Disability Only Course
In general, the IRS requires that a group (at least a single-employer group) have a minimum of how many members?
10 members
All of the following statements are true about the purpose of the Health Insurance Coverage Access Act EXCEPT:
It insures all Washington residents who seek health insurance coverage.
A worker's eligibility for Social Security disability benefits, and the amount received, is dependent upon all the following criteria EXCEPT:
the worker's family status
Once a producer is appointed to represent an insurance company, the appointment will remain valid for how long?
while the producer's license remains in good standing.
Which of the following is not a power or duty of the Washington Insurance Commissioner?
writing insurance code provisions
Joanne's producer license lapsed six months ago when she failed to satisfy the continuing education requirements. A policy she sold a year ago was renewed last month. What compensation, if any, may Joanne receive from the renewal?
100% of the renewal commission
A group short-term disability income plan (STD) typically has a maximum benefit period of
2 years
How long from contract signing and issue does an insurance company have to discover and void an insurance policy due to fraud?
24 months
An individual or group health insurance plan that was issued or substantially amended after March 23, 2010 and that insurers the policyholder or group member's child must offer to insure any child under what age?
26
Frances buys a Medicare supplement policy and a long-term care insurance policy. If she is unsatisfied with them, she can return them for a full refund of the premiums within how many days?
30 days in both cases.
A flat benefit amount for a partial disability is usually what percent of the full disability benefit?
50%
Under the proof of loss provision, within how many days of a loss does the insured have to provide the insurer with written proof of loss?
90 Days
Which of the following statements correctly describes Medicare Part A hospital insurance?
A benefit period begins on the day a beneficiary is admitted to the hospital.
Which of the following statements about the producer's role as a fiduciary is not correct?
A producer may apply limited premium funds to pay reasonable business expenses.
Which of the following best defines "disability" for purposes of qualifying for Social Security disability benefits?
A worker is unable to engage in any gainful employment, and has a disability that is expected to last at least one year or result in death.
Under the Patient Protection and Affordable Care Act, dependent children are eligible to be covered under their parent's group medical insurance policy until:
Age 26
The other insurance with other insurers provision extends to coverage with multiple insurers of which the primary insurer had prior knowledge. When is multiple coverage typically an issue?
An insured has coverage from a state's workers' compensation program.
Which statement about the characteristics of health insurance claims is NOT correct?
An insurer does not need to approve a medical procedure before it is performed on the insured.
Brick Motors co. offers a group disability plan and pays all of the premiums. Which of the following statements is correct if any employee suffers a disabling injury?
Benefits paid to the employee are taxable income to the employee.
All of the following statements regarding reinsurance are correct EXCEPT:
Claims are paid to the policyowner separately by each insurer participating in the reinsurance agreement.
Marla, a producer who wants to sell long-term care insurance policies in WA, must first di which of the following?
Complete 8 hours of coursework on LTC insurance.
In noncancelable insurance policies, which of the following is guaranteed?
During the noncancelable period, the insurer will not end the policy nor will it increase the premium.
The purpose for the Buyer's Guide, which must be given to every insurance prospect, is to
Explain the general features, benefits, and conditions of the type of insurance being considered.
Grant's Medicare SELECT plan offers the same benefits as the coverage provided under a standard plan. So why are Grant's Medicare SELECT plan premiums lower than those for a standard Medicare supplement policy?
Grant must obtain covered services through the plan's network. For this reason, his Medicare SELECT plan's premiums are lower than those for standard Medicare supplement policies.
Bruce, an HMO member, cannot get covered health-care services outside the HMO's provider network. What must Bruce do if he wants to use services outside the network but not pay for them?
He must but a point-of-service (POS) option.
Which of the following is a corporation or association connected to a health-care provider or a group of providers that accepts prepayment for health-care services from an individuals or groups in exchange for giving them a health-care services from the health-care provider or group of providers?
Health-care service contractor
Sally wants to qualify for a Medicare supplement policy. All of the following statements about her qualification are correct EXCEPT:
If Sally is at least 65 years old and applies for a Medicare supplement policy within six months of enrolling in Part B, she qualifies for the policy of her choice in her state as long as she meets the program's health requirements.
Which of the following plans is associated with traditional insurers and reimburses the insured for the cost of covered medical care received?
Indemnity plans
All of the following statements about taxes on accidental death and dismemberment (AD&D) benefits are correct EXCEPT:
Interest earned on a benefit settlement option involving proceeds retained by the insurer are not taxed.
All of the following statements about Allen's individually owned medial expense insurance policy are correct EXCEPT:
Medical expense insurance policy benefits are treated as taxable income.
Which of the following statements about disability income (DI) policies is incorrect?
Most DI policies cover both occupational-related disabilities as well as nonoccupational disabilities.
The premiums paid by Paul's employer for his group medical insurance coverage are not subject to Social Security taxes (FICA) or Medicare taxes. Why is this the case?
Premiums paid by Paul's employer for his group medical insurance coverage are not considered wages.
Able Insurance Co. sends a health insurance policy to Scott, its producer, for delivery to Stacy, a client. Scott and Stacy are old friends. Stacy is often absentminded and misplaces important documents, so Scott files the policy in his office for safekeeping. Which of the following statements is true?
Scott's actions constitute an unfair practice.
What type of plan can business owners use to help employees pay for their portion of group insurance coverage and other benefits.
Section 125 cafeteria plan
Starr Construction Company applied for a group health insurance policy for its employees. Which of the following statements is correct if the insurer offers Starr a community-rated plan?
Starr Starr's plan and premium rate will be the same as that offered by the insurer to all similar groups in the area.
Stephen joined a group health plan in January 2014 while he had a pre-existing condition. Which statement is correct about coverage for this condition?
Stephen's pre-existing condition must be covered the same as all other medical conditions and cannot be excluded for any length of time.
Based on the following job descriptions, which of the following persons does not need an insurance license?
Suzanne, who sets appointments for producers in an insurance agent.
In Washington, which of the following persons is not considered an insurance producer?
Sven, who brokers surplus lines contracts.
Labor unions are also known as which of the following for group health insurance purposes?
Taft-Hartley groups
Sandra and David orally agree that Sandra will pay David $25,000 to set fire to her ex-husband's house and the house burns to the ground. Which of the following statements is correct?
The contract cannot be enforced because its purpose is illegal.
Nick's policy has been canceled and Nick has paid a premium that was not due. Under the cancellation provision, what must the insurer do?
The insurer must return it to Nick.
What can the insured do if it is not possible to notify the insurer of a covered loss within the required number of days?
The notice of claim provision allows the insured to notify the insurer within 20 days or "as soon as reasonably possible."
A producer receives a policy that the insurance company issues for delivery to a new customer. The producer forgets to deliver the policy before going on an extended vacation. Who is responsible to the insured for the delayed delivery?
The producer and the insurance company.
Under the conformity with state statues provision, which of the following will happen if provisions of an insurer's health insurance policies are contrary to state law?
The provisions will automatically be changed to meet the minimum requirements of the law.
Which of the following statements about preexisting conditions with respect to LTC insurance policies is true?
They cannot be excluded if they arose more than six months before the effective date of coverage.
Alex sold an insurance policy before his license lapsed and earned a commission on the sale. Is he entitled to a commission if the policy is renewed?
Yes, because he was licensed when the policy was sold.
For tax purposes, the term "self-employed person" includes all of the following, EXCEPT:
a C corporation with fewer than two employees.
Carla incurs $7,000 in covered medical expenses. She must pay $500 of those expenses, and the policy will base how much benefit it pays on the remaining $6,500. What kind of deductible does Carla have?
a flat deductible
Which of the following allows insureds to increase a policy's level of benefits or scope of coverage in the future without having to prove insurability.
a guaranteed insurability rider
ERISA requires that a fiduciary be named to administer a health plan in a financially responsible manner and in the best interests of its enrollees. What is this function of ERISA called?
accountability
The insurance company function that is responsible for calculating company mortality and morbidity rates, and calculating dividends on participating life insurance policies is the:
actuarial division
Allen participates in a group plan. His plan provides a pre-set level, or schedule, of benefits. A schedule of benefits does all of the following, EXCEPT:
allow individual selection
An agent for ABC Insurance Company met with a client to talk about long-term care policies. The agent showed the client ABC's sample policies, referred to the ABC rate book, gave him an ABC business card, and told the client that ABC has given him unlimited binding authority. If the client assumes this is true, then which of the following describes the agent's authority in this case?
apparent authority
How late in the year can flexible spending account (FSA) participants apply their contributions for any one year?
as late as March 15 of the following year
All of the following statements regarding disability buy-out insurance are correct EXCEPT:
benefits are paid in the form of monthly payments for a specified number of years.
Dave has a small business. What kind of insurance can his small business use to provide funds necessary to continue operations if he becomes disabled?
business overhead expense insurance.
The elimination period is to a disability income insurance policy as which of the following is to a medical expense policy?
deductible
An insurance company issues a health insurance policy to Doug's client, and the policy is sent to Doug to deliver to his client. The client travels often and is unavailable when Doug calls to deliver the policy. What should Doug do?
deliver the policy to the client at the first reasonable opportunity.
Which of the following is not prohibited marketing practice?
discrimination among risks
Which of the following are NOT reimbursed (FSA) expenses?
elective cosmetic surgery and visits to non-licensed medical practitioners
What is the period after a disability starts during which no benefits are payable known as?
elimination period
Which of the following provisions of a health insurance policy imposes a waiting period before benefits begin?
elimination period
Which of the following is NOT an unfair claims settlement practice if committed by an insurance company in Washington?
failing to promptly settle a claim for which liability is uncertain
Assurance Insurance Co. is a Delaware corporation that wants to do business in WA. In Washington, Assurance would be considered what type of insurer?
foreign
Producers must act in the best interests of applicants and insureds, which requires that they do which one of the following in all cases?
give all important information about a proposed policy.
Washington health insurance reform legislation is intended to accomplish all of the following objectives EXCEPT:
help state residents find the most affordable health insurance.
Which of the following is NOT a factor states would use to determine eligibility for Medicaid?
household size
When is a health insurance policy considered to have lapsed?
if the premium is not paid by the end of the grace period
Which of the following is not a disciplinary measure that the Commissioner can take against a person who violates the insurance laws or regulations?
imprisonment
According to ERISA standards, group health plan enrollees must be given a summary plan description. What is the function of ERISA called?
information
Zelda, a producer selling health insurance, assures a prospective applicant that the insurance company she represents is backed by the protections of the Florida Life and Health Insurance Guaranty Association. What is true about this kind of assurance?
it is prohibited at all times
Which of the following is NOT a standard form of basic medical expense policy?
lab expense policy
Which of the following does not constitute the transaction of insurance?
mailing an insurance contract
Which of these health-care delivery plans shares the cost of the service and treatment with the provider?
managed care plan
How often must the Insurance Commissioner examine the affairs and transactions of every authorized insurer?
once every five years
Alice is a long-term care policyowner. Her return of premium option allows her to have a portion of the premium she paid for this policy:
paid to her estate or a named beneficiary when she dies.
Which of the following persons would not qualify for a temporary producer's license in Washington?
part-time producer of a licensed agency.
Which of the following standard provisions of a health insurance policy is not intended to prevent over insurance?
payment of claims
Which of the following is allowed under cancelable policies?
premium increases
HMOs cover care to treat an illness or to recover from an injury already ongoing. What other type of care do HMOs emphasize?
preventive care as a way to avoid more costly care to treat an illness.
Which of the following statements best describes the purpose for a business owning a key person disability income policy?
provide the business with funds to use for any purpose upon the disability of a key employee.
Which of the following must an insurer do under a cancelable policy?
refund any advance premiums paid before canceling the policy.
Which of the following health insurance provisions defines the rights of the insurer to cancel or continue the policy's coverage?
renewability provisions
Which of the following risk management techniques best describes the role of insurance?
risk transfer
All of the following statements regarding perils and hazards are correct EXCEPT:
smoking cigarettes is an example of a peril.
Which of the following is not considered an activity of daily living that, if the insured is unable to perform it, could trigger the payment of benefits from a long-term care insurance policy?
speaking
When pricing health insurance policies, insurers must account for morbidity rates. What do these rates indicate?
the average number of persons at various ages who can be expected to become disabled because of accident or sickness.
If a group health plan is experience rated, the underwriter will examine all of the following factors EXCEPT:
the claims statistics of groups similar to the group being rated.
In order to be grounds for ending a contract, what must a misrepresentation on an insurance application involve?
the deliberate withholding of material facts.
The time limit on certain defenses provision in a health insurance policy is largely the same as which provision in life insurance?
the incontestable clause
Which of the following statements about a guaranteed renewable disability income policy is correct?
the insurer can increase the premiums only if it increases the premium for all policies in the same class.
From an insurance perspective, underwriting is best defined as
the process of determining if an applicant is an insurable risk.
The Commissioner can suspend a producer's insurance license without a hearing in all of the following cases EXCEPT:
the producer has violated a department regulation.
Each application for health insurance requires the signature of which party?
the proposed insured, the producer, and all adults to be covered by the policy.
Henry, an insurance prospect, meets with Lisa, a producer. Lisa determines that Henry would be well served by buying a long-term care insurance policy. While submitting the application, she learns that Henry receives Medicaid benefits. She submits the application, and the policy is issued. Which of the following statements about Lisa's actions is true?
the sale was prohibited.
John has a history of severe leg pain. He applies for disability income coverage. The insurer may add an impairment rider. What usually determines whether a policy will be issued with an impairment rider?
the underwriting process
Into how many classes do many dental plans group their covered treatment and benefits?
three classes
When comparing her insurance company's policies to those of Zenith Insurance, Melanie makes a misleading statement to convince an insurance prospect to terminate a policy with Zenith and buy one from Melanie's company. What prohibited practice has Melanie engaged in?
twisting
Long-term care insurance policies have benefit periods, which are the length of time benefits will be paid. What are common benefits periods?
two to five years
Under what circumstances does a guaranteed insurability rider guarantee the policyowner's right to buy additional coverage?
under any circumstances