FInal Exam: California Life, Accident, and Health Insurance
Study online at https://quizlet.com/_7pf93u
1. What distinguishes a deferred annuity from an immediate annuity?: The time
at which benefit payments start
2. Cindy buys a 10-year certain annuity with an installment refund. After receiv-
ing monthly payments for 5 years, Cindy dies. How many remaining payments
will the insurer make to her beneficiary?: 60 payments
3. What is a common reason people purchase an annuity?: To protect against
the risk of outliving their financial resources
4. What kind of annuity pays income to two annuitants until their deaths?: Joint
and survivor annuity
5. What is a joint and survivor annuity?: 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.
6. 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: for a minimum of 120 months and a maximum of the remainder of her
life
7. Which of the following statements regarding a life insurance policy dividend
is TRUE?: It is the distribution of excess of funds accumulated by the insurer on
participating policies.
8. An insured owned by its policyholders is called a: mutual insurer
9. 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?: Rein-
surance
10. What is reinsurance?: An arrangement by which an insurance company trans-
fers a portion of a risk it has assumed to another insurer
11. Which of the following is NOT a characteristic of reinsurance?: Increases
the unearned premium reserve
12. Which of the following is a contract that involves one party which indem-
nifies another when a loss arises from an unknown event?: Insurance policy
13. What is an insurance policy?: A contract where one party promises to indem-
nify another against loss that arises from an unknown event
14. What is residual disability income insurance payments based on?: The
amount of the insured's income is reduced by the disability
15. Manuel 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
16. Which of the following is NOT a provision in a disability income policy?: -
Deductible and coinsurance provision
1/9
, FInal Exam: California Life, Accident, and Health Insurance
Study online at https://quizlet.com/_7pf93u
17. Which of these statements is NOT true concerning recurrent disabilities?-
: The insurer continues coverage after a new elimination period
18. Kim is insured under a disability income insurance policy with an "own-oc-
cupation" 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
19. What percentage of eligible employees must participate in a noncontribu-
tory group health plan before it can be put in effect?: 100%
20. Business Overhead Expense Insurance pays for: business expenses when
a business owner becomes disabled
21. Minimum participation standards exist for group health insurance plans in
order to: prevent adverse selection
22. The problem of overinsurance is addressed in which health insurance
provision?: Coordination of benefits
23. What is the purpose of the coordination of benefits (COB) provision?: To
avoid duplication of benefit payments and overinsurance when an individual is
covered under more than one group health plan
24. Who is financially liable for the payment of covered claims in a fully insured
group health plan?: Insurer
25. The insurer has the option of terminating a health insurance policy on a
date stated in the contract. What type of policy is this?: Optionally renewable
26. What is an optionally renewable policy?: A provision allowing an insurer to
terminate the policy on a date specified in the contract
27. Bruce is involved in an accident and becomes totally and permanently
disabled. His insurance policy continues in force without payment of further
premiums. Which policy provision is responsible for this?: Waiver of premium
provision
28. Christine has a health insurance policy that has been in force beyond the
incontestable period. The insurer has discovered that a fraudulent statement
was made on the application. What would the insurer have to pay on a claim,
assuming this wasn't a guaranteed renewable policy?: Nothing
29. What type of health insurance policy cannot be canceled by the insurer nor
increase the premiums?: Noncancellable
30. The conditions, times, and circumstances under which an insured is NOT
covered by a health policy are called?: exclusions
31. What are exclusions in a health policy?: Specified hazards listed in a policy
for which benefits will not be paid
2/9
Study online at https://quizlet.com/_7pf93u
1. What distinguishes a deferred annuity from an immediate annuity?: The time
at which benefit payments start
2. Cindy buys a 10-year certain annuity with an installment refund. After receiv-
ing monthly payments for 5 years, Cindy dies. How many remaining payments
will the insurer make to her beneficiary?: 60 payments
3. What is a common reason people purchase an annuity?: To protect against
the risk of outliving their financial resources
4. What kind of annuity pays income to two annuitants until their deaths?: Joint
and survivor annuity
5. What is a joint and survivor annuity?: 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.
6. 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: for a minimum of 120 months and a maximum of the remainder of her
life
7. Which of the following statements regarding a life insurance policy dividend
is TRUE?: It is the distribution of excess of funds accumulated by the insurer on
participating policies.
8. An insured owned by its policyholders is called a: mutual insurer
9. 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?: Rein-
surance
10. What is reinsurance?: An arrangement by which an insurance company trans-
fers a portion of a risk it has assumed to another insurer
11. Which of the following is NOT a characteristic of reinsurance?: Increases
the unearned premium reserve
12. Which of the following is a contract that involves one party which indem-
nifies another when a loss arises from an unknown event?: Insurance policy
13. What is an insurance policy?: A contract where one party promises to indem-
nify another against loss that arises from an unknown event
14. What is residual disability income insurance payments based on?: The
amount of the insured's income is reduced by the disability
15. Manuel 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
16. Which of the following is NOT a provision in a disability income policy?: -
Deductible and coinsurance provision
1/9
, FInal Exam: California Life, Accident, and Health Insurance
Study online at https://quizlet.com/_7pf93u
17. Which of these statements is NOT true concerning recurrent disabilities?-
: The insurer continues coverage after a new elimination period
18. Kim is insured under a disability income insurance policy with an "own-oc-
cupation" 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
19. What percentage of eligible employees must participate in a noncontribu-
tory group health plan before it can be put in effect?: 100%
20. Business Overhead Expense Insurance pays for: business expenses when
a business owner becomes disabled
21. Minimum participation standards exist for group health insurance plans in
order to: prevent adverse selection
22. The problem of overinsurance is addressed in which health insurance
provision?: Coordination of benefits
23. What is the purpose of the coordination of benefits (COB) provision?: To
avoid duplication of benefit payments and overinsurance when an individual is
covered under more than one group health plan
24. Who is financially liable for the payment of covered claims in a fully insured
group health plan?: Insurer
25. The insurer has the option of terminating a health insurance policy on a
date stated in the contract. What type of policy is this?: Optionally renewable
26. What is an optionally renewable policy?: A provision allowing an insurer to
terminate the policy on a date specified in the contract
27. Bruce is involved in an accident and becomes totally and permanently
disabled. His insurance policy continues in force without payment of further
premiums. Which policy provision is responsible for this?: Waiver of premium
provision
28. Christine has a health insurance policy that has been in force beyond the
incontestable period. The insurer has discovered that a fraudulent statement
was made on the application. What would the insurer have to pay on a claim,
assuming this wasn't a guaranteed renewable policy?: Nothing
29. What type of health insurance policy cannot be canceled by the insurer nor
increase the premiums?: Noncancellable
30. The conditions, times, and circumstances under which an insured is NOT
covered by a health policy are called?: exclusions
31. What are exclusions in a health policy?: Specified hazards listed in a policy
for which benefits will not be paid
2/9
