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Practice Exam 4
life and health
| Question | Answer |
|---|---|
| Harold, a variable annuity applicant, doesn't request the premium be invested in a stock or bond portfolio during the cancellation period. The policy is returned to the co. within the cancellation period. What is Harold entitled to receive? | The entire premium |
| 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 | a. replacement |
| 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 | d. life |
| An organization will cease to exist as an entity eligible to hold a license for all of these, except: a. termination of an association b. termination of a key employee c. dissolution of a corporation d. dissolution of a co-partnership | b. termination of a key employee |
| What does it mean if an agent's license is inactive? | the agent cannot transact any insurance business for which a license is required |
| If the Commissioner issues a Notice of Seizure for documents and the individual fails to send those documents what is the penalty? | 1 year in jail and/or $1000 fine |
| A disability income policy covers injuries suffered by an insured on or off the job is called? | an occupational policy |
| What must any person engaged in the business of acting as an insurance agent or broker who recieves compensation for arranging or directing sales in connection with a premium financing agreement do? | maintain a list of accounts in connection with comparison exempted in premium financing payments for three years. |
| All of these 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 | b. financial loss exposure |
| In a usual coordination-of-benefits provision, when the plans both have the provisions, coverage as an employee is primary to coverage paid to dependents. (T or F) | true |
| Which of these is not provided by hospice care? a. pain relief b. symptom management c. counseling d. rehabilitation | d. rehabilitation |
| Tony Brown has a CLU certification. Which 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 | d. agency names are never 'automatically' approved |
| A person has paid $50,000 into a fixed annuity over 20yrs, he decides to begin income payments the insurer calculates that he will receive $4000 per year for life, which means that he will receive a total of 100,000. In first 10 yrs, how much is taxable? | 2,000 |
| According to the code, all insurers must maintain a dept to investigate: a. possible abuses of rating laws b. possible arson c. possible fraudulent claims from insureds d. possible fraud by insurers | c. possible frauduelent claims from insureds |
| Which two are Activities of Daily Living? a. eating and dressing b. speaking and incontinence c. sleeping and walking d. bathing and hearing | a. eating and dressing |
| What does the insurance commissioner have the right to do if an agent lacks authority from an insurer named on a binder coverage? | suspend or revoke the license of the agent |
| An insured bought an annuity ten yrs ago. he will retire in five yrs. 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 is this? | variable annuity (seperate account) |
| The likelihood of incurring disease or disability at any given time is: a. risk b. morbidity c. mortality d. hazard | b. morbidity |
| The class beneficiary designation which means that the beneficiaries will receive equal shares of 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 | b. per capita |
| 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 yr old person will probably be able to collect disability income benefits from: | b. workers comp |
| in order to be qualified to sell LTC insurance in the state of CA, all licensees are required to pass a LTC knowledge exam every 10 yrs. (T or F) | False |
| The mathematical rule that says that as the number of individual but similar exposure units increases the easier it is to predict losses is: | The law of large numbers |
| A person licensed to advise clients about life and disability insurance for a fee is a: | Life and Disability Analyst |
| What happens to a license after the death of a natural person who holds a valid insurance license: | it always terminates |
| 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: | frequency |
| What are common insurance policy provisions? | entire contract, grace period, reinstatement |
| With the cost of living rider, the life insurance policy holder: | gets the automatic increase in the face value of there is an increase in the cost of living index. There is an additional premium for the additional coverage. |
| Which is NOT a standard level of care for a LTC policy? a. intermediate care b. custodial care c. skilled nursing care d. convalescent care | d. convalescent care |
| All is required on a life insurance application, except: a. health history b. amount of other life insurance in force c. age of the insured d. the amount of disability income insurance in force | d. the amount of disability income insurance in force |
| Regarding survivorship life insurance, the policy face amt is made out based only on the death of the first to die. (T or F) | False |
| What info can a party to a contract of insurance be allowed not to communicate according to CA law? | information which the other party already knows |
| Which provisions of a disability contract is likely to change the contract least and cost the most? | non-cancellable contract |
| According to the CA Insurance Code, a judgment against an applicant who entered a plea of 'noic contendere' is considered to be: | convicted |
| The policy provision which prevents an insurer from voiding a policy for misstatements after 2 years is: | incontestability |
| The clause that protects the proceeds of a life insurance policy from attachment by creditors after the death of the insured is: | Spendthrift trust clause |
| An association of industry specific employers who are joined together in order to qualify for, or gain premium advantages, in group insurance is: a. MEWA b. MEC c. MET d. MIB | c. MET (multiple employer trust) |
| What gives individuals the right to purchase additional life insurance regardless of their insurability? | guaranteed insurability |
| Under a disability insurance policy, an insured is eligible for a waiver of premium benefit: | after the first six months of disability |
| Which is NOT part of transacting insurance: a. solicitation b. establishing a list of clients c. negotiation d. execution of a contract | b. establishing a list of clients |
| An insurer organized under the laws of the State of Ca is a: a. domestic insurer b. foreign insurer c. non-alien insurer d. non-admitted insurer | a. domestic insurer |
| An insured and beneficiary die in a car accident and it is impossible to dtermine who died first. Who will receive the life insurance proceeds? | The insured's estate |
| A beneficiary wants to recieve $2000 per month until the principal and interest are exhausted. Which settlement option should be chosen? | Fixed amount option |
| In the social security program, contributions are compulsory for most workers. (T or F) | True |
| any person who diverts or misappropriates fiduciary funds is guilty of: a. misrepresentation b. forgery c. fraud d. theft | d. theft |
| A probationary period in a group health policy is intended for people: | who joined the group after the effective date |
| An insurer owned by policyholder is: a. fraternal insurer b. capital stock insurer c. mutual insurer d. reciprocal exchange | c. mutual insurer |
| Physicians and surgeons services, whether provided in a hospital or elsewhere are covered by Medicare Part: | Medicare Part B: There is a charge for the coverage |
| COBRA applies to employers with at least: a. 80 employees b. 20 employees c. 40 employees d. 60 employees | b. 20 |
| An agent who replaces an existing life insurance contract must: | Submit a copy of the replacement notice to the applicant, submit a copy of the replacement notice to the replacing insurer, and obtain a signed statement from the applicant as to whether insurance is to be replaced. |
| Why should a contingent beneficiary be named in a life insurance policy? | to determine who recieves the policy benefits if the primary beneficiary is deceased |
| What is a distribution of excess funds accumulated by the insurer on participating policies? | a life insurance policy dividend |
| When a co-partnership whose membership has changed must return the old license with signatures of the original partners to the Commissioner with an explanation. (T or F) | False |
| The Federal Act that is designed to protect group plan participants, establish pension equality, and mandates strict reporting and disclosure requirements is: | ERISA |
| The person whose life is the object of a life insurance policy is: | the Insured |
| How is the the Insurance Commissioner selected? | An election by the people |
| A policy is returned to the insurer within 10 days of the date the policy is delivered. How much of the premium is returned to the applicant? | 100% |
| The SEC is involved in the regulation of: | Variable life policies |
| HMOs are involved in all the following except: a. controlling costs by encouraging preventative care b. emphasizing the use of specialty physicians c. providing health care services d. providing health care financial coverage | b. emphasizing the use of specialty physicians |
| The guarantee insurability rider provides that the policy holder can purchase more insurance: | On his own life at certain specified ages without proof of insurability |
| Any attempt by an existing insurer or their agent to dissuade a policy owner from replacing an existing life insurance or annuity contract is known as: | Conservation |
| Unless the applicant indicates otherwise during the right-to-return period in an individual annuity, the premium for a variable annuity would be invested only in: | fixed income investments and money market funds |
| A distinct feature of the alternative funding method known as self-funding is: | The benefits are tailored to the needs of the participants |
| If a person gives an erroneous statement on an application unintentionally, this is: | False |
| As an employer, the sudden death of an employee is considered a: | Personnel loss |
| Regarding an organizational license, what happens when a corporation is dissolved? | the license is terminated |
| Senior citizens are given a 30 day right to return a life insurance policy: | at age 60 or older |
| In which plans are claim forms typically completed and submitted by the participant? | Indemnity |
| The purpose of the California Life and Health Guarantee Association is: | (Subject to certain limitations) to protect life and health policy holders and/or insureds when member insurers become insolvent |
| If an insurance agent or broker recieves a commission for arranging a premium finance agreement they must do what? | Disclose to the client the amount of commission recieved for arranging the financing agreement |
| Which is NOT ordinary life insurance: a. a life paid up to 65 policy b. a 30 year decreasing term policy c. a group life insurance policy d. a 20 year endowment policy | b. a 30 year decreasing term policy |
| Supplemental insurance used to pay for hospital confinement to treat a cancer is also know as: | Dread disease |
| The term policy has what characteristics? | It has a face amt of $100,000. Every five yrs, the premium paid increases. After ten years, the policy holder stops paying premiums and the coverage stops. The policy has no cash value. |
| The main master policy owner of a group health insurance contract is the: | Employer |
| If one were to recieve the principal sum benefit of death in a disability policy, the death must occur: | within a specified number of days after injury occurs |
| In life insurance, the loss of a key family member is considered a: | Human loss |
| Hospice care is for: | Terminally ill persons |
| The violation for a person engaging in any unfair method of competition is: | no more than $5000 for each act, or no more than $10,000 for each act if the act is judged to be willful |
| The purchase of an insurance policy may not provide 'elimination of the risk'. (T or F) | True |
| The core benefit plan without any additional benefits may be offered by insurers providing Medicare. (T or F) | True |
| A non-contributory group health plan must involve all members. (T or F) | True |
Created by:
elleman99