Life & Health - Practice Exam 3

Variable life insurance policies and variable annuities are primarily governed by the SEC, which stands for the Securities and Exchange Commission. The SEC is a regulatory agency responsible for enforcing federal securities laws and protecting investors in the United States. Since variable life insurance policies and variable annuities involve investments in securities, the SEC plays a crucial role in overseeing these products to ensure they comply with regulations and provide adequate protection to consumers.

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 cost of the loss. It helps determine the primary and secondary insurers, preventing duplication of coverage and ensuring that the insured is not over-compensated. By coordinating benefits, insurers can effectively manage claims and avoid excessive payouts.

The given answer is "Eliminate the risk of sickness". Insurance policies can provide various benefits to the insured, such as helping protect from the possibility of a loss, reducing the uncertainty of financial loss, and replacing a large possible loss with that of a small certain loss through premium payments. However, insurance policies typically do not eliminate the risk of sickness entirely. While health insurance can cover medical expenses related to sickness, it does not eliminate the risk of getting sick in the first place.

The given statement is true. According to the code, insurance companies are allowed to ask applicants questions that are not directly related to underwriting but are meant to gather marketing information. However, it is important that the applicant is informed about such practices. This allows insurance companies to collect data for marketing purposes while ensuring transparency and consent from the applicant.

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The incontestable clause of a life insurance policy prevents the insurer from canceling the policy if, after 2 years, there is a discovery of error, concealment, or misstatement by the policy owners. This means that once the policy has been in force for 2 years, the insurer cannot use any inaccuracies or omissions in the policy application as grounds for cancellation. This clause provides protection and stability for the policy owners, ensuring that their coverage cannot be revoked due to unintentional mistakes or omissions made during the application process.

A third-party administrator is an independent company that provides administrative services for a company's self-funded plans. This means that they handle various tasks such as processing claims, managing enrollment, and providing customer service for the company's health insurance plans. They are not affiliated with the insurance company or the life agent, but rather work independently to support the company's self-funded plans.

Usual, customary and reasonable (UCR) is the concept where medical expense insurance policies determine the amount that will be paid in benefits based on the costs of like services provided by health care professionals in the same local geographical area. This means that the insurance company will only pay for medical expenses that are considered usual, customary, and reasonable within the specific area. It helps to standardize the costs of medical services and ensure that the insurance company is not overpaying for certain treatments or procedures.

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 receives a portion of the insurer's profits. The dividends can be taken in cash, used to reduce premiums, or reinvested to earn interest. This type of policy allows the policyholder to benefit from the financial success of the insurance company.

A Multiple Employer Trust is a group of small businesses that come together to qualify for group insurance benefits. By forming this trust, these businesses can leverage their collective size to obtain better insurance rates and coverage options that may not be available to them individually. This allows them to provide their employees with affordable and comprehensive insurance plans, similar to what larger corporations can offer. This arrangement helps small businesses compete with larger companies in attracting and retaining employees.

The correct answer is that the Social Security system is only meant to be a supplement to an individual's major income; it only supplies a minimum floor of income. This means that the system is not designed to provide a person's entire income, but rather to provide a basic level of support. It is intended to supplement other sources of income, such as pensions or savings.

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All types of risks, including sub-standard, preferred, and standard risks, are acceptable to the underwriting department of an insurance company. The underwriting department assesses and evaluates risks to determine the premium rates and coverage options for the policyholders. Each type of risk may have different characteristics and may require different underwriting criteria, but they are all considered acceptable risks for the insurance company to insure.

Paying an annual premium means that the policyholder only needs to make one payment per year, while paying premiums every 6 months requires two payments per year. Therefore, by choosing to pay annually, the policyholder will pay less in total compared to paying premiums every 6 months.

Disability income insurers consider a potential insured's occupation as an underwriting factor because the degree of risk associated with that occupation directly impacts the likelihood of the insured becoming disabled and making a claim. Certain occupations may have higher risks of accidents, injuries, or health issues, which increases the chances of a disability occurring. By assessing the degree of risk of those in a particular occupation, insurers can determine the potential frequency and severity of claims, enabling them to price policies accurately and manage their risk exposure effectively.

Every licensee is required to indicate their license number on print advertisements, business cards, and written price quotations. This is important in order to provide transparency and allow potential clients or customers to verify the license status of the licensee. By including the license number on these documents, it ensures that the licensee is operating legally and can be held accountable for their actions.

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If Bertha files a medical claim, Arnold's company is considered secondary. This means that Bertha's company will be the primary insurer and will be responsible for paying the majority of the medical expenses. Arnold's company will only cover the remaining costs that are not covered by Bertha's insurance.

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 location of the insured does not impact the premiums charged for group disability income insurance.

The principle of indemnification refers to the process of restoring an individual to the same financial position they were in before a loss or damage occurred. This means that the person is compensated for their loss in a way that they are returned to the same state they were in prior to the incident. By doing so, they are made whole again and not left at a disadvantage due to the loss.

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

Juan, as an irrevocable beneficiary, has vested rights to the policy proceeds. This means that he has a legal claim to the proceeds and they cannot be affected by the policy owner or any creditors without his consent. This ensures that Juan's rights to the policy proceeds are protected and cannot be easily changed or taken away without his agreement.

An irrevocable beneficiary has certain rights to policy proceeds that are not shared by revocable beneficiaries. 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 control over the policy and its benefits, whereas revocable beneficiaries do not have the same level of control. Therefore, the statement is true.

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 can access essential medical services such as doctor visits, hospital stays, and preventive care. Additionally, HMOs provide financial coverage, which helps individuals cover the costs associated with their health care needs. Therefore, both statements 1 and 2 are true.

All eligible members must be covered under a "non-contributory" group health plan means that every employee who is eligible for the health insurance must be included in the plan without having to contribute any portion of the premium. This implies that the employer bears the entire cost of the insurance for all eligible employees.

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. Non-occupational group health plans typically do not cover injuries that occur on the job, as they are usually covered by workers' compensation insurance instead. Therefore, the hospital will not be paid by Teresa's non-occupational policy.

A speculative risk is a type of risk that involves the possibility of both gain and loss. Unlike pure risks, which only involve the possibility of loss, speculative risks offer the potential for a positive outcome or profit. This can include activities such as investing in the stock market or starting a new business venture, where there is a chance of making money but also a risk of losing it.

Ben can submit an application to Rock Solid Insurance Company from a prospect even without having an appointment. If the insurer approves the application, they are required to appoint Ben within 14 days.

The company will pay the claim 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 honors claims that occur within the grace period after the premium due date. In this case, the insured submitted the claim on the 8th day after the premium due date, which falls within the grace period, so the company will pay the claim.

The correct answer is "Pre-existing conditions exclusion." This refers to a clause in health and disability insurance policies that denies coverage for conditions that were experienced before the policy became effective. This means that any medical conditions or illnesses that a person had prior to obtaining the insurance will not be covered for a specified period of time.

The disability benefits provided by Social Security are not meant to entirely replace a worker's lost earnings. Instead, these benefits are designed to provide financial assistance to individuals who are unable to work due to a total and permanent disability. The amount of benefits received is determined by the worker's earnings up to the time of disability, and the disability must continue for benefits to continue.

The Medical Information Bureau is supported by insurance companies. This is because the Medical Information Bureau is a nonprofit organization that collects and stores medical information on individuals for the purpose of sharing it with member insurance companies. The information collected by the Medical Information Bureau helps insurance companies assess the risk of insuring individuals and make more informed underwriting decisions. Therefore, insurance companies have a vested interest in supporting and utilizing the services provided by the Medical Information Bureau.

A binding receipt in the context of life insurance means that the coverage becomes effective as soon as the receipt is issued, regardless of the insurability of the applicant. This means that even if the applicant's insurability changes after the receipt is given, the coverage will still be in effect. Therefore, the statement is true.

This description matches the features of a waiver of premium rider. With this rider, the policy owner does not have to pay the premiums anymore, but the dividends and cash value of the policy still continue to accumulate. This rider is typically used when the policy owner becomes disabled or unable to work and is unable to pay the premiums.

The correct answer is "All of the above" because policy riders are additional provisions that can be added to a life insurance policy to enhance its coverage. Accidental death and dismemberment rider provides additional benefits if the insured dies or becomes disabled due to an accident. Waiver of premium rider waives the premium payments if the insured becomes disabled and unable to work. Cost of living rider increases the death benefit to keep up with inflation. Therefore, all three options mentioned in the question are common policy riders frequently found in life insurance policies.

The correct answer is $4,000. The taxable amount of each year's annuity payment is determined by the exclusion ratio. The exclusion ratio is calculated by dividing the after-tax investment in the annuity by the expected total return over the life of the annuity. In this case, Patrick invested $100,000 and expects a total return of $200,000 over his life. Therefore, the exclusion ratio is 0.5 (100,000/200,000). Multiplying the exclusion ratio by each year's annuity payment of $8,000 gives us $4,000, which is the taxable amount.

When an additional amount of premium is used to pay for an accidental death benefit provision, it means that the policyholder is paying extra to receive an additional benefit in case of accidental death. This provision is separate from the cash value of the policy, which is the savings component that grows over time. Therefore, the additional premium paid for the accidental death benefit provision does not contribute to the cash value of the policy. Hence, the statement is true.

A cost of living adjustment rider is a type of supplementary benefit rider that can be used by the insured to offset the effects of inflation. This rider ensures that the benefits received from a disability income policy are adjusted to keep up with the rising cost of living. By incorporating this rider into the policy, the insured can maintain their purchasing power and ensure that their benefits are not eroded by inflation over time.

A guaranteed renewable policy is one in which the insurer cannot refuse to renew the policy or cancel it. While the insurer can change the premium for all insureds in a class, they are still obligated to continue providing coverage. This type of policy provides the insured with the assurance that their coverage will not be terminated as long as they continue to pay the premiums.

Settlement options for death benefits can be chosen by the policy owner when they apply for the policy, can be changed by the policy owner before the benefits are paid, and can also be chosen by the beneficiary if no option was established at the time of the insured's death. Therefore, all three statements are correct, making the correct answer 1, 2, and 3.

When premiums are paid into a universal life insurance policy, the insurer deducts expenses and mortality costs from the cash value. After deducting these costs, the insurer adds the current interest to the remaining cash value. This adjustment ensures that the cash value reflects the true value of the policy after accounting for expenses, mortality costs, and interest.

Per capita is the best beneficiary designation for this case because it ensures that each individual child receives an equal share of the benefit. If any of the children die before the insured, their share is not divided among the remaining children, but rather each surviving child receives an equal share. This ensures fairness and equal distribution of the benefit among all the children.

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 best describes a reduced paid-up non-forfeiture option because the insured stops paying premiums but still retains some value from the original policy. The cash value is used to purchase a new policy with a reduced face amount, but it is still a paid-up policy that will remain in force without further 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 complete control over which services are covered and authorized. The insured cannot receive any services without the gatekeeper's approval, indicating that the gatekeeper has the final say in determining the coverage of services.

Health Maintenance Organizations (HMOs) are not required by law to provide prescription drugs as part of their services. While some HMOs may choose to include prescription drug coverage, it is not a legal requirement for all HMOs. Therefore, the correct answer is False.

The elimination period in disability insurance contracts refers to a specific duration, measured in days or months, that must elapse after the onset of a disability before any benefits are paid to the insured. During this period, no benefits are provided. Once the elimination period is completed, the insured becomes eligible to receive payments if the disability continues. This provision ensures that the insurance coverage is not immediately activated upon the occurrence of a disability, but rather after a waiting period has passed.

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 policy owner will have to pay more for the rider, but in return, the coverage amount will also increase based on the increase in the index, providing additional protection against the rising cost of living.

According to the given statement, a health insurance carrier can reword the provisions in its contracts as long as the new wording is not less favorable to insureds and beneficiaries than the mandatory provisions. This implies that the carrier has the flexibility to modify the language of the contracts, as long as the changes do not negatively impact the policyholders and beneficiaries. Therefore, the statement is true.

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 she will receive payments for at least 10 years, even if she passes away before that time. If Jennifer lives longer than 10 years, she will continue to receive payments for the rest of her life. This option provides both a minimum guarantee and lifetime income.

Insurable interest is required to exist with a life insurance policy at the time the policy is written but not at the time of death. This means that the policyholder must have a financial interest in the life of the insured when the policy is initially taken out. This requirement ensures that the policy is not taken out solely for the purpose of benefiting from the insured's death. However, once the policy is in effect, the policyholder's insurable interest is no longer necessary for the policy to remain valid.

The correct answer is "Funds received by an insurer from an insured to realize the benefits of the policy." This answer accurately describes a premium as the amount of money that the insured pays to the insurer in order to receive the benefits outlined in the insurance policy. It highlights the fact that the insured is making a payment to the insurer, rather than receiving funds from the insurer. The other options are incorrect as they do not accurately describe a premium.

Fraud in the process of applying for insurance would be described as intentionally distorting the truth to obtain an insurance policy. This involves deliberately providing false information or misrepresenting facts in order to deceive the insurance company and obtain coverage under false pretenses.

Personal life insurance is typically purchased to provide financial protection for the policyholder and their loved ones in the event of their death. It can help to replace lost income, cover funeral expenses, pay off debts, and provide for the future financial needs of 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 agreement between business partners or co-owners that determines what will happen to the business if one of them dies or leaves the company. In this case, life insurance would be purchased specifically to fund the buyout of the deceased or departing partner's share of the business.

The correct answer is that death benefits are exempt from taxation. This means that when a policyholder dies, the beneficiaries will receive the death benefit without having to pay taxes on it. This is one of the advantages of life insurance, as it provides a tax-free payout to the beneficiaries. The other statements in the question are not true. Individual policy premiums are generally not tax deductible, and policy premiums that provide benefits to employees can be tax deductible for the employer.

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 concept of "indemnity" refers to the principle that an insured individual cannot receive more than their actual economic loss in the event of a claim. This means that the purpose of insurance is to provide financial compensation to the insured for their actual loss, rather than allowing them to profit from the claim. This principle ensures that insurance remains a tool for risk management and not a means for individuals to gain financially from unfortunate events.

A contingent beneficiary is someone who has the first right to receive the proceeds of a life insurance policy if there is no surviving primary beneficiary and the insured dies. This means that if the primary beneficiary passes away before the insured, the contingent beneficiary will be the first in line to receive the benefits.

Non-participating policies generally do not pay dividends. This is because non-participating policies do not share in the profits or surplus of the insurance company. On the other hand, participating policies are eligible for dividends as they are entitled to a share in the company's profits. Therefore, the statement that non-participating policies generally pay large dividends is false.

The statement in the code suggests that "transact" in the context of insurance does include negotiations preliminary to the execution of a contract of insurance. Therefore, the correct answer is False.

The correct answer is that the majority of workers in the U.S. must pay into the program. This means that a large percentage of the working population is required to contribute a portion of their income to the Social Security program. This is typically done through payroll taxes.

The term "transact" as it applies to the field of insurance includes solicitation, which means that it is a part of the process of selling insurance. Additionally, negotiations that happen before a policy is executed are also considered as transacting insurance. Finally, if a person transacts insurance without a valid license, they are guilty of a misdemeanor. Therefore, all three statements are correct, making the correct answer 1, 2, and 3.

Policy reserves are not used in determining life insurance rates. Policy reserves refer to the amount of money set aside by the insurance company to cover future claims and benefits. It is a financial provision made by the company to ensure that it has enough funds to fulfill its obligations to policyholders. While policy reserves are important for the financial stability of the insurance company, they do not directly impact the determination of life insurance rates. Rates are typically determined based on factors such as the insured's age, health, occupation, and lifestyle.

Beth can purchase 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 a medical examination or provide any other proof of her insurability at certain ages. The guaranteed insurability rider on her policy allows her to do so, giving her the flexibility to obtain additional coverage as needed.

Capitation refers to a payment model in which a service provider is paid a fixed monthly fee in an HMO (Health Maintenance Organization). This means that regardless of the number of services provided or the level of care required by the patient, the service provider receives a predetermined amount of money. This payment method incentivizes providers to focus on preventive care and efficient management of resources, as they are responsible for the overall health of their assigned patient population.

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In 1998, the agent must complete 25 hours of life and health continuing education, 8 of which are specifically focused on long-term care (LTC). This is because the agent primarily sells LTC insurance to individuals, so it is necessary for him to have a solid understanding of the topic. By completing the required hours of continuing education, including the specific LTC education, the agent can stay updated on industry trends, regulations, and best practices, ensuring that he can provide the best service to his clients.

Participating in a plan to offer free insurance if a person buys some form of service is not a legal activity in the state of California.

According to the terms of the suicide clause in a life insurance policy, if the insured commits suicide within a specified period after the policy is issued (in this case, 6 months), the insurer will refund all the premiums paid. This means that the insurer will not pay the full claim, pay nothing, or pay a pro-rated amount of the premiums received. Instead, they will return all the premiums that have been paid by the insured.

The correct answer is 1 and 3. This is because the definition of total disability income policy provided states that the individual must be 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 the individual's ability to work in any occupation, not just their own occupation. Additionally, this definition is considered more restrictive as it requires the individual to be unable to perform any suitable occupation, rather than just their own occupation.

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 can get back a portion of the money they have invested in premiums over time. This rider provides a financial benefit to the insured by offering a potential refund on their premiums, incentivizing them to maintain the policy and continue paying premiums.

The given statement suggests that the owner of an office building recognizes the hazards of the building due to its age and decides to get insurance to protect himself from a possible legal suit. However, this scenario does not represent avoidance of risk. Instead, it signifies risk transfer, as the owner is transferring the potential financial burden of a legal suit to the insurance company. Avoidance of risk would involve taking actions to eliminate or minimize the hazards associated with the building's age, rather than simply obtaining insurance coverage. Therefore, the correct answer is false.

The given correct answer is "A life and disability analyst." This is because the definition provided in the California Insurance Code states that a life and disability analyst is a person who, for a fee, offers advice to any insured with an interest in life or disability insurance contracts. Therefore, this definition aligns with the role and responsibilities of a life and disability analyst as described in the question.

Disability income insurance is designed to provide financial support to individuals who are unable to work due to a disability. Insurance companies need to carefully assess the risk associated with each application to ensure that they can provide coverage without incurring excessive losses. The underwriting department may reject an application if it appears that the applicant is likely to have losses that are significantly higher or more frequent than what the insurer's rates anticipate. This helps the insurer manage their risk and ensure the financial sustainability of the insurance product.

Annuity death benefits are not totally exempt from taxation. While some portion of annuity death benefits may be exempt from taxation, depending on the circumstances, the remaining portion may be subject to taxation. Therefore, the statement that annuity death benefits are totally exempt from taxation is false.

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

The doctrine of "utmost good faith" in insurance means that both parties involved in the transaction are expected to provide accurate and complete information. Each party is entitled to rely upon the representations of the other party means that both the insurer and the insured can trust the information provided by each other and make decisions based on that information. This principle promotes transparency and trust in the insurance business.

The given answer is incorrect because a warranty is not merely a statement made to the best of one's knowledge. A warranty is a promise or guarantee made by one party to another party in a contract, and it can be either express or implied. It is a legally binding statement that assures the other party that certain facts or conditions are true or will be fulfilled. Therefore, the correct answer should be "Warranties can be made about events in the past, present or future."

All the above statements are false. PPOs do not require members to choose a PPO-approved doctor in order to receive benefits. If a member sees a doctor that is not PPO-approved, there may be a reduction in the payment of services. Additionally, PPOs typically compensate doctors through a fee-for-service system, not capitation.

The statement is false because the Commissioner does not have the authority to rewrite certain sections of the California Insurance Code. While the Commissioner does have numerous responsibilities and wide-ranging authority concerning the code, rewriting sections is not one of them. The Commissioner can enforce and interpret the code, but any changes or amendments to the code would require legislative action.

When an agent's license is considered inactive, it means that all renewal fees have been paid, but there is a termination of all appointments. This means that even though the agent has fulfilled the financial obligations for license renewal, they no longer have any active appointments or affiliations with insurance companies. This could be due to various reasons such as retirement, resignation, or termination of contracts. It is important to note that the other options mentioned in the question, such as license not being renewed or no longer executing insurance transactions, do not necessarily result in an inactive license.

The California Insurance Code would find the name "Harris Insurance Services" acceptable when publishing Chuck Harris's name because it does not include any misleading or false information about the nature of the business or the individual's qualifications. It accurately represents the type of services provided by the company without making any claims about Chuck Harris's professional designation.

The common disaster provision in insurance policies is designed to protect contingent beneficiaries. This provision ensures that if the insured and the primary beneficiary both die in the same accident or event, the insurance benefits will go to the contingent beneficiaries instead. This provision provides a safeguard for the contingent beneficiaries, allowing them to receive the insurance benefits in case of a common disaster involving the insured and the primary beneficiary.

The correct answer is "A group life insurance policy". This is because a group life insurance policy is not considered ordinary insurance. Group life insurance is typically provided by an employer or an organization to cover a group of individuals, such as employees. It is not something that an individual can purchase on their own. In contrast, the other options listed (life paid-up-at-age-55 policy, 10-year endowment contract, term life insurance policy) are all types of individual life insurance policies that can be purchased by an individual.

The statement is false because the cash value of a non-participating paid-up-at-age-65 life insurance policy does not equal the face amount when the insured attains the age of 65. The cash value refers to the amount of money that the policyholder would receive if they were to surrender the policy before reaching the age of 65. The face amount, on the other hand, is the death benefit that would be paid out to the beneficiaries upon the insured's death. Therefore, the cash value and face amount are not the same.

The statement "The whole life policy will pay a higher amount to the beneficiary should the insured die within the first 10 years" is false. In a whole life policy, the death benefit remains the same throughout the entire policy term. It does not increase or decrease based on the timing of the insured's death.

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 upon the death of the second insured individual. This allows the policy to be used to pay any estate taxes that may be owed, ensuring that the estate can be passed on to heirs without having to sell off assets. These policies are also often issued in excess of $1 million because they are commonly used by wealthy individuals who have significant assets and estate tax liabilities. Therefore, both statements 1 and 2 are correct.

An occupational policy is the correct answer because it covers Jose for disability income benefits if he is injured while working or at home. This type of policy is specifically designed to provide coverage for injuries that occur during work-related activities, whether they happen at the workplace or at home. It is different from a non-occupational policy, which typically only covers injuries that occur outside of work. Workers compensation policy and key person policy are not applicable in this scenario.

The correct answer is to pay the renewal billing notice the Department sends out 90 days before the renewal date. This suggests that the Department sends out a billing notice 90 days prior to the renewal date, indicating that the renewal process involves a payment. This implies that the life agent's license needs to be renewed by paying the renewal fee mentioned in the billing notice.

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 insured decides to cancel the policy within the specified time frame, they are entitled to receive a full refund of the premium they paid.

Both answers B and C are correct because the insurer can make changes for administrative purposes if the applicant did not make the change, and the applicant or their agent can also make changes with the written consent of the insured.

If an applicant makes a misstatement on an insurance application with the express intent to mislead the insurer, it is considered fraud. This means that the applicant intentionally provided false information in order to deceive the insurer. On the other hand, if the misstatement is not material to the company's decision, it may not affect the application. This means that if the false information provided by the applicant does not have a significant impact on the insurer's decision-making process, it may not be considered as a factor in the application. Therefore, both statements 1 and 2 are correct.

The correct answer is that the Social Security rider pays only if the insured is not entitled to benefits from social insurance. This means that if the insured is already receiving benefits from a social insurance program, the rider will not provide any additional payment.

When a policy owner stops making premium payments on a 10-pay life policy and chooses the extended term insurance option, the face amount of the new extended term plan will be the same as the old 10-pay life policy, premium payments will no longer be required, and the extended term policy will be in force for a certain period and then expire. However, the extended term policy will not reflect the same cash value as the original policy. The cash value is specific to the original policy and is not carried over to the extended term policy.

Dividends paid from life insurance policies are not treated as a return of excess premium paid by the owner and are not taxable. Instead, dividends are considered a return of a portion of the policy's premiums and are generally not subject to income tax. This is because life insurance premiums are typically paid with after-tax dollars. Therefore, the statement that dividends are treated as a return of excess premium paid by the owner and are taxable is false.

The term "consideration" in the context of issuing an insurance policy refers to the payment made by the policyholder in exchange for the coverage provided by the insurer. It is the premium paid by the policyholder to obtain the insurance policy. Therefore, none of the options provided in the question accurately describe the term "consideration".

The California Insurance Code is basically the body of laws governing insurance business in this state. This means that it includes all the laws and regulations that are applicable to the insurance industry in California. The statement that it is broken into five sections is not mentioned in the given information. Therefore, the correct answer is 2 only.

Life income with period certain is not an example of a dividend option available on a whole life insurance policy. Dividend options allow policyholders to choose how they want to use the dividends earned from their policy. The one-year term option allows the policyholder to use the dividends to purchase a one-year term insurance policy. Application to reduce premium allows the policyholder to use the dividends to reduce their premium payments. Paid-up additions allow the policyholder to use the dividends to purchase additional coverage. However, life income with period certain is a payout option that determines how the death benefit is distributed to the beneficiaries, not a dividend option.

The correct answer is a, b, and c are false. The California Insurance Code provides a specific definition for a "life agent," which is none of the options given. Therefore, all of the options are false.

The period of time referred to in the question is called the "Illness waiver" period. During this period, if an illness occurs within the first 30 days after the policy's effective date, no benefits will be paid out of the policy.

The California Insurance Code has regulations that apply to both group plans and individually issued policies. These regulations allow senior citizens a minimum of 30 days to return a life or annuity contract to the insurer and receive a full refund of the premium. The code specifies a senior citizen as an individual who is at least 65 years of age at the time of purchase. Therefore, the correct answer is 2 only, as it accurately reflects the regulations outlined in the California Insurance Code.