Life & Health Insurance Quiz

1. 13. How does one qualify as a fully-insured individual under Social Security disability coverage?

Taxable income to the employee Applicants are not required to answer medical questions on the application Individual has been credited with the appropriate number of quarters of coverage contingent beneficiary

2. 1. Which of the following pieces of information is NOT gathered during the personal financial planning process?

An individual's civic organization memberships Indemnity contract Bank loans Inflation protection

3. According to the PPACA, an adult can be covered by a parent's health care plan until what age?

Automobile Materiality of concealment Age 26 Results

4. 5. What is a participating life insurance policy?

Participant Rescinding the contract Materiality Contract that allows the policyowner to receive a share of surplus in the form of policy dividends

5. What does the grace period allow a life insurance policyowner to do?

Medicare Fully insured workers Make a premium payment after the due date without any loss of coverage Probability that an event will occur

6. 4. If an insured dies because of an accident, which type of life insurance rider will provide additional coverage?

Participant Losses due to fraud are eliminated 65 Accidental death rider

7. 2. Which of the following is NOT a component of determining policy premiums?

Mortality The time at which benefit payments start Dividends Deferred compensation option

8. Which of the following does NOT have to be included on life insurance policy illustrations?

Up to age 26 Statement that all values and benefits are guaranteed Mortality rate Year in which worker was born

9. 6. Which of the following is a contract that involves one party which indemnifies another when a loss arises from an unknown event?

Insurance contract Rescinding the contract 12 months 60

10. 3. A participating company is also referred to as which type of insurer?

Mutual insurer Monthly income payments Medical ailments discovered during the underwriting process Binding receipts always provide insurance which starts from the date of receipt

11. 2. Which of the following types of life insurance is normally associated with a mortgage loan?

Decreasing term Equal consideration is required between the involved parties Advising a claimant to hire an attorney Fully insured

12. In what order are people on the MRMIP waiting list allowed to enroll?

Earnings are taxable when withdrawn Binding receipts always provide insurance which starts from the date of receipt Bank loans Based on the date an individual's application is received

13. Who is eligible for retirement benefits under Social Security?

Mutual insurer Fully insured workers Part of the premium is paid by the employee Only children born prior to policy's issue date may be included

14. At what age is a surviving spouse without dependents eligible for Social Security survivor benefits?

60 Doctor's services Law of large numbers extended term

15. 11. Which of the following statements do NOT apply to child coverage in a family policy?

Provide proof of insurability Materiality Only children born prior to policy's issue date may be included Speculative risk

16. 7. Which of the following is an insurer established by a parent company for the purpose of insuring the parent company's loss exposure?

Age 26 Benefits can be adjusted Probability that an event will occur Captive insurer

17. 1. What area of group health insurance is regulated under the Employee Retirement Security Act of 1974 (ERISA)?

An individual's civic organization memberships Disclosure and reporting Speculative risk Accidental death rider

18. 4. The importance of a representation is demonstrated in what rule?

Mortality rate Grace period Binding receipts always provide insurance which starts from the date of receipt Materiality of concealment

19. Christine has a health insurance policy that has been in force beyond the incontestable period. The insurer has discovered that a fraudulent statement was made on the application. What would the insurer have to pay on a claim, assuming this wasn't a guaranteed renewable policy?

Inflation protection The cause of a loss Permissive Nothing

20. Which of the following life insurance classifications charges the highest premium?

Substandard She continues to be enrolled during the leave Statement that all values and benefits are guaranteed First-dollar coverage

21. 3. Tim was recently terminated from his employment and opted to change his existing group term life insurance to individual permanent life insurance. What is this process called?

Mutual insurer Interpret policy provisions Interest Option Conversion

22. 1. Which of the following describes the number of deaths in a year compared to the number of people in a select group?

Modified premium, ordinary life, single premium Bathing Only children born prior to policy's issue date may be included Mortality rate

23. Which of the following is NOT protected under the California Life and Health Guarantee Association?

Interpret policy provisions Mortality rate Insurers Medical ailments discovered during the underwriting process

24. 6. Who is issued a certificate of insurance with a group insurance policy?

60 12/15th of the policy's face amount Participant Contract that allows the policyowner to receive a share of surplus in the form of policy dividends

25. What does ESOP stand for?

Employee Stock Ownership Plan 60 Reinsurance Interpret policy provisions

26. The misstatement of age provision in a health policy states that if an insured gives the wrong age at the time of application, what action can the insurance company take?

Law of large numbers 65 Benefits can be adjusted Hazard

27. 15. Which of the following is NOT true regarding a family policy that covers children?

12 months Bathing Conversion of child's coverage to permanent insurance requires evidence of insurability Results

28. 9. Which of the following is a type of insurance where an insurer transfers loss exposures from policies written for its insureds?

Individual has been credited with the appropriate number of quarters of coverage Medical questions must be answered on individual life insurance Insurer's expenses Reinsurance

29. 11. Which of the following is NOT an element of an insurable risk?

Health Insurance Counseling and Advocacy Program (HiCAP) Human life value approach Consent form Loss must be catastrophic

30. Who is issued a certificate of insurance with a group insurance policy?

Participant Policy exclusion Law of large numbers Pure risk is the only insurable risk

31. 2. When an accidental death benefit is added to a whole life policy, how does this affect the policy's cash value?

Policy's cash value is not affected Up to age 26 Speculative risk Decreasing term

32. Individuals become eligible for Medicare Part A benefits at what age?

Non-medical 65 Universal life Mortality

33. Which of the following is NOT considered to be an unfair claims settlement practice?

Applicants are not required to answer medical questions on the application Permissive The cause of a loss Advising a claimant to hire an attorney

34. 8. Which of the following is NOT a requirement of a contract?

Materiality of concealment Equal consideration is required between the involved parties Rescinding the contract Second-to-die policy

35. 7. Which course of action is the insurer entitled to when deliberate concealment is committed by the insured?

Nonforfeiture options Monthly Dividends Rescinding the contract

36. What does the term coinsurance refer to?

Contract that allows the policyowner to receive a share of surplus in the form of policy dividends Interpret policy provisions The policy's cost basis is exempt from taxation After the deductible is satisfied, the percentage paid by the insured for the remaining covered expenses

37. Which of the following is an insurer established by a parent company for the purpose of insuring the parent company's loss exposure?

Part of the premium is paid by the employee Captive insurer Non-deductible contributions and tax-free distributions Participant

38. When calculating life insurance premium rates, which component would an agent's commission fall under?

Suicide clause Insurer's expenses Noncancellable 20%

39. Which of the following does the California Department of Insurance (CDI) have NO jurisdiction over?

Medicare Medical ailments discovered during the underwriting process Extended term option Preferred Provider Organization (PPO)

40. 9. Within how many days must a Traditional IRA be rolled over to another IRA in order to avoid tax consequences?

The premium rates of the policyowner 60 Materiality of concealment Policy exclusion

41. Which of the following describes the increase in the probability of a loss due to an insured's dishonest tendencies?

A rating from a rating service company, such as A.M. Best Make a premium payment after the due date without any loss of coverage Modified premium, ordinary life, single premium Moral hazard

42. Under a health insurance policy, the provision that states the kind of benefits provided and the circumstances under which they will be paid is called the?

12 months Hazard insuring clause Policy exclusion

43. What is a participating life insurance policy?

Nothing Injuries caused by accidents An individual's civic organization memberships Contract that allows the policyowner to receive a share of surplus in the form of policy dividends

44. 4. How are death benefits that are received by a beneficiary normally treated for tax purposes?

Rescinding the contract Life annuity certain Contract may be accepted or rejected by the insured Exempt from federal income taxes

45. John has an insurance policy that gives him the right to share in the insurer's surplus. What kind of policy is this?

Injuries caused by accidents Substandard Employee Stock Ownership Plan Participating

46. 9. How does a conditional receipt differ from a binding receipt?

Conversion Retina surgery Binding receipts always provide insurance which starts from the date of receipt Contract may be accepted or rejected by the insured

47. What distinguishes a deferred annuity from an immediate annuity?

Part of the premium is paid by the employee Nonforfeiture options The time at which benefit payments start Reinsurance

48. How are Roth IRA's treated for tax purposes?

Policy's cash value is not affected Mortality rate Losses due to fraud are eliminated Non-deductible contributions and tax-free distributions

49. 3. What is the proper order of initial life insurance premiums, from lowest to highest?

Participant Based on the difference between the new and original policy annual premiums Modified premium, ordinary life, single premium Grace period

50. 7. Which type of risk is gambling?

Universal life Employer pays the premium for the converted policy Speculative risk Non-deductible contributions and tax-free distributions

51. When does a life insurance policy's waiver of premium take effect?

Insured becomes totally disabled Reinsurance Policy exclusion Policy's cash value is not affected

52. Which of the following plans will cover medical costs that Medicare doesn't cover?

Indemnity contract Medicare supplement Loss must be catastrophic Modified premium, ordinary life, single premium

53. Which of the following is a life insurance policy that does NOT require a physical exam?

Non-medical Life annuity certain Interest Option An individual's civic organization memberships

54. 8. What does ESOP stand for?

Materiality Risk is eliminated Employee Stock Ownership Plan A deceased worker's dependent parents of any age

55. 5. Which of the following is NOT considered a definition of risk?

Bank loans The cause of a loss Speculative risk Reinsurance

56. Coverage for care received from a network provider pays more than care received from a non-network provider in what type of health plan?

The cause of a loss Preferred Provider Organization (PPO) One party is restored to the same financial position the party was in before the loss occurred Roth IRA

57. Which of the following is NOT a life insurance settlement option?

Extended term option Insurer's expenses contingent beneficiary 20%

58. Allen has a disability income policy with a $2,500 monthly benefit and a 30-day elimination period. He is unable to work 90 days following an automobile accident. What will the policy pay?

$5,000 Offers a maximum interest rate that increases annually A deceased worker's dependent parents of any age Employee Stock Ownership Plan

59. 12. Kurt is an active duty serviceman who was recently killed in an accident while home on leave. Which military service exclusion clause would pay upon his death?

Straight life 12/15th of the policy's face amount Law of large numbers Results

60. Which of the following is NOT typically covered under vision care insurance?

Human life value approach Extended term option The cause of a loss Retina surgery

61. After a policy has lapsed, which provision allows the insured to continue coverage?

Reinstatement provision Automobile Based on the difference between the new and original policy annual premiums Workers' Compensation

62. If an insured dies because of an accident, which type of life insurance rider will provide additional coverage?

The policy's cost basis is exempt from taxation Decreasing term Accidental death rider Ethnicity

63. 11. How long is a person expected to be disabled in order to receive Social Security disability benefits?

Taxable income to the employee 12 months Grace period Life annuity certain

64. The problem of overinsurance is addressed in which health insurance provision?

The annuitant's life expectancy determines the annuity payments Misrepresentation on an insurance application Mortality Coordination of benefits

65. 20. A life insurance policy can be surrendered for its cash value under which policy provision?

Nonforfeiture options Monthly income payments The annuitant's life expectancy determines the annuity payments Accelerated death benefit

66. 3. When does a life insurance policy's waiver of premium take effect?

Insured becomes totally disabled Indemnity contract insuring clause Rescinding the contract

67. 12. Which of the following describes the increase in the probability of a loss due to an insured's dishonest tendencies?

Moral hazard 12 months extended term Individual wanting to sell their life policy to a third party

68. Which of the following actions is NOT allowed by Health Insurance Counseling and Advocacy Program (HiCAP) counselors?

Monthly Modified premium, ordinary life, single premium 60 Charge a fee

69. How are acts of war considered under a group life insurance policy?

Policy exclusion Life annuity certain Accidental death rider 65

70. The California Insurance Code requires that an insurer must have enough assets to cover its liabilities and for reinsurance of all outstanding risks. To remain solvent, it must also possess additional assets equal to what amount?

Mortality rate Its paid-in capital Insurer's financial rating Indemnity

71. What does the guaranteed insurability option allow an insured to do?

Captive insurer Nondiscrimination Purchase additional coverage with no evidence of insurability required Permissive

72. 8. Which of the following is NOT a characteristic of the conversion privilege?

First-dollar coverage Speculative risk Employer pays the premium for the converted policy Law of large numbers

73. 6. How are Roth IRA's treated for tax purposes?

Participant Non-deductible contributions and tax-free distributions Interest Option Grace period

74. 10. Mark, age 45, has a Modified Endowment Contract (MEC). What is the tax penalty for taking a loan against this policy prior to age 59 1/2?

Equal consideration is required between the involved parties Offers a maximum interest rate that increases annually 10% Notice of appointment must be submitted to the Commissioner

75. 3. Where would policy proceeds be paid if both the insured and primary beneficiary were killed in the same accident?

Year in which worker was born Indemnity contingent beneficiary Only children born prior to policy's issue date may be included

Life & Health Insurance Practice Quiz