Final Exam: California Life, Accident, and Health Insurance Questions & Answers(SCORED A+)

What is an insurance solicitor authorized to do? -ANSWER Help an agent or broker sell insurance According to the California Insurance Code, what is "insurance"? -ANSWER A contract What does a Hospital Confinement indemnity policy pay for? -ANSWER Pay a specified daily amount while the insured is confined to a hospital According to the California Insurance Code, how is the word "may" interpreted? -ANSWER Permissive Which statement is CORRECT when describing a contract of adhesion? -ANSWER Contract may be accepted or rejected by the insured. Retirement plans are prevented from favoring highly compensated employees under which government regulation -ANSWER Nondiscrimination When calculating life insurance premium rates, which component would an agent's commission fall under? -ANSWER Insurer's expenses 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 An insurance policy written after 1988 that fails to pass the seven-pay test is known as -ANSWER a modified endowment contract All of 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 services are health maintenance organizations (HMO's) NOT required to provide? -ANSWER Prescription drugs 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 of the following types of life insurance combines a savings element along with a flexible premium option? -ANSWER Universal life What determines the Social Security normal retirement age? -ANSWER Year in which worker was born When an insurance company requests an attending physician's report, the request must be accompanied by a -ANSWER copy of the signed authorization A savings vehicle designed to first accumulate funds and then systematically liquidates the funds is called a -ANSWER deferred annuity what does ESOP stand for? -ANSWER Employee Stock Ownership Plan Which Social Security status does a worker with 6 quarters of coverage during the last 13-quarter period have? -ANSWER Currently insured When a claimant has coverage under more than one health plan, which group medical plan provision applies? -ANSWER Coordination of benefits How is an agent's first-year commission calculated for a replacement long-term policy? -ANSWER Based on the difference between the new and original policy annual premiums Jerry is an insured who understated his age on his life insurance application, paying $12 per $1,000 of insurance instead of $15 per $1,000. If he dies, how will the adjusted death benefit be calculated? -ANSWER 12/15th of the policy's face amount What is considered the most common type of specified disease insurance policy? -ANSWER 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 insurance. Both the Federal and state governments jointly finance which health insurance entitlement program? -ANSWER Medi-Cal Which of these is NOT a valid policy dividend option? -ANSWER Monthly income payments 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