Test 14

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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

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.

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.

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.

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.

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.

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.

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.

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.

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.

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 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.

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.

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 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).

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.

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.

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.

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.

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.

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.

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.

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.

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

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.

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.

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.

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

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

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

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.

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.

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

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.

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.

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.

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.

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.

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.

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.

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.

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

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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

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

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

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.

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.

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.

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.

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.

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

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.