Accident and Health Practice Questions (July 5th, 2021. 74% attempt score)

A policyholder may return (for a full premium refund) any individual disability policy within how many days of receiving it? a)10 b)15 c)30 d)90

A) 10 A policyholder may return any individual disability policy within 10 days after receiving it. This10-day period is known as the free look period. If the policyholder returns the policy within the 10-day period, the insurance contract is invalid and all payments made under the contract must be refunded.

What type of group rating uses the actual experience of the group as a factor in developing the rates to be charged? a)Individual rating b)Experience rating c)District rating d)Community rating

B) Experience rating The actual loss experience of the group, in part, determines the rates charged by the insurer.

Which of the following is NOT among the goals of a Medicare supplement application? a)Presuming the applicant is eligible for Medicaid, based on the nature of the policy b)Determining whether or not an applicant has an existing Medicare supplement policy c)Determining whether or not the policy will replace another accident and health policy d)Advising applicants regarding the availability of counseling services

a) Presuming the applicant is eligible for Medicaid, based on the nature of the policy Medicare supplement policies must ask the applicant if they are eligible for Medicaid.

Benefit periods for individual short-term disability policies will usually continue from a)6 months to 2 years. b)2 years to age 65. c)1 week to 4 weeks. d)3 months to 3 years.

a)6 months to 2 years. Short-term disability is defined as a disability lasting not more than 2 years.

All of the following are true regarding long-term care (LTC) policies sold in Wisconsin EXCEPT a)Insurance companies may raise LTC rates only if they are raised for all individual who has the same policy. b)All long-term care policies must be guaranteed renewable for life. c)Insurers and intermediaries are required to provide an outline of coverage and the Guide to Long-Term Care to all prospective purchasers. d)An insurance company can only raise LTC rates if a person has become sick.

d)An insurance company can only raise LTC rates if a person has become sick. Insurers are only allowed to raise LTC rates by class, meaning all individuals covered by the same policy will all be charged a higher rate. Just because a person has become sick, an insurer may not change their individual policy rates.

An intermediary must maintain records for how long? a)3 years b)5 years c)10 years d)Permanently

a)3 years Each intermediary must maintain records for a 3 year period.

Which of the following is true regarding a term health policy? a)It is nonrenewable. b)It is conditionally renewable. c)It is guaranteed renewable. d)It is noncancellable.

a)It is nonrenewable. In term health policies, the owner has no rights of renewal.

A license applicant's trustworthiness and competence will be determined by all of the following EXCEPT a)Personal testimonies from previous co-workers and managers. b)Misrepresentations in the application process. c)Criminal record. d)Regulatory actions.

a)Personal testimonies from previous co-workers and managers. A determination of an applicant's trustworthiness and competence will be based on several factors, including criminal record and convictions; accuracy of information given on the application; regulatory actions; violation of orders of any state insurance Commissioner; and misrepresentation or fraud in the application process or insurance practice.

An insured has Medigap insurance and later becomes eligible for Medicaid. If the person elects to receive Medicaid coverage, for how many years can Medigap benefits and premiums be suspended? a)5 b)2 c)3 d)4

b) 2 If a person has Medigap insurance and later become eligible for Medicaid, it can be requested that benefits and premiums be suspended for up to two years while Medicaid coverage is in force.

When benefits are paid directly to the insured under a health insurance policy, the policy provides benefits on what type of basis?a)Scheduled b)Reimbursement c)Service d)Limited

b) Reimbursement The insured is responsible to pay the provider, and the policy reimburses the insured for covered expenses.

Under HIPAA, which of the following is INCORRECT regarding eligibility requirements for conversion to an individual policy? a)The gap of coverage for eligibility is a period of 63 or fewer days. b)An individual who was previously covered by group health insurance for 6 months is eligible. c)An individual who has used up COBRA continuation coverage is eligible. d)An individual who doesn't qualify for Medicare may be eligible.

b)An individual who was previously covered by group health insurance for 6 months is eligible. All of these eligibility requirements are correct, except an individual who was previously covered for at least 6 months. HIPAA requires that the individual have a previous continuous creditable health coverage for at least 18 months.

Disability income coverage specifies that the policy covers the insured if he is unable to perform any job for which he is qualified. In this case, total disability is defined as a)Own occupation - less restrictive than other definitions. b)Any occupation - more restrictive than other definitions. c)Any occupation - less restrictive than other definitions. d)Own occupation - more restrictive than other definitions.

b)Any occupation - more restrictive than other definitions. If total disability is defined as any occupation, it means the coverage will apply only if the insured cannot find any means of income whatsoever. This is more strict than own occupation, where a person merely has to prove that they cannot perform the job for which they were previously trained.

a)The benefit can be up to 66 and 2/3% of one's monthly income. b)The benefit can be up to 50% of one's yearly income. c)The elimination period is the same as in the short-term plan's benefit period. d)The benefit period may be to age 65.

b)The benefit can be up to 50% of one's yearly income. The maximum benefit is based upon monthly income.

All of the following are requirements of eligibility for Social Security disability income benefits EXCEPT a)Fully insured status. b)Waiting period of 5 months. c)Being age 65. d)Inability to perform any gainful work.

c)Being age 65. The term fully insured refers to someone who has earned 40 quarters of coverage (the equivalent of 10 years of work), and is therefore entitled to receive Social Security retirement, Medicare, and survivor benefits. The waiting, or elimination period for Social Security disability benefits is 5 months.

Which of the following is NOT a goal of risk retention? a)To increase control of claim reserving and claims settlements b)To fund losses that cannot be insured c)To minimize the insured's level of liability in the event of loss d)To reduce expenses and improve cash flow

c)To minimize the insured's level of liability in the event of loss Retention usually results from three basic desires of the insured: to reduce expenses and improve cash flow, to increase control of claim reserving and claims settlements, and to fund losses that cannot be insured.

Which of the following is NOT the purpose of HIPAA? a)To prohibit discrimination against employees based on their health status b)To limit exclusions for pre-existing conditions c)To provide immediate coverage to new employees who had been previously covered for 18 months d)To guarantee the right to buy individual policies to eligible individuals

c)To provide immediate coverage to new employees who had been previously covered for 18 months HIPAA does not prohibit employers or providers from establishing waiting periods or pre-existing conditions exclusions, in which case the coverage to new employees would not be immediate.

A long-term care insurance shopper's guide must be provided in the format developed by which of the following? a)Office of Insurance Regulation b)Director c)Medical Information Bureau d)NAIC

d) naic A long-term care insurance shopper's 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.

A long-term care policyholder requests that his policy be cancelled. Which of the following is true? a)The policyholder will be assessed a cancellation penalty. b)The policy will be cancelled, and the policyholder will not be charged any additional fees. No premium refunds are issued c)Long-term care policies are unique in that assessment of cancellation fees/refunds is left to the discretion of the insurance company. d)A prorated premium refund will be issued.

d)A prorated premium refund will be issued. Insurers are required to provide a prorated premium refund if the policyholder requests cancellation. Insurers must also provide a prorated premium refund to the insured's estate if the insured dies during the term of the policy.

Other than for a qualified life event, when can a change be made in benefits for a Flexible Spending Account (FSA)? a)At any time as necessary b)Within 3 months of the cause of the change c)No changes can be made once the policy is issued d)During the open enrollment period

d)During the open enrollment period FSA benefits may be changed during open enrollment, unless the circumstances are deemed a Qualified Life Event.

What is the benefit of experience rating? a)It helps employers with high claims experience to get group coverage. b)It helps employees with low claims experience to become exempt from group premiums. c)It allows employers with high claims experience to obtain insurance. d)It allows employers with low claims experience to get lower premiums.

d)It allows employers with low claims experience to get lower premiums. Group health insurance is usually subject to experience rating where the premiums are determined by the experience of this particular group as a whole. Experience rating helps employers with low claims experience because they get lower premiums.