CA-Life-Accident-and-Health Exam Dumps - CA Life, Accident and Health or Sickness Examination

Mortality tables, also known as life tables, are statistical charts used by actuaries and insurance companies to predict life expectancy and the probability of death at various ages. These tables are based on past data (A) and apply the theory of probability to the numbers (B) to estimate future mortality rates (D). However, they do not track a specific group of people from birth until they all die (C). Instead, they compile data from various sources to represent average mortality rates for a given population.

Insurance policies are designed to reduce uncertainty and provide financial protection against specific risks, but they do not eliminate risk entirely. Instead, they transfer the financial burden of potential losses to the insurer in exchange for a premium. This transfer allows the insured to replace a large, uncertain loss with a smaller, certain loss (the premium), and reduces worry by providing peace of mind. The inherent risk remains, but the financial impact is mitigated.

Endowment insurance is a type of life insurance policy that pays the face amount to the insured if they survive to the end of a specified period, known as the endowment period. If the insured dies during this period, the face amount is paid to the beneficiary. This differs from term insurance (A), which provides coverage for a specified term and pays out only if the insured dies during that term; whole life insurance (C), which covers the insured for their entire life and includes a savings component; and universal life insurance (D), which offers flexible premiums and death benefits along with a savings component.

ï‚· Indexed Annuities Features:Indexed annuities provide a minimum guarantee of interest rate (A) to protect the principal. They also offer protection during stock market declines (B) by ensuring the value does not drop below a certain level and allow participation in stock market gains (D) through interest crediting linked to a stock market index.

ï‚· Incorrect Feature:Indexed annuities do not offer an annually increasing maximum rate of interest (C). The maximum rate is often capped and does not increase each year.

ï‚· Reference:These features are outlined in the annuity product guidelines provided by the California Department of Insurance.

Adverse selection refers to a situation where those most likely to file claims are the ones most eager to purchase insurance, which can lead to higher-than-expected loss ratios for insurers. Characteristics of adverse selection include:

Occurring when premiums are low relative to the risk (A).

Attracting individuals with the greatest probability of loss (B).

Leading to poor underwriting results if many high-risk applicants are accepted (D).However, insurance companies can and do use underwriting criteria to assess and mitigate risks, meaning they can discriminate based on the probability of loss, which makes option C incorrect.

The principle of indemnity in insurance means that insureds are entitled to recover an amount not greater than the amount of their loss. This principle ensures that the insured does not profit from the insurance claim but is restored to the same financial position they were in before the loss occurred. This concept is fundamental to insurance policies to maintain fairness and prevent fraud. The California Department of Insurance emphasizes this principle to ensure proper compensation for losses.

The PPACA (also known as the Affordable Care Act) established health benefits exchanges, also referred to as American Health Benefits Exchanges or Health Insurance Marketplaces. These exchanges are designed to facilitate the purchase of health insurance by individuals and small businesses. The exchanges provide a platform where various insurance plans are listed and compared, making it easier for consumers to find affordable coverage. They are particularly aimed at individuals who do not have access to employer-sponsored insurance and small businesses seeking competitive insurance options for their employees.

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.