Health Exam

What is the elimination period for Social Security disability benefits? a)6 months b)12 months c)3 months d)5 months

d)5 months The elimination period for Social Security disability benefits is 5 months.

A producer or agent who negligently replaces health insurance for a client creates potential liability for: A.Breach of good faith B.Errors and omissions C.Personal injury D.The former insurer

B.Errors and omissions

Which type of health insurance should be purchased by a person who wants coverage for hospital bills in the event of accidental injury? A.Disability income B.Medical expense C.Accidental dismemberment D.Workers compensation

B.Medical expense

Under which disability income policy provision might an insured be considered totally disabled, even if working, following the loss of sight in both eyes? A.Recurrent disability B.Residual disability C.Presumptive total disability D.Regular occupation total disability

C.Presumptive total disability

An insured currently has group coverage issued by different health insurance companies. How will payment for medical expenses typically be handled when both group policies provide coverage?

B.Payment will be made in accordance with the policies' coordination of benefits provisions.

Which of the following is NOT required to be stated in the outline of coverage provided with a long-term care policy? a)Basic information about supplementary policies b)The policy number c)The right to return the policy for a refund d)Basic information about the insurance company

a)Basic information about supplementary policies The outline of coverage must follow the standard format included in the insurance regulations. It must provide information about the insurance company, the policy number, important features of the policy, and explain the right to return the policy for a refund

Which of the following would be a typical maximum benefit offered by major medical plans? a)$1 million b)$10 million c)$50,000 d)$500,000

a)$1 million Major medical plans have high maximum benefits such as $1,000,000 or $2,000,000. Maximum benefits are usually lifetime maximums.

What is the best way to change an application? a)Erase the previous answer and replace it with the new answer b)White-out the previous answer c)Draw a line through the incorrect answer and insert the correct one. d)Start over with a fresh application

d)Start over with a fresh application Most companies require that the app be filled out in ink. The agent might make a mistake when filling out the app or the applicant might answer a question incorrectly and want to change it. There are two ways to correct an application. The first and best is to simply start over with a fresh application. If that is not practical, draw a line through the incorrect answer and insert the correct one. The applicant must initial the correct answer.

Employer-sponsored group long-term care insurance generally has all of the following characteristics EXCEPT:

A.Noncancelable

To minimize adverse selection, a group dental contract may include any of the following provisions for employees who enroll after the date they were initially eligible to participate EXCEPT: A.Reduction of benefits by 50% for one year B.Reduction of maximum benefits for one year C.Exclusion of certain benefits for a certain period D.Requirement of a complete physical examination

D.Requirement of a complete physical examination

Ambulatory services under case management provisions try to monitor:

The cost-effectiveness of outpatient services

In a noncontributory health insurance plan, what percentage of eligible employees must participate in the plan before the plan can become effective? a)100% b)75% c)50% d)25%

a)100% One hundred percent of eligible employees must participate in a non-contributory health insurance plan for the plan to become effective.

An agent offers his client free tickets to a sporting event in exchange for the purchase of an insurance policy. The agent is guilty of a)Rebating. b)Coercion. c)Twisting. d)Controlled business.

a)Rebating. When producers give or promise anything of value that is not specified in the policy, they are guilty of rebating.

The fine for impersonation of a licensed producer is a)At least $500, but no more than $1,000. b)No more than $50. c)At least $10, but no more than $100. d)At least $100, but no more than $500.

Impersonation of a licensed producer is punishable by a fine of $10 to $100.

An insured was involved in an accident and could not perform her current job for 3 years. If the insured could reasonably perform another job utilizing similar skills after 1 month, for how long would she be receiving benefits under an "own occupation" disability plan? a)2 years b)1 month c)She would not receive any benefits. d)3 years

a)2 years Under an Own Occupation plan, if the insured cannot perform his/her current job for a period of up to two years, disability benefits will be issued, even if the insured would be capable of performing a similar job during that two-year period. After that, if the insured is capable of performing another job utilizing similar skills, benefits will not be paid.

Employer health plans must provide primary coverage for individuals with end-stage renal disease before Medicare becomes primary for how many months? a)12 months b)24 months c)30 months d)36 months

c)30 months The Omnibus Budget Reconciliation Act of 1990 as amended by the Balanced Budget Act of 1997 requires the employer health plan to provide primary coverage for 30 months for individuals with end-stage renal (kidney) disease before Medicare becomes primary.

Long-term care policies may require all of the following before paying benefits EXCEPT: A.A prior hospitalization B.A physician's certification of need C.A functional assessment D.An elimination period

A.A prior hospitalization

How does the Medicare Supplement at-home recovery services benefit differ from the Medicare home health care benefit? A.The Medicare Supplement benefit covers assistance with daily living B.The Medicare Supplement benefit covers durable medical equipment C.The Medicare Supplement benefit is unlimited D.The Medicare Supplement benefit covers only skilled care

A.The Medicare Supplement benefit covers assistance with daily living

In long-term care insurance, a person who is unable to independently perform the activities essential to daily living because of physical or cognitive impairment is said to be:

C.Functionally impaired

If an individual filed a claim under two individual health insurance policies issued by the same insurer, the insurer might return: A.50% of the lower of the two premiums, but pay all benefits under both policies B.Any annual premium amount in excess of $1,000 combined for both policies C.The premium amount paid for coverage, which would cause combined benefits to exceed a maximum benefit amount D.All premiums and cancel all existing policies purchased by the insured

C.The premium amount paid for coverage, which would cause combined benefits to exceed a maximum benefit amount

Periodontics includes all of the following EXCEPT: A.Bone surgery B.Guided tissue regeneration C.Gum disease treatment D.Dentures

D.Dentures

When several members of a family insured under the same major medical policy are involved in an accident, the coverage usually requires that: A.The coinsurance payments be increased. B.All family members satisfy their individual deductibles. C.Only the amount needed to satisfy the family deductible may be deducted from benefit payments. D.Only one individual deductible needs to be satisfied for all injuries the family received in the accident.

D.Only one individual deductible needs to be satisfied for all injuries the family received in the accident.

When a group health insurance contract covers employees in more than one state, the criteria for determining in which state the contract may be delivered includes any of the following EXCEPT: A.Where the policyholder is incorporated B.Where the policyholder's principal office is located C.Where the majority of insured individuals are employed D.Where the insurance company is incorporated

D.Where the insurance company is incorporated

What is the shortest possible elimination period for group short-term disability benefits provided by an employer? a)0 days b)30 days c)60 days d)90 days

a)0 days If an employer provides short-term disability benefits for its employees, the elimination period can be nonexistent, and the benefits can last as long as two years. The benefit typically spans 70-80% of the insured's income.

o 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? a)18 months b)5 years c)12 months d)63 days

a)18 months Under HIPAA regulations, to be eligible to convert health insurance coverage from a group plan to an individual policy, the insured must have 18 months of continuous creditable health coverage.

Within how many days of requesting an investigative consumer report must an insurer notify the consumer in writing that the report will be obtained? a)3 days b)5 days c)10 days d)14 days

a)3 days Investigative consumer reports cannot be made unless the consumer is advised in writing about the report within 3 days of the date the report was requested.

An insured misstated her age on an application for an individual health insurance policy. The insurance company found the mistake after the contestable period had expired. The insurance company will take which of the following actions regarding any claim that has been issued? a)Adjust the claim benefit to reflect the insured's true age b)Deny any claims and cancel the policy c)Deny paying a claim based on misrepresentation d)Pay the full amount of a claim because the contestable period has ended

a)Adjust the claim benefit to reflect the insured's true age The Misstatement of Age provision says that if a client has misstated her age, whether intentional or unintentional, they will adjust the benefit being paid. It doesn't matter when the mistake was found.

If an insurance company wishes to order a consumer report on an applicant to assist in the underwriting process, and if a notice of insurance information practices has been provided, the report may contain all of the following information EXCEPT the applicant's a)Ancestry. b)Credit history. c)Habits. d)Prior insurance.

a)Ancestry. The Fair Credit Reporting Act regulates what information may be collected and how the information may be used. Consumer Reports include written and/or oral information regarding a consumer's credit, character, reputation, and habits collected by a reporting agency from employment records, credit reports, and other public sources. Ancestry is not a relevant factor assessed in these reports.

Which of the following hospice expenses would NOT be covered in a cost-containment setting? a)Antibiotics b)Tylenol c)Morphine d)Special hospital bed

a)Antibiotics In a cost-containment setting, daily needs and pain relief are provided for hospice patients, but curative measures are not.

At what point must an Outline of Coverage be delivered? a)At the time of application or upon delivery of the policy b)At any point up to 30 days after policy delivery c)At the time of application only d)Upon delivery of the policy only

a)At the time of application or upon delivery of the policy An Outline of Coverage must be delivered at the time of application or upon delivery of the policy.

A small hardware store owner is involved in a car accident that renders him totally disabled for half a year. Which type of insurance would help him pay for expenses of the company during the time of his disability? a)Business overhead expense policy b)Key person insurance c)Disability buy-sell agreement d)Business disability policy

a)Business overhead expense policy Business Overhead Expense (BOE) insurance is sold to small business owners for the purpose of reimbursing the policyholder for various business overhead expenses during a period of total disability. Expenses such as rent, utilities, and employee salaries are covered.

The provision in a health insurance policy that ensures that the insurer cannot refer to any document that is not contained in the contract is the a)Entire contract clause. b)Time limit on certain defenses clause. c)Incontestability clause. d)Legal action against us clause.

a)Entire contract clause. Entire contract is a mandatory provision that is required by law.

How many pints of blood will be paid for by Medicare Supplement core benefits? a)First 3 b)None; Medicare pays for it all c)Everything after first 3 d)1 pint

a)First 3 Medicare supplemental policies cover costs of deductibles and coinsurance for Parts A and B. Since Medicare will not pay for the first 3 pints of blood, a Medicare Supplement plan will cover that. This is considered to be a core benefit.

In health insurance, if a doctor charges $50 more than what the insurance company considers usual, customary and reasonable, the extra cost a)Is not covered. b)Must be covered by the insurer. c)Counts toward deductible. d)Counts toward coinsurance.

a)Is not covered. An insurance company will pay the usual, reasonable, or customary amount for a given procedure based upon the average charge for that procedure.

If an employer provides health insurance for its employees, which of the following is true regarding pregnancy coverage? a)It must be covered to the same extent as any other medical condition. b)It can be excluded. c)It must be considered a disability. d)It can be grounds for requiring the employee to take leave.

a)It must be covered to the same extent as any other medical condition. The Pregnancy Discrimination Act states that pregnancy, childbirth and any related medical conditions must be covered to the same extent as any other medical condition under the policy.

The continuing education requirement for licensees, during the initial licensing period, is a a)Minimum of 60 hours of instruction. b)Minimum of 45 hours of instruction. c)Minimum of 45 hours of instruction to include 6 hours of ethics training. d)Minimum of 30 hours of instruction to include 4 hours of ethics training.

a)Minimum of 60 hours of instruction. During the first 36-month period following the date of original issue of the license, the person must satisfactorily complete courses or programs of instruction or attend seminars equivalent to a minimum of 60 hours of instruction.

Under the Fair Credit Reporting Act, if the consumer challenges the accuracy of the information contained in his or her report, the reporting agency must a)Respond to the consumer's complaint. b)Defend the report if the agency feels it is accurate. c)Change the report. d)Send an actual certified copy of the entire report to the consumer.

a)Respond to the consumer's complaint. The consumer has the right to request the information on the report, the reasons for turn down and any adverse underwriting decisions. The reporting agency is required to respond to the consumer's complaint, and, if necessary, to reinvestigate the report.

An individual purchased a Medicare supplement policy in March and decided to replace it 2 months later. His history of coronary artery disease is considered a pre-existing condition. Which of the following is true? a)The pre-existing condition waiting period fulfilled in the old policy will be transferred to the new policy, the new one picking up where the old one left off. b)Coronary artery disease coverage will be permanently excluded from the new policy. c)In replacement, pre-existing conditions must be waived, so sickness relating to coronary artery disease will be covered upon the policy's effective date. d)Because this is a new policy, the pre-existing condition waiting period starts over.

a)The pre-existing condition waiting period fulfilled in the old policy will be transferred to the new policy, the new one picking up where the old one left off. When an insured replaces one Medicare supplement policy with another, the pre-existing conditions waiting period does not start over. All types of waiting and elimination periods are carried over, not restarted, since that time was served with the original policy.

All of the following statements about Medicare supplement insurance policies are correct EXCEPT a)They cover the cost of extended nursing home care. b)They cover Medicare deductibles and copayments. c)They supplement Medicare benefits. d)They are issued by private insurers.

a)They cover the cost of extended nursing home care. Medicare supplement policies (Medigap) do not cover the cost of extended nursing home care. Medigap plans are designed to fill the gap in coverage attributable to Medicare's deductibles, copayment requirements, and benefit periods. These plans are issued by private insurance companies.

An insured is covered under 2 group health plans - under his own and his spouse's. He had suffered a loss of $2,000. After the insured paid the total of $500 in deductibles and coinsurance, the primary insurer covered $1,500 of medical expenses. What amount, if any, would be paid by the secondary insurer? a)$0 b)$500 c)$1,000 d)$2,000

b)$500 Once the primary insurer has paid the full available benefit, the secondary insurer will cover what the first company will not pay, such as deductibles and coinsurance. The insured will, then, be reimbursed for out-of-pocket costs.

The Medicare supplement renewal commissions paid in the third year must be as high as the commission of which year? a)1st b)2nd c)3rd d)4th

b)2nd The commission provided in renewal years must be the same as the commission in the second year and must be provided for no fewer than 5 renewal years.

An insurer used fraudulent representations to procure the payment of premiums. What sort of punishment does she face? a)A fine of up to $1,000 and imprisonment for up to 6 months b)A fine of between $100 and $1,000 or imprisonment for up to 1 year c)A fine of between $100 and $1,000 or imprisonment for up to 6 months d)A fine of up to $1,000 and imprisonment for up to 2 years

b)A fine of between $100 and $1,000 or imprisonment for up to 1 year In this case, the insurer faces a fine of between $100 and $1,000 or imprisonment for up to 1 year.

If the insured under a disability income insurance policy changes to a more hazardous occupation after the policy has been issued, and a claim is filed, the insurance company should do which of the following? a)Exclude coverage for on-the-job injury b)Adjust the benefit in accordance with the increased risk c)Cancel the policy d)Increase the premium

b)Adjust the benefit in accordance with the increased risk A part of the premium rating concerns the hazard of occupation.

In reference to the standard Medicare Supplement benefits plans, what does the term standard mean? a)Coverage options and conditions are developed for average individuals. b)All providers will have the same coverage options and conditions for each plan. c)Coverage options and conditions comply with the law, but will vary from provider to provider. d)All plans must include basic benefits A-N.

b)All providers will have the same coverage options and conditions for each plan. In reference to the standard Medicare Supplement benefits plans, the term "standard" implies that all providers will have the same coverage options and conditions for each plan.

To be eligible for tax credits under the ACA, individuals must have income that is what percent of the Federal Poverty Level? a)Between 10% and 100% b)Between 100% and 400% c)Higher than 300% d)Less than 10%

b)Between 100% and 400% Legal residents and citizens who have incomes between 100% and 400% of the Federal Poverty Level (FPL) are eligible for the tax credits.

Which of the following is true regarding inpatient hospital care for HMO members? a)Inpatient hospital care is not part of HMO services. b)Care can be provided outside of the service area. c)Care can only be provided in the service area. d)Services for treatment of mental disorders are unlimited.

b)Care can be provided outside of the service area. The HMO provides the member with inpatient hospital care, in or out of the service area. The services may be limited for treatment of mental, emotional or nervous disorders, including alcohol or drug rehabilitation or treatment.

Regarding long-term care coverage, as the elimination period gets shorter, the premium a)Gets lower. b)Gets higher. c)Remains constant. d)Premiums are not based on elimination periods.

b)Gets higher. LTC policies also define the benefit period for how long coverage applies, after the elimination period. The benefit period is usually 2 to 5 years, with a few policies offering lifetime coverage. Obviously the longer the benefit period, the higher the premium will be; and the shorter the elimination period, the higher the premium will be.

The Patient Protection and Affordable Care Act includes all of the following provisions EXCEPT a)Coverage for preventive benefits. b)Individual tax deduction for premiums paid. c)Right to appeal. d)No lifetime dollar limits.

b)Individual tax deduction for premiums paid. The Act does not offer tax deductions for health insurance premiums. The Act does offer a tax credit, which is different from a tax deduction. All the other provisions are included in the Act.

Which of the following insurance coverages would be allowed with an MSA? a)Individual health insurance b)Long-term care c)Medicaid d)Medicare

b)Long-term care MSA participants cannot have Medicare or any other health coverage that is not an HDHP. The following are exceptions: workers compensation, specific disease or illness, a fixed amount per day of hospitalization, accidents and/or disability, dental care, vision care, and long-term care.

Which of the following insurance options would be considered a risk-sharing arrangement? a)Surplus lines b)Reciprocal c)Stock d)Mutual

b)Reciprocal When insurance is obtained through a reciprocal insurer, the insureds are sharing the risk of loss with other subscribers of that reciprocal.

Following a career change, an insured is no longer required to perform many physical activities, so he has implemented a program where he walks and jogs for 45 minutes each morning. The insured has also eliminated most fatty foods from his diet. Which method of dealing with risk does this scenario describe? a)Retention b)Reduction c)Transfer d)Avoidance

b)Reduction The insured's change in lifestyle and habits would likely reduce the chances of health problems.

Following a career change, an insured is no longer required to perform many physical activities, so he has implemented a program where he walks and jogs for 45 minutes each morning. The insured has also eliminated most fatty foods from his diet. Which method of dealing with risk does this scenario describe?a)Retention b)Reduction c)Transfer d)Avoidance

b)Reduction The insured's change in lifestyle and habits would likely reduce the chances of health problems.

Which of the following is NOT provided by an HMO? a)Patient care b)Reimbursement c)Services d)Financing

b)Reimbursement Traditionally the insurance companies have provided the financing while the doctors and hospitals have provided the care. The HMO concept is unique in that the HMO provides both the financing and the patient care for its members. The HMO provides benefits in the form of services rather than in the form of reimbursement for the services of the physician or hospital.

When an employee is still employed upon reaching age 65 and eligible for Medicare, which of the following is the employee's option? a)Wait until the next birthday to enroll b)Remain on the group health insurance plan and defer eligibility for Medicare until retirement c)Enroll in Medicare, while the company must provide additional retirement benefits d)Enroll in Medicare when eligible; otherwise, Medicare benefits will be forfeited.

b)Remain on the group health insurance plan and defer eligibility for Medicare until retirement If an employee is still employed upon reaching age 65, federal laws require keeping the employee on the group health insurance rolls and deferring their eligibility for Medicare until retirement. The employee has the right to reject the company's plan and elect Medicare but the company can offer no incentives for switching to Medicare.

Which of the following will vary the length of the grace period in health insurance policies? a)The term of the policy b)The mode of the premium payment c)The length of any elimination period d)The length of time the insured has been insured

b)The mode of the premium payment The grace period is 7 days on a policy with a weekly premium mode; 10 days if a monthly premium mode; 31 days on other premium modes.

Which of the following is correct about Medicare? a)The program provides complete medical care at no cost. b)The program is divided into four parts (A-D). c)Part B is available to the insured at no cost. d)It is a federal program for welfare recipients.

b)The program is divided into four parts (A-D). Medicare has four parts: Part A covers hospital expenses; Part B covers doctor expenses; Part C allows people to receive all of their health care services through available provider organizations; and Part D for prescription drug coverage.

All of the following statements about Medicare supplement insurance policies are correct EXCEPT a)They are issued by private insurers. b)They cover the cost of extended nursing home care. c)They cover Medicare deductibles and copayments. d)They supplement Medicare benefits.

b)They cover the cost of extended nursing home care. Medicare supplement policies (Medigap) do not cover the cost of extended nursing home care. Medigap plans are designed to fill the gap in coverage attributable to Medicare's deductibles, copayment requirements, and benefit periods. These plans are issued by private insurance companies.

Income replacement contracts agree a)To replace the insured for his/her company, including hiring and training wages. b)To replace the insured's income up to a stated percentage if the insured suffers a loss due to a covered accident or sickness. c)To replace income if the head of the household is the primary insured, and he/she loses income due to a lay-off. d)To cover any accident on the job, but not accidents outside of his/her job.

b)To replace the insured's income up to a stated percentage if the insured suffers a loss due to a covered accident or sickness. Income replacement contracts agree to replace the insured's income, considering all sources of income, up to a stated percentage if the insured suffers a loss due to a covered accident or sickness.

An employee insured under a group health plan has been paying $25 monthly premium for his group health coverage. The employer has been contributing $75, for the total monthly cost of $100. If the employee leaves the company, what would be his maximum monthly premium for COBRA coverage? a)$25.50 b)$100 c)$102 d)$25

c)$102 The employer is permitted to collect a premium from the terminated employee at a rate of no more than 102% of the individual's group premium rate (in this scenario, 102% of $100 total premium is $102). The 2% charge is to cover the employer's administrative costs.

The sole proprietor of a business makes a total salary of $50,000 a year. This year, his medical expenses have reached a total of $75,000. What amount may the sole proprietor deduct in regards to his medical expenses? a)$10,000 b)$25,000 c)$50,000 d)$75,000

c)$50,000 The proprietors of a business may deduct the cost of a medical expense plan because they are considered to be self-employed individuals instead of employees. The deduction cannot legally exceed the taxpayer's earned income for the year even if the cost of the medical expense plan exceeds this amount (in this scenario, $50,000).

Individuals who itemize deductions can claim deductions for medical expenses not covered by health insurance that exceed what percent of their adjusted gross income? a)5% b)7% c)10% d)15%

c)10% Most people who itemize their deductions can claim deductions for unreimbursed medical expenses, those that are not covered by health insurance, that exceed 10% of their adjusted gross income.

How many eligible employees must be included in a contributory plan? a)100% b)50% c)75% d)90%

c)75% At least 75% percent of eligible employees can be included in a contributory plan. Both the employees and the employer contribute to premium payments.

Which of the following is NOT an enrollment period for Medicare Part A applicants? a)Special enrollment b)General enrollment c)Automatic enrollment d)Initial enrollment

c)Automatic enrollment There are 3 types of enrollment periods for Medicare Part A: initial enrollment period, general enrollment period and special enrollment period.

Which of the following provisions requires that any policy language that is in conflict with the state statutes of the state in which the insured resides is automatically amended to conform with those of the state of residence? a)Insurance with Other Insurers b)Legal actions c)Conformity with State Statutes d)Incontestability

c)Conformity with State Statutes Conformity with State Statutes provision states that any provision of the policy which, on its effective date, is in conflict with the statutes of the state in which the insured resides on that date, is automatically amended to conform to the minimum requirement of the statutes.

An insured is receiving hospice care. His insurer will pay for painkillers but not for an operation to reduce the size of a tumor. What term best fits this arrangement? a)Limited Coverage b)Claims Saving c)Cost-containment d)Selective Coverage

c)Cost-containment In a cost-containment setting, daily needs and pain relief are provided for hospice patients, but curative measures are not.

As deductible amounts increase, premium amounts change in what way? a)Remain the same. Changes in premium amounts do not affect deductible amounts. b)Either increase or decrease. c)Decrease d)Increase If deductibles increase, premiums decrease in response.

c)Decrease In other words, if the insured assumes more risk by paying a higher deductible, the insurer will lower premium amounts in response.

When an insurance agency published an advertising brochure, it emphasized the company's financial stability and sound business practices. In reality, its financial health is terrible, and the company will soon have to file for bankruptcy. Which of the following terms best describes the advertisement? a)Twisting b)Rebating c)False financial statement d)Defamation

c)False financial statement False financial statements are made when insurance companies attempt to hide their financial troubles from the public and government officials.

A new employee who meets HIPAA eligibility requirements must be issued health coverage on what basis? a)Nondiscriminatory b)Indemnity c)Guaranteed d)Noncancellable

c)Guaranteed If a new employee is eligible, under HIPAA regulations, the new employer must offer coverage on a guaranteed issue basis.

All of the following are true regarding the Medical Information Bureau (MIB) EXCEPT a)MIB reports contain previous insurance information. b)Insurers may not refuse to accept an application solely due to information in an MIB report. c)MIB reports are based upon information supplied by doctors and hospitals. d)MIB information is reported to underwriters in coded form.

c)MIB reports are based upon information supplied by doctors and hospitals. The information contained in MIB reports comes from the underwriting disclosures made by applicants to MIB member insurers on prior insurance applications.

Prior to purchasing a Medigap policy, a person must be enrolled in which of the following? a)Any private insurance policy b)Only Part A of Medicare c)Parts A and B of Medicare d)All four parts of Medicare

c)Parts A and B of Medicare To buy a Medigap policy, the applicant must generally have both Medicare Part A and Part B.

All of the following long-term care coverages would allow an insured to receive care at home EXCEPT a)Respite care. b)Home health care. c)Skilled care. d)Custodial care in insured's house.

c)Skilled care. Custodial care, respite care, home health care, and adult day care are all coverages used to reduce the necessity of admission into a care facility. Skilled care is almost always provided in an institutional setting.

All of the following are ways in which a Major Medical policy premium is determined EXCEPT a)The coinsurance percentage. b)The stop-loss amount. c)The average age of the group. d)The amount of the deductible.

c)The average age of the group. Major medical policy premiums vary depending on the amount of the deductible, the coinsurance percentage, the stop-loss amount and the maximum amount of the benefit.

An insured owes his insurer a premium payment. Since then, he incurs medical expenses. The insurer deducts the unpaid premium amount from the claim amount and pays the insured the difference. What provision allows for this? a)Proof of loss b)Payment of claims c)Unpaid premium d)Legal action

c)Unpaid premium If a premium is past due and the insurer owes claim payment, the amount of the premium will be deducted from the amount of the claim. For example, if a claim is worth $500 and the premium costs $200, the insured would receive the net total of $300 from his insurer.

If a producer's appointment has been terminated, within how many days must the insurance company notify the Commissioner? a)5 days b)10 days c)15 days d)30 days

d)30 days An insurer that terminates the appointment, employment, contract, or other insurance business relationship with a producer must notify the Commissioner within 30 days following the effective date of the termination.

If a consumer requests additional information concerning an investigative consumer report, how long does the insurer or reporting agency have to comply? a)7 days b)10 days c)3 days d)5 days

d)5 days Consumers must be advised that they have a right to request additional information concerning investigative consumer reports, and the insurer or reporting agency has 5 days to provide the consumer with the additional information.

When must the Medicare Supplement Buyer's Guide be presented? a)When the policy is delivered b)Within 30 days of policy delivery c)When the prospective policyholder inquires about a policy or at the time of application, depending on which occurs first. d)At the time of application

d)At the time of application Issuers of accident and sickness policies which provide hospital or medical expense coverage on an expense incurred or indemnity basis to a person eligible for Medicare by reason of age, must provide to that applicant a Medicare Supplement Buyer's Guide. Except for direct response issuers, delivery of the Buyer's Guide must be made at the time of application, and the insurance company must obtain a receipt.

Which of the following statements regarding Business Overhead Expense policies is NOT true? a)Premiums paid for BOE are tax-deductible. b)Any benefits received are taxable to the business. c)Leased equipment expenses are covered by the plan. d)Benefits are usually limited to six months.

d)Benefits are usually limited to six months. Business Overhead Expense (BOE) insurance is sold to small business owners for the purpose of reimbursing the policyholder for business overhead expenses during a period of total disability. Premiums are tax-deductible for a business, but any benefits received are taxable as income. Overhead expenses, including equipment and employee salaries, are covered by the plan. Salaries and profits of the employer are not protected.

What is the main eligibility factor for the MassHealth program? a)Age b)Ineligibility for other health insurance plans c)Pre-existing conditions d)Family income

d)Family income MassHealth is a public health insurance program for low to medium-income Massachusetts residents. Eligibility for MassHealth is based on the family income in related to the Federal Poverty Level (FPL), so even those who already have health insurance may qualify for this program.

Issue age policy premiums increase in response to which of the following factors? a)Increased deductible b)Inflation c)Age d)Increased benefits

d)Increased benefits The premiums of issue age policies can only increase in response to an increase in benefits.

Which of the following statements is NOT correct concerning the COBRA Act of 1985? a)It covers terminated employees and/or their dependents for up to 36 months after a qualifying event. b)It applies only to employers with 20 or more employees that maintain group health insurance plans for employees. c)COBRA stands for Consolidated Omnibus Budget Reconciliation Act. d)It requires all employers, regardless of the number or age of employees, to provide extended group health coverage.

d)It requires all employers, regardless of the number or age of employees, to provide extended group health coverage. COBRA Act applies to only employers with 20 or more employees.

Maximum benefits for a major medical plan are usually lifetime a)Open panel. b)Closed panel. c)Minimums. d)Maximums.

d)Maximums. Major medical plans have high maximum benefits such as $1,000,000 or $2,000,000. Maximum benefits are usually lifetime maximums.

When is an approval by the Commissioner NOT required for the use of policy forms? a)Only if the forms have been on file for at least 1 year b)Only if the domestic insurer is not being examined every 3 years c)Never d)Only if the forms have been on file for at least 30 days

d)Only if the forms have been on file for at least 30 days If a policy form has been on file for at least 30 days, an approval by the Commissioner is NOT required prior to use.

Which document helps ensure that full and fair disclosure is provided to the recipient of a policy? a)Benefit Limitations b)Policy Summary c)Statute of Limitations d)Outline of Coverage

d)Outline of Coverage The Outline of Coverage is created to ensure full and fair disclosure to the recipient of a new policy. This document can be released at the time of application or upon delivery of the policy.

Which of the following statements is INCORRECT concerning Medicare Part B coverage? a)Participants under Part B are responsible for an annual deductible. b)Part B will pay 80% of covered expenses, subject to Medicare's standards for reasonable charges. c)It is a voluntary program designed to provide supplementary medical insurance to cover physician services, medical services and supplies not covered under Part A. d)Part B coverage is provided free of charge when an individual turns age 65.

d)Part B coverage is provided free of charge when an individual turns age 65. Those who desire Part B coverage must enroll and pay a monthly premium.

An applicant for health insurance has not had a medical claim in 5 years. He exercises daily and does not smoke or drink. What classification do you assume the applicant would receive from his insurer? a)Low-risk b)Standard c)Superior d)Preferred

d)Preferred The "preferred" status indicates that an insured is in excellent physical condition and employs healthy lifestyles and habits. These individuals qualify for lower premiums than those who are in the lower categories.

Under the Accidental Death and Dismemberment (AD&D) coverage, what type of benefit will be paid to the beneficiary in the event of the insured's accidental death? a)Capital sum b)Double the amount of the death benefit c)Refund of premiums d)Principal sum

d)Principal sum Accidental Death and Dismemberment coverage only pays for accidental losses and is thus considered a pure form of accident insurance. The principal sum is paid for accidental death. In case of loss of sight or accidental dismemberment, a percentage of that principal sum will be paid by the policy, often referred to as the capital sum.

A husband and wife are insured under group health insurance plans at their own places of employment, and as dependents under their spouse's coverage. If one of them incurs hospital expenses, how will those expenses likely be paid? a)Neither plan would pay. b)Each plan will pay in equal shares. c)The insured will have to select a plan from which to collect benefits. d)The benefits will be coordinated.

d)The benefits will be coordinated. Benefits will be coordinated when individuals are covered under two or more health plans.

An insured who has an Accidental Death and Dismemberment policy loses her left arm in an accident. What type of benefit will she most likely receive from this policy? a)The principal amount in a lump sum b)The capital amount in monthly installments c)The principal amount in monthly installments d)The capital amount in a lump sum

d)The capital amount in a lump sum Accidental Death and Dismemberment policies pay a capital amount (a percentage of the principal amount) for the loss of one limb or loss of sight in one eye. The principal amount is paid for death or often for the loss of 2 limbs or loss of sight in both eyes. Benefits are paid in a lump sum.

In comparison to consumer reports, which of the following describes a unique characteristic of investigative consumer reports? a)They provide additional information from an outside source about a particular risk. b)They provide information about a customer's character and reputation. c)The customer has no knowledge of this action. d)The customer's associates, friends, and neighbors provide the report's data.

d)The customer's associates, friends, and neighbors provide the report's data. Both consumer reports and investigative consumer reports provide additional information from an outside source about a customer's character and reputation, and both types of reports are used under the Fair Credit Reporting Act. The main difference is that the information for investigative consumer reports is obtained through an investigation and interviews with associates, friends and neighbors of the consumer.

Hospital indemnity/hospital confinement indemnity policy will provide payment based on a)The type of illness. b)The premiums paid into the policy. c)The medical expense incurred. d)The number of days confined in a hospital.

d)The number of days confined in a hospital. Hospital indemnity/hospital confinement indemnity policy provides payment based only on the number of days confined in a hospital.

When employees are actively at work on the date coverage can be transferred to another insurance carrier, what happens to coinsurance and deductibles? a)They have to be reevaluated. b)Coinsurance carries over, but deductibles are generally higher. c)Deductibles carry over, but coinsurance is generally higher. d)They carry over from the old plan to the new plan.

d)They carry over from the old plan to the new plan. Coinsurance and deductibles may be carried over from the old plan to the new plan. The purpose of coinsurance and deductible carryover provisions is to credit expenses incurred so as to not penalize the insured.