Risk Management & Insurance Exam 4: Chapters 18, 19, 25, 26 Rejda
27) All of the following are considered to be instrumentalities of transportation and communication for purposes of inland marine insurance EXCEPT A) trains. B) tunnels. C) transmission lines. D) television towers.
A) trains.
23) Which of the following statements describes a Difference in Conditions (DIC) Policy? A) It is a type of commercial umbrella liability policy. B) It is an all-risk policy that covers perils not insured by basic property insurance contracts. C) It is designed to cover indirect losses for which the insured has direct damage coverage. D) It is used to settle disputes when an insured has more than one insurance policy with differing policy provisions.
B) It is an all-risk policy that covers perils not insured by basic property insurance contracts.
30) Which of the following statements about the businessowners policy is (are) true? I. It is designed to meet the insurance needs of large manufacturing firms. II. It is a package policy designed to meet the basic property and liability needs of an insured in a single contract. A) I only B) II only C) both I and II D) neither I nor II
B) II only
6) Which of the following statements about the provisions of the building and personal property coverage form is (are) true? I. A separate deductible must be satisfied for each building damaged in the same occurrence. II. Under the replacement cost option, there is no deduction for depreciation. A) I only B) II only C) both I and II D) neither I nor II
B) II only
33) Frank's property insurance requires periodic reporting of inventory values. Frank believes he can save money by under-reporting the inventory. Last period, Frank reported $200,000 when the value was really $400,000. Shortly after filing the report, when the value was $500,000, the inventory was destroyed. How much will Frank's insurer pay, assuming no deductible? A) nothing, as underreporting voids coverage B) $200,000 C) $250,000 D) $400,000
C) $250,000
28) All of the following statements about inland marine forms are true EXCEPT A) A mail coverage form covers securities in transit by first-class mail, registered or certified mail, or express mail. B) A commercial articles coverage form is used to insure photographic equipment and musical instruments. C) A jewelers block coverage form is used by individuals to insure jewelry limited in coverage by the homeowners form. D) The signs coverage form covers neon, mechanical, and electrical signs.
C) A jewelers block coverage form is used by individuals to insure jewelry limited in coverage by the homeowners form.
) What is the effect of the optional agreed value provision in the building and personal property coverage form? A) It provides replacement cost coverage. B) It increases insured values along with inflation. C) It suspends the coinsurance clause. D) It reduces the deductible to $50.
C) It suspends the coinsurance clause.
Which of the following statements about unemployment insurance benefits is true? A) Benefits are a flat amount regardless of a worker's previous wages. B) Because of federal legislation, the maximum benefit is the same in all states. C) Most states pay regular benefits for a maximum duration of 26 weeks. D) Under the extended benefits program, the federal government continues benefit payments for up to 3 years for workers who have exhausted their regular benefits.
c
Under Part A of Medicare, how is reimbursement for inpatient hospital care determined? A) The amount billed to Medicare by the hospital is the amount Medicare pays. B) Eighty percent of the hospital's regular charge for care is paid. C) The hospital's usual, reasonable, and customary charge is paid. D) Hospital care is classified into diagnosis-related groups (DRGs) and the amount reimbursed depends on the DRG classification of the care delivered.
d
Under one of the Medicare Advantage Plans, beneficiaries can receive care at a discounted rate by using health care providers that belong to the plan network. Care outside the network is also covered, but beneficiaries must pay higher out-of-pocket costs. This type of Medicare Advantage Plan is a A) Point of Service (POS) plan. B) Medical Savings Account (MSA) plan. C) Health Maintenance Organization (HMO) plan. D) Preferred Provider Organization (PPO) plan.
d
Which of the following is a current problem with workers compensation programs? A) declining involvement of lawyers in workers compensation claims B) exclusion of deaths and injuries attributable to terrorism C) reduced benefits for occupational illness D) rising share of medical costs as a share of total benefits
d
Which of the following statements about disability benefits under Social Security is true? A) There is a one-year waiting period before benefits are payable. B) Benefits are payable as long as the disabled worker is unable to perform his or her regular occupation. C) Benefits are payable only if the condition causing the disability is expected to result in death prior to age 65. D) In addition to the disabled worker receiving the benefits, benefits can also be paid to eligible dependents.
d
Which of the following statements about the full retirement age under the Social Security program is true? A) The current retirement age for full benefits is age 62. B) Beginning in the year 2020, the retirement age will be gradually increased to age 72. C) Early retirement with reduced benefits is allowed as early as age 55. D) Delayed retirement beyond the age for full benefits increases the amount of the monthly benefit.
d
Which of the following statements about a worker's primary insurance amount is (are) true? I. It is the monthly amount paid to a worker who elects early retirement at age 62. II. It is equal to 50 percent of the worker's final average pay that was subject to Social Security taxes.
neither
Which of the following statements concerning Medicare Prescription Drug Plans is (are) true? I. The monthly premium is based on the health status of the beneficiary and the number of prescriptions the beneficiary needs. II. After the beneficiary has paid an initial deductible, Medicare pays the entire cost of all prescription drugs the beneficiary needs.
neither
13) Which of the following statements about the business income coverage form is true? A) Business income is defined as gross earnings before taxes. B) Payroll is excluded unless it is specifically added. C) The form covers loss of business income and extra expenses incurred during restoration. D) The form can be used by a manufacturing operation only.
C) The form covers loss of business income and extra expenses incurred during restoration.
43) In the optional replacement cost coverage provision is not selected, how are losses settled under the building and personal property (BPP) coverage form? A) market value B) original purchase price C) actual cash value D) book value
C) actual cash value
Which of the following statements about Medigap policies is (are) true? I. Insurers are required to have an open enrollment period of 6 months from the date an applicant first enrolls in Medicare Part B and is age 65 or older. II. Most policies are of limited value because they largely duplicate benefits already provided by Medicare.
I only
Which of the following statements about participation in the Social Security program is (are) true? I. Most private sector employees are covered under the Social Security program. II. Each employee has the right to "opt out" of the Social Security program if the employee does not wish to participate in the program.
I only
Which of the following statements about problems and issues in workers compensation insurance is (are) true? I. The cost of medical care under workers compensation continues to rise. II. Enactment of workers compensation statutes has eliminated litigation with respect to work-related illnesses and injuries.
I only
Which of the following statements about the Medicare prescription drug benefit is (are) true? I. Beneficiaries select a prescription drug plan and pay monthly premiums, with the premium reduced or waived for low-income beneficiaries. II. The benefit provides first-dollar coverage of prescription drugs up to a maximum of $10,000 per year, but no coverage after $10,000.
I only
Which of the following statements about the financial status of Medicare Part A is (are) true? I. Part A has serious financial problems. II. Reforms instituted by Congress have reduced total Part A expenditures in recent years.
I only
Which of the following statements about the financing of OASDI and Medicare is (are) true? I. There is a maximum taxable wage base for OASDI. II. There is a maximum taxable wage base for Part A of Medicare.
I only
Which of the following statements about the medical insurance (Part B) portion of Medicare is (are) true? I. Participation in Part B of Medicare is voluntary. II. It is provided at no cost to anyone who is fully insured under Medicare.
I only
Which of the following statements about hospice benefits under the hospital insurance (Part A) portion of Medicare is (are) true? I. Hospice benefits are payable only while the beneficiary is hospitalized. II. Hospice benefits are provided to persons who are terminally ill.
II only
Which of the following statements about taxation of Social Security retirement benefits under federal law is (are) true? I. Social Security retirement benefits are never considered taxable income. II. Up to 85 percent of Social Security retirement benefits may be considered taxable income, depending on the amount of other income received by the beneficiary.
II only
Which of the following statements about the Social Security cost-of-living adjustment is (are) true? I. The amount of the adjustment is limited to a maximum of 2.5 percent annually. II. Increases are based on changes in the consumer price index.
II only
Which of the following statements about the role of physicians with respect to Medicare claims is (are) true? I. Physicians who do not accept an assignment of Medicare claims can charge as much as 200 percent of the Medicare-approved fee. II. Physicians who accept assignment agree to accept the Medicare-approved amount as payment in full.
II only
Which of the following statements is (are) true with respect to the Medicare Advantage Plans? I. These plans replace the original Medicare program, Parts A and B, which are no longer available to new retirees. II. These plans provide an opportunity for retirees to receive Medicare coverage through private health care plans.
II only
19) All of the following statements about business income insurance are true EXCEPT A) Business income is defined as total sales that would have been made if the loss had not occurred. B) Payroll is considered a continuing normal operating expense. C) Business income insurance does not cover the physical damage caused by a peril which created the interruption in business. D) The business income coverage form can be purchased with a coinsurance requirement.
A) Business income is defined as total sales that would have been made if the loss had not occurred.
1) Which of the following is (are) included in the common declarations page of a commercial package policy? I. A description of the insured property II. A listing of the causes-of-loss that are covered by the policy A) I only B) II only C) both I and II D) neither I nor II
A) I only
15) Which of the following statements about the extra expense coverage form is (are) true? I. It provides coverage for the increased cost that must be paid to continue operations during a period of restoration. II. It provides coverage for lost business income if a key customer or key supplier experiences a loss. A) I only B) II only C) both I and II D) neither I nor II
A) I only
39) The exterior walls, the roof, and the plumbing, heating and air conditioning systems of a residential condominium can be insured through the purchase of which of the following forms? I. Condominium association coverage form II. Condominium commercial unit-owners coverage form A) I only B) II only C) both I and II D) neither I nor II
A) I only
4) Which of the following statements about the building and personal property coverage form is (are) true? I. A limited amount of coverage is provided for pollutant cleanup and removal at the described premises if the release or discharge of the pollutant results from a covered cause of loss. II. Fire department service charges are specifically excluded because they are a normal cost of doing business. A) I only B) II only C) both I and II D) neither I nor II
A) I only
17) Which of the following forms is used to insure buildings that are under construction? A) builders risk coverage form B) floor plan coverage form C) new construction coverage form D) labor and materials coverage form
A) builders risk coverage form
21) Reimbursement for spoilage of frozen food caused by failure of a refrigeration unit at a frozen foods processor can be covered under A) equipment breakdown insurance. B) extra expense insurance. C) builders risk insurance. D) difference in conditions insurance.
A) equipment breakdown insurance.
36) Inter-Ocean Transfer owns 12 large cargo ships which transport goods. Inter-Ocean Transfer can obtain physical damage insurance on these vessels by purchasing A) hull insurance. B) cargo insurance. C) protection and indemnity insurance. D) freight insurance.
A) hull insurance.
25) There are a number of implied warranties in ocean marine insurance. One implied warranty is that the vessel is properly constructed and maintained, and that it properly equipped for the voyage to be undertaken. This implied warranty is the warranty of A) seaworthiness. B) barratry. C) no deviation from planned course. D) legal purpose.
A) seaworthiness.
42) John Jones is risk manager of Alpha-2-Omega Company. John wants coverage for "direct physical loss" ("open perils" coverage) under the business and personal property (BPP) coverage form. Which causes-of-loss form should he select? A) special form B) basic form C) standard form D) broad form
A) special form
3) Which of the following is covered under the building and personal property coverage form? A) the insured's stock and inventory when located inside the insured building B) vehicles owned by the insured C) aircraft and watercraft owned by the insured D) a manufacturing building owned by a key customer or key supplier of the insured.
A) the insured's stock and inventory when located inside the insured building
37) An Inter-Ocean Transfer cargo ship was forced to jettison some cargo in heavy seas. The various interests in the voyage at the time the property was jettisoned were If $400,000 worth of iron ore was jettisoned, for how much of this amount would Inter-Ocean Transfer be responsible under general average? A) nothing B) $160,000 C) $200,000 D) $400,000
B) $160,000
26) Which of the following statements about ocean marine insurance is true? A) The coverage is narrow and excludes perils of the sea. B) Hull insurance includes collision liability covering the ship's owner if the ship collides with another ship. C) Protection and indemnity (P&I) insurance covers the shipper of goods for cargo losses. D) A particular average loss is a loss incurred only if a ship is totally lost or destroyed.
B) Hull insurance includes collision liability covering the ship's owner if the ship collides with another ship.
11) Which of the following statements is (are) true concerning the value reporting form? I. Failure to report accurately suspends coverage. II. If the insured underreports the property values at a location, and a loss occurs at that location, recovery is limited to the proportion that the last value reported bears to the value that should have been reported. A) I only B) II only C) both I and II D) neither I nor II
B) II only
18) Which of the following statements about the condominium commercial-unit owners coverage form is (are) true? I. It provides coverage for the unit owner's proportionate financial interest in the condominium building. II. It provides coverage for the business personal property of the unit owner. A) I only B) II only C) both I and II D) neither I nor II
B) II only
2) Which of the following items is (are) contained in the common policy conditions page of the commercial package policy? I. The policy period II. A provision describing the insurer's right to audit the insured's books and records A) I only B) II only C) both I and II D) neither I nor II
B) II only
24) Which of the following statements about ocean marine insurance coverages is (are) true? I. Hull insurance limits coverage to the breakdown of a ship's machinery and equipment. II. Protection and indemnity insurance provides liability insurance to the ship owner for bodily injury and property damage to third parties. A) I only B) II only C) both I and II D) neither I nor II
B) II only
40) A navigation error caused a cargo ship to run aground on a reef. The ship, valued at $1.5 million, was carrying $1.5 million in grain and $1.5 in electronic devices. The ship sustained $150,000 in physical damage. If this loss is a "particular average" loss, how will the loss be settled? A) The owners of each of the three interests are responsible for $50,000. B) The owner of the ship is responsible for the entire $150,000 loss. C) The two cargo owners are each responsible for $75,000 of the loss. D) The owner of the ship is responsible for the first $100,000 of the loss, and the two cargo owners are each responsible for $25,000 of the loss.
B) The owner of the ship is responsible for the entire $150,000 loss.
12) Which of the following types of forms is used to insure fluctuations in business personal property, such as inventory and finished goods? A) accounts receivable coverage form B) a value reporting form C) difference in conditions insurance D) business income insurance
B) a value reporting form
29) A firm wishing to insure a single shipment of merchandise sent by a common carrier would purchase a(n) A) annual transit policy. B) trip transit policy. C) bailee's liability policy. D) equipment floater.
B) trip transit policy.
32) Renee is risk manager of XYZ Company. She purchased a Commercial Package Policy for her company and added one of the optional coverages. This option suspends the coinsurance clause and substitutes a new agreement covering any loss in the same proportion that the limit of insurance purchased bears to a value specified in the declarations. This provision is known as A) waiver of inventory coverage. B) inflation guard coverage. C) agreed value coverage. D) replacement cost coverage.
C) agreed value coverage.
7) One of the additional coverages under the building and personal property coverage form is "increased cost of construction." The coverage is payable if A) a skilled artisan is needed to duplicate the construction of the damaged property. B) a labor strike or materials shortage increases construction costs. C) an ordinance or building code increases the cost of construction. D) the materials necessary to rebuild the damaged structure are more expensive than ordinary building materials.
C) an ordinance or building code increases the cost of construction.
10) Which of the following statements about the causes-of-loss special form of the ISO commercial package policy is (are) true? I. The causes-of-loss special form insures against direct physical loss. II. The causes-of-loss special form excludes loss caused by earthquake. A) I only B) II only C) both I and II D) neither I nor II
C) both I and II
20) Which of the following statements about the equipment breakdown protection coverage form is (are) true? I. The covered cause of loss is a breakdown of covered equipment, including boilers, machinery, and electrical and mechanical equipment. II. It provides coverage for the reasonable cost of expediting permanent repair or replacement of damaged property. A) I only B) II only C) both I and II D) neither I nor II
C) both I and II
35) One type of commercial property insurance excludes perils which are covered by the basic coverages. Some businesses buy this coverage to fill coverage gaps, including flood and earthquake, and to cover property in other countries. This type of insurance is called A) protection and indemnity insurance. B) building and personal property coverage form. C) difference in conditions insurance. D) builders risk coverage form.
C) difference in conditions insurance.
22) One inland marine coverage form is the accounts receivable coverage form. In which of the following cases would the purchaser of this form (the insured) be indemnified through the coverage? A) if the insured cannot pay amounts owed because the purchaser has become insolvent B) if the insured cannot pay amounts owed because the purchaser has suffered an insured physical damage loss C) if the insured cannot collect accounts receivable because of the destruction of records D) if the insured cannot collect accounts receivable because the purchaser extended credit to poor credit risks
C) if the insured cannot collect accounts receivable because of the destruction of records
41) The business income and extra expense coverage form covers loss of business income and continuing normal operating expenses. How is business income (revenue) defined? A) total sales B) total sales less cost of goods sold C) pre-tax net profit D) after-tax net income
C) pre-tax net profit
14) The building and personal property coverage form provides several optional coverages. Under one optional coverage, no deduction is taken for depreciation when settling a covered loss. This optional coverage is called A) extra expense. B) agreed value. C) replacement cost. D) inflation guard.
C) replacement cost.
31) All of the following statements about the businessowners policy are true EXCEPT A) Coverage for business personal property includes coverage for leased personal property which the named insured has a contractual responsibility to insure. B) The amount of insurance on the buildings increases by a stated percentage each year. C) Additional coverages include pollutant cleanup and removal. D) The policy must be written with a deductible of at least $2,000 for property losses.
D) The policy must be written with a deductible of at least $2,000 for property losses.
16) XYZ, Inc. would suffer serious financial consequences if either of its two major customers were shut down and could not purchase XYZ products. Which of the following types of consequential loss protection would provide protection against this exposure? A) leasehold interest B) extra expense C) marine insurance D) business income from dependent properties
D) business income from dependent properties
5) All of the following are extensions of coverage under the building and personal property coverage form EXCEPT A) newly acquired or constructed property. B) valuable papers and records. C) personal property temporarily off the premises. D) currency and securities.
D) currency and securities.
34) Rick is risk manager of Herald News, a daily newspaper in a competitive market. Rick wants to make sure that if Herald's printing facility is damaged or destroyed, the paper will continue to be published. What type of insurance can Rick purchase to cover the added cost of continuing to print the paper after a physical damage loss has occurred? A) contingent business income coverage B) product liability insurance C) business income from dependent properties coverage D) extra expense coverage
D) extra expense coverage
9) Which of the following perils is not included in the causes-of-loss basic form of the ISO commercial package policy? A) fire B) lightning C) explosion D) flood
D) flood
38) Tom opened a store in a mall. His store is located between a theater and a department store. Tom counts on the theater and department store to generate walk-in business at his store. While his store has been successful, Tom knows that if either or both of the other businesses closed, his store would suffer an economic loss. What type of dependent property situation is illustrated in this scenario? A) contributing location B) recipient location C) manufacturing location D) leader location
D) leader location
44) Which ocean marine coverage provides comprehensive liability insurance for property damage caused by the ship to piers and docks, damage to the ship's cargo, and injury to the passengers or crew? A) collision liability clause B) hull insurance C) freight insurance D) protection and indemnity insurance
D) protection and indemnity insurance
All of the following persons are eligible for a benefit under the retirement portion of the Social Security program EXCEPT A) a divorced spouse, age 55, who was married to the retired worker for 6 years. B) a retired worker's 63 year-old spouse who is no longer caring for children. C) a retired worker's 52 year-old spouse who is caring for a 12 year-old daughter of the retired worker. D) a retired worker's unmarried 20 year-old son who has been severely disabled because of an automobile accident while he was in elementary school.
a
As of this year, Brad, age 50, has 40 credits under the Social Security program. These credits were all earned in the last 10 years. What is Brad's insured status under the program? A) He is currently and fully insured. B) He is currently insured, but not fully insured. C) He is fully insured, but not currently insured. D) He is neither currently insured nor fully insured.
a
EFG Company experienced a reduced demand for its products during a recession. EFG managers were considering laying off some workers when the personnel director said, "Let's not lay off these workers. If we do, our unemployment insurance premiums will increase. The state considers employment stability when determining our premium." Considering the firm's employment record when determining the rate to charge for unemployment insurance is called A) experience rating. B) class rating. C) schedule rating. D) retrospective rating.
a
Prior to the passage of workers compensation laws, all of the following common law defenses could be used by employers to avoid financial responsibility for work-related injuries EXCEPT A) contributory negligence. B) the fellow-servant doctrine. C) assumption of the risk. D) joint and several liability.
d
Which of the following statements about the characteristics of social insurance programs is true? A) Benefits are loosely related to a worker's earnings. B) Benefits are paid primarily on the basis of individual equity. C) Participation in social insurance programs is voluntary. D) Social insurance programs must be fully funded at all times to pay required benefits.
a
Which of the following statements about the characteristics of social insurance programs is true? A) They are designed to provide a floor of income with respect to the risks that are covered. B) The method of determining benefits is determined by insurance contractual provisions. C) Participants are required to satisfy a means test to receive benefits. D) With few exceptions, participation in social insurance programs is voluntary.
a
Which of the following statements is true with regard to the Medicare program? A) While Social Security old-age benefits are available at age 62, Medicare Part A benefits are not available, in most cases, until age 65. B) If an individual delays collecting Social Security old-age benefits until after the full retirement age, he or she is not eligible for Medicare benefits until he or she begins to collect old-age benefits. C) Part B of Medicare is funded through a payroll tax. D) Beneficiaries must pay a monthly premium for Medicare Part A coverage
a
Which of the following would help to reduce the long-range OASDI actuarial deficit ? A) increasing the payroll tax rate B) increasing benefits C) reducing the taxable wage base D) increasing the cost of living adjustment
a
All of the following changes would reduce the long-range deficit for the Social Security program EXCEPT A) increase the OASDI taxable wage base. B) delay scheduled increases in the full retirement age. C) make all OASDI benefits fully taxable. D) use general revenues of the federal government to help pay benefits.
b
All of the following persons are eligible for survivor benefits under Social Security EXCEPT A) dependent parents age 62 or older. B) unmarried children between the ages of 18 and 22 who are attending college. C) a surviving spouse age 60 or older. D) a surviving spouse with eligible children younger than age 16.
b
All of the following statements about the Medicare Prescription Drug Plan are true EXCEPT A) Medicare prescription drug coverage is available to all Medicare beneficiaries. B) Medicare prescription drug coverage is funded exclusively through the Part A payroll tax. C) The Medicare prescription drug program provides financial help for beneficiaries with limited income and financial resources. D) In addition to the initial deductible, there is a coverage gap where the beneficiary must pay the entire cost of prescription drugs.
b
Beth was injured at work and is eligible to receive workers compensation benefits. All of the following benefits are provided under workers compensation EXCEPT A) disability income. B) retirement benefits. C) rehabilitation. D) medical care.
b
Dale, age 65, was dismayed to learn about all of the deductibles, co-pays, limits, and exclusions in the Medicare program. Dale bought a type of health insurance specifically designed to supplement Medicare, and selected his coverage from among 10 standard policies that private insurers offer. What type of health insurance did Dale purchase? A) long-term care insurance B) Medigap insurance C) major medical insurance D) viatical insurance
b
Frank is doing some life insurance planning. A financial advisor said, "be sure to consider Social Security when examining sources of funds available for family support if you die." The financial advisor was referring to which Social Security benefit? A) retirement benefits B) survivor benefits C) disability benefits D) health insurance benefits
b
Tony is 48 years old. He earned the maximum taxable wage base under Social Security annually between the time when he was 26 and when he was 40. At age 40, he dropped out of the workforce to care for children as his wife had a high-paying job. Which statement is true regarding Tony's insured status under Social Security? A) Tony is fully insured and currently insured. B) Tony is fully insured, but not currently insured. C) Tony is currently insured, but not fully insured. D) Tony is neither fully insured nor is he currently insured.
b
Under one type of Medicare Advantage Plan, members of the plan can see any doctor or health services provider that accepts Medicare patients. If members receive care outside the network of member physicians and care facilities, they must pay higher out-of-pocket costs. This type of Medicare Advantage Plan is a A) Medicare HMO. B) Medicare PPO. C) Medicare Special Needs Plan. D) Medicare Private Fee-for-Service Plan.
b
Under the Medicare Prescription Drug Program, a coverage gap (also called a "donut hole") exists after the beneficiary and drug plan pay a certain amount for covered drugs. The coverage gap refers to A) the large, up-front deductible that must be satisfied if the patient has a prescription for a covered brand-name drug. B) the temporary gap in coverage that begins when the beneficiary and drug plan pay a certain amount for covered drugs during the year and ends when the catastrophic limit is reached and coverage resumes. C) the temporary gap in coverage that begins after beneficiaries reach the lifetime limit on catastrophic drug expenses and ends when a new deductible is met and coverage resumes. D) the temporary gap in coverage that begins when prescription benefits terminate for beneficiaries who attain age 68 and resumes when beneficiaries attain age 72.
b
Which of the following expenses is covered under the medical insurance (Part B) portion of the Medicare program? A) a long-term stay in rest home B) the fee charged by a surgeon for an operation C) the cost of semis-private room during a hospital stay D) routine prescription drugs outside of the hospital
b
Which of the following is a reason that social insurance programs exist? A) to compete with private insurance programs B) to provide a base of economic security C) to provide need-tested benefits to low-income individuals D) to reduce involvement of the government in insurance markets
b
Which of the following statements about benefits provided by workers compensation programs is true? A) Occupational disability and nonoccupational disability are covered. B) Death benefits and benefits to eligible survivors are payable if a worker is killed on the job. C) Medical benefits are usually subject to deductibles, coinsurance, and numerous exclusions. D) Retirement benefits are payable to retired workers through workers compensation.
b
Which of the following statements regarding the Emergency Unemployment Compensation (UEC) program is true? A) EUC benefits are limited to individuals who have exhausted regular state benefits and have annual incomes below the federal poverty level. B) EUC benefits are funded entirely by the federal government. C) EUC benefits are limited to employees who have lost their job because of a labor dispute. D) EUC benefits are available on a case-by-case based and awarded at the discretion of the Secretary of Labor.
b
In addition to most persons over age 65, which of the following persons is (are) eligible for Medicare benefits? I. Persons under age 65 who have been entitled to Social Security disability benefits for at least 24 months II. Persons under 65 who need long-term kidney dialysis treatment or a kidney transplant
both
Objectives of unemployment insurance include which of the following? I. To help unemployed workers find jobs. II. To encourage employers to stabilize employment.
both
Which of the following statements about the coverage of health care services under Part A of Medicare is (are) true? I. Services in the patient's home are covered if the patient requires skilled care and meets certain conditions. II. Hospice care is available for beneficiaries with a terminal illness.
both
Which of the following statements about the financing of the Social Security program is (are) true? I. Although the self-employed pay an OASDI tax rate that is twice the employee rate, they are allowed certain deductions that reduce the effective tax rate. II. The earnings base on which OASDI taxes are paid increases annually based on changes in average wages in the national economy.
both
Which of the following statements about the problems and issues of unemployment insurance programs is (are) true? I. Many state programs are inadequately financed. II. Only a small portion of the total unemployed receive benefits at any time.
both
Which of the following statements is (are) true with respect to the Social Security earnings test? I. The earnings test does not apply to dividends, interest, and rental income. II. The earnings test does not apply to work earnings for those individuals who have reached the full retirement age under Social Security.
both
All of the following provisions under the Affordable Care Act have an impact on the current Medicare Program EXCEPT A) free preventative care for seniors. B) additional funding to reduce fraud in the Medicare Program. C) free rest home care for beneficiaries over age 90. D) rebates for the Part D coverage gap (donut hole).
c
All of the following statements about the Medicare prescription drug benefit are true EXCEPT A) Beneficiaries are required to pay a monthly premium for the benefit. B) The plan provides protection against catastrophic prescription drug expenditures. C) Coverage is limited to when a beneficiary is hospitalized or a resident of rest home. D) The plan has a coverage gap before a beneficiary has coverage for catastrophic costs
c
As an alternative to the Original Medicare Plan, beneficiaries can elect to enroll in private health insurance plans that cover all services that the Original Medicare Plan covers except hospice care. These private health insurance plans that are an alternative to the Original Medicare Plan are called A) Medigap Insurance Programs. B) PACE Programs. C) Medicare Advantage Plans. D) Medicare Prescription Drug Plans.
c
Marion owns substantial financial assets. She was surprised that she qualified for Social Security retirement benefits when she retired because of her high investment income. What characteristic of social insurance programs is Marion overlooking with respect to her Social Security retirement benefits? A) Social insurance programs are financially self-supporting. B) Social insurance program benefits are loosely related to earnings. C) Social insurance benefits are not means tested. D) Full funding of social insurance programs is unnecessary.
c
Which of the following statements about the financing of unemployment insurance benefits is true? A) Each state maintains its own trust fund at the state level, and the state pays qualified beneficiaries from the trust fund the state administers. B) While experience rating is used for other types of insurance, it is not used in unemployment insurance. C) Part of an employer's contribution is used for administrative expenses, to fund extended benefits, and to maintain a loan fund that can be drawn upon if the state's account is depleted. D) Most state programs are financed primarily by payroll taxes paid by employees.
c
Which of the following statements about workers compensation programs is true? A) Injured workers must prove the employer was responsible for their injuries to collect benefits. B) Workers compensation disability income benefits (amount and duration) are uniform from state to state. C) Options available for complying with the law may include one or more of the following: self-insurance, private insurance, or insurance through a state fund. D) Most states have elective laws whereby the employer can choose whether or not to provide workers compensation coverage to employees.
c
In order to receive unemployment insurance benefits, an unemployed worker must meet all of the following eligibility requirements EXCEPT A) have qualifying wages and employment. B) be able to work. C) be actively seeking work. D) satisfy a 6-month waiting period.
d
Marco, a risk manager in California, is interviewing for a new position in the state of Washington. When Marco asked about methods of providing workers compensation, the answer surprised him. In Washington, employers can self-insure the risk or obtain coverage through a state fund. Private insurers do not market workers compensation insurance in Washington. Washington uses a A) competitive state fund. B) guaranty fund. C) reinsurance facility. D) monopoly state fund.
d
One insured status under Social Security requires you to have earned at least six credits duing the last 13 calendar quarters ending with the quarter of death, disability, or entitlement to retirement benefits. This insured status is A) disability insured. B) temporarily insured. C) fully insured. D) currently insured.
d
