California Life and Health Final Exam 171 Questions with Answers,100% CORRECT

Document Content and Description Below

California Life and Health Final Exam 171 Questions with Answers Whole Life Policies - CORRECT ANSWER also called permanent insurance, builds cash value, policy endows at age 100 401(k) - CORR... ECT ANSWER a Cash or Deferred Arrangement (CODA) plan that is a modified profit-sharing or pension plan. 403(b) - CORRECT ANSWER a Cash or Deferred Arrangement (CODA) plan that is a modified profit-sharing or pension plan. Limit of Liability - CORRECT ANSWER The total amount the insurer will pay for an insured risk. -Flexible premiums, -Guaranteed minimum death benefit -Guaranteed minimum rate of return. - CORRECT ANSWER are characteristics of an interest sensitive whole life policy Creditor - CORRECT ANSWER is the policyowner and beneficiary, and is issued the master policy regarding creditor groups that provide group credit insurance protection on the lives of debtors Extension of benefits and offer conversion to an individual policy - CORRECT ANSWER Mindy became disabled while a group policy was in force. When the policy was terminated, which of the following is a responsibility of the insurer? Accumulation period - CORRECT ANSWER "putting in" time and the growth time of the annuity. It is the time between when an annuity is purchased and the time when benefits begin. The insurer - CORRECT ANSWER not the producer, is required to notify insurers of policies to be replaced, and if requested, provide insurers with the policy comparison statement. Annuities - CORRECT ANSWER like insurance policies involve some risk, there is little if any guaranteed 60% - CORRECT ANSWER Under the PPACA, what is the actuarial value for a bronze plan? -full disclosure of compensation to broker -contact information for broker -gross purchase price paid for policy -the amount to be paid to policy owner. - CORRECT ANSWER Disclosures required at the time of the offer: Date by which funds will be available is - CORRECT ANSWER required to be disclosed at the time of a life settlement contract application. Implied warranty - CORRECT ANSWER A representation in an insurance contract qualifies as: Limited pay life policy - CORRECT ANSWER What type of policy provides coverage for life, but the premiums are not due beyond age 65, has guaranteed premium, accumulates cash value and the coverage will never decrease? A limited pay life plan - CORRECT ANSWER provides the same benefits as a standard whole life plan, but has a shorter premium paying period. Adult day care - CORRECT ANSWER What is medical or nonmedical care on a less than 24-hour basis, provided in a licensed facility outside the residence, for persons in need of personal services, supervision, protection, or assistance in sustaining daily needs, including eating, bathing, dressing, ambulating, transferring, toileting, and taking medications? The California Department of Insurance - CORRECT ANSWER Who has jurisdiction over entities that provide coverages designed to pay for health care providers' services that are not certified by other governmental agencies? Partnership policies provide lifetime asset protection and Medi-Cal services. Premiums for Partnership policies are approximately the same as for non-Partnership policies. - CORRECT ANSWER What is the major difference between Partnership policies and non-Partnership policies? Reimbursement. Medical expenses are structured to reimburse some level of medical expense. - CORRECT ANSWER Medical expense plans are what type of contracts? The policyowner chooses where their premiums are to be invested - CORRECT ANSWER With a variable annuity 138% - CORRECT ANSWER Some of the costs of the PPACA will be offset by tax credits and subsidies available to families with incomes starting at what percentage of the poverty level? 138%-400% of the poverty level - CORRECT ANSWER Some of the costs of the PPACA will be offset by tax credits and subsidies available to families with incomes between Long-term care - CORRECT ANSWER is not considered an essential health benefit? ambulatory patient services; -emergency services; -hospitalization; -maternity and newborn care; -mental health services and addiction treatment; -prescription drugs; -rehabilitative services and devices; -laboratory services; -preventive services, -wellness services, and -chronic disease treatment; -and pediatric services. - CORRECT ANSWER Essential health benefits include 2010 - CORRECT ANSWER Under the PPACA, health care plans do not have to cover preventive services if they were issued before September 23 of what year? Beginning on or after September 23, 2010 - CORRECT ANSWER All new health care plans must cover certain preventive services such as mammograms and colonoscopies without charging a deductible, co-pay or coinsurance. Certain preventive services like mammograms and colonoscopies - CORRECT ANSWER are now covered under the PPACA after September 23 2010 without charging a deductible, co-pay or coinsurance the benefit of employees/members. - CORRECT ANSWER In order for a labor union to be eligible to provide group insurance to its employees, the group coverage must be intended for UNLESS the termination or reduction in hours is due to gross misconduct. - CORRECT ANSWER An employee is entitled to continued coverage in the event the employee is terminated or has their hours reduced, The termination of employment or reduction in hours due to gross misconduct - CORRECT ANSWER In California, individuals who are not offered continued coverage under COBRA are entitled to continued coverage under a group policy in all of the following situations, EXCEPT: Needs Planning - CORRECT ANSWER Providing income and funds to meet lump sum obligations is the primary focus of -Income needed for daily family expenses -Cash required retiring outstanding debt -Funding college tuition for surviving children - CORRECT ANSWER Factors that should be considered in a needs approach calculation Renewable term - CORRECT ANSWER allows the policyowner to purchase another identical policy at the end of the year without proving insurability. Cash surrender value - CORRECT ANSWER What nonforfeiture option allows the policyowner to receive the policy's cash value? Allows the policyowner to receive the policy's cash value - CORRECT ANSWER The cash surrender value Human Life Value - CORRECT ANSWER What approach calculates the amount of money a person is expected to earn over their lifetime? Human Life Value Approach - CORRECT ANSWER Calculates the amount of money a person is expected to earn over his lifetime to determine the face amount of life insurance needed, thereby placing a dollar value on the life of an individual. Morbidity - CORRECT ANSWER When an insurer is determining how much premium to charge for a life insurance policy, the insurer considers all of the following, EXCEPT: Morbidity - CORRECT ANSWER is the rate at which accident, sickness or disability will occur - and is a determination when calculating health insurance premiums. -Mortality -interest earnings -expenses - CORRECT ANSWER what are the considerations when determining a life insurance premium Dental Vision Hospital Indemnity - CORRECT ANSWER Examples of Limited Benefit Plans, because they limit either the scope of coverage and/or the amount of coverage to one specific area Basic Medical - CORRECT ANSWER covers a wide range of services and therefore not a limited benefit plan 10 days - CORRECT ANSWER In California, what is the minimum free look period for a life insurance policy for someone under 60 years of age? -Private fee-for-service plans -Managed care plans -Preferred Provider plans - CORRECT ANSWER These plans are available under the Medicare Advantage program Medicare Private Fee-For-Service plans - CORRECT ANSWER are offered by private companies and allow beneficiaries to receive care from any provided approved by Medicare that is willing to accept the payment schedule of the plan. An insurance contract - CORRECT ANSWER is a legal agreement made between an insurance company and an individual. The insurance company, or insurer, collects a small amount of money termed premium from the insured individual. A legal agreement made between an insurance company and an individual - CORRECT ANSWER How does the California Insurance Code define an insurance contract? When the policy is delivered with all the other papers - CORRECT ANSWER Oliver has been approved for his new health insurance policy. When will he see a complete outline of coverage? Is the current interest rate, plus a guaranteed minimum - CORRECT ANSWER During the accumulation phase of the annuity, the interest for a fixed annuity: A fixed annuity can have two levels of interest rates - CORRECT ANSWER The insurer can guarantee the current rate at the beginning of the calendar year, and also guarantee a minimum rate that is paid if the current rate falls below that level. Melvin has an injury that has rendered him permanently and totally disabled. First, Melvin must be totally and permanently disabled. Next, he must wait 3 to 6 months after the disability occurs (the normal waiting period) before the insurer will pay under the disability income benefit. - CORRECT ANSWER Under what conditions will an insurer pay Melvin under the disability income rider attached to his life policy? 9.50% - CORRECT ANSWER The PPACA states that businesses required to buy insurance will be penalized if employees have to pay more than what percentage of their income for insurance? Flexible spending accounts - CORRECT ANSWER do not have a carry forward provision with their accounts. SEP - CORRECT ANSWER A qualified retirement plan that blends an IRA with a profit-sharing plan and allows the employer to deduct up to 25% of contributions made to all employees is called a: A securities license - CORRECT ANSWER is not required to sell Equity-Indexed Annuities (EIA)s. Standard, preferred, substandard and declined - CORRECT ANSWER are the common classification ratings underwriters use for risk Direct response policies - CORRECT ANSWER tend to have LOWER premiums and RESTRICTED policy benefits. Illustrations - CORRECT ANSWER are not part of the insurance contract. Illustrations - CORRECT ANSWER must be approved by the insurer, and the agent cannot make any changes to illustrations. -She can take a lump-sum refund of premiums paid minus withdrawals and surrender charges. -She can annuitize the contract based on cash accumulated at that time. (Surrender or Annuitize) - CORRECT ANSWER Helen, an annuity contract owner, has stopped making premium payments on her annuity - during the accumulation period. What are her options? A certificate of insurance which may contain a schedule of benefits - CORRECT ANSWER As evidence of being covered in a group medical plan, the employee will receive which of the following: Entity Plan, best for partnerships with several partners - CORRECT ANSWER What business continuation plan would be best for a furniture company owned by five partners? they are not limited to term life policies. - CORRECT ANSWER An advantage of survivorship policy is that 10, Essential health benefits include 10 benefit categories that must be offered under all individual and small group plans with no dollar limits under the PPACA. - CORRECT ANSWER Under the PPACA, there are how many essential health benefits? Variable policy premiums - CORRECT ANSWER An insurer's separate account is for: -The face amount and the premiums are level, and payable over the life of the insured, up to 100 years of age. -The cash value and death benefits are guaranteed by the insurer. -The premium can be lower than limited payment and single premium polices. - CORRECT ANSWER What are the advantages of purchasing a straight life policy? California Code of Regulations (CCR) - CORRECT ANSWER In California, which of the following contains the state's administrative rules pertaining to insurance? Nonadmitted - CORRECT ANSWER A surplus line insurer is $250,000 - CORRECT ANSWER The coverage provided by the CLHIGA is limited to a maximum of $250,000 for death, disability, long-term care, and health insurance benefits. $250,000 - CORRECT ANSWER What is the maximum amount the California Life and Health Insurance Guaranty Association will pay for death benefits from an insolvent insurer? A condition that occurs prior to making an application for insurance. An underwriter should be informed about any conditions that existed prior to an application for insurance. - CORRECT ANSWER An underwriter will consider which of the following conditions in making their decision to approve an application for insurance? A joint life plan, or first to die plan, will provide the survivor money to buy out the deceased partner's heirs. - CORRECT ANSWER What plan would likely meet the needs of 2 partners who want to create a buy/sell agreement and an inexpensive and simple funding plan? Information concerning an individual's character - CORRECT ANSWER According to the Fair Credit Reporting Act, which of the following is contained consumer reports? Consumer reports are - CORRECT ANSWER reports about the characteristics of an individual, including the individual's general character and reputation, employment history, living arrangements, and credit worthiness. Monthly - CORRECT ANSWER Under the PPACA, the shared responsibility payment is assessed on what basis? shared responsibility payment - CORRECT ANSWER is assessed on a monthly basis, but is only paid once for failure to purchase health insurance shared responsibility payment - CORRECT ANSWER annual penalty that will be assessed on US residents who do not purchase and maintain a certain level of health insurance coverage based on household income A multiple employer trust - CORRECT ANSWER When several employers form a trust fund to reduce the tax effects of providing employee benefits, especially life insurance, this is: Adverse Selection - CORRECT ANSWER Insurance uses a pre-existing condition clause to prevent: An insurance policy - CORRECT ANSWER is a contract where a promise of benefits to be paid is exchanged for premium payments a promise of benefits - CORRECT ANSWER In an insurance policy valuable consideration is exchanged for: Medi-Cal - CORRECT ANSWER The California Medicaid program is called: 2 years - CORRECT ANSWER In California, what is the incontestability period for group life insurance policies? Higher - CORRECT ANSWER When the insured and their dependents (spouse and children) are covered under a policy, premium rates are: experience rating - CORRECT ANSWER Which of the following is the method for rating group insurance premiums based on the prior claim history of the group? A limited-payment whole life - CORRECT ANSWER What kind of policy provides the option for the policyowner to pay for the entire policy over a specific and usually shorter period of time and grows cash value faster than ordinary life and matures when the insured reaches age 100 or dies? Guaranteed - CORRECT ANSWER Under the PPACA, issue of health insurance is: -Grace period provision -Time payment of claims provision -Reinstatement Provision - CORRECT ANSWER All of the following provisions are mandatory under the uniform NAIC law: Co-insurance - CORRECT ANSWER is a benefit design feature. Preventative and wellness care to keep its members well - CORRECT ANSWER A Health Maintenance Organization (HMO) is known for stressing which type of medical care? HMOs (Health maintenance Organization) - CORRECT ANSWER are designed to encourage its members to participate in testing and wellness program to promote good health. 250% of the Federal Poverty Level - CORRECT ANSWER Consumers qualify for varying cost sharing reductions to buy insurance if their income is a maximum of: Health benefit exchange - CORRECT ANSWER Under the PPACA, every state is required to create a: 12 mandatory provisions and 11 optional provisions. - CORRECT ANSWER How many mandatory provisions are in the NAIC model law for health insurance contracts? Uniform Individual Accident and Sickness Policy Provisions Law - CORRECT ANSWER also known as the model health insurance policy provisions Advanced premium tax credits (APTCs) - CORRECT ANSWER are available to those with an income that exceeds 100 percent of the federal poverty level (FPL), but does not exceed 400 percent (FPL). APTCs are calculated by the California Health Benefit Exchange (Covered California) and paid by the Exchange to insurers. -Life income -IRAs -Tax-deferred growth/cash accumulation -retirement income and education funds - CORRECT ANSWER Are personal uses of annuities Co-pay - CORRECT ANSWER Services which require a co-pay, such as office visits, require the co-pay for each visit an insured must make. The co-pay does not count toward the deductible. The co-pay will be due for covered services each time they are used. The deductible will apply to services that do not require a co-pay and the co-pay will not count toward the deductible. - CORRECT ANSWER What result should an insured be prepared for if his health policy has a co-pay for some services and a deductible for other services? 12 months - CORRECT ANSWER For a new hire signing up during the open enrollment period, the longest pre-existing period for conditions that occurred prior to employment under HIPPA is: 12 months before hire - CORRECT ANSWER Under HIPPA, a group plan may not exclude conditions that have been diagnosed or treated prior to employment unless it is within -Financial institutions wanting to share information with third parties must seek and acquire consent of the consumer prior to sharing the information. -Financial institutions must provide a simple opt-out mechanism with a clear notice to consumers. -Give consumers control over their nonpublic personal information - CORRECT ANSWER The California Financial Information Privacy Act requires Surgeon fees - CORRECT ANSWER are paid under Part B. The other services are paid under Part A. Medicare Part A - CORRECT ANSWER Provide benefits for Home Health Care, Hospice Care, and Hospital room and board dependent child - CORRECT ANSWER must be dependent on the employee for financial support because of a disability Insurance - CORRECT ANSWER What best describes spreading uncertainty of loss over a group of many individuals, and the law of large numbers? Licensed life-only agents can be appointed by an unlimited number of companies. - CORRECT ANSWER Which of the following is true about licensed life-only agents? Life-only agents - CORRECT ANSWER must be appointed with an insurer in order to transact insurance for that particular insurer. A life-only agent that is not exclusive may transact insurance for other insurance companies as long as he has become an appointed insurer of such other insurance companies. Obtain a certificate of insurance from her employer when she retires and Medicare will waive the penalties for late enrollment - CORRECT ANSWER Martha turned 65, so she is eligible to enroll in Medicare Part B, but she is continuing to work and has a group plan. What should Martha do? As long as Martha can provide proof of coverage from a creditable group plan, she may delay enrollment in Medicare Part B until she retires. - CORRECT ANSWER Martha turned 65, so she is eligible to enroll in Medicare Part B, but she is continuing to work and has a group plan. What should Martha do? The insurer is responsible for claims if they would have issued the policy normally. - CORRECT ANSWER Mr. Hanks sold a policy to Mr. Brown, collected the initial premium and gave Mr. Brown a conditional receipt. Before Mr. Hanks delivered the policy to the insurance company for approval, Mr. Brown was injured in an accident. What is the responsibility of the insurance company? A conditional receipt - CORRECT ANSWER is evidence of an obligation by the insurance company, providing the premium was submitted with an application that was acceptable and the applicant was insurable under the company's general underwriting rules. self-insurers, retain their own risk. - CORRECT ANSWER What does not fall in the private insurer category? uni-lateral contract - CORRECT ANSWER A one-sided agreement whereby a promise to do (or refrain from doing) something in return for a performance (not a promise) is what type of contract? -Provide the insurer with the signed statement from the applicant pertaining to replacement. -List any and all of applicant's existing policies/annuities to be replaced. -Provide the applicant with a policy comparison statement - CORRECT ANSWER If a replacement is involved, the agent must do all of the following, extended term - CORRECT ANSWER What nonforfeiture options permits the policyowner to use the cash values to purchase paid-up term life insurance coverage? Misstatement of age provision - CORRECT ANSWER allows the insurer to adjust the policy benefits if the insured's age is misstated on the policy application By the premium mode/frequency - CORRECT ANSWER How is the grace period in a health policy generally determined? grace period - CORRECT ANSWER While the general grace period for policies is 31 days, the grace period may be shorter if the premium frequency is less than monthly. A weekly premium has a grace period of 7 days, etc. 29 months (870 days) - CORRECT ANSWER A person that is disabled under Social Security is eligible for Medicare benefits after: A disabled individual - CORRECT ANSWER is eligible to be enrolled in Medicare Part A and Part B after being on Social Security benefits for 2 years (24 months). Since there is a 5-month elimination period the total wait for Medicare benefits will be 29 months before benefits become effective on Medicare. Fraud - CORRECT ANSWER Failure to disclose a procedure is only fraud if there was intent to gain some value (i.e., collect on a false claim.) (embarassement is not considered fraud) Gross single premium - CORRECT ANSWER consists of the net premium with loading Net single premium . - CORRECT ANSWER includes mortality and interest gross annual premium - CORRECT ANSWER net premium, with loading, for one year Waiver of premium rider on an insurance policy states that -The premiums are waived during the period of the disability -There is usually a waiting period for the benefit to kick in. -There is an additional premium charged for this coverage. - CORRECT ANSWER What is true about the waiver of premium rider on an insurance policy? 16, A surviving spouse is ineligible for Social Security Survivor's benefits once the youngest child reaches the age of 16. At this point, the child receives Social Security benefits until the age of 18 or 19, if the child is attending high school full-time. - CORRECT ANSWER The Social Security blackout period begins when the youngest child reaches the age of: The premium payment mode - CORRECT ANSWER determines the timing of premium payments, i.e., how often do you want to pay your premiums. Examples: monthly, quarterly, semi-annual (twice a year) or annually (once a year). Qualifying life event - CORRECT ANSWER Under the PPACA, an individual may get health coverage outside of open enrollment due to a Policy face, insuring clause, conditions, legal purpose - CORRECT ANSWER Which of the following are components that are part of every insurance contract? Something that increases the chance of loss - CORRECT ANSWER A hazard is best defined as: -Individuals over age 31 must earn 20 quarters of credit within the past 10 years. -Individuals under age 24 must earn 6 quarters of credit within the past 3 years. (2 quarters per year) - CORRECT ANSWER Eligibility for Social Security disability benefits is determined by all of the following, Individuals under age 30 must earn 10 quarters of credit within the past 5 years. - CORRECT ANSWER Eligibility for Social Security disability benefits is determined by all of the following, EXCEPT: 10 days - CORRECT ANSWER The specified time for a full refund for a new life policy is at least: $0 - CORRECT ANSWER What price has the PPACA set for a plan to provide the rationale behind an adverse claim determination? Adverse claim determination - CORRECT ANSWER Plans must provide the rationale behind an adverse claim determination based on the new evidence. This information must be provided automatically, free of charge, and sufficiently in advance of the date on which the plan must provide notice of its decision on appeal. representations - CORRECT ANSWER The entire contract clause provides that statements made by the insured, in the application are considered 1:5:1 - CORRECT ANSWER Under the PPACA, what is the maximum an insurance company to charge for tobacco use? A provision of the PPACA is the _Fair Health Insurance Premiums._ - CORRECT ANSWER This provision only allows an insurance company to charge a maximum of a 3:1 difference for age difference and 1.5:1 for tobacco use. This does not apply to grandfathered plans. A retirement income annuity - CORRECT ANSWER is an ordinary deferred annuity. It does have a decreasing term rider, and pays the death benefit from the rider in addition to the value of the annuity. The beneficiary is allowed to choose the settlement option. is not an ordinary immediate annuity - CORRECT ANSWER A retirement income annuity A term life plan - CORRECT ANSWER is not designed to accumulate cash value and it will expire or renew at a specified date or age. term life plan - CORRECT ANSWER What type of policy will never build cash value, and will terminate automatically at age 65? Registered contract - CORRECT ANSWER What type of contract is described as variable annuities, investment annuities, variable life insurance under which the death benefits and cash values vary in accordance with unit values of investments held in a separate account? variable annuities, investment annuities, variable life insurance under which the death benefits and cash values vary in accordance with unit values of investments held in a separate account. - CORRECT ANSWER A registered contract is described as variable annuities, investment annuities, variable life insurance under which the death benefits and cash values vary in accordance with unit values of investments held in a separate account. The policy has been expired no more than 3 years - CORRECT ANSWER Which of the following statements is true about conditions to reinstate a lapsed life insurance policy? Arson - CORRECT ANSWER Within the Fraud Division of the insurance department, there is a system, which puts info into a database in order to help prevent the commission of insurance fraud by which of the following crimes? Homemaker services - CORRECT ANSWER What is assistance with activities necessary to or consistent with the insured's ability to remain in his or her residence, that is provided by a skilled or unskilled person under a plan of care developed by a physician or a multidisciplinary team under medical direction? monthly. - CORRECT ANSWER Disability benefits are required to be paid no less than -The benefit is a stated dollar amount based on a percentage of income per month. -The premium is established by the insured's occupation and health status. -The company may be able to increase premiums. - CORRECT ANSWER An individual disability policy will be characterized in all of the following ways, The cash value - CORRECT ANSWER is surrendered to the insurer upon the death of the insured and the beneficiary would receive the death benefit. Materiality - CORRECT ANSWER is to be determined not by the event, but solely by the probable and reasonable influence of the facts upon the party to whom the communication is due. ERISA (Employee Retirement Income Security Act) - CORRECT ANSWER What legislation is responsible for requiring insurers to maintain standards for reporting and disclosure requirements of group health plans? at least 12 consecutive months - CORRECT ANSWER In California, how long are long-term care benefits designed to provide coverage? Medicare Select - CORRECT ANSWER Which of the following best describes a Medicare supplement policy that contains restricted network provisions? Medicare - CORRECT ANSWER does not cover long-term care -an individual long-term care policy -a rider to a life insurance policy -a group plan through his employer - CORRECT ANSWER The following cover long-term care they do not cover long-term care - CORRECT ANSWER Under Part A of Medicare after someone reaches age 65 Mutual insurance company - CORRECT ANSWER An insurance company whose main responsibility is to make money for its policyholders is called a: Individuals age 19 through 64 - CORRECT ANSWER with a modified adjusted gross income (MAGI) up to 138% percent of the Federal Poverty Level qualify for modified adjusted gross income eligibility for Medi-Cal. 138% - CORRECT ANSWER Medi-Cal is available for people making up to what percentage of the federal poverty level? 30 days - CORRECT ANSWER In California, what is the maximum free look period for a life insurance policy for someone under 60 years of age? a. The policy cannot be canceled as long as premiums are paid. - CORRECT ANSWER What is true about a noncancellable policy? guaranteed renewable policies - CORRECT ANSWER cannot be canceled as long as premiums are paid in a timely manner The guaranteed insurability rider (GIR), - CORRECT ANSWER sometimes referred to as the future increase option, permits the policyowner to buy additional permanent life insurance coverage at specific points in time in the future (i.e. marriage, births, etc.) without requiring the insured to provide proof of insurability. future increase option - CORRECT ANSWER also known as the guaranteed insurability rider The risk classification and mortality, interest earnings and expenses - CORRECT ANSWER Once an insurer has looked at the facts pertaining to a life insurance applicant, the insurer will categorize the risk and calculate premiums based on: Immediate annuities - CORRECT ANSWER do not have an accumulation period and payouts must begin within one year of the first premium payment Small Business Health Options Program - CORRECT ANSWER Under the PPACA, what is every state required to create to help small employers access affordable insurance for their employees? The choice of a provider, - CORRECT ANSWER in or out of network, does not automatically result in a lower quality of care. [Show More]

Last updated: 11 months ago

Preview 1 out of 19 pages