Health Insurance and Life Settlements: Key Concepts and Regulations, Exams of Nursing

Download Health Insurance and Life Settlements: Key Concepts and Regulations and more Exams Nursing in PDF only on Docsity! Final Exam-California Life, Accident, and Health Insurance Exam Practice Questions and Answers 2023-2024 What distinguishes a deferred annuity from an immediate annuity? - ANS The time at which benefit payments start Cindy buys a 10-year certain annuity with an installment refund. After receiving monthly payments for 5 years, Cindy dies. How many remaining payments will the insurer make to her beneficiary? - ANS 60 payments What is a common reason people purchase an annuity? - ANS To protect against the risk of outliving their financial resources What kind of annuity pays income to two annuitants until their deaths? - ANS Joint and survivor annuity What is a joint and survivor annuity? - ANS Provides payments the annuity to two people. If either person dies, the same income payments continue to the survivor for life. When the surviving annuitant dies, no further payments are made to anyone. Victoria owns a life annuity and elects to receive annuity payments monthly for the remainder of her life with "ten years certain". Her annuity will make payments - ANS for a minimum of 120 months and a maximum of the remainder of her life Which of the following statements regarding a life insurance policy dividend is TRUE? - ANS It is the distribution of excess of funds accumulated by the insurer on participating policies. An insured owned by its policyholders is called a - ANS mutual insurer An insurer enters into a contract with a third party to insure itself against losses from insurance policies it issues. What is the agreement called? - ANS Reinsurance What is reinsurance? - ANS An arrangement by which an insurance company trANS fers a portion of a risk it has assumed to another insurer Which of the following is NOT a characteristic of reinsurance? - ANS Increases the unearned premium reserve Which of the following is a contract that involves one party which indemnifies another when a loss arises from an unknown event? - ANS Insurance policy What is an insurance policy? - ANS A contract where one party promises to indemnify another against loss that arises from an unknown event What is residual disability income insurance payments based on? - ANS The amount of the insured's income is reduced by the disability What are exclusions in a health policy? - ANS Specified hazards listed in a policy for which benefits will not be paid 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? - ANS insuring clause What does an insuring clause state? - ANS Under a health insurance policy, the provision that states the kind of benefits provided and the circumstances under which they will be paid Which of these is NOT a relevant factor in the health insurance principle of morbidity? - ANS Intelligence How does rising morbidity rates affect health insurance? - ANS Increased premiums In health insurance, morbidity rates show - ANS the expected incidence of sickness or disability within a given group during a given period of time Which of the following factors is NOT used in underwriting health insurance policies? - ANS Intelligence Which of the following is NOT a requirement of a contract? - ANS Equal consideration is required between the involved parties Which of the following statements correctly describes a contract of indemnity? - ANS One party is restored to the same financial position the party was in before the loss occurred Which of the following is NOT required in the content of a policy? - ANS Probability of loss Which statement is CORRECT when describing a contract of adhesion? - ANS Contract may be accepted or rejected by the insured Restoring an insured to the same condition as before a loss is an example of the principle of - ANS Indemnity Which course of action is the insurer entitled to when deliberate concealment is committed by the insured? - ANS Rescinding the contract The importance of representation is demonstrated in what rule? - ANS Materiality of concealment What is the price of insurance for each exposure unit? - ANS Rate Which of the following is NOT an insurer policy expense? - ANS Premiums A beneficiary receives only the death benefit earnings in which settlement option? - ANS Interest option Which of these is the automatic mode of settlement for life insurance policy proceeds? - ANS Lump-sum A spendthrift clause in a life insurance policy - ANS restricts the ability of the beneficiary to sign benefits Premiums are best described as - ANS the amount an insured pays per unit of coverage What does the grace period allow a life insurance policy owner to do? - ANS Make a premium payment after the due date without any loss of coverage Which of the following does a policyowner NOT have a right to change? - ANS Dividend schedule When does a life insurance policy's waiver of premium take effect? - ANS Insured becomes totally disabled What are collateral assignments normally associated with? - ANS Bank loANS Jerry is an insured who understated his age on his life insurance application, paying $12 per $1,000 of insurance instead of $15 per $1,000. If he dies, how will the adjusted death benefit be calculated? - ANS 12/15th of the policy's face amount How is a life insurance policy dividend legally defined? - ANS A return of excess premium and not taxable If an insured dies because of an accident, which type of life insurance rider will provide additional coverage? - ANS Accidental death rider What time period allows an insured's life insurance policy to remain in force even if the premium was not paid of the due date? - ANS Grace period An insurer can be protected from adverse selection with which policy provision? - ANS Suicide clause A life insurance policy can be surrendered for its cash value under which policy provision? - ANS Nonforfeiture options In a modified endowment contract, the penalty tax imposed on premature withdrawals is - ANS 10% Wat is considered the most common type of specified disease insurance policy? - ANS Cancer Moral hazard is described as - ANS increased chance of a loss because of an insured's dishonest tendencies Which of the following is any situation that presents the possibility of a loss? - ANS Loss exposure Which of the following is a situation where there is a possibility of either a loss or a gain? - ANS Speculative risk Which of these statements correctly describes risk? - ANS Pure risk is the only insurable risk All of the following circumstances must be met for loss retention to be an effective risk management technique, EXCEPT - ANS Probability of loss is unknown A situation in which there is ONLY a chance of loss or no loss is a - ANS pure risk Which of the following refers to a condition that may increase the chance of a loss? - ANS Hazard A hazard can be best described as - ANS a condition that may increase the likelihood of a loss occurring How are Roth IRA's treated for tax purposes? - ANS Non-deductible contributions and tax-free distributions Retirement plANS are prevented from favoring highly compensated employees under which government regulation? - ANS Nondiscrimination What doe ESOP stand for? - ANS Employee Stock Ownership Plan ESOPs are typically invested in - ANS employer stock What type of coverage pays a benefit for part-time nursing care that can be provided in a patient's home? - ANS Home health care What portion does an insured pay for covered expenses under Medicare Part B after the deductible? - ANS 20% Rating an individual's need for long-term care benefits can be measured by - ANS activities of daily living Which of the following plANS will cover medical costs that Medicare doesn't cover? - ANS Medicare supplement Which Social Security status does a worker with 6 quarters of coverage during the last 13- quarter period have? - ANS Currently insured The "blackout period" affects whose benefits? - ANS Surviving spouse At what age is a surviving spouse without dependents eligible for Social Security survivor benefits? - ANS 60 According to Social Security, an individual with 6 credits of coverage during the previous 13- quarter is considered to be: - ANS currently insured An individual that has 40 quarters of coverage, for Social Security purposes, is considered to be - ANS fully insured In order to be considered "currently insured" under Social Security, an individual must be credited with: - ANS 6 quarters of coverage during the last 13-quarter period Key person insurance is intended to - ANS cover business losses due to the death of a key employee Which of the following pieces of information is NOT gathered during the personal financial planning process? - ANS An individual's civic organization memberships The Human Life Value concept is based on - ANS income An insurance policy issued in California may be called a comprehensive long-term care insurance policy if benefits are provided for - ANS Institutional (nursing facilities) and home care According to the PPACA, an adult can be covered by a parent's health care plan until what age? - ANS Age 26 Kimberly is an employee on leave under the Family and Medical Leave Act (FMLA). What will happen to her group health coverage? - ANS She continues to be enrolled during the leave People with low income can be provided with medical assistance through which program? - ANS Medi-Cal When selling a long term care insurance rider to an applicant, a life agent must take into consideration all of these factors, EXCEPT - ANS Attending physician's statement In what order are people on the MRMIP waiting list allowed to enroll? - ANS Based on the date an individuals's application is received After the annual deductible is met, a Medicare Part B patient will pay ____ of the remaining covered expenses. - ANS 20% After the annual deductible is met, Medicare Part B will pay ____ of the remaining approved charges. - ANS 80% Medicare Part B covers - ANS physician expenses How is a Medicare claim submitted? - ANS Expenses are submitted to Medicare by the health provider Jon's health plan pays benefits of 90% for in-network providers and 70% for out-of-network providers. What kind of plan is this? - ANS PPO What is PPO? - ANS A Preferred Provider Organization pays more for care received from a network provider than it pays for care from a non-network provider Individual health insurance coverage typically excludes injuries at an employee's workplace because - ANS it's covered by the state Workers' Compensation program If a healthcare provider is considered to be a "service provider", what does this mean? - ANS Payment for services goes directly to the provider Which statement is TRUE regarding Workers' Compensation coverage - ANS Employer pays the entire premium for Workers' Compensation coverage Jim is applying to become an insurance agent and has a past misdemeanor conviction that was later expunged due to California Penal Code 1203.4. Which of the following statements is correct? - ANS Jim must still disclose the conviction on his insurance license application 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? - ANS Its paid-in capital When handling premiums for an insured, an agent is acting in which capacity? - ANS Fiduciary An individual who trANS acts life, disability, or life and accident and health insurance on behalf of an insurer is called a(n): - ANS life agent Which of the following does the California Insurance Code NOT require an insurance policy to specify? - ANS Insurer's financial rating Which of the following is NOT protected under the California Life and Health Guarantee Association? - ANS Insurers Insurance agents and brokers must make their insurance records available to the Commissioner - ANS at all times Any changes in background information that occur after a producer application has been submitted or a license has been issued MUST be reported to the Insurance Commissioner within - ANS 30 days Failure to report background changes within 30 days as required under section 1729.2 of the California insurance code could subject a license or applicant to - ANS fine, suspension, and denial The California Insurance Code defines "policy" as a(n) - ANS written contract Before an insurer is allowed to test an individual for HIV, what must be completed? - ANS Consent form Which type of jurisdiction requires an insurer to have its rates accepted by the Insurance Department prior to using them? - ANS Prior approval Pete is a life agent who has misappropriated fiduciary funds to his own use. What is Pete guilty of? - ANS Theft Anyone employed in California to assist an insurance agent in trANS acting insurance is called an insurance - ANS solicitor According to the California Insurance Code, what is "insurance"? - ANS A contract What does the term "indemnity" mean as it pertains to insurance? - ANS To make whole According to the California Insurance Code, what term is used to describe a fact so important it could affect the policy premium? - ANS Materiality