( 2 )- Health Insurance Providers
Which Unfair Trade Practice involves an agent telling a prospective client that a policy's dividends are guaranteed?
Misrepresentation. (An agent who tells a client that dividends are guaranteed may be guilty of misrepresentation.)
Which of the following BEST describes how a Preferred Provider Organization (PPO) is less restrictive than a Health Maintenance Organization (HMO)?
More physicians to choose from.
Which of the following documents must an agent submit to the replacing insurance company during the replacement of an existing life insurance policy?
Notice to existing and replacing insurers of intention to replace. (When replacing an existing life insurance policy, an agent must submit notice to existing insurer and replacing insurer of intentions.)
An example of rebating would be?
Offering a client something of value not stated in the contract in exchange for their business. (Rebating can be defined as offering a prospect something of value that is not specified in a contract in order to induce the purchase of that contract.)
P is self-employed and owns an Individual Disability Income policy. He becomes totally disabled on June 1 and receives $2,000 a month for the next 10 months. How much of this income is subject to federal income tax?
$0- (Disability income benefits that derive from an individual policy which was paid entirely by the policyowner is not subject to federal income tax.)
What is the maximum Social Security Disability benefit amount an insured can receive?
100% of the insured's Primary Insurance Amount (PIA). (The Medicaid was designed to assist individuals who areMAXIMUM Social Security Disability benefit an insured may receive is equal to 100% of the insured's Primary Insurance Amount (PIA).
What is the maximum Social Security Disability benefit amount an insured can receive?
100% of the insured's Primary Insurance Amount. (PIA)
What percentage of eligible persons must a policy cover in a noncontributory group?
100%- (In a noncontributory group, the policy must cover 100% of eligible persons.)
All of these are a prerequisite for becoming a licensed agent EXCEPT?
Graduate from high school. (Graduating from high school is not a prerequisite for becoming a licensed agent.)
A "reimbursement policy" pays what amount of covered Long-Term Care expenses?
Actual covered expenses up to the daily maximum. (A "reimbursement policy" pays the actual covered expenses up to the daily maximum.)
Which of the following situations does NOT apply to the Florida Replacement Rule? .
An existing policyholder purchases an additional policy from the same insurer. (Florida's Replacement Rule applies to all of these situations EXCEPT "An existing policyholder purchases an additional policy from the same insurer"
In Florida, the underwriting and issuance of a master group health policy requires that all employees?
Are eligible to participate, regardless of their individual health history- The underwriting and issuance of a master group health policy in Florida requires that all employees or members must be eligible to participate, regardless of individual health history.
Medicaid was designed to assist individuals who are?
Below a specific income limit.
Which of the following organizations would make reimbursement payments directly to the insured individual for covered medical expenditures?
Commercial insurer.
Which of the following reimburses its insureds for covered medical expenses?
Commercial insurers.
An applicant who pays the initial premium at the time of application is typically given a(n)?
Conditional receipt. (A conditional receipt is normally given to an applicant who pays the initial premium at the time of application.)
The Consolidated Omnibus Budget Reconciliation Act (COBRA) gives workers (and their families) whose employment has been terminated the right to?
Continue group health benefits.
Medicare Part A and Part B do NOT pay for?
Dental work.
Which of the following does Social Security NOT provide benefits for?
Dismemberment. (Social Security provides for all of these types of benefits EXCEPT dismemberment.)
Non-occupational disability coverage is designed for?
Employees who suffer non-work related disabilities, since work-related disabilities are covered by Workers' Compensation. (Non-occupational disability coverage is designed for employees who suffer non-work related disabilities, since work-related disabilities are covered by Workers' Compensation.
An example of an unfair claims practice would be?
Failing to effectuate prompt, fair, and equitable settlements of a claim. (Failing to effectuate prompt, fair, and equitable settlements of claims is considered to be an unfair claims practice.)
Which type of renewability best describes a Disability Income policy that covers an individual until the age of 65, but the insurer has the right to change the premium rate?
Guaranteed Renewable. (The renewal provision in a guaranteed renewable policy specifies that the policy must be renewed (as long as premiums are paid) until the insured reaches a specified age. These usually have increasing premiums.)
K has a health policy that must be renewed by the insurer and the premiums can only be increased if applied to the entire class of insureds. This type of policy is considered?
Guaranteed renewable. (Guaranteed renewable is best described as a policy that must be renewed and premium rate increases can only be applied if for an entire class of insureds.)
J is a subscriber to a plan which contracts with doctors and hospitals to provide medical benefits at a predetermined price. What type of plan does J belong to?.
Health Maintenance Organization
A medical care provider which typically delivers health services at its own local medical facility is known as a?
Health Maintenance Organization.
J is a subscriber to a plan which contracts with doctors and hospitals to provide medical benefits at a predetermined price. What type of plan does J belong to?
Health Maintenance Organization. (A Health Maintenance Organization (HMO) contracts with doctors and hospitals to provide medical benefits to subscribers at a predetermined price.)
Which type of provider is known for stressing preventative medical care?
Health Maintenance Organizations (HMO's). (The health provider that stresses preventive medical care is known as a Health Maintenance Organization.)
Which type of provider is known for stressing preventative medical care?
Health Maintenance Organizations. (HMO's)
A 66 year-old is covered under a group health plan while employed with a business that has 40 employees. If she injures herself while walking in the park, what coverage would be considered primary?
Her group health plan.
A 66 year-old is covered under a group health plan while employed with a business that has 40 employees. If she injures herself while walking in the park, what coverage would be considered primary?
Her group health plan. ( If the employer has more than 20 employees, the group health plan generally pays first.)
Medicare Part B does NOT cover?
Inpatient hospital services. (Medicare Part B is a voluntary program designed to provide supplementary medical insurance to cover physician services, medical services, and supplies not covered under Part A.)
Which of these statements is INCORRECT regarding a Preferred Provider Organization (PPO)?
PPO's are NOT a type of managed care systems.
Under what system do a group of doctors and hospitals in a designated area contract with an insurer to provide services at a prearranged cost to the insured?
PPO.
Under what system do a group of doctors and hospitals in a designated area contract with an insurer to provide services at a prearranged cost to the insured?
PPO. (Preferred Provider Organization)
Which of the following types of insureds are life insurance companies allowed to make policy rate discriminations against?
People that smoke. (A life insurance company may make policy rate discriminations against people that smoke.)
Which action could result in a hearing being ordered by the Department of Financial Services?
Performing insurance transactions without a license. (A hearing may be conducted if anyone is suspected of engaging in the business of insurance without a license.)
The Coordination of Benefits provision?
Prevents an insured covered by two health plans from making a profit on a covered loss.
The individual who provides general medical care for a patient as well as the referral for specialized care is known as a?
Primary Care Physician.
A major medical policy typically?
Provides benefits for reasonable and necessary medical expenses, subject to policy limits.
D is an architect receiving Disability Income benefits who is not able to return to work full time, but can work on a part-time basis. Which of these features would allow D to continue receiving benefits?
Residual Benefit clause. (A residual amount benefit is based on the proportion of income actually lost due to the partial disability, taking into account the fact that the insured is able to work and earn some income.)
Association Plans that are designed to provide health benefits to their members are regulated by the state because?
They are insured by an authorized insurer. (Association Plans must be fully insured by an authorized insurer. The insurer is subject to state regulation.)
Which of the following statements is true about most Blue Cross/Blue Shield organizations?
They are nonprofit organizations.
Medicare is intended for all of the following groups EXCEPT?
Those enrolled as a full-time student.
Group Life policies in Florida are required to contain a conversion privilege that allows for conversion?
To an individual policy for a stated period of time. (In Florida, Group Life policies must contain a conversion privilege that allows for conversion to an individual policy for a specified period of time.)
The health insurance program which is administered by each state and funded by both the federal and state governments is called?
Medicaid. (Medicaid is funded by both the federal and state governments and administered by individual states.)
Which Unfair Trade Practice involves making a false statement on an insurance application in order to receive money from an insurer?
Misrepresentation. (Making a fraudulent statement on an insurance application would be considered an act of misrepresentation.)
The individual who provides general medical care for a patient as well as the referral for specialized care is known as a?
Primary Care Physician. (PCP)
Which of the following provisions is NOT required in HMO contracts/certificates?
Seven-day grace period. (A grace period of no less than 10 days must be expressly included in an HMO contract.)
Which of the following is NOT considered rebating?
Sharing commissions with an agent licensed in the same line of business. (Sharing commissions with other licensed agents is not considered rebating.)
Which mode of payment is NOT used by health insurance policies?
Single premium. (Single premium is not used when paying for health insurance policies.)
The percentage of an individual's Primary Insurance Amount (PIA) determines the benefits paid in which of the following programs?
Social Security Disability Income.
The percentage of an individual's Primary Insurance Amount (PIA) determines the benefits paid in which of the following programs?
Social Security Disability Income. (Social Security Disability Income pays benefits that are based on a percentage of an individual's Primary Insurance Amount (PIA).)
How many days does an insurance company have to reject a reinstatement application before it is automatically reinstated?
45. (If the insurer takes no action within 45 days, the policy will be reinstated automatically.)
Florida requires that an insurance agent must complete __ hours of continuing education on the subject of law and ethics every two years.?
5. (Florida requires that an insurance agent must complete 5 hours of continuing education on the subject of law and ethics every two years).
In health insurance policies, a waiver of premium provision keeps the coverage in force without premium payments?
After an insured has become totally disabled as defined in the policy. (The waiver of premium provision keeps the coverage in force without premium payments if the insured has become totally disabled as defined in the policy.
P is a forty year old woman and would like to purchase an annuity that will provide a lifetime income stream beginning at age sixty. Which of the following did she NOT buy?
An immediate annuity. (An immediate annuity is designed to make its first benefit payment to the annuitant at one payment interval from the date of purchase.)
In Florida, the underwriting and issuance of a master group health policy requires that all employees?
Are eligible to participate, regardless of their individual health history. (The underwriting and issuance of a master group health policy in Florida requires that all employees or members must be eligible to participate, regardless of individual health history.
Which of the following medical expenses does Cancer insurance NOT cover?
Arthritis. (Cancer insurance typically covers all of these medical expenses except for arthritis.)
Which of the following acts is an agent NOT authorized to do on behalf of an insurer?
Authorize claim payments. (Agents do not authorize payment of claims.)
T is an agent and when hired, is reminded that he has a responsibility to handle clients' funds in an honest and ethical manner. This responsibility is referred to as?
Fiduciary responsibility. (Fiduciary responsibility involves an agent handling funds of a client or insurance company honestly and fairly, and not using them for the agent's own purposes.)
T is receiving $3,000/month from a Disability Income policy in which T's employer had paid the premiums. How are the $3,000 benefit payments taxable?
Benefits are taxable to T. (When a disability income insurance plan is paid for entirely by the employer, the premiums are deductible to the employer. The benefits, in turn, are taxable to the recipient.)
Which type of policy would pay an employee's salary if the employer was injured in a bicycle accident and out of work for six weeks?
Business Overhead Expense. (A Business Overhead Expense policy covers fixed business expenses in the event of the owner becoming unable to work due to an accident or illness.)
An example of sliding would be?
Charging for an additional product without the applicant's consent. (Sliding involves selling additional coverage to an insurance applicant who doesn't want or need it. An agent will often "slide" this additional coverage in without the customer's knowledge or consent.)
The situation in which a group of physicians are salaried employees and conduct business in an HMO facility is called a(n)?
Closed panel.
Which of the following is NOT a consequence for placing business with an unauthorized insurer?
First degree misdemeanor. (All of these are possible consequences for placing business with an unauthorized insurer EXCEPT the conviction of a first degree misdemeanor.)
Which of these is considered a true statement regarding Medicaid?
Funded by both state and federal governments.
A medical care provider which typically delivers health services at its own local medical facility is known as a?
Health Maintenance Organization. (HMO)
J is a subscriber to a plan which contracts with doctors and hospitals to provide medical benefits at a predetermined price. What type of plan does J belong to?
Health Maintenance Organization. (HMO)
A medical care provider which typically delivers health services at its own local medical facility is known as a?
Health Maintenance Organization.(HMO)
Which of the following situations are NOT subject to Florida life insurance laws?
Insurance companies' day-to-day operations. (Florida life insurance laws apply to all of these situations EXCEPT "Insurance companies' day-to-day operations".)
An insurance company normally has 2 years to contest information provided on an accident and health application. This 2 year period begins on the date that the?
Insurer dates the policy. (An insurance company can usually contest the information contained in an accident and health application for two years from the date the insurance company dates the policy.)
Defamation occurs when an agent makes a false statement intended to?
Malign another insurer. (Defamation is an unfair trade practice involving false, maliciously critical, or derogatory statements intended to injure a person or company engaged in the insurance business.)
Which of the following is NOT an unfair claim settlement practice?
Needing written documentation of claim details. (All of these are unfair claim settlement practices except "Needing written documentation of claim details".)
How can an agent-in-charge have more than one location?
Only if the agent-in-charge is present when insurance activity occurs. (Multiple locations are allowed as long as the agent-in-charge is present when insurance activity occurs.)
Upon reaching the limiting age, a handicapped child can extend their health insurance coverage as a dependent?
Only if the child is incapable of employment and chiefly dependent on the policyowner. (Coverage may be extended if the handicapped child is incapable of employment and chiefly dependent on the policyowner.)
What is the primary factor that determines the benefits paid under a disability income policy?
Wages. (The major factor in determining the benefit amount paid under a disability income policy is wages.)
An agent's license can be suspended or revoked by?
Writing primarily controlled business. (An agent's license can be suspended or revoked by writing primarily controlled business.)
