kyla test 1

The Notice of Claims provision requires a policyowner to

notify an insurer of a claim within a specified time

Deductibles are used in health policies to lower

overuse of medical services

With Optionally Renewable Health policies, the insurer may

review the policy annually and determine whether or not to renew it

An individual Disability Income insurance applicant may be required to submit all of the following information EXCEPT

spouse's occupation

Which of the following statements is correct regarding an employer/employee group health plan?

the employer receives a master policy and the employees receive certificates

Which of the following statements does NOT accurately describe the tax treatment of premiums and benefits of individual Accident and Health insurance?

Disability income policy premiums are tax-deductible

A characteristic of Preferred Provider Organizations (PPOs) would be:

Discounted fees for the patient

Which of the following statements BEST describes the intent of a Coinsurance clause in a Major Medical policy?

Discourages overutilization of the insurance coverage

According to the Time Payment of Claims provision, the insurer must pay Disability Income benefits no less frequently than which of the following options?

Monthly

Which of the following BEST describes how a Preferred Provider Organization is less restrictive than a Health Maintenance Organization?

More physicians to choose from

Which of the following characteristics are associated with a large group disability income policy?

No medical underwriting

Which of these is considered a mandatory provision?

Payment of Claims

How does group insurance differ from individual insurance?

Premiums are lower

J has an Accidental Death and Dismemberment policy with a principal sum of $50,000. While trimming the hedges, J cuts off one of his fingers. What is the MAXIMUM J will receive from his policy?

$25,000

An insured covered by a group Major Medical plan is hospitalized after sustaining injuries that resulted from an automobile accident. Assuming the plan had a $1,000 deductible and an 80/20 Coinsurance clause, how much will the INSURED be responsible to pay with $11,000 in covered medical expenses?

$3,000

An individual has a Major Medical policy with a $5,000 deductible and an 80/20 Coinsurance clause. How much will the INSURED have to pay if a total of $15,000 in covered medical expenses are incurred?

$7,000

C was injured while deep sea diving and requires a hospital stay. C has a Major Medical policy with a 80/20 coinsurance clause and a $400 deductible. What is the MAXIMUM C will pay if the covered medical expenses are $2000?

$720

M's insurance company denied a reinstatement application for her lapsed health insurance policy. The company did not notify M of this denial. How many days from the reinstatement application date does the insurance company have to notify M of the denial before the policy will be automatically placed back in force?

45 days

The individual most likely to buy a Medicare Supplement policy would be a(n)

68-year old male covered by Medicare

N has a Major Medical policy that only pays a portion of N's medical expenses. N is responsible for paying the remaining balance. This provision is known as

Coinsurance

Which of the following statements about the classification of applicants is INCORRECT?

Substandard applicants are never declined by underwriters

Basic Hospital and Surgical policy benefits are

lower than the actual expenses incurred

Pre-hospitalization authorization is considered an example of

managed care

The reason for a business having a Business Overhead Expense Disability Plan is to cover

fixed business expenses

With Disability Income insurance, an insurance company may limit the monthly benefit amount a prospective policy holder may obtain because of the insured's

gross income at the time of purchase

Basic Medical Expense insurance

has lower benefit limits than Major Medical insurance

Which of the following will a Long Term Care plan typically provide benefits for?

home health care

With a Basic Medical Expense policy, what does the hospitalization expense cover?

hospital room and board

What must the policyowner provide to the insurer for validation that a loss has occurred?

Proof of Loss

Which contract permits the remaining partners to buy-out the interest of a disabled business partner?

Disability Buy-Sell

A Hospital/Surgical Expense policy was purchased for a family of four in March of 2013. The policy was issued with a $500 deductible and a limit of four deductibles per calendar year. Two claims were paid in September 2013, each incurring medical expenses in excess of the deductible. Two additional claims were filed in 2014, each in excess of the deductible amount as well. What would be this family's out-of-pocket medical expenses for 2013?

$1,000

M has a Major Medical insurance policy with a $200 flat deductible and an 80% Coinsurance clause. If M incurs a $2,200 claim for an eligible medical expense, how much will M receive in payment for this claim?

$1,600

XYZ Company pays the entire premium for its group health plan. The MINIMUM percentage of eligible employees that must be covered is

100%

P received Disability income benefits for 3 months then returns to work. She is able to work one month before her condition returns, leaving her disabled once again. What would the insurance company most likely regard this second period of disability as?

A recurrent disability

Which of the following is the MOST important factor when deciding how much Disability Income coverage an applicant should purchase?

Applicant's monthly income

All of the following statements about Major Medical benefits are true EXCEPT

Benefits have no maximum limit

Many small business owners worry how their business would survive financially if the owner becomes disabled. The policy which BEST addresses this concern is

Business Overhead Expense

Which of these circumstances is a Business Disability Buy-Sell policy designed to help in the sale of a business?

Business owner becoming disabled

Which of the following policy features allows an insured to defer current health charges to the following year's deductible instead of the current year's deducitble?

Carryover provision

What type of renewability guarantees premium rates and renewability?

Guaranteed renewable

A medical care provider which typically delivers health services at its own local medical facility is known as a

Health Maintenance Organization

J is a subscriber to a plan which contracts with doctors and hospitals to provide medical benefits at a preset price. What type of plan does J belong to?

Health Maintenance Organization

Which type of provider is known for stressing preventative medical care?

Health Maintenance Organizations (HMO's)

For which of the following expenses does a Basic Hospital policy pay?

Hospital room and board

Which of the following situations does a Critical Illness plan cover?

Leukemia

Which of these options can an individual use their medical flexible spending account to pay for?

Prescription drugs

The individual who provides general medical care for a patient as well as the referral for specialized care is known as a

Primary Care Physician

T is covered by two health insurance plans: a group plan through his employer and his spouse's plan as a dependent. When T submits a claim, his employer's plan is considered what type of carrier under the Model Group Coordination of Benefits provision?

Primary carrier

When an insured has the same disability within a specified time period and the insurance company provides the same benefits without a new waiting period, the second disability is covered under which of the following benefits?

Recurrent Disability

What does a Guaranteed Insurability rider provide a Disability Income policyowner?

The ability to periodically increase the amount of coverage without evidence of insurability

J, an Accidental Death and Dismemberment (AD&D) policy holder, dies after injuries sustained in an accident. J's age as stated on the application five years ago was found to be understated by ten years. Which of the following actions will the insurance company take?

The insurer will adjust the benefit to what the premiums paid would have purchased at the insured's actual age

Which of the following statements is true about most Blue Cross/Blue Shield organizations?

They are nonprofit organizations

Which of the following BEST describes how pre-admission certifications are used?

Used to prevent nonessential medical costs

The provision in a Group Health policy that allows the insurer to postpone coverage for a covered illness 30 days after the policy's effective date is referred to as the

Waiting Period

The provision in a health insurance policy that interrupts premiums being paid to the insurer while the insured is disabled is called the

Waiver of Premium

Medicare Part A and Part B do NOT pay for

dental work

When an employee is required to pay a portion of the premium for an employer/employee group health plan, the employee is covered under which of the following plans?

Contributory

Which of the following BEST describes a Hospital Indemnity policy?

Coverage that pays a stated amount per day of a covered hospitalization

M is insured under a basic Hospital/Surgical Expense policy. A physician performs surgery on M. What determines the claim M is eligible for?

Determined by the terms of the policy

B is a teacher who was injured in a car accident and cannot work. She is now receiving monthly benefits as a result of this accident. Which type of policy does B have?

Disability Income

The federal income tax treatment of employer-provided group health insurance can be accurately described as

Employee's coverage paid for by the employer is tax-deductible to the employer as a business expenditure

Which health policy clause stipulates that an insurance company must attach a copy of the application to the policy to ensure that it is part of the contract?

Entire Contract

When an insurance company sends a policy to the insured with an attached application, the element that makes the application part of the contract between the insured and the insurer is called the

Entire Contract provision

Which of these is considered a true statement regarding Medicaid?

Funded by both state and federal governments

With Accidental Death and Dismemberment policies, what is the purpose of the Grace Period?

Gives the policyowner additional time to pay past due premiums

Which of the following provisions specifies how long a policyowner's health coverage will remain in effect if the policyowner does not pay the premium when it is due?

Grace Period

A 66 year-old is covered under a group health plan while employed with a business that has 40 employees. If she injures herself while walking in the park, what coverage would be considered primary?

Her group health plan

S wants to open a tax-exempt Health Savings Account. To qualify for this type of account, Federal law dictates that S must be enrolled in a

High-deductible health plan

Which of the following statements about Health Reimbursement Arrangements (HRA) is CORRECT?

If the employee paid for qualified medical expenses, the reimbursements may be tax-free

T was treated for an ailment 2 months prior to applying for a health insurance policy. This condition was noted on the application and the policy was issued shortly afterwards.How will the insurer likely consider this condition?

Insurer will likely treat as a pre-existing condition which may not be covered for one year

Which of the following health insurance policy provisions specifies the health care services a policy will cover?

Insuring clause

Which of the following actions will an insurance company most likely NOT take if an applicant, who has diabetes, applies for a Disability Income policy?

Issue the policy with an altered Time of Payment of Claims provision

Which of the following statements BEST describes how a policy that uses the "accidental bodily injury" definition of an accident differs from one that uses the "accidental means" definition?

Less restrictive

T has Disability Income policy that pays a monthly benefit of $5000. If T becomes partially disabled, what can he likely expect?

Less than $5,000 per month benefit regardless of the cause

In Major Medical Expense policies, what is the intent of a Stop Loss provision?

Limits an insured's out-of-pocket medical expenses

Which of the following types of health coverage frequently uses a deductible?

Major Medical policy

Comprehensive Major Medical policies usually combine

Major Medical with Basic Hospital/Surgical coverage

The health insurance program which is administered by each state and funded by both the federal and state governments is called

Medicaid

If a retiree on Medicare required five hospital stays in one year, which policy would provide the best insurance for excess hospital expenses?

Medicare Supplement

S filed a written Proof of Loss for a Disability Income claim on September 1. The insurance company not responded to the claim. S can take legal action against the insurer beginning

November 1

Under what system do a group of doctors and hospitals in a designated area contract with an insurer to provide services at a prearranged cost to the insured?

PPO

Which of these statements is INCORRECT regarding a Preferred Provider Organization (PPO)?

PPO's are NOT a type of managed care systems

The provision that defines to whom the insurer will pay benefits to is called

Payment of Claims

What is considered to be a characteristic of a Conditionally Renewable Health Insurance policy?

Premiums may increase at time of renewal

A Disability Income policyowner suffers a disability which was due to the same cause as a previous disability. Both disabilities occurred within a five-month period. The insurer may cover the second disability without a new elimination period under the

Recurrent Disability provision

R had received full disability income benefits for 6 months. When he returns to work, he is only able to resume half his normal daily workload. Which provision pays reduced benefits to R while he is not working at full capacity?

Residual Disability

When a person returns to work after a period of total disability but cannot earn as much as he or she did before the disability, this situation is called which of the following?

Residual disability

A prepaid application for individual Disability Income insurance was recently submitted to an insurer. When the insurer received the Medical Information Bureau (MIB) report, the report showed that the applicant had suffered a stroke 18 months ago, something that was not disclosed on the application. Which of the following actions would the insurance company NOT take?

Send a notice to the MIB that the applicant was declined

Which of the following statements BEST describes dental care indemnity coverage?

Services are reimbursed after insurer receives the invoice

Which of the following statements describes the purpose of the Insuring clause in Health and Accident policies?

States the scope and limits of the coverage

What should an insured do if the insurer does not send claims forms within the time period set forth in a health policy's Claims Forms provision?

Submit the claim in any form

Disability policies do NOT normally pay for disabilities arising from which of the following?

War

All students attending a large university could be covered by

a blanket policy

Major Medical policies typically

contain a deductible and coinsurance

A Business Overhead Expense policy

covers business expenses such as rent and utilities

An agent takes an individual Disability Income application, collects the appropriate premium, and issues the prospective insured a conditional receipt. The next step the insurance company will take is to

determine if the applicant is an acceptable risk by completing standard underwriting procedures

M becomes disabled and is unable to work for six months. M dies soon after from complications arising from this disability. M has a Disability Income policy that pays $2,000 a month. Which of the following statements BEST describes what is owed to her estate?

earned, but unpaid benefits

Health insurance benefits NOT covered due to an act of war are

excluded by the insurer in the contract provisions

When determining the monthly benefit amount for a Disability Income policy, the factor that limits the amount a prospective insured may purchase is

income

The first portion of a covered Major Medical insurance expense that the insured is required to pay is called the

initial deductible