NJ Health Quiz
Gets higher. LTC policies also define the benefit period for how long coverage applies, after the elimination period. The benefit period is usually 2 to 5 years, with a few policies offering lifetime coverage. Obviously the longer the benefit period, the higher the premium will be; and the shorter the elimination period, the higher the premium will be.
Regarding long-term care coverage, as the elimination period gets shorter, the premium a) Gets lower. b) Gets higher. c) Remains constant. d) Premiums are not based on elimination periods.
Is renewable at the insured's option to a specified age. Guaranteed renewable means that the insured has the right to keep the policy until a specific age; however, while the insurer cannot increase the rates on an individual basis, the insurer can increase the rates for all insureds by class.
A guaranteed renewable disability insurance policy a) Is renewable at the insured's option to a specified age. b) Is renewable at the option of the insurer to a specified age of the insured. c) Is guaranteed to have a level premium for the life of the policy. d) Cannot be cancelled by the insured before age 65.
Critical illness. A critical illness policy covers multiple illnesses, such as heart attack, stroke, renal failure, and pays a lump-sum benefit to the insured upon the diagnosis (and survival) of any of the illnesses covered by the policy.
A health insurance policy that pays a lump sum if the insured suffers a heart attack or stroke is known as a) Medical expense. b) Critical illness. c) Major medical. d) AD&D.
Usual, customary and reasonable. The usual, customary and reasonable approach for determining insurance benefits is based upon the fees normally charged for specific procedures in the geographic location where the services are provided.
A medical expense policy that establishes the amount of benefit paid based upon the prevailing charges which fall within the standard range of fees normally charged for a specific procedure by a doctor of similar training and experience in that geographic area is known as a) Benefit schedule. b) Gatekeepers. c) Usual, customary and reasonable. d) Relative-value schedule.
$2,000 A producer or insurer who violates the solicitation regulations can be ordered to pay a fine of up to $2,000 for each violation. The Commissioner can also revoke or suspend the violator's license or certificate of authority
A producer or insurer who violates the solicitation regulations can be ordered to pay a fine for each violation of up to a) $5,000. b) $1,000. c) $2,000. d) $3,000.
Disability income A waiver of premium rider generally is included with guaranteed renewable and noncancellable individual disability income policies. It is a valuable provision because it exempts the insured from paying the policy's premium during periods of total disability.
A waiver of premium provision may be included with which kind of health insurance policy? a) Basic medical b) Hospital indemnity c) Dread disease d) Disability income
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.
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) Comprehensive health b) Major medical c) Group health d) Managed care
Unearned premiums are retained by the insurance company. This rider allows the insurer to cancel the policy at any time, or at the end of the policy period. Any unearned premium must be returned to the policyholder. If the insurer cancels, the unearned premium will be returned on a pro rata basis.
According to the rights of renewability rider for cancellable policies, all of the following are correct about the cancellation of an individual insurance policy EXCEPT a) Claims incurred before cancellation must be honored. b) An insurance company may cancel the policy at any time. c) Unearned premiums are retained by the insurance company. d) The insurer must provide the insured a written notice of the cancellation.
Obtaining an insurance license. An insurance transaction means the carrying on of business in insurance, which could include the solicitation of a policy, advising, negotiation, or inducement related to coverage or claims. Obtaining an insurance license is a prerequisite to transacting insurance.
All of the following would be considered an insurance transaction EXCEPT a) Obtaining an insurance license. b) Soliciting a policy. c) Advising a policyholder regarding a claim. d) Negotiating coverage.
No coverage will apply, since the injury could have been foreseen. An accidental means clause states that if the insured meant to do whatever caused their injury, no coverage applies since the resulting injury should have been foreseen.
An insured is covered by a disability income policy that contains an accidental means clause. The insured exits a bus by jumping down the steps and breaks an ankle. What coverage will apply? a) No coverage will apply, since disability income policies cover sickness only. b) Coverage will apply since the break was accidental. c) Coverage will apply, but will be reduced by 50%. d) No coverage will apply, since the injury could have been foreseen.
Dread Disease Policy A Dread Disease Policy is a limited policy that is written to specifically cover cancer expense.
Because of the history of cancer in her family, Julie purchased a policy that specifically covers the expense of treating cancer. Her policy would be classified as what type of policy? a) Dread Disease Policy b) Family History Cancer Policy c) Specified Health Policy d) Term Health Policy
Residual disability A residual disability will pay an amount to make up the difference between what the insured would have earned before the loss.
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
6 months An open enrollment period is a 6-month period that guarantees the applicants the right to buy Medigap once they first sign up for Medicare Part B.
How long is an open enrollment period for Medicare supplement policies? a) 90 days b) 6 months c) 1 year d) 30 days
An unfair trade practice It is an unfair trade practice to make any statement that an insurer's policies are guaranteed by the existence of the Insurance Guaranty Association. Though it is illegal to advertise, the statement is still true and would not be considered a misrepresentation.
If an insurance company makes a statement that its policies are guaranteed by the existence of the Insurance Guaranty Association, that would be considered a) A required disclosure. b) A legal representation of the Association. c) An unfair trade practice. d) A misrepresentation.
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.
In 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.
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.
In respect to the consideration clause, which of the following is consideration on the part of the insurer? a) Promising to pay in accordance with the contract terms b) Offering a secondary policy to the applicant c) Offering an unconditional contract d) Explaining policy revisions to the applicant
Attending physician Home health care is care provided in one's home and could include occasional visits to the person's home by registered nurses, licensed practical nurses, licensed vocational nurses, or community-based organizations like hospice. Home health care might include physical therapy and some custodial care such as meal preparations.
Occasional visits by which of the following medical professionals will NOT be covered under LTC's home health care? a) Attending physician b) Registered nurses c) Licensed practical nurses d) Community-based organization professionals
Misrepresentation. Issuing or circulating any sales material that is false or misleading would be considered misrepresentation and is illegal.
On its advertisement, a company claims that it has funds in its possession that are, in fact, not available for the payment of losses or claims. The company is guilty of a) Concealment. b) Unfair claim practice. c) Rebating. d) Misrepresentation.
Regulates consumer reports. The Federal Fair Credit Reporting Act regulates consumer reports, also known as consumer investigative reports, or credit reports.
The Federal Fair Credit Reporting Act a) Prevents money laundering. b) Regulates consumer reports. c) Protects customer privacy. d) Regulates telemarketing.
Monthly. If a claim involves disability income benefits, the policy must pay those benefits not less frequently than monthly. In all other cases, the company may specify the time period of 45 or 60 days for payment of claims.
Under an individual disability policy, the MINIMUM schedule of time in which claim payments must be made to an insured is a) Biweekly. b) Monthly. c) Within 45 days. d) Weekly.
$0 As with the other types of basic medical expense coverage, there is no deductible, but coverage is limited.
What is the typical deductible for basic surgical expense insurance? a) $0 b) $100 c) $200 d) $500
Disability Buy-Sell The Disability Buy-Sell agreement specifies how a business will pass between business owners if one of the owners dies or becomes disabled.
Which agreement specifies how a business will transfer hands when one of the owners dies or becomes disabled? a) Disability Buy-Sell b) Proprietary Transfer c) Absolute assignment d) Transfer of Ownership
The more liberal "own occupation" Total disability is defined differently under some disability income policies. The more liberal "own occupation" definition of disability makes it easier to qualify for benefits.
Which of the following definitions would make it easier to qualify for total disability benefits? a) The more strict "own occupation" b) The more liberal "own occupation" c) The more strict "any occupation" d) The more liberal "any occupation"
Making comparisons between different policies Making accurate comparisons of policies is not illegal.
Which of the following is NOT considered a misrepresentation as it pertains to unfair trade practices? a) Stating that the insurance policy is a share of stock b) Exaggerating the benefits provided in the policy c) Stating that the competitors will arbitrarily increase their premiums each year d) Making comparisons between different policies
Adult day care Adult day care is designed for those who require assistance with various ADLs on a daily basis, but not around the clock. Custodial care is usually the only service provided by adult day care facilities.
Which of the following long-term care benefits would provide coverage for care for functionally impaired adults on a less than 24-hour basis? a) Home health care b) Adult day care c) Residential care d) Assisted living
Home health care "Home health care" refers to nursing and other health care services rendered to a person in his or her residence on a part-time or intermittent basis (except that full-time 24-hour service is permitted when needed on a short-term basis) when continuing hospitalization would otherwise have been required if home health care were not provided.
Which of the following refers to nursing and other health care services rendered to a person in his or her residence on a part-time or intermittent basis? a) Hospice b) Remote health care c) Home health care d) Residential care
The extent of benefits is determined by the insured's income. Group plans usually specify the benefits based on a percentage of the worker's income. Group long-term plans provide monthly benefits usually limited to 60% of the individual's income.
Which statement accurately describes group disability income insurance? a) There are no participation requirements for employees. b) Short-term plans provide benefits for up to 1 year. c) The extent of benefits is determined by the insured's income. d) In long-term plans, monthly benefits are limited to 75% of the insured's income.
The group is assessed individually for insurability. Group health insurance policies must cover everyone in the group, regardless of age, health history, and occupation. Because of this blanket coverage, the group as a whole is assessed for insurability. The size, average age, gender ratio, persistency, and industry of the group are considered, along with other factors, when determining premiums. Groups can be reassessed annually in order to adjust premium amounts.
Which statement is NOT true regarding underwriting group health insurance? a) The cost of the policy is partially determined by the ratio of males to females in the group. b) Everyone in the group is covered, regardless of their medical history. c) The group is assessed individually for insurability. d) The premiums are reassessed annually.
Excessive benefits may be taxable. Regardless of whether or not the insured can deduct individual long-term care premiums, the benefits are received income tax free by the individual. Excessive benefits as determined by statute are taxable as ordinary income.
6. Which of the following statements is correct concerning taxation of long-term care insurance? a) Premiums are not deductible in any case. b) Excessive benefits may be taxable. c) Benefits may be taxable as ordinary income. d) Premiums may be taxable as income.
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.
A guaranteed renewable health insurance policy allows the a) Policy to be renewed at time of expiration, but the policy can be canceled for cause during the policy term. b) Insurer to renew the policy to a specified age. c) Policyholder to renew the policy to a stated age, with the company having the right to increase premiums on the entire class. d) Policyholder to renew the policy to a stated age and guarantees the premium for the same period.
Subrogation When the insureds accept loss payment from the insurance company, they must transfer their rights to recovery to the insurer. This prevents the insured from collecting twice for the same loss, and allows the insurer to indemnify the insurance company.
A provision found in insurance policies which prevents the insured from collecting twice for the same loss is called a) Subrogation. b) Consent to settle loss. c) Right of salvage. d) Appraisal.
60 days The temporary work authority expires no more than 60 days after it is issued and becomes ineffective when the actual license is issued.
After its issuance, the temporary work authority expires after how many days? a) 10 days b) 30 days c) 45 days d) 60 days
Rebates are allowed if it's in the best interest of the client. A rebate is an illegal act which involves returning something of value to the client as an inducement to buy, such as the commission. Rebates are only allowed if specifically stated in the policy. Insurance dividends are not considered rebates as the IRS considers it as a return of overpaid premium.
All of the following are true regarding rebates EXCEPT a) Dividends are not considered to be rebates. b) Rebates are allowed if it's in the best interest of the client. c) Rebates are only allowed if specifically stated in the policy. d) Rebating can be anything of economic value, given as an inducement to buy.
Skilled care. Custodial care, respite care, home health care, and adult day care are all coverages used to reduce the necessity of admission into a care facility. Skilled care is almost always provided in an institutional setting.
All of the following long-term care coverages would allow an insured to receive care at home EXCEPT a) Respite care. b) Home health care. c) Skilled care. d) Custodial care in insured's house.
Revocable If her husband is named as the revocable beneficiary, the insured would be the policyowner and could make changes to the contract. Her husband would receive any death benefit.
An insured wants to name her husband as the beneficiary of her health policy. She also wishes to retain all of the rights of ownership. The insured should have her husband named as what type of beneficiary? a) Primary b) Contingent c) Irrevocable d) Revocable
2 or more. HIPAA applies to groups of two or more
HIPAA applies to groups of a) At least 10. b) At least 100. c) More than 2, fewer than 50. d) 2 or more.
The employer contributions are not included in the individual insured's taxable income. HSA contributions made by an employer are not included in the determination of an individual's taxable income.
How do employer contributions to a Health Savings Account affect the insured's taxes? a) The employer contributions are taxed at the same rate as the Social Security tax rate. b) The employer contributions are taxed to the individual insured as earned income. c) The employer contributions are deducted from the individual insured's tax calculations. d) The employer contributions are not included in the individual insured's taxable income.
Court system If an insurer and insured have a dispute about whether a particular loss is covered under a policy, the court system is asked to interpret the contract.
If an insurer and insured have a dispute about whether a particular loss is covered under a policy, which authority will settle the dispute? a) Commissioner b) Federal Insurance Regulation Board c) Consumer Protection Agency d) Court system
Unilateral In a unilateral contract, the insured is not legally bound to do anything. The insurer, however, must pay losses covered by the policy.
In insurance policies, the insured is not legally bound to any particular action in the insurance contract, but the insurer is legally obligated to pay losses covered by the policy. What contract element does this describe? a) Conditional b) Unilateral c) Unidirectional d) Aleatory
Genetic characteristic. "Genetic characteristic" means any inherited gene or chromosome, or alteration thereof, that is scientifically or medically believed to predispose an individual to a disease, disorder, or syndrome, or to be associated with a statistically increased risk of development of a disease, disorder, or syndrome.
In insurance terms, if a person has a chromosomal defect that may predispose him/her to a disease, this is called a) Genetic defect. b) Disease precursor. c) Risk potential. d) Genetic characteristic.
Exclusions Exclusions are restrictions of coverage as stated in the policy
Items stipulated in the contract that the insurer will not provide coverage for are found in the a) Benefit Payment clause. b) Consideration clause. c) Exclusions. d) Insuring clause.
Exclusions. Exclusions are restrictions of coverage as stated in the policy.
Items stipulated in the contract that the insurer will not provide coverage for are found in the a) Benefit Payment clause. b) Consideration clause. c) Exclusions. d) Insuring clause.
5 months Under Social Security disability benefits, a person will have to wait five months before any benefits will be paid. Actual benefit payments start with the sixth month of disability.
Once the person meets the stringent requirements for disability benefits under Social Security, how long is the waiting period before any benefits will be paid? a) 12 months b) Benefits will be paid immediately. c) 90 days d) 5 months
The U.S. vs. the South-Eastern Underwriters Association In 1942, the Attorney General of the United States filed a brief on the Sherman Act against the South-Eastern Underwriters Association, a cooperative rating bureau, alleging that the bureau constituted a combination in restraint of trade. In 1944, the Supreme Court reversed its decision of Paul vs. Virginia, stating that insurance is interstate commerce and is therefore subject to regulation by the federal government. This decision stands today.
The Supreme Court stated that insurance is interstate commerce and is therefore subject to regulation by the federal government in the decision of what case? a) The U.S. vs. the South-Eastern Underwriters Association b) McCarran-Ferguson vs. New York c) Rosche-Wall vs. Alabama d) Paul vs. Virginia
5 All premiums must be remitted to the insurer within 5 business days after receipt of funds. All premiums due the insured must also be paid to the insured or credited to the insured's account within 5 business days.
The company owes premium money to the insured. The insurer gave the funds to the producer to return to the insured. Within how many days must the producer pay the insured? a) 5 b) 10 c) 14 d) 30
The employer. Health Reimbursement Accounts have no statutory limit. Limits may be set by employer, and rollover at the end of the year based on employer discretion
The limits of a health reimbursement account are set by a) State statutes. b) The insurer. c) Federal regulation. d) The employer.
Need A residual disability will pay an amount to make up the difference between what the insured would have earned before the loss.
The primary eligibility requirement for Medicaid benefits is based upon? a) Number of dependents. b) Need. c) Whether the claimant is insurable on the private d) market. d) Age.
Conditional A conditional contract requires both the insurer and policyowner to meet certain conditions before the contract can be executed, unlike other types of policies which put the burden of condition on either the insurer or the policyowner.
The proposed insured makes the premium payment on a new insurance policy. If the insured should die, the insurer will pay the death benefit to the beneficiary if the policy is approved. This is an example of what kind of contract? a) Adhesion b) Personal c) Unilateral d) Conditional
Insuring clause. The insuring clause is a provision on the first page of the policy that states the coverage and when it applies.
The section of a health policy that states the causes of eligible loss under which an insured is assumed to be disabled is the a) Consideration clause. b) Probationary period. c) Insuring clause. d) Incontestability clause.
Conditionally renewable The conditionally renewable provision is very similar to the optionally renewable provision. The primary difference is that conditionally renewable policies may be canceled for specific conditions contained in the policy, but optionally renewable policies do not specify a condition or reason for cancellation.
What is the contract provision that allows the insurer to nonrenew health coverage if certain events occur? a) Guaranteed renewable b) Conditionally renewable c) Optionally renewable d) Noncancellable
Stays with the employer. HRAs remain with the originating employer and do not follow an employee to new employment.
When an employee covered under a health reimbursement account changes employers, the HRA a) Returns to the insurer. b) Is split between the employee and employer. c) Stays with the employer. d) Follows the employee.
Impairment 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
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
Special Risk Policy The Special Risk Policy will cover unusual types of risks that are not normally covered under AD&D policies. It covers only the specific hazard or risk identified in the policy, such as a racecar driver test-driving a new car.
Which of the following special policies covers unusual risks that are NOT normally included under Accidental Death and Dismemberment coverage? a) Specified Disease Policy b) Credit Disability c) Special Risk Policy d) Limited Risk Policy
It is nonrenewable. In term health policies, the owner has no rights of renewal.
Which of the following is true regarding a term health policy? a) It is noncancellable. b) It is nonrenewable. c) It is conditionally renewable. d) It is guaranteed renewable.
Major medical coverage. The corridor deductible derives its name from the fact that it is applied between the basic coverage and the major medical coverage.
The corridor deductible derives its name from the fact that it is applied between the basic coverage and the a) Comprehensive expense coverage. b) Interval expense coverage. c) Limited coverage. d) Major medical coverage.
Nonoccupational coverage. Most group disability income is nonoccupational coverage, covering insureds only off the job. The employer carries workers compensation for on the job injuries or sickness.
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 a) Nonoccupational coverage. b) Unemployment coverage. c) Occupational coverage. d) Workers compensation.
Entire contract clause Entire contract is a mandatory provision that is required by law.
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 a) Entire contract clause. b) Time limit on certain defenses clause. c) Incontestability clause. d) Legal action against us clause.
Coinsurance The larger the percentage that is paid by the insured, the lower the required premium will be.
The provision that provides for the sharing of expenses between the insured and the insurance company is a) Divided cost. b) Coinsurance. c) Stop-loss. d) Deductible.
6 months A Medicare supplement policy cannot deny or limit coverage for a claim for losses incurred more than 6 months from the effective date of coverage
A Medicare supplement policy cannot deny or limit coverage for a claim for losses incurred more than how many months from the effective date of coverage? a) 24 b) 6 c) 9 d) 12
$12,000, all of which is taxable. In noncontributory group health plans, the employer pays the entire cost, so the income benefits are included in the employee's gross income and taxed as ordinary income
A noncontributory group disability income plan has a 30-day waiting period and offers benefits of $2,000 a month. If an employee is unable to work for 7 months due to a covered disability, the employee will receive a) $12,000, all of which is taxable. b) $14,000, none of which is taxable. c) $14,000, all of which is taxable. d) $12,000, none of which is taxable.
The policy will not lapse for 31 days if the premium is not paid when due. A mandatory provision of life insurance policies requires that a grace period be provided. The grace period is the period of time after the premium due date in which premiums may still be paid before the policy lapses for nonpayment of the premium
A policy with a 31-day grace period implies a) The policy benefits must be paid within 31 days after a claim is submitted. b) The policy will not lapse for 31 days if the premium is not paid when due. c) The policyholder may return the policy for a full refund within 31 days. d) The policy is incontestable after 31 days of delivery.
$2,000 A producer or insurer who violates the solicitation regulations can be ordered to pay a fine of up to $2,000 for each violation. The Commissioner can also revoke or suspend the violator's license or certificate of authority.
A producer or insurer who violates the solicitation regulations can be ordered to pay a fine for each violation of up to a) $2,000. b) $3,000. c) $5,000. d) $1,000.
$10,000 Any person violating an insurance law or regulation is liable to a penalty of no more than $5,000 for a first offense and no more than $10,000 for each subsequent offense.
A producer was found guilty of a 3rd violation of the Insurance Code. What would be the monetary penalty he will have to pay? a) $10,000 b) $15,000 c) $25,000 d) $5,000
A resident producer licensed for Property and Casualty insurance applying for a Life insurance license. The Commissioner may waive the prelicensing education and examination requirement if the applicant holds a professional designation or a license in the kind of insurance for which the applicant seeks authority. Property and Casualty producers applying for a life insurance license would not qualify for the exemption.
All of the following candidates for a resident producer license may be exempted from the examination requirement EXCEPT a) A person in public employment in the insurance field whose license terminated 10 months ago. b) A nonresident producer in good standing who is moving to this state. c) A resident producer licensed for Property and Casualty insurance applying for a Life insurance license. d) A professional who holds a Certified Financial Planner (CFP) designation.
Neither approved the application nor issued the policy When the agent receives the application and issues a conditional receipt, the insurer has not yet approved the application and issued the policy.
An applicant for a health insurance policy returns a completed application to her agent, along with a check for the first premium. She receives a conditional receipt two weeks later. Which of the following has the insurer done by this point? a) Approved the application b) Issued the policy c) Neither approved the application nor issued the policy d) Both approved the application and issued the policy
Workers Compensation Workers Compensation provides employees with medical, income, death, and rehabilitation benefits in the event of work-related injury.
An employee is injured in a construction accident, rendering him unable to work for a year. Which of the following plans would provide him with medical expense coverage and income assistance? a) Major Medical Insurance b) Long-term Care c) Social Security Disability d) Workers Compensation
False advertising False advertising is the illegal practice of advertising or circulating materials that are untrue, deceptive, or misleading.
An insurance company has published a brochure that inaccurately portrays the advantages of a particular insurance policy. What is this an example of? a) False advertising b) Unfair claims c) Twisting d) Defamation
Stop-Loss Limit A "stop-loss limit" is a specified dollar amount beyond which the insured no longer participates in the sharing of expenses.
An insured has endured multiple surgeries and hospitalizations for an illness during the summer months. Her insurer no longer bills her for medical expenses. What term best describes the condition she has met? a) Stop-Loss Limit b) Out-of-Pocket Limit c) Maximum Loss Threshold d) Maximum Loss
Time of Payment of Claims The Time of Payment of Claims provision specifies that claims are to be paid immediately upon written proof of loss.
An insured notifies the insurance company that he has become disabled. What provision states that claims must be paid immediately upon written proof of loss? a) Incontestability b) Physical Exam and Autopsy c) Legal Actions d) Time of Payment of Claims
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.
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
POS Point-of-Service (POS) plans are a combination of HMOs and PPOs.
If a health care plan has characteristics of an HMO and PPO, what type of plan is it? a) POS b) HIPAA c) MET d) FSA
180 If a producer dies or is rendered disabled, a family member, associate, etc. can enter an agreement with another producer to continue the business. This agreement can last no longer than 180 days.
If a producer dies or is rendered severely disabled, an unlicensed person can contract with another insurance producer to continue this person's insurance transactions for a) 90 days. b) 100 days. c) 180 days. d) 365 days.
Conversion Conversion provisions are required by law. It allows terminated employees to convert their group health coverage to individual insurance without evidence of insurability, within a specified amount of time, and for eligible reasons.
If an employee terminates her employment, which of the following provisions would allow her to continue health coverage under an individual policy, if requested within 31 days? a) Grace period b) Renewability c) Conversion d) Replacement
Adjust the benefit in accordance with the increased risk A part of the premium rating concerns the hazard of occupation.
If the insured under a disability income insurance policy changes to a more hazardous occupation after the policy has been issued, and a claim is filed, the insurance company should do which of the following? a) Exclude coverage for on-the-job injury b) Adjust the benefit in accordance with the increased risk c) Cancel the policy d) Increase the premium
The Department of Insurance If a hearing is requested, the Department will review the application and any additional information and determine whether the license may be issued.
If the issuance of a license is denied and a hearing is requested, which entity will be making determination whether or not the license should be issued? a) The state courts b) The Office of Administrative Law c) The Department of Insurance d) The NAIC
Elimination period. On disability income insurance, the time between the onset of an injury or sickness and the time benefits begin is known as the waiting or elimination period.
In disability income insurance, the time between the onset of an injury or sickness and when benefits begin is known as the a) Enrollment period. b) Probationary period. c) Elimination period. d) Qualification period.
When an insurer's underwriter approves coverage 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.
In forming an insurance contract, when does acceptance usually occur? a) When an insured submits an application b) When an insurer's underwriter approves coverage c) When an insurer delivers the policy d) When an insurer receives an application
Occasional nursing or rehabilitative care Intermediate care is nursing and rehabilitative care provided by medical personnel for stable conditions that require assistance on a less frequent basis than skilled care.
In long-term care insurance, what type of care is provided with intermediate care? a) Nonmedical daily care b) Daily care, but not nursing care c) Intensive care d) Occasional nursing or rehabilitative care
In an institutional setting Skilled nursing care is performed under the direction of a physician, usually in an institutional setting. an institutional setting.
In which of the following locations would skilled care most likely be provided? a) In an outpatient setting b) At a physician's office c) In an institutional setting d) At the patient's home
The individual's son gets a part-time job to help support the family Benefits cease when the individual reaches age 65, dies, or is no longer disabled. If a person has been receiving Social Security disability benefits at the time that he or she turns age 65, the disability benefits cease, and are replaced by Social Security retirement benefits. At death, family benefits will continue as survivor benefits. Benefits will continue for an adjustment period of three months if an individual no longer satisfies the definition of disability.
In which of the following situations would Social Security Disability benefits NOT cease? a) The individual dies b) The individual has undergone therapy and is no longer disabled c) The individual's son gets a part-time job to help support the family d) The individual reaches age 65
$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).
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)
Medicare Part C. Medicare consists of Hospital Insurance protection (Part A), Medical Insurance protection (Part B), and Medicare Advantage (Part C) (formerly known as Medicare+Choice). Medicare Part D is a "stand alone" drug insurance policy for persons who need the coverage and are eligible for Medicare Part A and/or Part B.
Medicare Advantage is also known as a) Medicare Part B. b) Medicare Part C. c) Medicare Part D. d) Medicare Part A.
Fiduciary responsibility All premiums collected on insurance policies must be held by a producer in a fiduciary capacity and must not be misappropriated, illegally withheld or improperly converted to the producer's own funds.
The requirement that agents must account for all insurance funds collected, and are not permitted to comingle those funds with their own is known as a)Premium accountability. b) Insurance-related conduct. c) Fiscal responsibility. d) Fiduciary responsibility
All of the above Today, insurance is regulated by each state through the three basic branches of government: the legislative, judicial, and executive branches.
Through which branch(es) of the government is insurance currently regulated? a) Legislative b) Judicial c) Executive d) All of the above
18 months Under HIPAA regulations, to be eligible to convert health insurance coverage from a group plan to an individual policy, the insured must have 18 months of continuous creditable health coverage.
To be eligible under HIPAA regulations, for how long should an individual converting to an individual health plan have been covered under the previous group plan? a) 18 months b) 5 years c) 12 months d) 63 days
An individual who was previously covered by group health insurance for 6 months is eligible. All of these eligibility requirements are correct, except an individual who was previously covered for at least 6 months. HIPAA requires that the individual have a previous continuous creditable health coverage for at least 18 months.
Under HIPAA, which of the following is INCORRECT regarding eligibility requirements for conversion to an individual policy? a) An individual who doesn't qualify for Medicare may be eligible. b) The gap of coverage for eligibility is a period of 63 or less days. c) An individual who was previously covered by group health insurance for 6 months is eligible. d) An individual who has used up COBRA continuation coverage is eligible.
Principal sum Accidental Death and Dismemberment coverage only pays for accidental losses and is thus considered a pure form of accident insurance. The principal sum is paid for accidental death. In case of loss of sight or accidental dismemberment, a percentage of that principal sum will be paid by the policy, often referred to as the capital sum
Under the Accidental Death and Dismemberment (AD&D) coverage, what type of benefit will be paid to the beneficiary in the event of the insured's accidental death? a) Capital sum b) Double the amount of the death benefit c) Refund of premiums d) Principal sum
Metal level classification Plans other than self-insured plans will be classified into four levels determined by how much of one's expected health care costs are covered. The four plans are bronze, silver, gold, and platinum. This is called metal level classification.
Under the Affordable Care Act, which classification applies to health plans based on the amount of covered costs? a) Risk classification b) Metal level classification c) Guaranteed and nonguaranteed d) Grandfathered and nongrandfathered
A statement that is sufficiently clear to identify the insured and the nature of the claim. The Insurance Code requires that each policy must include, "Written notice of claim must be given to the insurer within 20 days after the occurrence or commencement of any loss covered by the policy, or as soon thereafter as is reasonably possible".
Under the mandatory uniform provision Notice of Claim, the first notice of injury or sickness covered under an accident and health policy must contain a) An estimate of the total amount of medical and hospital expense for the loss. b) A complete physician's statement. c) A statement that is sufficiently clear to identify the insured and the nature of the claim. d) A statement from the insured's employer showing that the insured was unable to work.
If the producer's home state has the same CE requirements and the producer satisfies them Nonresident producers who satisfy CE requirements in their home state are not required to complete CE requirements in New Jersey if their home state recognizes the satisfaction of continuing education requirements on the same basis.
Under which of the following circumstances would a nonresident producer NOT required to complete CE hours in New Jersey? a) If the producer's home state has the same CE requirements and the producer satisfies them b) Any time nonresident producers satisfy CE requirements in their home state c) Under no circumstances: all producers must meet CE requirements in this state c) If a waiver is received from the Commissioner
$5,000 If a person violates a Cease and Desist Order, the Commissioner may assess a fine of up to $5,000 for each violation.
What is the fine for violating the Commissioner's cease and desist order? a) $5,000 b) $10,000 c) $20,000 d) $1,000
$100 In this state, promotional materials, articles of merchandise, or gifts that have a redeemable value of $100 or less are not considered "valuable consideration," and therefore, are allowed.
What is the maximum allowed value of a gift that an agent can give to an insured without violating the regulation on rebating? a) $10 b) $50 c) $100 d) $200
To help the insurance company to prevent overutilization of the policy The purpose of the coinsurance provision is for the insurance company to control costs and discourage overutilization of the policy.
What is the purpose of coinsurance provisions? a) To ensure payment to the doctors and hospitals b) To share liability among different insurance companies c) To help the insurance company to prevent overutilization of the policy d) To have the insured pay premiums to more than one company.
Application An individual can submit an application to an insurer, which requests that the insurer review the information and issue an insurance contract.
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
The Individual Health Coverage Program New Jersey established The Individual Health Coverage Program to guarantee access to health coverage for individuals and small employers, regardless of health status, age, claims history, or any other risk factor.
What program was established by New Jersey to guarantee access to health coverage for individuals and small employers, regardless of health status, age, claims history, or other risk factors? a) The Health Care Quality Act b) The New Jersey Insurance Guaranty Association c) The New Jersey Standard Health Care Program d) The Individual Health Coverage Program
Defamation A producer or broker who makes oral or written statements intended to injure another producer or insurer is guilty of the unfair trade practice of defamation.
When a producer was reviewing a potential customer's coverage written by another company, the producer made several remarks that were maliciously critical of that other insurer. The producer could be found guilty of a) Discrimination. b) Nothing, unless the remarks were in writing c) Defamation. d) Misrepresentation.
Under no circumstances Individual or group health insurance policies providing hospital or medical expense benefits that are issued, delivered, or approved for use in this state cannot exclude any person or eligible dependent on the basis of an actual or expected health condition due to any genetic characteristic.
When can a health insurance policy exclude a person from coverage based on a genetic characteristic? a)If it is a group policy b)When issued by a foreign insurer c)If the genetic characteristic predisposes the applicant to a life-threatening disease d)Under no circumstances
Commissioner The Commissioner has the power to conduct investigations, administer oaths, interrogate licensees, and issue subpoenas to any licensee or other person in connection with any investigation, hearing, or other proceeding.
Which of the following authorities is in charge of investigating claims held against licensees? a) Federal Bureau of Investigation b) Commissioner c) Governor d) State law enforcement
They discourage overinsurance and avoid duplication of benefits by permitting a reduction of benefits when a person is covered by more than one plan. Coordination of Benefits regulations are designed to discourage overinsurance and preserve the principle of indemnity by reducing benefits when coverage is available under two or more health plans.
Which of the following best describes the purpose of Coordination of Benefits regulations? a) They encourage people to purchase two or more health plans by allowing duplication of benefits under certain circumstances. b) They discourage overinsurance and avoid duplication of benefits by permitting a reduction of benefits when a person is covered by more than one plan. c) They discourage people from purchasing temporary insurance or dread disease plans. d) They allow people who are insured under two or more health plans to collect full benefits from each plan.
A list of available doctors The Insuring Clause lists the insured, the insurance company, what kind of losses are covered, and for how much the losses would be compensated.
Which of the following does the Insuring Clause NOT specify? a) The insurance company b) The name of the insured c) A list of available doctors d) Covered perils
Insurer's executive officer Only an executive officer of the company, not an agent, has authority to make any changes to the policy. The insurer must have the insured's written agreement to the change.
Which of the following entities has the authority to make changes to an insurance policy? a) Insurer's executive officer b) Department of Insurance c) Broker d) Producer
Commissioner The Commissioner establishes minimum standards for any policy that will be marketed as a Medicare supplement policy
Which of the following establishes minimum standards for any policy that will be marketed as a Medicare supplement policy? a) NAIC b) Federal Insurance Regulation Board c) Department of Banking and Insurance d) Commissioner
A Massachusetts resident who sells insurance full-time in Boston but wants to expand his customer base by becoming licensed in New Jersey. In order to obtain a nonresident license in this state, prospective licensees must be actively licensed producers in their own state.
Which of the following individuals would most likely be issued a nonresident producer's license? a) A New Jersey resident who will soon be moving to Washington and applies to the New Jersey Insurance Department for a nonresident license for Washington so she can sell insurance upon her arrival. b) An individual who has only lived in New Jersey for 3 months applies to the Insurance Department for a nonresident license in New Jersey. He will receive his resident license after living in New Jersey for 1 year. c) A Massachusetts resident who sells insurance full-time in Boston but wants to expand his customer base by becoming licensed in New Jersey. d) A Pennsylvania resident who has an expired producer's license in Pennsylvania.
The insurer may terminate the contract only at renewal for certain conditions. The insurance company cannot cancel a noncancellable policy, nor can the premium be increased beyond what is stated in the policy. The insured has the right to renew the policy for the life of the contract; however, the guarantee to renew coverage usually only applies until the insured reaches age 65.
Which of the following is NOT a feature of a noncancellable policy? a) The guarantee to renew coverage usually applies until the insured reaches certain age. b) The insured has the right to renew the policy for the life of the contract. c) The insurer may terminate the contract only at renewal for certain conditions. d) The premiums cannot be increased beyond the amount stated in the policy.
Counteroffer In order for insurance contracts to be legally binding, they must have four essential elements: agreement (offer and acceptance), consideration, competent parties, and legal purpose. Counteroffer is not required.
Which of the following is NOT an essential element of an insurance contract? a) Consideration b) Agreement c) Legal purpose d) Counteroffer
The application given to a prospective insured Consideration is something of value that is transferred between the two parties to form a legal contract.
Which of the following is NOT the consideration in a policy? a) The application given to a prospective insured b) Something of value exchanged between parties c) The premium amount paid at the time of application d) The promise to pay covered losses
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.
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
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.
Which of the following is the closest term to an authorized insurer? a) Certified b) Licensed c) Legal d) Admitted
The longer the elimination period, the lower the cost of coverage The "elimination period" is a period of days which must expire after the onset of an illness or occurrence of an accident before benefits will be payable. The longer the elimination period is, the lower the cost of coverage will be.
Which of the following is true regarding elimination periods and the cost of coverage? a) The longer the elimination period, the higher the cost of coverage b) Elimination periods have no effect on the cost of coverage. c) The longer the elimination period, the lower the cost of coverage d) The shorter the elimination period, the lower the cost of coverage
A Medicare supplement policy Benefits for the treatment of alcoholism are covered in New Jersey as long as the contract provides hospital or medical expense benefits
Which of the following policies is NOT required to include coverage for alcoholism? a) Any group health insurance plan b) A group policy with hospital expense benefit c) An individual health policy that already provides medical expense benefits d) A Medicare supplement policy
Payment of Claims The Payment of Claims provision states that the claims must be paid to the policyowner, unless the death proceeds need to be paid to a beneficiary.
Which of the following provisions would prevent an insurance company from paying a reimbursement claim to someone other than the policyowner? a) Payment of Claims b) Change of beneficiary c) Entire Contract Clause d) Proof of Loss
Payment of Claims The Payment of Claims provision states that the claims must be paid to the policyowner, unless the death proceeds need to be paid to a beneficiary.
Which of the following provisions would prevent an insurance company from paying a reimbursement claim to someone other than the policyowner? a) Proof of Loss b) Payment of Claims c) Change of beneficiary d) Entire Contract Clause
Multiple indemnity rider The Multiple Indemnity rider, which is included in some life and accidental death policies, can confer double or triple the amount of a benefit when death of the insured is due to specified circumstances. Usually the insured must be below a specified age, and death cannot be a result of preventable causes.
Which of the following riders will provide benefits above the base policy amount? a) Impairment rider b) Guaranteed insurability rider c) Loss of time benefit rider d) Multiple indemnity rider
They can be changed only with the written consent of that beneficiary. Once an irrevocable beneficiary is shown for the policy, it requires his or her written consent to change.
Which of the following statements is most correct concerning the changing of an irrevocable beneficiary? a) They may be changed only on the anniversary date of the policy. b) They can be changed only with the written consent of that beneficiary. c) They may be changed at any time. d) They can never be changed.
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 types of LTC is NOT provided in an institutional setting? a) Intermediate care b) Home health care c) Custodial care d) Skilled nursing care
New Jersey Life and Health Guaranty Association The New Jersey Life and Health Guaranty Association was created to protect policyowners, insureds, and beneficiaries under life insurance policies, health insurance policies, annuity contracts, and supplemental contracts when insurers fail to perform contractual obligations due to financial impairment.
Which of the following was created to protect policyowners, insureds, and beneficiaries under insurance contracts when insurers fail to perform contractual obligations due to financial impairment? a) New Jersey Insurance Consumer Protectorate b) New Jersey Insurance Solvency Association c) New Jersey Consumer Protection Organization d) New Jersey Life and Health Guaranty Association
Advising the insured that if the claim goes to arbitration, the insured would probably receive less than what is currently being offered This act is a violation as defined in the Unfair Settlement Practices.
Which of the following would be considered an unfair claims settlement practice? a) Requesting the insured to submit a signed proof of loss statement, after the insured has already verbally advised the insurer of the claim b) Requesting the insured swear under oath concerning the facts of the claim c) Delaying the settlement of a claim for 30 days in order for the insured to conduct an investigation d) Advising the insured that if the claim goes to arbitration, the insured would probably receive less than what is currently being offered
The applicant has a prior felony conviction. When an insurer and insured enter into a contract, both parties must be of legal age and mentally competent. It is legal for a person convicted of a felony to buy an insurance contract. An intoxicated person, however, may not be mentally competent, a 12-year-old student is considered to be underage in most states and a person under mind-impairing medication most likely would not be mentally competent
Which of the following would qualify as a competent party in an insurance contract? a) The applicant is a 12-year-old student. b) The applicant is under the influence of a mind-impairing medication at the time of application. c) The applicant has a prior felony conviction. d) The applicant is intoxicated at the time of application.
Fully insured status Social Security Disability benefits are available only if the worker is fully insured. Benefits are provided only after a 5-month waiting period.
Which one of the following is an eligibility requirement for Social Security disability income benefits? a) Experiencing at least one year of disability b) Being at least 50 years of age c) Currently employed status d) Fully insured status
Time of Payment of Claims The Time Payment of Claims provision requires that claims will be paid immediately upon receipt of proofs of loss except for periodic payments, which are to be paid as specified in the policy.
Which provision states that the insurance company must pay Medical Expense claims immediately? a) Legal Actions b) Relation of Earnings to Insurance c) Time of Payment of Claims d) Payment of Claims
Optionally Renewable The renewability provision in an optionally renewable policy gives the insurer the option to terminate the policy for any reason on the date specified in the contract (usually a renewal date). Furthermore, this provision allows the insurer to increase the premium for any class of optionally renewable insureds.
Which renewability provision allows an insurer to terminate a policy for any reason, and to increase the premiums for any class of insureds? a) Cancellable b) Guaranteed renewable c) Optionally renewable d) Conditionally renewable
