MISSED EXAM Q's

A small business owner is the insured under a disability policy the funds a buy-sell agreement. If the owner dies or becomes disabled, the policy will provide which of the following?

Cash to the owner's business partner to accomplish a buyout

An application for an individual health policy failed to complete the application properly. Before being able to complete the application and pay the initial premium, she is confined to a hospital. This will not be covered by insurance because she has not met the conditions specified in the ...

Consideration Clause The consideration clause specifies that both parties to the contract must give some valuable consideration. Since she didn't pay the initial premium, she is not covered.

Which of the following is the term for the specific dollar amount that must be paid by an HMO member for a service?

Copayment

Which of the following is the term for the specific dollar amount that must be paid by an HMO member for service?

Copayment A copayment is a specific dollar amount of the cost of care that must be paid by the members. For example the member May be required to pay $5 or $10 for each office visit.

And insurance institution or agent to disclose this information in violation of the information privacy and disclosure statues of North Carolina will be liable for ...

Damages sustained to the individual to whom the information relates

Dread Disease Policy

Dread disease policies cover medical expenses for a particular medical condition such as cancer or heart disease.

A policy which covers medical costs related to a specific condition is called a ...

Dread disease policy

When an insurer requires a written proof of loss after notice of such a loss has been given by the insured or beneficiary, the company must

Furnish a blank form to be used for that purpose

How is the amount of Social Security disability benefits calculated?

It is based upon the worker's Primary Insurance Amount (PIA), which is calculated from their Average Indexed Monthly Earnings over their highest 35 years.

Under workers compensation, which of the following benefits are NOT included?

Legal benefits; Under Workers Comp, medical and rehabilitation benefits, income benefits, and death benefits are all included.

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?

No coverage will apply, since the injury could have been foreseen.

A 37 - year old owns a policy with a guaranteed insurability writer. The policy owner would like to increase the benefit amount offered by the policy. What documentation will be required?

No documentation

An agent is completing an application for insurance for a client. The agent is required to provide the client "notice of information practices" at all of the following times EXCEPT...

No notice is ever required at the initial completion of the application

Which renewal option does not guarantee renewal and allows the insurance company to refuse renewal of the policy or any premium duedate?

Optionally Renewable

Which renewal option does NOT guarantee renewal and allows the insurance company to refuse renewal of a policy at any premium due date?

Optionally renewable; in an optionally renewable policy, it is the insurer's option as to whether to renew or not.

Don has both a basic expense and a major medical policy. He is injured in an accident, which requires several major surgeries. This quickly exhausts Don's basic expense policy. What must Don do before his major medical policy can pick up where the basic expense policy left off?

Pay a special deductible on his major medical policy

An insured pays her Major Medical Insurance premium annually on March 1. Last March she forgot to mail her premium to the company. On March 19, she had an accident and broke her leg. The insurance company would ...

Pay the claim because the accident occurred during the grace period, the insurance company will pay the claim.

A guaranteed renewable health insurance policy allows the...

Policyholder to renew the policy to a stated age, with the company having the right to increase premiums on the entire class. coverage is guaranteed, but rates can be adjusted for the entire class.

Which of the following are the main factors taken into account when calculating residual disability benefits?

Present earnings and earnings prior to disability

Which of the following is NOT provided by HMO?

Reimbursement

Todd has been informed that he has a hernia which needs repair. When Todd researches the cost, healers and his insurance plan will cover 200 points worth of the surgical expenses. Each Point represents $10, which means that $2000 of his surgery will be covered by his insurance plan. What system is Todd's insurance company using?

Relative value in a relative-value approach, a surgical procedure is assigned an amount of points relative to the maximum coverage allowed for a given surgery.

In the event of a loss, business overhead insurance will pay for...

Rent

In the event of a loss, business overhead insurance will pay for...

Rent BOI is designed to pay the ongoing business expenses of a small business owner while they are disabled or unable to work. However in some situations it will provide the funds to pay the salary or the rent of the owner.

If an insurer becomes insolvent, which of the following would pay benefits to policyholders?

The Guaranty Association

In a disability policy, the elimination period refers to the period between...

The first day of disability and the day the insured starts receiving benefits

Under a health insurance policy, benefits, other than death benefits, that have not otherwise been assigned, will be paid to...

The insured benefits that have not been assigned go to the insured

Under the L&H Guaranty Association, the maximum benefit one contract holder may receive in benefits, regardless of the number of contracts held, is...

$5,000,000

How long does a North Carolina agent have to notify the department of insurance in the event of a change of residence address?

10 business days

A client has a new individual disability income policy with a 20-day probationary period and a 30-day elimination period. Ten days later, the client breaks their leg and is off work for 45 days. How many days of disability benefits will the policy pay?

15 days

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...

24 months; 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 24 months.

How soon before the child's attainment of limiting age must proof of intellectual or physical disability be provided to an insurer, in order for coverage to continue on the child?

31 days

An insured wants to buy a disability income policy that pays a maximum monthly benefit of $1,200. To make sure that the disability benefit keeps up with inflation, the insured would need to add...

A cost of living rider; the cost of living rider is usually tied to the Consumer Price Index (CPI) or another recognized measure of inflation.

The benefits for individual disability plans are based on...

A flat amount; group disability plans usually specify the benefits based on a percentage of the worker's income, while individual policies usually specify a flat amount.

What is a foreign insurer?

An insurer with a home office in another state

Stating the insurer's policies are guaranteed by the existence of the Life and Health Guaranty Association is...

An unfair trade practice

Which of the following provides coverage on a first-dollar basis?

Basic expense

All of the following are true of the key percent disability income policy except

Benefits are considered taxable income to the business Key person disability benefits are not considered taxable income to the business

All of the following are true regarding key employee disability income insurance except...

Benefits are taxable to the employer.

In comparison to a policy that uses the accidental means definition, a policy that uses the accidental bodily injury definition would provide a coverage that is...

Broader in General

In an optionally renewable policy, the insurer has which of the following options?

increase premiums

In the event of loss, after a notice of claim is submitted to the insurer, who is responsible for providing claims forms and to which party?

insurer and insured

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?

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

Workers Compensation benefits are regulated by which entity?

state government

Which of the following is NOT a feature of a non-cancel label policy?

The insurer may terminate the contract only at renewal for certain conditions. The insurance company cannot cancel a non-cancellable policy, nor can the premium be increased beyond what is stated in the policy. The insured has the right to renew the policy for the life of the contract, however, the guarantee to Rene coverage usually only applies until the insured reaches age 65.

The commissioner is in power to examine the records of any person transacting insurance in the state as an agency, an agent or broker of record. If the commissioner just examined a person, the expense of the examination will be paid by...

The person examined

When an insurer issued an individual health policy that is guaranteed renewable, the insurer agrees

To renew the policy until the insured has reached age 65

An insurer or authorized representative of the insurer that terminated the appointment, employment, contract, or other insurance business relationship with an agent shall notify the Commissioner...

Within 30 days after the effective date of the termination