HEALTH insurance
An agent who sells an individual life insurance policy in North Carolina MUST deliver to the policyowner
A policy summary and Buyers guide
Which of the following statements BEST describes the intent of a Coinsurance clause in a Major Medical polic
A purpose of the Coinsurance clause in a Major Medical Policy is to discourage overutilization of the insurance coverage.
In health insurance policies, a waiver of premium provision keeps the coverage in force without premium payments
After an insured has become totally disabled as defined in the policy
At what time must a policyowner have insurable interest on the insured in order for the life policy to be valid?
At the time of application Correct. With life insurance, insurable interest must exist only at the policy inception.
Accidental Death coverage is provided to commercial airline passengers in which of the following types of policies?
Blanket Accident policy
The difference between group insurance and blanket health policies is
Blanket health policies do not issue certificates
What is issued to each employee of an employer health plan?
Certificate
Which of these is considered a true statement regarding Medicaid?
Funded by both state and federal governments
An insurance company may NOT reject a prospective insured's life application on the basis of which of the following factors?
Gender
With Accidental Death and Dismemberment policies, what is the purpose of the Grace Period?
Gives the policyowner additional time to pay overdue premiums
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
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
Medicare is intended for all of the following groups EXCEPT
Those enrolled as a full-time student
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
A Disability Income policyowner suffers a disability which was due to the same cause as a previous disability. Both disabilities occurred within a five-month period. The insurer may cover the second disability without a new elimination period under the
Recurrent Disability provision
Which type of policy pays benefits to a policyholder covered under a Hospital Expense policy?
Reimbursement- When benefits are paid to a policyowner covered under a Hospital Expense policy, the policy is known as reimbursement.
Disability policies do NOT normally pay for disabilities arising from which of the following?
war
When L applies for a Health Insurance Policy, L unintentionally fails to list a previous visit to a cardiologist. If the insurance company contests the policy, it MUST do so within 2 years
from the date of issue
Basic Medical Expense insurance
has lower benefit limits than Major Medical insurance
How would a contingent beneficiary receive the policy proceeds in an Accidental Death and Dismemberment (AD&D) policy?
if the primary beneficiary dies before the insured
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
An insurance company MUST clearly specify questions designed to obtain information solely for marketing research
in any insurance transaction
When determining the monthly benefit amount for a Disability Income policy, the factor that limits the amount a prospective insured may purchase is
income
In order for coverage on a non-medical insurance application to take effect the same day, the producer must collect a signed application and
initial premium
Information obtained from a phone conversation to the proposed insured can be found in which of these reports?
inspection report
The Insurance Information and Privacy Protection Act is designed to limit or direct the information collection activities of all of the following EXCEPT
insurance regulators
An insurance broker in North Carolina is a representative of the
insured
Q is hospitalized for 3 days and receives a bill for $10,100. Q has a Major Medical policy with a $100 deductible and 80/20 coinsurance. How much will Q be responsible for paying on this claim?
"$2,100". In this situation, $10,000 x 20% coinsurance + $100 deductible = $2,100.
M has a Major Medical insurance policy with a $200 flat deductible and an 80% Coinsurance clause. If M incurs a $2,200 claim for an eligible medical expense, how much will M receive in payment for this claim?
$1,600 In this situation, $2,200 - $200 deductible x 80% = $1,600.
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
C was injured while deep sea diving and requires a hospital stay. C has a Major Medical policy with a 80/20 coinsurance clause and a $400 deductible. What is the MAXIMUM C will pay if the covered medical expenses are $2000?
$720
N is covered under an individual Disability policy with a 30-day Elimination period and a monthly benefit of $500. N is totally disabled for 3 1/2 months. N's total benefit received on this claim is
1,250 Correct. After the 30-day Elimination period has been satisfied, the total benefit paid on this claim is $1,250 ($500+$500+$250).
An agent that has been or is engaged in conduct that violates the Insurance Information and Privacy Protection Act shall be issued and served a statement of charges and notice of hearing by the Commissioner of . The date of such hearing shall be AT LEAST how many days after service of charges?
10
XYZ Company pays the entire premium for its group health plan. The MINIMUM percentage of eligible employees that must be covered is
100% Most noncontributory group health plans require 100% participation by eligible employees.
An insured must notify an insurer of a medical claim within how many days after an accident?
20
AT LEAST how many days before the effective date of a rate increase must an insurer provide written notice to individual accident and health policyowners?
30
According to the Information and Privacy Protection Act, when access to recorded personal information is requested following an adverse underwriting decision, the insurer must make the information available within how many business days?
30
N has a Major Medical policy that only pays a portion of N's medical expenses. N is responsible for paying the remaining balance. This provision is known as
Coinsurance
Which of the following reimburses its insureds for covered medical expenses?
Commercial insurers
Insurance agents MUST obtain a license from North Carolina's
Commissioner of Insurance
Which of the following correctly explains the actions an agent should take if a customer wants to apply for an insurance policy?
Complete the application and review the information with the customer prior to obtaining the customer's signature, then send the application off to the insurance company
Medicare Part A and Part B do NOT pay for
Dental services are not covered by Medicare Part A or B.
What is the initial requirement for an insured to become eligible for benefits under the Waiver of Premium provision?
Insured must be under a physician's care
Which health policy clause specifies the amount of benefits to be paid?
Insuring
Which of the following health insurance policy provisions specifies the health care services a policy will provide?
Insuring clause
What does Medicare Parts A and B cover?
Part A covers hospitalization; Part B covers doctor's services
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
T is covered by an Accidental Death and Dismemberment (AD&D) policy that has an irrevocable beneficiary. What action will the insurance company take if T requests a change of beneficiary?
Request of the change will be refused
CH 6:Which factors are taken into consideration when an insurance company determines the premium rate for a Whole Life policy on an applicant?
Risk classification
P 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?
Sign an enrollment card
The percentage of an individual's Primary Insurance Amount (PIA) determines the benefits paid in which of the following programs?
Social Security Disability Income
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
Which of the following is the reimbursement of benefits for the treatment of a beneficiary's injuries caused by a third party?
Subrogation
A Business Overhead Expense policy would cover which of the following if a business owner becomes disabled?
Utilities and office rent
What type of rider would be added to an Accident and Health policy if the policyowner wants to ensure the policy will continue if he/she ever becomes totally disabled?
Waiver of Premium rider
ch 4Which of the following is the MOST important factor when deciding how much Disability Income coverage an applicant should purchase?
applicant's monthly income
In order to establish a Health Reimbursement Arrangement (HRA), it MUST
be established by the employer
Medicaid was designed to assist individuals who are
below a specific income limit
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
The situation in which a group of physicians are salaried employees and conduct business in an HMO facility is called a(n)
closed panel
Medicare
is a hospital and medical expense insurance program
An agent who signs a blank contract application or policy of insurance
is guilty of a misdemeanor
Which of the following is NOT a limited benefit plan?
life insurance policies
How does group insurance differ from individual insurance?
lower premiums
Which of the following characteristics is associated with a large group disability income policy?
no medical underwriting
K works for XYZ Clothing Store from September through December each year. K works 45 hours a week for this period of time. The employer's Group Policy would consider K
not eligible for the insurance because as a seasonal employee K does not meet the definition of "employee" under North Carolina law
An accident policy will most likely pay a benefit for a(n)
off-the-job accident
Deductibles are used in health policies to lower
overuse of medical services
Ch 7: No insurer shall refuse to insure an individual because of
race
With Optionally Renewable Health policies, the insurer may
review the policy annually and determine whether or not to renew it
An individual Disability Income insurance applicant may be required to submit all of the following information EXCEPT
spouse's occupation
Which of the following statements is correct regarding an employer/employee group health plan?
the employer receives a master policy and the employees receive certificates
A Business Disability Buyout plan policy is designed
to pay benefits to the Corporation or other shareholders
An assignment of benefits of a Health Policy
transfers payments to someone other than the policyowner
B is a teacher who was injured in a car accident and cannot work. She is now receiving monthly benefits as a result of this accident. Which type of policy does B have?
Disability Income
ch2: A medical care provider which typically delivers health services at its own local medical facility is known as a
Health Maintenance Organization
T owns an Accident & Health policy and notifies her insurance company that she has chosen a less hazardous occupation. Under the Change of Occupation provision, which of the following actions may her insurance company take?
Increase her policy's coverage amount
If the insured and primary beneficiary are both killed in the same accident and it cannot be determined who died first, where are the death proceeds to be directed under the Uniform Simultaneous Death Act?
Insured's contingent beneficiary Under the Uniform Simultaneous Death Act, if both insured and primary beneficiary are killed in the same accident and there is insufficient evidence to show who died first, policy proceeds will be paid as if the insured died last. In other words, the proceeds will be paid to the secondary or contingent beneficiary.
On January 8, an applicant filled out an application for a life insurance policy but did not include the initial premium. The insurance company approved the application on January 14 and issued the policy January 15. The producer delivered the policy on January 26 and collected the first premium. When did the coverage become effective?
January 26 Correct. In this situation, coverage became effective on the date the policy was delivered and first premium collected.
The fund that assures policyholders payment of death benefits on Life Policies, if the company is insolvent at the time of the claim, is called the
Life and Health Insurance Guaranty Association
The rules and regulations of the Life and Health Insurance Guaranty Association in North Carolina apply to
Life and Health Policies issued by companies authorized in North Carolina
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
According to the Time Payment of Claims provision, the insurer must pay Disability Income benefits no less frequently than which of the following options?
Monthly
Which of the following BEST describes how a Preferred Provider Organization (PPO) is less restrictive than a Health Maintenance Organization (HMO)?
More physicians to choose from
Agent J takes an application and initial premium from an applicant and sends the application and premium check to the insurance company. The insurance company returns the check back to J because the check is made out to J instead of the insurance company. What action should J take?
Return to the customer, collect a new check made out to the insurance company, and send the new check out to the insurance company If an agent receives a check made out to them instead of the insurance company, they should return the check to the customer and collect a new check properly made out to the insurance company.
Which of the following costs would a Basic Hospital/Surgical policy likely cover?
Surgically removing a facial birthmark
The provision in a health insurance policy that suspends premiums being paid to the insurer while the insured is disabled is called the
The Waiver of Premium provision in a health insurance contract suspends the insurer's right to receive premiums during a covered period of disability.
Which of the following statements is CORRECT about an agent who is taking an insurance application?
The agent should have the applicant initial any changes made on the application
Which type of provider is known for stressing preventative medical care?
The health provider that stresses preventive medical care is known as a Health Maintenance Organization.
T was insured under an individual Disability Income policy and was severely burned in a fire. As a result, T became totally disabled. The insurer began making monthly benefit payments, but later discovered that the fire was set by T in what was described as arson. What actions will the insurer take?
The insurer will rescind the policy, deny the claim, and recover all payments made
Which of the following organizations would make reimbursement payments directly to the insured individual for covered medical expenditures?
commercial insurer
The Consolidated Omnibus Budget Reconciliation Act (COBRA) gives workers (and their families) whose employment has been terminated the right to
continue group health benefits
K has an Accidental Death and Dismemberment (AD&D) insurance policy where her husband is beneficiary and her daughter is contingent beneficiary. Under the Common Disaster clause, if K and her husband are both killed in an automobile accident, where would the death proceeds be directed?
daughter
Circulation of any oral or written statement or any pamphlet, circular, article, or literature that is false or maliciously critical of or derogatory to the financial condition of an insurer is known as
defamation
Insurers organized under the laws of North Carolina are called
domestic companies
Health insurance benefits NOT covered due to an act of war are
excluded by the insurer in the contract provisions
An underwriter determines that an applicant's risk should be recategorized due to a health issue. This policy may be issued with a(n)
exclusion for the medical condition
The sections of an insurance contract which limit coverage are called
exclusions
Which of the following is NOT included in the policy face?
exclusions
