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CA PSI SITE - LIFE, ACCIDENT & HEALTH AGENT EXAMINATION (LIFE AGENT) LATEST 2024-2025, Exams of Health sciences

CA PSI SITE - LIFE, ACCIDENT & HEALTH AGENT EXAMINATION (LIFE AGENT) LATEST 2024-2025 ACTUAL EXAM 100 QUESTIONS & CORRECT DETAILED ANSWERS. GRADED A

Typology: Exams

2024/2025

Available from 11/23/2024

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CA PSI SITE - LIFE, ACCIDENT & HEALTH AGENT

EXAMINATION (LIFE AGENT) LATEST 2024-2025 ACTUAL

EXAM 100 QUESTIONS & CORRECT DETAILED ANSWERS.

GRADED A

4 elements of a valid contract - ANS1) Competent Parties

  1. Legal Purpose
  2. Agreement (offer and acceptance)
  3. Consideration
  4. Under a disability income insurance policy with an "own occupation" clause, an employee who can no longer perform the tasks of the job held at the time of injury is considered: A. Gainfully disabled B. Totally disabled C. Presumptively disabled D. Medically disabled - ANSB

A disability policy is issued and premiums are paid on an annual basis on the 1st of January. At the first anniversary, the insured decides they do not want to renew the policy and they do not pay the premium. On the 8th day after the premium due date, the insured submits a claim for medical expenses. How will the company respond to the claim? A. It will not be paid because the policy expired on the anniversary date. B. It will be paid because the insured did not request a formal cancellation C. It will be paid because the loss was not reported within the grace period. D. It will be paid because the loss occurred within the grace period. - ANSD A health insurance contract states that if, during the first 30 days after the policy's effective date, an illness occurs, there will be no benefits paid out of the policy. What is this period of time called? A. Probationary period B. Illness waiver C. Waiver period D. Benefit period - ANSB

A hospital confinement indemnity insurance policy pays: - ANSA daily dollar benefit for each day the insured is confined to a hospital A policy owner has the right to change all of the following, except: A. The beneficiary B. The payment mode C. The dividend schedule D. The dividend option - ANSC A policy owner makes the last premium payment on his $250,000 non-par whole life policy today. The owner is 70 years of age. When will the cash value reach $250,000. A. About 13 years from now B. The cash value is $250,000 today C. Never, he didn't pay up to age 100 D. When he reaches the age of 100 - ANSD

A supplemental insurance policy that pays a set amount for each day that an individual is hospitalized is known as: A. Long term care supplement B. Temporary major medical C. Hospital confinement indemnity D. Hospital surgical expense - ANSC Accidental Death Benefit rider - ANSLife Insurance Rider affecting the death benefit amount May be called multiple indemnity rider In the event of a claim, the policy normally pays double or triple the face amount only if the insured's death was a result of an accident. The benefit is payable only if death occurs before a specific age and within 90 days of the accident

According to Employee Retirement Income Security Act of 1974 (ERISA) fiduciary standards, benefit plans are operated for: A. Plan sponsors and beneficiaries B. Plan participants and employees C. Plan sponsors and employees D. Plan participants and beneficiaries - ANSD According to state law, what size print must be used for the licensee's license number on all price quotes, business cards, and printed material? A. There are no requirements for the license no. to be printed on any printed material B. Larger print than any other printed information on the material C. The same size print as the licensee's phone number, fax number or address D. Small print a the bottom of the material - ANSC According to the terms of the suicide clause found in a life insurance policy, if an insured commits suicide 6 months after the policy is issued, what will the insurer do? - ANSRefund all the premiums paid

Admitted Insurance Company vs. Non-Admitted Insurance Company - ANSAn admitted insurance company is authorized to transact insurance in California because it has a Certificate of Authority granted by the California Department of Insurance (CDI) A non-admitted insurance company is not authorized to transact insurance in California because of failing to comply with California requirements or did not seek admission Adult Day Health Care - ANSA LTC coverage designed to provide custodial care and supervision on a day care basis outside the home for individuals not requiring 24- hour confinement in a nursing home nut who continue to live at home. Aleatory Contract - ANSThe exchange of value is unequal. Insured's premium payment is less than the potential benefit to be received in the event of a loss. All of the following are examples of the dividend options available on a whole life insurance policy, except:

A. One-year term option B. Application to reduce premium C. Paid-up additions D. Life income with period certain - ANSD All of the following are true regarding a policy owner that ceases making premium payments on a 10-pay life policy and selects the extended term insurance option, except: A. The face amount will be the same on the new extended term plan as the old 10-pay life policy B. Premium payments no longer have to be made. C. The extended term policy will be in force a certain period and then expire. D. The extended term policy will reflect the same cash value as the original policy

  • ANSD All of the following are used in determining life insurance rates, except: A. Investment and interest return

B. Insurance company expenses C. Mortality expenses D. Policy reserves - ANSPolicy Reserves All of the following statements about the gatekeeper system are true, except: A. Specialists can choose to be gatekeepers for their patients B. The insured must utilize their primary physicians who authorize all care for the insured C. Referrals to specialists must be authorized by the gatekeeper D. Gatekeepers are a common feature of HMO plans - ANSB All of the following statements are correct regarding a "warranty" except: A. It is a statement merely made to the best of one's knowledge, and can only be express. B. Should either party violate a warranty it entitles the other party to cancel the contract. C. Warranties can be made about events in the past, present or future.

D. Warranties made at or during the execution of a policy must be contained in the policy, signed by the insured and attached to the contract - ANSA All the following are factors in determining premiums charged for group disability income insurance, except: A. The average age of all members of the group B. The location of the insured C. How long of a waiting or elimination period the policy reflects D. How long the benefits will play - ANSB An agent mostly sells long-term care insurance to individuals. He obtained his insurance license (life and health) in January of 1998. In 1998 he must: A. Complete 25 hours of life and health continuing education only B. Complete 25 hours of life and health continuing education and, in addition, complete 8 hours of LTC specific continuing education, a total of 33 hours C. Complete 25 hours of life and health continuing education, 8 of which are LTC specific D. None of the above - ANSC

An annuity which may be used to help fund retirement in a few years maintains a "separate account". the owner purchases "accumulation units". This is called a ____ annuity. - ANSVariable Arnold and Bertha are married and work for different firms. Arnold has group health insurance through his company that also insures Bertha. Likewise Bertha has group health insurance also covering Arnold. Select the correct statement below about how benefits are affected by the coordination of benefits provision in both plans. A. If Bertha files a medical claim Arnold's company is considered secondary. B. If Arnold files a medical claim Bertha's company is considered primary C. First the secondary insurer will decide what it won't pay for which will dictate what the primary insurer will pay D. Since both Arnold and Bertha are covered by a group plan neither insurer will pay if the other insurer is primary - ANSD Assume two people apply for life insurance with exactly the same monthly premiums. One individual buys a whole life policy, and the other, a 10-year

renewable term plan. Both are standard risks with no difference in their age or health rating. Select the statement from below which is false. C. The 10-year renewable term contract will have a premium increase every 10 years while the whole life policy premium remains level. D. The whole life policy will pay a higher amount to the beneficiary should the insured die within the first 10 years - ANSD Assuming CE requirements have been met, how is the life agent's license renewed ? - ANSPay the renewal billing notice the Department sends out 90 days before the renewal date. Ben is a life agent who would like to do business with the rock Solid Insurance Company but he doesn't have an appointment to sell their policies. Assuming Rock solid does not require exclusive representation, can Ben submit an application to them from a prospect? A. No, appointments are always required to be filed prior to submitting applications.

B. Yes, and the application need not be approved by the underwriting department. C. Yes, and if the insurer approves the application they must appoint Ben within 14 days. D. All the above are false. - ANSC Capitation - ANSHow HMO Primary Care Physicians are paid A fixed monthly fee made for each subscriber enrolled in the doctor's office regardless of the services provided. Carl's policy lapsed. Which of the following would reinstate his policy? A. Carl's insurance company accepted his late payment B. Carl sent a written noticed regarding his late payment C. Carl was issued a reinstatement application D. Carl contacted his agent - ANSA

Cease and Desist order - ANSGiven when unlicensed persons are caught transacting insurance without appropriate licensing, and penalties can be up to $5,000 a day. Choose the correct statement about a cost of living rider. The policy owner: A. Is only charged a flat fee to have the rider attached B. Could experience a decrease in amount of the policy if the CPI decreases. C. Pays an additional premium for the extra protection the rider provides and will see the face amount of the contract increase according to the increase of the index D. All the above - ANSC Contract of Adhesion - ANSOne party writes the contract without inout from the other party on a "take-it-or-leave-it" basis Contributory Plan - ANSA type of group insurance plan where employees pay 100% of premium payments and at least 75% of employees participate in this policy.

Custodial Care - ANSNonmedical care (non-skilled care) to provide assistance with activities of daily living such as bathing, toileting, eating, dressing, transferring, and continence. May be provided in a nursing home or in one's own home. Providers are not required to undergo medical training Disability income insurance offers various riders to supplement benefits from these policies. The Social Security rider: - ANSHelps establish a limit for the amount of income benefits paid to an insured who will receive substantial benefits that may or may not be paid from government programs. Disability income insurance pays a weekly or monthly income to replace a portion of the one's lost salary due to an inability to work. When a disability income insurance application is submitted, what reason might the underwritting department use to reject it? A. Insurers are willing to only accept applications with extremely small risks exposure. B. Underwriters have to reject a certain number of applications per a certain number of approved applications

C. Disability insurers have to eliminate applications that seem likely to have losses much more frequently or much more severely than what the insurer's rates anticipate. D. None of the above. - ANSC Disability Income Rider - ANSLife Insurance Disability Rider In the event of total disability and after the initial waiting period (such as 6 months), premiums are waived and the insured is paid a monthly income. The monthly disability income benefit is typically limited to a percentage of the face value. The benefit paid from the rider does not reduce the death benefits paid out upon death. Elimination Period - ANS• The elimination period may be as short as 30 days and as long as one year, with 90 days being the most common.

  • The elimination period is a waiting period after a loss occurs before the benefit period begins. o The shorter the elimination period, the higher premium.

Employees that have group life or health policies covering them are required to be issued a/an ______. A. Estimate of employers premiums B. Certificate of insurance C. Master policy D. Monthly premium notification on a non-participating plan - ANSB Endow - ANSMaturity date of policy, when it ends. Exclusive Provider Organization (EPO) - ANSAn EPO is a type of PPO that REQUIRES a subscriber to seek treatment from a limited number of network providers. Family Policies - ANSTo this base life insurance policy, a term insurance rider is attached that is designed to provide a monthly income to the survivor if the insured dies during the specified term. Free Look - ANSEvery policy of individual life insurance and annuities (other than variable contracts) that is used for delivery in California must contain a notice

regarding a return of the policy for cancellation of 10-30 days after its receipt by the owner. o The minimum free look period is 10 days for persons under age 60. o Persons who are age 60 or older must be given a 30-day free look period. Fully Insured Status - ANS• Fully Insured status requires an individual to have earned 40 quarters or credits, which is approximately 10 years of employment. o A fully insured worker has permanent coverage under Social Security and cannot lose this status. o Benefits that may be received under fully insured status are: Retirement income at age 62 or older. Spousal retirement at age 62 or older. Premium-free Medicare Part A Grace Period - ANSThe grace period is the time period provided after the premium due dates before a policy lapses.

  • The grace period in California is 60 days. Health Maintenance Organization (HMO) - ANSAn Health Maintenance Organization (HMO) is regarded as a managed health care system providing a

comprehensive array of medical services on a prepaid basis, which means little or no out of pocket expenses. o Copayment is required for office visits and hospital services. Copayments discourage unnecessary use of medical resources, such as emergency room services for non-emergency care. o HMOs are deemed to be both a health care financing and servicing mechanism by emphasizing preventive medicine by providing routine medical exams, wellness programs, and diagnostic screenings. Services include usual physician, hospitalization, prescription drugs, laboratory, x- ray, urgent care. Health maintenance organizations (HMOs) are required to provide for all of the following services, except: A. Prescription drugs B. Emergency services C. Preventive services D. Physicians services - ANSA

Hospice Care - ANSProvides pain control, comfort, and counseling for the terminally ill patient. Hospice care also includes a family counseling benefit. Human Life Value Approach vs. Needs Analysis Approach - ANSHuman Life Value approach is a measure of the projected future earnings and services of a person at risk in the event of a premature death. The objective is to provide the proper amount of coverage as determined by the value of the individual to his/her dependents using the following factors:

  • The individual's age and gender
  • The individual's occupation, annual wage, and planned retirement age
  • Inflation Needs Analysis Approach determines a need for coverage upon the premature death of an individual. It always assumes the death of the individual to be immediate and factors the following steps into arriving at the proper amount of coverage needed:
  • Calculate all financial needs caused by immediate death, including debts, medical bills, and final expenses
  • Provide lifetime income to the spouse
  • Pay off mortgage or other debts
  • Provide funds for children's education
  • Subtracts any assets available to fund financial needs after death (such as retirement plan, other insurance, liquid investments, separate savings) If an insurer pays an insured $25,000 in lost wages, $45,000 for physicians visits and hospital costs, and $15,000 for physical therapy treatments, and later discovers that the claim was fraudulent, the insured may be fined as much as: A. $25, B. $60, C. $85, D. $170,000 - ANSD If the premium on an individual health insurance policy is paid annually, semi- annually, or quarterly what is the minimum grace period required?

A. 10 days B. 20 days C. 30 or 31 days D. None of the above - ANSC Immediate vs. Deferred Annuity - ANSImmediate Annuity: Annuity that does not have an accumulation period and is used to generate immediate income within a year of the issue date. Deferred Annuity: Annuity that will pay periodic benefits starting at some specified time in the future; begins more than 1 year from the issue date. Deferred annuities are ideal for accumulating a retirement fund. In life insurance policies, naming beneficiaries is an important part of the application process. Choose from below the best description of a contingent beneficiary. A. One with the first right to receive proceeds if there is no surviving primary beneficiary and the insured dies. B. One with the right to proceeds only if the primary and secondary beneficiary die in a common disaster.

C. One with the right to proceeds if the insured dies. D. All the above are false - ANSA In order for insurers to help avoid the problem of over-insurance they include ___ provisions in their policies. A. Maximum limits B. Coordination of benefits C. Neither of the above - ANSCoordination of benefits In replacement, an existing insurer must provide policyowners with a policy summary for existing Life Insurance within how many days of receiving the written communication and replacement? A. 31 days B. 5 days C. 60 days D. 15 days - ANSB

In the California Insurance Code there is a definition that reads, in short, "....a person who, for a fee, offers to advise any insured having any interest in life or disability insurance contracts..." This is the definition of : A. An insurance broker paid on a fee-for-service B. A solicitor C. A life and disability analyst - ANSC In the insurance business, risk can best be defined as A. Sharing the possibility of a loss B. Uncertainty regarding the future C. Uncertainty regarding financial loss D. Uncertainty regarding when death will occur - ANSC Incontestability clause - ANSWithin the first 2 years of a policy, the insurer may contest a claim and void the contract upon proof of a material misstatement or fraud.

Indemnity Contract - ANSAn agreement to pay on behalf of another party under specified circumstances Irrevocable Beneficiary - ANSAn irrevocable beneficiary has certain guaranteed rights to assets held in the policy, and this beneficiary must agree to any changes in rights to compensation from policyowner. Jean's healthcare provider is a "service provider". This mans: A. Her payment for services goes directly to the provider B. She will get better service than a "fee for service" provider C. Her payment for services are always paid to the insured D. All the above above are true statements - ANSA Jim pays his premium monthly. What is his Grace Period? A. 7 days B. 30 days C. 31 days

D. 10 days - ANSD Joint Life - ANSJoint Life (First to Die) is a whole life policy that is written to cover 2 or more lives.

  • The death benefit is paid upon the first insured to die and the policy terminates. Joint Life Annuity - ANSAnnuity is payable to 2 or more named annuitants while all are living. o Upon death of the first annuitant, the benefit stops. Joint Survivorship - ANSJoint Survivorship (Last to Die) is a whole life policy written to cover 2 or more lives, and the death benefit is not paid until the last insured dies. Jose is covered by an insurance plan that will pay him disability income benefits if he is injured either while working or at home. The type of plan he has is a/an: A. Workers compensation policy B. Key person policy C. Non-occupational policy