AD Banker Retention Questions

Which party to a health insurance contract is responsible for making the premium payments? a. producer b. beneficiary c. policyowner d. insured

c. policyowner

Managed health care plans generally refer to covered persons as ____________ a. insureds b. employees c. subscribers d. providers

c. subscribers

An individual is applying for their producer license after passing the Illinois examination. What will their application fee be?

$50

A group disability plan is issued on a contributory basis and the employer pays 80% of the premium. If an employee is eligible to receive a weekly benefit of $1,000, how much is taxable?

$800

An insured is covered under a major medical plan with a $500 deductible that has not been paid and 80/20 coinsurance requirement. A minor injury is suffered and the total covered cost for treatment is $1,500. How much will the insurance company cover?

$800

Which of these statements best describes the difference between the "any occupation" and "own occupation" definitions?

-own occupation is less restrictive because it is easier to qualify for benefits -any occupation is more restrictive because it is harder to qualify for benefits

An insured purchases a disability income policy with a 90 day elimination period. If a disability lasts 100 days, the insured would be entitled to receive benefits for _____

10 days

In non contributory group health plans, how many eligible employees must be covered by the plan?

100%

A Group Health plan may deny coverage for pre-existing conditions for no more than how many months after the effective date of coverage?

12 months

The "time limit on certain defenses" generally terminates the insurance company's right to void a claim that is not based on a fraudulent statement for more than _______ years from the date of policy issue

2 years

A Medicare Supplement Policy must include, as a core benefit, Medicare Part B coinsurance in the amount of ________

20%

How much time after a qualifying event has occurred and notice is given of their right to continue insurance does an employee or dependent have to elect continuation of the group health plan under COBRA?

60 days

If an insurer makes a payment for a claim but the insured is dissatisfied with it, the insured must wait ___ days after proof of loss before taking any legal action

60 days

The Legal Actions provisions preserves the insured's right to bring suit against their own insurer, but the insured must wait at least _____ days after filing a proof of loss before pursuing this action

60 days

Under the legal actions provision, the insured cannot take legal action against the insurer for at least:

60 days after providing proof of loss

For life and health insurance, insurable interest must exist at the time of: a. application b. loss c. application and loss d. policy delivery

A. application

When Harry completed his insurance application, the agent discovered that he was under treatment for a chronic condition. In order to gather the necessary information, Harry's agent ordered a/an:

An attending physician statement

Which of the following is an insurance company organized under the laws of another state within the United States? a. Domestic b. Alien c. Foreign d. Authorized

C. foreign

The employees of a corporation must each pay a portion of the premium for their group insurance. This means they are members of a ____________

Contributory group plan

When a group members terminates employment, he or she has 31 days to purchase an individual policy without proof of insurability. This is referred to as the:

Conversion Privilege

A federal regulation called the __________ protects consumer privacy a. Consolidated Omnibus Budget Reconciliation Act b. Fraudulent Insurance Act c. Privacy Protection Act d. Fair Credit Reporting Act

D. Fair Credit Reporting Act (FCRA)

A _____________ insurance company is owned by its policyholders a. stock b. reciprocal .c. Fraternal Benefits Society d. mutual

D. mutual

A business entity in Illinois has applied for a producer license with a Uniform Business Entity Application and paid the required fees. what is the final step it must take before the application can be approved?

Designate a licensed producer

Under what circumstance may an unappointed producer solicit insurance policies in the state of Illinois?

If they maintain a bond with the insurer for which they solicit

Creating the impression that a governmental agency guarantees the terms of a policy is an example of

Misrepresentation

When the employer pays some or all of the cost of health insurance for its employees, the benefits paid to each employee are

NOT taxable to the employee

Which of the following sources of insurability alerts members about an insurance applicant's previous claim information?

The MIB

An insured covered under a $1 million accidental death and dismemberment policy is involved in an accident that resulted in the loss of both legs 3 days after the accident. Following a lengthy hospital stay, her losses included $300,000 in medical bills, $100,000 in hospital expenses, and $10,000 in loss of income due to her inability to work. Which of the following is payable from the AD&D policy?

The principal sum of $1 million for double dismemberment

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

Time of Payment of Claims (Mandatory Uniform Provision)

All of the following are characteristics of dental insurance plans, EXCEPT: a. orthodontic care is covered immediately following the effective date of the policy b. purely cosmetic services are excluded from coverage c. cleaning and x rays are preventive care services d. deductibles and coinsurance generally apply to basic and major services

a

An insurance company would most likely use an impairment rider in which of the following situations? a. G is looking to obtain a health insurance policy, but is concerned about a current heart condition b. S is looking to buy a disability income policy but is unemployed c. F has cancer and is looking to buy a cancer only policy to help with the cost of treatment d. T, age 70, wants to buy a long-term care policy but is receiving skilled care in a nursing home

a

In a guaranteed renewable policy, the premiums may a. be increased for all similarly classified insureds based on age b. not be changed at all from the original premium at the time the policy was issued c. only be increased according to the increased risk of an individual insured's health status d. be increased only in relation to the number of claims paid in the past year

a

The purpose of a respite care benefit in a Long Term Care policy is to: a. give a primary caregiver a break b. provide care for a person who is terminally ill c. cover care in an adult care facility d. cover the cost of insurance when a person is disabled

a.

A Medicare beneficiary enrolled in a Medicare Advantage plan may have any of these other insurance plans, EXCEPT: a. Medicare supplement b. Long term care c. Disability income d. Life insurance with cash value in excess of $1,500

a. Medicare Supplement

HMOs usually require patients to select a ________ as the person who will oversee and direct their basic health care in most cases a. Primary Care Physician b. care coordinator c. medical social worker d. insurance agent or broker

a. Primary Care Physician

All of the following are policy requirements of a Medicare Supplement policy, except: a. a 10 day free look period b. The Guide to People with Medicare must be provided at the time of application c. The Outline of Coverage contains information on the benefits, deductibles, exclusions, and premiums d. the insurer/producer must explain the relationship of this coverage to the benefits of Medicare

a. a 10 day free look period (it is 30 days free look)

Which of the following is not an example of a prohibited practice? a. Backdating b. Rebating c. Defamation d. Misrepresentation

a. backdating the age of an insured by no more than 6 months is not an example of a prohibited practice

If a premium is not paid at the time of application, the producer will obtain which of the following at the time of policy deliver? a. signed statement of good health b. attending physician's statement c. notice of consent d. conditional receipt

a. signed statement of good health

All of the following are modes of premium payment for health insurance, except: a. single pay b. quarterly c. monthly d. annually

a. single pay

If the premium is submitted with the application and a conditional receipt is issued, coverage is effective: a. the date of the application, or date of a completed medical exam if required, whichever is later, as long as the policy would have been issued as applied for b. the date the insurance company received the results of a required medical exam c. the date the policy is issued and mailed to the producer d. the date the insured or owner signed the policy delivery receipt

a. the date of application, or date of a completed medical exam if required, whichever is later, as long as the policy would have been issued as applied for

Group HMO contracts must provide health care services for

at least 12 months

A Business Overhead Expense policy, as a form of disability insurance, provides payments for all of the following, EXCEPT: a. employee wages b. owner's income c. taxes, utilities, rent d. raw materials used to manufacture goods sold

b

A High Deductible Health Plan is a a. basic medical expense plan which pays first dollar expenses b. health plan which requires the insured to absorb a relatively high deductible in exchange for a significantly reduced premium c. health plan offered by large companies who are trying to minimize the growing cost of providing employee health insurance d. Health Maintenance Organization established to provide comprehensive medical services on a prepaid basis

b

A Long Term Care policy may do which of the following? a. terminate coverage for the insured's rapid decline in health b. require an institutional stay up to 30 days to be eligible for noninstitutional benefits c. cover services performed by a member of the insured's family d. require prior hospitalization to be eligible for any benefit

b

A typical hospital indemnity insurance plan provides payment of benefits in which of the following ways? a. a percentage of benefits b. a daily benefit based on a stated dollar amount paid to the insured without regard to the actual medical expenses c. an amount equal to the insured's deductible and coinsurance amounts d. as reimbursement for usual, customary, reasonable necessary medical expenses paid by the insured

b

All of the following are potential risks of replacement of an individual health or disability insurance policy, except: a. premiums may be higher than the original policy b. coverage due to an accident will be restricted for 30 days after the effective date of the policy c. coverage may be reduced or excluded due to a pre existing condition d. a new probationary period may go into effect limiting coverage for losses due to sickness

b

An individual is covered under an individual disability income policy with a 90-day waiver of premium provision and a $100 monthly premium. If the insured becomes disabled due to serious illness and is unable to work for 6 months, which of the following statements will apply? a. premiums do not have to be paid during the entire 6 months b. the insured is responsible for paying the premiums for 3 months and will then receive a $300 refund and premiums are no longer payable for the remainder of the disability c. the insured does not qualify for waiver of premium since the disability is due to sickness d. the premiums must be paid by the insured for the entire 6 months and upon returning back to work the insurer will reimburse the insured for the premiums paid for the first 90 days

b

Which of the following is not an example of a cost containment measure? a. mandatory second opinion b. replacement c. utilization review d. preventive care

b

Which of the following is excluded from coverage under Medicare Part B? a. Home Health Care b. Acupuncture c. Outpatient emergency treatment d. Inpatient physician services

b. Acupuncture

Which of the following is excluded from coverage under Medicare Part A? a. Home Health Care b. Custodial Nursing Care c. Skilled Nursing Facility Care d. Inpatient Hospitalization

b. Custodial Nursing Care

All of the following are considered Activities of Daily Living (ADLs), except: a. bathing b. cooking c. eating d. dressing

b. cooking

To be eligible for a Medicare supplement policy, an individual must be: a. receiving Social Security disability benefits b. enrolled in Medicare Parts A and B c. covered under a Medicare Advantage plan d. under age 65

b. enrolled in Medicare Parts A and B

All of the following are differences between a PPO plan and an HMO, EXCEPT: a. freedom to choose any service provider b. it is a managed care plan c. providers charge a discounted fee negotiated in advance d. use of a Primary Care Physician

b. it is a managed care plan

A flexible spending account can only be opened if: a. a High Deductible Health Plan is purchased b. offered through an employer-established benefit plan c. qualified long term care coverage is purchased d. the insured is self employed

b. offered through an employer established benefit plan

A warranty is defined as which of the following? a. intentional misrepresentation on the application b. statement in the application that is guaranteed to be true c. a false statement in the application d. a substantially true statement

b. statement in the application that is guaranteed to be true

Which term best describes the maximum length of time that disability income benefits will be paid to the disabled insured?

benefit period

A policy is issued based on an insured's age of 40. After a disability occurs, the insurer discovers that the age was understated and the insured was actually 45 years old at the time of application. The insurer will most likely: a. refund the excess premiums since the insured overpaid premiums b. cancel the policy if the discovery is made within 2 years of policy issue c. reduce the benefit based on what the premiums paid would have purchased at the correct age d. pay the benefit as stated in the policy with no adjustment to the policy

c

All of the following are correct regarding employer group health insurance eligibility requirements and benefits, EXCEPT: a. employees must be considered full-time and actively at work b. newly hired employees must usually satisfy a probationary period before they can enroll in the plan c. employees can enroll at any time without restrictions d. employees must sign up during the enrollment period to avoid providing proof of insurability

c

All of the following are true regarding the Life and Health Insurance Guaranty Association, except: a. other members are assessed to provide money for the claims of an insolvent insurer b. it prevents financial loss to policyholders when an insurer becomes insolvent c. it covers HMOs d. The Association is not liable for more than $300,000 in the aggregate for any one life

c

An insured took out a disability income policy while working in a low hazardous occupation. When filing a claim for disability income benefits, the insurance company discovered the insured changed jobs 2 years prior to the loss. If the new job would have been classified as more hazardous, the insurance company will most likely a. reduce the benefit payment dollar for dollar to account for the premium underpayment b. pay no benefit since the insured failed to inform the insurance company on a timely basis of the change in occupation c. reduce the benefit to an amount the actual premium paid would have purchased under the proper job classification d. pay the benefit as contracted for since the policy is over 2 years old

c

Basic health plans provide "first dollar" coverage, which means: a. the insurance company pays 100% of all claims and the insured has no out of pocket expenses b. the beneficiary of an insured must pay the first dollar of expenses if an insured dies prior to paying the claim c. benefits are payable starting with the first dollar of expenses incurred up to a stated maximum benefit and without a deductible d. the insured must pay a deductible first before the insurer will pay any benefits

c

In an LTC policy, inflation protection: a. must be purchased b. cannot be sold to persons over age 75 c. must be offered d. is only available to persons over age 75

c

Which of the following is a state mandated benefit? a. Group Disability b. Subrogation c. Worker's Compensation d. Social Security

c

Which of the following statements regarding reinstatement of a health insurance policy is NOT correct? a. back premiums must be paid b. evidence of insurability may be required c. the insurer must approve the reinstatement application within 45 days of submission or it will be assumed to be rejected d. upon reinstatement, a 10 day probationary period applies to losses due to sickness

c

Original Medicare consists of which of the following? a. Medicare Part A b. Medicare Part B c. Medicare Part A and Part B d. Medicare Part A, B, C, and D

c. Medicare Part A and B

Which of the following is the primary source of underwriting information? a. medical exam b. Attending Physician Statement c. application d. Investigative consumer report

c. application

Which of the following is not a core benefit in a Medicare Supplement policy? a. those cost for the first three units of blood administered in a calendar year b. coverage for u to 365 days of hospital charges after Medicare benefits run out c. coverage for up to 365 days of long term care expenses after three days of hospitalization d. coinsurance payments payable under Part B

c. coverage for up to 365 days of long term care expenses after three days of hospitalization

All of the following are individual underwriting factors, EXCEPT: a. age b. gender c. marital status d. tobacco use

c. marital status

The Insuring Clause under an individual A&H policy would contain all the following except: a. what perils are covered b. the name of the insured and insurer c. premium or rate calculations d. the length of the policy period

c. premium or rate calculations (are part of the consideration clause)

Which of the following is true of an examination by the Director? a. The Department of Insurance must pay the costs associated with an examination b. Examinees have 30 days to request a hearing upon receipt of the Director's report c. The Director may appoint other examiners to investigate on their behalf d. A producer violating a written order may be fined up to $25,000

c. the Director may appoint other examiners to investigate on their behalf

If an incomplete application is accepted by the underwriter and a policy is issued without requesting the missing information, which of the following statements applies? a. the insurer can void the contract at any time since this is considered fraudulent b. the policy can be contested if a loss occurs within 2 years of the policy being issued c. the insurer waives its right to contest a claim based on the incomplete d. the producer will be personally responsible for out of pocket for any claims filed based on the missing information in the application

c. the insurer waives its right to contest a claim based on the incomplete application

Which of the following is not a characteristic of Medicare Part D? a. monthly premiums are required b. the beneficiary is responsible for an annual deductible and either a copayment or coinsurance c. these plans are funded by the federal government d. available to anyone eligible for Part A and/or Part B

c. these plans are funded by the federal government

Withdrawals may be made from the premium fund trust account only for the following, except: a. return of premiums to an insured b. commissions to the producer c. to pay claims d. to pay net premiums to the insurer

c. to pay claims

The Director may revoke, suspend, or refuse to renew a license for all the following, except: a. convicted of a felony b. suspended or revoked license in another state c. acted as an insurance agency through persons not licensed as producers d. issued insufficient coverage to a customer through apparent authority

d

Which of the following are characteristics of group disability income plans, EXCEPT: a. issued as nonoccupational b. premiums are paid based on a contributory or noncontributory basis c. coverage can be offered based on short term or long term disability benefits d. benefits are based on a percentage of the employee's income at the time the policy was issued

d

Which of the following benefits, if payable to an eligible employee, is considered to be primary to all other plans? a. Noncontributory Group Disability b. Contributory Group Disability c. Social Security d. Worker's Compensation

d

A Long Term Care policy provides benefits in each of the following settings, EXCEPT: a. intermediate care nursing facility b. the home of the insured c. hospice care in a family members home d. therapeutic care in a acute care hospital

d.

Medicaid differs from Medicare in that it is: a. optional coverage for Medicare beneficiaries b. only available to persons over age 21 and under age 65 c. health insurance for persons who do not have access to group health insurance d. a federal state medical assistance program providing health care benefits for low income persons

d.

Regarding the tax treatment of a qualified LTC policy, which of the following statements is correct? a. all premiums are tax deductible b. only 10% of the benefits are taxable c. only premiums paid by individuals age 65 or older are tax deductible d. LTC benefits are not taxable

d.

Illinois LTC Partnership policies require a disclosure notice, which includes: a. an insured may not receive benefits for pre-existing conditions for 12 months b. an insured may not have both Medicare and a Partnership policy c. Partnership policies may be more restrictive than other LTC policies in Illinois d. Purchasing a Partnership policy does not automatically qualify the insured for Medicaid

d. Purchasing a Partnership policy does not automatically qualify the insured for Medicaid

The Director is a. appointed by the State Senate b. appointed by the president of the NAIC c. elected through public nominations d. appointed by the governor

d. appointed by the governor

Newborn children are covered under medical expense plans beginning ______________ a. on the 14th day following birth b. on the 15th day following birth c. on the 31st day following birth d. immediately at birth and for at least 31 days

d. immediately at birth and for at least 31 days

Each of the following is an element of a legal contract, EXCEPT: a. consideration b. legal purpose c. agreement d. indemnity

d. indemnity

The terms "usual, customary, and reasonable" refer to which of the following? a. the standard accepted medical procedure for a given illness or injury b. the most commonly performed operations or treatments in a given territory c. a non-physician's evaluation and approval of a medical procedure recommended by a patient's physician or surgeon d. the average charge for a medical procedure, treatment, or service in a defined geographical area

d. the average charge for a medical procedure, treatment, or service in a defined geographical area

Which of the following is not a general power of the Director? a. make rules and regulations as necessary b. institute any action or legal proceeding to enforce insurance laws c. subpoena and examine witnesses under oath d. adjust claims

d. the director does not have the power to adjust claims

An application for health insurance is completed by a producer and signed by the applicant. The applicant remembers information that needs to be added to the application before being submitted to the insurer and contacts the producer, who has returned to the office. Which of the following statements is correct? a. Once the application is signed, answers reported on the application cannot be changed b. The applicant will have the opportunity to correct any information when the policy is delivered c. the producer can make any changes necessary with verbal consent of the applicant d. the producer must meet with the applicant in person to update the information and have the applicant initial the changes

d. the producer must meet with the applicant in person to update the information and have the applicant initial the changes

The time period that must elapse after a loss before benefits are payable under a policy is the

elimination or waiting period

When an employee is terminated, COBRA provides for the continuation of

health insurance at the employee's expense for up to 18 months

The insurer's promise to pay benefits is expressly stated in the:

insuring clause

If a premium is paid at the time of application and the policy is issued as applied, legal deliver occurs at the time of:

issuance of the policy

A(n) __________ is issued to the sponsor of the group, and employees receive an outline of coverage or other summary of benefits, which offers information about the plan's major benefits and principal exclusions

master policy

When an individual pays the full cost of individual disability income insurance, the disabled insured's benefit will be (tax wise)

non taxable in full, regardless of the employee's wage

All disability policies cover ________ disabilities, which are those occurring outside work

nonoccupational

When a disability buyout is funded by the partners, the premiums are (tax wise):

not deductible and the value of the benefit is not taxable as income

To qualify for Social Security disability, an individual must be unable to

perform any substantial gainful activity

To fund an HSA, an individual must

purchase a High Deductible Health Plan

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

recurrent disability

The elimination period in a disability income insurance policy:

serves as a time deductible before benefits are payable