California Life, Accident, and Health Insurance Final Exam Questions and Answers 2024, Exams of Nursing

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California Life, Accident, and Health

Insurance Final Exam Questions and

Answers 2024

What is considered the most common type of specified disease insurance policy? Cancer Minimum participation standards exist for a group health insurance plans in order to Prevent Adverse Selection How does underwriting differ between group life and individual life insurance? Medical questions must be answered on individual life insurance when handling premiums for an insured an agent is acting in which capacity? Fiduciary what is the term used to describe the frequency and severity of certain illnesses and accidents? Morbidity Which of the following describes the statement "The more times an event is repeated, the more predictable the outcome becomes"? Law of large numbers In order to be considered "currently insured" under Social Security, an individual must be credited with? 6 quarters of coverage during the last 13-quarter period How long must a policy be in force before an insurer is prohibited from denying claims based on misstatements made on the health

policy application? 2 Years Which of the following does the California Insurance Code NOT require an insurance policy to specify? Insurer's financial rating Which of the following is NOT required in the content of a policy? Probability of loss Which of the following pieces of information is NOT gathered during the personal financial planning process? An individual's civic organization memberships Which of the following is not considered to be an unfair claims settlement practice? Advising a claimant to hire an attorney When an applicant applies for insurance, the process by which the insurer determines whether to issue a policy is called? Underwriting How is a Medicare claim submitted? Expenses are submitted to Medicare by the health provider According to the PPACA, the medical enrollment tier that has 80% actuarial value is called: Gold Employer contributions to qualified plans are Tax-deductible by the employer Employee participation in a noncontributory group life plan must be 100% What does the term "illustration" mean when used in the phrase "life insurance policy illustration", according to the California Insurance Code? Presentation of policy features that includes non-guaranteed elements Which of the following is NOT a characteristic of a preferred provider organization (PPO)? Primary physicians serve as gatekeepers

John owns an insurance policy that gives him the right to share in the insurer's surplus. What kind of policy is this? Participating a life agent who has misappropriated fiduciary funds to his own use. What is Pete guilty of? Theft If an insured dies because of an accident, which type of life insurance rider will provide additional coverage? Accidental death rider Tom is shopping for a policy that covers two people and would pay the face amount ONLY when the first person dies. The type of life policy he is looking for is called a Joint life policy Which of these statements is NOT true concerning recurrent disabilities? The insurer continues coverage after a new elimination period An insurer owned by its policyholders is called a? Mutual Insurer Medicare Part B Covers? Physician Expenses Which of these is NOT a relevant factor in the health insurance principle of morbidity? Intelligence Which of these factors do not affect the rates of medical insurance? Race Which of the following types of life insurance is normally associated with a mortgage loan? Decreasing term which of the following is not included in comprehensive major medical plans? First-Dollar Coverage Moral hazard is described as the

Increased chance of a loss because of an insured's dishonest tendencies Which principle is accurately described with the statement "Insureds are entitled to recover an amount NOT greater than the amount of their loss"? Indemnity What time period allows an insured's life insurance policy to remain in force even if the premium was not paid on the due date? Grace Period How long must life agents keep their transaction records? 5 Years

What does the insurance term indemnity refer to? Make whole Individual health insurance coverage typically excludes injuries at an employee's workplace because? It's covered by the state Worker's Compensation program which of the following refers to a condition that may increase the chance of a loss? Hazard Life insurance surplus must be distributed to policy-owners at what frequency? Annually According to PPACA, what is a health benefits exchange? An entity to which individuals and small businesses can have access to affordable health coverage According to the California Insurance Code, which of the following is NOT an example of an insurable event? An insured suffers a financial loss in the state lottery at what point does a self-insured group qualify for stop-loss coverage? When claims exceed a specified limit in a set period of time The conditions, times, and circumstances under which an insured is NOT covered by a health policy are called? Exclusions Failure to report background changes within 30 days as required under section 1729.2 of the California insurance code could subject a license or applicant to? All of these Why is a life insurance policy's delivery date important? The free-look period begins on the policy delivery date The Human Life Value concept is based on? Income Which of the following is a characteristic of the disability elimination period?

Benefits are not payable In California, the elderly can receive information about health related issues from? The Health Insurance Counseling and Advocacy Program (HiCAP)" In what situation does a waiver of premium provision keep a health insurance policy in force without premium payments? When an insured becomes totally disabled At age 65, which of the following is available at no cost to all individuals? Medicare Part A which of these statements correctly describes risk? Pure risk is the only insurable risk non-deductible contributions are typically associated with a? Roth IRA Which type of worker has Social Security benefits available to them? Fully insured Which of the following describes the number of deaths in a year compared to the number of people in a select group?

Mortality Rate Lynn owns a life policy that guarantees the right to renew the policy each year, regardless of health, but at an increased premium. What kind of policy is this? Renewable term An individual covered under a disability income policy may be eligible for a partial disability benefit if? the insured can perform some of their job activities on a part-time basis What is a common reason people purchase an annuity? To protect against the risk of outliving their financial resources Which of the following is NOT an accurate description of Access for Infants and Mothers Program (AIM)? Only women who have private insurance plans with a maternity-only deductible or copayment greater than $1,500 are eligible" When a life insurance policy is surrendered, how does the cost recovery rule apply? The policy's cost basis is exempt from taxation Under a long-term care insurance policy, adult day care coverage will provide for? Part time care at a facility for elderly individuals who live at home An annuity which is backed by a life insurer's separate account is called a? Variable Annuity Who is issued a certificate of insurance with a group insurance policy? Participant How are acts of war and aviation treated under a group life insurance policy? Policy Exclusion A creditor would be allowed rights to life insurance policy proceeds if which of the following beneficiaries is chosen? The insured's estate. According to section 1729.2 of the California Insurance Code, which

of these does NOT qualify as "background information"? Misdemeanor charges filed, not resulting in a conviction The California Insurance Code allows an individual how many days to cancel a life policy for a full-refund? Between 10 to 30 Days The California Insurance Code defines "policy" as a(n)? Written Contract According to the California code governing claim settlement practices, which of the following is NOT considered to be an act of unfair discrimination? Denial of a claim based on reckless behavior Kimberly is an employee on leave under the Family and Medical Leave Act (FMLA). What will happen to her group health coverage? She continues to be enrolled during the leave Which of the following is NOT a feature of equity-indexed annuities? Offers a maximum interest rate that increases annually A terminated employee that has exercised the conversion privilege is able to convert? Term insurance into permanent insurance

What area of group health insurance is regulated under the Employee Retirement Security Act of 1974 (ERISA)? Disclosure and reporting after the annual deductible is met a medicare part b patient will pay of the remaining covered expenses. 20% How does a conditional receipt differ from a binding receipt? Binding receipts always provide insurance which starts from the date of receipt The reason for social insurance is to? Protect certain vulnerable segments of the population Bruce is involved in an accident and becomes totally and permanently disabled. His insurance policy continues in force without payment of further premiums. Which policy provision is responsible for this? Waiver of premium provision Who would be most likely to submit a Medicare Part A claim? Hospital Which of the following actions is NOT allowed by Health Insurance Counseling and Advocacy Program (HiCAP) counselors? Charge a fee An insurer that has been found using higher rates based on race, religion, or ethnicity is said to be engaging in? Unfair discrimination Which policy provision protects the policyowner from unintentional lapse of the contract? Grace period Under the misstatement of age provision in a health insurance policy, what can a company do if it discovers that an insured gave a wrong age at the time of application? Benefits can be adjusted

which of the following is not covered by the family and medical leave act (fmla)? Traveling overseas with a spouse An insurer enters into a contract with a third party to insure itself against losses from insurance policies it issues. What is this agreement called? Reinsurance What does a Hospital Confinement indemnity policy pay for? Pays a specified daily amount while the insured is confined to a hospital Allen has a disability income policy with a $2,500 monthly benefit and a 30-day elimination period. He is unable to work 90 days following an automobile accident. What will the policy pay? 90 days - 30 day elimination period is 60 days (2 months). 2 months X $2,500/month benefit = $5,000 total benefit paid. Which of the following would be considered an activity of daily living under a long term care policy? Bathing the elimination period in a disability income policy serves the same purpose as a?

Deductible All of the following circumstances must be met for loss retention to be an effective risk management technique, EXCEPT: Probability of loss is unknown Which of the following is NOT true regarding a family policy that covers children? Conversion of child's coverage to permanent insurance requires evidence of insurability. Which of the following is NOT an important reason for a life insurance application? The beneficiary must sign the application before the insurer will issue the policy Paul has an existing annuity and is sold a new one, in which the new policy holds no greater financial benefit to him than the existing contract. This is considered a(n)? Unnecessary replacement What distinguishes a deferred annuity from an immediate annuity? The time at which benefit payments start Buy-sell plans are typically funded by which two types of insurance? Life insurance and disability insurance. Which of the following does specified disease insurance NOT cover? Costs covered by medical expense insurance When calculating life insurance premium rates, which component would an agent's commission fall under? Insurer's Expenses Which of the following is NOT a requirement of a contract? Equal consideration is required between the involved parties Which of the following does the California Department of Insurance (CDI) have NO jurisdiction over? Medicare Which provision will pay a portion of the death benefit prior to the insured's death due to a serious illness? Accelerated death benefit Under the California Insurance Code, a licensee's license number

must be printed at what size on all price quotes, business cards, and printed material? The same size print as the licensee's phone number, fax number or address How are Roth IRA's treated for tax purposes? Non-deductible contributions and tax-free distributions An insurance company entitled to transact business in California is called a(n)? Admitted carrier Which of the following contracts is defined as "one that restores an injured party to the condition that was present before the loss"? Indemnity Contract Which word implies permissiveness according to the California Insurance Code? May Which of the following statements do NOT apply to child coverage in a family policy? Only children born prior to policy's issue date may be included What does the guaranteed insurability option allow an insured to do?

Purchase additional coverage with no evidence of insurability required What is the purpose of the Pre-Existing Condition Insurance Plan (PCIP)? PCIP was created by the PPACA for people rejected by private health insurers due to pre-existing conditions Which of the following types of information is NOT required for a life insurance application? Ethnicity What must an applicant do in order to authorize the release of an attending physician report? Sign a consent form A situation in which there is ONLY a chance of loss or no loss is a? Pure risk Reasonably necessary acts that an agent must perform for carrying out his/her expressly authorized duties are covered by an agent's Implied authority What percentage of eligible employees must participate in a noncontributory group health plan before it can be put in effect? 100% The free-look period for life insurance policy-owners age 60 or older is? 30 Days Pam is the primary beneficiary of a life insurance policy and wants to let the death benefit accumulate and receive only the monthly investment proceeds. Which settlement option should she choose? Interest Option What is the proper order of initial life insurance premiums, from lowest to highest? Modified premium, ordinary life, single premium Which of the following services are health maintenance organizations (HMO's) NOT required to provide? Prescription Drugs

Life insurance creates an immediate estate". This phrase means? When the insured dies, a death benefit is paid. Which statement is true regarding policy dividends? A Dividend Option is selected by the Insured at the time of Policy purchase Which of the following is considered to be a situation that has the potential for loss? Loss exposure A person who asserts a right of recovery under an insurance policy is called? Claimant All of the following are considered characteristics of group life insurance EXCEPT? Individual policies An annuitant would like to determine the current value of her annuity. To do this, she multiplies the number of "accumulation units" she owns times the unit value of the "separate account". What kind of annuity BEST matches this description? Variable Annuity

A life insurance policy where the insured can choose where the cash value can be invested is called? Variable Life In a Life Insurance Policy, the entire contract consists of the? Policy and Attached Application When a mutual insurer becomes a stock company, the process is called Demutualization In California, an insurer organized under the state laws of Oregon is called a(n)? Foreign Insurer All of the these are examples of cost sharing in a health insurance policy EXCEPT? Coordination Premiums are best described as? The amount an insured pays per unit of coverage which of the following is not typically covered under vision care insurance? Eye Surgery Which of the following terms is NOT associated with a Major Medical policy? Capitation All of these statements concerning Medicare are true EXCEPT? Long-term care is covered by Medicare Part C Medicare Part A covers what type of care? Skilled nursing facility care In regards to a group health insurance plan, which statement is CORRECT? A non-contributory group health plan must cover all eligible members What is a participating life insurance policy? Contract that allows the policy-owner to "receive a share of "surplus" in the

form of policy dividends An agent's attempt to stop the replacement of an existing life insurance policy is known as? Conservation Periodic increases in policy benefits are allowed in which long-term care policy provision? Inflation protection What is considered to be the definition of disability, according to Social Security? Inability to engage in any substantial gainful activity Mike and Ike are 30 year old identical twins. Both are in excellent health. each brother purchases a life policy that has a $750 annual premium. Mike buys a 10- year renewable term policy. Ike purchases a whole life policy. all of the following statements are true EXCEPT? Mike has option of using his cash value to purchase a reduced amount paid- up whole life insurance What are members of the Medical Information Bureau (MIB) required to report? Medical aliments discovered during the underwriting process How long is a person expected to be disabled in order to receive Social Security disability benefits? 12 months

Under a health insurance policy, the provision that states the kind of benefits provided and the circumstances under which they will be paid is called the? Insuring clause Individuals age 65 or older are exclusively eligible for which optional program? Medicare Part B Which of the following does NOT have to be included on life insurance policy illustrations? Statement that all values and benefits are guaranteed The "blackout period" affects whose benefits? Surviving Souse An insurer having a large number of similar exposure units is consider important because The greater the number insured, the more accurately the insurer can predict losses and set up "appropriate premiums" Which of the following risk classification charges the lowest premiums? Preferred When calculating life insurance premium rates, which component is affected by an insured's age and gender? Mortality A life insurance policy that pays the face amount if the insured survives to a specified? Endowment insurance What type of license is required for an individual who charges a fee to review an insured's existing life insurance policy? Life and disability "analyst" Under the Payment of Claims provision, when are benefits typically payable after proof of loss is received? Immediately Which statement about Health Maintenance Organizations is NOT true?

When a member uses "out-of-network" providers, a higher monthly fee is charged How many "activities of daily living" must an insured be UNABLE to perform in order to meet the chronically ill requirement of a Long-Term Care policy? Minimum of "two" activities of daily living