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Life & Health - Practice Exam 5

150 Questions
Life & Health - Practice Exam 5

Life & Health - Practice Exam 5

Questions and Answers
  • 1. 
    • A. 

      Pays benefits only if it turns out the insured is eligible for benefits from social insurance

    • B. 

      Pays a benefit if the insured is injured on the job and qualifies for workers compensation benefits

    • C. 

      Provides a payment only when the insured is totally disabled, but not receiving any social insurance benefit plans

    • D. 

      Provides for a bonus payment that will match social security disability income benefits, if they are paid

  • 2. 
    • A. 

      After-hours care

    • B. 

      Generic care

    • C. 

      Preventative care

    • D. 

      Fee for service care

  • 3. 
    • A. 

      A level death benefit with an increase in premium

    • B. 

      A level death benefit with a decrease in premium

    • C. 

      A decreasing death benefit with a level premium

    • D. 

      An increasing death benefit with a level premium

  • 4. 
    • A. 

      Select a provider and submit claims to the insurance company

    • B. 

      Select a provider at work and claims processor

    • C. 

      Pre-select a physician and third-party claims administrator

    • D. 

      Pre-select a clinic and submit claims to the insurance company

  • 5. 
    • A. 

      An irrevocable beneficiary may be changed by the policy owner without the beneficiary's consent

    • B. 

      An irrevocable beneficiary has a vested right that neither the policy owner nor his creditors can impair without the beneficiary's consent

    • C. 

      A revocable beneficiary can become the policy owner at any time by paying the premiums

    • D. 

      An irrevocable beneficiary has the right to name a contingent beneficiary for the policy

  • 6. 
    • A. 

      A hearing by the insurance commissioner to determine the severity of the the misrepresentation and to determine an appropriate course of action

    • B. 

      None, if the policy has been in force for ove 12 months

    • C. 

      Rescission of the policy

    • D. 

      A hearing by a court of law to determine an appropriate course of action an insurer may take

  • 7. 
    • A. 

      Guaranteed

    • B. 

      Insolvent

    • C. 

      Solvent

    • D. 

      Non-participating

  • 8. 
    • A. 

      The election is made by the policy owner at the time the application is submitted

    • B. 

      When no settlement option is chosen, the proceeds are automatically paid to the policy owner's state

    • C. 

      The policy owner may change the settlement option after it has been chosen

    • D. 

      The election may be made by the beneficiary if no settlement option is in force at the time of death of the insured.

  • 9. 
    • A. 

      To provide health insurance benefits to key employees

    • B. 

      To give a key employee the ability to purchase the business

    • C. 

      To give retirement benefits to key employees

    • D. 

      To cover decreased business earnings due to the death of a key employee

  • 10. 
    • A. 

      Deny the application probably after a hearing

    • B. 

      As long as it was not insurance related, the application will be granted

    • C. 

      Approve only after a review by a panel of insurance professionals

    • D. 

      Deny the application without a hearing

  • 11. 
    • A. 

      $150,000

    • B. 

      $100,000

    • C. 

      $0

    • D. 

      $50,000

  • 12. 
    • A. 

      None, due to the fact that the concealment was unintentional

    • B. 

      $250 fine to be paid to the injured party

    • C. 

      Possible imprisonment to the party who concealed the information

    • D. 

      Rescission of the contract

  • 13. 
    • A. 

      The probability of loss is unknown

    • B. 

      The losses are highly predictable

    • C. 

      The insured chooses to assume the losses involved

    • D. 

      The worst possible loss is not serious

  • 14. 
    • A. 

      Surrenders the right to change the premiums

    • B. 

      Reserves the right to change any of its terms

    • C. 

      Reserves the right to change the premiums, but may not change any of its terms

    • D. 

      May not renew the policy if the insured ceases to comply with certain conditions such as continued employment

  • 15. 
    • A. 

      Only when asked

    • B. 

      Only when the policy terms require it

    • C. 

      Only when relevant

    • D. 

      Never

  • 16. 
    • A. 

      Insurers may offer only broad coverage plans that contain both core benefits and additional benefits

    • B. 

      Insurers may freely offer whatever supplemental coverages they prefer to market

    • C. 

      Insurers may offer policies that contain only the core benefits

    • D. 

      Insurers may create insurance policies for approval by the CA Department of Insurance

  • 17. 
    • A. 

      Waive premium payments in the event of disability

    • B. 

      Access a portion of the death benefit in the event of serious illness

    • C. 

      Double the amount of the death benefit in the event of accidental death

    • D. 

      Purchase additional insurance regardless of insurability

  • 18. 
    • A. 

      Convertible term

    • B. 

      Level term

    • C. 

      Decreasing term

    • D. 

      Renewable term

  • 19. 
    The passage of worker's compensation legislation meant
    • A. 

      Employees no longer had any legal means of obtaining reimbursement for work injuries

    • B. 

      Employees would have to sue their employers to obtain reimbursement for work injuries

    • C. 

      Employers would be held responsible for the cost of their employee's work injuries regardless of fault

    • D. 

      Employers were no longer responsible for work injuries to employees

  • 20. 
    • A. 

      RW and Associates who represent BLG Insurance Corporation

    • B. 

      RW and Associates underwriting for BLG Insurance Corporation

    • C. 

      RW and Associates placing business through BLG Insurance Corporation

    • D. 

      RW and Associates using the services of BLG Insurance Corporation

  • 21. 
    • A. 

      Who joined the group after the policy effective date

    • B. 

      Without health coverage after a qualifying event who declined to join the group at the time of eligibility

    • C. 

      With a pre-existing condition when they joined the group

  • 22. 
    • A. 

      Waiver of premium

    • B. 

      Accelerated death benefit

    • C. 

      Cost of living

    • D. 

      Disability Income

  • 23. 
    • A. 

      Whole life insurance

    • B. 

      Universal life insurance

    • C. 

      Endowment insurance

    • D. 

      Term insurance

  • 24. 
    An example of a third party administrator is:
    • A. 

      An agent's supervisor who takes part of his commission

    • B. 

      An employee who handles self-insurance claims

    • C. 

      An employee who is responsible for evaluating for relative quality of competing group health and welfare benefits offered to his employer by insurers

    • D. 

      An outside organization that processes claims for an employers self-funded plans

  • 25. 
    • A. 

      Hospice care

    • B. 

      Hospital care

    • C. 

      Respite care

    • D. 

      Intermediate care

  • 26. 
    • A. 

      They receive remaining payments to be made under a settlement agreement upon the primary beneficiary's death

    • B. 

      The contingent beneficiary shares death proceeds equally with the primary beneficiary

    • C. 

      They receive the death proceeds if the primary beneficiary is deceased at the time of the insured's death

    • D. 

      More than one contingent beneficiary may be named

  • 27. 
    The payor rider on a juvenile life policy provides that if the payor dies or becomes disabled before the insured juvenile reaches the age specified on the policy
    • A. 

      The insurer will make the payments until the insured juvenile reaches the specified age

    • B. 

      The insurer will lend money to keep the policy in force

    • C. 

      The insured's estate will make the premium payments

    • D. 

      The insurer will make all the of the policy payments

  • 28. 
    • A. 

      Grace period provision

    • B. 

      Guaranteed insurability provision

    • C. 

      Reinstatement provision

    • D. 

      Waiver of premium provision

  • 29. 
    • A. 

      The policy face amounts are usually more than $1,000,000

    • B. 

      The policy face amount is paid out only upon the death of the first insured to die

    • C. 

      It offers premiums that are quite low compared to what is charged on separate policies

    • D. 

      It is particularly well suited to meet the needs of estate taxes

  • 30. 
    If an insurer is not able to meet financial obligations when due, the insurer would be considered
    • A. 

      Insolvent

    • B. 

      Unauthorized

    • C. 

      Impaired

    • D. 

      Non-admitted

  • 31. 
    • A. 

      Fine the insurance company for non-compliance

    • B. 

      Suspend or revoke the license of the agent

    • C. 

      Authorize the agent with a certificate of convenience

    • D. 

      Request a certificate of authority be issued immediately

  • 32. 
    • A. 

      The own-occupation definition used by the Social Security Administration

    • B. 

      The typical definition of partial disabiity used by disability income policies

    • C. 

      The total disability definition used by the Social Security Administration

    • D. 

      The typical definition of temporary disability used by disability income polices

  • 33. 
    People commonly purchase an annuity to protect against the rist of
    • A. 

      Dying before their home mortgage is paid off

    • B. 

      Becoming uninsurable

    • C. 

      Outliving their financial resources

    • D. 

      Dying too soon

  • 34. 
    In the event of an accidental death, the principal sum in a disability policy will be paid
    • A. 

      Over the course of a set period

    • B. 

      On a sliding schedule

    • C. 

      In one lump sum

    • D. 

      As a monthly indemnity

  • 35. 
    • A. 

      Stands for Health Insurance Counseling Advocacy Program

    • B. 

      Serves people needing information about Medicare

    • C. 

      Does not sell or endorse any specific types of insurance

    • D. 

      Provides assistance for a fee based upon ability to pay

  • 36. 
    Why is having a large number of similar exposure units important to insurers ?
    • A. 

      The greater the number insured, the more premium is collected to offset fixed costs

    • B. 

      The insurer increases its market share with every insured

    • C. 

      The greater the number insured, the greater the amount of premiums collected to help cover losses

    • D. 

      The greater the number insured, the more accurately the insurer can predict losses and set appropriate premiums

  • 37. 
    • A. 

      Today

    • B. 

      Age 85

    • C. 

      Never

    • D. 

      Age 100

  • 38. 
    • A. 

      Case management

    • B. 

      Activities of daily living

    • C. 

      The gatekeeper mechanism

    • D. 

      Co-insurance

  • 39. 
    In order to receive the principal sum benefit for death from a disability policy, the death must occur
    • A. 

      Within a specified number of days after injury

    • B. 

      Any time during a rehabilitation period

    • C. 

      Any time during a total dismemberment period

    • D. 

      Within the policy period from any cause

  • 40. 
    Which of the following are commonly covered by medical expense policies ?
    • A. 

      Elective cosmetic surgeries

    • B. 

      Pre-existing conditions

    • C. 

      Expenses covered by a workers compensation policy

    • D. 

      Accidental injuries

  • 41. 
    A health insurance deductible is:
    • A. 

      The insured's payment for healthcare that is not considered a covered expense

    • B. 

      The cost of a covered expense minus the office co-payment

    • C. 

      The portion of insurance premium paid for coverage by the insured

    • D. 

      The amount of covered expense that the insured pays before the insurer pays

  • 42. 
    • A. 

      The risks insured against

    • B. 

      The financial rating of the insurer

    • C. 

      The property or life being insured

    • D. 

      The policy period

  • 43. 
    • A. 

      Home health care

    • B. 

      Adult day care

    • C. 

      Hospital acute care unit

    • D. 

      Alzheimer's disease

  • 44. 
    Which of the following is a hazard ?
    • A. 

      A large number of similar exposure units

    • B. 

      A peril

    • C. 

      A condition that might increase the likelihoold of a loss occurring

    • D. 

      A speculative risk

  • 45. 
    A hospital confinement indemnity insurance policy pays
    • A. 

      An indemnity to the insured for all expenses incurrred when the insured is confined to a hospital

    • B. 

      The daily benefit coverage amount stated in the policy for each day the insured is confined in the hospital

    • C. 

      100% of the covered medical expenses less the deductible and co-insurance percentage

    • D. 

      The amount of the actual hospital expenses

  • 46. 
    • A. 

      The agent will be able to operate if a receipt for payment is returned prior to the license expiration date

    • B. 

      The agent will be able to operate for up to 60 days after the specified expiration date

    • C. 

      The agent will be able to operate if the agent goes in person to the insurance department to receive a temporary extension of the license

    • D. 

      The agent will be able to continue to operate after a 30 day extension to operate without receipt if requested and approved

  • 47. 
    A provision stating that health insured's and their insurers will share covered losses in an agreed proportion is called
    • A. 

      The stop-loss provision

    • B. 

      Comprehensive insurance

    • C. 

      Percentage insuring

    • D. 

      Co-insurance

  • 48. 
    • A. 

      Extended term

    • B. 

      Guaranteed insurability

    • C. 

      Accidental death

    • D. 

      Waiver of premium

  • 49. 
    • A. 

      Low premiums and high cash value

    • B. 

      High premiums and no cash value

    • C. 

      High premiums and high cash value

    • D. 

      Low premiums and no cash value

  • 50. 
    • A. 

      The policy owner begins to receive $200 monthly payments from the insurer that will continue for life

    • B. 

      The policy is surrendered and the policy owner is paid $10,000 by the insurer

    • C. 

      The cash value is used to purchase a $50,000 term policy that is paid-up for 10 years

    • D. 

      The cash value is used to purchase a $20,000 paid-up policy

  • 51. 
    What would we call a representation which fails to correspond with its stipulations or assertions ?
    • A. 

      Fatal

    • B. 

      Fraud

    • C. 

      Frivolous

    • D. 

      False

  • 52. 
    In the state of California
    • A. 

      Twisting is an approved practice

    • B. 

      Providing free insurance coverage in connection with the sale of services as an inducement for completing the transaction is not legal

    • C. 

      Life and health ratings may not be related to the age of the insured

    • D. 

      A life solicitor's license has the same licensing requirements as a life agent's license

  • 53. 
    The adjustments that an insurer makes in a cash value account in a universal life policy each time a payment is made includes all of the following, except
    • A. 

      Subtract from mortality and general expense charges

    • B. 

      Add the current interest

    • C. 

      Substract the policy surrender charges

    • D. 

      Add the current premium paid

  • 54. 
    The Employee Retirement Income Security Act of 1974 (ERISA) mandates requiring plan sponsor to provide participants with
    • A. 

      Plan descriptions and benefit statements

    • B. 

      Reports of tax qualification fulfillment

    • C. 

      Trust and solvency reports

    • D. 

      Annual financial statements

  • 55. 
    Which of the following requires a reporting company to respond to a consumer's complaint that his file contains inaccurate information about them
    • A. 

      Unfair Practices Act

    • B. 

      Fair Credit Reporting Act

    • C. 

      COBRA

    • D. 

      Medical Information Act

  • 56. 
    • A. 

      Discontinue coverage on the basis of employment

    • B. 

      Cancel the policy for health reasons

    • C. 

      Make unilateral benefit changes

    • D. 

      Change premiums for the same class insured

  • 57. 
    All of the following statements about social security disability benefits are true, except
    • A. 

      Benefits are based on the level of a worker's earnings up to the time of the disability

    • B. 

      Benefits will continue only while the worker cannot work at all

    • C. 

      Benefits are designed to replace the entire amount of a worker's earnings

    • D. 

      Workers must be totally and permanently disabled for at least five months to be eligible for benefits

  • 58. 
    • A. 

      Transfer coverage to another group

    • B. 

      Convert to an individual policy

    • C. 

      Elect to continue coverage

    • D. 

      Request a waiver of premium

  • 59. 
    Under social security, the definition of disability is the inability to engage in
    • A. 

      An approved occupation

    • B. 

      An activity with a given level of compensation

    • C. 

      Any substantial gainful activity

    • D. 

      The person's chosen career

  • 60. 
    • A. 

      In 1990, the average annual cost for a nursing care home was approximately $10,000 per year

    • B. 

      The need for LTC coverage can arise only after age 50

    • C. 

      Medi-Cal is one of the most commonly sold LTC policies. It is designed to protect the assets of middle-class californians

    • D. 

      The very poor and the very rich probably do not need LTC coverage

  • 61. 
    • A. 

      The program provides only a minimum floor of income. Individuals are expected to supplement this with their own personal programs.

    • B. 

      The actuarial value of each person's contributions are closely related to the actuarial value of each person's benefits

    • C. 

      With only a few exceptions, this is a voluntary program

    • D. 

      The program is fully funded

  • 62. 
    The insured's policy has deductible that is applied between the exhaustion of basic plan limits and the commencement of excess coverage.  This is called a:
    • A. 

      Family deductible

    • B. 

      Per cause deductible

    • C. 

      Corridor deductible

    • D. 

      Stop-loss limit

  • 63. 
    What makes up the entire contract in a life insurance policy ?
    • A. 

      The policy, and when attached, the application

    • B. 

      The policy, and any sales literature presented by the agent of the policy holder

    • C. 

      The policy, the application, and any verbal understandings

    • D. 

      The policy by itself, but never the applicatin

  • 64. 
    • A. 

      Deductible

    • B. 

      Co-insurance

    • C. 

      Maximum amounts

    • D. 

      Capitation

  • 65. 
    In California, the minimum participation requirement for a contributory large group health insurance plan is
    • A. 

      50% of eligible employees

    • B. 

      25% of eligible employees

    • C. 

      75% of eligible employees

    • D. 

      40% of eligible employees

  • 66. 
    Which of the following is a correct statement about life insurance policy types ?
    • A. 

      Group life insurance is offered only to employees who provide evidence of insurability

    • B. 

      The initial premium for term insurance is lower than the initial premium for whole life insurance

    • C. 

      Limited payment whole life policies stay in effect only for as long as the premium is paid

    • D. 

      Universal life policies have a structured premium payment schedule that must be followed during the entire contract period

  • 67. 
    • A. 

      Residual benefits are payable

    • B. 

      Occupational claims are payable

    • C. 

      No benefits are payable

    • D. 

      All claims are payable

  • 68. 
    A provision stating that the insured and the insurer will share covered losses in an agreed proportion is called
    • A. 

      Percentage sharing

    • B. 

      Co-insurance

    • C. 

      Stop-loss provision

    • D. 

      Comprehensive insurance

  • 69. 
    While an insurer is paying the premium for a life insurance policy under the waiver of premium rider
    • A. 

      The insurer is named as the primary beneficiary

    • B. 

      The cash value does not increase

    • C. 

      The dividend payments cease

    • D. 

      The policy remains in full force in every respect

  • 70. 
    • A. 

      Home health care

    • B. 

      Hospice

    • C. 

      Hospitalization

    • D. 

      Physicians services

  • 71. 
    According to the CA Insurance Code, all insurers must maintain a department to investigate:
    • A. 

      Possible abuses of rating laws

    • B. 

      Possible arson

    • C. 

      Possible fraudulent claims from insureds

    • D. 

      Possible abuses of fiduciary responsibilities

  • 72. 
    • A. 

      Out-of-pocket limit

    • B. 

      Calendar deductible

    • C. 

      Carry-over provision

    • D. 

      Corridor deductible

  • 73. 
    Which of these statements concerning Medicare is not true ?
    • A. 

      Part A provides hospital care

    • B. 

      Part B provides doctors and physicians services

    • C. 

      Part C provides long-term care benefits

    • D. 

      It is part of the Social Security program

  • 74. 
    Concerning Part B of Medicare, which of the following is incorrect?
    • A. 

      There is an annual deductible and co-payment

    • B. 

      It is paid entirely by FICA (social security) payroll taxes

    • C. 

      An individual must sign a form rejecting Part B or they will be enrolled in it

    • D. 

      It provides some coverage and benefits for most medical expenses not covered by Part A

  • 75. 
    From the list of descriptions below, select the one that is not eligible for Medicare
    • A. 

      A person who has been entitled to Social Security disability benefits for 24 months

    • B. 

      A person who has reached 65, is willing to pay a premium but is not eligible for Social Security,

    • C. 

      A person who has reached 65 and is eligible for Social Security.

    • D. 

      All the above are eligible

  • 76. 
    Hospice care provides services to patients who are:
    • A. 

      In a hospital and expected to recover

    • B. 

      Terminally ill

    • C. 

      Receiving respite care through Medicare

    • D. 

      None of the above

  • 77. 
    • A. 

      1 and 3

    • B. 

      1 and 4

    • C. 

      2 and 3

    • D. 

      2 and 4

  • 78. 
    • A. 

      True

    • B. 

      False

  • 79. 
    Which of these statement is not true with regard to insurers and policies that provide that provide Medicare supplement coverage ?
    • A. 

      They are required to issue all policies on either a guaranteed renewable or non-cancelable basis

    • B. 

      If the policy has been is force for at least 6 months, the insurer is prohibited from excluding any preexisting conditions.

    • C. 

      The insurers are prohibited from any exclusion for all preexisting conditions

  • 80. 
    Which of the following is not allowed by code in connection with the sale of Medicare supplement policies ?
    • A. 

      Offer only core benefits

    • B. 

      Offer only broader plans

    • C. 

      Offer core plans as a stand-alone or offer core plans along with broader plans

    • D. 

      Both A and B are not allowed

  • 81. 
    Medicare covers which of the following in order to provide long-term care for elderly:
    • A. 

      Very broad and substantial intermediate care benefits

    • B. 

      A wide range of custodial care coverage

    • C. 

      Very limited nursing home coverage

    • D. 

      Medicare provides none of the above

  • 82. 
    • A. 

      Those who are very rich or very poor probably are not in need of long term care coverage

    • B. 

      The annual cost of nursing home care was about $10,000 in 1990

    • C. 

      One of the best-structured plans for long term care for those in the middle class is Medi-Cal

    • D. 

      The need for long term care insurance begins only at middle age.

  • 83. 
    There is a type of benefit that pays for the cost of relief given to the caregiver of a person who requires constant care and supervision.  What is this type of care called ?
    • A. 

      Custodial Care

    • B. 

      Hospice care

    • C. 

      Intermediate relief care

    • D. 

      Respite care

  • 84. 
    Long-term care policies can be sold in various ways.  Which of the following is one of these ways?
    • A. 

      As part of an auto policy

    • B. 

      As a part of a comprehensive homeowner umbrella policy

    • C. 

      As part of a life insurance policy through the use of an endorsement

  • 85. 
    Pick from the following choices the features of a long-term care policy that would have the highest premium. 1. Long benefit period2. Short benefit period3. Long elimination period4. Short elimination period
    • A. 

      1 and 3

    • B. 

      2 and 3

    • C. 

      1 and 4

    • D. 

      2 and 4

  • 86. 
    Which of the following categories of benefits are not covered in a long-term care policy ?
    • A. 

      Home care benefits

    • B. 

      Custodial care benefits

    • C. 

      Acute care coverage in a hospital

    • D. 

      Community based care benefits

  • 87. 
    Any long-term care policy sold in California must provide for certain benefits.  Select the most correct answer describing these benefits from the choices below.
    • A. 

      Home care only

    • B. 

      Medicare supplement

    • C. 

      Institutional care only

    • D. 

      Institutional care and home care

  • 88. 
    Long-term care policies that deliver benefits for community based or home care services must include which of the following: 1. Respite care2 Hospice Care3. Home health care services
    • A. 

      1 and 3

    • B. 

      1 and 2

    • C. 

      1,2 and 3

    • D. 

      None of the above

  • 89. 
    • A. 

      They can exclude degenerative conditions like Alzheimer's

    • B. 

      They may require hospital stays of certain lengths be satisfied before benefits are provided

    • C. 

      "Inflation guard" is a non-legal provision in LTC policies

    • D. 

      All the above are false

  • 90. 
    • A. 

      True

    • B. 

      False

  • 91. 
    When Workers compensation laws became mandatory, it meant:
    • A. 

      HMOs were required to provide medical services to all employees

    • B. 

      Employers could use common law defenses more to their advantage

    • C. 

      Employers were financially responsible for employees on-the-job injuries, regardless of fault

    • D. 

      Employees were required to provide employers fault to file legal action

  • 92. 
    Who pays the premiums for a Workers Compensation policy for a retail store ?
    • A. 

      Equally divided between the employees and the storeowner.

    • B. 

      Because of the occupation classification, it is paid entirely by the employees.

    • C. 

      It is always paid entirely by the employer

    • D. 

      Retail stores are excluded from statutory workers compensation laws

  • 93. 
    Mike drives a truck for a delivery company.  In the course of making a delivery he is involved in a serious accident, and is taken to the hospital.  The hospital and doctors bills will be paid by:
    • A. 

      The company workers compensation policy

    • B. 

      Medi-Cal, assuming he qualifies for coverage

    • C. 

      Mike's private auto insurance policy

    • D. 

      None of the above

  • 94. 
    • A. 

      True

    • B. 

      False

  • 95. 
    The Worker's compensation portion (Part I) of the Worker's Compensation policy covers payments the employer (insured) must pay:
    • A. 

      Under Worker's compensation law

    • B. 

      To bring the work environment up to state safety codes.

    • C. 

      To cover common law exposures

    • D. 

      To coordinate with HMO coverage

  • 96. 
    • A. 

      Worker's compensation

    • B. 

      24-hour coverage

    • C. 

      All disability policies

  • 97. 
    • A. 

      Group medical coverage

    • B. 

      Accidental death and dismemberment coverage

    • C. 

      Individual hospital coverage

    • D. 

      Individual surgical benefits

  • 98. 
    A group health plan third party administrator might do any of the following, except:
    • A. 

      Receive employee payments

    • B. 

      Pay policy owner premiums

    • C. 

      Track insured eligibility

    • D. 

      Handle member complaints

  • 99. 
    Unintentional concealment entitles the injured party to which course of action ?
    • A. 

      Possible imprisonment to the party who concealed the information

    • B. 

      $250 fine to be paid to the injured party

    • C. 

      None, given the fact that the concealment was unintentional

    • D. 

      Rescission of the contract

  • 100. 
    When may a representation be withdrawn ?
    • A. 

      Only before the insurance is in effect

    • B. 

      At any time as long as both parties agree

    • C. 

      It can never be withdrawn

    • D. 

      Only after the policy is in effect

  • 101. 
    A significant benefit to the insured in group underwriting verses individual is
    • A. 

      There are no enrollment restrictions

    • B. 

      Previous claims are not a consideration

    • C. 

      The cost of coverage is lower

    • D. 

      Members are eligible for the entire contract period

  • 102. 
    • A. 

      Critical illness

    • B. 

      Group medical expense

    • C. 

      Specified disease

    • D. 

      Individual medical expense

  • 103. 
    How long must a life agent maintain records regarding policies sold in this state ?
    • A. 

      1 year

    • B. 

      2 years

    • C. 

      3 years

    • D. 

      5 years

  • 104. 
    The purpose of laws regarding the replacement of life and annuity contracts includes all of the following, except:
    • A. 

      To protect the interests of life insurers and their agents

    • B. 

      To establish penalties for failure to comply with replacement requirements

    • C. 

      To assure the purchaser receives information to make an informed decision

    • D. 

      To reduce the opportunity for misrepresentation and incomplete disclosures

  • 105. 
    All of the following would fall under the category of an "adverse underwriting decision", except:
    • A. 

      Charging a higher rate based upon the information given on the insurance application

    • B. 

      Failure of the agent to submit the application to an insurance company

    • C. 

      Declination of insurance coverage

    • D. 

      Termination of insurance coverage

  • 106. 
    What is the transplant donor benefit in a disability income policy ?
    • A. 

      A provision that provides medical coverage for the surgical expense of donating a body organ

    • B. 

      A provision that considers the insured to be disabled if donating a body organ.

    • C. 

      A provision that covers hospital expenses following the donation of a body organ

    • D. 

      A provision that extends coverage for rehabilitation after the donation of a body organ

  • 107. 
    In order to obtain group insurance without providing evidence of insurability, what do eligible individuals generally have to do ?
    • A. 

      Submit an attending physician's statement with their group enrollment cards

    • B. 

      Pay the first year premium in advance

    • C. 

      Nothing

    • D. 

      Enroll within a specified eligibility period

  • 108. 
    What is the purpose of the rehabilitation provision in a disability income policy ?
    • A. 

      To provide increases in disability benefits to keep pace with inflation

    • B. 

      To compensate insured's who lose their sight in both eyes

    • C. 

      To encourage disabled insureds to return to their original occupations

    • D. 

      To pay a portion of a workers pre-disability income when the insured returns to work

  • 109. 
    An agent who acts as an insurance agent, broker, solicitor, life agent, or bail agent, acts in which capacity when handling premiums or return premiums for an insured ?
    • A. 

      Natural person

    • B. 

      Fiduciary

    • C. 

      Legal representative

    • D. 

      Managing general agent

  • 110. 
    A measure of rating an individual's need for long term care benefits is called
    • A. 

      Activities of daily living

    • B. 

      The gatekeeper mechanism

    • C. 

      Case management

    • D. 

      Coinsurance

  • 111. 
    • A. 

      The number of insureds on the policy

    • B. 

      The number of exposure units

    • C. 

      The expense factor

    • D. 

      The premium adjustment factor

  • 112. 
    • A. 

      Non-forfeiture provisions

    • B. 

      Settlement options

    • C. 

      Collateral assignment

    • D. 

      Absolute assignment

  • 113. 
    What rights do individuals have if they disagree with the decision on the amount Medicare will pay ?
    • A. 

      They can change Medicare carriers

    • B. 

      They can terminate making premium payments until the claim is resolved

    • C. 

      They can ask a Medicare carrier to review the decision

    • D. 

      They can ask for a second opinion by the state medical examiner

  • 114. 
    • A. 

      Non-deductible premiums and tax-free benefits

    • B. 

      Non-deductible premiums and taxable benefits

    • C. 

      Deductible premiums and taxable benefits

    • D. 

      Deductible premiums and tax-free benefits

  • 115. 
    The conversion privilege allows a person to change coverage from
    • A. 

      A life insurance policy to an annuity

    • B. 

      A group policy to an individual policy

    • C. 

      An individual policy to a group policy

    • D. 

      An annuity to a life insurance policy

  • 116. 
    All of the following statements abut qualified pension plans are true, except:
    • A. 

      Employer contributions are taxable to employees in the year they are contributed

    • B. 

      Investment earnings are exempt from income tax until distributed

    • C. 

      Employer contributions are deductible from corporate income taxation

    • D. 

      Employer contributions are taxable to employees in the years they are received as benefits

  • 117. 
    What provision prevents a family from receiving benefits from two separate group policies with the same medical expense ?
    • A. 

      Assignment of benefits

    • B. 

      Conversion of benefits

    • C. 

      Extension of benefits

    • D. 

      Coordination of benefits

  • 118. 
    Self-funding of employee benefit plans cannot be used for
    • A. 

      Short-term disability benefits

    • B. 

      Health benefits

    • C. 

      Death benefits

    • D. 

      Hospital benefits

  • 119. 
    Which of the following coverages is NOT one of the three traditional benefits of a group basic medical expense plan ?
    • A. 

      Surgical expense

    • B. 

      Private nursing expense

    • C. 

      Physicians visit expense

    • D. 

      Hospital expense

  • 120. 
    The additional premium charged by an insurer for adding the accidental death benefit to a whole life policy
    • A. 

      Increases the yearly dividend amount

    • B. 

      Does not affect the policy's cash value

    • C. 

      Increases the policy's cash value

    • D. 

      Decreases the length of time that premiums are payable

  • 121. 
    What is the written instrument called in which the insurance contract is set forth ?
    • A. 

      The provisions

    • B. 

      The warrantees

    • C. 

      The policy

    • D. 

      The risk

  • 122. 
    Which non-forfeiture option uses cash surrender values to purchase paid-up term insurance for the full face amount of the policy ?
    • A. 

      Extended paid-up insurance

    • B. 

      Extended term insurance

    • C. 

      Reduced term insurance

    • D. 

      Reduced paid-up insurance

  • 123. 
    What is the difference between a defined contribution plan and a defined benefit plan ?
    • A. 

      The party receiving the distribution

    • B. 

      The party making the contribution

    • C. 

      The contract period requiring specific payments

    • D. 

      The penalties for early distribution

  • 124. 
    A life agent's records must include all of the following, except:
    • A. 

      All correspondence between the agent and the policy holder

    • B. 

      Printed material in general use which has been distributed by the insurer

    • C. 

      A copy of the outline of coverage

    • D. 

      All policies sold by the agent

  • 125. 
    A worker dies while he is credited with six quarters of the last 13 quarter period.  What status does the worker have under social security ?
    • A. 

      Partially insured

    • B. 

      Disability insured

    • C. 

      Currently insured

    • D. 

      Fully insured

  • 126. 
    A return premium rider is a rider that
    • A. 

      Returns insurance premiums if the insured surrenders the policy at any time after the third policy year

    • B. 

      Waives the policy premium while the inured is totally disabled

    • C. 

      Provides for the periodic return of a percentage of the premiums that have been paid if the insured becomes and remains disabled

    • D. 

      Permits the policy owner to receive a full refund of premium if the policy is returned during the first 90 days after deliver

  • 127. 
    An agent's appointment with an insurer will be discontinued if all of the following circumstances exist, except:
    • A. 

      The agent quits working for the insurer

    • B. 

      The insurer files a notice to terminate the appointment

    • C. 

      Another insurer submits an employment application

    • D. 

      The agent's insurance license expires

  • 128. 
    • A. 

      Premature death

    • B. 

      Disability

    • C. 

      Poor investments

    • D. 

      Retirement

  • 129. 
    Which retirement plan utilizes non-deductible contributions?
    • A. 

      Simplified employee pension plan

    • B. 

      Roth IRAs

    • C. 

      Profit-sharing plan

    • D. 

      Tax-sheltered annuity

  • 130. 
    Wellness benefits under a Health Maintenance Organization (HMO) typically include all of the following, except:
    • A. 

      Routine physicals

    • B. 

      Immunizations

    • C. 

      Flouride treatments

    • D. 

      Vision checks

  • 131. 
    All of the occurrences listed below are examples of an insurable event as defined by the CA Insurance Code, except:
    • A. 

      An insured suffers a financial loss in the state lottery

    • B. 

      A guest is injured by a fall from the insured's deck

    • C. 

      An insured is sued for unintentional slander of another person

    • D. 

      An insured is admitted to the hospital for delivery of a newborn

  • 132. 
    The social security normal retirement age depends upon
    • A. 

      The number of quarters of coverage

    • B. 

      The number of years of employment

    • C. 

      The worker's year of birth

    • D. 

      The worker's average annual earnings

  • 133. 
    The complete ransfer by the existing owner of all rights in an insurance policy to another person is
    • A. 

      Absolute assignment

    • B. 

      Endowment

    • C. 

      Collateral assignment

    • D. 

      Non-forfeiture

  • 134. 
    • A. 

      TSA

    • B. 

      IRA

    • C. 

      401(K)

    • D. 

      Keogh

  • 135. 
    Which settlement option allows only the death benefit earnings to be paid to the beneficiary
    • A. 

      Interest option

    • B. 

      Cash option

    • C. 

      Fixed period option

    • D. 

      Fixed amount option

  • 136. 
    In the absence of a coordination of benefits clause, all of the following circumstances might result in recovery of more than 100% of actual health care expenses, except:
    • A. 

      A worker's medical plan includes a carryover deductible provision

    • B. 

      A person working for two employers has health insurance through both

    • C. 

      Spouses are both employed and eligible for group medical benefits

    • D. 

      An executive has additional coverage through an association policy

  • 137. 
    • A. 

      There is an additional premium for the additional coverage

    • B. 

      No evidence of insurability is required for the annual increases in coverage

    • C. 

      The insured receives an automatic increase in the policy's death benefit when there is an increase in the cost of living index

    • D. 

      The face value of the policy raises or lowers as the cost of living index increases or decreases

  • 138. 
    The social security blackout period ends when the surviving spouse reaches the age of
    • A. 

      55

    • B. 

      60

    • C. 

      62

    • D. 

      65

  • 139. 
    Retirement benefits under social security are available only for workers who are
    • A. 

      Medicare insured

    • B. 

      Currently insured

    • C. 

      Disability insured

    • D. 

      Fully insured

  • 140. 
    In which plans do employers make specific contributions to an employee's retirement account?
    • A. 

      Defined contribution plans

    • B. 

      Individual retirement accounts

    • C. 

      Defined benefit plans

    • D. 

      Keogh plans

  • 141. 
    Traditional comprehensive major medical plans include all of the following, except:
    • A. 

      Deductibles

    • B. 

      Out-of-pocket maximums

    • C. 

      First-dollar coverage

    • D. 

      Coinsurance

  • 142. 
    In a 7 year vesting schedule, what percentage of employer contributions must be vested after 7 years of service ?
    • A. 

      40%

    • B. 

      60%

    • C. 

      80%

    • D. 

      100%

  • 143. 
    A representation in an insurance contract qualifies as which of the following ?
    • A. 

      An express warranty

    • B. 

      An implied warranty

    • C. 

      An amendment

    • D. 

      A policy provision

  • 144. 
    A policy holder stops making payments on a 20-pay life policy and converts the cash surrender value to extended term insurance.  All of the following statements are true, except:
    • A. 

      The extended term coverage will stay in force for a specified period of time, and then coverage will cease

    • B. 

      No further premium payments are required

    • C. 

      The term policy will have the same loan value as the original policy

    • D. 

      The extended term insurance will be for the same face amount as the 20-pay life policy

  • 145. 
    Identify which of the following is not a principal factor used to determine group disability income rates
    • A. 

      Average age of the insureds who make up the group

    • B. 

      Maximum indemnity period

    • C. 

      Length of the waiting/elimination period

    • D. 

      Location of the insured entity

  • 146. 
    Which non-forfeiture option uses an existing policy's cash value to purchase a paid-up policy with a lower face than the original policy?
    • A. 

      Extended paid-up insurance option

    • B. 

      Reduced paid-up insurance option

    • C. 

      Cash surrender value option

    • D. 

      Extended term option

  • 147. 
    • A. 

      The wife receives medical care. ABC group insurer is primary

    • B. 

      To reduce the risk of over-insurance, neither insurer will pay any benefits on any claim that is totally or partially covered by the other insurer if the other insurer is the primary carrier

    • C. 

      The primary carrier determines what they ow for a claim by finding out what the secondary carrier will not pay

    • D. 

      The husband receives medical care. XYZ group insurer is secondary.

  • 148. 
    The commonly used 30, 60, 90, and 180 disability terminology refers to the
    • A. 

      Amount paid by the insured before benefits are payable

    • B. 

      Payable amount split by the insured and the insurer

    • C. 

      Number of days for which no benefits are payable

    • D. 

      Number of days in which benefit payments end.

  • 149. 
    Each of the following terms is an imortant characteristic of a major medical policy, except
    • A. 

      Capitation fee

    • B. 

      Deductible

    • C. 

      Co-insurance

    • D. 

      Maximum amounts

  • 150. 
    HMOs are involved in all of the following, except
    • A. 

      Providing healthcare services

    • B. 

      Emphasizing the use of specialty physicians

    • C. 

      Controlling costs by encouraging preventive care

    • D. 

      Providing healthcare financial coverage