PSI Life, Accident, Health Practice Exam Questions

PSI Life, Accident, Health Practice Exam Questions ____________ is the initial step of the total process of insuring a health risk. - field underwriting _______________ is the process of selection, classification and rating, and determining if someone is insurable. - home office underwriting "Person" means all of the following EXCEPT 1 an association.

2 a corporation.

3 a business trust.

4 an organizational trust. - 4 an organizational trust.

A ____________ places insurance with a non-admitted insurer when insurance cannot be placed with an admitted insurer - surplus lines producer A ______________ Insurance Company is directed by officers and directors and has a stated amount of capital stock owned by stockholders - Stock A beneficiary receives ample income each month from the interest earned while the insurance company retains the principal. This is referred to as: - capital conservation A licensed life agent may __________ on behalf of a life insurer for which the life agent is not specifically appointed. - Present a proposal for insurance to a prospective policyholder A Life and Disability Analyst cannot be employed or paid by the insurer and must meet all of the following requirements, except: 1 Be a resident of the state of California 2 Be at least age 18 3 Pass a written examination prepared by the Commissioner

4 Have worked as a life licensee or employee of a licensee for 5 years - 2 Be at least age 18 A loss exposure is best defined as: - the possibility of a loss A person licensed to write insurance coverage with non-admitted insurers when such coverage cannot be placed with an admitted insurer is a(n): - Surplus lines broker A policy shall specify all of the following EXCEPT 1 the property or life insured.

2 the parties between whom the contract is made.

3 the period during which the insurance is to continue.

4 the method in which the coverage amount was calculated. - 4 the method in which the coverage amount was calculated.

A producer gathers information about the applicant for the insurer in order to avoid adverse selection. This is considered to be: - field underwriting A Property & Casualty Broker-Agent who is also licensed as a Life-Only agent may not charge a fee to a consumer for: - Analyzing a person's universal life insurance policy A small business owner used her life insurance policy as collateral for a bank loan. The face amount of the whole life policy was $100,000 and the original amount of the loan was $20,000. If the outstanding loan balance at the time the small business owner died was $10,000, how much will the policy's named beneficiary receive? - $90,000 A Straight Whole Life Policy has a _________ __________ premium and face value for the life of the insured - level guaranteed A(n) ___________ designed to produce leads must prominently disclose that 'an insurance agent will contact you', if that is the case. - advertisement According to CIC Section 1711, an organization ceases to exist as an entity eligible to hold a license EXCEPT 1 upon dissolution of a corporation.

2 upon the termination of all contracts.

3

upon dissolution of a copartnership.

4 upon the termination of an association. - 2 upon the termination of all contracts.

After receiving a claim, the insurer must correspond with the claimant at intervals of not less than how many days until the claim is resolved? - 30 After what time period is the policy considered to have been delivered in an acceptable way if premiums have been paid?

1 after 6 months if the premiums have been paid 2 after 1 year if the premiums have been paid by the insured 3 30 days after the first premium has been received by the insurer 4 only if a written receipt is obtained at the time of delivery, regardless of paid premiums 1 after 6 months if the premiums have been paid Albert owns a printing business in which he, at times, prints counterfeit money. One day while processing counterfeit bills, his arm is severely damaged. His insurance will: - Not cover the claim since he was involved in an illegal act at the time of injury All health plans, group and individual, offered through a Health Insurance Exchange must provide, at a minimum, essential health benefits in ______ categories of care and services. - 10 All of the following are a duty of an insurer in regards to claims on file and record documentation EXCEPT 1 maintaining claim data so that an insurer shall be able to provide the claim number, line of coverage, and other pertinent data.

2 recording the date the licensee received, date(s) the licensee processed and date the licensee transmitted or mailed every material and relevant document in the file.

3 maintaining any sales material, which had a material impact on the claims process.

4 maintaining claim files that are accessible, legible, and claim of duplication. - 3 maintaining any sales material, which had a material impact on the claims process.

All of the following are considered duties of the California Insurance Commissioner, except: 1 Enforce Insurance Code regulations 2 Revoke a license as a disciplinary measure 3 Set insurance rates - 3 Set insurance rates All of the following are correct regarding renewable term insurance, except: 1 No permanent cash or loan value 2 Can be written separately or with other types of insurance 3 Will expire after a specified period or attained age 4 Evidence of insurability is required to renew the policy - 4 Evidence of insurability is required to renew the policy All of the following are examples of representation EXCEPT 1 it may be oral or written.

2 it may be altered after the insurance is effected.

3 it cannot qualify as an express provision in a contract.

4 it is to be interpreted by the same as contracts in general. - 2 it may be altered after the insurance is effected.

All of the following are factors that are taken into consideration when using the Human Life Value approach in determining the proper amount of life insurance coverage, except: 1 Income 2 Loans/debts 3 Educational Background - Educational Background

All of the following are permitted to have blanket insurance policies with specific restrictions EXCEPT 1 any union with dues-paying members.

2 a volunteer or governmental fire department.

3 a newspaper.

4 an institution of learning. - 1 any union with dues-paying members.

All of the following are requirements for an applicant to be licensed as a life & disability insurance analyst EXCEPT 1 having a thorough knowledge of life or disability insurance products.

2 having been employed by an insurance company.

3 being a fit and proper person to hold the license applied for.

4 being of good business reputation and of good general reputation. - 2 having been employed by an insurance company.

All of the following are restricted from entering into an insurance contract, except: 1 Minors 2 Incompetent Parties 3 Retired persons 4 Someone under the influence of drugs or alcohol - 3 Retired persons All of the following are TRUE about the rules regarding the sale of life insurance and annuities to seniors age 65 or older EXCEPT 1 the senior is entitled to have others present during any presentation by an agent, broker or insurer.

2

all insurance brokers, agents, or insurers owe a prospective insured at 65 years or older a duty of honesty, good faith, and fair dealing.

3 the agent, broker or insurer is required to show a copy of their insurance license with name, address, and phone number when conducting business in the senior's home.

4 advance notice must be provided to the senior disclosing and identifying details of the visit and the agent or broker prior to the scheduled meeting. - 3 the agent, broker or insurer is required to show a copy of their insurance license with name, address, and phone number when conducting business in the senior's home.

All of the following are TRUE for commissions paid to an agent for the sale of a Medicare supplement policy EXCEPT 1 gifts, bonuses, prizes, awards or finder's fees given for sales or renewals are not considered compensation.

2 commissions paid for replacing policies shall not exceed the commission paid for renewing policies.

3 first year commissions must not exceed 200 percent of commissions paid for renewing policies.

4 renewal year commissions must be the same as second year and must be for a time period of no fewer than five years. - 1 gifts, bonuses, prizes, awards or finder's fees given for sales or renewals are not considered compensation.

All of the following are TRUE regarding regulation and use of an agency name EXCEPT 1 the use of the name must not mislead the public in any way.

2 the company must file with the commissioner and request approval of the name.

3 a name would not be denied on the basis of being too similar to other company names.

4 the name may not imply the agency offers services for which it is not licensed or approved. - 3 a name would not be denied on the basis of being too similar to other company names.

ALL of the following are TRUE regarding the process to change the California Code of Regulations EXCEPT 1

the Office of Administrative Law (OAL) may substitute its own judgment for that of the rulemaking agency.

2 the Administrative Procedure Act requires a minimum of 45 days for comments regarding the proposed changes.

3 the Agency may decide to change its initial proposal in response to public comments or on its own initiative after the initial public comment period.

4 the Emergency Rulemaking Process and the Regular Rulemaking Process are separate requiring different standards and procedures for proposed changes. - 1 the Office of Administrative Law (OAL) may substitute its own judgment for that of the rulemaking agency.

All of the following define insolvency EXCEPT 1 revocation of certificate of authority by the commissioner.

2 inability of the insurer to fully reinsure all outstanding risks.

3 impairment of minimum paid-in capital required in the aggregate.

4 inability of the insurer to meet its financial obligations when they are due. - 1 revocation of certificate of authority by the commissioner.

All of the following statements regarding a group Accidental Death and Dismemberment policy are incorrect, except: 1 The premiums paid by the employer are considered part of the employee's income 2 The premiums paid by the employer are not deductible as a business expense to the employer 3 Any benefits received are not taxable to the recipient 4 Accidental Death and Dismemberment Insurance is not available on a group basis, only on an individual basis - 3 Any benefits received are not taxable to the recipient All of the following terms are the same regardless of if the policy is life insurance or an annuity, except: 1 Annuitant

2 Owner 3 Insurer 4 Beneficiary - Annuitant All states have adopted the Uniform Individual Accident and Sickness Policy Provision Law. If an insurer changes any of these provisions, they must make sure it does not: Alter the minimum requirements of any provision An agent or representative who issues long term care insurance must do all of the following EXCEPT 1 establish marketing procedures to ensure that excessive coverage is not issued or sold.

2 complete a total of 10 hours of continuing education if licensed before January 1st, 2002.

3 complete the training requirements prior to soliciting customers for the sale of long term care products.

4 establish accounting procedures within 1 year to verify compliance with the insurance statutes of California. - 2 complete a total of 10 hours of continuing education if licensed before January 1st, 2002.

An agent who enters into agreements with more than one insurer is: - independent An agreement that establishes a price with the intent to purchase the assets of a business should one of the parties to the agreement predeceases the other is called a ___________. - buy-sell agreement An applicant for life insurance pays the agent the initial premium and receives a Conditional Receipt in return. If the policy was to be issued as substandard, but the applicant dies prior to policy issue, what is the result? - The insurer will refund any premiums paid An application for __________ of an expired license without retesting may be filed after the expiration date until the same month and day of the next succeeding year, providing the delinquent fee for that year is paid. - renewal An Essential Health Benefits package provides levels of coverage offered through all health exchanges, based on all of the following plans, except:

1 Silver 2 Gold 3 Platinum 4 Copper - copper An insurance agent is a person who transacts all of the following types of insurance EXCEPT: 1 annuities.

2 homeowners.

3 auto insurance.

4 life insurance. - 4 life insurance.

An insured purchased an ordinary life policy 15 years ago, and at that time listed her husband as the only beneficiary. Her husband died 2 years ago but she never changed the beneficiary. She dies, leaving one surviving adult child. Who receives the death benefit? - the insured's estate An insurer considers all of the following when determining the fixed annuity payments, except: 1 Expenses 2 Stock market value 3 Interest rates 4 The accumulation amount - 2 Stock market value Any premium rate adjustments and increases for a Medicare Supplement insurance policy must be provided to the insured in writing by the insurer at least _____ days prior to the effective date of the change. - 30 As long as employment continues, which is the ONLY reason the validity of a group life insurance policy can be contested?

1 Non-payment of premiums after the policy has been in force for two years.

2 A disability claim after the policy has been in force for more than two years.

3 Changes in union regulations after the policy has been in force for three years.

4 Omitting crucial details on the application after the policy has been in force for two years. - 1 Non-payment of premiums after the policy has been in force for two years.

As specified by the California Insurance Code, the validity of a group policy cannot be contested, except for nonpayment of premiums, after it has been in force for how long?

- 2 years As specified by the California Insurance Code, under the facility of payment clause, a group life insurer may pay to a relative or anyone it deems entitled to the group life benefits in the absence of: - a designated beneficiary Bert is the owner and insured of a permanent life insurance policy he purchased 20 years ago. He has never missed a premium payment. He would like to buy a new car but his bank account is running low. How can he obtain the necessary funds while still maintaining coverage? - Take a policy loan from the insurer Bess received information in regard to her individual Term Insurance explaining that she could convert the policy by doing which of the following?

1 Prove insurability and pay the same level premium.

2 Sign the conversion application agreeing to pay premiums computed at her attained age.

3 Prove insurability and pay premiums based on her current health status.

4 Proof of insurability is not required and pay premiums computed at a higher rate class. 2 Sign the conversion application agreeing to pay premiums computed at her attained age.

Beth has a contract stating she must be disabled for 3 months before benefits will begin to be paid. This 3-month period is known as the: - Elimination Period

By requiring a minimum medical loss ratio, an insurance company provides greater value to its policyholders when a ________ percentage of premiums is used for healthcare costs versus administrative expenses or profits. - higher Can any life insurer issue group life insurance with premium rates less than the usual rates for such insurance?

1 Yes, when the Department of Insurance has requested they do so.

2 Yes, if the insurer has filed an exemption form to do so.

3 Yes, they may do so on any group plan, with or without annuities.

4 No, there are no circumstances when this is allowed. - 3 Yes, they may do so on any group plan, with or without annuities.

Causing a person to give up an existing contract through surrender, lapse, or other forfeiture is known as: - twisting Concealment, whether intentional or unintentional, entitles the injured party to?

1 Modify insurance.

2 Rescind insurance.

3 Supplemental benefits.

4 Reduced cost insurance. - 2 Rescind insurance.

Concerning the Paid-Up Additions Dividend Option, all of the following are true, except: 1 Paid-up additions accelerate the growth of cash values.

2 Paid-up additions accelerate the amount of dividends credited 3 No more premiums are due on the addition to the policy 4 Eventually, no more premiums will be due on the policy - Eventually, no more premiums will be due on the policy ERISA sets minimum standards for pension plans primarily in the ______ industry. Private

Every licensee must include the license number on all of the following, except: 1 Home address labels 2 Advertisements 3 Price quotations 4 Business cards - 1 Home address labels For those individuals who have health issues, which of the following would be an insurance plan to consider? - Group he California Insurance Code requires all producers who meet with prospective clients age 65 and older in their homes for the purpose of transacting life insurance, annuities, or disability insurance products to first provide a written notice of the first meeting which producers must retain a copy of in their files for a minimum of ______ years. - 5 How can a licensee surrender any license for cancellation?

1 By posting a written statement on their website.

2 By calling the Department of Insurance and advising them verbally.

3 By submitting written notice or by delivering the license to the commissioner.

4 By submitting written notice to all contracted insurers and existing policyholders. - 3 By submitting written notice or by delivering the license to the commissioner.

How does an "admitted" person differ from an "nonadmitted" person, as it pertains to insurance?

1 An "admitted" person has admitted to a crime or fraud, while a "nonadmitted" person has not.

2 An "admitted" person has been granted admission to an insurance association, while a "nonadmitted" person has not been accepted.

3 An "admitted" person has been admitted to an accreditation program, while a "nonadmitted" person has yet to earn the credits.

4

An "admitted" person has the right to transact insurance business within the state, while a "nonadmitted" person is not entitled to this action. - 4 An "admitted" person has the right to transact insurance business within the state, while a "nonadmitted" person is not entitled to this action.

How is the insurance commissioner chosen?

1 Elected by the people.

2 Appointed by the Governor 3 Selected by a vote in the House and the Senate.

4 Randomly selected from a list of qualified candidates. - 1 Elected by the people.

How long does an employee in a group insurance policy have to exercise the conversion privilege after employment is terminated?

1 0 days with no eligible coverage once the employment is terminated 2 31 days to use the conversion privilege and begin an individual life insurance policy.

3 90 days to convert to an individual policy equal to the coverage under the group policy 4 6 months to exercise the conversion privilege after termination if the employee was illtreated - 2 31 days to use the conversion privilege and begin an individual life insurance policy.

If a Medicare Supplement policy replaces another Medicare Supplement policy that has been in force for _____ months or more, the replacing insurer cannot impose an exclusion or limitation based on a preexisting condition. - 6 If a policy is not approved as applied for, the insurer may make a: - counteroffer If an individual enrolls during the Medicare supplement plan _____ enrollment period, the insurer cannot use medical underwriting, refuse coverage, charge a higher premium, or impose a waiting period for pre-existing conditions. - open If money is paid when a change of ownership in a life insurance policy takes place, this is generally known as a ____________. - transfer for value

If the Insurance Commissioner has reason to believe that a producer has engaged in unfair competition, he/she is required to: - Advise the producer that he/she is entitled to a public hearing If the insurer cancels an individual health plan, what happens to the unearned premium? - It is refunded on a pro rata basis If the premium can fluctuate at the policyowner's discretion, meaning it can be increased, decreased, or even skipped at any premium due date, what premium paying method was used?

1 Adjustible 2 Special 3 Modified 4 Flexible - 4 flexible In a replacement transaction, why should the existing policy not be terminated until the replacing policy is issued and delivered? - Potential of new evidence of insurability being required In California what entity may opt for a self-insured medical, disability, and death benefit plan? - employers In the event of receiving notice of a claim or other claim communication, all of the following timelines are accurate EXCEPT 1 every licensee or claims agent shall transmit notice of the claim to the insurer in no more than 5 calendar days.

2 every licensee shall immediately, but in no more than 15 calendar days, furnish them a complete response.

3 every license or claims agent shall immediately transmit notice of claim to insurer.

4 every insurer shall within15 calendar days acknowledge receipt and provide to the claimant the necessary forms. - 1 every licensee or claims agent shall transmit notice of the claim to the insurer in no more than 5 calendar days.

In the event that a group health plan changes insurers in mid-year, all of the following apply, except: 1 Employees must be fully credited with all expenses that have accumulated toward the annual deductible and/or out-of-pocket limit.

2 Employees must be fully credited with costs such as copayments for prescription medications in companion or stand-alone prescription drug plans.

3 Employees must be fully reimbursed for unearned premiums - Employees must be fully reimbursed for unearned premiums In which situation is a person or other entity that provides coverage for medical expenses NOT subject to the jurisdiction of the insurance department?

1 When coverage is only offered to members of associations, unions and similar groups.

2 When the amount of coverage is limited to under $500,000.

3 When they have received an exemption from the insurance commissioner.

4 When they are subject to the jurisdiction of another agency of this or another state or the federal government. - 4 When they are subject to the jurisdiction of another agency of this or another state or the federal government.

Instead of waiting to receive her payments over time, Jeanne decides to obtain the greatest amount of money out of her annuity immediately. Which option did she choose? - lump sum Insureds that are less desirable than average risks and tend to seek insurance coverage to a greater extent than better risks is called: - adverse selection Insurers include provisions in contracts to help reduce unnecessary claims and the overpayment of claims. Which of the following is not one of those provisions?

1 Concurrent Review 2 Consideration Clause 3 Mandatory Second Surgical Option 4 Ambulatory Services - 2

Consideration Clause Jamie has a $200,000 permanent policy and cannot continue making the premium payments. She still, however, wants the peace of mind of being covered for the same $200,000 in death benefit although it may be for an abbreviated period of time. The Nonforfeiture Option Jamie should choose is: - extended term Jeanne has a $100,000 whole life insurance policy that has $1,000 of dividend additions, a $6,000 outstanding loan that includes unpaid interest, and a monthly premium of $500. If she dies during the grace period, what insurance settlement would be permitted? - $94,500 Joe has a whole life policy with a guaranteed insurability rider. He was 21 at the time the policy was issued. If he exercises all of the options at the ages specified under the typical rider, how many policies will he end up with? - 7 Karen, age 50, withdraws $1,000 from her Health Savings Account (HSA) for a purpose other than a qualified medical expense. As a result of this action: - The $1,000 is taxed as ordinary income, with an additional $200 penalty tax applied Life and Disability Insurance Analysts must provide an agreement with a statement that includes all of the following EXCEPT 1 that information and services that can be obtained directly from the insurance company without cost.

2 that the services to be performed for which a fee is to be charged, and that fee.

3 that fees can be received for servicing a policy on which they were the selling agent.

4 that if they are also licensed as an agent, that they receive commissions from the sale of products. - 3 that fees can be received for servicing a policy on which they were the selling agent.

Life insurance applications cannot contain questions about prior HIV testing unless the question is limited to prior testing for the purpose of obtaining: - Insurance Losses arising from all of the following conditions may be excluded from group life policies EXCEPT 1 aviation.

2 acts of war.

3

military service.

4 natural disasters. - 4 natural disasters.

Managed Care Organizations that offer a Medicare Advantage Plan require the subscriber to select a _____________ to manage health care needs. - Primary Care Physician Many insurers pay benefits based on the average fee charged in a geographical area.

This is referred to as: - Usual Customary and Reasonable Materiality to be solely determined by which of the following?

1 The probability that a certain occurrence of events will result in a claim.

2 The importance of the facts to the insurer and insured in making an underwriting decision.

3 The probable and reasonable influence of the facts upon the party to whom the communication is due.

4 The certainty that material provided to the insurer is truthful in all manners regardless of any mitigating circumstances. - 3 The probable and reasonable influence of the facts upon the party to whom the communication is due Medi-Cal expenditures on behalf of persons in institutional settings and all expenditures on behalf of persons age _____ and older are subject to 'asset recovery' under federal Medicaid rules following the death of the individual. - 55 Medicare Part B provides coverage for: - Outpatient hospital (emergency room/urgent care) treatment Mortgage or credit life refers to what type of life insurance coverage? - decreasing term No insurer or agent may unnecessarily replace a policyholder's Long-Term Care insurance policy or replace it with a policy that offers: - Fewer benefits and a greater premium No insurer or agent may unnecessarily replace a policyholder's Long-Term Care insurance policy or replace it with a policy that offers: - Fewer benefits and a greater premium Notice of claim is required within _____ days of loss. - 20

Of the following listed choices, which is true as it pertains to Medicare Part A? 1 It covers all prescription drugs 2 It is prepaid through FICA taxes and is automatic when that worker qualifies for social security benefits 3 All recipients pay a monthly premium 4 Provides coverage for outpatient services. - 2 It is prepaid through FICA taxes and is automatic when that worker qualifies for Social Security retirement benefits ('fully insured') Offering any kind of insurance as an inducement to the purchase of property or services without a separate fee charged to the insured for the insurance is a violation and is considered: - free insurance Originally, Medicare was for U.S. citizens age _______ and over. - 65 Permanent insurance is designed to provide coverage for a ___________. - lifetime Primarily, the _________ is the person who will receive any residual contract benefits after the annuitant has died. - Beneficiary Proof of loss is required within _____ days of loss. - 90 Social Security pays an eligible surviving spouse (or minor child) a one-time benefit of $________ upon the death of a covered worker. - 225 The _________ Enrollment Period provides an open enrollment period from January 1 to March 31 each year for those who did not enroll in Medicare Part B when they first became eligible. - General The _________ is the time period provided after the premium due date before a policy lapses. - grace period The __________ enrollment period begins when a person past age 65 who was covered by an employer sponsored group health plan is no longer covered by the plan (whether the person elects COBRA continuation or not). - special The __________ provision specifies what an insured must do, if a policy has lapsed, in order to put it back in force. - reinstatement

The 24-Hour Care Coverage product may NOT include the __________________ - sale of life insurance The arrangement under a Buy-Sell Agreement in which each party purchases insurance on the life of his/her partner(s) is called a(n): - cross purchase plan The California Insurance Code is enacted by: - California legislation The California Legislature declared all of the following when creating the Healthy Families Program EXCEPT: 1 that most uninsured children come from low-income families.

2 lack of educational resources for children and their parents leads to increased medical expenses.

3 that lack of insurance coverage for children results in reduced access to medical services.

4 when a child is seriously ill or injured, the costs of needed medical care can force families into financial ruin. - 2 lack of educational resources for children and their parents leads to increased medical expenses.

The Commissioner of Insurance has the power to: - Revoke a producer's license The following are all penalties for unlawfully acting as an insurer without a certificate of authority EXCEPT 1 the individual will be fined with a charge for a misdemeanor.

2 the individual may be charged a fine not to exceed $50,000.

3 the individual will be banned from practicing insurance for a period of 5 years.

4 the individual may be sentenced to county jail for a period not to exceed one year. - 3 the individual will be banned from practicing insurance for a period of 5 years.

The Insurance Commissioner has all of the following powers, except: 1 Making reasonable rules and regulations 2 Conducting investigations and examinations

3 Approving insurance policy forms sold within the state 4 Sentencing a person to state prison for conviction of insurance fraud - Sentencing a person to state prison for conviction of insurance fraud The Insurance Commissioner may deny an application for any license issued for any of the following EXCEPT 1 the applicant has been convicted of a felony.

2 the applicant is not of good business reputation.

3 the applicant is lacking in good judgment.

4 the granting of the license would be against the public interest. - 3 the applicant is lacking in good judgment.

The insurance contract is a(n) ___________ contract because it is an agreement that one party pays on behalf of another party under specified circumstances, such as when a loss occurs. - indemnity The mortality rate is based on mortality tables which show life expectancy and the death rate per _______ people living in the U.S. - 1,000 The name used to indicate the insured's age at time of policy renewal is the ________ age. - attained The premium charged for new policies obtained by exercising the Guaranteed Insurability Rider is based upon the: - Attained age of the insured The social insurance supplement (SIS) rider pays in addition to regular disability policies until: - Workers' Compensation or Social Security disability payments begin There is a conversion period of _______ days in which the employee may, upon termination of eligibility and without evidence of insurability, convert group benefits to an individual policy. - 31 This rider will provide paid-up coverage if the insured cancels or lapses the policy due to nonpayment of premium. - Nonforfeiture To be permitted to operate as a Life Settlement Broker, a life insurance producer must be licensed as a life agent for at least: - 1 year

Under a Key Employee Disability Income Policy, the employer is all of the following, except: 1 Recipient of the proceeds 2 Premium payor 3 Insured 4 Policyowner - 3 Insured Under Medicare Part D, individuals enrolled in a standalone plan from a participating approved Prescription Drug Provider (PDP) will pay: - A monthly premium, annual deductible and copays Under most circumstances, within how much time is an insurer expected to affirm or deny a claim? - 40 days Under the California Annuity Suitability Education Requirements, a life-only agent who sells annuity products to individual consumers must complete an initial _____-hour training course prior to soliciting for sales. - 8 Under the Entire Contract provision, the agreement between the insured and the insurer does not include: - Statements made to the applicant by the producer during the application process Under the Legal Actions Mandatory Uniform Provision, an insured must wait at least _____ days after providing proof of loss before he or she can take legal action against the insurer. - 60 days Under the PPACA, insurers must provide health insurance to any person, regardless of: - Medical history or current state of health Under the Uniform Individual Accident and Sickness Policy Provisions, what happens when a health policy contains provisions that have gone out of compliance because of changes in state law? - The policy will be construed as if it conformed to the law What are the requirements for notices required by any provision of the insurance code to a person unless expressly provided otherwise?

1 They should be made by telephone on a recorded line.

2 They should be received by email to their registered email address.

3 They should be sent to a mailing notice at their residence or place of business.

4 They should be prioritized with overnight express at their residence or place of business. - 3 They should be sent to a mailing notice at their residence or place of business.

What can happen if there is a material misrepresentation made in an application for insurance? - The insurer is permitted to rescind the policy from the time the misrepresentation was made What do all long-term care insurers, agents, and brokers owe to the policyholder or prospective policyholder?

1 a duty of honesty, good faith, and fair dealing 2 a duty to provide courteous and confidential service 3 a duty to provide the best price available for the coverage 4 a duty of integrity, compassion, and considerate service - 1 a duty of honesty, good faith, and fair dealing What does concealment, whether intentional or unintentional, entitle the injured party to?

1 Once the policy has been accepted, it may only be cancelled by the insured under very specific circumstances.

2 The insurer may rescind the contract on the basis of misrepresentation, concealment, or fraud by the insured.

3 Legal damages, not in excess of double the premiums paid.

4 A waiver of responsibility to meet contractual obligations. - 2 The insurer may rescind the contract on the basis of misrepresentation, concealment, or fraud by the insured.

What does the following refer to?

Administered by the state using federal guidelines; funded federally and by states for poor persons of all ages; for poor persons 65+, disabled, or blind, may qualify for nursing home benefits - Medicaid

What happens if an owner requests an immediate investment of monies in a variable annuity policy be returned during the 30 day cancellation period?

1 The owner shall forfeit any money invested.

2 The owner shall receive the market value at the time of the cancellation.

3 The owner shall receive a refund of premium but nothing earned during cancellation period.

4 The owner shall receive a full refund of premium, plus the market value, minus any commission fees. - 2 The owner shall receive the market value at the time of the cancellation.

What happens to the overall annual premium cost once a term rider expires? - it decreases What happens under a misstatement of age clause on a disability policy?

1 The policy would be terminated and all premiums would be returned to the policy owner.

2 The policy would be terminated and all premiums would be retained by the insurance company.

3 All amounts payable under this policy shall be what the premium originally would have purchased and been paid at the correct age.

4 Prior to any benefits being payable, the insured shall rate and pay the difference in premiums based u - 1 The policy would be terminated and all premiums would be returned to the policy owner.

What is the maximum fine for a person who transacts insurance without a valid license?

1 $10,000 and/or probation for 1 year.

2 $25,000 and/or imprisonment for a period not exceeding 6 months.

3 $50,000 and/or imprisonment for a period not exceeding one year.

4 $100,000 and/or imprisonment for a period not exceeding three years. - 3 $50,000 and/or imprisonment for a period not exceeding one year.

What is the maximum number of appointments a producer may accept? - unlimited

What is the name of the person named in the annuity contract to potentially receive any residual benefits? - beneficiary What is the name of the process in which an insurer selects, classifies, and determines the rate to be charged for the insurance applied for? - Underwriting What is the primary purpose of the California Insurance Guarantee Association? - to protect insureds from insurers that become insolvent What is the purpose of creating minimum underwriting standards for those testing positive for Acquired Immune Deficiency Syndrome, Human Immunodeficiency Virus or Aids Related Complex?

1 to ensure the premiums are comparable to those paid by individuals without those conditions 2 to allow underwriting to administer the tests to determine if the proposed insured has a condition without the consent of the individual 3 to avoid discrimination between individuals in the same rating class who have been diagnosed with the condition of AIDS, ARC or HIV 4 to allow the insurers to provide state of the art treatment for proposed insured individuals who have tested positive for AIDS, ARC or HIV - 3 to avoid discrimination between individuals in the same rating class who have been diagnosed with the condition of AIDS, ARC or HIV What makes a comprehensive long-term care policy unique from other long-term care policies?

1 Provides for both institutional and home care.

2 Provides for all the expenses incurred from long-term care.

3 Provides both life and long-term care for the insured individual.

4 Gives the insured the option of creating a paid up policy by paying in advance. - 1 Provides for both institutional and home care.

When a life insurance policy does not pass the ______-pay test, it becomes classified as a MEC. - 7

When a policy lapses due to nonpayment of premium, which nonforfeiture option is the automatic option? - extended term When a producer exceeds the authority expressed in the agency contract and the insurer does not take action, which of the following types of authority is created? apparent When a replacement policy is being considered, what is required from an insurer?

1 A notarized statement acknowledging reasons for replacement and identification information, signed by the applicant and the agent are required.

2 A price comparison breaking down the cost of the new coverage and the coverage that it will replace, including annual dividend statements is required to avoid penalties.

3 The agent is required to send a replacement notice within 60 days of the application to the insurer for any existing coverage that may be replaced by the new policy.

4 A list of existing policies, replacement notice signed by the applicant and the agent, and a notice sent to any existing insurers that replacement is possible are all requirements. A list of existing policies, replacement notice signed by the applicant and the agent, and a notice sent to any existing insurers that replacement is possible are all requirements.

When admission to a hospital's facilities is __________, the insurer may require preauthorization approval under a managed care plan before claims will be paid. - elective When an insured under age 60 purchases a new policy, how much time do they have to cancel and receive a full refund of premiums?

1 The insured has 90 days to decide they want to cancel a new policy and receive a partial refund of premiums paid.

2 The insured has only 5 days and not more than 20 days to inform the insurer they want to cancel a new policy and receive a full premium refund.

3 The insured has 60 days to cancel, but the insurer is not required to refund the full premium amount paid for the policy.

4 The insured has a period of not less than 10, and not more than 30 days, during which they may cancel and receive a full refund for the premiums paid. - 4 The insured has a period of not less than 10, and not more than 30 days, during which they may cancel and receive a full refund for the premiums paid.

When can a person act as an agent of the insurer?

1 when the agent participates in an insurer workshop 2 when the agent receives a compliance illustration from the insurer 3 when the insurer has accepted contracting paperwork from the agent 4 when the insurer has filed with the commissioner a notice of appointment - 4 when the insurer has filed with the commissioner a notice of appointment When does a disability policy become incontestable as to the statements contained in the application?

1 After this policy been in force for a period of one year during the lifetime of the insured.

2 After this policy been in force for a period of two years during the lifetime of the insured.

3 When the company has confirmed all of the statements and issued a binding contract.

4 Two years after the date of the application when a conditional receipt has been issued. 2 After this policy been in force for a period of two years during the lifetime of the insured.

When does a license become inactive for a broker?

1 upon the termination of his or her employment 2 upon the termination of all appointments, or all endorsements 3 upon the 365th calendar day that a policy has not been written 4 upon the termination of all existing policies for which he or she is the writing broker - 2 upon the termination of all appointments, or all endorsements When examination of an insurer shows the insurer to be insolvent and a danger to the public, which authority is granted to the Commissioner by the CIC? 1 The commissioner must make application to the Superior Court and obtain a court order.

2 The commissioner may take possession of offices, books and property immediately without court order.

3 The Superior Court shall authorize a receiver at the request of the Commissioner without delay.

4 The commissioner shall file a petition with the United States Secretary of the Treasury for appointment of a receiver. - 2 The commissioner may take possession of offices, books and property immediately without court order.

When is a person acting as a licensee allowed to act as an agent of the insurer?

1 when the agent has completed the licensing paperwork and submitted it to the insurer 2 when the insurer has filed with the commissioner a notice of appointment 3 when the insurer has provided the agent with applications 4 when the agent has received oral approval from the insurer to transact business - 2 when the insurer has filed with the commissioner a notice of appointment When is an entity buy-sell agreement plan used? - When the entity buys life insurance on each of the owners When is it allowable for a written application for any disability policy to be altered?

1 by the insurer, for administrative purposes only, when it is clear that the applicant has not made the insertions 2 by the agent who notices an error that is in disagreement with written information on file for that applicant 3 by an agent who verbally notifies the insured, for commission adjustments, of the reasons for the suggested alterations 4 by the insurer, to record such changes as to modify the application to meet all requirements of the California Insurance Code - 1 by the insurer, for administrative purposes only, when it is clear that the applicant has not made the insertions When may a licensee surrender for cancellation any license under which they are permitted to act?

1 upon renewal of the license

2 within 60 days of renewal of their license 3 at any time 4 when they no longer have any clients with policies in force - 3 at any time When the life insurance policy's cash value equals the face amount of the policy and the proceeds are paid to the policyowner, this is known as the policy's _________. endowment When the number of similar units increase, the predictability of loss improves according to: - the law of large numbers When will a primary care physician refer a HMO member to a specialist? - Usually after all other treatments have been exhausted Which are accepted practices for the sale and replacement of Medicare Supplement policies?

1 Using the terms "Medicare Supplement" , "Medigap" and "Medicare Wrap-Around" without limitation.

2 Cold lead advertising, which allows marketing without disclosing that contact will be made by an insurance agent or broker.

3 Offering a fair and accurate comparison of the product offered with any current insurance policies the prospective customer may have.

4 High pressure tactics, through the use of an explicit or implied threat designed to frighten or threaten the prospective client into taking action. - 3 Offering a fair and accurate comparison of the product offered with any current insurance policies the prospective customer may have.

Which are assets that are in excess of an insurer's liability for reported losses, expenses, taxes, and reinsurance of outstanding risks?

1 capital stock 2 capital assets 3 paid-in capital 4

excess investment - 3 paid-in capital Which circumstances in a pretext interview determine if the questions are permissible?

1 When an insured is questioned prior to the application to determine the best recommendations for coverage.

2 When an insured is consulted by a person who hides his true identity on purpose when fraud for a claim is suspected.

3 When questions are asked to help underwriting decide on coverage for the insured when health problems are suspected.

4 When questions are posed by a person who refuses to identify himself or his relation to the company prior to a policy being underwritten. - 2 When an insured is consulted by a person who hides his true identity on purpose when fraud for a claim is suspected.

Which contract would a bus line passenger purchase to cover injuries sustained while traveling across the United States? - limited travel accident Which form of negotiation is covered under the definition of "transact" as applied to insurance?

1 Negotiations on contract modifications.

2 Negotiations regarding an agent contract/ 3 Negotiations following execution.

4 Negotiations preliminary to execution. - 4 Negotiations preliminary to execution.

Which insurer's owner receives taxable corporate dividends as a return of profit? - stock Which is an ACCURATE statement regarding benefits of Medicare supplement and Medicare select plans?

1 The insurer is able to cancel, or deny renewal of an existing policy, based solely on the health of the insured.

2

There is no restriction for benefits after the coverage has been in effect for six months when involving a preexisting condition.

3 The coverage for a loss from an illness or disease is treated differently than for a loss resulting from an injury due to an accident.

4 The coverage for a spouse cannot be terminated for any reason, including for nonpayment of premiums. - 2 There is no restriction for benefits after the coverage has been in effect for six months when involving a preexisting condition.

Which is an ACCURATE statement regarding dependent coverage under a group insurance policy?

1 The coverage lasts from birth until age 18.

2 The coverage must not exceed more than 50 percent of the coverage for the insured employee.

3 The coverage must not exceed more than 100 percent of the coverage for the insured employee.

4 The coverage is not intended to cover preexisting medical conditions for the proposed dependent. - 3 The coverage must not exceed more than 100 percent of the coverage for the insured employee.

Which is an INACCURATE statement regarding a life settlement contract?

1 The owner receives a guarantee of the future settlement value.

2 It includes a finance loan made for a policy on or before the issuance of the policy.

3 The loan proceeds are used to solely pay premiums for the policy and any expenses incurred.

4 The owner agrees to sell the policy or any portion of the death benefit following the policy issue. - 3 The loan proceeds are used to solely pay premiums for the policy and any expenses incurred.

Which is an INACCURATE statement regarding blanket life insurance?

1

The premium is remitted by the policyholder.

2 The policy is for the benefit of the policyholder.

3 The insurance is written under a policy issued to a newspaper, magazine or other periodical.

4 The policy insures without any requirement of individual enrollment or individual commitment. - 2 The policy is for the benefit of the policyholder.

Which is an INACCURATE statement regarding inflation protection for long-term care insurance?

1 Increases are compounded annually at a rate not less than 5 percent.

2 Guarantees the insured individual the right to periodically increase benefit levels.

3 The protection covers a specified percentage of actual or reasonable charges, and includes a maximum specified indemnity amount.

4 Insurers shall offer to each policyholder or certificate holder the option to add an inflation protection feature with their policy at the time of purchase. - 3 The protection covers a specified percentage of actual or reasonable charges, and includes a maximum specified indemnity amount.

Which is an INACCURATE statement regarding standards to avoid unfair underwriting for applicants at risk for auto immune deficiency, human immunodeficiency virus, or AIDS related conditions?

1 Insurers must maintain strict confidentiality regarding personal information obtained as the results of any medical testing.

2 Insurers are permitted to schedule AIDS and HIV testing without the specific consent of the individual applying for insurance.

3 Insurers must establish performance standards to avoid making unfair distinctions between individuals in the same underwriting class.

4 Establish standards that allow for adequate assessment through underwriting to determine if a life or health policy can be issued to the applicant. - 2 Insurers are permitted to schedule AIDS and HIV testing without the specific consent of the individual applying for insurance.

Which is an INACCURATE statement regarding underwriting based on genetic testing?

1 The proposed insured must pay for the cost of the testing.

2 The proposed insured must provide informed consent prior to the testing.

3 The test results can be provided to the proposed insured, or to their physician to whom the individual should consult.

4 The purpose is to create standards classified by risks to avoid discrimination among proposed insureds with similar genetic markers. - 1 The proposed insured must pay for the cost of the testing.

Which is TRUE regarding a life and health agent who has not been specifically appointed by the insurer?

1 The insurer is obliged to accept the application for underwriting from the life agent.

2 If a policy is issued, the agent is required to forfeit any commission unless appointed.

3 The insurer is required to report the agent appointment within 21 days of the policy issue.

4 If a policy is issued, the insurer is considered to have authorized the agent to act on its behalf. - 4 If a policy is issued, the insurer is considered to have authorized the agent to act on its behalf.

Which of the following actions is considered part of the insurance sales process?

1 Rescission of the contract.

2 Transaction of unrelated matters that are made by the same parties.

3 Transaction of matters subsequent to execution of the contract and arising out of it.

4 Termination of future sales of the contract. - 3 Transaction of matters subsequent to execution of the contract and arising out of it.

Which of the following annuities is known for having the highest surrender charge percentages and the longest surrender charge time periods?

1

Market Value Adjustment Annuities 2 Indexed Annuities 3 Fixed Annuities 4 Variable Annuities - 2 Indexed Annuities Which of the following BEST defines the general concept of the 24-hour care plan?

1 It integrates workers compensation medical care with the care provided by group health insurance.

2 It provides immediate medical care from any source for injuries on which occur on the job.

3 It permits non job related injuries to be treated through the worker?s compensation program.

4 It pays any medical bill from a job related injury for services within the first 24 hours of the injury. - 1 It integrates workers compensation medical care with the care provided by group health insurance.

Which of the following is a party to a contract of insurance bound to communicate EXCEPT 1 those which the other knows.

2 those which the other waives communication.

3 those which the other would know by retaining a consultant with specialized knowledge in insurance matters.

4 those which, in the exercise of ordinary care, the other ought to know, and of which the other party has no reason to suppose him ignorant. - 3 those which the other would know by retaining a consultant with specialized knowledge in insurance matters.

Which of the following is an INACCURATE statement regarding replacement for longterm care coverage?

1

The policy must materially improve the position of the insured.

2 The sales commission is limited to the percentage of sale normally paid for renewal of long-term care policies.

3 Group long-term care policies have the same rules regarding replacement as individual long-term care policies.

4 Replacement commission is based on the difference between the annual premium of the replacement and the original policy. - 3 Group long-term care policies have the same rules regarding replacement as individual long-term care policies.

Which of the following is an insurer allowed to do in the event of a claim?

1 request or require an insured to submit to a polygraph examination when the claimant has a criminal record.

2 discriminate based upon the claimant's territory of the property insured 3 request a medical examination for the purpose of determining liability under a policy provision 4 attempt to settle a claim by a making a settlement offer that is unreasonably low - 3 request a medical examination for the purpose of determining liability under a policy provision Which of the following is not covered with Medicare Part A? 1 Outpatient care 2 Inpatient care in hospitals 3 Home health services 4 Hospice care - 1 Outpatient care Which of the following is TRUE of the conversion privileges for the insured in group life insurance?

1 The coverage amount without proof of insurability can be changed.

2

The option to name a new beneficiary can be exercised by the owner.

3 The owner can change the ownership of the policy but not the name of a beneficiary.

4 The policy can be transferred into an endowment or liquidated for its proceeds by the owner. - 2 The option to name a new beneficiary can be exercised by the owner.

Which of the following is TRUE regarding change of address for a licensee?

1 A licensee must notify the commissioner of an address change, but a license applicant does not.

2 The law only applies to the physical mailing address, for changes in email addresses are exempt.

3 The commissioner must be notified immediately of any change in the personal, business, or email address.

4 A licensee or applicant has 30 days to notify the commissioner of any change in email or physical address. - 3 The commissioner must be notified immediately of any change in the personal, business, or email address.

Which of the following is TRUE regarding nonadmitted insurers?

1 A felony is committed by the agent in the state of a nonadmitted insurer.

2 Acting as an agent for a nonadmitted insurer is considered a misdemeanor.

3 The agent shall pay $1,000 in addition to any fees involving the commission of a felony.

4 Specific penalties shall be determined by the Insurance Commissioner on a case by case basis. - 2 Acting as an agent for a nonadmitted insurer is considered a misdemeanor.

Which of the following may be insured against?

1 Disability.

2 Accidental death.

3 Wagering losses.

4 Catastrophic losses. - 3 Wagering losses.

Which of the following may insurers use in their underwriting?

1 ancestry 2 family medical history 3 genetic characteristics 4 national origin - 2 family medical history Which of the following might be considered a physical hazard?

1 The insured's attitude that good housekeeping is not important 2 the storage of all flammables in fireproof containers 3 Dishonesty on the part of the insured 4 The storage of flammables near a furnace - The storage of flammables near a furnace Which of the following provisions of free insurance offered as an incentive to purchase or rent property is TRUE? 1 It is permitted with no charge.

2 It requires a separate charge or fee.

3 If offered as a guarantee of the performance of goods, it is prohibited.

4 If issued by credit unions or with newspaper subscriptions, it is limited under Statute 777.2. - 2 It requires a separate charge or fee.

Which of the following statements is false regarding the Affordable Care Act? 1 It requires all employers to provide health insurance to their employees 2

It established the Health Insurance Marketplace 3 It consists of a combination of measures to control healthcare costs, and an expansion of coverage through public and private insurance including broader Medicaid eligibility and Medicare coverage, and subsidized, regulated private insurance 4 Its goals are increasing the quality and affordability of health insurance, lowering the uninsured rate by expanding public and private insurance coverage, and reducing the costs of healthcare for individuals and the government - 1 It requires all employers to provide health insurance to their employees Which of the following term policies costs the most, all other factors being equal?

1 Renewable and non-convertible 2 Renewable and convertible 3 Nonrenewable and convertible 4 Nonrenewable and non-convertible - renewable and convertible Which of the following types of coverage must have a proven insurable interest at the time of the application?

1 coverage for oneself 2 coverage for a spouse or domestic partner if the policy is less than $100,000 3 coverage for a minor child under age 18 or a corporate owned policy on an employee 4 coverage for any person upon whose life any estate or interest vested in him is dependent - 3 coverage for a minor child under age 18 or a corporate owned policy on an employee Which of these is a Mandatory Uniform Provision?

1 Illegal Occupation 2 Misstatement of Age 3 Conformity with State Statutes 4 Legal Actions - 4

Legal Actions (the rest are optional provisions) Which one of the following is not eligible for Cal-COBRA? 1 Self-Insured Plans 2 Indemnity Policies 3 HMO's 4 PPO's - 1 Self-Insured Plans Which one of the following regarding the California Individual Exchange and Small Business Health Options Exchange (SHOP) is false?

1 Allows for individuals and small businesses to compare plans and buy health insurance in the private market. The Exchange is an independent public entity within the state government and operates under the name of Covered California and must meet all federal requirements established under the ACA. 2 Small employers with less than 100 employees may also purchase coverage through the exchange.

3 Health insurance products offered through each Exchange must be available in the same form to consumers purchasing coverage outside the Exchange. All health plans and insurers participating in Covered Californa must also offer plans at the federally designated bronze, silver, gold and platinum levels off the Exchange.

4 Minimum coverage plans are designed to cover excessive medical bills that occur above the limit that an insured would be able to manage financially and are offered to those up to age 65, or those individuals who prove they are without affordable coverage options or are experiencing financial hardship - 4 Minimum coverage plans are designed to cover excessive medical bills that occur above the limit that an insured would be able to manage financially and are offered to those up to age 65, or those individuals who prove they are without affordable coverage options or are experiencing financial hardship (offered up to age 30, not 65) Which provision in a health insurance plan is used to avoid overinsurance when a person is covered by more than one plan? - coordination of benefits

Which Settlement Option pays for a specified period, regardless of who may receive the payments? - fixed period Which statement accurately describes de-mutualization?

1 a mutual insurance company that decides to convert to a stock company 2 a reinsurer which no longer feels the business relationship is mutually beneficial 3 two companies which reach a mutual decision that they will no longer transact business 4 an individual who decides its relationship with an insurer is no longer a mutually beneficial one - 1 a mutual insurance company that decides to convert to a stock company Which statement concerning individual health policy renewal provisions is most correct?

1 The more favorable the renewal provision to the insured, the higher the cost 2 Renewal provisions only apply to property and casualty contracts and are not included under individual A&H policies 3 The renewal provision has no impact on the cost of the policy to the insured 4 The more favorable the renewal provision to the insured, the lower the cost - 1 The more favorable the renewal provision to the insured, the higher the cost Which statement describes the intent of the California Financial Information Privacy Act? 1 It enables and authorizes the Gramm-Leach-Bliley Act into California legal system.

2 It permits civil lawsuits against financial institutions who violate the Gramm-Leach-Bliley Act. 3 It provides greater privacy protections than those provided in the federal Gramm-LeachBliley Act. 4 It permits greater flexibility to financial institutions than privacy protections enacted in Gramm-Leach-Bliley Act. - 3 It provides greater privacy protections than those provided in the federal Gramm-LeachBliley Act.

While both work with an insurer, how does an "Insurance broker" differ from an "insurance agent"?

1 The broker gets paid by commission, but the agent does not.

2 The broker does not transact on behalf of an insurer, while the agent does.

3 The broker has to be licensed, but the agent meets less stringent requirements.

4 The broker is unable to provide the same competitive prices that an agent provides. - 2 The broker does not transact on behalf of an insurer, while the agent does.

Who is the California Life and Health & Guarantee Association is regulated by?

1 The California Legislature.

2 The California Department of the Treasurer.

3 The California Insurance Commissioner 4 The Governor of California. - 3 The California Insurance Commissioner With a Guaranteed Universal Life policy the policy is guaranteed not to lapse as long as what premiums are paid? - the minimum required With a managed health care plan all _________ care must be covered as if it were provided on an in-network basis. - emergency