Simulated test - Oklahoma

A health benefit plan delivered in Oklahoma that provides benefits for the dependents of an insured individual must provide immunizations coverage from birth through the date such child is A ) 18 years old. B ) 16 years old. C ) 15 years old. D ) 12 years old.

A ) 18 years old. A health benefit plan delivered in Oklahoma that provides benefits for the dependents of an insured individual must provide coverage for each of the insured, from birth through the date such child is 18 for immunizations as mandated by O.S. 6060.4.

How many routine dental exams are allowed under an employer's group health plan? A ) 2 per year B ) 3 per year C ) Unlimited D ) 1 per year

A ) 2 per year Group dental insurance provided through an employer will often cover two routine dental exams per year, in addition to often limited coverage on braces and other appliances. Cosmetic dental work is not covered.

An applicant for an individual health policy failed to complete the application properly. Before being able to complete the application and pay the initial premium, she is confined to a hospital. This will not be covered by insurance because she has not met the conditions specified in the A ) Consideration Clause. B ) Insuring Clause. C ) Pre-existing Conditions Clause. D ) Eligibility Clause.

A ) Consideration Clause. The consideration clause specifies that both parties to the contract must give some valuable consideration. The payment of the premium is the consideration given by the applicant. Because the applicant had not paid an initial premium, she is not covered by insurance.

A valid certificate of authority is required by the Commissioner in order for an insurer to transact business in Oklahoma. Some exceptions apply to insurance transactions for which a Certificate of Authority is not required. Which of the following are permitted without a Certificate of Authority? A ) Investigation of claims by an insurer which has relocated in another state B ) Solicitation and inducement to insurance C ) Preliminary insurance negotiation D ) Effectuation of an insurance contract

A ) Investigation of claims by an insurer which has relocated in another state A Certificate of Authority is not required for investigation of claims by an insurer which has relocated in another state as specified in O.S. 606 & 1101.

Which of the following statements is NOT correct regarding Medicare? A ) Medicare Advantage must be provided through HMOs. B ) Medicare Advantage may include prescription drug coverage at no cost C ) Medicare Part A provides hospital care. D ) Medicare Part B provides physician services.

A ) Medicare Advantage must be provided through HMOs. Medicare Part A provides hospital care; Medicare Part B provides doctors and physician services, and Medicare Advantage (previously Medicare+Choice) offers expanded benefits for a fee through private health insurance programs such as HMOs and PPOs.

When a life insurance policy was issued, the policyowner designated a primary and a contingent beneficiary. Several years later, both the insured and the primary beneficiary died in the same car accident, and it was impossible to determine who died first. Which of the following would receive the death benefit? A ) The insured's contingent beneficiary B ) The insurance company C ) The insured's estate D ) The primary beneficiary's estate

A ) The insured's contingent beneficiary Under the Uniform Simultaneous Death Law, the law will assume that the beneficiary dies first in a common disaster. This provides that the proceeds will be paid to the contingent beneficiary or to the insured's estate if none is designated.

All of the following are correct about the required provisions of a health insurance policy EXCEPT A ), A reinstated policy provides immediate coverage for an illness. B ), Proof-of-loss forms must be sent to the insured within 15 days of notice of claim. C ), A grace period of 31 days is found in an annual pay policy. D ), The entire contract clause means the signed application, policy, endorsements, and attachments constitute the entire contract.

A ), A reinstated policy provides immediate coverage for an illness. Accidental injury is covered immediately, but to protect the insurer against adverse selection, losses resulting from sickness are covered only if the sickness occurs at least 10 days after the reinstatement date.

All of the following statements are correct regarding credit life insurance EXCEPT A ), Benefits are paid to the borrower's beneficiary. b), The amount of insurance permissible is limited per borrower. c), Premiums are usually paid by the borrower. d), Benefits are paid to the creditor.

A ), Benefits are paid to the borrower's beneficiary. In credit life insurance, the creditor is the beneficiary for the amount of benefit equal to the outstanding balance of the loan.

Under which of the following employer-provided plans are the benefits taxable to an employee in proportion to the amount of premium paid by the employer? A ), Disability Income B ), Major Medical C ), Dental Expense D ), Basic Medical Expense

A ), Disability Income The part of the benefit that is provided by the employer's contribution is income taxable to the employee.

Which of the following would NOT constitute doing the business of insurance in this state? A ), Examining insurer records B ), Investigating claims C ), Holding an insurance license D ), Delivering insurance contracts

A ), Examining insurer records Doing insurance business in this state involves, but it not limited to, making, proposing, or delivering insurance contracts, managing insurance records, processing insurance claims, and possessing an insurance license.

The Patient Protection and Affordable Care Act includes all of the following provisions EXCEPT A ), Individual tax deduction for premiums paid. B ), Right to appeal. C ), No lifetime dollar limits. D ), Coverage for preventive benefits.

A ), Individual tax deduction for premiums paid. The Act does not offer tax deductions for health insurance premiums. The Act does offer a tax credit, which is different from a tax deduction. All the other provisions are included in the Act.

In the event of loss, after a notice of claim is submitted to the insurer, who is responsible for providing claims forms and to which party? A ), Insurer to the insured B ), Insured to the insurer C ), Insurer to the Department of Insurance D ), Insured to the Department of Insurance

A ), Insurer to the insured Upon receipt of a notice of claim, the company must supply claims forms to the insured within a specified number of days.

The Commissioner may examine any company or person engaged in the insurance business as often as it is deemed appropriate, but is required to examine each foreign insurer at least A ), Once every 5 years. B ), Once a year. C ), Every 2 years. D ), Once every 3 years.

A ), Once every 5 years. The Commissioner may examine any company or person engaged in the insurance business as often as it is deemed appropriate, but is required to examine each insurer at least once every 5 years as specified by the Insurance Code.

When a life insurance policy was issued, the policyowner designated a primary and a contingent beneficiary. Several years later, both the insured and the primary beneficiary died in the same car accident, and it was impossible to determine who died first. Which of the following would receive the death benefit? A ), The insured's contingent beneficiary B ), The insurance company C ), The insured's estate D ), The primary beneficiary's estate

A ), The insured's contingent beneficiary Under the Uniform Simultaneous Death Law, the law will assume that the beneficiary dies first in a common disaster. This provides that the proceeds will be paid to the contingent beneficiary or to the insured's estate if none is designated.

Which of the following statements regarding the Change of Beneficiaries Provision is false? A) The policyowner has the right to change beneficiaries in any case. B) A policyowner can change beneficiaries without the consent of the former revocable beneficiary. C) The policyowner cannot change beneficiaries if he/she has chosen to have an irrevocable beneficiary, unless the policyowner has the permission of the irrevocable beneficiary. D) All policies that allow a death benefit must at least provide the option of a change of beneficiary provision.

A) The policyowner has the right to change beneficiaries in any case. The policyowner has the right to change beneficiaries unless he/she has chosen to have an irrevocable beneficiary. Otherwise, the policyowner can legally change beneficiaries, without the consent of the former beneficiary.

Agents who persuade insureds to cancel a policy in favor of another one when it might not be in the insured's best interest are guilty of A) Twisting. B) Defamation. C) Misrepresentation. D) Rebating.

A) Twisting. Twisting is a misrepresentation that persuades an insured or a policyowner, to his or her detriment, to cancel, lapse, or switch policies.

Each insurer must maintain at its principal office a complete file containing every printed, published or prepared advertisement of its policies for a period of at least A ) 5 years. B ) 4 years. C ) 2 years. D ) 3 years.

B ) 4 years. Each insurer must maintain files for 4 years as specified in Title 365:10-3.

What is the clause that describes the method of paying the death benefit in the event that the insured and beneficiary are both killed in the same accident? A ) Nonforfeiture Clause B ) Common Disaster Clause C ) Spendthrift Clause D ) Settlement Clause

B ) Common Disaster Clause The Common Disaster Clause provision states that when an insured and beneficiary die in a common accident, and the beneficiary dies before or within a specific period of time after the insured, the insurer will proceed as if the insured outlived the beneficiary.

Which of the following is TRUE about credit life insurance? A ) Debtor is the policy beneficiary. B ) Creditor is the policyowner. C ) Debtor is the annuitant. D ) Creditor is the insured.

B ) Creditor is the policyowner. In credit life insurance, the creditor is the policyowner and the beneficiary; the debtor is the insured.

Under which of the following employer-provided plans are the benefits taxable to an employee in proportion to the amount of premium paid by the employer? A ) Basic Medical Expense B ) Disability Income C ) Major Medical D ) Dental Expense

B ) Disability Income The part of the benefit that is provided by the employer's contribution is income taxable to the employee.

Which of the following is NOT required of a business entity applying for its required insurance producer license? A ) Paying state licensing fees B ) Ensuring that all employees of the business have passed an insurance licensing exam C ) Designating a licensed producer responsible for compliance with insurance laws D ) Submitting a uniform application to the Commissioner

B ) Ensuring that all employees of the business have passed an insurance licensing exam An entity must submit a uniform application to the Commissioner, pay required fees, designate a responsible producer and ensure that it is organized in compliance to state laws.

When an insurance agency published an advertising brochure, it emphasized the company's financial stability and sound business practices. In reality, its financial health is terrible, and the company will soon have to file for bankruptcy. Which of the following terms best describes the advertisement? A ) Rebating B ) False financial statement C ) Defamation D ) Twisting

B ) False financial statement False financial statements are made when insurance companies attempt to hide their financial troubles from the public and government officials.

The provision which prevents the insured from bringing any legal action against the company for at least 60 days after proof of loss is known as A ) Proof of loss. B ) Legal actions. C ) Time limit on certain defenses. D ) Payment of claims.

B ) Legal actions. This mandatory provision requires that no legal action to collect benefits may be started sooner than 60 days after the proof of loss is filed with the insurer. This gives the insurer time to evaluate the claim.

An individual applies for a life policy. Two years ago he suffered a head injury from an accident, so he cannot remember parts of his past, but is otherwise competent. He has also been hospitalized for drug abuse, but does not remember this when applying for insurance. The insurer issues the policy and learns of his history one year later. What will probably happen? A ) Because the insured is currently not a drug user, his policy will not be affected. B ) The policy will not be affected. C ) The policy will be voided. D ) The insurer will sue the insured for committing fraud.

B ) The policy will not be affected. In insurance, fraud is the intentional misrepresentation of material information that is crucial when deciding whether or not to write a contract for an applicant. If an insurer finds that an applicant has committed fraud, it can void the contract, provided that the discovery occurs within the first two years of the effective policy date. In this particular instance the applicant did not commit intentional fraud.

An applicant is discussing his options for Medicare supplement coverage with his agent. The applicant is 65 years old and has just enrolled in Medicare Part A and Part B. What is the insurance company obligated to do? A ), Send the applicant to a doctor for a physical. Nothing can happen until they get the results. B ), Offer the supplement policy on a guaranteed issue basis C ), Exclude pre-existing conditions from coverage under the supplement policies D ), Look at the applicant's medical history to decide what premium to charge

B ), Offer the supplement policy on a guaranteed issue basis Once a person becomes eligible for Medicare supplement plans, and during the open enrollment period, coverage must be offered on a guaranteed issue basis.

Which of the following does NOT have to be disclosed in a long-term care (LTC) policy? A ), Any riders or endorsements B ), The aggregate amount of premiums due C ), The meaning of the terms "reasonable" and "customary" D ), Any limitations or conditions of eligibility for LTC benefits

B ), The aggregate amount of premiums due All LTC policies must disclose and explain the renewability provisions. With regard to life insurance policies that provide an accelerated benefit for long-term care, the policy must include a statement to the effect that receipt of the accelerated benefits may be taxable, and that the insured should seek assistance from a personal tax advisor.

Which of the following is included on the certificate for credit life insurance? A ), A list of all previous participants, as well as current participants B ), The effective date and termination date C ), A list of all dependents D ), A list of all beneficiaries, whether participating members or not

B ), The effective date and termination date All individual or group certificates of credit life or health must also include the effective date and termination date of the policy.

In all health care plans under the Affordable Care Act (ACA), how many essential benefit categories are there? A) 5 B) 10 C) 12 D) 15

B) 10 There are 10 essential benefit categories under the ACA.

Which of the following is the term for the specific dollar amount that must be paid by an HMO member for a service? A) Cost share B) Copayment C) Deductible D) Premium

B) Copayment A copayment is a specific dollar amount of the cost of care that must be paid by the member. For example, the member may be required to pay $5 or $10 for each office visit.

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? A ) None B ) $1,000 C ) $3,000 D ) $4,000

C ) $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.

An insured wants to buy a disability income policy that pays a maximum monthly benefit of $1,200. To make sure that the disability benefit keeps up with inflation, the insured would need to add A ) 3% more to the premium each year. B ) An additional monthly benefit rider. C ) A cost of living rider. D ) A guaranteed purchase option rider.

C ) A cost of living rider. The cost of living rider is usually tied to the Consumer Price Index (CPI) or another recognized measure of inflation.

The benefits for individual disability plans are based on A ) The number of employees of the company. B ) A percentage of the worker's income. C ) A flat amount. D ) The employer's net worth.

C ) A flat amount. Group disability plans usually specify the benefits based on a percentage of the worker's income, while individual policies usually specify a flat amount.

If an insurance company makes a statement that its policies are guaranteed by the existence of the Insurance Guaranty Association, that would be considered A ) A required disclosure. B ) A legal representation of the Association. C ) An unfair trade practice. D ) A misrepresentation.

C ) 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 Insurance Guaranty Association. Though it is illegal to advertise, the statement is still true and would not be considered a misrepresentation.

The provision in a health insurance policy that ensures that the insurer cannot refer to any document that is not contained in the contract is the A ) Incontestability clause. B ) Legal action against us clause. C ) Entire contract clause. D ) Time limit on certain defenses clause.

C ) Entire contract clause. Entire contract is a mandatory provision that is required by law.

Which provision concerns the insured's duty to provide the insurer with reasonable notice in the event of a loss? A ) Claims Initiation B ) Consideration C ) Notice of Claim D ) Loss Notification

C ) Notice of Claim The Notice of Claim Provision spells out the insured's duty to provide the insurer with reasonable notice in the event of a loss.

An insurer is on the verge of bankruptcy and can no longer pay the claims to its insureds. Which of the following entities will make sure that the insureds receive their money? A ) Federal Insurer's Reserve B ) Commissioner's Fund C ) The Oklahoma Life and Health Insurance Guaranty Association D ) NAIC

C ) The Oklahoma Life and Health Insurance Guaranty Association The Oklahoma Life and Health Insurance Guaranty Association protects policyowners, insureds, and beneficiaries from financial losses caused by insurers who become insolvent or otherwise unable to perform their contractual obligations

Which of the following is NOT the purpose of HIPAA? A ) To prohibit discrimination against employees based on their health status B ) To limit exclusions for pre-existing conditions C ) To provide immediate coverage to new employees who had been previously covered for 18 months D ) To guarantee the right to buy individual policies to eligible individuals

C ) To provide immediate coverage to new employees who had been previously covered for 18 months HIPAA does not prohibit employers or providers from establishing waiting periods or pre-existing conditions exclusions, in which case the coverage to new employees would not be immediate.

In individual health insurance coverage, the insurer must cover a newborn from the moment of birth, and if additional premium payment is required, how many days should be allowed for payment? A ) Within 10 calendar days B ) Within 15 working days C ) Within 31 days of birth D ) Within a reasonable period of time

C ) Within 31 days of birth The insured must notify the insurer of a newly born dependent, and if additional payment is required, pay within 31 days.

According to Oklahoma law, the term "insurance agent" is synonymous with which of the following terms? A ), "Insurance adjuster" B ), "Insured" C ), "Insurance producer" D ), "Insurer"

C ), "Insurance producer" An insurance agent is one who is licensed to sell, solicit, or negotiate insurance, and is also identified by the term "insurance producer."

All of the following individuals may qualify for Medicare health insurance benefits EXCEPT A ), A person age 45 who has a permanent kidney failure. B ), A person under age 65 who is receiving Social Security disability benefits. C ), A retired person age 50. D ), A healthy person age 65.

C ), A retired person age 50. Under current federal laws, any of the described persons could qualify for Medicare, except for individuals under age 65 who have no special circumstances.

Which of the following must an insurer obtain in order to transact insurance within a given state? A ), Business entity license B ), Insurer's license C ), Certificate of authority D ), Producer's certificate

C ), Certificate of authority All insurers (domestic, foreign, or alien) must obtain a certificate of authority before transacting insurance within a given state.

In a basic expense policy, after the limits of the basic policy are exhausted, the insured must pay what kind of deductible? A ), Half B ), None C ), Corridor D ), Full

C ), Corridor The basic expense policy will provide coverage on a first-dollar basis (no deductible). After the limits of the basic policy are exhausted, the insured must pay a corridor deductible before the major medical coverage will pay benefits. The corridor deductible derives its name from the fact that it is applied between the basic coverage and the major medical coverage.

The provision which prevents the insured from bringing any legal action against the company for at least 60 days after proof of loss is known as A ), Payment of claims. B ), Proof of loss. C ), Legal actions. D ), Time limit on certain defenses.

C ), Legal actions. This mandatory provision requires that no legal action to collect benefits may be started sooner than 60 days after the proof of loss is filed with the insurer. This gives the insurer time to evaluate the claim.

All of the following are types of indemnity plans EXCEPT A ), Nonscheduled. B ), Basic. C ), Limited. D ), Comprehensive.

C ), Limited. There are three types of indemnity plans: scheduled (also known as "basic"), comprehensive (also known as "nonscheduled"), and a combination of scheduled and comprehensive plans.

Which type of care is NOT covered by Medicare? A ), Respite B ), Hospital C ), Long-term care D ), Hospice

C ), Long-term care Hospice care, which includes respite care, and hospital care are included in Medicare Part A.

Underwriting is a major consideration when an insured wishes to replace her current policy for all of the following reasons EXCEPT A ), Pre-existing conditions that were previously covered may not be covered under the replacing policy. B ), Benefits may change. C ), Premiums always stay the same. D ), Due to age or health, the policy may change dramatically.

C ), Premiums always stay the same. Underwriting is important when replacement is involved. It is an underwriter's duty to evaluate risk and decide whether or not a person is eligible for coverage. When replacement is involved, the insured may be under the assumption that a replacing policy is in his/her best interests, but after being evaluated by an underwriter, where premium and risk are exchanged, an insured may not be paying the same premium or receiving the same benefits.

Which of the following protects consumers against the circulation of inaccurate or obsolete personal or financial information? A ), The Guaranty Association B ), Consumer Privacy Act C ), The Fair Credit Reporting Act D ), Unfair Trade Practices Law

C ), The Fair Credit Reporting Act The purpose of the Fair Credit Reporting Act is to protect consumers against the circulation of inaccurate or obsolete information and to ensure that consumer reporting agencies are fair and equitable in their treatment of consumers.

An individual applies for a life policy. Two years ago he suffered a head injury from an accident, so he cannot remember parts of his past, but is otherwise competent. He has also been hospitalized for drug abuse, but does not remember this when applying for insurance. The insurer issues the policy and learns of his history one year later. What will probably happen? A ), The insurer will sue the insured for committing fraud. B ), Because the insured is currently not a drug user, his policy will not be affected. C ), The policy will not be affected. D ), The policy will be voided.

C ), The policy will not be affected. In insurance, fraud is the intentional misrepresentation of material information that is crucial when deciding whether or not to write a contract for an applicant. If an insurer finds that an applicant has committed fraud, it can void the contract, provided that the discovery occurs within the first two years of the effective policy date. In this particular instance the applicant did not commit intentional fraud.

Which health insurance provision describes the insured's right to cancel coverage? A) Insuring clause B) Cancellation provision C) Renewal provision D) Policy duration provision

C) Renewal provision Renewability provisions are included in each health insurance contract and outlines both the insurer's and insured's right to cancel or renew coverage. This is considered to be a very important provision required by HIPAA, the federal Health Insurance Portability and Accountability Act of 1996.

An insured has Medicare Part D coverage. Upon reaching the initial benefit limit, what percentage of the prescription drug cost is the insured responsible for paying? A ) 15% B ) 16% C ) 23% D ) 25%

D ) 25% Once the initial benefit limit is reached, an insured is only responsible for 25% of the prescription drug cost. This percentage applies to generic and brand name drugs.

What is the maximum period of coverage for most short-term limited-duration insurance policies? A ) 3 months B ) 6 months C ) 24 months D ) 36 months

D ) 36 months Federal regulations limit the duration of short-term health insurance to an initial period of less than 12 months, and, taking into account any extensions, a maximum duration of no longer than 36 months in total.

In order to maintain coverage under COBRA, how soon from termination of employment must an employee exercise extension of benefits? A ) 7 days B ) 10 days C ) 30 days D ) 60 days

D ) 60 days Under COBRA, terminated employees must exercise extension of benefits within 60 days of separation from employment.

All of the following are correct about the required provisions of a health insurance policy EXCEPT A ) Proof-of-loss forms must be sent to the insured within 15 days of notice of claim. B ) A grace period of 31 days is found in an annual pay policy. C ) The entire contract clause means the signed application, policy, endorsements, and attachments constitute the entire contract. D ) A reinstated policy provides immediate coverage for an illness.

D ) A reinstated policy provides immediate coverage for an illness. Accidental injury is covered immediately, but to protect the insurer against adverse selection, losses resulting from sickness are covered only if the sickness occurs at least 10 days after the reinstatement date.

Under the Affordable Care Act, which classification applies to health plans based on the amount of covered costs? A ) Guaranteed and nonguaranteed B ) Grandfathered and nongrandfathered C ) Risk classification D ) Metal level classification

D ) Metal level classification Plans other than self-insured plans will be classified into four levels determined by how much of one's expected health care costs are covered. The four plans are bronze, silver, gold, and platinum. This is called metal level classification.

In insurance policies, the insured is not legally bound to any particular action in the insurance contract, but the insurer is legally obligated to pay losses covered by the policy. What contract element does this describe? A ) Unidirectional B ) Aleatory C ) Conditional D ) Unilateral

D ) Unilateral In a unilateral contract, the insured is not legally bound to do anything. The insurer, however, must pay losses covered by the policy.

If the Commissioner has reason to believe that a person or insurer has violated the Insurance Code, the Commissioner may set a hearing. The notice of the hearing must be given how many days in advance? A ), 15 days B ), 30 days C ), 7 days D ), 10 days

D ), 10 days The Commissioner must give notice for a hearing at least 10 days in advance.

An insured has Medicare Part D coverage. Upon reaching the initial benefit limit, what percentage of the prescription drug cost is the insured responsible for paying? A ), 15% B ), 16% C ), 23% D ), 25%

D ), 25% Once the initial benefit limit is reached, an insured is only responsible for 25% of the prescription drug cost. This percentage applies to generic and brand name drugs.

In the event a policy lapses due to nonpayment of premium, within how many days would the policy be automatically reinstated once the outstanding premium is paid? A ), 10 days B ), 25 days C ), 30 days D ), 45 days

D ), 45 days If a policy premium is not paid by the end of the grace period, and the policy lapses, an insured may pay the outstanding premium and have the policy reinstated. If the insurer does not refuse reinstatement within 45 days from the date the conditional receipt was issued, the policy will be automatically reinstated.

In the event of the death, disablement of a licensee, or other specific events, the Commissioner may issue temporary license to another person to continue their business of insurance. A temporary license is issued for a period not to exceed A ), 9 months. B ), 12 months. C ), 90 days. D ), 6 months.

D ), 6 months. The Commissioner may also renew the temporary license once for "good cause".

Which of the following statements is CORRECT concerning the relationship between Medicare and HMOs? A ), HMOs do not pay for services covered by Medicare. B ), Medicare Advantage is Medicare provided by an approved HMO only. C ), All HMOs and PPOs charge premiums beyond what is paid by Medicare. D ), HMOs may pay for services not covered by Medicare.

D ), HMOs may pay for services not covered by Medicare. The advantages of an HMO or PPO for a Medicare recipient may be that there are no claims forms required, almost any medical problem is covered for a set fee so health care costs can be budgeted, and the HMO or PPO may pay for services not usually covered by Medicare or Medicare supplement policies, such as prescriptions, eye exams, hearing aids, or dental care.

Which of the following is INCORRECT concerning taxation of disability income benefits? A ), If the employer paid the premiums, income benefits are taxable to the insured as ordinary income. B ), If the insured paid the premiums, any disability income benefits are tax-free. C ), If the benefits are for a permanent loss, the benefits paid to the employee are not taxable. D ), If paid by the individual, the premiums are tax deductible.

D ), If paid by the individual, the premiums are tax deductible. If an individual purchases his or her own disability insurance with before-tax dollars, any benefits paid are tax free, but the premium is not tax deductible. If an employer pays the premium, the employer may deduct the premium as a business expense. Any benefits paid to an employee are taxable, unless it is for the permanent loss of a body part, or loss of use of a body part.

Which of the following licensees is NOT compensated directly related to the amount of insurance sold? A ), Insurance agent B ), Insurance producer C ), Insurance broker D ), Insurance consultant

D ), Insurance consultant Insurance consultants advise others about their insurance needs and coverages. Consultants are compensated by the people they advise, not by agents or insurers. Their compensation is not directly related to the amount of insurance sold, but based upon their advice and recommendations.

The section of a health policy that states the causes of eligible loss under which an insured is assumed to be disabled is the A ), Incontestability clause. B ), Consideration clause. C ), Probationary period. D ), Insuring clause.

D ), Insuring clause. The insuring clause is a provision on the first page of the policy that states the coverage and when it applies.

Which of the following is correct about a group health insurance policy? A ), It cannot exclude coverage for VA hospital treatment. B ), It cannot provide coverage for handicapped children. C ), It cannot exclude coverage from an occupational accident. D ), It cannot exclude newborn children from coverage.

D ), It cannot exclude newborn children from coverage. All individual and group health insurance policies and contracts that provide coverage for a child of the insured must provide coverage for newborn children, from the moment of birth.

Which health insurance provision describes the insured's right to cancel coverage? A ), Policy duration provision B ), Insuring clause C ), Cancellation provision D ), Renewal provision

D ), Renewal provision Renewability provisions are included in each health insurance contract and outlines both the insurer's and insured's right to cancel or renew coverage. This is considered to be a very important provision required by HIPAA, the federal Health Insurance Portability and Accountability Act of 1996.

Which of the following persons is required to hold an insurance producer license? A) A person who takes messages related to claims B) A person who creates insurance advertisements C) A person who administers employee benefits D) A person who negotiates insurance contracts

D) A person who negotiates insurance contracts Persons who perform clerical tasks that are not related to soliciting or negotiating insurance contracts, and for which they do not receive commissions are not required to be licensed.