Exam 8

Question 1

E8Q1. The rules regarding life insurance policy illustrations are intended to ensure all of the following, EXCEPT:

Answer 1

Ensure that the illustration specifies that both guaranteed and non-guaranteed elements will continue unchanged for all years shown.

Question 2

E8Q2. If an insurer inadvertently is found guilty of unfair trade practices while issuing, renewing, and servicing a policy, the insurer could be prosecuted for how many violations?

Answer 2

3

Question 3

E8Q3. An insurer owned by a parent company that provides insurance to cover the parent company’s loss exposures is a:

Answer 3

Captive insurer

Question 4

E8Q4. Which of the following is NOT excluded by group life?

Answer 4

Accidental injury

Question 5

E8Q5. The MINIMUM number of employees for group life insurance in California is:

Answer 5

2

Question 6

E8Q6. Which of the following could be used to pay off the mortgage on a home, providing a death benefit that equals the amount of outstanding debt on the home, no more and no less?

Answer 6

Decreasing term insurance

Question 7

E8Q7. What does the phrase “life insurance creates an immediate estate” mean?

Answer 7

The total death benefit will be paid to a beneficiary on the death of the insured

Question 8

E8Q8. Every insurer offering individual life insurance policies or annuities to senior citizens that use non-guaranteed elements in illustrations must provide a statement to that effect. Which of the following is correct regarding this statement?

Answer 8

Non-guaranteed elements must be in bold print

Question 9

E8Q9. The usual amount of death benefit in an industrial life insurance policy is:

Answer 9

Less than $2,000

Question 10

E8Q10. In which of the following qualified pension plans are benefits linked to the employee’s years of service and/or amount of compensation?

Answer 10

Defined benefit plan

Question 11

E8Q11. Which of the following allows employees to share in the financial success of the company?

Answer 11

Profit-sharing plan

Question 12

E8Q12. The Social Security age of retirement is dependent upon:

Answer 12

The individual’s date of birth

Question 13

E8Q13. Life insurance illustrations showing premiums, values, credits or charges that are not determined at issue demonstrate:

Answer 13

Non-guaranteed elements

Question 14

E8Q14. An ESOP invests in:

Answer 14

Employer stock

Question 15

E8Q15. When an insurer presents an illustration for life insurance, all of the following are prohibited, EXCEPT:

Answer 15

Using the insurer’s “disciplined current scale” in the illustrations

Question 16

E8Q16. In a group life plan, unmarried children may be covered as dependents until the age:

Answer 16

21

Question 17

E8Q17. An insurance company which is owned by individuals who purchase shares of stock in the company, share in profits in proportion to shares owned, and vote for a board of directors is known as what type of insurer?

Answer 17

Stock insurer

Question 18

E8Q18. Eligibility for Social Security retirement benefits is based on:

Answer 18

The number of quarters earned

Question 19

E8Q19. All of the following apply to an insurance broker (not an insurance agent), EXCEPT:

Answer 19

A broker is appointed by an insurer to transact insurance

Question 20

E8Q20. In order to qualify for Social Security retirement benefits the worker must be:

Answer 20

Fully insured

Question 21

E8Q21. All of the following are covered by the CLHIGA, EXCEPT:

Answer 21

Employer self-funded plans

Question 22

E8Q22. Which of the following is NOT covered by the CLHIGA?

Answer 22

Group stop loss plans

Question 23

E8Q23. In a group life policy with a death benefit of more than $50,000:

Answer 23

Premium cost for insurance above $50,000 is taxable as income to the insured

Question 24

E8Q25. If an insurer knowingly allows one of its agents to mislead a member of the public in order to induce the person to change their existing insurance, the Commissioner may:

Answer 24

Suspend the insurer’s certificate of authority for the class of business involved

Question 24

E8Q24. When a corporation ceases to exist entirely, their issurance license:

Answer 24

Terminates

Question 25

E8Q26. All of the following are required to be included in life insurance illustrations, EXCEPT:

Answer 25

A statement that the benefits in the illustration are guaranteed

Question 26

E8Q27. If an insurer indicates that an illustration will be used, they must do which of the following?

Answer 26

Send a summary status report to the policyowner annually

Question 27

E8Q28. If a dependent child covered by a group life plan is incapable of self-support, coverage under the plan may continue up to age:

Answer 27

Any age

Question 28

E8Q29. In a group life plan, a dependent child attending an educational institution may be covered until age:

Answer 28

24

Question 29

E8Q30. Any insurer that provides claim forms must include which of the following statements?

Answer 29

“For your protection California law requires the following to appear on this form: Any person who knowingly presents false or fraudulent claim for the payment of a loss is guilty of a crime and may be subject to fines and confinement in state prison.”

Question 30

E8Q31. A disability income policy covers injuries suffered by an insured on or off the job is called?

Answer 30

An occupational policy

Question 31

E8Q32. Which two are Activities of Daily Living?

Answer 31

Eating and dressing

Question 32

E8Q33. Medicare Part A, begins automatically at age:

Answer 32

65

Question 33

E8Q34. The insured’s policy has a deductible that is applied between the exhaustion of basic plan limits and the commencement of excess coverage. This is called a:

Answer 33

Stop-loss limit

Question 34

E8Q35. A waiting period between the onset of disability and the time when benefits begin is the:

Answer 34

Elimination Period

Question 35

E8Q36. A parent who lives at home is being cared for by an adult daughter on a full time basis. Which of the following would provide care if the daughter needs a period of separation?

Answer 35

Respite care

Question 36

E8Q37. The Federal law known as COBRA does which of the following?

Answer 36

Allowing for, and providing protection of ex-employees, as well as their dependents by providing them the same conversions and extension benefits for group health insurance benefits as those given to existing employees

Question 37

E8Q38. Which of the following conditions would NOT be included among the chronic illness triggers of a LTC policy?

Answer 37

Deafness

Question 38

E8Q39. What does a stop-loss provision in a medical expense insurance plan set a maximum for?

Answer 38

The limit of out-of-pocket expense payments covered each year under a policy

Question 39

E8Q40. Medicare PART B does/is not:

Answer 39

Cover the expense of virtually all drugs prescribed by a doctor

Question 40

E8Q41. If a physician is paid through a Preferred Provider Organization (PPO), the normal way of paying him/her is:

Answer 40

By payment directly for each service

Question 41

E8Q42. In a Workers’ Compensation contract, Part One provides payments for which of the following?

Answer 41

Sums the employer is legally required to pay under State Workers’ Compensation Laws

Question 42

E8Q43. Which of the following is the definition of morbidity?

Answer 42

The likelihood of illness or injury

Question 43

E8Q44. Which of the following is NOT true regarding Managing General Agents?

Answer 43

They do not collect premium money from producing broker-agents