The Ultimate Life & Health Practice Test III

The California Life and Health Insurance Guarantee Association is described as an organization that aims to protect the life and health owners and insureds in the event of impairment or insolvency of a member insurer. This means that if an insurance company becomes financially unstable or unable to fulfill its obligations, the association will step in to ensure that policyholders are still provided with coverage and benefits.

Jamie will be able to collect disability income benefits from Social Security. Social Security provides disability benefits for individuals who are unable to work due to a severe medical condition that is expected to last for at least one year or result in death. Since Jamie is completely paralyzed and the doctors believe she will not recover from her injuries, she meets the criteria for Social Security disability benefits.

Juan, as an irrevocable beneficiary, has vested rights to the policy proceeds. This means that he has a legal claim to the benefits and unless he gives consent, neither the policy owner nor any creditors can affect those rights. This ensures that Juan's rights to the policy proceeds are protected and cannot be changed or taken away without his consent.

The principle of indemnification refers to the act of restoring an individual to the condition they were in prior to a loss or damage. This means that the person is compensated in such a way that they are made whole again, as if the loss or damage never occurred. It is a form of insurance that aims to provide financial protection and ensure that the insured is not left in a worse position after a loss.

The correct answer is "Mutual" because a mutual insurance company is owned by its policyholders, who are referred to as "participating" shareholders. This means that the policyholders have the potential to receive dividends from the company's profits.

Julie is exercising her implied authority if she performs acts that are not specifically named in the written contract with Silver Dollar Insurance Company. Implied authority refers to the authority that is not explicitly stated in the contract but is reasonably assumed to be granted based on the nature of the agency relationship. In this case, Julie's position as a licensed insurance salesperson representing Silver Dollar Insurance Company implies that she has the authority to perform certain acts necessary for her role, even if they are not explicitly mentioned in the contract.

The correct answer is the description where the premium increases as the insured grows older, and after several years, the coverage and premiums end simultaneously without creating any cash value. This is characteristic of a term policy, where the coverage is provided for a specific term or period of time, and there is no cash value accumulation.

Variable life insurance policies and variable annuities are primarily governed by the SEC, which stands for the Securities and Exchange Commission. The SEC is responsible for regulating and overseeing the securities industry, including investment products such as variable life insurance policies and variable annuities. These products involve investment components, and the SEC ensures that they comply with relevant securities laws and regulations to protect investors. The FBI, EPO, and NAIC do not have jurisdiction over securities and investment products, making the SEC the correct answer.

The company will respond to the claim by paying it because the loss occurred within the grace period. Even though the insured did not renew the policy and did not pay the premium, the company still considers the claim valid because it was submitted within the grace period. The grace period is a specified period of time after the premium due date during which the policy remains in force, allowing the insured to submit a claim. Therefore, in this case, the company will honor the claim and cover the medical expenses.

In medical expense insurance policies, the concept of usual, customary and reasonable (UCR) refers to the method of determining the amount that will be paid in benefits. This approach takes into consideration the costs of similar services provided by healthcare professionals in the same local geographical area. It helps to ensure that the amount paid for medical expenses is fair and reasonable based on the prevailing rates in the area.

When an additional amount of premium is used to pay for an accidental death benefit provision, it means that the policyholder is paying extra for an additional coverage specifically for accidental death. This provision does not contribute to the cash value of the policy because it is a separate benefit that only pays out in the event of accidental death. Therefore, the statement is true.

The correct answer is "All of the above" because policy riders such as accidental death and dismemberment, waiver of premium, and cost of living are commonly included in life insurance policies. These riders provide additional benefits and coverage options to policyholders. Accidental death and dismemberment rider pays out a benefit if the insured dies or suffers a severe injury due to an accident. Waiver of premium rider waives the premium payments if the insured becomes disabled. Cost of living rider adjusts the policy's death benefit to keep up with inflation.

A variable annuity is a type of annuity where the owner purchases accumulation units to fund their retirement in a few years. In this type of annuity, there is a separate account that maintains the funds. The value of the variable annuity fluctuates based on the performance of the investments made by the separate account. This allows for potential growth in the investment and flexibility in choosing investment options. Therefore, the correct answer is variable.

The explanation for the correct answer, True, is that any entity that offers coverage for medical expenses in California is under the jurisdiction of the Department of Insurance, unless it can demonstrate that it falls under the jurisdiction of another government agency. This means that the Department of Insurance has authority over regulating and overseeing these entities to ensure compliance with relevant laws and regulations.

A morbidity table provides statistical data relating to the probability of a disability occurring. It is used in insurance and healthcare industries to assess the likelihood of an individual experiencing a disability or illness. This data helps in determining insurance premiums, designing healthcare policies, and understanding the overall health of a population. Mortality tables, on the other hand, provide statistical data relating to the probability of death occurring. Therefore, the correct answer is the Morbidity table.

Contributory group life insurance is a type of insurance where both the employer and the employee contribute to the premium payments. This means that the employee will have to pay a portion of the premium, usually deducted from their paycheck, in order to maintain the coverage. The employer may also contribute to the premium, but the employee's contribution is a necessary part of the insurance arrangement. Therefore, the statement "The employee will contribute to the premium payments" is true.

The death benefit paid to a beneficiary in a lump sum is not subject to federal income taxes. This is because the death benefit is considered a tax-free transfer of wealth and is not included in the beneficiary's taxable income.

When applying for insurance, there can be three different individuals involved: the owner of the contract, the insured, and the applicant. In some cases, these three roles can be fulfilled by three different individuals, meaning that each role is taken on by a separate person. However, it is also possible for the same person to fulfill all three roles, acting as both the owner of the contract, the insured, and the applicant. Therefore, both options 1 and 2 are correct.

When the owner of a life insurance policy elects to pay an annual premium, she will pay less as compared to paying premiums every 6 months. This is because the insurance company usually offers a discount or lower rate for policyholders who choose to pay their premiums annually. By paying annually, the policyholder avoids the administrative costs and processing fees that may be associated with more frequent premium payments. Therefore, paying annually is a cost-effective option for the policyholder.

An irrevocable beneficiary has certain rights to policy proceeds that revocable beneficiaries do not have. One such right is that the policyowner must obtain permission from the irrevocable beneficiary before borrowing from the cash value of the policy. This means that the irrevocable beneficiary has a level of control and protection over the policy proceeds that revocable beneficiaries do not possess. Therefore, the statement that an irrevocable beneficiary has certain rights to policy proceeds not shared by revocable beneficiaries is true.

The correct answer is "Guaranteed renewable" because this type of policy allows the insurer to change the premium for all insureds in a class, but it prohibits the company from refusing to renew or canceling the policy. This means that the insured has the guarantee that their policy will be renewable as long as they continue to pay the premium, regardless of any changes made by the insurer.

The "elimination period" in disability insurance contracts refers to a specific number of days or months that must pass after the onset of a disability before any payment of benefits can begin. This means that the insured individual must wait for a certain period of time before they become eligible to receive insurance coverage. During this elimination period, no benefits will be paid. Once the elimination period has passed, the insured individual can start receiving benefits if the disability continues.

All types of risks, including sub-standard, preferred, and standard, are acceptable to the underwriting department of an insurance company. The underwriting department is responsible for assessing and evaluating risks associated with potential policyholders. While sub-standard risks may have higher chances of claims, preferred risks have lower risks, and standard risks fall in between. The department's role is to determine appropriate premiums and coverage based on the level of risk. Therefore, all three categories of risks are considered acceptable and can be underwritten by the insurance company.

The cash value of a non-par whole life policy typically increases over time as the policy owner makes premium payments. In this case, the policy owner has just made the last premium payment, so the cash value will continue to grow until the policy owner reaches the age of 100. At that point, the cash value should reach $250,000.

Insurers include coordination of benefits provisions in their policies to avoid the problem of over-insurance. This provision ensures that multiple insurance policies covering the same risk do not result in the insured receiving more than the actual loss or expenses incurred. It helps determine which policy is primary and which is secondary, preventing duplication of coverage and potential overpayment. By coordinating benefits, insurers can effectively manage claims and ensure fair and appropriate compensation for the insured.

The correct answer is that this is an on-the-job injury. This means that Teresa's injury occurred while she was working at her company's plant, making it an occupational injury. As a result, her non-occupational group health plan will not cover the expenses related to this injury.

The "blackout period" in the life insurance planning process refers to the period of time when a surviving spouse does not receive any Social Security benefits. This means that there is a gap in the receipt of these benefits, which can have financial implications for the surviving spouse. It is important to consider this blackout period when planning for life insurance coverage to ensure that the surviving spouse is adequately protected during this time.

not-available-via-ai

A cost of living adjustment rider can be used by the insured to offset the effects of inflation on the purchasing power of benefits received from a disability income policy. This rider ensures that the benefits increase over time to keep pace with the rising cost of living, helping to maintain the insured's standard of living despite inflation. It provides a valuable safeguard against the eroding effect of inflation on the value of disability income benefits.

The statement is true because it states that a health insurance carrier can change the wording in its contracts as long as the new wording is equally beneficial to the insured individuals and beneficiaries. This allows the carrier to modify the language in the contracts to better suit their needs or comply with any changes in the law, while still ensuring that the insured individuals and beneficiaries are not negatively affected by these changes.

In this scenario, if Bertha files a medical claim, Arnold's company is considered the secondary insurer. This means that Bertha's company will be the primary insurer and will pay the benefits first. Arnold's company will then pay any remaining expenses that are not covered by Bertha's company. This is how the coordination of benefits provision works in both plans.

not-available-via-ai

The location of the insured is not a factor in determining premiums charged for group disability income insurance. Factors such as the average age of all members of the group, the waiting or elimination period of the policy, and the duration of the benefits play a role in determining the premiums. However, the geographical location of the insured does not directly impact the cost of the premiums.

The best way to define the concept of "indemnity" is that an insured cannot receive more than an actual economic loss in the event of a claim. This means that the purpose of insurance is to compensate the insured for their actual financial loss and not to provide them with a profit or gain from the claim. The principle of indemnity ensures that the insured is restored to the same financial position they were in before the loss occurred.

Insurable interest is required to exist at the time the policy is written but not necessarily at the time of death. This means that the policyholder must have a financial or emotional interest in the life of the insured individual when the policy is purchased, but this interest does not need to continue until the insured person's death. This requirement ensures that life insurance is not used for speculative purposes and that the policyholder has a legitimate reason to be insured.

Per capita is the best beneficiary designation in this case. Per capita means that each individual beneficiary receives an equal share of the benefit. If any of the children die before the insured, the remaining children will still receive an equal share, divided among them. This ensures that each child is treated equally and that their share is not affected by the death of another beneficiary.

A participating policy is a type of life insurance policy that gives the owner the right to share in the insurer's profits in the form of a dividend. This means that the policyholder not only receives the death benefit but also has the potential to earn additional income based on the insurer's financial performance. The dividends are typically paid out annually and can be used by the policyholder in various ways such as reinvesting, reducing premiums, or receiving cash payments. This feature makes participating policies attractive to individuals who want to participate in the success of the insurance company.

A family life insurance policy that provides coverage for children cannot be converted to permanent insurance for the children, and evidence of insurability is not required.

The correct answer is the insured decides to cease paying premiums on his $100,000 cash value policy. He uses the cash value to buy a paid-up policy of $40,000 face amount. This option is the best description of a reduced paid-up non-forfeiture option because the insured stops paying premiums on their current policy and uses the cash value to purchase a new paid-up policy with a reduced face amount. This allows the insured to maintain some coverage without having to continue making premium payments.

The given answer states that there is no provision for services to be covered without the approval of the gatekeeper. This means that the gatekeeper has full control over authorizing or denying coverage for any services. This characteristic implies that the gatekeeper system is designed to have strict oversight and control over the healthcare services provided to the insured.

The correct answer is "Yes, and if the insurer approves the application they must appoint Ben within 14 days." This means that Ben can submit an application to Rock Solid Insurance Company without having an appointment. If the application is approved by the insurer, they are required to appoint Ben within 14 days. This suggests that Rock Solid Insurance Company does not require exclusive representation and is open to working with agents who do not have prior appointments.

The given answer is the only option that is not a legal activity in the state of California. The other options, such as disregarding age in insurance rates and refusing to apply the practice of twisting in sales, are legal activities in the state.

The disability benefits provided by Social Security are not meant to entirely replace a worker's lost earnings.

Health Maintenance Organizations (HMOs) offer both basic health care services and health care financial coverage. This means that individuals who are part of an HMO have access to essential medical services such as doctor visits, hospital stays, and preventive care. Additionally, HMOs provide financial coverage for these services, which can help to reduce out-of-pocket costs for members. Therefore, both statements 1 and 2 are true.

Health Maintenance Organizations (HMOs) are not required by law to provide prescription drugs as part of their services. While HMOs typically offer a range of healthcare services to their members, including prescription drug coverage, there is no legal mandate for them to do so. The provision of prescription drugs as part of HMO services is determined by the specific plan and coverage options chosen by the individual or employer. Therefore, the statement that HMOs are required by law to provide prescription drugs is false.

The Medical Information Bureau is supported by insurance companies. The bureau is a database that collects and shares medical information about individuals who have applied for insurance policies. Insurance companies use this information to assess the risk of insuring individuals and determine premiums. The Department of Insurance oversees insurance regulations and policies, while insurance agents sell insurance policies to individuals. However, neither the Department of Insurance nor insurance agents directly support the Medical Information Bureau.

A binding receipt is a document that provides temporary coverage for a life insurance policy during the underwriting process. It ensures that the policy will be effective from the date the receipt is given, regardless of the insurability of the applicant. This means that even if the applicant is later found to be uninsurable, the policy will still be in effect from the date of the receipt. Therefore, the statement is true.

Settlement options allow the owner of the policy to choose how death benefits will be paid by the insurer. These choices can be made by the owner of the policy at the time of application (option 1), and they can also be changed by the owner at any time before the benefits are paid (option 2). Additionally, if no settlement option was established by the owner at the time of the insured's death, the beneficiary is allowed to make the choice (option 3). Therefore, all three options are correct.

A speculative risk refers to a situation where there is a possibility of both gain and loss, making it different from pure risk where only the possibility of loss exists. In this case, the answer "Involving the possibility of a gain in addition to the uncertainty of loss" accurately describes a speculative risk as it highlights the potential for both positive and negative outcomes.

When premiums are paid into a universal life insurance policy, insurers must make certain adjustments to the cash value. In this case, the company deducts for expenses and mortality costs, which are the costs associated with administering the policy and providing the death benefit. After deducting these costs, the company then adds the current interest, which is the interest earned on the cash value of the policy. This process ensures that the cash value reflects the net amount available to the policyholder after accounting for expenses and mortality costs, while also allowing for potential growth through the addition of interest.

The statement suggests that the Commissioner has the power to rewrite certain sections of the California Insurance Code. However, this is not true. While the Commissioner does have numerous responsibilities and authority related to the Insurance Code, rewriting sections of the code is not within their jurisdiction. They can enforce and interpret the code, but any changes or revisions must go through the legislative process. Therefore, the answer is False.

Since Patrick invested $100,000 and will receive a total of $200,000 over his lifetime, the difference between the total amount received and the initial investment is $100,000. This additional $100,000 is considered a return of principal and is not taxable. Therefore, the taxable portion of each year's annuity payment is $8,000 - $4,000 = $4,000.

The correct statement about a cost of living rider is that the policy owner pays an additional premium for the extra protection the rider provides and will see the face amount of the contract increase according to the increase of the index. This means that the cost of living rider provides a form of inflation protection, as the policy's face amount will increase along with the increase in the index. The policy owner will need to pay an extra premium for this added benefit.

The correct answer is "Funds received by an insurer from an insured to realize the benefits of the policy." This is the best description of a premium because it accurately reflects the payment made by the insured to the insurer in order to obtain the benefits of the insurance policy. The premium is the amount that the insured pays for the coverage provided by the policy, and it is received by the insurer to cover the costs of providing that coverage.

The given statement is false because according to the code, "transact" does include negotiations preliminary to the execution of a contract of insurance. This means that any negotiations or discussions that happen before the insurance contract is officially signed are considered part of the "transact" process in the context of insurance.

Death benefits from life insurance policies are generally exempt from taxation. This means that when the policyholder passes away, the beneficiaries receive the death benefit payout without having to pay income tax on it. However, individual policy premiums are not tax deductible, meaning that individuals cannot claim them as a deduction on their tax returns. Additionally, policy premiums that provide benefits to employees are not tax deductible for the employer. Therefore, the correct statement is that death benefits are exempt from taxation.

A contingent beneficiary is someone who has the first right to receive the proceeds from a life insurance policy if there is no surviving primary beneficiary and the insured passes away. This means that if the primary beneficiary is no longer alive, the contingent beneficiary will be the one to receive the benefits. It is important to name a contingent beneficiary to ensure that the benefits go to the intended person in case the primary beneficiary is not able to receive them.

Disability income insurance is designed to provide financial protection to individuals who are unable to work due to a disability. In order to manage risk and ensure the financial stability of the insurance company, the underwriting department evaluates each application. They need to assess the likelihood of potential losses that may occur if the policy is issued. Therefore, they may reject applications that appear to have a higher probability of experiencing more frequent or severe losses than what the insurer's rates anticipate. This helps the insurer maintain a balanced risk pool and ensure the long-term viability of the disability income insurance program.

The term "transact" as it applies to the field of insurance includes solicitation (option 1) and negotiations preliminary to the execution of a policy (option 2). This means that both soliciting potential customers and engaging in discussions or negotiations before finalizing an insurance policy are considered part of transacting insurance. Additionally, option 3 states that transacting insurance without a valid license is a misdemeanor, indicating that it is illegal to engage in insurance transactions without the proper licensing. Therefore, all three options are correct.

The correct answer is A life and disability analyst. This is because the definition given in the California Insurance Code specifically mentions a person who offers to advise any insured with an interest in life or disability insurance contracts. This aligns with the role of a life and disability analyst who provides advice and analysis regarding life and disability insurance policies.

Personal life insurance is typically purchased to provide financial protection for the policyholder's loved ones in the event of their death. It can help replace lost income, cover funeral expenses, pay off debts, and provide for the policyholder's dependents. However, covering a buy/sell agreement is not a reason for an individual to purchase personal life insurance. A buy/sell agreement is a legal contract between business owners that outlines what will happen to a business in the event that one of the owners dies or leaves the business. In this case, life insurance would be purchased by the business, not the individual, to fund the buyout of the deceased owner's share of the business.

The correct answer is that the majority of workers in the U.S. must pay into the program. This means that a large number of employees are required to contribute a portion of their income to the Social Security program. This is done through payroll taxes, which are deducted from their wages. The program is designed to provide financial support to retired workers, disabled individuals, and the families of deceased workers. The contributions paid by workers are intended to fund these benefits. Therefore, the statement accurately reflects the requirement for most workers to contribute to the Social Security program.

In regard to health insurance issued on a group basis, the statement that all eligible members must be covered under a "non-contributory" group health plan is true. This means that the employer bears the entire cost of the insurance premiums and the employees do not have to contribute any portion of their salary towards the plan. This is different from a "contributory" plan where employees are required to contribute a portion of their salary towards the insurance premiums.

not-available-via-ai

not-available-via-ai

The "life income with 10 years certain" option means that Jennifer will receive payments for at least 120 months or for the remainder of her life, whichever is longer. This option provides a guarantee that Jennifer will receive payments for at least 10 years, even if she were to pass away before that time. If Jennifer were to live longer than 10 years, the payments would continue for the rest of her life. This option provides both a guaranteed income for a specific period and lifelong income security.

The correct answer is 1 and 3. This is because the given definition of total disability income policy states that the insured individual is unable to perform the duties of any occupation for which they are suited by reason of education, training, experience, or prior economic status. This is an "any occupation" definition, as it considers any occupation the insured individual is qualified for. Additionally, this definition is considered more restrictive because it requires the insured individual to be unable to perform any occupation they are suited for, rather than just their own occupation.

According to the terms of the suicide clause in a life insurance policy, if the insured commits suicide within 6 months of the policy being issued, the insurer will refund all the premiums paid. This means that the insurer will return the full amount of money that the insured had paid towards the premiums of the policy. This is a common practice in life insurance policies to protect the insurer from potential fraudulent claims related to suicide.

Capitation is a payment model where a service provider is paid a fixed monthly fee per patient enrolled in a healthcare plan, regardless of the services provided or the number of times the patient seeks care. This model incentivizes providers to focus on preventive care and efficient management of patients' health, as they receive a set amount regardless of the actual services rendered. It is commonly used in Health Maintenance Organizations (HMOs) to control costs and promote coordinated care.

The correct statement about the ten-day free look provision in a life insurance policy is that a full refund of premium is required if the policy is returned within 10 days of delivery. This means that if the policyholder decides to cancel the policy within the specified time frame, they are entitled to receive a full refund of the premium they paid. The second statement, on the other hand, is incorrect as the contract is not in force during the 10-day period and any claims made during this time will not be paid if the insured returns the contract.

This statement is false because the owner of the office building is not avoiding risk, but rather taking a proactive step to protect himself from a potential legal suit by getting insurance. Avoidance of risk would involve not taking any action to address the potential hazards or not acquiring insurance at all.

Life insurance rates are determined based on various factors such as investment and interest return, insurance company expenses, and mortality expenses. These factors help the insurance company calculate the premium amount that needs to be charged to provide coverage. However, policy reserves are not directly used in determining life insurance rates. Policy reserves refer to the funds set aside by the insurance company to meet future obligations under the policy, such as cash surrender value or death benefit. While policy reserves are important for the financial stability of the insurance company, they do not directly impact the calculation of life insurance rates.

A standard coinsurance clause in a health insurance policy requires the insured individual to pay a percentage of medical expenses that are covered by the policy, but only after the annual deductible has been met. This means that the insurance company will cover a certain portion of the expenses, and the insured individual will be responsible for paying the remaining percentage. The coinsurance clause helps to share the cost of medical expenses between the insurance company and the insured individual.

The correct answer is that Beth can buy more insurance without the need to prove insurability on her life at specific ages. This means that she can increase her coverage without having to go through the process of proving that she is still insurable at certain ages. This is possible because Beth has a guaranteed insurability rider on her policy, which allows her to purchase additional insurance without medical underwriting or providing evidence of insurability. This can be a valuable feature for individuals who want to increase their coverage as they age without the risk of being denied due to changes in their health.

The doctrine of "utmost good faith" in insurance means that both parties involved in the insurance contract are expected to provide complete and accurate information to each other. This includes any representations or statements made by either party. By stating that "each party is entitled to rely upon the representations of the other party," it emphasizes the importance of trust and honesty in the insurance transaction. Both parties can rely on the information provided by the other party and make decisions based on that information.

The "return of premium" rider in disability insurance allows the insured to receive a percentage of the premiums they have paid at regular intervals, as long as they remain disabled. This means that if the insured continues to be disabled, they will receive a refund of some of the premiums they have paid over time. This rider provides a financial benefit to the insured in the event that they are unable to work due to a disability.

If an applicant makes a misstatement on an insurance application with the intention to deceive the insurer, it is considered fraud. This implies that the applicant deliberately provided false information to obtain insurance coverage. On the other hand, if the misstatement is not significant or material to the insurance company's decision-making process, it may not impact the application. In this case, the misstatement is not considered fraudulent, as it does not have a substantial effect on the insurer's assessment of the applicant's risk. Therefore, both statements 1 and 2 apply to an applicant's misstatement on an insurance application.

In 1998, the agent must complete 25 hours of life and health continuing education, 8 of which are specific to long-term care (LTC) insurance. This is because the agent sells LTC insurance to individuals, so it is necessary for them to have a deeper understanding of this specific type of insurance. By completing the required hours of continuing education, the agent can stay updated on any changes or developments in the industry and provide the best service to their clients.

Annuity death benefits are not totally exempt from taxation. While some portions of annuity death benefits may be exempt from taxation, other portions may be subject to taxation depending on various factors such as the type of annuity and the circumstances of the beneficiary. Therefore, the statement that annuity death benefits are totally exempt from taxation is false.

When all renewal fees are paid but there is a termination of all appointments, the license of an agent is considered inactive. This means that even though the agent has fulfilled their financial obligations by paying the renewal fees, they no longer have any active appointments to execute transactions of insurance. Therefore, their license is inactive until new appointments are made.

The given correct answer states that a warranty is not merely made to the best of one's knowledge and can be both express and implied. Warranties can be made about events in the past, present, or future, and if either party violates a warranty, it entitles the other party to cancel the contract. However, warranties made at or during the execution of a policy must be contained in the policy, signed by the insured, and attached to the contract.

This statement is false. When the insured of a non-participating paid-up-at-age-65 life insurance policy attains the age of 65, the cash value will not equal the face amount. The cash value represents the savings component of the policy, while the face amount is the death benefit. At age 65, the cash value may be less than the face amount, depending on various factors such as policy performance and premiums paid.

A group life insurance policy is not considered ordinary insurance because it is typically offered through an employer or organization to provide coverage for a group of individuals. It is not individually underwritten and the premiums are usually paid for by the employer or shared among the group members. In contrast, the other options listed (life paid-up-at-age-55 policy, 10-year endowment contract, and term life insurance policy) are all types of individual life insurance policies that are purchased by an individual and require individual underwriting.

not-available-via-ai

The common disaster provision in insurance policies is designed to protect contingent beneficiaries. This means that if the primary beneficiary and the insured both die in the same accident or event, the contingent beneficiary will still receive the benefits. This provision ensures that the insurance coverage is not lost in the event of a common disaster, providing financial protection for the contingent beneficiaries.

Dividends paid from life insurance policies are not treated as a return of excess premium paid by the owner and are therefore not taxable.

The correct answer is "All the above are false." This means that all of the statements mentioned in the question are false about PPOs. This implies that a PPO will pay benefits even if a member chooses a non-PPO approved doctor, there may be a reduction in the payment of services if a non-PPO approved doctor is seen, and PPOs do not compensate doctors through a system called capitation, but rather through fee-for-service.

The correct answer is that both B and C are correct. This means that for administrative purposes, the insurer can make changes to the application if it is noted that the applicant did not make the change. Additionally, the applicant or the agent can also make changes to the application with the written consent of the insured. Therefore, both options B and C allow for alterations to the applications for disability insurance.

The California Insurance Code would find "Harris Insurance Services" acceptable when publishing Chuck Harris's name because it does not include any misleading or false information about his designation or imply that he is an insurance company or part of one.

The correct answer is to pay the renewal billing notice the Department sends out 90 days before the renewal date. This indicates that the life agent's license is renewed by paying the renewal fee after receiving the renewal billing notice from the Department 90 days before the renewal date.

Survivorship life or second-to-die policies are effectively used to cover the costs of estate taxes because they provide a death benefit that is paid out when the second insured person dies. This allows the policy to provide funds to cover any estate taxes that may be owed upon the death of the second insured. These policies are also typically issued in excess of $1 million in most cases because they are often used by wealthy individuals who have large estates and significant estate tax liabilities. Therefore, the combination of covering estate taxes and being issued in large amounts supports the selection of options 1 and 2 as the correct answer.

Jose is covered by an occupational policy because it provides disability income benefits if he is injured while working or at home. This type of policy specifically covers injuries that occur in the workplace or during work-related activities, as well as injuries that happen at home but are directly related to his occupation.

The term "consideration" refers to the payment made by the insured to the insurance company in exchange for the insurance policy. It can be in the form of premium payments. None of the options provided in the question accurately describe the term "consideration" in relation to the issuance of an insurance policy.

The correct answer is "Pays only if the insured is not entitled to benefits from social insurance." This means that the Social Security rider will only provide additional payment if the insured is not already receiving benefits from social insurance. This rider is designed to fill in the gaps and provide additional coverage for individuals who do not qualify for social insurance benefits.

The correct answer is 2 only. This is because the California Insurance Code is essentially the body of laws that govern the insurance business in the state. It does not include any regulations issued by the Commissioner or specific sections related to different types of insurance.

not-available-via-ai

The options listed are all examples of dividend options available on a whole life insurance policy, except for the "Life income with period certain" option. This option is not related to dividends, but rather refers to a payout option for the policyholder, where they receive a guaranteed income for life with a specified period of time. Dividend options, on the other hand, allow policyholders to choose how they want their dividends to be used, such as applying them to reduce premiums, purchasing paid-up additions, or opting for a one-year term option.

The correct answer is a, b and c are false. The California Insurance Code defines a "life agent" as none of the options provided. It is not an insurance broker, an insurance agent, or a person authorized to aid an insurance agent to solicit life insurance. Therefore, all options a, b, and c are incorrect.

The correct answer is 2 only because the explanation states that the regulation allows a senior citizen a minimum of 30 days to return a life or annuity contract to the insurer and receive a full refund of the premium. It does not mention anything about group plans or the age requirement of 65 years.

The period of time mentioned in the question, where no benefits will be paid out if an illness occurs within the first 30 days after the policy's effective date, is referred to as an "Illness waiver." This waiver exempts the insurance company from providing coverage for any illnesses that arise during this specific time frame.