Ad banker health
If an insurer makes a payment for a claim but the insured is dissatisfied with it, the insured must wait _____ days after proof of loss before taking any legal action. A 20 B 60 C 45 D 90
The correct answer was B. According to the Legal Actions Provision (a Mandatory Uniform Provision), the insured must wait at least 60 days after proof of loss before legal action can be brought against the insurer.
The following statement is true concerning the income received from an individually owned disability income policy: A Premiums paid with after tax dollars, Income benefit taxable B Premiums are tax sheltered, Income benefit not taxable C Premiums paid with after tax dollars, Income benefit not taxable D Premiums are tax sheltered, Income benefit taxable
The correct answer was C. The premiums are not tax deductible and the benefits are not subject to federal income or FICA tax.
Which provision is a Mandatory Uniform Provision? A Change of Occupation B Illegal Occupation C Legal Actions D Misstatement of Age
The correct answer was C. The only response that is a Mandatory Uniform Provision is Legal Actions. All of the other responses are Optional Uniform Provisions.
An insurer offering Medicare Supplements to senior clients must: A Offer all of the standardized plans B Offer at least one of the other standardized plans in addition to Core Benefit Plan A C Select three standardized plans that it will offer D Offer Core Benefit Plan A if it sells any of the other plans
The correct answer was D. An insurer selling Medicare Supplement insurance must also make Plan A available if it offers any of the other plans.
Most group Disability Income contracts are offered on a(n): A. Contributory basis B. Occupational basis C. Noncontributory basis D. Nonoccupational basis
The correct answer was D. Workers' Compensation is designed to cover occupational or job-related accidents and disease, so the group plan would be designed to cover nonoccupational disabilities.
In a Medicare Supplement replacement sale, if the original policy has been in force for less than ______ months, the replacing insurer shall waive any time periods applicable to preexisting conditions to the extent that they have already been satisfied under the original policy. A. 3 B. 9 C. 6 D. 12
correct answer was C. In a Medicare Supplement replacement sale, if the original policy has been in force for less than 6 months, the replacing insurer shall waive any time periods applicable to preexisting conditions to the extent that they have already been satisfied under the original policy.
Which of the following statements is true with respect to maintaining a producer license? A Up to 24 excess credit hours of continuing education may be carried over to the next biennial reporting period B Licensees must inform the Director of a change of address within 90 days after the change C A producer who allows his/her license to lapse must wait 6 months to have another license issued D Controlled business is insurance written to cover the risks of the producer or his/her spouse, employer, or business
D
When constructing a major medical insurance policy, several criteria must be established, including: a. Policy deductible b. Maximum out-of-pocket amount c. Elimination period d. All of the above e. Both a and b only
E While major medical insurance policies typically have high deductibles, these must be established in the policy as well as the maximum amount of out-of-pocket costs that will be paid by the policy holder. The elimination period is not part of a major medical insurance policy.
All of the following are true regarding the Life and Health Insurance Guaranty Association, except: A It covers HMOs B The Association is not liable for more than $300,000 in the aggregate for any one life C It prevents financial loss to policyholders when an insurer becomes insolvent D Other member insurers are assessed to provide money for the claims of an insolvent insurer
The correct answer was A. The Life and Health Insurance Guaranty Association does not cover HMOs.
Which of the following is not a Mandatory Uniform Provision? A Physical Exam and Autopsy B Payment of Claims C Reinstatement D Conformity with State Statutes
The correct answer was D. Conformity with State Statutes is an Optional Uniform Provision.
The ___________ branch is responsible for interpreting and determining the constitutionality of the statutes. A Electoral B Legislative C Executive D Judicial
The correct answer was D. The judicial branch is responsible for interpreting and determining the constitutionality of the statutes.
The insured party has no part in determining the wording of an insurance contract. In this respect, insurance contracts are considered to be __________. a. Contracts of Adhesion b. Contracts of Forbearance c. Contracts by Regulation d. Contracts by Law
A If a contract contains unclear wording, then a court will interpret the language used against the writer of the contract - unless the wording that is used is required by law to be stated in a specific way.
The components of a long-term care insurance policy include all of the following EXCEPT: a. Elimination period b. Benefit amount c. Own occupation d. Benefit duration
C Own occupation is a type of benefit trigger that is found in a disability insurance policy, not in long-term care insurance policies. An elimination period in a long-term care insurance policy is the number of days that an insured must pay for their care after a qualifying claim, but before benefits begin to pay (such as with a deductible). The benefit duration in a long-term care policy states how long benefits will be paid to an insured, and the benefit amount may be stated either as a daily or monthly amount. (Some recent long-term care insurance plans also offer a lump-sum benefit payout option). 22.
A(n) __________ in an insurance contract is a statement by the issuing insurance company that sets out the essential element of insurance - to pay for losses covered in the policy. a. Beneficiary designation b. Premium amount c. Insuring clause d. Rider
C This promise of covering losses is in exchange for the premium that is paid by the insured and the compliance with the policy terms.
Which of the following is not a form of health insurance? I. Dental insurance II. Vision insurance III. Disability insurance IV. Long-term care insurance a. I only b. II only c. All of the above d. None of the above
D All of the above are types of health insurance policies.
A business client is looking for ways to decrease its monthly premiums. To get down to the premium level sought after by the company, the agent realizes they have to go to a high deductible health plan. As part of your advice to the business, what should you include in your discussion? a. HMO b. PPO c. POS d. HSA
D Health savings accounts (HAS) are used with high deductible health insurance policies. With an HSA, money that is saved on the premium may be put into the account and then funds are used for certain medical fees. Because the funds in the HSA account can be used for medical services, participants often use them for un-covered procedures such as chiropractic visits or other health-related services that are not covered by their insurance policy.
An employer group health insurance sponsor does all of the following, except: A. Issue the policy B. Pays the premium C. Provide underwriting information D. Apply for coverage
Nice try! The correct answer was A. The group sponsor applies for coverage, provides information for underwriting, maintains the policy, and makes premium payments. Only insurers issue policies. Relevant Content: Group Health Insurance
PPO plans pay providers based on a: A Prepaid basis determined by a primary care physician B Discounted fee for service negotiated in advance C Flat benefit determined by geographical region D Reimbursement basis
Nice try! The correct answer was B. The organizers and the providers agree upon medical service charges that are generally less than the providers would charge patients not associated with the PPO. Unlike most HMO arrangements the providers are paid on a fee-for-service basis rather than receiving a flat monthly amount.
Optional Uniform Provisions are included in the contract at the _______ option. A Beneficiary's B Commissioner's C Insurer's D Insured's
Sorry! The correct answer was C. The Optional Uniform Provisions are included at the insurer's option. However, if used, they must conform to that state's insurance code.
A Medicare Supplement may deny coverage for preexisting conditions for no more than how many months after the effective date of coverage? A. 6 B. 12 C. 0 D. 24
The correct answer was A. A Medicare Supplement may not deny coverage for preexisting conditions for more than 6 months after the effective date of coverage.
Which of the following is NOT an example of a prohibited practice? A Backdating B Defamation C Rebating D Misrepresentation
The correct answer was A. Backdating the age of an insured by no more than 6 months to save age is not an example of a prohibited practice.
Which type of policy determines benefits based on a relative value scale? A Basic surgical expense B Hospital indemnity C Dental expense D Major medical
The correct answer was A. Basic surgical expense plans determine benefits based on either a surgical schedule or a relative value scale, which assigns a value to a procedure with the highest level of difficulty and benefits for all other covered procedures are based on a percentage.
When, Peter, an independent contractor, purchased his own personal medical and dental insurance, he discovered that: A Self-employed persons may deduct up to 100% of the cost of health insurance for themselves and their dependents B Self-employed persons may deduct up to 100% of the cost of health insurance for themselves and their dependents over the 10% of AGI threshold C Self-employed persons may deduct up to 100% of the cost of health insurance, including long-term care insurance, for themselves and their dependents D Self-employed persons may deduct up to 100% of the cost of their medical insurance for themselves and their dependents, but not dental insurance
The correct answer was A. These costs are deductible without regard to the __ of AGI threshold, but this does not apply to long-term care insurance.
Which statement is false? A Mandatory Second Surgical Opinion is when the physician submits claim information prior to treatment, to determine in advance if the procedure is covered B Changes in an Accident and Health contract may be completed only with the written consent of the insurer C Fraudulent misstatements made in the application can be used to deny a claim at any time D The Guaranteed Insurability Rider may also be referred to as the Future Insurability Option
The correct answer was A. This describes Precertification, not Mandatory Second Surgical Opinion.
Which of the following statements is correct regarding cease and desist orders? A A person violating a cease and desist order relating to an unfair trade practice may be fined up to $5,000 per violation B A person violating a cease and desist order relating to an unfair trade practice may be fined up to $1,000 per violation C A person violating a cease and desist order must pay a fine of $100 per day for up to $1,000 D When a cease and desist order is served, the Director must issue notice of a hearing within 10 to 15 days from the notification date
The correct answer was B. A person violating a cease and desist order relating to an unfair trade practice may be fined up to $1,000 per violation. When a cease and desist order is served, the Director must issue notice of hearing within 20 to 30 days from the notification date. A person violating a cease and desist order must pay a fine of $100 per day, up to $5,000.
Which of the following is NOT correct regarding required time periods? A An insurer must reply to all pertinent communications within 15 days B An insurer must provide any necessary claim forms within 30 days C An insurer must pay a claim within 30 days after determining that the loss is covered D An insurer must give the claimant a reasonable written explanation of the settlement or denial of a claim within 30 days after determining liability
The correct answer was B. An insurer must provide any necessary claim forms within 15 days.
Which statement would be considered inaccurate regarding the underwriting of a group plan? A The corporate home office of the group normally is the group's address B Contributory plans require 100% employee participation C The cost of a group policy is determined by the type, size, and average age of the group and claims experience with previous insurers D The insurer can require a minimum percentage of the group to be enrolled to guard against adverse selection
The correct answer was B. Contributory plans require both the employee and the employer to contribute to the premium, and 75% participation is required.
The Illinois Guaranty Association will pay up to all of the following limits of liability, except: A $300,000 in life insurance death benefits B $350,000 in the present value of annuity benefits C $300,000 for disability insurance and long-term care insurance benefits D $500,000 for basic hospital, medical or surgical insurance benefits, and major medical insurance benefits
The correct answer was B. The Association may not be held liable for more than the insolvent insurer's contractual obligations, up to $250,000 in the present value of annuity benefits
All states have adopted the Uniform Individual Accident and Sickness Policy Provision Law. If an insurer changes any of these provisions, they must make sure it does not: A Weaken the application wording B Alter the minimum requirements of any provision C Conform to NAIC requirements D Cancel the law of large numbers
The correct answer was B. The insurer must assure that any variation must be at least as favorable as the original wording, and no mandatory provision may be deleted if applicable to the coverage.
With respect to a producer's fiduciary capacity, which of the following is true? A The payment of premiums to the producer by the insured is not the same as giving the money directly to the insurer B For knowingly misappropriating funds, the charge is a Class A misdemeanor for the first offense, and a felony for subsequent offenses, if $150 or less per offense C The producer is responsible to the insured for any return of premium D A producer is prohibited from adding a late payment charge to overdue balances on open accounts
The correct answer was B. The payment of premiums to the agent by the insured is the same as giving the money directly to the insurer. The insurer is responsible to the insured for any return of premium. A producer may add a late payment charge of up to 1.5% per month to overdue balances on open accounts.
Which provision states that the insurance company must pay claims immediately? A Payment of Claims B Time of Payment of Claims C Relation of Earnings to Insurance D Legal Actions
The correct answer was B. Time of Payment of Claims (a Mandatory Uniform Provision) stipulates that claims are to be paid immediately upon written proof of loss.
B has a double indemnity clause on a $120,000 Accidental Death and Dismemberment policy that will pay in the case of death due to a commercial plane crash. If B dies in a plane crash while flying on a commercial flight to a business meeting, the total amount the policy will pay is: A $0 B $120,000 C $240,000 D $60,000
The correct answer was C. A double indemnity clause will pay double the face amount of the policy in the case of accidental death, such as a commercial plane crash. The total benefit is $240,000.
Which of the following statements is false concerning HMO grievance procedures? A An HMO must keep a record of each filed grievance for at least 3 years after its resolution B An HMO must have a complaint resolution procedure C An HMO must submit its grievance process to the Director upon request D An HMO must respond to a complaint received by the Department within 21 days after receiving notice
The correct answer was C. An HMO must submit its grievance process to the Director for pre-approval.
Which of the following is not a prohibited provision regarding Long-Term Care? A Establishment of a new waiting period when replacing coverage within the same company, except for a benefit increase that the insured voluntarily selects B Termination on the ground of the insured's age or deterioration in health C Condition eligibility for recuperative benefits on prior institutionalization D Providing significantly more coverage for skilled care than coverage for lower levels of care
The correct answer was C. An insurer may not condition eligibility for any LTC benefits other than waiver of premium, post-confinement, post-acute care, or recuperative benefits on prior institutionalization.
Insurers include provisions in contracts to help reduce unnecessary claims and the overpayment of claims. Which of the following is not one of those provisions? A Mandatory Second Surgical Option B Emergency Services C Consideration Clause D Concurrent Review
The correct answer was C. The other choices are Managed Care Provisions designed to contain costs. The Consideration Clause stipulates that the payment of the first premium and the statements in the application are the applicant's consideration, and the insurer's consideration is the promise to pay within the contract terms.
Which of the following is not a Mandatory Uniform Provision of an Accident and Health policy? A Proof of Loss B Payment of Claims C Waiver of Premium D Time Limit on Certain Defenses
The correct answer was C. The other choices are Mandatory Uniform Provisions. Waiver of Premium is a provision that may or may not be included.
A long-term care policy is prohibited from: A Requiring a prior institutional stay of 30 days as a condition for receiving non-institutional benefits B Providing the same coverage for skilled nursing facility care as for lower levels of care C Excluding coverage for up to 6 months for a pre-existing condition for which medical advice or treatment was recommended by or received within 6 months before the effective date of coverage D Terminating due to the insured's age or deterioration of the insured's health
The correct answer was D. A long-term care policy is prohibited from providing more coverage for skilled nursing facility care than for lower levels of care; excluding coverage for more than 6 months for a pre-existing condition for which medical advice or treatment was recommended by or received within 6 months before the effective date of coverage; or requiring a prior institutional stay of more than 30 days as a condition for receiving non-institutional benefits.
How many days may a producer hold a premium before depositing it into a premium fund trust account? A 5 B 1 C 10 D 15
The correct answer was D. A producer must maintain a premium fund trust account if he/she holds any premium for 15 or more days before remitting it, deposits any premiums into a financial institution account, or uses the premiums.
Based upon Optional Uniform Provisions, in which of the following circumstances would an insurer have the right to deny disability income benefits entirely and disregard a claim as void? A At the time of disability, the insured's earnings are less than the policy benefits B A claim incurred while working in a more hazardous occupation than listed on the application C Misstatement of age (by 2 years) on the application D A broken leg sustained while committing a robbery
The correct answer was D. The Change of Occupation, Misstatement of Age, and Relation of Earnings to Insurance are all optional provisions that could allow an insurer to reduce benefits. The Illegal Occupations and Actions provision could allow an insurer to deny benefits entirely.
Notice of claim is required within _____ days of loss. A 10 B 90 C 15 D 20
The correct answer was D. Under the Notice of Claim Provision (a Mandatory Uniform Provision), the insured is required to notify the insurer, in writing, within 20 days of any loss.
Which of the following statements is true with respect to maintaining a producer license? A Up to 24 excess credit hours of continuing education may be carried over to the next biennial reporting period B Licensees must inform the Director of a change of address within 90 days after the change C A producer who allows his/her license to lapse must wait 6 months to have another license issued D Controlled business is insurance written to cover the risks of the producer or his/her spouse, employer, or business
The correct answer was D. Up to 15 excess credit hours of continuing education may be carried over to the next biennial reporting period. A producer who allows his/her license to lapse may be issued a license, without exam, by paying twice the renewal fee within 12 months after the original due date. Licensees must inform the Director of a change of address within 30 days after the change.
