Syncis Team Elite Questions 4 – Flashcards
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Harold, a variable annuity applicant does not request the premium be invested in a stock or bond portfolio during the cancellation period. The policy is returned to the company within the cancellation period. What is Harold entitled to receive?
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The entire premium.
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Any transaction that involves purchasing a life insurance policy and terminating an existing policy is known as...
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replacement.
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According to the CA Insurance Code, in which of the following classes of insurance can a binder NOT be issued?
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Life
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An organization will cease to exist as an entity eligible to hold a license for all of the following reasons, except...
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termination of a key employee.
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What does it mean if an agent's license is inactive?
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The agent cannot transact any insurance business for which a license is required.
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If the Commissioner issues a Notice of Seizure for documents and the individual fails to send those documents, what is the penalty?
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1 year in jail and/or $1000 fine.
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A disability income policy covers injuries suffered by an insured on or off the job is called...
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An occupational policy.
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Which of the following must any person engaged in the business of acting as an insurance agent or broker who receives compensation for arranging or directing sales in connection with a premium financing agreement do?
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Maintain a list of accounts in connection with compensation exempted in premium financing payments for three years.
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All of the following would be considered one of the three major types of loss exposures, except:
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Human and Personnel Loss exposure.
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Which of the following statements concerning the usual coordination-of-benefits provision are correct?
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When the plans both have the provision, coverage as an employee is primary to coverage paid to dependents.
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Which of the following is NOT provided by Hospice Care?
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Rehabilitation
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Tony Brown has a CLU certification. Which of the names would be automatically approved for his agency's use?
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None of these would be automatically approved.
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A person has paid $50,000 into a fixed annuity over 20 years. When he decides to begin income payments, the insurer calculates that he will receive $4,000 per year for life, which means that he will receive a total of $100,000. In the first 10 years of payments, how much is taxable each year?
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$2,000
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According to the code, all insurers must maintain a department to investigate...
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possible fraudulent claims from insureds.
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Which two are Activities of Daily Living?
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Eating and dressing. (The other four are mobility, toiletry, bathing, and transferring)
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What does the Insurance Commissioner have the right to do if an agent lacks authority from an insurer named on a binder for coverage?
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Suspend or revoke the license of the agent.
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An insured bought an annuity ten years ago. He will retire in five years. To determine the value of the annuity, the number of accumulation units is multiplied by the value of the separate account. What type of annuity was purchased?
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Variable Annuity
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The likelihood of incurring disease or disability at any given time is...
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morbidity
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The class beneficiary designation which means that the beneficiaries will receive equal shares of the death benefit divided among the surviving members of the class is...
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per capita
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Twelve months ago, a man slipped and fell down a flight of stairs at his workplace. As a result, he has a paralysis for which he is not expected to recover. This 46-year-old person will probably be able to collect disability income benefits from...
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Workers Compensation
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In order to be qualified to sell LTC insurance in the state of CA, agents must comply with all of the following except...
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All licensees are required to pass an LTC knowledge exam every 10 years.
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The mathematical rule that says that as the number of individual but similar exposure units increases, the easier it is to predict losses, is which of the following?
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The Law of Large Numbers.
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Which of the following is a description of a Life and Disability Analyst?
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A person licensed to advise clients about life and disability insurance for a fee.
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What happens to a license after the death of a natural person who holds a valid insurance license?
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It always terminates.
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If the financial loss on a certain group of people occurring over a certain period of time defines the pricing of a disability policy, it is the pricing principle known as...
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Frequency
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Which of the following are common insurance policy provisions?
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Entire contract, grace period, reinstatement
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With the cost of living rider, the life insurance policy holder..
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Gets the automatic increase in the face value if there is an increase in the cost of living index. There is an additional premium for the additional coverage.
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Which of the following is not a standard level of care for a LTC policy?
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Convalescent care
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All of the following is required on a life insurance application except...
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The amount of disability income insurance in force
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All of the following statements regarding survivorship life insurance are true except...
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the policy face amount is made out based only on the death of the first to die. ("Survivorship Life" is also called "Joint and Last to Die.")
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Which of the following is not an option for the use of the policy dividends?
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Fund the distribution of monthly income payment.
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What information can a party to a contract of insurance be allowed NOT to communicate according to California law?
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Information which the other party already knows. (Also information that should be known, information which the other party waives, and information that is not material to the risk.)
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Which of the following (recall) provisions of a disability contract is likely to change the contract least and cost the most?
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non-cancelable contract
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According to the CA Insurance Code, a judgment against an applicant who entered a plea of "nolo contendere" is considered to be...
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convicted.
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The policy provision which prevents an insurer from voiding a policy for misstatements after 2 years is...
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incontestability.
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The clause that protects the proceeds of a life insurance policy from attachment by creditors after the death of the insured is...
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spendthrift trust clause.
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An association of industry specific employers who are joined together in order to qualify for, or gain premium advantages in group insurance is...
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MET (Multiple Employer Trust or Multiemployer Trust)
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Which of the following gives individuals the right to purchase additional life insurance regardless of their insurability?
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Guaranteed insurability
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Under a disability insurance policy, an insured is eligible for a waiver of premium benefit...
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after the first six months of disability.
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Which is NOT part of transacting insurance?
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Establishing a list of clients
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An insurer organized under the laws of the State of California is a...
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domestic insurer.
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An insured and beneficiary die in a car accident and it is impossible to determine who died first. Who will receive the life insurance proceeds?
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The insured's estate
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A beneficiary wants to receive $2,000 per month until the principal and the interest are exhausted. Which settlement option should be chosen?
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Fixed amount option
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Which of the following applies to the social insurance program known as social security?
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Contributions are compulsory for most workers
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Any person who diverts or misappropriates fiduciary funds is guilty of...
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theft.
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A probationary period in a group health policy is intended for people...
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who joined the group after the effective date.
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An insurer owned by policyholders is...
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a mutual insurer.
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Physicians' and surgeons' services, whether provided in a hospital or elsewhere...
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are covered by Medicare Part B. There is a charge for coverage.
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COBRA applies to employers with at least...
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20 employees.
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All of the following are valid reasons for the Insurance Commissioner to deny the applicant for an insurance license except...
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applicant does not have a California business address.
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An agent who replaces an existing life insurance contract must do all of the following except...
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submit a copy of the replacement notice to the existing insurer.
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Why should a contingent beneficiary be named in a life insurance policy?
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To determine who receives the policy benefits if the primary beneficiary is deceased.
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Which statement best describes a life insurance policy dividend?
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It is a distribution of excess funds accumulated by the insurer on participating policies.
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In order for an entity to be eligible to hold a license, a co-partnership whose membership has changed must do all of the following except...
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return the old license with signatures of the original partners to the Commissioner with an explanation.
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The Federal Act that is designed to protect group plan participants, establish pension equality, and mandates strict reporting and disclosure requirements is...
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ERISA (Employee Retirement Income Security Act)
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The person whose life is the object of a life insurance policy is the...
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Insured.
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FYI Company's employee is injured while driving in the employ of the company. Coverage for the employee comes from...
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FYI's Workers Compensation
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An individual might purchase LTC protection out of concern for all of the following except...
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ineligibility for Medigap coverage.
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How is the Insurance Commissioner selected?
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An election by the people.
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A policy is returned to the insurer within 10 days of the date the policy is delivered. How much of the premium is returned to the applicant?
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100%
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The SEC is involved in the regulation of...
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variable life policies.
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A disability income policy social insurance supplement (SIS) benefit rider...
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pays a benefit if the insured does not qualify for social insurance benefits.
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HMOs are involved in all of the following except...
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emphasizing the use of specialty physicians.
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The guarantee insurability rider provides that the policy holder can purchase more insurance...
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on his own life at certain specified ages without proof of insurability.
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The purpose of laws regarding the replacement of life and annuity contracts includes all of the following except...
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to protect the interests of life insurers and their agent.
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Who has the right to change life insurance policy beneficiaries?
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The policyholder.
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Which is the most expensive LTC policy?
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14 day elimination period, 3 year benefit period
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A person who acts in a capacity that requires an active license without having a valid license is guilty of a...
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misdemeanor.
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Any attempt by an existing insurer or their agent to dissuade a policy owner from replacing an existing life insurance or annuity contract is known as...
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conservation.
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Unless the applicant indicates otherwise during the right-to-return period in an individual annuity, the premium for a variable annuity would be invested only in...
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fixed income investments and money market funds.
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Which of the following is not an example of cost sharing in a health insurance policy?
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Coordination
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Under the Consolidated Omnibus Budget Reconsolidation Act (COBRA) which of the following is a qualifying event?
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Divorce
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Along with having enough assets to provide for its liabilities and for reinsurance for all outstanding risks, in order to remain solvent, the insurer must also meet minimum requirements equal to what amount required by the California Code?
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Paid-in capital
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All of the following would be considered unfair trade practices except...
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committing an act of discrimination whether it be fair or unfair.
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All of the following would be considered unfair claim practices except...
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directly advising a claimant to obtain the services of an attorney.
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A distinct feature of the alternative funding method known as self-funding is...
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the benefits are tailored to the needs of the participants.
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A variable annuity applicant requests that the premium be immediately invested in a stock portfolio. The policy is returned to the insurer within the cancellation period. What is the applicant entitled to receive?
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The policy amount value on the date the policy was received by the insurer.
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If a person gives an erroneous statement on an application unintentionally, this is...
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false.
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As an employer, the sudden death of an employee is considered a...
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personnel loss. (NOT personal)
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Regarding an organizational license, what happens when a corporation is dissolved?
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The license is continued if an original partner (stockholder) remains with the new corporation.
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Which of the following would be considered a morale risk?
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The insured drives too fast.
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Senior citizens are given a 30 day right to return a life insurance policy...
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at age 60 and older.
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Subject to the restrictions of the CA Insurance Code, any person capable of making a contract may be considered...
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an insurer.
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In which of the following plans are claim forms typically completed and submitted by the participant?
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Indemnity
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Medicare Part A begins automatically at age...
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65.
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The purpose of the California Life and Health Guarantee Association is...
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(Subject to certain limitations) to protect life and health policy holders and/or insureds when member insurers become insolvent.
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If an insurance agent or broker receives a commission for arranging a premium finance agreement they must do which of the following?
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Disclose to the client the amount of commission received for arranging the financing agreement.
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Certain healthcare providers are called "service type providers." This means...
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Payments for services are made directly to the provider.
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Which of the following is not ordinary life insurance?
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A group life insurance policy
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A failure to communicate information which a party to an insurance contract knows and should communicate, is called an act of...
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concealment.
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When a family policy covers children, all of the following are true except...
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Evidence of insurability is required if coverage for children is permanent insurance. (This is the response that is NOT true.)
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Deductibles, coinsurance, and co-payments in a health insurance policy are cost-effective choices that have the effect of...
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cost sharing.
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Which of the following is not one of the common personal uses of life insurance?
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Funding a buy/sell agreement
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Under the Consolidated Omnibus Budget Reconciliation Act (COBRA), a qualifying event insures that an employee who is covered can...
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elect to continue coverage.
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An individual license is considered terminated...
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on the death of the licensee.
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A movie company concerned about their financial losses in case of the illness of one of their actors would purchase...
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surety insurance.
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Supplemental insurance used to pay for hospital confinement to treat a cancer is also known as...
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Dread disease.
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What must an insurer do who accepts an application from an agent who is not specifically appointed by that insurer and then issues a policy from that application?
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Forward to the Insurance Commissioner a Notice of Appointment within 14 days of receipt of application.
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Which of the following is considered ordinary life insurance?
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Mortgage insurance
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Which of the following is a true statement rgarding the social-security (OASDHI) program?
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The program provides a minimum floor of income, and is meant to supplement a retirees own personal program.
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Which party has rights in a life insurance policy only after the death of the insured?
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The beneficiary
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A person who spends #10,000 in a single premium annuity, and another $10,000 in a Certificate of Deposit (CD). Both pay 10% interest annually. The person is in a 31% income tax bracket. For 40 years, this person does not touch his annuity, and reinvests all income from the CD at 10%. Which of the following statements is true?
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The annuity would be worth several hundred thousand more because of the tax deferral of the earnings.
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Listed below are descriptions of four types of policies. Which is the term policy?
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The policy has a face amount of $100,000. Every five years the premium paid increases. After ten years, the policyholder stops paying premiums and the coverage stops. The policy has no cash value.
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The main master policy owner of a group health insurance contract is the...
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employer.
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If one were to receive the principal sum benefit of death in a disability policy, the death must occur...
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within a specified number of days after injury occurs.
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All of the following are true statements concerning the treatment of federal income tax on life insurance except...
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Annuity death benefit proceeds are exempt from all taxation.
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The policy owner, age 50, has been paying the premiums on his whole life policy for 15 years. He needs the equivalent of 1/3 of the cash value of his policy over the next two years. He wants to continue to have the policy protection and can afford to pay the premiums. Which of the following would appear to be his best course of action?
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Use the policy loan provision to borrow money from the policy, but keep paying the policy premiums to keep the policy in force.
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An insured bought a $150,000 non-participating whole life policy many years ago. She is 100 years old today. She has never borrowed from the policy, and has made all premium payments when due. The policy cash value is...
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$150,000
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In insurance terms, a representation can be considered...
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an implied warranty.
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In life insurance, the loss of a key family member is considered a...
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a personal loss. (NOT personnel)
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Under the 10-day right to return, the policy will pay proceeds...
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if the policy is not returned but premium is paid.
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Hospice care is for...
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Terminally ill persons.
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Identify the penalty for each violation for a person engaging in any unfair method of competition...
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No more than $5,000 for each act, or no more than $10,000 for each act if the act is judged to be willful
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In the absence of a coordination of benefits clause, all of the following circumstances might result in the recovery of some or all health care expenses except...
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guarantee association laws.
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Unless it is merely a statement of an expectation or belief, a representation as to the future is considered which of the following?
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Promise
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Regarding life insurance coverage for a company, the one responsible for obtaining the coverage, maintaining the policy, and paying the premium is...
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the master policy holder.
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The purchase of an insurance policy may not provide one of the following for the insured. Select the most complete answer
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Elimination of the risk
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Which type of life insurance policy gives the policy owner the right to share in the insurer's surplus?
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Participating
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Which of the following may be offered by insurers providing Medicare supplement policies?
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The core benefit plan without any additional benefits
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Which of the following is a correct statement about life insurance policy types?
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The initial payment for term insurance is lower than the initial premium for whole life insurance.
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Which of the following is true regarding participation in a group health plan?
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A non-contributory group health plan must involve all members.
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Terminally ill persons would need which of the following?
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Hospice care
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The department responsible for evaluation, selection, and distribution of risks is...
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The underwriting department
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Joe receives a large bonus at work and decides to purchase an annuity with it. His monthly income payments from the annuity will begin the following month. Which of the following has Joe purchased?
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A single premium immediate annuity
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The policy provision which comes into effect when the insured and primary beneficiary die in a simultaneous (common) accident with no evidence as to who died first is the...
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common disaster provision.
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In group insurance the Certificates of Insurance are issued to...
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the group members.
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A person has a disability policy with the following definition of disability: "the inability to perform any occupation for which the insured is suited through education, training, experience or prior economic status." This is an...
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any occupation definition and is less restrictive.
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Renewable term insurance can best be described as...
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a level death benefit with a raising premium.
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The Common Disaster provision is designed to protect the interests of which of the following?
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The contingent or secondary beneficiary
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How much continuing education is a new agent who is both life and fire & casualty licensed required to complete?
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25 hours per year for either license
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In order to deal with the financial consequences of the death of a senior sales manager, a corporation could purchase...
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key person insurance.
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What would a person be guilty of who refuses to submit books and records to the Commissioner?
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Misdemeanor
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Which of the following requires a reporting company to respond to a consumer's complaint that his file contains inaccurate information?
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Fair Credit Reporting Act
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Which of the following statements about policy dividends is true?
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The insured usually selects the dividend option at the time of policy purchase.
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In accidental death and dismemberment insurance, which of the following would not be considered accidental?
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Employee requires abdominal surgery after food poisoning in the lunch room.
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A health insurance co-payment is...
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A payment paid by the insured to the provider for the service.
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An insurance company pays claims after a self-insured specified limit has been reached. This is...
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Stop-loss coverage
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Insurers make an adjustment to the cash value of an account of a universal life policy each time a payment is made. The add the premium paid and...
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Current interest; adjusted for mortality and a general expense charge.
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Relevant to health insurance, morbidity includes all of the following except...
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intelligence.
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To be classified as accidental under a disability income insurance policy, the following criteria must be used...
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The cause may be unintentional, but the result must be accidental.
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After a life insurance policy has been in effect for two years, what keeps it from being rescinded by the insurer?
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The incontestability clause
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The type of healthcare provider that provides both the healthcare services and healthcare coverage is called a...
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Health Maintenance Organization.
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A single deductible amount for all members of the same family and a right to single family member deductibles is known as...
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family deductible.
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Insurer and the insured share covered loss. This is called...
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coinsurance.
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In managed care, the members' choice of providers is most restrictive in which of the following type of plan?
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HMO
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Each of the following terms is an important characteristic of a major medical policy except...
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Capitation
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When a claimant is covered by more than one plan, the situation is resolved through...
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coordination of benefits.
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The home care coverage of an LTC policy provides for...
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part-time nursing at home for a custodial care patient.
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Usually, in order to join a group insurance plan without proving insurability, an employee must...
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join the plan during the enrollment period.
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Which of the following is true about life insurance beneficiary designations?
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If there is no surviving beneficiary, the death benefit is paid to the insured's estate.
