moral hazard.
A.
B.
21.  Generally, it is unfair to discriminate against any one class of individuals in the business of insurance.  However, the code does permit the charging of a higher premium if such such premiums can be supported by mortality tables segregated by sex (gender)
A.
B.
22.  Fraud is an intentional act to deceive and induce another to part with something of value.  Which of the following would describe fraud in the process of applying for insurance ?1. intentionally distorting the truth to get an insurance policy 2. making a misrepresentation that has no material effect and displays no intent to lie.
A.
B.
C.
D.
23.  Every licensee must indicate on which of the following documents his or her license number ?
A.
B.
C.
D.
24.  Inflation can have a tremendous eroding effect on the purchasing power of benefits that are received from a disability income policy.  What type of supplementary benefit rider can be used by the insured to offset the effects of inflation ?
A.
B.
C.
D.
25.  A policy owner makes the last premium payment on his $250,000 non-par whole life policy today.  The owner is 70 years of age.  When will the cash value reach $250,000.
A.
B.
C.
D.
26.  The owner of a non-par whole life policy never misses a payment, never borrows from the policy's cash value, and finally reaches the age of 100.  What cash value is this person entitled to in comparison to the face amount ?
A.
B.
C.
D.
27.  When premiums are paid into a universal life insurance policy insurers must make certain adjustments to the cash value.  The company will add the current premium paid, and:
A.
B.
C.
D.
28.  Select the incorrect statement from the choices below concerning insurance applications.
A.
B.
C.
D.
29.  In the California Insurance Code there is a definition that reads, in short, "....a person who, for a fee, offers to advise any insured having any interest in life or disability insurance contracts..."  This is the definition of :
A.
B.
C.
30.  The license of an agent is considered inactive when:
A.
B.
C.
D.
31.  All of the following statements are correct regarding a "warranty" except:
A.
B.
C.
D.
1 comment
32.  What type of life insurance policy gives the owner the right to share in the insurer's profits in the form of a dividend ?
A.
B.
C.
D.
33.  Employees that have group life or health policies covering them are required to be issued a/an ______.
A.
B.
C.
D.
34.  Disability income insurers carefully consider a potential insured's occupation as an underwriting factor because of the:
A.
B.
C.
D.
35.  A hospital confinement indemnity insurance policy pays:
A.
B.
C.
D.
36.  In disability insurance, several riders are available for insureds to purchase.  The "return of premium" rider:
A.
B.
C.
D.
37.  According to the terms of the suicide clause found in a life insurance policy, if an insured commits suicide 6 months after the policy is issued, what will the insurer do ?
A.
B.
C.
D.
38.  The Commissioner has numerous responsibilities and wide-ranging authority concerning the California Insurance Code.  Should he deem it necessary, he can rewrite certain sections of the code to better serve the insuring public.
A.
B.
39.  Which of the following is not correct regarding the disability benefits provided by Social Security ?
A.
B.
C.
D.
40.  Settlement options provide a number of choices relating to how death benefits can be paid by the insurer.  These choices: 1. Can be made by the owner of the policy at the time of submission of the application. 2. Can be changed by the owner of the policy at any time before benefit are paid. 3. Can be made by the beneficiary if, at the time of death of the insured, no option was established.
A.
B.
C.
D.
41.  To protect (subject to statutory limitations) life and health owners and insureds in the event of impairment or insolvency of a member insurer.  This is a description of:
A.
B.
C.
D.
42.  Any entity providing coverage for medical expenses is subject to the jurisdiction of the Department of Insurance in California, unless it can show it is subject to the jurisdiction of another government agency
A.
B.
43.  Of the items listed below, which are requirements for a life and disability insurance analyst license ?
A.
B.
C.
D.
1 comment
44.  In the process of applying for insurance an applicant is asked questions that do not relate to underwriting but are clearly meant for attaining marketing information.  Under the code this practice is allowable assuming the person aplying for coverage is informed of such practices.
A.
B.
45.  Juan has been named as an irrevocable beneficiary in a life insurance policy. Juan, therefore:
A.
B.
C.
D.
46.  Decreasing term insurance is frequently used to pay the unpaid balance of a mortgage upon death of the mortgage holder.
A.
B.
47.  Which of the following is correct about the term "transact" as it applies to the field of insurance and the various penalties for insurance transactions in violation of the code ?1. Solicitation is a part of transacting insurance. 2. Negotiations preliminary to the execution of a policy falls within the definition of transacting insurance. 3. Should a person tranact insurance without a valid license he/she is guilty of a misdemeanor. 
A.
B.
C.
D.
48.  Chuck Harris has earned a Chartered Life Underwriter designation.  From the selections below choose the one that the California Insurance Code would find acceptable when publishing his name:
A.
B.
C.
D.
49.  In order for insurers to help avoid the problem of over-insurance they include ___ provisions in their policies.
A.
B.
C.
50.  Health Maintenance Organizations are required by law to provide prescription drugs as part of their services.
A.
B.
51.  Which of the following would be considered an alien insurer ?
A.
B.
C.
D.
52.  Many insurance policies issued contain a common disaster provision.  The provision is designed to protect:
A.
B.
C.
D.
53.  When the health insurer and the insured participae in the costs of expenses on an agreed percentage basis, it is known as coinsurance.
A.
B.
54.  If no other selection is made, which of the following settlement options becomes the default or automatic mode of settlement for the death benefit of a life insurance policy ?
A.
B.
C.
D.
55.  Select the correct statement about the Social Security system
A.
B.
C.
D.
56.  When an insured becomes totally and permanently disabled, her condition triggers a provision that keeps that policy in force even though the insured stops making premium payments.  This is a/an:
A.
B.
C.
D.
57.  From the items listed below, choose the characteristics not found in the HMO's "gatekeeper" system.
A.
B.
C.
58.  Health Maintenance Organizations (HMS) provide a number of benefits including: 1. Basic health care services2. Health care financial coverage
A.
B.
C.
D.
59.  The master policy owner of a group insurance policy is responsible for paying the premiums, submitting information about the employees, forwarding the applications to the insurer and maintaining the policy.
A.
B.
60.  If the premium on an individual health insurance policy is paid annually, semi-annually, or quarterly what is the minimum grace period required ?
A.
B.
C.
D.
61.  Disability income insurance offers various riders to supplement benefits from these policies.  The Social Security rider:
A.
B.
C.
D.
62.  Choose the correct statement about a cost of living rider.  The policy owner:
A.
B.
C.
D.
63.  A health insurance contract states that if, during the first 30 days after the policy's effective date, an illness occurs, there will be no benefits paid out of the policy.  What is this period of time called?
A.
B.
C.
D.
1 comment
64.  Frequently, juvenile life policies contain a payor rider.  This rider states that in the event the payor of premiums is disabled or dies, and the juvenile has yet to reach a specific age:
A.
B.
C.
D.
65.  Which of these is the best way to define the concept of "indemnity ?"
A.
B.
C.
D.
66.  By law, a health insurance carrier selling policies in this state may reword the provisions in its contracts, assuming the new wording is no less favorable to insureds and beneficiaries than those found in the mandatory provisions.
A.
B.
1 comment
67.  Which of the following is true about a service provider as it relates to health insurance ?
A.
B.
C.
D.
68.  Sam's insurance policy pays a dividend.  the agent that sold Sam the policy refers to the shareholders of the company as "participating", therefore it is a(n) ______________insurer.
A.
B.
C.
D.
69.  An agent mostly sells long-term care insurance to individuals.  He obtained his insurance license (life and health) in January of 1998.  In 1998 he must:
A.
B.
C.
D.
70.  Which of the following is not a feature of a major medical insurance policy ?
A.
B.
C.
D.
71.  A binding receipt issued on the sale of a life insurance policy becomes effective from the date the receipt is given --no matter what the insurability of the applicant.
A.
B.
72.  Choose the payments from an insurance policy which are not subject to federal income taxes:
A.
B.
C.
D.
73.  The principle of indemnification is best described below as:
A.
B.
C.
D.
74.  Jose is covered by an insurance plan that will pay him disability income benefits if he is injured either while working or at home.  The type of plan he has is a/an:
A.
B.
C.
D.
75.  The California Insurance Code cites a specific definition for a "life agent".  A life agent is:
A.
B.
C.
D.
76.  The term "consideration" applies to the issuance of an insurance policy.  Choose the best description of this term from the choices below.
A.
B.
C.
D.
77.  All the following are factors in determining premiums charged for group disability income insurance, except:
A.
B.
C.
D.
78.  Which of the following is not legal when determining premium rates for life or disability insurance ?
A.
B.
C.
D.
79.  Julie is a licensed insurance salesperson who represents the Silver Dollar Insurance Company.  If you were to look at the front of her office you would see a sign that reads: SILVER DOLLAR INSURANCE COMPANYJulie Insurance AgencyIf Julie performs acts that are not specifically named in the written contract she has the Silver Dollar she is exercising her _____________authority.
A.
B.
C.
D.
1 comment
80.  The insurer can change the premium assuming it is changed for all insureds in a class. However, the company cannot refuse to renew the policy, or cancel it.  This is a/an ____ policy
A.
B.
C.
D.
81.  An irrevocable beneficiary has certain rights to policy proceeds not shared by revocable beneficiaries.  For example, an irrevocable beneficiary must grant permission for the policyowner to borrow from the cash value
A.
B.
82.  One of the provisions commonly found in life insurance is the "misstatement of age" clause.  If the age of the insured is in error but not discovered until much later, the insurance company will:
A.
B.
C.
D.
83.  Jamie, who is under 65 years of age, fell off a horse while visiting her mother on a vacation.  This rendered her completely paralyzed.  Now after a year the doctors feel she will not recover from her injuries.  Choose from the selections below the program from which Jamie will be able to collect disability income benefits.
A.
B.
C.
D.
84.  Assume two people apply for life insurance with exactly the same monthly premiums.  One individual buys a whole life policy, and the other, a 10-year renewable term plan.  Both are standard risks with no difference in their age or health rating.  Select the statement from below which is false.
A.
B.
C.
D.
85.  If the owner of a life insurance policy elects to pay an annual premium, she will:
A.
B.
C.
D.
86.  What does a standard coinsurance clause found in a health insurance policy require ?
A.
B.
C.
87.  Which of the following is false about dividends paid from life insurance policies ? A dividend is:
A.
B.
C.
88.  If a service provider is paid a fixed monthly fee in an HMO, what is this called ?
A.
B.
C.
D.
89.  Why would a business use a key person life insurance policy ?
A.
B.
C.
D.
90.  When the insured of a non-participating paid-up-at-age-65 life insurance policy attains the age of 65, the cash value will equal the face amount.
A.
B.
1 comment
91.  There are four basic classes of life insurance.  All of the selections listed below are regarded as ordinary insurance, except:
A.
B.
C.
D.
1 comment
92.  Teresa is injured while woking at her company's plant.  She is taken to a hospital and receives several weeks of care.  She has a non-occupational group health plan at work.  The hospital will not be paid by the non-occupational policy because:
A.
B.
C.
D.
93.  All of the following would be considered an accident as it relates to health insurance, except:
A.
B.
C.
94.  Which of the following is false regarding the taxation of life insurance ?
A.
B.
C.
D.
1 comment
95.  Preferred Provider Organizations (PPOs) were an offshoot of the HMO system.  Which of the following statements is false about PPOs ?
A.
B.
C.
D.
96.  Oscar owns a whole life policy that he has been paying into for many years.  He would like to continue having life insurance, and can afford to make the premium payments, but needs about 30% of the case value for a couple of years.  What would be the best course of action for Oscar to take ?