California Life, Accident, and Health State Exam Questions and Answers Rated A

California Life, Accident, and Health State Exam Questions and Answers Rated A "blackout period" affects widowed spouse How long must an individual be unable to engage in any gainful activity due to physical or mental disability in order to qualify for total Social Security Total Disability? 12 months What does ESOP stand for? Employee Stock Ownership Plan An example of risk sharing would be Doctors pooling their money to cover malpractice exposures According to life insurance contract law, insurable interest exists at the time of application In California, the elderly can receive information about health relates issues from? HiCAP The purpose of Medicare Supplement Insurance is to address gaps in Medicare coverage, which can include? Medicare in-hospital deductible Which of the following is Ineligible to participate in Section 125 plan? An S-Corp Owner with greater than 2% share Which type of plan would be most appropriate for an individual on Medicare and is concerned that Medicare will NOT pay for charges exceeding the approved amount? Medicare Supplement Plan F what is the purpose of the pre-existing condition insurance plan Provides health insurance coverage to individuals who have preexisting conditions In most dental plans, a deductible typically is NOT applied to Preventative and diagnostic services What guarantees that the statements supplied by an insurance applicant are true? Warranty How is a health provider reimbursed if they do NOT have an agreement in place with the insurance company? With a usual, customary, and reasonable fee A provision in a whole life policy that allows a policyowner to terminate the policy in return for a reduced paid-up policy of the same type is called a(n) nonforfeiture provision Which of these statements regarding the annuitant is CORRECT? The annuitant's life expectancy determines the annuity payments Dishonest tendencies that increase the probability of loss are what types of hazard? Moral Hazard What is required after a life insurance agent sells an insurance policy to an applicant without being appointed by the insurer? Notice of appointment must be submitted to the Commissioner. "policy" is defined as written contract What is a corridor in relation to a Universal Life insurance policy? the gap between the total death benefit and the policy's cash value An indemnity plan provides the insured a specific dollar amount for services a limited payment whole life policy provides lifetime protection individuals age 65 or older are exclusively eligible for which optional program medicare part B Express power given to an agent in an agency agreement is the authority to represent the insurer Pat owns a 20-pay life policy with a paid-up dividend option. Which of the following statements is true? the policy may be paid up early by using policy dividends example of primary care physician would be an internist Upon policy delivery, which of the following must a producer have an applicant sign if no initial premium was collected with the life insurance application? a good health statement Silver plan offers 70% actuarial level of coverage provided Tom has a rider on his disability income policy that guarantees the right to increase his benefits without a medical exam. What kind of rider is this? Guaranteed insurability rider statement is true about medicare Benefits for diagnostic tests and X-Rays performed on an outpatient basis are provided by Part B "illustration" means presentation or depiction that includes nonguaranteed elements which of the following is Medicare Part B also known as? Medical insurance Levels of coverage Bronze, silver, gold, platinum States that have "no loss no gain" laws require a replacing policy to pay for ongoing claims under the policy it replaces example of third part administrator outside organization that processes claims for an employer's self-funded group plan Universal life has guaranteed interest rate with the chance to earn a rate that is higher than the guaranteed rate Who does a life settlement broker represent? Individual wanting to sell their life policy to a third party "May" means Permissive What is the elimination period of an individual disability policy? time period a disabled person must wait before benefits are paid Who assumes the investment risk with a fixed annuity contract? the insurer Results Clause states the insurer is excused from paying the amount only if the death is a result of war what are residual disability income insurance payments based on? The amount of the insured's income is reduced by the disability Which of the following does a life insurance policy summary normally include? The policy's cash value a health care provider claim may be settled using which of the following payment methods? Fee-for-service insurance term that the state of California uses for an insurer that is eligible to transact business in this state? Admitted Paul is an employee who caught a disease unique to the trade in which he was exposed to. Paul has a(n) occupational disease Which of the following enables a life policy to be replaced with another life policy and results in the postponement of the tax consequence? Section 1035 exchange sole proprietors are permitted tax deductions for health costs paid from their earnings 100% of cost Health insurance will typically cover which of the following perils? Injury due to accident How soon can the benefit payments begin with a deferred annuity? minimum of 12 months after date of purchase A type of group that has a constitutional and bylaws and has been organized for purposes other than obtaining insurance is called a association or labor group a health insurance policy where the insurer has the right to terminate the policy for reasons other than the insured's health is called conditionally renewable Spendthrift Clause a statement in a settlement agreement that indicates that the proceeds of the policy will be free from attachment or seizure by the beneficiary's creditors. Matt is applying for life insurance and requests a double indemnity rider. A double indemnity benefit will be payable to Matt's beneficiary if Matt dies instantly from a car accident Why are dividends from a mutual insurer not subject to taxation? because dividends are considered a return of a premium retirement plans are prevented from favoring highly compensated employees under which government regulation? nondiscrimination Donald is the primary insured of a life insurance policy and adds a children's term rider. What is the advantage of adding this rider? Can be converted to permanent coverage without evidence of insurability how long must life agents keep their transaction records? 5 years An agent's attempt to stop the replacement of an existing life insurance policy is known as conservation Which of these is NOT considered to be a purpose of an annuity? Annuities are intended to create an estate Medicare Part A does not pay for medical benefits provided for treatment in a skilled nursing facility beyond 100 days MRMIP is a state program that offers health coverage to California residents who are not able to obtain coverage due to pre-existing conditions In regard to the Affordable Care Act, how would a grandfathered health plan lose its grandfathered status? The insurer significantly raises co-insurance charges, deductibles, or co-payment charges. what type of jurisdiction requires an insurer to have its rates accepted by the insurance department prior to using them? Prior approval an example of the insured's consideration? a paid premium The taxable portion of each annuity payment is calculated using which method? Exclusion Ratio How are premiums paid by the insured for personally owned disability income insurance treated for tax purposes? not tax deductible a hospital or medical expense policy will typically cover dental treatment expenses under which circumstance? Dental treatment is needed to repair an injury Which of these is NOT subject to income taxation under a Modified Endowment Contract (MEC)? Death Benefit An HMO that involves a partnership of physicians and other providers who practice out of a central facility is called a(n) group HMO according to the affordable care act any plan in existence prior to which date 2010 A beneficiary has just received a claim payment for a life insurance policy. Which of the following is TRUE regarding the federal income tax liability owed? no income tax is owed Loss of income insurance provides an individual the means to replace wages The elimination period in a disability income policy serves the same purpose as a(n) ______ in a medical expense policy. deductible a pharmacy benefit covered perception drugs derived from a drug formulary The price of insurance for each exposure unit is called the rate Endowment policy insurance policy which provides for the payment of the face amount at the end of the specified period if the insured is still alive A 70-year old insured individual has suffered from kidney failure for the past 24 months. She is covered by her spouse's large-group employer plan. How will Medicare be utilized in this situation? Will be the secondary insurer and pay for claims not fully covered by the group plan a health insurance policy that allows an insurer to change the policy premiums but not cancel the policy is called guaranteed renewable policy If an employee contributes 50% toward the disability plan premium provided by an employer, what would be considered the taxable income of a $1,000 monthly disability benefit? $500 Which of the following is a contract that involves one party which indemnifies another when a loss arises from an unknown event? insurance contract Purchasing a life insurance policy in order to avoid the forced sale of assets upon death is called estate conversion "policy" is written contract A disability elimination period is best described as a time deductible A health insurance policy where the insurer has the right to terminate the policy for reasons other than the insured's health is called conditionally renewable considered to be a living benefit option in a life insurance policy accelerated death benefit Ron has a new employer and wishes to enroll in the company's group health plan. In determining whether his pre-existing health condition applies, Ron cannot have more than a ___ day gap without previous health insurance. 63 days Which is not a type of medicare advantage plan? Social Security Disability Income (SSDI) Dana is an employee who deposits a percentage of her income into her individual annuity. Her company also contributes a percentage into a separate company pension plan. What kind of annuity is this considered? Qualified retirement annuity The type of policy which pays on the death of the last person is called survivorship life The systematic liquidation of a sum of money is provided by a Annuity type of annuity that stops all payments upon the death of the annuitant? Life Annuity which of the following would disqualify a company's retirement plan from receiving favorable tax treatment? it is temporary Both federal and state government jointly financed which health insurance entitlement program? Medi-Cal After an insured gives notice of loss, what must he/she do if the insurer does not furnish forms? File written proof of loss Level premium term life insurance policies have premiums that are averaged over the policy period what determines the social security normal retirement age? year in which worker was born fixed period settlement options are considered to be a form of a Annuity list that has established amounts in accordance with a list of injuries, surgical procedures, or other losses. Benefit Schedule maximum amount an individual can contribute to a flexible savings account $2,500 the importance of representation is demonstrated in what rule? materiality of concealment Mortality is calculated by using a large risk pool of people and time which situation accurately describes a reduced paid- up nonforfeiture option? policy has a decreased face amount The election of COBRA for continuation of health coverage will? maintain the same coverage and increase premium A hazard can be best described as a condition that may increase the likelihood of a loss occuring Jonas is a whole life insurance policyowner and would like to add coverage for his two children. Which of the following products would allow him to accomplish this? child term rider the element that shows each party is giving something of value is called consideration According the the affordable care act, what metal tier is required to an actuarial value of 70% with covered individuals paying 30% through deductibles, co-pays, and other cost sharing features? silver In what part of an insurance policy are policy benefits found? declaration Rob purchased a standard whole life policy with a $500,000 death benefit when he was age 30. His insurance agent told him the policy would be paid up if he reached age 100. The present cash value of the policy equals $250,000. Rob recently died at age 60. The death benefit would be $500,00 Small employers who are sponsored by an insurer to provide group benefits to its employees are called MEWA When an insurer has met the qualifications necessary to transact business in California, it is said to be admitted The Do Not Call Registry offers exemptions for calls placed from all of the following EXCEPT insurance sales calls Disabled workers are covered under Workers' Compensation medical expense benefits for how long? no limit MEC tends to be an an investment vehicle Which of these describes the result of a modified endowment contract that failed to meet the seven-pay test? Pre-death distributions are typically taxable How are survivorship life insurance policies helpful in estate planning? Under a Modified Endowment Contract, what are the likely tax consequences? Pre-death distributions will become taxable What does the word "level" in Level Term describe? The face amount what is the proper order of initial life insurance premiums, from lowest to highest? modified premium, ordinary life, single premium. A renewable term life insurance policy can be renewed at a predetermined date or age, regardless of the insured's health what policy feature makes a universal life policy different from a whole life policy? flexible premium schedule universal life A universal life policy pays a death claim in the amount of the death benefit plus the savings element. Universal Life combines a savings element along with a flexible premium option best describes the relationship between the premiums of a whole life policy and the premium payment period? The shorter the payment period, the lower the premium What types of life insurance are normally used for key employee indemnification? term, whole, and universal insurance A securities license is required for a life insurance producer to sell variable life insurance What are collateral assignments normally associated with Bank Loans