CA Life and Health Insurance Exam, Exams of Nursing

Download CA Life and Health Insurance Exam and more Exams Nursing in PDF only on Docsity! CA LIFE AND HEALTH INSURANCE EXAM-With 100% Verified Solutions- 2024/2025 The insurance applicant is the individual who is applying to purchase insurance Before making a sale, the first thing an agent should do is identify the applicant's overall financial objectives. Key person life insurance used by a business to protect itself in case a valued employee dies. The death benefit would be paid to the company to hire and train a replacement. Premiums paid for key person life insurance are not tax deductible, but benefits are not taxable. If an organization terminates a key employee, the organization will still be eligible to hold a license as their organization will be unaffected. Preferred risks receive the lowest premium charges as they pose the lowest risk to the insurer. who selects which risks the insurer will take on. underwriting division within the insurance company Medical Information Bureau (MIB) Life insurance companies are members of the Medical Information Bureau. Members of the Medical Information Bureau (MIB) are required to report medical impairments found during the underwriting process. The HIPAA Privacy Rules establish national standards for the use and disclosure of protected health information. physician's report. When an applicant reveals medical conditions that require more information, the insurer will usually require an attending physician's report. - The request for an attending physician's report must be accompanied by a copy of the signed authorization. To authorize the release of an attending physician's report, the applicant must sign a consent form. nonparticipating policyowner will not receive dividends. Nonparticipating policies are issued by stock insurers. Stock insurers pay dividends to stockholders, not policyholders. Employees that are covered under a group policy receive certificates of insurance as their proof of coverage. three types of ordinary life insurance: whole life, endowment, term. Use the acronym "WET" to remember them. Group insurance is not a type of ordinary life insurance. variable annuity variable annuity is one in which the value of an accumulation unit can be multiplied by the number of units owned in a separate account. Money invested in variable annuities is held in the insurance company's separate account. An equity-indexed annuity An equity-indexed annuity has a fixed minimum interest rate, and the chance to get a higher rate of return, like that of the stock market. Notice Regarding Replacement. Both the agent and the applicant must sign the Notice Regarding Replacement. When replacing a policy, the agent is not required to send a copy of the replacement notice to the existing insurer. The new insurance company will provide notice to the existing insurer. Replacement is when an agent replaces a customer's current policy with a new one and is not illegal. However, the agent would not replace the customer's policy if the new policy is worse and the premium is higher. This would be considered twisting and is illegal. nonmedical application allows the insurer to write a life insurance policy without a physical exam. entire contract clause entire contract clause states the application is part of the contract if attached when issued. conditional receipt There is no coverage under a conditional receipt until all conditions are satisfied. insurance binder An insurance binder always creates immediate coverage (which is the main difference between a binder and a conditional receipt). A binding receipt provides a limited amount of coverage right away. Under the California Insurance Code (CIC), life insurance agents cannot issue binders. If an agent issues a binder for a company for which he or she is not appointed, the Commissioner can suspend or revoke the agent's license. A written binder is deemed a valid insurance policy for the purpose of proving that the insured has insurance coverage. This excludes life insurance. illustration An illustration is a presentation or depiction that includes nonguaranteed elements of a policy of life insurance over a period of years. Life insurance policy illustration regulations were not created to eliminate disclosure. cheaptest mode of premium payments annual Free Look Period The free look on life insurance and annuities is also known as the right to return. Life insurance companies are required to give the policyholder a minimum 10-day free look Policyholders who are age 60 or older are considered a senior citizen and must receive a 30- day minimum free look). If the owner of a variable annuity returns it during the right-to-return period, he or she will receive a full refund of all premiums paid. absolute assignment An absolute assignment is a permanent transfer of ownership rights. conversion feature The conversion feature allows an employee to go from group coverage to an individual policy. who declares dividends Dividends are declared by the board of directors and cannot be guaranteed. contingent beneficiary An insured would name a contingent beneficiary to ensure where the policy proceeds will go if the primary beneficiary dies prior to the insured. common disaster clause When insured and primary die at the same time, it is assumed that the primary died first so contingent can get the money disability income rider A disability income rider that is added to a life insurance policy will pay a replacement of the insured's lost income if the insured becomes disabled. waiver of premium rider The waiver of premium rider will waive the insured's premium if the insured becomes disabled. accidental death benefit rider The accidental death benefit rider will pay double the face amount if the insured dies as a result of an accident as defined in the policy. Cost of Living Rider If an insured purchases a cost of living rider, this rider will automatically increase their policy limits tied to the consumer price index. However, if the policy limit increases, so will the underlying premium. Guaranteed Insurability Rider The guaranteed insurability rider allows the insured to adjust benefits upwards at specified future option dates. group coverage Group coverage is usually less expensive than individual coverage. California requires a minimum of 2 employees be covered in a group life contract. If an employee wants to enroll without any restrictions, the employee would enroll during the eligibility period (open enrollment period). A group contract is between the insurer and the employer. Insurance agents must keep records regarding policies sold in this state for a minimum of 5 years. Sole proprietors without any employees are not eligible for group life coverage. If a dependent child covered by a group life plan is incapable of self-support, coverage under the plan may continue without any age limitation. In a group life plan, a dependent child attending an educational institution may be covered until age 26. Group life policies may exclude aviation, suicide and military action, but not death due to other accidents. contributory group policy In a contributory group policy, the premium is shared between the employer and employee. The employee contributes toward the premium. The employee pays all or part of the costs in a contributory group insurance plan. noncontributory plan A group contract where the employer pays 100% of the premium All eligible employees must participate Social Security Most workers contribute to Social Security through taxes levied on their earnings. Benefits are based on contributions, but are not equal to contributions. Social Security full retirement age is based upon the year in which an individual was born. Retirement benefits under Social Security are only available to workers who are fully insured. Fully insured status in Social Security requires 40 quarters of coverage. Eligibility for Social Security retirement benefits is based upon the number of quarters earned. An individual that has contributed to Social Security for 6 of the last 13 quarters who becomes disabled is currently insured under the system. Social Security blackout period the period of time when surviving family members are not eligible for Social Security survivors benefits. Survivors benefits stop during this period. The Social Security blackout period begins when the youngest child reaches age 16. The Social Security blackout period ends when the surviving spouse reaches age 60. widow w/no children eligibility age for social security survivors benifit age 60. tax on annuity vs life insurance death beneifits Annuity death benefits are not tax deductible or tax free. Life insurance death benefits are tax free. modified endowment contract has a 10% IRS early withdrawal penalty. are HMOs required to provide coverage for prescriptions drugs. no PPO (Preferred Provider Organization) A type of health plan that contracts with medical providers, such as hospitals and doctors, to create a network of participating providers. You pay less if you use providers that belong to the plan's network. if services are provided by a preferred provider, will PPO cover the services PPO may cover 100% of the services, less a nominal copayment. EPOS exclusive provider organization (EPO) is a type of PPO that utilizes a select group of exclusive preferred providers who are paid on a fee-for-service basis. Most EPOs utilize the gatekeeper concept where enrollees are assigned to a primary care physician who makes referrals to the various exclusive providers. EPOs provide an alternative to traditional HMOs and PPOs. Consumer-driven health plans include 1. point of service (POS) plans 2. medical savings accounts(MSAs) 3. high-deductible health plans (HDHPs). FSA -set up by the employer -owned by the employer, but the employee gets to decide which medical expenses to pay for with the FSA -can be used with most employer-sponsored health plans. HRA (Health Reimbursement Arrangement) -benefit account set up by an employer. The employer makes contributions into the HRA each year for the employee. The employee can use the balance in the HRA toward medical expenses not covered by the health plan, such as deductibles and coinsurance. An HRA can only be funded by the employer. Employee contributions are not permitted. HSA (Health Savings Account) Health insurance that includes a savings account that allows you to pay for healthcare on tax-free basis- like a retirement account for healthcare