Health Quiz Full Set

If a business wants to buy a disability income policy on a key employee, which of the following is considered the beneficiary?

employer - in key person disability insurance purchased by a business, the business is the policyowner and the beneficiary, and the key person is the insured.

Which of the following entities is not an insurer but an organization formed to provide insurance benefits for members of an affiliated lodge or religious organization?

fraternal benefit society - Fraternal insurers o/erate on the basis of a lodge or charitable organization, but they may also sell formal insurance plans for the benefit of their members. Reciprocal insurers are also associations that provide insurance for their members, but they are formed only for the purpose of providing insurance.

If an insured worker has earned 40 quarters of coverage, the worker's status under Social Security disability is

fully insured - A worker is fully insured under Social Security if the worker has accumulated the required number of credits based on their age.

An insured has health insurance that covers them at work and at home. This policy was written on what basis?

occupational - Occupational coverage provides benefits for illness, injury or disability resulting from accidents or sicknesses that occur on or off the job.

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 - The elimination period is the time immediately following the start of a disability when benefits are not payable. This is used to reduce the cost of providing coverage and eliminates the filing of many claims.

Items stipulated in the contract that the insurer will not provide coverage for are found in the

Exclusions - Exclusions are restrictions of coverage as stated in the policy.

An insured is involved in an accident that renders him permanently deat, although he does not sustain any other mapr infuries. The insured is still able to perform his current job. To what extent will he receive Presumptove Disability benefits?

Full benefits - Presumptive Disability plans offer full benefits for specified conditions. These policies typically require the loss of at least two limbs (Loss of use does not qualify in some policies.), total and permanent blindness, or loss of speech or hearing. Benefits are paid, even if the insured is able to work.

As it pertains to group health insurance, the continuation provision stipulates that

Group coverage must be extended for terminated employees up to a certain period of time at the employee's expense. - The continuation provision requires employers to continue group medical insurance for terminated workers and dependents. The terminated employee or dependents are responsible for paying the policy premium.

What are the three basic coverages for medical expense insurance?

Hospital, surgical and medical - Basic medical policies and major medical policies are commonly grouped into medical expense insurance. The three basic coverages are hospital, surgical and medical, and may be purchased separately or as a package.

An insurer devises an intimidation strategy in order to corner a large portion of the insurance market. Which of the following best describes this practice?

Illegal- it is is illegal to a participate in any boycott, coercion, or intimidation that is intended to restrict fair trade or create a monopoly

Mode of Premium Payment

Is defined as the frequency and the amount of the premium payment. - The mode refers to the frequency the policyowner pays the premium: monthly, quarterly, semiannually, or annually. The amount of premium will change accordingly.

What statement best describes the free look provision?

It allows the insured to return the policy within 10 days for a full refund of premiums if dissatisfied for any reason - Free look is a mandatory provision found in all life/health policies that allows the insured to return the policy within a specified number of days and receive a full refund of premium if dissatisfied with the policy for any reason.

In group insurance, what is the policy called?

Master policy - In group insurance the policy is called the master policy and is issued to the policyowner, which could be the employer, an association, a union, or a trust.

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

Nonoccupational coverage - Most group disability income is nonoccupational coverage, covering insureds only off the job. The employer carries workers compensation for on the job injuries or sickness.

With respect to the Consideration Clause, which of the following would be considered consideration on the part of the applicant for insurance?

Payment of premium - The two types of consideration on the part of an insurance applicant are payment of premiums and representations on the application.

A woman obtains health coverage through the Marketplace on October 1. Two weeks later she finds out that she is 3 months pregnant. Which of the following is true about coverage for pregnancy?

Pregnancy will be covered immediately - All health insurance Marketplace plans must cover pregnancy and childbirth, even if pregnancy begins before the coverage takes effect.

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

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

An insurer is attempting to determine the insurability of an applicant and decides to obtain medical information from several different sources. Which entity must be notified of the investigation?

The applicant - It is required by law that an insurer inform the applicant of all sources that will be contacted in determining the applicant's insurability, in addition to how the information will be gathered.

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 - Insurable interest means that the applicant must experience a financial loss when the insured is hurt or sick. Insurable interest is only needed by the applicant and only at the time of application.

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. The grace period is 7 days if paid weekly, 10 days if paid monthly and 31 days for all other modes.

The required privacy disclosure notice must be provided by insurer to current policyholders at least once in any period of

12 months - In the case of a policyholder, the notice required must be provided at least once in any period of 12 consecutive months during which the policy is in effect.

A friend helped an insurance producer sell an insurance policy. The producer can share the commission with the friend it

The friend is licensed in the same line of insurance. - Insurance producers are allowed to share or split commissions only if both parties are properly licensed for that line of insurance.

If the Commissioner of Insurance is unable to complete their term,

The governor appoints a replacement. - If a vacancy in the Commissioner's office occurs during the term, the Governor appoints a replacement Commissioner for the unexpired term.

Which provision states that the insurance company must pay Medical Expense claims immediately?

Time of Payment of Claims - The Time Payment of Claims provision requires that claims will be paid immediately upon receipt of proofs of loss except for periodic payments, which are to be paid as specified in the policy.

A hospital indemnity policy will pay

A benefit for each day the insured is in a hospital. - Hospital confinement indemnity policies pay specific amounts that depend on the amount of time the insured is confined

Which of the following does the Insuring Clause NOT specify?

A list of available doctors - The Insuring Clause lists the insured, the insurance company, what kind of losses are covered, and for how much the losses would be compensated.

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. - If an insured misstates his or her age upon policy application, the optional misstatement of age provision will change the payable benefit to that which would have been purchased at the insured's actual

All of the following would be considered rebating EXCEPT

An agent misrepresents policy benefits to convince a policyowner to replace policies. - Rebating occurs when an insured is offered something of value in order to induce the sale of an insurance product. Both the offer and acceptance of a rebate are illegal.

Which of the following statements is true concerning the alteration of optional policy provisions?

An insurer may change the wording of optional provisions, as long as the change does not adversely affect the policyholder. - Optional policy provisions can be changed by an insurer, as long as the changes do not adversely affect the policyholder.

Stating that an insurer's policies are guaranteed by the existence of the Life and Health Guaranty Association is

An unfair trade practice - It is an unfair trade practice to make any statement that an insurer's policies are guaranteed by the existence of the Life and Health Guaranty Association.

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

"Own occupation" - less restrictive than other definitions - In theory, the brain surgeon could find other work, but because her disability income policy specifies that she is covered for her own occupation, she would be wholly covered.

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?

$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 gr&up premium rate (in this scenario, 102% of $100 total premium is $102). The 2% charge is to cover the employer's administrative costs.

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?

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

In order to get a nonresident license in North Carolina an agent must

Submit the request for licensure in the form prescribed by the Commissioner and pay the applicable - An agent may apply for a nonresidential license by showing that they are in good standing as an agent in their home state and by paying a fee, if the two states reciprocate.

An insured notifies the insurance company that he has become disabled. What provision states that claims must be paid immediately upon written proof of loss?

Time of Payment of Claims - The Time of Payment of Claims provision splcifies that claims are to be paid immediately upon written proof of loss.

Workers Compensation benefits are regulated by which entity?

state government - The state government offers and regulates Workers Compensation benefits, which vary slightly from state to state.

Workers compensation insurance covers a worker's medical expenses resulting from work related sickness or injuries and covers loss of income from

work-related disabilities - All states have workers compensation laws, which were enacted to provide mandatory benefits for employee's work related injuries, illnesses, or death.

Before the Commissioner will issue a broker's license, the licensee must obtain a bond for at least

$15,000 - in order to receive a broker's license, the applicant must file a bond with the Commissioner for at least $15,000, or in lieu of a bond, deposit with the Commissioner the equivalent amount in cash or certificate of deposits.

An insured is covered by a partially contributory group disability income plan that pays benefits of $4,000 a month. If the insured pays 25% of the monthly premium, how much of the monthly benefit would be taxable?

$3,000 - On partially contributory group disability income insurance, only that portion of the benefits that are related to the premium paid by the employer is taxable to the employee. In this case, because the employer pays 75% of the premium, the employee will be taxed on 75% of the benefits.

Assume that the insured owns a Major Medical policy with a $2,000 deductible, an 80/20 coinsurance and a $15,000 stop loss lim The insured suffered covered losses of $10,000. How much will the insurance company pay for the claim?

$6,400 - Correct! The insurance company will cover 80% of the claim after the deductible is paid by the insured: $10,000 - $2,000 = $8,000; $8,000 ×.80 = $6,400

Health insurers providing health benefit plans must send the claimant a payment of claim within how many days of receiving a claim?

30 calendar days - Health claims must be paid within 30 calendar days of receiving a claim.

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?

50/50 - After the deductible has been paid, the insurance company will pay a specified amount for a physician's visit, while the insured pays the remaining percentage. This is called "coinsurance". Plans will often be listed in a fraction format, with the first number representing the amount that will be paid by the insurer. The less the insurer must pay with coinsurance payments, the lower the premiums will be. Therefore, Ray should choose the 50/50 plan.

What is a foreign insurer?

An insurer with a home office in another state - A domestic insurer's home office is in this state, a foreign insurer's is in another state, and an alien insurer's is in another country.

Which of the following provisions specifies the policyowner's right to transfer the policy's ownership?

Assignment - The right to transfer a policy's ownership is specified by the assignment provision.

What coverage, written in conjunction with hospital expense policies, covers surgeons' fees, anesthesiologist, and the operating room?

Basic Surgical Expense - Basic surgical expense coverage includes surgeons' fees, anesthesiologist, and the operating room when it is not covered as a miscellaneous medical item

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

Basic expense - A basic expense policy will provide coverage on a first-dollar basis (no deductible). After the limits of the basic policy are c/hausted, the insured must pay a corridor deductible before the major medical coverage will pay benefits.

A person who knowingly obtains information about an individual from an agent or the insurer under false pretenses has committed a(n)

Class 1 misdemeanor - A person who knowingly obtains information about an individual from an insurer or agent under false pretenses guilty of a Class 1 misdemeanor.

Which of the following reports will provide the underwriter with the information about an insurance applicant's credit?

Consumer report - Consumer reports include written and/or oral information regarding a consumer's credit, character, reputation, or habits collected by a reporting agency from employment records, credit reports, and other public sources.

Which of the following is NOT a characteristic or a service of an HMO plan?

Contracting with insurance companies - HMOs seek to identify medical problems early by providing preventive care. They encourage early treatment and whenever possible provide care on an outpatient basis rather than admitting the member into the hospital. Contracts are between the insured and the HMO, not an insurance company.

Which of the following entities has the authority to make changes to an insurance policy?

Insurers executive officer- only an executive officer of the company, not an agent, has the authority to make any changes to the policy. The insurer must have the insured written agreement change to the change

Which of the following provisions would prevent an insurance company from paying a reimbursement claim to someone other the the policyowner?

Payment of Claims - The Payment of Claims provision states that the claims must be paid to the policyowner, unless the death proceeds need to be paid to a beneficiary.

Which of the following are the main factors taken into account when calculating residual disability benefits?

Present earnings and earnings prior to disability - Residual disability will help pay for loss of earnings by making up the difference between the employee's present earnings and what they were earning prior to disability.

Who chooses a primary care physician in an HMO plan?

The individual member - When an individual becomes a member of the HMO, he or she will choose a primary care physician. Once chosen, the primary care physician will be regularly compensated for being responsible for the care of that member.

A man works for Company A and his wife works for Company B. The spouses are covered by health plans through their respective companies that also cover the other spouse. If the husband files a claim,

The insurance through his company is primary - The policy that covers the person filing the claim will be considered the primary policy.

Which of the following best describes the "first-dollar coverage" principle in basic medical insurance?

The insured is not required to pay a deductible - The three basic types of coverage (hospital, surgical and medical) are often referred to as first-dollar coverage becaus they usually do not require the insured to pay a deductible.

The insuring clause of a disability policy usually states all of the following EXCEPT

The method of premium payment - The insuring clause, usually on the first page of the policy, is the general statement that defines the insurance agreement and identifies the insured and the insurance company and states what kind of loss (peril) is covered.

The amount of Social Security disability benefits is based upon the worker's Primary Insurance Amount (PIA), which is calculated from their Average Indexed Monthly Earnings over which years? Which years of income may be deleted from calculation?

Their highest 35; lowest 5 - The amount of Social Security disability benefits is based upon the worker's Primary Insurance Amount (PIA), which is calculated from their Average Indexed Monthly Earnings over their highest 35 years. The lowest 5 years of income may be deleted from calculation.

What is the purpose of COBRA?

To provide continuation of coverage for terminated employees - The Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) requires any employer with 20 or more employees to extend group health coverage to terminated employees and their families after a qualifying event.

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

If a licensee fails to notify the Commissioner of insurer insolvency, if known or suspected, and to provide a statement of relevant facts, which of the following is TRUE?

the commissioner may suspend or revoke the person's license - It is the duty of any licensed person, or employee or representative of an insurance company to notify the Commissioner of any violations of the General Statutes of the Insurance Code, or insurer insolvency. The Commissioner may suspend, revoke, or refuse to renew the license of any licensee who willfully fails to comply with this section of the Insurance Code.