set 4

Deductible

the portion of the loss that is to be paid by the insured before any claim may be paid by the insurer

If the total monthly benefits paid under a disability income policy exceed one of the following—whichever is greater—then the insurer can reduce the benefits proportionally:

- the monthly earnings of the insured at the time the disability began - the average monthly earnings of the insured during the two years before the disability

Benefits paid to an insured by an individual disability income policy are

-tax-free.

Benefits received by a disabled employee from a group disability policy whose premiums are paid by an employer will be

-taxable.

Kristi purchases an annuity that will pay her husband an income for 15 years. If he dies, this income will become payable to their children for the remainder of the period. Kristi has what kind of annuity? A. Joint life with period certain B. Life annuity with survivorship C. Survivorship annuity D. Temporary annuity certain

Temporary annuity certain

When the recipient pays the premiums

When are group disability benefits considered to be tax-free to the insured? When the recipient pays the premiums When the employer pays the premiums When both the employer and recipient pay the premiums When benefits paid are equal to or lower than the recipient's salary

Fiduciary

Person in a position of financial trust

Medicare or Medigap do not

pay for treatment in a nursing home for anything more than a limited basis.

At what age are individuals become INELIGIBLE for Florida Health Kids Coverage? A) 21 B) 15 C) 16 D) 19

19 ( Only children under the age of 19 are eligible for Florida Healthy Kids coverage

Which of the following are responsible for enforcing specific administrative statutes enacted by Congress? A Cabinet-level federal departments B. State administrative agencies C. Law enforcement agencies D. Independent federal administrative agencies

A Cabinet-level federal departments

Tax Considerations — Group disability plan benefits paid to a disabled employee are

-taxable if premiums are paid by the employer.

Which of the following does not allow withdrawals or distributions for non-medical expenses?

-Limited policy

Disability income is one type of accident and health insurance contract. Which of the following is covered by this type of policy?

-Loss of income due to illness

COBRA states that the terminated employee may continue coverage under the employer's plan for up to 18 months as long as he or she pays the premium. The employer will

-collect the premium from the terminated employee at a rate of no more than 102% of the group premium. Employers are mandated to offer COBRA if they employ twenty or more employees.

HMO policies include

-common limitations with regard to benefits that are similar to limitations found in major medical and other forms of health insurance.

Long-term care insurance pays a benefit to an insured when

-he or she is unable to perform activities of daily living due to a physical or cognitive impairment.

Pure Risk

No chance for a gain

Aleatory

Outcome depends upon an uncertain future event. A contract in which there will be unequal exchange of money.

Which document helps ensure that full and fair disclosure is provided to the recipient of a policy? A) Outline of coverage B) Benefit of limitations C) Policy Summary D) Statute of limitations

Outline of coverage ( The outline of coverage is created to ensure full and fair disclosure to the recipient of a new policy. This document can be released at any time of the application or upon delivery of the policy)

Describe the Funding Method

Principal is funded either immediately with a single premium or over time with a series of periodic payments

Rescind/Recission

Recalling a policy due to misrepresentation or fraud

Fixed period settlement options are considered to be a form of what?

Annuity

Which of these statements regarding the annuitant is CORRECT? A. The contract can only be assigned by the annuitant B. The annuitant is the only individual who can surrender the contract C. The annuitant must also be the beneficiary D. The annuitant's life expectancy determines the annuity payments

The annuitant's life expectancy determines the annuity payments

Apparent authority

The appearance of or an assumption of authority based on words or actions on the part of the agent

*How does the grace period apply in a health insurance policy?

The grace period is a stated period of time after the premium due date during which the policy remains in force even though the premium has not been paid. The grace period applies to premiums other than the initial premium.

What will the beneficiary receive if an annuitant dies during the accumulation period? A. The greater of the accumulated cash value or the total premium paid B. The lesser of the accumulated cash value or the total premium paid C. The interest earned on the accumulated cash value D. Nothing

The greater of the accumulated cash value or the total premium paid

disability income insurance

The health insurance policy that is designed to provide periodic payments when an insured is unable to work because of sickness or injury i

In a group policy, who is issued a certificate of insurance?

The individual insured ( the certificate tells what is covered in the policy, how to file a claim, how long coverage will last, and how to convert the policy to an individual policy)

Insurer

The insurance company

The agent must provide an outline of coverage for a health policy to the applicant: Select one: a. Upon application only b. Upon policy issuance c. Upon policy delivery only d. Upon application or policy delivery

The outline of coverage must be provided to applicants upon policy delivery at the latest. The correct answer is: Upon application or policy delivery

Henry, an insurance prospect, meets with Lisa, a producer. Lisa determines that Henry would be well served by buying a long-term care insurance policy. While submitting the application, she learns that Henry receives Medicaid benefits. She submits the application, and the policy is issued. Which of the following statements about Lisa's actions is true?

The sale was prohibited.

Uniform Simultaneous Death Act

There is no evidence as to which party died first

Which of the following types of policies pays a stated amount for each day an individual is hospitalized? Hospital confinement indemnity Hospital endowment Short-term major medical Surgical expense

A)

How is a health provider reimbursed if they do NOT have an agreement in place with the insurance company? With a contingent fee With a scheduled fee With a usual, customary, and reasonable fee With a reasonably appropriate fee

C)

Kim has health insurance with a deductible of $500 and an 80/20 coinsurance. How much will she pay if she incurs a loss of $1,500? $200 $500 $700 $1,300

C)

Which type of coverage pays an amount per day for hospitalization directly to the insured regardless of the insured's other health insurance? MEWA Mutual Group Hospital indemnity

D)

Ron has a life insurance policy with a face value of $100,000 and a cost of living rider. If the consumer price index has gone up 4%, how much may Ron increase the face value of the policy? A) $400 B) $800 C) $2,000 D) $4,000

D) $4,000

Minimum Standards for Individual Health Insurance Policies: Hospital Confinement Indemnity Benefits

Hospital confinement indemnity insurance indemnifies the insured for hospitalization expenses for at least 31 days per confinement.

20

How many employees must an employer have for a terminated employee to be eligible for COBRA? 20 30 40 50

A minimum of 12 months after date of purchase (A deferred annuity is an annuity contract in which periodic income payments are not scheduled to begin for at least 12 months.)

How soon can the benefit payments begin with a deferred annuity?

Mindy became disabled while a group policy was in force. When the policy was terminated, which of the following is a responsibility of the insurer? Select one: a. Extension of benefits b. Offer conversion to an individual policy c. Both of the above d. None of the above

If Mindy was disabled prior to the termination of the group policy, benefits can be extended, and she must be offered the opportunity to convert to an individual policy. The correct answer is: Both of the above

Contain and offer and an acceptance

In order for a contract to be valid, it must Be filed with the state Be signed and witnessed by an attorney Be in writing Contain an offer and an acceptance

Last Survivor Policy

Mostly used by husband and wife for estate planning. Written for million dollars or more. It will pay on the death of the second to die.

Insurance

Transfers risk of loss from the insured to the company

The existing policy no longer meets the needs of the insured An advantage of replacing an existing health insurance policy with a new would would be when the existing policy no longer meets the needs of the insured.

Which of the following would be the advantage of replacing an existing health insurance policy with a new one?

If you are injured in the normal duties of your job, then what pays for surgery and physical therapy?

Workers compensation

Which of the following pays benefits on a relative value basis?

-Surgical expense coverage

Loss

A reduction in quality, quantity, or value of something

Limited policies are generally used to

supplement individual or group medical plans

Standard Risk

One that falls within the company's guidelines without requiring additional charges or special restrictions

Nonparticipating Life Policies

Policy not designated to pay the policy owner a dividend

Nonparticipating Life

Policy not designed to pay the policy owner a dividend

$100-$1,000

civil penalty for insurance code violation

information published under freedom of information act goes to ____ ____

federal register

The benefit limits are the

maximum benefits the insurer is willing to accept for an individual risk.

If agents or brokers engage in misrepresentation during the replacement of health insurance contracts, they may be exposed to errors and omissions liability as well as having their insurance licenses ........ or ........

suspended or revoked

Completion of Application

When an application form asks an applicant to provide answers to questions about his or her health to determine whether the applicant is eligible for coverage or to determine the existence of a pre-existing condition, the questions must be clear and precise. They should not lead the applicant to reply in unavoidably vague or general answers.

in order to determine the amount payable, the assigned points (relative value) are multiplied by a

conversion factor. This conversion factor represents the total amount payable per point

T or F All federal administrative agencies answer directly to the president.

False

Which of the following levels of care in a long-term care plan involves non-medically trained persons?

-Custodial care

A business overhead expense policy provides disability income protection for the owner of the business. All of the following are covered expenses under a BOE policy:

-Employee salary; Utilities; Rent

A business overhead expense policy provides disability income protection for the owner of the business. All of the following are covered expenses under a BOE policy, EXCEPT:

-Employer Salary

Per Capita

"Per Head" Each surviving child will receive an equal share of the proceeds

The three basic coverages

(hospital, surgical and medical) may be purchased separately or together as a package

PPOs differ from the HMOs in two ways

1. They do not provide care on a prepaid basis, but physicians are paid a fee for service 2. Subscribers are not required to use physicians or facilities that have contract with the PPO

Health Care False Claim Act: claim

A claim is any attempt to make a health care payer pay for health care.

Juvenile Insurance

An individual insurance policy for children

Federal administrative agencies are created by _________ A. the U.S. President B. general public elections C. the U.S. Congress D. the U.S. judiciary

C. the U.S. Congress

An example of a presumptive disability would be a stroke deafness diabetes cancer

Deafness

Custodial Care

Describes the kind of care a person needs who cannot perform the activities of daily living

ToF; not all substantive rules are subject to judicial review

F

Administrative law is a combination of substantive and ________ law.

Procedural

Preferred Provider Organization (PPO)

Provides services at a pre-determined fee

Moral Hazard

Results from individuals' values and character traits

T or F Administrative subpoena refers to an order that directs the subject of the subpoena to disclose the requested information.

True

A comprehensive health insurance policy

cover all sickness or accidents that are not specifically excluded.

Limited health insurance policies

only cover specific accidents or diseases.

a party who appeals administrative order to judicial review is called

petitioner

Broker

A licensed fire and casualty licensee who represents the client for a fee

Employers are required to comply with COBRA if they employ:

-Twenty or more employees

Who is the individual paid on a fee-for-service basis? Subscriber Administrator Insured Provider

D)

Health insurance policies include an exclusion provision. All of the following would be excluded under an accident and health policy, EXCEPT:

-Self-inflicted injury

The maximum amount of expenses that an insured is responsible for before a major medical plan pays 100% of remaining expenses is known as the:

-Stop loss limit

An insured who is covered by an HMO is known as which of the following?

-A subscriber

What type of policy provides benefit to a business if its director of sales becomes totally disabled?

-Key employee

Waiver of Premium

Allows for the waiver of premium payments in the event of the total disability of the insured

Contributory plan

Used in group insurance. Employers require that the employees help pay for their benefit plans by paying part of the premium

After the first premium has been paid

When does an immediate annuity begin making payments?

Annuitant

Person who receives an income benefit from an annuity

is eligible for coverage upon hire

According to HIPAA, when an insured individual leaves an employer and immediately begins working for a new company that offers group health insurance, the individual is eligible for coverage upon hire must wait 360 days to be eligible for coverage must continue coverage with the previous employer is eligible for only health insurance, not life or dental insurance

Buy Sell Agreement

An agreement that the deceased partner's interest will be sold to the surviving partners at the stated price

What is the straight life income option?

An annuity payout option that guarantees income for annuitant's lifetime.

3 years An insurance producer is required to maintain the usual and customary records pertaining to authorized transactions for 3 years.

An insurance producer is required to maintain the usual and customary records pertaining to authorized transactions for how long?

What are immediate annuities?

Annuities designed to make its first benefit payment to the annuitant at one payment interval from the date of purchase.

What are deferred annuities?

Annuities that accumulate interest earnings on a tax-deferred basis and provide income payments at some specified future date.

What is group accident and health insurance?

Group accident and health insurance is that form of health insurance covering groups of persons under a master group policy as limited by law.

Concealment

Intentional withholding of material facts that would affect an insurance policy's validity is called a(n) Estoppel Concealment Adhesion Misrepresentation

Define a Multiple Employer Welfare Arrangements (MEWA):

Multiple Employer Welfare Arrangements(MEWA) as an alternative to true group insurance to provide self-funded health care benefits to employees of two or more large employees.

A policyowner suffers an injury that renders him incapable of performing one or more important job duties. Any decrease in income resulting from this injury would make him eligible for benefits under which provision? Partial disability Nondisabling injury Presumptive disability Flat amount disability

Partial disability

Underwriter

People who assess risk and determine classification of the insured

Total disability is defined differently under some disability income policies. The two are

"any occupation" and "own occupation"

If an HSA distribution is made due to a disability of the account holder, the amount is subject to taxation but not the

- 20% tax penalty. Interest also accrues in the account tax free as well.

All of the following statements about long-term care insurance policies issued in Washington are correct

- An insured's age can be a reason to refuse renewal. - Indemnification must be on the same basis for sickness and for accident. - Riders, waivers, or endorsements cannot limit coverage.

Health Maintenance Organizations (HMOs)

- began to appear in the 1970s and offered to employers with more than 25 employees - offered for a monthly subscription fee - can be "closed panel", where HMO care providers are restricted to treating only HMO subscribers, or "open panel", where providers can also see non HMO patients

Medical Expense

- provides limited benefits for non-surgical expenses that are not charged by the hospital - include physicians expense, x-ray, lab, emergency room, ambulance, second surgical opinions, private duty nursing, and fixed dollar maternity

Many group medical expense plans are limited to specific types of benefits, although there are some that are

-broad enough to provide coverage for virtually any type of medical expense.

HMOs have been formed by

-employers, labor unions, private investors, insurers, physicians, hospitals and medical schools. There are several types of HMOs.

Health Savings Accounts (HSA)

-is a tax-sheltered savings account similar to the IRA, but earmarked for medical expenses. It is referred by some as the next generation of Medical Savings Accounts (MSAs). It has actually replaced MSAs.

This lifetime maximum limit generally applies to each covered person (or dependent). Some plans contain

-maximum limits for each cause of medical expenses (i.e., per cause limit). Other plans include an annual benefit limit that is restored at the inception of each policy period.

Disability Income Other Criteria — An insured's age will influence premiums since the older one is, the greater the tendency to become disabled. Therefore, the greater the risk to the insurer. An insured's gender will influence premiums because a female statistically seeks medical treatment more often than a male and therefore

-will pay a higher premium. An insured's occupation will impact rates since more hazardous occupations carry more risk. Therefore, a higher premium is required.

A policy that has lapsed may be reinstated. However, to protect the insurer against adverse selection, losses resulting from sickness are covered only if the sickness occurs at least 10 days after the reinstatement date. Losses due to accidental injury are covered immediately upon reinstatement of the policy.

...

Under the misstatement of age provision in a health insurance policy, if an insurer discovers that an insured gave a wrong age at the time of application, it can adjust the benefits. Benefit amounts payable in such cases will be what the premiums paid would have purchased at the correct age.

...

John owns an individual disability income policy paying $800 per month with a 30 day waiting period. If he is disabled for 90 days what amount paid by his policy is taxable as income?

0$

Insurance Policy

A written contract that outlines the obligations and responsibilities of the insured and the insurer

Substandard Risk

A greater than average risk for the insurer

What is the nonforfeiture value of an annuity before annuitization?

All premiums paid, plus interest, minus any withdrawals and surrender charges.

An indemnity plan pays both the insured and health care provider provides the insured a specific dollar amount for services pays the health care provider directly for services rendered is typically issued as a group plan

B)

An insured has a stop-loss limit of $5,000, a deductible of $500, and an 80/20 coinsurance. The insured incurs $25,000 of covered losses. How much will the insured have to pay? $500 $5,000 $5,400 $5,600

B)

An insured is protected from the expense of a catastrophic illness by which of the following health insurance provisions? Self-insurance Stop-loss Deductible Reimbursement

B)

An insured under a Major Medical expense plan with a zero deductible and 80/20 coinsurance provision files a $1,000 claim. How much of this claim is the insured responsible for? $160 $200 $600 $800

B)

At what point does a self-insured group qualify for stop-loss coverage? When the insured reaches an age stated in the policy When claims exceed a specified limit in a set period of time When claims exceed the policy's maximum lifetime benefit limit When the average claim amount exceeds the limit stated in the policy

B)

Distributions from a Health Savings Account (HSA) for qualified medical expenses are fully taxable tax-free partially taxable tax credits

B)

Jennifer is required to pay a specific sum out of pocket before any benefits are paid in a year. Her health policy most likely contains a(n) stop-loss provision deductible copayment out of pocket provision

B)

How are benefits financed under the Supplementary Part B of Medicare?

Benefits under Part B of Medicare are optional. If elected, they are financed by monthly premiums paid by the insured and supplemented by the federal government.

What is the name of the provision which states that a copy of the application must be attached to the policy when issued? A) Policy Summary B) Buyer's Guide C) Entire Contract D) Entire Policy

C) Entire Contract

an AJLs decision is referred to as

administrative order

All individual health insurance policies must include a notice of claim provision requiring that a written notice of claim must be given to the insurer within how long after the occurrence of the loss? A) 5 days. B) 24 hours. C) 20 days. D) 10 days.

C) 20 days. All individual health insurance policies must include a notice of claim provision. According to this provision, written notice of a claim must be given to the insurer within 20 days after a covered loss starts, or as soon as possible thereafter. The insurer must provide a claims form to the insured within 15 days of receiving notice of a claim. Failure to do so means that the insured may meet the time requirement for proof of loss by giving the insurer a written statement verifying the loss.

What is the purpose for having an accelerated death benefit on a life insurance policy? A) It allows for a spouse to be added as a rider to a life insurance policy B) It allows for policy loans to be advanced to the insured in the event of unemployment C) It allows for cash advances to be paid against the death benefit if the insured becomes terminally ill D) It allows for a third party to purchase a life insurance policy at a discounted rate and immediately advance a portion of the death benefit

C) It allows for cash advances to be paid against the death benefit if the insured becomes terminally ill

When it is used, the time limit on the certain defenses provision in a health insurance policy provides that the policy cannot be contested and claims cannot be denied after two (or three) years EXCEPT: A) for nonpayment of premiums. B) for mental incompetence of the insured. C) for fraudulent statements in the application. D) for incomplete policy records.

C) for fraudulent statements in the application.

*What are some of the common causes of loss that are not covered by typical health insurance contracts?

Common causes of loss not covered by typical health insurance contracts are: 1) intentional self-inflicted injury 2) act of war 3) military service 4) injuries in private aviation as pilot or crew member 5) losses due to preexisting conditions 6) *cosmetic surgery 7) expenses not associated with treatment of injury or sickness 8) mental disorders

All of the following plans allow for employee contributions to be taken on a pre-tax basis EXCEPT Section 125 Plan Premium Only Plan Cafeteria Plan Health Reimbursement Arrangement Plan

D)

Health insurance policies typically contain a provision stating that insureds and their insurer will share covered losses in an agreed proportion. Which provision does this refer to? Internal limit Stop-loss Deductible Coinsurance

D)

Major Medical expense plans provide coverage for each of the following EXCEPT Medically necessary surgery Diagnostic tests Blood and urine lab screens Work-related injuries

D)

Major medical expense plans typically use a cost containment measure for emergency hospital care. This is referred to as a(n) capitation exclusion limitation deductible

D)

_________ establishes the protocol that must be followed by an administrative agency while enforcing substantive laws. A. Formal ruling B. Substantive administrative law C. Informal ruling D. Procedural administrative law

D. Procedural administrative law

_________ consists of laws that regulate particular industries. A. Independent federal administration B. General government regulation C. Statements of policy D. Specific government regulation

D. Specific government regulation

Medical Expenses: reimbursement

Expenses may be paid directly to the insured, and the insured would be responsible for paying the medical expenses.

Civil penalty of not less than $100 and not more than $5,000 For any violation of the Unfair Claims Settlement Practices Act, the Insurance Commissioner may subject an insurer to a civil penalty of not less than $100 and not more than $5,000.

For violating the Unfair Claims Settlement Practices Act, the Insurance Commissioner may subject an insurer to which of the following penalties?

Errors & Omissions Insurance

Liability insurance which provides coverage for an act, error, or omission that agent or company makes

In discussing a long-term care program with a prospect, the agent should review which of the following carefully? Select one: a. The prospect's cognitive ability b. Their children's capacity to provide assistance c. The prospect's assets and financial situation d. Home devices that will aid mobility

Long-term care is an asset protection program. The primary risk for a long stay in a facility is spending down one's income and assets, making it difficult for other members of the family who may survive. The correct answer is: The prospect's assets and financial situation

Which of the following is true about Medicare/Medicaid and Medicare supplements? Select one: a. They can provide nursing home benefits needed for aging. b. Medicare and Medicare supplements can provide nursing home benefits from an injury for 6 months. c. They all provide nursing home benefits. d. None of the above

Medicare pays for nursing home care that is related to a covered illness or injury - not for aging. Medicare and Medicare supplements can provide nursing home benefits, but the coverage is limited and usually does not extend beyond 100 days and only if it follows hospital confinement. The correct answer is: None of the above

Marco, a 38-year-old accountant, applies for a health insurance policy that will replace an existing policy. Which of the following disclosure documents is he not likely to receive from the producer?

Medicare supplement Buyer's Guide

Medicare Supplement Health Insurance Act: Minimum Standards for Benefits; Exclusions for Pre-existing Conditions; Part A Deductibles and Coinsurance

Medicare supplement policies issued in or for delivery in Washington must include certain minimum standards for benefits.

If the policy is not a ....... supplement, the disclosures must state that the policy is not a ...... supplement contract.

Medicare, Medicare

Which of these statements concerning an individual Disability Income policy is TRUE?

Normally includes an Elimination period

Nonforfeiture

Not losing cash values, when policy lapses for non-payment. Three options to choose from: cash surrender, reduced paid up, extended term.

Andy the annuitant dies before the annuity start date. Which of the following is a TRUE statement? A. Principal returned is taxable B. Benefits are still payable tax-free to the beneficiary C. Company retains entire cash value D. Premiums paid plus interest earned is returned to the beneficiary

Premiums paid plus interest earned is returned to the beneficiary

An individual purchased a Medicare supplement policy in March and decided to replace it 2 months later. His history of coronary heart disease is considered a pre-existing condition. Which of the following is true? A) In replacement, pre-existing conditions must be waived, so sickness relating to coronary heart disease would be covered under the policies effective date B) Because this is a new policy, the pre-existing waiting period starts over C) The pre-existing waiting period fulfilled in the old policy will be transferred to the new policy, the new one picking up where the old one left off D) Coronary artery disease coverage will be permanently excluded from the new policy

The pre-existing waiting period fulfilled in the old policy will be transferred to the new policy, the new one picking up where the old one left off (When an replaces one Medicare supplement policy with another, the pre-existing conditions waiting period does not start over. All types of waiting and elimination periods does not start over. All types o waiting and elimination periods are carried over, not restarted, since that time was served with the original policy)

Long Term Care Adult Day Care —

This type of care is designed for seniors who live at home but whose family members are not able to stay at home with them during the day since the primary care giver is absent or at work. The level of care provided at adult day care centers is similar to home health care. These centers usually provide transportation to and from the center.

Indemnity

To restore one to the previous financial condition that existed prior to the loss

Any occupation

Total disability as the insured's inability to perform the duties of any occupation for which the insured is reasonably qualified by education, training, or experience

One formed under the laws of Oklahoma

Which one of the following is a domestic insurer?

The agent must take special care with the accuracy of the application in the interest of both the......and the........

company and insured

The term "................" refers to coverage of an individual under several kinds of health plans with no lapse of coverage for more than .... days.

creditable coverage, 63 days

group underwriter has the responsibility

deciding whether and on what basis the group may be insured, but also of drawing the contract in such a way as to prevent adverse selection against the insurer by individuals eligible for coverage.

Comprehensive major medical policies include a

deductible and coinsurance, and are generally sold on a group basis

a federal act that protects persons from harassment by federal administrative agencies

equal access to justice act

Disability policies provide benefits if the insured has suffered a disability caused by an accident or an illness. An accident is a

fortuitous event that is unexpected and unintended and results in an injury. This is generally referred to as accidental bodily injury. This may be contrasted with accidental means, a more restrictive definition of an accident, which indicates that the cause and result must be accidental or no coverage is provided.

Question 75 of 100 Janelle has a history of back problems. When she applies for a health insurance policy, the insurer issues a policy with a provision stating that the policy does not cover any loss or disability resulting from any injury to or disorder of the spine. Which type of rider has the insurer added to the policy? exclusion rider pre-existing condition rider impairment rider payment rider

impairment rider Explanation: An insurer will use an impairment rider to limit or exclude coverage for a specific condition an insured may have, such as back or spinal problems.

which of the following is NOT an example of utilization review?

ongoing inspection of accident prone individuals CORRECT: monitoring health of Hospital stay, monitoring the appropriateness of care, setting a hospital release date for patient

Elimination period is a waiting period that is imposed on the insured from the

onset of disability until benefits payments commence. It is a deductible measured in days, instead of dollars.

Home health care may involve all of the aforementioned types of care, or visits by an RN, LPN or a licensed vocational nurse (plus housework, meal preparation and certain types of therapy such as physical therapy), except that it is

provided in the patient's home rather than in a nursing facility. It is not performed in an institutional (nursing care facility) setting.

Social Insurance Supplement (SIS) or Social Security Riders are used to

supplement or replace benefits that might be payable under social security disability

An insured owns an individual Disability Income policy with a 30-day Elimination Period for sickness and accidents and a monthly indemnity benefit of $500. If the insured is disabled for 3 1/2 months, what is the MAXIMUM amount he would receive for an approved claim?

$1,250 3.5 months - 1 month elimination period = 2.5 months. 2.5 months X $500 monthly indemnity = $1,250.

N is covered under an individual Disability policy with a 30-day Elimination period and a monthly benefit of $500. N is totally disabled for 3 1/2 months. N's total benefit received on this claim is

$1,250 After the 30-day Elimination period has been satisfied, the total benefit paid on this claim is $1,250 ($500+$500+$250).

Limited Policy Plans do not:

(1) cover pre-existing conditions; (2) provide essential coverages as required by the Affordable Care Act; (3) qualify for Affordable Care Act cost assistance or subsidies; and (4) waive the "shared responsibility payment" or penalty fee / tax for not having approved insurance

Professional overhead expense plans are available to owners in a

- "profession" (i.e., physician, attorney, CPA, etc.).

Generally, Major Medical Expense Policies provide the following coverage

- Comprehensive coverage for hospital expenses (room and board and miscellaneous expenses, nursing services, physicians' services, etc.) - Catastrophic medical expense protection - Benefits for prolonged injury or illness

Policy Delivery

- Health insurance policies must be delivered to the insured within a reasonable time after they are issued. If an insurer relies on its producers to deliver its policies, the insurer as well as the producer is responsible for any delay by the producer in delivering the policy. - A producer is required to physically deliver the policy to the insured. A producer cannot simply hold the policy for safekeeping or other purposes, even if the insured acknowledges that the producer is doing so.

Standard Provisions: Reinstatement

- If a policyholder fails to pay the renewal premium within the grace period and the policy lapses, the policy will nevertheless be reinstated if the insurer accepts payment at a later date - insured must apply for reinstatement and the insurer will issue a conditional receipt to the insured until the application for reinstatement is approved. - If the insurer fails to approve the application within 45 days, the policy will be automatically reinstated unless the insurer has given written notice to the insured that it will not reinstate the policy. - will cover any losses after the reinstatement is signed and any sickness related loss 10 days after reinstatement - same coverage

Guaranteed Issue

- Insurers that issued standardized Medicare supplement plans B, C, D, F, F with high deductible, G, K, L, M, or N on or after June 1, 2010 must issue coverage under a 2010 plan of any of these types without evidence of insurability to any policyholder if the new policy replaces one of these types of policies issued before June 1, 2010. - Similarly, insurers that issued standardized Medicare supplement plan A on or after June 1, 2010 must issue coverage under a 2010 plan A without evidence of insurability to a policyholder if the new policy replaces a Medicare supplement plan A issued before June 1, 2010.

Business Overhead Expense

- covers a disabled owner; covers expenses such as rent, mortgage interest, utilities, and payroll - does NOT cover the business owner's salary - benefits paid are taxable

Key Person Disability

- covers the cost of hiring replacements plus it permits the owner to continue the salary of regular employees (third-party contract)

Permanent Disability

- total or partial disability that is expected to remain for the duration of life

Premium determination of income policies are based on several criteria. Each of the following will influence disability income premiums, EXCEPT:

-Mortality

Premiums paid for an individual disability income policy are not tax deductible. Monthly income benefits received from the plan when an insured becomes disabled are:

-Not taxable as income

The term "health" insurance is one that includes

-accident and health insurance, accident and sickness insurance, sickness insurance, disability income insurance, accident only insurance, travel accident insurance and many other forms.

HSA Tax Treatment — Contributions made by a family member on behalf of an eligible individual are tax-deductible. Employer contributions on behalf of an eligible individual are tax-deductible to the employer and excluded from

-employee income tax and not subject to FICA payroll taxes.

Speculative risk (i.e., gambling) may not be insured because

-it involves the chance for loss or gain.

HMOs also function on an individual practice association basis. These plans offer more flexibility with regard to subscribers selecting physicians and are also called

-open-panel plans. Many physicians participating in this type of plan provides services at their own office. They are able to treat HMO subscribers and any other patients who are not HMO subscribers.

commercial insurers refer to their clients as "insureds," while HMOs, Blue Cross/Blue Shield and others refer to such individuals as

-participants, members or subscribers.

Business Overhead Expense policies (BOE) cover legitimate business expenses such as

-rent, utilities, advertising, employee salary (i.e., the cost of labor) and expenses, depreciation and other costs associated with the operation of the business.

Types of Group Plans — Group disability income insurance consists of two primary products known as

-short-term disability (STD) and long-term disability (LTD).

There are four major levels of care including

-skilled nursing care, intermediate nursing care, custodial care and home health care.

BOE policies are written on a reimbursement basis. The business is reimbursed by the policy for actual overhead expenses incurred. Most BOE policies are written for benefit periods of one or two years only. Premiums paid on BOE policies are

-tax-deductible as a business expense.

premiums paid on individual plans of disability income or medical expense insurance are not tax-deductible. Therefore, the benefits received from such plans are generally not

-taxable as income

Coverage under group plans may be continued for certain employees and dependents even after employment has been terminated. COBRA, for example, provides for

-the continuation of group coverage after employment is terminated or the employee dies.

With a disability buy-out, If a partner becomes disabled, the monthly income benefit is generally paid to

-the corporation (i.e. firm) and then later paid to the disabled partner (or family) according to the terms of the buy-out / buy-sell agreement.

The grace period, entire contract, and reinstatement provisions are mandatory uniform provisions.

...

Most policies offer benefit periods of

1 year, 2 years, 5 years, and to age 65. Some plans offer lifetime benefits. The longer the benefit period, the higher the premium will be.

Health Care: *Preexisting Conditions (applies to groups of two or more and HMO group policies only)

1) Policies may not exclude coverage for preexisting conditions for longer than 12 months (18 months for late enrollees), with a six-month look back. 2) Genetic information is not a preexisting condition in the absence of a diagnosis. 3) No preexisting condition period may be applied to newborns, adopted children, or pregnancy. 4) Credit must be given for time served under other creditable coverage.

Two Major Types of Losses in Accident and Health Insurance

1. Loss of Income (Disability) 2. Hospital/Medical Expenses

Renewal Clauses

1. Optionally Renewable: insurer may cease coverage on the renewal date for any reason 2. Conditionally Renewable: insurer may cease coverage on the renewal date only if specified conditions exist at that time; premiums may be increased upon renewal only on a class basis 3. Guaranteed Renewable: insurer cannot cease coverage; premiums may increased only on a class basis 4. Non-Cancelable: insurer cannot cease coverage; premiums cannot be increased (MOST FAVORABLE)

The partial disability benefit is typically

50% of the total disability benefit, and is limited to a certain period of time

Under the annual deductible limit rule, the maximum amount that can be contributed to an MSA is ...% of the high-deductible plan for individuals or ....% of the family deductible for those with family coverage.

65% , 75%

Exists For profit A Fraternal Benefit Society is a nonprofit entity.

A Fraternal Benefit Society has each of the following characteristics EXCEPT

Non-payment of premium A Medicare Supplement policy may be cancelled for nonpayment of premiums due.

A Medicare Supplement policy may be cancelled for which of the following reasons?

Medicare Supplement Health Insurance Act: Medicare supplement insurer

A Medicare supplement insurer includes insurance companies, fraternal benefit societies, health-care service contractors, and health maintenance organizations. A direct response insurer is one who transacts insurance directly with a potential insured without the use of an insurance producer.

What type of group health plan allows the employer to assume varying amounts of risk, avoids premium taxes and minimizes administrative expense for a company? Select one: a. ASO arrangement b. TPA arrangement c. HMO plan d. PPO plan

A TPA (Third Party Administrator) will be able to provide a plan that allows an employer to assume varying amounts of the total risk, while providing administrative services to manage the plan. The correct answer is: TPA arrangement

When will the claimant send proof of claim

A claimant must submit the proof of claim to the insurer within one year, unless the claimant was legally incapacitated.

Mutual Company

A company that is owned by its policy owners

Mutual company

A company that is owned by its policy owners

Elimination Period

A period of time after an insured suffers a covered disability until benefits become payable (waiting period)

Beneficiary

A person whom the insurer will pay the death proceeds upon the death of the insured.

Minimum Standards for Individual Health Insurance Policies: Recurrent Conditions

A policy cannot specify that a recurrent condition must be separated by a period of more than six months.

A temporary insurance agent license can be issued for what maximum period of time? Select one: a. 90 days b. 120 days c. 180 days d. 1 year

A temporary license will remain in force for a period not to exceed 180 days. The correct answer is: 180 days

Tax-Deferred

A term that is used when income is earned on an investment but taxes are postponed until benefit payments (qualified plan)

When an insured has a major medical plan with first dollar coverage, how does this impact the benefits paid? No deductible payment is required Deductible specified in the contract is payable by the insured Insured must pay a percentage of covered losses An initial deductible plus a percentage of the remaining covered loss is owed by the insured

A)

Which of the following is a restatement condition? A) Proof of insurability B) Changes in the insuring clause C) Premium increase D) Premium decrease

A) Proof of insurability

Which of the following is true of the Administrative Procedure Act? A. It establishes how rules and regulations can be adopted by federal administrative agencies. B. It was enacted following the September 11, 2001 terrorist attacks. C. It provides for a uniform legal and justice system across the United States. D. It divides administrative power between the federal legislative branch and state legislatures.

A. It establishes how rules and regulations can be adopted by federal administrative agencies.

General government regulation consists of laws that regulate _________ A. businesses and industries B. government-aided organizations C. the executive branch of the federal government D. the legislative branch of the federal government

A. businesses and industries

All of the following are true regarding Small Employer Group Health plans, EXCEPT: A.) No probationary period may apply to new enrollees B.) It is subject to HIPAA portability rules C.) It is guaranteed issue if the employer agrees to pay the premium D.) It requires a minimum of two and a maximum of 50 eligible employees

A.) No probationary period may apply to new enrollees New enrollees in a Small Employer Group Plan who have no prior creditable coverage may be subject to a 12-month probationary period for pre-existing conditions they were treated for during the six-month period immediately prior to enrollment. Late enrollees may be on probation for up to 18 months.

Which of the following is true about the Social Security rider in a disability income policy? Select one: a. The rider may or may not continue when Social Security benefits start. b. An all or nothing rider pays the insured a benefit if Social Security pays nothing. c. An offset rider pays the insured a benefit that is reduced by any benefit paid by Social Security. d. All of the above

All of the statements are true about the Social Security rider. The correct answer is: All of the above

Return of Premium Rider (Disability Income)

Allows for a portion of the premium to be returned (refunded) to the insured if the policy owner (he/she) is permanently disabled. Refunds

Waiver of Premium Rider

Allows for the waiver of premium payments in the event of the total disability of the insured

Conversion

Allows insured to change the current plan to another plan, usually without evidence of insurability. Also a changing of a mutual company to a stock company

Tax-Deferred

Allows the cash values to accumulate without tax penalties and postpones taxation to a later date. A term that is used when income is earned on an investment but taxes are postponed until benefit payments (qualified plan)

**What is an Exclusive Provider Organizaton?

An EPO, or exclusive provider organization, is a new type of entity authorized by the 1992 Legislature. It is a provider that has entered into a written agreement with a health insurance company to provide health care services for certain insureds. It can offer these services through its own facilities or a network of health care professionals, or it may use another facility, such as an HMO.

An accidental death and dismemberment policy will pay benefits for all of the following losses, EXCEPT: Select one: a. Severance of an arm b. Loss of an eye c. Extended disability d. Loss of life

An accidental death and dismemberment policy will not pay a disability benefit. The correct answer is: Extended disability

What is the cash refund option?

An annuity payout option which guarantees total annuity fund is paid out; paid in lump sum to beneficiary if annuitant dies.

Life Annuity Certain

An annuity that pays income to the annuitant for life or to a named beneficiary for a period certain if the annuitant has died

Medicare Supplement Health Insurance Act: Applicant

An applicant for a Medicare supplement policy is the person who will be the insured or the certificate holder (in the case of a group Medicare supplement policy). A certificate is the evidence of insurance issued under a group Medicare supplement policy.

Fraud Deliberately lying in order to achieve a lower premium rate is considered insurance fraud.

An applicant for health insurance deliberately lies in order to obtain a lower premium rate. This is an example of

Commissioner of Insurance

An elected official who oversees all of the responsibility of the Department of Insurance

The following are considered eligible dependents:

An employee's spouse who is not legally separated from the employee; Dependent children up to age 26.; Natural, adopted and step-children up to age 26

1 month

An immediate annuity has been purchased with a single premium. When does the annuitant typically begin receiving benefit payments?

Alien Insurance Company

An insurance company incorporated outside the country

Foreign Insurance

An insurance company that is incorporated outside the state where it is conducting business

Health Care: *Maternity Coverage

An insurer may not: 1) deny the mother or her newborn eligibility, or continued eligibility, to enroll or renew coverage, for the purpose of avoiding the requirements of the bill 2) penalize, reduce or limit payment to a provider who complies with the bill 3) offer incentives to a provider to render care inconsistent with the law; or 4) restrict benefits for hospital length of stay which are less favorable than the benefits provided.

Accident

An unforseen event: result being property damage, loss, bodily injury or death

Implied Authority

Authorization to do something even though it is not in writing

Which of these would limit a company's liability to provide insurance coverage? A) Waiver B) Exclusion C) Rider D) Provision

B) Exclusion

Which of these is considered to be a Living Benefit option in a life insurance policy? A) Reinstatement B) Waiver of premium C) Accelerated death benefit D) Payor benefit

C) Accelerated death benefit

Which of the following does a policyowner NOT have a right to change? A) Payment mode B) Dividend option C) Dividend schedule D) Beneficiary

C) Dividend schedule

Which of the following protects a policyowner from a misrepresentation caused by an innocent mistake? A) Reinstatement clause B) Entire Contract clause C) Incontestable clause D) Nonforfeiture clause

C) Incontestable clause

All of the following are considered to be nonforfeiture options available to a policyowner EXCEPT A) Extended Term Insurance B) Cash Surrender C) Reduction of Premium D) Reduced Paid-Up Insurance

C) Reduction of Premium

3 hours

CE required in ethics

In case of loss of sight or accidental dismemberment, a percentage of that principal sum will be paid by the policy, often referred to as the

Capital Sum

HMOs that contract with outside physicians to provide health care service to their subscribers compensate those providers on a

Capitation basis (HMOs generally pay the provider a fixed amount per subscriber in exchange for the medical services agreed upon, called a capitation basis)

Conditional

Certain conditions must be met to make the contract enforceable

All of the following are true regarding HIPAA, EXCEPT: A.) Those who do not enroll in the group coverage on time may be subject to limitations B.) Small group medical expense covers groups from 2 to 50 employees C.) New employees may not be excluded from a group due to medical reasons D.) Small group policies are guaranteed issue and may not be cancelled for any reason

D.) Small group policies are guaranteed issue and may not be cancelled for any reason: Although small employer group coverage is both guaranteed issue and guaranteed renewable under HIPAA, small group policies may be cancelled for non-payment of premium. Remember, a small group is defined as a minimum of 2 and a maximum of 50 employees. By definition, a large group contains at least 51 employees.

Medicare Supplement Health Insurance Act: accident, accidental injury, and accidental means

Definitions for accident, accidental injury, and accidental means must be based on "results" language, so that whether an occurrence is determined to be an accident is based not on the actions that led to the result, but on the result itself.

An oral injury that requires repair A medical expense plan will normally provide dental coverage for an oral injury that requires repair.

Dental coverage in an employer-sponsored medical expense insurance policy will typically cover which of the following?

Common Disaster Clause

Determines the order of death when the insured and beneficiary die in the same accident.

Certificate of Insurance:

Each individual covered under the group policy is issued a Certificate of Insurance

All of the following are activities of daily living?

Eating, Dressing, Bathing

Rider

Endorsement to an insurance contract that modifies clauses and provision of the policy

The taxable portion of each annuity payment is calculated using what method?

Exclusion ratio

Administrative agencies are usually granted ________, such as the power to investigate and prosecute possible violations of statutes, administrative rules, and administrative orders.

Executive power

ToF; public notice and participation is required for interpretive rule

F

____ is a federal administrative agency that regulates radio, television broadcasting, and telecommunications

FCC

40 and older Group and individual health insurance policies must cover annual mammography screenings for women aged 40 and older.

Group and individual health insurance policies that provide coverage to women must cover annual mammography screenings for women aged:

Request for a blood test to detect presence of HIV virus HIV disclosure to an insurance applicant may include the request for a blood test to detect presence of HIV virus.

HIV disclosure for an insurance applicant may include which of the following?

Long Term Care Insurance

Health insurance that provides funds for people who need home health care, extended health care or nursing home care

Gift whose value is under $100 Gifts whose value is OVER $100 is considered to be a form of inducement and prohibited.

In Oklahoma, all of these are considered forms of inducement EXCEPT

What is Experience Rating:

In larger groups, rates may be based on past claims experience.

Guaranteed Renewable Insurance Contract

Insured guaranteed to renew the policy at each renewal date. Insurer cannot change the terms but may change the premiums for an entire class

What happens to interest earned if the annuitant dies before the payout start date?

It is taxable

Master Contract/Policy

It is used for group insurance. Employer owns the master policy, which outlines the coverage by the insurer. Employees receives a certificate of insurance

$50,000

Maximum fine for willful violation of the insurance code

How long does COBRA continuation last?

Maximum period of coverage continuation for termination of employment or a reduction in hours of employment is 18 months. For all other qualifying events, such as disability or death, the maximum period of coverage continuation is 36 months,

Question 58 of 100 Edward, age 65, is thinking about purchasing a Medicare Advantage plan. If he purchases a plan, his benefits can be administered through all of the following EXCEPT: Medicaid preferred provider organizations (PPOS) Medicare health maintenance organizations (HMOS) Medicare special needs plans

Medicaid Explanation: Under Medicare Advantage plans, Medicare beneficiaries can choose to have Medicare benefits administered by traditional Medicare or by Medicare health maintenance organizations (HMOS), preferred provider organizations (PPOS), private fee-for-service plans, and Medicare special needs plans.

Basic hospital, surgical and medical policies and the major medical policies are commonly grouped into what are referred to as

Medical Expense Insurance. They provide benefits for the cost of medical care that results from accidents or sickness.

Fixed period settlement option

Once a person has died, the death proceed is paid out as a level amount of money, which is principal and interest over a specified period of time

Fixed period settlement option

Once a person has died, the death proceed is paid out as a level amount of money, which is principal and interest over a specified period of time.

Standard Provisions: Payment of Claims; Time Payment of Claims

Once the insurer receives proof of loss, it is supposed to immediately pay the benefits due to the insured, the beneficiary, or the insured's estate. If benefits are to be paid over a period of time, they cannot be paid any less often than monthly. - payments in monthly or more

Noncontributory plan:

One in which an employer pays the entire premium and the employee does not contribute to the premium of the plan.

When does Medicare cover nursing home care?

Only if it is part of treatment for a covered illness or injury ( Medicare will NOT cover long-term care or nursing home care unless it is part of the treatment for a covered illness or injury)

A(n) ________ is a decision issued by an administrative law judge.

Order

Dividend

Paid on participating policies. Return to the policy owners of excess premiums charged for the insurance coverage and are not guaranteed

Which annuity payout option allows the policyowner to choose a pre-determined number of benefit payments? A. Period certain B. Straight life C. Installment refund D. Amount certain

Period certain

Accumulation Period

Period of time when the annuity contract is being funded (grows tax deferred)

Dread Disease

Policies purchased to cover a specific disease, such as cancer or heart disease

Free Look Period

Policy owner has the right to return the policy for any reason during a specific number of days and receive a full refund of premium. (10 days; or 30 days for senior citizens (60 or older)).

The primary purpose of the Coordination of Benefits Provision found in group Medical Expense coverage is to:

Prevent the claimant from profiting from an injury or sickness. Coordination of Benefit (COB) Provisions are designed to prevent the insured from collecting in full from more than one insurer. Usually, under COB, one policy is primary and the other is secondary. COB Provisions only apply to group insurance, not individual.

This amount is usually equal the amount of coverage under the insurance contract, or the face amount, paid for accidental death

Principal Sum

Cost of Living Rider

Provides an increase in the amount of insurance coverage without the insured proving insurability. Tied to consumer price index

Medicare

Provides health insurance benefits to eligible people over 65 and some disabled people prior to age 65

Contingent (Secondary) Beneficiary

Receives the policy proceeds if the primary beneficiary is deceased, also called contingent beneficiary

Admitted Insurer

Recognized by the Department of Insurance to transact insurance: approved or authorized

A Disability Income policyowner suffers a disability which was due to the same cause as a previous disability. Both disabilities occurred within a five-month period. The insurer may cover the second disability without a new elimination period under the

Recurrent Disability provision

Question 39 of 100 Stacey and Edna are both 45 years old, and each owns an individual long-term care policy with a two-year benefit period and a $150 daily benefit. However, Stacey's policy has a 30-day elimination period, while Edna's has a 90-day elimination period. Which statement is correct? Stacey's policy will cost more than Edna's policy. Edna's policy will cost more than Stacey's policy. Both policies will cost approximately the same amount. Stacey's policy will provide more coverage than Edna's policy.

Stacey's policy will cost more than Edna's policy. Explanation: When applying for an LTC policy, the policyowner selects the benefit period and daily benefit amount. The longer the benefit period and the larger the benefit amount, the more expensive the policy. However, longer elimination periods reduce the premium amount.

Which of the following groups would most likely be covered under a blanket accident policy? A) office workers for a retail business B) Factory workers at the automobile assembly plant C) Independent contractors who work for a general contractor D) Students at a public school

Students at a public school (Blanket insurance is issued on those groups that have members that are constantly changing)

________ law is law that an administrative agency enforces--federal statutes enacted by Congress or state statutes enacted by state legislatures.

Substantive administrative

For an individual to qualify for their employer's group coverage, they must: Select one: a. Work a minimum of 20 hours a week b. Have served any required probationary period of employment c. Not be pregnant if a female or have a pregnant spouse d. Serve a pre-existing condition probationary period

The basic requirement for any group is to be a full-time employee and serve the prescribed waiting period of employment. The correct answer is: Have served any required probationary period of employment

*What is the purpose of the "entire contract clause" in health insurance?

The clause states that the policy, its endorsements and any attached materials, including the application, constitute the entire contract of insurance. This assures that no other documents that are not actually a part of the contract can be used to deny claims or coverage

When does the waiver of premium rider take effect? Select one: a. At the moment of the disability b. When the claim is filed c. After a 30 day waiting period d. After 60 days

The waiver of premium rider will waive premiums retroactively (if necessary) to when the disability occurred. The correct answer is: At the moment of the disability

Offer & Acceptance

There must be a definite, unqualified offer by one party, and the other party must accept this offer in its exact terms. In insurance, the applicant usually makes the offer when submitting the application. If the first premium payment accompanies the application, acceptance takes place when an insurer's underwriter approves the application and issues a policy. If the first premium does not accompany the application, acceptance by the applicant occurs when the policy is delivered and the applicant pays the first premium.

Minimum Standards for Individual Health Insurance Policies

These standards are required in individual health insurance policies issued or delivered in Washington. However, they do not apply to long-term care, Medicare supplement, or disability income insurance policies.

Accidental bodily injury provision

Under a disability income policy, which provision would be payable if the cause of an injury is unexpected and accidental? Presumptive disability provision Absolute accidental provision Accidental death benefit provision Accidental bodily injury provision

Capitation

Used in HMO's Doctors receive payments regardless of services based on members in an area. When an HMO pays the doctor a flat monthly fee for every patient.

Certificate

What is issued to each employee of an employer health plan? Provision Receipt Policy Certificate

Equity-indexed annuity

Which of the following is an annuity that is linked to a market-related index?

A paid premium

Which of the following is an example of insured's consideration? Insurer's promise to pay benefits A paid premium Legal purpose Intent

Annuitization phase

Which of the following is considered to be the period when the accumulated value in an annuity is paid out?

Question 76 of 100 While taking an insurance application, Betty suggests backdating her client's application so that the proposed insured will be a year younger on the form. Is Betty's action ethical? Yes, as long as the application is backdated no more than 18 months. No; backdating is illegal. Yes; backdating up to a year is fine Yes, as long as it is for six months or less and authorized by the insurer.

Yes, as long as it is for six months or less and authorized by the insurer. Explanation: Insurers normally allow an applicant to backdate a policy by up to six months to qualify the applicant to have the policy issued at a younger age. The insurance company must authorize all backdating.

in special industries, warrantless searches are ____ considered _____.

automatically, valid

_____ are state agencies that license and regulate operation of banks

baking departments

These activities of daily living include:

bathing, dressing, eating, transferring or moving about the home, continence, toileting and taking medication.

Which of the following is a benefit trigger under a long-term care policy?

cognitive impairment

4years

commissioners term of office

The policy may also contain a provision which applies when more than one family member is injured in a single accident, also called the

common accident provision. In this case, only one deductible applies for all family members involved in the same accident

Which of the following would not be considered an activitiy of daily living (ADL) for the purpose of triggering benefits under a long-term care insurance policy?

communicating

power that administrative agencies are granted such as to investigate and prosecute possible violations of statutes, and administrative rules and orders

executive power

Supplementary Major Medical Policies are used to supplement the coverage payable under a basic medical expense policy. After the basic policy pays the supplemental major medical will provide coverage for

expenses that were not covered by the basic policy, and expenses that exceed the maximum. If the time limitation is used up in the basic policy, the supplemental coverage will provide coverage thereafter

Adverse selection takes place when

more people with high loss records buy insurance than people with average or below average loss records

Premiums paid on an individual long-term care policy are

not tax-deductible (unless the plan is qualified).The benefits received, therefore, will not be taxable.

Custodial care involves the handling of personal needs such as bathing, walking, eating, dressing or taking medication. Individuals providing such non-medical care are generally

not trained medical personnel, although the care must be approved and ordered by a physician (and supervised by a registered nurse).

Generally, APA establishes ____ ____ of federal agency action, _____ to be held in most cases, and requires certain procedural safeguards and protocols to be followed at these proceedings

notice requirements, hearings

informal rule making, aka _____ ____ _____, refers to review of all ___ and ____ ____, and announcement of ____ ___ ____

notice-and-comment rule making, written, oral comments, final rule making

The Gatekeepers role when used by an HMO is

obtaining referrals to Specialists from primary care physicians

Question 42 of 100 Mike and Joyce's health coverage is provided by their employer, Acme MFG, Inc. As such, how is their insurance provided? as individual policies as part of a state health plan on a group basis at a prohibitively high cost

on a group basis Explanation: Group health insurance is a key aspect of the health insurance market, and it is available to employer groups.

Limited Benefits may be paid......

on an expense-paid (reimbursement) basis or indemnity basis.

It is common in most vision expense insurance plans to restrict benefits to..... exam and ..... pair of glasses in any ......month period.

one exam, one pair, 12 month period

the purpose of the partial disability benefit is to cover a

partial loss of income when the insured is disabled to the point that he or she can still report to work, but is not able to perform al of the regular duties of the job

The capital sum is a

percentage of that principal sum paid by the policy, this happens in case of accidental dismemberment or loss of sight in one eye. The amount of the benefit will vary according to the severity of the injury.

Benefit limitations - the amount of monthly benefit that is payable under most disability income policies is based on a

percentage of the insured's past earnings.

LTC policies promise to pay benefits if the insured is unable to perform basic daily activities without assistance. Most policies require that an insured be unable to

perform two activities of daily living for at least ninety days.

Cabinet-level federal department members are appointed by _____ and confirmed by _____ ____ of the ____.

president, majority vote, senate

Federal Government Insurance companies

provides coverage for some disabled individuals and those over age 65 in the form of Medicare and Medicaid. Medicaid offers assistance as both a federal- and state-sponsored program. The federal government also offers disability insurance protection through the Social Security system.

The ...... and the ......... are the most common occasions for errors and omissions (E&O) situations to occur that may result in providing inadequate coverage or failure to maintain and service coverage.

sales interview and the policy delivery

The HMO provides benefits in the form of

services rather than in the form of reimbursement for the services of the physician or hospital. The HMO concept is unique in that the HMO provides both the financing and patient care for its members.

The probationary period applies to only

sickness, not accidents or injury

Medical savings accounts are only available to

small employers (with 50 or fewer employees) or a self-employed person. Generally, participants in the plan cannot have Medicare or any other health coverage that is not a high deductible health plan (HDHP).

Consideration

something of value that each party gives to the other. Insured- payment of premium and the representations made in the application. Insurer- promise to pay in the event of loss

There is no deductible in basic hospital expense coverage and the limits on room and board are set at a

specified dollar amount per day up to a maximum number of days

Payments for surgical expenses are usually fixed amounts based on a

surgical fee schedule. Insurance companies use fee schedules to determine the average cost of a procedure according to usual, customary and reasonable charges

Each basic surgical expense coverage contract has a

surgical schedule that lists the types of operations covered and their assigned dollar amounts. If the operation is not listed, the contract may pay for a comparable operation.

Premiums paid for BOE insurance are

tax deductible to the business as business expense. However, the benefits received are taxable to the business as received

A "notice to the applicant" must be issued to all applicants for health insurance coverage. This notice informs..... must be left with applicant

the applicant that a credit report will be ordered concerning his or her past history and any other health insurance for which they have previously applied.

Question 79 of 100 Standard Coal Corporation has 325 employees and is applying for a group health insurance plan. When underwriting the plan, the insurer will examine the risk characteristics of whom? the group as a whole selected segment of various categories of employees each individual employee employees who work in the coal mining industry as a whole

the group as a whole Explanation: When insurers underwrite group health insurance policies or plans, they examine the risk characteristics of the group. As a general rule, insurers do not accept or reject individual insureds within a group; they select or reject the group as a whole.

Question 47 of 100 Who is ultimately responsible for the health insurance advertisements of an insurance company? the insurance company the agent the advertising agency that creates it the Superintendent of Insurance

the insurance company Explanation: An insurer is responsible for all of its marketing materials. It must have a system of controlling the content, form, and distribution of these materials, whether an agent or ad agency is creating or distributing the materials.

A Limited Policy can include Accident Only — Pays a benefit if

the insured is injured in any type of accident, on or off the job.

Question 84 of 100 Which of the following provisions details how claims are paid? the payment of claims provision the reinstatement provision the grace period the physical examination and autopsy provision

the payment of claims provision Explanation: The payment of claims provision details how claims are paid.

Question 94 of 100 Under medical expense insurance the insurer assigns a price-a certain dollar amount or unit value-to each specific medical cost, procedure, charge, or aspect of coverage. What is this system? the policy's benefits schedule the policy's usual and customary charges the policy's basic medical expense plan the policy's hospital expense plan

the policy's benefits schedule Explanation: Under a usual and customary payment approach, the insurer bases its benefits on charges that are typical for the area in which the service is performed.

Question 23 of 100 All of the following entities mandate the size of a group health insurance plan EXCEPT: the state's attorney general the IRS the group's home state the insurer underwriting the plan

the state's attorney general Explanation: The IRS, the state insurance office, and the insurer all have a say in the qualifying size of a group plan. The state's attorney general is not involved

An outline of coverage must be delivered at

the time of application or upon delivery of the policy. except with direct response sales

A Limited Policy can include Short-term Medical Plans — Short term insurance plans provide coverage from

thirty (30) to one hundred eighty (180) days, or up to a year in some States. They are primarily used by those who are between jobs with employer-provided coverage, a new hire awaiting the start of employer-provided coverage, or between open enrollment periods. They are low cost plans that help bridge gaps in times of transition.

False Financial Statements

those that are intended to deceive public officials or the general public about the financial condition of an insurer. This often occurs when an important fact about the financial status of an insurer is deliberately withheld in order to present the company in a more favorable light.

A pre-existing condition in a Medicare supplement policy issued in Washington cannot be defined more restrictively than a condition for which medical advice or treatment was recommended by or received from a physician within how many months before the effective date of coverage?

three

10 days

time a hearing must be held following an application

A disability elimination period is best described as a

time deductible

Disability income and long-term care policies usually have a

time deductible in the form of elimination period

30 days

time given to request a hearing

The purpose of rules and regulations regarding advertisements:

to ensure truthful and adequate disclosure of relevant information to the consumer, and to prevent unfair competition among insurers.

formal rule making is a ____ ____ at which parties may present evidence, engage in cross-examination, present rebuttal evidence and such.

trial-like hearing

Insolvent

unable to meet financial obligations

Orthodontic care

will have a separate maximum and a separate deductible, which may differ from the deductible for restorative care.

When can a long-term care policy deny a claim for losses incurred because of a pre-existing condition? A) within 6 months of the effective date of coverage B) within 12 months of the effective date of coverage C) at any time D) at no time

within 6 months of the effective date of coverage ( A LTC policy cannot deny a claim for losses incurred more than 6 months from the effective date of coverage because of pre-existing conditions)

specific underwriting requirements will vary by........

insurer

Each of the following influences the premium charged for major medical coverage

-Stop loss limit; Coinsurance; Deductible

Disability Income Benefit Period —

-The maximum length of time for which an insured collects monthly income will also affect the premium charged. The most common monthly income benefit periods are 12, 24, and 30 months, 5 years, 10 years, 20 years, to age 65, or for life.

Stop Loss Limit (SLL) -

-These are the total "out-of-pocket" expenses that an insured incurs as a result of deductibles and coinsurance amounts.

Solvency

A measure of financial stability where assets exceed liabilities

Hospital and Medical Expense

A medical expense contract covers many of the expenses one incurs from an accident or sickness, such as a physician or hospital expense.

Individual and Group Eligible Expenses Covered:

Room and board Ambulance services, Nursing care (RN, midwife, nurse practitioner), Physical and speech therapy, Special diets, Emergency care, X-rays, Maternity benefits, Lab Fees, Home health care, Medication/Prescription drugs, Vision care, Medical supplies (casts, splints, crutches, braces), Blood and blood plasma, Operating room charges, Pacemakers, Anesthesia Charges for out-patient service centers, Radiation therapy, Physician services (M.D., osteopath, podiatrists, speech pathologists, chiropractors, dentists, therapists, psychologists, social workers, etc.), Hospital beds, Surgical expenses, Wheelchair rentals, Physician expense

Which market index is normally associated with an indexed annuity's rate of return?

S&P 500

permission that an administrative agency grants to persons or businesses to conduct certain types of commerce or profession

license

$25

license renewal fee

What is the accumulation period?

The time at which the funds are being paid into the annuity, which may continue after purchase payments cease because of interest.

Premiums charged for franchise insurance are generally...... than for an individual policy, but..... than group coverage.

less, more

Total Claim - Deductible - Insured's Share of Coinsurance =

$ paid by the Company

Pierre is covered by his employers group medical plan. His employer pays for 75% of the premium and he pays for 25%. How much would a $10,000 benefit be taxable as income under this plan?

$0 benefits that fall under a major medical plan are considered to be a reimbursement for a loss, and does not taxable as income.

Long Term Care Insurance model included the following:

-(1) Insurers must provide an outline of coverage to the consumer which summarizes the benefits and features of the policy; (2) The policy owner must be provided with a free-look period (usually thirty days) during which the policy may be returned to the insurer and a full refund of premium will be paid to the owner; (3) The policy may not include substantially greater benefits for skilled nursing care than that provided for intermediate or custodial care; (4) Policies must include a renewability provision of at least guaranteed renewable (the policy may be include a noncancelable provision); and (5) Impairment riders limiting or denying coverage for specific health conditions are not permitted.

CDHPs involve a three tier structure of payment for health care including:

-(1) a tax-exempt health account that an individual uses to pay for health expenses up to a certain amount; (2) a high deductible health insurance policy that pays for medical expenses beyond the deductible; and (3) a gap between those two on which the individual pays any health care expenses out of his or her own pocket.

The primary forms of health insurance with which the license candidate must be familiar includes

-(1) disability income insurance; (2) medical expense insurance; (3) alternative medical expense providers and; (4) long-term care insurance.

If a distribution is made to the MSA for a reason other than to pay for qualified medical expenses, the amount withdrawn will be subject to an income tax and an additional ....% tax.

20% tax

An HSA holder who uses the money for a nonhealth expenditure pays tax on it, plus a ....% penalty. After age ....., a withdrawal used for a nonhealth purpose will be taxed, but not penalized.

20%, age 65

In order for an employee to be eligible for small group insurance, he/she must work at least how many hours per week?

25

Question 12 of 100 Harold buys a long-term care insurance policy but decides not to keep it. How many days does he have to return it for a full refund of the premium? 10 14 21 30

30 Explanation: Long-term care insurance policies issued in Ohio must provide a free-look period of at least 30 days, during which time the insured can return the policy for any reason and receive a full refund of the premium.

Question 52 of 100 Horace buys a Medicare supplement insurance policy but decides not to keep it. How many days does he have to return it for a full refund of the premium? 10 14 21 30

30 Explanation: Medicare supplement policies issued in Ohio must provide a free-look period of at least 30 days, during which time the insured can return the policy for any reason and receive a full refund of the premium.

The entire contract provision of a disability income policy defines the contract to include all the following EXCEPT: A) any riders the insurer may unilaterally add to the policy in the future. B) the riders attached to it when the policy was issued. C) the properly completed and signed application. D) the policy document.

A) any riders the insurer may unilaterally add to the policy in the future.

If an impairment rider is attached to a health insurance policy, it will: A) exclude from coverage losses resulting from specified conditions. B) decrease the amount of benefits provided. C) increase the premium rate charged. D) lengthen the policy's waiting period.

A) exclude from coverage losses resulting from specified conditions.

A life insurance policy normally contains a provision that restricts coverage in the event of death under all of the following situations EXCEPT A) fare-paying passenger B) pilot of personal airplane C) suicide D) war

A) fare-paying passenger

When must an insurance company present an outline of coverage to an applicant for Medicare supplement policy?

At the time of application ( For Medicare supplement policies, the insurance company must present an outline of coverage to all applicants at the time of the application)

When must the Medicare Supplement Buyer's Guide be presented?

At the time of the application (Issuers of accident and sickness policies which provide hospital or medical expense coverage on the expense incurred or indemnity basis to the person eligible for Medicare by reason of age, must provide to that applicant a Medicare supplements Buyers Guide. Except for direct response issuers, delivery of the buyers guide must be made at the time of the application, and the insurance company must obtain a receipt)

"Maximum benefits" refers to the upper limit of the total lifetime benefits the insurance company will pay upper limit percentage of what the insurance company will pay for coinsurance upper limits of what the insured will pay in out-of-pocket expenses upper limits of what an insurance company will pay for any particular claim

B)

A pharmacy benefit covers prescription drugs derived from a list called a(n) administrative drug list drug formulary controlled substance list generic benefit manager

B)

Under Barbara's individual disability income policy, she has been receiving $700 a month for the last three years. This year, her benefit increased to $728. Which of the following is the most likely reason her benefit amount has gone up? A) The Social Security Administration increased its benefits. B) She has a cost-of-living (COLA) rider on her policy. C) Her policy contains a step-rate benefit that increases every three years. D) The severity of her disability has increased.

B) She has a cost-of-living (COLA) rider on her policy.

Which of the following riders allows an insurer to issue a health insurance policy to an individual that covers everything but a certain injury or illness? A) Multiple indemnity. B) Waiver for impairments. C) Preexisting condition. D) Optional exclusion.

B) Waiver for impairments.

A business disability buy-out insurance plan may include an "elective indemnity." This feature can be used to: A) reimburse other business owners or partners for the insured's loss of services to the business. B) pay a lump-sum death benefit to the insured's family. C) postpone payment of the benefit to the insured. D) enable the business owners to add other owners to the policy.

C) postpone payment of the benefit to the insured. Under the elective indemnity provision, the owners can elect to take either periodic payments or postpone the benefit until it is determined that the disabled owner will not recover sufficiently to return to work, thereby postponing the decision regarding the sale of the disabled owner's share of the business to the other owners.

2 years

CE compliance period

Which of the following policies would pay benefits to an insured for illness due to cancer only?

Dread disease policy

Viatical

Insurance paid to terminally ill persons. Typically in lump sum. Absolute assignment is required.

Commission

Money that is paid to an agent for selling an insurance company's policies

Level Premium

Premium on the policy remains the same throughout the length of the policy

Rate

The classification the insured is assigned and or the dollar amount paid for a policy

Fully Insured

Used in Social Security where the worker has paid in for 40 quarters or 10 years

Eligibility/Enrollment Period

Used in life and health group benefits. Period of time a employee can enroll for benefits without proof of insurability

When is a 10% penalty tax imposed on withdrawals?

When they are made before age 59 1/2.

Copayment

an arrangement in which an insured must pay a specified amount for services "up front" and the provider pays the remainder of the cost

authority of an administrative agency to adjudicate cases in administrative proceedings

judicial authority

false advertising

wide scope of communication, from publishing an ad in a newspaper or magazine, to broadcasting a commercial on television or the internet. They cannot include any untrue, deceptive, or misleading statements that apply to the business of insurance or anyone who conducts it.

application for license usually includes acceptance of ____ ____ from and ____ of interested parties

written comments, hearings

Most policies will pay the accidental death benefit as long as the death is caused by the accident and occurs within.....days.

90 days

Question 83 of 100 An insurer intends to terminate the group health plan of ABC Company. Generally, how much advance notice is required before the termination? 30 days 45 days 60 days 90 days

90 days Explanation: In general, insurers must notify the employer of their intent to discontinue a group health plan at least 90 days before terminating the plan.

Payor Rider

A waiver of premium on the juvenile policy. If the premium payor dies or becomes totally disabled, the premium is waived until the insured child reaches a specified age

When a child reaches the limiting age of a health insurance policy of the insured parent, and has an intellectual or physical disability, the insurer ma require proof that the child? A) Is incapable of self-sustaining employment because of the disability B) Is chiefly dependent upon the policyholder for support and maintenance C) Qualifies for total disability benefits D) A&B

A&B (The laws prohibit an insurance company from terminating coverage on a dependent who is and continues to be incapable of self-sustaining employment because of an intellectual or physical disability, and chiefly dependent upon the policyholder or subscriber for support and maintenance)

Low frequency diseases can be exclusively covered by what kind of health insurance policies? Limited policies Blanket policies Employer policies Restricted policies

A)

The elimination period in a disability income policy serves the same purpose as a(n) ______ in a medical expense policy. deductible coinsurance HSA reimbursement

A)

Major medical insurance plans provide a broad range of benefits under one policy since they cover hospital and surgical expenses but with a greater ceiling of coverage. In other words,

-major medical plans possess higher coverage limits than did the earlier plans.

One of the overall objectives of a consumer driven health plan is to

-make employees more cost conscious about their health care.

Pure risk is the only type of risk that

-may be insured since it involves the chance for loss only.

A Flexible Spending Account FSA) is an IRS Section 125 cafeteria plan that allows an employee to set aside a portion of earnings to pay for qualified expenses as established in the cafeteria plan, most commonly for

-medical expenses, dental and vision care, and prescription drugs, but often for dependent care (e.g., physically challenged dependent) or other expenses.

In managed care or HMOs scenarios, a member or subscriber may have a limited choice of providers versus

-medical plans which allow for a choice of any provider.

Medical expense insurance, which is generally referred to as "health" insurance, involves a wide range of benefits that can cover almost every expense connected with hospital and medical care. This type of coverage pays for

-medical services provided to individuals and their families.

A Limited Policy can include Blanket Policies — Pays a benefit for

-members of a covered group who are formed for a reason other than employment. Student of a college or a members of a team sport or summer camps may be covered by this type of coverage.

An individual or family member covered by these plans is referred to as an insured, whereas an HMO or PPO refers to covered persons as

-members or subscribers.

Most States provide automatic coverage for

-newborn infants from the moment of birth even if the newborn suffers from a congenital or inherited health condition. Even in cases where maternity coverage (i.e. pre-birth) may not be included, health insurance coverage for a newborn is covered (i.e. post birth) for a specified period of time.

Basic medical expense plans provide benefits in various ways. Some provide coverage on a fee for service or reimbursement basis. A provider (i.e., doctor) treats a patient, charges a fee and is

-reimbursed for services provided by the insurer.

Sickness or illness is defined as either a sickness or disease contracted after the policy has been in force at least

30 days; or a sickness or disease that first manifests itself after the policy is in force.

Medical Information Bureau (MIB)

A non-profit organization supported by (funded by) member life and health insurance companies. Prevents fraud and over insurance.

What is a "noncontributory" group health insurance plan?

A noncontributory plan is one in which the employer pays the total cost. Employees are not required to contribute to the plan through payroll deduction.

What kind of policy pays $100 daily benefit for a hospital stay with no deductible? Select one: a. Indemnity plan b. Basic plan c. Major medical plan d. Reimbursement plan

A plan that pays a flat amount without any schedule of benefits is an indemnity plan. The correct answer is: Indemnity plan

In a life insurance policy, the entire contract consists of A) policy and conditional receipt B) policy and all sales material C) policy and any verbal agreements D) policy and attached application

D) policy and attached application

All of the following are optional provisions in an individual accident and health insurance policy EXCEPT: A) loss-of-time benefit adjustment. B) illegal occupation. C) change of beneficiary. D) change of occupation.

C) change of beneficiary.

age 65 Medicare Supplement coverage permits an open enrollment period on a guaranteed issue basis upon reaching age 65.

Medicare Supplement coverage permits an open enrollment period on a guaranteed issue basis upon reaching

T or F The Privacy Act provides that documents in the possession of federal administrative agencies are confidential to the respective agencies and cannot be accessed by the public.

False

T or F The delegation doctrine only allows executive and legislative powers to administrative agency, and not judicial.

False

Consolidated Omnibus Budget Reconciliation Act

Federal law that applies to employers offering group insurance who have 20 or more employees. Election of employee to continue health insurance benefits under certain events: job, loss or death of spouse

Consolidated Omnibus Budget Reconciliation Act (COBRA)

Federal law that applies to employers offering group insurance who have 20 or more employees. Election of employee to continue health insurance benefits under certain events: job, loss or death of spouse

Employee Retirement Income Security Act

Federal law that outlines plan description and benefits for pension plans. Requires annual reporting and provides equality.

A physician opens up a new practice and qualifies for a $7,000/month Disability Income policy. What rider would the physician add if he wants the ability to increase his policy benefit as his practice and income grow?

Guaranteed Insurability Option rider

Tom has a rider on his disability income policy that guarantees the right to increase his benefits without a medical exam. What kind of rider is this? Waiver of premium rider Guaranteed benefit rider Payor benefit rider Guaranteed insurability rider

Guaranteed insurability rider

Bryce purchased a disability income policy with a rider that guarantees him the option of purchasing additional amounts of coverage at predetermined times without requiring to provide evidence of insurability. What kind of rider is this?

Guaranteed insurability rider A guaranteed insurability rider guarantees the insured the option of purchasing additional amounts of disability income coverage at predetermined times without requiring the insured to provide evidence of insurability.

Health Care: *What has Florida done to make sure the Florida Insurance Code conforms to the provisions of the federal Health Insurance Portability and Accountability Act of 1996 (HIPAA)?

HIPAA requires that any person with 18 months of creditable coverage, who does not have access to other health insurance, must be given access to an insurance policy. Creditable coverage includes a group health plan, individual health insurance delivered in Florida, Medicare and Medicaid as well as coverage by the Florida Comprehensive Health Association and others. However, the last period of creditable coverage must have been under a group health plan.

Lapse

Happens when the premium for the policy is not paid and grace period has expired

Free-Look Period

Medicare supplement policies must provide for a free-look period of at least 30 days, during which the buyer can return the policy for any reason for a full refund of the premium paid. If the refund is not paid within 30 days after the buyer returned the policy, the insurer must pay a penalty of 10 percent of the refund in addition to the amount due.

Which of the following it NOT an unfair Trade Practice under Florida state law with regard to HMO plans? A) Unfair claim settlement practices B) Failure to maintain claim handling procedures C) Twisting D) Operating an HMO on a closed-panel basis

Operating an HMO on a closed-panel basis (Florida law allows HMOs to operate as either open-panel or closed-panel)

Cancelable

Policy that can be terminated

Canelable

Policy that can be terminated

Family Protection Policy

Policy that provides protection for all family members. Term insurance for children and spouse. If a child converts to a permanent plan of life insurance, evidence of insurability is not required.

Nonoccupational Disability Income Policy

Policy that will only pay a claim when the disability occurs off the job

Participating Life

Policy which pays a dividend to its owners

Ordinary Insurance

Policy written on individual basis. It is either term insurance, permanent insurance or an endowment policy. Permanent plan and face amounts of nothing less than $1,000.

The three most important underwriting factors considered in accepting or classifying health insurance applicants are as follows:

Physical condition of the applicant and other insureds; Moral and morale hazards; and Occupation.

Individual Disability Income:

Premiums are Not tax-deductible; Benefits are Not income taxable

Group Medical Expenses Plan:

Premiums are Tax-deductible to employer (i.e., business expense); Benefits Not income taxable

Group A D & D:

Premiums are Tax-deductible to employer (i.e., business expense);Benefits Not income taxable

What does Coordination of Benefits (COB) provision do?

On a group medical expense plan, if a child is covered as a dependent on both of their parent's group plans where they work, the plan of the parent whose birthday comes first during the year is primary.

Conservation

When a company or agent tries to prevent a client from replacing an existing life or annuity contract with a different company. Effort to keep life insurance policies from lapsing

Question 86 of 100 To qualify for an insurance agent's license, a person must have all of the following EXCEPT: a college degree a good reputation and character a licensing fee 18 years of age

a college degree Explanation: To qualify for a license, an applicant must be at least 18 years old, be of good moral character, not have been convicted of a felony or crime involving dishonesty, complete a prelicensing education program, pay the licensing fees, be a U.S. citizen (or legally authorized to work in the United States), and pass the required state examination. A criminal background check may also be required.

The Massachusetts Child Health Insurance Program

a combination of state-initiated and Medicaid expansion programs that provides insurance for children in low-income families.

Question 98 of 100 How late in the year can flexible spending account (FSA) participants apply their contributions for any one year? as late as March 1 of the following year as late as April 15 of the following year as late as March 15 of the following year as late in the year as necessary

as late as March 15 of the following year Explanation: Participants can apply the FSA contributions they made for any one year as late as March 15 of the following year

Other benefits that are available include but are not limited to:

assisted living care, adult day care (that must be provided in a legally operated and licensed facility that provides care at least five days a week), care coordination, case management, alternate care, community care and respite care.

under florida health insurance policy, medical coverage of a newborn begins?

at birth ( Coverage for a newborn begins at birth in the state of Florida)

What is the Medicaid program?

at is the Medicaid program? This is a federal program, under the Social Security Act amendments of 1965. It is a program under which the federal government makes grants to the states to help fund health care benefits under public assistance programs. It is basically a welfare program for persons with insufficient income or resources to pay for health care. Each state manages it's own Medicaid program .

Comprehensive major medical plan is a combination of

basic expense coverage and major medical coverage, sol as one policy. They cover practically all medical expenses, hospital, physicians, surgical, nursing, drugs, laboratory tests, etc.

To be eligible for a Health Savings Account, an individual must

be covered by a high deductible health plan (HDHP), must not be covered by other health insurance, must not be eligible for Medicare, can't be claimed as a dependent on someone else's tax return.

As opposed to the limited coverage available under the Basic Medical Expense Policies, Major Medical Expense Policies offer a

broad range of coverage under one policy.

Accidental Death and Dismemberment (AD&D) coverage

can be written as a rider or as a separate policy. It is, however, most frequently part of group life and group health plans. It provides for the payment of a lump-sum benefit in the event that the insured dies from an accident, as defined in the policy, or in the event of loss of certain body parts caused by an accident.

LTC plans include a provision describing that the policy will pay benefits if the insured is suffering from a cognitive impairment. This impairment includes

a senior suffering from Alzheimer's disease, strokes or other types of brain damage or dementia.

Riders

added to the basic insurance policy to add, modify or delete policy provisions

Basic dental plans generally cover

diagnostic and preventive services such as x-rays, cleaning and fluoride treatment. Coverage for restorative services may added (non-routine) which include fillings, oral surgery and periodontics (e.g., gum disease).

With Disability Income insurance, an insurance company may limit the monthly benefit amount a prospective policy holder may obtain because of the insured's

gross income at the time of purchase

When determining the monthly benefit amount for a Disability Income policy, the factor that limits the amount a prospective insured may purchase is

income When determining the monthly benefit amount for a Disability Income policy, the factor that limits the amount a prospective insured may purchase is income.

Question 92 of 100 Your client suffered injuries from a gunshot wound. Further investigation showed that the injuries were sustained in connection with a criminal activity. Which provision would protect the insurer from liability for a claim? conformity with state statutes illegal occupation intoxicants and narcotics hazardous occupation

illegal occupation Explanation: The illegal occupation provision protects the insurer from claims made for injuries resulting from criminal activity. The insurer can deny liability when the insured's claim arises from an illegal activity he or she participated in.

Routine and major restorative care

includes treatments for cavities, oral surgery, bridges and dentures. These procedures are covered up to a specific maximum, subject to an annual deductible per insured family member and a coinsurance.

Boycott and Intimidation

it is illegal to be involved in any activity that is intended to restrict fair trade or to create a monopoly

there is no ____ in administrative proceeding

jury

Health conditions covered under the current policy may..... be covered under the new policy because of pre-existing condition limitations, or new waiting periods may be required in a new policy.

not

In replacing one policy for another The agent also must make sure that the current policy is....... cancelled before the new policy is issued.

not cancelled

The HMO tries to limit costs by only providing care from physicians that meet their standards and are willing to

provide care at a prenegotiated price

minimum creditable coverage is designed to

provide individuals with financial access to a broad range of health care services, without incurring severe financial losses as a result of serious illness or injury.

Private insurance companies

provide the large portion of all individual and group health insurance.

The purpose for the probationary period is to

reduce the chances of adverse selection against the insurer. This helps the insurer guard against those individuals who would purchase a disability income policy shortly after developing a disease or other health condition that warrants immediate attention.

Skilled nursing care consists of daily nursing and rehabilitative care that may be performed by (or under the supervision of) skilled medical personnel and based on the orders of an attending physician. This involves

twenty-four hour nursing service subject to periodic review by a physician.

All of the following are basic expenses covered by a hospital expense plan

-Room and board; Diagnostic tests; Lab fees

30 days

for insurer to file notice of appointment

An insurance company or an agent cannot disclose any personal or privileged information about an individual unless any of the following occurs: A ....... authorization by the individual dated and signed within the past....months has been provided;

written, 12 months

Which of the following provides relief for a primary care giver?

-Respite care

T or F All substantive rules are subject to judicial review.

True

How are acts of war and aviation treated under a group life insurance policy? A) Optional rider B) Policy exclusion C) Covered hazard D) Mandatory provision

B) Policy exclusion

All of these are characteristics of a major medical expense policy EXCEPT large benefit maximums deductibles elimination periods coinsurance

C)

What is the tax liability for employer contributions in Health Savings Accounts (HSA's)?\ Taxable as regular income to the employee Tax-deductible expense to the employee No tax payment needed Taxable to the employee when they exceed 7 1/2 % AGI

C)

Which of the following is NOT included in comprehensive major medical plans? Maximum coverage limits Coinsurance First-dollar coverage Deductibles

C)

A fee for service health insurance plan will normally cover vitamins and natural remedies cosmetic procedures gym membership a disease

D)

The taxable portion of each annuity payment is calculated using which method? A. Exclusion Ratio B. Taxable Ratio C. Cost Basis D. Tax Basis

Exclusion ratio

Concealment

Failure to communicate information which a party to a contract knows and should communicate

Prescription drug coverage

an optional benefit under a group medical policy. Generally, the insured pays a copayment amount (like $10) and the insurance company pays the balance. There are generally limitations on quantities that one can purchase at one time (such as 30-day supply).

5 years

examine domestic insurers (also foreign & alien)

A producer's function as the field underwriter is

to gather credible information from an applicant that would assist the underwriter in screening marginal or unacceptable risks before taking an application for an insurance policy.

family deductible whereby the annual deductible is satisfied if

two or more family members pay a deductible in a given year, regardless of the amount of claims incurred by additional family members

"any occupation" definition of total disability requires the insured to be

unable to perform any occupation for which he or she is reasonably suited by reason of education, training or experience

Accidental bodily injury means the damage to the body is

unexpected and unintended.

Life Insurance

A form of insurance that pays off upon death of the person insured

Life insurance

A form of insurance that pays off upon death of the person insured

Business Health Partnerships:

Premiums Tax-deductible to partnerships (paid by partnership); Benefits Not income taxable

Business Overhead Expense:

Premiums Tax-deductible to the business; Benefits Taxable as income to the business. NOTE: Taxable benefits are then used to pay business expenses which are then tax-deductible.

Group Long-Term Care:

Premiums are Tax-deductible to employer (i.e., business expense); Benefits Not income taxable

Again, disability income policies are designed to protect one's earned income. This type of insurance will generally provide coverage until

-an insured retires and no longer earns an income.

All of these are standard exclusions found in a life insurance policy EXCEPT A) hazardous occupations B) aviation C) disability D) war

C) disability

With CDHPs Individuals have the opportunity to save money that they do not spend this year for

-health care expenses in future years (in some plans one can withdraw funds for retirement).

Which policy provision protects the policyowner from unintentional lapse of the contract? A) Grace period B) Free look period C) Incontestability D) Settlement options

A) Grace period

An adverse underwriting decision is not permitted if based solely upon the presence of symptoms, but only if HIV is confirmed in .......to the symptoms.

relation

When the relative value approach is used, each surgical procedure will be assigned a number of points that are

relative to the number of points assigned to the maximum benefit. The maximum points are usually assigned to major surgical procedures, such as open-heart surgery

With regard to claims, if an insurer fails to provide an insured with claim forms the insured may file an

-unfair claim grievance with the Department of Insurance and send to the insurer a provider certified explanation of the medical procedures and treatment received.

All of the following are required provisions for accident and health policies EXCEPT: A) entire contract and changes. B) misstatement of age. C) change of beneficiary. D) proof of loss.

B) misstatement of age.

If the group disability plan is contributory, the percentage of income benefits received is

-taxed proportionately in relation to the percentage of the premium paid by an employer. For example, if an employer pays 80% of the group disability premium, 80% of the benefit received by the disabled employee is taxable.

Individuals may avoid this penalty by filing an affidavit stating that ......... formed the basis of their refusal of creditable coverage.

religious beliefs

Surgical Expenses

- covers a surgeon's fee for procedures done while hospitalized - a surgical schedule in the policy states a relative value that determines maximum benefit payable using a conversion factor (absolute values are rare and do not use conversion factors) - operations not listed are paid on a usual and customary and reasonable basis (UCR)

Medical Expense Policies

- deals with medical expenses that are incurred when an individual become sick or injured - types: 1. Basic Medical Expense 2. Major Medical Policies 3. Comprehensive (Supplemental) Policies

Major Medical Policies

- developed to cover CATASTROPHIC medical expenses - an "all-risk" concept of coverage in that all medical expenses will be covered unless specifically excluded from coverage

Social (Government) Disability Insurance

- disabilities may also be eligible for benefits provided by some form of social insurance - private policies will coordinate their benefits to consider the possibility of over-insuring individuals who receive social program benefits **Social Security and Workers Comp**

Multiple Employer Welfare Arrangements (MEWA's)

- groups of employers who pool together in order to provide group insurance benefits to their employees; employer must first join a Trust Agreement - must be established by an association of employers or professional that is governed by a constitution or by-laws - MEWA's may be formed on a self-funded or fully funded basis - self-funded MEWAs are not subject to the Guaranty Association

Accidental Death and Dismemberment

- pays a scheduled amount for each specific type of loss - pays FACE (PRINCIPAL) amount if killed accidentally; payable to a beneficiary - pays some percentage of the face amount or (CAPITAL) amount for dismemberment

In a PPO, all network providers are considered

"preferred," and you can visit any of them, even specialists, without first seeing a primary care physician. Certain services may require plan pre-certification, an evaluation of the medical necessity of inpatient admissions and the number of days required to treat your condition

HSAs are linked to high deductible insurance. A person may obtain coverage under a qualified health insurance plan with established minimum deductibles ($....... for singles and $...... for families in 2021).

$1,400, $2,800

HSA: Each year eligible individuals (or their employers) are allowed to save up to certain limits, regardless of their plan's deductible (current contribution limits are $...... for singles and $....... for families).

$3,650, $7,200

$......... in life insurance death benefits, but not more than $........ in net cash surrender and net cash withdrawal values for life insurance. $........ in health insurance benefits, including any net cash surrender and net cash withdrawal values. $........ in the present value of annuity benefits, including net cash surrender and net cash withdrawal values.

$300,000 life insurance $100,000 net cash surrender life Insurance $100,000 health insurance $100,000 Annuity Benefits

The LTC policy is designed to pay a daily benefit for at least twelve consecutive months once a reasonable waiting period is satisfied. These daily benefit amounts generally are available from

$50 to $250 per day but will vary depending upon the level of care provided. For example, the benefit for skilled nursing care is greater than home health care

Question 29 of 100 Hector's long-term care policy has a 30-calendar-day elimination period and pays a $200 daily benefit. On March 1, his doctor certified that he needed long-term care assistance, and a home health aide began coming to his home every day, at a cost of $100 per day. Ninety days later, Hector improved and no longer needed such care. What amount of benefits will his policy pay? $9,000 $12,500 $6,000 $0

$6,000 Explanation: Hector's policy will begin paying benefits once the elimination period has ended, which means that it will pay benefits from day 30 to day 90. Over this 60-day period, the policy will pay $6,000 in benefits ($100 per day).

In addition, a qualified plan according to The Health Insurance Portability and Accountability Act of 1996 (HIPAA) is one that:

(1) cannot pay expenses that are reimbursable under Medicare; (2) is at least guaranteed renewable; (3) does not include a cash surrender value; (4) only provides long-term care services; (5) complies with various consumer protection provisions; and (6) states that all refunds of premium and policy owner dividends, if any, must be applied as future reductions in premiums or to increase future benefits.

A Limited Policy can include Critical Illness or Specified Disease — This type of policy pays a lump sum benefit when an insured is diagnosed with a covered illness or disease. Also referred to as dread disease plans, these policies may cover individual diseases including but not limited to:

(1) heart disease, including heart attacks, bypass and other cardiac surgeries; (2) stroke; (3) organ transplants; (4) paralysis and amputations; (5) rheumatoid arthritis; (6) presumptive forms of disability such as loss of sight, hearing, speech and limbs; (7) multiple sclerosis and muscular dystrophy; (8) dementia; (9) autoimmune diseases such as lupus; and (10) various infections.

A Limited Policy can include Cancer Only Policy — Pays a specific indemnity limit (i.e., dollar amount) for treatment of cancer only expenses. Benefits paid are generally for specified events such as:

(1) hospital confinement; (2) radiation and chemotherapy treatment; (3) medical imaging (e.g., MRI); (4) hospital confinement; (5) immunotherapy; (6) cancer screening; (7) experimental treatment; and (8) outpatient surgical benefits. This type of coverage is used to supplement individual or group medical plans.

A Limited Policy can include Vision Care — This coverage is available as an individual or carve-out plan, or through a group health insurance plan. It may provide coverage for:

(1) routine eye exams by an optometrist or ophthalmologist: (2) vision correction: and (3) basic frames (upgrades of frames must be paid by the insured). Routine eye exams are generally covered since other health problems such as high blood pressure, diabetes or kidney problems may be discovered during a routine eye examination. Benefits are generally provided on a reasonable and customary basis. These plans usually do not cover safety lenses, prescription sunglasses, plastic lenses, upgrades of frames, benefits for necessary eye surgery or treatment for eye diseases. The latter two exclusions are covered by a medical expense plan. In addition, some plans do cover elective procedures to improve vision such as LASIK surgery.

Recurrent Disability is generally expressed in a policy provision that specifies the period of time

(usually 3-6) months), during which the recurrence of an injury or illness will be considered as a continuation of a prior period of disability. The significance of this feature is that recurrence of a disabling condition will not be considered to be a new period of disability so that the insured is not subject to another eliminati0n period

Standard Provisions: Grace Periods

* A policyholder is entitled to the following grace periods following the premium due date, during which the policy remains in force: - at least seven days for policies with premiums that are due weekly - at least ten days for policies with premiums that are due monthly - at least 31 days for all other policies

Basic Medical Expense

- pays hospital confinement expenses on a reimbursement basis (paying benefits to the policy holder) or on a service basis (to the medical professionals) - combination of a hospital policy, basic medical policy, and surgical coverage - generally do not have a deductible or coinsurance feature (1ST DOLLAR COVERAGE)

Important stuff from Health Laws 11 under question *What are the key requirements of the Florida Employee Health Care Access Act?

*Preexisting exclusions are limited to 12 months for conditions manifested during the previous 6 months for small employers with two (2) to 50 workers. Florida law provides that no preexisting condition exclusion may apply to pregnancy for groups of two or more. Exclusions are limited to 24 months for conditions manifested during the previous 24 months for employers with one worker. *Under the act's "portability" provision, a worker or dependent will have to meet the waiting period for an existing condition only once, even if the individual changes employers and insurers. Eligibility for this "portability" provision is limited to workers or dependents that have had qualifying previous coverage continually to a date not more than 63 days before the effective date of the new coverage

For long-term disability plans, elimination periods are available just like they are for individual plans

- 30, 60, 90, days, etc. Again, a primary purpose of an elimination period is to lower the cost of disability insurance for the benefit of everyone.

Standard Provisions: Entire Contract Clause

- A health insurance policy must specify that the policy, any endorsements, and any attached documents constitute the entire insurance contract. - Changes to the contract are invalid unless they are approved and endorsed by an officer of the insurance company. A producer cannot change the terms of the policy.

Open Enrollment

- A health insurer cannot deny or condition Medicare supplement insurance on an applicant's health status, claims experience, receipt of health care, or medical condition when the application is made before or during the six-month period that begins with the first day of the first month in which the applicant is at least 65 years old and is enrolled in Medicare Part B. - If the applicant submits the application within this period and has had a continuous period of creditable coverage of at least three months, the insurer cannot exclude any pre-existing conditions. If the creditable coverage is less than three months, the insurer must reduce the exclusionary period by the amount of time that the applicant had satisfied for a pre-existing condition before enrollment.

Minimum Standards for Individual Health Insurance Policies: Noncancelable or Guaranteed Renewable Policies

- A noncancelable or guaranteed renewable policy cannot terminate a spouse's coverage just because the insured's coverage was terminated, unless the insured did not pay the premium. - if the insured dies, the spouse will still be covered - The terms noncancelable or guaranteed renewable cannot be used in a policy without further explanation of their meaning. - can be used when the insured has the right to continue the policy by paying premiums until they are 65 or ready for Medicare.

Health insurance policies issued in or for delivery in Washington are forbidden

- A policy cannot impose a probationary or waiting period of more than 30 days. - A policy for certain specified diseases (involving hernia, disorder of reproductive organs, appendix, and tonsils, for instance) can impose a probationary or waiting period of up to six months, except in cases of emergency. - An accident insurance policy cannot contain a probationary or waiting period. - A policy issued after March 23, 2010 cannot exclude coverage for pre-existing conditions. - A policy or rider for additional coverage cannot be issued as a dividend unless the policyholder is offered an equivalent cash payment as an alternative, but no such dividend policy or rider can be issued for an initial term of less than six months. - An insurer cannot discriminate against policyholders, enrollees, subscribers, or certificate holders in a group health plan who are eligible for or receiving assistance from Medicaid.

Minimum Standards for Individual Health Insurance Policies: Handicapped Dependent Children

- A policy must continue coverage for any dependent child who reaches the limiting age and is incapable of self-sustaining employment due to developmental disability or physical handicap, if the child depends on the insured for support. - The policy can require that within 31 days of the child's reaching the limiting age, the insured must provide proof of the child's incapacity and dependency for coverage to continue. - Within coming of age, insured has 31 days to prove the kid still is not able to live on their own

Minimum Standards for Individual Health Insurance Policies: Other Forms of Coverage

- Accident-only coverage pays benefits for death, dismemberment, disability, or hospitalization and medical care caused - Specified accident coverage pays benefits for a specific type of accident. It covers accidental death or accidental death and dismemberment. by an accident. - Limited benefit health insurance coverage pays benefits that are less than the minimum standards required by law, but which the Commissioner approves as being in the public interest to offer for sale. Insurers who issue or deliver these policies in Washington can do so only if they provide an outline of coverage to the insured.

Minimum Standards for Individual Health Insurance Policies: Accidental Death and Dismemberment Benefits

- Accidental death and dismemberment benefits must be paid if the loss occurs within no less than 90 days of the accident, regardless of total disability - Disability income benefits cannot require the loss to begin less than 30 days after the accident. - if the insurer cancels or does not want to renew policy must pat benefits if the accident happened while the policy was still in force.

Standard Provisions: Time Limit on Certain Defenses

- After a health insurance policy has been in effect for two years, the insurer can void the policy or deny a claim only if the insured made a mistake on the application - If the insured has the right to continue a policy by paying premiums on time until at least age 50—or in the case of a policy issued after age 44, for at least five years after policy issue—the policy may demand that the insurer cannot compose a policy that has been in force for two years. - insurer cannot deny claims after 2 years from hen the policy is issued

Minimum Standards for Individual Health Insurance Policies: Replacement [WAC 284-50-430]

- Application forms for health insurance policies are required to seek information from the consumer as to whether the insurance will replace another health insurance policy already in force. - If replacement is involved, an insurer or producer must give the applicant a "Notice Regarding Replacement of Accident and Sickness Insurance" before the policy is delivered. The insurer will keep a copy signed by the applicant.

Taxation

- premiums paid for medical expense insurance, deductibles, coinsurance, and dental can be used as a tax deduction if these expenses in a year exceed 7.5% of the persons adjusted gross income for the year - disability taxation depends on who pays the premiums on the policy

, insurers must avoid the following unfair practices and methods of competition:

- Attained age rating: Using the increased age of an insured person to charge a higher premium or other additional costs in a Medicare supplement insurance policy; - Twisting: Making misrepresentations to induce a person to lapse, surrender, terminate, keep, or convert an insurance policy; - High pressure tactics: Convincing a person to buy an insurance policy by using force, fear, threats, or other undue pressure. - Cold lead advertising: Marketing insurance policies by using methods that do not conspicuously disclose the fact that insurance is being sold or that a producer or insurance company will make contact with the prospective customer.

Minimum Standards for Individual Health Insurance Policies: Disability Income Benefits

- Disability income insurance pays weekly or monthly benefits for a specified time during a disability resulting from illness or injury or both. Benefits that are payable after age 62 and reduced on the basis of age alone cannot be less than half of the benefits payable before age 62. - The benefit period must be at least six months. However, if the policy covers disability arising from pregnancy, childbirth, or miscarriage, the benefit period must be at least one month. - Furthermore, these policies cannot have an elimination period that is longer than the following: **90 days in policies providing a benefit of one year or less ** 180 days in policies providing a benefit of more than one year but less than two years ** 365 days in all other policies paying a benefit for as long as the disability continues

Insurers who market Medicare supplement policies in Washington must:

- Establish marketing procedures to ensure that their producers accurately and fairly compare policies of competitors with their own companies' policies; - Establish policies to make sure that excessive insurance is not sold; - Caution each policyholder that his or her policy may not cover all medical expenses; - Make every reasonable effort to determine whether an applicant or enrollee for Medicare supplement insurance already has disability insurance, and the types and amounts of such insurance; and - Establish procedures to verify that they are complying with these requirements.

Group plans differ from individual plans in a variety of ways

- Group plans usually specify the benefits based on a percentage of the worker's income, while individual policies usually specify a flat amount - Short-term group plans usually provide maximum benefit periods of 13 to 26 weeks, with weekly benefits of 50% to 100% of the individual's income. Individual short-term plans have maximum benefit periods of 6 months to 2 years - Group long-term plans provide maximum benefit periods of more than 2 years, with monthly benefits usually limited to 60% of the individual's income - Group disability plans also have minimum participation requirements. Usually, the employee must have worked 30 to 90 days before becoming eligible for coverage - Group plans usually make benefits supplemental to any benefits received under workers compensation - Some group disability plans limit coverage to only nonoccupational disabilities

All of the following statements are true about the purpose of the Health Insurance Coverage Access Act

- It is operated independent from the Washington State Health Insurance Pool (WSIP). - It is available only to Washington residents. - It allows access to health insurance coverage to Washington residents who have been denied health insurance.

Medicare Supplement Health Insurance Act: Pre-existing Conditions

- Persons who are eligible for a Medicare supplement policy can enroll in such a policy up to 63 days after their coverage ends under an employer's group plan or a Medicare Advantage plan - A pre-existing condition cannot be defined more restrictively than a condition for which medical advice was given or treatment was recommended by a physician within three months before the effective date of coverage.

Penalty for Noncompliance

- The act prohibits anyone from filing a false claim for health insurance benefits. Each violation is a separate offense. A person cannot conceal or fail to disclose information about a claim with the intent to obtain payment on the claim. Health-care providers are also prohibited from collecting payments that violate their agreements with insurers. - Anyone who violates these prohibitions is guilty of a Class C felony and subject to imprisonment for up to five years, a fine of up to $10,000, or both.

what does the "Notice Regarding Replacement of Accident and Sickness Insurance" state

- The applicant is entitled to advice about the replacement from the existing insurer or producer, and such advice may be in the applicant's best interest. - If the applicant has considered all information available to him or her and still wants to replace the existing policy with a new one, he or she must be truthful when completing the application. - Failure to include all material medical information may give the insurer a reason to deny claims and rescind the policy.

Furthermore, whenever an applicant for a Medicare supplement policy is required to provide his or her medical history, that history must be completed by

- The applicant; - The applicant's relative; - The applicant's legal guardian; or - A physician.

An insurer can ask, but cannot require, that an individual or family member of the individual undergo a genetic test if the insurer meets the following conditions:

- The request is made for clinical research purposes. - The insurer makes it clear that compliance with the request is voluntary and that refusal will have no effect on insurability or the premium. - Genetic information acquired cannot be used for underwriting, setting premium rates, or issuing, renewing, or replacing a policy.

Definitions of the Term Accident

- Under ACCIDENTAL BODILY INJURY (ABI), only criterion is that the loss be accidental; only the end result must be unforeseen and unintended - Under ACCIDENTAL MEANS, both the cause AND the end result must be unforeseen and unintended - only ABI can be used in group policies in NC **accidental bodily injury = end results only (least restrictive) **accidental means = cause and end results (most restrictive)

Limitations to Coverage Under Major Medical Policies

- due to the all-risk nature of major medical policies, some items which were excluded in basic medical policy, do retain limits (referred to as inside(internal) limits): 1. Maternity Care: treated on a "same as any disabling occurrence" basis 2. Mental Illness: typically limits the max benefit for each visit to a yearly max for outpatient care (inpatient granted full benefits) 3. Substance Abuse: typically limited much the same as mental illness except that outpatient treatment only covered if qualified substance abuse treatment facility

Which of the following pays for non-surgical care in a doctor's office or in the home?

-Physician's expense coverage

Medicare Supplement Health Insurance Act: Outline of Coverage; Disclosure

- When a producer or insurer initiates the sale of a Medicare supplement insurance policy, the producer or insurer is required to complete and sign an outline of coverage—a formal disclosure form—before delivering it to the applicant by the time the applicant applies for the policy. The insurer must get a receipt from the applicant after delivering the outline of coverage (unless the insurer is a direct response insurer). - When a policy offers health insurance coverage other than through a Medicare supplement policy, the outline of coverage must inform the resident that the policy is not a Medicare supplement policy. If the outline of coverage does not state this, the first page of the policy must do so. When a policy offers health insurance coverage to persons eligible for Medicare, it is required to disclose the extent to which it duplicates Medicare. However, producers cannot sell a health insurance policy that duplicates Medicare benefits unless it will pay benefits without regard to other health insurance coverage in effect and it gives the required disclosures. The law prohibits anyone from selling a Medicare supplement policy to a person who already has one, unless the policy is being sold as a replacement.

Medicare Supplement Health Insurance Act: Buyer's Guide

- When an insurer is selling or soliciting a health insurance policy offering hospital or medical expense coverage benefits to persons whose age makes them eligible for Medicare, the insurer is required to provide them with a Medicare supplement Buyer's Guide in addition to the outline of coverage. - This Buyer's Guide is called the Guide to Health Insurance for People with Medicare and was developed by the National Association of Insurance Commissioners (NAIC) and the Health Care Financing Administration (HCFA) of the U.S. Department of Health and Human Services. - The insurer must deliver the Buyer's Guide whether or not the policy it is selling is a Medicare supplement policy. - The insurer is required to deliver the Buyer's Guide to the applicant when the application is made, and the insurer is required to get a receipt for delivering it. Direct response insurers must deliver the Buyer's Guide upon request, but not later than when the policy is delivered to the insured.

Social Insurance Supplement (SIS) or Social Security Riders provide for the payment of income benefits generally in three different situations

- When the insured is eligible for Social Security benefits but before the benefits begin (usually there is a 5 month waiting period for Social Security benefits) - If the insured has been denied coverage under Social Security (roughly 75% of the people who apply for Social Security benefits are denied coverage because of their rigid definition of total disability) - When the amount payable under Social Security is less than the amount payable under the rider (in this case only the difference will be paid)

Accident and Health Insurance

- a contract where the insurer, in exchange for the premium submitted, indemnifies the insured for the medical expenses caused by illness or injury and/or the loss of earnings due to disabilities as long as the expense or disabling occurrence happened during the policy period

Disability Buyouts

- allow the healthy partner(s) to purchase the interest of the disabled partner - does NOT apply to a sole proprietorship

Managed Care Plans

- attempt to control or limit unlimited access on when to see and doctor and which doctor to see - HMO, PPO - characteristics 1. primary care physicians act as "gatekeepers" by controlling access to further health care 2. preventative care in order to maintain wellness and minimize health care costs 3. use of case management techniques such as concurrent review, pre-admission certifications, second surgical opinions, etc.

Case Management Provisions

- attempt to control the cost of medical procedures and contain premium costs 1. Second Surgical Opinions: paid by the insurer; used to verify the need of a recommended procedure 2. Pre-Certification Provisions: require expected procedures to be submitted for approval; prevent unnecessary expenses 3. Concurrent Review: allows the insurer to monitor the hospital stay to make sure everything is proceeding as planned

Residual Disability

- attempts to measure the amount of income lost - will be paid when a partial disability reduces total income below a designated level - benefit paid will be the same percentage of the total disability benefit that the insured is losing of their income - benefits are reduced as income increase - compensates for cut in pay; when your new job pays less than the old one you had before you became disabled

insurers must follow these standards when issuing accident and health insurance policies in Washington

- basic hospital expense coverage - basic medical-surgical expense coverage - hospitalization coverage - major medical insurance - disability income insurance - accident-only policies - specified disease or specified accident coverage - Medicare supplement policies - limited benefit coverage

Distributions from an HSA used exclusively to pay for qualified medical expenses of the account beneficiary, his or her spouse or dependents are income tax free. Distributions not used exclusively to pay for qualified medical expenses of the account beneficiary (spouse or dependents) will

- be included in the recipient's gross income and is subject to the 20% federal tax penalty.

Standard Provisions: Discrimination Prohibited

- can't deny because of race, religion, national origin, or the presence of any sensory, mental, or physical handicap.

Comprehensive (Supplemental) Major Medical

- combine a basic medical expense policy and a major medical policy into one - provide excess coverage over a basic medical expense policy

Policy Exclusions

- common exclusions are war, military service, intentionally self-inflicted injuries, aviation, overseas residence, and disabilities arising from committing a felony - coverage may also be denied if a loss is caused by the insured being intoxicated or under the influence

Limited Benefit Policies

- cover a limited number of accidents, illnesses, or have a limited dollar benefit (must contain a statement of "This is a Limited Policy" on the first page - limited benefit policy types: 1. Limited Accident (Travel Accident): provide limited benefits for specific injuries (travel, automobile, etc.) 2. Limited Sickness (Dread Disease): cover a limited number of illnesses (polio, cancer, etc.) 3. Hospital Indemnity Plans: pay a stated dollar amount for each day hospitalized without regard to other coverage; made directly to insured

An outline of coverage must accompany every individual health insurance policy delivered or issued for delivery in Washington. The outline of coverage will

- identify the types of coverage the policy provides; - describe the policy's coverage and benefits; - state the exceptions and limitations in coverage; - state the renewal provisions and any right that the insurer reserves to change premiums; and - state that the outline only summarizes the policy, which should be consulted for the policy's controlling provisions.

expenses paid for long-term care services, including premiums paid for qualified plans, are treated like any other medical expense. This means that

- if such expenses (including premiums paid for qualified LTC plans) exceed 10% of an individual's adjusted gross income, they are tax-deductible.

Partial Disability

- inability to perform one or more duties of an occupation - less than half of business time - typically, partial disability concerns injuries only - usual benefit will be 50% of the amount payable for total disability and paid for a specified maximum time (such as 6 months) **policy will state what % you will get for partial disability based on payout for total disability)

Washington health insurance reform legislation is intended to accomplish all of the following objectives

- increase consumers' awareness of their health coverage - improve access to information about health-care services to consumers in managed care plans - enable consumers to make better decisions about their health care

Standard Provisions: Cancelation

- insurer can cancel anytime as long as they give the person a 5 day notice - After a policy has been renewed beyond its original term, however, cancelation can take effect upon receipt of the written notice. - Upon cancelation, the insurer must return any unearned portion of the premium paid. The amount of the earned premium is computed on a pro rata basis.

Medicare Supplement Health Insurance Act: Application Responsibilities; Replacement Forms

- insurer checks if applicant has Medicare supplement policy, Medicare Advantage, Medicaid coverage, or another health insurance policy in force. - they tell the applicant that more than one Medicare supplement policy is not necessary and that the policy may not cover all of the applicant's expenses. - By March 1 every year, an insurer must report to the Commissioner with information for every individual who has more than one Medicare supplement policy issued by the insurer. - If a Medicare supplement policy replaces another Medicare supplement policy that has been in effect for at least three months, the replacing period cannot impose any new periods for pre-existing conditions, waiting periods, elimination periods, or probationary periods. -

LTC policies generally include an elimination period (available from 0 to 365 days though this will vary by State) that functions just like it does in a disability income policy. Again, the purpose of an elimination period is to

- lower the cost of coverage for the benefit of everyone. Some policies calculate the elimination period using calendar days while other plans count only the days on which you receive a covered service

Affordable Care Act

- mandates preventative care - pre-existing conditions have to be covered - children can remain on parents policy until age 26 - no lifetime benefit limits

Total Disability

- may arise from either illness or injury related occurrences - may be defined as: 1. Inability to perform duties of ANY occupation (most restrictive) 2. Inability to perform duties of any occupation for which he/she is reasonably suited by education, training, or experience 3. Inability to perform duties of his/her OWN occupation (least restrictive) - most policies contain a combination of the definitions above; will be liberal at the beginning of a disability and become more restrictive after a period of time (protects the company from MALINGERING)

Dental Insurance

- may be added to some policies by rider - characteristics: deductibles apply, co-pay, low policy limits (yearly max), one or two fluoride treatments a year, bridge replacements once every 5 years, excludes pre-existing conditions, excludes strictly cosmetic procedures

Benefit Period

- may be short term (up to 2 years) or long term (over 2 years with a max to age 65)

In general, a policy cannot limit or exclude coverage by type of illness, accident, treatment, or medical condition. However, a policy can limit or exclude coverage for the following:

- mental or emotional disorders, alcoholism, and drug addiction; - routine pregnancy; - illness, treatment, or medical condition arising out of war or act of war; participation in a felony, riot, or insurrection; service in the armed forces or auxiliary units; suicide, attempted suicide, or self-inflicted injury; aviation as a crewmember; and interscholastic sports; - cosmetic surgery, unless it is for reconstructive purposes following surgery for trauma, infection, or disease, or it is to correct a functional defect caused by a congenital disease or anomaly in a covered dependent child; - foot care; - treatment in a government hospital; - benefits provided under Medicare or another government program other than Medicaid, workers' compensation, employer's liability or occupational disease law, or motor vehicle no-fault law; - services performed by a member of the covered person's immediate family; - services for which no charge is usually made in the absence of insurance; - dental care or treatment; - eye glasses and hearing aids; - rest cures, custodial care, transportation, and routine physical examinations; - territorial limitations; and - specified diseases and specified accident policies.

Non-Occupational v. Occupational (Full) Coverage

- non-occupational: benefits restricted to only non-occupational related occurrences - occupational: coverage provided both on and off the job; provides around the clock protection without regard to any payment received under workers comp - occupational coverage is generally reserved for those individuals not covered under a workers comp plan

Presumptive Disability

- obvious total, permanent disability requiring no demonstration of inability to work (loss of sight, hearing, speech, or two or more limbs)

Preferred Provider Organizations (PPO)

- organized by insurance companies to provide pre-paid health care to insureds without restricting the choice of doctor or facility - recuit medical professionals to provide care at pre-arranged fees - if treatment is with a preferred provider, out-of-pocket cost is lower and predictable as only a per visit co-pay is paid to the doctor - if treatment is with an unlisted professional (out of network) provider, benefits are paid under a major medical concept (deductible) ***advantage of a PPO over an HMO is that the PPO offers a wider choice of providers

Disability Income Policy

- provide weekly or monthly benefits to replace salary or wages lost while sick or injured - will rarely be 100% of gross income; typical maximum benefits are 50% or 70% of gross income - may also be referred to as loss of time or loss of income policies - benefits will be taxable if an employer pays the premiums; if the cost is shared, the benefit in proportion to the employer's premium payment will be taxable (if YOU pay all the premiums, benefits are not taxable)

Blanket Accident and Surgery

- provides group coverage for special situations where group membership changes rapidly (schools, public gatherings, employer sponsored recreational activities, etc.) - policy is issued to the head of the organization and the covered individuals do not receive a policy or certificate - the policy defines the group and coverage is provided to any individual who meets the definition of the group **Key: CONSTANTLY CHANGING MEMBERS, therefore no certificate is needed

Purpose of Accident and Health Insurance

- provides protection against the financial impact of illness or injury and provides payment for loss of income and/or expenses brought about because of this

employees have the option of a pre-tax payroll deduction that may be used for some insurance premiums, unreimbursed medical expenses and child / dependent care expenses. Employers utilize the availability of an FSA to

- retain quality employees and help hire new employees.

Policies with surgical expense coverage may function in any of three ways:

- scheduled basis; usual, customary and reasonable (UCR); relative value

Premiums paid by the employer for group disability plans are

- tax-deductible as a legitimate business expense. An employee that shares in the premium is not allowed to deduct the amount paid since it is considered a "personal" insurance expense.

Additional definitions of Total Disability include "inability to engage in any reasonable occupation for which the insured is qualified" or "the inability to engage in any gainful occupation." The more liberal the definition of disability,

- the greater the premium

Recurrent Disability

- the onset of disability, after recovery from a preceding disability period, resulting from the SAME accident or illness - will be treated as a continuation of the previous disability if occurring within a stated period of time, such as 6 months (do not have to meet elimination period again, but part of benefit period has already passed)

Uniform Policy Provisions

- there is not a mandated exact word contract, but most states have certain provisions that must be addressed in each policy that must comply to certain standards - 12 Uniform Mandatory Provisions - 9 Uniform Optional Provisions

Standard Provisions: Other Benefits

- this is for other insurance besides expense-incurred, but the person still has more than one insurance policies - the insurer will also prorate benefits on any basis other than expense incurred. Any premiums paid for excess coverage will be returned to the insured.

Probationary Period

- time from issuance to the effective date of the policy, generally 30 days or less during which time losses from sickness will not be covered; losses from accidents may be covered - purpose is to eliminate coverage for pre-existing conditions and protect against adverse selection

Elimination (Waiting) Period

- time from onset of a disability until benefit payment begins - a time deductible that eliminates benefits for a period the insured feel appropriate (30 days, 60 days, etc.); the longer the elimination period, the lower the premium - found only in disability policies; benefits start after this - can receive back pay for the elimination period with a retroactive feature

Some States require that LTC insurers offer non-forfeiture benefits as part of the policy. This results in a policy with a higher premium than a plan that does not include such benefits. These benefits will allow the insured

- to receive some value for the plan if the policy lapses for nonpayment of premium.

Washington enacted its Medicare Supplement Health Insurance Act to carry out the following intentions:

- to set minimum standards for benefits; - to require that an outline of coverage be used in sales of Medicare supplement insurance; - to set requirements for disclosure of information to consumers; - to prohibit certain provisions in Medicare supplement policies; - to define and prohibit certain unfair acts and practices; - to set loss ratio requirements; - to assure orderly implementation and conversion of Medicare supplement insurance benefits and premiums following changes in the federal Medicare program; - to standardize coverage, terms, and benefits of Medicare supplement policies; - to eliminate policy provisions that duplicate Medicare benefits; and - to refund premiums paid for benefits that duplicate Medicare benefits.

Temporary Disability

- total or partial disability where complete recovery is anticipated

Coordination of Benefits (COB) Clauses

- used to reduce the cost of insurance and to adhere to the principle of indemnity - determines order of premium payment among several medical expense contracts that may apply to a loss (ex: if spouses are on each other's insurance policy at work) - determines which carrier will act as primary and which will act as secondary - important with group insurance

Health insurers cannot refuse to enroll a child in the parent's health insurance plan because the child

- was born out of wedlock; - Is not claimed as a dependent on the parent's federal income tax return; or - The child does not live with the parent or in the insurer's service area.

Group Health Insurance

- written on members of a common group; must have been formed for a purpose other than obtaining insurance

Tom is covered by the same plan as Bill. He incurs covered expenses of $4,000. How much of this total bill will be paid by the insurer?

-$3,000

Bill is covered by a comprehensive major medical plan providing basic first dollar coverage of $1,000. The policy also includes a $500 corridor deductible and coinsurance of 80/20. If Bill incurs covered expenses of $3,000, what will be his coinsurance amount?

-$300

HSA Eligibility — Any individuals under the age of 65 is eligible to contribute to an HSA if they are covered by a government approved (i.e., qualified) High Deductible Health Plan (HDHP). In addition, any individual is eligible who:

-(1) is not covered by any other health plan that is not an approved HDHP, except permitted insurance such as Workers' Compensation, insurance for a specified disease or illness, and insurance that pays a fixed amount per day for hospitalization; (2) is not entitled to benefits under Medicare; and (3) may not be claimed as a dependent on the tax return of another person.

HSA Qualified Withdrawals — These are tax-free (and penalty free) at any age if used to pay for medical expenses including but not limited to:

-(1) physician's visits; (2) prescription drugs; (3) chiropractic; (4) dental; (5) vision; (6) many alternative therapies such as acupuncture; and (7) all other traditional in-patient and out-patient medically related expenses (as those covered under an MSA). Withdrawals may also be used to pay for COBRA premiums, health insurance premiums while an individual is receiving unemployment compensation or long-term care insurance premiums. Eligible expenses are the same as those deemed eligible under an MSA.

Non-forfeiture option is normally available in one of three different forms.

-1 after paying premiums for a specified number of years, if the insured ceases payment, a reduced paid-up policy would result. 2) after paying premiums for a specified number of years, if the insured stops paying premiums, the same benefit would apply for a shortened period of time. 3) following the payment of premiums for a specified minimum number of years, if premiums cease, a specified dollar amount will be refunded to the insured (this is the most expensive form).

A tax deduction is provided for a person whose unreimbursed medical expenses exceed what percent of his or her adjusted gross income?

-10%

In addition, other qualifying events allow the beneficiary or dependents continuous coverage under the employer's plan if the employee dies, is terminated for a reason (i.e., being laid-off, resigning or retiring) other than gross misconduct (i.e., stealing from an employer) or as a result of a divorce or legal separation. In some cases an employer may not know of a qualifying event if it involves divorce, legal separation or the cessation of child coverage. Therefore, the employee or family member must notify the employer within

-60 days of the event or the right to elect COBRA coverage is lost. The continuation period for beneficiaries and dependents under these circumstances is 36 months.

Most major medical plans also include an initial deductible. Once this is satisfied, the insured and insurer pay a coinsurance amount. This is generally split on an

-80/20 basis where the insurer pays the larger of the two.

Qualified medical expenses that can be paid from an HSA or FSA:

-Acupuncture, Insurance premiums, Alcohol treatment, Lab fees, Ambulance charges, Legal abortions, Artificial limbs or teeth, Long-term care premiums, Birth control pills, Meals, Braces, Oxygen, Chiropractic care, Physician services, Christian Science treatment, Psychiatric care, COBRA premiums, Psychologist fees, Contact lenses, Seeing Eye dog, Cosmetic surgery, Special education, Dental treatment, Sterilization, Eyeglasses , Surgeon's fees, Health insurance, Therapy, Hearing aids, Vasectomy

Disability Income Benefit Computation Example:

-Assume that an insured owns a policy paying $1,000 per month if totally disabled and it includes a thirty day waiting period. Assume further that the insured is totally disabled for 75 days. Following the 30 day waiting period, he will collect monthly income for 45 days or 1 and ½ months for a total of $1,500.

PPOs may be run by

-Blue Cross/Blue Shield, by an insurance company or as a result of an employer-employee relationship.

Which of the following major medical provisions requires the sharing of medical expenses between the insurer and insured?

-Coinsurance

Essentials of Individual Insurance:

-Each person covered possesses his or her own policy; Each person selects his or her benefits /coverages; Any individual can apply; Individual underwriting (greater administrative costs); Coverage continues as long as premium is paid; More expensive with more restrictions

All of the following does allow withdrawals or distributions for non-medical expenses:

-Flexible Spending Accounts; Health Savings Accounts; Medical Savings Accounts

A primary care physician is also known as the:

-Gatekeeper

As the cost of health care spiraled in the 1970's, new alternative health providers such as

-Health Maintenance Organizations (HMOs), Preferred Provider Organizations (PPOs), and Multiple Employer Trusts (METs) were created.

Premium determination of income policies are based on several criteria. Each of the following will influence disability income premiums

-Insured's age; Waiting period; Length of benefit period

David has an individual disability income policy that will pay a $5,000 per month benefit if he becomes totally disabled. The policy also includes a partial disability rider. If David becomes partially disabled, what will his policy pay?

-Less than $5,000 a month for up to six months

Which of the following types of disability income policies excludes losses arising out of the occupation of the insured for which the insured is entitled to receive Workers' Compensation benefits?

-Non occupational

Each of the following influence the premium charged for major medical coverage, EXCEPT:

-Occupation

Essentials of Group Insurance:

-One master policy is issued to the group; Covered members have the same benefits / coverages; Only eligible group members can apply; Group underwriting (lower administrative costs); Coverage ceases when the member leaves the group; Less expensive premium with few restrictions

New providers may be added to the plan if they agree to follow PPO standards and charge the applicable fees. The arrangement or contract between the individual physician and the preferred provider organization is called a

-PPA (Preferred Provider Arrangement). All PPAs must conform with state law and generally must be approved by the Division or Department of Insurance in any State where it operates. Again, a member may seek treatment outside a PPO network.

Other basic benefits that must be provided by an HMO include:

-Physician's services; Inpatient and outpatient hospital services; Emergency services; Limited outpatient mental health services; Treatment for drug and alcohol abuse or addiction; Diagnostic lab and radiological services; Home health care services (some plans offer this service as an option); Medical social services

Which of the following describes a system where a group of physicians and hospitals in a designated area enter into an agreement with an insurer to provide medical services at a prearranged price?

-Preferred Provider Organization

The insurer's consideration in a health insurance contract is the:

-Promise to pay

Statements made by the applicant that are recorded on an application by the agent are considered:

-Representations

All of the following are basic expenses covered by a hospital expense plan, EXCEPT:

-Routine dental care

Assume John is covered by a major medical plan with basic coverage up to $1,000. The policy then includes a $500 corridor deductible and an 80/20 coinsurance amount. What will each party be responsible for if John incurs $4,000 of covered expenses?

-The insurer pays the initial $1,000 under the basic expenses. This leaves $3,000 of remaining expenses. John then satisfies the $500 corridor deductible. Now there are $2,500 in remaining expenses. John pays for his coinsurance amount of 20% or an additional $500 and the insurer pays $2,000 which is its coinsurance amount. Therefore, of the entire $4,000 bill, John is responsible for $1,000 and the insurer $3,000.

Which of the following pays benefits for services performed by medical personnel based on a geographical area?

-Usual, customary and reasonable

If an insured's 20-year-old son drops out of college, will he continue to be covered under his parent's major medical policy?

-Yes, up to age twenty-six

The insured also has the option of paying the hospital and submitting a claim to the insurer. In this scenario the insured will be "reimbursed" according to the policy. This means that

-a basic hospital expense policy will pay "up to its policy limits" or "up to its stated limit" or "up to its coverage limit" as long as the covered accident or illness occurs during the policy period.

HSA Deductibles and Contributions — In order to qualify for an HSA, the law requires that an individual carry a high deductible health plan. The size of the deductible depends upon the number of people actually being insured. If there is one person to be issued, it is classified as a single or "self-only" plan. If the policy covers two or more people, it is classified as

-a family plan. The minimum deductible allowed for self-only coverage is $1,350 ($6,650 for a stop loss / out of pocket limit) and the maximum allowable contribution limit is $3,450. For a family plan, the amounts are $2,700 and $6,900 ($13,300 out-of-pocket) respectively.

Some health policies may also include a beneficiary designated by the policy owner. However, a beneficiary will only be listed when

-a health policy provides an accidental death benefit.

With Disability Income, the length of an elimination period chosen by the insured should be based upon his or her earned income and the ability to pay premiums. For instance, if cash flow is the insured's primary concern, he or she may choose

-a longer waiting period since this would reduce the annual premium.

Another type of surgical expense coverage pays on a relative value basis. This type pays benefits based on

-a point system assigned to each procedure. The policy identifies a dollar per point value (i.e., a conversion factor). For example, if knee surgery were 50 points and the policy paid $50 per point, the benefit paid would be $2,500.

Generally, major medical insurance plans pick up where basic medical expense coverage leaves off whether providing

-a supplement to the basic plan or as a stand-alone plan.

Dependent children were formerly covered by their parents health insurance plan until age 19, or if they are a full-time student until age 23. The Affordable Care Act (ACA) legislation increases this to

-age 26.

HSA Funding — HSAs can be funded by a combination of employer, employee and family member contributions. However, all contributions made by or on behalf of an eligible individual are

-aggregated for the purpose of applying the maximum limit. Rollovers from MSAs and other HSAs are not subject to annual contribution limits. Rollovers from an IRA or Flexible Spending Account (FSA) are not permitted.

Health Reimbursement Account (HRA) is an employer funded account that reimburses employees for qualified medical expenses if such expenses are not covered by a high deductible health plan of some sort. It can only be established by

-an employer for an employee. Again, the funds must be used to pay for qualified medical expenses. These qualified medical expenses are the same as those applying to MSAs, HSAs and FSAs. Only an employer provides the funds.

Morbidity also influences the cost of coverage. This concept, like "mortality" in life insurance, involves

-an estimate of the probability that a person will suffer a disability and to what extent (i.e., how serious). Morbidity is unlike mortality since it (morbidity) cannot be defined exactly.

Non-occupational policy provides coverage for injuries or sicknesses that occur "off the job." Group disability insurance is

-an example of non-occupational coverage.

Medical expense insurance or "medical plans" cover eligible medical expenses including but not limited to hospital costs, physician's expenses, surgical expenses, prescription drugs, nursing care, diagnostic treatment, laboratory fees, rehabilitation expenses, physical therapy and other miscellaneous or ancillary medical related medical expenses. Medical expense insurance may be purchased on

-an individual or group (i.e., employer-sponsored) basis

The comprehensive major medical plan combines basic (first dollar) expenses and a major medical plan. It may be characterized by

-an initial or corridor deductible and provides the most comprehensive (i.e., broadest) health insurance coverage. This means that it covers virtually all types of medical services and supplies.

some POS plans require that a member inform the POS that they are going to seek treatment outside the network. Then the PCP can attempt to persuade the member to seek treatment inside the network. However, if the member decides to look for outside treatment it is permitted. There are two types of POS plans including

-an open-ended HMO type and a gatekeeper PPO type.

If the HMO is provided for a group, the employer must allow

-any participating HMO to have access to eligible employees during an open enrollment period.

Even if the pre-authorization form is not filed with the insurer, covered benefits

-are still paid. This process simply allows the provider and the insured to know in advance what services are covered and how much will be paid by the policy.

Most major medical policies carry a limit or ceiling of protection in amounts of $1 million or more. The policy will stipulate

-as to what the limit applies. For example, the contract may state that the limit applies as a lifetime maximum amount for all illnesses or accidents.

Premiums paid on an individual disability income policy are not tax-deductible. Benefits received from this policy, however, are tax-free without limitations. For instance,

-assume Joe has a DI policy paying him $1,000 per month if he is disabled. The policy has a thirty (30) day waiting period. Joe is then disabled for twelve (12) months. His policy would pay him $11,000 during that period tax free.

Some major medical plans are written with coverage for basic (first dollar) expenses and a corridor deductible. This corridor deductible must

-be satisfied by the insured once the base plan pays up to its specified limit.

Partial disability means

-being able to perform some but not all of one's occupational duties.

Total disability generally means

-being unable to engage in ANY of one's occupational activities.

Until the passage of the Pregnancy Discrimination Act, many major medical and medical expense plans excluded maternity benefits as well. This Act requires that

-benefit plans of employers with 15 employees or more treat childbirth, pregnancy and other related conditions the same as any other covered illness.

Before the Omnibus Budget Reconciliation Act of 1993 was passed, provisions regarding eligibility for group coverage were determined by an employer, underwriting practices of an insurer or State law. This Act contained regulations designed to better guarantee that group medical benefits will be made available to children. If a group medical plan provides coverage for dependent children of participants, it must also provide

-benefits for children who are adopted (or placed for adoption) with the same terms, conditions and benefits that apply to natural children.

The physician's expense insurance provides

-benefits to cover a physician's fees for non-surgical care in the hospital, doctor's office, or in the home (i.e., house call). It is sometimes referred to as "outpatient services" and is generally included with either the hospital or surgical expense plan. It is usually not written alone. An amount per visit (i.e., $50) is usually paid for treatment of an injury or illness.

Some disability income policies do not cover losses arising out of the occupation of the insured. In other words, such policies do not provide coverage if the insured will also collect from Workers' Compensation or other social insurance plans. This type of disability income contract is

-called non-occupational.

The insurance contract is also considered to be conditional since the insurer promises to pay a valid claim if a covered accident or sickness occurs during the policy period or policy term. In other words, payment of the health claim will result based on

-certain conditions which must be satisfied.

Therefore, the employer is the policy owner of the master contract. The covered employees receive a booklet or certificate of coverage which describes and verifies benefits provided by the group plan. It also identifies how long coverage will last and how to file or report a claim. The covered employee is also known as the

-certificate holder. Group plans also offer additional benefits to classes of employees on the basis of length of employment, salary or pay grade, or job category.

One of the objectives of a PPO is to

-channel patients to providers that discount medical services. Therefore, to entice more members to participate, the organization may offer concessions with (i.e., lower) deductibles or coinsurance provisions.

An HMO may be structured or formed on a group practice plan basis which is also known as a closed-panel plan. This type of plan is

-characterized by doctors who are directly contracted with or employed by the HMO or they are employed by a provider who is contracted with the HMO. The subscriber is required to use the physicians who are employed by the HMO.

A PPO is not a traditional comprehensive health care provider. The provider is the physician or hospital "providing" medical services. Physicians are paid a fee for the services they provide. Covered insureds may

-choose any primary care physician (i.e., gatekeeper) they desire for treatment. The provider (i.e., doctors) offers to discount medical service fees while organizations promise to increase patient volume. In other words, physicians and hospitals in a designated area contract with an insurer to provide services at a prearranged cost to the insured.

A member provides proof of enrollment to the facility, pays a small co-payment (i.e., $10, $20, etc.), and then receives needed treatment. The medical services are provided at the facility. No claim forms need be processed. Therefore, HMOs

-combine health care delivery with prepaid financing.

Health Maintenance Organizations (HMOs) are regarded to be organized systems of health care that provide

-comprehensive health care services to enrollees (i.e., members) living within a specified region. Formerly referred to as prepaid group practice plans, a prepaid premium must still be paid and members are then allowed to seek treatment when needed at an HMO facility. HMOs do not function on a reimbursement basis

With CDHPs An employer pays a fixed contribution amount which the employee uses to purchase his or her own medical and benefits. This allows an employer to

-control costs if the annual contributions remain fixed. The employer also has the option of increasing the contribution each year as well.

Group disability insurance is also a two party contract between the insurer and the employer who is the policy owner. The covered employee, also known as the certificate holder, is not a party to the contract. If an employee leaves his or her job, the group disability income coverage may be

-converted to an individual plan without proving insurability. The 31-day conversion period also applies as it does in group life insurance.

Long-term care coverage can be purchased by securing an individual policy, as part of a group or voluntary plan, or when a rider is added to a life insurance policy. No matter how provided, such coverage is designed to

-cover at least twelve consecutive months for one or more necessary types of care in a setting other than a hospital. This coverage does not cover hospital confinement.

Some medical expense and major medical plans exclude

-coverage for mental illness, alcoholism or drug addiction unless required to cover such benefits by State mandate.

CDHP Consumer Driven Healthcare Plans are sometimes referred to as defined contribution medical expense plans. In such plans, an employee has an increased number of choices and responsibilities with the selection of medical expense coverage. These plans engage

-covered individuals in selecting their own health care providers, managing their own health expenses and improving their own health with respect to factors that they can control.

Employers who provide group disability benefits for employees should coordinate them with other social insurance plans, such as Workers' Compensation, to

-decrease the opportunity for fraud or malingering. Generally, monthly STD or LTD benefits are reduced by any benefits collected from social insurance plans.

An insured can reduce his or her medical expense insurance (i.e., major medical) premium by increasing the

-deductible, the coinsurance amount or the stop loss limit.

HMOs emphasize preventive care which was not a covered benefit by traditional insurers nor the Blues. Preventive care attempts to

-detect medical problems before symptoms appear. This includes such services as routine physical examinations, immunizations, mammograms, pap smears, well baby care and family planning services.

Experience rating may also be used to

-determine the amount of a refund to which an employer is entitled if he or she possesses a better claim experience than anticipated. Many experts feel that experience rating provides premium equity among all policy owners.

Long-term care insurance provides a broad range of medical and personal services for individuals who need assistance with daily activities for a lengthy period of time. The reason such assistance is needed is

-due to a mental or physical impairment as a result of the aging challenge. The assistance needed may be provided in a nursing home, an adult day care center or at the senior's home.

A business owner would purchase a key employee or key partner policy to protect and indemnify the business in the event that a key-employee becomes disabled. Partners in a business may purchase this type of protection on one another as well. If the business owner buys a policy covering the key employee it will

-ease a major portion of the financial challenge placed upon the business when the key-employee becomes disabled

Another distinguishing feature of group insurance is the use of experience rating. If the group is large enough, the actual claim experience of the group will be a factor in determining the future premium to be charged. The "experience" is determined

-either at the issue date or at the end of a policy period. If applied at the end of the policy period, it is used "prospectively" or "for the future" policy period.

Like any type of group plan, individuals cannot form a group with the exclusive intent to purchase insurance coverage. The group must form for an employment related purpose. In other words, there must generally be an

-employer-employee relationship in order to purchase group coverage. The group contract is purchased by the employer.

However, with regard to individual medical expense policies, premiums paid may be tax-deductible if they and other non-reimbursed medical expenses

-exceed 10% of the insured's adjusted gross income.

Major medical provides "blanket" of coverage as well. Some types of major medical policies cover first dollar expenses up to a specific dollar limit. Benefits provided by major medical plans are usually

-expressed as a percentage of eligible expenses (i.e., 80%)

Employers who do not comply with COBRA may be stripped of their

-federal income tax deduction. An individual receiving coverage under COBRA may also apply it toward his or her creditable coverage (according to HIPAA).

Money deducted from an employee's pay into an FSA is not subject to payroll taxes, resulting in substantial payroll tax savings. One significant disadvantage to using an FSA is that

-funds not used by the end of the plan year are lost to the employee, known as the "use it or lose it" rule.

HMO organization also emphasizes treatment by a primary care physician (PCP) as well. A PCP acts as a

-gatekeeper to control access to specialists. Generally, the HMO only covers the cost of specialist services if referred by the PCP.

A comprehensive major medical plan is very similar to a traditional major medical plan except that it

-generally provides first dollar coverage up to a specified limit (i.e., basic expenses), before a deductible needs to be satisfied by the insured. Most policies provide similar coinsurance percentages as those appearing in major medical plans (i.e., 80/20).

PPOs may function on an open panel or closed panel basis. Multiple option plans may also be available. These plans are

-generally sponsored by a single provider who offers the employer a variety of plans characterized by lower administrative costs

Disability Income Benefit Riders include Partial Disability Rider — This involves the inability to perform some but not all of one's duties. If a person adds this rider to their individual policy and later is determined by a physician to be partially disabled,

-he or she will collect 50% of their monthly total disability benefit. Partial disability benefits are payable for a maximum of six months following a waiting period.

Partial and residual disability riders may not usually be added to the same policy. Again, residual disability will reimburse an insured based on

-his or her percentage of lost income due to a covered disability. For example, if the insured was losing 70% of his income because he could not perform all his duties, he would collect from his policy 70% of the normal monthly totally disability benefit.

Hospital expense plans are generally written on a reimbursement basis. This means that

-if the insured receives medical treatment, either the physician or hospital is being "reimbursed" for the care provided.

Disability income policies cover

-illness (sickness) or accident. Injuries must be as a result of accidental bodily injury or due to accidental means.

If the group disability plan is non-contributory (i.e., the employer pays the premium), the benefits received are

-included in the disabled employee's gross income and taxable as ordinary income.

If the group disability plan is fully contributory (i.e., employee pays the entire cost), benefits received are

-income tax free.

Like most health insurance policies, a major medical policy will pay "up to its stated limits." Premiums paid for major medical policies are

-influenced by provisions including the deductible selected, the coinsurance amount carried by the policyholder, the maximum benefits or ceiling of protection selected and the stop-loss limit selected by the policy owner.

Policies will possess varying types of deductibles such as

-initial deductibles, calendar year deductibles, individual or family deductibles or a corridor deductible. The inclusion of the deductible allows the insurer to provide a high limit of protection at a lower premium rate since the insured is retaining a portion of the risk.

Many policies include prior approval or a pre-authorization requirement. This provision requires that the

-insured notify the insurer before undergoing certain diagnostic or surgical procedures (except in emergency situations).

Emergency care is covered by health maintenance organizations HMOs. This type of medical care is also covered if even if provided by a non-plan physician or hospital as long as it is necessary (i.e., urgency). Hospital services are also covered in full for the length of a stay. Optional coverages may also be added and require additional premium including

-intermediate and long-term care (nursing home) services, vision care, dental care, prescription drugs and pharmacy services or rehabilitative services. Some HMOs offer home health care as an option as well.

Some key employee policies will pay a benefit directly to the disabled employee. In this case, if the employer pays the premium, this amount

-is tax-deductible as a business expense. The benefits received will generally be taxable as income to the disabled employee.

Exclusions found in medical expense and major medical plans are similar to those appearing in other health insurance policies including

-loss caused by war; elective cosmetic surgery; routine dental care except if necessitated by an accident; routine physical examinations; occupational injuries or disease covered by Workers' Compensation; intentionally self-inflicted injuries; care provided in a government sponsored medical facility; long-term, custodial, convalescent or rest care; injuries sustained while engaging in an illegal activity (i.e. felony); vision or hearing care; pre-existing conditions; injuries sustained in an aviation activity except for those on a commercial flight; or private duty nursing.

Disability income health insurance protects an individual (and family) against

-loss of earnings or income as a result of total disability.

Insurance is a social device used to transfer risk from one party to another through a legal contract (i.e., policy) for a consideration (i.e., premium).With health insurance, an insured transfers the risk of

-lost income to a disability insurer or transfers the risk of incurring medical expenses to a medical expense insurer.

Employers also save when employees elect a FSA pre-tax payroll deduction because

-lower adjusted gross income also reduces matching FICA and Federal Unemployment Tax that is payable by the employer.

With a disability buy-out, Whether the purchaser, policy owner, beneficiary and premium payor is the business entity (i.e., entity plan) or the business owners (i.e., cross purchase plan), the premiums are

-not deductible and the proceeds are exempt from income taxation. However, a shareholder may be taxed on a gain, if any is realized, over and above his or her original basis in the stock. In this case "basis" refers to the amount the shareholder paid for the stock originally.

With Key Employee Disability, The employer is the policy owner and retains all ownership rights (i.e., naming or changing the beneficiary) of the policy. The benefits are paid to the business. Thus, premiums paid for this policy are

-not tax-deductible and benefits received are tax free

If the disability policy pays a monthly income in addition to any benefits received by Workers' Compensation or other social insurance plan, it is referred to as an

-occupational policy. Therefore, this type of policy covers injuries or sicknesses that occur "on or off the job." An example of an occupational plan is an individual disability income policy.

Major medical policies also include a coinsurance clause which requires the insured to share in a portion of the loss after a deductible is satisfied. Most coinsurance amounts are 80%. This means that

-once a deductible is satisfied by an insured, the insurer will pay 80% of the remaining medical expenses and the insured will pay 20% up to a specified limit such as $2,000, $2,500 or $3,000. These last amounts are known as stop loss limits.

Disability Income Waiting Periods — Elimination or waiting periods are available from

-one to seven days in short-term disability plans.

Policies may be written on a reimbursement or indemnity basis as well. For instance, assume

-that John is covered by a reimbursement type of plan with a maximum hospital benefit of $500,000. He is hospitalized due to an illness for twenty days. The bill is $25,000. The policy will pay or reimburse John or the hospital the amount equal to the expenses incurred (i.e., $25,000).

Hospital Expense coverage, sometimes referred to as basic hospital expense insurance or a basic medical expense plan, is designed to

-pay all or some of the cost of room and board for a specified number of days (i.e., 30, 60, 90, 120, 180, etc.). For instance, the policy may pay $100, $200, or $300 per day while the insured is confined to a hospital. Other covered medical expenses (while hospital confined) include nursing care, x-rays, diagnostic tests, ambulance services costs, lab fees, prescribed drugs, anesthesia, operating room charges, other medicines, and ancillary (miscellaneous) expenses.

Deposits to an HSA are 100% tax-deductible for the self-employed or any individual (and family members) who wishes to create one and can be withdrawn to

-pay for routine medical bills with tax-free dollars.

The HSA provides more flexibility and choices for the individual and / or family. For example, determine the amount of premium spent on a high cost traditional medical plan. Use a portion of that premium to purchase a lower cost, high deductible medical plan. Deposit the amount left over into the tax-deductible HSA. This account can be used to

-pay for smaller covered medical expenses until the deductible is satisfied. Up to 100% of the deductible amount can be contributed to the HSA, subject to maximum limits.

Disability Income Benefit Riders include Residual Disability Rider — Residual disability involves a person who is unable to perform all of his or her duties, just like partial disability (whether permanent or temporary). However, the benefit under this rider is paid if the loss of income is a residual effect of the disability. This type of disability involves a

-percentage of lost income which usually exceeds the flat 50% paid by partial disability.

A primary form of health insurance involves disability income (DI) insurance. This type of health insurance protection provides

-periodic (i.e., monthly) income payments to an insured who is unable to work and earn an income due to an accident or illness. This type of insurance may be issued on an individual or group basis. Life, health, and property/liability insurers write this type of coverage.

the coinsurance clause provides an incentive for insureds and physicians to keep expenses within manageable limits. The purpose of the coinsurance clause is to

-permit insurers to "encourage" an insured to share the cost of medical care.

HMOs do not function on a reimbursement basis and offer coverage on a

-prepaid basis emphasizing preventive care.

Major medical policies provide coverage for medical services included in basic hospital expense, surgical expense, and physician's expense contracts. In addition, they also provide further protection by covering medical costs such as

-prescription drugs, blood tests and transfusions, artificial eyes, artificial limbs, crutches, casts, splints, and wheelchair rentals. Some States mandate further coverages as well such as maternity and pregnancy benefits, treatment for alcoholism and drug addiction or treatment for mental illness.

A disability buy-out agreement funded by disability income insurance is written to

-protect the firm and a partner's monetary interest (i.e., value) in the business if he or she becomes totally disabled.

Group plans also provide a conversion privilege as well. This allows an employee whose employment is terminated to simply

-purchase an individual health insurance plan at a higher individual rate. Proving insurability is generally not required if an employee wishes to convert to an individual plan, although the new individual plan may not include the same benefits as in the group plan.

A new type of managed care arrangement in existence today is a point-of-service plan (POS). A POS is a hybrid arrangement that combines aspects of a traditional HMO and a PPO. These plans are characterized by a higher degree of managed care than that provided by a PPO. In this plan, members elect whether to

-receive treatment within the network or outside the network. Subscribers are allowed to use the services of physicians within an HMO or outside the plan. If a member seeks treatment outside the network from a nonmember physician, the doctor will be paid on a fee for service basis. In addition, the benefits may be reduced as in the previously described PPO.

A deductible helps to

-reduce medical costs by eliminating small claims or losses. Most deductibles are fixed dollar amounts.

PPOs provide health care through its network but also allow members to seek treatment out of the network if desired. This aspect of a PPO provides coverage on an indemnity basis (i.e., reimbursement). However, coverage and benefits may be

-reduced when treatment is sought outside the network. Therefore, a range of service is provided rather than comprehensive type care as in an HMO.

Short-term disability plans, generally available through employer-sponsored benefit plans, usually provide monthly benefits for up to

-six (6) months (i.e., up to 26 weeks).

If John had owned an indemnity plan that paid $200 per day for a hospital stay, he would receive $4,000 (twenty days X $200 per day).Therefore, the indemnity plan does not pay

-specifically for the medical expenses. Rather, it pays an insured a stated benefit identified in the contract. In this example, the policy pays or "indemnifies" John an amount per day for hospitalization.

The exclusions appearing in these HMO plans are also similar and in many cases identical to those found in a major medical plan. In addition, these policies also include provisions that permit an insured to control his or her cost of coverage as well including a

-stop-loss limit, coinsurance, deductibles and other cost containment or cost savings method.

Supplemental Accident benefit is generally included in major medical plans although some insurers may require an extra premium for it. It provides that an insured will receive first dollar coverage up to a stated amount (i.e., $500) if he or she

-suffers an accidental injury. Coverage is generally provided up to the stated amount without the requirement of a deductible.

Many health plans combined hospital and surgical expense coverage. Surgical expense plans cover the cost of the

-surgeon's fee, an assistant surgeon, the fees of an anesthesiologist and any postoperative expenses.

With Business Overhead Expenses (BOE) Benefits received are

-taxable as ordinary income, but are, in essence, later a deductible expense when they are paid out by the business to meet continuing expenses.

Some plans cover this benefit on a scheduled basis (i.e., $2,000 for a knee operation) with an itemized list of all surgical procedures covered and their assigned dollar limit. This benefit schedule means

-that a maximum dollar amount of coverage is provided in an "itemized list" for each surgical procedure.

Managed care involves medical expense plans that attempt to control costs by controlling the behavior of participants (i.e., those insured). These plans involve

-the (prepaid) financing, managing and delivery of health care services by a group of medical providers who share in the financial risk of the plan (or who have an incentive to deliver cost effective medical services).

Once the insured's out of pocket expenses reach a specified dollar amount (i.e., the stop loss limit), the insurer pays 100% of any further medical expenses for the policy period. Therefore, the SLL is

-the amount of out-of-pocket expenses the insured incurs during the policy period. Premium can be saved by increasing one's SLL. If the SLL is lowered, the cost increases.

Most major medical policies include an initial deductible. This is

-the amount of the covered loss that must first be absorbed by the insured before other policy benefits are paid.

Consolidated Omnibus Budget Reconciliation Act (COBRA) mandated that employers must provide an employee and any "qualified beneficiary" with group health coverage following a "qualified event" (i.e., if employment is terminated). This federal law provides for

-the continuation of coverage under specific circumstances including job termination, death, divorce or a child ceasing to be eligible for group coverage.

Major medical health insurance evolved as a result of

-the increased expenses associated with medical procedures, treatment and care. These policies were designed to protect an individual and family against catastrophic type losses.

Assume that an insured was covered by a policy with a $500 initial deductible with a coinsurance clause of 80/20. He or she incurred expenses of $2,000. How much is the insured responsible for? How much is the insurer responsible for?

-the insured is responsible for the initial $500 deductible. This leaves $1,500 of remaining expenses. With an 80/20 coinsurance clause the insurer is responsible for its coinsurance amount of 80% of the $1,500 which equals $1,200. The insured must pay his or her coinsurance amount of 20% of the $1,500 which equals $300. Therefore, the insured is responsible for $800 ($500 plus $300) and the insurer pays $1,200.

Disability Income Waiting Period — A waiting period, also known as the elimination period, is common to most types of disability income insurance. It functions like a deductible. On each occasion that an insured becomes totally disabled, a waiting period must be satisfied during which no monthly benefit is payable. The longer the waiting period selected,

-the lower the policy premium. The availability of an elimination period allows an insurer to reduce the cost of coverage for the benefit of everyone. Common waiting periods available include 30, 60, 90, 180, and 365 days.

The National Association of Insurance Commissioners (NAIC) created and authored the Long-Term Care Insurance Model Act which specifies

-the minimum standards that products must satisfy in order to be considered long-term care insurance.

Some medical plans cover specified or limited coverage while others provide comprehensive coverage. As mentioned, surgical expense plans sometimes provide benefits on a scheduled or relative value basis while some insurers cover medical services on a usual, customary and reasonable basis (UCR). This latter benefit means

-the normal charge for a certain procedure or service performed by medical providers in the insured's geographical area.

Some surgical expense plans provide coverage on a usual, customary and reasonable (UCR) basis. This means that

-the policy pays a benefit deemed to be the usual, customary and reasonable charge for the geographical area where the procedure was performed.

Some group plans utilize a community rating method. This type of method is generally used for smaller groups or individuals and utilizes the identical premium rate structure for all subscribers or groups in a community regardless of their past or potential loss experience. In other words,

-the premiums in community rating are generally based upon the overall claim experience of the insurer.

Some medical expense plans provide basic benefits while others offer comprehensive coverage for all medical services provided as a result of an illness or accident. Benefits paid by the policy are sent directly to

-the provider (i.e., physician) or institution (i.e., hospital) or as a reimbursement of actual expenses incurred.

Insurance is to be used to indemnify or reimburse an individual or family for a loss. It is not to be used for

-the purpose of profiting from a loss.

Business Overhead Expense policies (BOE) do not include

-the salary or profit of the business owner. The salary of the owner should be protected by an individual disability income policy.

Because of the pre-authorization requirement, the medical provider files a form with the insurer describing the treatment needed. The insurer reviews the form and returns it to the provider (i.e., physician). The form specifies

-the services that are covered and the amount of any reimbursement.

Disability Income Premiums — Premium rates are determined per $100 of monthly income. Additional criteria that will affect or influence the amount of the annual premium includes:

-the waiting period selected; the monthly income benefit selected; the age, sex, income, occupation and health history of the proposed insured; the length of the benefit period selected; and whether or not the insured owns other disability income insurance.

Benefits are continually revised and upgraded. Benefit periods available, like disability income policies, may include

-twelve months, twenty-four months, five years, ten years or for life.

Long-term disability plans generally provide extended benefits after a disabled employee has been unable to work due to an accident or illness for six months. LTD plans provide benefits, following the initial six months of disability, for up to

-two, five or ten years, to age 65 and even for life in some cases.

Disability Income Monthly Benefit — Most disability income insurers who issue individual policies permit an applicant to purchase a monthly benefit that is 50 to 60% of their monthly earned income. Therefore, if the applicant's earned income is $3,000 per month, the insurer would allow him/her to purchase (a total benefit among all policies purchased)

-up to $1,500 to $1,800 of monthly income benefit. The reason insurers do not allow an individual to insure more of their income is to prevent malingering. For example, if a person was able to purchase a monthly benefit equal to 80% or 100% of their monthly income, he or she is statistically more likely to stay on disability longer.

Other HMOs function on an open-ended basis. Do not confuse this with open-panel. An HMO that is open-ended means that

-up to 10% of the medical services it provides may be delivered by physicians who are not affiliated nor formally contracted with the HMO. HMOs may also operate on a for-profit or nonprofit basis.

The initial type of managed care plan in existence was an HMO. These organizations did not provide coverage for treatment outside of the managed care network since they required subscribers to

-utilize the services of pre-approved providers. Many consumers shied away from these organizations since they felt that the choice of providers was not present.

All health insurance policies must contain a grace period. The minimum grace period for weekly premium policies is 7 days, for monthly premium policies, 10 days, and for all other types of policies, 31 days.

...

Insurance Fraud Department

1) Initiate independent inquiries and conduct independent investigations when the insurance fraud unit has cause to believe that a fraudulent insurance act may be, is being, or has been committed 2) Review reports or complaints of alleged fraudulent insurance activities from federal, state, and local law enforcement and regulatory agencies, persons engaged in the business of insurance, and the public to determine whether the reports require further investigation and to conduct these investigations 3) Conduct independent examinations of alleged fraudulent insurance acts and undertake independent studies to determine the extent of fraudulent insurance acts

Name three purposes of an annuity.

1)To liquidate an estate 2)For tax-free growth of principal 3)To distribute accumulated principal

Two Perils Covered By Health Insurance

1. Accidents 2. Sickness

Other Common Policy Provisions

1. Free Look Period (10 Day) 2. Renewal Clauses: - Optionally Renewable - Conditionally Renewable - Guaranteed Renewable -Non-Cancelable 3. Coordination of Benefits Clauses 4. Case Management Provisions - Second Surgical Opinions - Pre-Certification Provisions - Concurrent Review

Question 20 of 100 Which of the following is the most likely elimination period used in disability income policies that are purchased by a company for disability buy-out purposes? 24 months 12 months 180 days 0 days

24 months Explanation: To ensure that the insured owner is indeed permanently disabled and his interest in the business is not bought out too early, the elimination period in a disability buy-out policy is generally much longer than that found in individual (personal) DI policies.

General Regulations of Accident and Health Policies

1. Application for health insurance must be attached to the policy; any request for additional copies of the app must be answered WITHIN 15 DAYS of the request 2. Any policy with a stated age limit on coverage must continue through the policy period in which the insured reaches the age limit; misstatement of age limits insurers liability to a refund of premium 3. Insurers may not refuse benefits because services were provided by a nurse, chiropractor, optometrists, etc. and not directly by a physician 4. Group insurance coverage may not be terminated through non-pay of premium unless each certificate holder is given 45 days notice 5. Policies cannot be declared lapsed without 15 DAYS PRIOR WRITTEN NOTICE of impending lapse 6. Must provide benefit for the treatment of chemical dependency ; group contracts must establish minimum per person benefits of $8000 per year, $16000 per lifetime for chemical dependency treatment

9 Uniform Optional Provisions (protect the insurer)

1. Change of Occupation - change to a MORE hazardous occupation, BENEFITS REDUCED; change to a less hazardous occupation, RATE REDUCTION, REFUND OF EXCESS PREMIUM 2. Misstatement of Age - benefits will be changed to that which the premiums would have purchased at the correct age (cannot touch premiums like in life insurance) 3. Other Insurance in this Insurer - more than one policy in the SAME COMPANY, may elect which policy shall pay benefit on claim; other will cancel and return premiums to insured 4. Insurance with Other Insurers (Medical Expense Policies) - duplicating coverage with other insurers; company's liability shall be their pro-rate proportion relative to all other policies in forcer 5. Insurance with Other Insurers (Loss of Time/Disability Policies) - same as above 6. Relation of Earnings to Insurance - loss of time benefits shall not exceed current earnings of the insured or the average monthly income of the past two years, whichever is greater, but not less than $200 7. Unpaid Premiums - may be deducted from claims payments 8. Conformity with State Statutes - provisions that conflict with statutes of the state are automatically amended to meet requirements 9. Illegal Occupations - liability may be denied if insured is injured while committing an illegal occupation

Common Provisions of Group Health Insurance

1. Continuation of Group Benefits: grants right of the certificate holder to continue group coverage at up to 102% of the rate charged for coverage under the group policy for up to 18 MONTHS (as long as premiums are paid) after losing eligibility; reserved for individuals who have been covered for at least 3 CONSECUTIVE MONTHS prior to termination (except dental, vision, and prescription drugs) 2. Conversion Privilege: at termination or end of 18 month continuation period, certificate has 31 days to convert to their own individual insurance policy without evidence of insurability; premium will be based on individual's age and sex; conditions covered previously cannot be considered pre-existing

A true managed care plan should have 5 characteristics

1. Controlled access of providers 2. Comprehensive case management 3. Preventive care 4. Risk sharing 5. High quality care

Disability Optional Benefits/Riders

1. Cost of Living Rider: increase maximum benefits during a period of disability in relation to increases in the Consumer Price Index (known as the Cost of Living Adjustment Rider, COLA); must have been receiving benefits for 12 months before activated 2. Guaranteed Purchase Option (Guaranteed Insurability): insured can purchase additional amounts of benefits at selected intervals without proving insurability 3. Waiver of Premium: will make premium payments on behalf of the insured from the date of disability if disabled for longer than the elimination period

12 Uniform Mandatory Provisions (protects the insured)

1. Entire Contract: Changes - contract = policy, endorsements, and application; only an executive officer, not an agent, can make changes; prevents external documents from being added to the policy 2. Time Limit On Certain Defenses (Incontestable) - no statements (except fraud) shall be used to deny a claim after the policy has been in force for two years 3. Grace Period - 10 days if payments made monthly, 31 days if made annually; protects against unintentional lapses 4. Reinstatement - can be done with app if premium is accepted; if app is required, reinstatement is automatic if premium not refunded within 45 days of issuance of conditional receipt; accidents covered IMMEDIATELY, sickness after 10 DAYS 5. Notice of Claim - must notify company within 20 DAYS of a loss; notice of continuation of disability may be require every 6 months 6. Claims Forms - insurer must supply claims forms WITHIN 15 DAYS after learning of claim 7. Proof of Loss - insured must provide within 180 DAYS OF LOSS 8. Time of Payment of Claims - claims are to be paid immediately; loss of time benefits paid not less frequently than monthly 9. Payment of Claims - death benefits are to be paid to beneficiary or estate; other claims to the service provider at the insurer's option 10. Physical Exam and Autopsy - insurer's right to examine the insured; not allowed where PROHIBITED BY LAW 11. Legal Actions - insured must wait 60 DAYS after submitting proof of loss before legal action can be taken, but not later than 3 years 12. Change of Beneficiary - consent of beneficiary not require unless irrevocable

Other Uniform Provision Requirements

1. Entire money and considerations must be expressed 2. Effective and termination dates must be expressed 3. Statements are binding only if application is attached 4. Only the APPLICANT can alter statements on the application 5. False statements on the application may bar recovery on a claim only if they are MATERIAL to the acceptance of risk 6. If a misstatement of age leads the insurer to accept premiums beyond a state age limit, the insurers liability is limited to a refund of premium 7. No policy provision may waive, restrict, or modify the listed Uniform Provisions 8. Exceptions and Reductions must be clearly labeled 9. No undue prominence may be given to any section 10. All Accident and Health Insurance policies must insure only one person or one policy holder for family coverage. Children may be insured under family coverage through age 26 11. Each policy form (including riders) must be identified by a number in the lower left-hand corner of the 1st page

Characteristics of a PPO

1. Form of prepaid healthcare (managed care) 2. No claim forms - provider files claim 3. Co-Pays (flat amount) 4. Subscriber/Member 5. Preventative Care - routine physicals 6. Still have in-network providers, but MUCH wider selection; out-of-network doctors/providers covered, but have co-insurance concept (deductible, etc.) 7. Pick primary care physician 8. Got rid of gatekeeping system (no longer need a referral to see a specialist) 9. No panel system

Characteristics of an HMO

1. Form of prepaid healthcare (managed care) 2. No claim forms - provider files the claim 3. Co-Pays 4. Subscriber/Member 5. Preventative Care - Routine Physicals 6. In-Network v. Out of Network (not covered) 7. Primary Care Physicians - Assigned Doctor 8. Gatekeeping System (referral/specialist) 9. Open v. Closed Panel 10. Independent Practice Association (open panel)

Characteristics of Group Health Insurance

1. Head of organization gets a Master Policy and each person in the group gets a Certificate of Insurance 2. Can be non-contributory (100% participation) or Contributory (75% participation) 3. Employees must become eligible for the group coverage no later than 90 DAYS after beginning employment (full-time employees included non-seasonal persons working 30 hours or more per week) 4. Physical exam not required for groups of 50 or more if the individual joins within first 31 days of eligibility 5. After first year of coverage, premiums for group health insurance may be adjusted every six months with 45 days notice of rate increase to employees (cost of coverage depends on amount of benefits, ratio of males/females, average age, and loss experience of group) 6. No fiduciary (employer) may cause the cancellation of group insurance through non-pay of premiums unless employers are provided 45 DAYS ADVANCE WRITTEN NOTICE

Basic Medical Expense Coverage (Includes)

1. Hospital Expenses 2. Surgical Expenses 3. Medical Expenses

To Calculate Deductible

1. Insured Pays: Total - Deductible, x Co-Pay, + Deductible 2. Insurer Pays: Total - Deductible, x Co-Pay (Insurer's Portion)

Specialty Policies

1. Limited Benefit Policies 2. Accidental Death and Dismemberment 3. Key Person Disability 4. Business Overhead Expense 5. Disability Buyouts 6. Dental Insurance

Characteristics and Provisions of Major Medical Policies

1. Maximum Benefit/Aggregate Limit: per person over their lifetime; may be applied on a lifetime or per occurrence basis 2. Deductible: initial deductible applies to each person, each year (family deductibles limit total deductibles applicable to a family each year) 3. Common Accident Provision: only one deductible would apply is several family members were injured in a common accident 4. Co-Insurance/Participation Provision: medical expenses are shared by the insured and insurer based on a ratio 5. Stop-Loss Clause: limits max out-of-pocket payment of co-insurance paid by the insured to a specified dollar amount in which 100% is paid by insurer for the rest of the year 6. Carry-Over Provision: expenses incurred in last three month of the year that received NO reimbursement can be used towards deductible for the following year (avoids paying 2 deductibles in a short period of time) 7. Restoration of Benefits Provision: replaces a certain amount of the aggregate limit each year to reinstate coverage lost due to claims 8. Pre-Admission Certification: form of case management; requires treatment be pre-authorized; requires that provider submit expected procedures for approval (prevent unnecessary tests and treatments)

Nature of Accident and Health Policies (Requirements Regarding the Forms)

1. Policies must contain a statement to the effect of "Your policy may not be in force when you have a claim! Please read your policy!" 2. Minimum 10 day free look period 3. Policies may be renewed at the option of the insured unless the insurer provides, in writing, notice of intent to non-renew (30 days to 2 years notice of nonrenewal, depending on length of policy) 4. Rates can be increased on a CLASS BASIS with approval from the commissioner with 45 DAYS NOTICE 5. Coverage cannot be terminated upon reaching termination date if it is found that the child is incapable of self-sustaining employment due to mental or physical handicap 6. Policies that include dependent children begin at moment of birth and will cover congenital deformity (Newborns covered from moment of birth, but must be added within 31 days) 7. Cannot use genetic material to determine insurability (or sickle cell TRAIT) 8. Must provide coverage for preventive measures (mammograms, pap smears, etc.); also must cover cancer treatment drugs for benign and malignant tumors 9. Forms or Rates for accident and health coverage must be disapproved by the commissioner within 90 days, or can be used

Possible Structures of a HMO

1. Staff Model: HMO owns the facility and health care providers are on staff to the HMO; services are received at the HMO facility and treatment outside the facility will not be provided (CLOSED PANEL) 2. Group Practice Model: HMO is organized by a cooperative of medical practitioners as a for-profit enterprise; services are provided at the HMO facility with benefits not paid or greatly reduced for treatment outside of the facility; can be closed or open paneled 3. Individual (Independent) Practice Association Model: individual doctors participating in the HMO continue to see patients at their offices rather than at a central facility and provide services at prearranged prices; Health care providers are NOT employees of the HMO (OPEN PANEL)

Exclusions to the Basic Medical Expense Policies

1. Vision Care 2. Out-Patient Prescription Drugs 2. Outpatient Treatment

Exclusions to Major Medical Policies

1. War and Military Duty 2. Intentionally Self-Inflicted Injuries 3. Strictly Cosmetic Procedures 4. Vision Care 5. Dental Care 6. Treatment in a Government Facility (such as a VA hospital - double coverage) 7. Occurrences covered by Workers Comp

Common Characteristics of Comprehensive (Supplemental) Major Medical Policies

1. initial benefits are paid in accordance with policy limits and schedules as established in the basic expense portion of the coverage without an initial deductible up to a certain amount 2. Corridor Deductible is the amount of money that the insured must pay after the basic medical (hospital) expense coverage has reached its limits and before the major medical benefits begin; amount typically lower than the initial deductible found in major medical and assessed in the middle of coverage as opposed to the beginning 3. After corridor deductible is satisfied, major medical coverage performs in the same manner as normal utilizing both co-insurance and stop-loss clause

Question 53 of 100 The optional cancelation provision in an individual health policy allows the insurer to cancel the policy for failure to pay premiums. However, the insurer must give the policyowner how many days' notice before canceling in this case? 45 days 30 days 15 days 10 days

10 days Explanation: The insurer must give the policyowner 45 days' notice before canceling a health policy. If cancelation is due to nonpayment of premium, the insurer must give the owner 10 days' notice.

The probationary period is a waiting period, often

10 to 30 days, from the policy issue date during which benefits will not be paid for illness-related disabilities.

In order for an employee to be considered eligible for small group insurance, he/she must work at least how many hours per week?

25 ( "eligible employee" means an employee who works full time, having a normal work week of 25 or more hours, and who has met any applicable waiting-period requirements or other requirements)

Credit Disability

A credit disability policy is issued only to those in debt to a specific creditor. In case of the borrower's disability, payments to the creditor will be made on the loan until the disabled borrower is able to return to work.

What percentage of the premium can an employer charge a non-disabled employee for COBRA coverage:

102% Under COBRA, the premium cannot exceed 102 percent of the cost of the plan for similarly situated individuals who have not incurred a qualifying event, including both the portion paid by the employees and any portion paid by the employer before the qualifying event, plus 2 percent for administrative costs.

Question 70 of 100 Anthony becomes an agent for Acme Insurance Company. Acme has not filed the notice of appointment with the Superintendent. It must do so within how many days? 10 15 30 31

30 Explanation: The insurer must file a notice of appointment with the Superintendent within 30 days of making a producer its agent or receiving the first insurance application.

Medicare supplement policies, by law, must provide a free look provision of

30 days (Florida follows the NAIC model in following a 30-day free look provision)

Frances buys a Medicare supplement policy and a long-term care insurance policy. If she is unsatisfied with them, she can return them for a full refund of the premiums within how many days?

30 days in both cases

The Florida Health Insurance Coverage Continuation Act requires insurers that sell health plans to small employers to offer in those plans to elect to continue coverage, without providing evidence of insurability, to employees who lose their coverage and are unable to replace it. The premium rate for this coverage may NOT exceed? A) The regular group rate B) 102% of the regular group rate C) 115% of the regular group rate D) 200% of the regular group rate

115% of the regular group rate ( The coverage may be extended for a period of up to 18 months at a rate not to exceed 115% of the regular group rate)

Question 6 of 100 If a disability arises from a pre-existing condition, an individual health insurance policy can exclude it from coverage if the disability begins within how many months after the effective date of coverage? 6 12 18 24

12 Explanation: Individual and group health insurance policies can exclude coverage for disabilities that begin within the first 12 months after the effective date of coverage if the disabilities result from a pre-existing condition.

Question 11 of 100 Bob had been working at Sunset Airlines for ten years when he was laid off on June 1. How long can Bob continue his health insurance coverage under Sunset's group plan? 6 months 12 months 18 months 24 months

12 months Explanation: A group sickness and accident insurance policy must provide that an employee or member who has been insured continuously for at least 3 months and whose coverage is terminated for any reason other than nonpayment of the premium is entitled to continue coverage under the group plan for up to 12 months.

Anyone that files an income tax return as a resident of the commonwealth must indicate whether they have had creditable coverage in force for each of the previous ... months. If a taxpayer does not comply with this requirement, the Commissioner is permitted to retain any amount overpaid for creditable coverage - provided it does not exceed ....% of the minimum insurance premium for that coverage.

12 months, 50%

Elimination periods found in most policies range from

30 days to 180 days. The longer the elimination period, the lower the premiums

V is insured under an individual Disability Income policy with a 30-day Elimination period. On July 1, he is involved in an accident and temporarily disabled. He returns to work on December 1. How many months of benefit are payable?

4 months After the 30-day Elimination period has been satisfied, there will be 4 months of benefit payments.

Which of the following acts protects persons from harassment by federal administrative agencies? A. Freedom of Information Act B. Equal Access to Justice Act C. Government in the Sunshine Act D. Privacy Act

C. Government in the Sunshine Act

Question 2 of 100 A health insuring corporation policy must provide coverage for dependent children until what age, provided they are Ohio residents and are not eligible for coverage under Medicare or another group policy? 18 28 21 19

28 Explanation: A health insuring corporation policy that ends coverage for an unmarried dependent child upon reaching the limiting age specified in the policy must extend until age 28 if the child is an Ohio resident or full-time student at a public or private higher education institution, is not employed by an employer that offers a health benefit plan, and is not eligible for coverage under Medicare or Ohio's Medicaid program.

A long-term care insurance policy issued in Washington must trigger benefits when an insured is unable to perform how many activities of daily living?

3

The insurance company must retain all advertisements from the date the advertisement was first used, for how long?

3 years

Health Care False Claim Act: deceptive claim

A deceptive claim is a claim that is based on a false statement of fact or the failure to reveal a material fact, with the purpose of misleading a health care payer. False means entirely or partially untrue or deceptive.

Frank is shopping for a disability income policy. Which of the following would have the HIGHEST premium? 14 day waiting period / 5 year benefit period 14 day waiting period / 10 year benefit period 28 day waiting period / 5 year benefit period 28 day waiting period / 10 year benefit period

14 day waiting period / 10 year benefit period

If a parent would like to enroll a child over the ane of 5 into the Florida Healthy Kids Program, their family income must be under what percentage of the federal proverty level?

200% ( To qualify for the Florida Healthy Kids program, a child's family's income must be below 200% of the federal poverty level. If a child's family's income exceeds 200%, they are only eligible until the age of 5)

Question 62 of 100 Terry is licensed in Ohio as a life and health insurance agent. To maintain his license, how many hours of continuing education must he complete every two years? 12 24 30 40

24 Explanation: In every two-year license renewal period, licensees are required to complete at least 24 hours of continuing education. At least three hours must be in ethics training.

Provided they are over the age of ....., all of the following individuals are required to obtain creditable coverage for as long as it is affordable: Residents of the ..........; and Individuals that have become residents within the previous ... days.

18, commonwealth, 63 days

Long term care benefits are triggered when the insured is unable to perform at least A) 1 ADL's B) 2 ADL's C) 3 ADL's D) 4 ADL's

2 ADL's ( Long term care benefits are triggered wen the insured is unable to perform at least 2 ADL's)

A policyholder has a major medical plan with a 80%/20% coinsurance and a deductible of $75. If the insured has previously met her deductible and receives a bill for $175, how much will the insurer pay? $35 $75 $100 $140

D)

Similarly, health benefits plans are prohibited from including waiting periods that exclude coverage for more than ... months (following the date of enrollment). When an eligible individual or group changes from one health benefit plan to another, a new waiting period may be employed - for up to .... months. No waiting period may be imposed if an insured is eligible for creditable coverage for ... months prior to the date of enrollment.

4 months, 4 months, 18 months prior

If an insurer requires an applicant to take an HIV test, the insurer must notify the applicant of positive tests results no later than ...... days from the blood sample being taken.

45 days

Question 100 of 100 A health insuring corporation policy that provides maternity benefits must cover a hospital stay of at least how long? 24 hours after a vaginal delivery 48 hours after a vaginal delivery 72 hours after a Cesarean section 48 hours after a Cesarean section

48 hours after a vaginal delivery Explanation: Health insuring corporation policies that provide maternity benefits must cover a hospital stay of at least 48 hours after a vaginal delivery and at least 96 hours after a Cesarean section.

What is the statute of limitations on lawsuits for health insurance policies

5 years ( No legal action may be brought on a health insurance policy within 60 days after written loss has been given. After 60 days in the state of Florida, legal action may be brought against the insurer for up to 5 years after filling proof of loss)

For purposes of Washington health insurance reform legislation, a small employer is any person or business entity that is actively engaged in business and employed an average of no more than how may persons in the preceding calendar year?

50

A corporation can be considered a " small-group employer" if it has at least one and a maximum of how many employee's? A) 20 B) 30 C) 40 D) 50

50 ( "small group employers" means any person , firm, corporation, partnership, or association that is actively engaged in business that has no more than 50 eligible employees)

An insured, returning from a disability, is working part-time. If he qualifies for a partial disability provision, he will receive what percent of his pre-disability wage from disability benefits in addition to his part-time salary? Select one: a. 30% flat with no offsets b. 50%, but the total wage may not exceed his pre-disability wage c. 60% offset by Social Security d. 70% if the part time wage is less per hour than his pre-disability wage

50% of pre-disability wage is usually the maximum for a partial disability. The correct answer is: 50%, but the total wage may not exceed his pre-disability wage

A pre-existing condition in a long-term care insurance policy issued in Washington cannot be defined more restrictively than a condition for which medical advice or treatment was recommended by or received from a physician within how many months before the effective date of coverage?

6

Question 49 of 100 A Medicare supplement policy cannot define a pre-existing condition more restrictively than a condition for which medical advice was given or treatment recommended by or received from a medical doctor within how many months before the effective date of coverage? 24 12 6 3

6 Explanation: A Medicare supplement policy cannot define a pre-existing condition more restrictively than a condition for which medical advice was given or treatment was recommended by or received from a medical doctor within six months before the effective date of coverage.

Health benefit plans may not include pre-existing condition provisions excluding coverage for a period beyond ...months (following the date of enrollment).When determining whether a pre-existing condition provision applies, all health benefit plans must credit the time the person was covered under prior coverage - if that coverage was continuous for at least .... days prior to the request for new coverage. Coverage must become effective within .... days of the date of application.

6 months, 63 days, 30 days

All of the these are examples of cost sharing in a health insurance policy EXCEPT Copayments Deductibles Coinsurance Coordination

D)

Any carrier providing replacement coverage for group hospital, medical or surgical expense or service benefits within .... days from the date of discontinuance of a prior HMO contract or policy that provided the same benefits must ........ cover all enrollees who were validly covered under the previous HMO contract at the date of discontinuance, and who would otherwise be eligible for coverage under the succeeding carrier's contract, regardless of any provisions of the contract relating to active employment or hospital confinement or pregnancy.

60 days, immediately

Major medical insurance will typically cover medical expenses that result from a crime committed by the insured a self-inflicted injury intoxication a negative reaction to prescribed medication

D)

Question 65 of 100 Jane is insured under an individual accident and sickness insurance policy that also covers her family. The policy must include benefits for well child care from birth through what age? 6 8 9 12

9 Explanation: Accident and sickness insurance policies that cover an insured's family members must provide coverage for child health supervision services from the moment of birth until age nine.

Disability income insurance is designed to

replace lost income in the event of this contingency, and is a vital component of a comprehensive insurance program. May be purchased individually or through an employer on a group basis

If an insurance company offers Medicare supplement policies, it must offer which of the following plans? A) A B) A&B C) B-N D) A-D

A ( An insurance company must make available to each applicant a policy form offering the basic core benefits (Plan A) if it will offer any Medicare Supplement policies. An insurance company does not have to issue all or any of the plans B through N)

Which of the following is a true statement about dependent coverage on group health policies? Select one: a. The dependent can be a natural child, step child or adopted child. b. A child can be considered dependent after age 19 if he/she was disabled before that time. c. A child can be considered dependent after 19 if a full time student. d. All of the above

A dependent can be any of those listed. Usually coverage lasts until they reach 19, but if the child was mentally or physically disabled prior to turning 19, or if the child is a full time student, coverage can be extended. The correct answer is: All of the above

terminal illness settlement benefit A form of an accelerated death benefit is a terminal illness settlement benefit.

A form of an accelerated death benefit is a

When presenting long-term care or Medicare Supplement plans, it is necessary to provide the prospect with a: Select one: a. Prefilled application form b. A Shoppers Guide for the product presented c. Illustrations with large print d. Testimonials from other buyers

A Shoppers Guide (Outline of Coverage) is required for many sales to senior citizens. The correct answer is: A Shoppers Guide for the product presented

Minimum Standards for Individual Health Insurance Policies: Basic Hospital Expense Benefits

A basic hospital expense policy will pay an insured's hospital expenses for at least 31 days of continuous confinement while the insured receives necessary medical treatment after an accident or sickness. Coverage applies to daily hospital room and board, miscellaneous hospital services, and outpatient services.

Per Stirpes

A beneficiary class designation that states, if one of the primary beneficiaries dies before the insured, their portion of hte death benefit is paid to the deceased beneficiary's children when the insured dies. "through the roots" maintains the order of beneficiaries

Which of the following statements is true regarding key person disability income insurance? Select one: a. Premiums are not tax-deductible and benefits are taxable. b. Premiums are tax-deductible, but benefits are taxable. c. Premiums are tax-deductible and benefits are tax-free. d. Premiums are not tax-deductible, but benefits are received tax-free.

A business cannot deduct the premiums for key person disability income insurance, but the benefits are received tax-free. The correct answer is: Premiums are not tax-deductible, but benefits are received tax-free.

when should the claimant notify insurance?

A claimant must notify the insurer of the loss within 20 days after the loss or as soon thereafter as reasonably possible.

Non-Admitted Insurer

A company not licensed to do business in a particular state

A health insurance policy that will not pay benefits unless confined to a hospital is known as a: Select one: a. Noncancellable contract b. Unilateral contract c. Contract of adhesion d. Conditional contract

A conditional contract will not provide benefits or payments until specific conditions are met by the insured. The correct answer is: Conditional contract

Annuity

A contract that liquidates an estate and accumulates a sum of money as an income (retirement plan)

What is a "contributory" group health insurance plan?

A contributory plan is one that requires that each participating employee pay some specified part of the cost of the plan. This payment is usually made through a payroll deduction.

Most of HMOs operate through what type of system?

A group enrollment system either at their place of employment or as a member of an association ( Most HMOs operate almost exclusively through a group enrollment system, in which each member pays a fixed monthly premium, whether or not they have used the services of the HMO that month)

Most HMOs operate through what type of system?

A group enrollment system either at their place of employment or as a member of an association (Most HMOs operate almost exclusively through a group enrollment system, in which each member pays a fixed monthly premium, whether or not they have used the services of the HMO in the last month)

Medicare Supplement Health Insurance Act: guaranteed renewable

A guaranteed renewable Medicare supplement policy is renewable only at the insured's option through timely payment of premiums. The insurer can reserve the right to change premium rates by class.

What type of health insurance policy states that the insurance company may not cancel the policy, but they may increase the rates on a specified class of insureds? Select one: a. Non-cancellable policy b. Optionally renewable policy c. Guaranteed renewable policy d. Conditionally renewable policy

A guaranteed renewable policy allows the insurance company to increase rates on the policy anniversary, but it may not cancel the policy. The correct answer is: Guaranteed renewable policy

48 hours for vaginal birth or 96 hours for caesarean section A health benefit plan provides maternity benefits must provide at least 48 hours of inpatient care for vaginal birth, or 96 hours for caesarean section, for the mother and newborn infant following delivery.

A health benefit plan that provides maternity benefits must provide at least how many hours of inpatient care for the mother and newborn infant following delivery?

Health Care False Claim Act: health care payment

A health care payment is a payment for health care services or the right to receive payment for such services.

Preexisting Condition

A health condition or sickness that occurred prior to the issuing of a health policy

Preferred Provider Organization

A health insurance provider that gives members flexibility in choice of case providers

What is a health maintenance organization (HMO)?

A health maintenance organization is a health care delivery system which provides comprehensive health care services for its members. The members are typically enrolled on a group basis by their employer. The employer pays a fixed periodic contribution in advance for the services of participating physicians and cooperating hospitals. The employee may also contribute to the prepayment in some groups.

What type of benefits are paid under a hospital indemnity policy? Select one: a. Doctor's bills incurred both in and out of the hospital b. Specified sum of money for the length of the hospital stay c. Laboratory charges d. All of the above

A hospital indemnity policy provides income to the patient for as long as he or she is confined in the hospital. The correct answer is: Specified sum of money for the length of the hospital stay

Which statement best describes a Multiple employer welfare arrangement?

A joining together by employers to provide health benefits for the employee ( A MEWA provides benefits for a number of member groups)

Sam failed to enroll his spouse in his group health plan when she was eligible. What must be done to enroll her late? Select one: a. Give the spouse credit for time served under the other plan and let her enroll b. Require her to wait until the anniversary of the group plan c. Require a completed health statement and use an accept or reject method to determine eligibility d. Offer COBRA since she has lost coverage as a result of a reduction in hours

A late enrollment for a group plan will usually require a health statement and the insurance company will have the right to accept or reject the applicant. The correct answer is: Require a completed health statement and use an accept or reject method to determine eligibility

Fair Credit Reporting Act

A law that requires a reporting agency to take action if a consumer complains about inaccurate information

Cease and Desist Order

A legal term that means "stop doing whatever you are doing"

providing referrals A license is NOT required when you are providing referrals.

A license is NOT required when you are

8% A life insurance policy loan shall bear interest at a specified rate, NOT in excess of 8%.

A life insurance policy loan shall bear interest at a specified rate, NOT in excess of

Participating Life Insurance

A life insurance policy that allows policy holders to "participate" or share in the profits of the insurance company (mutual insurer). Policy which pays a dividend to its owner.

Nonparticipating Life Insurance

A life insurance policy that does not pay dividends to policyowners

Reduced Paid-Up Insurance

A life insurance policy that reduced the death benefit for life of insured with no additional premium. A non-forfeiture option.

giving the applicant merchandise worth $75 for the purchase of insurance A life insurance producer would be found guilty of inducing a customer to purchase insurance in all of these situations except giving the applicant merchandise worth $75 for the purchase of insurance.

A life insurance producer would be found guilty of inducing a customer to purchase insurance in all of the following situations EXCEPT:

Noncontributory Benefits

A life or health insurance plan that a employer provides for employees in which 100% of the employees are covered

Incontestable Clause

A life policy cannot be voided by the insurer after a period stated in the policy (2 years)

Joint Life Insurance

A life policy covering two or more lives. It may be written as a first to die or second to die policy

Paid-Up Life Insurance

A life policy that no longer requires a premium payment, yet still provides protection

An annuity is primarily used to provide? A. retirement income B. disability income C. long-term care benefits D. death benefits

retirement income

*How do HMOs differ from traditional health insurance plans?

A major difference is that the HMO provides medical service while emphasizing preventive medicine and early treatment through routine physical examinations and diagnostic screening techniques. At the same time, the HMOs also provide complete hospital and medical care for sickness and injury. Traditional health insurance plans are designed to provide reimbursement for medical costs in the treatment of sickness or injury. These plans emphasize curative rather than preventive medicine and contribute toward the cost of medical services rather than delivering the service.

How soon can the benefit payments begin with a deferred annuity?

A minimum of 12 months after date of purchase.

For what reason may an insurance company, within two years after the date of issue of the policy, return all premiums instead of paying a claim when the application is attached to, and made part of, the policy?

A misrepresentation, omission, concealment of fact, or incorrect statement may prevent recovery under the contract or policy only if any of the following apply: 1) A misrepresentation, omission, concealment, or statement is fraudulent or is material either to the acceptance of the risk or to the hazard assumed by the insurer 2) If the true facts had been known to the insurer pursuant to a policy requirement or other requirement, the insurer in good faith would not have issued the policy or contract, would not have issued it at the same premium rate, would not have issued a policy or contract in as large amount, or would not have provided coverage with respect to the hazard resulting in the loss.

*What is a "non-cancelable" policy?

A non-cancelable policy is continuable at the option of the policyowner at the premium stated in the policy. The insured thus may continue it until its stated date by timely payment of the fixed premium. No change in benefits or premiums may be made by the insurer.

For a non-contributory plan, how many of the employees must be offered coverage under the group? Select one: a. 75% b. 80% c. 90% d. 100%

A non-contributory plan is based on the employer paying the full cost of the program, which means 100% of the employees must be covered. The correct answer is: 100%

James has been out on disability for 3 years, but is working part time. If he cannot ever work full time, in order for James to receive benefits on this basis, his disability plan should have which provision? Select one: a. Rehabilitative employment b. Residual disability c. Partial disability d. Income protection

A partial disability benefit will allow a reduced benefit for as long as needed within the terms of the contract. The correct answer is: Partial disability

In order to qualify for the skilled nursing benefit under Medicare Part A, the patient must do all of the following, EXCEPT: Select one: a. Have a qualifying hospital stay prior to going to the skilled nursing facility b. Be expected to show improvement in the condition being treated c. Be limited to 20 days of custodial care d. Be admitted to a Medicare approved facility

A patient may receive skilled nursing care up to 100% for 20 days and an additional 80 days subject to a co-pay. The patient must show improvement in condition to continue to qualify for payment of skilled nursing care. The correct answer is: Be limited to 20 days of custodial care

To qualify for Medicare based on end stage renal disease (ESRD) an individual must meet all of the following conditions, EXCEPT: Select one: a. Be age 65 b. Require regular dialysis due to kidney failure c. Have worked long enough to receive benefits under Social Security d. Be a dependent of someone who has worked long enough to qualify for Social Security benefits

A person can become eligible for Medicare at any age as long as the work or dependency history makes them eligible for Social Security benefits. A need for a kidney transplant may also be a qualifying event. The correct answer is: Be age 65

What is meant by the lapse of a policy?

A policy lapses and insurance ceases when the premium is not paid when due nor within the grace period.

*What is meant by the term "preexisting condition"?

A preexisting illness or preexisting condition is defined as any disease or sickness that was diagnosed by a physician or treated within a stated period prior to health insurance taking effect, or any disease or sickness that was diagnosed by a physician not treated prior to the effective date of coverage; or any disease or sickness exhibited within a period before coverage symptoms that a physician could have diagnosed and for which a prudent person would have sought treatment.

A primary dental plan will usually cover which of the following services? Select one: a. Cleaning, X-rays and fillings b. Fillings and Crowns c. Orthodontics d. Endodontics

A primary dental plan is designed to provide service for preventative (cleaning and X-rays) and fillings. The correct answer is: Cleaning, X-rays and fillings

Misappropriation of premium funds Disciplinary action may be taken by the Commissioner for misappropriation of premium funds.

A producer may be disciplined by the Commissioner for which of the following actions?

Errors and omissions

A professional liability for which producers can be sued for mistakes of putting a policy into effect are Fiduciary bond Errors and omissions Fiduciary trust Errors and oversights

Binding Receipt

A receipt that verifies the agent received money from the applicant. Life insurance cannot be bound.

P received Disability income benefits for 3 months then returns to work. She is able to work one month before her condition returns, leaving her disabled once again. What would the insurance company most likely regard this second period of disability as?

A recurrent disability A second period of disability from the same or related cause of a prior disability is called a recurrent disability.

Question 41 of 100 Under an insurance contract, which of the following best describes the difference between a representation and a warranty? A representation is not part of a contract, while a warranty becomes part of a contract. A representation is always part of a contract, while a warranty is part of a contract only under certain conditions. representation is guaranteed to be true, while a warranty is not. A warranty determined to be false has no effect on the validity of a contract, and a representation is not regarded this way

A representation is not part of a contract, while a warranty becomes part of a contract. Explanation: A representation is not guaranteed by its maker to be true; it is only believed to be true. A warranty is a statement guaranteed to be true, and it becomes a party of a policy contract

A benefit that is a percentage of the total disability benefit for a period of disability is called: Select one: a. Recurrent disability b. Limited disability c. Residual disability d. Presumptive disability

A residual disability benefit is a percentage of the total disability benefit for periods of partial disability. The correct answer is: Residual disability

Who can sell variable annuities?

A sales rep. who is registered with FINRA as well as one who holds a state insurance license.

Variable Life Insurance

A security based permanent life insurance policy. The policy owner gets to choose how the cash values are invested (separate account)

Health Insurance Counseling & Advocacy Program

A service provided by volunteers that advises the elderly about insurance needs for no fee

Health Insurance Counseling & Advocacy Program (HICAP)

A service provided by volunteers that advises the elderly about insurance needs for no fee

What is a single premium funded by?

A single lump-sum premium which creates the principal immediately.

*What is the definition of a "small employer"?

A small employer is an employer who employs not more than 50 employees, and the majority of whom are employed in Florida. The law applies to employers with 1-50 employees. (This includes sole proprietors, independent contractors and self-employed individuals.)

Which of the following policies is a special risk policy? Select one: a. Dread disease b. Hospital indemnity c. Travel accident d. Cancer

A special risk policy will pay one benefit for a specific event. Once the travel accident policy pays for an accidental death, it will no longer be in force. The correct answer is: Travel accident

Deductible

A stated dollar amount that the insured must pay before policy benefits are paid

Corridor Deductible

A sum of money that the insured pays on a health claim after the insurer has paid for the basic benefits but before the major medical portion of the policy pays any part of the claim.

A group blanket health policy is best suited for which of the following? A) A manufacturer B) a large family C) A summer camp D) A small employer

A summer camp ( group blanket health insurance polices are meant to cover members of a group or association without evidence of insurability. Coverage is usually limited to loss from specific causes)

180 days A temporary producer's license issued by the Insurance Commissioner without examination is valid for a period of no longer than 180 days.

A temporary producer's license issued by the Insurance Commissioner without examination is valid for a period of no longer than

Which of the following would be considered a limited benefit policy? Select one: a. A blanket policy b. A travel accident policy c. A hospital indemnity policy d. A cancer policy

A travel accident policy will pay a benefit only if the loss occurs when traveling. The correct answer is: A travel accident policy

Accidental Death & Dismemberment

A type of life and health insurance which pays a lump-sum benefit in the event of either the accidental death or dismemberment of the insured. Pays a death benefit (principal sum) or benefit for losing a limb (capital sum) in the event of an accident.

Which of the following groups would probably be covered by blanket insurance? A) A large family B) A publishing company C) people who obtain temporary insurance D) A university's sports team

A university's sports team ( A blanket policy covers members of a particular group when they are participating in a particular activity. Such groups include students, campers, passengers on a common carrier., or sports teams. Often the covered individuals name is not known because individuals come and go. Unlike group health insurance, the individuals are automatically cover, and they do not receive a certificate of insurance)

Insurance policy

A written contact that outlines the obligations and responsibilities of the insured and the insurer

Medical Expense Insurance would cover an injury occurring at the insured's residence an injury occurring at work an injury caused by war elective surgeries

A)

Medical expense policies will typically cover which of the following? Injuries caused by accidents Routine dental care Prescription eyeglasses Voluntary cosmetic procedures

A)

Ted has a health insurance plan that requires him to pay a specific sum out of pocket before any benefits are paid in a calendar year. Which of these does his health plan have? Calendar-year deductible Coinsurance provision Stop-loss feature Integrated deductible

A)

Which of the following does specified disease insurance NOT cover? costs covered by medical expense insurance medical expenses that are noncovered incidental costs out-of-pocket expenses

A)

first appeal for administrative order consists of ____ by the _____ ____, and further appeal can be made to the appropriate ____.

review, administrative agencies, court

Jerry is an insured who understated his age on his life insurance application, paying $12 per $1,000 of insurance instead of $15 per $1,000. If he dies, how will the adjusted death benefit be calculated? A) 12/15th of the policy's face amount B) 1/2 of the policy's face amount C) 3/4 of the policy's face amount D) Full face amount

A) 12/15th of the policy's face amount

Which of the following is considered to be an alternative to a life settlement? A) Accelerated death benefit rider B) Waiver of premium rider C) Extended term option D) Decreasing term insurance

A) Accelerated death benefit rider

If an insured dies because of an accident, which type of life insurance rider will provide additional coverage? A) Accidental death rider B) Payor rider C) Accelerated rider D) Extended term rider

A) Accidental death rider

Which dividend option would an insurer invest the policyowner's money and add any interest earnings as the dividends accrue? A) Accumulation at Interest Option B) Cash Dividend Option C) Paid-Up Additions Option D) One-Year Term Dividend Option

A) Accumulation at Interest Option

What are collateral assignments normally associated with? A) Bank loans B) Policy loans C) Insuring clause D) Automatic premium loans

A) Bank loans

What disability policy indemnifies the business for certain expenses incurred when the business owner is disabled? A) Business overhead expense policy. B) Cash value policy. C) Key-person disability policy. D) Disability buy-out policy.

A) Business overhead expense policy.

In what part of an insurance policy are policy benefits found? A) Declarations B) Entire contract C) Waivers D) Conditions

A) Declarations

Barbara's policy includes a rider which allows her to purchase additional insurance at specific dates or events without evidence of insurability. This rider is called a(n) A) Guaranteed insurability rider B) Payor rider C) Endowment rider D) Family income rider

A) Guaranteed insurability rider

Harry, the owner of a convenience store, is the insured under a business overhead policy. Were Harry to become disabled, the policy would cover all of the following EXCEPT: A) Harry's salary. B) the store manager's salary. C) utility bills. D) the rent.

A) Harry's salary.

Ned recently injured his back. The insurance company might legitimately deny his claim for disability income benefits for which of the following reasons? A) He is not under a doctor's care. B) His wife's income is adequate to support both of them. C) His income from investments is adequate to replace his income. D) He injured his back while snowboarding on vacation.

A) He is not under a doctor's care.

Which of these is NOT considered to be a nonforfeiture option in a whole life insurance policy? A) Interest only B) Reduced paid-up insurance C) Extended term insurance D) Cash surrender

A) Interest only

Which of the following is an optional provision in an individual accident and health insurance policy? A) Misstatement of age. B) Entire contract. C) Reinstatement. D) Time limit on defenses.

A) Misstatement of age. Individual accident and health insurance policies must contain reinstatement, time limit on defenses, and entire contract provisions. A misstatement of age provision is optional. If the insured's age has been misstated, he will receive the benefits that the premium would have purchased at the correct age.

Joanne has a $100,000 whole life policy with an accumulated $25,000 of cash value. She would like to borrow $15,000 against the cash value. Which of the following statements is TRUE? A) Net death benefit will be reduced if the loan is not repaid B) No interest will be charged on loan balance C) Term life policies are the only type of insurance that allows policy loans D) A loan can be taken out for up to the face amount of the policy

A) Net death benefit will be reduced if the loan is not repaid

Which situation accurately describes a reduced paid-up nonforfeiture option? A) Policy has a decreased face amount B) Face amount of the new policy equals that of the original policy C) Cash value is surrendered to policyowner D) Premiums must continue to be paid

A) Policy has a decreased face amount

A policyowner may exercise which of these dividend options that uses the dividend to pay all or part of the next premium due? A) Reduction of premium dividend option B) Extended term option C) Paid-up option D) Cash dividend option

A) Reduction of premium dividend option

Which of the following statements about the grace period and reinstatement provisions in a health insurance policy is NOT correct? A) Under a health policy's reinstatement terms, insured losses from accidental injuries and sickness are covered immediately after reinstatement. B) Craig's health policy has a grace period of 31 days. He had a premium due June 15, while he was on vacation. He returned home July 7 and mailed his premium the next day. The insurer received it July 10. His policy would have remained in force. C) States may require grace periods of 7, 10, or 31 days, depending on the mode of premium payment or term of insurance. States may also set their own state specific grace periods as long as those periods are at least as favorable as those set in the model provisions act. D) Warren's medical expense policy was reinstated on September 30. He became ill and entered the hospital on October 5. His hospital expense will not be paid by the insurer.

A) Under a health policy's reinstatement terms, insured losses from accidental injuries and sickness are covered immediately after reinstatement. **Only losses due to accidental injury are covered immediately upon reinstatement of the policy.

Which of the following provisions is optional in an individual health insurance policy? A) Unpaid premium provision. B) Change of beneficiary provision. C) Entire contract provision. D) Grace period.

A) Unpaid premium provision. An unpaid premiums provision is optional and states that when a claim is paid, any premium due may be deducted from the payment.

Bruce is involved in an accident and becomes totally and permanently disabled. His insurance policy continues in force without payment of further premiums. Which policy provision is responsible for this? A) Waiver of premium provision B) Insuring provision C) Return of premium provision D) Automatic premium loan provision

A) Waiver of premium provision

All of these are common exclusions to a life insurance policy EXCEPT A) accidental death B) military service C) aviation D) hazardous occupations

A) accidental death

All of the following types of insurers underwrite health insurance EXCEPT: A) annuity companies. B) casualty insurance companies. C) monoline companies. D) life insurance companies.

A) annuity companies.

Individual accident and health insurance policies must contain all of the following provisions EXCEPT: A) change of occupation provision. B) change of beneficiary provision. C) proof of loss provision. D) time limit on certain defenses provision.

A) change of occupation provision.

Ownership of a life insurance policy may be temporarily transferred with a(n) A) collateral assignment B) absolute assignment C) transferable assignment D) beneficiary assignment

A) collateral assignment

Life insurance policies will normally pay for losses arising from A) commercial aviation B) war C) suicide D) hazardous jobs

A) commercial aviation

Which of the following is NOT a common life insurance policy rider? A) extended term B) automatic premium loan C) waiver of premium D) accidental death

A) extended term

A provision that allows a policyowner to withdraw a policy's cash value interest free is a(n) A) partial surrender B) waiver of premium C) automatic premium loan D) grace period

A) partial surrender

Benefit periods for short-term disability income policies typically vary from: A) six months to two years. B) one to 12 months. C) one to five years. D) three months to three years.

A) six months to two years. Long-term disability policies carry benefit periods of two years and longer.

An insured individual and the policy's beneficiary die from the same accident. The common disaster provision states the insurer will continue as if A) the insured outlived the beneficiary B) the beneficiary outlived the insured C) no beneficiary was ever named D) the insured and beneficiary died at the same time

A) the insured outlived the beneficiary

A whole life insurance policy accumulates cash value that becomes A) the policy loan value which the insured may borrow against B) the death benefit C) the source of funding for administration fees D) a source of funding a term rider to the policy

A) the policy loan value which the insured may borrow against

If an insured dies during the grace period with no premiums paid A) the policy would be payable, minus the premium amount B) the policy would be payable only after the beneficiary makes past due premium payment C) all past premiums will be refunded with interest D) the claim would be denied

A) the policy would be payable, minus the premium amount

Which of the following Medicare supplement plans would be available to a reasonably healthy 9-year old? A) A only B) A-C only C) A-N D) K&L

A-N (All Medicare supplement plans ( A-N) must be made available to qualifying applicants, regardless of age)

Which of the following is a provision of the Freedom of Information Act? A. It gives the public access to documents in the possession of federal administrative agencies. B. It protects persons from harassment by federal administrative agencies. C. It opens most federal administrative agency meetings to the public. D. It allows public admission to the day-to-day workings of an administrative agency.

A. It gives the public access to documents in the possession of federal administrative agencies.

Which of the following is true of a substantive rule? A. Violators can be held criminally liable. B. It does not have the force of law and is only issued as a guideline. C. Substantive rules are exempt from judicial review. D. It interprets existing statutory language

A. Violators can be held criminally liable.

Life Paid-Up

Also known as a limited payment whole life policy. Premiums are paid for a specific number of years, but the policy still endows at 100. Type of policy with premiums that are fully paid up within a stated period of time, but endows at age 100.

Contingent Beneficiary

Also known as the secondary beneficiary, receives the policy proceeds if the primary is deceased

Premium

Amount of money paid by the insured (policy owner) to the insurer

Question 60 of 100 Miranda submits an application for a $250,000 insurance policy on her friend Paul's life. ABC Insurers issues the policy, even though it is aware that Paul knows nothing about the policy. Which of the following is TRUE? ABC Insurers has acted unlawfully ABC Insurers is required by law to notify Paul about the policy within 30 days. ABC Insurers must obtain Paul's written consent after issuing the policy. ABC Insurers has acted lawfully.

ABC Insurers has acted unlawfully Explanation: It is unlawful for an insurer or agent to insure a person without the person's knowledge or consent.

There are two major causes of loss (perils) under a health insurance policy.

Accidental Injury and Sickness

Accidental Injury

Accidental bodily injury is an unforeseen and unintended injury that resulted from an accident rather than a sickness.

Licensed and duly appointed producers According to Oklahoma Statute, commissions may be paid to licensed and duly appointed producers.

According to Oklahoma Statute, commissions may be paid to

All individual or group health contracts or agreements According to Oklahoma law, all individual or group health contracts or agreements must include coverage for equipment, supplies, and related services for the treatment of Type I and Type II diabetes when prescribed by a physician or other licensed health care provider.

According to Oklahoma law, which of the following must include coverage for equipment, supplies, and related services for the treatment of Type I and Type II diabetes when prescribed by a physician or other licensed health care provider?

Kathy's annuity is currently experiencing tax-deferred growth until she retires. Which phase is this annuity in? A. Payout period B. Accumulation period C. Deferred period D. Growth period

Accumulation period

Question 40 of 100 Acme Insurers recently started an advertising campaign in Ohio for its new health insurance products. Which of the following statements is true? Acme may not use testimonials in the advertisements. Acme may not use paid endorsements in the advertisements. Acme can compare its products to competitors only if the comparisons are fair and complete. Acme's advertisements cannot mention other competitors or products.

Acme can compare its products to competitors only if the comparisons are fair and complete. Explanation: An advertisement can compare an insurer's products with those of its competitors, but the comparisons must be fair and complete.

________ law is law enacted by governments that regulate industries and businesses and professionals.

Administrative

a federal statute that establishes procedures to be followed by federal administrative agencies while conducting their affairs

Administrative Procedure Act

Which of the following would be considered unfair advertising for group health insurance? Select one: a. Using insurance jargon b. Contrived testimonials c. Incomplete comparisons of other insurers_ group health insurance products d. All of the above

Advertising for health insurance policies must be truthful, not misleading, and avoid using insurance jargon. The correct answer is: All of the above

While the............ eliminated pre-existing conditions for individual and group accident and health insurance policies,

Affordable Care Act

When does an immediate annuity begin making payments? A. After multiple premiums have been paid B. After the first premium has been paid C. After policy has been active for one year D. After the incontestable period

After the first premium has been paid

*What should insurance agents know about unauthorized insurance entities?

Agents must take the time to be sure they are dealing with a licensed insurance entity. Agents should check with the Department of Financial Services to be sure they are dealing with a Florida-licensed insurance company before representing any company. Recently, there has been an alarming increase in the marketing of insurance, predominantly group health plans, in which the insurer is not authorized to conduct the business of insurance in Florida. These plans are usually represented as being as an Employee Retirement Income Security Act (ERISA) plan, which is claimed to be exempt from the state Office of insurance Regulation. A true ERISA Plan must be single employer-based and the employer controls the plan. Any plan involving more than one employer is a Multiple Employer Welfare Arrangement (MEWA) and is subject to licensure and regulation by the Office of Insurance Regulation. Agents frequently agree to market these plans without exercising due diligence and then must face clients whose medical bills remain unpaid and are without any insurance.

Which of the following contains elements that are part of every legal contract? Select one: a. Agreement, Consideration, Competent parties, Legal purpose b. Offer and Acceptance, Consideration Competent parties c. Consideration, Competent parties, Legal purpose, Reasonable Expectations d. Agreement, Indemnity, Consideration, Legal purpose

Agreement (also offer and acceptance), consideration, competent parties and legal purpose are required elements of every contract. Reasonable expectations and indemnity are legal interpretation by the courts. The correct answer is: Agreement, Consideration, Competent parties, Legal purpose

The waiver of premium does NOT include which provision? All future premiums are waived if the insured recovers from the disability If the insured qualifies, the premiums are waived retroactively to the beginning of the disability The waiver of premium generally does not extend past the insured's age 60 or 65 To qualify for the exemption, the insured must experience total disability for more than a specified period

All future premiums are waived if the insured recovers from the disability

Minimum Standards for Individual Health Insurance Policies: Free-Look Provision

All health insurance policies (except single premium, nonrenewable policies) must provide the policyholder with an unconditional right to return the policy within ten days of receiving the policy and have the premium refunded if, after examining the policy, the policyholder is not satisfied with it for any reason. - if it is a Medicare supplement and long-term care insurance policies the insured gets 30 days - if the long term care is by mail, they get 60 days

Minimum Standards for Individual Health Insurance Policies: Renewal, Continuation, and Nonrenewal Provisions

All individual health insurance policies must include provisions for renewal, continuation, or nonrenewal.

When must an insurer's rates be filed with the Commissioner? Select one: a. Prior to usage b. Within 3 days after first usage c. Within 7 days after first usage d. Within 30 days after first usage

All insurer's rates must be filed with the Commissioner prior to usage and must be approved. The correct answer is: Prior to usage

Before starting operations as an HMO, the organization must meet which of the following requirements? A) Obtain a certificate of authority from the insurance department B) Obtain a valid health care provider certificate from the department of health and rehabilitation services C) Make a deposit of $10,000 to the rehabilitation administration expense fund D) All of the above

All of the above ( The requirements to start an HMO in Florida include all of the above, as well as other requirements as stated in the statutes)

Immunization benefits may not be subject to a schedule Immunization benefits may be subject to a schedule for each child listed as a dependent on a health benefit plan.

All of the following are true regarding required immunization benefits for each child listed as a dependent on a health benefit plan EXCEPT:

Health Care: *Guaranteed Renewability

All policies are renewable except for the following reasons: 1) failure to pay premiums; 2) fraud or intentional misrepresentation; or 3) the insurer ceases offering coverage, in which case the insurer is prohibited from selling coverage for a specified period of time.

Standard Provisions: Free Look, Return of Policy

All policies must have a notice either printed on its face or attached stating that the person to whom the policy is issued is allowed to return the policy within 10 days after delivery and request a refund for premium paid, if they are not satisfied for any reason. - 10 days to return policy after getting it

Return of Premium Rider

Allows for a portion of the premium to be returned if the policy owner is not disabled

What is the Florida law regarding an "outline of coverage" for health insurance policies?

An Outline of Coverage must accompany every individual or family accident and health insurance policy when: 1) it is delivered or issued for delivery. Or the Outline of Coverage can be delivered to the applicant at the 2) time the application is taken and an acknowledgment of receipt or certificate of delivery of such outline is provided to the insurer with the application.

*What information must be contained in the "Outline of Coverage"?

An Outline of Coverage must contain the following information: 1) A statement that identifies the applicable category of coverage afforded by the policy based on minimum basic standards. 2)A brief description of the principal benefits and coverages provided in the policy. 3) A summary statement of the principal exclusions and limitations or reductions contained in the policy, including, but not limited to, preexisting conditions, probationary periods, elimination periods, deductibles, coinsurance and any age limitations or reductions. 4) A summary statement of the renewal and cancellation provisions, including any reservation by the insurer of a right to change premiums. 5) A statement that the outline contains a summary only of the details of the policy as issued (or of the policy as applied for) and that the issued policy should be referred to for the actual contractual governing provisions. 6) When home health care coverage is provided, a statement that such benefits are provided in the policy.

Agent's appointment

An agent becomes "appointed" or approved to sell insurance for specific insurance companies

Using an insurance license to sell mainly to relatives is referred to as: Select one: a. A familial business b. An incestuous business c. A paternal business d. A controlled business

An agent is not allowed to use a license for the principal purpose of procuring controlled business (insurance sold to relatives, employers, or employees). The correct answer is: A controlled business

Contract

An agreement that outlines the rights and responsibilities of the insurer and the insured

*Are limitations imposed on the benefits payable under Part B of Medicare?

An annual deductible is applied to all benefits, and there is a stipulated participation (co-insurance) requirement for costs above the deductible

Refund annuity (An annuity that returns the difference between the annuity value and the income payments made to a beneficiary when the annuitant dies during the distribution period is a refund annuity.)

An annuitant dies during the distribution period. What kind of annuity will return to a beneficiary the difference between the annuity ( a fixed sum of money paid to someone each year, typically for the rest of their life.) value and the income payments already made?

retirement income

An annuity is primarily used to provide

Life Annuity Certain

An annuity that pays income to the annuitant for life or to a named beneficiary for a period certain if the annuitant has died. Annuity guaranteeing a given number of income payments whether or not the annuitant is alive to receive them. It pays the annuitant for a guaranteed period of time or the life of the annuitant, whichever is greater.

An individual is "eligible" for individual coverage, if:

An individual is "eligible" for individual coverage, if: 1.Their most recent health coverage was group insuranceor a church or government plan; 2.They have at least 18 months of prior "creditable" coverage; 3.There was no lapse in coverage greater than 63 days; 4.They have elected and exhausted COBRA; and... 5.They are not eligible for coverage under any other group plan, Medicare or Medicaid.

Foreign Insurance Company

An insurance company that is incorporated outside the state where it is conducting business

Domestic Insurer

An insurance company that is organized in the state where it is conducting business

Valid Contract

An insurance contract has 4 requirements: - mutual assent - consideration - competent parties - legal purpose.

This violation is a felony and can result in a fine of up to $5,000 Any person performing insurance transactions without a producer's license or under a license that has been suspended or revoked can be penalized up to $5,000 and charged with a felony.

An insurance producer whose license has been revoked continues to provide insurance services. Which of the following is TRUE?

when can the insured not sue?

An insured cannot sue an insurer on a claim before 60 days or more than 3 years have passed since filing proof of loss.

Standard Provisions: Legal Actions

An insured cannot sue the insurer on a claim before 60 days have passed since filing written proof of loss. However, an insured cannot bring suit after three years have passed since filing proof of loss.

How do insurance companies control the temptation to carry multiple policies allowing an insured to make money on a claim? Select one: a. The insurer can limit the benefits payable on the policies. b. The insurer can cancel one of the policies and keep the premiums. c. The insurer can raise the premiums to make it less attractive. d. The insurer can do nothing.

An insurer can limit the benefits payable on the policies. The correct answer is: The insurer can limit the benefits payable on the policies.

Minimum Standards for Individual Health Insurance Policies: Outline of Coverage

An insurer cannot deliver or issue for delivery a health insurance policy unless the insurer delivers an outline of coverage with it. In the alternative, the insurer (or its producer) can give the outline of coverage to the applicant when taking the application.

Medicare Supplement Health Insurance Act: Prohibited Compensation for Replacement by Same Insurer

An insurer cannot pay producers any more than the renewal compensation that would have been paid on an existing Medicare supplement policy if an existing Medicare supplement policy is replaced by another such policy issued by the same insurer, and the benefits are substantially the same as those under the old Medicare supplement policy.

when will the insurer send claim forms?

An insurer must send claim forms to a claimant within 15 days of receiving notice of a claim.

Medicare Supplement Health Insurance Act: Advertising

An insurer that sells Medicare supplement insurance to Washington residents is required to provide the Commissioner with copies of any advertisements intended for use in the state before actually using them. These copies must be filed at least 30 days before the insurer intends to use them. (If the advertisement is for radio or television, the insurer can provide an audio or video recording at the Commissioner's request.)

Question 15 of 100 While reviewing a life insurance policy issued by her home office, Agent Angela notices that the premium is considerably higher than she quoted the insured and the policy contains features that were not requested. Which of the following is her best course of action? Angela should present the policy as is; because it was generated by the home office, the extra features are probably required Angela should reschedule the upcoming appointment with the insured while the home office reviews the policy and recalculates the premium. Angela should recalculate the premium herself. Angela should call the client and delay, saying the insurer seems to have lost the policy.

Angela should reschedule the upcoming appointment with the insured while the home office reviews the policy and recalculates the premium. Explanation: Under the concept of utmost good faith, both parties are entitled to receive all the material facts related to the circumstances under which they enter into the contract

Question 81 of 100 Which of the following best illustrates risk transfer? Anita purchases health insurance to protect herself in the event of a serious illness. Abigail refuses to buy a home and continues to rent because she thinks homeowners insurance is too expensive. Anne refuses to venture out after dark, citing the fear of being assaulted. Arlene decides not to purchase life insurance because she has dependents and plenty of cash in her savings accounts to cover any final expenses.

Anita purchases health insurance to protect herself in the event of a serious illness. Explanation: In risk transfer, an individual or business transfers the risk of loss to an insurance company in return for the payment of a premium.

may 1st

Annual appointment renewal date, pay annual fees

Maria would like an annuity that provides a guaranteed accumulation or payout. The type of annuity she is seeking is called? variable payout fixed accumulation interest guaranteed annuity certain

Annuity certain

For which of the following types of employees is an employer group health plan considered the primary plan? Select one: a. Disabled employees b. Employees with kidney failure c. Employees age 65 or older d. All of the above

Answer: A

What benefits might your disability policy pay if you have experienced an accident, but you can work part time as you recover fully? Select one: a. Regular benefits for the first six months and a reduced benefit thereafter b. Partial benefits based on ability to perform certain duties c. No benefits, since you can perform some of the duties of your occupation d. A delayed benefit if your condition does not improve

Answer: C

Adhesion

Any ambiguous language in the contract, the court would side with policy owner

Rebating

Any inducement offered to the insured in the sale of insurance products that is not specified in the policy. Both offer and acceptance are illegal.

15 Any person of competent legal capacity may contract for life and health insurance at a minimum age of 15.

Any person of competent legal capacity may contract for life and health insurance at a minimum age of

Consideration

Anything of value (money or something of economic value) exchanged for a promise or for performance that is needed to make an instrument binding on the contracting parties. (Premium)

Hazard

Anything that increases the chance of loss

Which of the following is the MOST important factor when deciding how much Disability Income coverage an applicant should purchase?

Applicant's monthly income

Adverse Selection

Applicant, who is uninsurable or presents a higher than average risk, attempts to obtain a policy from an insurer at standard rates

Question 18 of 100 Which statement about HIVIAIDS testing by health insurers is correct? Insurers can never ask applicants to submit to an HIV test. Insurers must obtain a physician's notice before requiring applicants to submit to HIV tests. Applicants must give their informed written consent before they can be tested for HIV. Insurers can disclose HIV test results to any third party once an applicant consents to testing.

Applicants must give their informed written consent before they can be tested for HIV. Explanation: When underwriting an individual health insurance policy, an insurer may require an applicant to take an HIV test in conjunction with tests for other health conditions. Insurers can require an HIV test only if the individual gives written consent to the test.

Agent

Appointed by an insurance company to sell its products and represents the insurer

Morale Hazard

Arise due to a person's indifference or carelessness

In most instances, how are health insurance policies taxed? Select one: a. If premiums are tax-deductible, benefits are also tax-deductible. b. Premiums and benefits are not taxed. c. If premiums are tax-deductible, benefits are taxed as income. d. Premiums and benefits are both taxed.

As a general rule, if the premiums are tax-deductible, the benefits are taxed as income. The correct answer is: If premiums are tax-deductible, benefits are taxed as income.

ABC employs 60 people. One of the employees is disabled and qualified for Medicare benefits as a result of the length of his disability. Which of the following is required? Select one: a. The employee must have access to the same benefits offered to other employees. b. The employer must furnish a Medicare Supplement in lieu of group coverage. c. The employee must accept COBRA options. d. The employee must accept Medicare as his primary insurance provider.

As long as an employee remains part of the group, he/she must receive the same level of benefits as if he/she were active. The correct answer is: The employee must have access to the same benefits offered to other employees.

At what point must an Outline of Coverage be delivered?

At the time of the application or upon delivery of the policy ( An outline of coverage must be delivered at the time of the application or upon delivery of the policy)

Amy has a group medical policy through her employer with a $500 deductible and a 90% coinsurance provision. She incurs $1,500 in covered health care services. How much will her group insurance carrier pay? $500 $900 $1,000 $1,350

B)

An example of elective cosmetic surgery would be reconstructive breast surgery after a mastectomy removing excess fat from an insured's waistline surgery to correct a birth defect reconstructive surgery after suffering injuries from an automobile accident

B)

Kate has a Major Medical Plan with a 75/25 coinsurance and a deductible of $25. How much will she have to pay if she, not having met any of her deductible, visits the doctor and receives a bill for $125? $25.00 $50.00 $75.00 $100.00

B)

Under the required claim forms provision of a health insurance policy, an insurer must furnish the claim form to the insured within how many days after receiving a notice of claim? A) 21 days. B) 15 days. C) 30 days. D) 10 days.

B) 15 days. Under the required claim forms provision of a health insurance policy, an insurer must furnish its claim form to the insured within 15 days after receiving notice of a claim. Otherwise, the claimant may submit proof of loss in any form that explains the occurrence, the character, and extent of the loss.

An individual may take legal action to recover on an accident and health insurance policy no sooner than how many days after written proof of loss is provided? A) 50 days. B) 60 days. C) 30 days. D) 20 days.

B) 60 days. Accident and health insurance policies must contain a legal action provision stating that legal actions to recover on a policy can begin no sooner than 60 days or later than 3 years after written proof of loss is furnished.

An error was made on Mary's life insurance application. Which of the following areas do errors commonly occur on applications and for which the incontestable clause does NOT apply? A) Martial status B) Age C) Address D) Income

B) Age

A life insurance policyowner was injured in an automobile accident which results in a total and permanent disability. Which rider would pay a monthly amount because of this disability? A) Long-term care rider B) Disability income rider C) Annuity rider D) Waiver of premium

B) Disability income rider

Jim has just received a lump-sum payment from his individual disability income policy provider. Which of the following is the best explanation for this payment? A) The elimination period has ended. B) His policy includes a return-of-premium provision. C) The definition of disability in his policy has been changed from any occupation to own occupation. D) His Social Security benefit has been terminated.

B) His policy includes a return-of-premium provision.

When does a life insurance policy's waiver of premium take effect? A) Insured becomes unemployed B) Insured becomes totally disabled C) Insured has had policy in force for a specified number of years D) Insured has become terminally ill

B) Insured becomes totally disabled

What does the grace period allow a life insurance policyowner to do? A) Contest the terms of the policy after the issue date B) Make a premium payment after the due date without any loss of coverage C) Allows for a full refund after policy delivery D) Make a policy loan interest payment after the due date without any loss of coverage

B) Make a premium payment after the due date without any loss of coverage

What is an insurer required to do when faced with an error made under the Misstatement of Age provision? A) Cancel the policy B) Pay age-corrected benefits C) Pay full benefits as stated in the policy D) Bill the policyowner for back premiums

B) Pay age-corrected benefits

What does the guaranteed insurability option allow an insured to do? A) Transfer ownership of the policy B) Purchase additional coverage with no evidence of insurability required C) Provides for the early payment of some portion of the policy face amount should be insured suffer from a terminal illness D) Allows the insured to convert a term life policy to whole life with no evidence of insurability

B) Purchase additional coverage with no evidence of insurability required

After a policy has lapsed, which provision allows the insured to continue coverage? A) Entire contract provision B) Reinstatement provision C) Nonforfeiture provision D) Grace period provision

B) Reinstatement provision

Which of the following statements characterizes a cancelable policy? A) The insurer may cancel the policy only at the end of the term. B) The insurer may cancel the policy at any time. C) The insurer may not cancel the policy because of the insured's retirement. D) The insurer may not cancel the policy because of the insured's age.

B) The insurer may cancel the policy at any time.

Pat owns a 20-pay life policy with a paid-up dividend option. Which of the following statements is true? A) The policy may be paid up early by using accumulated cash values B) The policy may be paid up early by using policy dividends C) The policy's premiums will increase after 20 years D) The policy's cash values steadily decrease after 20 years

B) The policy may be paid up early by using policy dividends

All of the following riders can increase the death benefit amount EXCEPT A) Cost of Living B) Waiver of Premium C) Accidental Death Rider D) Guaranteed Insurability

B) Waiver of Premium

An individual accident and health insurance policy must contain all of the following EXCEPT: A) the amount of policy premiums. B) a 21-day grace period. C) a change of beneficiary provision. D) a reinstatement provision.

B) a 21-day grace period.

All of these are valid policy dividend options for a life insurance policyowner EXCEPT A) cash outlay to the policyowner B) accumulate without interest C) reduction in policy premium D) buy additional insurance coverage

B) accumulate without interest

Question ID: 201567 All of the following statements are required uniform provisions in an individual health insurance policy EXCEPT: A) reinstatement. B) change of occupation. C) grace period. D) entire contract.

B) change of occupation. The change of occupation provision sets forth the changes that may be made to premium rates or benefits payable if the insured changes occupations. This is an optional provision.

Paul is hospitalized with a back injury and, upon checking his disability income policy, learns that he will not be eligible for benefits for at least 60 days. This would indicate that his policy probably has a 60-day: A) disability period. B) elimination period. C) blackout period. D) probationary period.

B) elimination period.

The effect of an impairment rider attached to a health insurance policy is to: A) increase the premium rate charged. B) exclude losses resulting from specified conditions. C) decrease the amount of benefits provided. D) lengthen the preexisting condition waiting period.

B) exclude losses resulting from specified conditions.

A life insurance rider that allows an individual to purchase insurance as they grow older, regardless of insurability, is called a(n) A) guaranteed term rider B) guaranteed insurability rider C) accelerated benefit rider D) cost of living rider

B) guaranteed insurability rider

The automatic premium loan provision authorizes an insurer to withdraw from a policy's cash value the amount of A) any interest payable from an outstanding policy loan balance B) past due premiums that have not been paid by the end of the grace period C) the outstanding policy loan balance D) any surrender charges owed by the policyowner

B) past due premiums that have not been paid by the end of the grace period

A rider that assures premiums will be paid on a juvenile policy until the child reaches a specific age is called a(n) A) waiver of premium rider B) payor rider C) automatic premium loan rider D) juvenile waiver rider

B) payor rider

In order to activate the reinstatement clause of a lapsed life insurance policy, the insured MUST A) remit all past-due premiums within the grace period B) provide evidence of insurability to the insurer C) resubmit a new life insurance application D) provide a valid reason for the lapse

B) provide evidence of insurability to the insurer

The two major actions required for a policyholder to comply with the Reinstatement Clause are A) provide evidence of insurability, agree to a new incontestable period B) provide evidence of insurability, pay past due premiums C) pay past due premiums, agree to new incontestable period D) pay past due premiums, agree to a reduction in coverage

B) provide evidence of insurability, pay past due premiums

The probationary period in disability income policies usually lasts: A) no more than one week. B) two weeks to one month. C) two to five months. D) six months to one year.

B) two weeks to one month.

Loans obtained by a policyowner against the cash value of a life insurance policy A) are treated as taxable income B) would not be treated as taxable income C) are limited by the face amount of the policy D) would be subject to a Federal estate tax

B) would not be treated as taxable income

Agencies' investigation and gathering of information from businesses and persons that may have violated its statute, and administrative rules and orders, and have Not Voluntarily supplied those information

administrative search

The Federal Trade Commission which enforces federal antitrust and consumer protection laws is an example of an) _________. A. government-aided organizations B. independent federal administrative agency C. law enforcement agency D. cabinet-level federal departments

B. independent federal administrative agency

Which of the following is the Department of Homeland Security's foremost responsibility? A. to enforce laws to prevent and control civil unrest in the country B. to enforce laws to prevent domestic terrorist attacks and related criminal activities C. to enforce laws to prevent the possibility of the United States going to war D. to enforce laws to prevent and control economic recession in the country

B. to enforce laws to prevent domestic terrorist attacks and related criminal activities

Which of the following powers allow administrative agencies to issue substantive rules? A. executive power B.rule making C. judicial authority D. licensing

B.rule making

Insolvency

Bankrupt/Assets do not equal paid-in-capital

What are variable annuities?

Based on non-guaranteed equity investments so they shift the investment risk from the insurer to the contract owner.

Basic medical expense coverage is often referred to as

Basic Physicians' Nonsurgical Expense Coverage because it provides coverage for nonsurgical services a physician provides. However, the benefits are usually limited to visits to patients confined in the hospital No deductible with benefits, but coverage is usually limited to number of visits per day, limit per visit, or limit per hospital stay

Minimum Standards for Individual Health Insurance Policies: Basic Medical-Surgical Expense Benefits

Basic medical-surgical expense insurance covers expenses incurred for surgical services, anesthesia, and in-hospital medical services for at least 21 days per confinement.

Who is eligible for benefits under Part A of the Medicare program?

Basically, coverage under Part A is available to all persons age 65 or over drawing Social Security benefits. In addition, all persons who are eligible for Social Security disability income benefits are eligible.

Mrs. Conroe's policy lapsed. Her agent, Mrs. Acker, accepted her past due premiums and re-instated her policy. Since agents cannot usually reinstate policies, why it was allowed in this case? Select one: a. Mrs. Acker is a top agent. b. Mrs. Conroe was truly sorry that she had let the policy lapse. c. Mrs. Acker was allowed to accept late premiums in the past to reinstate policies. d. All of the above

Because the insurance company allowed Mrs. Acker to accept late premiums in the past for the purpose of reinstating a policy, they allowed it in this case. The correct answer is: Mrs. Acker was allowed to accept late premiums in the past to reinstate policies.

A disability policyowner is injured and becomes totally disabled. The benefits pay for 2 years, starting from the date of the injury. What is this time period called? Recurrent period Probationary period Benefit period Elimination period

Benefit Period

All of the following are true regarding comprehensive dental plans, EXCEPT: Select one: a. Comprehensive plans have coinsurance. b. Comprehensive plans have deductibles. c. Benefits are paid on a first-dollar basis. d. Comprehensive plans are also referred to as nonscheduled.

Benefits are paid on a usual, reasonable and customary basis. The correct answer is: Benefits are paid on a first-dollar basis.

Question 26 of 100 Terry wants to apply for disability income benefits under his group policy. The policy has a 90-day elimination period. What does this mean for Terry? He must wait 90 days before filing the claim. Benefits will not begin until 90 days after Terry submits his initial claim for benefits. Benefits will be paid only for 90 days Benefits will not begin until 90 days after the disability occurs

Benefits will not begin until 90 days after the disability occurs Explanation: Terry must qualify for benefits by waiting out the 90-day elimination period. During this period, no benefits are paid. If the disability continues at the end of this period, disability income payments begin at that time.

The First Street Church plans to sponsor a summer camp for the youth of their congregation. They would like to purchase insurance that would pay benefits should one of the youth get injured while participating in the camp activities. The type of policy they would likely need is a/an? A) Accidental death and dismemberment B) Limited Accident C) Blanket D) limited sickness

Blanket ( A policy that covers all of the participants without naming them individually is a blanket policy)

A group policy used to provide accident and health coverage on a group of persons being transported by a common carrier, without naming the insureds persons individually is called?

Blanket policy

Students attending a State university may receive health insurance coverage from which of the following policies?

Blanket policy

Tom

Bob and Tom start a business. Since each partner contributes an important element to the success of the business, they decide to take life insurance policies out on each other, and name each other as beneficiaries. Eventually, they retire and dissolve the business. Bob dies 12 months later. The policies continue in force with no change. Both partners are still married at the time of Bob's death. In this situation, who will receive Bob's policy proceeds? Toms Spouse Bobs estate Bobs spouse Tom

*Does Florida law provide for the continuation of coverage for handicapped children?

Both individual and group health insurance policies must continue to provide coverage for a handicapped child, covered under a family policy, when that child becomes an adult. This requirement applies when the child is, and continues to be, both (1) incapable of self-sustaining employment by reason of mental retardation or physical handicap and (2) chiefly dependent upon the policyholder for support and maintenance. This rule applies even though the family policy would normally terminate coverage for a child who reaches a specified age.

*What are the requirements for newborn child coverage under Florida law?

Both individual and group health insurance policies that provide coverage for a family member of the insured must also provide that the health insurance benefits for children will be payable for a newborn child of the insured from the moment of birth. The law also requires that coverage be provided for a newborn child of a covered family member (e.g., the newborn of a covered daughter or son) for a period of 18 months.

Who must sign the notice regarding replacement?

Both the applicant and the agent ( Before issuing a replacement policy, the insurer must furnish the applicant with a notice regarding replacement, which must be signed by both the applicant and the agent)

There are three types of disability income policies used for businesses:

Business Overhead Expense, Key Person Disability, and Disability Buy-sell insurance

an order that directs the subject to disclose the requested information

administrative subpoena

A long-term care insurance policy issued in Washington can limit or exclude benefits for which of the following?

mental or nervous disorders

The HMO provides the member with inpatient hospital care, in or out of the service area. The services may be limited for treatment of

mental, emotional or nervous disorders, including alcohol or drug rehabilitation or treatment.

The basic purpose of health insurance underwriting is to

minimize the problem of adverse selection.

The focus of major medical insurance is providing coverage for critical illnesses only preventative care medical and hospitalization expenses doctor's visits

C)

What is considered the most common type of specified disease insurance policy? Multiple Sclerosis Heart disease Cancer Stroke

C)

What type of policy would only provide coverage for specific types of illnesses (cancer, stroke, etc)? MEWA Blanket insurance Dread disease insurance Disability insurance

C)

Which of the following is NOT included under a health benefit plan? Major medical policy Basic hospital policy Hospital indemnity plan Surgical expense policy

C)

purpose of health insurance field underwriting

minimize the problem of adverse selection.

A health insurance policy will typically cover injuries obtained from war elective cosmetic surgery preventative health services work related injuries

C)

A payment system for health care in which the provider is paid for each service given is called a blanket plan lump sum fee-for-service a prepaid arrangement

C)

A proposed insured for a health insurance policy was treated for heart disease within the past year. When applying for health insurance, the heart disease treatment does not count as a preexisting condition is not required to be reported on the application indicates a preexisting condition is irrelevant to underwriting

C)

All of the following are qualifications for establishing a health savings account (HSA) EXCEPT Enrolled in a high deductible health plan Be under the age of 65 (not enrolled in Medicare) Enrolled in a health plan with a prescription drug benefit Enrolled in a health plan that limits out of pocket expenses

C)

An insured has a health plan that pays established amounts in accordance with a list of injuries, surgical procedures, or other losses. This list is called a loss chart benefit summary benefit schedule coverage menu

C)

Which of the following statements is NOT true regarding a Critical Illness Plan? Pays a lump sum to the insured upon the diagnosis of a critical illness The insurer may have a list of critical illnesses they will cover Coverage is limited to a single devastating disease Also known as Specified Disease Plans

C)

Which of the following types of deductibles would apply a single deductible to both medical and dental insurance coverage? Standard deductible Combined deductible Integrated deductible Blended deductible

C)

Sidney makes $3,000 a month as a machine shop supervisor. His disability income policy provides for a monthly payment of $2,500 in the event of total disability. If Sidney were to become partially disabled, but continued to work at 60% of his pay, what would the policy pay, assuming it had a residual disability provision? A) $0, since Sidney was not fully disabled. B) $1,200 a month. C) $1,000 a month. D) $2,500 a month.

C) $1,000 a month. A residual disability income policy ties the benefit payments directly to the proportion of actual earnings lost. In this problem, since Sidney is earning 60% of his predisability pay, the residual benefit would be 40% of the full benefit, or $1,000, calculated as .40 x $2,500.

An accident and health insurance policy that provides for monthly payments has a grace period of: A) 7 days. B) 14 days. C) 10 days. D) 31 days.

C) 10 days.

The minimum grace period for weekly premium policies is: A) 30 days. B) 31 days. C) 7 days. D) 10 days.

C) 7 days.

If an insured's age on a life insurance policy has been misstated, what is the insurer's liability if the insured dies? A) No death benefit is owed because of the misstatement of age B) The full original death benefit listed on the policy C) A prorated death benefit based on the amount of insurance the insured's premiums would have been if purchased at the correct age D) The original death benefit listed on the policy minus any outstanding loans and interest

C) A prorated death benefit based on the amount of insurance the insured's premiums would have been if purchased at the correct age

How is a life insurance policy dividend legally defined? A) A return of excess premium and partially taxable B) A return of excess of premium and fully taxable C) A return of excess premium and not taxable D) A return of excess premium subject to capital gains tax

C) A return of excess premium and not taxable

When an accidental death benefit is added to a whole life policy, how does this affect the policy's cash value? A) Increases the policy's cash value B) Decreases the policy's cash value C) Policy's cash value is not affected D) Policy loans will no longer be available

C) Policy's cash value is not affected

Which of the following is the best reason why a medical plan would require a concurrent review for hospital patients? A) The doctor and the patient consult on discharge times. B) The insurance company and the health care providers make decisions jointly. C) Quality care is assured at the most reasonable expense. D) The patient is discharged in the shortest possible time.

C) Quality care is assured at the most reasonable expense.

Kurt is an active duty serviceman who was recently killed in an accident while home on leave. Which military service exclusion clause would pay upon his death? A) Active B) Status C) Results D) Leave

C) Results

An insurer can be protected from adverse selection with which policy provision? A) Insuring clause B) Grace period C) Suicide clause D) Reinstatement

C) Suicide clause

James is the insured on a life insurance policy where his age was misstated on the application. Which of the following is CORRECT regarding the death benefit amount? A) The original face amount will be paid to the beneficiary B) The policy will be voided with no death benefits paid C) The death benefit paid will be what the premium would be purchased at the correct age D) The amount of premiums paid will be returned with interest

C) The death benefit paid will be what the premium would be purchased at the correct age

Which of the following statements regarding a conditionally renewable policy is NOT correct? A) The insured has the conditional right to renew the policy up to a given date. B) The insurer may refuse to renew the contract as the result of the insured's retirement. C) The insurer may refuse to renew the contract as the result of the insured's deteriorating health. D) The insured has the conditional right to renew the policy up to a given age.

C) The insurer may refuse to renew the contract as the result of the insured's deteriorating health.

Under a life insurance policy, what does the insuring clause state? A) The agent's obligation to provide the proper amount of coverage B) The insurer's obligation to return all premiums upon an approved death claim C) The insurer's obligation to pay a death benefit upon an approved death claim D) The agent's obligation to pay a death benefit upon an approved death claim

C) The insurer's obligation to pay a death benefit upon an approved death claim

The double indemnity provision in a life insurance policy pertains to an insured's death caused by a(n) A) sickness B) suicide C) accident D) war

C) accident

A provision that allows a policyowner to temporarily give up ownership rights to secure a loan is called a(n) A) automatic premium loan B) nonforfeiture option C) collateral assignment D) irrevocable assignment

C) collateral assignment

A waiver of premium rider allows an insured to waive premium payments if the insured is A) temporarily disabled B) unemployed C) completely and permanently disabled D) experiencing financial hardship

C) completely and permanently disabled

Matt is applying for life insurance and requests a double indemnity rider. A double indemnity benefit will be payable to Matt's beneficiary if Matt A) is killed while committing a felony B) dies of a stroke C) dies instantly from a car accident D) is injured in a skiing accident and dies 18 months later

C) dies instantly from a car accident

The insurance company has totally revised its individual health insurance policy. Mary likes the coverage she already has and is concerned about the changes. She contacts the producer who sold her the policy, who tells her that: A) rising health care costs have necessitated the changes, and her policy is still the best coverage available. B) she has 6 month to accept the new policy. C) her policy will not be affected by the changes. D) under the entire contract provision of her policy, the company has the right to make changes with 30-days notice.

C) her policy will not be affected by the changes. Under the entire contract provision of her policy, no changes can be made to the policy after it has been issued. Therefore, her policy will be unaffected.

A broad statement that generally appears on the first page of a health insurance policy and specifies conditions under which benefits will be paid is known as the: A) guaranty provision. B) assurance clause. C) insuring clause. D) warranty provision

C) insuring clause. The insuring clause identifies the insurer and insured, specifies benefits and includes the insurer's promise to pay benefits for specific kinds of losses.

Regarding the waiver of premium provision, all of the following statements are correct EXCEPT: A) it is generally available with disability income policies. B) the waiver may apply retroactively to the original date of disability following a waiting period. C) it is frequently included with both individual and group policies. D) such a waiver usually does not apply after the insured reaches age 60 or 65.

C) it is frequently included with both individual and group policies. **A waiver of premium does not apply to group insurance.

The suicide clause of a life insurance policy states that if an insured commits suicide within a stated period from the policy's inception, the insurer will only be liable for a return of premiums paid A) minus indebtedness and with interest B) during the last 12 months C) minus indebtedness and without interest D) during the last 6 months

C) minus indebtedness and without interest

A whole life policy option where extended term insurance is selected is called a(n) A) dividend option B) settlement option C) nonforfeiture option D) interest-only option

C) nonforfeiture option

An endorsement found in an insurance plan which modifies the provisions of the policy is called a(n) A) attachment B) add-on C) rider D) supplement

C) rider

The entire contract of an individual health insurance policy includes all the following EXCEPT: A) endorsements and waivers. B) endorsements and riders. C) the buyer's guide and any riders. D) the application and waivers.

C) the buyer's guide and any riders.

After a health insurance policy is in force, the initial period that often must pass before a loss due to sickness can be covered is known as: A) the trial term. B) the elimination period. C) the probationary period. D) the preexisting interval.

C) the probationary period. The probationary period helps the insurer to avoid paying benefits for losses due to illness contracted before the policy was issued.

Which of the following is true of administrative agencies? A. All administrative agencies directly answer to the president. B. An existing administrative agency cannot administer a new law. C. Administrative agencies can be created by federal, state, and local governments. D. A separate administrative agency must be created to enforce every law.

C. Administrative agencies can be created by federal, state, and local governments.

A(n) _________ announces a proposed course of action that an agency intends to follow in the future. A. interpretive rule B. operational code C. statement of policy D. substantive rule

C. statement of policy

24 hours

CE required per compliance period (doesn't apply to credit insurance line)

________ are federal agencies that advise the president and are responsible for enforcing specific administrative statutes enacted by Congress.

Cabinet-level federal departments

_____ ____ ____ advise the president and are responsible for enforcing ____ ____ enacted by Congress

Cabinet-level federal departments, specific laws

What are surrender charges?

Charges made by most insurance companies to contract owners for liquidating deferred annuities in the early years of the contract which cover the costs associated with selling/issuing contracts and costs associated to insurer's need to liquidate underlying investments.

Question 95 of 100 All of the following statements about health insurance reinstatement provisions are correct, EXCEPT: Reinstatement is normally effective when the insurer notifies the insured. The insurer has no more than 45 days to reject the reinstatement. If the insurer does not notify the insured within 45 days of the date of application for reinstatement, the policy is automatically reinstated. Under reinstated health insurance policies, accidents covered immediately. Claims resulting from sickness are covered immediately.

Claims resulting from sickness are covered immediately. Explanation: The insurer has no more than 45 days to reject the reinstatement. If the insurer does not notify the insured within 45 days of the date of application for reinstatement, the policy is automatically reinstated.

What process determines group rates by using a preset table that deals with the demographic make up of the group? Select one: a. Industry rating b. Group rating c. Community rating d. Combined rating

Community rating uses data gathered on a specific geographic area's overall health insurance claims experience. The correct answer is: Community rating

Abby is a licensed producer who sells long-term care insurance policies in Washington. Her license is due for renewal in six months. What must she do to renew the license?

Complete 4 hours of coursework on LTC insurance

COBRA:

Consolidated Omnibus Budget Reconciliation Act The rationale behind COBRA is to provide transitional health care coverage until the employee or family member can obtain coverage or employment elsewhere

Deferred Annuity

Contract that will start making payments at some future date (grows tax deferred)

"Take it or leave it" is the basis for insurance policies. Because of this, they are referred to as: Select one: a. Contracts of Adhesion b. Aleatory Contracts c. Unilateral Contracts d. Contracts

Contracts of Adhesion are "take it or leave it". The correct answer is: Contracts of Adhesion

Blanket Health Insurance

Cover a group of individuals who are exposed to the same risks. Individuals within the group are changing constantly

Decreasing Term Insurance

Coverage in which the face amount of a life insurance policy declines by a stipulated amount over a period of time

Key Person Insurance

Covers decreased business earnings due to a death or disability of a key employee. (Ex. Senior sales manager, etc.)

Hospital Expenses

Covers: - in-patient care - hospital room and board, up to a stated dollar limit per day for a max number of days - miscellaneous (ancillary) expense (operating room, lab charge, drugs, etc.); may be allocated (scheduled) or unallocated (unallocated is subject to a max expense benefit) - intensive care coverage

Any of the following is considered advertising for a health insurance company, EXCEPT: Select one: a. Magazine or newspaper publications b. Material used to recruit new agents c. Prepared sales talks d. Morbidity tables

Morbidity tables are used to determine rates for health products. The correct answer is: Morbidity tables

Business Health Insurance Key Employee Disability (Owner/Payor of Premium):

Premiums Not tax-deductible; Benefits Not taxable as ordinary income

A dread disease policy is considered to be a type of hospital expense policy group health insurance policy major medical insurance policy limited health insurance policy

D)

Non-Contributory Group Disability Income (Employer Paid):

Premiums Tax-deductible to employer ; Benefits Income taxable to the employee

The elimination period under a hospital indemnity plan is the period in which pre-existing conditions are not taken into consideration the period in which all deductibles are eliminated the specified number of days after an insurance policy's issue date during which coverage is not afforded for sickness the specified number of days an insured must wait before becoming eligible to receive benefits for each hospitalization

D)

What does a Hospital Confinement indemnity policy pay for? Pays for the entire cost of the hospital stay Pays for the deductible and coinsurance of the hospital stay Pays for cost of the hospital stay after the deductible and coinsurance has been met Pays a specified daily amount while the insured is confined to a hospital

D)

What does the term coinsurance refer to? The stated initial dollar amount that the individual insured is required to pay before insurance benefits are paid The amount the Federal government pays after the deductible is met A situation where two insurance policies cover the same claim After the deductible is satisfied, the percentage paid by the insured for the remaining covered expenses

D)

Which of the following terms is NOT associated with a Major Medical policy? Stop-loss Comprehensive Deductible Capitation

D)

Individual health insurance policies specify that the insured must furnish proof of loss to the insurer how long after the date of the loss? A) Proof of loss is not required for most health insurance policies. B) 10 days. C) Immediately. D) 90 days.

D) 90 days. Individual health insurance policies must contain a proof of loss provision stating that the insured must furnish proof of loss to the insurer within 90 days of the date of loss.

Which statement is true regarding policy dividends? A) Dividends are always guaranteed B) Nonparticipating policies issue dividends C) Dividends are always taxable D) A dividend option is selected by the insured at the time of policy purchase

D) A dividend option is selected by the insured at the time of policy purchase

Which provision will pay a portion of the death benefit prior to the insured's death due to a serious illness? A) Cash surrender B) Nonforfeiture C) Return of premium D) Accelerated death benefit

D) Accelerated death benefit

Of the following dividend options, which of these is taxable? A) Reduction of premium B) One year term C) Paid-up additions D) Accumulation at interest

D) Accumulation at interest

Under the misstatement of age provision in a health insurance policy, what can an insurer do if it discovers that an insured gave a wrong age at the time of application? A) Assess a penalty. B) Cancel the policy. C) Increase the premium. D) Adjust the benefits.

D) Adjust the benefits.

Which of the following is NOT part of an insurance contract? A) Policy B) Application C) Riders D) Certificate of Authority

D) Certificate of Authority

What disability policy can be used to fund buy-sell agreements between partners or stockholders in a closely held corporation? A) Business overhead expense policy. B) Long-term care disability policy. C) Key-person disability policy. D) Disability buy-out policy.

D) Disability buy-out policy.

An insurer will accept a premium from the insured and continue the coverage in full force as though it was NOT late during which time period? A) Incontestable period B) Probation period C) Reinstatement period D) Grace period

D) Grace period

What time period allows an insured's life insurance policy to remain in force even if the premium was not paid on the due date? A) Entire contract period B) Free-look period C) Reinstatement period D) Grace period

D) Grace period

Thomas, an insured, submits a claim and proof of loss for medical expenses covered by his major medical policy. According to the time of payment of claims provision, how soon must the company pay the claim? A) Within 90 days. B) Within 150 days. C) Within 30 days. D) Immediately.

D) Immediately.

Which of these is NOT considered to be a common life insurance nonforfeiture option? A) Cash surrender B) Extended term insurance C) Reduced paid-up insurance D) Life income annuity

D) Life income annuity

Mike and Ike are 30 year old identical twins. Both are in excellent health. Each brother purchases a life policy that has a $750 annual premium. Mike buys a 10-year renewable term policy. Ike purchases a whole life policy. All of the following statements are true EXCEPT A) Mike's policy will develop no cash value over the policy's term B) Ike may eventually take out a policy loan C) Ike will have a level premium D) Mike has the option of using his cash value to purchase a reduced amount of paid-up whole life insurance

D) Mike has the option of using his cash value to purchase a reduced amount of paid-up whole life insurance

Which of the following is an optional provision in an individual accident and health insurance policy? A) Time limit on defenses. B) Change of beneficiary. C) Reinstatement. D) Misstatement of age.

D) Misstatement of age.

Which of these is NOT a valid policy dividend option? A) Reduce premium B) Paid-up additions C) One-year term D) Monthly income payments

D) Monthly income payments

A life insurance policy can be surrendered for its cash value under which policy provision? A) Payor options B) Dividend options C) Settlement options D) Nonforfeiture options

D) Nonforfeiture options

Which type of rider will waive the premium on a child's life insurance policy if the parent paying the premium dies? A) Waiver of premium B) Juvenile waiver C) Guaranteed insurability D) Payor benefit

D) Payor benefit

What is an insurance policy's grace period? A) Period of time after the initial premium is paid and before the policy is issued B) Period of time it takes for a policy's underwriting to compete C) Period of time after a policy is issued and before it is delivered to policyowner D) Period of time after the premium is due but the policy remains in force

D) Period of time after the premium is due but the policy remains in force

Which of these is NOT a characteristic of the Accelerated Death Benefit option? A) The face amount and policy premium are not affected by the payment B) Before payment of the benefit is made, specific conditions must exist, such as suffering from a terminal illness C) There may be a dollar limit on the maximum benefit D) The benefit can be offered as a rider at a specific extra cost or may be at no cost

D) The benefit can be offered as a rider at a specific extra cost or may be at no cost

Which of the following statements regarding an accidental death and dismemberment rider for a disability insurance policy is NOT correct? A) The sum payable under the dismemberment feature is typically expressed as a muliple of the disability policy's weekly indemnity. B) Once a sum has been paid under the dismemberment feature, the disability income payments stop. C) The life insurance feature of this rider does not pay a death benefit if the death is due to natural causes. D) The dismemberment feature provides insureds with periodic payments to help them during a rehabilitation period.

D) The dismemberment feature provides insureds with periodic payments to help them during a rehabilitation period. **It provides them with a lump sum payment, not periodic payments.

When a life insurance policy is surrendered, how does the cost recovery rule apply? A) The policy's cost basis is taxable B) The insurer withholds the cost basis C) The entire cash value is taxable D) The policy's cost basic is exempt from taxation

D) The policy's cost basic is exempt from taxation

Insurers generally pay a maximum benefit of 60% of predisability income for disability income benefits for all the following reasons EXCEPT: A) to assure that the insured does not receive more than his predisability income while disabled. B) to discourage malingering. C) because benefits paid to individual insureds are generally income tax free. D) because benefits are based on net, after-tax earnings.

D) because benefits are based on net, after-tax earnings.

A guaranteed issue insurance policy has no A) initial premium requirement B) incontestable period C) waiting period D) medical underwriting

D) medical underwriting

Accident and health policies that provide coverage on an expense-incurred basis for a family member of the insured: A) must cover only those family members covered at the time the policy is issued. B) must require notice to the insurer of the birth of a newborn before coverage is provided. C) may exclude sickness from a newborn's coverage. D) must cover a newborn child from the moment of birth.

D) must cover a newborn child from the moment of birth.

A provision in a whole life policy that allows a policyowner to terminate the policy in return for a reduced paid-up policy of the same type is called a(n) A) insuring clause B) payor provision C) reinstatement provision D) nonforfeiture provision

D) nonforfeiture provision

A life insurance policyowner does NOT have the right to A) change a beneficiary B) select a beneficiary C) take out a policy loan D) revoke an absolute assignment

D) revoke an absolute assignment

Insured losses are covered immediately after a health policy is reinstated when: A) claim forms are submitted with proof of loss. B) hospitalization is required. C) all back premiums have been paid. D) the losses result from accidental injuries.

D) the losses result from accidental injuries. Insured losses are covered immediately after a health policy is reinstated when the losses result from accidental injuries. Insured losses from sickness will not be covered unless they occur at least ten days after reinstatement. This is to prevent adverse selection against the insurer.

Dorian exercised a nonforfeiture option by using his life policy's cash value to purchase an extended term insurance option. When the term insurance expires, A) he has the option of resuming the original policy and paying the same premium B) the coverage can be extended with a lump sum payment C) all remaining cash values are paid to the policyowner D) the protection ends

D) the protection ends

The free-look provision gives the policyowner A) the right to return the policy for a partial refund within a specified number of days B) the right to contest the terms of the policy C) the right to change a policy provision D) the right to return the policy for a full refund within a specified number of days

D) the right to return the policy for a full refund within a specified number of days

________ is a federal act that opens most federal administrative agency meetings to the public.

Government in the sunshine act

Which of the following is true of state administrative agencies? A. They are created by federal administrative agencies. B. They act as advisory boards for the president. C. They are not empowered to enforce statutes. D. Their decisions can be appealed to a state court.

D. Their decisions can be appealed to a state court.

Seth Brown is covered by a non-contributory group medical expense policy that paid 80% of his $20,000 hospital bill. Which of the following is true: A.) The premium is not tax deductible to the employer, and the benefits are not taxable to Seth B.) 100% of the premium is tax deductible by the employer, and 100% of the benefits are taxable to Seth C.) 50% of the premium is tax deductible by the employer and 50% of the benefits are taxable to Seth D.) The premium is fully tax deductible to the employer, and the benefits are not taxable to Seth

D.) The premium is fully tax deductible to the employer, and the benefits are not taxable to Seth. On group medical expense insurance, employers may tax deduct the premiums they pay since the coverage is a fringe benefit for employees. However, benefits paid to employees are not taxable.

All small employer group health plans, in order to comply with the requirements of the Florida employee health care access act, must be issued on what basis?

Guaranteed issue ( A small group plan must be issued on a guaranteed-issue basis, which means an insurance policy must be offered to an employer, employee, or dependent of the employee, regardless of health status, pre-existing conditions or claims history)

Warranty

Guaranteed truth

Standard Provisions: Expense-Incurred Benefits

If a person has other insurance that provides benefits on an expense-incurred (or for-service) basis, the total amount of coverage the person can have from a single insurer will be limited to a specific maximum amount, no matter how many health insurance policies have been issued to the person. - there is a max amount of coverage someone can get, this is so someone doesn't try to finess and get hella coverage

A 70-year-old individual who bought a Part B Medicare policy 2 months ago just began kidney dialysis treatments this week. The individual is now applying for a Medicare supplement policy, Which begins in 8 months. Which of the following could the insurer do to avoid paying for the dialysis? A) Charge a higher premium B) Declare a pre-existing condition C) Permanently exclude coverage for dialysis D) Deny the supplement policy

Declare a pre-existing condition ( If an applicant is aged 65 or greater applies for Medicare supplement coverage while covered under Medicare Part B insurance, an insurer cannot alter the price of coverage based on prior claims experience or health status, provided that the application was made during the first 6 months of Part B coverage. The insurer may however exclude benefits during the first 6 months based upon a pre-existing condition for which the policyholder received treatment during the 6 months before it became effective)

group dental plans help to minimize adverse selection Dental health plans are typically underwritten as group coverage because group dental plans help to minimize adverse selection.

Dental health plans are typically underwritten as group coverage because

What is a Coordination of Benefits Provision (COB):

Determines which policy is primary and which policy is excess. The rule states that the benefits of a plan covering a person other than as a dependent shall be paid before those of a plan that covers the same person as a dependent. If the rules does not clarify which is primary and which is excess, then the benefits of the plan that covered the claimant the longest is primary. Coordination of Benefits vary by state.

Question 73 of 100 Roger presents a prospective insured, Diane, with an application. Diane completes the application, writes a check for the first premium, and gives these to Roger. The insurance company approves Diane's application and issues her policy. Which of the following best describes this process? Rogers offered the policy, and Diane accepted. The insurance company offered the policy, and Diane accepted. Diane made an offer to buy the policy, and the insurance company accepted. Rogers offered the policy, and the insurance company accepted the offer.

Diane made an offer to buy the policy, and the insurance company accepted. Explanation: In an insurance transaction, typically the applicant makes the offer by submitting a completed application and paying the first premium. Upon approval of the application, the insurance company formally accepts the offer by issuing the insurance policy

K becomes ill after traveling overseas and is unable to work for 3 months. What kind of policy would cover her loss of income?

Disability Income

B is a teacher who was injured in a car accident and cannot work. She is now receiving monthly benefits as a result of this accident. Which type of policy does B have?

Disability Income In this situation, a Disability Income policy will pay monthly benefits to a teacher who is unable to work as a result of a car accident.

All of the following out of pocket expenses qualify for a medical deduction, EXCEPT: Select one: a. Prescription Drugs b. Dental Expense c. Diabetic supplies d. Disability insurance premium

Disability benefits are not eligible for deduction, since the income received will be tax-free. The correct answer is: Disability insurance premium

Occupational Disability Income

Disability income policy that will pay benefits whether on the job or off the job

Coordination of Benefits

Discourages multiple payments for the same claim under two or more policies

Coordination of Benefits (COB)

Discourages multiple payments for the same claim under two or more policies

Which of the following is not an activity of daily living?

Driving

in adjudicating administrative proceedings, agencies must comply with the ____ ____ ____ of the U.S. Constitution

Due Process Clause

Lisa has recently bought a fixed annuity. What is considered to be a disadvantage of owning this type of annuity?

During periods of inflation, annuitants will experience a decrease in purchasing power of their payments.

Policyowner (The policyowner is the only one who can surrender an annuity during the accumulation period.)

During the accumulation period, who can surrender an annuity?

Permitted Compensation Arrangements

If an insurer pays a commission for the sale or renewal of a Medicare supplement policy, the commission must stay the same in terms of the percentage of premium for each year that the coverage remains in effect

M becomes disabled and is unable to work for six months. M dies soon after from complications arising from this disability. M has a Disability Income policy that pays $2,000 a month. Which of the following statements BEST describes what is owed to her estate?

Earned, but unpaid benefits In this situation, any earned but unpaid benefits will be paid.

Social Security Disability

Eligibility Requirements: - available to those individuals who have made a minimum of 40 quarters (work credits) of FICA contributions - disabilities must be permanent and total, with permanent being defined as in existence for 5 months and anticipated to last at least 1 year or end in death - total disability is defined as the complete inability to do ANY productive work - benefit is based upon the amount of FICA tax contributions and number of dependents **social security is NOT funded by the federal government; the PIA is the base used to calculate a person's eligible benefits

In a Disability Income policy, which of these clauses acts as a deductible?

Elimination Period The Elimination Period serves as the deductible in a Disability Income policy.

ESOP

Employee Stock Ownership Plan - A defined contribution plan in which an employee obtains shares of stock in the company

Which of the following is true with regard to the funding of voluntary plans?

Employee pays the entire premium

Monopolistic

Employers only can buy worker's compensation insurance through a state ran fund

Third Party Administrators (TPAs) do all of the following in connection with self-funded health insurance plans, EXCEPT:

Employers who elect to self-fund their health insurance plans usually hire a Third Party Administrator (TPA) to perform the clerical functions of the plan, such as handling enrollments and claims. Many TPAs are actually owned by insurance companies, who provide stop-loss (or excess) coverage for the self-funded employer in the event that claims are excessive. However, TPAs are not involved in the marketing of the plan.

Which types of insurance companies marketing long-term care insurance coverage must establish procedures to assure that any comparison of policies by its agents will be fair and accurate?

Every company is required to establish marketing procedures ( Every insurer marketing long-term care coverage must establish marketing procedures to assure that any comparison of its policies by its agents is accurate and fair. Companies must also have marketing guidelines to ensure that excessive insurance is not sold or issued to clients)

Question 32 of 100 Which of the following statements is not true about group insurance? A master contract is issued. Underwriting is on a group, not an individual, basis. Exclusions and riders are written for the most at-risk members. The cost is lower than it is for individual policies.

Exclusions and riders are written for the most at-risk members. Explanation: A key provision of group insurance is that it does not discriminate on the basis of an individual's health history

_____ is a federal administrative agency that enforces federal antitrust and consumer protection laws

FTC

T or F Administrative agencies do not have to comply with the Due Process Clause of the U.S. Constitution when adjudicating cases of violation.

False

T or F Even in an emergency situation, a warrantless search conducted by an administrative agency constitutes a violation of the Fourth Amendment.

False

T or F General government regulation consists of laws that regulate the operation of the three branches of the federal government.

False

T or F Procedural administrative law establishes the procedure that must be followed by the federal or state legislatures in creating an administrative agency.

False

T or F The Administrative Procedure Act establishes procedures that industries and businesses must follow when conducting their affairs.

False

Employee Retirement Income Security Act (ERISA)

Federal law that outlines plan description and benefits for pension plans. Requires annual reporting and provides equality.

Medicare Supplement Insurance

Fills in gaps left out of Medicare part A and B. Must include the core benefits (medi-gap)

Insurable Interest

Financial interest in having the life of the insured continue

Insurance Interest

Financial interest in having the life of the insured continued

What are equity indexed annuities (EIA)?

Fixed annuities that offer the potential for higher credited rates of return than their traditional counterparts but also guarantee the owner's principal.

annuity

Fixed period settlement options are considered to be a form of a(n)

T or F All state regulatory laws are drafted by the federal government and then adopted by the state.

Flase

What annuity requires premium payments that vary from year to year?

Flexible premium deferred annuity

Standard Provisions: Conformity with State Statutes

If any provision in a health insurance policy conflicts with the laws of the state in which the insured lives, the policy is automatically amended to conform to the minimum requirements of those laws.

Which of the following was designed to ensure continued access to affordable health insurance coverage for employees of small employers, their dependents, and other qualified beneficiaries not currently protected COBRA?

Florida health insurance Coverage continuation ACT ( The purpose and intent of the Florida Health insurance coverage continuation Act is to ensure continued access to affordable health insurance coverage for employees of small Employer's, their dependents and other qualified beneficiaries not currently protected by the consolidated omnibus budget reconciliation act [COBRA]).

Which of the following government health programs provides health insurance coverage to children who do not have access to adequate health care services?

Florida healthy kids ( Florida healthy kids provides health insurance coverage to children who do not have access to adequate health care services. Medicare is generally reserved for adults over the age of 65. Social security provides for workers- not children. Blue cross and blue shield is not a governmental health program)

*What is the minimum number of employees specified by Florida law that must be included before a group health insurance policy can be issued?

Florida law does not specify any minimum number for employee group health insurance.

*In a family basic policy, when do maternity benefits go into effect?

Florida law provides that no preexisting condition exclusion may apply to pregnancy for groups of two or more. Consequently, maternity benefits go into effect when a family basic policy is issued.

Health Care: *Guaranteed Availability of Individual Coverage

Florida law requires eligibility for guaranteed-issuance of an individual health insurance policy to include persons with 18 months of prior coverage under a group health plan; or under an individual plan, if the prior insurance coverage is terminated due to the insurer or HMO becoming insolvent or discontinuing all policies in the state, or due to the individual no longer living in the service area of the insurer or HMO.

*What is the Florida Employee Health Care Access Act?

Florida's small group health insurance law passed in the 1992 legislative was amended in the 1993 legislative session. (Amendments were part of the Health Care and Insurance Reform Act of 1993.) The act governs group health insurance provisions provided by insurers or HMOs to small employers.

30 Following military service, an insured must submit a request for reinstatement to a private health insurer no later than 30 days following deactivation.

Following military service, an insured must submit a request for reinstatement to a private health insurer no later than how many days following the deactivation?

*What is a preferred provider organization (PPO)?

Following the passage of legislation in 1983, insurance companies were authorized to enter into "alternative rates of payment" agreements with licensed health providers. Those entering into the agreements are called preferred provider organizations (PPOs). The concept is that if one provider or a group of providers has a large volume of business from a group of insureds, it can afford to give them health care at lower guaranteed costs. This savings in health care costs can then be used to prevent health insurance premiums from increasing for that particular group of insureds.

COBRA for Employers over 20 EEs:

For COBRA, employers with 20 or more employees must allow terminated employees and their dependents to continue their group coverage by paying 102% of the group

How are the premiums for an individual disability income policy and a Medicare supplement policy treated on a tax basis? Select one: a. Disability income premiums are deductible, Medicare supplement are not deductible. b. Medicare supplement premiums are deductible, disability income premiums are not deductible. c. Both are deductible. d. Neither is deductible.

For tax purposes, individual disability income premiums are not deductible, however the benefits paid under a disability income policy are tax free. The correct answer is: Medicare supplement premiums are deductible, disability income premiums are not deductible.

Surplus Lines Broker

Found in Property and Casualty insurance. Can place insurance with non-admitted insurers

administrative searches are subject to __________, which protects persons and businesses from __________.

Fourth Amendment, unreasonable search and seizures

Fraternals typically sell what type of insurance? Select one: a. Property insurance b. Accident and health insurance only c. Life, accident and health insurance d. Liability insurance

Fraternal benefit societies are mostly involved in life and health insurance. The correct answer is: Life, accident and health insurance

Fraternal benefit societies are described by all of the following, EXCEPT: Select one: a. They provide insurance to their members. b. They can be religion-based. c. They include ethnic or charitable organizations. d. They include stock and mutual companies.

Fraternals are religious, ethnic or charitable organizations that provide insurance to their members. The correct answer is: They include stock and mutual companies.

Maureen's health insurance policy has been effect for the last four years. Therefore, the insurance company can contest it only on which basis?

Fraudulent application.

________ consists of laws that regulate businesses and industries collectively

General government regulation

Contestable period

Generally, the first two years in life insurance. During this period if the insurer finds any reason to dispute the information on the application, the insurer can rescind the policy or deny the claim

Contestable Period

Generally, the first two years in life insurance. During this period if the insurer finds any reason to dispute the information on the application, the insurer can rescind the policy or deny the claim.

Question 9 of 100 Each HMO member signs up with one primary care physician (PCP). The PCP must refer the member to a specialist before any treatment from the specialist is covered. The PCP can be a doctor in general practice or a doctor specializing in any of the following, EXCEPT internal medicine pediatrics or obstetrics Geriatrics Gynecology

Geriatrics Explanation: The PCP can be a doctor in general practice or can specialize in family practice, internal medicine, pediatrics, or obstetrics and gynecology

A Health Maintenance Organization (HMO) is known for stressing which type of medical care? Select one: a. Preventative and wellness care to keep its members well b. Diagnostic medicine after a member develops health conditions c. Surgical options after internal medicine has run its course d. A limit on the number of visits a patient may use on a calendar year basis

HMOs are designed to encourage its members to participate in testing and wellness program to promote good health. The correct answer is: Preventative and wellness care to keep its members well

An HMO will stress all of the following, EXCEPT: Select one: a. Higher deductibles for curative services b. Low or no co-pay for doctor visits c. Screenings for potential health conditions d. Wellness as a lifestyle

HMOs generally do not have deductibles, but they do assess co-pays in some cases. The correct answer is: Higher deductibles for curative services

Define HIPPA:

Health Insurance Portability and Accountability Act): HIPAA requires that every insurer who offers individual health insurance make available at least two plans, on a guaranteed issue basis, for certain "eligible" individuals. HIPAA is designed to provide "portability" of coverage without a new probationary period. HIPAA applies to group medical expense plans, but does not apply to disability income insurance. HIPAA's "portability" provisions apply to individuals who have at least 12 months of prior "creditable" coverage, with no gap in coverage of more than 63 days.

In North Carolina managed care includes both

Health Maintenance Organizations (HMOs), and Preferred Provider Organizations (PPOs).

Question 25 of 100 Which of the following statements best describes the providers of health insurance? Health insurance is available through private carriers only. Health insurance is available through the federal government only. Employers provide health insurance. Health insurance is available in the private sector and through local, state, and federal governments.

Health insurance is available in the private sector and through local, state, and federal governments. Explanation: Health insurance is not just available through private carriers.

Government Plans

Health insurance policies exclude expenses either paid or eligible for payment under Medicare or other federal, state, or local medical expense program, such as state child health programs.

All of the following would be legal activities for an HMO to engage in EXCEPT? A) dental services B) Medical services C) Health education D) Health insurance solicitation

Health insurance solicitation ( An HMO may not engage in any services that do not fall in Florida's definition of "comprehensive health care services")

Which of the following is a corporation or association connected to a health-care provider or group of providers that accepts prepayment for health-care services from individuals or groups in exchange for giving them health-care services from the health-care provider or group of providers?

Health-care service contractor

DHS was created after enactment of ____ ____ ____.

Homeland Security Act,

On a tax-deferred basis

How do interest earnings accumulate in a deferred annuity?

3 years A life insurance policy must be in effect for 3 years before the policyowner may use the nonforfeiture provision.

How long must a life insurance policy be in effect before the policyowner may use the nonforfeiture provision?

How are health insurance claims paid within a PPO network? What happens if a patient uses an out-of-network provider?

If a patient uses a provider within the network, the provider will get paid for the services directly from the insurer. The PPO provider is prohibited from charging any additional amount to the patient above what the provider is paid from the insurer, except for the coinsurance amount that is based on the network discounted fee that the provider agreed to accept. If the patient uses an out-of-network provider, the insurer must also pay the provider directly for the services, but in this case, the provider can charge the patient any difference between what is paid by the insurer and the amount the provider charges for services.

Not greater than $1,000 If it is discovered that a producer cheated on their examination for an insurance license, the Commissioner may place on probation, censure, suspend, revoke, or refuse to issue the producer's license, as well as assess a fine of no more than $1,000.

If it is discovered that a producer cheated on their examination for an insurance license, the Commissioner may place on probation, censure, suspend, revoke, or refuse to issue the producer's license, as well as assess a fine of

issue a cease and desist order If the Commissioner has received a complaint that an individual has committed an Unfair Trade Practice, the Commissioner may immediately issue a cease and desist order.

If the Commissioner has received a complaint that an individual has committed an Unfair Trade Practice, the Commissioner may immediately

the premiums paid plus interest earned will be given to the beneficiary ( If the annuitant dies before the annuity start date, the beneficiary receives the premiums paid plus interest earned.)

If the annuitant dies before the annuity start date,

Standard Provisions: Unpaid Premium

If the insured has failed to pay a premium that is due when a claim is made, the insurer may deduct the amount of the premium from the amount payable to the insured or beneficiary. - take it out of the take home money

Standard Provisions: Misstatement of Age or Sex Provision

If the insured misstated his or her age in the application, benefits payable will be what the premiums would have purchased at the correct age.

In the situation in which health insurance premiums are not tax-deductible, the benefits are: Select one: a. Always tax-free b. Tax-free, as long as they do not exceed the actual cost of medical expenses c. Only tax-free for disability income insurance d. Taxable as ordinary income

If the premiums are not tax-deductible, the benefits are tax-free, as long as they do not exceed the actual cost of medical expenses. The correct answer is: Tax-free, as long as they do not exceed the actual cost of medical expenses

*When were health insurance benefits added to the Social Security program?

In 1965, the Social Security Act was amended to add a health insurance program for the aged and disabled.

50 employees In Oklahoma, a small employer may not consist of more than 50 eligible employees.

In Oklahoma, a small employer may not consist of more than how many eligible employees?

two years of issue The contestable period for health policies in Oklahoma is 2 years.

In Oklahoma, claims for a medical expense health plan may be denied due to a material misrepresentation within

Consideration

In an insurance contract, the element that shows each party is giving something of value is called Offer Acceptance Consideration Purpose

Unilateral

In an insurance contract, the insurer is the only party legally obligated to perform. Because of this, an insurance contract is considered Voidable Conditional Aleatory Unilateral

24 hours every 2 years Oklahoma has a continuing education requirement of 24 hours every 2 years for license renewal.

In conjunction with an Oklahoma insurance license renewal, which one of the following is the continuing education REQUIREMENT?

What is Community Rating:

In contrast to experience rating, Community Rating which sets premiums by using the same rating structure for all insureds regardlessof their past loss experienc

Usual, customary & reasonable

In health insurance, pays a dollar amount based on the geographical location

Non-Medical Application

In life insurance, an application on an insured that does not require the insured to take a physical

Endow

In life insurance, the cash value of the policy equals the face amount

Which of the following is one of the major differences between private and government insurance? Select one: a. Private insurance can deny coverage to individuals. b. Government insurance can be either federal or state. c. Both private and government have disability coverage. d. Government insurance is more efficiently run

In order to stay in business, private insurance can deny coverage to high-risk individuals and minimize their losses. The correct answer is: Private insurance can deny coverage to individuals.

Mr. "A" lapsed his disability policy March 2. He reinstated it on March 22. He claimed coverage for an illness that occurred March 26. Is the claim valid? Why? If the same circumstances occurred except that the claim was for an accident rather than a sickness, would it be paid?

In the first situation the claim would not be valid. An illness would have had to occur more than ten days after reinstatement for a claim to be valid. In the case of the accident, the insurance company would be liable for the claim because the insured would be entitled to full benefits as soon as the policy was re-instated.

Must have residence in Oklahoma for 6 months prior to submitting the license application There is not a 6-month residence requirement in Oklahoma to qualify for a resident producer license.

In the state of Oklahoma, to qualify for a Resident Producer license each of the following is required EXCEPT?

A CEO's personal assistant suffered injuries at home and as a result, was unable to work for four months. Which type of policy will pay a monthly benefit to the personal assistant?

In this situation, a Disability Income policy would pay monthly benefits.

Rebating

Includes money, reductions in commissions, stock, bonds, securities, and their dividends or profits, special favors or advantages of benefits, and personal services. An insurance producer may give a gift, prize, promotional article, logo merchandise, meal, or entertainment activity, but may not give cash, a cash card, or any form of currency, or refund, or discount in premium.

Simon has purchased a fixed immediate annuity. His payment amount will be dependent upon principal, interest, and the contract's? A. surrender charge B. death benefit C. cash refund D. income period

Income period

Congress creates other federal administrative agencies called ________ that have broad regulatory powers over key areas of the national economy.

Independent federal administrative agencies

Long Term Care Respite Care —

Individuals who provide living assistance at home are called care givers. Respite care provides relief for the major care giver (i.e., gives the care giver a break) and may even include an overnight stay by a respite care giver. Respite care is also provided at adult day care centers. Adult day care is either medically-based (i.e., physical therapy) or recreational-based (i.e., arts, crafts, entertainment).

What can a MET include?

Industry trust formed for employers in the same industry, such as real estate offices. However, because there are many trade associations providing insurance under their own regulations and guidelines, the majority of multiple-employer trusts are made up of employers who do not belong to any trade association.

All of the following are typical health policy exclusions, EXCEPT: Select one: a. Injuries caused by acts of war b. Injuries that are self-inflicted c. Injuries that are the result of foolishness d. Injuries that are the result of a preexisting condition

Injuries that are caused by acts of war, are self-inflicted or the result of a preexisting condition are typically excluded from coverage - as are injuries resulting from piloting a private plane. The correct answer is: Injuries that are the result of foolishness

Business owner and business client

Insurable interest does NOT occur in which of the following relationships? Sister and brother Parent and children Business partners Business owner and business client

Which of the following entities must approve all Medicare supplement advertisements?

Insurance commissioner or Director ( An insurance company must provide a copy of any Medicare supplement advertisement intended to be used in this state to the insurance director for review or approval)

Insurance contracts pay for losses on an: Select one: a. Indemnity basis b. Cash payment basis c. Valued basis d. All of the above

Insurance contracts pay for losses on an indemnity, valued or cash basis. The correct answer is: All of the above

Insurance is: Select one: a. Guaranteed payment for losses incurred by the insured b. A transfer of the uncertainty of loss from the insured to the insurance company c. The unintentional decrease in value of an asset d. The rate at which people get sick

Insurance is the transfer of uncertainty of loss from the insured to the insurance company. The correct answer is: A transfer of the uncertainty of loss from the insured to the insurance company

Rebating, which is an unfair trade practice This is an example of rebating, which is prohibited.

Insurance producer Kate offers insureds a $250 shopping card if they purchase an insurance product through her. What is this an example of?

Worker's Compensation Insurance

Insurance purchased by employers on their employees in case of work related injuries. Employers are responsible regardless of fault

credit life Insurance that is designed to pay the balance of a loan if the insured dies before the loan has been repaid in full is credit life.

Insurance that is designed to pay the balance of a loan if the insured dies before the loan has been repaid in full is

When a person applies for Medicare supplement insurance, whose responsibility is it to confirm that the applicant does not already have accident or sickness insurance already in force? a) Federal government b) Agent c) Insurer d) State government

Insurer ( Although it is illegal for an application to intentional misrepresent himself in an insurance application, it is the insurer's ultimate responsibility to make sure that the applicant does not already have another accident or sickness policy in force)

becomes financially insolvent Insurers do business in Oklahoma only after a thorough financial review. MOST insurance policies written in Oklahoma are protected by the Guaranty Association established to protect policyowners in the event an admitted company becomes financially insolvent.

Insurers do business in Oklahoma only after a thorough financial review. MOST insurance policies written in Oklahoma are protected by the Guaranty Association established to protect policyowners in the event an admitted company

Question 17 of 100 Which of the following statements about the Fair Credit Reporting Act is CORRECT? Insurers must notify their applicants any time that a consumer or investigative report has been requested. The act states that applicants cannot dispute consumer reports because they are final in nature. The act attempts to keep all consumer data private by prohibiting its disclosure to any third parties, including insurers. If an insurance applicant has been rejected based on a consumer report, the insurer is prohibited from disclosing the name of the reporting agency

Insurers must notify their applicants any time that a consumer or investigative report has been requested. Explanation: The Fair Credit Reporting Act requires an insurance company to notify its applicants any time a consumer or investigative report has been requested.

All of the following are commonly used when investigating the insurability of an applicant, EXCEPT: Select one: a. An attending physician's statement b. A credit report c. Contacting the Medical Information Bureau (MIB) d. Talking to the neighborhood watch

Insurers typically utilize the physician's statement, credit report and MIB when determining insurability of an applicant. They do not talk to the neighborhood watch. The correct answer is: Talking to the neighborhood watch

A child is dependent upon her parents for support because of a physical disability. Coverage may be continued beyond a normal limiting age when the child?

Is incapable of self-sustaining employment ( Coverage beyond the normal limiting age may continue if a handicapped child is incapable of self-sustaining employment)

Question 37 of 100 David is insured under an individual long-term care insurance policy. Which of the following actions can the insurer take after David is diagnosed with dementia? It can increase the premium. It can refuse to renew the policy. It can decrease coverage. It can renew the policy.

It can renew the policy. Explanation: A long-term care insurance policy may not be canceled or nonrenewed because of the insured's age or deterioration of mental or physical health.

All of the following are elements of insurable risks, EXCEPT: Select one: a. Loss must occur by chance or accident b. Large number of homogenous units c. Loss must be predictable d. Loss must be catastrophic

Losses must not be catastrophic risking insurer insolvency. The correct answer is: Loss must be catastrophic

An insurance company whose main responsibility is to make money for its policyholders is called a: Select one: a. Mutual insurance company b. Stock insurance company c. Health maintenance organization (HMO) d. Preferred provider organization (PPO)

It is a mutual insurance company that answers to the policyholders. The mutual company focuses on providing maximum benefits to the policyholders and considers long-term safety of its investments. The correct answer is: Mutual insurance company

Question 36 of 100 If an agent is selling insurance for a company that does not have a certificate of authority to operate in that state, what is the status of the company in that state? It is an alien company It is a non-admitted company It is an unregistered company. It is a limited lines company.

It is a non-admitted company Explanation: A company not holding a certificate of authority in the state in which it does business is a non-admitted insurer in that state

An insured under a group health plan has a dependent child who has an intellectual disability. When the child was enrolled in the insured's policy, the insurer offered coverage at a much higher rate than for other dependents. Which of the following is true?

It is considered illegal discrimination ( Discrimination against handicap dependents is prohibited. Health insurers cannot refuse coverage, or charge unfair discriminatory rates for health insurance coverage for a person solely because of an intellectual or physical disability)

Misrepresentation

It is illegal to issue, publish, or circulate any illustration or sales material that is false, misleading, or deceptive as to policy benefits or terms, the payment of dividends, etc. This also refers to oral statements.

Question 88 of 100 Which of the following statements is correct concerning any sale of a Medicare supplement policy that results in the insured having more than one such policy? It is recommended for the best insurance protection. It is permitted if the insured intends to eventually replace one of them. It is allowed if the producer provides the appropriate disclosures. It is prohibited in all cases.

It is prohibited in all cases. Explanation: Any sale of a Medicare supplement policy that results in the insured having more than one Medicare supplement policy is prohibited.

What happens to interest earned if the annuitant dies before the payout start date? A. It is taxable B. It is taxable only if no beneficiary is named C. It is not taxable D. It is only taxable if contract has been in force under one year

It is taxable

marital status It is the responsibility of the producer to report all of these to the insurance commissioner EXCEPT changes of his or her marital status.

It is the responsibility of the producer to report all of the following information to the insurance commissioner EXCEPT changes of his or her

Question 90 of 100 For many years, Medicare Parts A and B comprised the entire Medicare program. In 1997, Medicare was expanded to include another option, Part C. What does Part C do? It covers the costs of prescription drugs. It fills the gaps in standard Medicare coverage, creating Medicare supplements. It opens the program to new health-care providers and health-care programs that offer a limited range of services to Medicare participants It opens the program to new health-care providers and health-care programs that offer the full range of Medicare services to participants.

It opens the program to new health-care providers and health-care programs that offer the full range of Medicare services to participants. Explanation: Part D, not part C, covers the costs of prescription drugs.

Which of the following does NOT describe hospice care? A) It provides care in a home-like setting B) It provides care to terminally ill people. C) It provides care to people with life expediencies of 1 to 2 years D) It provides continuous care

It provides care to people with life expediencies of 1 to 2 years ( Hospice provides short-term, continuous care in a home-like setting to terminally-ill people with life expediencies of 6 months or less)

The Florida Employee Health Care Access Act serves which of the following purposes? A) It encourages limited group health insurance provisions provided by HMOs B) It requires employers to purchase insurance that covers all pre-existing conditions of covered employees without limitation C) It mandates minimal health insurance provisions to employees of companies with 10 or fewer employees D) It regulates group health insurance provisions provided by insurers or HMOs to small employers

It regulates group health insurance provisions provided by insurers or HMOs to small employers ( The Florida Employee Healthcare Access Act regulates group health insurance provisions provided by insurers or HMOs to small employers)

Joe cannot be denied reinstatement to his original individual health plan An Oklahoma resident activated for military service cannot be denied reinstatement into the same individual health insurance coverage that lapsed while the person was on active duty.

Joe is a military retiree after having served 20 years of active duty. Upon retiring, he requests reinstatement of his lapsed individual health policy and is denied. Which of the following is correct?

Question 38 of 100 All of the following are examples of hazards EXCEPT: Ron tends to forget to wear his seat belt when he drives. Sue is a heavy cigarette smoker. John is taking medications to control his high blood pressure. Jane, a business owner, refuses to fix a broken sidewalk in front of her shop because she and the town cannot agree on who must repair it

John is taking medications to control his high blood pressure. Explanation: A hazard is a condition that increases the number of losses or the severity of losses. Taking medications to control a life-threatening disease is a hazard-reduction technique.

Question 35 of 100 State Insurers was incorporated in Ohio ten years ago on June 1. By what date must it renew its certificate of authority each year? June 1 June 15 June 30 July 1

June 30 Explanation: A company's certificate of authority must be renewed by June 30 each year. A company must file an application and pay the required fee to renew its certificate of authority.

Who are METS formed by?

METS are formed by insurers, producers, brokers or third-party administrators who are called sponsors.

........ hazard is a significant factor in health insurance underwriting because of the possibility of malingering, and it is the....., not the home office underwriter, who actually has personal contact with the applicant. It is the responsibility of the ...... to ask the applicant questions clearly and precisely and to record the answers accurately.

Moral, agent, agent

Question 51 of 100 Which of the following illustrates pure risk? Knowing that his family depends on his income, Franklin wants to insure his life. Knowing that he needs to do more to boost his retirement savings, Saul invests his life savings in the stock market Hoping to boost his savings in the event of an emergency, Ralph takes a second mortgage on his home and uses the proceeds to gamble in Las Vegas. Believing his financial situation will be more secure if he were self-employed, Ron cashes in his life insurance policy to start a business.

Knowing that his family depends on his income, Franklin wants to insure his life. Explanation: Only pure risk is insurable. Pure risk may result only in a loss, unlike speculative risk, which may result in loss or gain.

Twisting (life & accident/health only)

Knowingly making any misleading representation or incomplete or fraudulent comparison of any insurance policies or insurers for the purpose of inducing, or tending to induce, any person to lapse, forfeit, surrender, terminate, retain, pledge, assign, borrow on, or convert any insurance policy or to take out a policy of insurance with another insurer

Every insurer marketing Long-Term Care insurance must establish marketing procedures to ensure all of the following EXCEPT A) Comparisons of policies are fair and accurate B) Excessive insurance will not be sold C) Every reasonable efforts is made to identify an applicants other insurance D) LTC policies are marketed effectively to prospective insureds

LTC policies are marketed effectively to prospective insureds ( All insurers marketing long-term care policies must establish these procedures. Additionally, companies must have marketing guidelines to insure that excessive insurance is not sold or issued)

Multiple Employer Trust (MET)

Legal entities in which two or more financially unrelated companies join together to provide group insurance

There must be legal reasons for entering into the contract

Legal purpose is a term used in contract law meaning There must be an offer and acceptance The contract must be aleatory There must be legal reasons for entering into the contract The contract must be a contract of adhesion

T has Disability Income policy that pays a monthly benefit of $5000. If T becomes partially disabled, what can he likely expect?

Less than $5,000 per month benefit regardless of the cause In a $5,000 per month Disability Income Policy, a covered partial disability will typically result in less than $5,000 per month regardless of the nature of the disability.

________ is a permission that an administrative agency grants to persons or businesses to conduct certain types of commerce or professions.

License

nonprofit legal entities created to protect policyowners, insured, and beneficiaries against insolvent insurers within certain limitations.

Life and Health Guaranty Associations

Which type of annuity guarantees a stated number of income payments, whether or not the annuitant is still alive to receive them? A. Life annuity certain B. Secure life annuity C. Irrevocable survivor annuity D. Guaranteed life annuity

Life annuity certain

What is the different between life insurance and annuities?

Life insurance builds an estate by paying money into the contract. Annuities liquidate an estate by the periodic payment of money out of the contract.

Term Insurance

Life insurance protection for a designated number of years

Group Insurance

Life or health insurance provided for large numbers of people who have something in common, such as the same employer

Which of the following statements concerning a Medicare Supplement plan are true? Select one: a. An individual must qualify for Medicaid to be eligible for these policies. b. An insurance company must be affiliated with Medicare to sell supplement policies. c. Medicare supplements are typically available when a person reaches age 59 1/2 and up. d. An insurance company must have a certificate of authority to market Medicare Supplements

Like any policy, an insurance company must have a certificate of authority from the state where they are selling a policy in order to market that product. The correct answer is: An insurance company must have a certificate of authority to market Medicare Supplements.

Which of the following is NOT considered a limited policy? Select one: a. Dental coverage b. Accident coverage c. Vision coverage d. Disability income coverage

Limited policies provide limited coverage for a particular health care setting, ailment or disease. Dental and vision are considered limited policies, as is accident coverage. The correct answer is: Disability income coverage

Stop Loss Provision

Limits the insured's out of pocket expenses

During periods of inflation, annuitants will experience a decrease in purchasing power of their payments ( The disadvantage of fixed annuities is annuitants could experience a decrease in the purchasing power of their payments over a period of years due to inflation.)

Lisa has recently bought a fixed annuity. Which of these is considered to be a disadvantage of owning this type of annuity?

Question 93 of 100 Which of these is not an independent agency that rates insurance companies? A-M Best Duff and Phelps Lloyd's of London Standard and Poor's

Lloyd's of London Explanation: A-M Best, Duff and Phelps, and Standard and Poor's are all rating agencies. Lloyd's of London is an association of individuals and companies that underwrite insurance on their own accounts.

Long-term Care Expense

Long-term care policies provide benefits for medically necessary services which one receives in a nursing home or perhaps in one's own home (home health care), but not care received in an acute care unit of a hospital.

Coming from an insurance point of view, which of the following is the main risk associated with disability? Loss of limbs Loss of income Decreased work skills Decreased mobility

Loss of income

Loss of Income From Disability

Loss of income caused by accident and/or sickness causing an insured the inability to work and earn income is covered under disability income policies or coverages. Disability income insurance is a valued contract or stated amount that pays weekly or monthly benefits due to an injury or sickness. Benefits may be determined by the insured's past earnings and may be limited to a percentage of that income.

All of the following statements describe a MEWA EXCEPT? A) MEWAs are groups of at least 3 employers B) MEWAs can be sponsored by insurance companies C) MEWA employers retain full responsibility for any unpaid claims D) MEWAs can be self-insured

MEWAs are groups of at least 3 employers ( MEWAs are groups of at least 2 employers who pool their risks to self-insure. MEWAs can be sponsored by an insurance company, an independent administrator, or another group established to provide group benefits for its participants)

Minimum Standards for Individual Health Insurance Policies: Major Medical Expense Benefits

Major medical expense insurance covers hospital, medical, surgical, and room and board expenses for at least 31 days per confinement.

Coinsurance

Major medical policy feature in which the insurer and the insured share in the cost of medical expenses

Coninsurance

Major medical policy feature in which the insurer and the insured share in the cost of medical expenses

defamation Making or publishing any oral or written statement that is FALSE or maliciously critical of the financial condition of an insurer, and is calculated to injure any person engaged in the business of insurance is known as defamation.

Making or publishing any oral or written statement that is FALSE or maliciously critical of the financial condition of an insurer, and is calculated to injure any person engaged in the business of insurance is known as

Health Maintenance Organization (HMO)

Managed care health insurance with an emphasis on preventive care

Question 4 of 100 Mark has satisfied the requirements of reinstatement but receives no notice from the insurer during the 45-day period. Which of the following will happen? Mark can assume the reinstatement has not been accepted, and he can get his money back Mark must contact the insurer to determine its decision. Mark's policy is automatically reinstated. Mark's policy automatically lapses.

Mark's policy is automatically reinstated. Explanation: If no notice is given during that period, the policy is automatically reinstated.

A Group insurance policy is a...

Master policy usually between the employer and the insurer.

Are maternity benefits required in health insurance policies?

Maternity benefits may or may not be offered under individual health insurance policies. There is no requirement provision under Florida law. However, group medical expense plans must provide maternity benefits

Question 44 of 100 Maude is 65 years old and chooses Medicare Part B coverage, for which she pays a monthly premium. She incurs $1,000 this year in covered Part B medical expenses. What must Maude pay? Maude must pay the deductible. Of the remaining amount, Medicare Part B would pay 80 percent and she would pay the remaining 20 percent Maude must pay the deductible. Of the remaining amount, Medicare Part B would pay 70 percent and she would pay the remaining 30 percent. Maude must pay the deductible. Of the remaining amount, Medicare Part B would pay 50 percent and she would pay the remaining 50 percent. Maude must pay the deductible. Of the remaining amount, Medicare Part B would pay 20 percent and she would pay the remaining 80 percent.

Maude must pay the deductible. Of the remaining amount, Medicare Part B would pay 80 percent and she would pay the remaining 20 percent Explanation: Maude must pay the deductible. Of the remaining amount, Medicare Part B would pay 80 percent and she would pay the remaining 20 percent.

Question 71 of 100 Emil, an agent licensed in Ohio, moves to Georgia on April 30. He is required to notify the Ohio Department of Insurance by what date? May 7 May 15 May 30 October 31

May 30 Explanation: An agent who changes his or her address must notify the Insurance Department within 30 days of the change.

A state program of medical assistance for needy persons that is administered under federal guidelines is?

Medicaid ( Medicaid is administered by each state according to Federal guidelines and is financed from both state and federal funds. Each state may establish its own standards to determine who is indigent and what medical services are provided, subject to the minimum standard established by the Federal government)

*What Is Medicare supplemental insurance and what is its purpose?

Medicare supplemental insurance is a form of private insurance designed to pay some or all of the deductible and co-payment amounts that Medicare recipients are required to pay. The coverage applies to both the hospital and medical insurance plans administered by the federal government for the elderly and permanently disabled. The purpose of the Medicare supplemental insurance is to relieve the insured of the significant total costs not paid by Medicare due to its deductible and co-payment provisions. Medicare supplement insurance is available to individuals who enroll within the six months prior to their 65th birthday, those who are under 65 and have End Stage Renal Disease (ESRD), or those who have SSI eligibility.

Which of the following statements is correct? A) Medicare does not pay for nursing home care in any case B) Medicare will cover nursing home care if it is part of the treatment for a covered illness C) Care needed because of aging is covered by medicare, but not by Medicare supplements D) Care needed because of aging is covered by Medicare

Medicare will cover nursing home care if it is part of the treatment for a covered illness ( Medicare will cover nursing home care if it is part of the treatment for a covered injury or illness, but care needed because of aging is not covered by Medicare or Medicare supplements. Medicare and Medicare supplements pay for skilled nursing care, but the coverage is limited. Medicaid does pay for nursing home care, but it provides coverage only for those who qualify with low income and low assets)

All of the following are required provisions in all individual health insurance policies delivered in this state EXCEPT? A) Misstatement of age B) Entire contract C) Grace period D) Reinstatement

Misstatement of age (Misstatement of age is an optional health insurance policy provision, meaning it may be included in the policy at the option of the insurer)

Settlement Options

Mode of distributing the proceeds from the policy in other than a lump sum (fixed period, fixed amount interest only, life income option)

Contributory Group Disability Income (Shared Premiums):

Premiums Tax-deductible to employer;Benefits Partially taxable to employee (whatever proportion of the premium is paid by the employer, that same proportion of the benefit received by an employee is taxable).

What benefits are available for maternity in basic policies?

Most family basic policies cover maternity claims. Usually the hospital expenses are covered up to ten times the room and board benefit. The insured would receive $10,000 if the room and board were $1000. This item ($1,000) would be paid if the hospital charges were equal to (or greater than) this amount regardless of the length of time the patient was in the hospital.

Last Survivor Policy (Second-to-Die)

Mostly used by husband and wife for estate planning. Written for million dollars or more. It will pay on the death of the second to die.

What is a MET?

Multiple employer trust is a group of 10 or more employers who form a trust in order to maximize tax implications of providing certain types of benefits for their employees, particularly life insurance)

What does MEWA stand for?

Multiple employer welfare associations

In a long-term care policy, pre-existing condition limitations? A) are not permitted B) Must appear as a separate paragraph and be clearly labeled C) Apply to 12 months from the effective date of coverage D) Never have specific exclusions

Must appear as a separate paragraph and be clearly labeled ( if there are any limitations in the policy with respect to pre-exisiting conditions these limitations must appear in a separate paragraph in the policy labeled " pre-existing condition limitations". A long term-care policy cannot deny a claim for losses incurred more than 6 months from the effective date of coverage because of a pre-existing condition)

A long-term care insurance shoppers guide must be provided in the format developed by which of the following? A) NAIC B) Office of insurance regulations C) Director D) Medical information Bureau

NAIC ( A long-term care insurance shoppers guide must be provided in the format developed by the National Association of insurance commissioners [NAIC]. The shopper's guide must be presented to the applicant prior to completing the application)

NAIC

National Association of Insurance Commissioners, an organization composed of insurance commissioners from all 50 states, the District of Columbia and the 4 U.S. territories, formed to resolve insurance regulatory issues

A Medicare supplement plan (Medigap) is designed to provide benefits for all of the following services, EXCEPT: Select one: a. Custodial care facility b. A portion of the surgeon's bill not paid in full by Medicare c. Hospital deductibles d. A portion of lab and X-ray tests not paid in full by Medicare

Neither Medicare not Medicare supplement plan provide benefits for custodial care. The correct answer is: Custodial care facility

When may an insurer require an insured to provide genetic information? A) Upon policy renewal B) When establishing insurability C) Only during the underwriting process D) Never

Never ( Insurers are prohibited from requesting a person or a relative of a person to supply generic information)

Group health insurance usually...

No Probationary Period and little underwriting Group rates are usually lower than rates charged for individual policies and coverage is generally broader. Groups may not be formed just to buy insurance. They must exist for another reason.

Routine and preventive maintenance

No deductible or copayment, This coverage benefit usually includes routine examinations and teeth cleaning once a year, and perhaps full-mouth X-ray once every 3 years.

Can an insurer exclude coverage for bone marrow transplants?

No, provided the particular use of the bone marrow procedure is determined to be acceptable and not experimental under rules adopted by the Department of Health.

If an error is found in the application, may the agent recopy the application and sign the applicant's name?

No. In this case the agent should return it to the applicant and have a new application completed.

On a master group policy issued to an association, may employees of members of the association be covered?

No. Such policies may insure the spouses and dependent children of members, but not individuals who are not members of the association or dependents thereof.

*May a health insurance company refuse coverage or require a higher premium because the person to be insured has the sickle-cell trait or solely because of their sex or marital status?

No. That would violate the Florida rules on discrimination.

If an application for insurance is not attached to the policy, may the insurance company claim the application contains false answers and void the policy?

No. The application only becomes a part of the policy and subject to legal contest by the insurance company when it is attached to the policy.

If the insured is engaged in a more hazardous occupation at the time of claim than was originally contemplated in the policy, can the insurance company deny the claim?

No. The claim will be paid in full unless the policy contains a provision setting forth that in such cases there will be a reduction in benefits.

May an agent make a change in any application without the written consent of the policy owner?

No. The insurance company home office can make certain changes for administrative purposes. This must be done in such a manner that they are clearly not to be ascribed to the applicant.

Can an insurer refuse coverage solely because the proposed insured has been diagnosed as having a fibrocystic condition?

No. The law prohibits this unless the condition is diagnosed through a breast biopsy that demonstrates an increased disposition to developing breast cancer.

*Is Part A of Medicare optional coverage?

No. This coverage is provided at no premium cost for the eligible persons.

Medical Information Bureau (MIB)

Non-profit organization supported by insurance companies. OR A non-profit organization funded by member life and health insurance companies. Prevents fraud or over insurance.

HSA Penalties for Non-Qualified Withdrawals —

Non-qualified withdrawals prior to age 65 will be subject to a 20% penalty and must be reported as ordinary income. Non-qualified withdrawals over age 65 must be reported as ordinary income in the year withdrawn (like an IRA)

A noncancellable policy is most likely a: Select one: a. Individual health insurance contract b. Individual disability income policy c. Accident only policy d. Group policy

Noncancellable policies most often occur with individual disability income. The correct answer is: Individual disability income policy

Any policy of health insurance that provides coverage for maternity care must also cover the services of all of the following EXCEPT? A) Midwives B) Licensed birth centers C) Nurse-midwives D) None of the above. All are true

None of the above. All are true (Any policy of health insurance that provides coverage for maternity care must also cover the services of certified nurse-midwives, midwives and services of licensed birth centers)

J has a Disability Income policy that does NOT provide benefits for losses occurring as the result of his employment. What kind of coverage is this?

Nonoccupational coverage The coverage provided by a Disability Income policy that does not provide benefits for losses occurring as the result of the insured's employment is called nonoccupational coverage.

Shortly after a replacement transaction on a Medicare Supplement policy, the insured decided to cancel the policy, but it unsure whether the free-look provision applies. The insured can find this information in the?

Notice regarding replacement (The notice Regarding Replacement must inform the applicant of the 30-day free-look provision of the replacing policy)

When an applicant intends to replace existing individual health coverage, a .................. must be signed and submitted with the application.

Notice to Applicant Regarding Replacement

The Medicare Part D 'doughnut hole' occurs: Select one: a. After the $415 deductible has been met, the doughnut hole begins b. When Part D pays all prescription drug costs c. When the individual pays a percentage of all generic prescription drug costs d. When catastrophic coverage begins, the individual only pays a small copayment for each prescription drug

Once the combined spending between the individual and the plan reaches $3,820 the individual is in his coverage gap known as the 'doughnut hole' where the individual pays a portion of generic prescription drug costs until the required out-of-pocket expenses for the year has been met. The correct answer is: When the individual pays a percentage of all generic prescription drug costs

What are the advantages of a contributory group health Insurance plan?

One advantage of a contributory plan is that greater benefits can be provided than if only the employer portion was used for funding. Another advantage is that employees take a greater interest in the plan, since they share in its cost.

Chris is an insured bricklayer who severed his left hand in an automobile accident. Although his primary duty cannot be performed, Chris is also a substitute high school teacher. He collects a full disability income check every month. How does his policy define total disability? Recurrent Any occupation Own occupation Presumptive

Own occupation

Which clause defines total disability as being unable to perform the major duties of the insured's regular occupation? Own occupation clause Any occupation clause Residual clause Presumptive clause

Own occupation clause

*What types of benefits are provided under Part A of Medicare?

Part A of Medicare provides benefits for the following: 1) inpatient hospital services, including all those ordinary services furnished by a hospital to its inpatients; 2) post-hospital skilled nursing care in a facility having an arrangement with a hospital for the timely transfer of patients; 3) post-hospital home health services if the recipient must be in the care of a physician and under a plan established by a physician for such services after being discharged as a hospital inpatient; and 4) hospice care for the terminally ill (in lieu of other benefits).

What is the basis for reimbursement for services provided under Part A?

Payment of bills under Part A is made to the providers of the service on the basis of "reasonable costs" incurred in providing care for the patient.

Double indemnity or Accidental Death Rider

Pays double the death benefit if insured dies as a result of an accident

Straight Life Settlement Option

Pays the payee a specified income for his/her lifetime. Upon the payee's death, nothing further is paid to anyone

Which of the following factors would be an underwriting consideration of a small employer carrier? A) Claims experience B) health status C) Medical history D) Percentage of participation

Percentage of participation ( Coverage under a small employer health benefit plan is generally available only if at least 75% of eligible employees elect to be covered)

In what form do disability income policies typically pay benefits? Lump sum Periodic income Tax credit Annuity

Periodic income

Which type of disability would be less than total impairment and equal to permanent impairment? Partial total disability Permanent partial disabilty Residual partial disability Temporary partial disability

Permanent partial disabilty

Question 80 of 100 Your client wants to purchase a Medicare supplement policy with a high deductible option and low premium payments. Which plan would you recommend among the following options? Plan K or L Plan F Plan D Plan N

Plan K or L Explanation: Plans K and L provide a lesser level of benefits, but their premiums are much lower than those associated with the other plans. Plans K and L may also offer high deductible options, which would further lessen the premium payments.

The group maximum probationary period:

Pre-existing conditions on a small employer group health plan is 12 month

Business Health Sole Proprietors (i.e., major medical):

Premiums Fully deductible as of 2004 and thereafter; Benefits Not income taxable

Individual Medical Expense Plans:

Premiums May be included in unreimbursed medical expenses (i.e., and be tax-deductible if those expenses exceed 10% of the insured's AGI);Benefits are Not income taxable

Individual Long-Term Care:

Premiums May be tax-deductible if a qualified plan; Benefits are Not income taxable

Disability Buy-Out Policy (Owner/Payor of Premium):

Premiums Not tax-deductible; Benefits Not income taxable

Premiums for Medicare Part B may be tax deductible under what circumstance? Select one: a. They are an automatic tax credit for persons over age 65. b. They are not deductible under any circumstance. c. If the premiums are deducted from income tax, all benefits are taxable. d. The premiums for Part B are includable in overall medical expense for deduction subject to the 10% threshold for medical expense deduction.

Premiums for Part B premiums are treated just as any other medical expense inclusion as a deductible medical expense on a tax return. A person must itemize and medical expenses must exceed 10% of adjusted gross income before there is an allowable deduction. The correct answer is: The premiums for Part B are includable in overall medical expense for deduction subject to the 10% threshold for medical expense deduction.

Medical providers are paid on a capitation basis in which of the following dental plans? Select one: a. Prepaid dental b. Comprehensive c. Basic d. Comprehensive and basic

Prepaid dental plans operate similarly to HMOs, where medical providers are paid on a capitation basis. The correct answer is: Prepaid dental

A medical insurance plan in which the health care provider is paid a regular fixed amount for providing care to the insured and does not receive additional amounts of compensation depending upon the procedure is called?

Prepaid plan ( Under a prepaid plan, the health care providers are paid for services in advance, whether or not any services have been provided. The amount paid to the provider is based upon the projected annual cost as determined by the provider)

Modified Endowment

Prevents a life insurance policy from becoming an investment vehicle

a long-term shopper's guide must be presented at what point?

Prior to the time of application ( A long-term care insurance shoppers guide must be provided in the format developed by the National Association of Insurance Commissioners [NAIC]. The shoppers guide must be presented to the applicant prior to completing the application).

________ is a federal act which states that federal administrative agencies can maintain only information about an individual that is relevant and necessary to accomplish a legitimate agency purpose.

Privacy act

________ requires the respondent to be given proper and timely notice of the allegations or charges against him or her and an opportunity to present evidence on the matter.

Procedural due process

accelerated benefits Proceeds payable to a policyowner under a life insurance contract in anticipation of death or upon the occurrence of specified life-threatening conditions as defined by the policy are best described as accelerated benefits.

Proceeds payable under a life insurance contract to a policyowner in anticipation of death or upon the occurrence of specified life-threatening conditions as defined by the policy are best described as:

California Insurance Guarantee Association

Protects the insured if the insurance company becomes insolvent

What is the primary reason for buying an annuity? A. Provide tax-free income B. Provide a risky, yet high return investment C. Provide an instant estate D. Provide future economic security

Provide future economic security

What is the purpose of a Disability Income Benefit? Provide money for living expenses Completely replace the insured's total income Reimburse for medical expenses related to a disability Pay for business overhead expenses if the owner becomes disabled

Provide money for living expenses

OASDHI (Social Security)

Provides a minimum floor of retirement

Disability Income Insurance

Provides the insured with an income after being disabled due to an accident or illness

Randall purchased an insurance policy and stated he never had heart trouble, but he had a myocardial infarction several years prior to his application. Shortly after the policy was issued, Randall experienced a fatal heart attack. What action is the insurance company likely to take? Select one: a. Pay a pro-rata benefit calculated on the number of years since his last heart attack. b. Void the policy and refund all premiums c. Pay the claim, since it resulted in death d. Pay the claim minus a penalty for concealment

Randall's statement about not having heart problems previously is fraud. Any time fraud is involved, the insurance company is allowed to cancel a policy, regardless of the time frame, and refund premiums. The correct answer is: Void the policy and refund all premiums

When an insured has the same disability within a specified time period and the insurance company provides the same benefits without a new waiting period, the second disability is covered under which of the following benefits?

Recurrent Disability In this situation, the insurer will provide the same benefits without a new elimination period under the Recurrent Disability benefit.

Which of the following is NOT specifically prohibited by state law as an unfair-trade practice? A) Using misleading representations to induce uncalled for action by the insured B) Using incomplete comparisons of policy to induce uncalled-for action by the insured C) Failing to disclose that the solicitations of an insurance contract are the result of a marketing method D) Reducing the premiums paid by employers by group insurance based on loss experience

Reducing the premiums paid by employers by group insurance based on loss experience ( Insurers are permitted to lower the premiums of employer's group insurance because of loss experience. This is called experience rating. All the other practices would be considered unfair trade practices)

An annuitant dies during the distribution period. What kind of annuity will return to a beneficiary the difference between the annuity value and the income payments already made?

Refund annuity

Administrative laws are often referred to as ________ statutes.

Regulatory

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.

R had received full disability income benefits for 6 months. When he returns to work, he is only able to resume half his normal daily workload. Which provision pays reduced benefits to R while he is not working at full capacity?

Residual Disability A residual disability benefit is usually a percentage of the total disability benefit for periods when the insured is unable to perform some of the duties of his/her occupation.

When a person returns to work after a period of total disability but cannot earn as much as he or she did before the disability, this situation is called which of the following?

Residual disability 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.

_____ is a federal administrative agency that regulates the issuance and trading of securities

SEC

Able Insurance Co. sends a health insurance policy to Scott, its producer, for delivery to Stacy, a client. Scott and Stacy are old friends. Stacy is often absentminded and misplaces important documents, so Scott files the policy in his office for safekeeping. Which of the following statements is true?

Scott's actions constitute an unfair practice.

when congress enacted the Securities Act of 1933 and the Securities Exchange Act of 1934, it created _____ to administer and enforce those statutes

Securities and Exchange Commission

Question 43 of 100 Jenny enrolled in a health insuring corporation plan on June 15. Two days later, she lost her job and decided that she could no longer afford the policy. What are her options? She cannot cancel the policy. She can return the policy for a partial refund of premium. She can cancel the policy. She cannot return the policy because the free-look period has ended.

She can cancel the policy. Explanation: A person who enrolls in a health insuring corporation contract may cancel the agreement within 72 hours after signing the contract

Abby purchased a long-term care policy on June 15. Two weeks later, she lost her job and decided that she could no longer afford the policy. What are her options?

She can return the policy for a full refund of premium.

Short-term disability plans may be designed with any of the following features, EXCEPT: Select one: a. Benefits may be paid as a percent of income. b. Benefits may be paid as a flat indemnity amount. c. Benefits will coordinate with Workers' Compensation. d. Both accidents and sicknesses will be covered.

Short-term disability usually does not cover on the job losses. It does not coordinate with Workers' Compensation, since it is not a covered loss. The correct answer is: Benefits will coordinate with Workers' Compensation.

Medicare Supplement Health Insurance Act: Sickness

Sickness cannot be defined more restrictively than an illness or disease of the insured that first appears after the effective date of coverage and while the policy is in force. The definition can exclude sickness or illness for which benefits are provided under worker's compensation, occupational disease, employer's liability, or similar law.

Sickness

Sickness is normally defined as an illness, which first manifests itself while the policy is in force. The majority of health insurance claims result from sickness rather than accidental injury. An emergency medical condition is one which is so severe in pain or symptoms that if not treated quickly and properly could cause serious bodily harm, or possibly death.

What would be a reason to exclude the payment of benefits under a health insurance policy for costs associated with the treatment of an occupational Illness or injury?

Since most states' workers' compensation laws provide for payment of medical costs for work-related injury or illness, the exclusion in private insurance of these costs would be an effort to avoid duplication of payments.

Medicare Part B offers benefits for all of the following, EXCEPT: Select one: a. Psychiatric care b. Skilled nursing facilities c. Physician's services d. Health care aids

Skilled nursing facilities are covered on a limited basis under Medicare Part A. Part B will cover physician services, diagnostic, X-ray and lab and durable medical equipment. The correct answer is: Skilled nursing facilities

Multiple Employer Trusts (METs) were created to provide group coverage for:

Small employers in the same industry. Multiple Employer Trusts (METs) were created for small employers in the same industry. METs group together a number of small employers, thereby creating a large group. Employees of the small employer can generally select to purchase whatever coverage they want, within what is offered by the MET.

Typically, Long-Term Disability benefits are coordinated with which benefit plan? Social Security Individual Retirement Account Life insurance Accrued sick time

Social Security

Which of the following statements is true regarding medical expense policies owned by sole proprietors? Select one: a. Premiums are tax-deductible and benefits are received tax-free. b. Premiums are not tax-deductible, but benefits are received tax-free. c. It is illegal for sole proprietors to purchase medical expense policies. d. Premiums are tax-deductible, but benefits are taxable.

Sole proprietors can fully deduct their premiums for medical expense insurance as a business expense. Benefits are received tax-free. The correct answer is: Premiums are tax-deductible and benefits are received tax-free.

Vision Care

Some employers provide this form of group health insurance to their employees to cover eye examinations and eyeglasses, or hearing aids on a limited basis. Know that per the Affordable Care Act, pediatric vision benefits are mandatory.

All of the following are activities of living living EXCEPT? A) eating B) Transferring C) Speaking D) Dressing

Speaking ( The 6 activities of daily living recognized in LTC policies are eating, toileting, transferring, bathing, dressing and continence)

Commissioners advertising rules

Standardize and simplify coverage for applicant to understand policy terms and compare coverages; Eliminate misleading or confusing provisions ; Eliminate deceptive sales practices; Eliminate unimportant coverages that are of no substantial economic value to the policyholder.

Administrative agencies may issue a ________ that announces a proposed course of action that an agency intends to follow in the future.

Statement of policy

Representation

Statements that are made to the best of one's knowledge. An implied warranty, and a promise as to the future.

________ is a rule issued by an administrative agency that has the force of law and to which covered persons and businesses must adhere.

Substantive rule

There are two common types of Major Medical Policies available,

Supplemental Major Medical Policies and Comprehensive Major Medical Policies

ToF; ALJs are employee of an administrative agency

T

ToF; Courts generally defer to the administrative agencies in licensing matters

T

ToF; statement of policy do not have the force of law

T

Mortality Table

Table that shows the average number of deaths (used to establish life insurance rates)

Mortality table

Table that shows the average number of deaths (used to establish life insurance rates)

180 days

Temporary license valid

Renewable Term Insurance

Term insurance where the insured has the option of continuing the coverage for a period of time but with an increase in premiums based on age

Accelerated Death Benefit

Terminally ill persons access part of the policy proceeds prior to death

HIPAA Pre-existing Condition Limitations for groups of two or more:

The "look back" period for pre-existing conditions is limited to six months and a pre-existing condition becomes covered 12 months after enrollment (18 months for late enrollees)

Question 96 of 100 Sandra's accounting business owns a business overhead expense policy in the event she becomes disabled. Sandra has a heart attack and calls on the policy. Which of the following is a correct statement with regard to the taxation of the benefits received under the policy? The BOE benefits are taxable as income to the business. The BOE benefits are not taxable as income to the business. The BOE benefits are taxable as income to Sandra. The BOE benefits are not taxable.

The BOE benefits are taxable as income to the business. Explanation: The BOE benefits are taxable as income to the business. The premiums, however, are tax deductible.

What Is the Florida Health Insurance Plan?

The Florida Health Insurance Plan is a mechanism designed by the legislature to guarantee health insurance to any Florida resident who, for health reasons, is unable to secure coverage from the voluntary health insurance market. The benefits provided by the plan are the same as the standard and basic plans for small employers

Health plan insurers are prevented from collecting genetic information for underwriting purposes or limited in their requests for genetic tests by? A) Underwriters' risk classification standards B) The genetic Anti-Discrimination Act C) The Generic Information and Nondiscrimination Act D) Individual insurers' underwriting standards

The Generic Information and Nondiscrimination Act ( The genetic information and Nondiscrimination act of 2008 [GINA] limits what requests a health plan insurer can make regarding testing, and prohibits the collection of genetic information for underwriting purposes)

All of the following are common methods to obtain medical information, EXCEPT: Select one: a. Contacting the Medical Information Bureau b. An exam by a physician in his office or clinic c. A consumer credit report d. Having medical technologist take samples for lab work.

The Medical Information Bureau (MIB), an exam by a doctor and lab work are all consistent with methods used by insurers to gather medical information. The correct answer is: A consumer credit report

5 years The Oklahoma Insurance Commissioner is REQUIRED to examine domestic insurers AT LEAST every 5 years.

The Oklahoma Insurance Commissioner is REQUIRED to examine domestic insurers AT LEAST every

having been convicted of a misdemeanor The Oklahoma Insurance Commissioner may place on probation, censure, suspend, revoke, or refuse to issue to an applicant for all of the following causes EXCEPT having been convicted of a misdemeanor.

The Oklahoma Insurance Commissioner may place on probation, censure, suspend, revoke, or refuse to issue to an applicant for all of the following causes EXCEPT

Health Maintenance Organizations (HMOs) The Oklahoma Life and Health Insurance Guaranty Association provides financial policyholder protection for all of the following EXCEPT Health Maintenance Organizations (HMOs).

The Oklahoma Life and Health Insurance Guaranty Association provides financial policyholder protection for all of the following EXCEPT

protect consumers with guidelines regarding credit reporting and distribution The primary purpose of the Fair Credit and Reporting Act is to protect consumers with guidelines regarding credit reporting and distribution.

The PRIMARY purpose of the Fair Credit and Reporting Act is to

What does a Guaranteed Insurability rider provide a Disability Income policyowner?

The ability to periodically increase the amount of coverage without evidence of insurability

Short-term disability riders are called: Select one: a. Social insurance supplement riders b. Additional monthly benefit riders c. Impairment riders d. Hospital confinement riders

The additional monthly benefit (AMB) rider provides benefits during the first 6 - 12 months of the claim. The correct answer is: Additional monthly benefit riders

Which of the following does NOT have to be disclosed in a long-term care policy (LTC) A) the meaning of the terms " reasonable" and "customary" B) Any limitations or conditions of eligibility for LTC benefits C) Any riders or endorsements D) The aggregate amount of premiums due

The aggregate amount of premiums due ( All LTC policies must disclose and explain the renewability provisions.

Unearned Premium

The amount of money the insured paid to the insurer that has not been used to provide coverage for the person

Unearned premium

The amount of money the insured paid to the insurer that has not been used to provide coverage for the person

*What information regarding the agent is required on the application?

The application must contain the name of the insurance company, the name of the soliciting agent and the agent's identification number as it appears on his or license. This information may be printed, typed, stamped or handwritten, if legible.

What is the purpose of the insurance application form?

The application provides the insurance company with necessary information regarding the insured's age, address, health history and other factors. This information is important so that the insurance company can properly determine if the applicant meets their underwriting rules and can determine the proper premium.

What is the basic character of the benefits provided under Part A?

The benefits are for hospital expense and related expenses.

What types of benefits are provided under Part B of Medicare?

The benefits provided under Part B are basically the following: 1) physicians' and surgeons' services whether furnished in a hospital, clinic, office home or elsewhere; 2) medical and health services, including X-rays and lab tests, ambulance services, rental of medical equipment, prosthetic devices,

Which of the following is a valid basis for an insurer to refuse to insure a child under a parent's health insurance plan?

The child's parents are divorced.

For an insurance contract to be complete, it must comply with which of the following? Select one: a. All the papers, including the application must be on file with the agent for the policyholder to examine. b. A copy of the contract, all attached riders and a copy of the application must be give to the insured. c. All the specifics of the company's filing with the insurance commissioner must be on file for public view. d. The policy delivered to the insured is a brief summary of what is on file with the Insurance Commissioner and will contain an abridged summary of benefits available.

The contract is not complete until the policy, along with any riders or other attachments, and a copy of the original applications and any amendments are given to the insured. The correct answer is: A copy of the contract, all attached riders and a copy of the application must be give to the insured.

Z owns a Disability Income policy with a 30-day Elimination period. Z contracts pneumonia that leaves him unable to work from January 1 until January 15. Z then becomes disabled from an accident on February 1 and the disability lasts until July 1 the same year. Z will become eligible to receive benefits starting on (not enough information. Did not say when he bought the policy)

The correct answer is "March 1". The elimination period is the period of time between the onset of a disability, and the time you are eligible for benefits. It is best thought of as a deductible period for your policy. After a 30-day Elimination period, Z will become eligible for receiving benefits on March 1.

What is the elimination period of an individual disability policy?

The correct answer is "Time period a disabled person must wait before benefits are paid". The elimination period of an individual disability insurance policy refers to the amount of time a disabled person must wait before benefits are paid.

What type of information is NOT included in a certificate of insurance? A) The policy benefits and exclusions B) The procedures of the filling a claim C) The length of coverage D) The cost the company is paying for monthly premiums

The cost the company is paying for monthly premiums

Fixed Amount Settlement Option

The death benefit is paid to the beneficiary in a series of fixed amount installments until the proceeds plus interest are exhausted

Apparent

The deeds and actions of a producer indicate what kind of authority? Express Apparent Implied Conditional

What is a structured settlement?

The distribution of funds from the settlement of lawsuits or the winnings of a lottery and other contests.

Question 16 of 100 Sullivan has a health savings account. All of the following are correct statements about taxation of this account EXCEPT Sullivan makes contributions to the account on an after-tax basis. The earnings in the account grow tax free. The earnings in the account grow tax deferred. Contributions to the account are tax deductible.

The earnings in the account grow tax deferred. Explanation: Contributions to an HSA are made on an after-tax basis and are tax deductible. The earnings grow tax free, and distributions are not taxed.

school In this situation, the address on the envelope may NOT include any combination of words which imply that the correspondence is from the school.

The envelope in which insurance solicitation material is contained may be addressed to the parents of students. The address may NOT include any combination of words which imply that the correspondence is from the

*What are the requirements for dependent coverage under a group, blanket, or franchise health insurance policy?

The policy must insure a dependent child of the policyholder or certificate holder at least until the end of the calendar year in which the child reaches the age of 26, if the child meets all of the following. 1) The child is dependent upon the policyholder or certificate holder for support. 2) The child is living in the household of the policyholder or certificate holder, or the child is a full-time or part-time student. The policy must also offer the policyholder or certificate holder the option to insure a child of the policyholder or certificate holder at least until the end of the calendar year in which the child reaches the age of 30, if the child: 1) is unmarried and does not have a dependent of her own: 2) is a resident of this state or a full-time student; and 3) is not provided coverage as a named subscriber, insured, enrollee,or covered person under any other group, blanket, or franchise health insurance policy or individual health benefits plan, or is not entitled to benefits under Title XVIII of the Social Security Act.

*What extensions of benefits are required in group health insurance policies?

The following extensions of benefits are required: 1) Every group, blanket or franchise policy or contract renewed, delivered or issued for delivery in the state of Florida shall contain a reasonable provision for extension of benefits in the event of total disability at the date of discontinuance of the policy of contract. The extension shall be required whether the group policyholder or other entity secures replacement coverage from a new insurer or forgoes the provision of coverage. 2) Discontinuance of the policy during a disability shall have not effect on benefits payable for that disability or confinement under a group plan providing benefits for loss of time from work or specific indemnity during hospital confinement. 3) In the case of hospital or medical expense coverage other than for dental and maternity expense, a reasonable extension-of-benefits or accrued"liability provision is required, which provides for continuation of policy benefits in connection with the treatment of a specific accident or illness incurred while the policy was in effect. 4) An extension of benefits is required in a group, blanket or franchise policy or contract that provides coverage for dental procedures either in the form of reimbursed expenses or services performed. 5) In the case of maternity expense coverage, a reasonable extension of benefits or accrued liability provision is required. The required provision must provide for continuation of policy benefits in connection with maternity expenses for a pregnancy that began while the policy was in effect. The extension shall be for the period of that pregnancy and may not be based upon total disability. 6) Any applicable extension of benefits or accrued liability shall be described in any policy or contract involved as well as in group insurance certificates. The benefits payable during any period of extension or accrued liability may be subject to the regular benefit limits of the policy or contract. 7) This section also applies to holders of group certificates which are renewed, delivered or issued for delivery to residents of this state under group policies effectuated or delivered outside this state, unless a succeeding carrier under a group policy has agreed to assume liability for such benefits

What are the special rules designed to protect the insureds against the unintentional lapse of a long-term care policy?

The following rules, designed to provide ample notice to insureds and owners, require that: 1) !!A long-term care policy must have a grace period of not less than 30 days!!, during which a premium may be paid after it is due and before the policy lapses; 2) A long-term care policy must not be canceled for nonpayment unless, after the grace period, and at least 30 days prior to the cancellation, a notice has been mailed to the policy owner and to a secondary addressee, if one has been designated ( the insurer must notify the owner of the right to designate a secondary addressee at least annually ); and If a long-term care policy is canceled due to nonpayment, the policy owner may reinstate the policy for a period of at least 5 months if the owner or secondary addressee demonstrates that the lapse was unintentional and due to cognitive impairment, loss of functional capacity or confinement in a care facility for a period exceeding 60 days.

How are annuitants outlives life expectancy with a straight life income option paid?

The funds for additional benefit payments will be derived primarily from funds that were not distributed to life annuitants who died before life expectancy.

Grace Period

The grace period for all life policies is 1 month. For Disability Insurance: Time period following the premium due date: Weekly premium 7 days Monthly premium 10 days Other policies 31 days

Law of Large Number

The greater the number of exposures, the more accurate the prediction

*What must the insurance company do when it receives notice of claim?

The insurance company must furnish the claimant with proof-of-loss forms within 15 days. If it does not furnish the claimant with its forms, the claimant may present proof in any reasonably written manner showing the nature of loss, extent of loss and other information.

What is the purpose of a medical examination during the pendency of a claim?

The insurance company uses the medical examination to determine the extent of the disability of the insured.

Short Rate Calculation

The insured no longer wants the insurance coverage, the company returns the unearned premium minus administration fees

Short Rate Cancellation

The insured no longer wants the insurance coverage, the company returns the unearned premium minus administration fees

Thomas submitted an application for health insurance with the full first premium and was issued a conditional receipt. On which provision of the contract is the application and premium payment based? Select one: a. The rights of ownership clause b. The insuring clause c. The consideration clause d. The entire contract clause

The insured's consideration is the completed application and the initial premium. The correct answer is: The consideration clause

An insurer hires a representative to advertise its company at a local convention. The representative lies about the details of some of the policies, in an attempt to secure more business for the company. Who is responsible for the representative's claims?

The insurer ( An insurer is completely responsible for advertisements regarding its company, regardless of who creates, presents or distributed the material)

An insurance advertisement exaggerates the benefits of an insurance policy, due to human error at the insurer's advertising agency. Who will the department of insurance hold responsible for the exaggeration A) The advertising agency B) The person who made the error C) The insurer D) Inadvertent errors are not subject to any penalties

The insurer ( Insurance companies must adhere to strict advertising requirements. the insurer whose policies are depicted is ultimately responsible for its advertisements)

Who assumes the investment risk with a fixed annuity contract and why?

The insurer because they guarantee the annuitant's principal as well as a guaranteed minimum rate of return, even if the underlying assets underperform the guaranteed rate.

Standard Provisions: Illegal Occupation

The insurer can exclude any loss that arises from the insured's participation in a felony or engagement in an illegal occupation. - it's not their problem

Standard Provisions: Physical Examination and Autopsy

The insurer has the right to conduct a physical examination of the insured whenever and as often as reasonably necessary to investigate a claim. The insurer may also conduct an autopsy of the deceased insured unless the law forbids it.

*What is the usual provision in a policy with respect to misstatement of age or sex of the insured?

The policy will provide, in substance, "If the age or sex of the insured has been misstated, all amounts payable under this policy shall be such as the premium paid would have purchased at the correct age or sex."

What provision does the usual disability insurance policy contain with reference to a change of beneficiary?

The policyowner has the right to change the beneficiary upon proper notification to the insurance company and without consent of the beneficiary.

Implied

The power given to an individual producer that is not specifically addressed in his/her contract is considered what type of authority? Discreet Apparent Implied Express

Question 22 of 100 Miranda was treated for skin cancer six months before she applied for and was issued a health insurance policy. Two and a half years later, the cancer returned, and Miranda is again receiving treatment. Which statement about the insurer's duty to pay Miranda's claims is correct? The insurer can deny her claims because they involve a pre-existing condition. The insurer must pay her claims because benefits can never be excluded for cancer treatment The insurer must pay her claims because the pre-existing condition exclusion period has ended. The insurer can deny her claims because the pre-existing condition exclusion period has not ended.

The insurer must pay her claims because the pre-existing condition exclusion period has ended. Explanation: Individual health insurance plans with grandfathered status (those in effect on or before March 23, 2010) are exempt from the requirements of the Affordable Care Act. They can exclude coverage for pre-existing conditions. Most pre- existing condition periods are limited to 12 to 24 months. After this period, benefits associated with a pre-existing condition are covered. Miranda's insurer must cover any treatments for skin cancer.

Fixed Period Settlement Option

The insurer pays the beneficiary equal amounts of money consisting of principal plus interest at regular intervals over a period of years

T was insured under an individual Disability Income policy and was severely burned in a fire. As a result, T became totally disabled. The insurer began making monthly benefit payments, but later discovered that the fire was set by T in what was described as arson. What actions will the insurer take?

The insurer will rescind the policy, deny the claim, and recover all payments made

Replacement is not always the best option for the insured because: Select one: a. A new policy could required the applicant to prove insurability b. A new incontestable period will start with the issuance of the new policy. c. The premiums for the new policy could be higher. d. All of the above

The items listed are all considerations for an applicant when he/she is considering replacing an existing policy. The correct answer is: All of the above

In connection with the issuance of a master group health insurance policy, may health questions be asked to permit the insurance company to select risks?

The law provides that all employees or all members, as the case may be, must be eligible regardless of individual health history. The insurer may decline the entire group, but not individual employees.

How are health insurance rates governed?

The law provides that the benefits must be reasonable for the premium charged. The Office of Insurance Regulation has established various criteria that insurance companies must meet before rates can be approved. These are based on loss ratios and expense ratios and are designed to prevent the insured from being overcharged by the insurance company. Prior rate approval does not apply to group health insurance policies, effectuated and delivered in this state, insuring groups of 51 or more persons, except for Medicare supplement insurance, long-term care insurance, and any coverage under which the increase in claim costs over the lifetime of the contract due to advancing age or duration is pre-funded in the premium.

*What is the length of the grace period in a health insurance policy?

The law provides that there must be a grace period of not less than seven days on weekly premium policies, ten days for monthly premium policies and 31 days for all others.

Insurance Code

The laws of the state, written by legislature, that regulate insurance companies and agents

Benefit Period

The length of time that the insured will receive the money from the insurance company based on the written contract in a disability income contract

2-year term

The licensing period for a producer's license is a

Which of the following is part of the loss of earnings test for disability? Select one: a. Inability to perform duties of the insured's own occupation for 2 to 5 years b. Inability to perform the duties of any suitable occupation c. Both of the above d. None of the above

The loss of earnings test for disability includes both the inability to perform duties of the insured's own occupation for 2 to 5 years and the inability to perform the duties of any suitable occupation. The correct answer is: Both of the above

Cash Surrender Value

The money in a permanent policy that the policy owner is entitled if he/she no longer wants the policy

Cash Surrender Value (CSV)

The money in a permanent policy that the policy owner is entitled if he/she no longer wants the policy

How is the original Medicare program structured?

The original Medicare program has two parts. Part A covers eligible persons over age 65 and those under age 65 who are eligible for Social Security Disability benefits. Part B is optional for the same groups covered by Part A. It provides a program of surgical and doctor care plus certain other benefits. A premium is withheld from the participants' Social Security check to cover Part B.

What is the annuitization phase?

The period when the accumulated value in an annuity is paid out.

Insured

The person (party) covered by an insurance policy (object of the policy)

Managed Care Plans Quality care —

The plan will carefully select medical providers who are competent and experienced. These features allow an insurer or provider organization to exert influence over the delivery, use and costs of services in order to achieve the purpose of managed care which is to control health insurance costs and claim expenses.

*An agent accepts a premium for a lapsed disability policy. When does the reinstatement become effective?

The policy becomes effective for accident coverage immediately, but does not become effective for any illness coverage until after ten days from the date of acceptance.

Why is it important that the agent carefully ask the applicant each question on the application and see that the answers are correctly stated?

The policy is issued based on the statements and agreements contained in the application. The insured or a beneficiary may not have a valid claim unless the questions have been answered truthfully and correctly on the application.

Coercion

The practice of persuading someone to do something by using force of threats. Entering into any agreement to commit any act of _____ or intimidation resulting in unreasonable restraint of, or monopoly in, the business of insurance. It is prohibited to advertise or circulate any materials that are untrue, deceptive, or misleading. False or deceptive advertising specifically includes misrepresenting any of the following: 1) terms, benefits, conditions or advantages of any policy 2) any dividends to be received from the policy or previously paid out 3) financial condition of any person or the insurance company 4) true purpose of an assignment or law against a policy.

If the annuitant dies before the annuity start date? A. the benefits will be given tax-free only to a stated beneficiary B. nothing is given to the beneficiary C. the premiums paid will be given to the beneficiary D. the premiums paid plus interest earned will be given to the beneficiary

The premiums paid plus interest earned will be given to the beneficiary

What are the primary advantages of a noncontributory group Insurance plan?

The primary advantages of a noncontributory plan are employer control and total participation by all eligible employees, since no contribution is required of them.

The principal losses related to accident and health insurance are: Select one: a. Loss of income from disability and medical expenses from the cost of medical treatments, physician's fees, hospitalization and prescriptions b. Loss of earning power caused by premature death c. Loss of retirement income caused by prolonged life d. All of the above

The principal types of losses dealt with in accident and health insurance are medical expenses and loss of income caused by disability. The correct answer is: Loss of income from disability and medical expenses from the cost of medical treatments, physician's fees, hospitalization and prescriptions

An insured has received a claim form from the insurance company and has completed the form with proper documentation of the loss. The insureds' policy provides periodic payments for benefits. How much time does the insurance company have to pay the claim? Select one: a. 20 days b. 30 days c. 45 days d. 60 days

The provision states that all claims for losses will be paid at least monthly. The correct answer is: 30 days

Which of the following is not true about insurable interest? Select one: a. For life and health, it must exist at the time of application. b. The purchaser cannot also be the person insured. c. Marriage or blood relationship are valid for insurable interest. d. Business partners can have insurable interest in each other.

The purchaser can also be the person insured. The correct answer is: The purchaser cannot also be the person insured.

Health Care False Claim Act:

The purpose of the Health Care False Claim Act is to control the cost of health care by reducing fraudulent insurance claims. The act imposes specific penalties for violations.

customer service representatives The requirements for continuing education apply to all of the following EXCEPT customer service representatives.

The requirements for continuing education apply to all of the following EXCEPT

Morbidity Table

The table that shows the average number of sickness or accidents at various ages

Exclusion Ratio

The taxable portion of each annuity payment is calculated using which method?

What is meant by "reinstatement"?

The term means placing a policy in force again after it has lapsed.

Aleatory

The term which describes the fact that both parties of a contract may NOT receive the same value is referred to as Apparent Estoppel Aleatory Unilateral

Multiple Employer Trusts (METs):

The trust gives these small businesses the greater benefits and lower costs that have usually been available only to the large companies providing group insurance to their employee.

*Four different types of groups are eligible for group health insurance.

The types of groups eligible for group health coverage are: 1) employer/employee groups; 2) labor unions and association groups; 3) debtor groups; and 5) any other group that is eligible for group life insurance.

Underwriting Group Policies:

The underwriter must accept the entire group, or reject the entire group.

Group Contract:

The underwriter should determine that individual participation meets the company's guidelines in order to prevent adverse selection.

If a company fails to respond to a request for reinstatement, the policy will automatically reinstate in how many days? Select one: a. 10 days b. 30 days c. 45 days d. 60 days

The uniform code will force a reinstatement if the company fails to act in 45 days. If the company requests additional information, that extends the period. The correct answer is: 45 days

What steps should 3 equal partners in a company valued at $300,000 do to be prepared in case 1 or more of the partners becomes disabled? Select one: a. Have their attorney draft an agreement that allows the continuing partners to pay the disabled partner's spouse b. Have their attorney draft an agreement to eliminates the partnership for the disabled partner c. Have their attorney draft a disability buy-out agreement and insure each partner for $100,000 in disability payments to fund the agreement d. Purchase individual disability plans in the amount of the partner's salary

There are two elements to a good buy-out agreement. First, there needs to be a written agreement that is binding on the partners. Second, the agreement should be funded with disability policies to insure the disabled partners receive fair value for his share of the business. The correct answer is: Have their attorney draft a disability buy-out agreement and insure each partner for $100,000 in disability payments to fund the agreement

All of the following are true statements about Medicare Part B, EXCEPT: Select one: a. The first three pints of blood in a given year are not covered. b. A deductible must be met for each expense. c. There is a copay of 20% of all reasonable charges for covered, medically necessary services. d. All of the above

There is a single annual deductible which can be met by combining any expenses occurring under Medicare Part B. It is not necessary to meet a deductible for each service. The correct answer is: A deductible must be met for each expense.

Presumptive Disability is a provision that is found in most disability income policies which specifies the conditions that will automatically qualify the insured for full disability benefits

These conditions are dismemberment (the loss of use of any two limbs), total and permanent blindness, or loss of speech or hearing. Some policies require actual severance of limbs rather than loss of use

Question 13 of 100 Marilyn, 72, thinks she may be spending a significant amount of money on medical expenses. She considers transferring her assets to her son so that she will be poor enough to qualify for Medicaid. Her son cautions her about Medicaid's look-back rules. How will these rules pertain to her? They will reflect the amount of Medicaid benefits paid on Marilyn's behalf during the first six months of Medicaid eligibility. They will reflect the amount of benefits Medicare pays for care that Marilyn receives if she is in a skilled nursing home facility. Look-back rules look at the income, if any, that Marilyn earned during the 36 months before she applied for Medicaid. These rules allow Medicaid to look back on transfers of assets Marilyn made during the 60 months before applying for Medicaid.

These rules allow Medicaid to look back on transfers of assets Marilyn made during the 60 months before applying for Medicaid. Explanation: If an asset is improperly transferred, a state can consider the asset countable toward eligibility determination. States can look back for 60 months to find improper transfers of assets. If a transfer of assets for less than fair market value is found, the state must withhold payment for nursing facility care and certain other long-term care services.

Which of the following are true of MET's?

They allow several small employers to purchase less expensive insurance together ( Those small employers who cannot fully qualify for group health insurance band together for the purpose of buying insurance)

Which of the following statements about preexisting conditions with respect to LTC insurance policies is true?

They cannot be excluded if they arose more than six months before the effective date of coverage.

Which of the following is true regarding Medicare Supplement Policies?

They must be guaranteed renewable (Each Medicare Supplement policy must be at least Guaranteed renewable)

Question 63 of 100 Which of the following is NOT a drawback of basic hospital, surgical, and physician policies? They restrict the right to choose a health care provider. They limit the types of coverage provided and the amounts that the insurer will pay. They commonly have a number of exclusions that the plan does not cover. They lack cost controls.

They restrict the right to choose a health care provider. Explanation: These types of policies may not pay more than a small percentage of an insured's total costs, which can be quite large.

Modified Endowment Contract (MEC)

This concept applies to permanent life insurance. Prevents a life insurance policy from being used as or becoming an investment vehicle.

Basic surgical expense coverage

This coverage is commonly written in conjunction with Hospital Expense policies. These policies pay for the costs of surgeons' services, whether the surgery is performed in or out of the hospital Coverage includes surgeons' fees, anesthesiologist, and the operating room when it is not covered as a miscellaneous medical item No deductible, but coverage is limited

Managed Care Plans Controlled access to providers —

This encourages or forces subscribers to use predetermined providers. This utilizes primary care physicians (PCP) who act as gatekeepers to determine the necessity of care;

Long Term Care- Assisted Living Care (ALFs) —

This form of care is provided in a facility that cares for seniors who are too frail to care for themselves but do not yet require the level of care provided by a nursing home. This type of care supplements nursing care and is not intended to be a substitute for it.

Managed Care Plans Case management —

This involves reviewing individual cases at all levels to determine the type of treatment needed, monitoring ongoing care and determining the success of the treatment provided;

Managed Care Plans Risk sharing —

This involves the plan and the providers sharing in the financial consequences of medical decisions (i.e., a doctor gets a bonus for not ordering unnecessary tests)

*What Is the Florida Health Insurance Coverage Continuation Act?

This legislation (627.6691) requires insurers that sell health plans to small employers (less than 20 employees) to offer in those plans a right to elect continued coverage, without providing evidence of insurability, to the covered employee or their dependents who will lose employer-sponsored group coverage for various reasons and who may not be able to obtain replacement insurance. Coverage may be continued in most circumstances for up to 18 months beyond the time when it would have otherwise ended. This Florida law extends essential provisions similar to the federal COBRA to employers in Florida with less than 20 employees and is referred to as "Mini-COBRA"

Irrevocable Beneficiary

This person cannot be removed as beneficiary unless this person gives his/her written consent

Small Employers Access Program which includes the creation of the Small Business Health Plan

This plan is intended to provide small employers the option and the ability to provide health care benefits to their employees through the creation of purchasing pools. These pools may be comprised not only of employers with up to 25 employees, but any municipality, county, school district or hospital employer located in rural areas as defined in statute s.288.0656(2)(b), as well as any nursing home employer regardless of the number of employees

An insurer offers a policy very similar to Medicare, although it differs slightly. An agent tells an applicant that the policy is Medicare, since the policies are so similar anyway. Which of the following is true?

This practice is ILLEGAL ( A policy may not be advertised as Medicare supplement, Medigap, or Medicare Wrap around unless the policy is in full compliance of the law under such labels. In this insurance, the insurer misrepresented the policy, which is an illegal practice)

Standard Provisions: Change of Beneficiary

Unless the insured makes an irrevocable beneficiary designation, the insured retains the right to change the beneficiary. Consent of any beneficiary is not required for the insured to surrender or assign the policy or to change any beneficiary or for other changes in the policy.

Susan was admitted to the hospital. She failed to pay her premium prior to admission, but is within the grace period. Under the unpaid premium provision the company is entitled to: Select one: a. Deny the claim outright b. Subtract the unpaid premium from the claim payment c. Delay the claim until the premiums are current d. Terminate the policy and deny the claim

This provision allows the insurance company the opportunity to do the right thing without violating the terms of the contract. The correct answer is: Subtract the unpaid premium from the claim payment

What is the purpose of the "other insurance" provision?

This provision operates when there is other insurance coverage in force which the insured has failed to give written notice about to the insurance company prior to the time that a claim begins. This clause gives the insurance company the right to prorate benefits and make appropriate premium refunds. The purpose of this clause is to prevent over-insurance through multiple policies.

*What is the "time limit on certain defenses" provision?

This provision states in general that after two years, no misstatements except fraudulent ones, made by the applicant on the application, shall be used to void the policy or to deny a claim for loss incurred commencing after the end of such two year period. It also provides that no claim for loss incurred after two years from the date of issue shall be denied on the grounds that a disease or physical condition, not specifically excluded by name, had existed prior to that date.

What information is contained within the "time of payment of claims" provision?

This provision stipulates the time after proof of loss is received by the insurance company within which the claim payment must be made.

*What is meant by the term "coordination of benefits"?

This term refers to insurance companies coordinating the payment of benefits when an insured is covered by two or more group health insurance policies. Its purpose is to limit benefits from multiple plans to no more than 100 percent of expenses incurred and to designate the order in which insurers are to pay benefits. As a cost containment measure, this section was amended to require or allow a greater degree of coordination so as to avoid duplication of benefits.

What is meant by the term "required provisions" in health insurance contracts?

This term refers to those provisions that must be included in health insurance contracts as a matter of law.

What type of arrangement allows a number of small businesses to be grouped together to obtain prices and benefits normally available to a large employer? Select one: a. A Health Maintenance Organization b. A Multiple Employer Welfare Association c. A Multiple Employer Trust d. A Franchise Group Health Plan

This type of arrangement is known as a Multiple Employer Trust (MET). The correct answer is: A Multiple Employer Trust

Managed Care Plans Preventive care —

This type of care attempts to prevent medical conditions before symptoms appear.

Competent Parties

Those entering into the contract must be of legal age and must be mentally competent to understand the contract, and not under the influence of drugs or alcohol

What is the elimination period of an individual disability policy? Time period an insured must wait before coverage begins Time period a disabled person must wait before benefits are paid Time period after the policy issue date in which the provisions are still contestable The point in time when benefits are no longer payable

Time period a disabled person must wait before benefits are paid

Where must the wording 'Accident Only Plan' be prominently displayed on an accident only policy? Select one: a. It must be in bold type in the exclusions section. b. It must be in bold type in the time limit for certain defenses section. c. It must be in bold type on the front page of the policy. d. It must be in bold type on a special insert before delivery.

To avoid confusion, ACCIDENT ONLY or similar wording must be prominently displayed on the front page of an accident policy. The correct answer is: It must be in bold type on the front page of the policy.

Required Notice to Insured

To make sure that the insured is aware that the policy's benefits are limited, the insurance company must, by law, plainly state the limited policy notice on the first page of the policy, "THIS IS A LIMITED POLICY."

Long-term care policies require that in addition to the applicant, at least one person must be designated in the policy. What is the role of the designated person? A) To receive notice of policy lapse or termination B) To receive policy benefits if the insured is deceased C) To pay the premiums on the policy D) To cosign the policy application

To receive notice of policy lapse or termination ( An individual long-term care policy cannot be issued until the insurer has received from the applicant, either a written designation or at least 1 person, in addition to the applicant, who is to receive notice of lapse or termination of the policy for nonpayment of premium)

30 days

To report change of address

gathering prospective buyer information Transacting insurance includes any of the following EXCEPT gathering prospective buyer information.

Transacting insurance includes any of the following EXCEPT

Coverage of newborn children includes all of the following EXCEPT: A) Birth abnormalities B) Congenital defects C) Costs associated with prematurity D) Transportation costs up to $3,000 if medically necessary

Transportation costs up to $3,000 if medically necessary ( coverage includes injury or sickness, congenital defects, physical abnormalities, or prematurity, and transportation costs of up to $1,000 if medically necessary)

T or F Local administrative agencies are agencies created by cities, municipalities, and counties to administer local regulatory law.

True

T or F Regulatory statutes can be termed as administrative laws.

True

T or F The Department of Homeland Security is an example of a federal administrative agency.

True

T or F The decisions issued by an administrative law judge are in the form of administrative orders.

True

Insurability

When applying for life or health insurance, insured must meet certain criteria established by the insurance company

When an HMO knowingly makes any misleading representations, incomplete or fraudulent comparisons for the purpose of inducing any person to lapse, forfeit, terminate, surrender or convert any insurance policy or contract with another insurance company or HMO, they are in the unfair violation practice of?

Twisting ( Twisting is knowingly making misleading representations or incomplete or fraudulent comparisons for the purpose of inducing a person to termination existing coverage and purchasing new or different coverage that may or may not be in the persons best interest)

a cabinet level federal administrative agency whose mission is to enforce laws to prevent terrorist attacks and related criminal activities

US Department of Homeland Security

*What minimum percentage participation is required by Florida law under employee group health insurance before a policy can be issued?

Under Florida law there is no specific minimum percentage participation of employees under employee group health insurance.

Under HIPAA, the maximum probationary period for new group enrollees who do not have any prior creditable coverage is ____ months:

Under HIPAA, pre-existing conditions that a new group enrollee was treated for during the six-month look-back period will be covered if they reoccur after the 12-month probationary period is over. If they reoccur during the 12-month probationary period, they are not covered and never will be. However, pregnancy may not be considered to be a pre-existing condition, so pre-existing pregnancy is covered right away on group medical expense policies.

The terms must be accepted or rejected in full

Under a contract of adhesion, There is the potential for an unequal exchange value The insurer's obligations are dependent upon certain acts of the insured individual The terms must be accepted or rejected in full Only one party makes any kind of enforceable promise

Contributory plan:

Under a contributory plan, in which both the employer and the employee contribute toward the premium, 75% of all eligible employees must be cov

Which of the following is a benefit of a prescription drug policy? Select one: a. Prescriptions are usually free. b. Prescriptions are for a set price. c. Prescriptions are for a set, lower price. d. Prescriptions can be refilled at any time.

Under a prescription policy, prescription drugs are not only at a set price, but a much lower price - usually $2, $3 or $5, regardless of the actual cost of the drug. The correct answer is: Prescriptions are for a set, lower price.

24 months Under an Unfair Claims Settlement Practices Act, an insurer CANNOT request a refund of an overpayment paid to a claimant after 24 months.

Under an Unfair Claims Settlement Practices Act, an insurer CANNOT request a refund of an overpayment paid to a claimant after

Isaac is enrolled in his employer's group plan on a non-contributory basis when he is hospitalized. Isaac is reimbursed for the medical expense he incurred less a $500 deductible. How much of his benefits will be taxed? Select one: a. Isaac will have no tax liability, as medical benefits are not taxable. b. Isaac will have to include all benefits beyond the $500 deductible c. Isaac will have to include only the benefits that exceed 7.5% of his adjusted gross income in his income. d. Isaac will have to include benefits in his income if his adjusted gross income is more than $65,000.

Under current tax law, medical benefits are not taxable, in spite of his employer paying premiums for the plan. The correct answer is: Isaac will have no tax liability, as medical benefits are not taxable.

employee's waiting period for coverage of a preexisting condition can be reduced under the new employer's health plan

Under the Health Insurance Portability and Accountability Act (HIPAA), the employee's new Group Health Plan will verify Creditable Coverage so that the employee's benefits still owed can be claimed employee cannot be excluded from the new employer's health plan employee's waiting period for coverage of a preexisting condition can be reduced under the new employer's health plan new health insurance carrier will have a clear record of any chronic conditions that exist

Giving a gift of more than $100 value to a client as an inducement to purchase insurance Under the Oklahoma Insurance Code, a licensed insurance producer is prohibited from giving a gift of more than $100 value to a client as an inducement to purchase insurance.

Under the Oklahoma Insurance Code, a licensed insurance producer is prohibited from which of the following?

An insured has submitted notice of loss for a medical bill to the insurance company, which has not responded in a timely fashion. Under these circumstances the insured's best course of action is to: Select one: a. Submit the proof of loss in any form and the insurance company is required to accept that and consider the claim b. Demand a full refund of premium paid including reasonable interest c. Report this to the insurance commissioner's office as a breach of contract and request their intervention d. Wait until the proper claim form arrives before he can proceed

Under the uniform claims rules, when a company fails to furnish a claim for when they have been notified of a loss, the insured may submit proof of loss in any reasonable form, and the company is bound to accept it. The correct answer is: Submit the proof of loss in any form and the insurance company is required to accept that and consider the claim

Under what types of health insurance policies are the provisions for naming and changing beneficiaries most important?

Under those policies that provide benefits in the event of the insured's death.

Member's part-time employment status

Under which criteria may a group health plan exclude participation? Member's claims history Member's current age Member's pre-existing condition Member's part-time employment status

Robert is 65 and retired. What should he consider about delaying his enrollment in Medicare Part B? Select one: a. There is no penalty and Robert can delay enrollment indefinitely. b. There is a 10% per year increase in premium which is permanent. c. As long as Robert has a Medicare supplement plan, he does not need Medicare Part B. d. Robert may be denied coverage entirely if he delays.

Unless the applicant has a specific waiver for late enrollment that usually involves working beyond age 65, there is a 10% per year premium increase which will be permanent. The correct answer is: There is a 10% per year increase in premium which is permanent.

Code Section 770

When purchasing a property that is financed, an insurer cannot force the purchaser to buy insurance from a particular agent or broker

Both spouses are covered by their employer group plans for full family coverage. Based on usual guidelines, how is the order of coverage determined? Select one: a. The father's coverage is always primary. b. The first qualification is which parent has been covered longest. c. Primary coverage is usually determined by which parent's birthday comes earliest in the year. d. The couple may choose the plan with the higher benefit schedule.

Unless there is a legal separation and a court order, the spouse's plan whose birthday falls earliest in the year is primary. The correct answer is: Primary coverage is usually determined by which parent's birthday comes earliest in the year.

pay a cash surrender value Upon surrender of a whole life policy, which has been in force for AT LEAST 3 full years, and within 60 days after the date the premium payment is due and unpaid, the insurer will pay a cash surrender value.

Upon surrender of a whole life policy, which has been in force for AT LEAST 3 full years, and within 60 days after the date the premium payment is due and unpaid, the insurer will

COBRA and qualifying event?

Upon the occurrence of a "qualifying event," the employee or family member must notify the group insurer or plan administrator, who must provide up to 60 days for coverage election under COBRA. After coverage election, employees or family members have another 45 days to pay the premium. Under COBRA, the dependents of a deceased or disabled employee may continue group coverage for another 36 month

Credit Life

Usually decreasing term insurance; however, also is Level Term or Increasing Term. This insurance covers the balance of a loan

What is the traditional probationary (waiting) period for coverage from a Medicare supplemental policy to be in effect? Select one: a. Immediately b. 30 days c. 60 days d. 90 days

Usually the waiting or probationary period is 30 days. The correct answer is: 30 days

A vision plan will usually include benefits for all of the following, EXCEPT: Select one: a. Annual eye examination b. Eye surgery c. Contact lenses d. Eyeglass frames

Vision plans will include periodic eye exams, glasses, and contacts. The correct answer is: Eye surgery

When a long-term care policy is replaced, any pre-existing condition limitation will be:

Waived

The provision in a health insurance policy that suspends premiums being paid to the insurer while the insured is disabled is called the

Waiver of Premium The Waiver of Premium provision in a health insurance contract suspends the insurer's right to receive premiums during a covered period of disability.

Disability policies do NOT normally pay for disabilities arising from which of the following?

War

Can an EE non-renew or cancel their group policy?

What an insurer can and can't do in regards to small group insurance, an insurer CAN legally non-renew or cancel a small group plan if the employer stops paying the premium

Representation

What are an applicants statements concerning occupation, hobbies, and personal health history regarded as? Warranty Guarantee Representation Collateral

Authority that is not specifically given to an agent in the agency contract, but that an agent can reasonably assume to carry out his/her duties

What is implied authority defined as? Authority given in writing to an agent in the agency agreement Authority that is not specifically given to an agent in the agency contract, but that an agent can reasonably assume to carry out his/her duties Authority given to handle claims and process payments Authority given to an agent to act outside the scope of the agency agreement

All premiums paid, plus interest, minus any withdrawals and surrender charges

What is the nonforfeiture value of an annuity before annuitization?

What is the primary factor that determines the benefits paid under a disability income policy?

What is the primary factor that determines the benefits paid under a disability income policy?

Only the insurer is legally bound

What makes an insurance policy a unilateral contract? Only the insured pays the premium Only the insured can change the provisions Only the insurer is legally bound Only the insured is legally bound

Conserevation

When a company or agent tries to prevent a client from replacing an existing life or annuity contract with a different company

20 days When a life insurance or annuity replacement policy is sold, the policyowner has a right to return the policy for a full refund of premium within 20 days.

When a life insurance or annuity replacement policy is sold, the policyowner has a right to return the policy for a full refund of premium within

Conversion (Demutualization)

When a mutual insurance company changes to a stock insurance company

A person becomes eligible for Medicare when: Select one: a. Part A is automatic for all persons reaching Age 65. b. Part B is only available for those who have reached the fully insured status. c. There are no exceptions to the age 65 rule. d. If a person retires at age 59 1/2, they may request a special exception.

When a person reaches age 65 they become eligible for Medicare Part A, even if they continue to work. The correct answer is: Part A is automatic for all persons reaching Age 65.

If, after a hearing, the Superintendent finds that an individual has engaged in an unfair practice, the Superintendent can take all the following actions, EXCEPT: Select one: a. Suspend the individual's license b. Revoke the individual's license c. Assess a civil penalty d. Jail the individual

When an individual is found to have committed an unfair trade practice, the Superintendent has the power to revoke, suspend, refuse to issue or renew, and assess civil penalties and administrative costs incurred by the department. The correct answer is: Jail the individual

*What is generally the law regarding change of occupation by the insured after the policy is issued?

When an insurance company charges a different rate for persons in different occupations, the policy may provide for a reduction in benefits if the insured changes to a more hazardous occupation, unless the insured has previously notified the insurance company and has paid an increased premium. However, if the insurance company wrote all risks at the same rate, then the change of occupation would not affect the benefits.

Suitability of Recommended Purchase; Excessive Insurance

When recommending the purchase or replacement of a Medicare supplement policy, a producer must reasonably try to determine whether the policy is appropriate for the customer. The sale of a Medicare supplement policy that will result in the customer having more than one such policy is prohibited. Also, an insurer cannot issue a Medicare supplement policy to anyone who is enrolled in Medicare Part C unless the effective date of coverage is after the termination date of the person's Part C coverage.

If an employer pays the entire cost of the group health insurance premiums, which of the following is true regarding the taxation of premiums and benefits? Select one: a. Premiums are tax-deductible to the employer and benefits are taxable to the employees. b. Premiums are not tax-deductible to the employer and benefits are tax-free to the employees. c. Premiums are tax-deductible to the employer and benefits are not taxable to the employees. d. Premiums are paid with after-tax dollars and benefits are taxable as ordinary income.

When the employer pays the premiums for a group health insurance policy, the employer can tax-deduct the amount of premiums paid. Employees do not pay taxes on medical expense benefits received. The correct answer is: Premiums are tax-deductible to the employer and benefits are not taxable to the employees.

Express authority

When the principal gives the agent authority in writing, its referred to as Express authority Implied authority Apparent authority Imposed authority

S & P 500 (An indexed annuity rate of return is linked to a market index, like the S & P 500.)

Which market index is normally associated with an indexed annuity's rate of return?

Life only (The life only annuity payout option has no additional payouts regardless of when the annuitant dies.)

Which of the following annuity payout options makes no additional payments regardless of when the annuitant dies?

An S-Corp Owner with a greater than 2% share

Which of the following is INELIGIBLE to participate in a Section 125 Plan? Key Employee in a C-Corp Highly Compensated Employee in an S-Corp A C-Corp Owner with a greater than 2% share An S-Corp Owner with a greater than 2% share

A high school diploma Having a high school diploma is not a qualification to be licensed as a producer or adjuster.

Which of the following is NOT a qualification to be licensed as a producer or adjuster?

Sharing commissions with an applicant Sharing commissions with a client (applicant) is considered a form of rebating and is prohibited.

Which of the following is considered an example of rebating?

Temporary employee

Which of the following is typically NOT eligible for coverage in a group health policy? Full-time employee Temporary employee Business owner Partner in a partnership

Individual Major Medical Expense policy A disclosure notice must be given to an applicant in the event of replacing an existing individual major medical expense policy with a new one.

Which of the following plans require a replacement disclosure notice be given to the applicant in the event of policy replacement?

Flexible premium deferred annuity

Which of these annuities require premium payments that vary from year to year?

The annuitant's life expectancy determines the annuity payments (. Annuity payments are based on the annuitant's life expectancy.)

Which of these statements regarding the annuitant is CORRECT?

Straight life

Which of these will have the highest monthly payout upon annuitization?

Life income (The settlement option that pays a specified amount to an annuitant, but pays no residual value to a beneficiary is known as life income.)

Which settlement option pays a stated amount to an annuitant, but no residual value to a beneficiary?

Life annuity certain

Which type of annuity guarantees a stated number of income payments, whether or not the annuitant is still alive to receive them?

Consideration Clause

Which type of clause describes the following statement: "We have issued the policy in consideration of the representations in your applications and payment of the first-term premium" Premium Clause Consideration Clause Adhesion Clause Contestability Clause

All of the following government programs provide health insurance protection, EXCEPT: Select one: a. Medicare b. Medicaid c. OASDI d. Food Stamps

While food stamps are a government program, it will not provide health benefits to participants. The other plans will provide benefits to those who are eligible for the benefits provided. The correct answer is: Food Stamps

Medicare Part A requires a deductible for a hospital stay. That deductible is expressed in relation to the stay as: Select one: a. 1% of the hospital charges b. A flat dollar amount c. A dollar amount that increases with each admission d. A flat dollar amount deductible tied to the CPI

While the deductible may increase annually, it is a flat dollar amount for each spell of illness. The correct answer is: A flat dollar amount

All of the following are true about group health policies, EXCEPT: Select one: a. Groups must exist naturally. b. The contract is issued to the employer or union, etc. c. The policyholder is the employee. d. Each employee receives a certificate of coverage.

With a group contract, the policyholder is the employer, union, or association that contracts with the insurer for the coverage. The correct answer is: The policyholder is the employee.

When do HMO's file reports of their activities to the department?

Within 3 months of the end of the fiscal year (Each HMO is required to file a report of its activities within 3 months of the end of each fiscal year. The department may require reports more frequently if it is deemed necessary)

In individual health insurance coverage, the insurer must cover a newborn from the moment of birth, and if additional premium of payment is required, how many days should be allowed for payment?

Within 30 days of birth ( The insured must notify the insurer of a newly born dependent, and if additional payment is required, pay within 30 days)

It would be considered taxable income to the employee

Without a Section 125 Plan in place, what would happen to an employee's payroll contribution to an HSA? It would be considered taxable income to the employee The employee would not be allowed to an HSA The employer would pay payroll tax and FICA on the contribution amount The employer would not be allowed to deduct the contribution from the employee's pay

All of the following are basic types of health insurance plans EXCEPT A) Major medical B) Health maintenance organizations C) Basic medical expense D) workers compensation

Workers compensation (Workers compensation coverage is actually considered liability coverage because it pays those medical expenses of employees that an employer is legally liable to provide)

*What is the time limit for giving notice of claim?

Written notice must be given within 20 days, giving the name of the policyowner, nature of the loss and other information to identify the claimant to the insurance company. In the event it is not reasonably possible to give notice within this time, notice must be given as soon as reasonably possible.

Question 54 of 100 Jenny misstated her age on her application for insurance, stating she was 38, when her actual age was 42. If her policy contains a provision that addresses this situation, is Jenny entitled to benefits? Yes, but at a level her premium would buy at her true age. Yes, but a retroactive charge to account for past owed premiums will be assessed to her. No, but her policy remains in force. No, and her policy will be canceled.

Yes, but at a level her premium would buy at her true age. Explanation: The misstatement of age provision addresses the fact that Jenny misstated her age on the insurance application. She is entitled to benefits, but the benefits payable will reflect what her premium would have bought at her actual age.

*Does the free look also apply to Medicare supplement policies?

Yes, but in the case of Medicare supplements and long-term care policies the period is 30 days.

*May a policyowner sue the insurance company to recover under a policy?

Yes, provided: 1) *the suit is filed at least 60 days after proof of loss has been given; 2) the loss is not paid within 120 days from the date of filing proof of loss as required by the policy if the claim is contested; and 3) the suit is brought within five years after proof of loss is furnished to the company.

Are there limitations imposed on the post-hospital skilled nursing care benefits?

Yes. A maximum limit of 100 days is imposed on each benefit period, and a co-payment is applicable from the 21st to the 100th day of care.

*Are there special marketing provisions in Florida for Medicare Supplements?

Yes. All Medicare Supplements marketed in Florida must meet or exceed the requirements of the NAIC Medicare Supplements Insurance Minimum Standards Model Act. Additionally they must: - Contain a definition of Medicare-eligible expense that is not more restrictive than that used by Medicare - Provide that benefits designed to cover the deductibles, daily copays and coinsurance of Medicare will be changed automatically to keep up with the changes instituted in these cost of Medicare, - Be written in simple language, and -Contain a prominently displayed coordination of benefits clause

*Are there any special requirements imposed on an agent who solicits Medicare supplements?

Yes. Florida law requires an agent to ask every person solicited whether he or she is currently covered under another contract. The agent must explain the extent to which the proposed coverage will overlap or duplicate the existing coverage. Before an application is taken, the Department of Financial Services requires that an agent obtain a signed form from the prospect acknowledging that this information has been provided.

Is health insurance coverage for alcoholism or drug dependency required by Florida law?

Yes. Group health insurance policies are required to offer coverage for alcoholism and drug dependency to the policyholder (i.e. the employer, not the employee). Although certain minimum benefits must be offered, the statute allows the policy owner to select "any alternative benefits or level of benefits as may be offered by the insurer.

Can an insurance company demand an independent medical examination during the pendency of the claim?

Yes. It may request such an examination as often as it reasonably requires.

*Does Florida law require a free look for Medicare Supplement policies?

Yes. It states a Medicare Supplement policy must, "Contain a prominently displayed no-loss cancellation clause enabling the insured to return the policy within 30 days of the date of receipt of the policy, or the certificate issued there under, with return in full of any premium paid."

Are there limitations placed on the inpatient hospital service benefits?

Yes. Medicare Part A pays for allowable medically necessary inpatient hospital costs above a "benefit period" deductible amount for up to 150 days of hospitalization.

*Are there policy standards under Florida law that must be met to be considered long-term care policies?

Yes. The Financial Services Commission is tasked with adopting rules regarding required disclosures, term of renewability, eligibility for benefits, non-duplication of benefits, continuing or conversion, probation and elimination periods, requirements for replacement, disclosure of tax consequences, standards of marketing, and more. Some of these include that a long -term care policy sold in Florida must: 1) !!Provide a free look of at least 30 days!! after delivery during which the owner may return the policy to the insurer for a full refund; 2) !!Be prominently stamped on the first page!! that the policy is an approved long-term care policy and that it may not meet all the long-term car cost incurred by the buyer; 3) !!Be accompanied by the Buyer's Guide and Outlined of Coverage!! which describes the principal benefits, exclusions, and limitations of the policy, include renewal and conditions for premium increases; 4) !!Include a disclosure statement!! indicating whether or not the policy is intended to be tax qualified long-term care policy and also whether it is intended to be limited benefit policy as defined the International Revenue Code; 5) Offer an !!inflation protection rider!! designed to account for reasonably anticipated increases in the coast of long-term care services; and 6( Include nonforfeiture benefit in the event of the policy lapse which provides for reduced paid-up, extended term, reduced benefit, or other approved benefits that account for premiums paid.

*Must a free privilege be disclosed to an applicant?

Yes. The existence of a free look must be disclosed. It provides that after the policyholder has received and read the policy, if the decision is made that it is not the coverage desired, the policy may be returned and a full refund of premiums received. 1) Health and disability policies require a 10 day period, 2) life and annuity policies require a 14 day period, and 3) long term care and Medicare policies require a 30 day period. This would not apply to short-term single premium policies (aviation accident policies).

*Are persons insured under a master group health policy entitled to a certificate of insurance?

Yes. The law provides that each member of the insured group must receive a certificate that sets forth the essential features of the master insurance contract. In health insurance, this certificate is usually in the form of a booklet describing the benefits

Do the words "physician" or "medical doctor" when used in a health insurance policy include dentists?

Yes. The law requires that the words physician or medical doctor, when used in such policies, include a dentist when the policy covers surgical procedures that are specified in the coverage or are performed in an accredited hospital in consultation with a licensed physician and are within the scope of a dentist's professional license.

Are there other provisions that can be included in the policy but are not required?

Yes. These are known as the "optional provisions" and are found in some health insurance policies.

If you are injured in the normal duties of your job, what pays for the loss of income?

Your disability policy

Question 61 of 100 Carol applied for life insurance in the amount of $250,000. Her agent gives her a document that provides $100,000 of coverage during the underwriting period. What did the agent give her? a promissory a conditional receipt a temporary waiver a binding endorsement

a conditional receipt Explanation: During the underwriting period of determining insurability, an insured may be granted coverage through an insurance receipt. A conditional receipt usually limits this coverage to less than the face amount applied for.

Question 87 of 100 Blanket disability policies can be issued to all of the following EXCEPT: a common carrier, covering all passengers a school, covering students an employer, covering employees a family, covering family members

a family, covering family members Explanation: Blanket sickness and accident insurance may be issued to common carriers, employers, colleges, volunteer fire departments, and other similar groups.

Dental expense insurance

a form of medical expense health insurance that covers the treatment, care and prevention of dental disease and injury to the insured's teeth. An important feature of a dental insurance plan which is typically not found in a medical expense insurance plan is the inclusion of diagnostic and preventive care (teeth cleaning, fluoride treatment, etc.). Some dental plans require periodic examinations as a condition for continued coverage.

A pre-existing condition is

a medical condition for which the insured sought medical advice or treatment within a specified period of time prior to the policy issue.

Waiting period

a period of time that must pass after a loss occurs before the insurer starts paying policy benefits

Under the income limit rule,

a person cannot contribute more than what was earned for the year from the employer through whom the person has an HDHP.

Enrollee

a person enrolled in a health insurance plan, an insured (doesn't include dependents of the insured)

Question 50 of 100 Your prospective insured has just submitted to you a completed application for life insurance with the first premium payment. As the agent, what do you then provide? a carbon copy of the application a premium receipt a temporary policy a bridge policy

a premium receipt Explanation: Premium receipts are designed to offer interim coverage while the application is being approved and the policy is being formally issued.

In a PPO, the insured does not have to select

a primary care physician. The insured may choose medical providers not found on the preferred list and still retain coverage.

Dental Expense Plans are

a specialized form of health expense coverage designed to pay for regular dental care and care necessitated by accidents. It is generally written on a group basis or on a stand-alone basis and is subject to a deductible

A Limited Policy can include Hospital Indemnity Plans —Sometimes referred to as a hospital income policy, this type of limited health insurance contract pays

a specified benefit when the insured is confined to a hospital due to an accident or illness. The contract generally pays an amount per day when the insured is in the hospital. Hospital indemnity plans may pay a benefit only if the insured is confined to a hospital due to an accident and some only pay the stipulated daily benefit if the confinement is due to illness

A deductible is

a specified dollar amount that the insured must pay first before the insurance company will pay the policy benefits

Life income is a settlement option that pays...

a stated amount to an annuitant, but no residual value to a beneficiary.

Question 64 of 100 Under most disability income policies, how is partial disability defined? the inability of a worker to work at his or her own job the inability of a worker to work at any job for which he or she is reasonably suited the loss of two or more limbs a worker's inability to perform some of his or her usual job functions

a worker's inability to perform some of his or her usual job functions Explanation: According to the any occupation definition of total disability, a person is unable to engage in any occupation for pay or profit.

To prevent against an unintentional lapse, the insurer issuing this type of policy must receive from the applicant

a written designation of at least one person, in addition to the applicant, who is to receive notice of lapse or termination of the policy due to nonpayment of premium (or a written waiver stating that the applicant does not desire to designate another to receive notice).

limited policies are considered........and.........policies,

accident/sickness

Injury is defined using either the

accidental bodily injury definition, or the accidental means definition

The principal sum is paid for

accidental death. This amount is usually equal the amount of coverage under the insurance contract, or the face amount

Question 31 of 100 An individual health insurance policy can exclude coverage for losses caused by all of the following EXCEPT: war or warlike acts while committing a felony accidental injuries noncommercial airline travel

accidental injuries Explanation: Health insurance policies typically exclude benefits if a loss occurs due to war or while traveling on a noncommercial airline. Policies also will not pay benefits if the insured is receiving treatment in a government hospital, but must cover accidental injuries.

Accidental Death and Dismemberment coverage only pays for

accidental losses and is thus considered a pure form of accident insurance.

Accidental Death and Dismemberment rider pays for

accidental losses only, and is thus considered a pure form of accident insurance.

Question 55 of 100 What are the three important goals an agent should strive for in completing an application? risk assessment, pre-screening, and verification mortality, morbidity, and risk assessment accuracy, thoroughness, and clarity credit, character, and moral assess ment

accuracy, thoroughness, and clarity Explanation: So that they can assess insurability to the best of their knowledge, agents should strive for accuracy, thoroughness, and clarity in every application they take.

Sales presentations must be.......and.........

accurate and complete

exceptions to government in the sunshine act are meetings where 1) person is _________, 2) _____ _____ is considered, 3) attendance would significantly _____ its fruitfulness, 4) _____ ____ is considered

accused of crime, subpoena issuance, frustrate, day-today operation

____ ____ are created by federal, state, and local governments to enforce regulatory statutes

administrative agencies

____ ____ ____ presides over an administrative proceeding and decides questions of law and fact concerning cases

administrative law judges

Question 97 of 100 Which of the following is an acceptable method of soliciting Medicare supplement insurance? cold lead advertising advertising insurance policies in trade journals and inviting consumers to contact an agent for more information soliciting policies door-to-door and telling prospects that they must buy a policy before they become uninsurable making appointments to discuss Medicare supplement policies and inducing prospects to lapse their existing policies

advertising insurance policies in trade journals and inviting consumers to contact an agent for more information Explanation: Advertising policies in trade journals and inviting consumers to contact an agent for more information does not violate Ohio's solicitation and sales rules with respect to Medicare supplement insurance.

The cost of living adjustment (COLA) rider will help protect

against inflation. Under this rider the insured's monthly benefit will be increased automatically, once claim payments have begun.

18

age to apply for license

When underwriting health insurance policies, the prime considerations are ......

age, gender, occupation, physical condition, avocations, moral and morale hazards, and financial status of the applicant.

Because the application is often the main source of underwriting information, it is the....... responsibility to make certain that the application is filled out completely, correctly, and to the best of the applicant's knowledge.

agent's

Some supplemental major plans also include an integrated deductible in which case the

amount of the deductible may be satisfied by the amount paid under basic medical expense coverage

Stop-loss amount would be the

amount that the insured pays out of pocket during the year. When the insured's out-of-pocket expenses reach the stop-loss, the insurance company then provides coverage at 100% of eligible expenses for the remainder of the year. The out of pocket expenses that qualify for the stop-loss would be the insured's portion of the coinsurance and it may or may not include the deductible. The higher the stop-loss, the lower the premium will be.

Solicitation

an attempt to persuade a person to buy an insurance policy; it can be done orally or in writing

A Medical Savings Account (MSA)

an employer-funded account linked to a high-deductible medical insurance plan. The employer raises the medical plan deductible and returns all or part of the premium savings to the employees to contribute to the MSA. The employee then uses the funds from the MSA to cover health insurance deductibles during the year. If there is a balance at the end of the year, the employee may leave in the account and earn interest or withdraw the remaining amount (as taxable income).

Question 27 of 100 All of the following are potential consequences of a health-insurance policy rider EXCEPT: additional premium cost a potential savings in overall health-care costs an end to medical expenses increased or reduced coverage

an end to medical expenses Explanation: A rider may add to the cost of the premium. However, the additional benefits purchased may result in lower health-care costs in the long run. Coverage may be increased, or coverage may be reduced, as with an exclusion rider.

Some LTC policies include a guarantee of insurability option as well as a return of premium option. The guaranteed insurability option functions like it does in a disability or life insurance policy and, if elected, provides

an increase in benefits (generally limited to a 5% increase) without the insured proving insurability

Loss of income insurance provides an individual the means to replace wages an individual the ability to collect workers' compensation an individual the ability to continue with medical coverage after a disability unlimited income replacement to a disabled person

an individual the means to replace wages

Question 48 of 100 A health insuring corporation provides or arranges basic health-care services for enrollees through what method? a health maintenance organization a preferred provider organization an open-panel or a closed-panel plan the state Medicaid program

an open-panel or a closed-panel plan Explanation: A health insuring corporation pays for, reimburses, or provides, delivers, or arranges basic health-care services, supplemental health-care services, or specialty health-care services (or a combination) through either an open-panel plan or a closed-panel plan.

Most major medical policies feature an

annual deductible that, as the name implies, is paid once in any year, regardless of the amount of claims in that year

The factor used most often when underwriting a disability income policy is annual earnings sex of the insured marital status occupation

annual earnings

An HMO that is found to be in violation by committing an unfair trade practice as defined in the act, may suffer the penalty of? A) Suspension of certificate of authority B) Revocation of license C) Administrative fine D) any of the above

any of the above ( The penalty for the commission of unfair trade practice can range from probation to suspension or revocation of license of certificate of authority, and/or administrative fine up to $50,000)

Whenever a LTC policy is replaced,

any preexisting condition limitation in the new policy will be waived.

There are two ways to correct an application. The first and best is to simply start over with a fresh application. If that is not practical, draw a line through the incorrect answer and insert the correct one. The....... must initial the correct answer.

applicant

Care is provided to members of the HMO by a limited number of physicians that

are approved to practice in the HMO

Primary Care Provider (PCP) is a health care professional who is responsible for

monitoring an individual's overall health care needs. Typically, a PCP serves as a "gatekeeper" for an individual's medical care, referring the individual to specialists and admitting them to hospitals when needed

Individual health insurance policies underwriting

are underwritten to cover the applicant, their spouse and family. Many of the factors considered in life insurance underwriting apply. However, unlike life insurance where there can be only one death claim per insured, in health insurance, multiple claims per insured is the rule rather than the exception. For this reason, underwriting and classification of risk is extremely important from an insurance company standpoint.

HIPAA further states that qualified long-term care services include necessary diagnostic, preventive, therapeutic, caring, treating, and rehabilitative services. A qualified plan must include

at least five of the ADLs Assisted Daily Living Services described in the HIPAA legislation.

In order for the member to get to see a specialist, the primary care physician (gatekeeper) must

refer the member. The referral system keeps the member away from higher priced specialists unless it is truly necessary.

Which of the following is NOT required to be stated in the outline of coverage provided with long-term care policies? A) The policy number B) The right to return the policy for a refund C) Basic information about the insurance company D) basic information about supplementary policies

basic information about supplementary policies ( The outline of coverage must follow the standard format in the insurance regulations. It must provide information about the insurance company, the policy number, important features about the policy, and Explain the right to return the policy for a refund).

Residual disability is the type of disability income policy that provides

benefits for loss of income when a person returns to work after a total disability, but is still not able to work as long or at the same level he/she worked before becoming disabled Residual disability will help pay for loss of earnings

DHS provide services in the critical areas such as 1) ____, 2) ____, 3) ____, 4)____.

border and transportation security, chemical, biological, radiological, and nuclear countermeasures, information analysis and infrastructure protection, emergency and terrorist incident response

A policy that uses the accidental bodily injury definition will provide

broader coverage than a policy that uses the accidental means definition

How does the Health Care False Claim Act help control the cost of health care in Washington?

by penalizing fraudulent claims

Question 77 of 100 Bill's health policy provides coverage for routine doctor visits, hospital expenses, surgical care, and medical treatment. Which of the following types of plans does Bill have? any provider plan limited choice of providers plan specified plan comprehensive plan

comprehensive plan Explanation: Any provider coverage means the insured can use any health-care provider.

Question 24 of 100 Increased cost associated with increased coverage are characteristic of what type of health-care plan? specified plan any provider plan comprehensive plan limited choice of provider plan

comprehensive plan Explanation: Any provider coverage means the insured can use any health-care provider. The term does not indicate cost of coverage

Pre-existing conditions

conditions for which the insured has received diagnosis, advice, care, or treatment during a specific time period prior to the application for health coverage

Legal purpose

contract must be for a lawful reason, and not against public policy

Question 99 of 100 When determining an employee's deductions based on the amount of premiums and other qualifying expenses paid above 10 percent of the employee's adjusted gross income, which expenses are NOT considered? contributions for group long-term care coverage contributions for group medical expense coverage contributions for group dental coverage contributions for group disability plans and group AD&D coverage

contributions for group disability plans and group AD&D coverage Explanation: Employee contributions to a group dental coverage are considered qualifying medical expenses when determining this excess

_____ enforce state corporation law and regulate issuance of securities

corporation departments

The basic expense policy will provide coverage on a first-dollar basis (no deductible). After the limits of the basic policy are exhausted, the insured must pay a

corridor deductible before the major medical coverage will pay benefits. The corridor deductible derives its name from the fact that it is applied between the basic coverage and the major medical coverage

Question 7 of 100 Group sickness and accident insurance policies must cover the cost of all of the following types of care EXCEPT: chiropractic care podiatry cosmetic surgery mammography

cosmetic surgery Explanation: Individual and group sickness and accident insurance policies must provide benefits when care is provided by licensed chiropractors, osteopaths, optometrists, and podiatrists. Policies must provide benefits for mammography screening to detect breast cancer in adult women.

both administrative agency and respondent may be represented by ____

counsel

Basic hospital expense coverage

cover room and board, and miscellaneous hospital expenses, such as lab and x-ray charges, medicines, use of operating room and supplies, while the insured is confined in a hospital

A blanket policy

covers members of a particular group when they are participating in a particular activity. Such groups include students, campers, passengers on a common carrier, or sports teams. Often the covered insureds names are not known because they come and go. Unlike group health insurance the individuals are automatically covered, and they do not receive a certificate of insurance. Blanket policies are commonly written and pay on an accident-only basis.

a doctrine that says when an administrative agency is created it is delegated certain powers

delegation doctrine

An insurance company issues a health insurance policy to Doug's client, and the policy is sent to Doug to deliver to his client. The client travels often and is unavailable when Doug calls to deliver the policy. What should Doug do?

deliver the policy to the client at the first reasonable opportunity

Health savings accounts (HSAs)

designed to help individuals save for qualified health expenses that they, their spouse, or their dependents incur. An individual who is covered by a high deductible health plan can make a tax-deductible contribution to an HSA, and use it to pay for out-of-pocket medical expenses. Contributions by an employer are not included in the individual's taxable income.

Some policies also include a carry-over provision that states that if the insured

did not incur enough expenses during the year to meet the deductible, any expenses incurred during the last 3 months may be carried over to the next policy year to satisfy the new annual deductible

In a Disability buy-sell insurance policy; Disability buyout agreement specifies who will purchase a

disabled partner's interest and legally obligates that person or party to purchase such interest upon disability.

When an individual policy is issued or delivered,....... forms must be provided to the applicant at the time of application or at the time of delivery. The disclosure forms must reflect the actual policy provisions when issued,

disclosure forms

Basic coverage is referred to as first-dollar coverage because they usually

do not require the insured to pay a deductible. This differs from Major Medical Expense insurance. However, the basic medical coverages usually have more limited coverage than the major medical policies

The purpose of the elimination period is to

eliminate coverage for short-term disabilities in which the insured will be able to return to work in a relatively short period of time.

government enact administrative agencies, aka ____ ____, to regulate ____, ____, and ____.

regulatory statutes, industries, businesses, professionals

Question 67 of 100 What is the period after a disability starts during which no benefits are payable known as? elimination period probationary period exclusion provision benefit period provision

elimination period Explanation: The elimination period in a disability income policy is the period after a disability starts during which no benefits are payable. It is also called the waiting period.

Non-occupational disability coverage is designed for

employees who suffer non-work related disabilities, since work-related disabilities are covered by Workers' Compensation

A PPO is an organization, generally administered by a third party administrator (i.e., TPA), which

enters into a contractual arrangement with doctors or hospitals (i.e., providers) in order to secure medical coverage for its insureds (i.e., members).

If the policy is issued, a copy of this application is stapled in the back of the policy and it becomes part of the.......

entire contract.

Question 91 of 100 Underwriter Ulysses is new on the job and wants to make sure he does not engage in any discriminatory practices. He should know that state law prohibits discrimination against a specific group of people in all of the following EXCEPT determining eligibility. establishing selection criteria based on statistical records identifying coverage exclusions setting coverage limits.

establishing selection criteria based on statistical records Explanation: State laws prohibit discrimination when determining eligibility, setting coverage limits, setting deductibles, identifying exclusions, and settling claims. Insurers are expected to establish their selection criteria based on statistical records.

Under the calendar day method,

every day of the week would count in determining the elimination period regardless of whether you received any services on those days.

Question 69 of 100 Which of the following documents, which sets forth the benefits the subscribers are entitled to receive, must a health insuring corporation give to its subscribers? certificate of authority evidence of coverage subscriber agreement certificate of insurability

evidence of coverage Explanation: Subscribers are entitled to an evidence of coverage, which describes the health-care services and benefits to which they are entitled. The evidence of coverage also lists the premium rate, the insurer's complaint procedures, and any limits or exclusions impacting benefits.

XYZ company has applied for group health insurance for its employees. What information would the Insurer's Underwriters likely used to determine the appropriate coverage and final premium rate given to the group?

experience rating an experience rating system is used to estimate how much of a specific group will have to spend on medical care.

in hazardous industries, a statute ____ provides for _____ _____ _____.

expressly, nonarbitrary warrantless searches

regarding the equal access to justice act, courts have generally held that the agency's conduct must be ____ ____ before an award can will be made

extremely outrageous

_____ ____ ____ are created by Congress, and have broad regulatory powers over ____ ____ of the ____ ____.

federal administrative agencies, key areas, national economy

The Preferred Provider Organizations (PPOs) could be seen as the traditional medical systems' answer to HMOs. In the PPO system, the physicians are paid

fees for their services rather than a salary, but the member is encouraged to visit approved member physicians that have previously agreed upon the fees to be charged.

Question 34 of 100 Agent Thomas submits a fraudulent application for a health insurance policy using his daughter's name. He then submits a claim and collects $1,000 from the insurer. Which act has Agent Thomas committed? misdemeanor fifth-degree felony felony-misdemeanor first-degree felony

fifth-degree felony Explanation: A person commits insurance fraud if he or she submits a fraudulent insurance application or claim. If the claim is between $500 and $5,000, the person is guilty of a fifth-degree felony.

HMOs operate on a capitated basis: the HMO receives a

flat amount each month attributed to each member, whether they see a physician or not. In essence, it is a prepaid medical plan. As a member of the plan, you will receive all services necessary from the member physicians and hospitals.

30 days

for insurer to notify the Commissioner of the termination of an appointment

a federal act that gives the public access to documents in the possession of federal administrative agencies

freedom of information act

The AD&D policy will usually pay the...... principal for the loss of sight in both eyes, or two or more limbs; however, it may only pay........ for the loss of one hand or one foot. In addition, some policies will pay double or triple indemnity, meaning the policy will pay ...... or ....... times the face amount in the event of accidental death.

full, 50%, twice or three times

Question 19 of 100 HMO members are required to use their plan's network of doctors and hospitals to obtain covered services. Access to that network is controlled by a primary care physician, or PCP. What is this person sometimes called? goalie primary contact gatekeeper carekeeper

gatekeeper Explanation: A primary care physician is called a gatekeeper. This term refers to the physician's role in controlling subscribers' access to the network of health-care specialists.

whereas ____ ____ ____ consists of laws that regulate all businesses and industries, unless specifically exempt, _____ ____ ____consists of laws that regulate specific industry and no other.

general government regulation, specific government regulation

according to APA, in adopting a substantive rule, agencies must 1) publish a ____ ____ of the proposed rule making in the ____ ____ that include a) the ____, ____, and ____ of the rule making proceedings, b) the ____ _____, c) _____ or a description of the ____ and ____ involved; 2) give interested persons an ________; 3) go through ____ ____ ____ procedure; 4) require, in some instances, ____ ____ ____ procedure.

general notice, federal register, time, place, nature, legal authority, substance, subject, issue, opportunity to participate, informal rule making, formal rule making

any test that is conducted to determine the presence or absence of genetic characteristics in an individual. Insurance companies cant force it applicants have to wish to take it

genetic test

The HMO offers services to those living within specific

geographic boundaries, such as county lines or city limits. If individuals live within the boundaries, they are eligible to belong to the HMO, but if they do not live within the boundaries they are ineligible.

a federal act that opens most federal administrative agency meetings to the public

government in the sunshine act

Question 57 of 100 One difference between individual and group disability income policies is that group Di policies are not portable, while individual policies are not affected by the insured leaving one employer for another. individual DI is generally less expensive than group DI group DI benefits are non-taxable, while individual DI benefits are taxed as ordinary income it is easier to qualify for individual DI than group DI

group Di policies are not portable, while individual policies are not affected by the insured leaving one employer for another. Explanation: Most group DI policies are not portable, whereas individual DI policies are not affected by the insured's change of employers. Individual DI benefits are generally non-taxable, while group DI benefits may be taxable to the extent that the employer paid the premiums

Most health insurance is written on a........basis from one's employer. Individual coverage may be available for a family, but it would be medically underwritten.

group basis

Agents who sell unauthorized plans are subject to

having their licenses suspended or revoked and/or monetary penalties assessed against the agent. Under Florida law, if an unlicensed insurer fails to pay claims, agents who sold the unlicensed coverage are liable for unpaid claims. It is also possible that civil and criminal action can be taken against them. As of October 1, 2002 any agent licensed in this state, who, in this state, represents or aids an unauthorized insurer commits a third-degree felony.

n many cases, the initial premium is not paid until the policy is delivered. Most insurance companies require that when the agent collects the premium, he or she must also obtain a statement signed by the insured testifying to his/her continued good......

health

Massachusetts individual mandate for minimum creditable coverage requires individuals to have ......insurance even if they already have accident/sickness insurance.

health insurance

Comprehensive coverage

health insurance that provides coverage for most types of medical expenses

By means of the Health Maintenance Act of 1973, Congress strongly supported the growth of

health maintenance organizations (HMOs) in this country. The act forced employers with more than 25 employees to offer HMO as an alternative to their regular health plans

Question 85 of 100 Joseph is the newly appointed Superintendent of Insurance for Ohio. He has a reputation for being strict on law enforcement and is expected to implement regulations that will benefit consumers. As Superintendent, he can be expected to do all of the following EXCEPT investigate insurers and producers for compliance with the law impose civil fines on those who break the law issue cease and desist orders to prevent violations of the law. impose jail terms upon those who are convicted of violating the law.

impose jail terms upon those who are convicted of violating the law. Explanation: As Superintendent of Insurance, Joseph can investigate violations of the law, issue cease and desist orders to prevent violations of the law, and impose fines and penalties offenders. He cannot sentence anyone to jail because that is beyond his authority as Superintendent.

Probationary Period is another type of waiting period that is imposed under some disability income policies. It does not replace the elimination period, but is

in addition to it.

Discrimination

in rates. premiums, or policy benefits for persons within the same class or with the same life expectancy is illegal. Unless the distinction is made for a business purpose or required by law you cannot base anything on marital status, race, color, national origin, creed or ancestry.

Simon has purchased a fixed immediate annuity. his payment amount will be dependent upon principal, interest, and the contract's ________.

income period

Guaranteed Insurability Rider, also referred to as Future Increase Option, allows an insured to

increase the benefit level to a specific predetermined amount at certain times or on certain occasions without proof of insurability. The times when the benefit may be increased are generally at ages 25, 28, 31, 34, 37 and 40. An increase may also be taken at one's marriage or the birth of a child. In order to exercise this rider, the insured must qualify from an income standpoint to prevent overinsurance

Question 30 of 100 Group coverage is available for all of the following, EXCEPT employee groups franchises and associations independent small-business owners government units

independent small-business owners Explanation: Group coverage is available to government units.

A Limited Policy can include Travel Accident — Pays a specific amount for

injuries or death suffered on common carriers (i.e., commercial airline, train, bus, etc.).

Question 82 of 100 Total disability will be presumed under a presumption of disability provision if an insured suffers any of the following physical losses, EXCEPT loss of eyesight. loss of hearing. injury to a limb. loss of speech.

injury to a limb. Explanation: If an insured loses his or her ability to speak, the insured is presumed to be totally disabled.

Because the application is so important, most companies require that it be filled out in.....

ink

Controlled business

insurance written on the interest of the licensee, licensee's immediate family, or licensee's employer, or insurance covering the licensee, the members of the licensees immediate family, a business entity, or the officers, partners, or employees of such a business entity of which the licensee or a member of the licensee's immediate family is an officer, partner, associate, or employee. This does not include insurance written in connection with credit transactions (title insurance). If during any 12-month period, the aggregate commissions earned on this business exceeded 35% of the aggregate commissions earned on all business written by the licensee during the same period.

an example of a primary care physician would be an

internist

a rule issued by an administrative agency that interprets existing statutory language

interpretive rule

An .............. includes information on an applicant's character, general reputation, personal habits, and mode of living that is obtained through investigation. For example, this report could include interviews with associates, friends, and neighbors of the applicant. Such reports may not be performed unless the applicant is clearly and accurately .................. The consumer report notification is usually part of the application. At the time that the application is completed, the agent will separate the notification and give it to the applicant.

investigative consumer report, informed of the report in writing.

agencies can use only the ____, ____, and ____ powers that are delegated to it

legislative, judicial, executive

Benefit period refers to the

length of time over which the monthly disability benefit payments will last for each disability after the elimination period has been satisfied.

Question 68 of 100 Which of the following types of health insurance covers specific conditions or provides benefits for specific health services? disability income policies long-term care policies limited benefits policies medical expense policies

limited benefits policies Explanation: Medical expense policies cover the cost of medical care and medical services.

Question 1 of 100 Although Kevin is healthy and has not been diagnosed with cancer, many members of his family have been treated for one or more cancerous conditions. Consequently, Kevin is in the market for cancer insurance. Cancer insurance is what type of health insurance? disability income policy long-term care policy limited benefits policy medical expense policy

limited benefits policy Explanation: Long-term care policies cover the cost of sustained, long-term care provided in a nursing home, at home, or through extended health-care agencies or facilities.

Stop-Loss limit is a provision in the policy that

limits the amount of coinsurance that a policyholder must pay - Are there co-payments the individual must pay for certain services, such as doctor visits? If one uses doctors outside a plan's network, how much more will he or she pay? - Is there a limit on how much the plan will pay for a person's care in a year or over a lifetime? (A single hospital stay for a serious condition could cost hundreds of thousands of dollars.)

agencies created by cities, municipalities, counties, and other local government bodies to administer local regulatory law

local administrative agencies

Question 28 of 100 Marty is a widower with no surviving family members. He is concerned about how he will pay for custodial or nursing home care if it is ever needed. Which of the following will provide a significant amount of coverage for this type of care? Medicare supplement insurance Medicare Advantage Medicare long-term care insurance

long-term care insurance Explanation: Long-term care insurance covers nursing home services, home health care services, adult day-care services, residential community living services, and respite care services (providing temporary respite for a family member who has assumed caregiving responsibilities). Medicare and Medicare supplement policies provide few benefits for long- term care assistance.

Question 66 of 100 Which of the following types of health insurance covers the cost of sustained care provided in a nursing home, at home, or through extended health care agencies or facilities? disability income policies long-term care policies limited benefits policies Medicare supplement policies

long-term care policies Explanation: Long-term care policies cover the cost of sustained, long-term care provided in a nursing home, at home, or through extended health-care agencies or facilities.

which of the following is considered to be a point-of-service (POS) plan?

managed care plan

Question 5 of 100 Which of the following are covered by Medicare Part C? doctors' services, inpatient and outpatient medical and surgical services and supplies, and physical and speech therapy managed care plans, preferred provider organizations, and private fee-for-service plans occupational therapy, diagnostic tests, and medical supplies skilled nursing facility care, cosmetic and personal comfort items

managed care plans, preferred provider organizations, and private fee-for-service plans Explanation: These services are covered by Part B of the Medicare program.

Any medical expense plan that attempts to contain costs by controlling the behavior of participants is considered a

managed care program

$10,000

maximum fine for violation of the insurance code (cease & desist order)

routine dental care is excluded by

medical expense plans (except if needed due to an accident).

A copayment is a specific part of the cost of care or a flat dollar amount that must be paid by the

member. For example, the member may be required to pay $5, $10 or $25 for each office visit

Question 74 of 100 Which of the following does NOT fall within the definition of a health insurance advertisement? radio announcement about health insurer's products memo from an insurer's president to employees print article designed to create consumer interest in a health insurer sales presentation by a health insurer's producer

memo from an insurer's president to employees Explanation: Advertisements of health insurance consist of printed and published material, audiovisual material, and descriptive literature of an insurer delivered by direct mail to the public, periodicals, radio and TV scripts, billboards, descriptive sales literature and aids, form letters, and prepared sales presentations.

Question 56 of 100 Jamie is insured under an individual health insurance policy. For which of the following reasons can the insurer cancel her policy? paying the premium during the grace period making a claim within six months after the policy was issued omitting immaterial information about her family's health history in the application moving outside the service area of the insurer's network of providers

moving outside the service area of the insurer's network of providers Explanation: An individual health insurance policy will be renewed at the insured's request. However, an insurer may cancel a policy if the insured no longer lives within the service area of the insurer's network of providers.

Contributions to an MSA

must be made in cash or its equivalent. There are 2 limits on the amount the employee and employer can contribute to an MSA: the annual deductible limit, and an income limit.

LTC policies may not be issued unless

non-forfeiture benefits have been offered.

how are premiums paid by the insured for personally owned disability income insurance treated for tax purposes?

not tax-deductible premiums paid for personal disability income insurance are NOT tax-deductible by the individual insured, but the disability benefits are tax-free to the recipient.

Question 33 of 100 Eddie purchased a Medicare supplement policy five years ago from ABC Insurers and now suffers from dementia. Which action can ABC Insurers take, given the decline in Eddie's health? cancel the policy charge twice the premium decrease the amount of coverage nothing, because the policy cannot be canceled

nothing, because the policy cannot be canceled Explanation: All Medicare supplement policies must be guaranteed renewable. Once issued, a policy cannot be canceled except for non-payment of premiums.

A hospital indemnity policy provides a specific amount on a daily, weekly or monthly basis while the insured is confined to a hospital. Payment under this type of policy is unrelated to the medical expense incurred, but based only on the

number of days confined in a hospital. This can also be called a hospital fixed-rate policy

Intermediate (nursing) care involves

occasional nursing and rehabilitative care that must be based on a physician's orders and provided by skilled medical personnel.

Defamation

occurs when an oral or written statement is made that is intended to injure a person engaged in the insurance business. This also implies to statements that are derogatory or maliciously critical of the financial condition of any person or company

Under the days of service method,

only days when you receive services will count toward the elimination period. This means that if an insured receives services three days a week, it will take longer for his or her benefits to start and it could mean that there will be more out-of-pocket expenses before benefits commence.

The insured is allowed to receive care from any provider, but if the insured selects a PPO provider, the insured will realize lower

out-of-pocket costs. Conversely, if a non-network provider is used, the insured's out-of-pocket costs will be higher.

Question 59 of 100 Amanda applied for a long-term care policy, at which time she received a document disclosing the policy's benefits, exclusions, renewal provisions, and continuation provisions. Which document did Amanda receive? outline of coverage Notice Regarding Replacement Shopper's Guide Buyer's Guide

outline of coverage Explanation: An outline of coverage describes a long-term care policy's benefits, exclusions, renewal provisions, and continuation provisions.

When soliciting a prospective customer for the sale of a life insurance policy offering long-term care insurance benefits, Marla must provide certain disclosure documents. What is the proper order in which she must present these documents?

outline of coverage, Shopper's Guide, policy summary

Business overhead expense (BOE) insurance is a unique type of policy that is sold to small business owners who must continue to meet

overhead expenses such as rent, utilities, employee salaries, installment purchases, leaded equipment, etc., following a disability

Care provided must be medically necessary and appropriate. A plan of care is generally required for

patients who need long-term care.

Some employer sponsored plans are also referred to as worksite plans. An employer sponsors the plan but the employees

pay a portion or all of the cost.

hospital fixed-rate policy payment

payment based on only on the number of days confined in a hospital.

Which of the following standard provisions of a health insurance policy is not intended to prevent overinsurance?

payment of claims

Medical Expenses: If a person were covered as a dependent under their spouse's group insurance

payment of medical expenses would be coordinated.

Question 45 of 100 Employer group health plans are prohibited from offering Medicare-covered employees or spouses coverage under a Medicare supplement plan that discriminates based on age. pays for services covered by Medicare. gives preference to one spouse over the other. is more expensive than Medicare.

pays for services covered by Medicare. Explanation: Employers are prohibited from offering employees or spouses on Medicare a supplement plan that pays for services already covered by Medicare.

Individual deductible which is when each insured is

personally responsible for a specified deductible amount each year

A PPO is a group of

physicians and hospitals that contract with employers, insurers, or third party organizations to provide medical care services at a reduced fee.

Many HMOs offer plan members the option to self direct care, as one would under an indemnity or PPO plan, rather than get referrals from primary care physicians. An HMO with this opt-out provision is known as a

point-of-service (POS) plan. How the plan functions (compared to an HMO or indemnity plan) depends on whether individual plan members use their primary care physician or self direct their care at the "point of service"

per occurrence deductible or flat deductible which the insured is required to pay for each claim,

possibly resulting in more than one deductible being paid in a given year

according to HIPAA, LTC plans, whether group or individual, are considered to be accident and health insurance. This means that

premiums paid by an employer under a group plan are tax-deductible. Therefore, the benefits received by an employee are not taxable (unless the benefit is paid on a per diem basis and exceeds certain amounts).

Question 21 of 100 Which benefit did the Medicare Modernization Act of 2003 add to the original Medicare+Choice plans? prescription drug coverage hospice care outpatient mental health and alcoholism treatment long-term care

prescription drug coverage Explanation: In 2003, the Medicare Prescription Drug, Improvement and Modernization Act became law. It allowed Medicare+Choice to add prescription drug coverage, which became known as Medicare Advantage (MA) plans.

If the person can only work part-time or at a lesser paying position, residual disability will make up the difference between their

present earnings and what they were earning prior to disability

documents exempt from freedom of information act are 1) documents classified by ____ to be in the interests of ____ _____, 2) documents that are _____ _____ from disclosure, 3) documents that would interfere with the ____ _____ ____, 4) ____, ____, and similar files, 5) documents containing ____ ____ or other ____ or _____ information

president, national security, statutorily prohibited, law enforcement proceedings, medical, personnel, trade secrets, confidential, privileged

Question 8 of 100 Sal loses his sight in a chemical accident in his garage. His group disability insurance plan pays a regular monthly benefit but does not require proof of ongoing disability. Which of the following policy provisions is guiding this practice? statutory disability partial disability presumptive disability residual disability

presumptive disability Explanation: Because of the nature of Sal's disability, ongoing proof of the disability is not required. It is presumed that Sal will not regain his sight.

The main goal of the HMO Act was to reduce the cost of health care by utilizing

preventative care. While most insurance plans offered no benefits for preventive care prior to 1973, HMOs offer free annual check-ups for the entire family. In this way, the HMOs hope to catch diseases in the earliest stages, when treatment has the greatest chance for success. The HMOs also offer free or low-cost immunizations to members in an effort to prevent certain diseases

When an individual becomes a member of the HMO they will choose their

primary care physician (PCP) or gatekeeper. Once chosen, the primary care physician or HMO will be regularly compensated for being responsible for the care of that member, whether care is provided or not. It should be in the primary care physician's best interest to keep this member healthy to prevent future time for treatment of disease

A long term care shopper's guide must be present at which point? A) prior to the time of application B) At the time of application C) Between the completion of the application and the delivery of the policy D) at the time of policy delivery

prior to the time of application ( A long-term care insurance shopper's guide must be provided in the format developed by the National association of insurance commissioners (NAIC). The shoppers guide must be presented to the applicant prior to completing the application)

_____ is a federal act which states that federal administrative agencies can maintain only information about an individual that is _____ and ____ to accomplish a legitimate agency purpose

privacy act, relevant, necessary

Question 14 of 100 When collecting personal financial or health information, an insurance company is required to do all of the following EXCEPT notify individuals about the company's privacy practices. describe conditions under which the company may disclose the information to other parties. provide methods for individuals to prevent disclosure of the information. provide individuals with copies of documents disclosed to other parties.

provide individuals with copies of documents disclosed to other parties. Explanation: When collecting or using nonpublic personal financial or health information, an insurer must notify individuals about the insurer's privacy policies and practices, describe conditions under which the insurer may disclose this information to other parties, and provide methods for individuals to prevent this disclosure.

A hospital indemnity policy

provides a specific amount on a daily, weekly or monthly basis while the insured is confined to a hospital. Payment under this type of policy is unrelated to the medical expense incurred, but based only on the number of days confined in a hospital. This can also be called a hospital fixed-rate policy.

A dread disease, or limited risk, policy

provides a variety of benefits for a specific disease such as cancer policy or heart disease policy. Benefits are usually paid as a scheduled, fixed-dollar amount of indemnity for specified events or medical procedures, such as hospital confinement or chemotherapy.

Franchise insurance

provides health coverage for small groups whose numbers are too small to qualify for true group insurance. Franchise insurance is not group insurance, since individual policies are issued for each participant. Individual underwriting is done for each person, and each participant submits his or her own application and medical history.

Voluntary group plans provide voluntary benefits to an employee. Voluntary benefits are products provided by an employer that the employee

purchases and for which he or she pays 100% of the premium. Premiums are generally paid through a payroll deduction.

Question 46 of 100 To boost her insurance sales at the end of the year, Trudy started offering potential clients a $250 cash gift card in exchange for purchasing a life insurance policy. Which ethical sales practice has Trudy violated? false information rebating churning twisting

rebating Explanation: Agents cannot offer anything of value to induce someone to buy insurance, including a rebate of the premium, dividends, stocks or bonds, or paid employment. They also cannot pay or offer to pay anything of value that is not specified in the insurance contract. This unfair trade practice is known as rebating.

Under the terms of the insurability conditional receipt, the insurance coverage becomes effective as of the date of the......, provided the application is approved. This receipt is generally provided to the applicant when the initial....... is paid at the time of application.

receipt, premium

Question 72 of 100 Robin breaks a leg while snow skiing. Considering herself lucky it was only a leg, she decides she will never again attempt snow skiing. Which of the following is Robin using as a means of risk management? risk retention risk avoidance risk reduction risk transfer

risk avoidance Explanation: Risk management by avoidance means avoiding situations that could result in loss.

The underwriter's function is to select ......, which are acceptable to the insurance company. The selection criteria used in this process, by law, must be only those items that are based on sound actuarial principles or expected experience. The underwriter cannot decline a risk based on ...........

risks, blindness or deafness, genetic characteristics, marital status, or sexual orientation.

Question 89 of 100 Which of the following must employer group plans offer enrollees in a group plan when they are over age 65? lower premiums Medicare supplement plans same coverage that is provided to younger employees Medicaid

same coverage that is provided to younger employees Explanation: Employer group plans are required by law to offer employees age 65 and over the same coverage offered to younger employees.

Question 78 of 100 The federal Risk Retention Act of 1986 contains guidelines for which of the following entities? self-insuring businesses re-insurers credit life insurance companies high-risk business insurers

self-insuring businesses Explanation: A risk retention group (RRG) is an insurance company that provides self-insurance services to owner-members. These members all have a business, occupation, or professional relationship with one another.

Emergency care must be provided for the member in or out of the HMOs

service area. If emergency care is being provided for a member outside the service area, the HMO will be eager to get the member back into the service area so that care can be provided by salaried member physicians

Most major medical policies include a coinsurance provision that provides for the

sharing of expenses between the insured and the insurance company

Which of the following is not considered an activity of daily living that, if the insured is unable to perform it, could trigger the payment of benefits from a long-term care insurance policy?

speaking

An individual Disability Income insurance applicant may be required to submit all of the following information EXCEPT

spouse's occupation

Any physician or hospital that qualifies and agrees to follow the PPO's

standards and charge the appropriate fees that the PPO has established can be added to the PPO's approved list at any time

agencies created by state legislative branch to administer state regulatory laws

state administrative agencies

a statement issued by an administrative agency that announces a proposed course of action that h=the agency intends to follow in the future

statement of policy

while ____ ____ ___ refers to the core law that an administrative agencies enforces, ____ ____ ____ refers to the procedures that must be followed while enforcing the former.

substantive administrative law, procedural administrative law

a rule by an administrative agency that has the force of law and to which covered persons and businesses must adhere

substantive rule

administrative agencies have been delegated legislative powers that consist of ____ ____ ____, ____ ____ ____, _______, and ________.

substantive rule making, interpretive rule making, statements of policy, granting of license

What is not used from the HSA account each year stays in the account and continues to grow interest on a tax-favored basis. These funds can

supplement retirement just like an IRA. HSA must -be combined with a lower cost, high deductible health insurance plan

Partial disability is often defined as

the inability to perform one or more of the regular duties of one's own occupation or the inability to work on a full-time basis, which results in a decrease in the individual's income.

"own occupation" definition of total disability is defined as

the inability to perform the duties of one's own occupation This is the more LIBERAL definition which makes it easier to qualify for disability benefits

Medical expenses: paid on a scheduled basis,

the insurance company will refer to a list determining the cost of the treatment, and it will only pay to a certain amount.

When opening an HSA account, an individual must be ..... the age of Medicare eligibility. For taxpayers aged .... and older, an additional contribution amount is allowed (up to $.........).

under, age 55, $1,000

Accidental means indicates that the cause of the accident must be

unexpected and unintended.

It is an .............. to make any statement that an insurer's policies are guaranteed by the existence of the Insurance Guaranty Association.

unfair trade practice

Question 10 of 100 Basic hospital, surgical, and physician policies offer insureds all of the following benefits, EXCEPT first-dollar coverage with no deductibles the right choose health-care provider unlimited coverage and no ceiling on the amounts that the insurer will pay 100 percent reimbursement with no co-payments (up to specified maximums per charge, per treatment, or per policy term

unlimited coverage and no ceiling on the amounts that the insurer will pay Explanation: Basic hospital, surgical, and physician policies limit the types of coverage provided and the amounts the insurer will pay

Question 3 of 100 ABC Insurance Company diligently maintains files of advertisements it uses to market its health insurance policies. How long must it keep them before it can purge them? until the Superintendent's next examination or four years, whichever occurs later until the Superintendent's next examination or five years, whichever occurs sooner until the Superintendent's next examination at least five years

until the Superintendent's next examination or four years, whichever occurs later Explanation: Every insurer must keep a file of every advertisement used to market its health insurance policies. The insurer must maintain this file for at least four years or until the Superintendent's next examination of the insurer, whichever occurs later.

Group health insurance underwriting

varies in important particulars from that of individual health insurance. While the purpose remains the same, evaluation of the inherent hazard and assignment of the appropriate class and premium rate, the techniques and standards for evaluation are decidedly different.

administrative searches are considered reasonable if 1) _____ ____, 2) validated with _____ _____, 3) conducted in _____ _____ when ______, 4) the business belongs to ____ ____, 5) the business belongs to ____ ____.

voluntarily agreed, search warrant, emergency situation, warrantless, special industry, hazardous industry

Generally, disability income policies do not cover losses arising from

war, military service, intentionally self-inflicted injuries, overseas residence, or injuries suffered while committing or attempting to commit a felony