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1-3 Questions and Answers (Latest Update 2025)
Question # Carol is injured driving a company car at work. Her Health insurance coverage: AProvides excess or supplementary coverage BWill provide coverage on a pro-rata basis with Workers Compensation CWill cover her injuries DWill not cover her since this is an occupational injury - Correct Answer ✅D Explanation: Most Health insurance provides 'non-occupational' (off the job) coverage for sickness or injury, meaning that occupational coverage is excluded. However, if a person is not required to be covered by Workers Compensation, some Health policies will cover both on and off the job, which is known as 'occupational' coverage. Question #
1-3 Questions and Answers (Latest Update 2025)
The minimum participation percentage for large group insurance under the California code is: A50% B40% C75% D25% - Correct Answer ✅C Explanation: The California Insurance Code requires a 75% minimum participation percentage for large group Life insurance. Question # All of the following are classified as Life insurance EXCEPT: AWhole life
1-3 Questions and Answers (Latest Update 2025)
Explanation: The client has $100,000 in his account, of which $50,000 is his own money, which was contributed with after-tax dollars. Since his contributions will be returned tax free and since they make up half of his account value, only half of his annual pay-out (the earnings portion) will be taxable as ordinary income. Further, you can find his projected life span by dividing the $100, total by his $4,000 annual pay-out, which would be 25 years. After 25 years, he will have recovered all of his own contributions, so the entire $4, would be taxable. Remember, annuity payouts are for life. Question # Which of the following is true regarding 'speculative' risk: AThere is no chance for gain BIt has a chance for gain or loss CIt is insurable DIt has a chance for loss only - Correct Answer ✅B
1-3 Questions and Answers (Latest Update 2025)
Explanation: Speculative risk has the chance for gain or loss and is not insurable. For example, if you buy a lottery ticket you might gain, but you will probably lose. It is 'pure' risk that is insurable, which has the chance for loss only, with no chance for gain. On Life insurance, you might die. On Health insurance, your might become sick or injured. On Fire insurance, your house could burn down. These are 'pure' risks. Question # Part A of Medicare provides basic hospital benefits including coverage for the care and counseling of the terminally ill, which is known as: ALong term care BHome health care CSkilled nursing facility care DHospice care - Correct Answer ✅D Explanation:
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The MIB is a non-profit information agency formed to assist health insurers uncover misrepresentations or fraudulent actions by applicants for insurance. MIB members that find an impairment in underwriting report such findings, as well as situations which applicants have previously been involved in and information received from physicians or other persons commenting on the status of a proposed insured. Question # If a $100,000 Whole Life insurance policy with a cash value of $10, lapsed and the insured selected the reduced paid-up non-forfeiture option, all of the following would be true EXCEPT: AThe new policy would have a cash value BThe new policy would have a face amount of $100, CThe new policy would not require proof of insurability DThe new policy would provide coverage to age 100 - Correct Answer ✅B Explanation:
1-3 Questions and Answers (Latest Update 2025)
If the insured selects the reduced-paid up non-forfeiture option, the insurer will use the cash value in the lapsed policy to buy the insured a new Whole life policy at the insured's current age without evidence of insurability. The new policy will be paid-up until age 100 or the insured's death, whichever comes first, and will have an immediate cash value. However, $10,500 would not be enough to buy the insured a $100,000 policy, so coverage will be reduced. Question # Under the Women's Health and Cancer Rights Act all health insurance plans which cover mastectomies must also cover which of the following: ARehabilitation BReconstructive surgery CHome health care DPrescription drug coverage - Correct Answer ✅B Explanation:
1-3 Questions and Answers (Latest Update 2025)
The MIB is a nonprofit information agency supported by Life & Health insurance companies, in order to help insurers uncover misrepresentations or fraudulent actions by applicants. MIB member companies that find health impairments in underwriting report their findings to the MIB in the form of a code number. The MIB discloses to underwriters the applicants prior health history, including information received from doctors. However, insurance company underwriting actions are not recorded anywhere in MIB files. Question # A Comprehensive Major Medical Expense policy generally includes all of the following EXCEPT: AFirst dollar coverage with high lifetime limits BA deductible CA capitation fee DCo-insurance - Correct Answer ✅c Explanation:
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'Capitation' fees are a characteristic of HMOs, not policies written by insurance companies. A 'capitation' fee is a per person fee that an HMO pays a doctor based upon the number of patients they see during a specified period of time. Comprehensive Major Medical Expense insurance is a combination of a Basic plan and a Major Medical plan, which is generally the best coverage you can obtain from an insurance company. Question # When an Agent pleads 'nolo contendere' to a violation of the insurance code, it means: AHe is pleading guilty to a violation of the insurance code BHe is pleading not guilty to a violation of the insurance code CHe is leaving the determination of guilt up to the opinion of the Commissioner DHe has been convicted of a violation of the insurance code - Correct Answer ✅c Explanation:
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After a 5 month waiting period, Social Security provides disability income benefits for those whose disability is expected to last at least 12 months or result in their death and are incapable of performing the duties of any occupation. Medicare covers medical expenses, not disability income. LTC covers custodial care in a nursing home. Workers Compensation only covers occupational, job-related injury or sickness. Question # An insurance company 'admitted' to do business in California is also known as an: AForeign insurer BAlien insurer CDomestic insurer DAuthorized insurer - Correct Answer ✅d Explanation:
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All insurers, except for Surplus Lines insurers, must be 'admitted' or 'authorized' by the Insurance Commissioner before they can transact business in this state, whether they are domiciled in this state (domestic), another state (foreign) or in another country (alien). Question # Which of the following is not a Life insurance non-forfeiture option: APaid-up additions BCash surrender CExtended term DReduced paid-up - Correct Answer ✅a Explanation: Paid-up additions is a dividend option, not a non-forfeiture option. If a mutual insurer pays a dividend, the policy owner may use that dividend as a single premium to buy additional Whole Life insurance, which is paid-up
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Question # A life insurance policy which will allow the insured to self direct the cash value into different sub-accounts is: AAdjustable Life BVariable Life CUniversal Life DEndowment - Correct Answer ✅b Explanation: A variable life insurance policy will allow the insured to select from a number of different investment accounts to invest the cash value. Variable life is a securities product and a securities license is needed to sell it in addition to a life insurance license. Question #
1-3 Questions and Answers (Latest Update 2025)
In every LTC policy that provides home care benefits, eligibility for home care benefits require that the insured be unable to perform at least ____ Activities of Daily Living (ADLs) or have an impairment of cognitive ability: AFour BThree COne DTwo - Correct Answer ✅d Explanation: LTC policies written to provide home care benefits must provide those benefits if the insured cannot perform at least two ADLs, which include such things as dressing, bathing, feeding, walking and the general ability to care for oneself. Question # If a Defined Benefit qualified pension plan has a 7 year 'vesting' schedule, after 7 years all employer contributions plus earnings are:
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A121st Day of continue disability B120th day of continued disability C90th day of continued disability D91st day of continued disability - Correct Answer ✅a Explanation: Since the policy has a 90 day waiting or elimination period there will be no benefits paid for the first 90 days of disability. After the insured satisfies the waiting/elimination period, benefits must be paid at least monthly and will be paid on the first day of the month for the previous month. Question # All of the following are true about the difference between a Conditional Receipt and a Binding Receipt EXCEPT: AA Binding Receipt provides immediate coverage and a Conditional Receipt does not
1-3 Questions and Answers (Latest Update 2025)
BThe Conditional Receipt creates immediate coverage and a Binding Receipt does not CA Binding Receipt is not generally used in Life and Health insurance whereas the Conditional Receipt is DNeither a Binding or a Conditional Receipt is given unless the premium has been paid - Correct Answer ✅B Explanation: Most Life and Health insurers require that their agents use Conditional Receipts, which state that no coverage is in effect until the applicant has satisfied all the conditions (such as passing a physical exam) and the underwriter has approved the application. A Binding Receipt may be used by some insurers to provide the applicant with a small amount of coverage while the results of the physical exam and underwriting process are pending. Once the underwriter approves the application, then the full amount of coverage takes effect. Neither type of receipt may be given out unless the applicant has paid the premium. Question # Which of the following health care providers is not a physician?
