CA LIFE AND HEALTH INSURANCE
EXAM KEY FACTS Questions & Answers
The insurance applicant is - ANSWERSthe individual who is applying to purchase
insurance
Before making a sale, the first thing an agent should do is - ANSWERSidentify the
applicant's overall
financial objectives.
Key person life insurance - ANSWERSused by a business to protect itself in case a
valued employee
dies. The death benefit would be paid to the company to hire and train a replacement.
Premiums paid for key person life insurance are not tax deductible, but benefits are not
taxable.
If an organization terminates a key employee, the organization will still be eligible to
hold a
license as their organization will be unaffected.
Preferred risks - ANSWERSreceive the lowest premium charges as they pose the
lowest risk to the insurer.
who selects which risks the insurer will
take on. - ANSWERSunderwriting division within the insurance company
Medical Information Bureau (MIB) - ANSWERSLife insurance companies are members
of the Medical Information Bureau.
Members of the Medical Information Bureau (MIB) are required to report medical
impairments found during the underwriting process.
The HIPAA Privacy Rules - ANSWERSestablish national standards for the use and
disclosure of protected
health information.
physician's report. - ANSWERSWhen an applicant reveals medical conditions that
require more information, the insurer will
usually require an attending physician's report.
- The request for an attending physician's report must be accompanied by a copy of the
signed
authorization.
To authorize the release of an attending physician's report, the applicant must sign a
consent
form.
, nonparticipating policyowner - ANSWERSwill not receive dividends. Nonparticipating
policies are
issued by stock insurers. Stock insurers pay dividends to stockholders, not
policyholders.
Employees that are covered under a group policy receive certificates of insurance as
their
proof of coverage.
three types of ordinary life insurance: - ANSWERSwhole life, endowment, term. Use the
acronym "WET" to remember them. Group insurance is not a type of ordinary life
insurance.
Whole life insurance is also known as continuous premium whole life insurance.
what does insurer subtract from premium on universal life - ANSWERS-the insurer will
subtract from it the
mortality and general expenses, then add the current interest and deposit it into the
cash value.
The rate of return paid on the cash value of an indexed whole life policy will keep up
with
the rate of inflation.
variable life - ANSWERS-life insurance policy that allows the policyowner to self-direct
cash values into different
subaccounts
-Variable insurance products are regulated by the state department of insurance and
the
Securities and Exchange Commission (SEC) since they are considered to meet the
definition
of a securities product.
A variable/universal life policy has no fixed, guaranteed rate of return.
family policy - ANSWERS-provides life insurance for an entire family and allows the
children to convert
from term to whole life coverage without a physical exam.
A family life insurance policy consists of whole life on one spouse and level, convertible
term on the other spouse and children.
If a payor benefit rider is added to a juvenile life policy, it will waive the premium for the
policy until the child reaches a certain age (often 21) if the parent dies.
joint life policy - ANSWERS-covers multiple lives and pays out when the first insured
dies.
survivorship life insurance: - ANSWERSquite low compared with those that would be
charged for separate policies; it is well situated
EXAM KEY FACTS Questions & Answers
The insurance applicant is - ANSWERSthe individual who is applying to purchase
insurance
Before making a sale, the first thing an agent should do is - ANSWERSidentify the
applicant's overall
financial objectives.
Key person life insurance - ANSWERSused by a business to protect itself in case a
valued employee
dies. The death benefit would be paid to the company to hire and train a replacement.
Premiums paid for key person life insurance are not tax deductible, but benefits are not
taxable.
If an organization terminates a key employee, the organization will still be eligible to
hold a
license as their organization will be unaffected.
Preferred risks - ANSWERSreceive the lowest premium charges as they pose the
lowest risk to the insurer.
who selects which risks the insurer will
take on. - ANSWERSunderwriting division within the insurance company
Medical Information Bureau (MIB) - ANSWERSLife insurance companies are members
of the Medical Information Bureau.
Members of the Medical Information Bureau (MIB) are required to report medical
impairments found during the underwriting process.
The HIPAA Privacy Rules - ANSWERSestablish national standards for the use and
disclosure of protected
health information.
physician's report. - ANSWERSWhen an applicant reveals medical conditions that
require more information, the insurer will
usually require an attending physician's report.
- The request for an attending physician's report must be accompanied by a copy of the
signed
authorization.
To authorize the release of an attending physician's report, the applicant must sign a
consent
form.
, nonparticipating policyowner - ANSWERSwill not receive dividends. Nonparticipating
policies are
issued by stock insurers. Stock insurers pay dividends to stockholders, not
policyholders.
Employees that are covered under a group policy receive certificates of insurance as
their
proof of coverage.
three types of ordinary life insurance: - ANSWERSwhole life, endowment, term. Use the
acronym "WET" to remember them. Group insurance is not a type of ordinary life
insurance.
Whole life insurance is also known as continuous premium whole life insurance.
what does insurer subtract from premium on universal life - ANSWERS-the insurer will
subtract from it the
mortality and general expenses, then add the current interest and deposit it into the
cash value.
The rate of return paid on the cash value of an indexed whole life policy will keep up
with
the rate of inflation.
variable life - ANSWERS-life insurance policy that allows the policyowner to self-direct
cash values into different
subaccounts
-Variable insurance products are regulated by the state department of insurance and
the
Securities and Exchange Commission (SEC) since they are considered to meet the
definition
of a securities product.
A variable/universal life policy has no fixed, guaranteed rate of return.
family policy - ANSWERS-provides life insurance for an entire family and allows the
children to convert
from term to whole life coverage without a physical exam.
A family life insurance policy consists of whole life on one spouse and level, convertible
term on the other spouse and children.
If a payor benefit rider is added to a juvenile life policy, it will waive the premium for the
policy until the child reaches a certain age (often 21) if the parent dies.
joint life policy - ANSWERS-covers multiple lives and pays out when the first insured
dies.
survivorship life insurance: - ANSWERSquite low compared with those that would be
charged for separate policies; it is well situated
