AIL TEST REVIEW

insurable interest can be best described by which of the following?

the applicant must experience a financial loss due to an accident or sickness that befalls the insured

A producer must complete a new set of continuing education hours every

3 years.

After moving, licensees must inform the Commissioner of a change of address within

30 days.

The Commissioner may examine an insurer as often as deemed necessary, but domestic insurers must be examined at least once every

5 years

In Iowa, Long-term Care policies may NOT contain a provision that denies a claim for losses based on a pre-existing condition that lasts for more than

6 months.

Which of the following would be considered an unfair claims settlement practice?

A claims adjuster advises the insured that if the claim goes to arbitration, the insured would probably receive less than what is currently being offered

Which is NOT a characteristic of group health insurance?

A policy is issued to each insured individual.

All of the following are correct about the required provisions of a health insurance policy EXCEPT

A reinstated policy provides immediate coverage for an illness

Which of the following definitions would make it easier to qualify for total disability benefits?

A.)

A brain surgeon has an accident and developed tremors in her right arm. Which disability income policy definition of total disability will cover her for all losses?

A.) "Own occupation" - more restrictive than other definitions. B.) "Any occupation" - less restrictive than other definitions C.) "Any occupation" - more restrictive than other definitions D.) "Own occupation" - less restrictive than other definitions D

All of the following statements concerning workers compensation are correct EXCEPT

A.) All states have workers compensation. B.) Benefits include medical, disability income, and rehabilitation coverage. C.) A worker receives benefits only if the work related accident was not his/her fault. D.) Workers compensation laws are established by each state. C

The transfer of an insured's right to seek damages from a negligent party to the insurer is found in which of the following clauses?

A.) Appraisal B.) Subrogation C.) Arbitration D.) Salvage B

Which of the following applies to partial disability benefits?

A.) Benefits are reduced once an insured is no longer under a doctor's care. B.) Payment is limited to a certain period of time. C.) An insured is entitled to a principle sum benefit for the partial loss of a limb. D.) Payment is based on termination of employment. B

Which of the following is NOT true regarding Workers Compensation?

A.) Benefits are regulated by the state government. B.) Benefits are offered by the insurer. C.) Benefits are not regulated by the federal government. D.) Benefits vary from state to state. B.) Benefits are offered by insurer

Which of the statements is correct concerning taxation go long-term care insurance?

A.) Benefits may be taxable as ordinary income B.) Premiums may be taxable as income C.) Premiums are not deductible in any case D.) Excessive benefits may be taxable D

Which type of insurance provides funds for a business organization to purchase the business interest of a dibbled partner?

A.) Corporate Disability B.) Disability buy-sell C.) Disability interest buy-out D.) Corporate transfer B

If an insured changes his payment plan from monthly to annually, what happens to the total premium?

A.) Doubles B.) Increases C.) Decreases D.) Stays the same C

Concerning group Medical and Dental insurance, which of the following statements is INCORRECT?

A.) Employee paid premiums may be deducted if certain conditions are met. B.) Employee benefits are tax deductible the year in which they were received. C.) Benefits received by the employee are free from federal income tax D) Premiums paid by the employer are deductible as a business expense. B

Which of the following is NOT a mandatory coverage in health insurance policies in Iowa?

Maternity benefits

To sign up for a Medicare prescription drug plan, individuals must first be enrolled in

Medicare Part A.

What type of care is Respite care?

Relief for a major care giver

What is the maximum amount of time that a person can have a temporary producer's permit?

180 days

An insured pays a monthly premium of $100 for her health insurance. What would be the duration of the grace period under her policy?

10 days

A woman's health insurance policy dictates which doctors she is allowed to see. Her health providers share an assumed risk for their patients and encourage preventive care. What best describes the health system that the women is using?

A.) Group health. B.) Managed care C.) Comprehensive health D.) Major medical B

Which of the following is INCORRECT concerning taxation of disability income benefits?

A.) If paid by the individual, the premiums are tax deductible. B.) If the employer paid the premiums, income benefits are taxable to the insured as ordinary income. C.) If the insured paid the premiums, any disability income benefits are tax free. D.) If the benefits are for a permanent loss, the benefits paid to the employee are not taxable. A

Workers Compensation benefits are regulated by which entity?

A.) Insurer B.) Federal government C.) State government D.) Employer C

Under workers compensation, which of the following is NOT included?

A.) Legal benefits B.) Medical and rehabilitation benefits C.) Income benefits D.) Death benefits A

Two individuals are in the same risk and age class; yet, they are charged different rates for their Insurance policies due to an insignificant factor. What is this called?

A.) Misrepresentation B.) Adverse selection C.) Discrimination D.) Law of large numbers C

Which of the following premium modes would result in the highest annual. cost for an insurance policy?

A.) Monthly B.) Quarterly C.) Semi-annual D.) Annual

The coverage provided by a disability income policy that does not pay for losses. occurring as the result of the insured's employment is called

A.) Nonoccupational B.) Unemployment coverage C.) Occupational Coverage D.) Worker's compensation A

Disability income policies can provide coverage for a loss of income when returning to work only part-time after recovering from total disability. What is the benefit that is based on the insured's loss of earnings after recovery from a disability?

A.) Partial disability. B.) Income replacement C.) Residual Income D.) Recurrent disability C

Which of the following describes taxation of individual disability income insurance premiums and benefits?

A.) Premiums are not tax deductible, but benefits are taxable. B.) Premiums are tax deductible, but benefits are not taxable. C.) Premiums are tax deductible and benefits are taxable. D.) Premiums are not tax deductible, but benefits are not taxable. D

Which of the following is CORRECT regarding Business Overhead Expense Insurance?

A.) Premiums are tax deductible. B.) Benefits received are received tax free. C.) Benefits received are taxable income to the employee D.) Premiums are not tax deductible. A

The legal process that gives the insurer, after payment is loss, the right to seek recovery from a third party that was responsible for the loss is known as

A.) Subrogation B.) Adverse Selection C.) Right of recession D.) Principle of indemnity. A

A policy owner. has a health insurance policy with his wife listed as the primary beneficiary. He would like to change the primary beneficiary to his sister. Which of the following is true?

A.) The policy owner will have to cancel this policy and apply for a new one with a new primary beneficiary. B.) Unless the policy designated the current beneficiary is irrevocable, the policy owner can make the change any time. C.) The policy owner can only change the primary beneficiary with the current beneficiary's consent. D.) The beneficiary may only be changed if a court deems the change acceptable. B

Which characteristic does NOT describe managed care?

A.) Unlimited access to providers. B.) High-quality care C.) Shared risk D.) Preventive Care A

Under what condition are group disability income benefits received by an employer NOT taxable as income?

A.) When the employer makes all the premium payments. B.) When the employee is 59 1/2 C.) When the benefits received are equal or less than the employee's percentage of the contribution D.) When the benefits received are equal or less than the employee's percentage of the contribution. D

Which of the following is the closest term to an authorized insurer?

Admitted

In reference to the standard Medicare Supplement benefits plans, what does the term standard mean?

All providers will have the same coverage options and conditions for each plan.

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

Any occupation - more restrictive than other definitions.

A temporary producer's license may be used for which of the following?

Completing the affairs of an insurance producer

An applicant for an individual health policy failed to complete the application properly. Before being able to complete the application and pay the initial premium, she is confined to a hospital. This will not be covered by insurance because she has not met the conditions specified in the

Consideration Clause.

What is an important feature of a dental expense insurance plan that is NOT typically found in a medical expense insurance plan?

Diagnostic and preventive care

An insured is hospitalized with a back injury. Upon checking his disability income policy, he learns that he will not be eligible for benefits for at least 30 days. This indicates that his policy is written with a 30-day

Elimination period.

Which of the following riders would NOT increase the premium for a policyowner?

Impairment rider

Which type of a hospital policy pays a fixed amount each day that the insured is in a hospital?

Indemnity

All of the following are differences between individual and group health insurance EXCEPT

Individual insurance does not require medical examinations, while group insurance does require medical examinations.

Which of the following entities can legally bind coverage?

Insurer

Which of the following best describes the MIB?

It is a nonprofit organization that maintains underwriting information on applicants for life and health insurance.

Which of the following is INCORRECT concerning Medicaid?

It is solely a federally administered program.

The Healthy and Well Kids in IA Program (HAWK-I) is funded by

Jointly by the State of Iowa and the Federal government.

Insurance that would pay for hiring a replacement for an important employee who becomes disabled is called

Key employee disability insurance.

A women's health insurance policy dictates which doctors she is allowed to see. Her health providers share an assumed risk for their patients and encourage preventive care. What best describes the health system that the women is using?

Managed care

On its advertisement, a company claims that it has funds in its possession that are, in fact, not available for the payment of losses or claims. The company is guilty of

Misrepresentation.

Can a group that is formed for the sole purpose of obtaining group insurance qualify for group coverage?

No, the group must be formed for a purpose other than obtaining group insurance.

Don has both a basic expense and a major medical policy. He is injured in an accident, which requires several major surgeries. This quickly exhausts Don's basic expense policy. What must Don do before his major medical policy can pick up where the basic expense policy left off?

Pay a special deductible on his major medical policy

Which of the following answers does NOT describe the principal goal of a Preferred Provider Organization?

Provide medical services only from physicians in the network

Todd has been informed that he has a hernia which requires repair. When Todd researches the cost, he learns that his insurance plan will cover 200 points worth of surgical expenses. Each point represents $10, which means that $2000 of his surgery will be covered by his insurance plan. What system is Todd's insurance company using?

Relative value

Which of the following special policies covers unusual risks that are NOT normally included under Accidental Death and Dismemberment coverage?

Special Risk Policy

Which of the following is true about the requirements regarding HIV exams?

The applicant must give prior informed written consent.

The Commissioner is conducting an examination of a domestic insurance company. Who is responsible for the cost of the examination?

The company being examined

Which of the following will vary the length of the grace period in health insurance policies?

The mode of the premium payment

Which of the following is NOT true regarding partial disability?

This is a form of insurance that covers part-time workers.

A medical expense policy that establishes the amount of benefit paid based upon the prevailing charges which fall within the standard range of fees normally charged for a specific procedure by a doctor of similar training and experience in that geographic area is known as

Usual, customary and reasonable.

Social Security Supplement (SIS) or Social Security Riders would provide for the payment of income benefits in each of the situations below EXCEPT

When the amount payable under Social Security is more than the amount payable under the rider.

Can an individual who belongs to a POS plan use an out-of-network physician?

Yes, and they may use any preferred physician, even if not part of the HMO

Under the mandatory uniform provision Notice of Claim, the first notice of injury or sickness covered under an accident and health policy must contain

a statement that is sufficiently clear to identify the insured and the nature of the claim.

To be eligible for tax credits under the ACA, individuals must have income that is what percent of the Federal Poverty Level?

between 100% and 400%