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CA XCEL LIFE, ACCIDENT, HEALTH LICENSE EXAM QUESTIONS
WITH CORRECT ANSWERS
"what does the group life underwriting risk selection process help protect insurance companies
from? - CORRECT ANSWER adverse selection"
"The open enrollment period for Medicare Part B is... - CORRECT ANSWER January 1 through
March 31"
"The period in which there are no social security benefits for the surviving spouse is called -
CORRECT ANSWER Blackout period
(begins when the youngest child turns 16 and continues until the spouse reaches age 60 at the earliest)" "which of the following does restorative dental treamtent cover?
- dentures - CORRECT ANSWER crowns"
"What does a life insurance policy guarantee to the stated beneficiary upon the death of the insured?
- Funeral expense fund
- Specified amount of money
- Policy dividend
- Policy's cash value - CORRECT ANSWER Specified amount of money"
"Which type of life insurance offers flexible premiums, a flexible death benefit, and the choice of how the cash value will be invested?
- Modified whole life policy
- Adjustable life policy
- Universal policy
- Variable universal policy - CORRECT ANSWER Variable universal policy" "Which of these premium payment frequencies is not typically available to a policyowner?
- Quarterly
- Semi-annual
- Bi-weekly
- Monthly - CORRECT ANSWER Bi-weekly" "Failure to report background changes with 30 days as required under section 1729.2 of the California insurance code could subject a license or applicant to
- Suspension
- Denial
- Fine
- All of these - CORRECT ANSWER all of these" "According to PPACA, what is a health benefits exchange?
- An entity that offers affordable health coverage to only those with low incomes
- An entity where existing policies can be converted to new policies
- An entity that provides tax credits to employers for providing health insurance to their employees
- An entity to which individuals an d small businesses can have access to affordable health
coverage - CORRECT ANSWER an entity to which individuals and small businesses can have
access to affordable health coverage" "Shawn, Mike, and Dave are borhters who have a $100,000 "first to die" joint life policy covering all three of their lives. If mike dies first, the policy proceeds
- Will be divided by probate
- Will go to mike's estate
- Will no longer provide insurance protection
- Will not be paid until the last brother dies - CORRECT ANSWER Will no longer provide insurance protection" "What will the beneficiary receive if an annuitant dies during the accumulation period?
"Under a long-term care insurance policy, adult day care coverage will provide for
- Part time care at a facility for elderly individual who live at home
- Full time care at a facility for elderly individuals
- living arrangements in an assisted living center
- Full time home health care - CORRECT ANSWER Part time care at a facility for elderly individual who live at home" "an insurer will accept a premium from the insured and continue the coverage in full force as though it was not late during which time period?
- Incontestable period
- Grace period
- Reinstatement period
- Probation period - CORRECT ANSWER grace period" "ABC insurance company paid an insured $30,00 in lost wage, $35,000 for hospital costs, and $20,000 for physical therapy treatments. ABC later discovers this was a fraudulent claim. How much may the insured be fined?
- $65,
- $170,
- $85,
- $150,000 - CORRECT ANSWER $170,000" "All of the following are characteristics of a Group Life insurance plan EXCEPT
- Group underwriting
- individual underwriting
- probationary period
- master contract - CORRECT ANSWER individual underwriting" "Which annuity payout option allows the policy owner to choose a pre-determined number of benefit payments?
- installment refund
- Amount certain
- Straight life
- Period Certain - CORRECT ANSWER Period Certain" "All of the following are examples of a business continuation plan EXCEPT
- key person insurance
- Cross-purchase agreement
- Deferred compensation
- Stock redemption plan - CORRECT ANSWER Deferred compensation" "Where must you specifically reside to qualify for MRMIP?
- California
- California and its reciprocal states
- United States
- North America - CORRECT ANSWER California" "According to the California insurance code, what term is used to describe a fact so important it could affect the policy premium?
- Absolute
- Materiality
- Warranty
- Guarantee - CORRECT ANSWER Materiality" "How is an agent's first year commission calculated for a replacement long-term policy?
- Based on the new policy's annual premium
- Based on the original policy's annual premium
- The new policy's commission minus penalty
- Based on the difference between the new and original policy annual premiums - CORRECT
ANSWER Based on the difference between the new and original policy annual premiums"
"At what point does a self-insured group qualify for stop-loss coverage?
- When the average claim amount exceeds the limit stated in the policy
- When the insured reaches an age stated in the policy
- When claims exceed the policy's maximum lifetime benefit limit
- Human value protection
- Liquidity maintenance
- Survivor fun
- Estate conservation - CORRECT ANSWER Estate conservation" "Fraternal Benefit Society has each of the following characteristics EXCEPT
- Without capital stock
- Incorporated
- Exist for profit
- Exist for the benefit of its members - CORRECT ANSWER Exist for profit" "Which of the following is considered to be any situation that has the potential for loss?
- Law of large numbers
- Risk transfer
- Adverse Selection
- Loss exposure - CORRECT ANSWER Loss exposure" "Who does a life settlement broker represent?
- Insurance company
- Life agent
- Private firm
- Individual wanting to sell their life policy to a third party - CORRECT ANSWER Individual wanting to sell their life policy to a third party" "A health insurance policy paid on a quarterly basis has a grace period of
- 10 days
- 31 days
- 7 days
- 60 days - CORRECT ANSWER 31 days" "Most U.S. life insurance companies belong to the
- Underwriting information Bureau
- Medical information Bureau
- FINRA
- National Association of insurance commissioners - CORRECT ANSWER Medical information Bureau" "A hazard can be best described as
- The tendency for poorer than average risks to seek out insurance
- A risk that has the potential for both loss and gain
- A condition that may increase the likelihood of a loss occurring
- The potential for loss - CORRECT ANSWER A condition that may increase the likelihood of a loss occurring" "Which of the following acts is NOT a Federal offense committed by an insurance agent?
- Falsifying records
- Misrepresentation on an insurance application
- Embezzlement
- Insurance Fraud - CORRECT ANSWER Misrepresentation on an insurance application" "Which of the following is NOT considered a definition of risk?
- The potential for loss
- Uncertainty
- Exposure to danger
- The cause of a loss - CORRECT ANSWER The cause of a loss" "The systematic liquidation of a sum of money is provided by a(n)
- Endowment contract
- Annuity
- Life insurance policy
- 1035 contract exchange - CORRECT ANSWER Annuity" "When handling premiums for an insured, an agent is actin in which capacity?
- Manager
- Representative
- Fiduciary
- Proxy - CORRECT ANSWER Fiduciary"
- The cause of disability was from an accident only
- The insured is enrolled in a rehabilitation program
- The insured can perform some of their job activities on a part-time basis
- The insured cannot perform any of their job activities - CORRECT ANSWER The insured can perform some of their job activities on a part-time basis" "Intentional withholding of material facts that would affect an insurance policy's validity is call a(n)
- Estoppel
- Misrepresentation
- Adhesion
- Concealment - CORRECT ANSWER Concealment" "A person who is a nonsmoker, of average weight, an in excellent health would most likely be in which risk classification?
- Acceptable
- Standard
- Substandard
- Preferred - CORRECT ANSWER Preferred" "What prevents a life insurance policy from being rescinded by the insurer after being in force for two years?
- Grace period provision
- Free-look provision
- Subrogation
- Incontestability clause - CORRECT ANSWER Incontestability clause" "Which of the following types of policies pays a stated amount for each day an individual is hospitalized?
- Hospital confinement indemnity
- Hospital endowment
- Short-term major medical
- Surgical expense - CORRECT ANSWER Hospital confinement indemnity" "Which of these statements is NOT true concerning recurrent disabilities?
- The recurrence of a disability must occur within a specified time period after the prior disability
- A recurrent disability is considered to be a continuation of the prior disability
- The insurer continues coverage after a new elimination period
- The recurrent disability must be caused from the original disability - CORRECT ANSWER The insurer continues coverage after a new elimination period" "A dread disease policy is considered to be a type of
- Group health insurance policy
- Hospital expense policy
- Limited health insurance policy
- Major medical insurance policy - CORRECT ANSWER Limited health insurance policy" "Which of the following enables a life policy to be replaced with another life policy and results in the postponement of the tax consequence?
- Section 1040 exchange
- Spendthrift option
- Nonforfeiture option
- Section 1035 exchange - CORRECT ANSWER Section 1035 exchange" "which of the following actions may an insurance company NOT do in a health policy that contains a guaranteed renewable premium benefit?
- Cancel policy if premiums are not paid
- Stop renewing policy when the insured reaches a specified age
- Increase the premiums on the basis of an entire classification
- Increase the premiums on an individual basis - CORRECT ANSWER Increase the premiums on an individual basis" "Coming from an insurance point of view, which of the following is the main risk associated with disability?
- Decreased work skills
- Loss of Limbs
- Loss of income
- Decreased Mobility - CORRECT ANSWER Loss of income" "ESOPs are typically invested in
- Tax credit
- Annuity
- Lump sum
- Periodic income - CORRECT ANSWER Periodic income" "Ron has a life insurance policy with a face value of $100,000 and a cost of living rider. If the consumer price index has gone up 4%, how much may Ron increase the face value of the policy?
- $4,
- $
- $2,
- $800 - CORRECT ANSWER $4, (100,00 x 0.04 = 4,000)" "A payment system for health care in which the provider is paid for each service given is called
- Fee-for-service
- A prepaid arrangement
- A blanket plan
- Lump sum - CORRECT ANSWER Fee-for-service" "A nonparticipating policy will
- Provide tax advantages
- Not pay dividends
- Give policyowners special privileges
- Provide a return of premium - CORRECT ANSWER Not pay dividends" "Which of the following is an example of the insured's consideration?
- Insurer's promise to pay benefits
- Intent
- Legal purpose
- A paid premium - CORRECT ANSWER A paid premium" "Which of the following describes the increase in probability of a loss due to an insured's dishonest tendencies
- Moral hazard
- Speculative hazard
- Morale hazard
- Physical hazard - CORRECT ANSWER Moral hazard" "All of these statements concerning Medicare are true EXCEPT
- Long-term care is covered by Medicare Part C
- Doctors' services are covered by Medicare Part B
- Hospice is covered by Medicare Part A
- Medicare is primarily funded by federal payroll and self-employment taxes - CORRECT
ANSWER Long-term care is covered by Medicare Part C"
"When a decreasing term policy is purchased, it contains a decreasing death benefit and
- Decreasing premiums
- Variable premiums
- Level premiums
- Increasing premiums - CORRECT ANSWER level premiums" "Which of these factors is NOT taken into account when determining an applicant's life insurance needs?
- Automobile
- Social security
- Savings
- Pension - CORRECT ANSWER Automobile" "Insurance companies determine risk exposure by which of the following?
- Law of large numbers and risk pooling
- Insurable interest
- Population table data
- Insurance exchanges - CORRECT ANSWER Law of large numbers and risk pooling" "What is the primary feature of a viatical settlement?
- No interest on policy loans
- Lower premiums
- Reduced death benefit prepayment
"Which of the following is not covered by the Family and Medical Leave Act (FMLA)?
- Traveling overseas with a spouse
- Adoption
- Attending to the serious health condition of a parent
- Pregnancy - CORRECT ANSWER Traveling overseas with a spouse" "The California Insurance Code requires that an insurer must have enough assets to cover its liabilities and for reinsurance of all outstanding risks. To remain solvent, it must also possess additional assets equal to what amount?
- Amount determined by the insurance guarantee association
- $10,000,
- 50% of its stock value
- its paid-in-capital - CORRECT ANSWER its paid-in-capital"
"MRMIP is a - CORRECT ANSWER State program that offers health coverage to California
residents who are not able to obtain coverage due to pre-existing conditions" "How does one qualify as a fully-insured individual under Social Security disability Coverage?
- Individual has been credited with the appropriate number of quarters of coverage
- Individual is expected to be disabled for 5 months
- Individual is currently employed
- Individual is currently covered under Medicaid - CORRECT ANSWER Individual has been credited with the appropriate number of quarters of coverage" "What are members of the Medical information Bureau(MIB) required to report?
- Medical ailments discovered during the underwriting process
- The premium of the policy applied for
- The underwriting methods used to acquire personal information
- The face amount of the policy applied for - CORRECT ANSWER Medical ailments discovered during the underwriting process" "Under a non-cancellable health insurance policy, an insurer can
- Increase the premium
- Cancel the policy for any reason
- Change the policy provisions
- Cancel the policy for nonpayment of premium - CORRECT ANSWER Cancel the policy for nonpayment of premium" "In a life insurance policy, the entire contract consists of
- Policy and any verbal agreements
- Policy and attached application
- Policy and all sales material
- Policy and conditional receipt - CORRECT ANSWER Policy and attached application" "Which of the following is NOT required in the content of a policy?
- Period to which the coverage exists
- Probability of loss
- Parties involved in the contract
- Risk insured against - CORRECT ANSWER Probability of loss" "According to the PPACA, an adult can be covered by a parent's health care plan until what age?
- 21
- 18
- 25
- 26 - CORRECT ANSWER 26" "An agent's attempt to stop the replacement of an existing life insurance policy is known as
- Preservation
- Prevention
- Conservation
- Concealment - CORRECT ANSWER Conservation" "Which of these factors do NOT affect the rates of medical insurance?
- Health
- Occupation
- Gender
- Race - CORRECT ANSWER Race"
"If an insured's age on a life insurance policy has been misstated, what is the insurer's liability if
the insured dies - CORRECT ANSWER A prorated death benefit based on the amount of
insurance the insureds premiums would have been if purchased at the correct age" "Which of the following is NOT considered advertising?
- Direct mailing from an agency
- An illustration
- A sales presentation
- A rating from a rating service company, such as A.M. Best - CORRECT ANSWER A rating from a rating service company, such as A.M. Best" "Who is the individual paid on a fee-for-service basis?
- Administrator
- Insured
- Subscriber
- Provider - CORRECT ANSWER Provider" "How is Medicare Part B funded?
- User premiums
- Employer taxes
- Payroll taxes
- General tax revenue and user premiums - CORRECT ANSWER General tax revenue and user premiums" "Within how many days must a traditional IRA be rolled over to another IRA in order to avoid tax consequences?
- 90
- 60
- 30
- 45 - CORRECT ANSWER 60" "Health insurance involves two perils, accident and _____
- Death
- Sickness
- Liability
- Disability - CORRECT ANSWER Sickness" "An individual can enroll in a Part C Medicare Advantage Plan at what time?
- When becoming eligible for Medicaid
- When becoming eligible for Medicare
- At age of retirement
- Age 59.5 - CORRECT ANSWER When becoming eligible for Medicare" "all of theses are reasons the commissioner may disapprove a licensee's request to use a fictitious name EXCEPT
- The name is the licensee's actual name
- The name is too similar to a name already filed and in use by another licensee
- The name states, infers, or implies that the licensee is an insurance company
- The use of the name may mislead the public in any respect - CORRECT ANSWER The name is the licensee's actual name" "Which of the following is Medicare Part B also known as?
- Hospital insurance
- Medical insurance
- Long-term care insurance
- Medigap - CORRECT ANSWER Medical insurance" "The California insurance code allows an individual how many days to cancel a life policy for a full- refund?
- Between 15 and 20 days
- Between 10 and 30 days
- Between 30 and 45 days
- Up to 10 days - CORRECT ANSWER Between 10 and 30 days" "According to the Affordable Care Act, any plan in existence prior to which date is considered a grandfathered plan?
- March 23, 2010
- March 23, 2012
