California Life, Accident, and Health Insurance Final Exam tested questions (latest 2025, Exams of Insurance Economics

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California Life, Accident, and Health Insurance Final Exam

1. What is an insurance solicitor authorized to do

Help an agent or broker sell insurance

2. According to the California Insurance Code, what is "insurance ">>>> A con- tract
3. What does a Hospital Confinement indemnity policy pay for

Pay a spec- ified daily amount while the insured is confined to a hospital

4. According to the California Insurance Code, how is the word "may" inter- preted

Permissive

5. Which statement is CORRECT when describing a contract of adhesion >>>> - Contract may be accepted or rejected by the insured.

6. Retirement plans are prevented from favoring highly compensated em- ployees under which government regulation >>>> Nondiscrimination
7. When calculating life insurance premium rates, which component would an agent's commission fall under

Insurer's expenses

8. All of the following circumstances must be met for loss retention to be an effective risk management technique, EXCEPT >>>> Probability of loss is unknown

Conversion of child's coverage to permanent insurance requires evi- dence of insurability 13.Which of the following types of life insurance combines a savings ele- ment along with a flexible premium option Universal life 14.What determines the Social Security normal retirement age Year in which worker was born 15.When an insurance company requests an attending physician's report, the request must be accompanied by a >>>> copy of the signed authorization 16.A savings vehicle designed to first accumulate funds and then system- atically liquidates the funds is called a

>>>> deferred annuity

ance policy>>>> Cancer Cancer affects 1 in 2 men and 1 in 3 women and typically involves a lot of out-of-pocket expenses. Considered most common type of specified disease in- surance. 23.Both the Federal and state governments jointly finance which health insurance entitlement program>>>> Medi-Cal 24.Which of these is NOT a valid policy dividend option>>>> Monthly income payments

26.An insurance policy issued in California may be called a comprehensive long-term care insurance policy if benefits are provided for >>>> Institutional (nurs- ing facilities) and home care 27.According to the PPACA, an adult can be covered by a parent's health care plan until what age>>>> Age 26 28.Under a noncancellable health insurance policy, an insurer can >>>> cancel the policy for nonpayment of premium

29.AAA Insurance Company has transferred a portion of its loss exposure to BBB Insurance Company. In this reinsurance transaction, what is AAA Insurance Company called>>>> Primary Insurer

30. 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

disclose the conviction on his insurance license application 39.Insurance agents and brokers must make their insurance records avail- able to the Commissioner >>>> at all times 40.The Human Life Value concept is based on >>>> income

41. At age 65, which of the following is available at no cost to individuals>>>> - Medicare Part A 42.The importance of a representation is demonstrated in what rule >>>> Materi- ality of concealment 43.Express power given to an agent in an agency agreement is >>>> the authority to represent the insurer 44.The risk selection process is primarily given to which insurance company department>>>> Underwriting

45.Why is a life insurance policy's delivery date important>>>> The free-look period begins on the policy delivery date 46.An employee for XYZ Corp is injured on the job. Where does coverage for the employee's injuries come from>>>> Workers' Compensation 47.Rating an individual's need for long-term care benefits can be measured by >>>> Activities of daily living 48.When handling premiums for an insured, an agent is acting in which capacity>>>> Fiduciary 49.Individual health insurance coverage typically excludes injuries at an em- ployee's workplace because >>>> it's covered by the state Worker's Compensation program 50.Which of the following does specified disease insurance NOT cover >>>> costs covered by medical expense insurance 51.Which of the following is NOT a requirement of a contract >>>> Equal consid- eration is required between the involved parties 52.ESOPs are typically invested in >>>> employer stock 53.Buy-sell agreements are typically funded by which two insurance prod- ucts>>>> Life insurance and disability insurance 54.Which of the following is NOT covered by the Family and Medical Leave Act (FMLA)>>>> Traveling overseas with a spouse 55.The "blackout period" affects whose benefits>>>> Surviving spouse 56.Employer contributions to qualified plans are >>>> Tax deductible

62. When a mutual insurer becomes a stock company, the process is called- >>>> Demutualization 63.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 64.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 65. Medical expenses policies will typically cover which of the following>>>> - Injuries cause by accidents 66.A situation in which there is ONLY a chance of loss or no loss is a fundamental risk >>>> pure risk 67. Which statement about Health Maintenance Organization is NOT true>>>> - When a member uses out-of-network providers, a higher monthly fee is charged 68.Who does a life settlement broker represent>>>> Individual wanting to sell their life policy to a third party 69.What effect did the Pregnancy Discrimination Act have on the health industry>>>> Pregnancy must be treated as any other medical condition

70.What time period allows an insured's life insurance policy to remain inform even if the premium was not paid on the due date>>>> Grace period 71.A creditor would be allowed rights to life insurance policy proceeds if which of the following beneficiaries is chosen>>>> The insured's estate 72.What distinguishes a deferred annuity from an immediate annuity>>>> The time at which benefit payments start 73.The elimination period in a disability income policy serves the same purpose as(n) in a medical expense policy >>>> deductible 74.When a life insurance policy is surrendered, how does the cost recovery rule apply>>>> The policy's cost basis is exempt from taxation 75.An insured is protected from the expense of a catastrophic illness by which of the following health insurance provisions>>>> Stopp-loss 76.Which of the following is NOT required in the content of a policy>>>> Prob- ability of loss 77.The insurer has the option of terminating a health insurance policy on a date stated in the contract. What type of policy is this>>>> Optionally renewable

insur- er determines whether to issue a policy is called >>>> underwriting 87.When an accidental death benefit is added to a while life policy, how does this affect the policy's cash value>>>> Policy's cash value is not affected 88.Which of the following acts is NOT a Federal offense committed by an insurance agent >>>> Misrepresentation on an insurance application 89.A contract requires >>>> an offer and acceptance of the contract terms 90.A beneficiary receives only the death benefit earnings in which settle- ment option>>>> Interest option 91.Manuel is considered to be a disable person as defined by the Americans with Disabilities Act (ADA). As such, he is unable to perform any of the following life activities EXCEPT >>>> Driving 92.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 >>>> Family income policy 93.Which of the following factors is NOT used in underwriting health insur- ance policies>>>> Intelligence

94.How does underwriting differ between group life and individual life insur- ance>>>> Medical questions must be answered on individual life insurance 95.Which of the following are two examples of activities of daily living (ADL's) used in qualifying for long-term care benefits>>>> Eating and dressing 96.According to the California Insurance Code, what is used to describe a fact so important it could affect the policy premium>>>> Materiality 97.An annuitant would like to determine the amount of an annuity distribu- tion that is exempt from taxation. What is used to calculate this>>>> Exclusion ratio 98.What is considered to be the definition of disability, according to Social Security>>>> Unable to engage in any substantial gainful activity 99.Paul has existing annuity and is sold a new one, in which the new policy holds no greater financial benefit to him that the existing contract. This is considered a(n) >>>> unnecessary replacement

100. Which of the following is NOT a common life insurance policy rider>>>> ex- tended term
101. Under a disability income insurance policy, which criteria must be met for "bodily injury" to be classified as accidental>>>> The cause may be intention- al, but the result must be accidental
102. An individual who transacts life, disability, or life and

plans with a maternity-only deductible or copayment greater than $1,500 are eligible

109. Which of the following statements correctly describes a contract of indemnity>>>> One party is restored to the same financial position the party was in before the loss occurred
110. 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
111. What are members of the Medical Information Bureau (MIB) required to report>>>> Medical ailments discovered during the underwriting process
112. Which of the following statements about aleatory contracts is NOT true>>>> The insured and the insurer contribute equally to the contract
113. What is a common reason people purchase an annuity>>>> To protect against the risk of outliving their financial resources
114. The California Insurance Code defines "policy" as a(n) >>>> Written contract
115. Where must you specifically reside to qualify for MRMIP>>>> California
116. The probability of death listed by year, is demonstrated in >>>> Mortality tables
117. Which of these is NOT a relevant factor in the health insurance

principle of morbidity>>>> Intelligence

118. Which of the following is NOT included in comprehensive major medical plans>>>> First-dollar coverage
119. An insurance company entitled to transact business in California is called a(n) >>>> admitted carrier
120. The free-look period for life insurance policy owners age 60 or older is >>>> 30 days
121. Which of the following is a contract that involves one party which indemnifies another when a loss arises from an unknown event>>>> Insurance policy
122. In regards to a group health insurance plan, which statement is COR- RECT>>>> A non-contributory group health plan must cover all eligible members
123. A life insurance policy's limit of liability would be >>>> the policy's face amount
124. How is a life insurance policy dividend legally defined>>>> A return of excess premium and not taxable