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LIFE ACCIDENT AND HEALTH OR SICKNESS
EXAMINATION EXAM TEST BANK 600+
QUESTIONS AND CORRECT ANSWERS
(VERIFIED ANSWERS) |ALREADY GRADED A |
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Which type of insurance policy provides a death benefit that matches the projected outstanding debt on an individual's home? -----CORRECT ANSWER-----------Mortgage redemption An insurer owned by policyholders is : -----CORRECT ANSWER-----------Mutual insurer Why are having a large number of similar exposure units Important to insurers? ----- CORRECT ANSWER-----------The greater the number insured , the more accurately the insurer can predict losses and set appropriate premiums Insured are entitled to recover an amount NOT greater than the amount of their loss under the principle of : -----CORRECT ANSWER-----------Indemnity What recourse does an insurer have if a violation of a material warranty on the part of the insured is discovered? -----CORRECT ANSWER-----------Rescission of the policy Unintentional concealment entitled the injured party to which course of action? ----- CORRECT ANSWER-----------Rescission of the contract All of the following would be considered unfair trade practices , EXCEPT -----CORRECT ANSWER-----------Committing an act of discrimination whether it is fair or unfair.
What would a person be guilty of who refuses to submit books and records to the commissioner once a seizure order has been executed? -----CORRECT ANSWER------ -----Misdemeanor Which type of insurance policy gives the policy owner the right to share in the insurer's surplus? -----CORRECT ANSWER-----------Participating As authorized by the California Insurance Code , the Insurance Commissioner has provided standards for names used by life insurance agents. Under these standards which , if any , of the following are automatically acceptable for Mary Brown a holder of the CLU designation? -----CORRECT ANSWER-----------Mary Brown Insurance Services All of the following are characteristics of reinsurance EXCEPT it -----CORRECT ANSWER-----------Increases the unearned premium reserve A person authorized by and on behalf of an insurer who transacts life disability or life and accident and health insurance is defined as a -----CORRECT ANSWER-----------Life agent An insured bought an annuity ten year ago. He will retire in five years 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? -----CORRECT ANSWER----- ------Variable Annuity It is considered an unfair method of competition for an agent to advertise that the insurer the agent is appointed with is : -----CORRECT ANSWER-----------A member of the Insurance Guarantee Association All of the following occurrences listed below are example of an insurable events as defined by the CA Insurance Code , EXCEPT -----CORRECT ANSWER-----------An insured suffers a financial loss in the state lottery
CORRECT ANSWER-----------The insurer will make the payments until the insured juvenile reaches the specified age usually twenty - one or twenty - five An example of a third party administrator is -----CORRECT ANSWER-----------An outside organization that process claims for an employer's self - funded plans What does the phrase life insurance creates an immediate estate " mean? ----- CORRECT ANSWER-----------The total death benefit will be paid to a beneficiary on the death of the insured Which policy is a saving instrument designed to first accumulate funds and then systematically to liquidate the funds? -----CORRECT ANSWER-----------Deferred annuity A Long Term care insurance rider can include coverage for all of the following EXCEPT : -----CORRECT ANSWER-----------Hospital acute care Which statement best describes a life insurance policy dividend? -----CORRECT ANSWER-----------Legally defined as a return of excess premium and not taxable. Which of the following information is not required to be communicated in a life insurance contract? -----CORRECT ANSWER-----------Personal judgment When are parties to a contract required to communicate information solely based on personal judgment for a matter in question? -----CORRECT ANSWER-----------Never After the deductible is paid , what percentage of the balance of approved charge does Medicare part A pay? -----CORRECT ANSWER-----------80%
Medicare Part A provides coverage for all of the following , EXCEPT : -----CORRECT ANSWER-----------Physician services Benefits under social security are available only for workers who are -----CORRECT ANSWER-----------Fully insured ( 40 quarters of coverage ) For social security purpose , a person with 40 quarters of coverage is considered. ----- CORRECT ANSWER-----------Fully insured ( 40 quarters of coverage ) Who are members of the Medical information bureau? -----CORRECT ANSWER--------- --Life and health insurers ( life and health insurance companies ) Which of the following is the best definition of premium? -----CORRECT ANSWER------- ----Money the insured pays the insurer to obtain the benefits in the policy. What rule is used to determine the importance of a representation? -----CORRECT ANSWER-----------The materiality of concealment The theory of probability is applied to life insurance through the use of -----CORRECT ANSWER-----------Mortality tables In health insurance , the result of a rise in the morbidity rate is : -----CORRECT ANSWER-----------Increased premium In the absence of a coordination of benefits clause , all of the following circumstance might result in recovery of more than 100 % of actual health care expense EXCEPT ----- CORRECT ANSWER-----------A worker's medical plan included a carryover deductible provision
All of the following statements are true regarding Health Insurance Counseling Advocacy program HICAP counselors EXCEPT -----CORRECT ANSWER-----------Are qualified to give legal advice A 10 years period certain annuity with an installment refund is purchased. The annuitant dies after being receiving monthly payments for 5 years. How many remaining payments will the insurer make? -----CORRECT ANSWER----------- 60 payments NAIC reporting frequency for insurer financial statements is -----CORRECT ANSWER--- --------Annually Which of the following statements regarding risk is TRUE -----CORRECT ANSWER------ -----Only pure risks are insurable The California Code of Regulations governing claim settlement practice prohibits all of the following acts of unfair discrimination EXCEPT denial of claim based on ----- CORRECT ANSWER-----------Reckless behavior What is it called when an insurer uses higher rates based solely on religion , race or ethnic group? -----CORRECT ANSWER-----------Unfair discrimination All of the following statements about aleatory contracts are true EXCEPT : ----- CORRECT ANSWER-----------The insured and insurer contribute equally to the contract A contract in which one party promises to indemnify another against loss that arises from an unknown event is : -----CORRECT ANSWER-----------An insurance policy A commonly used cost containment measure for emergency hospital care under a major medical expense plan is? -----CORRECT ANSWER-----------Deductible
An insurer entitled to transact business by complying with the California Insurance Code? -----CORRECT ANSWER-----------Admitted carrier An insurance solicitor is a person authorized to : -----CORRECT ANSWER----------- Assist a broker or agent in selling insurance Upon notification of a claim , a claimant may have access to the California Fair Claims Settlement Practices Regulations through all of the following means EXCEPT ----- CORRECT ANSWER-----------An interview appointment with the agent of record The inability of an insured to perform one or more of the regular duties of his or her own occupation " this is a description of a -----CORRECT ANSWER-----------Partial disability As established by PPACA , an adult child may be covered by the parent's health insurance plan until what age? -----CORRECT ANSWER-----------26 years old It is a Federal offense to commit all of the following except : -----CORRECT ANSWER--- --------Misrepresent facts on an insurance application A person who acts in a capacity that requires an active license without having a valid license , is guilty of -----CORRECT ANSWER-----------Misdemeanor Any situation that presents the possibility of a loss is known as : -----CORRECT ANSWER-----------A loss exposure Unless it is merely a statement of an expectation or a belief , a representation as to the future is considered which of the following? -----CORRECT ANSWER-----------Promise
All of the following are requirements of a contract EXCEPT : -----CORRECT ANSWER-- ---------There must be equal consideration between the parties The PRIMARY objectives of insurance regulation include all of the following EXCEPT --- --CORRECT ANSWER-----------Interpret policy provisions The increase in the probability of a loss resulting from an insured's dishonest tendencies is known as : -----CORRECT ANSWER-----------Moral hazard Moral hazard can be defined as the increase : -----CORRECT ANSWER-----------Chance of a loss occurring due to an insured's dishonest tendencies Risk can be defined as all of the following EXCEPT : -----CORRECT ANSWER----------- The cause of loss All of the following qualify as Background Information as defined in Section 1729.2 of the California Insurance Code , EXCEPT -----CORRECT ANSWER----------- Misdemeanor charges All of the following qualify as " background information " as defined in Section 1729.2 of the California Insurance Code , EXCEPT : -----CORRECT ANSWER----------- Misdemeanor charges filed , not resulting in a conviction An agent who violates the laws governing life insurance policy illustrations is subject to all of following EXCEPT : -----CORRECT ANSWER-----------Mandatory termination of all insurer appointments Making an insured whole by restoring them to the same condition as before a loss is an examp of -----CORRECT ANSWER-----------The principle of indemnity
Loss retention is an effective risk management technique when all of the following conditions exist , EXCEPT -----CORRECT ANSWER-----------The probability of a loss unknown According to the California Insurance Code , an insurance policy must specify all of the following EXCEPT the : -----CORRECT ANSWER-----------Financial rating of the insurer A policy owner has the right to change all of the following , EXCEPT : -----CORRECT ANSWER-----------The dividend schedule In group life insurance , who is issued a certificate of insurance? -----CORRECT ANSWER-----------The participant Traditional comprehensive major medical plans include all of the following , EXCEPT : -- ---CORRECT ANSWER-----------First - dollar coverage When medical expense policies do not state specific dollar benefit amounts , but instead base payments. upon the charges for like services in the same geographical area , benefits are designated as : -----CORRECT ANSWER-----------Usual , customary , and reasonable charges Which health insurance contract provision addresses the problem of over insurance? -- ---CORRECT ANSWER-----------Coordination of benefits When a person charges an insured a fee to review the insured's existing life policy , what type of license does that person need? -----CORRECT ANSWER-----------A life and disability analyst
An agent who act as an insurance agent , broker , solicitor , life agent , or bail agent , acts in which capacity when handling premiums or return premiums for an insured? ----- CORRECT ANSWER-----------Fiduciary Jean's healthcare provider is a " service provider " this mean : same -----CORRECT ANSWER-----------Her payment for services goes directly to the provider Supplemental insurance used to pay for hospital confinement to treat cancer is also known as : -----CORRECT ANSWER-----------Dread disease As defined by the California insurance code , " insurance " is a : -----CORRECT ANSWER-----------Contract Direct response distribution of insurance utilize all of the following promote the sale of insurance EXCEPT : -----CORRECT ANSWER-----------Phone calls from agents According to the California insurance code , if a company certificate of authority is revoked , the commissioner may do any of the following EXCEPT -----CORRECT ANSWER-----------Using guarantee fund to pay salaries Vision insurance usually limits in all of the following ways EXCEPT? -----CORRECT ANSWER-----------Specified dollar amount for examination If an insurer must have its rates accepted by the department of insurance prior to using them , then the insurer would be under which jurisdiction : -----CORRECT ANSWER----- ------Prior approval
In a life insurance policy issued after 1988 , failure to pass the 7 - pay test results in ----- CORRECT ANSWER-----------Modified endowment contract According to the California Insurance Code , an " insurance broker " is? -----CORRECT ANSWER-----------Compensated for transacting insurance on behalf of another person with an insurer As used in California insurance code , the word " may " means which of the following? - ----CORRECT ANSWER-----------Permissive During the solicitation of a long term care insurance rider , a life agent must consider all of the following EXCEPT the applicant's : -----CORRECT ANSWER-----------Attending physician statement Vision care " insurance usually cover all of the following EXCEPT? -----CORRECT ANSWER-----------Eye surgery Which health insurance provision protects an insured from the expense of a catastrophic illness? -----CORRECT ANSWER-----------Stop - loss Which program is designed to provide medical assistance to people with low incomes? -----CORRECT ANSWER-----------Medi - Cal What is the first step in submitting Medicare claims? -----CORRECT ANSWER----------- The medical provider submits expense to Medicare Which of the following is an express power of an agent in an agency agreement? ----- CORRECT ANSWER-----------Authority to represent the insurer
Which type of insurance coverage has both a saving element and a flexible premium option? -----CORRECT ANSWER-----------Universal life Which report of an insurance applicant's creditworthiness and personal characteristics may influence eligibility for life and health insurance? -----CORRECT ANSWER----------- Consumer report Which policy provision protects the insurer against possible adverse selection? ----- CORRECT ANSWER-----------Suicide clause How can partners guarantee a market for their share of the business in the event of death? -----CORRECT ANSWER-----------Buy sell agreements Which of the following would an agent be guilty of for misrepresenting the mount of dividends a policy will pay? -----CORRECT ANSWER-----------A misdemeanor When a family policy covers children all of the following are true EXCEPT ----- CORRECT ANSWER-----------Evidence of insurability is required to convert coverage for children to permanent insurance A life insurance policy written after 1988 that fails to meet the seven pay test is known as -----CORRECT ANSWER-----------A modified endowment contract What is the difference between deferred annuities and immediate annuities? ----- CORRECT ANSWER-----------Deferred annuities have longer accumulation periods Death benefits that are received by a beneficiary are generally : -----CORRECT ANSWER-----------Exempt from federal income tax
Which of the following is a characteristic of nonqualified annuities? -----CORRECT ANSWER-----------Tax - deferred earnings What is one difference between group life and individual life underwriting? ----- CORRECT ANSWER-----------Individual life insurance requires the appliance to answer medical questions Which two insurance products are commonly used to fund buy sell agreements ----- CORRECT ANSWER-----------Life insurance and disability insurance Individual life insurance policies sold to seniors in the state of California must include a prominently placed statement that divulges all of the following information , EXCEPT : -- ---CORRECT ANSWER-----------Proof of surrender must be notarized at the agent's principle office Your client has just bought a new home which he has financed with a $ 150,000 , 7.5 % interest , 30 years bank loan. He would like to be sure that if he dies that the unpaid balance of the mortgage would be paid. He wants a policy that will cover the mortgage balance - no more , no less- any time during the life of the mortgage Which policy is designed to meet this need? -----CORRECT ANSWER-----------Decreasing term policy All of the following are true about term life insurance policies EXCEPT the ----- CORRECT ANSWER-----------Face amount is paid if the insured survives to the end of the policy period A person owns a life annuity. He elects to receive his annuity payments monthly for the remainder of his life with " ten years certain ". The annuity will make payments : ----- CORRECT ANSWER-----------For a minimum of 120 months and a maximum of the remainder of his life
Which of the following is NOT an option for the use of the policy dividends? ----- CORRECT ANSWER-----------Fund the distribution of monthly income payments In insurance terminology , " indemnity " means : -----CORRECT ANSWER-----------Make whole A contract of indemnity is one in which : -----CORRECT ANSWER-----------One party is restored to the same financial position the party was in before the loss occurred Which component of a life insurance premium is based on the insured's age and gender ? -----CORRECT ANSWER-----------Mortality Under the PPACA , Which medical enrollment tier is 80 % actuarial value? Same ----- CORRECT ANSWER-----------Gold ( cover 80 % ) ( Patient pays 20 % ) The process by which an insurer decides whether to issue requested insurance is called -----CORRECT ANSWER-----------Underwriting What is a morbidity table? -----CORRECT ANSWER-----------A table that has information on the probability of disabilities because of sickness or accident A benefit provided by Long Term Care policies that give rest or relief to family member caring for one who needs ongoing custodial care is : -----CORRECT ANSWER----------- Respite care Part A of Medicare covers expenses incurred for : -----CORRECT ANSWER----------- Home health care
Which of the following is not an example of what an insurance policy can provide an insured? -----CORRECT ANSWER-----------Eliminate the risk of sickness. Chuck Harris has earned a Chartered Life Underwriter designation. From the selections below choose the one that the California Insurance Code would find acceptable when publishing his name : -----CORRECT ANSWER-----------Harris Insurance Services Jennifer has reached a time in her life where she wishes to begin receiving payments from her tax - deferred annuity. Her agent has suggested she take the money by means of the " life income with 10 years certain " option. When she does , the insurer will make payments : -----CORRECT ANSWER-----------For at least 120 months or the remainder of her life. The insurer can change the premium assuming it is changed for all insured's in a class. However the company cannot refuse to renew the policy , or cancel. This is a / an : ----- CORRECT ANSWER-----------Guaranteed renewable policy Any transaction that involves purchasing a life insurance policy and terminating an existing policy is known as a : -----CORRECT ANSWER-----------Replacement COBRA applies to employers with at least : -----CORRECT ANSWER----------- 20 employees Which party has rights in a life insurance policy only after the death of the insured? ----- CORRECT ANSWER-----------The beneficiary Renewable term insurance can best be described as : -----CORRECT ANSWER----------
- A level death benefit with a raising premium
