health insurance questions

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)A statement that is sufficiently clear to identify the insured and the nature of the claim. b)A statement from the insured's employer showing that the insured was unable to work. c)An estimate of the total amount of medical and hospital expense for the loss. d)A complete physician's statement.

a)A statement that is sufficiently clear to identify the insured and the nature of the claim.

What is the main difference between coinsurance and copayments? a)Copayment is a set dollar amount. b)With copayments, the insured pays all of the cost. c)With coinsurance, the insurer pays all of the cost. d)Coinsurance is a set dollar amount.

a)Copayment is a set dollar amount.

What is an important feature of a dental expense insurance plan that is NOT typically found in a medical expense insurance plan? a)Diagnostic and preventive care b)A broad coverage area c)A low monthly premium d)Low cost deductibles

a)Diagnostic and preventive care

In a disability policy, the probationary period refers to the time a)During which illness-related disabilities are excluded from coverage. b)Between the first day of disability and the day the disability must continue before the insured receives any benefits. c)Between the 10th day of an illness-related disability and the first payment. d)Between the first day of disability and the actual receipt of payment for the disability incurred.

a)During which illness-related disabilities are excluded from coverage.

If an Indiana family has a low level of income and cannot afford health insurance, what program could help? a)The Indiana Children's Health Insurance Program b)The Indiana Health Insurance Pool c)The Federal Insurance Assistance Program d)The Guaranty Association Fund

a)The Indiana Children's Health Insurance Program

Which of the following is true regarding a hearing upon the nonrenewal of a producer's license? a)The hearing must be held within 30 days of the written demand. b)After the hearing, the Commissioner may impose a criminal penalty on the applicant. c)A hearing guarantees renewal of the license. d)The Commissioner may request a hearing within 63 days of the nonrenewal date.

a)The hearing must be held within 30 days of the written demand.

What is the purpose of coinsurance provisions? a)To help the insurance company to prevent overutilization of the policy b)To have the insured pay premiums to more than one company. c)To ensure payment to the doctors and hospitals d)To share liability among different insurance companies

a)To help the insurance company to prevent overutilization of the policy

In all health care plans under the Affordable Care Act (ACA), how many essential benefit categories are there? a)5 b)10 c)12 d)15

b)10

A licensed producer must inform the Commissioner of a change of name within a)2 weeks. b)30 days. c)90 days. d)1 year.

b)30 days.

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

b)6 months

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

b)90 days of a loss.

A hospital indemnity policy will pay a)Any expenses incurred by the stay in the hospital, minus coinsurance payments and deductibles. b)A benefit for each day the insured is in a hospital. c)Income lost while the insured is in the hospital. d)All expenses incurred by the stay in the hospital.

b)A benefit for each day the insured is in a hospital.

All of the following are correct about the required provisions of a health insurance policy EXCEPT a)The entire contract clause means the signed application, policy, endorsements, and attachments constitute the entire contract. b)A reinstated policy provides immediate coverage for an illness. c)Proof-of-loss forms must be sent to the insured within 15 days of notice of claim. d)A grace period of 31 days is found in an annual pay policy.

b)A reinstated policy provides immediate coverage for an illness.

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

b)Acute care in a hospital

All of the following would be considered rebating EXCEPT a)An agent offers tickets to a baseball game as an inducement to buy insurance. b)An agent misrepresents policy benefits to convince a policyowner to replace policies. c)An agent offers the use of his lake house to a client as an inducement to buy an insurance policy from him. d)An agent offers to share his commission with a policyholder.

b)An agent misrepresents policy benefits to convince a policyowner to replace policies.

In order to get a non-resident license in this state, producers must a)Surrender their licenses in their state of residence. b)Apply and pay a fee to a non-resident state that reciprocates. c)Pass the non-resident state exam and satisfy their continuing education requirements. d)Represent an agency located in this state.

b)Apply and pay a fee to a non-resident state that reciprocates.

Occasional visits by which of the following medical professionals will NOT be covered under LTC's home health care? a)Community-based organization professionals b)Attending physician c)Registered nurses d)Licensed practical nurses

b)Attending physician

Alexander has a policy with his ex-wife as its beneficiary. What provision allows him to change the beneficiary to his new wife? a)Payment of claims b)Change of beneficiary c)Absolute assignment d)Entire contract

b)Change of beneficiary

An applicant for an individual health policy failed to complete the application properly. Before being able to complete the application and pay the initial premium, she is confined to a hospital. This will not be covered by insurance because she has not met the conditions specified in the a)Eligibility Clause. b)Consideration Clause. c)Insuring Clause. d)Pre-existing Conditions Clause.

b)Consideration Clause.

When would a misrepresentation on the insurance application be considered fraud? a)Any misrepresentation is considered fraud. b)If it is intentional and material c)Never: statements by the applicant are only representations. d)When the application is incomplete

b)If it is intentional and material

All of the following are differences between individual and group health insurance EXCEPT a)Individual policies are renewable at the option of the insured, while group usually terminates when the individual leaves the group. b)Individual insurance does not require medical examinations, while group insurance does require medical examinations. c)In individual policies, the individual selects coverage options, while in a group plan all employees are covered for the same coverage which is chosen by the employer. d)Individual coverage can be written on an occupational or nonoccupational basis; group plans cover only nonoccupational.

b)Individual insurance does not require medical examinations, while group insurance does require medical examinations.

Who must be licensed to sell, solicit and negotiate insurance contracts in the state of Indiana? a)Temporary producer b)Insurance producer c)Insurance consultant d)Limited Lines producer

b)Insurance producer

Insurance that would pay for hiring a replacement for an important employee who becomes disabled is called a)Business overhead expense disability insurance. b)Key employee disability insurance. c)Blanket disability insurance. d)Long-term disability.

b)Key employee disability insurance.

Can a group that is formed for the sole purpose of obtaining group insurance qualify for group coverage? a)Yes, but only if the group is over 35 people. b)No, the group must be formed for a purpose other than obtaining group insurance. c)No, a group of individuals cannot apply for group coverage unless represented by an association or trust. d)Yes, any group can apply for group coverage.

b)No, the group must be formed for a purpose other than obtaining group insurance.

All of the following are the most common variations in a Long-Term Care policy EXCEPT a)Number of home health visits covered. b)Number of family dependents. c)The amount paid for nursing home care. d)Number of days of confinement covered.

b)Number of family dependents.

An insured pays her Major Medical Insurance premium annually on March 1. Last March she forgot to mail her premium to the company. On March 19, she had an accident and broke her leg. The insurance company would a)Pay half of her claim because the insured had an outstanding premium. b)Pay the claim. c)Hold the claim as pending until the end of the grace period. d)Deny the claim.

b)Pay the claim.

Insurers may change which of the following on a guaranteed renewable health insurance policy? a)No changes are permitted. b)Rates by class c)Coverage d)Individual rates

b)Rates by class

The annual contribution limit of a Dependent Care Flexible Spending Account is set by a)The insured. b)The IRS. c)The employer. d)The insurer.

b)The IRS.

Which of the following would provide an underwriter with information concerning an applicant's health history? a)The inspection report b)The Medical Information Bureau c)A medical examination d)The agent's report

b)The Medical Information Bureau

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.

An individual purchased a Medicare supplement policy in March and decided to replace it 2 months later. His history of coronary artery disease is considered a pre-existing condition. Which of the following is true? a)Because this is a new policy, the pre-existing condition waiting period starts over. b)The pre-existing condition waiting period fulfilled in the old policy will be transferred to the new policy, the new one picking up where the old one left off. c)Coronary artery disease coverage will be permanently excluded from the new policy. d)In replacement, pre-existing conditions must be waived, so sickness relating to coronary artery disease will be covered upon the policy's effective date.

b)The pre-existing condition waiting period fulfilled in the old policy will be transferred to the new policy, the new one picking up where the old one left off.

All of the following statements about Medicare supplement insurance policies are correct EXCEPT a)They are issued by private insurers. b)They cover the cost of extended nursing home care. c)They cover Medicare deductibles and copayments. d)They supplement Medicare benefits.

b)They cover the cost of extended nursing home care.

Insurers usually do not reimburse claimants for 100% of income lost due to disability. What is the reason for insurer limitations on coverage amounts? a)To pay no more than 50% of the pre-disability income b)To provide an incentive for the insured to return to work c)To make sure there is enough money to reimburse all the claims d)To reimburse only for the premiums paid into the policy

b)To provide an incentive for the insured to return to work

Which characteristic does NOT describe managed care? a)Preventive care b)Unlimited access to providers c)High-quality care d)Shared risk

b)Unlimited access to providers

Rule 18 governing Accident and Sickness Insurance Advertising includes all of the following EXCEPT a)Prepared sales talks. b)Want ads soliciting new agents. c)Sales aids issued by an insurer for presentation to the public. d)Any printed or published literature.

b)Want ads soliciting new agents.

Can an individual who belongs to a POS plan use an out-of-network physician? a)Yes, but they must use the HMO physician first b)Yes, and they may use any preferred physician, even if not part of the HMO c)No d)Yes, but they must use the POS physician first

b)Yes, and they may use any preferred physician, even if not part of the HMO

If a new individual long-term care policyholder is not satisfied with a new policy, within how many days can the insured return the policy for a full premium refund? a)10 b)90 c)30 d)7

c)30

What is the duration of the free-look period for Medicare supplement policies? a)10 days b)15 days c)30 days d)60 days

c)30 days

Within how many days after the initial pretrial hearing date must an insurance producer report criminal prosecution of the producer to the Commissioner? a)7 days b)15 days c)30 days d)60 days

c)30 days

Most policies will pay the accidental death benefits as long as the death is caused by the accident and occurs within a)30 days. b)60 days. c)90 days. d)120 days.

c)90 days.

The Commissioner must be notified in all of the following circumstances EXCEPT a)A change of the producer's email address. b)A termination of a producer's appointment. c)A change of the producer's business phone number. d)A change of the producer's residential address.

c)A change of the producer's business phone number.

What is a material misrepresentation? a)Any misstatement by the producer b)Concealment c)A statement by the applicant that, upon discovery, would affect the underwriting decision of the insurance company d)Any misstatement made by an applicant for insurance

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

Which of the following is NOT true regarding coverage for adopted children? a)Premium must be received by the insurance company no later than 31 days from the date of adoption for the coverage to continue. b)Adopted children are automatically covered for 31 days without a premium payment. c)Adopted children are covered for an unlimited period of time. d)Coverage for adopted children is the same as for other dependents.

c)Adopted children are covered for an unlimited period of time.

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)The elimination period will be extended 6 months for each year of age misstatement. b)Because the misstatement occurred more than 2 years ago, it has no effect. c)Amounts payable under the policy will reflect the insured's correct age. d)The contract will be deemed void because of the misstatement of age.

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

Which of the following is NOT required to be stated in the outline of coverage provided with a long-term care policy? a)The right to return the policy for a refund b)Basic information about the insurance company c)Basic information about supplementary policies d)The policy number

c)Basic information about supplementary policies

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

c)Insurer

Who makes up the Medical Information Bureau? a)Former insured b)Physicians and paramedics c)Insurers d)Hospitals

c)Insurers

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

Which of the following statements concerning group health insurance is CORRECT? a)Each employee receives a policy. b)Under group insurance, the insurer may reject certain individuals from coverage. c)The employer is the policyholder. d)Only the employer receives a certificate of insurance.

c)The employer is the policyholder.

An insured purchased a noncancellable health insurance policy 1 year ago. Which of the following circumstances would NOT be a reason for the insurance company to cancel the policy? a)The insured reaches the maximum age limit specified in the policy. b)Within two years of the application, the insurer discovers a misrepresentation. c)The insured is in an accident and incurs a large claim. d)The insured does not pay the premium.

c)The insured is in an accident and incurs a large claim.

Insured Z's health insurance policy year begins in January. His policy contains a carry-over provision. In November, he has a small claim which is less than his deductible. Which of the following is true? a)The insured is now eligible for an integrated deductible until the new policy year. b)The insured must satisfy this year's deductible, but next year's deductible will begin when or if he makes a claim in the following calendar year. c)The insured may carry over the amount of this year's expenses to next year, which will help satisfy next year's deductible. d)The deductible will be waived.

c)The insured may carry over the amount of this year's expenses to next year, which will help satisfy next year's deductible.

Which of the following is NOT a feature of a noncancellable policy? a)The guarantee to renew coverage usually applies until the insured reaches certain age. b)The insured has the right to renew the policy for the life of the contract. c)The insurer may terminate the contract only at renewal for certain conditions. d)The premiums cannot be increased beyond the amount stated in the policy.

c)The insurer may terminate the contract only at renewal for certain conditions.

Which of the following is true about an insurance producer license? a)Producer license cannot be revoked until expired. b)The license expires every 2 years; it is the producer's responsibility to apply for a license renewal. c)The license remains in effect as long as the renewal fee is paid and continuing education requirements are met by the due date. d)The license is renewed every four years when all the fees are paid.

c)The license remains in effect as long as the renewal fee is paid and continuing education requirements are met by the due date.

Which of the following will vary the length of the grace period in health insurance policies? a)The length of time the insured has been insured b)The term of the policy c)The mode of the premium payment d)The length of any elimination period

c)The mode of the premium payment

If a producer allowed his or her license to lapse, which of the following would NOT be true? a)The Commissioner may waive the penalty is the renewal fee is received within 30 days of the expiration. b)The producer must have completed CE requirements prior to the lapse for the license to be reinstated. c)The producer must take a written examination within 12 months of the lapse for the license to be reinstated. d)The producer will have to pay a penalty of 3 times the usual renewal rate before the license can be reinstated.

c)The producer must take a written examination within 12 months of the lapse for the license to be reinstated.

An insured is upset that her new health insurance policy was delivered to her by certified mail and not through her agent. Which of the following is true? a)The insured should ask for a new policy to be delivered. b)The policy will not be legal until it is delivered by an agent. c)There is nothing wrong with this form of policy delivery. d)The insured should complain to the insurer.

c)There is nothing wrong with this form of policy delivery.

If only one party to an insurance contract has made a legally enforceable promise, what kind of contract is it? a)Conditional b)A legal (but unethical) contract c)Unilateral d)Adhesion

c)Unilateral

A brain surgeon has an accident and develops tremors in her right arm. Which disability income policy definition of total disability will cover her for all losses? a)"Own occupation" - more restrictive than other definitions b)"Any occupation" - less restrictive than other definitions c)"Any occupation" - more restrictive than other definitions d)"Own occupation" - less restrictive than other definitions

d)"Own occupation" - less restrictive than other definitions

What is a penalty tax for nonqualified distributions from a health savings account? a)8% b)10% c)12% d)20%

d)20%

In health insurance policies issued in this state, what is the maximum age for coverage of dependent children? a)18 years old b)19 years old c)22 years old d)26 years old

d)26 years old

Which of the following long-term care benefits would provide coverage for care for functionally impaired adults on a less than 24-hour basis? a)Residential care b)Assisted living c)Home health care d)Adult day care

d)Adult day care

Regarding a PPO, which of the following is correct when selecting a primary care physician? a)The insured may choose medical providers not found on the preferred list and still retain coverage. b)The insured is allowed to receive care from any provider, but if the insured selects a PPO provider, the insured will realize lower out-of-pocket costs. c)If a non-network provider is used, the insured's out-of-pocket costs will be higher. d)All of the above are correct

d)All of the above are correct

If the Insurance Department believes that a producer may be in violation of an insurance law or regulation, what may be issued? a)Arrest warrant b)Writ of noncompliance c)Call to obey d)Cease and desist order

d)Cease and desist order

The provision that provides for the sharing of expenses between the insured and the insurance company is a)Stop-loss. b)Deductible. c)Divided cost. d)Coinsurance.

d)Coinsurance.

All of the following could be considered rebates if offered to an insured in the sale of insurance EXCEPT a)An offer of employment. b)Stocks, securities, or bonds. c)An offer to share in commissions generated by the sale. d)Dividends from a mutual insurer.

d)Dividends from a mutual insurer.

How are HMO territories typically divided? a)Type of physician services available b)Community rating system c)By where the HMO can find the least expensive physicians d)Geographic areas

d)Geographic areas

Which of the following types of license is most suitable for an individual or corporation that, for compensation, acts or aids in any manner in soliciting applications for a policy of insurance on behalf of an insurance company admitted to do business in Indiana? a)Insurance consultant b)Surplus lines insurance producer c)Limited insurance producer d)Insurance producer

d)Insurance producer

Insured A recently purchased an individual health policy. Insured B purchased the same policy, but did so as the result of a direct response solicitation. Which of these two insureds has a longer free look period? a)Insured A b)Both have the same free look period c)Neither has a free look period d)Insured B

d)Insured B

The section of a health policy that states the causes of eligible loss under which an insured is assumed to be disabled is the a)Incontestability clause. b)Consideration clause. c)Probationary period. d)Insuring clause.

d)Insuring clause.

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.

The provision which prevents the insured from bringing any legal action against the company for at least 60 days after proof of loss is known as a)Time limit on certain defenses. b)Payment of claims. c)Proof of loss. d)Legal actions.

d)Legal actions.

Which of the following describes taxation of individual disability income insurance premiums and benefits? a)Premiums are not tax deductible, but benefits are taxable. b)Premiums are tax deductible, but benefits are not taxable. c)Premiums are tax deductible, and benefits are taxable. d)Premiums are not tax deductible, and benefits are not taxable.

d)Premiums are not tax deductible, and benefits are not taxable.

In the event of a loss, business overhead insurance will pay for a)Loss of profits. b)Salary of the business owner. c)Medical bills of the business owner. d)Rent.

d)Rent.

An insured has endured multiple surgeries and hospitalizations for an illness during the summer months. Her insurer no longer bills her for medical expenses. What term best describes the condition she has met? a)Out-of-Pocket Limit b)Maximum Loss Threshold c)Maximum Loss d)Stop-Loss Limit

d)Stop-Loss Limit

Insurable interest can be best described by which of the following? a)The insured must be genuinely interested in the life of the applicant. b)All beneficiaries need to have notification of their status. c)It is not necessary for the insured to be aware of the insurable interest or give permission for the insurance that is to be written d)The applicant must experience a financial loss due to an accident or sickness that befalls the insured.

d)The applicant must experience a financial loss due to an accident or sickness that befalls the insured.

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 principal amount in a lump sum b)The capital amount in monthly installments c)The principal amount in monthly installments d)The capital amount in a lump sum

d)The capital amount in a lump sum

How do employer contributions to a Health Savings Account affect the insured's taxes? a)The employer contributions are taxed at the same rate as the Social Security tax rate. b)The employer contributions are taxed to the individual insured as earned income. c)The employer contributions are deducted from the individual insured's tax calculations. d)The employer contributions are not included in the individual insured's taxable income.

d)The employer contributions are not included in the individual insured's taxable income.

The Affordable Care Act requires all U.S. citizens and legal residents to have qualifying health care coverage. This is known as a)The Insurance Marketplace. b)Safe Harbor mandate. c)Special enrollment. d)The individual mandate.

d)The individual mandate.

A medical expense policy that establishes the amount of benefit paid based upon the prevailing charges which fall within the standard range of fees normally charged for a specific procedure by a doctor of similar training and experience in that geographic area is known as a)Relative-value schedule. b)Benefit schedule. c)Gatekeepers. d)Usual, customary and reasonable.

d)Usual, customary and reasonable.