FINAL EXAM -CALIFORNIA LIFE AND HEALTH INSURANCE (CA)

FINAL EXAM -CALIFORNIA LIFE AND HEALTH INSURANCE (CA) Employer-provided group term life insurance is exempt from income taxation up to - CORRECT ANSWER-$50,000 Medicare Part B has an initial enrollment period. How many months after an individual's 65th birthday month does this enrollment period end? - CORRECT ANSWER-3 months Which statement is true regarding policy dividends? - CORRECT ANSWER-A dividend option is selected by the insured at the time of policy purchase What does the insurance term "indemnity" refer to? - CORRECT ANSWER-Make whole What is a common reason people purchase an annuity? - CORRECT ANSWER-To protect against the risk of outliving their financial resources The importance of a representation is demonstrated in what rule? - CORRECT ANSWER-Materiality of concealment Who does a life settlement broker represent? - CORRECT ANSWER-Individual wanting to sell their life policy to a third party Who is financially liable for the payment of covered claims in a fully insured group health plan? - CORRECT ANSWER-Insurer The Human Life Value concept is based on - CORRECT ANSWER-income Business Overhead Expense Insurance pays for - CORRECT ANSWER-business expenses when a business owner becomes disabled At what point does a self-insured group qualify for stop-loss coverage? - CORRECT ANSWER-When claims exceed a specified limit in a set period of time What percentage of eligible employees must participate in a noncontributory group health plan before it can be put in effect? - CORRECT ANSWER-100% A life insurance policy where the insured can choose where the cash value can be invested is called - CORRECT ANSWER-variable life Which of these statements correctly describes risk? - CORRECT ANSWER-Pure and speculative risks are both insurable The elimination period in a disability income policy serves the same purpose as a(n) ______ in a medical expense policy. - CORRECT ANSWER-deductible What is required after a life agent sells an insurance policy to an applicant without being appointed by the insurer? - CORRECT ANSWER-Notice of appointment must be submitted to the Commissioner Retirement plans are prevented from favoring highly compensated employees under which government regulation? - CORRECT ANSWER-Nondiscrimination ESOPs are typically invested in - CORRECT ANSWER-employer stock The reason for social insurance is to - CORRECT ANSWER-protect certain vulnerable segments of the population 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? - CORRECT ANSWER-60 payments he free-look period for life insurance policyowners age 60 or older is - CORRECT ANSWER-30 days What is considered to be the definition of disability, according to Social Security? - CORRECT ANSWER-Unable to engage in any substantial gainful activity "Life insurance creates an immediate estate". This phrase means: - CORRECT ANSWER-when the insured dies, a death benefit is paid How are death benefits that are received by a beneficiary normally treated for tax purposes? - CORRECT ANSWER-Exempt from federal income taxes Exempt from federal income taxes - CORRECT ANSWER-Payment for services goes directly to the provider When an insurance company requests an attending physician's report, the request must be accompanied by a - CORRECT ANSWER-copy of the signed authorization Which policy provision protects the policyowner from unintentional lapse of the contract? - CORRECT ANSWER-Grace period What kind of annuity pays income to two annuitants until their deaths? - CORRECT ANSWER-Joint and survivor annuity