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Life License-Test#1
Part 3
| Question | Answer |
|---|---|
| 61. The home care coverage of a LTC policy provides for: | part-time nursing at home for a custodial care patient; |
| 62. A Health Maintenance Organization (HMO) plan contains costs by promoting: | preventative care; this includes regular check ups and is encouraged by HMOs |
| 63. What recourse does an insurer have if a violation of a material warranty on the part of the insured is discovered? | rescission of the policy; rescission is possible during the contestability period |
| 64. An insured bought a $150,000 non-participating Whole Life policy many years ago. He is 100 yrs old today. He has never borrowed from policy's cash value and has faithfully made all payments when due. The policy's current cash value is: | $150,000; cash value in Whole Life insurance policy is calculated and structured actuarially so that it will equal the death benefit and is paid to the insured when the policy matures or "endows" at age 100 |
| 65. which provision will pay a portion of the death benefit prior to the insured's death due to a serious illness? | accelerated death benefit; aka "living needs rider" |
| 66. the Payor Rider on a juvenile life policy provides that if the payor dies or becomes disabled before the insured juvenile reaches the age specified on the policy: | the insurer will make the payments until the insured juvenile reaches the specified age; typically, the insurer pays until the juvenile reaches age 21 or 25 |
| 67. people commonly purchase an annuity to protect against the risk of: | outliving their financial resources; one of the benefits this is, once it annuitizes, the contract holder can receive payments for the rest of their life |
| 68. in order to receive the principal sum benefit for death from a disability policy, the death must occur: | within a specified number of days after injury |
| 69. according to the CA Insurance Code, an insured's policy must specify all of the following except, | the financial rating of the insurer; must: the risks insured against, the property of life being insured, and policy period |
| 70. which of the following is a hazard? | a condition that might increase the likelihood of a loss occurring; includes physical, moral, morale, and legal hazards |
| 71. term insurance is typically characterized by: | low premiums and no cash value; cash value found in Whole Life and other ordinary policies |
| 72. in state of CA: | providing free insurance coverage in connection with the sale of services as an inducement for completing the transaction is illegal; insurers, agents or brokers not allowed to do this as an inducement to purchase/rental of real/personal property/services |
| 73. from list of descriptions below, select the person(s) that is/are eligible for Medicare: | a person who has been entitled to Social Security (SS) disability benefits for 24 months; who has reached 65, is willing to pay a premium but not eligible for SS; who has reached 65 and is eligible for SS |
| 74. Medicare covers which of the following in order to provide long-term care for the elderly? | very limited nursing home coverage |
| 75. how long must a life agent maintain records regarding policies sold in this state? | 5 years |
| 76. the purpose of laws regarding the replacement of life and annuity contracts includes all of the following except: replacement laws designed to protect consumers | to protect the interests of life insurers and their agents; includes: to establish penalties for failure to comply w/ replacement reqs, assure purchaser receives info to make an informed decision, reduce opportunity for misrep and incomplete disclosures |
| 77. in order to obtain group insurance w/out providing evidence of insurability, what do eligible individuals generally have to do? | enroll within a specified eligibility period; insurability must be proven if individual joins the group after the enrollment or eligibility period; during enrollment or eligibility period, no med exam required, in CA insurers do ask med ?s of preex condi |
| 78. what is the purpose of the rehabilitation provision in a Disability Income policy? | to encourage disabled insureds to return to their original occupations; rehab = recovery |
| 79. which of following coverages is NOT one of the three traditional benefits of a group basic medical expense plan? | private nursing expense; in plan are: surgical expense, physicians visit expense, and hospital expense |
| 80. what is the difference btw a defined contribution plan and a defined benefit (DB) plan? (Defined Contribution plans have a 10% penalty for withdrawals before age 59 1/2 except for allowed distributions) | the penalties for early distribution; DB plans usually have an agreed early distribution date (often age 55) which allows employee to take a reduced amt of benefits as an annuity w/out penalty; otherwise early distributions are not permitted in DB plans; |
| 81. HMOs are involved in all of the following except: | emphasizing the use of specialty physicians; involved are: providing healthcare services, controlling costs by encouraging preventive care, and providing healthcare financial coverage |
| 82. during the disability Elimination Period: | no benefits are payable; elimination period is a waiting period similar to a "time deductible" |
| 83. if a person was in violation of Section 770 of the CA Insurance Code, what action would the insurance Commissioner most likely take if the violation dealt w/ loans on security of real or personal property? | issue a cease and desist order for a violation of more than one transaction; this is the usual minimum for violations |
| 84. the price of insurance for each exposure unit is called the: | rate; def |
| 85. the CA Insurance Code states the policies or certificates may be called comprehensive Long-Term Care insurance if they provide benefits for: | Institutional (nursing facilities) and home care; the word "comprehensive" indicates that a broader coverage is being offered, ie institutional and home care |
| 86. long term care policies can be replaced for all of the following reasons, except: | the new policy has fewer benefits and a higher premium; the client cannot be left in a worse position than they started |
| 87. all of following statements about SS disability benefits are true, except: ... and permanently disabled for at least 5 months to be eligible for benefits; waiting period b4 SS benefits begin to be paid is 5 months from disability,benefits are limited | benefits are designed to replace the entire amt of worker's earnings; true are: benefits are based upon level of worker's earnings up to time of disability, benefits will continue only as long as recipient cannot work at all, worker's must be totally.. |
| 88. An ESOP invests in: | employer stock; ESOP = Employee Stock Ownership Plan |
| 89. The federal law known as COBRA does which of the following? | allowing for, and providing protection of ex-employees, as well as their dependents by providing them the same conversion and extension benefits for group health insurance benefits as those given to existing employees |
| 90. The Common Disaster provision is designed to protect the interests of which of the following? | the contingent or secondary beneficiary; the primary beneficiary is assumed to have died before the insured in a common disaster in order to ensure that the proceeds go to the contingent beneficiary if one exists |
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jennyhqs2
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