Insurance 215

To be considered chronically ill a person must be unable to perform at least how Activities of Daily Living (ADLs)?

2

11. The minimum grace period in a health insurance policy paid on a quarterly basis is:

31 days

If an application is filed for the reinstatement of a Health Insurance policy but the company takes no action on such reinstatement, the policy is automatically reinstated after how many days?

45

22. How many exclusions are in the original Medicare system?

9

4. A Hospital Expense policy that pays a FLAT AMOUNT per day for hospital room and board pays benefits on what basis?

A fixed rate amount

60. Which of the following statements concerning reinstatement of a health insurance policy is true?

Accidents are covered immediately

Which of the following would be true in a disability policy?

Accidents are covered immediately, sickness after 15 days

Which of the following is/are usually eligible for coverage under a family health policy?

Adopted children Step Children Foster Children

93. Which of the following regarding group disability income insurance is correct?

Benefits are supplemental to workers' comp Benefits are paid for non-occupational disabilities Benefits are generally taxable to the insured

In using the needs approach to buying health coverages, which of the following is least important?

Final expense funds which would be considered for the purchase of life insurance.

The term agency refers to which of the following?

Location

20. In Florida, what is the minimum schedule in which claim payments must be made to an insured under an individual disability policy?

Monthly

What will the insurer do if its Disability Income policy contains a Change of Occupation provision, and the insured changes to a more hazardous job than is subsequently injured?

Policy benefits will be reduced to an amount the premium would have purchased originally, based on the more hazardous occupation.

ch.17 Basic Medical expense policies contain which feature?

Room & Board benefits Physician office visits Miscellaneous benefits

If the insured was able to work only 40% of the time, suffering a loss of 60% of her salary, then the policy would pay 60% of the disability benefit.

The benefit being what the insured would have received if she had become totally disabled. It pays for partial disability.

During what period is a new life insurance policy owner entitled to review a policy and return it for a full refund?

Within 14 days after delivery of the policy

The HMO Act of 1973 states that

an employer with 25 or more employees must offer enrollment *if* they are currently offering some other type of group plan.

100. A residual disability benefit would pay a benefit

based upon the proportion of income lost due to partial disability

16. The HIV/AIDS written consent form must include all of the following except:

sexual orientation

Which of the following statements is correct concerning Medicaid?

. 1. To be eligible, one must be poor or become poor. 2. Medicaid provides for custodial care in a nursing home. 4. It is available to people of all ages

There are _____ standard Medicare supplement policies.

10

ch22 The grace period must be at least 7 days for weekly premiums,

10 days for monthly premiums, and 31 days for all other frequencies.

In noncontributory group plans, the insurance company requires what percentage of eligible employees be covered by the plan?

100%

Routine cleaning & oral exams are usually covered at .

100%

67. Under the Claims Forms Provision, it is the company's responsibility to supply claim forms to an insured within how many days after receiving notice of a claim?

15

62. A Medicare supplement Notice to Buyer must be displayed:

2. on the first page of the policy 3. on the first page of the Outline of Coverage

23. Which of the following statements applies to the rights of a surviving spouse under a group insurance policy?

23. Which of the following statements applies to the rights of a surviving spouse under a group insurance policy?

51. The free-look provision for Medicare supplements is how long?

30

Medicare supplement policies must contain a minimum free look period of how long?

30

71. Grouping small businesses together to obtain group insurance as one large group is characteristic of which of the following?

A Multiple Employer Trust (MET)

The Legal Action provision states that a policyowner must wait a minimum of how many days after submitting Proof of Loss to an insurance company before making a lawsuit against the company?

A law suit may be brought as early as 60 days and as late as five years, both from the original proof of loss date.

37. An illness from which the body can fully recover with proper medical attention is called:

An acute illness

25. Which of the following is NOT considered to be an element of replacement?

An existing policy is subjected to a loan of 10 percent of its value.

98. The following statements about INSURABLE INTEREST are true:

Brothers and sisters have an insurable interest in each other. A creditor can have an insurable interest in a debtor limited to the amount of indebtedness. People are considered to have an insurable interest in themselves.

A Health Savings Account allows for tax-deductible contributions that grow tax free and may be withdrawn tax free to pay for qualified medical expenses.

But, there must be a high deductible health insurance plan in place, a minimum $2400 deductible for a family. The money in these plans can be used to pay for doctors' fees, prescriptions, etc. not covered by their health plan.

Which of the following would not be considered a "presumptive" disability, automatically qualifying an individual for full benefits under a disability policy?

Cancer

Divisible surplus

Dividends

An applicant asks an agent for a greater face value or death benefit than the agent's company is willing to offer a policy for. The agent places this application with another company who WILL offer a policy for that benefit. Even though the agent is NOT appointed with that company this would be

Excess or rejected business and is allowed

Quack Inthebox has turned 65 and is enrolled in both Medicare Parts A and B. She had a major stroke last year, and now is considering purchasing a Medicare supplement policy but is concerned that her health issues will make the policy unaffordable. What should the agent tell her?

Her health issues will not effect the premium rate.

103. Josh, age 67, continues to work for his company who has 20 employees. He is covered under their group major medical policy. Josh is also covered under Medicare. Which of the following is true?

His group plan is his primary payor, Medicare is his secondary payor

Which of the statements below about Medicare Part B is/are true?

I. There is an annual deductible. II. The insured is required to pay 20% after the deductible is met.

Riders or endorsements may do which of the following to a health insurance policy?

I. add benefits II. restrict benefits III. limit coverage IV. increase premiums

Once you pass the state examination, you are licensed by the state. You will then be appointed by an insurance company.

If 4 years go by without an appointment, you will need to retake the exam.

What would cause the Chief Financial Officer to conduct a hearing?

If he has reasonable cause to believe you have defamed an insurance company

31. How much Disability Income can be purchased is determined by:

Income

Which of the following is correct about the replacement rule?

Instructions regarding the rule are available from appointed life insurers.

Which of the following is true about coinsurance?

It helps control overutilization of benefits.

ch 17 Dread disease, a travel accident, vision care, and hospital indemnity policies are all examples of:

Limited risk policies

12. An insurer must establish a suitability supervision system including all of the following EXCEPT

Limiting annuity replacements to agents with two or more years field experience

64. Which of the following is not considered a "service provider"?

Lloyds of London

13. In which case are long term care benefits taxable?

Long term care benefits are only taxable to the insured to the extent that they exceed an annual amount established by the IRS.

Which of the following is correct concerning Health Maintenance Organizations?

Members may be part of a group, individual, or family plan. They may be self-funded. They finance health care on a pre-payment basis.

40. Which of the following statements concerning Medicare is true?

Part B is optional

34. Which part of Medicare requires premium payment by most eligible participants?

Part B, supplementary medical insurance

65. Which of the following are NOT eligible for Medicare coverage?

People with any life threatening condition

All of the following statements are correct about policy loan interest rates EXCEPT

Policy loan interest rates were set by the Office of Insurance Regulation in 1933 and may not be changed.

HMOs are known for stressing:

Preventive health care & early treatment

89. All of the following characteristics apply to disability buy-sell agreements except:

Providing for a death benefit

9. In a Basic Surgical policy, which of the following pays per point?

Relative Value

33. In a health insurance policy, what term describes a situation where a policyowner transfers a portion of his or her rights in an insurance policy to the hospital?

Right of assignment

92. Faye is hospitalized for a serious illness. After being dismissed she submits a claim to:

She may submit the claim to either the agent or the company.

Health insurance may be written by all the following types of companies except:

Surety

A Health Savings Account does not allow:

Tax free non-qualified withdrawals

63. Which of the following is correct concerning Medicaid's "look back" and home equity exemption?

The "look back" is 5 years and the exemption is $750,000

Who comprises the Financial Services Commission?

The Governor, CFO, Attorney General, & the Agriculture Commissioner

56. Regarding HMOs and Medicare, which of the following is not a part of the "special procedures" when dealing with individuals eligible for Medicare?

The agent must inform the prospect that re-enrollment in Medicare is subject to a 90 day waiting period

35. When a mistake has been made in the application, which would be the best course of action taken by the agent?

The agent should correct the mistake and have the applicant initial it

32. Which of the following would not be found in the Buyer's guide?

The beneficiary

Disability buy-outs have long elimination periods (such as two years)to ensure the owner is permanently disabled.

The buyout is provided with lump sum payments. For death benefits to be payable, the buy-sell would need to be funded with life insurance.

A 35 year old male computer programmer and his 35 year wife, also a computer programmer, apply for disability insurance. Which would pay the higher monthly premium (assuming all things are equal)?

The female programmer Female rates tend to be higher, until age 55 (aprox.), then tend to even out.

An employee has decided to leave a group coverage and convert to individual health insurance. Which of the following is true regarding the coverage of the individual plan?

The individual plan will have the same benefits as the group coverage.

86. Which of the following is classified under the four principle areas of the Florida Insurance law:

The qualifications & licensing requirements of the agents The rights of policyowners & beneficiaries Policy Provisions

When considering if a long term care policy is suitable for an applicant, all of the following should be considered:

The values, benefits and costs of the applicant's existing insurance, if any. The applicant's goals or needs with respect to long term care insurance. The applicants ability to pay for the proposed coverage.

39. An unaffiliated agent may affiliate with which of the following?

They may not affiliate with anyone

ch 18 The company must pay the benefits at least monthly.

Weekly if they desire, but they can not "drag" the payments out.

81. All of the following are common exclusions in a long-term insurance policy:

acts of war drug and alcohol dependency non-organic mental conditions

ch 22 Optional Provisions 1 and 2, addressing changes of occupation and misstatement of age, permit the insurer to do which of the following?

adjust the benefits that correspond to the premiums that have been paid

What is included under the miscellaneous expense benefit?

anesthesia

Anyone age 65 and over and works for a company which has 20 or more employees must be offered the same benefits

as those offered to younger employees. But, His plan at work is his primary payor. Medicare pays what his group plan does not.

Under presumptive disability, becoming

blind, deaf, loss of speech, or the loss of two or more limbs would automatically qualify an individual for full benefits under an individual disability policy.

ch 23 The factor in premium computation that has to do with the record-keeping and statistical analysis insurance companies perform is:

claims experience

Regarding dental insurance, deductibles and co-insurance typically do not apply to which of the following?

cleaning & exams

The miscellaneous expense benefit in a basic hospital expense policy will cover

drugs and medicine administered in the hospital hospital room and board

Which of the following is NOT an objective of the State Partnership program for long term care?

eliminating the need for Medicaid

95. In terms of social and economic benefits, insurance is

equally important economic and social benefit

All of the following are eligible groups under Florida law EXCEPT

groups established to buy insurance

Part A is compulsory and has no premium. Part B is optional (voluntary) and has a premium. Part A has a per benefit period deductible/, whereas Part B

has an annual deductible. No premium is required for Part A. The premium for Part B is deducted from the Social Security check.

ch 19 Health Savings Accounts are like a 401K for

health insurance. An individual buys a High Deductible Health Plan (to have a lower premium) and sets aside money in an account (pre-tax) to pay medical expenses up to the amount of the high deductible.

Surety companies "Bond" those who deal

in money. Such as a surety bond which guarantees performance. All the others may write health insurance. Chapter 16

Long Term Care policies sold in Florida must include all of the following:

include nonforfeiture benefits in the event of lapse offer inflation protection provide a free look of at least 30 days

If the insurance company takes no action on the reinstatement with-in 45 days the policy

is automatically reinstated. Accidents are covered immediately but sickness will not be covered for ten days. `

26. Long term care policies must offer coverage for all of the following except:

mental disorders

Mental disorders are allowed to be excluded, but Alzheimer's is not a mental disorder

since it is a neurological condition.

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:

stop-loss limit

61. The state would require an agent's home office to be licensed as an "insurance agency" if:

the agent hung out a sign on the front lawn

15. What is on part 3 of the application?

The agent's report

The policyowner/insured of a $100,000 life insurance policy died of a heart attack four months after taking out the policy. The company then learned that the insured had been treated for a heart condition nine months prior to being insured, but the fact had been omitted from the application. Which course of action would the company likely follow? 1. The company had to pay the death benefit because the discrepancy was not uncovered prior to the insured's death. 2. The company had to pay the death benefit because the contract is incontestable after the payment of the initial premium. 3. The company will not have to pay the death benefit, but will return the premiums.

3 only

70. A Medicare supplement has _______ free look.

30 day

36. Under a health policy, an insured is required to provide written Proof of Loss to the insurance company within a maximum of how many days after a loss?

90

ch 25An agent takes an application from a proposed insured without receiving payment of the first premium.The insurance company issues the policy and, when the agent visits the proposed insured to deliver it, she realized that the health of the applicant has deteriorated significantly since the application was taken. The agent should:

refuse to deliver the policy or to accept any premium offered.

Hoggie was licensed in March of 2010 and was appointed in April of the same year. In March of 2011 Hoggie gave up his appointment but maintained his license with the intent of returning to the business at a later time. What must Hoggie do to get reappointed in April of 2015?

retake the examination

76. A Supplementary Medical Expense policy combines the benefits of what two types of plans?

Basic Medical and Major Medical

13. All of the following statements about life insurance benefits are correct EXCEPT

Benefits payable to the insured's estate are protected from the creditors

16. Which of the following actions accurately portrays the limit Florida insurance regulations set for the combining of advertising for insurance policies with association membership?

By requiring separate applications and separate signatures

21. 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?

Coinsurance

74. The type of health care provider that provides both the health care services and the health care coverage is a:

Health Maintenance Organization.

8. Which of the following plans used with High Deductible Health Plans is employee owned?

Health Savings Accounts (HSAs)

Which of the following accurately describes the 'free look' provision?

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

All of the following statements regarding the life insurance policy summary are correct EXCEPT

It must illustrate all guaranteed policy dividend values

73. Which of the following statements is usually true about a Medical Expense policy?

It pays benefits on a cost-incurred basis only.

19. All of the following are true about health insurance dividends except:

Mutual (participating) insurers generally issue dividends Mutual (participating) insurers generally issue experience-rated plans Stock insurers generally issue experience-rated plans The two major factors that influence these are expenses and claims costs of the insurer

18. Which of the following is the correct number of lives required in Florida for a group life insurance policy?

No minimum

For an individual life insurance contract on an insured 64 years of age or older, the insurer must advise the applicant

Of their right to designate a secondary addressee to receive a copy of any policy lapse notice

ch 25 Which of the following best describes how premiums are paid for coverage under Florida Healthy Kids Corporation?

Premiums are paid with local, state, federal and family money.

27. Which of the following rules would apply if an agent knows an applicant is going to cash in an old policy and use the funds to purchase new insurance?

Replacement rule

ch. 17 Coinsurance example: This could be 80/20 , 75/25, or just about any ratio you could think of. The higher the amount the company pays, the higher the premium.

The insured can control his/her premium by electing to pay a higher share.

21. All of the following statements are correct about the law for conversion (change of plan) EXCEPT

The maximum amount of face value that can be converted is $2,000

29. Which of the following is NOT required when a group life insurance policy is canceled?

The policy owner must notify the department of the cancellation.

55. 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 this policy?

Waiver of premium

Coverage under COBRA terminates

When an employee is fired

the N.A.I.C. is not part of the legislative branch. They have no ability to create laws. They have no power to prosecute or punish. They do, however,

set the standards that each state will follow to one degree or another. The commissioner is a member of the board.

Which of the following would be considered an agent?

general lines agent

ch 21 Generally, long term care benefits are received by the insured tax-free - BUT,

if they exceed an amount established by the IRS then the excess will be taxable to the insured each year. You don't need to know the dollar amount, just that benefits are only taxable if they exceed an amount set by the IRS.

17. Tendencies for attitude and state of mind which cause indifference to loss are a:

morale hazard

In the past, people would give away assets to their children so that Medicaid would pay for their nursing home. But, the Deficit Reduction Act of 2005

now allows the state to "look back" for 5 years. Anything given away during the last 5 years will be "brought back" for determining assets.

38. Regarding disability, 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:

permanent partial disability

When an insured person returns a policy to the insurance company within the Free Look Period, the Insurance company must do which of the following?

refund all premiums paid

20. How will a beneficiary naming a former spouse on a preexisting insurance contract be changed by the divorce?

the beneficiary designation is voided by the divorce

ch 17 Under the relative value approach, each surgery is assigned a number of points. The more expensive the surgery

the greater the number of points. The insured purchases a policy with a conversion factor of perhaps $20 per point. If a surgical procedure is assigned 500 points the policy will pay $10,000.

If a consumer purchases a Medicare supplement plan within 6 months from the first day of the first month in which the person is BOTH 65 and enrolled in Medicare Parts A and B,

the insurance company can not rate the premium for the supplement because of health status.

The principle that the large amount of exposures that are combined into a group, the more certainty there is to the amount of loss incurred in any given period is known as:

the law of large numbers