Insurance Study Guide
Which of the following is another term for an authorized user
admitted
Under which of the following employer-provided plans are the benefits taxable to an employee in proportion to the amount of premium paid by the employer?
disability income
In a disability policy, the probationary period refers to the time
during which illness-related disabilities are excluded from coverage
The provision in a health insurance policy that ensures that the insurer cannot refer to any document that is not contained in the contract is the
entire contract clause
Insurance is the transfer of
risk
All of the following are ways in which a Major medical policy premium is determined except
the average age of the group
In a group policy, who is issued a certificate of insurance
the individual insured
Under a health insurance policy, benefits, other than death benefits, that have not otherwise been assigned, will be paid to
the insured
An insured's disability income policy includes an additional monthly benefit rider. For how many years can the insured expect to receive payment from the insurer before Social Security benefits begin?
1
To avoid violations of unfair claims settlement regulations, insurers are required to acknowledge the receipt of a claim within how many days?
10 days
According to OBRA, what is the minimum number of employees required to constitute a large group?
100
Under the Affordable Care Act, what percentage of preventive care must be covered without cost sharing?
100%
The most the Insurance Guaranty Association will pay for net cash surrender values is
100,000
How long is the open enrollment period under an employer group health insurance plan
30 days
In the event a policy lapses due to nonpayment of premium, within how many days would the policy be automatically reinstated once the outstanding premium is paid?
45
The minimum number of credits required for partially insured status for Social Security disability benefits is
6
Insurance producers that do not have company appointments are considered a/an
Representative of the consumer
Which of the following dental insurance categories would cover the filling of cavities
Routine and major restorative care
Which of the following does NOT have to be disclosed in a long-term care (LTC) policy?
The aggregate amount of premiums due
Who chooses a primary care physician in an HMO
The individual member
Who chooses a primary care physician in an HMO?
The individual member
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?
The insured is in an accident and incurs a large claim
Which of the following is true regarding elimination periods and the cost of coverage?
The longer the elimination period, the lower the cost of coverage
An insurer wishes to compare the information given in an insurance application with previous insurance applications by the same applicant but for different companies. What organization can help the insurer accomplish this?
The medical Information Bureau
An agent is in the process of replacing the insured's current health insurance policy with a new one. Which of the following would be a proper action?
The old policy should stay in force until the new policy is issued
All of the following statements about Medicare supplement insurance policies are correct EXCEPT
They cover the cost of extended nursing home care
Which provision states that the insurance company must pay Medical Expense claims immediately?
Time of payment of claims
Which of the following is not the purpose of HIPAA?
To provide immediate coverage to new employees who had been previously covered for 18 months
How soon following the occurrence of a covered loss must an insured submit written proof of such loss to the insurance company?
Within 90 days or as soon as reasonably possible, but not to exceed 1 year
Can an individual who belongs to a POS plan use an out-of-network physician?
Yes, and they may use any preferred physician, even if not part of the HMO
A hospital indemnity policy will pay
a benefit for each day the insured is in a hospital
The benefits for individual disability plans are based on
a flat amount
Which of the following information regarding an insured is NOT included in an Investigative Consumer Report, which is requested by an underwriter?
medical history
Under the Affordable Care Act, which classification applies to health plans based on the amount of covered costs?
metal level classification
Which of the following is the term used when a person in a fiduciary position has used assets in manner for which they were not intended such as the wrongful taking or use of money belonging to another?
missappropriation of funds
In a POS plan, benefits for covered services when self-referring (without having your primary care physician arrange for the service) are generally
more expensive
In an individual long-term care insurance plan, the insured is able to deduct the premiums from taxes. What income taxation will be imposed on the benefits received?
no tax
The coverage provided by a disability income policy that does not pay benefits for losses occurring as the result of the insured's employment is called
nonoccupational coverage
An insured does not have to pay coinsurance or deductibles on a full-series mouth x-ray, but does have to pay a deductible to get his cavities filled. Which dental plan does he have?
nonscheduled
What is the official name for the social security program
old age survivors disability insurance
Which renewability provision allows an insurer to terminate a policy for any reason, and to increase the premiums for any class of insureds
optionally renewable
Which of the following provisions would prevent an insurance company from paying a reimbursement claim to someone other than the policy owner?
payment of claims
Which of the following is the most common time for errors and omissions to occur on the part of an insurer?
policy delivery
An applicant for health insurance has not had a medical claim in 5 years. He exercises daily and does not smoke or drink. What classification do you assume the applicant would receive from his insurer?
preferred
What is the initial period of time specified in a disability income policy that must pass, after the policy is in force, before a loss can be covered?
probationary period
In respect to the consideration clause, which of the following is consideration on the part of the insurer?
promising to pay in accordance with the contract terms
If a court ordered payment for a loss that was not covered in the policy even if it was clearly worded, it would be an example of which legal concept?
reasonable expectations
An agent offers his client free tickets to a sporting event in exchange for the purchase of an insurance policy. The agent is guilty of
rebating
Any inducement offered to the insured in the sale of an insurance policy that is not specified in the policy is an unlawful practice known as
rebating
which of the following insurance options would be considered a risk sharing arrangement
reciprocal
Which of the following insurers are owned by stockholders?
stock
A husband and wife are insured under group health insurance plans at their own places of employment, and as dependents under their spouse's coverage. If one of them incurs hospital expenses, how will those expenses likely be paid?
the benefits will be coordinated
When Linda suffered a broken hip, she notified her agent, in writing, within 12 days of the loss. However, her agent did not notify the insurance company until 60 days after the loss. Which of the following statements correctly explains how this claim would be handled?
the insurer is considered to be notified since the notification to agent equals notification to the insurer
Who is the beneficiary in a credit disability income policy?
the lending institution
Which of the following is not covered under Plan A in Medigap insurance
the medicare part A deductible
When employees are actively at work on the date coverage can be transferred to another insurance carrier, what happens to coinsurance and deductibles?
they carry over from the old plan to the new plan
Which of the following is not a goal of risk retention
to minimize the insureds level of liability
When an insurer issues an individual health insurance policy that is guaranteed renewable, the insurer agrees
to renew the policy until the insured has reached age 65
How soon after the due date should the insurer pay the agent appointment fees?
within 30 days
As deductible amounts increase, premium amounts change in what way
decrease
Which type of a hospital policy pays a fixed amount each day that the insured is in a hospital?
indemnity
difference between individual and group health insurance
individual insurance does not require medical examinations, while group insurance does require medical examinations
The purpose of managed care health insurance plans is to
Control health insurance claims expenses
Health Savings Accounts (HSAs) are designed to
Help individuals save for qualified health expenses.
Which of the following is an example of an agent's fiduciary responsibilities?
forwarding premiums to the insurer
Under which of the following circumstances can financial institutions share insurance coverage information with third parties, for the purpose of soliciting the purchase of insurance?
if a consumer does not sign and return the notice of disclosure
Which of the following entities has the authority to make changes to an insurance policy?
insurer's executive officer
The section of a health policy that states the causes of eligible loss under which an insured is assumed to be disabled is the
insuring clause
The type of dental plan which is incorporated into a major medical expense plan is a/an
integrated dental plan
In a Disability Income policy, all of the following are considered presumptive disabilities EXCEPT
loss of one eye
Maximum benefits for a major medical plan are usually lifetime
maximums
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
consideration clause
When transacting business in this state an insurer formed under the laws of another country is known as a/an
Alien insurer
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
Amounts payable under the policy will reflect the insured's correct age
While a claim is pending, an insurance company may require
An independent examination as often as reasonably required
Under a key person disability income policy, premium payments
Are made by the business and are not tax-deductible
All of the following are true regarding Key Employee Disability Income insurance EXCEPT
Benefits are taxable to the employer
After a person's employment is terminated, it is possible to obtain individual health insurance after losing the group health coverage provided by the employer. Which of the following is NOT true?
By law, the new individual policy must provide the same benefits as the group insurance policy
After a person's employment is terminated, it is possible to obtain individual health insurance after losing the group health coverage provided by the employer. Which of the following is NOT true?
By law, the new, individual policy must provide the same benefits as the group insurance policy.
In the event of a divorce, which of the following would allow a divorcee to continue receiving group health coverage under an insured spouse's plan for an additional 36 months
COBRA
Which of the following provisions must be included on the first page of a Medicare supplement policy, which states the insurer's right to change premium amounts?
Continuation provision
The gatekeeper of an HMO helps
Control specialist costs
After a year of receiving disability income benefits, the insured notices that her monthly benefit has increased slightly. What rider does the policy most likely have that would cause this?
Cost of Living Adjustment Rider (COLA)
All of the following statements concerning accidental death and dismemberment coverage are correct except
Death benefits are paid only if death occurs within 24 hours of an accident
Which agreement specifies how a business will transfer hands when one of the owners dies or becomes disabled
Disability buy-sell
In a disability policy, the probationary period refers to the time
During which illness-related disabilities are excluded from coverage
Which of the following is an example of an unfair claims settlement practice?
Failure to promptly settle a claim when liability has been clearly established
health coverage becomes effective when the
First premium has been paid and the application has been approved.
State law specifically prohibits using illegal inducements in the marketing of insurance. All of the following would be considered illegal inducements EXCEPT
Inviting prospective clients to the grand opening of the company's new officer
Which of the following best describes a misrepresentation
Issuing sales material with exaggerated statements about policy benefits
All of the following statements are true of a combination dental plan except
It is also known as the superimposed plan
Which of the following statements is not correct regarding medicare
Medicare advantage must be provided through HMOs
A long-term care insurance shopper's guide must be provided in the format developed by which of the following?
NAIC
Under which of the following organizations are the practicing providers compensated on a fee-for-service basis?
PPO
Which of the following are the main factors taken into account when calculating residual disability benefits?
Present earnings and earnings prior to disability
What type of care is Respite care?
Relief for a major care giver
If an insurance company makes a statement that its policies are guaranteed by the existence of the Insurance Guaranty Association, that would be considered
an unfair trade practice
All of the following qualify for Medicare Part A except
anyone who is willing to pay a premium
In comparison to a policy that uses the accidental means definition, a policy that uses the accidental bodily injury definition would provide a coverage that is
broader in general
An insurer neglects to pay a legitimate claim that is covered under the terms of the policy. Which of the following insurance principles has the insurer violated?
consideration
