Health Insurance Basics & Individual Policies: CA-LH practice questions

Health Insurance Basics & Individual Policies CA-LH-06-400

An applicant has a medical condition that makes them a 'substandard risk.' How might an insurer respond to this application?

Automatically decline the application without reviewing the applicant's medical records Issue it with a rated premium, an impairment rider, or reduced benefits Issue the policy at the standard rate but require a higher deductible. Issue the policy as a 'preferred' risk to encourage the applicant to accept coverage

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The answer is B: Issue it with a rated premium, an impairment rider, or reduced benefits

Insurers may handle substandard risks by charging an extra premium (rating), excluding specific conditions (impairment rider), or limiting the benefit levels to offset the increased risk.

Reviewed in our October 2026 California fact-check.

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Health Insurance Basics & Individual Policies CA-LH-06-401

Which of the following describes the 'Gatekeeper' concept in an HMO plan?

The primary care physician (PCP), who authorizes referrals to specialists The insurance company's claims auditor who reviews all submitted claims for fraud The state regulator who oversees the HMO's network adequacy and licensing The hospital administrator who approves emergency room admissions.

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The answer is A: The primary care physician (PCP), who authorizes referrals to specialists

In an HMO, the Primary Care Physician acts as the gatekeeper, controlling access to specialized care to manage costs and ensure appropriate utilization of services.

Reviewed in our October 2026 California fact-check.

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Health Insurance Basics & Individual Policies CA-LH-06-402

A client is concerned about their family history of Alzheimer's disease. Which trigger in an LTC policy would specifically address this?

The 'Skilled Nursing' trigger. The 'Cognitive Impairment' trigger. The 'Activities of Daily Living' trigger. The 'Accidental Bodily Injury' trigger.

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The answer is B: The 'Cognitive Impairment' trigger.

LTC policies typically have two main benefit triggers: the inability to perform ADLs and the presence of a cognitive impairment, such as Alzheimer's or dementia.

Reviewed in our October 2026 California fact-check.

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Health Insurance Basics & Individual Policies CA-LH-06-403

An individual purchases a disability policy that is 'Noncancelable.' What does this mean for the policyholder?

The insurer cannot cancel the policy, but can increase premiums for the entire class of insureds. The insurer cannot cancel the policy and cannot increase the premiums for the life of the policy. The insured can cancel the policy at any time, but the insurer cannot. The insurer can cancel the policy at any time for any reason.

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The answer is B: The insurer cannot cancel the policy and cannot increase the premiums for the life of the policy.

A noncancelable policy gives the insured the right to renew the policy to a certain age, and the insurer cannot change the premium or cancel the coverage, providing the highest level of stability.

Reviewed in our October 2026 California fact-check.

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