Health Insurance

Prior to purchasing a Medigap policy, a person must be enrolled in which of the following? A. All four parts of Medicare B. Any private insurance policy C. Only Part A of Medicare D. Parts A and B of Medicare

Parts A and B of Medicare

All of the following statements concerning Medicaid are correct EXCEPT A. Persons, at least 65 years of age, who are blind or disabled and financially unable to pay, may qualify for Medicaid Nursing Home Benefits. B. Medicaid is a state funded program that provides health care to persons over age 65, only. C. Individual states design and administer the Medicaid program under broad guidelines established by the federal government. D. Individuals claiming benefits must prove they do not have the ability or means to pay for their own medical care.

Medicaid is a state funded program that provides health care to persons over age 65, only. Medicaid is a government funded (both state and federal) program designed to provide health care to poor people of all ages.

The primary eligibility requirement for Medicaid benefits is based upon A. Number of dependents. B. Need. C. Whether the claimant is insurable on the private market. D. Age.

Need.

A brain surgeon has an accident and develops tremors in her right arm. Which disability income policy definition of total disability will cover her for all losses? A. "Any occupation" - more restrictive than other definitions B. "Own occupation" - less restrictive than other definitions C. "Own occupation" - more restrictive than other definitions D. "Any occupation" - less restrictive than other definitions

"Own occupation" - less restrictive than other definitions In theory, the brain surgeon could find other work, but because her disability income policy specifies that she is covered for her own occupation, she would be wholly covered.

Within how many days of requesting an investigative consumer report must an insurer notify the consumer in writing that the report will be obtained?

3 days

What best describes MIB

A nonprofit organization that maintains underwriting information on applicants for life and health insurance

All of the following individuals may qualify for Medicare health insurance benefits EXCEPT A. A retired person age 50. B. A healthy person age 65. C. A person age 45 who has a permanent kidney failure. D. A person under age 65 who is receiving Social Security disability benefits.

A retired person age 50. Under current federal laws, any of the described persons could qualify for Medicare, except for individuals under age 65 who have no special circumstances.

An insured misstated her age on an application for an individual health insurance policy. The insurance company found the mistake after the contestable period had expired. The insurance company will take which of the following actions regarding any claim that has been issued?

Adjust the claim benefit to reflect the insured's true age

In which Medicare supplemental policies are the core benefits found? A.Plans A and B only B. Plan A only C. Plans A-D only D. All plans

All plans The benefits in Plan A are considered to be core benefits and must be included in the other types. Therefore, all types contain the core benefits offered by Plan A.

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?

Ask her to sign the statement of good health

In a replacement situation, all of the following should be considered EXCEPT: A. exclusions B. Assets C. Benefits D. Limitations

Assets In a replacement situation the agent must be careful to compare the benefits. limitations, and exclusions found in the current and proposed replacement policy

To comply with the Fair Credit Reporting Act, when must a producer notify an applicant that a credit report may be requested?

At the time of application

What best describes the aleatory nature of an insurance contract?

Exchange of unequal value an aleatory contract is a contract in which unequal amounts or values are exchanged. The amount of the premium the insurer pays is much less than the potential loss assumed by the insurer

What phase begins after a new policy is delivered?

Free look period

A Medicare supplement plan must have at least which of the following renewal provisions? A. Conditionally renewable B. Nonrenewable C. Noncancellable D. Guaranteed renewable

Guaranteed renewable Medicare supplements must be at least guaranteed renewable.

Which of the following statements is NOT true concerning Medicaid? A. It is intended to provide medical assistance for certain categories of people who are needy. B. It consists of 3 parts: Part A: hospitalization, Part B: doctor's services, Part C: disability income. C. It is a state program. D. It is funded by state and federal taxes.

It consists of 3 parts: Part A: hospitalization, Part B: doctor's services, Part C: disability income. Medicaid is a state program funded by state and federal taxes that provide medical care for the needy. Parts A-C are part of Medicare.

A woman's health insurance policy dictates which doctors she is allowed to see. Her health providers share an assumed risk for their patients and encourage preventive care. What best describes the health system that the woman is using? A. Comprehensive health B. Major medical C. Group health D. Managed care

Managed care There are 5 distinguishing features of managed care: controlled access to providers, comprehensive case management, risk sharing, preventative care, and high-quality care.

Which of the following programs expands individual public assistance programs for people with insufficient income and resources? A. Unemployment compensation B. Medicaid C. Medicare D. Social Security

Medicaid

To sign up for a Medicare prescription drug plan, individuals must first be enrolled in A. Medicare Parts A and C. B. Medicare Part D. C. Medicare Part A. D. Medicare Part B and C.

Medicare Part A. To receive Medicare prescription drug benefits, beneficiaries must sign up with a plan offering this coverage in their area and must be enrolled in Medicare Part A or in Parts A and B.

Which of the following premium modes would result in the highest annual cost for an insurance policy? A. Monthly B. Quarterly C. Semi-annual D. Annual

Monthly

Which of the following definitions would make it easier to qualify for total disability benefits? A. The more strict "own occupation" B. The more liberal "own occupation" C. The more strict "any occupation" D. The more liberal "any occupation"

The more liberal "own occupation" Total disability is defined differently under some disability income policies. The more liberal "own occupation" definition of disability makes it easier to qualify for benefits.

All of the following statements about Medicare supplement insurance policies are correct EXCEPT A. They cover the cost of extended nursing home care. B. They cover Medicare deductibles and copayments. C. They supplement Medicare benefits. D. They are issued by private insurers

They cover the cost of extended nursing home care.

Which of the following is NOT true regarding partial disability? A. The insured can still report to work and receive benefits. B. Benefit payments are typically 50% of the total disability benefit. C. An insured would qualify if he couldn't perform some of his normal job duties. D. This is a form of insurance that covers part-time workers.

This is a form of insurance that covers part-time workers. Partial disability covers full-time-working insureds who are unable to perform some, but not all, of their regular job duties or can no longer work full-time, which ultimately results in a loss of income. Payment from partial disability is typically 50% of the total disability benefit.

Which of the following statements is CORRECT about Social Security? A. It is more than income received while employed. B. It is very easy to qualify for disability benefits. C. It is designed for people over 59½. D. To be eligible, one must meet certain requirements.

To be eligible, one must meet certain requirements. A person must have been employed in a job that is covered under Social Security, or the spouse of a deceased covered worker.

Before an agent delivers a policy, the insurer makes a last-minute change to the policy. The agent informs the insured of this change and he accepts it. In response, the insurer must

have the insured sign in a statement that he is aware of the change

When would a misrepresentation on an insurance application be considered fraud?

if it is intentional and material could be considered fraud which can be grounds for voiding the contract

What four elements must an insurance contract contain in order to be considered legally binding?

offer and acceptance consideration competent parties legal purpose

In terms of parties to a contract, which of the following does NOT describe a competent party? A. person must be competent to understand the contract B. person must have at least a secondary education C. person must not be under the influence of drugs or alcohol D. person must be of legal age

person must have at least a secondary education person must -be mentally competent to understand the contract -both parties be of legal age -person must not be under the influence of drugs or alcohol

Which of the following would qualify as a competent party in an insurance contract? A. the applicant is intoxicated at the time of application B. the applicant is a 12 year old C. the applicant is under the influence of mind-impairing medication at the time of the application D. the applicant has a prior felony conviction

the applicant has a prior felony conviction

A noncontributory group disability income plan has a 30-day waiting period and offers benefits of $2,000 a month. If an employee is unable to work for 7 months due to a covered disability, the employee will receive A. $14,000, all of which is taxable. B. $12,000, none of which is taxable. C. $12,000, all of which is taxable. D. $14,000, none of which is taxable.

$12,000, all of which is taxable. In noncontributory group health plans, the employer pays the entire cost, so the income benefits are included in the employee's gross income and taxed as ordinary income.

How long is an open enrollment period for Medicare supplement policies? A. 1 year B. 30 days C. 90 days D. 6 months

6 months An open enrollment period is a 6-month period that guarantees the applicants the right to buy Medigap once they first sign up for Medicare Part B.

Warranty

A statement that is guaranteed to be true and if untrue may breach an insurance contract

Alexander has a policy with his ex-wife as its beneficiary. What provision allows him to change the beneficiary to his new wife? A. Payment of claims B. Change of beneficiary C. Absolute assignment D. Entire contract

Change of beneficiary The change of beneficiary mandatory provision allows the policyowner to change the beneficiary designation.

An insurer neglects to pay a legitimate claim that is covered under the terms of the policy. Which of the following insurance principles has the insurer violated?

Consideration The binding force in any contract is consideration. Consideration on the part of the insured is the payment and premiums and the health representations made in the application. Consideration on the part of the insurer is the promise to pay in the event of loss.

Which of the following includes information regarding a person's credit, character, reputation, and habits? A. Insurability Report B. Agent's Report C. Consumer Report D. Consumer History

Consumer Report includes written and/or oral information regarding a consumer's credit, character, reputation, and habits collected by a reporting agency from employment records, credit history, and other public soucres

The purpose of managed care health insurance plans is to A. Control health insurance claims expenses. B. Provide for the continuation of coverage when an employee leaves the plan. C. Give the insured an unlimited choice of providers. D. Coordinate benefits.

Control health insurance claims expenses.

Social Security disability definition includes all of the following EXCEPT A. Disability expected to last for at least 6 months. B. The inability to engage in any gainful work. C. Disability resulting from a medically determinable mental impairment. D. A physical impairment expected to result in death.

Disability expected to last for at least 6 months. For the purposes of obtaining benefits, the Social Security Act defines disability as inability to engage in any gainful employment due to a medically determinable physical or mental impairment that is expected to result in death or last for a continuous period of 12 months.

A life insurance policy has a legal purpose if both of which of the following elements exist?

Insurable interest and consent: to ensure legal purpose of a life insurance policy, it must have both insurable interest and consent

Who makes up the The Medical Information Bureau (MIB)

Insurers

Which of the following applies to partial disability benefits? A. Benefits are reduced once an insured is no longer under a doctor's care. B. Payment is limited to a certain period of time. C. An insured is entitled to a principal sum benefit for the partial loss of a limb. D. Payment is based on termination of employment.

Payment is limited to a certain period of time. The partial disability benefit is typically 50% of the total disability benefit, and is limited to a certain period of time.

According to the PPACA metal levels classification, if a health plan is expected to cover 90% of the cost for an average population, and the participants would cover the remaining 10%, what type of plan is that? A. Silver B. Gold C. Platinum D. Bronze

Platinum Bronze level benefit plans pay 60% of expected health care costs; silver level plans pay 70%; gold level plans pay 80%, and platinum level plans pay 90%.

A woman obtains health coverage through the Marketplace on October 1. Two weeks later she finds out that she is 3 months pregnant. Which of the following is true about coverage for pregnancy? A. Pregnancy will only be covered if additional premium is paid. B. Pregnancy will not be covered as a pre-existing condition. C. Pregnancy may be covered with the insurer's special approval. D. Pregnancy will be covered immediately.

Pregnancy will be covered immediately.

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

Present earnings and earnings prior to disability Residual disability will help pay for loss of earnings by making up the difference between the employee's present earnings and what they were earning prior to disability.

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

Rates by class On a guaranteed renewable health insurance policy, the insurer may increase premiums on a class basis only and not on an individual policy.

A provision found in insurance policies which prevents the insured from collecting twice for the same loss is called A. Appraisal. B. Subrogation. C. Consent to settle loss. D. Right of salvage.

Subrogation.

What protects consumers against circulation of inaccurate or obsolete personal or financial information?

The Fair Credit Reporting Act (FCRA)

What would provide an underwriter with information concerning an applicants health history?

The Medical Information Bureau (MIB)

A husband and wife are insured under group health insurance plans at their own places of employment, and as dependents under their spouse's coverage. If one of them incurs hospital expenses, how will those expenses likely be paid? A. The insured will have to select a plan from which to collect benefits. B. The benefits will be coordinated. C. Neither plan would pay. D. Each plan will pay in equal shares.

The benefits will be coordinated. Benefits will be coordinated when individuals are covered under two or more health plans.

In which of the following situations would Social Security Disability benefits NOT cease? A. The individual dies B. The individual has undergone therapy and is no longer disabled C. The individual's son gets a part-time job to help support the family D. The individual reaches age 65

The individual's son gets a part-time job to help support the family

Which of the following is NOT a feature of a guaranteed renewable provision? A Coverage is not renewable beyond the insured's age 65. B The insured's benefits cannot be reduced. C The insurer can increase the policy premium on an individual basis. D The insured has a unilateral right to renew the policy for the life of the contract.

The insurer can increase the policy premium on an individual basis

Which of the following statements is true regarding coinsurance? A The smaller the percentage that is paid by the insured, the lower the required premium will be. B The smaller the percentage that is paid by the insured, the more consistent the required premium will be. C The larger the percentage that is paid by the insured, the lower the required premium will be. D The larger the percentage that is paid by the insured, the higher the required premium will be.

The larger the percentage that is paid by the insured, the lower the required premium will be.

On a health insurance application, a signature is required from the following individuals

The policyowner, the agent, and (the insured if different from the policy owner)

In forming an insurance contract, when does acceptance usually occur?

When an insurer's underwriter approves coverage

Workers compensation insurance covers a worker's medical expenses resulting from work related sickness or injuries and covers loss of income from A. Job termination. B. Plant or office closings. C. Temporary job layoffs. D. Work-related disabilities.

Work-related disabilities. All states have workers compensation laws, which were enacted to provide mandatory benefits for employee's work related injuries, illnesses, or death.

Which of the following is NOT a factor in determining qualifications for Social Security disability benefits? A. Worker's occupation B. Worker's PIA C. Worker's age D. Number of work credits earned

Worker's occupation

Representations are written or oral statements made by the applicant that are

considered to be true to the best of the applicants knowledge

Which of the following is NOT a consideration in a policy? A. the premium amount paid at the time of the policy B. the promise to pay covered losses C. the application given to a prospective insured D. something of value exchanged between parties

the application given to a prospective insured Consideration is something of value that is transferred between the two parties from a legal contract

An agent is in the process of replacing the insured's current health insurance policy with a new one. Which of the following would be a proper action? A. there should be at least a 10-day gap between policies B. Policies must overlap to cover pre-existing conditions C. the old policy must be canceled before the new one can begin D. the old policy should stay in for until the new policy is issued

the old policy should stay in for until the new policy is issued The agent must make sure that the current policy is not cancelled before the new policy is issued

Which of the following is true regarding health insurance underwriting for a person with HIV? A. the person may be declined if he/she has symptoms B. the person may not be declined for medical coverage solely based on HIV status C. person may be declined for HIV but not Aids D. the person may be declined

the person may not be declined for medical coverage solely based on HIV status The HIV consent form provides the insurance company with authorization to test for HIV virus and applies to all life and health policies. Underwriting for HIV or AIDS is permitted as long as it is not unfairly discriminatory. Medical coverage, however, cannot be denied per recent health care reform (no exclusions for pre-existing conditions)