Health Insurance Exam

A Medicare supplement policy CANNOT deny a claim for losses incurred more than how many months from the effective date of coverage due to a pre-existing condition? a)6 b)12 c)18 d)24

A

A nonresident producer in Illinois just relocated to Indiana and became a resident producer in that state. What must the producer do to satisfy one of Illinois' requirements for nonresident producers? a)File a change of address within 30 days b)Pay a fee to the Illinois Department of Insurance c)Resubmit a nonresident license application d)Nothing

A

A notice stating an insured's unconditional right to return his or her policy within how many days for a full refund must appear prominently on the first page of a policy? a)10 b)15 c)20 d)30

A

An insured is covered by a disability income policy that contains an accidental means clause. The insured exits a bus by jumping down the steps and breaks an ankle. What coverage will apply? a)No coverage will apply, since the injury could have been foreseen. b)No coverage will apply, since disability income policies cover sickness only. c)Coverage will apply since the break was accidental. d)Coverage will apply, but will be reduced by 50%.

A

Applications for policies advertised by what method must include a statement announcing that the policy excludes pre-existing conditions from coverage? a)Direct response b)Any form of written advertising c)Television commercials d)All of the above

A

Assuming that all of the following people are covered by a High Deductible Health Plan and are not claimed as dependents on anyone's tax returns, which would NOT be eligible for a Health Savings Account? a)Amanda is 67 and is covered by a basic medical expense policy b)Andy is 55 and is covered under a dental care policy c)Jenny is 60 and also has a long-term care insurance plan d)Joe is 40 and is not covered by any other health insurance

A

For what time period after the effective date of the policy can coverage be excluded on permissible pre-existing conditions applicable to a Medicare supplement insurance policy? a)6 months b)30 days c)2 months d)3 months

A

How is emergency care covered for a member of an HMO? a)A member of an HMO can receive care in or out of the HMO service area, but care is preferred in the service area. b)A member of an HMO may receive care at any emergency facility, at the same cost as if in his or her own service area. c)HMOs have salaried member physicians, but they do not cover emergency care. d)An HMO emergency specialist will cover the patient.

A

How many pairs of glasses in a 12-month period will a vision expense insurance plan cover? a)One b)Two c)Three d)Unlimited

A

If a business wants to buy a disability income policy on a key employee, which of the following is considered the beneficiary? a)The employer b)The insurer c)The employee d)The producer

A

If one takes Social Security retirement benefits at age 62, what needs to be done at age 65 to qualify for Medicare? a)Nothing b)Apply for coverage through the state c)Appear for a physical at the Social Security office d)Apply at a local Social Security office

A

Long-term care coverage may be available as any of the following options EXCEPT a)Endorsement to a health policy. b)Group long-term care. c)Individual long-term care. d)Endorsement to a life policy.

A

Once the person meets the stringent requirements for disability benefits under Social Security, how long is the waiting period before any benefits will be paid? A: 5 months B: 12 months C: Benefits will be paid immediately D: 90 days

A

The benefits for individual disability plans are based on a)A flat amount. b)The employer's net worth. c)The number of employees of the company. d)A percentage of the worker's income.

A

When health care insurers negotiate contracts with health care providers or physicians to provide health care services for subscribers at a favorable cost, it is called a)Preferred Provider Organization (PPO). b)Managed care. c)Indemnity plans. d)Point of Service Plans (POS).

A

Which of the following is NOT a feature of a noncancellable policy? a)The insurer may terminate the contract only at renewal for certain conditions. b)The premiums cannot be increased beyond the amount stated in the policy. c)The guarantee to renew coverage usually applies until the insured reaches certain age. d)The insured has the right to renew the policy for the life of the contract.

A

Which of the following is NOT covered under Part B of a Medicare policy? a)Routine dental care b)Home health care c)Lab services d)Physician expenses

A

Which of the following is not true of Disability Buy-Sell coverage? a)Benefits are considered taxable income to the business. b)It is typically written to cover partners or corporate officers of a closely held business. c)Premium payments are not deductible to the business. d)The policies provide funds for the business organization to purchase the business interest of a disabled partner.

A

Which of the following statements regarding Business Overhead Expense policies is NOT true? a)Benefits are usually limited to six months. b)Premiums paid for BOE are tax-deductible. c)Any benefits received are taxable to the business. d)Leased equipment expenses are covered by the plan.

A

Who must inform the Director of a producer's felony conviction? a)The producer b)MIB c)State police d)FBI

A

Within how many days of requesting an investigative consumer report must an insurer notify the consumer in writing that the report will be obtained? a)3 days b)5 days c)10 days d)14 days

A

A group Medicare policy is replaced with another from a different insurer. An insured's policy covered a chronic heart condition. How may the new insurer handle this same condition? a)Probationary period b)It will not be regarded as a pre-existing condition. c)Policy exclusion d)Limited benefits

B

A nonresident licensed producer moves to Illinois and wants to obtain a license in this state. Which of the following is true regarding the licensing examination? a)If the producer has been licensed for over 10 years in his home state, the examination requirement will be waived. b)No examination will be required. c)The producer will be required to take the Illinois licensing examination. d)The producer will need to take a uniform secondary licensing examination to satisfy the Illinois examination requirement.

B

An association could buy group insurance for its members if it meets all of the following requirements EXCEPT a)Is contributory. b)Has at least 50 members. c)Has a constitution and by-laws. d)Holds annual meetings.

B

How long must an insurer's advertisement be kept on file? a)3 years b)4 years c)5 years d)Permanently

B

If a nonresident if applying for a license in Illinois and his home state does not require continuing education for Illinois residents, a)If the applicant has been licensed for over 10 years in his home state, the continuing education requirement is waived. b)The continuing education requirement will be waived in Illinois. c)The applicant must complete the required education in Illinois before being issued a license. d)The applicant can take a federal exam that will serve the continuing education requirement in Illinois.

B

Insurable interest can be best described by which of the following? a)It is not necessary for the insured to be aware of the insurable interest or give permission for the insurance that is to be written b)The applicant must experience a financial loss due to an accident or sickness that befalls the insured. c)The insured must be genuinely interested in the life of the applicant. d)All beneficiaries need to have notification of their status.

B

Once the person meets the stringent requirements for disability benefits under Social Security, how long is the waiting period before any benefits will be paid? a)90 days b)5 months c)12 months d)Benefits will be paid immediately.

B

Rita bought an individual limited health care plan in Illinois in which some of the risk of her health costs was assumed by her health care provider. Which of the following plans does she have? a)HMO b)LHSO c)PPO d)Limited

B

The annual contribution limit of a Dependent Care Flexible Spending Account is set by a)The insured. b)The IRS. c)The employer. d)The insurer.

B

What are the 2 types of Flexible Spending Accounts? a)Medical Savings Accounts and Health Reimbursement Accounts b)Health Care Accounts and Dependent Care Accounts c)Health Care Accounts and Health Reimbursement Accounts d)Medical Savings Accounts and Dependent Care Accounts

B

What is the maximum age for qualifying for a catastrophic plan? a)26 b)30 c)45 d)62

B

Which of the following are the main factors taken into account when calculating residual disability benefits? A: Present earnings and standard cost of living B: Present earnings and earnings prior to disability C: Earnings prior to disability and the length of disability D: Employee's full-time status and length of disability

B

Which of the following determines whether disability insurance benefits are taxed? a)If the total of benefits paid meets the minimum state taxation standard b)Whether the premiums were tax deductible c)State statutes d)Contract provisions

B

Which of the following is NOT covered under Plan A in Medigap insurance? a)The first three pints of blood each year b)The Medicare Part A deductible c)Approved hospital costs for 365 additional days after Medicare benefits end d)The 20% Part B coinsurance amounts for Medicare approved services

B

Within how many days may a person who is being examined by the Director for nonfinancial business practices request a hearing after receiving the examination report? a)3 days b)10 days c)15 days d)30 days

B

A guaranteed renewable health insurance policy allows the a)Policy to be renewed at time of expiration, but the policy can be canceled for cause during the policy term. b)Insurer to renew the policy to a specified age. c)Policyholder to renew the policy to a stated age, with the company having the right to increase premiums on the entire class. d)Policyholder to renew the policy to a stated age and guarantees the premium for the same period.

C

A producer conducts business ethically and receives high praise from most customers. The producer pays all of the required license renewal fees, but receives a notice that its license has been terminated. What is the most likely reason for this? a)The company did not pass its semi-annual exam. b)The license expires. c)Lack of continuing education d)Lack of customer volume

C

All Illinois long-care insurance policies must provide LTC coverage for at least how many consecutive months? a)3 months b)6 months c)12 months d)24 months

C

All of the following apply to short-term disability plans EXCEPT a)Individual plans can provide benefit periods of up to 2 years. b)A benefit period of 26 weeks is most common for group plans. c)Both group and individual plans are renewable. d)Group plans can provide benefit periods of up to 52 weeks.

C

An agent is ready to deliver a policy to an applicant but has not yet received payment. Upon delivery, the agent collects the applicant's premium check, answers any questions the applicant may have, and then leaves. What did he forget to do? a)Ask the applicant to sign a statement that acknowledges that the policy had been delivered b)Collect a late payment fee c)Ask her to sign a statement of good health d)Offer her a secondary policy

C

An insured is applying for a policy in order to replace an existing policy; a replacement notice must be given to and signed by the applicant unless the existing coverage is a)Limited term. b)Limited coverage. c)Single premium nonrenewable. d)Single premium renewable.

C

An insured makes regular contributions to his Health Savings Account. How are those contributions treated in regards to taxation? a)They are not deductible. b)They are taxed as income. c)They are tax deductible. d)They are considered after-tax contributions.

C

Compared with how it indemnifies losses resulting from accidents, a Medicare supplement policy generally indemnifies against losses resulting from sickness a)Less. b)More frequently. c)No differently. d)More.

C

Group disability income insurance premiums paid by the employer are a)Tax deductible by the employee. b)Tax deferred to the employer. c)Deductible by the employer as an ordinary business expense. d)Taxable to the employee.

C

How long must an insurer keep books and records of insurance transactions in the Premium Fund Trust Account? a)3 years b)5 years c)7 years d)Indefinitely

C

If an individual covered under a Medicare supplement policy becomes eligible for Medicaid, how long can benefits and premiums be suspended for the Medicare policy? a)6 months b)1 year c)2 years d)Indefinitely

C

If an insured requests forms that are necessary to present a claim, within how many working days must the insurer provide the forms? a)5 b)10 c)15 d)20

C

If an insurer plans to cancel an insured's long-term care policy because the premiums are not being paid, how much notice must be given? a)1 working week b)2 working weeks c)30 days d)No notice is needed.

C

Illinois law requires that a licensed insurance producer notify the Director, in writing, of any change in their residential address within a)90 days. b)10 days. c)30 days. d)60 days.

C

In the event a discontinued policy is replaced by another group policy, what costs will the prior insurer be NOT liable to pay? a)Extended total disability benefits b)Accrued liabilities c)A small percentage of basic medical expenses after the switch has been made d)A & B

C

Insurers may change which of the following on a guaranteed renewable health insurance policy? a)Individual rates b)No changes are permitted. c)Rates by class d)Coverage

C

Long-term care coverage may be available as any of the following options EXCEPT a)Individual long-term care. b)Endorsement to a life policy. c)Endorsement to a health policy. d)Group long-term care.

C

Paula applied for a Medicare Supplement policy one month before her 65th birthday. The policy was issued on her birthday, Jan. 31. Her producer mailed the policy by certified mail, and she received the policy on Feb. 5. How long does Paula have to examine the policy and decide whether to keep it? a)10 days from the date it was received b)30 days from the date of the application c)30 days from the date it was received d)30 days from the date it was issued

C

Premiums paid by self-employed sole proprietors or partners for medical expense insurance are a)Not tax deductible. b)Partially tax deductible. c)Totally tax deductible. d)Taxable.

C

Prior to requesting renewal of an insurance producer's license, how many hours of continuing education must a producer complete? a)16 hours b)20 hours c)24 hours d)30 hours

C

The Director issued a written notice about a hearing for a business entity. The hearing is scheduled for May 1st. The affected business entity should receive the notice no later than a)3 business days before the hearing. b)2 weeks in advance. c)April 20th. d)April 1st.

C

The Director may refuse to issue a license if a licensee's aggregate amount of premiums on controlled business exceeded the aggregate amount of premiums on all other insurance business during a)Any 1 year. b)The licensing period. c)2 calendar years immediately preceding the extension date of the license. d)The 6-month period immediately following the issuance or extension of the license.

C

What are the licensing requirements for negotiating or soliciting coverage of a limited health service organization? a)A person may have a life producer license. b)A person must have a valid variable products license. c)A person may have a limited insurance representative license. d)A person does not need to be licensed to sell LHSO policies.

C

When John fills out his Medicare application, he intentionally omits his long-standing history of heart disease. Which of the following is most likely to happen? a)Heart diseases losses will not be paid. b)Nothing, as long as the insurer does not note the misrepresentation after two years from the effective policy date. Otherwise, his coverage will be canceled. c)His policy will be canceled. d)His benefits will be reduced.

C

Which health insurance provision describes the insured's right to cancel coverage? a)Insuring clause b)Cancellation provision c)Renewal provision d)Policy duration provision

C

Which of the following is CORRECT regarding Business Overhead Expense insurance? a)Benefits received are taxable income to the employee. b)Premiums are not tax deductible. c)Premiums are tax deductible. d)Benefits received are received tax free.

C

Which of the following is NOT covered under Plan A in Medigap insurance? a)The 20% Part B coinsurance amounts for Medicare approved services b)The first three pints of blood each year c)The Medicare Part A deductible d)Approved hospital costs for 365 additional days after Medicare benefits end

C

Which statement accurately describes group disability income insurance? a)There are no participation requirements for employees. b)Short-term plans provide benefits for up to 1 year. c)The extent of benefits is determined by the insured's income. d)In long-term plans, monthly benefits are limited to 75% of the insured's income.

C

A new employee who meets HIPAA eligibility requirements must be issued health coverage on what basis? a)Noncancellable b)Nondiscriminatory c)Indemnity d)Guaranteed

D

A policy must meet all of the following minimum benefit standards to be advertised or issued for delivery in Illinois as a Medicare supplement policy EXCEPT a)The policy cannot indemnify against losses resulting from sickness on a different basis than from losses resulting from accidents. b)The policy must provide that benefits designed to cover cost-sharing amounts under Medicare will be changed automatically to coincide with any changes in the applicable Medicare deductible amount. c)Medicare supplement policies must be guaranteed renewable. The insurer may not cancel or not renew solely on the grounds of deterioration of health or any other reason other than nonpayment of premium. d)The policy cannot deny a claim for losses incurred more than 6 months from the effective date of coverage due to a pre-existing condition.

D

All of the following are true regarding Key Employee Disability Income insurance EXCEPT a)The employer owns the policy. b)Benefits are paid to the employer to retrain a new person. c)Premiums are not tax deductible for the employer. d)Benefits are taxable to the employer.

D

All policy applications must identify which of the following? a)Conditions of acceptance b)MIB c)Director d)Producer who solicited the applicant's business

D

An HMO applicant is currently receiving medical assistance benefits. Which of the following alterations can the HMO make to the policy? a)Rider b)Elimination period c)Exclusion d)None of the above

D

An HSA holder who is 65 years old decides to use the money in the account for a nonhealth expense. Which of the following is true? a)There will be no taxes and no penalties. b)There will be a tax and a 20% penalty. c)There will be a 20% penalty. d)There will be a tax.

D

An insured is involved in an accident that renders him permanently deaf, although he does not sustain any other major injuries. The insured is still able to perform his current job. To what extent will he receive Presumptive Disability benefits? a)Partial benefits b)Full benefits for 2 years c)No benefits d)Full benefits

D

An insured submitted a notice of claim to the insurer, but never received claims forms. He later submits proof of loss, and explains the nature and extent of loss in a hand-written letter to the insurer. Which of the following would be true? A: The claim most likely will not be paid since the official claims form was not submitted B: The insurer will be fined for not providing the claims forms C: The insured must submit proof of loss to the Department of Insurance D: The insured was in compliance with the policy requirements regarding claims

D

An insured wants to name her husband as the beneficiary of her health policy. She also wishes to retain all of the rights of ownership. The insured should have her husband named as what type of beneficiary? a)Primary b)Contingent c)Irrevocable d)Revocable

D

An insurer has collected $2,000 in commissions on recently issued long-term care policies. However, in the process of policy solicitation, the insurer has violated marketing regulations for long-term care insurance. What is the maximum penalty the insurer may face? a)$1,000 b)$2,000 c)$6,000 d)$10,000

D

At what age may an individual make withdrawals from an HSA for nonhealth purposes without being penalized? A: 55 B: 59 1/2 C: 62 D: 65

D

Bethany studies in England for a semester. While she is there, she is involved in a train accident that leaves her disabled. If Bethany owns a general disability policy, what will be the extent of benefits that she receives? A: Full B: 50% C: 25% D: None

D

How may a pre-existing condition be regarded in relation to a condition for which medical advice was given from a physician within 6 months before the effective date of coverage? a)Exclusionary basis b)More restrictive c)Each situation is different. There are no rules. d)Equivalent

D

In the event a policy lapses due to nonpayment of premium, within how many days would the policy be automatically reinstated once the outstanding premium is paid? A: 10 days B: 25 days C: 30 days D: 45 days

D

Insurers may change which of the following on a guaranteed renewable health insurance policy? A: Coverage B: Individual rates C: No changes are permitted D: Rates by class

D

Premium payments for personally-owned disability income policies are a)Eligible for tax credits. b)Tax deductible. c)Tax deductible to the extent that they exceed 10% of the adjusted gross income of those itemizing deductions. d)Not tax deductible.

D

The relation of earnings to insurance provision allows the insurance company to limit the insured's benefits to his/her average income over the last a)6 months. b)12 months. c)18 months. d)24 months.

D

What is a penalty tax for nonqualified distributions from a health savings account? a)8% b)10% c)12% d)20%

D

Which of the following is NOT provided by an HMO? A: Services B: Financing C: Patient care D: Reimbursement

D

Which of the following is correct regarding the taxation of group medical expense premiums and benefits? a)Premiums are not tax deductible and benefits are taxed. b)Premiums are not tax deductible and benefits are not taxed. c)Premiums are tax deductible and benefits are taxed. d)Premiums are tax deductible and benefits are not taxed.

D

Which of the following is generally NOT a limited health service included under an LHSO? a)Clinical laboratory services b)Ambulance care service c)Vision care services d)Surgical services

D

Which of the following offers limited health care plans, in which some of the risk of cost is assumed by the plan's providers? a)PPO b)HMO c)Limited care d)LHSO

D

Which of the following provisions is mandatory for health insurance policies? a)Recurrent disability b)Unpaid premiums c)Intoxicants and narcotics d)Physical examination and autopsy

D