Health Insurance

#53. To sign up for a Medicare prescription drug plan, individuals must first be enrolled in a) Medicare Part D. b) Medicare Part A. c) Medicare Part B and C. d) Medicare Parts A and C.

Medicare Part A. To receive Medicare prescription drug benefits, beneficiaries must sign up with a plan offering this coverage in their area and must be enrolled in Medicare Part A or in Parts A and B

#44. Which renewal option does NOT guarantee renewal and allows the insurance company to refuse renewal of a policy at any premium due date? a) Guaranteed renewable b) Noncancellable c) Optionally renewable d) Conditionally renewable

Optionally renewable d) In an optionally renewable policy, it is the insurer's option as to whether to renew or not.

In which Medicare supplemental policies are the core benefits found? a) All plans b) Plans A and B only c) Plan A only d) Plans A-D only

a) All plans

On a disability income policy that contains the "own occupation" definition of total disability, the insured will be entitled to benefits if they cannot perform a) Any job that they are suited for by prior training. b) Any job that they are suited for by prior experience. c) Their regular job. d) Any job that they are suited for by prior education.

c) Their regular job.

Each violation of the Insurance Code can result in fines up to $1,000 or imprisonment for a. 3 months. b. 6 months. c. 9 months. d. 12 months.

b. 6 months.

In underwriting a substandard risk, which of the following is INCORRECT? a) A discounted premium would be charged. b) The policy could be modified in the coverage or amount of coverage requested. c) The applicant could be rejected for coverage. d) Additional exclusions could be included to modify the underlying policy coverage.

#13. a) A discounted premium would be charged. A substandard risk is one below the insurer's standard or average risk guidelines. An individual can be rated as substandard for any number of reasons-- poor health, dangerous occupation, or dangerous avocations. Some substandard risks are rejected outright, while others will be accepted for coverage at a higher premium.

A purchaser of an individual long-term care insurance policy has the right to return the policy for a full refund of the premium if done within a) 10 days of its issue. b) 10 days of its delivery. c) 30 days of its issue. d) 30 days of its delivery.

30 days of its delivery. Long-term care policies must contain a prominently displayed no-loss cancellation clause enabling the insured to return the policy within 30 days of the receipt of the policy with return in full of any premium paid.

Which of the following is a TRUE statement regarding Medicare supplement insurance? a) It may exclude coverage by type of illness or treatment. b) It cannot be advertised to the general public. c) It cannot duplicate benefits provided by Medicare. d) It may not include pre-existing condition limitations.

It cannot duplicate benefits provided by Medicare.

What is the shortest possible elimination period for group short-term disability benefits provided by an employer? a) 0 days b) 30 days c) 60 days d) 90 days

a) 0 days

If an insured is not satisfied with a new health policy, he or she may return it for a full premium refund within how many days of receiving the policy? a) 10 b) 15 c) 20 d) 31

a) 10

#37. Following hospitalization because of an accident, Bill was confined in a skilled nursing facility. Medicare will pay full benefits in this facility for how many days? a) 20 b) 100 c) 80 d) 3

a) 20 Following hospitalization for at least three days, if medically necessary, Medicare pays for all covered services during the first 20 days in a skilled nursing facility. Days 21 through 100 require a daily copayment.

#52. Under the uniform required provisions, proof of loss under a health insurance policy normally should be filed within a) 90 days of a loss. b) 20 days of a loss. c) 30 days of a loss. d) 60 days of a loss.

a) 90 days of a loss. Under the Uniform Required Provisions, proof of loss under a health insurance policy normally should be filed within 90 days of a loss.

#16. Which of the following is NOT covered under a long-term care policy? a) Acute care in a hospital b) Adult day care c) Hospice care d) Home health care

a) Acute care in a hospital

All of the following are true regarding Key Employee Disability Income insurance EXCEPT a) Benefits are taxable to the employer. b) The employer owns the policy. c) Benefits are paid to the employer to retrain a new person. d) Premiums are not tax deductible for the employer.

a) Benefits are taxable to the employer. Key person disability income premiums are not deductible to the business, but the benefits are received income tax free by the business.

A man is injured while robbing a convenience store. How does his major medical policy handle the payment of his claim? a) Claim is denied if his policy contains the Illegal Occupation provision. b) 50% of claim will be paid. c) If the man is not convicted, he will get 75% of his claim paid. d) The claim is paid in full.

a) Claim is denied if his policy contains the Illegal Occupation provision.

How many pints of blood will be paid for by Medicare Supplement core benefits? a) First 3 b) None; Medicare pays for it all c) Everything after first 3 d) 1 pint

a) First 3

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

Under the Fair Credit Reporting Act, individuals rejected for insurance due to information contained in a consumer report a) Must be informed of the source of the report. b) Are entitled to obtain a copy of the report from the party who ordered it. c) Must be advised that a copy of the report is available to anyone who requests it. d) May sue the reporting agency in order to get inaccurate data corrected.

a) Must be informed of the source of the report. Under the Fair Credit Reporting Act, if an insurance policy is declined or modified because of information contained in a consumer report, the consumer must be advised and provided with the name and address of the reporting agency.

A participating insurance policy may do which of the following? a) Pay dividends to the policyowner b) Provide group coverage c) Pay dividends to the stockholder d) Require 80% participation

a) Pay dividends to the policyowner A participating insurance policy will pay dividends to the owner based upon

Under which provision can a physician submit claim information prior to providing treatment? a) Prospective Review b) Concurrent Review c) Anticipatory Treatment d) Suspended Treatment

a) Prospective Review

Under the Fair Credit Reporting Act, if the consumer challenges the accuracy of the information contained in his or her report, the reporting agency must a) Respond to the consumer's complaint. b) Defend the report if the agency feels it is accurate. c) Change the report. d) Send an actual certified copy of the entire report to the consumer.

a) Respond to the consumer's complaint.

An insurer is no longer financially able to pay claims on the policies it has issued. Which of the following entities will make sure that the claims are fully paid? a) The Idaho Life and Health Guaranty Association b) State reserve funding c) Director d) Federal Association of Insurers

a) The Idaho Life and Health Guaranty Association

An applicant is considered to be high-risk, but not so much that the insurer wants to deny coverage. Which of the following is NOT true? a) The insurer will issue a conditional coverage. b) The insurer can increase the premium. c) The insurer can add exclusions to the policy. d) The insurer can rate-up the policy.

a) The insurer will issue a conditional coverage.

#23. In forming an insurance contract, when does acceptance usually occur? a) When an insurer's underwriter approves coverage b) When an insurer delivers the policy c) When an insurer receives an application d) When an insured submits an application

a) When an insurer's underwriter approves coverage

How long is an open enrollment period for Medicare supplement policies? a. 6 months b. 1 year c. 30 days c. 90 days

a. 6 months

Under an individual disability policy, the MINIMUM schedule of time in which claim payments must be made to an insured is a. Monthly. b. Within 45 days. c. Weekly. d. Biweekly.

a. Monthly.

An insured is covered under 2 group health plans - under his own and his spouse's. He had suffered a loss of $2,000. After the insured paid the total of $500 in deductibles and coinsurance, the primary insurer covered $1,500 of medical expenses. What amount, if any, would be paid by the secondary insurer? a) $0 b) $500 c) $1,000 d) $2,000

b) $500 Once the primary insurer has paid the full available benefit, the secondary insurer will cover what the first company will not pay, such as deductibles and coinsurance. The insured will, then, be reimbursed for out-of-pocket costs.

#54. What is the maximum age for qualifying for a catastrophic plan? a) 26 b) 30 c) 45 d) 62

b) 30 Young adults under age 30 and individuals who cannot obtain affordable coverage (have a hardship exemption) may be able to purchase individual catastrophic plans that cover essential benefits.

records of insurance transacted through a given producer must be kept available for inspection for a minimum of a) 3 years. b) 5 years. c) 7 years. d) 10 years.

b) 5 years. Records of transactions must be kept available for inspection by the Director for at least 5 years after the transaction's creation or completion, whichever is later. This does not apply to life and disability insurance.

To attain currently insured status under Social Security, a worker must have earned at least how many credits during the last 13 quarters? a) 4 credits b) 6 credits c) 10 credits d) 40 credits

b) 6 credits

The minimum number of credits required for partially insured status for Social Security disability benefits is a) 4 credits. b) 6 credits. c) 10 credits. d) 40 credits.

b) 6 credits. To be considered partially insured, an individual must have earned 6 credits during the last 13-quarter period.

An individual currently licensed in South Carolina just moved to Idaho. In order to avoid a prelicensing examination, how soon after establishing legal residence should she apply for a resident license? a) Immediately b) 90 days c) 60 days d) 30 days

b) 90 days Small employers must have between 2 and 50 eligible employees.

Under a Key Person disability income policy, premium payments a) Are made by the business and are tax-deductible. b) Are made by the business and are not tax-deductible. c) Are made by the employee and are not tax-deductible. d) Are made by the employee and are tax-free.

b) Are made by the business and are not tax-deductible. Premiums are nondeductible to the business; however, benefits are received tax-free by the business.

Concerning group Medical and Dental insurance, which of the following statements is INCORRECT? a) Employee paid premiums may be deducted if certain conditions are met. b) Employee benefits are tax deductible the year in which they were received. c) Benefits received by the employee are free from federal income tax. d) Premiums paid by the employer are deductible as a business expense.

b) Employee benefits are tax deductible the year in which they were received.

Which of the following health care plans would most likely provide the insured/subscriber with comprehensive health care coverage? a) Basic medical expense plan b) Health Maintenance Organization plan c) Group dental insurance plan d) Medical-surgical expense plan

b) Health Maintenance Organization plan HMOs provide a package of comprehensive health care services that include routine physicals, immunizations, well baby care, family planning, etc., as well as the treatment of sickness and injury.

Which insurance principle states that if a policy allows for greater compensation than the financial loss incurred, the insured may only receive benefits for the amount lost? a) Reasonable expectations b) Indemnity c) Stop-loss d) Consideration

b) Indemnity

Which of the following is considered a presumptive disability under a disability income policy? a) Loss of one hand or one foot b) Loss of two limbs c) Loss of one eye d) Loss of hearing in one ear

b) Loss of two limbs

All of the following statements describe a MEWA EXCEPT a) MEWAs can be self-insured. b) MEWAs are groups of at least 3 employers. c) MEWAs can be sponsored by insurance companies. d) MEWA employers retain full responsibility for any unpaid claims.

b) MEWAs are groups of at least 3 employers. MEWAs are groups of at least 2 employers who pool their risks to self-insure. MEWAs can be sponsored by an insurance company, an independent administrator, or another group established to provide group benefits for participants.

Which of the following are the main factors taken into account when calculating residual disability benefits? a) Present earnings and standard cost of living b) Present earnings and earnings prior to disability c) Earnings prior to disability and the length of disability d) Employee's full-time status and length of disability

b) Present earnings and earnings prior to disability

Which of the following is NOT a characteristic of a group long-term disability plan? a) The benefit can be up to 66 and 2/3% of one's monthly income. b) The benefit can be up to 50% of one's yearly income. c) The elimination period is the same as in the short-term plan's benefit period. d) The benefit period may be to age 65.

b) The benefit can be up to 50% of one's yearly income.

#48. An insured submitted a notice of claim to the insurer, but never received claims forms. He later submits proof of loss, and explains the nature and extent of loss in a hand-written letter to the insurer. Which of the following would be true? a) The insured must submit proof of loss to the Department of Insurance. b) The insured was in compliance with the policy requirements regarding claims. c) The claim most likely will not be paid since the official claims form was not submitted. d) The insurer will be fined for not providing the claims forms.

b) The insured was in compliance with the policy requirements regarding claims. If claims forms are not furnished to the insured, the claimant is deemed to have complied with the requirements of the policy if he or she submits written proof of the occurrence, nature of the loss, and extent of loss to the insurer.

Under the Physical Exam and Autopsy provision, how many times can an insurer have the insured examined, at its own expense, while a claim is pending? a) 2 examinations per week of the claim processing period b) Unlimited c) None at all d) 1 examination per week of the claim processing period

b) Unlimited

To be eligible under HIPAA regulations, for how long should an individual converting to an individual health plan have been covered under the previous group plan? a. 63 days b. 18 months c. 5 years d. 12 months

b. 18 months

When an insured purchased her disability income policy, she misstated her age to the agent. She told the agent that she was 30 years old, when in fact, she was 37. If the policy contains the optional misstatement of age provision a. Because the misstatement occurred more than 2 years ago, it has no effect. b. Amounts payable under the policy will reflect the insured's correct age. c. The contract will be deemed void because of the misstatement of age. d. The elimination period will be extended 6 months for each year of age misstatement.

b. Amounts payable under the policy will reflect the insured's correct age.

An insured pays a monthly premium of $100 for her health insurance. What would be the duration of the grace period under her policy? a.7 days b.10 days c.31 days d.60 days

b.10 days

An insured was involved in an accident and could not perform her current job for 3 years. If the insured could reasonably perform another job utilizing similar skills after 1 month, for how long would she be receiving benefits under an "own occupation" disability plan? a) She would not receive any benefits. b) 3 years c) 2 years d) 1 month

c) 2 years Under an Own Occupation plan, if the insured cannot perform his/her current job for a period of up to two years, disability benefits will be issued, even if the insured would be capable of performing a similar job during that two-year period. After that, if the insured is capable of performing another job utilizing similar skills, benefits will not be paid.

Within how many days are insurers required to notify the Director that a producer's employment has been terminated? a) 10 days b) 15 days c) 30 days d) 60 days

c) 30 days

A free-look period on a Medicare supplement policy must be at least a) 10 days. b) 15 days. c) 30 days. d) 60 days.

c) 30 days.

Employer health plans must provide primary coverage for individuals with end-stage renal disease before Medicare becomes primary for how many months? a) 12 months b) 24 months c) 30 months d) 36 months

c) 30 months

#32. How many eligible employees must be included in a contributory plan? a) 100% b) 50% c) 75% d) 90%

c) 75%

An accident-related loss can be covered under the accidental death and dismemberment portion of a policy if it occurs within how many days of the accident? a) 30 b) 60 c) 90 d) 120

c) 90 When accidental death and dismemberment coverage is part of the insurance contract, the insured must have the option to include all insureds under the coverage and not just the principal insured. Benefits are payable if the loss occurs within 90 days of the accident.

An insurer neglects to pay a legitimate claim that is covered under the terms of the policy. Which of the following insurance principles has the insurer violated? a) Representation b) Adhesion c) Consideration d) Good faith

c) Consideration

#47. All of the following are true about group disability Income insurance EXCEPT a) The waiting period starts at the onset of the injury or sickness. b) The longer the waiting period, the lower the premium. c) Coverage applies both on and off the job. d) Benefits are usually short term.

c) Coverage applies both on and off the job. Employees who are injured on the job are covered by Workers Compensation insurance. Group Disability Income insurance is designed to cover employees only while they are off the job, so the coverage is considered to be nonoccupational in nature.

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

c) HMOs may pay for services not covered by Medicare.

#43. All of the following statements describe a MEWA EXCEPT a) MEWA employers retain full responsibility for any unpaid claims. b) MEWAs can be self-insured. c) MEWAs are groups of at least 3 employers. d) MEWAs can be sponsored by insurance companies.

c) MEWAs are groups of at least 3 employers. MEWAs are groups of at least 2 employers who pool their risks to self-insure. MEWAs can be sponsored by an insurance company, an independent administrator, or another group established to provide group benefits for participants.

In a POS plan, benefits for covered services when self-referring (without having your primary care physician arrange for the service) are generally a) The same cost. b) Self-referral is not allowed. c) More expensive. d) Less expensive.

c) More expensive.

An insured is involved in a car accident. In addition to general, less serious injuries, he permanently loses the use of his leg and is rendered completely blind. The blindness improves a month later. To what extent will he receive Presumptive Disability benefits? a) Partial benefits b) Full benefits until the blindness lifts c) No benefits d) Full benefits

c) No benefits Presumptive Disability plans offer full benefits for specified conditions. These policies typically require the loss of use of at least two limbs, total and permanent blindness, or loss of speech or hearing. Benefits are paid, even if the insured is able to work. Because the insured's blindness was only temporary and the loss of use in only 1 leg, he does not qualify for presumptive disability benefits

Which of the following must be present in all Medicare supplement plans? a) Outpatient drugs b) Plan C coinsurance c) Plan A d) Foreign travel provisions

c) Plan A

#80. Who might receive dividends from a mutual insurer? a) Stockholders b) Agents c) Policyholders d) Subscribers

c) Policyholders A mutual insurer has no stock, and is owned by the policyholders. Since they may receive a dividend (not guaranteed), such policies are known as participating policies. Dividends received by policyholders of a mutual insurer are not taxable.

Which of the following entities protects policy owners, insureds, and beneficiaries from financial losses caused by insurers that are unable to perform their contractual obligations? a) Federal Association of Insurers b) Insurer's Guild c) The Idaho Life and Health Guaranty Association d) Director

c) The Idaho Life and Health Guaranty Association

An insured who has an Accidental Death and Dismemberment policy loses her left arm in an accident. What type of benefit will she most likely receive from this policy? a) The capital amount in monthly installments b) The principal amount in monthly installments c) The capital amount in a lump sum d) The principal amount in a lump sum

c) The capital amount in a lump sum Accidental Death and Dismemberment policies pay a capital amount (a percentage of the principal amount) for the loss of one limb or loss of sight in one eye. The principal amount is paid for death or often for the loss of 2 limbs or loss of sight in both eyes. Benefits are paid in a lump sum.

#69. When can a Long-Term Care policy deny a claim for losses incurred because of a pre-existing condition? a) Never b) At any time c) Within 6 months of the effective date of coverage d) Within 12 months of the effective date of coverage

c) Within 6 months of the effective date of coverage A long-term care policy cannot deny a claim for losses incurred more than 6 months from the effective date of coverage because of a pre-existing condition.

Which of the following is NOT covered under Plan A in Medigap insurance? a. The 20% Part B coinsurance amounts for Medicare approved services b. .The first three pints of blood each year c.The Medicare Part A deductible d. Approved hospital costs for 365 additional days after Medicare benefits end

c.The Medicare Part A deductible

Fire insurance companies must report to the state fire marshal any settlements related to fire losses in amounts of a) $10,000 or more. b) $2,000 or more. c) $20,000 or more. d) $1,000 or more.

d) $1,000 or more.

The maximum number of eligible employees a small employer may have is a) 15. b) 20. c) 30. d) 50.

d) 50. Small employers must have between 2 and 50 eligible employees.

Which of the following is permitted to be covered under the principal policyholder's accidental death and dismemberment portion of a disability policy? a) Policyholder only b) Dependents c) Employees d) All of the above

d) All of the above

#41. Under a Key Person disability income policy, premium payments a) Are made by the employee and are not tax-deductible. b) Are made by the employee and are tax-free. c) Are made by the business and are tax-deductible. d) Are made by the business and are not tax-deductible.

d) Are made by the business and are not tax-deductible. Premiums are nondeductible to the business; however, benefits are received tax-free by the business.

When handling premium funds, insurance producers are acting in a a) Accounting capacity. b) Financial capacity. c) Special capacity. d) Fiduciary capacity.

d) Fiduciary capacity.

Who must pay for the cost of a medical examination required in the process of underwriting? a) Applicant b) Underwriters c) Department of Insurance d) Insurer

d) Insurer

In a group health policy, a probationary period is intended for people who a) Have a pre-existing condition at the time they join the group. b) Have additional coverage through a spouse. c) Want lower premiums. d) Join the group after the effective date.

d) Join the group after the effective date.

#61. Premium payments for personally-owned disability income policies are a) Eligible for tax credits. b) Tax deductible. c) Tax deductible to the extent that they exceed 10% of the adjusted gross income of those itemizing deductions. d) Not tax deductible.

d) Not tax deductible. Consumers must be advised that they have a right to request additional information concerning investigative consumer reports, and the insurer or reporting agency has 5 days to provide the consumer with the additional information.

A participating insurance policy may do which of the following? a) Provide group coverage b) Pay dividends to the stockholder c) Require 80% participation d) Pay dividends to the policyowner A participating insurance policy will pay dividends to the owner based upon actual mortality cost, interest earned and costs.

d) Pay dividends to the policyowner A participating insurance policy will pay dividends to the owner based upon actual mortality cost, interest earned and costs.

Which of the following applies to partial disability benefits? a) An insured is entitled to a principal sum benefit for the partial loss of a limb. b) Payment is based on termination of employment. c) Benefits are reduced once an insured is no longer under a doctor's care. d) Payment is limited to a certain period of time.

d) Payment is limited to a certain period of time.

Under which provision can a physician submit claim information prior to providing treatment? a) Concurrent Review b) Anticipatory Treatment c) Suspended Treatment d) Prospective Review

d) Prospective Review

Which statement accurately describes group disability income insurance? a) In long-term plans, monthly benefits are limited to 75% of the insured's income. b) There are no participation requirements for employees. c) Short-term plans provide benefits for up to 1 year. d) The extent of benefits is determined by the insured's income.

d) The extent of benefits is determined by the insured's income.

What do long-term care policies offer to policyholders to account for inflation? a) They do not account for inflation. b) They automatically increase premiums to account for inflation. c) They pay a dividend that increases every 7 years. d) They offer the option of purchasing coverage that raises benefit levels accordingly.

d) They offer the option of purchasing coverage that raises benefit levels accordingly.

A policyowner provides a check to the producer for her initial premium. How soon from receiving the check must the producer remit it to the insurer? a) Within 3 days b) Within 7 days c) Within 14 days d) Within 21 days

d) Within 21 days

In insurance, an offer is usually made when a. The insurer approves the application and receives the initial premium. b. The agent hands the policy to the policyholder. c. An agent explains a policy to a potential applicant. d.An applicant submits an application to the insurer.

d.An applicant submits an application to the insurer.