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California Life Accident and Health Insurance State Exam Questions and Answers Latest Updated 2024/2025 (Verified Answers) Manuel is considered to be a disabled person as defined by the Americans with Disabilities Act (ADA). As such, he is unable to perform any of the following life activities EXCEPT - ANSWER-Driving Which of the following is NOT a provision in a disability income policy? - ANSWER-Deductible and coinsurance provision Which of these statements is NOT true concerning recurrent disabilities?
- ANSWER-The insurer continues coverage after a new elimination period Kim is insured under a disability income insurance policy with an "own- occupation" clause. She was recently injured in an automobile accident and can no longer perform the tasks of her job. Kim is now considered to be - ANSWER-totally disabled What percentage of eligible employees must participate in a noncontributory group health plan before it can be put in effect? - ANSWER-100%
Business Overhead Expense Insurance pays for - ANSWER-business expenses when a business owner becomes disabled Minimum participation standards exist for group health insurance plans in order to - ANSWER-prevent adverse selection The problem of overinsurance is addressed in which health insurance provision? - ANSWER-Coordination of benefits What is the purpose of the coordination of benefits (COB) provision? - ANSWER-To avoid duplication of benefit payments and overinsurance when an individual is covered under more than one group health plan Who is financially liable for the payment of covered claims in a fully insured group health plan? - ANSWER-Insurer The insurer has the option of terminating a health insurance policy on a date stated in the contract. What type of policy is this? - ANSWER- Optionally renewable
What is a common reason people purchase an annuity? - ANSWER-To protect against the risk of outliving their financial resources What kind of annuity pays income to two annuitants until their deaths? - ANSWER-Joint and survivor annuity What is a joint and survivor annuity? - ANSWER-Provides payments the annuity to two people. If either person dies, the same income payments continue to the survivor for life. When the surviving annuitant dies, no further payments are made to anyone. 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 a maximum of the remainder of her life Which of the following statements regarding a life insurance policy dividend is TRUE? - ANSWER-It is the distribution of excess of funds accumulated by the insurer on participating policies. An insured owned by its policyholders is called a - ANSWER-mutual insurer
An insurer enters into a contract with a third party to insure itself against losses from insurance policies it issues. What is the agreement called? - ANSWER-Reinsurance What is reinsurance? - ANSWER-An arrangement by which an insurance company transfers a portion of a risk it has assumed to another insurer Which of the following is NOT a characteristic of reinsurance? - ANSWER- Increases the unearned premium reserve Which of the following is a contract that involves one party which indemnifies another when a loss arises from an unknown event? - ANSWER-Insurance policy What is an insurance policy? - ANSWER-A contract where one party promises to indemnify another against loss that arises from an unknown event What is residual disability income insurance payments based on? - ANSWER-The amount of the insured's income is reduced by the disability
How does rising morbidity rates affect health insurance? - ANSWER- Increased premiums In health insurance, morbidity rates show - ANSWER-the expected incidence of sickness or disability within a given group during a given period of time Which of the following factors is NOT used in underwriting health insurance policies? - ANSWER-Intelligence Which of the following is NOT a requirement of a contract? - ANSWER- Equal consideration is required between the involved parties Which of the following statements correctly describes a contract of indemnity? - ANSWER-One party is restored to the same financial position the party was in before the loss occurred Which of the following is NOT required in the content of a policy? - ANSWER-Probability of loss
Which statement is CORRECT when describing a contract of adhesion? - ANSWER-Contract may be accepted or rejected by the insured Restoring an insured to the same condition as before a loss is an example of the principle of - ANSWER-Indemnity Which course of action is the insurer entitled to when deliberate concealment is committed by the insured? - ANSWER-Rescinding the contract The importance of representation is demonstrated in what rule? - ANSWER-Materiality of concealment What is the price of insurance for each exposure unit? - ANSWER-Rate Which of the following is NOT an insurer policy expense? - ANSWER- Premiums A beneficiary receives only the death benefit earnings in which settlement option? - ANSWER-Interest option
Scott has just purchased a new house. He is now shopping for a life insurance policy that provides a death benefit that matches the projected outstanding debt of his mortgage. Which life policy would best suit his needs? - ANSWER-Mortgage redemption A life insurance policy that pays the face amount if the insured survives to a specified period of time is called - ANSWER-endowment insurance Which of the following is NOT a risk classification that an underwriter would use? - ANSWER-Dividend risk When an applicant applies for insurance, the process by which he insurer determines whether to issue a policy is called - ANSWER-underwriting 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
Which of the following types of information is NOT required for a life insurance application? - ANSWER-Ethnicity The Medical Information Bureau consists of - ANSWER-life and health insurance companies What must an applicant do in order to authorize the release of an attending physician report? - ANSWER-Sign a consent form What are members of the Medical Information Bureau (MIB) required to report? - ANSWER-Medical ailments discovered during the underwriting process Which of the following does specified disease insurance NOT cover? - ANSWER-costs covered by medical expense insurance Major medical expense plans typically use a cost containment measure for emergency hospital care. This is referred to as a(n) - ANSWER- deductible
Which of the following is a situation where there is a possibility of either a loss or a gain? - ANSWER-Speculative risk Which of these statements correctly describes risk? - ANSWER-Pure risk is the only insurable risk All of the following circumstances must be met for loss retention to be an effective risk management technique, EXCEPT - ANSWER-Probability of loss is unknown A situation in which there is ONLY a chance of loss or no loss is a - ANSWER-pure risk Which of the following refers to a condition that may increase the chance of a loss? - ANSWER-Hazard A hazard can be best described as - ANSWER-a condition that may increase the likelihood of a loss occurring How are Roth IRA's treated for tax purposes? - ANSWER-Non-deductible contributions and tax-free distributions
Retirement plans are prevented from favoring highly compensated employees under which government regulation? - ANSWER- Nondiscrimination What doe ESOP stand for? - ANSWER-Employee Stock Ownership Plan ESOPs are typically invested in - ANSWER-employer stock What type of coverage pays a benefit for part-time nursing care that can be provided in a patient's home? - ANSWER-Home health care What portion does an insured pay for covered expenses under Medicare Part B after the deductible? - ANSWER-20% Rating an individual's need for long-term care benefits can be measured by - ANSWER-activities of daily living Which of the following plans will cover medical costs that Medicare doesn't cover? - ANSWER-Medicare supplement
Which of the following pieces of information is NOT gathered during the personal financial planning process? - ANSWER-An individual's civic organization memberships The Human Life Value concept is based on - ANSWER-income An insurance policy issued in California may be called a comprehensive long-term care insurance policy if benefits are provided for - ANSWER- Institutional (nursing facilities) and home care According to the PPACA, an adult can be covered by a parent's health care plan until what age? - ANSWER-Age 26 Kimberly is an employee on leave under the Family and Medical Leave Act (FMLA). What will happen to her group health coverage? - ANSWER-She continues to be enrolled during the leave People with low income can be provided with medical assistance through which program? - ANSWER-Medi-Cal
When selling a long term care insurance rider to an applicant, a life agent must take into consideration all of these factors, EXCEPT - ANSWER- Attending physician's statement In what order are people on the MRMIP waiting list allowed to enroll? - ANSWER-Based on the date an individuals's application is received Which of the following is NOT an accurate description of Access for infants and Mothers Program (AIM)? - ANSWER-Only women who have private insurance plans with a maternity-only deductible or copayment greater than $1,500 are eligible Which of the following actions is NOT allowed by Health Insurance Counseling and Advocacy Program (HICAP) counselors? - ANSWER-Charge a fee What is the purpose of the Pre-Existing Condition Insurance Plan (PCIP)? - ANSWER-PCIP was created by the PPACA for people rejected by private health insurers due to pre-existing conditions
Who does a life settlement broker represent? - ANSWER-Individual wanting to sell their life policy to a third party 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 Which of the following does NOT have to be included on life insurance policy illustrations? - ANSWER-Statement that all values and benefits are guaranteed Which of the following describes a contributory group insurance plan? - ANSWER-Part of the premium is paid by the employee A terminated employee that has exercised the conversion privilege is able to convert - ANSWER-term insurance into permanent insurance How does underwriting differ between group life and individual life insurance? - ANSWER-Medical questions must be answered on individual life insurance
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 Who are the parties to the master contract in a group life insurance policy? - ANSWER-Insurer and employer Which of the following does Medicare Part A NOT provide coverage for? - ANSWER-Doctor's services Which of the following healthcare providers provides both the healthcare services and healthcare coverage? - ANSWER-Health Maintenance Organization (HMO) Individuals become eligible for Medicare Part A benefits at what age? - ANSWER- 65 After the annual deductible is met, a Medicare Part B patient will pay ____ of the remaining covered expenses. - ANSWER-20%
