Health Insurance Exam

A small hardware store owner is involved in a car accident that renders him totally disabled for half a year. Which type of insurance would help him pay for expenses of the company during the time for his disability?

- Business overhead expense policy

The act of voluntarily giving up insurance by the insured is called

- Cancellation

A small business owner is the insured under a disability policy that fund a buy-sell agreement. If the owner dies or becomes disabled, the policy would provide which of the following?

- Cash to the owner's business partner to accomplish a buyout

If an applicant has a substandard risk, the insurer will most likely

- Charge an extra premium

Which of the following in NOT true of basic medical expense plans?

- Coverage for catastrophic medical expenses

Why is it essential for an insurer to document all correspondence with an insured?

- Errors and omissions (it is essential to have proof of these interactions, in the event that an insured would sue the insurer

A producer is acting in what capacity when he or she is trying to obtain credible information about an applicant for health insurance?

- Field underwriting

Which provision allows the policy holder a period of time, while coverage is in force, to examine a health insurance policy and determine whether or not to keep it?

- Free Look Period

Under which of the following disability income plans would the benefits be subject to income tax?

- Group

A new employee who meets HIPAA eligibility requirements must be insured health coverage on what basis?

- Guaranteed

Which authority is NOT stated in an agent's contract but is required for the agent to conduct business?

- Implied (Basics authorities that allows an agent to conduct daily business. Not everything they do is written in the contract)

Who must pay the cost of a medical examination required in the process of underwriting?

- Insurer

In a disability income policy, all of the following are considered presumptive disabilities EXCEPT

- Loss of one eye

Who is involved in completing the agent's report?

- Only the agent

What provision states that the claims be paid immediately?

- Time of Payment of Clauses

When an individual purchases insurance, what risk management technique is he or she practicing?

- Transfer

How soon following the occurrence of a covered loss must an insured submit written proof of such loss to the insurance company?

- Within 90 days or as soon as reasonably possible, but not exceed 1 year

Which of the following types of agent authority is also called "perceived authority?"

Apparent

At what point must an Outline of Coverage be delivered?

At the time of application or upon delivery of the policy

What statement best describes the free look provision?

- It allows the insured to return the policy within 10 days for a full refund of the premiums if dissatisfied for any reason

Which of the following is not true regarding a Certificate of Authority?

- It is issued to group insurance participants

Which insurance pays to train a new important employee that is vital to the business?

- Key person insurance

Which of the following will vary the length of the grace period?

- Mode of the premium payment

Under an individual disability policy, the minimum schedule of time in which claim payment must be made to an insured is

- Monthly

A person who does not lock the door or does not repair leaks shows an indifferent attitude. This person presents what type of hazard?

- Morale (Careless attitude)

An insured's health claim internal appeal was denied. The insurer must do all of the following EXCEPT

- Offer a payment plan

Which document helps ensure that full and fair disclosure is provided to the recipient of a policy?

- Outline of Coverage (Outline of Coverage is created to ensure full and fair disclosure)

Who might receive dividends from a mutual insurer

- Policyholders

All of the following are examples of risk retention EXCEPT

- Premiums ( Retention is a panned assumption of risk ,or acceptance of responsibility of a loss through deductibles, copayments, or self-insurance

Some who has taken a safer career, jogs each day, and eats healthier is practicing

- Reduction

When the benefits are paid directly to the insured under a health insurance policy, the policy provides benefits on what type of basis?

- Reimbursement (The policy reimburses for covered expenses)

What provision can reduce the disability benefit based upon the insured's current income?

- Relation of earning to insurance

In case of a loss, the indemnity provision in insurance policies

- Restores an insured person to the same financial state as before the loss

Health Insurance underwriting is best defined as

- Selection, classification, and rating of risk

Which of the following is an example of a peril that is covered in accidental and health insurance policy?

- Sickness ( a peril is a cause of loss)

Hazard is best defined as

- Something that increases the risk of loss

Which of the following would an accident-policy NOT cover?

- Surgery to repair a wrist damaged from tendonitis

In insurance, an offer is usually made when

- The completed application is submitted

The period of time immediately following a disability during which benefits are not payable is

- The elimination period

Which is NOT true regarding an insured who is considered to be a standard risk?

- The insured may have to pay slightly higher premiums

An insurer hire a representative to advertise its company at a local convention. The representative lies about the details of some of the policies, in an attempt to secure more business for the company. Who is responsible for the representative's claims?

- The insurer (Company is responsible, regardless of who makes the marketing material)

Which of the following statements is true regarding coinsurance?

- The larger the percentage that is paid by the insured, the lower the required premium will be.

What is the Grace Period?

- The policy will not lapse for a certain amount of time if the premium is not paid when it is due.

What is Coinsurance?

- The provision that provides for the sharing of expenses between the insured and the insurance company

Which of the following is an example of a producers fiduciary duty?

- The trust that a client places in the producer in regard to handling premiums

Which of the following regarding conditional receipts is true?

- They are temporary insuring agreements

Which of the following is NOT true regarding partial disability?

- This is a form of insurance that covers part-time workers

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

- Time of Payment of Claims

IF a business owner becomes totally disabled, a Business Overhead Expense policy will pay all of the following EXCEPT

- Loss of the owner's income

Which of the following is considered a presumptive disability under a disability income policy

- Loss of two limbs

All of the following are characteristics of a Major Medical Expense policy EXCEPT

- Low maximum limits

All of the following are true regarding the Medical Information Bureau (MIB) EXCEPT

- MIB reports are based upon information supplied by doctors and hospitals (They come from underwriting disclosures made by applicants to MIB member insurers on prior insurance applications)

When an individual is covered infer two health insurance policies that have duplicate benefits which could make a claim for benefits of an injury or illness profitable, it is called

- Overinsurance

What is the major difference between a stock company and a mutual company?

- Ownership

Which of the following provision would prevent an insurance company from paying a reimbursement claim to someone other than the policyowner

- Payment of Claims

If a health plan is expected to cover 90% of the cost for an average population, and the participants would cover the remaining 10%, what type of plan is that?

- Platinum

Which of the following is the most common time for errors and omission to occur on the part of an insurer?

- Policy delivery (Most common time for errors are in the sales interview and policy delivery)

A medical insurance plan in which the health care provider is paid a regular fixed amount for providing care to the insured and does not receive additional amounts of compensation dependent upon the procedure performed is called

- Prepaid plan

Which of the following are the main factors taken into account when calculating residual disability benefits?

- Present earnings and earning prior to disability

Certain conditions, such as dismemberment or total permanent blindness, will automatically qualify the insurer for disability benefits. Which disability policy provision does this describe?

- Presumptive disability

A man's physician submits claim information to his insurer before she actually performs a medical procedure on him. She is doing this to see if the procedure is covered under the patients plan and how much.

- Prospective review

Under which provision can a physician submit claim information prior to providing treatment?

- Prospective review

A situation in which a person can only lose or have no change represents

- Pure risk

Which of the following options would be considered a risk-sharing arrangement?

- Reciprocal ( When insurance is obtained through reciprocal insurance, the insureds are sharing the risk of loss with other subscribers of that reciprocal)

In the event of a loss, business overhead insurance will pay for

- Rent

An employee becomes insured under a PPO plan provider by his employer. If the insured decides to go to the physician who is not a PPO provider, which of the following will happen?

- The PPO will pay reduced benefits

Which of the following is true about the requirement s regarding HIV exams?

- The applicant must give prior informed written consent

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?

- The capital amount in a lump sum (Capital amount is a percentage of the principle amount for the loss of one limb. The principle amount is paid for the death or loss of both limbs or loss of sight in both eyes)

What is the purpose of the Coinsurance provisions?

- To help the insurance company to prevent overutilization of the policy

A single mother wants to make sure that is she is unable to work for health reasons, she and her children will be protected financially. Which of the following insurance plans would best suit her needs?

- Total disability plan

In forming an insurance contract, when does acceptance usually occur?

- When an insurer's underwriter approves coverage ( Offer is made but the applicant by the application, acceptance takes place once application is approved)

If you are out of the country and are involved in an accident, how much will the insurance company cover?

- 0%

The minimum number of credits required for partially insured stated for Social Security disability benefits is

- 6 credits

If an employer provides long term group disability insurance for its employees, what percentage of monthly wages are lower paid employees eligible to collect?

- 66 and 2/3%

In underwriting a substandard risk, which of the following is INCORRECT?

- A discounted premium would be charged (substandard is below the insurers standards meaning poor health conditions)

Where would Long-term care services be rendered?

- A nursing home

Which of the following individuals will be eligible for coverage on the Health Insurance Marketplace?

- A permanent resident lawfully present in the US

Which of the following losses will be covered by a group medical expense policy?

- A pre-existing condition (These can no longer be excluded from coverage by individual or group medical expense policies)

What is the Free-Look Period?

- A right to return the policy for a full premium refund

What is a material misrepresentation?

- A statement by the applicant that, upon the discovery, would affect the underwriting decision of the insurance company

Under the mandatory uniform provision Notice of Claim, the first notice of injury or sickness covered under an accident and health policy must contain

- A statement that is sufficiently clear to identify the insured and the nature of the claim

What document grants express authority to an agent?

- Agents contract with the principle

In disability income insurance, if an insured is considered disabled, if they cannot perform any job they are suited for by prior education, training or experience, they fall under which definition of total disability?

- Any Occupation

What is the term used for an applicant's written request to an insurer for the company to issue a contract, based on the information provided?

- Application

If an insurer meets the state's financial requirement sand is approved to transact business in the state, it is considered to be

- Authorized

Which of the following statements regarding Business Overhead Expense policies is NOT true?

- Benefits are usually limited to six months

When an insurer offers services like preadmission testing, second opinions regarding surgery, and preventative care, which term would best apply

- Case Management Provision

What term best describes the acts of withholding material information that would be crucial to an underwriting decision?

- Concealment

Which process will the insurance company use to monitor the insured's hospital stay to make sure that everything is preceding according to schedule?

- Concurrent review

An insurer neglects to pay a legitimate claim that is covered under the terms of the policy. Which of the following principles has the insurer violated?

- Consideration

An applicant for an individual health policy failed to complete the application of the properly. Before paying the first premium, he is put in the hospital and is not covered by insurance because he has not met the conditions specified in the

- Consideration Clause

The purpose of managed care health insurance plans is to

- Control health insurance claims expenses

Which rider, when added to a disability income policy, provides for changes in the benefits payable based on the changes in the consumer price index?

- Cost of living adjustment rider

All of the following are true about group disability income insurance EXCEPT

- Coverage applies both on and off the job

All of the following statements concerning Accidental Death and Disbursement coverage are correct EXCEPT

- Death benefits are paid only if death occurs within 24 hours of an accident (it will be paid if death occurs within 90 days of the accident)

All of the following may be excluded from coverage in a Major Medical Expense policy EXCEPT

- Emergency surgery

The provision that states that both the printed contract and a copy of the application form from the contract between the policyowner and insurer is called the

- Entire Contract

The provision in a health insurance policy that ensure that the insurer cannot refer to any document that is not contained in the contract is the

- Entire Contract Clause

Which of the following entities has the authority to make changes to an insurance policy?

- Insurer's executive officer

Which document is used to assess risk associated with an applicant's lifestyle and character?

- Investigative consumer report