Missed practice exam questions (insurance exam)
In the agent / insurer relationship, who is considered the principal?
Insurer
If the commissioner wants to assess a complaint accusing an insurer of false advertising last year, where would the Commissioner need to go to access the details of the advertisement?
The insurer
Which statement is an accurate description of life insurance policy dividends? a) They are paid as return of premium to policy owners by stock insurance b) They are guaranteed to be paid and they are taxable as income c) They are likely to be larger in nonparticipating policies d) They are not taxable and are not guaranteed
d) They are not taxable and are not guaranteed
Whose responsibility is it to ensure that the application for health insurance is complete and accurate? a) The policy owner's b) The underwriter c) The applicants d) The agents
d) the agents
To whom may a certificate of authority be issued?
To an insurer authorized to transact business in this state.
Within what number of days can a new HMO enrollee expect to receive evidence of coverage?
30 days
A newborn infant must be covered under a policy for routine nursery care and pediatric cost until either the mother is discharged from the hospital or a period of
5 days
Before an agent delivers a policy, the insurer makes a last-minute change to the policy. The agent informs the insured of this change, and he accepts it. In response, the agent must a)Deliver the policy without further confirmation from the insured. b)Have the insured sign a statement of acknowledgement, only if the change affects the premium amount. c)Notify the policy beneficiary of the change. d)Have the insured sign a statement acknowledging that he is aware of the change.
Have the insured sign a statement acknowledging that he is aware of the change. Note: If the insurer makes a change to the policy, the change must be explained to the insured, and the insured must sign a statement acknowledging that the change was explained.
An insurance company that is owned by the policy holders is called a
Mutual Insurer
Who may share in the commission for the sale of a life insurance policy?
Only producers properly licensed for the type of insurance transaction.
A man is an attorney when he applies for a health policy. He decides to become a professional bungee jumper. He files a claim. What should happen?
The insurance company will pay the claim according to the benefits available if the correct premium had been paid.
Who is responsible for the cost associated with the examination of insurers?
The insurer who is being examined
An employee id covered under COBRA. His previous premium payment was $100 per month. His employer now collects $102 each month. Why does the employer collect the extra $2?
To cover the employer's admin costs
Under the mandatory uniform provision "notice of claim" written notice of a claim must be submitted to the insurer within what time parameters?
Within 20 days
How many consecutive months of coverage (other than in an acute care unit of a hospital) must LTC insurance provide in this state? a)12 b)24 c)36 d)6
a) 12 Long-term care policies, which can be marketed in the form of individual policies, group policies, or as riders to life insurance policies, provide coverage for individuals who are no longer able to live an independent lifestyle and require living assistance at home or in a nursing home facility. They must provide coverage for at least 12 consecutive months in a setting other than an acute care unit of a hospital.
Which of the following describes the relationship between a capital sum and a principal sum? a) Capital sums are percentages of principal sums b) Principal sums vary, while capital sums do not c) Capital sums, while principal sums do not
a) Capital sums are percentages of principal sums
A portion of a patient's open-heart surgery costs is paid by the organization that provided the surgery and post-operative care. Which type of organization is this? a) HMO b) Contributing c) Shared risk d) Integrated
a) HMO
In contrasting stock insurers with mutual insures, which statement is true? a) stock insured are owned by the shareholders and issue nonparticipating policies b) dividends are tax free while policy dividends are taxable c) Nonparticipating policies can pay out dividends to the policyholders d) Mutual insurers are owned by the shareholder and issue participating policies
a) stock insured are owned by the shareholders and issue nonparticipating policies
Which of the following is NOT a Medicaid qualifier? a) Residency b) Insurability c) Income level d) Age
b) Insurability
Which of the following is the closest term to an authorized insurer? a)Legal b)Admitted c)Certified d)Licensed
b) admitted Insurers who meet the state's financial requirements and are approved to transact business in the state are considered authorized or admitted into the state as a legal insurer.
Most policies will pay the accidental death benefits as long as the death is caused by the accident and occurs within a)30 days. b)60 days. c)90 days. d)120 days.
c) 90 days Most policies will pay the accidental death benefit as long as the death is caused by the accident and occurs within 90 days.
The provision which prevents the insured from bringing any legal action against the company for at least 60 days after proof of loss is known as a)Time limit on certain defenses. b)Payment of claims. c)Proof of loss. d)Legal actions.
d) Legal actions This mandatory provision requires that no legal action to collect benefits may be started sooner than 60 days after the proof of loss is filed with the insurer. This gives the insurer time to evaluate the claim.
An insurance agent visits a potential client and explains various types of policies. The customer displays a lack of interest, so the agent guarantees higher dividends that he knows would be possible. Which term describes what the agent has done? a) Rebating b) Twisting c) Defamation d) Misrepresentation
d) Misrepresentation
An insured purchased a core policy (Plan A) to supplement his Medicare coverage. Following a stay in the hospital, the insured found that the supplemental coverage paid for all of the following EXCEPT a) The first three pints of blood b) The 20% Part B coinsurance amounts for Medicare approved services c) Part A coinsurance amount d) Part A deductible
d) Part A deductible
Disability income policies can provide coverage for a loss of income when returning to work only part-time after recovering from total disability. What is the benefit that is based on the insured's loss of earnings after recovery from a disability? a)Recurrent disability b)Partial disability c)Income replacement d)Residual disability
d) Residual disability A residual disability will pay an amount to make up the difference between what the insured would have earned before the loss.
Which of the following entities is considered the principal? a) The producer or agent soliciting the policy b) The director of the insurance company c) The head of the Department of Insurance d) The insurer issuing a policy
d) The insurer issuing the policy
The provision which prevents the insured from bringing any legal action against the company for at least 60 days after proof of loss is known as a)Time limit on certain defenses. b)Payment of claims. c)Proof of loss. d)Legal actions.
d) legal action This mandatory provision requires that no legal action to collect benefits may be started sooner than 60 days after the proof of loss is filed with the insurer. This gives the insurer time to evaluate the claim.
What are producers required to do in order to renew their license?
Continuing education Pay renewal fee
True or False All additional provisions written by insurers are cataloged by their respective states.
False
What illegal act does a producer commit when the producer represents a policy in a more favorable light than the policy really is?
Misrepresentation
Which of the following is not correct concerning taxation of disability income benefits? a) If paid by the individual, the premiums are tax deductible b) If the insured paid the premiums, any disability income benefits are tax free
a) If paid by the individual, the premiums are tax deductible.
Todd has been informed that he has a hernia which requires repair. When Todd researches the cost, he learns that his insurance plan will cover 200 points worth of surgical expenses. Each point represents $10, which means that $2000 of his surgery will be covered by his insurance plan. What system is Todd's insurance company using? a)Relative value b)Basic Surgical c)Point-based medical d)Conversion factor
a) Relative value In a relative-value approach, a surgical procedure is assigned an amount of points relative to the maximum coverage allowed for a given surgery.
An insured pays a monthly premium of $100 for her health insurance. What would be the duration of the grace period under her policy? a)7 days b)10 days c)31 days d)60 days
b) 10 days The grace period is 7 days if the premium is paid weekly, 10 days if paid monthly, and 31 days for all other modes.
The purpose of the Fair Credit Act is to a) Ensure the consumer receives a copy of investigative consumer reports b) Ensure coverage for all applicants c) Protect consumers against the circulation of inaccurate or obsolete personal or financial information d) Protect the insurer rom adverse selection
c) Protect consumers against the circulation of inaccurate or obsolete personal or financial information
Jane was granted a temporary license for her deceased husband's agency on March 1st. On May 1st she processed an application for life insurance on a new applicant. The application was..........
The application was processed without a valid license
What document describes an insured's medical history, including diagnoses and treatments? a)Attending Physician's Statement b)Physician's Review c)Individual Medical Summary d)Comprehensive Medical History
a) Attending Physician's Statement An Attending Physician's Statement (APS) is the best way for an underwriter to evaluate an insured's medical history. The report includes past diagnoses, treatments, length of recovery time, and prognoses.
What is the maximum fine for the Insurance Code violation? a)$500 b)$1,000 c)$10,000 d)$50
b) $1,000 If an individual is convicted of a crime as a result of violating the Insurance Code, a fine of no less than $50 and no more than $1,000 may be imposed in addition to any criminal penalties.
All of the following are correct about the required provisions of a health insurance policy EXCEPT a)The entire contract clause means the signed application, policy, endorsements, and attachments constitute the entire contract. b)A reinstated policy provides immediate coverage for an illness. c)Proof-of-loss forms must be sent to the insured within 15 days of notice of claim. d)A grace period of 31 days is found in an annual pay policy.
b) A reinstated policy provides immediate coverage for an illness. Accidental injury is covered immediately, but to protect the insurer against adverse selection, losses resulting from sickness are covered only if the sickness occurs at least 10 days after the reinstatement date.
All of the following could qualify as a group for the purpose if purchasing group health insurance except.... a) Single employer with 14 employees b) An association of 35 people c) Labor union d) Multiple employer trust
b) An association of 35 people
Which entity decides what conditions justifiably warrant an HMO to cancel or not renew an enrollee's contract? a)Federal standards b)Commissioner c)National Insurance Board d)Each individual HMO
b) commissioner An enrollee's contract may be canceled or denied renewal when the enrollee fails to pay charges for coverage, when fraudulent misrepresentations are made in the application, when material contract violations are made, or for any other reason established by the Commissioner.
All of the following could be considered rebates if offered to an insured in the sale of insurance EXCEPT a)An offer to share in commissions generated by the sale. b)Dividends from a mutual insurer. c)An offer of employment. d)Stocks, securities, or bonds.
b) dividends from mutual insurer Dividends paid to policyholders of a mutual insurer are not considered to be a rebate because the policy specifies that they might be paid.
Which of the following types of LTC is NOT provided in an institutional setting? a)Intermediate care b)Home health care c)Custodial care d)Skilled nursing care
b) home health care Home health care is given in the home, but skilled nursing, intermediate, and custodial care may all be provided in an institutional setting.
Which of the following best describes the "first-dollar coverage" principle in basic medical insurance? a)The insured must first pay a deductible. b)The insurer covers the first claim on the policy. c)Deductibles and coinsurance are taxed first. d)The insured is not required to pay a deductible.
d) The insured is not required to pay a deductible The three basic types of coverage (hospital, surgical and medical) are often referred to as first-dollar coverage because they usually do not require the insured to pay a deductible.
What is a required advance notice for a hearing held by the Commissioner of Insurance? a)5 days b)10 days c)15 days d)30 days
b) 10 days The Commissioner must give 10 days' advance notice to all parties affected by the hearing.
Which statement best describes agreement as it relates to insurance contracts? a) each party must offer something of value b) One party accepts the exact terms of the party's offer c) the intent of the contract must be legally acceptable to both parties.
b) One party accepts the exact terms of the party's offer
An insured pays her Major Medical Insurance premium annually on March 1. Last March she forgot to mail her premium to the company. On March 19, she had an accident and broke her leg. The insurance company would a)Pay half of her claim because the insured had an outstanding premium. b)Pay the claim. c)Hold the claim as pending until the end of the grace period. d)Deny the claim.
b) Pay the clam Because the accident occurred during the grace period, the insurance company will pay the claim.
Which of the following entities must approve systems designed to resolve grievances concerning the HMO's operation? a)MIB b)Commissioner c)No approval is necessary. d)State Insurance Board
b) commissioner The Commissioner must approve the form and content of a new group contract.
What type of licensee represents the insurance company?
Agent
Three types of insurer classification domiciles
Domestic Foreign Allien
How many hours of approved continuing education must a licensee complete every 2 years?
24 hours per 2 years
How long is the contestability period in long term care policies on the grounds of misrepresentation?
2 Years
A retail shop owner is insured under a business overhead expense policy that pays a maximum monthly benefit of $2,500. His actual monthly expenses are $3,000. If the owner becomes disabled, the monthly benefit payable under his policy will be
$2,500
What is the purpose of the Gatekeeper?
Controlling Cost
An insured has an individual disability income policy with a 30 day elimination period. He becomes disabled on June 1st for 15 days. When will he collect on his disability income payments?
He won't collect anything The insured cannot collect anything because he did not satisfy the elimination period.
An insured was diagnosed two years ago with kidney cancer. She was treated with surgeries and chemotherapy and is now in remission. She also has a 30 year smoking history. The insure is now healthy enough to work and has just started a full-time job. Which describes the health insurance that she will most likely receive?
She would be covered under her employers group insurance plan, without higher premiums.
The guaranteed purchase option is also referred to as the a) Impairment rider b) Evidence of insurability c) Future increase option d) Multiple indemnity rider
c) Future increase option
A guaranteed renewable health insurance policy allows the a)Policyholder to renew the policy to a stated age, with the company having the right to increase premiums on the entire class. b)Policyholder to renew the policy to a stated age and guarantees the premium for the same period. c)Policy to be renewed at time of expiration, but the policy can be canceled for cause during the policy term. d)Insurer to renew the policy to a specified age.
a) Policyholder to renew the policy to a stated age, with the company having the right to increase premiums on the entire class. Coverage is guaranteed, but rates can be adjusted for the entire class.
Because an insurance policy is a legal contract, it must conform to the state laws governing contracts which require all of the following elements EXCEPT a)Conditions. b)Consideration. c)Legal purpose. d)Offer and acceptance.
a) conditions Conditions are part of the policy structure. Consideration is an essential part of a contract.
What term is used for replacing insurance policies for the sole purpose of making commissions? a)Misrepresentation b)Replacement c)Coercion d)Churning
d) churning "Churning" is defined as replacing insurance policies for the sole purpose of making commissions.
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? a)Representation b)Adhesion c)Consideration d)Good faith
c) Consideration The binding force in any contract is consideration. Consideration on the part of the insured is the payment of premiums and the health representations made in the application. Consideration on the part of the insurer is the promise to pay in the event of loss.
A husband and wife both incur expenses that are attributed to a single major medical insurance deductible. Which type of deductible do they have in their policy? a) Family b) Flat c) Annual d) Per occurrence
a) Family
What happens to the copy of the application for health insurance once the policy is issued? a) It becomes part of the entire contract b) It is filed with the Department of Insurance c) It is discarded d) It is returned to the insured
a) It becomes part of the entire contract
Which of the following statements is NOT true concerning Medicaid? a)It is intended to provide medical assistance for certain categories of people who are needy. b)It consists of 3 parts: Part A: hospitalization, Part B: doctor's services, Part C: disability income. c)It is a state program. d)It is funded by state and federal taxes.
b) It consists of 3 parts: Part A: hospitalization, Part B: doctor's services, Part C: disability income. Medicaid is a state program funded by state and federal taxes that provide medical care for the needy. Parts A-C are part of Medicare.
Concerning insurance, the definition of a fiduciary is a)A retail clerk. b)A producer/broker who handles insurer funds in a trust capacity. c)A person who handles assets or money belonging to others. d)All of the above.
b) a producer/broker wh handles insurer funds in a trust capacity A fiduciary is a producer/broker who handles insurer funds in a trust capacity.
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 a)Broader in duration. b)Broader in general. c)More limited in general. d)More limited in duration.
b) broader in general A policy that uses the accidental bodily injury definition will provide broader coverage than a policy that uses the accidental means definition.
Which type of misrepresentation persuades an insured, to his or her detriment, to cancel, lapse, or switch policies from one to another? a)Rebating b)Twisting c)Switching d)False advertising
b) twisting "Twisting" is a misrepresentation that persuades an insured/owner, to his or her detriment, to cancel, lapse, or switch policies from one to another.
On a participating insurance policy issued by a mutual insurance company, dividends paid to policyholders are a)Guaranteed. b)Not taxable since the IRS treats them as a return of a portion of the premium paid. c)Paid at a fixed rate every year. d)Taxable as ordinary income.
b)Not taxable since the IRS treats them as a return of a portion of the premium paid. With participating policies, policyowners are entitled to dividends, which, in the case of mutual companies, are nontaxable because they are considered a return of excess premiums.
What is the purpose of the impairment rider in health insurance policy? a) To provide disability coverage b) To identify pre-existing conditions c) To exclude coverage for a specific impairment d) To cover impairments that otherwise could not be covered
c) To exclude coverage for a specific impairment
Agents who persuade insureds to cancel a policy in favor of another one when it might not be in the insured's best interest are guilty of a)Misrepresentation. b)Rebating. c)Twisting. d)Defamation.
c) twisting Twisting is a misrepresentation that persuades an insured or a policyowner, to his or her detriment, to cancel, lapse, or switch policies.
All of the following are true regarding key person disability income insurance except. a) The employer receives the benefits if the key person is disabled b) The employer pays the premiums c) The employee is the insured d) Premiums are tax deductible as a business expense
d) Premiums are tax deductible as a business expense
nsurers may change which of the following on a guaranteed renewable health insurance policy? a)Coverage b)Individual rates c)No changes are permitted. d)Rates by class
d) Rates by class On a guaranteed renewable health insurance policy, the insurer may increase premiums on a class basis only and not on an individual policy.
An agent makes a mistake on the application and then corrects his mistake by physically entering the necessary information. Who must then initial that change? a)Agent b)Applicant c)Executive officer of the company d)Insured
a) Agent Any changes made to the application must be initialed by the applicant.
To legally transact insurance in this state, an insurer must obtain which of the following? a)Business entity license b)Certificate of Insurance c)Certificate of Authority d)Power of Attorney
c) certificate of authority A Certificate of Authority is required in order to transact insurance.
Which of the following riders would NOT increase the premium for a policyowner? a)Impairment rider b)Payor benefit rider c)Waiver of premium rider d)Multiple indemnity rider The impairment rider excludes a specified condition from coverage, therefore, reducing benefits. An insurance company will not charge extra for a rider that reduces benefits.
a)Impairment rider
What type of licensee represents the insurance company?
Broker
What type of licensee represents the insured?
Broker
An insured had a heart attack while jogging, but is expected to return to work in approximately 6 weeks. The insureds Disability income policy will
Replace a percentage of lost income
Ray has an individual major medical policy that requires a coinsurance payment. Ray very rarely visits his physician and would prefer to pay the lowest premium possible. Which coinsurance arrangement would be best for Ray? a)50/50 b)75/25 c)80/20 d)90/10
a) 50/50 After the deductible has been paid, the insurance company will pay a specified amount for a physician's visit, while the insured pays the remaining percentage. This is called "coinsurance". Plans will often be listed in a fraction format, with the first number representing the amount that will be paid by the insurer. The less the insurer must pay with coinsurance payments, the lower the premiums will be. Therefore, Ray should choose the 50/50 plan.
How soon following the occurrence of a covered loss must an insured submit written proof of such loss to the insurance company? a)As soon as possible b)Within 20 days c)Within 60 days d)Within 90 days or as soon as reasonably possible, but not to exceed 1 year
a) ASAP The "proof of loss" provision states the claimant must submit a proof of loss within 90 days; however, if it is not possible to comply, the time parameter is extended to 1 year. The one-year limit does not apply if the claimant is not legally competent to comply with this provision.
A participating insurance policy may do which of the following? a)Pay dividends to the policyowner b)Provide group coverage c)Pay dividends to the stockholder d)Require 80% participation
a) pay dividends to the policyowner A participating insurance policy will pay dividends to the owner based upon actual mortality cost, interest earned and costs.
An insured misstated her age on an application for an individual health insurance policy. The insurance company found the mistake after the contestable period had expired. The insurance company will take which of the following actions regarding any claim that has been issued? a)Adjust the claim benefit to reflect the insured's true age b)Deny any claims and cancel the policy c)Deny paying a claim based on misrepresentation d)Pay the full amount of a claim because the contestable period has ended
a) Adjust the claim benefit to reflect the insured's true age The Misstatement of Age provision says that if a client has misstated her age, whether intentional or unintentional, they will adjust the benefit being paid. It doesn't matter when the mistake was found.
n insurance, an offer is usually made when a)An applicant submits an application to the insurer. b)The insurer approves the application and receives the initial premium. c)The agent hands the policy to the policyholder. d)An agent explains a policy to a potential applicant.
a) An applicant submits an application to the insurer In insurance, the offer is usually made by the applicant in the form of the application. Acceptance takes place when an insurer's underwriter approves the application and issues a policy.
Which of the following would be required to hold a license as an insurance producer? a)An employee of an insurer who receives commissions only on a few policies a year b)A person who receives premiums for existing policies at the insurer's principal office c)A full-time salaried employee who counsels his employer regarding insurance d)A company officer conducting market research and prospecting
a) An employee of an insurer who receives commissions only on a few policies a year Receipt of commissions requires a license as an insurance producer.
All other factors being equal, which of the following premium modes would result in the lowest overall premium? a) annual b) Quarterly c) Semi-annual d) Monthly
a) Annual
What is the term used for an applicant's written request to an insurer for the company to issue a contract, based on the information provided? a)Application b)Policy Request c)Insurance Request Form d)Request for Insurance
a) Application An individual can submit an application to an insurer, which requests that the insurer review the information and issue an insurance contract.
A small hardware store owner is involved in a car accident that renders him totally disabled for half a year. Which type of insurance would help him pay for expenses of the company during the time of his disability? a)Business overhead expense policy b)Key person insurance c)Disability buy-sell agreement d)Business disability policy
a) Business overhead expence policy Business Overhead Expense (BOE) insurance is sold to small business owners for the purpose of reimbursing the policyholder for various business overhead expenses during a period of total disability. Expenses such as rent, utilities, and employee salaries are covered.
A child is covered under an HMO plan through her non-custodial parent. Which of the following is NOT true? a)Claims cannot be submitted by the custodial parent without the non-custodial parent's permission. b)Payments on claims can go directly to the custodial parent. c)Payments on claims can go directly to the provider of health care services. d)None of the above
a) Claims cannot be submitted by the custodial parent without the non-custodial parent's permission. If a child is covered under an HMO plan through a non-custodial parent, the HMO will permit the child's custodial parent, or the provider with that parent's approval, to submit claims for payment for covered services without the approval of the non-custodial parent.
How many pints of blood will be paid for by Medicare Supplement core benefits? a)First 3 b)None; Medicare pays for it all c)Everything after first 3 d)1 pint
a) First 3 Medicare supplemental policies cover costs of deductibles and coinsurance for Parts A and B. Since Medicare will not pay for the first 3 pints of blood, a Medicare Supplement plan will cover that. This is considered to be a core benefit.
How many pairs of glasses in a 12-month period will a vision expense insurance plan cover? a)One b)Two c)Three d)Unlimited
a) One How many pairs of glasses in a 12-month period will a vision expense insurance plan cover?a)Oneb)Twoc)Threed)Unlimited
All of the following statements about mutual insurance companies are correct except a) Policy dividends issued by mutual companies are guaranteed and not taxable b) Dividends allow policy holders to share in a mutual company's divisible surplus c) Dividends are a return of unused premium d) Mutual companies issue policies referred to as participating
a) Policy dividends issued by mutual companies are guaranteed and not taxable
An applicant for an individual health policy failed to complete the application properly. Before being able to complete the application and pay the initial premium, she is confined to a hospital. This will not be covered by insurance because she has not met the conditions specified in the a)Consideration Clause. b)Insuring Clause .c)Pre-existing Conditions Clause. d)Eligibility Clause.
a) consideration clause The consideration clause specifies that both parties to the contract must give some valuable consideration. The payment of the premium is the consideration given by the applicant. Because the applicant had not paid an initial premium, she is not covered by insurance.
Which of the following is INCORRECT concerning Medicaid? a)It is solely a federally administered program. b)It provides medical assistance to low-income people who cannot otherwise provide for themselves. c)It pays for hospital care, outpatient care, and laboratory and X-ray services. d)The federal government provides about 56 cents for every Medicaid dollar spent.
a) is is solely a federally administered program Medicaid is assistance program for persons with insufficient income and/or resources to pay for health care. States administer the program that is financed by federal and state funds.
A woman's health insurance policy dictates which doctors she is allowed to see. Her health providers share an assumed risk for their patients and encourage preventive care. What best describes the health system that the woman is using? a)Managed care b)Comprehensive health c)Major medical d)Group health
a) managed care There are 5 distinguishing features of managed care: controlled access to providers, comprehensive case management, risk sharing, preventative care, and high-quality care.
The insuring clause of a disability policy usually states all of the following EXCEPT a)The types of losses covered. b)The method of premium payment. c)The identities of the insurance company and the insured. d)That insurance against loss is provided.
b) method of premium payment The insuring clause, usually on the first page of the policy, is the general statement that defines the insurance agreement and identifies the insured and the insurance company and states what kind of loss (peril) is covered.
In individual health insurance coverage, the insurer must cover a newborn from the moment of birth, and if additional premium payment is required, allow how many days for payment? a)Within 15 working days b)Within 90 days of birth c)Within a reasonable period of time d)Within 10 calendar days
b) within 90 days of birth The insured must notify the insurer of a newly born dependent, and if additional payment is required, pay within 90 days.
The Federal Fair Credit Reporting Act a)Prevents money laundering. b)Regulates consumer reports. c)Protects customer privacy. d)Regulates telemarketing. The Federal Fair Credit Reporting Act regulates consumer reports, also known as consumer investigative reports, or credit reports.
b)Regulates Consumer reports
L has a major medical policy with a $500 deductible and 80/20 coinsurance. L is hospitalized and sustains a $2,500 loss. What is the maximum amount that L will have to pay? a)$1,000 (deductible + 20% of the entire bill) b)$2,500 (the entire bill) c)$900 (deductible + 20% of the bill after the deductible [20% of $2,000]) d)$500 (amount of deductible)
c) $900 (deductible + 20% of the bill after the deductible [20% of $2,000]) L would first pay the $500 deductible; out of the remaining $2,000, the insurer will pay 80% ($1,600) and the insured will pay 20% ($400).
Which of the following conditions is NOT necessary for becoming a non-resident producer in this state? a)Being licensed as a resident producer b)Paying appropriate fees c)Passing the licensing examination d)Being a resident producer in good standing in the home state
c) Passing the licensing examinaton To become a non-resident producer in Arkansas, one must be a licensed resident producer in good standing in one's home state, and submit appropriate application and fees. No additional prelicensing education or examinations are required as long as the two states have reciprocity.
Which of the following is not mandatory under the Uniform Provisions law as applied to accident and health policies? a) time limit on certain defenses b) physical examinations c) probationary period
c) Probationary period
A Medicare SELECT policy does all of the following EXCEPT a)Provide payment for full coverage under the policy for covered services not available through network providers. b)Provide for continuation of coverage in the event that Medicare SELECT policies are discontinued due to the failure of the Medicare SELECT program. c)Prohibit payment for regularly covered services if provided by non-network providers. d)Make full and fair disclosure in writing of the provisions, restrictions, and limitations of the Medicare SELECT policy to each applicant.
c) Prohibit payment for regularly covered services if ptovided by non-network providers A Medicare SELECT policy issued in this state must not restrict payment for covered services provided by non-network providers if the services are for symptoms requiring emergency care and it is not reasonable to obtain such services through a network provider.
Insureds have the right to do which of the following if they have NOT received the proper claim forms within 15 days of their notice to the insurer of a covered loss under a major medical policy? a) Demand full payment immediately for the claim b) Speak with a claims adjuster or another representative from the insurance company c) Submit the description in their own words on a plain sheet of paper
c) Submit the description in their own words on a plain sheet of paper
Which of the following is true about the requirements regarding HIV exams? a)Prior informed oral consent is required from the applicant. b)HIV exams may not be used as a basis for underwriting. c)The applicant must give prior informed written consent. d)Results may be disclosed to the agent and the underwriter.
c) The applicant must give prior informed written consent. A separate written consent form must be obtained prior to an HIV exam. HIV exam results may be disclosed to underwriters, but not agents.
n insurance, an offer is usually made when a)The agent hands the policy to the policyholder. b)An agent explains a policy to a potential applicant. c)An applicant submits an application to the insurer. d)The insurer approves the application and receives the initial premium.
c) an applicant submits an application to the insurer In insurance, the offer is usually made by the applicant in the form of the application. Acceptance takes place when an insurer's underwriter approves the application and issues a policy.
Which of the following is correct about a group health insurance policy? a)It can exclude newborn children from coverage. b)It cannot exclude coverage for VA hospital treatment. c)It can provide coverage for handicapped children. d)It cannot exclude coverage from an occupational accident.
c) it can provide coverage fro handicapped children Both individual and group policies covering a family must provide coverage on handicapped children of the insured. If, upon reaching the maximum age for coverage, the child continues to be incapable of self-support and is chiefly dependent upon the policyholder for support and maintenance, coverage may continue beyond the specified maximum age.
In which of the following situations is it legal to limit coverage based on marital status? a)Legal separation during the application process b)Divorce within the last six months of applying for insurance c)It is never legal to limit coverage based on marital status. d)Excessive number of divorces, as defined by the Insurance Code
c) it is never legal to limit coverage based on marital status Availability of insurance benefits or coverage may not be denied based on sex or marital status. Marital status may be considered for the purpose of defining persons eligible for dependent benefits.
Which of the following determines whether disability insurance benefits are taxed? a)Contract provisions b)If the total of benefits paid meets the minimum state taxation standard c)Whether the premiums were tax deductible d)State statutes
c) whether the premiums were tax deductible The taxation status of benefits is often determined by whether the premium has been tax deducted.
All of the following statements about Medicare Part B are correct EXCEPT a)It covers services and supplies not covered by Part A. b)It is financed by monthly premium c)It is financed by tax revenues. d)It is a compulsory program
d) It is a compulsory program Part B is elective. Individuals become eligible for Part B at the same time they become eligible for Part A, however Part B requires that a monthly premium be paid.
In respect to the consideration clause, which of the following is consideration on the part of the insurer? a)Offering a secondary policy to the applicant b)Offering an unconditional contract c)Explaining policy revisions to the applicant d)Promising to pay in accordance with the contract terms
d) Promising to pay in accordance with the contract terms The consideration clause requires the insurer to promise to pay in accordance to the terms stated in the contract.
Which of the following is a statement that is guaranteed to be true, and if untrue, may breach an insurance contract? a)Concealment b)Indemnity c)Representation d)Warranty
d) Warranty A warranty in insurance is a statement guaranteed to be true. When an applicant is applying for an insurance contract, the statements he or she makes are generally not warranties but representations. Representations are statements that are true to the best of the applicant's knowledge.
To comply with Fair Credit Reporting Act, when must a producer notify an applicant that a credit report may be requested? a)When the applicant's credit is checked b)When the policy is delivered c)At the initial interview d)At the time of application
d) at the time of application A notice to the applicant must be issued to all applicants for health insurance coverage.
Helga is eligible to receive medical assistance benefits and is applying for an HMO policy. Which type of provisions can she expect to be included on policy, in order to exclude coverage based on her eligibility for medical assistance? a)Rider b)Exclusion c)Elimination period d)None of the above
d) none of the above No contract or evidence of coverage issued by an HMO may contain any provision which limits or excludes payments of health care services to or on behalf of the enrollee because the enrollee or any covered dependent is eligible for or is receiving medical assistance benefits.
