Insurance Code And Policy Quiz
Do you wanna know more about insurance code and policy? Let's take this quiz now!
- 1.
Any transaction that involves purchasing a life insurance policy and terminating an exsiting policy is known as:
- A.
REPLACEMENT
- B.
REINSURANCE
- C.
REINSTATEMENT
- D.
ASSIGNMENT
Correct Answer
A. REPLACEMENTExplanation
A replacement refers to the process of purchasing a new life insurance policy while terminating an existing policy. It involves replacing an old policy with a new one. This can occur when a policyholder decides to switch to a different insurance company or when they want to change the terms or coverage of their current policy. It is important to carefully consider the implications of a replacement since it may involve surrender charges, potential loss of benefits, and changes in premium costs.Rate this question:
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- 2.
Harold, a variable annuity applicant, does not request the premium be invested in a stock or bond portfolio during the cancellation period. The policy is returned to the company within the cancellation period. What is Harold entitled to recieve?
- A.
THE PREMIUM
- B.
THE VALUE OF THE POLICY
- C.
THE PREMIUM LESS THE SURRENDER CHARGE
- D.
THE VALUE OF THE POLICY ON THE DAY THE POLICY WAS DELIVERED
Correct Answer
A. THE PREMIUMExplanation
During the cancellation period, if Harold returns the policy to the company and does not request the premium to be invested in a stock or bond portfolio, he is entitled to receive the premium back. This means that he will receive the full amount of money he paid as the premium for the variable annuity policy.Rate this question:
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- 3.
According to the Ca Insurance code, in which of the following classes of insurance can a binder NOT be issued?
- A.
MARINE
- B.
AUTO
- C.
FIRE
- D.
LIFE
Correct Answer
D. LIFEExplanation
According to the California Insurance Code, a binder cannot be issued in the class of insurance for LIFE. This means that temporary insurance coverage cannot be provided for life insurance policies through binders. Binders are commonly used to provide temporary coverage until a formal insurance policy is issued, but in the case of life insurance, binders are not allowed.Rate this question:
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- 4.
An organization will cease to exist as an enity eligible to hold a license for all of the following reasons, EXCEPT:
- A.
Termination of an association
- B.
Termination of a key employee
- C.
Dissolution of a corporation
- D.
Dissolution of a co-partnership
Correct Answer
B. Termination of a key employeeExplanation
An organization will cease to exist as an entity eligible to hold a license if there is a termination of an association, dissolution of a corporation, or dissolution of a co-partnership. However, the termination of a key employee alone would not result in the organization ceasing to exist as an eligible entity.Rate this question:
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- 5.
What does it mean if an agents license is inactive?
- A.
The agent can still transact insurance business in CA, but not in any other states until the license is reacivated
- B.
The agent can transact any insurance business with another agent's approval
- C.
The agent can transact any insurance business for which the agent is licensed
- D.
The agent cannot transact any insurance business fro which a licednse is requried
Correct Answer
D. The agent cannot transact any insurance business fro which a licednse is requriedExplanation
If an agent's license is inactive, it means that the agent cannot transact any insurance business for which a license is required. This means that the agent is not legally allowed to engage in any insurance transactions until their license is reactivated.Rate this question:
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- 6.
If the commissioner issues a Notice of Seizure for documents and the individual fails to send those documents what is the penalty?
- A.
1 year in jail
- B.
1,000 fine
- C.
1 year in jail/ or 1,000 fine
- D.
Each state handles discipline in its own way
Correct Answer
C. 1 year in jail/ or 1,000 fineExplanation
If an individual fails to send the documents requested after receiving a Notice of Seizure from the commissioner, the penalty is either 1 year in jail or a $1,000 fine.Rate this question:
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- 7.
A disability income policy covers injuries suffered by an insured on or off the job is called?
- A.
An occupational policy
- B.
A non-occupational policy
- C.
A wraparound policy
- D.
Twenty-four-hour policy
Correct Answer
A. An occupational policyExplanation
An occupational policy is the correct answer because it specifically covers injuries suffered by an insured individual while they are on the job. This type of policy provides disability income benefits for work-related injuries or illnesses, ensuring that the insured is financially protected in the event of a disability caused by their occupation. It does not cover injuries or disabilities that occur outside of work.Rate this question:
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- 8.
Which of the following must any person engaged in the business of acting as an insurance agent or broker who recieves compensation for arranging or directing sales in connection with a premium financing agreement do?
- A.
Provide a list of the potential complaints lodged aganist the broker or agent through past customers
- B.
Provide records of interest payments to the broker agent with respect to interest paid by the insurer
- C.
Maintain a list of accounts in connection with compensation exempted in premium financing payments for three years
- D.
Provide a list of current accounts for any client who wishes to see the records
Correct Answer
C. Maintain a list of accounts in connection with compensation exempted in premium financing payments for three years -
- 9.
All of the following would be considered one of the three major types of loss exposures, EXCEPT;
- A.
Liability loss exposure
- B.
Financial loss exposure
- C.
Human and loss exposure
- D.
Property loss exposure
Correct Answer
C. Human and loss exposureExplanation
The correct answer is "Human and loss exposure." This is because the three major types of loss exposures are typically considered to be liability loss exposure, financial loss exposure, and property loss exposure. Human and loss exposure is not typically recognized as a distinct category of loss exposure.Rate this question:
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- 10.
Which of the following statements concerning the usual coordination-of-benefits provision are correct?
- A.
When the plans both ahve the provision, coverage as an employee is primary to coverage paid to dependents
- B.
Coverage under COBRA is primary to other coverage paid to the employee
- C.
Medicare coverage is always primary to "medical coverage"
- D.
Coverage under any plam with the provision is primary to coverage under any plan without the provision
Correct Answer
A. When the plans both ahve the provision, coverage as an employee is primary to coverage paid to dependentsExplanation
When both plans have the coordination-of-benefits provision, the coverage as an employee takes precedence over the coverage paid to dependents.Rate this question:
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- 11.
Which of the following is NOT provided by Hospice Care?
- A.
PAIN RELIEF
- B.
SYMPTOM MANAGEMENT
- C.
COUNSELING
- D.
REHABILITATION
Correct Answer
D. REHABILITATIONExplanation
Hospice care focuses on providing comfort and support to individuals who are terminally ill and their families. It aims to improve the quality of life through pain relief, symptom management, and counseling. Rehabilitation, on the other hand, is not typically provided by hospice care. Rehabilitation focuses on restoring function and improving physical abilities, which may not be the primary goal for individuals in hospice care who are nearing the end of their lives.Rate this question:
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- 12.
Tony Brown has a CLU certification. which of the following names would be automatically approved for his agency's use?
- A.
Tony Brown CLU and Company
- B.
Browinies Insurance Company
- C.
Brown Insurance
- D.
None of these name will be automatically approved
Correct Answer
D. None of these name will be automatically approvedExplanation
The CLU certification is a professional designation for insurance professionals specializing in life insurance and estate planning. However, having this certification does not automatically approve any specific names for an agency's use. The approval of agency names typically depends on various factors such as legal requirements, availability, and compliance with industry regulations. Therefore, none of the given names would be automatically approved solely based on Tony Brown's CLU certification.Rate this question:
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- 13.
A person has paid $50,000 into a fixed annuity over 20 years.When he decides to begin income payments the insurer calculates that he will recieve $4,000 per year for life, which means that he will recieve a total of $100,000. In the first 10 years of payments how much is taxable each year?
- A.
$0
- B.
$800
- C.
$2,000
- D.
$4,000
Correct Answer
C. $2,000Explanation
The taxable amount each year for the first 10 years is $2,000. This is because the person paid $50,000 into the annuity over 20 years, resulting in a total of $100,000 to be received. Since the person will receive $4,000 per year for life, the remaining $2,000 each year is considered taxable income.Rate this question:
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- 14.
According to the code, all insurers must maintain a department to investigate
- A.
POSSIBLE ABUSES OF RATING LAWS
- B.
POSSIBLE ARSON
- C.
POSSIBLE FRADULANT CLAIMS FROM INSURED
- D.
POSSIBLE FRAUD BY INSURERS
Correct Answer
C. POSSIBLE FRADULANT CLAIMS FROM INSUREDExplanation
The code states that all insurers must maintain a department to investigate possible fraudulent claims from insured individuals. This means that insurance companies are required to have a specific department dedicated to looking into claims that may be fraudulent or deceitful. This is important in order to prevent individuals from making false claims and receiving undeserved payouts from insurance companies. By having this department in place, insurers can thoroughly investigate any suspicious claims and take appropriate action if fraud is detected.Rate this question:
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- 15.
Which are two activities of Daily Living?
- A.
EATING AND DRESSING
- B.
SPEAKING AND INCONTINENCE
- C.
SLEEPING AND WALKING
- D.
BATHING AND HEARING
Correct Answer
A. EATING AND DRESSINGExplanation
The two activities of daily living are eating and dressing. These activities are essential for individuals to maintain their basic self-care and independence. Eating refers to the ability to consume food and drink, while dressing refers to the ability to choose and put on appropriate clothing. Both activities are necessary for individuals to meet their basic needs and participate in daily life.Rate this question:
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- 16.
What does the Insurance Commissioner have the right to do if an agent lacks authority from an insurer named on a binder for coverage?
- A.
REQUEST HIS CERTIFICATE OF AUTHORITY
- B.
AUTHORIZE AGENT WITH A CERTIFICATE OF CONVENIENCE
- C.
SUSPEND OR REVOKE THE LICENSE OF THE AGENT
- D.
FINE THE INSURANCE COMPANY
Correct Answer
C. SUSPEND OR REVOKE THE LICENSE OF THE AGENTExplanation
The Insurance Commissioner has the right to suspend or revoke the license of the agent if they lack authority from an insurer named on a binder for coverage. This means that if the agent does not have the proper authorization from the insurer to provide coverage, the Insurance Commissioner has the power to take disciplinary action against the agent by suspending or revoking their license. This is to ensure that agents are acting in accordance with the regulations and guidelines set by the insurance industry.Rate this question:
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- 17.
An insured bought an annuity ten years ago. He will retire in five years. To determine the value of the annuity, the number of accumulation units is mutiplied by the value of the seperate account. What type of annuity was purchased?
- A.
VARIABLE ANNUITY
- B.
FIXED PREMIUM ANNUNITY
- C.
TAX SHELTERED ANNUITY
- D.
SINGLE PAYMENT ANNUITY
Correct Answer
A. VARIABLE ANNUITYExplanation
The insured purchased a variable annuity. In a variable annuity, the value of the annuity is determined by the number of accumulation units multiplied by the value of the separate account. This means that the value of the annuity can fluctuate based on the performance of the investments in the separate account. This type of annuity provides the potential for higher returns but also carries more risk compared to other types of annuities.Rate this question:
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- 18.
The likelihood of incurring disease or disability at any given time is;
- A.
RISK
- B.
MORBIDITY
- C.
MORTALITY
- D.
HAZARD
Correct Answer
B. MORBIDITYExplanation
Morbidity refers to the state of being diseased or the incidence of disease within a population. It measures the likelihood of incurring disease or disability at any given time. Therefore, the correct answer is MORBIDITY.Rate this question:
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- 19.
The class beneficiary designation which means that the beneficiaries will recieve equal shares of the death benefit divided among surviving members of the class is
- A.
CLASS BENEFICIRIES, EQUAL SHARES
- B.
PER CAPITA
- C.
PER STRIPES
- D.
PER DIEM
Correct Answer
B. PER CAPITAExplanation
Per capita means that each member of the class will receive an equal share of the death benefit. This means that regardless of the number of surviving members, each individual will receive an equal portion of the total benefit.Rate this question:
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- 20.
Twelve months ago, a man slipped and fell down a flight of stairs at his workplace. As a result he has a paralysis for which he is not expected to recover. This 46 year old person will probably be able to collect disability income benefits from
- A.
MEDICARE
- B.
WORKERS COMPENSATION
- C.
MEDICAID
- D.
SOCIAL SECURITY
Correct Answer
B. WORKERS COMPENSATIONExplanation
Workers compensation is a type of insurance that provides benefits to employees who are injured or disabled as a result of their job. In this case, the man slipped and fell at his workplace, resulting in paralysis. Since he is not expected to recover, he would likely be eligible to collect disability income benefits from workers compensation. Medicare, Medicaid, and Social Security are not typically associated with workplace injuries and disabilities, making workers compensation the most appropriate option.Rate this question:
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- 21.
In order to be quilified to sell LTC insurance in the state of CA, agents must comply with all of the following: EXECPT
- A.
All Licenses are required to pass a LTC knowledge exam every 10 years
- B.
For licenses issued after January 1, 1992, 8 hours of training for the first four 12 month periods from date of license issuance, then 8 hours prior to each renewal
- C.
Non-resident licensees file with the Insurance Commissioner and have Commissioner approve education requirement
- D.
8 hours prior to renewal for licences issued prior to January 1, 1992
Correct Answer
A. All Licenses are required to pass a LTC knowledge exam every 10 yearsExplanation
Agents in the state of CA who are qualified to sell LTC insurance must comply with several requirements. These include completing 8 hours of training for the first four 12-month periods after license issuance, then 8 hours prior to each renewal. Non-resident licensees must file with the Insurance Commissioner and have the Commissioner approve their education requirement. However, the exception is that all licenses are not required to pass a LTC knowledge exam every 10 years.Rate this question:
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- 22.
The mathematical rule that says that as the number of individual but similar exposure units increases the easier it is to predict losses is which of the following?
- A.
INSURABLE INTEREST STANDARD
- B.
CONTRACT LAW
- C.
LAW OF LARGE NUMBERS
- D.
MATERIALITY
Correct Answer
C. LAW OF LARGE NUMBERSExplanation
The Law of Large Numbers is a mathematical principle that states that as the number of individual but similar exposure units (such as insurance policies) increases, the easier it becomes to predict losses. This principle is important in insurance because it allows insurers to make more accurate predictions about the frequency and severity of future losses based on historical data and actuarial calculations. By having a large pool of similar risks, insurers can spread the potential losses more evenly and reduce the overall risk. This helps insurers to set appropriate premiums and manage their business effectively.Rate this question:
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- 23.
Which of the folowing is a description of a Life and Disability Analyst?
- A.
A BROKER PAID FEES FOE SERVICE
- B.
A PERSON LICENSED TO ASSIST AN AGENT IN SOLICITING LIFE INSURANCE
- C.
A PERSON LICENSED TO ADVISE CLIENTS ABOUT LIFE AND DISABILITY INSURANCE FOR A FEE
- D.
ANY AGENT
Correct Answer
C. A PERSON LICENSED TO ADVISE CLIENTS ABOUT LIFE AND DISABILITY INSURANCE FOR A FEEExplanation
The correct answer is "A person licensed to advise clients about life and disability insurance for a fee." This answer accurately describes the role of a Life and Disability Analyst, who is licensed to provide advice and guidance to clients regarding life and disability insurance. They are authorized to charge a fee for their services, indicating that they provide professional expertise in this field.Rate this question:
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- 24.
What happens to a license after the death of a natural person who holds a valid insurance license?
- A.
IT ALWAYS TERMINATES
- B.
IT MAY BE TRANSFERED TO ANOTHER PERSON
- C.
THE LICENSE BECOMES INACTIVE UNTIL THE EXPIRATION DATE
- D.
THE LICENSE MUST BE RETURNED TO THE COMMISSIONER TO CANCEL THE LICENSE
Correct Answer
A. IT ALWAYS TERMINATESExplanation
After the death of a natural person who holds a valid insurance license, the license always terminates. This means that the license is no longer valid and cannot be transferred to another person. The license becomes null and void upon the death of the license holder.Rate this question:
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- 25.
If the financial loss on a certain group of people occuring over a certain period of time defines the pricing of a disability policy, it is the pricing principle known as:
- A.
RAPIDITY
- B.
SECURITY
- C.
RISK
- D.
FREQUENCY
Correct Answer
D. FREQUENCYExplanation
The correct answer is FREQUENCY. In this context, the pricing of a disability policy is determined by the financial loss occurring over a certain period of time. The frequency of these losses, i.e., how often they occur, is a key factor in determining the pricing of the policy. The more frequent the losses, the higher the pricing would be to compensate for the increased risk and potential payouts.Rate this question:
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- 26.
Which of the following are common insurance policy provisions?
- A.
REINSTATEMENT, SUICIDE, PRE-EXISTING CONDITONS
- B.
ENTIRE CONTRACT, GRACE PERIOD, REINSTATEMENT
- C.
ENTIRE CONTRACT, INCONTESTABILITY, PRE-EXSITING CONDITIONS
- D.
GRACE PERIOD, SUICIDE, RIGHT TO RETURN
Correct Answer
B. ENTIRE CONTRACT, GRACE PERIOD, REINSTATEMENTExplanation
The common insurance policy provisions are the entire contract, grace period, and reinstatement. The entire contract provision states that the insurance policy includes all agreements between the insured and the insurer. The grace period provision allows the insured a specified period of time after the premium due date to make the payment without any penalty. The reinstatement provision allows the insured to reinstate a lapsed policy by paying any outstanding premiums and providing evidence of insurability.Rate this question:
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- 27.
With the cost of living rider, the life insurance policy holder
- A.
Must increase or decrease the face value of the policy as the index increases or decreases
- B.
Gets the automatic increase in the face value if there is an increase in the cost of living index. there is an additional premium for the additional coverage
- C.
Gets the automatic increase in the face value if the index goes up. There is no charge except for the flat charge for the rider
- D.
All of the above are false
Correct Answer
B. Gets the automatic increase in the face value if there is an increase in the cost of living index. there is an additional premium for the additional coverageExplanation
The correct answer is that the life insurance policy holder gets an automatic increase in the face value if there is an increase in the cost of living index, and there is an additional premium for the additional coverage. This means that if the cost of living increases, the face value of the policy will also increase without any action required from the policy holder. However, this increase in coverage comes with an additional premium that the policy holder must pay.Rate this question:
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- 28.
Which of the following is not a standard level of care for a LTC policy?
- A.
INTERMEDIATE CARE
- B.
CUSTODIAL CARE
- C.
SKILLED NURSING CARE
- D.
CONVALESCENT CARE
Correct Answer
D. CONVALESCENT CAREExplanation
The correct answer is CONVALESCENT CARE. Convalescent care refers to the care provided to individuals who are recovering from an illness or surgery and need assistance with daily activities. It is not typically included as a standard level of care in a long-term care (LTC) policy, which typically covers intermediate care, custodial care, and skilled nursing care.Rate this question:
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- 29.
All of the following is required on a life insurance application, EXECPT:
- A.
HEALTH HISTORY
- B.
AMOUNT OF OTHER LIFE INSURANCE IN FORCE
- C.
AGE OF THE INSURED
- D.
THE AMOUNT OF DISABILITY INCOME INSURANCE IN FORCE
Correct Answer
D. THE AMOUNT OF DISABILITY INCOME INSURANCE IN FORCEExplanation
On a life insurance application, the health history, amount of other life insurance in force, and age of the insured are all required pieces of information. However, the amount of disability income insurance in force is not necessary for a life insurance application.Rate this question:
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- 30.
All of the following statements regarding survivorship life insurance are true, EXCEPT:
- A.
It is particularly well stuated to provide cash to cover estate taxes
- B.
The policy face amounts are usually for more than 1,000
- C.
it offers premiums that are quite low compared to what you would be charged for seperate policies
- D.
The policy face amount is made out based only on the death of the first to die
Correct Answer
D. The policy face amount is made out based only on the death of the first to dieExplanation
Survivorship life insurance is a type of policy that covers two individuals, typically spouses, and pays out the death benefit only after both insured individuals have passed away. This type of insurance is commonly used to provide cash to cover estate taxes upon the death of the second insured individual. The policy face amounts are usually for more than $1,000, and it offers lower premiums compared to separate policies for each individual. Therefore, the statement "the policy face amount is made out based only on the death of the first to die" is not true, as survivorship life insurance pays out after the death of both insured individuals.Rate this question:
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- 31.
Which of the following is not an option for the use of the policy dividends?
- A.
Fund the distrubution of monthly income payment
- B.
PURCHASE PAID UP ADDITIONS
- C.
REDUCE THE CURRENT PREMIUM
- D.
PURCHASE ONE YEAR TERM INSURANCE
Correct Answer
A. Fund the distrubution of monthly income paymentExplanation
The policy dividends cannot be used to fund the distribution of monthly income payments. Policy dividends are usually paid out to policyholders as a return of premium or as a share of the insurance company's profits. They can be used to purchase paid-up additions, reduce the current premium, or purchase one-year term insurance, but not for the distribution of monthly income payments.Rate this question:
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- 32.
What information can a party to a contract of insurance be allowed NOT to communicate according to California law?
- A.
INFORMATION THE OTHER PARTY ALREADY KNOWS
- B.
INFORMATION NOT SPECIFICALLY ASKED BY AN AGENT AND COMPANY, EVEN IF ITS CONSIDERED RELEVANT
- C.
INFORMATON WHICH IS MATERIAL TO THE CONTRACT
- D.
INFORMATION WHICH CANNOT BE PROVEN BUT IS MATERIAL
Correct Answer
A. INFORMATION THE OTHER PARTY ALREADY KNOWSExplanation
According to California law, a party to a contract of insurance is allowed not to communicate information that the other party already knows. This means that if both parties are already aware of certain information, there is no obligation to communicate it again.Rate this question:
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- 33.
Which of the following (recall) provisions of a disability contract is likely to change the contract least and cost the most?
- A.
CONTINIOUS INDEMNITY CONTRACT
- B.
NON-CANCELABLE CONTRACT
- C.
GUARANTEED RENEWABLE CONTRACT
- D.
EXPENSE ARRANGEMENT
Correct Answer
B. NON-CANCELABLE CONTRACTExplanation
A non-cancelable contract is likely to change the contract least and cost the most. This is because a non-cancelable contract guarantees that the insurer cannot cancel or change the terms of the policy as long as the premium is paid on time. This provides the policyholder with stability and assurance that their coverage will remain the same throughout the duration of the contract. However, this level of security comes at a higher cost compared to other provisions, as the insurer takes on a greater risk by offering such a guarantee.Rate this question:
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- 34.
According to California Insurance code, a judgement agaginst an applicant who enterd a plea of "nolo contendere" is considered to be:
- A.
Innocent by code, but guilty by law
- B.
Innocent
- C.
Referred to the Insurance Commisioner for opinion
- D.
Convicted
Correct Answer
D. ConvictedExplanation
According to the California Insurance code, a judgment against an applicant who entered a plea of "nolo contendere" is considered to be "convicted." This means that even though the applicant did not admit guilt, the judgment still treats them as if they were found guilty.Rate this question:
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- 35.
The policy provision which prevents an insurer from voiding a policy for misstatements after 2 years is:
- A.
Incontestabilty
- B.
Indemnity
- C.
Misrepresentation
- D.
There is no such provision
Correct Answer
A. IncontestabiltyExplanation
The correct answer is Incontestability. This policy provision prevents an insurer from voiding a policy for misstatements made by the insured after a specific period of time, usually 2 years. It provides a level of protection to the insured, ensuring that their policy cannot be cancelled or voided based on innocent or unintentional misstatements made during the application process. After the incontestability period has passed, the insurer cannot use misrepresentations as grounds for policy cancellation or denial of claims.Rate this question:
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- 36.
The clause that rotects the proceeds of a life insurance policy from attachment by creditors after the death of the insured is:
- A.
Common disaster clause
- B.
Spendthrift trust clause
- C.
Icontestability clause
- D.
Beneficiary clause
Correct Answer
B. Spendthrift trust clauseExplanation
The correct answer is the Spendthrift trust clause. This clause protects the proceeds of a life insurance policy from being attached by creditors after the death of the insured. It establishes a trust that restricts the beneficiary's access to the funds, preventing them from being used to satisfy the beneficiary's debts or obligations. Instead, the funds are managed by a trustee who distributes them to the beneficiary in a manner that ensures their financial security and prevents them from being seized by creditors.Rate this question:
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- 37.
An association of industry specific employers who are joined together in order to qualify for, or gain premium advantages, in group insurance is:
- A.
MEWA
- B.
MEC
- C.
MET
- D.
MIB
Correct Answer
C. METExplanation
MET stands for Multiple Employer Trust, which is an association of industry-specific employers who join together to qualify for or gain premium advantages in group insurance. This allows smaller employers to pool their resources and negotiate better insurance rates and benefits for their employees. By joining a MET, employers can access the benefits of a larger group, similar to those offered by a large corporation, which can help reduce costs and provide more comprehensive coverage.Rate this question:
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- 38.
Which of the following gives individuals the right to purchase additional life insurance regardless of their insurability?
- A.
Incontestabilty
- B.
Accelerated death benefit
- C.
Guaranteed insurability
- D.
Waiver of premium
Correct Answer
C. Guaranteed insurabilityExplanation
Guaranteed insurability gives individuals the right to purchase additional life insurance regardless of their insurability. This means that even if the individual's health or other factors change, they can still obtain more life insurance coverage without having to go through the underwriting process again. It provides flexibility and ensures that individuals can increase their coverage as their needs change over time.Rate this question:
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- 39.
Under a disability insurance policy, an insured is eligible for a waiver of premium benefit:
- A.
Under the age 65
- B.
After the first six months of disability
- C.
During maternity leave
- D.
During delayed retirement
Correct Answer
B. After the first six months of disabilityExplanation
After the first six months of disability, an insured is eligible for a waiver of premium benefit under a disability insurance policy. This means that the insured does not have to pay the premiums for the policy during the period of disability after the initial six months. This benefit helps to alleviate the financial burden on the insured during a time when they are unable to work due to their disability.Rate this question:
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- 40.
Which is NOT part of transacting insurance?
- A.
Solicitation
- B.
Establishing a list of clients
- C.
Negotiation
- D.
Execution of a contract
Correct Answer
B. Establishing a list of clientsExplanation
Establishing a list of clients is not part of transacting insurance. Transacting insurance involves various activities such as solicitation, which refers to the act of seeking potential clients for insurance policies. Negotiation is also a crucial part of transacting insurance, as it involves discussing and finalizing the terms and conditions of the insurance contract. Lastly, the execution of a contract is essential to complete the insurance transaction. However, establishing a list of clients is not directly related to the process of transacting insurance, as it focuses more on marketing and building a customer base.Rate this question:
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- 41.
An insurer organized under the laws of the State of California is a:
- A.
Domestic insurer
- B.
Foriegn Insurer
- C.
Non-alien insurer
- D.
Non-admitted insurer
Correct Answer
A. Domestic insurerExplanation
A domestic insurer refers to an insurance company that is organized and operates under the laws of a specific state. In this case, since the insurer is organized under the laws of the State of California, it is considered a domestic insurer.Rate this question:
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- 42.
An insured and beneficiary wants to recieve $2,000 per month until the principal and interest are exhausted. Which settlement option should be chosen?
- A.
Fixed amount option
- B.
Cash option
- C.
Fixed period option
- D.
Interest option
Correct Answer
A. Fixed amount optionExplanation
The insured and beneficiary should choose the fixed amount option. This option allows them to receive a specific amount of $2,000 per month until the principal and interest are exhausted. This ensures a steady and predictable income stream for the insured and beneficiary, meeting their desired monthly payment requirement.Rate this question:
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- 43.
An insured an benificiary die in a car accident and it is impossible to determine who died first. Who will recieve the life proceeds?
- A.
The insured's estate
- B.
The insuranc ecompany retains the proceeds
- C.
The beneficiary's estate
- D.
Both the insured's and beneficiary's estate will share
Correct Answer
A. The insured's estateExplanation
In this scenario, if it is impossible to determine who died first, the general rule is that the insured is presumed to have outlived the beneficiary. Therefore, the insured's estate would receive the life proceeds.Rate this question:
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- 44.
Which of the following applies to the social insurance program know as social security?
- A.
Contributions are compulsory for most workers
- B.
Benefits are based upon a contract with the insured
- C.
Benefits are paid to each individual matching their contributions
- D.
All insured workers begin to recieve benefits at age 65
Correct Answer
A. Contributions are compulsory for most workersExplanation
The social insurance program known as social security requires most workers to make compulsory contributions. This means that individuals are required by law to contribute a portion of their income towards the social security program. These contributions are used to fund the benefits provided by the program, such as retirement benefits, disability benefits, and survivor benefits. The compulsory nature of the contributions ensures that the program has a steady source of funding to provide these benefits to eligible individuals.Rate this question:
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- 45.
Any person who diverts or misappropriates fiduciary funds is guilty of:
- A.
Misrepresentation
- B.
Forgery
- C.
Fraud
- D.
Theft
Correct Answer
D. TheftExplanation
If a person diverts or misappropriates fiduciary funds, it means they are taking funds that they are entrusted with for their own personal use or benefit, rather than using them for their intended purpose. This action is considered theft because it involves unlawfully taking someone else's property, in this case, the fiduciary funds.Rate this question:
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- 46.
A probationary period in a group health policy is intended for people:
- A.
Who decline to join the group during the eligibility period
- B.
With other coverage after the qualifying event
- C.
With a pre-existing condition when the joined the group
- D.
Who joined the group after the effective date
Correct Answer
D. Who joined the group after the effective dateExplanation
The probationary period in a group health policy is designed for individuals who joined the group after the effective date. This means that if someone becomes a member of the group health policy after the policy's effective date, they may be subject to a probationary period before certain benefits become available to them. During this probationary period, the individual may have limited coverage or may not be eligible for certain benefits. This provision is in place to prevent individuals from joining the group only when they need immediate medical attention and then dropping out once their needs are met.Rate this question:
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- 47.
An insure, owned by policyholders is:
- A.
Fraternal insurer
- B.
Capitol stock insurer
- C.
Mutal insurer
- D.
Reciprocal insurer
Correct Answer
C. Mutal insurerExplanation
A mutual insurer is owned by its policyholders, who are also the beneficiaries of the company's profits. Policyholders contribute premiums and share in the company's financial success through dividends or reduced premiums. This ownership structure allows mutual insurers to prioritize the interests of their policyholders rather than external shareholders. Mutual insurers often have a long-term perspective and focus on providing stable and affordable coverage to their policyholders.Rate this question:
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- 48.
Physicians and surgeons services, whether provided in a hospital, or elsewhere:
- A.
Are covered by Medicare Part B. There is a charge for the coverage
- B.
Are covered by Medicare part A. There is no charge for the coverage
- C.
Are covered by Medicare Part A. There is a charge for the coverage
- D.
Are covered by Medicare Part 6. There is no charge for the coverage
Correct Answer
A. Are covered by Medicare Part B. There is a charge for the coverageExplanation
Physicians and surgeons services are covered by Medicare Part B, which is a specific part of Medicare that covers outpatient medical services. Unlike Medicare Part A, which covers hospital stays and has no charge for coverage, Medicare Part B requires individuals to pay a premium for the coverage. Therefore, the correct answer is that physicians and surgeons services are covered by Medicare Part B with a charge for the coverage.Rate this question:
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- 49.
COBRA applies to employers with at least:
- A.
80 employees
- B.
20 employees
- C.
40 employees
- D.
60 employees
Correct Answer
B. 20 employeesExplanation
COBRA, which stands for Consolidated Omnibus Budget Reconciliation Act, is a federal law that allows employees to continue their health insurance coverage after leaving their job. The law applies to employers with at least 20 employees. Therefore, the correct answer is 20 employees.Rate this question:
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- 50.
All of the following are valid reasons for the Insurance Commissioner to deny the applicant for an insurance license, EXCEPT:
- A.
Applicant does not have a good business reputation
- B.
Applicant is not properly qualified to perform duties
- C.
Applicant does not have a California business address
- D.
Applicant lacks integrity
Correct Answer
C. Applicant does not have a California business addressExplanation
The Insurance Commissioner can deny an applicant for an insurance license for various reasons, such as not having a good business reputation, not being properly qualified to perform duties, or lacking integrity. However, the absence of a California business address is not a valid reason for denial.Rate this question:
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Current Version
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Mar 21, 2023Quiz Edited by
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Nov 19, 2011Quiz Created by
Anansalee
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