California Life/Health Exam

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The three examples of California insurance are:: Life
Health and Disability
Annuities
Annuities are:: -Not Insurance
-But a retirement product sold by insurance companies.
A peril is:: The direct cause of a loss. (ie Fire is always a peril).
A hazard _____ the ___ of a ____ ocurring.: increases
chance
loss
3 Type sof hazrds are ___, ___ and ___.: Physical
Moral
Morale
The two types of risk are: Only _____ is insurable.: Pure (insurable)
Speculative
_____ reduces financial risk among many.: Risk pooling
______ is when ____________ purchase insurance and adversely affect the insureres.: Adverse selection
Uninsurable
______ restores an insured to the condition he/she was prior to the loss.: Indemnity
Private insurers protect themselves from ____ by ______: adverse selection
underwriting applications
___ restores an insured to previous condition: Indemnity
Private insurers protect themselves from _____ by _____: adverse selection
underwriting applications
______ means to have protection against the consequences of death, illness, accident, injury: insurable interest
The six elements of an ideally insurable event are:: predictable
cannot be catastrophic
must be due to chance
definite and measurable
Large loss exposure
loss exposure must be randomly selected
Risk management is a combination of ___, ____, ___ and _____: transfer
avoidance
reduction
retention
Insurers use ___ and ___ tables to predict future losses: mortality and morbidity
Driving recklessly is a ____ hazard: morale
Competent parties do not include: Minors (under 16 for LI)
Mentally infirm
Those under the influence
____ law deals with damage done to others: Tort
Four major elements of a contract are:: agreement, competent parties, legal purpose, consideration
____ ocurrs when ___ parties give value in exchange for ____: Consideration
both parties to the contract
promises
____ protects an insurer from dishonest applicants and is in effect for ___: Recission
Two years of the policy
In California an insurance contract requires these six things:: The parties
The propert or life
The interest of the insured
The risk insured against
time duration
Specification of premium
_____ is an intent to deceive: Fraud
____ guarantee material facts int he application: Warranties
A ___ oculd ___ a contract if it is material to the risks insured: Misrepresentation
Void
Life contacts are ___ becasue they ___: personal
Do not follow the property
If the insurer pays a claim for a covered loss, the policy is an example of a ________: Conditional contract
An aleatory contract has values that are ____ and performance by a part is contingent on an event that ____: Not even
May not happen
A policy of adhesion is ___ by one part and ___ by the other. In other words ___: Drafted
Accepted or rejected
Take it or leave it, no bargaining
Insurance contracts are ___ meaning they are only ___ against one party, in this case ____: Unilateral
enforceable
Insurer
According to the CIC the ___ clause appears on the ___ page of the policy: Insuring
First
_____ whether ____ or _____ is grounds for rescining a policy.: Concealment
Intentional
Unintentional
The penalty for fraud is:: $150,000 or double the amount of the fraud if over $150,000
AND/OR
2-5 yrs in state prison
The four elements of a contract are:: Competent Parties
Legal Purpose
Offer and acceptance
Consideration
Warranties are ___ and apply to the ____.: guaranteed to be true
past, present and future
A person has unlimited insurable interest in ___, ___ and ___: himself
spouse
children
Two types of errors in representation are:: Misrepresentations (little)-can be grounds for rescision
Materiality (BIG)-have bearing on decision to insure
An estoppel is:: a prevention from asserting a legal right due to past actions
A ___ contract has no legal effect and is rescinded or anulled A ___ contract can be set aside by one party or until ana ge of majority: Void
Voidable
The insurance dision established a ____ to prevent and detect fraudulent claims. An insurer must report a claim within ___ of detection.: Fraud Bureau
60 Days
Every insurer in the state must have a ____: Special Investigative Unit
What the insured pays for coverage is the ____: Premium
____ develop and establish rates for insurance: Actuaries
Insurers expenses are paid through a ___ charge built into the ____: Load
Premium
A ____ payment mode is the least expensive, while a ___ mode is most expensive: Annual/yearly
monthly
Payment modes are only ___, ____, ____, _____: Annual
Semi annual
Quarterly
Monthly
Gross premiums are equal to ___: Net premiums (necessary to fund future benefits) plus expenses
When the ___ cancels a policy, unearned ___ are returned minus a ____ This is called: Insured
Premiums
Penalty
Short Rate
When the ___ cancels a policy the ____ gets the entire unearned premium with no penalty. This is called ___: Insurer
Insured
Pro Rata
When the insurers assets exceed their liabilties this is known as:: Earned surplus
_____ are the insured's share of the ____ of a participating insuance company.: Policy dividends
Divisible surplus
Policy dividends are _____ _____ and are not _____ but any _____ receieved is taxable.: never guaranteed
taxable
interest
Individual life insurance premiums are ____ ___.: Not tax deductible.
Premiums paid in a group life plan are ____: Tax deductible
The savings amount in a whole life policy is the: Cash Value
The ___ benefit is also known as the ____ amount or the ___ of ___.: Death
Face
Limit of Liability
The settlement options for a life policy are ___, ___, ___, ___, and ___.: Cash (lump sum)
Interest
Fixed period
Fixed amount
Life income (annuity)
A death benefit is ___ when paid in alump sum: Tax exempt
Only the ___ can select the settlement option during the ____'s lifetime: Policy owner
insured's
A ____ exchange is a ___ of ____ insurance products. There is ___ taxation on any ____ transferred to the new policy.: 1035
swap
like
No
earnings
The ___ is what an insured pays for a ____ of ___. One ____ equals $1000 of coverage.: Rate
Unit
Coverage
Unit
Underwriters ___, ___ and ___ risks.: classify
select
rate
The ____, ____ and ___ could be up to three different people in a life contract: owner
applicant
insured
The ___ is a pre-selector who solicits prospects that represent a ____: agent
good risk
The three classifications of risk are ___, ___ and ____: preferred
standard
substandard
An insurer can obtain ____ ____ statements provided they have ____ permission from the applicant.: physician's
writeen
Questions on the application can not be used solely for ____: Marketing information
The MIB stands for ____ and is funded by ____ to detect ___ of ____: Medical Infomation Bureau
insurance companies
concealment
physical meical conditions
An ____ or the ____ can make changes to an application with the permission of the ____: Agent
Applicant
Applicant
The ____ and not the ____ must initial any change to an app.: applicant
beneficiaries
Insurers must notify an ____ if an HIV test is positive and may not inform a ___ including a ___ without written authorization: Applicant
Third Party
Doctor
The only required signatures on an app are those of the ____ and ___ or ____ The ___ does not sign: Agent
Proposed insured
Policy owner
Insurer
A _____ receipt states that once the applicant pays a ___ the insurer will cover at the time of the ___ or approval by ___ pending review of ____: Conditional
Premium
Application
Insurer
Medical Exam
A ____ receipt provides immediate coverage.: Binding
In a ____ app, no physical exam is required: Non medical
_____ term insurance is used until the issuance of the policy applied for.: Preliminary
______ delivery is when the ___ delivers the policy to someone acting for the insured such as an ___ or mailing ht epolicy to the insured.: Constructive
insurer
agent
____ delivery is when the agent to the ___ delivers the policy: Actual
Agent to the insured
A senior is someone ___ or older for ____ and ____: 60 or older
life insurance
annuities
For health insurance a senior is ____ or ____: 65 or older
The ____ period last ___ days for ages under 60 and ___ for over 60 and starts at the time of ____: Free look
10
30 days
policy delivery
The two policy cost comparisons are ____ and ____: traditional net cost
interest adjusted net cost
Group life requires ___ or ___ medical underwriting than individual.: Less
None
Three categories of life insurance: Ordinary (individual)
Industrial
Group
Types of term insurance: Level
Increasing
Decreasing
Renewable
Convertible
Decreasing term can be used to pay ____ if ____ dies: Outstanding mortgage
Insured
With ____ whole life, there will be a ___ premium for a specific period of time. It still endows at age ___: Limited pay whole life
Higher
100
Modified whole life has ___ premium for first ____ years with ___ premium increase.: Lesser
Five
One
Graded whole life has a ___ premium first year with ____ increase until ____: lesser
gradual
level
___ whole life has the ___ indexed to the CPI The premium may ___: Indexed
Death Benefit
Increase
With an ____ cash value grows rapidly and provides a _____ benefit.: endowment
living
MEC stands for ___ and provides __ consequences for over funding policy withdrawals of ____: Modified Endowment Contract
tax
cash value
A family policy covers all under ____ and additional children are added ___: one policy
with no premium
Joint life covers ___ and pays at the ___ of ____: Two people
death
first insured
Survivorship life covers ___ pays benefits when ____. It is sold in ____ and used to ___.: Two people
last insured dies
large face amounts
pay estate taxes
A ___ juvenile policy automatically increases ___ when ____.: Jumping
Five times
Age 21
Universal life has ___, choice of ___ death benefits It is an ____ product a features ___ of premium: Flexible premiums
two death benefits
insurance
unbundling
In the general account the ___ has risk. In a separate account ____ runs investment risk.: insurer
the insured
Variable universal has ___ premiums, ____ is not guaranteed. Utilizes a ___ account and the _____ is not guaranteed.: Flexible premiums
Cash value
separate
death benefit
____ regulates investments in the separate account.: The SEC
The entire contract provision includes the ___, ___, ____: Policy
Application
Rider
The ownership provision allows ____ to change ___, ___, ____ and transfer or ___ the policy and _____ the cash value: The policy owner
premium payment modes
beneficiaries
assign the policy
own cash value
A policy owner is usually the ___ and the ___.: Insured
premium payor
Policy ownership rights include ___, ___, ___, ___, ___, ____, ____.: Name beneficiaries
Assign the policy
Select settlement options
Maturity options
Payment mode
Dividend options
Conversion (1035)
Only the insurance ____ has the authority to make changes to a policy,not the ___.: company
agent
The ____ is required on the first page of an insurance policy by the CIC. It includes ___, ___, ___.: Insuring clause
Parties to contract
Promise to pay
Scope and conditions
Free look periods are ___ for those under 60 and __- for a ___ policy, and ___ for life applicants over age 60.: 10 days
20 days
30 days
To prevent unintentional lapses a policy should determine a ___, generally ___. If death occurs during this time, insrer will pay ___.: grace period
31 days
death benefit minus premium due
In an __ ___ ___ feature, the insurer will take the ___ from the ___ to prevent a policy lapse. This creates a ___ against the ___. ___ will be charged.: Automatic Premium Loan
premium
cash value
loan
cash value
interest
____ is the ability to restore a policy after day ___ to ___ status. Usually this right is preserved for ___ years but can be longer.: Reinstatement
32
original
three
In order to qualify for reinstatement, the insured must pay ___ and ___ and may have to ___.: overdue premiums
outstanding loans
prove insurability
After ___ statments in the application become incontestible, including ____ and ____. However this does not apply to __ ,__ and __.: two years
material misrepresentations
concealments
Imersonations
Lack of insurable interest
Intent to murder
A ___ _ ____ rider allows the waiver of ___ in the event the insured becomes ______, lasting ____ prior to the age of ___.: Waiver of Premium
premiums
totally and permanently disabled
65
3-6 months
In a waiver of premium rider, the ____ continues to increase and __- are paid.: cash value
dividends
Disability for the first ___ is defined as unable to ___, thereafter unable to work ____: 2 years
own job
any reasonable job
Waiver of ___ ____ assures that premiums will be paid by the insurer in case of ___ or ___ of the ____ until the insured reaches a specified ___.: payors premium
death or disability
premium payor
age
An __ ___ ___ aka __ ___rider would ___ the benefit if death resulted before a certain ___ due to an ____. IT has no effect on ___ values, only the ___.: Accidental death benefit
Double indemnity
double or triple
age
accident
cash value
death benefit
An __ __ ___ rider or living needs can pay the __ ___ in ___ for persons who are ___: Accelerated Death Benefits
face value
advance
teminally ill
A ___ is a person or persons named to receive proceeds at death of the insured, and they must ___ to collect.: beneficiary
survive the insured
If the ___is other than the insured and there is no beneficiary, proceeds go to ___: owner
owner
A ___ has the right to select a settlement option if none has been selected: beneficiary
The succession of beneficiaries is ___, ___ and then ____.: primary
cotingent
tertiary
Distributions to beneficiaries can be __ ___ where proceeds are divided ___ among survivors OR ___ ___ where shares pass on to deceased beneficiaries ___: per capita
equally
per stirpes
children
The Uniform __ ___ Act is a common state probate law that presumes the ___ died first if the sequence cannot be determined.: Simultaneous Death
beneficiary
The __ ___ Clause presumes the ___ died last if the beneficiary fails to survive the insured by ______ usually ___.: Common Disaster
insured
stated number of days
90
The ___ ___ clause protects ___ ___ from ___ claims on the ___or ___.: Spendtrift Trust
policy proceeds
creditors
beneficiary
insured
Premiums paid by an employer in __ ___ insurance are not ___.: key person
tax deductible
A ___ does not have to have ____ interest in order to collect policy proceeds: beneficiary
insurable
For the purpose of buying group life insurance the group must be ___ and required ___ in CA.: natural
10 members
In a group life policy the employer ___, ___ and ___ and issues ___ to members. Employees never receive the ___ policy.: applies
pays
owns
certificates
master
Contributory group life requires ___ participation and employees ___: 75%
pay part of the premium
Non contributory group life requies ___ participation and the employer pays ___: 100%
entire premium
In group ___ insurance the employer may pay the entire ___: term
premium
In group ___ insurance the employee may be required to pay ___ in order to generate __ ___: ordinary
premiums
cash value
In group ___ ___ insurance the employer pays for ___ ____ and the employee pays the ___ ____ portion.: paid up
term coverage
paid up
In group universal life the employee pays _____ and __ accumluates like an individual policy.: all of the premiums
cash value
Franchsie insurance is for ____ and is typicall associated with ____: less than 10 members
professionals
Blanket life covers ___ of people not ____ named but subject to _____. Must be approved by ____.: any number
individually
similar hazards
Cal Insurance Comiss
An employees ___ and ___ may determine group life benefits.: earnings
position
A flat benefit provides the ___ for ___.: Same
Everyone
A group life policy may insure dependents if at least ___ of the members elect coverage. Coverage may not exceed __ of members.: 75%
50%
Dependants for group life are defined as ____ and unamrried children through age __ (___ if in school). And other children over ___ not capable of ___ due to ___.: spouse
20
22
21
employment
mental/pysical disability
California is a ____ ___ state and all group policies must be approved by the ____: prior approval
insurance comissioner
____ is not an underwriting factor in group life, or other insurance except for ___: Location of a group
Health
Conversion from group life to individual coverage takes ___: 31 days
In group ___ ____, the benficiary is the ___ not the insured: credit life
lender
In group health coverage the ___ ___ is intended for people who join the group after the ___ ____: probationary period
effective date
A ___ ____ creates and estate while a ___ liquidates it through ____: insurance policy
annuity
income payments
An immediate annuity, also known as a __ ___ ___ ___ is a ___ deposit that begins generating income immedaitely (in less than ___).: Single Premium Immediate Annuity
lump sum
6 months
A deferred annuity can be ___ known as a __ __ ___ ___or ____ known as __ __ __ ___.: single premium
single premium deferred annuity
series of payments
flexible premium deferred annuity
In a fixed annuity the company ______ during the ___ and fixed payments during the ___. Funds are in the ___and the ___ bears the risk.: guarantees an interest rate
accumulation period
annuity period
general fund
insurer
A variable annuity is a hedge against ___ where the ___ bears risk and funds are invested in ____. Accumulation and income will ___ and an agent must be licensed by the ___.: inflation
annnity owner
separate funds
vary
SEC
A ___ annuity payment provides payment for life The is no ____: straight life
bebnficiary
___ w/ ____ provides payment for life guranteed to a ___ for ___ if annuitant should die sooner.: Life w/ period certain
beneficiary
defined period
A _______ payment of an annuity guarantees income for life and if the annuitant dies before payments have ____ the balance will be paid in a ___ to the ___.: cash refund
equalled the annuity fund
lump sum
beneficiary
An ___ ____ gurantees an annuitant income for life and ___ ____ to the beneficiary in the amount of the short funding of the ____: installment refund
installment payments
annuity account
Joint and Survivor paymnet options are for __ ___ and will continue until the ___ ___, reducing by ___ or __- after the ____.: two people
last death
1/2
1/3
first death
__ ___ Annuities are deferred contracts used to fund individual qualified retirments. They are __ ___ on distribution.: Tax Sheltered
fully taxed
An equity indexed annuity is tied to an ____, it is not a ___ annuity as all risk is borne by the _____ and EIAs include a ____ ____ rate of interest.: index
variable
insurer
guaranteed minimum
The ___ payout option provides the most cash flow but only for ____: straight life
annuitant's life time
The free look period for annuities is ___ or ___: 10 days
or 30 for seniors age 60 and over
1035 exchanges can be done __ to __ or ___ policy to ___ but never ___ to ___ policy.: annuity to annuity
life to annuity
annuity to life
A maximum of ___ social security credits can be earned each year. To be ___ insured a person must have earned ___ credits during the ___ quarter period ending in which they died. Fully insured means ___ credits.: 4
currently
6
13
Fully
40
To qualify for Soc Sec disability a person must be ___: currently insured
The ___ period is when the __ child reaches age ___ before the widowed sppouse reaches age __- becasue no benefits are payable.: balckout
youngest child
16
60
the child's surviving benefit from social security is ___ until age ___ or __ if still in school: 75% of deceased PIA
18
19
Medicare eligibility is for those ____, suffering from terminal _____ or receiving social security disabilty for __ consecutive months.: 65 or older
renal failure
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Social security uses the ___ definition of disability which is the ____ _____ definition.: narrowest
any occupation
The scoail security waiting period is ___ months, and the benefit may be paid retroactively for ___ preceding the date the app is filed.: 5 months
12 months
ERISA vesting schedules are for up to ___: 7 years
While ___ is the premium factor used in life insurance ___is the premium factor in health insurance: mortality
morbidity
Premiums on health insurance tend to ___ periodically.: increase
Medical insurance is a __ contract becasue amount received is ____: reimbursement
based on amount of loss
Disability insurance is a ___ contract becasue the __ is fixed: valued
amount paid at loss
A peril is an ___ and ___ event that results in ____: unforseen
unintended
bodily injury
___ type providers are HMO's such as ____/____: Service
Blue Cross/Blue Shield
___ type providers are PPOs, EPO's and MET's: indemnity
___ policies pay up to the amount of loss while ___ policies pay a flat amount: reimbursement
indemnity
Service providers are ____ health care and ____ mechanisms commonly known as____: self contained
financing
HMOs
HMOs do not have ____ but they do have ____. They use the ___ system to control costs.: deductibles
co pays
gatekeeper
A ___ fee compensates physicians who contract with an HMO: capitations
PPOs contract with their provider on a ____ ____ for services and can have ___ and ____. They are usually the most expensive.: prearranged fee
deductible
co-insurance
A MET provides ____ reduction not ____ reduction: premium
cost
If a PPO insured goes outside of network the PPo will ____: pay reduced benefits
TPAs handle ___and ___ for employers but do not ___: claims and admin
collect
___ coverage provides ___ health polcies at wholesale prices in the workplace/: Franchise
individual
Workers comp is based on the ___ priciple and ___ liability. The ___ is the insured party.: no fault
absolute
employer
Workers comp cna be purchased from ___ ___ and ___: private insurance
self insurance
State Comp Insurance Fund
An employee is covered by workmans comp if at ___, ____, or promoting ____.: fixed location
non fixed (IE sales)
goodwill
___ coverage is separate from workmans comp and others who are injured: Liability
Benefits of workmans comp are ___, ___, ___ and ____: medical expenses
indemnity for lost income
death benfits
rehab benefits
___ rating is used to increase or decrease premiums depending on ____ experience.: Merit
loss
___ coverage combines health and workmans comp. To sell it, a life agent must ____ and _____.: 24 hour
pass proctored exam
attend live 6hr CE course
California's ____ fund is used to compensate workers whose injuries make them more succeptible to futher complications: second injury
____ or ____ while ____ will alleviate an employer of WC payments.: Drunkeness
Illicit drug use
on the job
Only ___ are eligible for WC coverage though the emloyers are still ____: employees
insured
The three basic types of BASIC medical expense plans are:: basic hospital
basic surgical
basic physicians
Basic hospital expense covers daily ___with limits on ___ amount and ___. It also covers miscellaneous expenses as a ____ of ____.: room and board
dollar amount
length of stay
multiple
romm and board limit
Basic surgical expense covers ____, ___ and ___ with assigned amounts for each ___. ___is responsible for charges exceeding schedule.: surgeons fees, anasthesia fees, pot op
procedure
insured
Basic Physicians expense covers ___ and ___ while hospitalized up to ___ per visit: visits
non surg care
max dollar
Two types of MAJOR medical expense coverage:: Comprehensive
Supplemental
A ___ deductible allows insured to bring forward to satisfy the next years deductible: Carry over
____ shares expenses between insurer and insured up to a ____ which limits out of pocket expenses: Coinsurance
stop loss
___ conditions can may result in a ___ where there is no coverage: pre existing
probationary period
Coordination of benefits prevents ___ and determines ___: over insurance
primary and seconday insurers
____ _____ policies cover specific diseases such as ___ and ___: dread disease
cancer
heart disease
____ replaces the loss of income from illness or injury: disability insurance
____ disability covers on and off the job, is more ___ and ___: Occupational
expensive
broad
___ disability is less expensive and covers only off the job: Non occ
Disability income benefits provide ___ of monthly income but there is a ___ on how much the insurer will issue: 60-70%
ceiling
The most restrictive definition of disability is used by ___ and is the inability to perform ____ reasonably suited in ___, ___ or ___.: Social security
Any occupation
Education, training experience
A broader coverage of disability is the inability to perform ____, but may be ___ restrictive for long-term disability. Requires insured to be ___ and not engaged in ___: Own occupation
More restrictive
Under care
Gainful occupation
Partial disability income will pay _____ of ____. Residual disability will replace lost income as a ___ of ____: A percentage (often 50%)
Disability benefit
Percentage
Monthly benefit
Due to the ___ there is no ___ during the first ___ of a policy.: Probationary period
Sickness coverage
30 days
An ___ period is the time between ___ and ___ and applies to each claim. Rates will ___ as the period decreases. It is the second pricing factor after ___: Elimination
Occurrence of disability
Eligibility for benefits
Increase
Policy period
If a disability recurs within ___ there is no new elimination period: 6 months
Short-term disability is from ___ to __ weeks, while long term is ___ to ___ or ___.: 13 to 52
One year to age 65 or life
When an individual works in 2 occupations, ___ and ___ are tied to the most ___: Premiums
Benefits
Hazardous
A ____ rider waives ___ while ___: Waiver of premium
Premiums
Collecting benefits
A ___/____ of premium gives back premiums if ___ or partially if total claims are ____: Return/rebate
No claims
Less than premium paid
An automatic increase provision increases ___ to match ___. Also known as a ___.: Benefits
Inflation
COLA
Individual disability benefits are ___ when it comes to taxation. Group plans are taxed only on the ___. Employers only write off ___ and ___ not disability.: Exempt
Portion paid for by the employer
Group life and health
A franchise DI policy will be tax free if premiums are ___., meaning itâ€™s an ___ policy.: Paid by insured
Individual
AD&D is pure ___ and has ___. They pay ___ for accidental ____.: Accident coverage
Limited purpose
Lump sums
Accidental results
The ___ in an AD&D is the death benefit if death occurs within ___: Principal sum
90 days
The ___ is the amount payable for a specified loss, expressed in _____ of ___. It must be below the ____ even after ___: Capital sum
Percentage
Principal sum
Death benefit
Addition
A travel accident policy is a ___ ____ policy: Limited risk
There are ___ mandatory health insurance policy provisions and are ____ . They must use the wording provided unless ___.: 12
Required by law
Wording may be substituted that favors the insured or beneficiary
The grace period in health policies is __ days for ___ premiums, ___ days for ___ premiums and ___ days for all other premiums: 7 weekly
10 monthly
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