Life & Health - Practice Exam 6

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Health Care Quizzes & Trivia

Life & Health - Practice Exam 6


Questions and Answers
  • 1. 
    • A. 

      Physical examination

    • B. 

      Attending physician's statement

    • C. 

      Investigative consumer report

    • D. 

      Agent's report

  • 2. 
    • A. 

      Endowed

    • B. 

      Substandard

    • C. 

      Standard

    • D. 

      Preferred

  • 3. 
    During the disability elimination period
    • A. 

      Occupational claims are payable

    • B. 

      Small claims are payable

    • C. 

      No benefits are payable

    • D. 

      Residual benefits are payable

  • 4. 
    • A. 

      A disabled employee while he is working part-time and receiving lost income under their long-term disability benefit

    • B. 

      An employee who loses sight in one eye because of an accident on the job

    • C. 

      An employer contributing half of the disability benefit to an employee out on long-term disability

    • D. 

      The prorated income an employer pays an injured employee out on short-term disability

  • 5. 
    • A. 

      It is somewhat larger in a non-participating whole life policy than in a comparable participating policy

    • B. 

      It is the interest paid to the policy owner on the cash value of a permanent insurance policy

    • C. 

      It is distribution of excess of funds accumulated by the insurer on participating policies

    • D. 

      It is a stockholders return on his investment in the company

  • 6. 
    If a person was in violation of Section 770 of the CA Insurance Code, what action would the insurance Commissioner most likely take if the violation dealt with loans on the security of real or personal property ?
    • A. 

      Require the violator to complete an approved ethics course before soliciting in the statement of California again

    • B. 

      Issue a cease and desist order for a violation of more than one transaction

    • C. 

      Charge the violator with a felony with a six month maximum jai sentence per violation

    • D. 

      Issue a fine or $205,000 per violation

  • 7. 
    If no other method of payment is selected, which of the following is the automatic mode of settlement for life insurance proceeds?
    • A. 

      Extended term insurance

    • B. 

      Lump-sum settlement in cash

    • C. 

      Life income

    • D. 

      Paid-up policy

  • 8. 
    The process whereby a mutual insurer becomes a stock company is called:
    • A. 

      Reorganization

    • B. 

      Stock split

    • C. 

      Stock buyout

    • D. 

      Demutualization

  • 9. 
    A supplemental insurance policy that pays a set amount for each day that an individual is hospitalized is known as:
    • A. 

      Long term care supplement

    • B. 

      Temporary major medical

    • C. 

      Hospital confinement indemnity

    • D. 

      Hospital surgical expense

  • 10. 
    Any situation that presents the possibility of a loss is known as:
    • A. 

      A covered loss

    • B. 

      A loss exposure

    • C. 

      Risk potential

    • D. 

      Consideration

  • 11. 
    A commonly used cost containment measure for emergency hospital care under a major medical expense plan is:
    • A. 

      Premium tax

    • B. 

      Deductible

    • C. 

      In-patient fee

    • D. 

      Pre-admission test

  • 12. 
    • A. 

      Cash option

    • B. 

      Fixed amount option

    • C. 

      Interest option

    • D. 

      Fixed period option

  • 13. 
    An agent acting 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. 

      Legal representative

    • B. 

      Fiduciary

    • C. 

      Managing general agent

    • D. 

      Natural person

  • 14. 
    • A. 

      A minimum of 75% of eligible members is required for a non-contributory group health plan

    • B. 

      A non-contributory group health plan must cover all eligible members

    • C. 

      A contributory group health plan must cover all eligible members

    • D. 

      A minimum participation of 50% of eligible members is required for a contributory group health plan

  • 15. 
    According to state law, what size print must be used for the licensee's license number on all price quotes, business cards, and printed material?
    • A. 

      There are no requirements for the license no. to be printed on any printed material

    • B. 

      Larger print than any other printed information on the material

    • C. 

      The same size print as the licensee's phone number, fax number or address

    • D. 

      Small print a the bottom of the material

  • 16. 
    Social Security disability benefits are paid to persons expected to die or be disabled at least:
    • A. 

      3 months

    • B. 

      6 months

    • C. 

      12 months

    • D. 

      24 months

  • 17. 
    • A. 

      Extended paid-up insurance

    • B. 

      Reduced term insurance

    • C. 

      Extended term insurance

    • D. 

      Reduced paid-up insurance

  • 18. 
    The group medical plan provision that applies when a claimant has coverage under more than one plan is knows as?
    • A. 

      Integration

    • B. 

      Co-insurance

    • C. 

      Coordination of benefits

    • D. 

      Maximum benefits

  • 19. 
    All of the following statements about the gatekeeper system are true, except:
    • A. 

      Specialists can choose to be gatekeepers for their patients

    • B. 

      The insured must utilize their primary physicians who authorize all care for the insured

    • C. 

      Referrals to specialists must be authorized by the gatekeeper

    • D. 

      Gatekeepers are a common feature of HMO plans

  • 20. 
    • A. 

      Medicare Part A

    • B. 

      Medicare Part B

    • C. 

      Social Security retirement benefits

    • D. 

      Long term care insurance

  • 21. 
    • A. 

      Long term care insurance

    • B. 

      Medicare Part A

    • C. 

      Social Security survivor benefits

    • D. 

      Medicare Part B

  • 22. 
    Traditional comprehensive major medical plans include all of the following, except:
    • A. 

      Deductibles

    • B. 

      Co-insurance

    • C. 

      Out-of-pocket maximums

    • D. 

      First-dollar coverage

  • 23. 
    According to Employee Retirement Income Security Act of 1974 (ERISA) fiduciary standards, benefit plans are operated for:
    • A. 

      Plan sponsors and beneficiaries

    • B. 

      Plan participants and employees

    • C. 

      Plan sponsors and employees

    • D. 

      Plan participants and beneficiaries

  • 24. 
    After the deductible is paid, what percentage of the balance of approved charges does Medicare Part B pay ?
    • A. 

      20%

    • B. 

      50%

    • C. 

      80%

    • D. 

      100%

  • 25. 
    With Medicare coverage:
    • A. 

      Benefits are available only to persons age 65 or older

    • B. 

      Both Part a and Part B provide benefits for care and skilled nursing facilities

    • C. 

      Part B provides benefits for diagnostic tests and x-rays performed on an out-patient basis

    • D. 

      Part A has no deductibles nor co-insurance for the first 60 days of hospitalization

  • 26. 
    Life insurance settlement options include all of the following, except:
    • A. 

      Interest option

    • B. 

      Extended term option

    • C. 

      Fixed amount option

    • D. 

      Fixed period option

  • 27. 
    All of the following are features of a preferred provider organization (PPO), except:
    • A. 

      Dependence upon referrals to see a specialist

    • B. 

      Providers are paid on a fee-for-service basis

    • C. 

      Employees have a choice of practitioners

    • D. 

      Primary care physicians act as gatekeepers

  • 28. 
    • A. 

      Complete a course on workers compensation and general principles of employer liability

    • B. 

      Nothing; they are already authorized to sell this coverage with a life license

    • C. 

      Complete a course on long-term disability coverage and workers compensation coverage

    • D. 

      Complete the proper application and pay the fee

  • 29. 
    A life insurance application is important for all of the following reasons, except;
    • A. 

      Statements made in the application are required to be true to the best of the applicant's knowledge

    • B. 

      The beneficiary must sign the application before the insurer will issue the policy

    • C. 

      The application contains essential information about the applicant

    • D. 

      The application becomes a part of the policy if a copy is attached

  • 30. 
    The price of insurance for each exposure unit is called the:
    • A. 

      Premium

    • B. 

      Rate

    • C. 

      Adjustment factor

    • D. 

      Package price

  • 31. 
    By adopting a self-funded health plan, an employer will have greater flexibility in all areas of the planning, except:
    • A. 

      Claims severity

    • B. 

      Group size

    • C. 

      Benefits provided

    • D. 

      Cost

  • 32. 
    To authorize the release of an attending physician's report, the applicant must:
    • A. 

      Sign a consent form

    • B. 

      Send a letter to the physician

    • C. 

      Furnish the name of the physician

    • D. 

      Submit to a physical examination

  • 33. 
    Yearly probabilities of death are shown in
    • A. 

      Mortality tables

    • B. 

      Morbidity tables

    • C. 

      Policy illustrations

    • D. 

      Policy summaries

  • 34. 
    Members of the Medical information Bureau are required to report:
    • A. 

      The names of all patients treated by member physicians

    • B. 

      The cause of death when death benefits are paid

    • C. 

      Medical impairments found during the underwriting process

    • D. 

      Amounts of insurance applied for by all applicants

  • 35. 
    When referring to an insurance contract, when must a representation be made ?
    • A. 

      Either at the time of or after policy issuance

    • B. 

      Only after a policy is issued

    • C. 

      Only before a policy is issued

    • D. 

      Either at the time of or before policy issuance

  • 36. 
    Frank and Ernest are 25 year old identical twins.  They are both in excellent health.  Both buy life policies that have $500 annual premiums.  Frank buys a 5-year renewable term policy.  Ernest buys a whole life policy.  Which statement is no true ?
    • A. 

      Ernest's whole life policy will have a larger death benefit if he dies during the first 5 years

    • B. 

      Frank has the option of using his cash value to purchase a reduced amount of paid-up whole life insurance

    • C. 

      Ernest's whole life policy will develop a larger cash value

    • D. 

      Ernest's whole life premium will remain the same. Frank's premium will increase every 5 yeas.

  • 37. 
    The request for an attending physician's report must be accompanied by a copy of the:
    • A. 

      Policy illustration

    • B. 

      Signed application

    • C. 

      Underwriting criteria

    • D. 

      Signed authorization

  • 38. 
    A provision stating that health insureds and their insurers will share covered losses in an agreed proportion is called
    • A. 

      Comprehensive insurance

    • B. 

      Stop-loss provision

    • C. 

      Co-insurance

    • D. 

      Percentage sharing

  • 39. 
    • A. 

      Substandard

    • B. 

      Standard

    • C. 

      Endowed

    • D. 

      Preferred

  • 40. 
    A group insurance plan is contributory when the:
    • A. 

      3rd party administrator collects part of the premium

    • B. 

      Employer pays all of the premium

    • C. 

      Employee pays part of the premium

    • D. 

      Service provider collects part of the premium

  • 41. 
    The CA Insurance Code states that policies or certificates may be called comprehensive long term care insurance if they provide benefits for:
    • A. 

      Institutional (nursing facilities) and home care

    • B. 

      Institutional care (nursing facilities) only

    • C. 

      Disability income

    • D. 

      Home care only

  • 42. 
    • A. 

      The surviving children

    • B. 

      The surviving spouse

    • C. 

      The disabled worker

    • D. 

      The fully insured worker

  • 43. 
    • A. 

      Fund the addition of monthly income payments

    • B. 

      Purchase a one-year term addition

    • C. 

      Purchase paid-up additions

    • D. 

      Reduce the current premium

  • 44. 
    • A. 

      Life insurance companies

    • B. 

      Physicians

    • C. 

      Hospitals

    • D. 

      Health insurance companies

  • 45. 
    After the deductible, what portion does a patient pay for covered expenses under Medicare Part B ?
    • A. 

      20%

    • B. 

      50%

    • C. 

      80%

    • D. 

      100%

  • 46. 
    • A. 

      Rate making

    • B. 

      Underwriting

    • C. 

      Claims handling

    • D. 

      Marketing

  • 47. 
    • A. 

      Categorizing

    • B. 

      Unfair discrimination

    • C. 

      Social injustice

    • D. 

      Redlining

  • 48. 
    A policy owner has the right to change all of the following, except:
    • A. 

      The beneficiary

    • B. 

      The payment mode

    • C. 

      The dividend schedule

    • D. 

      The dividend option

  • 49. 
    Long term care policies can be replaced for all of the following reasons, except:
    • A. 

      The new policy has a lower premium

    • B. 

      The insured's condition has materially improved

    • C. 

      The new policy has greater benefits

    • D. 

      The new policy has fewer benefits and a higher premium

  • 50. 
    When must insurance records for insurance agents and insurance brokers be made available to the insurance commissioner ?
    • A. 

      One month after policy issuance

    • B. 

      At all times

    • C. 

      Within 30 days of a written request by the commissioner

    • D. 

      Annually and submitted with the proper paperwork

  • 51. 
    A self-insured group qualifies for stop-loss coverage after claims:
    • A. 

      Equal the anticipated loss per month

    • B. 

      Exceed a specified limit in a set period of time

    • C. 

      Meet the out of pocket expense during the policy period

    • D. 

      Average the maximum amount stated on the master policy

  • 52. 
    In a reinsurance agreement, the insurance company that transfers its loss exposure to another insurer is called:
    • A. 

      Primary insurer

    • B. 

      Reinsurer

    • C. 

      Captive insurer

    • D. 

      Secondary insurer

  • 53. 
    • A. 

      Family protection

    • B. 

      Level term

    • C. 

      Mortgage protection

    • D. 

      Joint life

  • 54. 
    • A. 

      Underwriting

    • B. 

      Rate making

    • C. 

      Marketing

    • D. 

      Adverse selection

  • 55. 
    • A. 

      The amount the insured pays per unit of coverage

    • B. 

      Money the insured pays the insurer to obtain the benefits in the policy

    • C. 

      Money the insurer pays the insured to obtain the benefits in the policy

    • D. 

      Bonus paid by an agent to convince an insured to buy a policy

  • 56. 
    If an insurer pays an insured $25,000 in lost wages, $45,000 for physicians visits and hospital costs, and $15,000 for physical therapy treatments, and later discovers that the claim was fraudulent, the insured may be fined as much as:
    • A. 

      $25,000

    • B. 

      $60,000

    • C. 

      $85,000

    • D. 

      $170,000

  • 57. 
    • A. 

      The materiality of concealment

    • B. 

      That of aleatory contracts

    • C. 

      The insurable interest standard

    • D. 

      The law of adhesion

  • 58. 
    All of the following statements about social security disability benefits are true, except:
    • A. 

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

    • B. 

      Benefits will continue only as long as the recipient cannot work at all

    • C. 

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

    • D. 

      Worker's must be totally and permanently disabled for at least 5 months to be eligible for benefits

  • 59. 
    An agent must submit all of the following to the insurer, except:
    • A. 

      A copy of all printed communications used for the presentation

    • B. 

      A copy of the signed replacement notice, if replacement is involved

    • C. 

      A statement signed by the applicant as to whether replacement of existing life insurance is involved in the transaction

    • D. 

      A signed statement as to whether or not the agent knows a replacement is involved in the transaction

  • 60. 
    • A. 

      The applicant must be insurable in order to have coverage only under the binding receipt

    • B. 

      Only a conditional receipt always provides insurance that is effective from the date the receipt is given

    • C. 

      Only a binding receipt always provides insurance that is effective from the date receipt is given

    • D. 

      Premiums must be paid to receive only a conditional receipt

  • 61. 
    After a life insurance policy has been in effect for two years, what prevents it from being rescinded by the insurer ?
    • A. 

      The incontestability clause

    • B. 

      The reinstatement clause

    • C. 

      The grace period provision

    • D. 

      The right to return provision

  • 62. 
    Under a disability income insurance policy with an "own occupation" clause, an employee who can no longer perform the tasks of the job held at the time of injury is considered:
    • A. 

      Gainfully disabled

    • B. 

      Totally disabled

    • C. 

      Presumptively disabled

    • D. 

      Medically disabled

  • 63. 
    • A. 

      Broad plans that exclude the core benefits

    • B. 

      The core benefit plan without any additional benefits

    • C. 

      Plans that duplicate benefits covered by Medicare

    • D. 

      Plans without a right to return premium

  • 64. 
    To meet the chronically ill trigger of a long term care policy, an individual must be unable to perform a minimum of :
    • A. 

      1 activity of daily living

    • B. 

      2 activities of daily living

    • C. 

      3 activities of daily living

    • D. 

      4 activities of daily living

  • 65. 
    The initial requirements for a licensed agent to sell long term care insurance includes training in all of the following area, except:
    • A. 

      Financial planning

    • B. 

      Available long term care services and facilities

    • C. 

      California regulations

    • D. 

      Alternatives to the purchase of long term care insurance

  • 66. 
    Health maintenance organizations (HMOs) are required to provide for all of the following services, except:
    • A. 

      Prescription drugs

    • B. 

      Emergency services

    • C. 

      Preventive services

    • D. 

      Physicians services

  • 67. 
    A measure for rating an individuals need for long term care benefits is called:
    • A. 

      A gatekeeper mechanism

    • B. 

      Activities of daily living

    • C. 

      Case management

    • D. 

      Co-insurance

  • 68. 
    Under disability income insurance, bodily injury must meet the following criteria to be classified as accidental:
    • A. 

      Only the result need be accidental

    • B. 

      Only the cause need be accidental

    • C. 

      Both the cause and the result need be accidental

    • D. 

      The cause may be intentional, but the result must be accidental

  • 69. 
    Jean's healthcare provider is a "service provider".  This mans:
    • A. 

      Her payment for services goes directly to the provider

    • B. 

      She will get better service than a "fee for service" provider

    • C. 

      Her payment for services are always paid to the insured

    • D. 

      All the above above are true statements

  • 70. 
    All of the following are used in underwriting for health insurance, except:
    • A. 

      Income

    • B. 

      Sex

    • C. 

      Age

    • D. 

      Intelligence