EXAMFX Simulated exam

A producer has just received his insurance license. For how many days may the producer initially transact insurance for an insurer without an appointment? (Choose from the following options) 1. 0 days 2. 10 days 3. 15 days 4. 60 days

15 days

In the event a policy lapses due to nonpayment of premium, within how many days would the policy be automatically reinstated once the outstanding premium is paid? a) 10 b) 25 c) 30 d) 45

30 days

A 63-year-old man is planning to be employed until age 68. When will he be eligible for Medicare? (Choose from the following options) 1. Age 70, if still employed 2. Age 69 ½ if no longer employed 3. Age 65, regardless of his employment status 4. As soon as he retires at age 68

Age 65, regardless of his employment status

Which describes the features of a comprehensive major medical policy? a)There is no coinsurance. b)Basic medical expense benefits are provided in a single package. c)The deductible is always expressed as deferred amount. d)It is the same as major medical insurance.

Basic medical expense benefits are provided in a single package.

HMOs that compensate their health care providers based upon a predetermined payment amount per enrollee for a specified period of time, in exchange for providing a defined set of covered health care services, regardless of the amount of services actually provided, are said to be operating on which method? a)Service for a fee b)Capitation c)Preferred Provider d)Indemnity

Capitation

Because an insurance policy is a legal contract, it must conform to the state laws governing contracts which require all of the following elements EXCEPT a)Conditions. b)Consideration. c)Legal purpose. d)Offer and acceptance.

Conditions

Who can take a tax deduction for their share of the Social Security tax? a)No one b)Employees only c)Employers only d)Employees and employers

Employers only

The insurance policy, together with the policy application and any added riders form what is known as a)Contract of adhesion. b)Whole life policy. c)Entire contract. d)Certificate of coverage.

Entire contract

Which of the following best describes the aleatory nature of an insurance contract? a)Only one of the parties being legally bound by the contract b)Ambiguities are interpreted in favor of the insured c)Policies are submitted to the insurer on a take-it-or-leave-it basis d)Exchange of unequal values

Exchange of unequal values

Which of the following statements is NOT correct concerning the COBRA Act of 1985? a)It covers terminated employees and/or their dependents for up to 36 months after a qualifying event. b)It applies only to employers with 20 or more employees that maintain group health insurance plans for employees. c)COBRA stands for Consolidated Omnibus Budget Reconciliation Act. d)It requires all employers, regardless of the number or age of employees, to provide extended group health coverage.

It requires all employers, regardless of the number or age of employees, to provide extended group health coverage.

The Kentucky Life and Health Guaranty Association maintains all of the following accounts EXCEPT a)Annuities. b)Health insurance. c)Liability insurance. d)Life insurance.

Liability insurance

When Bob filled out an application for health insurance, he accidentally misstated the time period during which he was treated for acid reflux. If he had recorded this information correctly, his insurer would have charged a higher premium. When Bob is treated for erosive esophagitis 3 years after the policy's effective date, the insurer discovers the error. Which of the following is most likely true? a)Bob will be required to pay the "extra" premium that he would have been charged. b)Nothing, assuming that Bob's misstatement is found to be an honest mistake. c)Bob will be required to pay all medical bills related to erosive esophagitis. d)Bob's policy will be terminated.

Nothing, assuming that Bob's misstatement is found to be an honest mistake.

.Which is true regarding the Uniform Individual Accident and Sickness Policy Provisions Law? (Choose from the following options) 1. The purpose of the provision is to define the right of the policyholder; there is a separate law outlining the rights of insurers. 2. There are ten mandatory provisions. 3. There are twelve optional policy provisions. 4. Provisions may be reworded by the insurer.

Provisions may be reworded by the insurer

Which is true regarding obtaining underwriting sources? a)The insurer does not need to inform the applicant of how the information is gathered; informing only of the source is sufficient. b)The insurer only needs to inform the applicant of how the information is being gathered; it is not necessary to disclose the sources. c)It is illegal to obtain information from outside sources in order to determine an applicant's insurability. d)The applicant must be informed of the sources contacted and how the information is being gathered.

The applicant must be informed of the sources contacted and how the information is being gathered.

A hearing may be held when requested in writing, when required by the Insurance Code, or when a)The Governor feels it would be beneficial. b)An insurance company feels it should be required. c)A foreign insurance company is involved. d)The Commissioner finds it necessary.

The commissioner finds it necessary

When Linda suffered a broken hip, she notified her agent, in writing, within 12 days of the loss. However, her agent did not notify the insurance company until 60 days after the loss. Which of the following statements correctly explains how this claim would be handled? a)The insurer is considered to be notified since the notification to agent equals notification to the insurer. b)The insurer may delay the payment of this claim for up to 6 months. c)The insurer may settle this claim for less than it otherwise would have had the notification been provided in a timely manner. d)The insurer may deny the claim since it was not notified within the required 20-day time frame.

The insurer is considered to be notified since the notification to agent equals notification to the insurer.

A health insurance policy may cover all of the following risks EXCEPT a)War-related injuries. b)Dental expenses. c)Loss of income due to disability. d)Medical expenses.

War related injuries

A hospital indemnity policy will pay a)A benefit for each day the insured is in a hospital. b)Income lost while the insured is in the hospital. c)All expenses incurred by the stay in the hospital. d)Any expenses incurred by the stay in the hospital, minus coinsurance payments and deductibles.

a benefit for each day the insured is in a hospital

In disability income insurance, the time between the onset of an injury or sickness and when benefits begin is known as the (Choose from the following options) a) Enrollment period. b) Probationary period. c) Elimination period. d) Qualification period.

elimination period

How many pints of blood will be paid for by Medicare Supplement core benefits? (Choose from the following options) 1. None; Medicare pays for it al l2. Everything after first 3 3. 1 pint 4. First 3

first 3

Where are the execution agreements found in a health insurance application? (Choose from the following options) a)Before the section to be filled in by the soliciting agent b) At the very beginning c) Immediately preceding the applicant's signature d) At the very end

immediately preceding the applicants signature

Which of the following is NOT a penalty for willful violation of a Commissioner's order by an insurer? a)Revocation of the certificate of authority b)An administrative fine c)Imprisonment d)A desist order

imprisonment

In which of the following locations would skilled care most likely be provided? a)At a physician's office b)In an institutional setting c)At the patient's home d)In an outpatient setting

in an institutional setting

.Which type of a hospital policy pays a fixed amount each day that the insured is in a hospital? (Choose from the following options) 1. Indemnity 2. Surgical 3. Blanket 4. Medigap

indemnity

Which of the following describes taxation of individual disability income insurance premiums and benefits? a)Premiums are tax deductible, and benefits are taxable. b)Premiums are not tax deductible, and benefits are not taxable. c)Premiums are not tax deductible, but benefits are taxable. d)Premiums are tax deductible, but benefits are not taxable.

premiums are not tax deductible, and benefits are not taxable

An insured who has an Accidental Death and Dismemberment policy loses her left arm in an accident. What type of benefit will she most likely receive from this policy? (Choose from the following options) 1. The principal amount in monthly installments 2. The capital amount in a lump sum 3. The principal amount in a lump sum 4. The capital amount in monthly installments

the capital amount in a lump sum

Under a health insurance policy, benefits, other than death benefits, that have not otherwise been assigned, will be paid to a)Creditors. b)Beneficiary of the death benefit. c)The spouse of the insured. d)The insured.

the insured

How soon following the occurrence of a covered loss must an insured submit written proof of such loss to the insurance company? (Choose from the following options) 1. As soon as possible 2. Within 20 days 3. Within 60 days 4. Within 90 days or as soon as reasonably possible, but not to exceed 1 year

within 90 days or as soon as reasonably possible, but not to exceed 1 year