Life & Health - Practice Exam 4
Life & Health - Practice Exam 4
- 1.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 receive ?
- A.
The entire premium
- B.
The value of the policy on the day it was cancelled
- C.
The premium less the surrender charge
- D.
The value of thepolicy on the day the policy was delivered
- 2.Any transaction that involves purchasing a life insurance policy and terminating an existing policy is known as:
- A.
Replacement
- B.
Reinsurance
- C.
Reinstatement
- D.
Assignment
- 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
- 4.An organization will cease to exist as an entity 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
- 5.What does it mean if an agent's license is inactive ?
- A.
The agent can still transact insurance business in CA, but not in any other states until the license is reactivated
- 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 for which a license is required.
- 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 and/or $1,000 fine
- D.
Each state handles discipline in its own way
- 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
- 8.Which of the following must any person engaged in the business of acting as an insurance agent or broker who receives compensation for arranging or directing sales in connection with a premium financing agreement do ?
- A.
Provide a list of the potential complaints lodged against 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
- 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 personnel loss exposure
- D.
Property loss exposure
- 10.Which of hte following statement concerning the usual coordination-of-benefits provision are correct ?
- A.
When the plans both have 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 plan with the provision is primary to coverage under any plan without the provision
- 11.Which of the following is NOT provided by Hospice Care?
- A.
Pain relief
- B.
Symptom management
- C.
Counseling
- D.
Rehabilitation
- 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.
Brownies Insurance Services
- C.
Brown Insurance
- D.
None of these would be automatically approved
- 13.A person has apaid $50,000 into a fixed annuity over 20 years. When he decides to begin income payments the insurer calculates that he will receive $4,000 per year for life, which means that he will receive a total of $100,000. In te first 10 years of payments how much is taxable each year ?
- A.
$0
- B.
$800
- C.
$2,000
- D.
$4,000
- 14.According to the code, all insurers must maintain a department to investigate:
- A.
Possible abuses of rating laws
- B.
Possible arson
- C.
Possible fraudulent claims from insureds
- D.
Possible fraud by insurers
- 15.Which two are Activities of Daily Living?
- A.
Eating and dressing
- B.
Speaking and Incontinence
- C.
Sleeping and walking
- D.
Bathing and hearing
- 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
- 17.An insured bought an annuity ten years ago. He will retire in five year. To determine the value of the annuity, the number of accumulation units is multiplied by the value of the separate account. What type of annuity was purchased ?
- A.
Variable annuity
- B.
Fixed premium annuity
- C.
Tax sheltered annuity
- D.
Single payment annuity
- 18.The likelihood of incurring disease or disability at any given time is:
- A.
Risk
- B.
Morbidity
- C.
Mortality
- D.
Hazard
- 19.The class beneficiary designation which means that the beneficiaries will receive equal shares fo the death benefit divided among the surviving members of the class is:
- A.
Class beneficiaries, equal shares
- B.
Per capita
- C.
Per stirpes
- D.
Per diem
- 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
- 21.In order to be qualified to sell LTC insurance in the state of CA, agents must comply with all of the following, except:
- A.
All licensees 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 licenses issued prior to January 1, 1992
- 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.
The law of large numbers
- D.
Materiality
- 23.Which of the following is a description of a Life and Disability Analyst ?
- A.
A broker paid fees for 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
- 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 transferred to another person
- C.
The license becomes inactive until the expiration date
- D.
The license must be returned to the Commisioner to cancel the license
- 25.If the financial loss on a certain group of people occurring 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
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