Health Insurance Practice Test

Which of the following is an example of a producer cooperative? a. Blue Cross/Blue Shield organization b. Fraternal benefit societies c. Mutual companies d. Reciprocals

a. Blue Cross/Blue Shield organization

When may agents change a policy or waive its provisions according to Required Provision 1? a. Never b. With the approval and signatures of the insured and of an executive officer of the insurance company. c. With the approval and signature of the insured. d. With the approval and signature of an executive office of the insurance company.

a. Never

A disability that is presumed to result from the same or a related cause of prior disability is called a a. recurrent disability. b. residual disability. c. presumptive disability. d. delayed disability.

a. recurrent disability.

According to Required Provision 2, unless an insured has made fraudulent misstatements, a policy is incontestable after a. 1 year. b. 2 years. c. the insurer has accepted the initial premium. d. the insurer has signified its intent to pay a claim.

b. 2 years.

Which statement is correct? a. Warranties are statements an individual believes to be true to the best of his or her knowledge. b. Concealment is the withholding of information that should have been provided to an insurer. c. Misrepresentations are universally assumed to be material. d. All of the above are correct.

b. Concealment is the withholding of information that should have been provided to an insurer.

Primary support for Medicare Part A comes from a. general tax revenues. b. Social Security payroll taxes. c. private funding. d. a combination of the above.

b. Social Security payroll taxes.

The employees of Ace Trucking company must each pay a portion of the premium for their group insurance. This means they are members of a a. noncontributory group plan. b. contributory group plan. c. participating plan. d. nonparticipating plan.

b. contributory group plan.

Individuals covered by a group plan receive a. individual insurance policies. b. notices of proposed insurance. c. certificates of insurance. d. copies of the master policy.

c. certificates of insurance.

A Medicare SELECT policy differs from a regular Medigap policy in that it a. provides more coverages. b. costs more. c. Both A and B d. Neither A nor B

d. Neither A nor B

The type of health insurance policy most likely used to cover all students attending a large university is a. a blanket policy. b. a franchise policy. c. an ASO d. a self-insured plan.

A blanket policy.

Which of the following qualified as a compensable injury under Workers Compensation coverage? a. A factory worker fractures an elbow while working overtime. b. An employee is struck by a car and seriously injured while walking back to work following a lunch break. c. A worker is involved in an auto accident while driving to work. d. All of the above qualify.

A factory worker fractures an elbow while working overtime.

A company that is licensed to sell insurance in a particular state is a. a domestic company. b. an alien company. c. a nonadmitted company. d. an authorized company.

An authorized company.

What term describes the concept that the insurer and the insured share in the cost of medical expenses, with the insurer bearing the greater share? a. Deductible b. Stop-loss limit c. Coinsurance d. Benefit restoration

Coinsurance

An applicant for insurance may pay the initial premium and receive a document from the agent indicating that if the policy is issued as requested, coverage begins on the date of the document. What is this document called? a. Executing Agreements b. Conditional Receipt c. Warranty d. Notice of inspection

Conditional Receipt

The type of health care provider that provides both the health care services and the health care coverage is a a. Preferred Provider Organization. b. Health Maintenance Organization. c. Blue Cross/Blue Shield Organization. d. Traditional health insurance company.

Health Maintenance Organization.

Which of the following represent certain consumer safeguards enacted by states and patterned after a model act developed by NAIC? a. Fair Credit Reporting Act b. The MIB c. Information and Privacy Protection Act d. COBRA

Information and Privacy Protection Act

Dread disease, travel accident, vision care and hospital indemnity policies are all examples of a. LTC policies. b. limited policies. c. group policies. d. blanket policies.

Limited policies.

Optional Provisions 1 and 2, addressing changes of occupation and misstatement of age, permit the insurer to do which of the following? a. Cancel the policy b. Request the insured to fill out a new application to correct previous misstatements or alter information that has changed since the application was originally submitted. c. Charge a "back-end" premium to make up for the premium that the insurer would have charged had the true situation been known. d. Pay indemnities equal to benefits that would have been purchased at the premium paid had the insurer known the facts when the premium was established.

Pay indemnities equal to benefits that would have been purchased at the premium paid had the insurer known the facts when the premium was established.

Which of the following are NOT eligible for Medicare coverage? a. People age 65 and older who are eligible for Social Security. b. People age 65 and older not eligible for Social Security, but willing to pay a monthly premium. c. People of any age who have been entitled to disability benefits for 24 months. d. People with any life-threatening condition.

People with any life-threatening condition.

With regard to group insurance, who has the responsibility to apply for coverage, provide information about the group, maintain the policy and pay premiums? a. The agent that wrote the group coverage. b. The insurer that provides the group coverage. c. The individuals that make up the group. d. The master policyowner.

The master policyowner.

Trent Bixley is named by the insured, Nancy Bixley, as the first in line to receive the death benefit provided by Nancy's accident policy. Their daughter Elaine is named as second in line to receive the benefit. Which statement is correct? a. Trent is the primary beneficiary and Elaine is the contingent beneficiary. b. Trent is the contingent beneficiary and Nancy is the primary beneficiary. c. Nancy is the primary beneficiary and Elaine is the contingent beneficiary. d. Both Trent and Elaine are primary beneficiaries.

Trent is the primary beneficiary and Elaine is the contingent beneficiary.

In order to be qualified, a long-term care policy must require assistance with how many activities of daily living (ADLs) before benefits may be paid? a. 2 b. 3 c. 4 d. There is no minimum or maximum number required.

a. 2

What term describes a situation where a policyowner transfers a portion of his or her rights in an insurance policy to another party in order to secure a debt to that party? a. Collateral Assignment b. Absolute Assignment c. Transfer Assignment d. Accumulations Assignment

a. Collateral Assignment

A Health Maintenance Organization (HMO) in a certain city contracts with an independent medical group to provide services to HMO subscriber. The HMO pays the group organization, rather than paying the individual medical practitioners. What type of HMO structure is this? a. Group Model b. Network Model c. Staff Model d. IPA Model

a. Group Model

Luis and Margarita Rodriguez have a family health policy that includes 2 riders. One rider excludes coverage for Margarita's existing diabetes. The other rider indicates that the couple may purchase additional disability income coverage at specified dates in the future without proving insurability. What 2 riders are attached to this policy? a. Impairment and guaranteed insurability riders. b. Impairment and COLA riders. c. Waiver of premium and guaranteed insurability riders. d. Waiver of premium and multiple indemnity riders.

a. Impairment and guaranteed insurability riders.

Which of the following is NOT true concerning the notice of claim and claim forms according to Required Provisions 5 and 6? a. The insured must file the notice of claim within 10 days or as soon after as reasonably possible. b. If the insurer fails to send the insured claims forms within 15 days after the insured gives notice of claim, the insured may submit written proof of the loss. c. Notice to the insurer may be given by a beneficiary of the insured on the insured's behalf. d. Notice provided to any authorized agent of the insurance company is considered to be proper notification to the insurer.

a. The insured must file the notice of claim within 10 days or as soon after as reasonably possible.

When medical expenses policies do not state specific dollar benefit amounts, but instead base payments upon the charges for like services in the same geographical area, benefits are designated as which of the following? a. Usual, customary and reasonable charges b. Stated charges c. Percentage of state charges d. Designated charges

a. Usual, customary and reasonable charges

Select the correct statement about converting from a family policy to an individual policy. a. Usually, conversion may be made without evidence of insurability if the individual does so within 31 days after the family coverage ends. b. Conversion generally must be made within 31 days after the family coverage ends and the individual must provide evidence of insurability. c. Generally, conversion may be made anytime within the 365 days following the individual's 19th birthday without evidence of insurability; 31 days after that, the individual may convert, but evidence of insurability will be required. d. Usually, no evidence of insurability is required if the individual is a full-time student at a recognized institution of higher education and makes the conversion within 31 days of graduation.

a. Usually, conversion may be made without evidence of insurability if the individual does so within 31 days after the family coverage ends.

The usual payment arrangement under a Preferred Provider Organization contract is a. a fee for each service b. a flat monthly amount for each subscriber. c. reimbursement to the individual subscriber. d. Any of the above.

a. a fee for each service

A certain health insurance policy states that the insurer will not refuse to renew the policy and furthermore, the insurer may not cancel the policy. However, the insurer may change the premium by class or insureds. This policy is a. a guaranteed renewable policy. b. an optionally renewable policy. c. a conditionally renewable policy. d. a noncancellable policy.

a. a guaranteed renewable policy.

Group credit health insurance requires all of the following EXCEPT a. a medical exam. b. a master policyowner. c. a minimum number of debtors. d. premium payment by each debtor.

a. a medical exam.

Brenda names her husband as the beneficiary of the accidental death benefit in her health policy. She has relinquished her right to change the beneficiary designation. According to Required Provision 12, Brenda's husband is a. an irrevocable beneficiary. b. a revocable beneficiary. c. a contingent beneficiary. d. a tertiary beneficiary.

a. an irrevocable beneficiary.

Under Optional Provision 7, when premiums are unpaid at the time a claim is submitted, the insurer may a. deduct unpaid premiums from benefits before paying the claim. b. deny the claim even though it has not cancelled the policy. c. charge a low rate of interest for each period premiums remain unpaid. d. take any of the actions described above.

a. deduct unpaid premiums from benefits before paying the claim.

Normally, Blue Cross/ Blue Shield makes payments for medical expenses a. directly to the providers. b. to subscribers who are responsible for paying the providers. c. directly to the providers under group plans and to the subscriber under individual policies. d. only to HMOs or PPOs.

a. directly to the providers.

The Medical Information Bureau is a nonprofit organization supported by a. insurance companies b. the federal government. c. state governments. d. All of the above.

a. insurance companies

Major medical policies may include a type of deductible wherein the insured pays a new deductible amount for each different event that causes medical expenses to be insured. This is the a. per-cause deductible. b. all-cause deductible. c. common accident or illness provision. d. carryover provision.

a. per-cause deductible.

An insured's disability income policy defines total disability as "the insured's inability to perform the duties of any occupation for which he or she is reasonably qualified by education, training or experience." This definition is known as the a. "own occupation" definition and is more restrictive than other definitions. b. "any occupation" definition and is more restrictive than other definitions. c. "own occupation" definition and is less restrictive than other definitions. d. "any occupation" definition and is less restrictive than other definitions.

b. "any occupation" definition and is more restrictive than other definitions.

Required Provision 7 indicates that except in the absence of the insured's legal capacity, if it was not reasonably possible for the insured to provide proof of loss as required in a policy, the latest time the proof of loss may be furnished is a. 3 years from the time proof is otherwise required. b. 1 year from the time proof is otherwise required. c. within 90 days of a final notice from the insurer. d. unlimited.

b. 1 year from the time proof is otherwise required.

Which of the following most accurately and completely described an application? a. A form furnished by the insurer requesting certain information to become part of the insurance policy. b. A written request from an applicant to an insurer requesting the insurer to issue a policy on the basis of the information in application. c. An oral request from an agent to an insurer to issue an insurance policy. d. An application can be any of the above.

b. A written request from an applicant to an insurer requesting the insurer to issue a policy on the basis of the information in application.

In order to obtain group insurance without providing evidence of insurability, what do eligible individuals generally have to do? a. Submit an attending physician's statement with their group enrollment cards b. Enroll within a specified eligibility period. c. Enroll within the first 90 days of employment. d. All of the above.

b. Enroll within a specified eligibility period.

Which of the following waives the elimination period in a disability policy? a. Impairment rider b. Hospital confinement rider c. Cost of living adjustment rider d. Guaranteed insurability rider

b. Hospital confinement rider

Required Provision 10 indicates that if the insurer wants to have an autopsy performed while a claim is pending, the insurer a. Must have the permission of the insured's beneficiary or estate administrator in order to do so. b. May do so if it is not forbidden by law and if the insurer pays for it. c. May do so only if it presents evidence that substantiates the insurer's opinion that an autopsy is required. d. Must first pay the claim and then may order an autopsy for which the insurer pays.

b. May do so if it is not forbidden by law and if the insurer pays for it.

Which part of Medicare requires premium payment by most eligible participants? a. Part A, basic hospital insurance b. Part B, supplementary medical insurance c. Respite care d. All of the above

b. Part B, supplementary medical insurance

Which of the following correctly describes Medicaid? a. Supplements Medicare before age 65 b. Provides medical benefits for certain low-income people, for the disabled and for families with dependent children. c. Is usually totally funded by the states with little or no federal reimbursement. d. All of the above.

b. Provides medical benefits for certain low-income people, for the disabled and for families with dependent children.

What is the underlying purpose of a second injury fund? a. To encourage safety practices in the workplace b. To promote the employment of previously injured or physically handicapped workers c. To limit benefits for employees involved in more than one job-related injury d. To relieve the state burden for Workers Compensation benefits

b. To promote the employment of previously injured or physically handicapped workers

A health insurance policy that the insurer may choose not to renew only on the premium due date is called a. a conditionally renewable policy. b. an optionally renewable policy. c. a cancellable policy. d. a guaranteed renewable policy.

b. an optionally renewable policy.

A third-party administrator is a. an outside consultant that evaluates the quality of group health and welfare benefits. b. an outside organization that manages employers' self-insured plans. c. a legal entity that makes group insurance available to small employers. d. an arbitrator who works to settle health insurance claims.

b. an outside organization that manages employers' self-insured plans.

The Health Maintenance Organization concept that service providers are paid a fixed monthly fee for each member is called a. a designated service. b. capitation. c. closed panel. d. the gatekeeper system.

b. capitation.

Second surgical opinions, precertification, concurrent and retrospective reviews and outpatient/ambulatory services are all elements of a cost-containment system commonly known as a. COBRA. b. case management. c. prior authorization. d. LTC.

b. case management.

All Medicare supplement (or Medigap) policies must a. have the same premium . b. have the same core benefits. c. duplicate benefits provided by Medicare. d. All of the above.

b. have the same core benefits.

A certain major medical policy states a maximum number of days for which convalescent care will be paid as well as a maximum number of X-rays that will be paid for under any one claim. These are examples of a. first dollar coverage. b. inside limits. c. carryover provisions. d. stop-loss limits.

b. inside limits.

Medicare supplement insurance is designed to a. take care of all expenses not covered by Medicare. b. pay at least some of the health care costs that Medicare will not pay. c. provide health care coverage for poor people on welfare. d. prevent spousal impoverishment.

b. pay at least some of the health care costs that Medicare will not pay.

Under Workers Compensation, a disability that is a permanent physical impairment leaving the individual incapable of performing the previous regular occupation, but capable of performing some other type of work, is a a. permanent total disability. b. permanent partial disability. c. temporary total disability. d. temporary partial disability.

b. permanent partial disability.

When an insurer cedes part of an insured's coverage to another insurance company, retaining only part of the risk for itself, the insurer is engaging in a. expensive loading. b. reinsurance. c. unfair discrimination. d. misrepresentation.

b. reinsurance.

When an insured holds more than one occupation, and occupation is used to classify the risk, the insurer will generally classify the insured according to the occupation a. at which the insured spends the majority of hours each week. b. that is most hazardous. c. in which the insured has been employed for the longest period of time. d. that produces the lowest premium.

b. that is most hazardous.

Optional Provision 9, which deals with conformity to state statutes, provides a. that states may revise their insurance regulations to conform to policies normally written within the individual states. b. that policy provisions in conflict with state statutes where in the insured resides are automatically amended to conform to the minimum requirements of law. c. for both of the above. d. for neither of the above.

b. that policy provisions in conflict with state statutes where in the insured resides are automatically amended to conform to the minimum requirements of law.

Required Provision 4 addresses reinstatement of a lapsed policy. According to this provision, when an insured applies for reinstatement and receives a conditional receipt, how long does the insurer have to approve or deny reinstatement before the policy will be automatically reinstated? a. 180 days from the date the unpaid premium was due b. 30 days from the date the date the insurer receives the application for reinstatement c. 45 days from the date of the conditional receipt d. There is no such automatic reinstatement.

c. 45 days from the date of the conditional receipt

According to Required Provision 11, the insured is prevented from filing suit against the insurer for at least a. 20 days and not longer than 1 year from the date of proof of loss. b. 30 days and not longer than 3 years from the date of proof of loss. c. 60 days and not longer than 3 years from the date of proof of loss. d. 90 days and not longer than 5 years from the date of proof of loss.

c. 60 days and not longer than 3 years from the date of proof of loss.

What is a cancellable policy? a. A policy that only the insured may cancel. b. A policy the insurer may choose not to renew only on the premium due date. c. A policy the insurer may cancel at any time by returning the unearned premium. d. A policy the insurer may not cancel unless the insured has failed to pay the premiums.

c. A policy the insurer may cancel at any time by returning the unearned premium.

Which of the following accurately describes the "free look" provision? a. Allows the proposed insured to look over a policy carefully before applying for it. b. Allows the proposed insured to look over the application carefully before completing it. c. Allows the insured to look over the issued policy for a specific number of days and return it for a premium refund if desired. d. Allows the insurance company to obtain an inspection report and medical examination on the proposed insured prior to issuing the policy.

c. Allows the insured to look over the issued policy for a specific number of days and return it for a premium refund if desired.

Employer-paid premiums for employee group health insurance are generally a. tax-deductible to the employer. b. nontaxable to the employees. c. Both of the above. d. Neither of the above.

c. Both of the above.

Select the correct statement below. a. COBRA permits companies who have terminated employees to stop their group coverage as of the date of termination. b. When employers discontinue group coverage, employees must prove they are insurable in order to convert to individual coverage. c. COBRA protects dependents of employees by mandating for them the same extension and conversion privileges available to employees covered by group plans. d. All of the above are correct.

c. COBRA protects dependents of employees by mandating for them the same extension and conversion privileges available to employees covered by group plans.

Which of the following is NOT classified as an occupational disease under Workers Compensation? a. George, a coal miner who gets black lung disease. b. Mary, a technician at a nuclear power plant who gets radiation sickness. c. Coreen, a teacher who gets chicken pox from one of her first grade students. d. Sam, a mixer at a paint factory with poor ventilation who develops a nervous disorder related to paint fumes

c. Coreen, a teacher who gets chicken pox from one of her first grade students.

Some major medical policies begin with basic first dollar coverage that pays up to its limits, then the insured must pay a certain dollar amount of expenses before the major medical portion steps in. What term applied to the dollar amount the insured must pay between the basic policy and the major medical coverage? a. Coinsurance percentage b. Stop-loss limit c. Corridor deductible d. Internal limit

c. Corridor deductible

Select the correct statement about long-term care policies. a. ADLs are not generally a consideration under these policies. b. Most LTC policies are guaranteed renewable up to age 70, after which they revert to optionally renewable policies. c. Present policies are most likely to pay benefits regardless of the level of care required by the insured. d. Virtually all LTC policies require prior hospitalization before benefits will be paid.

c. Present policies are most likely to pay benefits regardless of the level of care required by the insured.

According to Optional Provision 8, if the insurance company cancels a policy, on what basis must prepaid premiums be returned to the insured? a. Short rate basis, which means all unearned premium is returned to the insured. b. Short rate basis, which means the insurer may retain part of the unearned premium in order to cover its expenses. c. Pro rata basis, which means all unearned premium is returned to the insured. d. Pro rata basis, which means the insurer, may retain part of the unearned premium in order to cover its expenses.

c. Pro rata basis, which means all unearned premium is returned to the insured.

Under what circumstances do major medical policies usually provide for restoration of benefits? a. Usually, major medical policies do not have such provisions. b. Usually, restoration is permitted only after the insured is certified as being totally and permanently disabled. c. Restoration usually occurs after a specified dollar amount of benefits has been exhausted and after the insured has proved insurability. d. Normally, restoration of benefits is provided only if the major medical policy is written in conjunction with a disability income policy, and restoration occurs upon the insured's application for it after recovering from a temporary disability.

c. Restoration usually occurs after a specified dollar amount of benefits has been exhausted and after the insured has proved insurability.

Under a credit health policy, what is the maximum amount of any accidental death benefit included? a. $20,000 b. The amount of the original indebtedness. c. The amount of outstanding indebtedness at any given time. d. A specified multiple of the monthly loan payment.

c. The amount of outstanding indebtedness at any given time.

Which of the following statements is NOT true concerning a coordination of benefits situation? a. The group insurer for the person with the claim is primary. b. The group insurer for the spouse of the person with the claim is secondary. c. To prevent overinsurance, the secondary insurer does not pay benefits. d. Where children are involved, the primary group insurer is the insurer for the parent whose birthday comes first in the year.

c. To prevent overinsurance, the secondary insurer does not pay benefits.

Which of the following would NOT be a likely consideration in determining premium rates for group health insurance? a. Length of the waiting period b. Maximum indemnity period c. Whether the business is a close corporation or publicly held corporation. d. Degree of occupational hazard associated with the group.

c. Whether the business is a close corporation or publicly held corporation.

Optional Provisions 3, 4, 5 and 6 deal with situations where an insured can receive more money from loss of time benefits than from working, or more for reimbursement of medical expenses than these services costs. This is a. known as fraud and allows the insurer to be relieved from paying benefits. b. cause for an insurer to cancel a policy without paying benefits for expenses incurred above actual wages or actual costs. c. called overinsurance and can be remedied by each insurer's paying proportionate benefits or a single insurer allowing the insured to choose the policy from which benefits will be paid. d. known as misrepresentation, and is cause for the insurer to increase premiums proportionate to the amount of insurance provided under all policies.

c. called overinsurance and can be remedied by each insurer's paying proportionate benefits or a single insurer allowing the insured to choose the policy from which benefits will be paid.

The factor in premium computation that has to do with the recordkeeping and statistical analysis insurance companies perform is a. expense loading. b. reserves. c. experience. d. policy fees.

c. experience.

Jay, who is employed by Carson Company, is assigned to work temporarily in another state. While in the other state, Jay is injured on the job. He is entitled to benefits of the Workers Compensation law in the state in which he was hired even though his injury occurred in a different state. This indicates that the Workers Compensation law in the state where Jay was hired a. is compulsory. b. is elective. c. includes extraterritorial provisions. d. has a second injury fund.

c. includes extraterritorial provisions.

An insured's accident policy uses the phrase "accidental bodily injury" and/or resulting death This phrase a. means the insured will receive a lower benefit than a policy that uses the phrase "accidental means." b. means the same as the phrase "accidental means." c. is less restrictive than the phrase "accidental means." d. is more restrictive than the phrase "accidental means."

c. is less restrictive than the phrase "accidental means."

As compared to individual disability income policies, group disability income policies are generally a. more costly and have less liberal provisions. b. more restrictive in terms of covered medical expense. c. less costly and have more liberal provisions. d. tied more closely to Social Security disability benefits.

c. less costly and have more liberal provisions.

Before Cranston was disabled, he was a full-time engineer earning about $70,000 annually. Now, 2 years later, he is able to work part-time, earning about $25,000 annually. It is likely that Cranston would be classified as a. totally and permanently disabled. b. recurrently disabled. c. partially disabled. d. not disabled at all.

c. partially disabled.

Health Maintenance Organizations are required to provide all of the following EXCEPT a. emergency services. b. preventive services. c. prescription drugs. d. physicians' services.

c. prescription drugs.

In noncontributory group plans, how many eligible employees must be covered by the plan? a. At least 50% b. Usually 75% or more c. At least 90% d. 100%

d. 100%

What is the minimum grace period, provided in Required Provision 3, for all policies other than monthly or weekly premium policies? a. 7 days b. 10 days c. 15 days d. 31 days

d. 31 days

Which of the following describes a multiple employer trust (MET)? a. An association of employers cooperating to reduce medical costs through prevention. b. An organization that handles investments for self-insured plans. c. An insurance plan for employers with multiple branch offices or plant locations. d. A legal entity that small employers may join to become eligible for group insurance.

d. A legal entity that small employers may join to become eligible for group insurance.

Which of the following is a requirement for payment of Social Security disability benefits? a. Total and permanent disability for at least 5 months b. Fully insured and disability insured c. Expected disability of 12 months or longer or ending in death d. All of the above

d. All of the above

What type of disability policy covers a fixed period of time and provides funds for long-term commitments if an owner or key employee of a business is disabled? a. Reducing term disability coverage b. Key person disability coverage c. Business overhead expenses coverage d. Disability buy-out coverage

d. Disability buy-out coverage

A health insurance policy includes an endorsement indicating the insurer will allow the policy to continue in force without further premiums if the insured is totally and permanently disabled. What endorsement is attached to his policy? a. Guaranteed insurability b. Impairment c. Multiple indemnity d. Waiver of premium

d. Waiver of premium

When are disability income benefits received as nontaxable income to the recipient? a. Always b. Never c. When the employer has paid the premium d. When the employee has paid the premium

d. When the employee has paid the premium

All of the following are alternatives an insurer has when asked to insure a substandard risk EXCEPT a. reject the risk. b. attach a rider to the policy excluding certain coverages or conditions. c. charge a higher than standard premium. d. issue the policy with a probationary period after which the insurer may continue or cancel the policy.

d. issue the policy with a probationary period after which the insurer may continue or cancel the policy.

Each of the following would be found in the insuring clause of an insurance policy EXCEPT a. general scope of coverage. b. conditions under which benefits are payable. c. definitions. d. name of the insured.

d. name of the insured.

All of the following are benefits provided under Part A of Medicare EXCEPT a. inpatient hospital care. b. skilled nursing facility care. c. hospice care. d. physicians' services for inpatient care.

d. physicians' services for inpatient care.

In a disability income policy, there is a period during which no benefits will be paid for illness of any kind. This period usually does not apply to accidents, only illness. The term that describes this interim is the a. elimination period. b. benefit period. c. waiver period. d. probationary period.

d. probationary period.

Many major medical policies include a provision whereby when expenses reach a certain dollar amount, the insured no longer shares in the cost of expenses; the insurer pays 100% of remaining covered charges. This is referred to as the a. maximum benefit. b. benefit restoration. c. coinsurance percentage. d. stop-limit.

d. stop-limit.

All of the following are reasons an application is important EXCEPT a. the application becomes part of the policy when attached to the policy. b. the application helps to more fully identify the applicant. c. statements made in the application become the basis for issuing the policy. d. the application becomes part of the insuring clause when attached to the policy.

d. the application becomes part of the insuring clause when attached to the policy.

In Health Maintenance Organizations, the use of a primary care physician or PCP is common as part of a. the group model. b. a capitation arrangement. c. open enrollment. d. the gatekeeper system.

d. the gatekeeper system.

The optional short-term disability income benefit that pays a lump sum for specified injuries is called the a. hospital income benefit. b. elective indemnity benefit. c. supplement income benefit. d. partial disability benefit.

elective indemnity benefit.

All of the following statements about noncancellable policies are true EXCEPT 1. a noncancellable policy is also called a noncancellable and guaranteed renewable policy. 2. the only right to cancel the noncancellable policy is for nonpayment of premium. 3. the insurer may increase the premium rate after the policy is in effect provided it does so by classes of insured. 4. the insurer may regain the right to cancel or not to renew when the insured reaches an age specified in the policy.

the insurer may increase the premium rate after the policy is in effect provided it does so by classes of insured.