final exam questions health and life insurance exam

Z owns a Disability Income policy with a 30-day Elimination period. Z contracts pneumonia that leaves him unable to work from January 1 until January 15. Z then becomes disabled from an accident on February 1 and the disability lasts until July 1 the same year. Z will become eligible to receive benefits starting on:

March 1

Which of these factors do NOT play a role in the underwriting of a health insurance policy?

Marital status

Which of the following statements about Individual Accident and Health minimum standards is CORRECT?

Minimum standards apply to policy definitions as well as to benefits

What type of renewability guarantees premium rates and renewability?

Noncancellable

Which of the following BEST describes a short-term medical expense policy?

Nonrenewable

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

November 1

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

PPO's are NOT a type of managed care systems

Which of the following health insurance coverages is BEST suited for meeting the expenses of catastrophic illness?

Major Medical

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

Payment of Claims

Which Long Term Care insurance statement is true?

Pre-existing conditions must be covered after the coverage has been in force for six months

The policy provision that entitles the insurer to establish conditions the insured must meet while a claim is pending is:

Time Limit on Certain Defenses

Which Accident and Health policy provision addresses preexisting conditions?

Time Limit on Certain Defenses

The rules pertaining to senior-specific certifications and professional designations do NOT apply to which of the following types of coverage?

Title insurance

A Business Overhead Expense policy would cover which of the following if a business owner becomes disabled?

Utilities and office rent

In Virginia, COBRA permits terminated employees to receive which of the following?

Continued coverage in group health plan

T and S are named co-primary beneficiaries on a $500,000 Accidental Death and Dismemberment policy insuring their father. Their mother was named contingent beneficiary. Five years later, S dies of natural causes and the father is killed in a scuba accident shortly afterwards. How much of the death benefit will the mother receive?

$0

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

$25,000

J's Major Medical policy has a $2,000 deductible and an 80/20 Coinsurance clause. If J is hospitalized and receives a bill for $10,000, J would pay:

$3,600

What is the maximum Social Security Disability benefit amount an insured can receive?

100% of the insured's Primary Insurance Amount (PIA)

An insurer must provide an insured with claim forms within __ days after receiving notice of a loss.

15 days

To renew an insurance license, the agent holding 2 types of licenses must complete how many continuing education credits by December 31 in even numbered years?

24 credits

A Qualified Long Term Care policy requires the Free Look provision to refund 100% of premiums paid within how many days of policy delivery?

30 days

An insurance agent must notify the Bureau of Insurance of a change of residential address within how many calendar days?

30 days

When does a Probationary Period provision become effective in a health insurance contract?

30 days after the policy's inception

According to the Mandatory Uniform Policy Provisions, what is the maximum amount of time after the premium due date during which the policy remains in force even though the premium has not been paid?

31 days

After a hearing, the State Corporation Commission may order an agent who willfully violates any provision of the insurance code to pay a MAXIMUM penalty per violation of

5000 $

An agent may share commissions with which of the following individuals?

A licensed agent with the same license type

Which of the following statements describes what an Accident and Health policyowner may NOT do?

Adjust the premium payments

Which of the following individuals is required to hold an appointment with an insurance company which they represent?

An agent

When an insurance application is taken by a producer, which of these statements is true?

Any changes made on the application require the applicant's initials

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

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

G is an accountant who has ten employees and is concerned about how the business would survive financially if G became disabled. The type of policy which BEST addresses this concern is:

Business Overhead Expense

Which health policy clause specifies the amount of benefits to be paid?

Insuring

M applies for a health insurance policy and pays the initial premium. When the agent completes the application, a conditional receipt is left with the applicant. The insurance company's underwriting department request's M's medical records and determines that M has had asthma for many years. All of the following are probable underwriting outcomes, EXCEPT:

Changing the policy's provisions

P is a Major Medical policyowner who is hospitalized as a result of injuries sustained from participating in a carjacking. How will the insurer most likely handle this claim?

Claim will be denied

A Disability Income policyowner recently submitted a claim for a chronic neck problem that has now resulted in total disability. The original neck injury occurred before the application was taken 5 years prior. The neck injury was never disclosed to the insurer at the time of application. How will the insurer handle this claim?

Claim will be paid and coverage will remain in force

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

Insuring clause

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

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

Each agent shall complete all continuing education requirements by no later than November 30, and shall be given a final opportunity to complete such requirements by

December 31 every even year

A CEO's personal assistant suffered injuries at home and as a result, was unable to work for four months. Which type of policy will pay a monthly benefit to the personal assistant?

Disability Income

Which of the following does Social Security NOT provide benefits for?

Dismemberment

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

Entire Contract provision

The Commission in Virginia has the power to

Examine insurer solvency

Which of the following is NOT included in the policy face?

Exclusions

After an insured gives notice of loss, what must he/she do if the insurer does not furnish forms?

File written proof of loss

What action should a producer take if the initial premium is NOT submitted with the application?

Forward the application to the insurer without the initial premium

Which of these is considered a true statement regarding Medicaid?

Funded by both state and federal governments

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

HMO

Which of the following types of organizations are prepaid group health plans, where members pay in advance for the services of participating physicians and hospitals that have agreements?

HMO

Who makes the legally enforceable promises in a unilateral insurance policy?

Insurance company

According to Virginia HIPAA regulations, a health insurance issuer of individual policies may discontinue coverage in each of the following situations EXCEPT

Insured's health status has declined

In Virginia, records must be kept for each of the following insurance transactions EXCEPT

Premium quotes not accepted by the insured or prospective insured

Which of the following statements about a Guaranteed Renewable Health Insurance policy is CORRECT?

Premiums normally increase at time of renewal

What is the purpose of the Time of Payment of Claims provision?

Prevents delayed claim payments made by the insurer

K is the insured and P is the sole beneficiary on an Accidental Death and Dismemberment (AD&D) insurance policy. Both are involved in a fatal accident where K dies before P. Under the Common Disaster provision, which of these statements is true?

Proceeds will be paid to P's estate

An insurance licensee is required to provide records of insurance transactions to the State Corporation Commission

Promptly upon request for examination of the licensee

K failed to pay a renewal premium within the time granted by the insurer. K then sends in a payment which the insurer subsequently accepts. Which policy provision specifies that coverage may be restored in this situation?

Reinstatement

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

Services are reimbursed after insurer receives the invoice

P is a producer who notices 5 questions on a health application were not answered. What actions should P take?

Set up a meeting with the applicant to answer the remaining questions

The insuring clause

States the scope and limits of the coverage

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

Substandard applicants are never declined by underwriters

Which of the following costs would a Basic Hospital/Surgical policy likely cover?

Surgically removing a facial birthmark

Which of the following actions is considered an Adverse Underwriting Decision?

Terminating insurance coverage

What would the Medical Information Bureau (MIB) identify?

Testing positive for marijuana use from a previous screening

Testimonials used in Accident & Health insurance must meet all of the following requirements EXCEPT

They must be approved by the Virginia Commissioner of Insurance

T files a claim on his Accident and Health policy after being treated for an illness. The insurance company believes that T misrepresented his actual health on the initial insurance application and is, therefore, disputing the claim's validity. The provision that limits the time period during which the company may dispute a claim's validity is called:

Time Limit on Certain Defenses

The Virginia organization responsible for approving all continuing education instructors, continuing education courses, and programs of instruction for insurance agents is the

Virginia Insurance Continuing Education Board

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

Waiting Period

At what point does an informal contract become binding?

When one party makes an offer and the other party accepts that offer

If an individual has an Accidental Death and Dismemberment policy and dies, an autopsy can be performed in all these situations, EXCEPT:

When the state prohibits this by law

When soliciting a Medicare Supplement policy, an insurance agent should advise an applicant that the

agent is there to determine what, if any, policy is appropriate for the purchaser, considering existing coverage

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

beneFITS HAVE NO MAXIMUM LIMIT

The Consolidated Omnibus Budget Reconciliation Act (COBRA) gives workers (and their families) whose employment has been terminated the right to:

continue group health benefits

A person who issues false written or oral statements that are maliciously critical of the financial condition of an insurance company may be found guilty of

defamation

An insurance agent's license may be suspended or revoked if the agent has

engaged in twisting

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

excluded by the insurer in the contract provisions

The sections of an insurance contract which limit coverage are called:

exclusions

An advertisement stating that an agent is licensed for a line of authority, when that agent is not licensed for that line of authority, is

false advertising

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

fixed business expenses

An insurance company may NOT reject a prospective insured's insurance application on the basis of which of the following factors?

gender

The Health Insurance Portability and Accountability Act (HIPAA) gives privacy protection for:

health information

An insurer receives proof of loss for an acceptable medical expense claim under an Individual Health Insurance Policy. Under the Time of Payment of Claims provision, the insurer MUST pay the benefits:

immediately

Insurance agents MUST maintain premiums in a fiduciary capacity and remit them

in the ordinary course of business

An Accident & Health policy must provide Essential Benefits without annual and lifetime limits when purchased

individually or with group coverage through the Federal Marketplace

The phrase "This policy will only pay for a semi-private room" is an example of a(n):

internal limit

Insurance policies are considered aleatory contracts because

performance is conditioned upon a future occurrence

Insurance agents who must maintain premiums in a fiduciary account may withdraw funds from the account to pay all of the following expenses EXCEPT

personal medical expenses

Under the Affordable Care Act (ACA), all of the following coverages must be provided EXCEPT

plastic surgery

The Coordination of Benefits provision:

prevents an insured covered by two health plans from making a profit on a covered loss

During the appeal period, an agent may successfully appeal license termination due to continuing education requirements if

proof of compliance is provided

The Legal Actions provision of an insurance contract is designed to do all of the following, EXCEPT:

protect the producer

Insurance companies and agents must implement an information security program to accomplish each of the following EXCEPT

provide policyholder lists to the Commissioner of Insurance

The act of offering an applicant something of value as an inducement to purchase a policy of insurance is

rebating

Licensed agents are NOT required by the Virginia Code to keep

records of premium quotations that are not accepted by the insured

Which of the following is NOT an unfair trade practice?

reinsurance

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

submit the claim in any form

An assignment of benefits of a Health Policy:

transfers payments to someone other than the policyowner

An insurer who quotes different policy rates to individuals in the same class of risk may be guilty of

unfair discrimination

In an insurance contract, the insurer is the only party who makes a legally enforceable promise. What kind of contract is this?

unilateral