Quiz Questions
During the application process, a statement made by an applicant that becomes part of the contract is considered to be a(n) warranty representation waiver exclusion
warranty
Laura has an employer-based preventative health care plan that focuses on an enrollee's problems, such as drug abuse or stress. These plans are called wellness programs preventative managed care employee utilizations plans employer-based initiatives
wellness programs
A contract is considered void in all of the following situations EXCEPT when one party is a minor when consideration is unequal when consideration is incomplete when agreement cannot be reached between parties
when consideration is unequal
how does an underwriter take into account an applicant's marital status? when determining if a policy will be issued when determining if an applicant is insurable when determining who is eligible for depended coverage when determining if a rating will be placed on a policy
when determining who is eligible for depended coverage
Under what circumstance does an accident and health insurer have the right to request an autopsy? when the claim exceeds an amount specified in the policy when 2 days have passed after death when not prohibited by state law when consent is given by the beneficiary
when not prohibited by state law
Which of the following can be defined as a cause of a loss? Adversity Risk Hazard Peril
Peril
the ______ is considered to be the principal under the law of agency. beneficiary insurer insured producer
insurer
Periodic health claim payments MUST be made at least monthly weekly daily annually
monthly
Which group is the Do Not Call Registry designed to protect against? telemarketers charities political organizations relatives
telemarketers
a producer gives a conditional receipt to a client for an insurance policy after collecting the initial premium. When will the policy become effective? when the policy is issued the date of policy delivery when the conditions of the receipt are met the date the sales appointment was set
when the conditions of the receipt are met
when does the producer give a premium receipt for an accident and health insurance application? when the application has been approved when the initial premium has been collected with the application during the medical exam when the completed application has been collected
when the initial premium has been collected with the application
Pete is covered by a group health insurance plan which covers employees in multiple states. This plan is governed by the laws of which state? where the certificate of coverage was mailed to. where most of the employees reside. where the master contract was issued. where the insurer's home office is located.
where the master contract was issued
The following are all elements of a valid contract EXCEPT consideration offer and acceptance competent parties written evidence
written evidence
Policyowners MUST be provided with privacy notices every year 2 years 3 years 4 years
year
Medicare supplement insurance that provides a preventative medical care benefit will often cover respite care hospitalization custodial care yearly physical examinations
yearly physical examinations
After the initial enrollment period for Medicare Part B has expired, when may an individual purchase again? January-March of each year October-December of each year 6 months after the individual's birthday month of each year 3 months after the individual's birthday month of each year
January through March of each year
newborn children are automatically covered under existing family sickness and accident plan at the moment of birth for a period of at least ____ days 10 15 30 31
31
Social Security disability income requirements state that in order to become fully insured on a permanent basis, you must have worked in a covered occupation for 10 quarters 20 quarters 30 quarters 40 quarters
40 quarters
at what age do most people become eligible for Medicare? 59 1/2 62 65 72
65
upon the direct request of a consumer, who asserts in good faith that h/she has been a victim of fraud, a consumer reporting agency must include a fraud alert in the file of the consumer for no less than 30 days 60 days 90 days 120 days
90 days
Which of the following describes coverage for the Medicare Part B coinsurance? only a long-term care policy will cover Medicare Part B coinsurance A Medicare supplement optional benefit a Medicare supplement core benefit Medicare Part B does not require a coinsurance so no additional coverage is needed
A Medicare Supplement core benefit
What is a "functional assessment" for long-term care benefits? An assessment of the insurer's financial solvency A review of the insurer's ability to pay long-term care benefits A review of the insured's ability to perform the activities of daily living An assessment of the quality of care given in a long-term care facility
A review of the insured's ability to perform the activities of daily living
in long-term care insurance, what is an "ADL"? Advocates of daily living Approved dollar limits Activities of daily living Accepted doctor lists
Activities of daily living
Which of these statements regarding insurance is false? One way insurers deal with catastrophic loss is through reinsurance. As the number of insured units increases, the number of losses decreases. Speculative risk cannot be insured. Pure risk can be insured
As the number of insured units increases, the number of losses decreases
which of the following statements BEST describes a double indemnity provision in travel accident insurance? Benefits are doubled under certain circumstances stated in the policy. If the claim is disputed in court and the insurer loses, the face mount will be doubled. Benefits cover two people when traveling. Accidents and illnesses are covered while the insured is travelling
Benefits are doubled uner certain circumstances stated in the policy.
For employees covered in multiple states under a group health plan, jurisdiction rules cannot alter contract provisions COBRA laws eligibility standards contribution percentages
COBRA laws
Which of the following types of insurers limits the exposure it writes to those of its owners? Restricted insurer Limited insurer Confined insurer Captive insurer
Captive insurer
Which of the following is NOT an allowable exclusion for a long-term care insurance policies? self-inflicted injuries acute care custodial care outside the U.S. care for incurable conditions
Care for incurable conditions
A comprehensive group policy also covers expenses related to vision care. Which of the following is not typically covered under a vision plan? Cataract surgery Routine eye exam Corrective vision glasses Corrective contact lenses
Cataract surgery
Jill has a group health plan with an employer that covers employees in more than one state. Which of the following aspects is NOT affected by the state regulatory jurisdiction established for this plan? eligibility requirements. required provisions. minimum enrollment percentage. continuation of coverage under COBRA.
Continuation of coverage under COBRA
Linda is covered with long-term care insurance and has early-stage Alzheimer's. She is still about to reside in her home while receiving primary care, as opposed to moving into a nursing home. All of the following long-term benefits encourage home health care EXCEPT Custodial care Home health care Adult day care Respite care
Custodial care
An agreement is reached when an insurance contract is formed. Which of the following is NOT considered to be an element of an agreement Meeting of the minds Offer Acceptance Equity
Equity
An organization that requires healthcare services to be provided by a network of physicians and hospitals is known as a(n) PPO HMO POS HDHP
HMO
James owns a business and purchased a policy that covers the business expense of finding a permanent or temporary employee to replace a disabled one. This type of disability coverage is called Key business coverage key maintenance coverage key employee coverage key employer coverage
Key employee coverage
Which of the following financial products creates an instant estate, no matter when the date of death? Mutual Funds Life Insurance Certified of deposit Deferred annuity
Life Insurance
which of the following is syndicated established by a group of insurers to share underwriting duties? reinsurer Lloyd's organization NAIC Multi-line insurers
Lloyd's organization
A MET third-party administrator may NOT perform which of the following functions? Claims processing Marketing the plan Underwriting the plan Insuring the plan
Marketing the plan
Which of the following relationships demonstrates insurable interest in the absence of economic interest? Lifelong friends Employees Marriage partners Business associates
Marriage partners
Which of these is a type of private insurance that covers the cost=sharing amounts under Medicare? Major medical insurance Medicaid Disability income Medicare Supplement
Medicare Supplement
Medicare Part A coinsurance payments are covered by Part B Medicare Part D Medicare Medicare Supplement Plan A Never covered
Medicare Supplement Plan A
Which individual would be best suited for Medicare Supplement insurance? Medicare enrollee Medicaid enrollee Social Security recipient HMO subscriber
Medicare enrollee
Which of the following does NOT meet the requirements of "skilled nursing care"? Must be ordered by a doctor Must require daily care Must be provided exclusively in a hospital Must be provided by skilled medical practitioners
Must be provided exclusively in a hospital
Specialty care is provided by which of the following health maintenance organization (HMO) providers? Neurologist HMO administrator HMO director Gatekeeper
Neurologist
Which of the following accurately describes a participating insurance policy? Policyowners may be entitled to receive dividends Policyowners pay assessments for company losses Stock companies allow their policy owners to share in any company earnings Policyowners are not entitled to vote for members of the board of directors
Policyowners may be entitled to receive dividends
According to the law of large numbers, how would losses be affected if the number of similar insured units increases? The higher the exposure, the higher the cost of each loss No effect on predicting losses Predictability of losses will be improved Ability to predict losses decreases
Predictability of losses will be improved
Which of the following outlines the authority given to the producer on behalf of the insurer? Rebating arrangement Commingling contract Controlled business clause Producer contract
Producer contract
What type of risk involves the potential for loss with no possibility for gain? Speculative risk Pure risk Adverse risk Morale risk
Pure risk
Which of these statements is NOT a characteristic of the law of large numbers? Individual losses can be predicted based on past experience Group losses can be predicted based on past experience Losses can be predicted in large groups with a higher degree of accuracy Rates can be calculated to compensate for losses
Rates can be calculated to compensate for losses
An insurer has a contractual agreement which transfers a portion of its risk exposure to another insurer. What type of contractual arrangement is this? Coinsurance contract Mutuality agreement Reinsurance contract Reciprocity arrangement
Reinsurance contract
How can an insurance company minimize exposure to loss? Risk concealing Reinsuring risks Reissuance Risk assumption
Reinsuring risks
What is the accounting measurement of an insurance company's future obligations to its policyowners? Credits Reserves Surplus account Retention fund
Reserves
Which of the following can be defined as "the potential for loss"? Hazard Risk Transference Peril
Risk
Which term describes the elimination of a hazard? Risk avoidance Risk retention Risk transference Risk pooling
Risk avoidance
Which of the following describes the act of insuring a risk against possible loss? Risk avoidance Risk transfer Hazard reduction Loss management
Risk transfer
Which one of these is NOT considered to be an element of an insurable risk? Speculative risk Pure risk Loss cannot be catastrophic Loss must be due to chance
Speculative risk
Who regulates an insurer's claim settlement practices? National Association of Claim Adjusters State attorney general National Association of Insurance Commissioners State Insurance department
State Insurance department
Steve has a group disability income policy where the premiums are paid by his employer. He elected to pay for additional residual disability coverage. Which of the following statements is true? Steve's disability benefits are received tax free. the premiums for Steve's disability policy are tax-deductible for Steve. Steve can deduct the premium for the amount he paid for the additional residual disability coverage. Steve will pay taxes on the disability benefit received from his employer, but will receive nay residual disability benefits tax-free.
Steve will pay taxes on the disability benefit received from his employer, but will receive any residual disability benefits tax-free
Which group is the Do Not Registry designed to protect against? Telemarketers Charities Political organizations Relatives
Telemarketers
Which of the following is a true statement regarding a Medicare Supplement policy purchased during the open enrollment period? There will be a reduction in benefits the elimination period will be longer than normal the cost of premiums will be higher than normal the policy will be issued regardless of health
The policy will be issued regardless of health
Which reinsurance contract between two insurers involves an automatic sharing of the risks assumed? Arbitrage reinsurance Facultative reinsurance Excess reinsurance Treaty reinsurance
Treaty reinsurance
Which report contains information regarding an individual's general reputation and credit standing? credit report consumer report MIB report Agent's report
a consumer report
After an applicant reads and signs an insurance application, he/she should be conscious of the fact that a false statement could lead to loss of coverage premium refunds are not allowed the policy is guaranteed to be issued the premium quoted by the agent is final
a false statement could lead to loss of coverage
Medicare can be described as a supplemental income source for individuals over the age of 65 or permanently disabled. a state health program for individuals over the age of 65 or permanently disabled. a federal health program for individuals with financial need. a federal health insurance program for individuals over the age of 65 or permanently disabled
a federal health insurance program for individuals over the age of 65 or permanently disabled
The coinsurance for skilled nursing facility services covered by Medicare after the 100% Medicare coverage ends is 15% of the approved amount 30% of the approved amount a percentage of the approved amount a flat dollar amount per day
a flat dollar amount per day
A health plan offered by private insurance companies is social security medicaid medicare a medicare supplement
a medicare supplement
Multiple Employer Trust (METs)
a method of marketing group benefits to employers who have a small number of employees. this can provie a single type of insurance or a wide range of coverage. to get covered by this you must first become a member.
which of the following best describes a point-of-service (POS) plan? a plan which combines medical health care with long-term care coverage a plan which combines indemnity plan features with those of an HMO a plan which does not allow treatment with non-network providers a plan which operates like a PPO plan without a gatekeeper
a plan which combines indemnity plan features with those of an HMO
Which situation would not require the insured's consent when a life insurance policy is issued? a policy is purchased by a husband for his wife a policy is purchased by a parent for a minor child a policy is purchased by a business partner for another partner a policy is purchased by an employer for an employee
a policy is purchased by a parent for a minor child
what does the term "field underwriting" refer to in the health insurance industry? a producer's contract with the applicant the interaction of an underwriter with the applicant the medical reports issued by the MIB an insurer conducting an investigative report
a producer's contract with the applicant
XYZ Insurance Company gives direct authority to its producers to sell insurance through an agency contract, but nothing is stated regarding the collection of premiums. Which authority grants the producer the right to collect premiums? implied authority apparent authority express authority assumed authority
implied authority
How can a group dental insurer discourage adverse selection? allow pre-existing conditions eliminate deductibles and coinsurance extend open enrollment period limit the duration of coverage
limit the duration of coverage
Custodial care is normally covered under major medical insurance medicare Part B long-term disability insurance Long-term care insurance
long-term care insurnace
A physician who accepts assignment on all Medicare claims is called a(n) participating provider authorized provider registered provider admitted provider
participating provider
the main role of accident and health and disability insurance is to protect against on-the-job injuries and illnesses. protect against medical care costs and the loss of earning power. protect against medical care costs and the loss of earning power. protect against the premature death of the insured. protect against accidents.
protect against medical care costs and the loss of earning power
A Medicare Supplement policy is required to do which of the following? provide a 10 day free-look period provide a 20 day free-look period provide a 30 day free-look period provide a 60 day free-look period
provide a 30 day free-look period
An insured is entitled to coverage under a policy that a prudent person would expect it to provide. This principle is called adhesion reasonable sensibility reasonable expectations insurable interest
reasonable expectation
Kelly purchases a health insurance policy issued on a conditionally renewable basis. The insurance company has a right to refuse renewal of the policy for any change in Kelly's health specific reasons stated in the contract any reason the insurer sees fit profitability reasons
specific reasons stated in the contract
An example of rebating would be using intimidation in order to restrain or monopolize the business of insurance a mutual insurance company paying dividends to its policyowners reducing the premiums across the board for a specific risk class splitting the commission with the buyer on a sale of insurance
splitting the commission with the buyer on a sale of insurance
under which circumstance can an insurance company offer group health insurance? the sponsoring group is composed of totally unrelated members. the sponsoring group was formed for illegal purposes. the sponsoring group provides an employer-employee relationship. the sponsoring group was formed to purchase group insurance at reduced rates.
the sponsoring group providdes an employer-employee relationship
How is an insured's accident and health claim handled by an insurer if it occurs during the policy's grace period? the claim has to be approved by an officer of the insurer no claim will be paid untill premiums is paid current the claim is paid in full and the unpaid premium will be waived by the insurer the unpaid premium may be subtracted from the reimbursement
the unpaid premium may be subtracted from the reimbursement
An insured files for an accident and health insurance policy claim eight days after the premium due date. The benefit payable is $500 and the overdue premium is $200. Assuming that the policy pays on a first-dollar basis and contains the unpaid premium provision, how much will the insurer pay? $0 $200 $300 $500
$300
the minimum grace period for individual sickness and accident insurance policies with monthly premiums is __ days 7 10 14 21
10
Medicare will cover a maximum of how many days per benefit period in a skilled nursing facility? 10 days 30 days 60 days 100 days
100 days
What is the maximum Social Security Disability benefit amount an insured can receive? 50% of the insured's Primary Insurance Amount (PIA) 75% PIA 100% PIA 100% PIA minus any monies received from a retirement plan
100% PIA
The health insurance premiums paid for by each partner in a partnership is considered to be non-deductible 50% tax deductible 75% tax deductible 100% tax deductible
100% tax deductible
Individuals seeking Social Security disability income benefits must have a disability that will eventually lead to death, or be expected to last at least 3 months 6 months 9 months 12 months
12 months
Part A Medicare includes coverage for all of the following services EXCEPT first 60 days of hospitalization 120 days of skilled nursing facility care hospice care inpatient mental health care limited to 190 days in a lifetime
120 days of skilled nursing facility care
the maximum prison sentence given under federal law for unfair and deceptive insurance practices is 15 years 10 years 5 years 1 year
15 years
An insured must notify an insurer of a medical claim within how many days after an accident? 10 20 30 40
20
How many employees must an employer have from the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) to apply? at least 10 at least 15 20 or more 100 or more
20 or more
Nonqualified medical expense distributions from a Health Savings Account (HSA) have a tax penalty of 7.5% 10% 20% 30%
20%
a licensee who is required to take continuing education must complete 24 hours of continuing education, which includes ___ hour(s) of ethics coursework 1 2 3 4
3
Which of the following health plans pay benefits on a pre-paid service basis? Medicare Medicaid group medical expense plans HMO
HMO
An accident and health plan that typically covers ONLY the services of approved providers is called a(n) HMO plan POS plan PPO plan Major medical plan
HMO plan
Terry receives long-term physical therapy at her residence. What type of insurance would cover this service? home health care long-term disability income nursing home respite care
Home health care
For insurance purposes, similar objects which are exposed to the same group of perils are referred to as Homogenous perils Similar exposure units Homogeneous exposure units Common hazards
Homogeneous exposure units
Which of the following is NOT an example of risk retention? Becoming aware of a risk and taking no action Self-insuring a given risk Deciding a business deal is risky but not going through with it anyways Not doing a business deal after deciding it would be too risky
Not doing a business deal after deciding it would be too risky
Dividends from a mutual insurance company are paid to whom? Policyholders Beneficiaries Preferred stockholders Stockholders
Policyholders
What type of risk involves the potential for loss AND the possibility for gain? Homogeneous Adverse Pure Speculative
Speculative
what is normally the consequence for NOT obtaining preadmission certification prior to receiving inpatient medical care? a reduction in benefits a delay in the payment of benefits a cancellation of coverage a taxation of benefits
a reduction in benefits
An accident and health insurance policy defines an injury as "bodily injury by accidental means". For an injury to be covered on this policy, what is required? the accident must be external and violent. the cause of the accident must be intentional. only the injury resulting from an accident must be unintentional. both the cause and resultant injury must be accidental.
accidental means
Disability income insurance normally excludes coverage for disabilities that arise form automobile accidents injuries sustained while traveling abroad occupational injuries active military duty
active military duty
A producer working for an insurance company may be personally liable for acts performed which are expressed in the agency contract acts performed which are prohibited in the agency contract all actions taken on behalf of the insurer nothing
acts performed which are prohibited in the agency contract
Which of the following is NOT covered by a comprehensive long-term care policy? custodial care acute care physical therapy skilled nursing care
acute care
Which of the following statements accurately describes the "time limit on certain defenses"? after a stated period of time, claims cannot be denied to material misrepresentation on the application all claims can be disputed after two years an insured cannot file a lawsuit within 90 days of the claim being filed the right to return an accident and health policy must be within 10 days of policy delivery
after a stated period of time, claims cannot be denied to material misrepresentation on the application
An agent's authority to bind an insurer to an insurance contract may be granted in the agent's contract and the insurance company's appointment agent's license and insurance company's certificate of authority buyer's guide and policy summery state guaranty association
agents contract and the insurance company's appointment
What is a major difference between private commercial insurers and HMO's an HMO pays claims on a fee-for-service basis a private commercial insurer typically has fewer health provider choices an HMO combines medical care delivery and funding in one organization a private commercial insurer only offers individual coverage
an HMO combines medical care delivery and funding in one organization
What is a major difference between private commercial insurers and HMO's? an HMO pays claims on a fee-for-service basis a private commercial insurer typically has fewer health provider choices an HMO combines medical care delivery and funding in one organization. A private commercial insurer only offers individual coverage
an HMO combines medical care delivery and funding in one organization.
a television advertisement features a sickness and accident insurance product that is endorsed by a specific group. In this advertisement, the compensation amount must be disclosed the group must be approved by the Better Business Bureau any control by the insurer over the group must be disclosed the group's officers must be listed
any control by the insurer over the group must be disclosed
According to the Pregnancy Discrimination Act of 1978, employers must treat pregnancy in the same manner as any other medical disability a suspension an unpaid holiday a pre-existing condition
any other medical disability
Use of XYZ Insurance Company brochures, business cards, and rating guides is an example of expresses authority implied authority apparent authority fiduciary duty
apparent authority
An applicant submits an accident and health insurance application where an investigative consumer reports is used in the underwriting process. Which of these statements is true? applicant can determine which items in the report to leave out insurer can obtain a copy of this report without the applicant's knowledge fee for the report is typically paid by the applicant applicant has a right to receive a copy of the report
applicant has a right to receive a copy of the report
in what situation could an insurance policy's coverage be modified? applicant is a preferred risk applicant is substandard risk applicant is a standard risk applicant is uninsurable
applicant is a substandard risk
Julie is in need of assistance with one or two activities of daily living. She may be eligible for a(n) respite care facility hospice facility assisted living facility intermediate care facility
assisted living facilityc
A reciprocal insurer typically has an administrator who manages the premium collected from the group's members. This administrator is called a(n) reciprocal commissioner attorney general attorney-in-fact reciprocal director
attorney-in-fact
in long-term care insurance, what is the length of time for which claims will be paid? Benefit period Free-look period Grace period Elimination period
benefit period
The change of occupation provision in a Disability Income policy states that, in the event the insured changes to a less hazardous occupation, which of the following may apply? benefits will remain the same in the event of a covered claim premiums cannot be adjusted benefits can be increased in the event of a covered claim benefits can be reduced in the event of a covered claim
benefits can be increased in the event of a covered claim
Tim had an on-the-job accident and collects benefits from his individual disability income policy. Which factor could possibly reduce these benefits? state and federal income taxes. benefits he receives from workers compensation. total household income. assistance he receives from friends and family.
benefits he receives from workers compensation
In a disability buy-sell agreement, the policies funding the agreement are owned by the business entity officers shareholders employees
buisnness entity
A disabled business owner who has payroll and business expenses paid for has what kind of insurance policy? key person franchise disability business overhead expense disability income
business ocerhead expense
Tina is insured under a business overhead expense insurance policy. Which of the following would be covered if she were to become disabled? a decrease in the company's valuation business property rental expense Tina's salary dividends owned to shareholders
business property rental expense
Which of these is true regarding the exchange of consideration among parties involved in an insurance contract? required to be in currency must be equal can be unequal must be certified by the state where transaction takes place
can be unequal
what is a Pap test designed to detect? cervical cancer prostate cancer oral cancer breast cancer
cervical cancer
a consultant derives their income from which source? clients NAIC insurance companies resident producers
clients
preferred provider organization (PPO)
collection of health care providers such as physicians, hospitals, and clinics who offer their services to certain groups at prearranged discount prices. in return the group refers its members to the preferred providers for health care services. unlike HMOs, this organization usually operate on a fee-for-service-rendered basis not on a prepaid basis.
The insurer's obligation to pay a claim depends on whether the insured or beneficiary has complied with all policy conditions. This makes the policy a(n) agency agreement aleatory agreement contract of good faith conditional contract
conditional contract
What must be given to an accident and health insurance applicant when the producer receives an application and the initial premium? producer's report conditional receipt commission disclosure good health statement
conditional recept
The payment of the first premium, the promise to pay a covered loss, and the agreement to abide by policy conditions are all examples of consideration legal purpose representation acceptance
consideration
An accident and health insurance policy's premium requirements are set forth in which of the following provisions? insurance clause entire contract clause consideration clause premium mode
consideration clause
The courts will normally interpret a policy in favor of the insured when the meaning of the policy is not clear. This is because an insurance policy is a(n) warranty contract aleatory contract contract of adhesion unilateral contract
contract of adhesion
An insurance application requires an applicant to make a full, accurate disclosure of the risk factor involved. Using this criteria, an insurance policy is considered what type of contract? aleatory contract estoppel contract contract of utmost good faith unilateral contract
contract of utmost good faith
In what situation would disability income insurance premiums be a deductible expense? partnership paying for group disability income coverage for the partners corporation paying for group disability income coverage for its employees individual paying for his/her own individual disability policy parent paying for a child's individual disability policy
corporation paying for group disability income coverage for its employees
Reductions in coverage are one feature of _________ in Health Insurance policies. optional provisions mandatory provisions cost containment the insuring clause
cost containment
Which statement is true about a permanent disability under workers compensations coverage? employee is expected to return to work within 6 months coverage includes nonoccupationally injuries employee is expected to make a full recovery coverage excludes nonoccupationally injuries
coverage excludes nonoccupational injuries
ABC Partnership is a business with a limited number of partners. Which disability buy-sell agreement is best suited for this business? Optional buy-back agreement Entity purchase agreement cross purchase agreement organizational group agreement
cross purchase agreement
What type of doctor-ordered care assists an individual with performing basic daily activities such as bathing, dressing, and eating? custodial care respite care family care domestic care
custodial care
An employer pays the accident and the health insurance premiums for its employees. The premiums paid by the employer are deductible to the business. taxable to the employee. tax-deferred to the business. reimbursed as a tax credit.
deductible to the business
which of these noncontributory group plans would a claim likely result in the payment of federal income taxes? accidental death blanket health major medical disability income
disability income
Social Security OASDI
disability income benefits are available to covered workers who qualify under the requirments. one of the requirements is the individual must be so mentally or physically disabled that he cannot perform any substantial gainful work. must be expected to last at least 12 months or result in early death.
an insurer is required to offer inflation protection to each long-term applicant at the time of purchase. This inflation protection does NOT require evidence of insurability is based on the S&P 500 index requires evidence of insurability is only offered to applicants under the age 60
does NOT require evidence of insurability
Blue Cross and Blue Shield
dominant health insurers of the US. the insurer pays the provider directly for the medical treatment given to the subscriber, instead of reimbursing the insured. As participating providers, the doctors and hospitals contractually agree to specific costs for the medical services provided to the subscribers. (Members are known as subscribers.) These are called prepaid plans because the subscribers pay a set fee for medical services covered under the plan.
Which parties are directly involved in a group accident and health insurance contract? insurer and employees insurer, employees, and employer employer and insurer employer and employees
employer and insurer
Which of the following statements BEST describes employer contributions for employer provided health insurance? Employer is given tax credits for contributions paid. Employee can deduct contributions by the employer. Employer contributions are deductible. Employer contributions are taxable to the employee.
employer contributions are deductible
Christopher is issued an insurance policy that contains an attached agreement which alters the terms of the policy. This attached agreement is called a(n) extension endorsement sanction restriction
endorsement
The benefit period of Medicare Part A begins on the first day the insured notices symptoms enters a hospital becomes eligible for Medicare is diagnosed of an illness
enters a hospital
Which of the following health insurance provisions requires that the application becomes part of the policy? consideration clause insuring clause entire contract clause application clause
entire contract clause
Notice of information practices must be given to a policyholder at least every year every two years every three years every four years
every three years
The difference between a doctor's actual charges and the amount approved by Medicare is referred to as a(n) usual, reasonable, and customary amount. excess charge. deductible. surplus fee.
excess charge
Terry suffers an injury at his workplace which is covered by workers compensation. Terry also has a medical expense insurance policy. Under medical expense insurance policies, losses that are covered by workers compensation are typically excluded from coverage partially covered covered, but requiring a higher deductible and copay subject to age restrictions
excluded from coverage
Employer-paid qualified long-term care insurance premiums are typically deducted from the employee's net income included in the employee's gross income included as a dividend to the employee excluded from the employee's gross income
excluded from the employee's gross income
Long Term policies will usually pay for eligible benefits using which of the following methods? delayed fee for service expense incurred respite
expense incurred
which of the following are used by most insurers when determining the premiums for large groups? large number rating group rating area rating experience rating
experience rating
The power directly given to a producer in an agency contract are called express apparent implied assumed
express
An appointed producer's implied authority is derived from the NAIC express authority the insurer's Certificate of Authority evident authority
express authority
an example of an Unfair Claims Settlement Practice is making it mandatory that proof of loss be provided for each claim requiring a time limit for submitting claims failing promptly investigate and settle legitimate claims paying claims in a timely matter
failing promptly investigate and settle legitimate claims
Federally qualified HMO's must offer dental coverage urgent care family planning services custodial care
family planning services
Where does the primary funding for Medicare Part A come from? private funding insurance company funding state funding federal payroll and self-employment taxes.
federal payroll and self-employment taxes
Medicare Part A does NOT provide coverage for inpatient room and board inpatient prescription meds first 3 pints of blood skilled nursing facility care
first 3 pints of blood
which of these is NOT a factor during the health insurance underwriting process? current residence physical condition occupation former residence
former residence
When the disclosure of an insured's nonpublic information is involved, what is the insurer obligated to do? insurer is not obligated to take any action insurer is obligated to verify that the agent is in compliance give notice, explain, and allow opting out provide the proper NAIC paperwork
give notice, explain, and allow opting out
An insured may be required to sign which document at policy delivery to ensure there has not been any adverse medical conditions since the time of the application? binding receipt good health statement agent's report MIB disclosure
good health statement
Tonya has been diagnosed with kidney failure and is covered by group accident and health insurance through her large employer. Which of these accident and health plans will be primary during the months immediately following her diagnosis? Medicare Medicaid Medicare Supplement Her employer's group accident and health plan.
her employer's group accident and health plan
Lamont has a point-of-service plan and is seeking to obtain health services outside the network. What will likely be the end result? reduction in care given higher out-of-pocket costs increase in premiums denial of specialized services
higher out-of-pocket costs
What can be expected when a preferred provider organization (PPO) patient decides to use a non-PPO? Higher out-of-pocket expenses. Lower out-of-pocket expenses. 100% coverage. No coverage.
higher out-of-pocket expenses
A family counseling benefit is typically offered under which of these coverages? Skilled nursing care respite care home health care hospice care
hospice care
some standard Medicare supplement policies include which benefit? hospice care respite care vision care custodial care
hospice care
which of the following is NOT true of a preferred provider plan? if service is obtained outside the preferred provider plan, benefits are reduced and costs increase. members of the preferred provider plan select from among the preferred providers for needed services. hospitals can only initiate preferred provider plans preferred provider plans can include dental care
hospitals can only initiate preferred provider plans
Medicare
its purpose is to provide hospital and medical expense insurance protction for those aged 65 and oler. also provides protection to any individual who suffers from chronic kidney disease or to those who are receiving social security disability benefits
A characteristic of preferred provider organizations (PPO) is PPOs operate like an HMO on a prepaid basis if service is obtained outside the PPO, benefits are reduced and costs increase PPOs are generally public in nature rather than private Health care providers themselves are barred from forming a PPO due to conflict of interest
if service is obtained outside the PPO, benefits are reduced and costs increase
a characteristic of preferred provider organizations (PPO) is PPOs operate like an HMO on a prepaid basis if services is obtained outside the PPO, benefits are reduced and costs increase PPOs are generally public in nature rather than private health care providers themselves are barred from forming a PPO due to conflict of interest
if services is obtained outside the PPO, benefits are reduced and costs increase
In a staff model HMO, enrollees normally have which of the following pharmacy options available to them? mail-order pharmacy in-house pharmacy captive pharmacy network pharmacies
in-house pharmacy
When must insurable interest for a life insurance contract to be valid? inception of the contract throughout the entire length of the contract when the insured dies during the contestable period
inception of the contract
a health insurance underwriter will most likely view alcohol abuse as a(n) decreased exposure to risk increased exposure to risk condition which cannot be taken into account condition which results in an automatic rejection for coverage
increased exposure to risk
The type of health insurance in which underwriting procedures are the most restrictive is accidental individual group employer-paid
individual
What happens when an initial offer is answered with a counteroffer? an arbitrator decides on a compromise the counteroffer is legally enforceable initial offer is void initial offer is automatically accepted
initial offer is void
Medicare Part A typically covers inpatient drugs custodial care disability income respite care
inpatient drungs
Which of these procedures in NOT designed for ambulatory care centers? inpatient surgery vaccinations outpatient surgery physical examinations
inpatient surgeries
the Medical Information Bureau consists of members from which group? doctors hospitals insurance companies underwriters
insurance companies
Which of these statements reflects an accurate portrayal of Medicare SELECT? insured uses preferred providers in exchange for paying lower premiums evidence of insurability must always be given before enrollment Medicare SELECT is normally subject to deductibles and coinsurance Open enrollment periods do not apply to Medicare SELECT plans
insured uses preferred providers in exchange for paying lower premiums
who is required to notify the producer in the even of appointment termination? governor superintendent attorney general insurer
insurer
Which health policy clause specifies the amount of benefits to be paid? insuring consideration free-look payment mode
insuring
Andy is in need of health care performed by skilled medical practitioners, but only on an intermittent basis. What level of care will his doctor likely prescribe? Respite care Intermediate care Custodial care Skilled nursing care
intermediate care
In what way are insurance policies said to be aleatory? only one party makes any kind of enforceable promise involves the potential for the unequal exchange of value contract is prepared by only one party vagueness in a contract's wording is resolved in favor of the policyowner
involves the potential for the unequal exchange of value
TRI-CARE
is a federal goverment accident and health plan which provides accident and health coverage to military services members and their families
multiple employer welfare arrangement (MEWA)
is a type of MET. consists of a small employers who have joined to provide health benefits for their employees, often on a self-insured basis. they are tax-exempt entities. employees covered by this are required by law to have an employment related common bond
which of the following statements regarding hospital pre-admission authorization is NOT true? no delays for emergency treatment it encourages weekend admission non-emergency situations require notification to the insurance company other types of treatment may be encouraged
it encourages weekend admission
the initial premium for an accident and health insurance policy is typically paid in what way? the applicant mails it to the insurer after the policy has been approved it is typically obtained by the agent and forwarded to the insurer it is typically forwarded to the insurer by the applicant the agent pays it from any commissions received
it is typically obtained by the agent and forwarded to the insurer
all of these are duties that a producer may required to perform when delivering an insurance policy EXCEPT acquire a statement of good health signature gather the initial premium review policy with applicant leave a conditional receipt with client
leave a conditional receipt with client
Which of the following financial products creates an instant estate, no matter when the date of death? mutual funds life insurance certificate of deposit deferred annuity
life insurance
Which of these do NOT indicate the presence of insurable interest in a life insurance contract? Lifelong friendship marriage blood-related co-owning a business
lifelong friendship
Inpatient psychiatric care is covered under Part A Medicare insurance for 190 days per billing period hospital visit year lifetime
lifetime
What action can an insurer take to discourage malingering and false disability claims? the insurer can selectively refuse a disability claim for specific diseases. the probation period can be increased for specific injuries. limit the amount of benefits an insured can receive from two disability policies with the same insurer. a premium rating can be given to an insured with more than on epolicy with the same insurer.
limit the amount of benefits an insred can receive from two disability policies with the same innsurer
an insurance policy may be issued with a preferred insurance premium in all of these situations EXCEPT good credit history living in a rural area good health history being a nonsmoker
living in a rural area
Employees generally receive workers compensation benefits for only medical expenses due to occupational accidents. employment termination. lost wages and medical expenses due to occupational accidents. only lost wages due to accidents that occur on the job.
lost wages and medical expenses due to occupational accidents.
Which of the following situations would an insurance agent need to guard against liability for professional errors and omissions? remitting premiums to an insurer conducting a sales meeting with other agents making a recommendation to a potential insured to replace existing coverage setting a sales appointment with a potential client
making a recommendation to a potential insured to replace existing coverage
Risk ____ is the process of analyzing exposures that create risk and designing programs to handle them. acceptance management administration transfer
management
An insurance contract may be voided if a misrepresentation found on the application is determined to be conditional aleatory material intentional
material
Greg applies for insurance and makes a false statement on the application that will influence whether or not the insurer will accept the risk. Greg's false statement is called a(n) substandard representation unacceptable risk material misrepresentation adverse selection
material misrepresentation
Medicare Supplement insurance requires an individual to be at least how old for open enrollment? 59 1/2 years old 65 years old 70 1/2 years old no minimum age
no minimum age
Tim is covered by an accident and health insurance policy that may not be changed in any way by the insurer up to a stated age, as long as the premiums are paid. What type of policy is this? optionally renewable noncancelable guaranteed renewable conditionally renewable
noncancelable
Which of the following health insurance plans charges a premium that cannot be increased? guaranteed renewable cancelable noncancelable conditionally renewable
noncancelable
An agent whose actions exceed the authority granted by contract is acting under apparent authority acting under implied authority not backed by the insurer backed by the insurer
not backed by the insurer
which statement is true regarding hospital preadmission certification of emergency situations? notification is not required for emergency situations insured cannot be admitted without preadmissions certification notification is required to be given before insured is admitted to the hospital notification is required to be given after insured is admitted to the hospital
notification is required to be given after insured is admitted to the hospital
an insured is covered with a health insurance policy. If the insured would like to cancel the policy, he/she must wait until the end of the calendar year notify the insurance company in writing notify the insurance company by telephone provide a reason for cancelling
notify the insurance company in writing
Which element of a contract constitutes a definite and unqualified proposal by one party to another? adhesion consideration acceptance offer
offer
Service providers
offer benefits to subscriers in return for the payment of a premium. Benefits are in the form of services provided by hospitals and physicins in the plan
typically, working individuals age 65 or over must be offered the same health benefits as the younger employees. covered by Medicare exclusively. paying a higher premium than younger employees. covered by a Medicare Supplement policy.
offered the same Health benefits as the younger employees
health maintenance organization (HO)
offers comprehensive prepaid health services to its subscribing members. They not only finance health care sercices for their members on a prepayment basis, but also organize and deliver the health services as well. the subscribers pay a fixed periodic fee to this as opposed to paying for services only when needed and are provided with a broad range of health services, from routine doctor visits to emergency and hospital care.
Insurable interest involves what assumption insurable interest must exist during the entire life of the insured one person gains from the death of another person one person benefits from another person's continued life insurable interest must only exist at the time of the insured's death
one person benefits from the other person's continued life
All of these statements correctly describe an aleatory contract EXCEPT a legal wager is considered an aleatory contract potential unequal exchange of value for both parties only one party makes any kind of legally enforceable offer element of chance is involved
only one party makes any kind of legally enforceable offer
Julie is an employee with a group health plan that contains the Mandatory Second Surgical Opinion provision. What is to be expected with this provision in place? mandatory second surgical options are required when emergency surgery is needed the second surgical option must always be accepted by the insured out-of-pocket expenses are higher when a second surgical option is obtained as opposed to having only one out-of-pocket expenses are lower when a second surgical opinion is obtained as opposed to having only one
out-of-pocket expenses are lower when a second surgical opinion is obtained as opposed to having only one
Which would NOT be a location where skilled nursing care is provided? Hospital Custodial care facility Nursing home Personal residence
personal residence
A health insurance applicant is notified that a physical examination is required. Which of the following statements is correct? physical examinations are performed at the expense of the applicant physical examinations are performed at the expense of the insurer all applicants for group health insurance require a physical examination all applicants for health insurance do not require a physical examination
physical examinations are performed at the expense of the insurer
Which of these is NOT a factor that influences group health insurance underwriting? physical exams of group members. number of individuals in the group. group's claims experience. type of occupation group is involved in.
physical exams of group members
which of these plans allow a participant to choose either a network or a non-network provider at the time when medical care is needed? HMO Medicare Supplement Point-of-service Limited benefit
point-of-service
which of the following statements BEST describes disability buy-sell insurance policies? benefits are taxable to the business entity. premiums are typically tax-deductible. policy proceeds are typically received income tax-free. benefits are paid to the disabled insured.
policy proceeds are typically received income tax-free
the standard provisions of an accident and health insurance policy require that the policy, endorsements, and attached paper constitute the "entire contract" policy summer, conditional receipt, and initial premium constitute the "entire contract" change of occupation provision is mandatory grace period be no shorter than 60 days
policy, endorsements, and attached paper constitute the "entire contract"
whose interests are being protected under replacement rules? beneficiary insurer policyowner producer
policyowner
which of the following accurately describes a participating insurance policy? policyowners may be entitled to receive dividends policyowners pay assessments for company losses stock companies allow their policyowners to share in any company earnings policyowners are not entitled to vote for members of the board of directors
policyowners may be entitled to receive dividends
Patrick purchased a long-term care policy. He has a health condition for which medical treatment was recommended by a physician within 6 months prior to the policy's effective date. This condition is called a(n) antecedent condition pre-existing condition hazardous condition grandfathered condition
pre-existing condition
The law of large numbers enables an insurer to predict losses avoid adverse selection classify rates assure company profits
predict losses
A Guaranteed Renewable provision allows discrimination of individuals who have an increased loss experience premiums that may not be increased beyond contractual requirements premiums which can only be increased per rate class cancellation of the policy at the insurer's discretion
premiums which can only be increased per rate class
A guaranteed renewable provision allows discrimination of individuals who have an increased loss experience premiums that may not be increased beyond contractual requirements premiums which can only be increased per rate class cancellation of the policy at the insurer's discretion
premiums which can only be increased per rate class
Home health care benefits typically do NOT include coverage for nursing care wheelchairs physical therapy prescription medication
prescription medication
Karen is a health maintenance organization (HMO) subscriber. Who provides all of her preventative and routine care? Primary care physician Provider specialist Preventative coordinator HMO director
primary care physician
Which of the following does NOT fall under "hospital care" in a typical health maintenance organization (HMO) plan? private duty nursing inpatient x-rays inpatient mental health care inpatient lab services
private duty nursing
Alan is an enrollee of a health maintenance Organization (HMO) which uses a gatekeeper system. If there ever comes a time when he needs emergency health services, what should he do? Receive permission from the primary physician to begin treatment. Call the HMO to verify coverage. Proceed to the nearest emergency room. Contact the HMO for a listing of approved providers.
proceed to the nearest emergency room
when a producer submits an application that discloses personal information regarding the applicant, who supplies the privacy notice? producer insurer underwritter fiduciary
producer
the authority for a producer to bind an insurer to an insurance contract is found in the producer's appointment notary agreement bonded accord certificate of authority
producer's appointment
A certificate of coverage for a group health policy is best described as a contract between the employer and employee. a contract between the employer and the insurer. proof of coverage for the employee. proof of coverage for the employer.
proof of coverage for the employee
Group accident and health insurance may be offered by an insurer when the sponsoring group was formed to purchase insurance. provides individual evidence of insurability of its group members. provides an employer-employee relationship. consists of unrelate members.
provides an employer-employee relationship
Medicaid
purpose is to provide matching federal fund to states for their medical public assistance plans to help needy persons, regarless of age. the benefits are gerally payable to low income individuals who are blind, disabled, or under 21 years of age. benefits may be applied to medicare deductibles and copayment requirements.v
Ambiguities in insurance contracts are typically interpreted in favor of the insured. This rule is referred to as subrogation reasonable expectations insurable interest adhesion
reasonable expectations
Which of the following is NOT a reason the government provides insurance? stimulate economic development reduce fraudulent claims ensure social needs are being met increase availability of health coverage
reduce fraudulent claims
ABC Company is attempting to minimize the severity of potential losses within its company. The company is engaged in risk transference retention reduction avoidance
reduction
which of these is NOT an Unfair Claims Settlement Practice? Misrepresenting pertinent policy provisions relating to coverage after loss refusing to pay persons bringing false or fraudulent claims compelling insureds to initiate a lawsuit by offering less on insurance claims failing to acknowledge and act promptly with respect to insurance claims
refusing to pay persons bringing false or fraudulent claims
Which type of policy pays benefits to a policyholder covered under a Hospital Expense policy? limited special risk reimbursement blanket
reimbursement
Which of the following is NOT a basic underwriting action for accident and health insurance? excluding a particular health condition from coverage removing uniform policy provisions declining applications issuing a policy at standard issue
removing uniform policy provisions
Statements made by an insured on an accident and health insurance application are considered to be representations warranties conditional aleatory
representations
What is the accounting measurement of an insurance company's future obligations to its policyowners? credits reserves surplus account retention fund
reserves
What is the insurer responsible for when a producer is acting within the scope of authority granted in the agency contract? all actions by the producer not responsible for any act by the producer responsible for acts that involve misrepresentation only responsible for acts by the producer that are authority only
responsible for the acts by the producer that are authority only
When a health insurance policy includes a Mandatory Second Surgical Opinion provision, the insured must cover the cost of the second opinion seek a second opinion for all surgeries seek a second opinion for specified elective surgeries seek a second opinion for emergency surgery
seek a second opinion for specified elective surgeries
which of these is NOT considered the responsibility of a producer in the underwriting process? collecting additional medical information if needed promptly sending the completed application to the insurance company forwarding any material personal observations to the insurer selecting the final approval date
selecting the final approval date
A stock insurance company is owned by its ________ officers board of directors policyowners shareholders
shareholders
Dividends from a stock insurance company are normally sent to beneficiaries shareholders policyowners insureds
shareholders
Laura is a new employee and will be obtaining non-contributory group Major Medical insurance from her employer. Which of the following actions must she take during the open enrollment period? authorize for payroll deductions. agree to a physical examination. sign an enrollment card. register with her state of residency.
sign an enrollment card
Medicare Part A covers which type of care? skilled nursing facility care custodial care respite care intermediate nursing facility care
skilled nursing facility care
Which of the following would NOT have a restricted ability to enter into a contract? Mentally ill person minor person under the influence of alcohol small employer
small employer
An individual may receive Medicare Part A Hospital benefits, regardless of age, as long as the person has received which of the following benefits for at least 24 months? unemployment workers compensation Medicaid social security disability
social security disability
Rick provides a notice of claim to his sickness and accident insurer. If he does not receive a claim form within 15 days, he may comply with the proof of loss provision by providing a letter from his personal physician waiting 90 days and filling a compliant with the Governor submitting verbal proof of loss submitting written proof of loss
submitting written proof of loss
Qualified long-term care premiums are treated for tax purposes as qualified retirement plans always non-deductible 100% tax-deductible tax-deductible to the extent they exceed 7 1/2% AGI
tax-deductible to the extent they exceed 7 1/2% AGI
An insurable risk requires that the chance for both a loss or gain exists the loss must be catastrophic that the chance of loss be calculable that the loss must be incalculable
that the chance of loss be calculable
All parts of the Medicare program (except for public information and enrollment) are administered by which federal agency? the ACA the Social Security Administration The Department of Homeland Security The Centers for Medicare and Medicaid Services
the Centers for Medicare and Medcaid Services
Which statement concerning the Entire Contract provision in an individual accident and health insurance policy is TRUE? the agent can waive policy provisions and change the policy with the insurer's consent the agent has the authority to waive the policy's provisions under certain conditions the agent has the authority to change the policy under certain conditions the agent doesn't have the authority to change the policy or waive its provisions
the agent doesn't have the authority to change the policy or waive its provisions
Why might it be beneficial for an employee to purchase private disability income insurance for workplace injuries when he/she is already covered by worker's compensation? Loss of income that results from a workplace injury is not covered by worker's compensation. Worker's comp claims require a lengthy elimination period before benefits are paid. worker's comp benefits are taxable and additional coverage needs to be purchased to offset the tax. the benefits arising from a worker's compensation claim could be inadequate to replace the loss of income.
the benefits arising from a worker's compensation claim could be inadequate to replace the loss of income.
why might it be beneficial for an employee to purchase private disability income insurance for workplace injuries when he/she is already covered by worker's compensation? loss of income that results from a workplace injury is not covered by worker's compensation worker's compensation claims require a lengthy elimination period before benefits are paid workers compensation benefits are taxable and additional coverage needs to be purchased to offset the tax the benefits arising from a workers compensation claim could be inadequate to replace the loss of income
the benefits arising from a workers compensation claim could be inadequate to replace the loss of income
K is an agent who takes an application for individual life insurance and accepts a check from the client. He submits the application and check to the insurance company, however the check was never signed by the applicant. If the application is approved, when will coverage be effective? the date the sales appointment was made the date the application was submitted to the insurance company the date of application the date the producer delivered the policy, collected the initial premium, and obtained a good health statement from the insured
the date the producer delivered the policy, collected the initial premium, and obtained a good health statement from the insured
The insured's consideration given for a health insurance policy is the first premium payment and the application the initial premium payment only the application the initial premium and an investigative report
the first premium payment and the application
who may terminate coverage under a cancelable health insurance policy? the insured only the insurer only the insurer or the insured an officer of the insurer
the insured or the insurer
Under the Law of Agency, the principal is considered to be the producer the insurer the plan administrator the insured
the insurer
An arrangement where an individual is authorized to act on behalf of another person or company is established through estoppel the law of agency the law of adhesion an aleatory contract
the law of agency
in accident and health insurance, field underwriting is very important because of the protection given to the producer's commission the opportunity to charge a higher premium inflation the risk of a moral hazard
the risk of moral hazard
how is a community rating used for underwriting purposes? each member of a large group is individually underwritten each individual group plan in the same geographical area is individually underwritten the same rates are charged for individual and group plans in the same risk category the same rates are changed for individual and group plans in the same geographical area
the same rates are changed for individual and group plans in the same geographical area
A business becoming incorporated is an example of risk _____. reduction severance retention transfer
transfer
A hold-harmless clause is an example of risk avoidance retention transfer sharing
transfer
Purchasing insurance is an example of risk transference avoidance retention sharing
transference
The grouping of two or more small employers in order to obtain group health insurance at a favorable rate is called a multiple employer grouping trust alliance corporation
trust
An insurance company's failure to enforce a contract's provision is called a(n) waiver warranty assignment concealment
waiver
Giving up a known right on a voluntary basis is called a(n) disclaimer estoppel waiver surrender
waiver
An insurance company can be liable for a producer's unauthorized act only when a felony is involved when the agency contract is unclear concerning the authority given at anytime only if the agency contract is unilateral
when the agency contract is unclear concerning the authority given
