Insurance Agent License
When holding insurance premiums and other funds, agents must act in a what role?
a fiduciary capacity
Which helped Medicare subscribers fill the gaps in Medicare coverage?
The insurance industry created Medicare supplement policies.
Which statement is correct about residual benefit payments?
The insured must lose at least 20 percent of pre-disability income before benefits begin.
Which statement is CORRECT about a guaranteed renewable disability income policy?
The insurer can increase the premium if it increases the premium for all policies in the same class.
A ______________gives the applicant coverage from the date of the medical exam (if required) or the signed application—whichever is later
conditional receipt
The purpose of policy exclusions is to specify:
conditions that the policy does not cover
Ambiguities in an insurance contract are most often interpreted in favor of the policyowner because insurance contracts are:
contracts of adhesion
As _______________________, insurance policies must be accepted "as-is" by policyowners. Since the policyowner had no say in drafting the terms of the contract, ambiguities in an insurance contract are usually interpreted in favor of the policyowner.
contracts of adhesion
Which are NOT qualified, unreimbursed medical expenses for purposes of the medical expense deduction?
contributions to premiums for group AD&D insurance
A company's group health plan specifies that if the insured is eligible for benefits under another policy, the plan will be the primary plan. Which provision does this?
coordination of benefits
Sponsored by fraternal societies,____________________ are not-for-profit organizations that specialize primarily in life insurance and annuity products that are usually available only to the society's members.
fraternal insurers
Which disability would most likely qualify for a full benefit under the presumption of disability provision?
loss of eyesight (He/she suffers a specified loss that, by definition, is deemed total and permanently disabling.)
An applicant for a $500,000 whole life insurance policy pays the initial premium along with his application. In this case, what has the applicant done?
made an offer to the insurer.
Which of the following does NOT constitute the transaction of insurance?
mailing an insurance contract
Under the Age Discrimination in Employment Act, an employer that reduces group health benefits for older employees must:
maintain equal contributions for all employees
The addition of Part C to Original Medicare (Parts A and B) provided Medicare-eligible individuals with:
managed care and private fee-for-service plans
Any provider coverage has always been a characteristic of:
medical expense indemnity policies
Which account is no longer available to small employers and self-employed individuals as a means of paying for medical expenses?
medical savings accounts
The customer can return the policy during the ________ -_________ _______ and receive a full refund of the premium. This period lasts for at least TEN days after the policy is delivered.
free-look period
Though not specifically cited in the producer's contract, the producer is expected to telephone prospects on the insurer's behalf to arrange sales appointments. This is an example of what kind of producer authority?
implied authority
A provision in an insurance policy that states that after a policy has been in force for a set period, the insurer cannot contest a claim for any reason except for non-payment of premiums. Under most policies, that period is two years.
incontestability Clause
A Medigap policy is a traditional____________________. In contrast, a Medicare SELECT plan is a managed care policy.
indemnity policy
The______________________ consideration is the promise to pay a benefit for a covered loss.
insurance company's
What kind of information is NOT commonly requested on a health insurance application?
likelihood of disability or illness
A tax-qualified long-term care insurance policy lets policyowners deduct premiums as a medical expense while also receiving:
limited tax-free benefits
The Health Insurance Portability and Accountability Act of 1996 (HIPAA) created which two categories of long-term care policies?
tax-qualified and non-tax-qualified LTC policies
A business offers a group disability income plan and pays the premiums. If an employee suffers a disabling injury, the benefits paid to the employee will be:
taxable income to the employee
A basic physician expense policy typically specifies:
the maximum benefit amount per visit, and the maximum number of visits per injury or illness
The insurer of a_________________ health insurance policy cannot cancel the policy or increase the premium.
noncancellable
When selling individual life insurance, Mary tells prospects that Florida law requires them to purchase a long-term care rider, even though this is not true. Which unfair trade practice has Mary committed? discrimination sliding rebating churning
sliding
If an applicant's assets exceed certain limits, the applicant must deplete them before becoming eligible. This is referred to as _______________________
spending down
An insured's policy with Company A pays $2,000 in benefits. His policy with Company B pays $3,000 in benefits for the same loss. He suffers a $5,000 loss and files a claim with both insurers. Company A's proportion of the loss is:
40 percent ($2,000 divided by $5,000)
The insurer has up to ___ days to reject the application for reinstatement. If the insurer does nothing, reinstatement is automatic.
45
Which Act applies to entities with access to information about a person's health?
HIPPA
A health insurance policy covers accidents immediately upon reinstatement. It can delay coverage for claims arising from sickness for up to ____ days after reinstatement. This protects the insurer from adverse selection.
10
Most states require that a group have at least how many members to qualify for standard group health insurance?
10
___ days for monthly premiums (Grace Period)
10
How long is the standard free-look period?
10 days
A group health insurance policy issued in Florida can exclude a pre-existing condition from coverage for up to how many months?
12
ABC Life Insurance Co. sells term and whole life insurance policies through agents. If it sells a policy, it must give the customer the right to examine the policy for at least how long?
14 days
Under the Patient Protection and Affordable Care Act, dependent children may be covered under their parent's group medical insurance policy until what age? 22 19 30 26
26
Horace buys a Medicare supplement insurance policy but decides not to keep it. How many days does he have to return it for a full refund of the premium?
30 Days
___ days for all other payment modes (Grace Period)
31
At what age does an employee gain the protection of the Age Discrimination in Employment Act (ADEA)?
40
The _____________ is the insurer's promise to pay a benefit if a certain event occurs. The insuring clause: -describes the type and scope of coverage -defines terms used in the policy -states the conditions under which the policy will pay a benefit
Insuring Clause
Which statement about the taxation of accidental death and dismemberment policy benefits is correct?
Interest earnings on benefits held by the insurer are taxed.
Which statement is correct about the MIB (Medical Information Bureau)?
It collects medical information about insurance applicants.
What is the effect of a binding receipt given to an applicant?
It guarantees coverage during the underwriting period even if the insured turns out to be uninsurable.
Why does an individual health insurance policy have a probationary period?
It helps the insurer avoid adverse selection.
Which of the following statements about the renewability of small employer health plans is NOT true?
Plans can be canceled only after the insurer provides 180 days' prior notice.
Which statement about group disability income (DI) insurance is correct?
Plans can offer benefit periods for short-term disability and long-term disability.
Which statement is true about the "any occupation" and "own occupation" definitions of total disability?
Policies with an own occupation definition are more expensive.
A ___________ sells, signs, and delivers health insurance policies to prospects and buyers. He or she must ensure that insurance applications are completed accurately and must submit them to the insurer.
Producer
ERISA does NOT regulate group health insurance plans with respect to:
Promoting the sponsors best interest
Entitles the insurer to written proof of loss within 90 days of loss.
Proof of loss
_______________________is a risk transfer technique because it transfers to a third party (the insurer) the financial risk associated with premature death.
Purchasing insurance
A disability income insurance policy with a noncancellable renewability provision typically cannot be cancelled until the insured:
Reaches age 65
To boost her sales at the end of the year, Trudy started offering potential clients a $250 cash gift card in exchange for purchasing a life insurance policy. Which unethical sales practice has Trudy committed?
Rebating
As a risk management technique, which of the following best illustrates risk transfer?
Robert purchases life insurance because he figures doing so is far less expensive than trying to save all the money his survivors would need upon his death.
Which Medicare supplement plan covers the copayment for the 61st through 90th day of hospitalization?
Plans A through N
The ___________ period is usually 15 to 30 days.
Probationary
Andrea earned $3,000 each month before she was injured in an accident. Now she works part-time and earns $1,000 a month. Her disability income policy pays a $2,000 monthly benefit for total disability. The policy uses a flat rate to determine benefits for partial disability. How much will Andrea receive?
$1,000 A flat benefit payment for partial disability is a percentage of what would be paid for a total disability. This amount is typically 50 percent. As a result, if Andrea's policy pays $2,000 for total disability, she will receive 50 percent of this amount, or $1,000, as a partial disability payment.
How long is the typical elimination period of a business overhead expense (BOE) policy?
15 to 60 days
HIPAA guarantees the availability of health insurance coverage in the individual market for eligible individuals who have had at least how many months of aggregate creditable coverage?
18 months
A disability buy-out insurance policy typically has an elimination period of:
18 to 24 months
Which is a common benefit period in a long-term care insurance policy?
2 to 5 years
Employers with fewer than how many employees are exempt from COBRA requirements?
20
How long from when an insurance contract is issued does an insurance company have to void a life insurance policy on the basis of fraud?
24 months (from the date the contract was signed and issued.)
____ days for weekly premiums (Grace Period)
7
All insurance companies selling Medigap policies must sell Plan__ and either Plan C or Plan F.
A
Medicare Part ___ (hospital insurance) covers inpatient hospital care, skilled nursing home care, post-hospital home health care, and hospice care.
A
Medicare Part____ usually does not cost a premium, only an annual deductible and coinsurance.
A
As a contract, a health insurance policy requires all of the following elements EXCEPT:
A deadline
Which statement about health insurance is correct?
A group plan is usually offered through employers or associations.
Which statement does NOT describe the standard Medicare supplement plans?
A plan may be cancelled if the insured's health significantly deteriorates.
Jake borrowed $300,000 from ABC Capital Company. He buys a credit disability insurance policy equal to the amount of the loan. Soon afterward, he suffers an injury that prevents him from working. He is unable to pay back the loan. To whom will the policy pay the benefit?
ABC Capital Company
ABC, Inc. does not want an insured group health plan and it does not want to entirely self-insure, either. What can ABC do?
ABC can self-insure part of its plan and insure the rest with an insurance company.
Which group would be considered a natural group for purposes of obtaining group health insurance?
Alumni of a college
Which statement is correct about the tax treatment of group disability income benefits?
An employee pays income tax on the percentage of benefits equal to the percentage of premium the employer paid.
Under the ______ occ definition, the policy pays benefits if the insured cannot work in any occupation for which he or she has the necessary education, training, or experience.
Any
Tom is a part-time employee of the Acme Supply Co. Which statement is correct about his participation in Acme's group health insurance plan?
As a part-time employee, he is probably not eligible to participate.
Medicare Part ____ costs a monthly premium, annual deductible, and coinsurance.
B
Medicare Part _______ (medical insurance) covers physicians' services, outpatient hospital care, physical therapy, ambulance trips, medical equipment, and some preventive services. Part B supplements Part A coverage.
B
Which of the following provides access to health insurance to Florida residents who have been rejected by at least two insurers for health reasons?
Florida Health Insurance Plan
The maximum time for which benefits are paid for a disability under a DI policy or for long-term care under a long-term care policy.
Benefit Period
In a medical expense policy, which method uses pre-determined prices for medical or health services to determine the benefit?
Benefit schedule
Which statement describes the "pool of money" approach to benefits under a long-term care insurance policy?
Benefits are defined as a total sum of money from which money can be drawn in any amount for as long as the money lasts.
What favorable tax treatment do qualified long-term care insurance policies receive?
Benefits are not taxed, within limits.
Which of the following statements about individual disability income policies is correct?
Benefits never exceed the insured's income.
What does the fact that Bob is eligible for Medicare coverage under Part A indicate about his age and Social Security status?
Bob is at least 65 years old and eligible for Social Security retirement benefits or has received Social Security disability benefits.
Which governments regulate group health insurance?
Both state and federal
Which of the following statements about utmost good faith in insurance contracts is correct?
Both the insured and insurer must act in utmost good faith.
Medicare Part ______ (Medicare Advantage) is a managed care plan alternative to Original Medicare. Provided through commercial insurance companies, this comprehensive plan combines the coverage of Parts A and B and delivers it like a PPO.
C
A dental plan that categorizes covered treatments into three categories will typically place diagnostic and preventive care in:
Category 1
This provision allows the insurer to increase the premium if the insured changes to a more hazardous occupation.
Change of Occupation
What does ERISA NOT require of claims procedures and appeals under a group health plan?
Claimants may designate the plan's fiduciary as their representative.
The term ______________is associated with major medical insurance. It is a percentage of the total charges that the insured pays.
Coinsurance
Which statement about health savings accounts is correct?
Contributions are tax deductible.
The term _________________ is associated with managed care plans. It is a flat dollar amount that the member pays.
Copayment
Which is NOT required of health insurers doing business in the small employer market?
Coverage is guaranteed renewable even if the employer moves outside the insurer's service area.
A _______ disability insurance policy covers the risk of becoming disabled and being unable to pay off a loan.The policy's benefit period is the same as, not shorter than, the loan period.
Credit
This care helps a person with daily living activities like bathing, dressing, or eating. While custodial care must be directed and monitored by a licensed physician, it does not need to be administered by skilled professionals and is often given by nurse's aides. It can be given in nursing homes, assisted living facilities, adult day-care centers, respite centers, or a person's home.
Custodial care
Medicare Part _____ adds prescription drug coverage to Medicare Parts A and B. It is provided through Medicare-approved commercial insurers.
D
Which federal law regulates group health plans and protects their enrollees?
ERISA
A waiting period before benefits begin. During this time, benefits are not paid. Common _______ periods are: 30 days 60 days 90 days 180 days
Elimination
The shorter the policy's ________ period is, the higher the premium. An applicant who wants to minimize premiums should choose a longer ______ period.
Elimination
The following statements about flexible spending accounts (FSAs) are correct, EXCEPT:
Employees can use FSA funds to pay costs that their employer's health plan covers.
Who establishes the standards of eligibility for employee participation in an employer's group health plan?
Employer
Specifies that a policy, riders, and endorsements make up the contract between the insurer and insured.
Entire Contract
________________________programs include Medicare and Social Security. State insurance programs include Medicaid and Workers Compensation.
Federal insurance
Agents and insurers must maintain records of their insurance transactions for at least how long? five years three years one year two years
Five years
Which method of determining the benefit amount is most common in individual disability income policies?
Flat amount
The_______ ______ _______________ __________ protects policyowners, insureds, and beneficiaries of life insurance policies, health insurance policies, and annuity contracts if an insurer fails to perform its contractual obligations because it becomes impaired or insolvent.
Florida Life and Health Guaranty Association
_____________________________companies are nonprofit organizations that sell life and health insurance to members of the fraternal society they are affiliated with.
Fraternal insurance
The ____________ provision gives the policyowner some time after the due date to pay the premium.
Grace Periodttt
Jim incurred $6,000 in medical expenses. He submits a claim for benefits to his primary plan, which covered $4,000 of these costs. Which statement is correct?
He can receive no more than $6,000 in benefits from both the primary and secondary plans.
_________ insurance policies normally allow the policyowner a ten-day free-look period. Depending on the type of coverage and the policyowner's age and state of residence, that period can be 20 or 30 days. The period begins when the policy is delivered to the policyowner.
Health
How does health insurance differ from life insurance?
Health insurance protects against risks that may arise more than once in a lifetime. (Unlike the risk of death, a person may face health risks many times during his or her life.)
Long-term care (LTC) insurance is NOT designed to provide coverage for:
Health services for the poor
How do overinsurance provisions (Other Insurance in This Insurer, Insurance with Other Insurer, and Other Insurance with Other Insurers) protect insurers?
If several insurers cover the same risk, they limit the liability of any one of them to the proportion of the total benefits it assumes.
Which is NOT true about the delivery of health insurance policies?
If the application did not include the first premium, the producer collects the premium and a surcharge when delivering the policy.
A cancellable policy allows the insurer to:
Increase premium
Which plan reimburses the insured for the cost of covered medical care received?
Indemnity plan
Which statement about maternity coverage in group and individual health plans is correct?
Individual and group plans that cover maternity care must cover the services of midwives and birth centers.
___________________________, sold by home service insurance companies, is sold in small face amounts, usually less than $10,000 (and frequently between $1,000 and $2,500).
Industrial life insurance
How does the guaranteed renewable provision affect an individual medical expense insurance policy?
It is standard in medical expense policies.
Which statement is correct about the benefit period in a credit disability insurance policy?
It is the same as the loan period.
Which statement is correct about a buy-up option in a disability income insurance policy for professionals?
It lets the insured buy more coverage in the future without evidence of insurability.
Which statement accurately describes the work of the MIB (Medical Information Bureau)?
It reports medical information about insurance applicants to member insurance companies.
What purpose does a mandatory minimum group size serve in underwriting group health insurance?
It spreads the risk and the administrative costs among numerous participants.
If the premium is not paid by the end of the grace period, the policy ________.
Lapses
States determine________ eligibility based on an applicant's: disability or age (at least 65 years) income limitations asset limitations
Medicaid
Which statement describes states' administration of Medicaid?
Medicaid services vary from state to state.
Which statement describes the benefit triggers in tax-qualified and non-tax-qualified long-term care insurance plans?
Medical necessity triggers benefits under non-tax-qualified plans.
Medicare supplement insurance policies supplement coverage of which Medicare Part?
Medicare Parts A and B only
___________________ is a managed care alternative to a traditional Medicare supplement policy, it only supplements Medicare Parts A and B. It cannot be used to supplement Medicare Advantage (Part C
Medicare SELECT
Which statement is correct about Medicare supplement coverage for prescription drug coverage?
Medicare supplement policies cannot offer prescription drug coverage.
Which health insurance policy supports and improves Medicare coverage?
Medicare supplement policy
What is another name for Medicare supplement policies?
Medigap
Which statement about individual disability income (DI) insurance is correct?
Most DI policies cover only nonoccupational disabilities.
Which of the following documents must an agent deliver to a policyowner who buys a life insurance policy that replaces another?
Notice Regarding Replacement
Which provision requires the insured to notify the insurer within a certain number of days after a covered loss?
Notice of claims (within 20days after covered loss)
Under the ______ occ definition, the policy pays benefits if the insured cannot work in his or her own occupation due to disability.
Own
__________ manage independent agencies that are not affiliated with a single insurer but instead have sales agreements with multiple insurers.
PPGAs. (Personal Producing General Agent )
The fact that ownership of a health insurance contract cannot be transferred to another party makes it what type of contract?
Personal
All of the following statements regarding the career agency distribution system are correct EXCEPT:
Personal producing general agents (PPGAs) are commonly hired to manage career agencies.
__________are conditions that are not covered. The insurer denies claims related to these conditions.
Policy exclusions
The reinstatement provision lets a ___________ reinstate a lapsed policy within a certain period. To reinstate a policy, the ________ applies for it, pays past-due premiums with interest, and gives proof of insurability.
Policyowner
Twelve mandatory provisions in health insurance policies protect the _______
Policyowner
Which statement describes the tax treatment of premiums for business disability buy-out insurance?
Premiums are not deductible, and benefits are not taxed.
Which statement is NOT correct about the tax treatment of business overhead expense (BOE) insurance?
Premiums cannot be deducted.
Which statement is correct about the taxation of premiums for business disability income insurance?
Premiums for key person disability income insurance are not deductible by the business.
If Jack takes a new job that is less hazardous than the job he had when he obtained health coverage, the insurer may
Reduce the coverage
In a typical basic medical expense policy, how does the insurer reimburse covered expenses?
Reimbursement is paid at up to 100 percent of covered expenses, subject to a maximum limit.
A provision that lets the policyowner place a lapsed policy back in force within a certain period. This period is typically three years.
Reinstatement
Sasha, Kendall, Adam, and Julio are licensed agents in Florida. The Department of Financial Services would NOT be able to suspend or revoke which agent's license for engaging in the following acts?
Sasha, who sold insurance policies to family members and friends this year
All the following statements regarding perils and hazards are correct EXCEPT:
Smoking cigarettes is an example of a peril.
Which statement is correct about the operation of an employer's self-insured group health insurance plan?
The employer pays covered claims.
Which type of health policy offers coverage for treatment of a specified disease or condition, such as heart disease or cancer?
Specified
What is NOT correct about the coordination of benefits in group health insurance plans?
Spouses' plans pay equal benefits for covered dependent children.
An insured's managed care plan most likely refers to the insured as the:
Subscriber or the participant
An insured's health insurance plan pays 80 percent of the covered loss. The fact that it is a reimbursement contract relates to which characteristic of health insurance?
The benefit is based on the loss suffered.
What happens if a person submits an insurance application without the first premium?
The insurer must make an offer to the applicant.
Debbie owns a noncancelable individual disability income policy. She receives benefits for one year and then returns to work. Which statement is correct about the policy's renewal?
The insurer must renew the policy if Debbie pays the premium.
How does the other insurance with other insurers provision cover losses on other than an expense-incurred basis?
The insurer returns premiums that exceed the amount associated with its proportion of prorated benefits.
Which statement about the taxation of qualified long-term care insurance policies is NOT correct?
The limit of the deductible premium decreases with the insured's age.
An insured applies for reinstatement but gets no response from the insurer within 45 days. What will happen?
The policy is automatically reinstated.
Which of the following statements about COBRA is CORRECT?
The premium for continued group medical coverage may be up to 102% of the premium that would otherwise be charged
What will cause a health insurance policy to lapse?
The premium is not paid by the end of the grace period.
Which statement about disability reducing term insurance policies is correct?
The purpose of the policy is to cover the term of a loan.
What does COBRA guarantee an employee who voluntarily leaves an employer's insured group?
The right to continue group insurance coverage at the employee's expense for up to 18 months.
Which statement about the right to continue group health insurance under COBRA is NOT correct?
The younger spouse of an insured who becomes eligible for Medicare benefits cannot continue group coverage.
Brittany Importers is headquartered in Florida and would like to purchase a group health plan to cover its employees. What is the minimum number of employees that Brittany Importers must have to be eligible for group insurance?
There is no minimum
Why are the premiums that an employer pays for group medical insurance NOT subject to Social Security taxes or Medicare taxes?
They are not wages.
Which is correct about the purpose of Medicare supplement policies?
They help pay for hospital, medical, and surgical costs as well as provide funds for deductibles and coinsurance.
How does the Pregnancy Discrimination Act prevent discrimination against pregnant employees?
They must be treated the same under the plan as non-pregnant employees.
What determines whether a health insurance policy will be issued with an impairment rider?
Underwriting
If the applicant is found to be _________ , he or she is still covered from the time the receipt was given until the insurer notifies the applicant that it will not issue a policy.
Uninsurable
A _______________________ rider lets the insured skip premium payments during periods of total disability
Waiver of premium
While taking an insurance application, Betty recommends backdating it so that the proposed insured will appear to be a year younger on the form. Can Betty do this?
Yes. Backdating is permitted if it is for six months or less and authorized by the insurer
What are premium payments for a tax-qualified long-term care insurance plan considered for federal income tax purposes?
a medical expense
Laura was injured in an accident. She incurred $1,000 in medical bills. Even though she was not disabled or lost any income, her disability income policy paid for these expenses because it has:
a nondisabling injury provision
Lucy is applying for an individual health insurance policy and discloses that she is diabetic, which is considered which of the following?
a physical hazard
After Todd was injured in a car crash, he received occupational therapy to help him return to work. His disability income policy paid for this therapy because it had:
a rehabilitation provision
Which health insurance policy pays a benefit if the insured dies or is dismembered because of an accident?
accidental death and dismemberment (AD&D) policy (Accidental death and dismemberment policies provide a benefit if the insured dies or is severely injured because of an accident.)
Which insurance company function calculates company mortality and morbidity rates as well as the dividends on participating life insurance policies?
actuarial division
The tendency of a person diagnosed with a serious illness to try to buy life or health insurance is known as:
adverse selection (The tendency of people to buy and keep insurance if they perceive themselves to be at a greater risk of a loss is a moral hazard called adverse selection.)
Once the insured has triggered the benefits of a long-term care insurance policy, when will they begin?
after the elimination period
In a group health insurance plan, a schedule of benefits does NOT:
allow the insured to choose benefits
Which insurance sales distribution arrangements is NOT affiliated with just a single insurance company but instead represents multiple companies?
an independent sales office that is managed by a Personal Producing General Agent (PPGA)
Disability income insurance policies sold to those in blue-collar occupations typically use which definition of total disability?
any occupation
An insurance producer tells a life insurance applicant that he has the authority to waive the medical exam that is normally required by the insurer with every application. The insurer may be required to accept the application without a medical exam due to the producer's:
apparent authority
The _________ consideration is the application and the first premium payment.
applicant's
The purpose of the relation of earnings provision is to:
avoid overinsurance
A ____________________(or temporary insurance agreement) gives the applicant coverage during the underwriting period. Coverage takes effect when the application is signed.
binding receipt
Which governments regulate group health insurance?
both state and federal
Which type of business disability insurance covers a business' monthly operating expenses while the owner is disabled?
business overhead expense insurance
A_____________________ lets employees pay for qualifying medical expenses, including health insurance premiums, with pre-tax income. Cosmetic treatments, child day care, and medical monitoring devices are not qualified medical expenses.
cafeteria plan
The ____________ provision lets an insurer cancel the policy at any time with 45 days' notice. The 45-day notice is also necessary if the insurer is not going to renew the policy or changes the premium.
cancellation
To confirm that an individual was insured for a stated period, which of the following must a health insurer issue to an insured individual?
certificate of creditable coverage
Which is NOT a benefit option common to Section 125 cafeteria plans?
child day care
Under an indemnity plan, the insured can:
choose doctors and health care providers
Due to a significant drop in sales this year, Agent Smith has been soliciting current clients and encouraging them to use the policy values in their existing life insurance policies to purchase new policies in order to increase his commissions. Which unfair trade practice has Agent Smith committed?
churning
Which provision of a health insurance policy requires the insurer to give the insured the forms necessary to file a claim?
claim forms
The main purpose for errors and omissions insurance (E&O) is to:
cover damages that arise due to services a producer non-willfully failed to render
In addition to mandatory and optional provisions, health insurance policies have other provisions that:
define the full scope of a policy's features, benefits, and limitations
When an applicant applies for a health insurance policy, a producer is NOT required to:
determine the premium rate
When Social Security disability benefits begin, the disability benefits from a social insurance supplement (SIS) rider will:
diminish or end
Which form of business disability insurance pays a lump sum to the owners when one of them is totally disabled?
disability buy-out insurance
An________ period begins every time a covered loss occurs.
elimination
Who determines the coverage and benefits offered under an employer's group plan?
employer
Who determines the length of the waiting period in a group health insurance plan?
employer and insurer
Where can a person set up a health care savings account (HSA)?
financial institution
The Office of Insurance Regulation can examine the business transactions, accounts, and records of domestic insurers as often as necessary, but must do so at least once every how many years?
five years
An insured incurs $7,000 in covered medical expenses. Her comprehensive major medical policy requires her to pay $500 of those expenses before the policy will pay a benefit based on the remaining $6,500. What kind of deductible does the insured have?
flat deductible
Which account uses employee contributions to pay for qualified medical care expenses that an employer's health plan does not cover?
flexible spending account (FSA)
Members' access to an HMO's network of health care providers is controlled by a primary care physician who is also called the:
gatekeeper
When acting in the best interests of applicants and insureds, producers must:
give all important information about a proposed policy
In,_________ the probationary period is the time the employee must be employed before being eligible for insurance benefits.
group insurance
The future increase option rider is also known as the:
guaranteed insurability rider
A_______ __________ policy assures the policyowner that the insurer will not cancel the policy, although it may increase premiums.
guaranteed renewable
All Medicare supplement policies are______________________ A policy cannot be canceled because of the insured's health. Premiums may be increased, though the increase must apply to all such policies issued by the insurer, and not just to a particular insured's policy.
guaranteed renewable.
When a person exhausts health insurance coverage under COBRA, HIPAA guarantees that the person will:
have access to a guaranteed-issue individual health insurance policy, regardless of health
What forms the basis of a health savings account (HSA)?
high-deductible, high out-of-pocket cost insurance plan with a tax-favored savings account
When determining eligibility for Medicaid, states do NOT consider:
household size
The insurer's promise to pay a specified benefit if a certain event happens is contained in the:
insuring clause
This is ongoing care for a person's condition but is not needed all day. It is delivered by registered nurses, licensed practical nurses, and nurses' aides who are supervised by a doctor. Typically provided to patients who are recovering from acute medical conditions, it is usually delivered in a nursing home. It may also be given in one's home, an assisted living facility, or a community-based center.
intermediate care
Which level of long-term care provides ongoing but not continuous care to address a person's condition and is delivered by registered nurses, licensed practical nurses, and nurses' aides under a doctor's supervision?
intermediate care
Which would NOT be considered a natural group that is eligible for group insurance? Large family
large family
What is the mathematical concept of probability that helps insurers estimate the statistical likelihood of mortality or morbidity losses at any given age?
law of large numbers
Which of the following is NOT required in order to operate as an HMO in Florida?
license of certification
Producers should never sell a non-admitted insurer's products unless they are:
licensed surplus lines brokers.
How may a person eligible for Medicare avoid automatic enrollment in Part B?
notify the Social Security Administration that the person wants to opt out
An insurance producer's responsibilities to insurance applicants include all the following EXCEPT:
offer the same rebate to every applicant
A married couple's health coverage is provided by their employer. On what basis is their insurance provided? on a group basis
on a group basis
An insured is injured and files a claim under his disability income insurance policy. When does the elimination period begin?
on the date of injury
The career agency system uses producers who primarily if not exclusively represent_______ insurer.
one
For purposes of small group health insurance, the minimum number of members that a group can have is:
one or two
If a claim is filed under a health insurance policy because the insured died, the insurer has the right to:
order an autopsy to determine the cause of death
Sanjay applied for an individual health insurance policy in Florida. The agent gave him a document at the time of application that summarizes the type of coverage provided, the exceptions and limitations, and the conditions for renewal. Which document did Sanjay receive?
outline of coverage
Alice own a long-term care policy. Her return of premium option allows her to have a portion of the premium:
paid to her estate or a named beneficiary when she dies
An agent's license can be suspended or revoked for all of the following reasons EXCEPT:
paying commissions to a licensed agency
Which activity is NOT an error or omission that makes an agent or producer legally liable to both the insured and the insurer?
placing insurance with an approved surplus lines insurer
A ______-______ __________is a health condition that existed before an insurance policy was issued.
pre-existing condition
Which of the following provides enrollees with access to limited health-care services through an exclusive panel of providers?
prepaid limited health service organization (PLHSO)
After a disability income policy has been issued, what period of time must pass before the insured may file a claim for benefits?
probationary period
Medicare Part A pays for hospital services that are considered to be:
reasonable and medically necessary
What must an insurer do under a cancelable policy?
refund any advance premiums before canceling the policy
This is continuous, 24-hour care delivered by licensed medical professionals, under the direct supervision of a doctor. This care is usually delivered in a nursing home.
skilled nursing care
Which standard provision allows a lapsed policy to take effect again?
reinstatement provision
Which provision gives the insurer the right to cancel coverage?
renewability provision
Genevieve wants to renew her Florida insurance agent's license. Which of the following is not a condition for renewal?
report of insurance sales made in the last two years
Due to the increasing cost of health insurance, employers with group health insurance plans usually:
require participating employees to contribute to the premium through payroll deductions
Jennifer purchases an individual health insurance policy on June 1. One week later, she loses her job and decides she can no longer afford the policy. What are her options?
returning the policy for a full refund of premiums
Which of the following is used to change coverage in a health insurance policy?
rider
Disability income policies usually exclude coverage for:
self-inflicted injuries
Although the employer sets the eligibility standards for participation in its group health insurance plan, the insurer alone:
sets the minimum participation standards
An income replacement disability insurance policy pays a monthly benefit that equals:
the actual amount of income lost
When pricing health insurance policies, the morbidity rates indicate:
the average number of persons in a large group who are expected to become disabled because of accident or sickness
In order to be grounds for the insurer to void a contract, an applicant's statements on an insurance application must involve:
the deliberate withholding of material facts
From an insurance perspective, the term "loss exposure" means:
the extent to which an insurer is subject to a possible loss
Under the Patient Protection and Affordable Care Act, the terms platinum level, gold level, silver level, and bronze level refer to a classification of health insurance plans that differ by: the deductible and coinsurance requirements of the plan. the number of essential health benefits (EHBs) covered under the plan. the percentage of essential health benefit (EHB) costs in the general population funded by the plan the underwriting classification assigned to the insured.
the percentage of essential health benefit (EHB) costs in the general population funded by the plan.
An application for health insurance requires the signature of:
the proposed insured and the producer
Which health insurance policy provision requires the insurer to pay claims immediately after receiving proper proof of loss?
time of payment of claims
Why does a disability income insurance policy limit the maximum benefit to a percentage of the insured's pre-disability wages and earnings?
to encourage the insured to return to work
Why does an insurer require that a certain percentage of eligible members participate in a group health insurance plan?
to protect the insurer from adverse selection
What is the principal purpose of Medicaid?
to provide health care and health-related services to people with low incomes
An insured's medical expense plan pays a higher benefit when health care services are rendered by a physician within the plan's network. This indicates that the plan is NOT a(n):
traditional medical expense plan
A guaranteed insurability rider guarantees the right to buy additional coverage:
under any circumstances
Transacting insurance includes all of the following EXCEPT:
underwriting insurance contracts
Through the______________________, insurance company underwriters determine if the risk proposed for insurance should be accepted or rejected. That is, they determine if the applicant represents an insurable risk.
underwriting process
Sandy and Cindy are healthy, 45 years old, and have similar life expectancies. Though they are insured by the same company, Sandy's life insurance premiums are considerably lower than Cindy's. What may this indicate a case of? unfair discrimination false advertising misrepresentation twisting
unfair discrimination
A _______________ contract means that only one party-the insurer-makes an enforceable promise. The insured makes no enforceable promise and must only continue paying premiums to keep the policy in force.
unilateral
Medicare Part B benefits exclude coverage for:
vaccinations
Bill believes he has a cause of action against his health insurer for its refusal to pay benefits on a claim. He filed written proof of loss on April 1. Not having received a response by May 1, he decides to take legal action. His attorney will probably advise him to
wait
