Self study insurance
D- Aleatory Contract Insurance contracts are Aleatory in that (1)- there is an element of chance for both of the contracting parties and (2)- The dollar values exchanged May not be equal.
A contract by which the dollar values exchanged May not be equal is what kind of contract? A- Unilateral contract B- conditional contract C- contract of Adhesion D- Aleatory Contract
C- contract of Adhesion Because insurance contracts are contracts of adhesion. This means that the contract has been prepared by one party (the insurer); it is not the result of negotiation between the parties. In effect, the applicant "adheres" to the terms of the contract when he or she accepts it.
A contract that is prepared by one party and is not the result of negotiations is what kind of contract? A- Unilateral contract B- conditional contract C- contract of Adhesion D- Aleatory Contract
C- a broad range of medical expenses usually with a deductible and coinsurance provision A major medical policy picks up where medical expense insurance leaves off. It has a deductible and coinsurance provision Unit 17
A major medical policy is best described as one that covers? A- most of the medical expenses in a hospital B- most of the medical expenses not covered by a hospital policy C- a broad range of medical expenses usually with a deductible and coinsurance provision D- hospital and other medical expenses as well as income lost by sickness or accident
B- they result from accidental injuries To protect the company against adverse selection, losses resulting from sickness are covered only if the sickness occurs at least 10 days after the reinstatement date. -Accidents are cover immediately.- Unit 26: previsión, and required coverage
A reinstated health insurance policy covers insured losses immediately when: A- all back premiums are paid B- they result from accidental injuries C- a physician certifies the injury or illness D- a claim is submitted
A- a mutual insurance company A mutual insurer is an incorporated insurer without permanent capital stock. The policyholders are members and elect the governing body of the insurer. Mutual Insurance companies are corporations and, by law, must be incorporated in order to write insurance. The operating objective of a mutual insurance company is to provide insurance to its owners, the policyowners, at the lowest possible net cost. Study unit 26- mutual insurance company
A type of insurer that is incorporated without permanent capital stock; where it's policy holders are members and elect the governing body of the insurer is? A- a mutual insurance company B- a captive insurer C- a preferred provider D- an unauthorized insurer
D- subscribers pay for services only when needed HMO's offer comprehensive prepaid health care services to its subscribing members. Subscribers pay a fixed periodic fee to the HMO as opposed to paying for services only When needed. HMO are known for stressing preventive care, the objective being to reduce the number of unnecessary hospital admission and duplication of services.
All of the following are characteristics of an HMO, Except A- stresses preventive care in order to reduce the number of unnecessary hospital admission and duplication of service B- a medical surgical expense plan which makes payments directly to the doctor C- subscribers pay a fixed periodic fee to the HMO D- subscribers pay for services only when needed
B- health insurance companies Health insurance companies are not service providers Unit 16
All of the following may be classified as voluntary service organizations Except? A- preferred provider organization (PPOs) B- health insurance companies C- blue cross and blue shield D- health maintenance organization (HMOs)
B- reinsurers usually deal with group policy-owners. Reinsurer are a specialized branch of the insurance industry because they insure insurers
All of the following statements regarding types of insurers are correct Except. A- fraternal benefits societies must be non profit organization. B- reinsurers usually deal with group policy-owners C- mutual insurance companies are owned by their policy owners D- stock insurance companies seek a profit for their share holders
B- defamation The act of making a false oral or written statement, which is maliciously critical of or derogatory to financial condition of any insurance company, is otherwise know as defamation. Defamation of character includes both libel(written) and slander (spoken) of a person. Unit 26; marketing practices
An Agent that tells a prospect that a competing insurer is charging lower premiums because it is hurting for business, would be guilty of which of the following? A- Fraud B- Defamation C-libel D- intimidation
B- his family Controlled business means Life and Health Insurence contracts covering the agent or members of the agent family; officers, directors, stockholders, partners or employees of a business in which the agent or a member of his family is engaged; or the debtors of a firm, association or cooperation of which the agent is an officer, director, stockholders, partner or employee. Study unit 26: agents and agencies
An Agent would be in violation of the controlled business statute is he sells mostly to A- members of his golf club B- his family C- federal employees D- members of his church
C- Void contract Because an Void Contract is an agreement without legal effect. In essence, it is not a contract at all, for it lacks one of the elements specified by the law of valid contract. An Void contract cannot be enforced by either party. For EXAMPLE: a contract having an illegal purpose is void, and neither party to the contract can enforce it.
An agreement that is not legally enforceable under any circumstance is called a/an? A- informal contract B- formal contract C- void contract D- voidable contract
D- morale hazard Because morale referees to mind and from attitude causing indifference to loss.
An individual who has a habit of driving recklessly would be considered to be a? A-peril B- physical hazard C- moral hazard D- morale hazard
B- An alien company An alien insurance company is one that is chartered and organized in any country other than the United States. It is considered an alien insurance company in all states. Unit 2, state regulation
An insurance company, which is incorporated in London, England and authorized to do business in Florida is A- foreign company B- an alien company C- an international company D- a domestic company
D-$27,800 The most the insured will pay is the $200 deductible and 20% of the second $10,000 (2,000); a total of $2,200. The remaining 27,800 is paid by the company. Unit 17
An insured has a comprehensive medical policy that will pay as follows: the 1st $10,000; $200 corridor deductible; 80% of the next $10,000; thereafter, the policy also contains a stop loss provision. If the insured incurred expenses of $30,000, how much would the company have to pay? A- $4,000 B-$3,760 C-$2,200 D-$27,800
D- Hazard Because hazard is any factor that gives rise to a peril. A Peril is defined as the immediate specific event causing loss and increasing risk.
Any factor that increases the chance of loss to insured is a? A- speculative risk B- pure risk C- peril D- hazard
B- implied authority Implied authority is incidental to express authority since not every single detail of an agents authority can be spelled out. Study unit 3, agent and broker
Authority not expressly granted, but which the agent is assumed to have in order to transact the business of the principal, is called A- express authority B- implied authority C- binding authority D- apparent authority
C- residual disability A residual disability benefit is based on the proportion of income the insured has lost. Unit 18
Bill returns to work after a period of total disability but cannot earn as much as he did before the disability; this situation is called which of the following? A- partial disability B- recurring disability C- residual disability D- presumptive disability
A- Daisy would pay 1,960 $9,000(total bill)-$200(deductible)=$8,800•20%(company part); daisy pays $1,760 plus $200 (deductible) =1,960. Unit 17
Daisy Mae was hospitalized for 7 days and her total bill was $9,000. She has a major medical policy which has an 80/20 flat deductible. Which of the following would be true? A- Daisy would pay 1,960 B- the policy would pay $8,800 C- Daisy would pay $1,760 D- the policy would pay nothing
A- daves lost income Coverage is provided for daves loss of income. Unit: 18 purposes of disability
Dave and his passenger were injured in an auto accident with another vehicle. Dave's disability income policy would most likely cover which of the following? A- daves lost income B- the disability of the other driver C- his medical expenses D- the dismemberment of an arm of the passenger
B-risk retention Because one way to retained risk is self insurance. Setting up a fund to offset the cost of potential loss is regarded as self assurance.
Harold W. Has decided to set up a fund to Pay for potential medical bills. Harold has chosen which of the following methods of handling risk? A-Risk avoidance B- risk retention C- risk reduction D- risk transference
A- $1,200 Me. Pyle pays the stop loss amount of $1,000 plus $200 deductible (total $1,200). The first $5,000, the company pays 100% (basic medical ). Total bill-basic paid= $22,000- $5,000= $17,000 balance. $17,000-$200 deductible (pyle paid); $16,800•20%= $3,360 (stop-loss of $1,000) Unit 17
Homer Pyle has a $1,000,000 comprehensive medical policy in which the basic portion has a limit of $5,000. The policy has a corridor deductible of $200 and an 80/20 coinsurance provision. The policy has a stop loss feature of $1,000. Mr Pyles expenses were 22,000. How much would Mr. Pyle have to pay A- $1,200 B- $3,360 C- $3,400 D- $4,360
C- 5 months Disability benefits begin after the worker has satisfied a waiting period of 5 consecutive months, during which he or she must be disabled. Study unit 12: types of OASDI benefits
How many months is the waiting period for disability income benefits under the social security programs? A- 1 month B- 2 months C- 5 months D- 6 months
C- 48 months If a licensee loses an appointment for any line of business through any means, his or her qualifications for that portion of his or her license will remain valid for 48 months. However, the licensee May not engage in Insurence activity for that line of business until a new appointment is obtained. Study unit 26: code of ethics
If a licensee loses an appointment for any line of business, his or her qualifications for that portion of his or her license will remain valid for? A- 24 months B- 36 months C- 48 months D- 60 months
B- between the first day of disability and The day to which the disability must continue before it can result in the insured receiving benefits For example, if an insured chose a 60days elimination period, no payments would be made for the first 60days of disability. Unit 18
In an accident and health policy, the elimination period refers to the period A- between the effective date of the policy and the date on which any payments under the policy become due B- between the first day of disability and The day to which the disability must continue before it can result in the insured receiving benefits C- between the first day of disability and the actual receipt of payment for the disability D- during which any specific illness or accident is excluded from coverage
B- 40 For most people, the required number of credits is 40(representing approximately 10 years of work) Unit 12. Quarters of coverage
In order for a worker to be considered fully insured, how many quarters of coverage must be accumulated? A- 30 B- 40 C- 60 D- 100
D- doctors are paid on a fee for service basis The HMO pays the doctors a monthly fee for each subscriber on their list of patients whether or not a subscriber has received treatment. Unit 16
In which way does a PPO differ from an HMO? A- subscribers pay a fixed periodic fee B- stress preventive care C- subscribers may choose their doctor from a list of doctors who are under contract D- doctors are paid on a fee for service basis
D- the agent is guilty of twisting The practice of Including a policy owner with one company to lapse, forfeit, or surrender a life insurance policy for the purpose of taking out a policy in another is referred to as twisting. Twisting is subject to fine, revocation of license, and sometimes imprisonment. An agent who exhibits fraudulent conduct in committing the practice of twisting can be charged with a first degree misdemeanor if he/she displays fraudulent conduct and may be subject to a 5,000 fine for each non willful violation or 75,000 for each willful violation. Study unit 26: marketing practices
John Q agent persuades a prospect to lapse an existing policy in order to purchase a new policy. Which of the following statements is Correct? A- the agent acted in the best interest of the client B- the agent acted ethically and legally C- the action taken was considered to be a legal replacement D- the agent is guilty of twisting
D- $0 When the deductible is an integrated deductible, you subtract the basic medical limit from the deductible. $1,000 (deductible)- $3,000(basic medical) =-$2,000. When the results is less than 0 then the deductible is zero. Unit 17
Mary Harrison has a $50,000 comprehensive medical policy in which the basic medical portion has a limit of $3,000. The policy has 80/20 coinsurance provision and a major medical integrated deductible of 1,000. If Mary incurred covered expenses of $15,800, how much of the deductible would she pay? A- $1,000 B- $3,000 C- $2,800 D- $0
D- blue cross and blue shield are a for profit health care service organization
Regarding Blue Cross Blue Shield plans, which of the following is Incorrect? A- blue cross offers prepayment plans designed to cover hospital services B- in Florida, these organizations are considered mutual insurance companies C- blue shield covers surgical expenses and other medical services performed by physician D- blue cross and blue shield are a for profit health care service organization
C- elimination period is another term of the probationary period The probationary period is a one time only period that begins on the policys effective date and ends 15 or 30 days after the policy has been in force. Unit 18
Regarding the "elimination period " commonly found in disability income policies, which of the following statements is Incorrect? A- the period immediately following the onset of a covered disability during which no benefits are payable B- the elimination period can be compared to a deductible C- elimination period is another term of probationary period D- the longer the elimination period, lower the premium
D- all Insurence products Sliding is an unfair trade practice that applies to all Insurence products. Unit 26, marketing practices
Sliding is a unfair trade practice that applies to which of the following? A- Life Insurence products only B- health insurance products only C- annuities only D- all Insurence products
D- enforce criminal penalties against those who violate the insurance code Only The courts protect insurance companies and insureds by enforcing criminal penalties against those who violate the insurance code. Study unit: 26 office of regulation
The Chief Financial Officer and the other Office of Insurence Regulation has the power to do all of the following EXCEPT? A- Conduct investigation B- enforce insurance laws C- conduct examinations D- enforce criminal penalties against those who violate the insurance code
D- employers of less than 50 employees Also known as the "managed competition." it allows small businesses ( employers of less than 50 employees) to provide group health insurance coverage for its employees. Study unit 26: Florida employee health care access Act
The Florida employee health care access applies to A- service providers B- group health insurance providers C- employers of 50 or more employees D- employers of less than 50 employees
C- NAIC model legislation Because the Unfair Trade Practices Act is a model act written by the NAIC and adopted by the most states empowering state insurance commissioners to investigate and issue cease and desist orders and penalties to insurers for engaging in unfair or deceptive practices, such as misrepresentation or coercion.
The Unfair Trade Practices Act is a ? A- Federal Law B- State Law C- NAIC model legislation D- SEC directive
A- 10 days The free look periods vary according to the type of policy. Health and disability policies required a 10 day period. Life and Annuity requires 14 days, a Long Term Care and Medicare policies require a 30 day period. Study unit 26: free look
The existence of a "Free Look" privilege must be disclosed to the applicant. The Free Look period for health and disability policies is? A- 10days B- 14 days C- 30 days D- a minimum of 31 days
A- the inability of the insured to engage in "any occupation" for wage or profit The "any occupation" definition is the strictest. Example: if a surgeon can't perform surgery but is able to teach, lecture, etc no benefits will be paid. Unit 18
The following are four specific definitions of Total Disability used in disability income insurance. From the insurer's viewpoint, which is the most strict? A- the inability of the insured to engage in "any occupation" for wage or profit B- the inability of the insured to engage in his/her "own occupation" for wage or profit C- the inability of the insured to engage in "any occupation" for which he or she is reasonably suited by education, training or experience for wage or profit D- a combination of two of the above using a more liberal definition for the initial period of disability then charging to a more strict definition for the remainder of the disability
B- adverse selection Adverse selection means " selection against the company" it protects the company from paying for a sickness that existed prior to the issue date of the policy and for a stated period after the issue date ( pre-existing period) Unit 17
The preexisting condition exclusion in a health policy helps to protect the insurance company against which of the following? A- malingering B- adverse selection C- over insurance D- over utilization
D- defamation Defamation is declared to be unethical and is defined as making, publishing, or circulating any oral, written, or printed statement that is false, or maliciously critical of or derogatory to financial condition of any insurance company, or which is calculated to injure any person engaged in the business of life insurance. Study unit 26: rule, code of ethics
The unethical practice of making, publishing, or circulating any oral, written, or printed statement that is false, or maliciously critical of or derogatory to financial condition of any insurance company is referred to as? A- Misrepresentation B- twisting C- rebating D- Defamation
B- misrepresentation Misrepresentation are declared to be unethical. No person shall make, publish, disseminate, circulate, or place before the public, or cause, directly or indirectly, to be made, published, disseminate, circulated, or place before the public, in a newspaper, magazine, or other publication, or over any radio or television station, or any other way of advertisement, announcement or statements containing any assertion, representation or statement with respect to the business of insurance or whit respect to any person in conduct of his insurance business, which is untrue, deceptive or misleading. Study unit 26; misrepresentation :rule
The unethical practice of publishing Or circulating A newspaper, magazine, or other form of notice containing any untrue or misleading statements with respect to an insurance business which is deceptive or misleading is referred to as A- defamation B- misrepresentation C- twisting D- advertising
D- rest cures and normal custodial care Medical expense policies do not cover rest cures and normal custodial care Unit 17
Under a basic medical expense policy, which of the following is NOT covered? A- daily room and board B- miscellaneous expenses C- nurses expense benefits and convalescent care facility benefits D- rest cures and normal custodial care
B- relative value scale The relative value scale is similar to the surgical schedule method, except that instead of a flat dollar amount being assigned to every surgical procedure, a set of points is assigned Unit 17 medical expenses plan
Under basic surgical expense, which of the following methods assigns points to determine the benefit payable? A- surgical schedule B- relative value scale C- reasonable and customary approach D- Flat schedule
C- capital sum The capital sum is the amount payable for the accidental loss of sight or accidental dismemberment. Unit: 19 AD&D
What is the Dismemberment benefit payable under an AD&D policy called? A- principal sum B- dismemberment sum C- capital sum D- capitation sum
C- supply the insured with proof of loss forms within a specified time period It is the company's responsibility to supply a claim form to an insured within 15 days after receiving notice of claim. Study unit: 26 claim regulation
What must an insurer do when it receives notice of a claim ? A- nothing, wait for further information B- initiate contract with providers of health care services C- supply the insured with proof of loss forms within a specified time period D- send out a claims investigator immediately
A-Securities and Exchange commission SEC and the state Because in 1959, the Supreme Court ruled that federal securities laws applied to insurers that issued variable annuities and, thus require these insurers to conform to both SEC and State regulation. The SEC also regulates variable life insurance.
What two organizations regulate variables life and variable annuities? A-Securities and Exchange commission SEC and the state B- Federal Trade Commission FTC and the state C- National Association of Insurence Commissioner's NAIC and the federal Government D- Federal Communications Commission FCC and the state
C- reimbursement Medical expense insurance is typically based on a contract of reimbursement, meaning that the benefit an insured receives is not fixed but instead on the amount of the loss. It's purpose is to reimburse the insured for the amount of loss sustained(within limits) unit 17
When benefits are paid to a policy owner covered under a hospital expense policy, the policy is considered to be which of the following? A- service B- limited accident C- reimbursement D- special risk
A- McCarran- Ferguson Act of 1945 Because the passage of the McCarran-Ferguson Act of 1945 defeated the attempt by federal agencies to regulate insurance. This law made it clear that continued regulation of insurance by the states was in the public's best interest. This Act led each state to revise its insurance laws to conform to the federal law. Today the insurance industry is considered to be state regulated.
Which of the following Acts assured continues state regulation of insurance? A- McCarran- Ferguson Act of 1945 B- Securities and Exchange Act of 1933 C- Fair Credit Reporting Act of 1970 D- Financial Services Modernization Act of 1999
B- a written contract may be modified by oral evidence The parol evidence rule states that when parties put their agreement in writing, all previous verbal statements come together in that writing, and a written contract cannot be changed or modified by parol (oral) evidence. Parol evidence is oral or verbal evidence or that which is given verbally in a court of law Study unit 3, legal concepts
Which of the following concerning the parol evidence rule is Not correct? A- parol evidence is evidence that is given verbally in a court of law B- a written contract may be modified by oral evidence C- when parties put their agreement in writing, all previous verbal statements come together in that writing D- a written contract cannot be changed or modified by parol(oral) evidence
C- age The primary factors that enter into premium calculators for health insurance include interest, expense, types of benefits, and morbidity. Loading is the amount added to net premiums to cover the companys operating expenses and contingencies. Age, sex, occupation, and claims experience are other secondary factors. Unit 15: characteristics
Which of the following is Not a basic premium factor in health insurance? A- Expenses B- Morbidity C- age D- loading
D- Certificate of Authority An HMO is required to obtain a Certificate of Authority From the office of insurance regulation to provide services in Florida. The office will not issue a certificate unless the HMO first receives a valid Health Care Provider Certification from the Agency for Health Care Administration of Florida and met the other requirements set forth in Florida statutes. Study unit 26; regulation and licensing. HMO requirements
Which of the following is required to start an HMO in Florida? A- approval by the SEC B- An appointment C- approval by the NAIC D- Certificate of Authority
B- a disability income policy A disability income policy is the only policy written on a non cancellable and guaranteed renewable basis. Unit 18
Which of the following policies can be written on a non cancellable and guaranteed renewable basis? A- a major medical expense policy B- a disability income policy C- both a major medical expense and a disability income policy D- none of the above
B- waiver of premium With a waiver of premium rider, if the insured is totally disabled for specified period, usually three or six months, the insured will not pay the premium as long as the disability lasts. Unit 18
Which of the following provisions allows a policy to continue in force without further premiums because the insured became totally and permanently disabled? A- juvenile payor provision B- waiver of premium C- accidental death D- automatic premium loan
D- presumptive disability Presumptive disabilities include blindness, deafness, loss of speech, and loss of two or more limbs. Unit 18 presumptive disability
Which of the following provisions would provide full benefits for the rest of the benefit period if an insured suffered a stroke and lost the ability to speak? A- partial disability B- recurring disability C- Residual disability D- presumptive disability
B- social Insurence substitute The social security rider, sometimes called the "social insurance substitute" rider, provides for the payment of additional income when the insured is eligible for social insurance benefits but those benefits have not yet begun, have been denied or have begun in an amount less than the benefit amount of the rider. Unit 18
Which of the following riders provides for additional income while waiting for social insurance benefits to begin? A- cost of living adjustment rider B- social insurance substitute C- guaranteed insurability rider D- return of premium rider
B- speculative risk Because it involves the chance of gain and loss
Which of the following risks involves the chance of both loss and gain? A- pure risk B-speculative risk C- impure risk D- whole risk
C- premiums are collected weekly or monthly by the agent Because premiums are collected on a weekly basis by the agent at the policy-owners home
Which of the following statements applies to industrial Insurence? A- premiums are payable in a monthly or quarterly basic B- premiums are payable only on an annual basis C- premiums are collected weekly or monthly by the agent D- premiums must be paid by mail
C- waiver Because a waiver is the voluntary giving up of a legal, given rights.
Which of the following terms is used for the voluntary relinquishment of a known right ? A- Estoppel B- adhesión C- waiver D- Unilateral
