CA Life and Health Exam Questions and Answers Already Passed

CA Life and Health Exam Questions and Answers Already Passed What is insurance? Insurance is the legal contract where two parties agree that if something will happen, a value will be exchanged. What's the difference between pure risk and speculative risk? Pure risk is when you'll lose it all or there will be no change. Speculative risk you can either win or lose. What is peril? peril is the causes of loss insured against in an insurance policy What is hazard? conditions that increase the probability of something bad happening What's the diff between moral, morale, and physical hazard? physical is the hazard that results from physical body issues. Moral hazard is the evaluation of character (lying) morale hazard is an indifference which causes risk. What is the law of large numbers? the larger the number of people more exposed to risk, the more predictable the risk outcome. What is an insurable event? the more predictable an event, the more insurable it becomes What's the diff between contract and tort law tort is non-contract and private Four major elements of a contract agreement, consideration, competent parties, legal purpose contract of adhesion prepared by insurer then accepted or rejected Conditional contract conditions need to be met in order for contract to be executed aleatory contract exchange of unequal amounts of value unilateral contract only one party is forced to do something personal contract can't be transferred w/out notifying insurer When can you rescind a contract intentional or unintentional concealment, violation of material warranty, false material representation six specifications for insurance policies parties contracted person insured statement of insurable interest risks insured against time period stated premium 4 categories of info necessary for financial planning debt income mortgage expenses key person insurance losing someone key to a business buy-sell insurance (business continuation) what will be done with a business if the owner dies Premiums life insurance payment installments term life insurance covered only for a specific term three types of term life insurance level increasing decreasing fixed life insurance is contracts that offer guaranteed minimum or stated benefits Variable life insurance is where it keeps place with inflation and cash value accumulates based upon a specific portfolio of stocks (investment based) ; level fixed Class designation for beneficiaries Consideration clause states value offered by insured (amount of premium payment) accumulation period when the annuitant makes payments and grow tax deferred What is not funded by an annuity death benefits Annuitants must be a natural person Gross premium = Mortality - Interest + Expenses What types of services are provided under long-term care's assisted living linens and personal laundry service assistance with dressing and bathing reminders regarding medication assistance with eating Assisted living offers nonmedical assistance. What does the guaranteed insurability rider allow for specific additional amounts of insurance to be purchased at specific ages, dates and events without proving insurability however, the coverage is purchased at the insured's attained age and the maximum allowable purchase is specified in the base policy. This rider usually expires at the insured's age 40. A tax-sheltered annuity is a special tax-favored retirement plan available to Certain groups of employees only. The interest earned on policy dividends is Taxable If a person receives benefits for long term care from Medi-Cal, when that recipient dies, the state may Pursue asset recovery against the estate of the recipient. According to the Medical Loss Ratio (MLR), what is the minimum percentage of health coverage premium that must be applied to actual medical care in a large group health plan? 85, 80 for small What is not covered under a long-term care policy? Acute care in hospital Who owns the policy in executive bonuses employee Where does info from MIB come from underwriting disclosures What is covered under Medicare A a) Post-hospital nursing care. b) Home health services. c) In-patient hospital services What happens when you have two or more health plans benefits are coordinated A person who can only sell life insurance is called a life-only agent What is a dread disease policy limited policy that specifically overwrites cancer expense A hospital indemnity policy will pay A benefit for each day the insured is in a hospital. Who must pay for the cost of a medical examination required in the process of underwriting? Insurer The paid-up addition option uses the dividend To purchase a smaller amount of the same type of insurance as the original policy. An insured receives an annual life insurance dividend check. What term best describes this arrangement? cash option In reference to the standard Medicare Supplement benefits plans, what does the term standard mean? All providers will have the same coverage options and conditions for each plan. A domestic insurer issuing variable contracts must establish one or more separate accounts If a firm has 30 employees that are actively engaged in business on at least 50% of its working days during the preceding calendar year, what is its classification? small employer In a non-contributory group health plan The employees do not elect to participate in the plan and since the employer pays the premium, all eligible employees are covered under the plan. How many eligible employees must be included in a contributory plan? 75` What is the waiting period on a Waiver of Premium rider in life insurance policies? 6 months Both Universal Life and Variable Universal Life have a Flexible premium and are interest sensitive The life insurance policy clause that prevents an insurance company from denying payment of a death claim after a specified period of time is known as the incontestability clause Medical Savings Accounts (MSAs) are available to small business employees and self-employed individuals who have High deductible health insurance Which of the following must the patient pay under Medicare Part B? 20% of covered charges above the deductible Which of the following statements is TRUE concerning the Accidental Death Rider? it will pay double or triple What are the 2 types of Flexible Spending Accounts? Health Care and Dependent Health Care Under the Affordable Care Act, a special enrollment period allows an individual to enroll in a qualified health plan within how many days of a qualifying event? 60 days What is the penalty for excessive contributions to an IRA? 6% What is franchise insurance? It is health coverage for small groups whose numbers are too small to qualify for true group insurance If a life insurance policy develops cash value faster than a seven-pay whole life contract, it is a modified endownment contract What is the penalty for IRA distributions that are below the required minimum for the year? 50 What is the period of coverage for events such as death or divorce under COBRA? 36 months Are death benefits fundable by annuities? no Your client wants to know what the tax implications are for contributions to a Health Savings Account. You should advise her that the contributions are tax deductible Which of the following describes the taxation of an annuity when money is withdrawn during the accumulation phase? Withdrawn amounts last in first out basis What are the consequences of a failure to comply with the Commissioner's office while it is executing a seizure order? It is a misdemeanor punishable by a fine of $1,000, one year imprisonment, or both. What insurance coverage is allowed with an MSA Long term care What is the elimination period for Social Security disability benefits? 5 months Which of the following will vary the length of the grace period in health insurance policies? mode of premium payment annuity period The "annuity period" is the time during which accumulated money is converted into an income stream. It may last for the lifetime of the annuitant or for a shorter specified period of time depending on the benefit payment option selected. What is the main purpose of the Seven-pay Test? determines if insurance policy is an MEC During the free-look period, the premium for a variable annuity may not be invested in value funds What document describes an insured's medical history, including diagnoses and treatments? attending physical statement What is the consideration clause The consideration clause states that the value offered by the insured is the premium and statements made in the application, so it will include the information about the amount and frequency of premium payments. Variable Life insurance is based on what kind of premium? level fixed HIPAA applies to groups of 2 or more Common Disaster Clause The Common Disaster Clause provision states that when an insured and beneficiary die in a common accident, and the beneficiary dies before or within a specific period of time after the insured, the insurer will proceed as if the insured outlived the beneficiary. In health insurance, what is a copayment? A specific amount paid by the insured when treatment is received Medicare Advantage is also known as Medicare Part C Payor Benefit Rider Payor Benefit Rider does not increase the Death Benefit; it only pays the premium if the payor is disabled or dies. With Guaranteed Insurability Rider, the policyowner can increase DB at specified ages or events, i.e. marriage or birth of a child; Cost of Living Rider increases DB to keep pace with inflation; in Accidental Death Rider, if the insured dies from an accident, DB is a multiple of the Face Amount. Waiver of premium rider waive future premiums if disabled for 6 months