exam fx study guide

Occasional visits by which of the following medical professionals will NOT be covered under LTC's home health care?

Attending physician

A dentist is off work for 4 months due to a disability. His dental assistant's salary would be covered by:

Business Overhead Insurance

Which of the following describes the relationship between a capital sum and a principal sum?

Capital sums are percentages of principal sums

Which of the following provisions gives an employee the right to exchange group insurance for an individual policy within a certain number of days from termination of employment?

Conversion provision

Which of the following is NOT true of a major-medical health insurance policy?

It is designed to pay on a first dollar of expense basis

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

Key employee disability insurance

All of the following are the most common variation in Long-Term Care policy EXCEPT 1. the number of days of confinement covered 2. the number of home health visits covered 3. the amount paid for nursing home care, and other contract provisions 4. Number of family dependents

Number of family dependents

Producer licenses will NOT be issued to business entities in which of the following cases

One partner's license was revoked in the previous 5 years

Which of the following best describes a presumptive disability?

One that is severe enough that the insured automatically qualifies for full disability benefits

Which of the following best describes presumptive disability?

One that is severe enough that the insured automatically qualifies for full disability benefits

All of the following would be considered rebating EXCEPT? -an agent offers tickets to a baseball game as an inducement to buy insurance -an agent misrepresents policy benefits to convince a policyowner to replace policies -an agent offers the use of his lake house to a client as an inducement to buy an insurance policy from him -an agent offers to share his commission with a policyholder

an agent misrepresents policy benefits to convince a policyowner to replace policies

All other factors being equal, which of the following premium modes would result in the lowest overall premium?

annual

What is the term used for an applicant's written request to an insurer for the company to issue a contract, based on the information provided?

application

A typical Accidental Death & Dismemberment policy covers all of the following losses EXCEPT

income - Accidental Death & Dismemberment policies cover loss of body parts or life only

In an optionally renewable policy, the insurer has which of the following options?

increase Premiums

An insurance company that is owned by the policyholders is called a

mutual company

The primary eligibility requirement for Medicaid benefits is based upon

need

With respect to the entire contract clause in health policies, who has the authority to make changes to an existing policy?

only an executive officer of the company

On an accidental Death and Dismemberment policy, the death benefit payable is known as the

principal sum

In the event of a loss, business overhead insurance will pay for:

rent

Whose responsibility is it to determine if all of the questions on an application have been answered?

the agent

Which of the following entities is considered the principal?

the insurer issuing a policy

Which of the following statements is incorrect regarding the definition of total disability?

total disability is the inability to preform partial duties of any occupation for which a person is suited by reason of education, training or experience

Which of the following is a statement that is guaranteed to be true, and if untrue, may breach an insurance contract?

warranty - an absolutely true statement upon which the validity of the insurance policy depends

An employee that becomes ineligible for group coverage because of termination of employment or change in status, must exercise extension of benefits under COBRA

within 60 days

A retail shop owner is insured under a business overhead expense policy that pays a maximum monthly benefit of $2,500. His actual monthly expenses are $3,000. If the owner becomes disabled, the monthly benefit payable under his policy will be

$2,500

Regarding long-term care coverage, as the elimination period gets shorter, the premium

gets highier

The Medical Information Bureau (MIB) was created to protect

Insurance companies from adverse selection by high risk persons

An insured is upset that her new health insurance policy was delivered to her by certified mail and not through her agent. Which of the following is true?

(there is nothing wrong with this form of policy delivery) Although it is advisable for an agent to personally deliver a policy, in order to answer any questions and insure delivery, it is legal for a policy to be effectively delivered without the presence of an agent. It is legal to deliver a policy through some types of mail

What is true regarding partial disability?

- The insured can still report to work and receive benefits. - Benefit payments are typically 50% of the total disability benefit. -An insured would qualify if he couldn't perform some of his normal job duties

All of the following are abilities of the New Jersey Life and Health Guaranty Association in the event of insurer insolvency

-Assumption of payment of insurer's contractual obligations -Issuing moratoriums on payment -Imposition of contract time

The following long-term care coverages would allow an insured to receive care at home

-Custodial care in insured's house -Respite care -Home Health care

All of the following statements about mutual insurance companies are true

-Dividends are a return of unused premium -Dividends allow policyholders to share in a mutual company's divisible surplus -Mutual companies issue policies referred to as participating

What is true about Medicaid?

-It provides medical assistance to low-income people who cannot otherwise provide for themselves. -It pays for hospital care, outpatient care, and laboratory and X-ray services. -The federal government provides about 56 cents for every Medicaid dollar spent.

In a replacement situation, all of the following must be considered:

-Limitations -Exclusions -Benefits

All of the following are minimum standards for Medicare supplements:

-They must have a 30 day free look -They must be guaranteed renewable -They may have a 6 month probationary period

All of the following health insurance disability benefits are income tax free

-employee paid group disability -key person disability benefits -personally owned individual disability insurance

what is true regarding the definition of total disability?

-total disability can be the inability to preform the duties of one's own occupation -disability is defined differently under certain disability income policies -total disability can be the inability to preform any occupation for which a person is reasonably suited by reason of education, training or experience

How many consecutive months of coverage (other than in an acute care unit of a hospital) must LTC insurance provide in this state?

12

If a person is disabled at age 27 and meets social security's definition of total disability, how many work credits must he/she have earned to receive benefits?

12 credits

To be eligible under HIPAA regulations, for how long should an individual converting to an individual health plan have been covered under the previous group plan?

18 months

How long is an open enrollment period of Medicare supplement policies?

6 months

A subscriber has been treated for a medical condition by his primary care physician for 3 months with experimental remedies without a significant health improvement before being referred to a specialist. Which of the following types of plans does the subscriber have?

A gatekeeper HMO plan to control the costs

Which is NOT a characteristic of group health insurance?

A policy is issued to each insured individual

The free-look provision allows for which of the following?

A right to return the policy for a full premium refund

Which of the following best defines the Probationary Period in group health policies?

A specified period of time that a person joining a group has to wait before becoming eligible for coverage

In insurance, an offer is usually made when

An applicant submits an application to the insurer

Under HIPAA, which of the following in INCORRECT regarding eligibility requirements for conversion an individual policy? 1. An individual who was previously covered by group health insurance for 6 months is eligible 2. An individual who has used up COBRA continuation coverage is eligible 3. An individual who doesn't qualify for Medicare may be eligible 4. The gap of coverage for eligibility is a period of 63 or less days

An individual who was previously covered by group health insurance for 6 months is eligible

All of the following statements concerning Accidental Death and Dismemberment coverage are correct EXCEPT

Death benefits are paid only if death occurs within 24 hours the death penalty will be paid if the accidental death occurs within 90 days of the accident

Which of the following terms describes making false statements about the financial condition of any insurer that are intended to injure any person engaged in business of insurance?

Defamation

In a disability policy, the probationary period refers to the time

During which illness-related disabilities are excluded from coverage

In a disability policy, the probationary period refers to the time:

During which illness-related disabilities are excluded from coverage

What is the goal of HMO?

Early detection through regular checkups

How many pints of blood will be paid for by medicare supplement core benefits?

First 3

What phase begins after a new policy is delivered?

Free look period

Which one of the following is an eligibility requirement for social security disability benefits?

Fully insured status

The Guarenteed Purchase Option is also referred to as the

Future increase option

Which of the following is available to employers of all sizes?

HRAs - Health reimbursement Accounts consist of funds set aside by employers to reimburse employees for qualified medical expenses; they are available to all sizes of employers.

When an insurer combines two periods of disability into one, the insured must have suffered a

Recurrent disability

When an employee covered under a health reimbursement account changes employers, The HRA:

Stays with the employer

A newly licensed producer wants to begin working immediately, but her license has not yet been issued. Which of the following is true? -The producer may transact insurance through another producer for a maximum period of 180 days -The producer may transact insurance, provided that she has official documentation that she passed her licensing exam -The producer may not transact insurance until her license has been issued -The producer may obtain a temporary work authority

The producer may obtain a temporary work authority

All of the following are minimum standards for Medicare supplements EXCEPT? -They may duplicate coverage provided by Medicare -They must have a 30 day free look -They must be guaranteed renewable -They may have a 6 month probationary period

They may duplicate coverage provided by Medicare

What is the purpose of coinsurance provisions?

To help the insurance company to prevent overutilization of the policy

What is the purpose of COBRA?

To provide continuation of coverage for terminated employees

In insurance policies, the insured is not legally bound to any particular action in the insurance contract, but the insurer is legally obligated to pay losses covered by the policy. What contract element does this describe?

Unilateral

Which of the following provides coverage on a first-dollar basis?

basic expense policy

what specific kind of insurance is often written in conjunction with hospital expense policies and includes surgeons' and anesthesiologists fees?

basic surgical expense insurance

An agency wants to obtain license statistics on one of its new producers. It requests a document that the Insurance Department can produce, which lists the producer's license status, lines of license that the producer can transact, and other information. This report is called a

certification of license status

An insurance contract requires that both the insured and the insurer meet certain conditions in order for the contract to be enforceable. What contract characteristics does this describe?

conditional

Which of the following is the term for the specific dollar amount that must be paid by an HMO member for a service?

copayment

Ray has an individual major medical policy that requires a coinsurance payment. Ray very rarely visits his physician and would prefer to pay the lowest premium possible. Which coinsurance arrangement would be best for Ray?

90/10

A small company offers group health insurance to its employees, but recently has decided to terminate the health insurance contract, leaving the workers without insurance. What can the employees do regarding their insurance?

Convert to an individual health policy

All of the following are abilities of the New Jersey Life and Health Guaranty Association in the event of insurer insolvency EXCEPT -Assumption of payment of insurer's contractual obligations -Guardianship of all physical properties, documents, and effects of insurer -Issuing moratoriums on payment -Imposition of contract time

Guardianship of all physical properties, documents, and effects of insurer

What are the 2 types of Flexible Spending Accounts?

Health Care Accounts and Dependent Care Accounts

Which is true regarding HMO coverage?

It is divided into geographic territories.

Which of the following time periods is the general enrollment period for Medicare Part B?

January 1 through March 31 each year

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 expense policy left off?

Pay a special deductible on his major medical insurance

Who determines the eligibility and contribution limits of an HRA?

The employer

A man is an attorney when he applies for a health policy. He decides to become a professional bungee jumper. He files a claim. What should happen?

The insurance company will pay the claim according to the benefits available if the correct premium had been paid

A 63-year-old man is planning to be employed until age 68. When will he be eligible for Medicare?

at age 65 regardless of his employment status

If an employee terminates her employment, which of the following provisions would allow her to continue health coverage under an individual policy, if requested within 31 days?

conversion

All of the following statements about mutual insurance companies are true EXCEPT? -Policy dividend issued by mutual companies are guaranteed and not taxable -Dividends are a return of unused premium -Dividends allow policyholders to share in a mutual company's divisible surplus -Mutual companies issue policies referred to as participating

Policy dividend issued by mutual companies are guaranteed and not taxable

Which of the following could most likely be issued a resident producer license? -Sam lives and works in a neighboring state -Julie recently moved from New Jersey to a neighboring state and will no longer work in her New Jersey office -Joe is actively licensed in his home state and applies for a nonresident license in New Jersey -Sally lives in a neighboring state but has an office in New Jersey

Sally lives in a neighboring state but has an office in New Jersey

If an insurer and insured have a dispute about whether a particular loss is covered under a policy, which authority will settle the dispute?

court system

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 would indicate that his policy was written with a 30-day

elimination period

All of the following health insurance disability benefits are income tax free EXCEPT -employee paid group disability -key person disability benefits -personally owned individual disability insurance -employer paid group disability

employer paid group disability