Insurance Licensing CA Life, Accident and Health or Sickness Examination CA-Life-Accident-and-Health Exam Dumps: Updated Questions & Answers (December 2025)

Specified disease insurance policies provide coverage for particular diseases listed in the policy. The most common type of specified disease insurance is cancer insurance, which offers financial protection and support specifically for cancer diagnosis and treatment-related expenses. This type of policy helps cover costs not typically covered by standard health insurance, such as experimental treatments, travel, and accommodation during treatment.

Under the PPACA, individuals whose household income is between 100% and 400% of the federal poverty level (FPL) may be eligible for premium tax credits to help reduce the cost of health insurance purchased through the Exchange. However, individuals at exactly 400% of the FPL or higher do not qualify for these premium tax credits. Therefore, statement C is incorrect as it implies that individuals at exactly 400% FPL are eligible.

 Definition of Elimination Period:An elimination period in a disability income policy is the time that must pass after a covered event before the insurer begins to make benefit payments. This period helps to keep premiums more affordable by preventing small or short-term claims.

 Other Provisions:Residual benefits (A), cost of living rider (C), and automatic increase provision (D) are additional features that can be included in a policy but typically add to the cost of premiums.

 Reference:This is specified in various insurance policy guides and documents provided by the California Department of Insurance.

According to Section 1729.2 of the California Insurance Code, "background information" includes various details about an insurance license applicant's past conduct and professional history. This includes any administrative action regarding a professional or occupational license (B), any misdemeanor or felony conviction, or the filing of felony criminal charges in state or federal court (C), and any admission, or judicial finding or determination, of fraud, misappropriation or conversion of funds, misrepresentation, or breach of fiduciary duty (D). However, misdemeanor charges that are filed but do not result in a conviction (A) do not qualify as "background information."

Definition: A unilateral contract is one where only one party makes a legally enforceable promise.

Mechanism: In a unilateral contract, the other party is not obligated to act, but if they do, the promisor is bound to fulfill their promise.

Example: Insurance policies are classic examples of unilateral contracts. The insurer promises to pay benefits in the event of a covered loss, but the policyholder is not obligated to file a claim.

Characteristics: These contracts differ from bilateral contracts, where both parties exchange mutual promises.

Regulations: California insurance law recognizes unilateral contracts as valid and enforceable, provided they meet all other legal contract requirements.

References:

California Department of Insurance contract law guidelines.

Legal definitions and examples of unilateral contracts.

Coordination of Benefits (COB) is a provision in group medical plans that determines the order in which multiple insurance policies will pay benefits when a claimant has coverage under more than one plan. The purpose of COB is to prevent duplicate payments and ensure that the combined payments from all insurers do not exceed the total cost of the services. This provision helps manage the claims process efficiently when more than one health plan is involved.

Risk is generally defined in the insurance industry as the chance of loss, the probability of an unexpected outcome, and uncertainty. These aspects highlight the potential for a deviation from expected results, which is the essence of risk. However, the cause of loss is typically referred to as a peril, not risk. Perils are specific causes of loss covered by an insurance policy, such as fire, theft, or natural disasters.

 Definition of Representation: A representation is a statement made by an applicant for insurance or by the insured during the policy period.

 Failure to Correspond: If a representation fails to match its stipulations or assertions, it is considered "false."

 Impact: False representations can lead to denial of claims or voiding of the policy, depending on the materiality of the misrepresentation.References: California Insurance Code Section 358 states that a representation is false when it fails to correspond with its assertions or stipulations.

The primary objectives of insurance regulation include rate regulation (A), consumer protection (B), and solvency surveillance (C). These objectives are focused on ensuring fair pricing, protecting consumers from unfair practices, and maintaining the financial stability of insurers. However, interpreting policy provisions (D) is generally not an objective of insurance regulation. Instead, interpretation of policy provisions is typically handled by courts or through arbitration if disputesarise.

Universal life insurance is a type of life insurance that includes both a savings element (cash value) and a flexible premium option. Policyholders can adjust their premium payments and death benefits, which allows for greater flexibility compared to whole life insurance, which has fixed premiums and benefits. Universal life policies also accumulate cash value, which can be used for loans or withdrawals.