Midterm 2

In noncontributory group plans, how many eligible employees must be covered by the plan?

100%

What is the minimum grace period for all policies other than monthly or weekly premium policies?

31 days

According the the required provision that addresses reinstatement of a lapsed policy, when an insured applies for reinstatement and receives a conditional receipt, how long does the insurer have to approve or deny reinstatement before the policy will be automatically reinstated?

45 days from the date of the conditional receipt

According to one required provision, the insured is prevented from filing suit against the insurer for at least:

60 days and not longer than three years from the date of proof of loss.

The Principal at Anytown High School is wanting to purchase a type of health insurance policy that will cover most of the students attending the school. What type of policy would you recommend?

A blanket policy.

Of the following, which is NOT a requirement for becoming a licensed producer?

A college degree

Which of the following describes a multiple employer trust (MET)?

A legal entity that small employers may join to become eligible for group insurance

What is a cancellable policy?

A policy the insurer may cancel at any time by returning the unearned premium.

Which of the following most accurately and completely describes an application when submitted with an initial premium?

A written request from an applicant to an insurer requesting the insurer to issue a policy on the basis of the information in the application

After being issued, an insurance producer license will remain in effect for how long, unless revoked or suspended?

As long as the license renewal fee is paid and the continuing education requirements are met

Which of the following policies offers first dollar coverage?

Basic Medical Plans

What term describes the concept that the insurer and the insured share in the cost of medical expenses with the insurer bearing the greater share?

Coinsurance

A corridor deductible acts as a corridor between benefits under one type of health insurance plan and benefits under another medical insurance plan. This corridor deductible is a feature of which of the following plans?

Comprehensive Major Medical Plan

Which statement below is correct concerning dental care policies?

Comprehensive dental care policies usually pay a percentage of reasonable and customary charges for nonroutine treatment.

Which statement is correct?

Concealment is the withholding of information that should have been provided to an insurer.

Some major medical policies begin with basic first dollar coverage that pays up to its limits, then the insured must pay a certain dollar amount of expenses before the major medical portion steps in. What term applies to the dollar amount the insured must pay between the basic policy and the major medical coverage?

Corridor deductible

Select the correct statement regarding long-term care policies.

Current policies are more likely to pay benefits regardless of the level of care required by the insured.

Of the following, which is NOT a cause to suspend an insurance producer's license?

Did not meet the company's production quota.

In order to obtain group insurance without providing evidence of insurability, what do eligible individuals generally have to do?

Enroll within a specified eligibility period

Which of the following is NOT considered an unfair trade practice?

Failing to affirm or deny coverage of claims within a reasonable time after proof of loss statements.

Which of the following is a requirement for payment of Social Security disability benefits?

Fully insured and disability insured, Total and permanent disability for at least five months, and be expected to be disabled for 12 months or longer or end in death

Of the following statements regarding hearings, which one is NOT correct?

Generally, a hearing must be held within 60 days after the Commissioner receives a written request.

A Health Maintenance Organization (HMO) in a certain city contracts with an independent medical group to provide services to HMO subscribers. The HMO pays the group organization, rather than paying the individual medical practitioners. What type of HMO structure is this?

Group model

Of the following statements about state guaranty associations, which one is CORRECT?

Guaranty associations cover insureds' unpaid claims if an insurer becomes insolvent.

The type of health care provider that provides both the health care services and the health care coverage is a

Health Maintenance Organization.

Which of the following waives the elimination period in a disability policy?

Hospital confinement rider

Which of the following statements regarding claims payments is not included in the required provisions?

If there is no beneficiary designated for any death benefits payable, the insurer will pay the benefit to any relative of the insured by blood or marriage who appears to be entitled to it.

Oswald changes jobs in June. He had been covered by group health for two years at his previous job. His new job offers group health coverage with a six month exclusion for preexisting conditions. Assuming that Oswald enrolls at the earliest opportunity in the group health program at his new job, when will any preexisting conditions Oswald may have be covered in his new group health plan?

Immediately

Joe and Jane Customer have a family health policy that includes two riders. One rider excludes coverage for Jane's existing diabetes. The other rider indicates that the couple may purchase additional disability income coverage at specified dates in the future without proving insurability. What two riders are attached to this policy?

Impairment and guaranteed insurability riders

Dread disease, hospital income, vision care, and prescription drug insurance are considered what type of policies?

Limited policies.

Which of the following premium payment modes will result in the highest total annual premium?

Monthly

Which of the following laws requires similar treatment of physical and mental conditions?

None of these answers are correct.

Which of the following is not one of the core benefits included in any Medicare supplement policy?

Part A deductible for each benefit period

Which part of Medicare requires premium payment by most eligible participants?

Part B, Supplementary Medical Insurance

Twisting involves which of the following?

Policy replacement

If the insurance company cancels a policy, on what basis must prepaid premiums be returned to the insured?

Pro rata basis, which means all unearned premium is returned

Which of the following most accurately describes Medicaid?

Provides medical benefits for certain low income people, for the disabled, and for families with dependent children

Of the following, which is NOT an unfair claims settlement practice?

Replacing one insurance policy with another policy

Medicare Part A is primarily supported by:

Social Security payroll taxes.

Primary financial support for Medicare Part A comes from:

Social Security payroll taxes.

Under a credit health policy, what is the maximum amount of any accidental death benefit included?

The amount of outstanding indebtedness at any given time

Which of the following is not true concerning the notice of claim and claim forms?

The insured must file the notice of claim within 10 days or as soon after as reasonably possible.

Which of the following statements is not true concerning a coordination of benefits situation?

To prevent overinsurance, the secondary insurer does not pay benefits.

When medical expense policies do not state specific dollar benefit amounts, but instead base payments upon the charges for like services in the same geographical area, benefits are designated as which of the following?

Usual, customary and reasonable charges

Select the correct statement about converting from a group policy to an individual policy.

Usually, conversion may be made without evidence of insurability if the individual does so within 31 days after the family coverage ends.

A health insurance policy includes an endorsement indicating the insurer will allow the policy to continue in force without further premiums if the insured is totally and permanently disabled. What endorsement is attached to this policy?

Waiver of premium endorsement

When are disability income benefits received as nontaxable income to the recipient?

When the employee has paid the premium

Which of the following would not be a likely consideration in determining premium rates for group health insurance?

Whether the business is a close corporation or publicly held corporation

The usual payment arrangement under a Preferred Provider Organization contract is:

a fee for each service.

A certain health insurance policy states that the insurer will not refuse to renew the policy and furthermore, the insurer may not cancel the policy. However, the insurer may change the premium by classes of insureds. This policy is:

a guaranteed renewable policy.

All of the following are reasons why the Commissioner may issue a temporary insurance license EXCEPT:

a person wants to try selling insurance for a few months before taking the state insurance exam.

For non-routine treatments, a comprehensive policy generally pays:

a specified percentage of the reasonable and customary charges.

Misrepresentation is:

a written or oral statement which is false.

When an insurance company receives approval to offer insurance in a particular state, the company is considered:

an authorized company.

Each of the following would be an element in the definition of fraud except:

an individual warrants a fact stated on the application.

A health insurance policy that the insurer may choose not to renew only on the premium due date is called:

an optionally renewable policy.

An insured's disability income policy defines total disability as "the insured's inability to perform the duties of any occupation for which he or she is reasonably qualified by education, training or experience." This definition is known as the:

any occupation definition.

Sam is injured in an auto accident and is now receiving benefits from his individual disability income policy. Sam's benefits:

are received tax-free and generally limited to a percentage of monthly income.

There are optional provisions that deal with situations where an insured can receive more money from loss of time benefits than from working, or more for reimbursement of medical expenses than these services cost. This is:

called overinsurance and can be remedied by each insurer's paying proportionate benefits or a single insurer allowing the insured to choose the policy from which benefits will be paid.

The Health Maintenance Organization concept that service providers are paid a fixed monthly fee for each member is called:

capitation.

The employees of Ace Trucking company must each pay a portion of the premium for their group insurance. This means they are members of a:

contributory group plan.

Vision care insurance policies most often cover:

cost of lenses and frames.

All of the following are considered unfair trade practices EXCEPT:

failing to handle claims promptly.

Health insurance is purchased to deal with all of the following risks except:

financial consequences of legal liability for injury to another party.

The Coordination of Benefits Provision is designed to:

give insureds as much coverage as possible while eliminating overinsurance.

All Medicare supplement policies must:

have the same core benefits.

The Commissioner may deny, suspend, revoke, or refuse to renew a Producer license for all of the following EXCEPT:

having been convicted of any misdemeanor.

Connie is receiving intermittent part-time nursing care a few days a week at home as she recovers from chemotherapy. This level of care is known as:

home health care.

The Medical Information Bureau is a nonprofit organization supported by:

insurance companies.

An insureds accident policy uses the phrase "accidental bodily injury" to define what constitutes accidental injury and/or resulting death. This phrase:

is less restrictive than the phrase "accidental means."

All of the following are alternatives an insurer has when asked to insure a substandard risk except:

issue the policy with a probationary period after which the insurer may continue or cancel the policy.

As compared to individual disability income policies, group disability income policies are generally:

less costly and have more liberal provisions.

For a contributory plan with some insurance companies, if the employee does not apply within the eligibility period he or she:

may be required to take a medical exam, even for a nonmedical plan.

Each of the following would be found in the insuring clause of an insurance policy except:

name of the insured.

Legislation that requires that when health insurance is replaced, ongoing claims under the former policy must continue to be paid under the new policy is known as:

no loss-no gain legislation.

George has a policy that may not be canceled by the insurer. The insurer also may never raise George's premiums. George's policy is:

noncancellable.

The initial enrollment period for Part B of Medicare begins:

on the first day of the third month before the month in which the individual attains age 65.

Before Terry was disabled, he was a full-time engineer earning about $70,000 annually. Now, two years later, he is able to work part-time, earning about $25,000 annually. It is likely that Terry would be considered as:

partially disabled.

Two optional health insurance provisions address changes of occupation and misstatement of age. These provisions allow the insurer to:

pay benefits equal to an amount that would have been purchased at the premium paid had the insurer known the facts when the premium was established.

Major medical policies may include a type of deductible wherein the insured pays a new deductible amount for each different event that causes medical expenses to be incurred. This is the:

per-cause deductible.

All of the following are benefits provided under Part A of Medicare except:

physicians' services for inpatient care.

In a disability income policy, there is a period during which no benefits will be paid for illness of any kind. This period usually does not apply to accidents, only to illness. The term that describes this interim is the:

probationary period.

A Medicare Select policy differs from a standard Medicare Supplement policy in that it:

provides the same coverage at a lower cost.

Enticing a customer with something of value not stated in the contract to induce the purchase of insurance is:

rebating.

A disability that is presumed to result from the same or a related cause of prior disability is called a:

recurrent disability.

When an insurer cedes part of an insured's coverage to another insurance company, retaining only part of the risk for itself, the insurer is engaging in:

reinsurance.

Statements made by an applicant in an application for insurance are generally considered to be:

representations.

policies that limit benefits to specified maximums per procedure with first dollar coverage are:

scheduled.

All of the following are requirements to obtain an insurance license except:

spend one year as an intern in a licensed agency.

Employer-paid premiums for employee group health insurance are generally:

tax-deductible to the employer and nontaxable to the employees.

All of the following acts by an insurance producer are considered unfair trade practices EXCEPT:

telling a prospect that a policy has received a certain amount of dividends for the past several years.

All of the following applicants are exempt from taking the insurance exam except:

temporary license holder.

The optional provision which deals with conformity to state statutes provides:

that policy provisions in conflict with state statutes where the insured resides are automatically amended to conform to the minimum requirements of the law.

If a company wishes to share information about a customer's health with a third party:

the customer must actively opt-in to allowing the disclosure.

In Health Maintenance Organizations, the use of a primary care physician or PCP is common as part of:

the gatekeeper system.

All of the following statements about noncancellable policies are true except:

the insurer may increase the premium rate after the policy is in effect provided it does so by classes of insureds.

If the insurance company accepts a special class risk:

the premium will be higher than for a normal risk.

Unless an insured has made fraudulent misstatements, a policy is incontestable after:

two years.

When specific amounts for surgery are not scheduled and the insurer agrees to pay the prevailing rate in a certain area, this rate is called:

usual, customary and reasonable.

The most important rating factor in a LTC policy is:

whether or not an individual can perform activities of daily living.