Q's Flashcards
1
Q
What is meant by referring to an insurance policy as a unilateral contract?
A
Only one party makes a legally enforceable promise
2
Q
When must insurance records of insurance agents and brokers be made available to the Insurance Commissioner?
A
At all times
3
Q
Any situation that presents the possibility of a loss is known as
A
A loss exposure
4
Q
Which of the following information is not required to be communicated in a Life insurance contract?
A
Personal Judgement
5
Q
The direct distribution of insurance utilizes all of the following to promote the sale of insurance EXCEPT
A
Telephone call from an agent
6
Q
A contract in which one party promises to indemnify another against loss that arises from an unknown event is
A
An insurance policy
7
Q
All of the following statements about aleatory contracts are true EXCEPT
A
the insured and insurer contribute equally to the contract
8
Q
All of the occurrences listed below are examples of an insurable event as defined by the California Insurance Code EXCEPT
A
An insured suffers a financial loss in the state lottery
9
Q
All of the following would be considered unfair trade practices EXCEPT
A
Committing any act of discrimination whether it be deemed fair or unfair
10
Q
As authorized by the California Insurance Code, the Insurance Commissioner has provided standards for names used by life insurance agents. Under these standards which, if any, of the following are automatically acceptable for Mary Brown, a holder of the CLU designation?
A
Mary Brown Insurance Services
11
Q
A contract indemnity is one in which
A
one party is restored to the same financial position the party was in before the loss occurred
12
Q
In insurance terminology, “indemnity” means
A
make whole
13
Q
As defined in the California insurance Code, “insurance” is a
A
Contract
14
Q
What would a person be guilty of who refuses to deliver any books, records, or assets to the commissioner once a seizure order has been executed?
A
A misdemeanor
15
Q
An agent who is acting as an insurance agent, broker, solicitor, life agent, accident and health, or bail agent acts in which capacity when handling premiums or return premiums for an insured?
A
Fiduciary
16
Q
Which of the following statements regarding risk is True?
A
Only pure risk are insurable
17
Q
The purchase of an insurance policy may accomplish all of the following for the insured EXCEPT
A
the elimination of risk
18
Q
Insured are entitled to recover an amount NOT greater than the amount of their loss under the principle of
A
indemnity
19
Q
What rule is used to determine the importance of a representation?
A
The materiality of concealment
20
Q
The required contents of a policy include all of the following EXCEPT
A
the probability of loss
21
Q
All of the following are characteristics of reinsurance EXCEPT it
A
Increases the unearned premium reserve
22
Q
According to the California Insurance Code, an insurance policy must specify all of the following EXCEPT the
A
financial rating of the insurer
23
Q
All of the following qualify as “background information” as defined in Section 1729.2 of the California Insurance Code, EXCEPT
A
misdemeanor charges filed, not resulting in a conviction
24
Q
Loss retention is an effective risk management technique when all of the following conditions exist EXCEPT the
A
probability of loss is unknown.
25
A situation in which there is a possibility of loss or a gain is a
speculative risk
26
Why is having a large number of similar exposure units important to insurers/
The greater the number insured, the more accurately the insurer can predict losses and set appropriate premiums.
27
All of the following are benefits of insurance EXCEPT it
eliminates fraudulent losses.
28
Who are members of the Medical information Bureau?
Life and health insurers.
29
The process by which an insurer decides whether to issue requested insurance is called
underwriting
30
Unless it is merely a statement of an expectation or belief, a representation as to the future is considered which of the following?
Promise
31
Upon notification of a claim, a claimant must be given access to the California Fair Claims Settlement Practices resolution by all of the following means EXCEPT
by interview appointment with the agent of record.
32
What is the definition of premium?
Money an insured pays an insurer to obtain the benefits provided in the policy
33
What is the goal of the underwriting process?
to avoid selecting a disproportionate number of bad risks
34
Insurer policy expenses include all of the following EXCEPT
Premiums
35
Unintentional concealment entitles the injured party to which course of action, if any?
Rescission of the contract
36
Making an insured whole by restoring them to the same condition as before a loss is an example of
The principle of indemnity
37
Risk can be defined as all of the following EXCEPT
the cause of loss
38
Which of the following is a requirement of a contract?
There must be an offer and acceptance of the contract terms
39
Moral hazard can be defined as the increase
chance of a loss occurring due to an insureds dishonest tendencies
40
According to the California Insurance Code, the Commissioner can disapprove a licensee's request to use a fictitious name for any of the following reasons EXCEPT that the
Name is the licensee's actual name
41
It is considered an unfair method of competition for an agent to advertise that the insurer the agent is appointed with is
a member of the Insurance Guarantee Association
42
All of the following are the requirements of contract EXCEPT
there must be equal consideration between the parties
43
If an insurer must have its rates accepted by the insurance Department before using them, the insurer would be operating in which of the following types of jurisdictions?
Prior approval
44
It is Federal offense for an insurance agent to do all of the following EXCEPT
misrepresent facts on an insurance application
45
How often MUST an insurer file the National Association of Insurance Commissioners (NAIC) financial statement?
Annually
46
A person authorized by and on behalf of an insurer who transacts life, disability or life and accident and health insurance is defined as a
life agent
47
An insurer entitled to transact business by complying with the California Insurance Code is known as an
admitted carrier
48
Who are the members of the Medical Information Bureau?
Life and Health insurers
49
If you have been convicted of a misdemeanor and that misdemeanor conviction is later expunged pursuant to California Penal Code Section 1203.4, which of the following is true?
Even though your misdemeanor conviction was expunged, you must still disclose your misdemeanor conviction on your individual application for an insurance license
50
The direct response distribution of insurance utilizes all of the following to promote the sales of insurance EXCEPT
telephone call from the agent
51
The increase in the probability of a loss resulting from an insured's dishonest tendencies is known as
moral hazard
52
which is an agreement in which an insurer contacts with a third party to insure itself against losses from insurance policies it issues?
Reinsurance
53
Which if the following would an agent be guilty of for misrepresenting the amount of dividends a policy will pay?
A misdemeanor
54
What rule is used to determine the importance of a representation?
The materiality of concealment
55
Which of the following is a hazard?
A condition that may increase the likelihood of a loss occurring
56
When are parties to a contract REQUIRED to communicate information solely based on personal judgment for a matter in question?
Never
57
According to the California Insurance Code, if an insurer's certificate of authority is revoked, the Commissioner can proceed with any of the following actions EXCEPT
using Guarantee Funds to pay salaries
58
Section 1729.2 of the California Insurance Code requires insurance producer applications and licenses to notify the Insurance commissioner in writing, within __ days of charges in background information after an application has been submitted or a license has been issued.
30
59
The insurer's department with PRIMARY responsibility for the risk selection process is called
underwriting
60
A person owns a life annuity. He elects to receive his annuity payments monthly for the remainder of his life with "ten years certain". The annuinity will make payments.
for a minimum of 120 months and a maximum of the remainder of his life
61
All of the following information is gathered during the personal financial planning process EXCEPT
a listing of a persons civic and professional organization memberships
62
Which policy provision allows an insured to continue coverage under a previously lapsed policy?
The reinstatement provision
63
According to the California Insurance Code, governing the use of life insurance policy illustrations, the term illustration means
a presentation of policy features that include non-guaranteed elements
64
The life insurance grace period allows the insured to
Pay the premium after the due date without loss of coverage
65
When a family policy covers children, all of the following are true EXCEPT
evidence of insurability is required to convert coverage for the children to permanent insurance
66
An attempt by an agent to deter an insured from replacing an existing life insurance policy is called
conservation
67
Which of the following would an agent be guilty of for misrepresenting the amount of dividends a policy will pay
A misdemeanor
68
The additional premium charged by an insurer for adding the accidental death benefit to whole life policy
does not affect the policy's cash value
69
How much employer-provided group term life insurance is exempt from income taxation?
$50,000
70
How long is the free cancellation period for the life insurance offered to individuals who are 60 or older?
30 days
71
What does the statement: life insurance created an immediate estate" mean?
The total death benefit is paid whenever the insured dies
72
Which report of an insurance applicant's creditworthiness and personal characteristics may influence eligibility for life and health insurance?
Consumer report
73
In group life insurance, who is issued a certificate of insurance?
The participant
74
Which type of insurance guarantees the right to renew the policy each year, regardless of health, but at an increased premium?
Renewable term
75
If a life agent sells a whole life policy to a prospect on behalf of an insurer without an appointment, the
insurer must submit a notice of appointment to the commissioner
76
Which component of a life insurance premium is based on the insured's age and gender?
Mortality
77
Which benefits are provided by key employee insurance?
Payment to a business when an important employee dies
78
How can partners guarantee a market for their share of the business in the event of death?
Buy-sell agreements
79
Which policy covering two or more individuals pays the face amount only when the first person dies?
Joint life policy
80
Which two insurance products are commonly used to fun buy-sell agreements?
Life insurance and disability insurance
81
Which policy provision protects the insurer against possible adverse selection?
Suicide clause
82
Which type of insurance coverage has both a savings element and a flexible premium option?
Universal life
83
A life insurance policy written after 1988 that fails to meet the seven - pay test is known as
a modified endowment contract
84
What type of insurance policy provides a death benefit that matches the projected outstanding debt on an individual home?
Mortgage redemption
85
An agent who violates the laws governing life insurance policy illustrations is subject to all of the following EXCEPT
mandatory termination of all insurer appointments.
86
Which policy is a saving instrument designed to first accumulate funds and then systematically to liquidate the funds?
Deferred annuity
87
Individual life insurance policies sold to seniors in the State of California must include a prominently placed statement that divulges all of the following information EXCEPT
proof of surrender must be notarized at the agent’s principal office
88
People commonly purchase an annuity to protect against the risk of:
outliving their financial resources.
89
What is one difference between group life an individual life underwriting?
Individual life insurance requires the applicant to answer medical questions.
90
88.A $50,000 whole life policy with a cash value of $10,000 has been in force for eleven years. The policyowner is unable to continue the
premium payments. Which of the following describes the reduced paid-up nonfordeiture option?
The cash value is used to select a $20,000 paid-up policy
91
89.Which of the following is a characteristic of nonqualified annuities?
Tax-deferred earnings
92
A 10-year certain annuity with an installment refund is purchased. The annuitant dies after receiving monthly payments for 5 years. How many remaining payments will the insurer make?
60 payments
93
The payor rider on a juvenile life policy provides that if the payor dies or becomes disabled before the insured juvenile reaches the age specified in the policy that the
insurer will make the payments until the insured juvenile reaches a specified age-usually twenty-one or twenty-five.
94
Which of the following contracts provides benefits that fluctuate automatically with investment results?
Variable life insurance
95
The theory of probability is applied to life insurance through the use of
mortality tables
96
What is the difference between deferred annuities and immediate annuities?
Deferred annuities have longer accumulation periods
97
which of the following is NOT an option for the use of the policy dividends?
Fund the distribution of monthly income payments
98
The insured is totally and permanently disabled. The insured’s policy continues in force without payment of further premiums because the policy contains a
waiver of premium provision
99
Your client has just bought a new home which he has financed with a $150,000, 7.5% interest, 30 –year bank loan. He would like to be sure that if he dies that the unpaid balance of the mortgage would be paid. He wants a policy that will cover the mortgage balance-no more, no less-anytime during the life of the mortgage. Which policy is designed to meet this need?
Decreasing term policy
100
Death benefits that are received by a beneficiary are generally
exempt from federal income tax
101
An insured replaces an existing annuity with a new one and must pay a surrender charge for cancelling the existing annuity. The new policy holds no greater financial benefits to the insured than the
existing contract. This is an example of
an unnecessary replacement
102
What do we call the process whereby insurers decide which customers to insure and what coverage to offer?
Underwriting
103
what is used to determine the amount of an annuity distribution that is exempt from taxation?
The exclusion ratio
104
The number of deaths during a year compared with the total number of persons exposed in the class is known as the
mortality rate
105
The insured bought an annuity ten years ago. He will retire in five years. To determine the value of his annuity, he must multiply the value of the “accumulation units” he owns, times the value of the “separate account”. This type of annuity is known as a
variable annuity
106
All of the following are true about term life insurance policies EXCEPT the
face amount is paid if the insured survives to the end of the policy period
107
A life insurance policy dividend is
legally defined as a return of excess premium and not taxable.
108
Life insurance policies written without a physical examination are called
non-medical
109
Why is the delivery of a life insurance policy important?
The free-look period begins on the policy delivery date.
110
What is an ESOP?
Employee Stock Ownership Plan
111
Which policy provision protects the insurer against possible adverse selection?
Suicide clause
112
An insured replaces an exciting annuity with a new one and must pay a surrender charge for cancelling the existing annuity. The new policy holds no greater financial benefits to the insured than the
existing contract. This is an example of
an unnecessary replacement
113
A group life policy is issued on a contributory basis. This means that the
insured employees will pay part of the premium
114
What is the penalty tax imposed on amounts received from a modified endowment contract?
10%
115
A participating life insurance policy is defined as a contract that
allows the policyowner to receive a share of surplus in the form of policy dividends
116
All of the following are contained in a mortality table EXCEPT
number living at the end of designated year.
117
Which policy pays the face amount if the insured survives to the end of a certain period?
Endowment insurance
118
A husband and wife have a disabled child who is financially dependent upon them. The death of one parent would not result in financial disaster for the disabled child, but the death of both parents
would. Which policy should they purchase?
Second-to-die policy
119
How can partners guarantee a market for their share of the business in the event of death?
Buy-sell agreements
120
Which policy covering two or more individuals terminates after paying benefits on the first to die?
Joint life policy
121
The accidental benefit rider is also known as
double indemnity
122
The use of non-medical life insurance accomplishes all of the following EXCEPT
insureds can avoid answering medical questions on the application
123
Who MUST sign a statement acknowledging that a life insurance policy illustration was given to an applicant?
The applicant and the agent
124
In financial planning, the human life value concept is based on an individual’s
income
125
When does an individual have an insurable interest in the life of another person?
The individuals depends on the other person for financial support
126
The cost of employer-provided group life insurance above $50,000 is
taxable as income to the employee
127
If a term life insurance policy is renewable, the renewal provision usually states that:
a higher premium is payable at each renewal.
128
Life insurers must include all of the following in their financial statements EXCEPT
policy summary description.
129
Common life insurance policy riders include all of the following EXCEPT
extended term
130
In a group life insurance policy, who are the parties to the master contract?
The insurer and the employer
131
Which statement is TRUE regarding employer contributions to qualified plans?
They are tax deductible by the employer
132
Which of the following statements about policy dividends is TRUE?
Insureds elect a dividend option at the time of policy purchase
133
Which policy allows the insured to choose where the assets backing the cash value are invested?
Variable life
134
Creditors have rights to life insurance policy proceeds when the beneficiary is the
insured’s estate
135
Which distribution from an annuity would be subject to a penalty tax?
A single payment made to a taxpayer who is age 55
136
The adjustments that insurers make to the cash value account in a universal life policy each time a payment is made includes all of the following EXCEPT
subtract the policy surrender charges
137
The conversion privilege allows a terminating employee to convert
term insurance into permanent insurance
138
Which government regulation prevents retirement plans from favoring highly compensated employees?
Nondiscrimination
139
What is the difference between a conditional premium receipt and a binding premium receipt?
Only a binding receipt always provides insurance that is effective from the date the receipt is given.
140
A life insurance policy’s waiver of premium takes effect if an insured
becomes totally disabled
141
A 10-year certain annuity with an installment refund is purchased. The annuitant dies after receiving monthly payments for 5 years. How many remaining payments MUST the insurer make?
60 payments
142
Under a group life insurance policy, acts of war and aviation are examples of:
policy exclusions
143
What does the statement “Life insurance creates an immediate estate” mean?
The total death benefit is paid whenever the insured’s dies
144
Which policy provision protects an insurer against a lawsuit before the insurer has had a reasonable opportunity to investigate a claim?
Legal actions
145
What factor determines the difference between deferred and immediate annuities?
When annuity benefit payments begin
146
How does the cost recovery rule apply when a life insurance policy is surrendered for its cash value?
The cost basis of the policy is exempt from taxation
147
The components of determining policy premiums include all of the following EXCEPT
dividends
148
From lowest to highest, which is the CORRECT order of initial premiums for life insurance policies?
Modified premium, ordinary life, single premium.
149
Underwriters classify insurance risks as any of the following EXCEPT
dividends risks
150
Under which group term life provision does an insurer make payments to the guardian of a beneficiary who is a minor?
Facility of payment
151
A beneficiary wants to let the death benefit accumulate and receive only the monthly investment proceeds. Which settlement option should be chosen?
Interest option
152
Death benefits that are received by a beneficiary are generally
exempt from federal income tax
153
The California Insurance Code requirements regarding the return of life or annuity contracts issued to seniors
gives a senior at least 30 days to return specified life and/or annuity contracts for a full refund.
154
When a family policy covers children, all of the following are true EXCEPT
evidence of insurability is required to convert coverage for children to permanent insurance.
155
An insurer’s request for an attending physician’s report MUST be accompanied by a copy of the
signed authorization
156
What is REQUIRED when an application reveals conditions that require more information?
Attending physician’s statement
157
Which policy provision protects the policy owner from unintentional lapse of the contract?
Grace period
158
Under which policy provision can a policy be surrendered for its net cash value?
Nonforfeiture options
159
The policyowner, age 50, has been paying the premiums on his whole life policy for fifteen years. He needs the equivalent of one-third of his policy’s cash value for two years. He wants to continue to have the same amount of life insurance protection and he can afford to continue to pay the policy’s premium. Which of the following would appear to be his BEST course of action?
Use the policy loan provision to borrow money from the policy, but keep making the premium payments to keep the policy in force.
160
In a 5-year vesting schedule, what percentage of employer contributions MUST be vested after 5 years of service?
100%
161
Which of the following is a characteristic of nonqualified annuities?
Tax-deferred earnings
162
Which of the following is a correct statement about the premium payment modes? The total premium paid by a life policyowner for one policy year is:
greater if the premium is paid semiannually rather than annually
163
What is the limit of liability on a life insurance policy?
The face amount of the policy
164
Traditional comprehensive major medical plans include all of the following EXCEPT
first-dollar coverage
165
Under a disability income insurance policy with an own occupation clause, an individual who can no longer perform the tasks of the job held at the time of injury is considered
totally disabled
166
Part-time nursing care that follows a hospitalization and can be provided in a patient’s home is covered under
home health care benefits
167
What type of insurance can be purchased at airports, bus terminals, and railroad stations?
travel accident insurance
168
During the solicitation of a long term care insurance rider, a life agent must consider all of the following EXCEPT the applicant’s
attending physician statement
169
Vision care insurance usually covers all of the following EXCEPT
eye surgery
170
All of the following are optional group medical coverages EXCEPT
maternity
171
What is the cost of service from the Health Insurance Counseling Advocacy Program (HICAP)?
No charge
172
All of the following may opt for a self insured medical and disability plan EXCEPT
individuals
173
Which statement about Medicare is NOT correct?
Medicare Part C covers long-term care
174
In order to obtain group insurance without providing evidence of insurability, what do eligible individuals generally have to do?
Enroll within a specified eligibility period
175
The adult day care coverage level of a long-term care policy provides for
part-time nursing at a facility for elderly who live at home
176
Regarding the Health Benefit Exchanges, as created by PPACA, all of the following statements are true EXCEPT
an individual enrolling in a bronze level plan is not eligible for reduced cost-sharing.
177
Under the PPACA, which medical enrollment tier is 80% actuarial value?
gold
178
Provision in a disability income policy include all of the following EXCEPT
deductible and coinsurance amounts
179
All of the following statements are true regarding Health Insurance Counseling Advocacy Program (HICAP) counselors EXCEPT HICAP counselors
are qualified to give legal advice
180
The initial enrollment period for Medicare Part B ends how many months after the 65th birthday month?
Three months
181
Which program is designed to provide medical assistance to people with low incomes?
Medi-Cal
182
A commonly used cost containment measure for emergency hospital care under a major medical expense plan is the
deductible
183
A supplemental insurance policy that pays a set amount for each day that an individual is hospitalized is known as
hospital confinement indemnity
184
The group medical plan provision that applies when a claimant has coverage under more than one plan is known as
coordination of benifits
185
Which group provides information about Health-related issues to the elderly in California?
The Health Insurance Counseling and Advocacy Program(HICAP)
186
The Employee Retirement Income Security Act of 1974 (ERISA) regulates group health insurance in the area of
disclosure and reporting
187
Which health plan pays more for care received from a network provider than it pays for care from a non-network provider?
Preferred Provider Organization(PPO)
188
A long-term care insurance rider can include coverage for all of the following EXCEPT
hospital acute care
189
Residual disability income insurance payments are based on
the amounts the insured's income is reduced by the disability
190
Why is an injury caused by an accident at an employee's workplace excluded from individual health insurance coverage?
It is covered by the state Workers Compensation program
191
In health insurance the coinsurance is
A percentage paid for covered expenses by the insured and insurer after the deductible is satisfied
192
Vision insurance usually limits coverage in all of the following ways EXCEPT
a specific dollar amount for examinations
193
What happens if an insurer violates the Medical Loss Ratio rule and spends too much money on administrative costs?
Insurers that do not meet the Medical Loss Ratio standard will be required to provide rebates to their customers and reduce spending on their administrative costs.
194
What is the first step in submitting Medicare claims?
The medical provider submits expenses to Medicare
195
Health Insurance Counseling and Advocay Program (HICAP) counselors can do all of the following except.
charge for their services
196
When medical expense policies do not state specific dollar benefit amounts, but instead base payments upon the charges for like services in the same geographical area, benefits are designated as
usual, customary, and reasonable charges
197
As established by PPACA, an adult child may be covered by a parent’s health insurance plan until what age?
26 years old
198
Two of the long-term care chronically ill activities of daily living (ADLs) are
eating and dressing
199
For Social Security purposes, a person with 40 quarters of coverage is considered
fully insured
200
In California, a child may obtain individual health coverage through all of the following EXCEPT
Healthy Families
201
Which of the following is NOT an example of cost sharing in a health insurance policy?
Coordination
202
The insurer can do which of the following under a noncancelable health insurance policy?
Cancel the policy for nonpayment of premium
203
In the absence of a coordination of benefits clause, all of the following circumstances might result in recovery of more than 100% of actual health care expenses EXCEPT:
a worker’s medical plan includes a carryover deductible provision
204
What rights do individuals have if they disagree on the amount Medicare will pay?
They can ask a Medicare carrier to review the decision
205
An individual is allowed to enroll in individual health insurance under the following circumstances EXCEPT
within 30 days of being diagnosed with an illness
206
Medicare Part A provides coverage for all of the following EXCEPT
physician’s services
207
After deductible, what portion does a patient pay for covered expenses under Medicare Part B?
80%
208
The premium of a proposed disability income policy could be lowered by increasing the
elimination period
209
Providers of coverage for all of the following types of care are subject to the jurisdiction of the California Department of Insurance (CDI) EXCEPT
lasik
210
Which plan covers the medical expenses that are NOT covered by Medicare?
Medicare supplement
211
The type of health care provider that provides both the health care services and health care coverage is called
Health Maintenance Organization
212
In medical expense insurance, what serves the same purpose as the elimination period in disability income insurance?
Deductible
213
What is the purpose of social insurance?
To protect certain vulnerable segments of the population.
213
An example of a third - party administer is an
outside organization that processes claims for an employer's self-sunded group plan
213
The Family and Medical Leave Act(FMLA) covers all of the following EXCEPT
traveling with a spouse who has been transferred overseas.
214
Which program pays the cost of nursing home care for people who cannot afford it themselves?
Medi-Cal
215
215
216
Benefits under Social Security are available only for workers who are
fully insured
217
Group health plans obligated by the Consolidated Omnibus Budget Reconciliation Act (COBRA) cover groups of at least
20 employees
218
With Medicare coverage
Part B provides benefits for diagnostic tests and X-rays performed on an outpatient basis.
219
A health insurance issuer offering coverage in the individual market must provide premium rebates if its medical loss ratio (MLR) is less than what percentage?
80%
220
According to the California Insurance Code, all of the following Long- Term Care(LTC) insurance sales are considered unnecessary EXCEPT
a replacement LTC policy with equal benefits for a lower premium.
221
All of the following types of insurance pay benefits in addition to those paid by other insurance policies held by the insured EXCEPT
medical expense
222
The most common type of specified disease insurance policy is
cancer
223
After the deductible is satisfied, what percentage of a reasonable charges does Medicare Part B pay?
80%
224
Which of the following statements concerning the usual coordination of benefits provision is correct?
When two plans both have the provision, coverage as an employee is primary to coverage as a dependent.
225
Which health insurance provision protects an insured from the expense of a catastrophic illness?
Stop-loss
226
Which health insurance contract provision addresses the problem of overinsurance?
Coordination benefits
227
Relevant factors in the health insurance principle of morbidity include all of the following EXCEPT
intelligence
228
To reach currently insured status under the Social Security system, an individual must be credited with a MINIMUM of
6 quarters of coverage during the last 13-quarter period
229
In health insurance, the result of rising morbidity rates is
increased premiums
230
Which health plan might apply 90% coinsurance to network providers and 70% coinsurance to non-network providers?
Preferred Provider Organization(PPO)
231
The Family and Medical Leave Act(FMLA) covers all of the following EXCEPT
traveling with a spouse who has been transferred overseas
232
A surviving spouse without dependent children is eligible for Social Security survivor benefits at age
60
233
What happens if an insurer violates the Medical Loss Ratio rate and spends too much money on administrative costs?
*Insurers that do not meet the Medical Less Ratio standard will be required to provide rebates to their customers and reduce spending on their administrative costs.
234
Vision insurance usually limits coverage in all of the following ways EXCEPT
a specific dollar amount for examinations
235
When an agent writes a replacing long-term care policy, the agent’s first year sales commission will be determined based on the
difference between the new and original policy annual premiums
236
Why is an injury caused by an accident at an employee’s workplace excluded from individual health insurance coverage?
It is covered by the state Worker’s Compensation program
237
All of the following conditions must be met to qualify for residual disability benefits under a disability income policy EXCEPT
qualifies for Social Security disability benefits
238
All of the following features of a Preferred Provider
Organization (PPO) EXCEPT
primary care physicians act as gatekeepers
239
In the Worker’s Compensation policy, Part One, Workers’ Compensation, pays for
sums the insured is required to pay under state Workers’ Compensation law
240
Under Social Security, the definition of disability is the inability to engage in
any substantial gainful activity
241
At what age are individuals eligible for Medicare Part A benefits?
65
242
The Employee Retirement Income Security Act of 1974(ERISA) regulates group health insurance in the area of
disclosure and reporting
243
Which plan covers the medical expenses that are NOT covered by Medicare?
Medicare supplement
244
Which of the following conditions would NOT be included among the chronic illness triggers of a long-term care policy?
Deafness
245
Which of the following conditions would NOT be included among the chronic illness triggers of long-term care policy?
Deafness
246
Insurers are prohibited from denying claims based on misrepresentations in a disability policy application after the policy has been in force for
Two years
247
Which funded government program is jointly administered by the federal and state governments?
Medi-Cal
248
What rights do individuals have if they disagree with a decision on the amount Medicare will pay?
They can ask the Medicare carrier to review the decision
249
Which long-term care policy provision allows for a periodic increase in policy benefits
Inflation protection
250
All of the following statements about Medicare Part B are correct EXCEPT it
pays for virtually all drugs prescribed by a physician
251
Under PPACA, what is a health benefit exchange?
PPACA creates new entities called American Health Benefit Exchanges through which individuals, small businesses, and those who do not have access to affordable employer coverage, can purchase
coverage
251
The initial enrollment period for Medicare Part B ends how many months after the 65th birthday month?
Three months
252
What is the first step in submitting Medicare claims?
The medical provider submits expenses to Medicare
253
Unless certified by another governmental agency, which entity has jurisdiction over providers of coverage designed to pay for health care
services?
The Department of Insurance
254
Long-term care insurance may be purchased in all of the following forms EXCEPT
federal government-sponsored policies
255
Under the Consolidated Omnibus Budget Reconciliation Act(COBRA), a qualifying event ensures that an employee who loses coverage can
elect to continue coverage
256
Which statement is TRUE regarding Worker’s Compensation?
The employer pays the entire premium for Workers’ Compensation Coverage
257
Which program is designed to provide medical assistance to people with low incomes?
Medi-Cal
258
The Social Security normal retirement age depends upon the
worker’s year of birth
259
Who submits Medicare Part A claims?
Hospitals
260
How long do Worker’s Compensation medical expenses continue for disabled workers?
There is no limit
261
Which of the following statements concerning the usual coordination of benefits provision are CORRECT?
When two plans both have the provision, coverage as an employee is primary to coverage as a dependent
262
The Americans with Disabilities Act(ADA) defines a disabled person as one who is unable to perform any of the following life activities EXCEPT
driving
263
After the deductible, what portion does a patient pay for covered expenses under Medicare Part B?
20%
264
Probationary periods reduce costs to employers in all of the following ways EXCEPT
employees must pay the entire premium during this time
265
Members of the Medical Information Bureau are REQUIRED to report
medical impairments found during the underwriting process
266
A worker dies who is credited with 6 quarters of coverage during the last 13-quarter period. What status does the worker have under Social Security?
Currently insured
267
What is the cost of service from the Health Insurance Counseling Advocacy Program (HICAP)?
No charge
268
What is covered by Part A of Medicare?
Hospitalization
269
The frequency and severity of certain illnesses and accidents is known as
morbidity
270
A Long-Term Care Insurance rider can include coverage for all of the following EXCEPT
hospital acute care
271
A terminating employee who wants to exercise the conversion privilege must meet all of the following requirements EXCEPT
supply evidence of insurability
272
An insured has a disability income policy with a $1500 monthly benefits and a 30-day elimination period. The insured is unable to work for 120 days following an accident. What amount will the policy pay?
$4500
273
Social Security survivor benefits are available for all of the following EXCEPT
parents of any age who were dependent upon the deceased worker
274
Under group disability insurance an employee is eligible for a partial disability benefit when they can
perform some of their job activities on a part time basis after injury
275
Which of the following is NOT an example of cost sharing in a health insurance policy?
Coordination
276
The insurer can do which of the following under a noncancelable health insurance policy?
Cancel the policy for nonpayment of premium
277
In the absence of a coordination of benefits clause, all of the following circumstances might result in recovery of more than 100% of actual health care expenses EXCEPT:
a worker’s medical plan includes a carryover deductible provision
278
What rights do individuals have if they disagree with a decision on the amount Medicare will pay?
They can ask a Medicare carrier to review the decision
279
An individual is allowed to enroll in individual health insurance under the following circumstances EXCEPT
within 30 days of being diagnosed with an illness
280
Medicare Part A provides coverage for all of the following EXCEPT
physicians’ services
281
After the deductible, what portion does a patient pay for covered expenses under Medicare Part B?
80%
282
The premium of proposed disability income policy could be lowered by increasing the
elimination period
283
Providers of coverage for all of the following types of care are subject to the jurisdiction of the California Department of Insurance(CDI)EXCEPT
lasik
284
Which plan covers the medical expenses that are NOT covered by Medicare?
Medicare supplement
285
The type of health care provider that provides both the health care services and health care coverage is called
a Health Maintenance Organization
286
In medical expense insurance, what serves the same purpose as the elimination period in disability income insurance?
Deductible
287
An example of a third-party administrator is an
outside organization that processes claims for an employer’s self-funded group plan.
288
The Family and Medical Leave Act(FMLA) covers all of the following EXCEPT
traveling with a spouse who has been transferred overseas
289
What is the purpose of social insurance?
To protect certain vulnerable segments of the population
290
Which program pays the cost of nursing home care for people who cannot afford it themselves?
Medi-Cal
291
Which program pays the cost of nursing home care for people who cannot afford it themselves?
Medi-Cal
292
Benefits under Social Security are available only for workers who are
fully insured
293
Group health plans obligated by the Consolidated Omnibus Budget Reconciliation Act(COBRA) cover groups of at least
20 employees
294
With Medicare coverage
*Part B provides benefits for diagnostic tests and X-rays performed on an outpatient basis.
295
A health insurance issuer offering coverage in the individual market must provide premium rebates if its medical loss ratio (MLR) is less than what percentage?
80%
296
According to the California Insurance Code, all of the following Long- Term Care (LTC) insurance sales are considered unnecessary EXCEPT
a replacement LTC policy with equal benefits for a lower premium
297
All of the following types of insurance pay benefits in addition to those paid by other insurance policies held by the insured EXCEPT
medical expense
298
The most common type of specified disease insurance policy is
cancer
299
After the deductible is satisfied, what percentage of a reasonable charge does Medicare Part B pay?
80%
300
Which of the following statements concerning the usual coordination of benefits provision is correct?
When two plans both have the provision, coverage as an employee is primary to coverage as a dependent.
301
Which health insurance provision protects an insured from the expense of a catastrophic illness?
Stop-loss
302
Which health insurance contract provision addresses the problem of overinsurance?
Coordination of benefits
