Insurance exam 1

Dread Disease Policy

Due to Karen's family history of heart disease, she purchased a policy that specifically covers the expense of treating heart disease. What kind of policy did Karen purchase?

B. Insurance is used when covering Speculative Risk

Each of the following are true statements describing insurance, except: A. Insurance transfers risk from the insured to the insurer B. Insurance is used when covering Speculative Risk C. The payment of a small certain loss (the premium) is traded for the large uncertain possiblity of loss (the claim) D. Uses the principle of Law of Large Numbers to help predict loss

2 or more

HIPAA applies to groups of ____________

A fee for each service they provide

How are PPO physicians paid?

3

If a policy was assigned by an insured within ____ years of an insured's death, the entire face amount of their policy would be included in their taxable estate.

Employee

If an employee elects to continue coverage under the COBRA regulations, who would pay the premium?

0 days

If an employer offers Short Term Disability benefits to an employee, what is the shortest elimination period their employee can expect?

Certificate of Authority

If an insurer is admitted and qualified, what would they receive from the Department of Insurance?

POS

If your Health Care plan has characteristics of an HMO and a PPO, what type of plan do you have ?

Consideration

In order for a contract to become valid, each party must give the other party something of value. This fulfills the essential part of the contract known as:

25

Certain groups require a specific amount of participation. How many members are required for a Labor Union?

250

Paul's LTC policy will pay a specific fixed dollar of $250 per day. The actual cost of his care is $225. What will his policy pay?

Income

At the time of an application for disability benefits, what factor determines the amount of an insured's coverage?

D. Manufacturing plant

A blanket policy would be suited for all of the following except: A. Summer Camp B. College football team C. Girl Scouts D. Manufacturing plant

5

A cancellation provision gives an insurer the right to cancel a policy at any time after giving how many days notice to an insured?

Co-payment

A specific part of the cost of care, or a flat dollar amount that must be paid by a member of a Health Care plan, is called?

Principal and Capital

Accidental Death and Dismemberment benefits cover ____and ____ amounts.

A 30 Day Elimination Period

Adam was hospitalized with neck and back injuries. He found out that he would not be eligible for coverage for 30 days. Adam's policy has which of the following?

C. Power of Agency

All of the following are agent authorities and powers, except: A. Expressed B. Apparent C. Power of Agency D. Implied

Sex, age, occupation

All of the following are units in determining rates:

Primary Care Physician

An HMO plan with the gatekeeper system, allows members to see a specialist by obtaining a referral from the:

Fair Credit Reporting Act

An applicant is denied insurance because of information found on a Consumer Report. Which of the following requires the insurance company to supply the applicant with the name and address of the Consumer Reporting Company?

Moral

An applicant lying about his/her age represents what type of hazard?

Foreign

An insurance company incorporated in one state and licensed to conduct business within another state is called?

Mutual Company

An insurance company that is owned by its policyholders and can pay annual dividends to them is considered :

$50,000

An insured has an Accidental Death & Dismemberment policy with a principal value of $50,000. He looses sight in both eyes in a hunting accident. How much will he receive?

C. An applicant's statements on an application are considered warranties

An insured's representations and warranties are incorrectly stated in which of the following statements? A. Statements made by an applicant that are guaranteed true are considered to be warranties B. Statements that an applicant believes to be true, but does not guarantee are considered to be representations C. An applicant's statements on an application are considered warranties D. An applicant's statements on an application are considered representations

D. An applicant's statements on an application are considered representations

An insured's representations and warranties are incorrectly stated in which of the following statements? A. Statements made by an applicant that are guaranteed true are considered to be warranties B. Statements that an applicant believes to be true, but does not guarantee are considered to be representations C. An applicant's statements on an application are considered warranties D. An applicant's statements on an application are considered representations

It will reimburse Dan for his overhead business costs while he is disabled

Dan is a small business owner that just became disabled. Two years ago he bought a Business Overhead Expense policy. How can the policy help Dan?

None

Devin has an LTC policy and he is able to deduct the premiums from his taxes. What tax does Devin pay on the benefits he receives?

Elimination Period

Disability benefits are not paid during which period?

Relation of earnings to insurance provision

Disability benefits can be reduced based on an insured's present income. Which provision will allow this to occur?

Declined

Joe has just been diagnosed with a quickly-spreading, fatal form of cancer; his doctor predicts that he will live for a month. He applied for an individual Health Insurance policy. What risk classification will he most likely receive?

Prosthodontic

John Smith was just fitted for dentures. What kind of treatment did John Smith receive?

Copayment

John, an HMO subscriber, pays a dollar amount for each service he receives. What is the amount called?

His insurer

Ken applied for a Medicare Supplement. Who must make sure he does not already have a Health policy in force?

Cost-Containment

Leo is receiving Hospice Care. His insurer will pay for painkillers, but not for an operation to reduce the size of his tumor. What term best fits this arrangement ?

A. Alzheimer's disease

Long Term Care policies contain exclusions. Which of the following is not a LTC exclusion? A. Alzheimer's disease B. Pre-existing condition C. Drug addiction D. Nervous disorders

No, it is also funded by monthly premiums

Medicare Part B is funded from the general revenues of the Federal Government. Is this its only funding source?

Partial benefits

Mr. Henry became totally disabled and needs rehabilitation to return to his job. But unfortunately, he is unable to return to his original place of employment. His policy contains a Rehabilitation Benefit. What costs will it cover?

Adult Day Care

Mr. Jones has care that transports him to a center with activities. What best describes his LTC?

All costs except for her pregnancy

On May 5th Sarah purchased a Health policy. On May 12th she was informed that she was two months pregnant. What will her coverage pay regarding her pregnancy?

Contract of Adhesion

One party submitting a "take-it-or-leave-it" contract to another party is a characteristic of what type of contract?

A. Reduction

Removing ice from a sidewalk is an example of what type of risk management? A. Reduction B. Transfer C. Adverse Selection D. Peril

The capital amount in a lump sum

Sam lost his right arm in an accident covered under his Accidental Death & Dismemberment policy. What will Sam receive from his policy?

C. Death

The Future Increase Option Rider is associated with all of the following times except: A. Marriage B. Birth C. Death D. Age 37

Avoid Adverse Selection

The agent is known as the "Field Underwriter" because of the information he/she gathers for an insurer. This helps an insurer:

The total lifetime benefits an insurer will pay

The term maximum benefit refers to the upper limit of:

0%

Tim has a disability policy and he recently became disabled as a result of being at war. What extent of his disability will be covered under his policy?

5 months

To receive Social Security Disability benefits one must wait during an elimination period. How long would an insured wait?

Military personnel

Tri-care refers to a Health Care system exclusively designed for who?

6 months

Under HIPAA, Group Health plans CANNOT impose more than a 12 month pre-existing conditions exclusion for a person who sought medical advice, treatment, or diagnosis within the last:

Never, it is not permitted

Under the PPACA provisions, when will an insured pay a larger copayment or rate for using an out of network provider in an emergency situation rather than an in network provider?

D. Cervical Cancer exams

Under the Patient Protection and Affordable Care Act, all of the following are essential preventive care services except: A. Wellness services B. Screenings for behavioral disorders C. Habitual and rehabilitative diet counseling D. Cervical Cancer exams

All plans

What Medicare Supplement plans would have the core benefits?

Part D

What Medicare program will cover off the label drugs?

Adjust the benefit

What can an insurer do if it is discovered that an insured gave a wrong age at the time of their application?

Present earnings and earnings before a disability

What factors are always considered in calculating residual disability benefits?

Endodontics

What is associated with dental pulp?

Actual charge

What is the amount a doctor bills for a service?

Entire contract clause

What is the mandatory provision that states what documents must be contained in a contract?

Excess

What is the type of charge between the Medicare approved amount for supplies and the actual charge?

Disability Buy Sell

What kind of insurance contract provides funds for a business to be able to purchase the interest of a disabled partner?

Dread Disease

What kind of policy is very specific and covers only certain conditions like Cancer?

Plan A

What must be in all Medicare Supplement policies?

100%

What percentage of Medical, Dental and Vision Expense Insurance premiums may be deducted as a business by an employer?

Renewability

What provision gives an insured the right to cancel their coverage?

Legal Actions

What provision stipulates that an insured can't bring legal action against their insurer for at least 60 days?

Free look

What provision will allow Sam to inspect his policy and if dissatisfied, be able to return it for a full refund?

Producer's report

What report contains information about an agent's evaluation of the proposed insured?

All employers

What size company can offer a Health Reimbursement Account to their employees?

A package of Comprehensive services

What type of Health Care services are provided by an HMO?

Waivers for impairments, Limitations, Time limit on certain defenses

When a client is considering replacing an existing Health insurance policy, all of the following should be areas of concern:

If the wording is not less favorable to an insured

When can a company change the wording of a uniform policy provision?

An insurer may not rescind a policy due to an unintentional omission of information on an application

When can an insurer rescind a policy due to an unintentional omission of information on an application?

Never, they are not issued one

When do individuals under a Blanket policy receive their Certificate of Insurance?

Never

When may an insurance company request a blood relative of an applicant to provide genetic information?

A. The maximum benefit is based on monthly income

Which best related to the maximum benefit of a group Long Term Disability plan? A. The maximum benefit is based on monthly income B. The maximum benefit is based on age C. The maximum benefit is based on type of occupation D. The maximum benefit is based on risk of employment

D. Obtaining a sickness or injury

Which incident below would qualify someone for disability benefits? A. Loss from war B. Intentionally self inflicting an injury C. Living overseas D. Obtaining a sickness or injury

C. An insurer may terminate the contract for certain conditions

Which of the following characteristics is not associated with a Non-Cancellable policy? A. An insurer cannot cancel the policy B. An insurer cannot increase the premium C. An insurer may terminate the contract for certain conditions D. An insurer has the right to make contract changes

C. To reduce the 1 year waiting period for pre-existing conditions

Which of the following describes the purpose for a Certificate of Coverage? A. To reduce the 6 month waiting period for pre-existing conditions B. To reduce the 5 month waiting period for pre-existing conditions C. To reduce the 1 year waiting period for pre-existing conditions D. To reduce and discontinue coverage

C. At least 3 or more employers must join together to form a MET

Which of the following does not describe a MET? A. METS obtain coverage by joining together B. METs can be self insured C. At least 3 or more employers must join together to form a MET D. METs are arrangements for employers

Subscribers

Which of the following entities are responsible for making premium payments?

C. Coverage for catastrophic Medical expenses

Which of the following is NOT true of Basic Medical plans? A. First-dollar coverage B. No deductibles C. Coverage for catastrophic Medical expenses D. Low dollar limits

B. The policyholder can renew their policy and their insurer can increase their premium

Which of the following is a true feature of a Guaranteed Renewable Health policy? A. The policyholder can renew their policy up to five years B. The policyholder can renew their policy and their insurer can increase their premium C. An insurer can increase a policyholder's risk D. An insurer can renew the policy with proof of insurability

Prospective Review

Which of the following is an advance utilization management tool to determine if a procedure is covered under a Health Plan?

C. Claims must be submitted on claim forms provided by an insurer

Which of the following is false in relationship to policy provisions? A. The Free Look time is 10 days B. The Grace Period for weekly mode policies is 7 days C. Claims must be submitted on claim forms provided by an insurer D. Proof of a loss must be provided within 90 days

D. Welfare

Which of the following is not a Social Security benefit? A. Death B. Retirement C. Disability D. Welfare

D. Race of an applicant

Which of the following is not considered in rating a Health policy? A. Occupation of an applicant B. Copayment amount C. Benefits in a policy D. Race of an applicant

A. To control costs

Which of the following statements best describes the HMO gatekeeper concept? A. To control costs B. To limit services C. To lower a deductible amount D. To provide equal coinsurance

Financial loss after an insured dies

Which of the following will NOT be covered by a Health Insurance policy?

Experience

Which rating uses the actual experience of the group as an underwriting premium factor?

Standard

Which risk refers to applicants with similar lifestyles in the same age category?

0%

William is studying in Germany for two semesters to learn the art of German cuisine. He was injured in a biking accident which left him disabled. He has a disability policy. What percent of his benefits will be paid from it?

Metal level

With the PPACA, how is the amount of covered cost by the health plans determined?