California Life, Accident and Health Insurance Final Exam Questions With 100% Correct Veri, Exams of Health sciences

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California Life, Accident and Health Insurance Final Exam

Questions With 100% Correct Verified Answers

When an insurance company requests an attending physician's report, the request must be accompanied by a – ANSWER: Copy of the signed authorization Which of these is the automatic mode of settlement for life insurance policy proceeds? ANSWER: - lump sum Which of the following best describes the statement "the more times an event is repeated, the more predictable the outcome becomes"? - ANSWER: Law of large numbers What area of group health insurance is regulated under the Employee Retirement Security Act of 1974 (ERISA)? - ANSWER: Disclosure and reporting If an insured dies because of an accident, which type of life insurance rider will provide additional coverage? - ANSWER: Accidental death rider A report which is based on creditworthiness and personal characteristics that influences an insurance applicant's eligibility for life and health insurance is called a(n) - ANSWER: Consumer report Tim was recently terminated from his employment and opted to change his existing group term life insurance to individual permanent life insurance. What is this process called? - ANSWER: conversion The California insurance code allows an individual how many days to cancel a life policy for a full- refund? - ANSWER: Between 10 and 30 days A creditor would be allowed rights to life insurance policy proceeds if which of the following beneficiaries is chosen? - ANSWER: The insured's estate When an applicant for insurance, the process by which the insurer determines whether to issue a policy is called - ANSWER: Underwriting Who are the parties to the master contract in a group life insurance policy? - ANSWER: Insurer and employer What is the price of insurance for each exposure unit? - ANSWER: rate When an accidental death benefit is added to a whole life policy, how does this affect the policy's cash value? - ANSWER: Policy's cash value is not affected Which of the following acts in NOT a federal offense committed by an insurance agent? - ANSWER: Misrepresentation on an insurance application Which type of risk is gambling? - ANSWER: Speculative risk Which of the following is NOT true regarding a family policy that covers children? - ANSWER: Conversion of child's coverage to permanent insurance requires evidence of insurability Which course of action is the insurer entitled to when deliberate concealment is committed by the insured? - ANSWER: Rescinding the contract

All of the following circumstances must be met for loss retention to be effective risk management techniques EXCEPT - An applicant has revealed conditions that require more information. Which of the following is needed next? - ANSWER: Attending Physician's Statement All these are reasons the commissioner may disapprove a licensee's request to use a fictitious name EXCEPT - ANSWER: The name is the licensee's actual name Which of the following statements do NOT apply to child coverage in a family policy - ANSWER: Only children born prior to policy's issue date may be included A spendthrift clause in a life insurance policy - ANSWER: restricts the ability of the beneficiary to assign benefits Retirement plans are prevented from favoring highly compensated employees under which government regulations? - ANSWER: Nondiscrimination Restoring an insured to the same condition as before a loss is known as - ANSWER: principle of indemnity When calculating life insurance premium rates, which component is affected by an insured's age and gender? - ANSWER: Mortality Reasonably necessary acts that an agent must perform for carrying out his/her expressly authorized duties are covered by an agent's - ANSWER: implied authority Which of the following is NOT a true description of non-medical life insurance? - ANSWER: Applicants are not required to answer medical questions on the application A participating company is also referred to as which type of insurer? - ANSWER: Mutual insurer Which of the following is NOT consideration a definition of risk? - ANSWER: Cause of loss A terminated employee that has exercised the conversion privilege is able to convert - ANSWER: term insurance into permanent insurance How long must life agents keep their transaction records? - ANSWER: 5 years Express power given to an agent in an agency agreement is - ANSWER: the authority to represent the insurer Mark, age 45, has a Modified Endowment Contract (MEC). What is the tax penalty for taking a loan against this policy prior to age 59 1/2? - ANSWER: 10% According to the California insurance code , how is the word "may' interpreted? - ANSWER: Permissive The risk selection process is primarily given to which insurance company department? - ANSWER: Underwriting Which word implies permissiveness according to the California Insurance Code? - ANSWER: May 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) - ANSWER: unnecessary replacement

An agents attempts to stop the replacement of an existing life insurer insurance policy is known as - ANSWER: Conservation John and Mary have a handicapped child that is financially dependent upon them. The death of one of the parents would not be financially disastrous, however the death of both likely would be. Which policy would be best suited for them? - ANSWER: Second-to-die policy Which statement is correct when describing a contract adhesion? - ANSWER: Contract may be accepted or rejected by the insured AAA insurance Company has transferred a portion of its loss exposure to the BBB insurance Company. In this reinsurance transaction, what is AAA insurance company called? - ANSWER: Primary insurer Which of the following is NOT a characteristic of reinsurance? - ANSWER: Increases the unearned premium reserve What does the insurance term indemnity refer to? - ANSWER: to make whole A savings vehicle designed to first accumulate funds and then systematically liquidates the funds is called an - ANSWER: Differed annuity How are Roth IRA's treated for tax purposes? - ANSWER: Non-deductible contributions and tax-free distributions Which statements are true regarding policy dividends? - ANSWER: A dividend option is selected by the insurer at the time of policy purchase When intentional concealment is involved, what course of action is the injured party entitled to? - ANSWER: Rescission of the contract Life insurance surplus must be distributed to policy owners at what frequency? - ANSWER: Annually An insurer that has been found using higher rates based on race, religion, or ethnicity is said to be engaging in - ANSWER: Unfair discrimination What does the guarantee insurability option allows insured to do? - ANSWER: Purchase addition coverage Which of the following does a policy owner NOT have the right to change? - ANSWER: Dividend schedule What does a life settlement broker represent? - ANSWER: Individual wanting to sell their life policy to a third party An annuitant would like to determine the amount of an annuity distribution that is exempt from taxation. What is used to calculate this? - ANSWER: Exclusion ratio How long is a person expected to be disabled in order to receive social security disability benefits? - ANSWER: 12 months The California insurance code defines "policy" as a(n) - ANSWER: Written contract A life insurance policy's limit of liability would be - ANSWER: The policy's face amount

When calculating life insurance premium rates, which component would an agents commission fall under? - ANSWER: Insurer's expenses 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 - ANSWER: Joint Life Policy According to section 1729.2 of the California insurance code, which of these does NOT qualify as "background information" - ANSWER: Misdemeanor charges filed , not resulting in a conviction Jerry is an insured who understands his age on his life insurance application, paying $12 per $1,000 of insurance instead of $15 per $1,000. If he died , how will the adjusted benefit be calculated? - ANSWER: 12/15th of the policy's face amount What is an insurance solicitor authorized to do? - ANSWER: Help an agent or broker sell insurance In a life insurance policy, the entire contract consists of - ANSWER: Policy and attached application What is a participating life insurance policy? - ANSWER: Contract that allows the policyowner to receive a share of surplus in the form of policy dividends Employer-provided group term life insurance is exempt from income taxation up to - $50, Why is a life insurance policy's delivery date important? - ANSWER: The free-look period begins on the policy delivery date An insurance policy written after 1988 that fails to pass the seven-pay test is known as - ANSWER: Modified Endowment Contract What insurance term the state of California uses for an insurer that is eligible to transact business in this state? - ANSWER: Admitted Non-deductible contributions are typically associated with a - ANSWER: Roth IRA 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? - ANSWER: Reinsurance Which of the following is considered to be any situation that has potential for loss - ANSWER: Loss exposure Which of the following is NOT a requirement for a terminated employee that has exercised this conversation privilege? - ANSWER: Provide proof of insurability The medical bureau consist of - ANSWER: Life and health insurance companies Mike and Ike are 30 year old identical twins. Both are in excellent health. Each brother purchases a life policy that has $750 annually premium. Mike buys a 10-year renewable term policy. Ike purchased a whole life policy. All of the following are true EXCEPT - ANSWER: Mike has the option using his cash value to purchase a reduced amount of paid-up whole life insurance Which of the following does NOT have to be included on life insurance policy illustrations? - ANSWER: Statement that all values and benefits are guaranteed A person who asserts a right of recovery under an insurance policy is called - ANSWER: claimant Which of the following is NOT an insurer policy expense? - ANSWER: premiums

Which of these statements correctly describe risk? - ANSWER: Pure risk is the only insurance risk Which of the following is NOT a life insurances settlement option? - ANSWER: Extended term option Which of the following is NOT a primary objective of insurance regulations? - ANSWER: Interpret policy provisions Insurance agents and brokers must make their insurance records available to the commissioner - ANSWER: At all times The free look period for life insurance policy's owners age 60 or older is - ANSWER: 30 days Which policy provision protects the policyowner from unintentional lapse of the contract? - ANSWER: grace period An annuity which is backed by a life insurer's separate account is called a(n) - ANSWER: Variable annuity Which of the following is NOT considered to be an act of insurance solicitation? - ANSWER: Publishing a magazine where one of the advertisers is an insurer In renewable term life insurance policy, the contract will usually - ANSWER: require a higher premium payable at each renewal According to the California Insurance Code, what term is used to describe a fact so important it could affect the policy premium? - ANSWER: Materiality Victoria owns a life annuity and elects to receive annuity payments monthly for the remainder of her life with "ten years certain". Her annuity will make payments - ANSWER: For a minimum of 120 months and maximum of the remainder of her life. An insurance company entitled to transact business in California is called a(n) - ANSWER: admitted carrier How is the cost of employer-provided group life insurance with coverage amounts above $50, treated for tax purposes? - ANSWER: Taxable income to the employee All these are common personal uses of life insurance EXCEPT - ANSWER: Fund a buy-sell agreement When handling premiums for an insured , an agent is acting in which capacity - ANSWER: fiduciary According to the California code governing claim settlement practices, which of the following is NOT considered to be an act of unfair discrimination? - ANSWER: Denial of claim based on reckless behavior Which of the following is an insurer established by a parent company for the purpose of insuring the parent company's loss exposures? - ANSWER: Captive insurer Most U.S. life insurance companies belong to the - ANSWER: Medical Information Bureau What is required after a life agent sells an insurance policy to an applicant without being appointed by the insurer? - ANSWER: Notice of appointment must be submitted to the Commissioner

According to the California Insurance Code, what is the maximum penalty per violation for anyone who unwillfully commits an unfair method of competition? - ANSWER: $5, What does a life insurance policy's premium take effect? - ANSWER: Insured becomes totally disabled Anyone employed in California to assist an insurance agent in transacting insurance is called an insurance - ANSWER: solicitor