Insurance Fundamentals: California Life and Health Insurance Guarantee Association, Exams of Nursing

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The California life and health insurance guarantee association covers all of these types of policies, EXCEPT - ✅✅Self-funded plans All of these are common exclusions to a life insurance policy EXCEPT - ✅✅accidental death An individual can enroll in a part C Medicare advantage plan at what time? - ✅✅When becoming eligible for Medicare Which of the following is an NOT protected under the California life and health guarantee association? - ✅✅Insurers The authority granted to a licensed producer is provided via the - ✅✅Law of Agency A common exclusion or limitation on dental policy is - ✅✅Endodontics Key person insurance is intended to - ✅✅cover business losses due to the death of a key employee A terminated employee that has exercised the conversion privileges able to convert - ✅✅Term insurance into permanent insurance The role of the federal government was expanded when Medicaid was established by allowing the state to - ✅✅receive matching funds to expand public assistance programs _________ is NOT An element of a valid contract. - ✅✅countersignature Which type of coverage pays an amount per day for hospitalization directly to the insured regardless of the insurance other health insurance? - ✅✅Hospital indemnity How long must an individual be unable to engage in any gainful activity due to physical or mental disability in order to qualify for Social Security total disability? - ✅✅12 months Life insurance surplus must be distributed to policy owners at what frequency? - ✅✅Annually What is involved when a life insurance policy has been backdated? - ✅✅Making the policy effective on an earlier date than the present What prevents a life insurance policy from being rescinded by the insurer after being in force for two years? - ✅✅Incontestability clause When intentional concealment is involved, what course of action is the injured party entitled to? - ✅✅Rescission of the contract Medicare part D has an initial enrollment period. How many months after an individual's 65th birthday month does this enrollment period end? - ✅✅3 months Who acts as the gate keeper in a health maintenance organization (HMO)? - ✅✅Primary care physician What is required after a life agent sells an insurance policy to an applicant without being appointed by the insurer? - ✅✅Notice of appointment must be submitted to the Commissioner Free look provision gives the policy owner - ✅✅the right to return the policy for a full refund within a specified number of days Written notice for a health claim must be given to the insurer ______ days after the occurrence of the loss. - ✅✅20 days A person who asserts a right of recovery under an insurance policy is called - ✅✅claimant Which of the following is NOT a primary objective of insurance regulation? - ✅✅Interpret policy provisions In an insurance contract, the applicants "consideration" is the - ✅✅Statements made in the application and the premium What is the tax liability for employer contributions in Health Savings Accounts (HSA's)? - ✅✅No tax payment needed Insurance companies determine risk exposure by which of the following? - ✅✅Law of large numbers and risk pooling Coverage for care received from a network provider pays more than care received from a non-network provider in what type of health plan? - ✅✅Preferred Provider Organization (PPO) Maria is a Preferred Provider Organization (PPO) subscriber and received care from an out-of-network provider. Which of the following is the likely result? - ✅✅Care is covered If a subscriber of a preferred provider organization (PPO) receives care from an out of network provider, care is covered but at a lower percentage compared to treatment from an in-network provider Which of the following statements is TRUE about Medicaid? - ✅✅It is funded by federal, state, and local taxes, But is administered by each state 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? - ✅✅Jim must still disclose the conviction on his insurance license application A type of insurer that is owned by its policy owner just called - ✅✅Mutual How is a health provider reimbursed if they do NOT have an agreement in place with the insurance company? - ✅✅With a usual, customary, and reasonable fee Kathy's annuity is currently experiencing tax-deferred growth until she retires. Which phase is this annuity in? - ✅✅Accumulation Period A life insurance policy that has premiums fully paid up within a stated time period is called - ✅✅limited payment insurance Which of the following would be considered an underwriting duty of an agent - ✅✅Completing all applications and collecting initial premiums Manual is considered to be a disabled person as defined by the Americans with disabilities act (ADA). As such, he is unable to perform any of the following life activities EXCEPT - ✅✅Driving Paul has an existing annuity and is sold a new one, in which the new policy holds no greater financial benefit to him than the existing contract. This is considered a(n) - ✅✅unnecessary replacement This is an example of unnecessary replacement. People with higher loss exposure have the tendency to purchase insurance more often than those average risk. This is called - ✅✅adverse selection Adverse selection is the tendency of persons with higher loss exposure to purchase insurance more often than those average risk. Which policy feature makes a universal life policy different from a whole life policy - ✅✅"A flexible premium schedule" The policy feature that makes universal life different from whole life insurance policies is its flexible premium schedule. What is the purpose for having an accelerated death benefit on a life insurance policy? - ✅✅It allows for cash advances to be paid against the death benefit if the insured becomes terminally ill Which of the following is an annuity that is linked to a market-related index? - ✅✅Equity indexed annuity Which of the following is NOT true regarding a family policy that covers children? - ✅✅Conversion of child's coverage to permanent insurance requires evidence of insurability Insurance premium is determined by each of the following factors EXCEPT - ✅✅Liquidity An employer is issued a Group medical insurance policy. This single contract is known as a(n) - ✅✅Master policy An annuity is primarily used to provide - ✅✅retirement income Which word implies permissiveness according to the California insurance code - ✅✅May The federal employees benefit program consists of two types of plans for federal civilian employees. The two plans are fee-for-service and - ✅✅Pre-paid Two types of plans participate in the FEHB program: fee-for-service plans and health maintenance organizations ( prepaid) 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? - ✅✅conversion Kim is insured under a disability income insurance policy with an "own occupation" Clause. She was recently injured in an automobile accident and can no longer perform the tasks of her job. Kim is now considered to be - ✅✅Totally disabled Under the payment of claims provision, when our benefits typically payable after proof of loss is received? - ✅✅Immediately Upon policy delivery, which of the following must a producer have an applicant sign if no initial premium was collected with the life insurance application? - ✅✅A good health statement In this situation the producer must have the applicant sign a statement of good health when delivering the policy. Who would be most likely to submit a Medicare part A claim? - ✅✅hospital HIPAA considers which of the following as "individually identifiable health information"? - ✅✅A person's health claim information These are considered NOT " individually identifiable health information" A persons employment history, a persons hire date, a persons net income Maximum Benefits refers to the - ✅✅upper limit of the total lifetime benefits the insurance company will pay Which of the following is NOT a risk classification that an underwriter would use? - ✅✅Dividend risk Underwriters classify insurance risks as all of these: Preferred risk, standard risk, substandard risk How many "activities of daily living" must an insured be UNABLE to perform in order to meet the chronically ill requirement of a long-term care policy? - ✅✅Minimum of two activities of daily living Under the California insurance code, a licensees license number must be printed out what size on all price quotes, business cards, and printed material? - ✅✅The same size print as the licensees phone number, fax number or address The legal action provision in a health contract is limited to no more than____years - ✅✅5 Which of the following is NOT included under a health benefit plan? - ✅✅Hospital indemnity plan How are premiums paid by the insured's for personally owned disability income insurance treated for tax purposes? - ✅✅Not tax deductible Premiums paid for personal disability income insurance are not deductible by the individual insured,but the disability benefits are tax-free to the recipient. Which of the following is an NOT typically covered under vision care insurance? - ✅✅Eye surgery An individual covered under a disability income policy may be eligible for a partial disability benefit if - ✅✅the insured can perform some of their job activities on a part-time basis All of these are common personal uses of life insurance EXCEPT - ✅✅Fund a buy-sell agreement Purchasing a life insurance policy in order to avoid the force sale of assets upon death is called - ✅✅Estate conversation According to the California insurance code, what term is used to describe a fact so important it could affect the policy premium? - ✅✅Materiality Ambiguities in an insurance policy are always resolved in favor of the? - ✅✅Insured Which statement is NOT true regarding social security benefits? - ✅✅Benefits are designed to replace the entire amount of the worker's earnings The free-look Period for life insurance policy owner's age 60 or older is? - ✅✅30 days Insurance represents the process of risk - ✅✅transference Which of these statements correctly describes risk? - ✅✅Pure risk is the only insurable risk Where must you specifically reside to qualify for MRMIP? - ✅✅California In order to be considered "currently insured" under Social Security, an individual must be credited with - ✅✅6- Quarters of coverage during the last 13-Quarter period Under a long-term care insurance policy, adult day care coverage will provide for - ✅✅part time care at a facility for elderly individuals who live at home An HMO that involves a partnership of physicians and other providers who practice out of a central facility is called a(n) - ✅✅Group HMO Which of the following types of life insurance combines a savings element along with a flexible premium option? - ✅✅Universal Life In which of the following situations with the insured be liable for a loss? - ✅✅The insured suffered an injury as an innocent bystander during a bank robbery. Because the insured did not commit or participate in the felony, the loss will be covered. A whole life insurance policy accumulates cash value that becomes - ✅✅the policy loan value which the insured may borrow against Buy-sell agreements are typically funded by which two insurance products? - ✅✅Life insurance and disability insurance Buy-sell agreements are used to Assure the ownership of the business is properly transferred upon the death or disability of an owner or partner and are normally funded by life and disability insurance. Premiums are best described as - ✅✅the amount an insured pays per unit of coverage As of January 1, 2014, and employer with up to 25 full-time equivalent (FTE's) with average annual wage is less than $50,000 may be eligible for a tax credit of_______of the premiums paid by the employer. - ✅✅50% As classified by the Affordable Care Act (ACA), a Silver Plan offers - ✅✅70% actuarial level of coverage provided Under a disability income policy, which provision would be payable if the cause of an injury is unexpected and accidental? - ✅✅Accidental bodily injury provision Which of the following is a situation where there is a possibility of either a loss or gain - ✅✅Speculative risk What determines the Social Security normal retirement age? - ✅✅Year in which worker was born What happens to interest earned if the annuitant dies before the payout start date? - ✅✅It is taxable Moral hazard is described as the - ✅✅increased chance of a loss because of an insured's dishonest tendencies A fee-for-service health insurance plan will normally cover? - ✅✅disease According to the California insurance code, which of the following is an NOT an example of an insurable event? - ✅✅An insured suffers a financial loss in the state lottery Who is responsible for assembling the policy forms for insureds? - ✅✅Insurance carriers If an insured dies because of an accident, which type of life insurance rider will provide additional coverage? - ✅✅Accidental death rider A report which is based on credit worthiness and personal characteristics that influences an insurance applicants eligibility for life and health insurance is called? - ✅✅Consumer report A medical provider that excepts Medicare assignment must - ✅✅Accept payment based upon a defined Medicare schedule as payment in full Which of these is NOT considered to be a non-forfeiture option and a whole life insurance policy? - ✅✅Interest only What does the group life underwriting risk selection process help protect companies from? - ✅✅Adverse selection Is the tendency of less favorable insurance risks to seek or continue insurance to a greater extent than others. Which of the following types of life insurance is normally associated with a mortgage loan? - ✅✅Decreasing term Under the Affordable care act, how would a grandfathered health plan lose its grandfathered status? - ✅✅The insurer significantly raises co-insurance charges, deductibles, or co-payment charges Pierre is covered by his employer's group major medical plan. His employer pays for 75% of the premium and he pays for 25%. How much would a $10,000 benefit be taxable as income under this plan? - ✅✅$0 Benefits that fall under a major medical plan or considered to be a reimbursement for a loss, and is not taxable as income. Which of the following employers is required to follow ERISA regulations? - ✅✅A local electrical supply company with 12 employees When a mutual insurer becomes stock a company, the process is called - ✅✅Demutualization Which of the following is NOT included under long-term care insurance? - ✅✅Hospital acute care What is an "insurance broker" according to California insurance code? - ✅✅A person compensating for transacting insurance on behalf of another person with an insurer Life insurance policies will normally pay for losses arising from - ✅✅commercial aviation The cause of a loss is referred to as a - ✅✅peril Continued coverage under COBRA would be provided to all of the following EXCEPT: - ✅✅a covered employee is terminated for gross misconduct What is the purpose of the pre-existing condition insurance plan (PCIP)? - ✅✅PCIP was created by the PPACA for people rejected by private health insurers due to pre-existing conditions Who is the individual paid on a fee-for-service basis? - ✅✅provider A group disability income plan that pays tax free benefits to cover employees is considered? - ✅✅Fully contributory Which of the following is NOT a characteristic of conversion privilege? - ✅✅Employer pays the premium for the converted policy 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? - ✅✅Its paid-in capital What is known as the immediate specific event causing loss and giving rise to risk? - ✅✅peril The probability of death, listed by year, is demonstrated in? - ✅✅Mortality tables Premiums paid that exceed 7 1/2% of an insured's adjusted gross income (AGI) are tax deductible when paid for which of the following plans? - ✅✅Qualified long-term care plan