FInal Exam: California Life, Accident, and Health Insurance
Questions And Correct Answers | Already Graded A+
What distinguishes a deferred annuity from an immediate annuity?
-Solution
The time at which benefit payments start
Cindy buys a 10-year certain annuity with an installment refund. After
receiving monthly payments for 5 years, Cindy dies. How many
remaining payments will the insurer make to her beneficiary?
-Solution
60 payments
What is a common reason people purchase an annuity?
-Solution
To protect against the risk of outliving their financial resources
What kind of annuity pays income to two annuitants until their deaths?
-Solution
Joint and survivor annuity
What is a joint and survivor annuity?
-Solution
Provides payments the annuity to two people. If either person dies, the
same income payments continue to the survivor for life. When the
surviving annuitant dies, no further payments are made to anyone.
Victoria owns a life annuity and elects to receive annuity payments
monthly for the remainder of her life with "ten years certain". Her annuity
will make payments
-Solution
for a minimum of 120 months and a maximum of the remainder of her
life
Which of the following statements regarding a life insurance policy
dividend is TRUE?
-Solution
It is the distribution of excess of funds accumulated by the insurer on
participating policies.
1
,An insured owned by its policyholders is called a
-Solution
mutual insurer
An insurer enters into a contract with a third party to insure itself against
losses from insurance policies it issues. What is the agreement called?
-Solution
Reinsurance
What is reinsurance?
-Solution
An arrangement by which an insurance company transfers a portion of a
risk it has assumed to another insurer
Which of the following is NOT a characteristic of reinsurance?
-Solution
Increases the unearned premium reserve
Which of the following is a contract that involves one party which
indemnifies another when a loss arises from an unknown event?
-Solution
Insurance policy
What is an insurance policy?
-Solution
A contract where one party promises to indemnify another against loss
that arises from an unknown event
What is residual disability income insurance payments based on?
-Solution
The amount of the insured's income is reduced by the disability
Manuel is considered to be a disabled person as defined by the Americans
with Disabilities Act (ADA). As such, he is unable to perform any of the
following life activities EXCEPT
-Solution
Driving
Which of the following is NOT a provision in a disability income policy?
-Solution
Deductible and coinsurance provision
Which of these statements is NOT true concerning recurrent disabilities?
2
, -Solution
The insurer continues coverage after a new elimination period
Kim is insured under a disability income insurance policy with an "own-
occupation" clause. She was recently injured in an automobile accident
and can no longer perform the tasks of her job. Kim is now considered to
be
-Solution
totally disabled
What percentage of eligible employees must participate in a
noncontributory group health plan before it can be put in effect?
-Solution
100%
Business Overhead Expense Insurance pays for
-Solution
business expenses when a business owner becomes disabled
Minimum participation standards exist for group health insurance plans in
order to
-Solution
prevent adverse selection
The problem of overinsurance is addressed in which health insurance
provision?
-Solution
Coordination of benefits
What is the purpose of the coordination of benefits (COB) provision?
-Solution
To avoid duplication of benefit payments and overinsurance when an
individual is covered under more than one group health plan
Who is financially liable for the payment of covered claims in a fully
insured group health plan?
-Solution
Insurer
The insurer has the option of terminating a health insurance policy on a
date stated in the contract. What type of policy is this?
-Solution
Optionally renewable
3
Questions And Correct Answers | Already Graded A+
What distinguishes a deferred annuity from an immediate annuity?
-Solution
The time at which benefit payments start
Cindy buys a 10-year certain annuity with an installment refund. After
receiving monthly payments for 5 years, Cindy dies. How many
remaining payments will the insurer make to her beneficiary?
-Solution
60 payments
What is a common reason people purchase an annuity?
-Solution
To protect against the risk of outliving their financial resources
What kind of annuity pays income to two annuitants until their deaths?
-Solution
Joint and survivor annuity
What is a joint and survivor annuity?
-Solution
Provides payments the annuity to two people. If either person dies, the
same income payments continue to the survivor for life. When the
surviving annuitant dies, no further payments are made to anyone.
Victoria owns a life annuity and elects to receive annuity payments
monthly for the remainder of her life with "ten years certain". Her annuity
will make payments
-Solution
for a minimum of 120 months and a maximum of the remainder of her
life
Which of the following statements regarding a life insurance policy
dividend is TRUE?
-Solution
It is the distribution of excess of funds accumulated by the insurer on
participating policies.
1
,An insured owned by its policyholders is called a
-Solution
mutual insurer
An insurer enters into a contract with a third party to insure itself against
losses from insurance policies it issues. What is the agreement called?
-Solution
Reinsurance
What is reinsurance?
-Solution
An arrangement by which an insurance company transfers a portion of a
risk it has assumed to another insurer
Which of the following is NOT a characteristic of reinsurance?
-Solution
Increases the unearned premium reserve
Which of the following is a contract that involves one party which
indemnifies another when a loss arises from an unknown event?
-Solution
Insurance policy
What is an insurance policy?
-Solution
A contract where one party promises to indemnify another against loss
that arises from an unknown event
What is residual disability income insurance payments based on?
-Solution
The amount of the insured's income is reduced by the disability
Manuel is considered to be a disabled person as defined by the Americans
with Disabilities Act (ADA). As such, he is unable to perform any of the
following life activities EXCEPT
-Solution
Driving
Which of the following is NOT a provision in a disability income policy?
-Solution
Deductible and coinsurance provision
Which of these statements is NOT true concerning recurrent disabilities?
2
, -Solution
The insurer continues coverage after a new elimination period
Kim is insured under a disability income insurance policy with an "own-
occupation" clause. She was recently injured in an automobile accident
and can no longer perform the tasks of her job. Kim is now considered to
be
-Solution
totally disabled
What percentage of eligible employees must participate in a
noncontributory group health plan before it can be put in effect?
-Solution
100%
Business Overhead Expense Insurance pays for
-Solution
business expenses when a business owner becomes disabled
Minimum participation standards exist for group health insurance plans in
order to
-Solution
prevent adverse selection
The problem of overinsurance is addressed in which health insurance
provision?
-Solution
Coordination of benefits
What is the purpose of the coordination of benefits (COB) provision?
-Solution
To avoid duplication of benefit payments and overinsurance when an
individual is covered under more than one group health plan
Who is financially liable for the payment of covered claims in a fully
insured group health plan?
-Solution
Insurer
The insurer has the option of terminating a health insurance policy on a
date stated in the contract. What type of policy is this?
-Solution
Optionally renewable
3
