Health insurance ExamFX
Most policies will pay the accidental death benefits as long as the death is caused by the accident and occurs within
90 days
How often must the commissioner or an examiner designated by the commissioner examine domestic insurance companies?
As often as the commissioner seems necessary, but not less frequently than every 5 years
How often must the commissioner or an examiner designated by the commissioner examine domestic insurance companies ?
As often as the commissioner seems necessary, but not less frequently than once every five years
To comply with Fair Credit Reporting Act, when must a producer notify an applicant that a credit report may be requested?
At the time of application
When must insurable interest exist for a life insurance policy?
At the time of application
Under which of the following employee-provided plans are the benefits taxable to an employee in proportion to the amount of premium paid by the employer?
Disability income
Wyd twin brothers applied for life insurance from company a, the company found that while neither of them smoked and both had a similar lifestyle, one of the twins was in a much stronger financial position that the other. Because of this, the company charged him a higher rate for his insurance . This practice is considered
Discrimination
Which of the following best describes an insurance company that had been formed under the laws of this state ?
Domestic
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
All of the following may be excluded from coverage in a major medical expenses policy , except
Emergency surgery
In a group policy, the contract is between
Employer and the insurance company.
The insurance policy, together with the policy application and any added riders form what is known as
Entire Contract
Under an individual disability policy, the MINIMUM schedule of time in which claim payments must be made to an insured is
monthly
What do individuals use to transfer their risk of loss to a larger group?
insurance
A tornado that destroys property would be an example of which of the following?
peril
A medical insurance plan in which the health care provider is paid a regular fixed amount for providing care to the insured and does not receive additional amounts of compensation dependent upon the procedure performed is called
prepaid plan
What is the maximum period that an insurer would pay benefits in accordance with an additional monthly benefit rider?
1 year
An insureds long-term Care policy is scheduled to pay a fixed amount of coverage of $120 per day. The long-term care facility only charged $100 per day. How much will the insurance company pay?
$120 a day
Wha is the maximum amount that the Alabama life and disability Insurance guaranty association will pay in benefits for one life?
$300,000
An insured has a primary group health plan and an excess plan, each covering losses up to $10,000. The insured suffered a loss of $15,000. Disregarding any copayments or deductibles, how much will the excess plan pay?
$5000
Assume that the insured owns a major medical policy with a $2,000 deductible, an 80/20 coinsurance and a $15,000 stop loss limit. The insured suffered covered losses of $10,000. How much will the insurance company pay for the claims ?
$6,400
An insured disability income policy includes an additional monthly benefit rider. For how many years can the insured expect to receive payment from the insurer before social security benefits begin?
1
A noncontributory group disability income plan has a 30-day waiting period and offers benefits of $2,000 a month. If an employee is unable to work for 7 months due to a covered disability, the employee will receive
12,000 , all of which is taxable
A client had a new individual disability income policy with a 20-day probationary period and a 30-day elimination period. Ten days later, the client breaks their leg and is off work for 45 days . How many days of disability benefits will the policy pay?
15 days
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?
2 years
A person buys an individual long-term care policy and is not satisfied with the provisions. Within how many days will the insured be able to return the policy for a full premium refund ?
30 days
A producer licensed in Alabama must notify the insurance depart of any changed of address in his or her residence or business address within how many days ?
30 days
Licensees must make a report of any action taken against them in another jurisdiction or by another governmental agency in Alabama within how many days of the final disposition of the matter?
30 days
Whenever the commissioner receives a demand for hearing, a hearing shall be scheduled to be held within
30 days
The minimum number of credits required for partially insured status for social security disability benefits is
6 credits
Whenever the Commissioner believes that a licensee is acting or yang methods contrary to the insurance laws or regulations of Alabama, to prevent further acts or methods from being conducted before a hearing can be held to determine the facts, the commissioner may impose
A cease and Desist order on the license
Underwriting for disability insurance is unique due to the type of risk involved. Which of the following situations illustrates this?
A construction worker pays a higher premium and receives a poorer classification of disability
An individual, who is and continues to be a resident of Alabama, and who has 18 Months if prior continuous coverage, but is no longer able to obtain coverage, shall be eligible for health expense coverage under
Alabama Health plan
An insured carries health insurance with two different providers and is covered on an expense incurred basis. He has an appendectomy and files the claims to both insurers. Neither company is notified in advance that the insurer has other coverage. What should each insurer pay?
A proportionate amount
In which of the following situations is it illegal for an insurer to disclose privileged information about an insured?
A researcher for marketing purposes
Which of the following groups would probably be covered by blanket insurance?
A university's sports team
The insurers health policy only pays for medical costs related to accidents. Which of the following types of policies does the insured have?
Accident-only
When the insured purchased his health policy he was a window washer. He has since changed occupations and now manages a library. If the insurer is notified of the insured's change of occupation, the insurer should
Adjust the benefit in accordance with the decreased risk
The omnibus budget reconciliation act of 1990 required that large group health plans must provide primary coverage for disabled individuals under
Age 65 who are not retired
Which of the following individuals is eligible for a health savings account?
Allison is insured by a High Deductible Health Plan (HDHP)
When an insured purchased her disability income policy, she misstated her age to the agent. She told the agent that she was 30 years old, when in fact, she was 37. If the policy contains the optional misstatement of age provision
Amounts payable under the policy will reflect the insured's correct age.
Which of the following authorities issues insurance producer licenses?
Commissioner
All of the following applicants for an insurance producer license are exempt from prelicensing education requirements except
An applicant for a dealers license
Regarding uniform mandatory provisions concerning claims, all of the following are true except
An insured must notify the insurer of a claim on forms prescribed by the insurer
If an insurance company makes a statement that its policies are guaranteed by the existence of the Insurance Guaranty Association, that would be considered
An unfair trade practice.
What is the term used for an applicants written request to a insurer for the company to issue a contract, based on the information provided?
Application
Which of the following provides coverage on a first-dollar basis?
Basic expense
Which describes the features of a comprehensive major medical policy?
Basic medical expenses benefits are provided in a single package
While serving commissioner, which of the following would be allowable to that individual?
Be a policyholder of a health insurance contract
Insurance policies ensures that after a loss proceeds will go to the
Beneficiary
All of the following are true of the key person disability in come policy except
Benefits are considered taxable income to the business
Which of the following statements regarding business overhead expense policies is not true?
Benefits are usually limited to six months.
Which of the following would qualify someone for disability benefits?
Both accident and sickness
Who must sign the notice regarding replacement ?
Both the applicant and agent
A small business owner is the insured under a disability policy that finds a buy-sell agreement. If the owner dies or becomes disabled, the policy would provide which of the following?
Cash to the owner's business partner to accomplish a buyout
When the commissioner suspects that a person is violating an insurance law or other regulation, what can be issued that would order the person to stop committing the act of violation?
Cease and Desist order
Which of the following is a requirement that must be satisfied before an applicant can receive an insurance producer license in Alabama?
Complete prelicensing classroom instruction, unless otherwise expempt by the commissioner
A health insurance plan that covers all accidents and sicknesses that are not specifically excluded from the policy us referred to as a
Comprehensive plan
What is the contract provision that allows the insurer to nonrenew health coverage if certain events occur?
Conditionally renewable
All of the following are lines of insurance that may be transacted under a life and accident/ health producer license except
Consequential loss insurance
Which of the following is not covered by Medicare?
Cosmetic surgery
Which rider, when added to a disability income policy, provides for changes in the benefits payable based on changes in the consumer price index?
Cost of living adjustment rider
Which agreement specifies how a business will transfer hands when one of the owners dies or becomes disabled?
Disability Buy-Sell
What type of group rating do the blue cross and blue shield organizations use as a factor in developing the rates to be charged?
Experience rating
The authority granted to an agent through the agents contract is referred to as
Express authority: express powers are written into the contract between the insurer and the agent
Which of the following choices best describes the blackout period?
From the youngest child's age 16
Under which of the following disability income plans would the benefit be subject to income tax?
Group
What insurance concept is associated with the names Weiss and fitch?
Guides describing company financial integrity
An association could buy insurance for its member if it meets all of the following requirements except
Has at least 50 members
Medical savings accounts ( MSAs) are available to small business employees and self- employed individuals who have
High deductible health insurance.
In which of the following locations would skilled care most likely be provided ?
In an institutional setting
Guarantee of insurability option In long-term care policies allows the insurer to
Increase benefit levels without providing proof of insurability
Which of the following entities must approve all Medicare supplement advertisements?
Insurance Commissioner or Director
When a person applies for Medicare supplement insurance, whose responsibility is it to confirm that the applicant does not already have accident or sickness insurance already in force?
Insurer
In health insurance, if a doctor charges $50 more than what the insurance company considers usual, customary and reasonable, the extra cost
Is not covered
What is the benefit of experience rating?
It allows employers with low claims experience to get lower premiums.
Which of the following is incorrect concerning Medicaid?
It is solely a federally administered program
Which of the following statements concerning Medicare part B is correct?
It pays for physician services, diagnostic tests, and physical therapy.
Every insurer marketing long-term care insurance must establish marketing procedures to ensure all of the following except
LTC policies are marketed effectively to prospective insureds.
Maximum benefits for a major medical plan are usually lifetime
Maximums
What type of benefit helps to pay for accidental injuries that are not severe enough to qualify as disabilities?
Medical Reimbursement Benefit
Which of the following is the term used when a person, in a fiduciary position, has used funds in manner for which they were not intended such as the wrongful taking or use of money belonging to another?
Misappropriation of funds
The coverage provided by a disability income policy that does not pay benefits for losses occurring as the result of the insurers employment is called
Nonoccupational coverage
An insured purchased a disability income policy within a 10-year benefit period. The policy stated a 20-day probationary period for illness. If the insured is hospitalized with an illness 2 weeks after the policy was issued, how much will the policy pay?
Nothing ; illness is not covered during the first 20 days of the contract
Shortly after a replacement transaction on a Medicare policy, the insured decided to cancel the policy , but us nature whether the free- look provision applies. The insured could find that information in the
Notice regarding replacement
Dr. Tom, an HMO provider , has agreed to take more patients than those directly referred to him by his HMO. Toms plan operates on which of the following basis?
Open panel
When an individual is covered under two health insurance policies that have duplicate benefits which could make a claim for benefits because of an injury or illness profitable, it is called
Overinsurance
Which of the following provisions would prevent an insurance company from paying a reimbursement claim to someone other than the policy owner?
Payment of Claims
In Alabama, an insurance company certificate of authority is issued for what period of time ?
Perpetual
Underwriting is a major consideration when an insured wishes to replace her current policy for all of the following reasons except
Premiums always stay the same
Which of the following is not among the goals of a Medicare supplement application?
Presuming the applicant is eligible for Medicaid, based on the nature of the policy
The primary purpose of disability income insurance is to
Replace income lost due to a disability
The insuring clause of a disability policy usually states all of the following except
The method of premium payment
A person steps off a street car and trips and breaks his ankle. This type of injury can be described as
Sudden and unforeseen
Which of the following may not be included in an insurance company's advertisement?
That it's policies are covered by state guaranty association
Which of the following is NOT covered under plan A in medigap insurance?
The Medicare Part A deductible
All of the following are ways in which a major medical policy premium is determined except
The average age of the group
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 ?
The benefits will be corrdinated
In a group policy, who is issued a certificate of insurance?
The individual insured
In order for an insured under Medicare part A to receive benefits for care in a skilled nursing facility, which of the following conditions must be met?
The insured must have first been hospitalized for 3 consecutive days.
An insured wants to transfer his personal insurance policy to a friend. Under what conditions would this be possible?
The insured will need a written consent of the insurer.
Which of the following entities was created to protect insureds against an insurers insolvency?
The life and disability insurance guaranty association
An agent is in process of replacing the insureds current health insurance policy with a new one. Which of the following would be a proper action?
The old policy should stay in force until the new policy is issued.
An individual applies for a life policy. Two years ago he suffered from a head injury from an accident, so he cannot remember parts of his past, but is otherwise competent. He has also been hospitalized for drug abuse, but does not remember this when applying for insurance. The insurance issues the policy and learns of his history one year later. What will probably happen?
The policy will not be affected
A policy with a 31-day grace period implies
The policy will not lapse for 31 days if the premium is not paid when due
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 ?
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.
An insurer offers a policy very similar to Medicare, although it differs slightly. An agent tells an applicant that the policy is Medicare, since the policies are so similar anyway. Which of the following is true ?
This practice is illegal
Evaluating information that established adverse selection risk is the purpose of which stage of insurance?
Underwriting
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?
Unpaid premium
A medical expense policy that establishes the amount of benefit paid based upon the prevailing charges which fall sighing 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
If an applicant for a life insurance policy and person to be insured by the policy are two different people, the underwriter would be concerned about
Whether an insurable interest exists between the individuals.
A group policy used to provide accident and health coverage on a group of persons being transported by a common carrier, without naming the insured persons individually is called
a blanket policy
In disability income insurance, if an insured is considered disabled if they cannot perform any job they are suited for by prior education, training or experience, they fall under which definition of total disability?
any occupation
In a replacement situation, all of the following must be considered EXCEPT
assets
In a basic expense policy, after the limits of the basic policy are exhausted, the insured must pay what kind of deductible?
corridor
On a major medical insurance policy, the amount that an insured must pay in a claim before the insurer will pay is known as
deductible
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 the business of insurance?
defamation
An insurance company has published a brochure that inaccurately portrays the advantages of a particular insurance policy. What is this an example of ?
false advertisements
An insurance company is domiciled in Montana and transacts insurance in Wyoming. Which term best describes the insurers classification in Wyoming?
foreign
If an insured worker has earned 40 quarters of coverage, the workers status under social security disability is
fully insured
Which of the following expenses is not covered by a health insurance policy?
funeral
Under workers compensation, which of the following benefits are Not included?
legal benefits
Which is true regarding the uniform individual accident and sickness policy provisions law?
provisions may be reworded by the insurer
Benefit periods for individual short-term disability policies will usually continue from
six months to two years
Workers compensation benefits are regulated by which entity?
state government
An applicant is considered to be high- risk, but not so much that the insurer wants to deny coverage. Which of the following is not true?
the insurer will issue a conditional coverage
What is the purpose of the rehabilitation benefit in disability insurance?
to cover the expense of retraining the insured to return to work
Under the Physical Exam and Autopsy provision, how many times can an insurer have the insured examined, at its own expense, while a claim is pending?
unlimited
Another term used to describe "no deductible " is
First-dollar basis
Which of the following would be a typical maximum benefit offered by major medical plans?
1 million
The patient protection and affordable care act mandates that insurers provide coverage for adult children of the insured up to the age of
26
What documentation grants express authority to an agent ?
Agent's contract with the principal
All of the following are considered to be basic benefits of an HMO plan except
prescription drugs
The relation of earnings to insurance provision allow we the insurance company to limit the insureds benefits to his/her average income over the last
24 months
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?
Adjust the claim benefit to reflect the insured's true age
Which term describes a situation In which people who are most likely to have claims are the most likely to seek insurance?
Adverse selection
What source pays for individual disability income premiums?
After tax dollars
At what point must an outline if coverage be delivered?
At the time of application or upon delivery of the policy
If an insurer meets the states finiacial requirements and is approved to transact business in the state, it is considered to be
Authorized
Group disability income insurance premiums paid by the employer are
Deductible by the employer as an ordinary business expense
Social security disability definition includes all of the following expect
Disability expected to last for at least 6 months
An insured is involved in an accident. After the accident is determined to be her fault, the police give her a breathalyzer test to determine whether or not she had been drinking alcohol before the accident. Her bliss alcohol level is over the legal limit. What type of health benefits will her health insurance policy pay for her injuries if the policy includes the narcotics and intoxicants provision?
No benefits
Regarding the taxation of business overhead policies
Premiums are deductible, benefits are taxed.
Under a disability income policy, the insurer does not pay a monthly benefit that is equal to the insureds previous income. The reason for paying a benefit amount that is less than the insureds income to
Prevent over utilization and malingering
An insurer hired a representative to advertise its company at a local convention. The representative lies about the details of some of the policies , in an attempt to secure more business for the company. Who is responsible for the representatives claims?
The insurer
If a policy is rated-up, which of the following is true?
The premium increases
Which is generally true regarding insurers who have been classified as preferred risks?
Their premiums are lower
Which of the following statements is most correct concerning the changing of an irrevocable beneficiary?
They can be changed only with the written consent of that beneficiary.
Most health insurance policies exclude all of the following except
accidental injury
Which of the following entities has the authority to make changes to an insurance policy?
insurer's executive officer
An insured pays her major medical insurance premium annually on March 1. Last March she forgot to mail her premium to the company. On March 19, she had an accident and broke her leg. The insurance company would
pay the claim
All of following benefits are available under social security except
welfare benefits
Under a disability income policy, the insurer pays a monthly benefit that is less than the insurers income. What is the reason for that?
To prevent over utilization and malingering
A single mother wants to make sure that if she is unable to work for health reasons, she and her child would be protected financially. Which of the following insurance plans would best suit her needs?
Total disability plan
Which of the following health care plans would most likely provide the insured/subscriber with comprehensive health care coverage?
health maintenance organization plan