Exam (elaborations)
California Life, Accident and Health Cram Course Exam 1-3
California Life, Accident and Health Cram Course Exam 1-3
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California Life, Accident and HealthCram Course Exam 1-3
Question #90476
Carol is injured driving a company car at work. Her Health insurance
coverage:
AProvides excess or supplementary coverage
BWill provide coverage on a pro-rata basis with Workers Compensation
CWill cover her injuries
DWill not cover her since this is an occupational injury - -D
Explanation:
Most Health insurance provides 'non-occupational' (off the job) coverage for
sickness or injury, meaning that occupational coverage is excluded.
However, if a person is not required to be covered by Workers
Compensation, some Health policies will cover both on and off the job, which
is known as 'occupational' coverage.
-Question #90486
The minimum participation percentage for large group insurance under the
California code is:
A50%
B40%
C75%
D25% - -C
Explanation:
The California Insurance Code requires a 75% minimum participation
percentage for large group Life insurance.
-Question #90409
All of the following are classified as Life insurance EXCEPT:
AWhole life
BTerm
CEndowment
DAccidental Death & Dismemberment (AD&D) - -D
Explanation:
,AD&D is a type of Disability (Health) insurance, not Life.
-Question #90464
A client invests $50,000 in after-tax dollars into a deferred annuity over a
period of time. When he annuitizes, he will receive $4,000 a year over his
projected life span. If his total return is expected to be $100,000, how much
of the client's $4,000 annual annuity pay-out will be taxable each year for
the first 10 years:
A$800
BNone
C$4,000
D$2,000 - -D
Explanation:
The client has $100,000 in his account, of which $50,000 is his own money,
which was contributed with after-tax dollars. Since his contributions will be
returned tax free and since they make up half of his account value, only half
of his annual pay-out (the earnings portion) will be taxable as ordinary
income. Further, you can find his projected life span by dividing the
$100,000 total by his $4,000 annual pay-out, which would be 25 years. After
25 years, he will have recovered all of his own contributions, so the entire
$4,000 would be taxable. Remember, annuity payouts are for life.
-Question #90470
Which of the following is true regarding 'speculative' risk:
AThere is no chance for gain
BIt has a chance for gain or loss
CIt is insurable
DIt has a chance for loss only - -B
Explanation:
Speculative risk has the chance for gain or loss and is not insurable. For
example, if you buy a lottery ticket you might gain, but you will probably
lose. It is 'pure' risk that is insurable, which has the chance for loss only, with
no chance for gain. On Life insurance, you might die. On Health insurance,
your might become sick or injured. On Fire insurance, your house could burn
down. These are 'pure' risks.
-Question #90425
Part A of Medicare provides basic hospital benefits including coverage for the
care and counseling of the terminally ill, which is known as:
,ALong term care
BHome health care
CSkilled nursing facility care
DHospice care - -D
Explanation:
Medicare is a federal health insurance program for people 65 or older who
qualify for Social Security, people of any age with permanent kidney failure,
and those who are permanently and totally disabled. An individual is
automatically eligible for Medicare Part A with no monthly premium at age
65, which includes coverage for hospitalization, skilled nursing, home health
care and hospice care.
-Question #90441
Medical Information Bureau (MIB) members must report which of the
following:
ALife insurance death claims
BHealth conditions discovered during the underwriting process
CInsurance company actions taken
DAdverse underwriting decisions - -B
Explanation:
The MIB is a non-profit information agency formed to assist health insurers
uncover misrepresentations or fraudulent actions by applicants for
insurance. MIB members that find an impairment in underwriting report such
findings, as well as situations which applicants have previously been
involved in and information received from physicians or other persons
commenting on the status of a proposed insured.
-Question #90460
If a $100,000 Whole Life insurance policy with a cash value of $10,500
lapsed and the insured selected the reduced paid-up non-forfeiture option,
all of the following would be true EXCEPT:
AThe new policy would have a cash value
BThe new policy would have a face amount of $100,000
CThe new policy would not require proof of insurability
DThe new policy would provide coverage to age 100 - -B
Explanation:
If the insured selects the reduced-paid up non-forfeiture option, the insurer
will use the cash value in the lapsed policy to buy the insured a new Whole
, life policy at the insured's current age without evidence of insurability. The
new policy will be paid-up until age 100 or the insured's death, whichever
comes first, and will have an immediate cash value. However, $10,500 would
not be enough to buy the insured a $100,000 policy, so coverage will be
reduced.
-Question #90495
Under the Women's Health and Cancer Rights Act all health insurance plans
which cover mastectomies must also cover which of the following:
ARehabilitation
BReconstructive surgery
CHome health care
DPrescription drug coverage - -B
Explanation:
Under WHCRA, group health plans, insurance companies and health
maintenance organizations (HMOs) offering mastectomy coverage also must
provide coverage for certain services relating to the mastectomy in a
manner determined in consultation with a attending physician. This required
coverage includes all stages of reconstruction of the breast on which the
mastectomy was performed, surgery and reconstruction of the other breast
to produce a symmetrical appearance, and prostheses and treatment of
physical complications of the mastectomy.
-Question #90423
Medical Information Bureau (MIB) members consist of:
ALife & Health insurers
BWorkers Compensation insurers
CAll answer options are incorrect
DFire & Casualty insurers - -A
Explanation:
The MIB is a nonprofit information agency supported by Life & Health
insurance companies, in order to help insurers uncover misrepresentations
or fraudulent actions by applicants. MIB member companies that find health
impairments in underwriting report their findings to the MIB in the form of a
code number. The MIB discloses to underwriters the applicants prior health
history, including information received from doctors. However, insurance
company underwriting actions are not recorded anywhere in MIB files.
-Question #90471
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