Health Insurance Exam

A guaranteed renewable health insurance policy allows the

Policy holder to renew the policy to a stated age, with the company having the right to increase premiums on the entire class

What are the main factory taken into account when calculating residual disability benefits?

Present earning and earning prior to disability

A private investigator has been hired by an insurance company to obtain a character report on an insurance applicant. The investigator contacts the applicant and requests an interview stating that he is conducting a research for a publication. The applicant permits the interview and unknowingly gives information that will be used in the underwriting decision. Which of the following does this scenario describe?

Pretext interview

Insurers may change what on a guaranteed renewable health insurance policy?

Rates by class

Todd has been informed that he has a hernia which requires repair. When Todd researches the cost, he learns that his insurance plan will cover 200 points worth of surgical expenses. Each point represents $10, which means that $2000 of his surgery will be covered by his insurance plan. What system is Todd's insurance company using?

Relative Value

An insured wants to name her husband as the beneficiary of her health policy. She also wishes to retain all of the rights of ownership. The insured should have her husband named as what type of beneficiary?

Revocable

Contributionary

Split cost between employer and employee

In major medical insurance policies, when the insured's share of coinsurance reaches a certain amount, the insured is no longer obligated to pay it. This feature is known as

Stop-loss

Whose responsibility is it to determine if all of the questions on an application have been answered?

The agent

Insurable interest can be best described by...

The applicant must experience a financial loss due to an accident or sickness that befalls the insured

If a business wants to buy a disability income policy on a key employee, which of the following is considered the applicant?

The employer

Disclosure authorization forms must include all of the following except

The format in which the information may be shared

Disclosure authorization forms must not include

The format in which the information may be shared

Who chooses a primary care physician in an HMO?

The individual member

What is not true regarding qualifications for social security disability benefits is not true?

The individual must be at least 65 years old

Insured Z's health insurance policy year begins in January. His policy contains a carry-over provision. In November, he has a small claim which is less that his deductible. Which of the following is true?

The insured may carry over the amount of this year's expenses to next year, which will help satisfy next year's deductible

An insured submitted a notice of claim to the insurer, but never received claims forms. He later submits proof of loss, and explains the nature and extent of loss in a hand-written letter to the insurer. Which of the following would be true?

The insured was in compliance with the policy requirements regarding claims.

Which of the following statements is true regarding coinsurance?

The larger the percentage that is paid by the insured, the lower the required premium will be

How does a member of an HMO see a playlist?

The primary care physician refers the member

When employees are actively at work on the date coverage can be transferred to another insurance carrier, what happens to coinsurance and deductibles?

They carry over from the old plan to the new plan

Which provision states that the insurance company must pay medical expense claims immediately?

Time of payment claims

A noncontributory group disability income plan has a 30-day waiting period and offers benefits of $2,000 a month. If an employee is unable to work for 7 months due to a covered disability, the employee will receive

$12,000, all of which is taxable

Failure to notify the commissioner of changes to a licensee's address within 10 business days may result in an administrative fee of

$50

Major Medical Health insurance policy

-The benefits are subject to deductibles -Designed to cover hospital and medical expenses of a catastrophic nature -Usually has a maximum benefit amount

The insuring clause of a disability policy usually states

-The identities of the insurance company and the insured - That insurance against loss is provided -The types of losses covered

Managed Care qualities

-preventive care -high quality care -Shared risk

An insured pays a monthly premium of $100 for her health insurance. What would be the duration of the grace period under her policy?

10 days

A disability income policy is written with a 10-month benefit period, a 30-day elimination period, and a 30-day probationary period. If the insured becomes disabled due to illness 9 days after the effective date, the policy will pay benefits for a maximum of

10 months

Under the Affordable Care Act, what percentage of preventive care must be covered without cost sharing?

100%

A client has a new individual disability income policy with a 20-day probationary period and a 30-day elimination period. Ten days later, the client breaks their leg and is off work for 45 days. How many days of disability benefits will the policy pay?

15 days

What is the maximum age for qualifying for a catastrophic plan?

30

After appointing an agent, how long does an insurer have to file with the commissioner the form detailing the agents name, address, and other needed information?

30 days

If the Commissioner denies an initial application for an agent, how long does the applicant have to request a review after receiving notification of the denial?

30 days

An employer responsible for paying part or all of the premium for a group life or group health plan cannot willfully fail to pay the premium without first giving the employees how many days' advance notice?

45 days

How long is the grace period if you pay weekly, monthly, and all other modes?

7 days, 10 days, 31 days

After receiving notice that an adverse underwriting decision has been made, an individual has how long to request information about that decision in writing?

90 days

Most policies will pay the accident death benefits as long as the death is caused by the accident and occurs within

90 days

Which of the following would be an example of a limited accident and health insurance policy?

A dread disease policy

How is emergency care covered for a member of an HMO?

A member of an HMO can receive care in or out of the HMO service area, but care is preferred in the service area

An agent found representing an unlicensed company is guilty of

A misdemeanor

How can a new physician be added to the PPO's approved list?

Agree to follow the PPO standards and charge the appropriate fees

Under which condition would an employee's group medical benefits be exempt from income taxes?

An employees group medical benefits are generally exempt from taxation as income

What is not true regarding uniform mandatory provisions concerning claims

An insured must notify the insurer of a claim on forms prescribed by the insurer

Disability income coverage specifies that the policy covers the insured if he is unable to perform any job for which he is qualified. In this case, total disability is defined as

Any occupation- more restrictive than other definitions

Which of the following provides coverage on a first dollar basis?

Basic expense

Which of the following is true regarding inpatient hospital care for HMO members?

Care can be provided outside of the service area

Any person who knowingly obtains information about an individual from an agent or the insurer under false pretenses has committed a

Class 1 Misdemeanor

An applicant for an individual health policy failed to complete the application properly. Before being able to complete the application and pay the initial premium, she is confined to a hospital. This will not be covered by insurance because she has not met the conditions specified in the

Consideration Clause

The purpose of managed car health insurance plans is to

Control health insurance claims expenses

In a basic expense policy, after the limits of the basic policy are exhausted, the insured must pay what kind of deductible?

Corridor

A waiver of premium provision may be included with what kind of health insurance policy?

Disability income

Concerning group Medical and Dental insurance, what is not true

Employee benefits are tax deductible the year in which they were recieved

Noncontributionary

Employer pays entire cost

The HMO Act of 1973 required employers to offer an HMO plan as an alternative to regular health plans if the company had more than 25 employees. How has this plan since changed?

Employers are no longer forced to offer HMO plans

Circulating deceptive sales material to the public is what type of unfair trade practice?

False advertising

When is a child eligible for coverage on a parent's policy?

From the moment of birth

An insured is involved in an accident that renders him permanently deaf, although he does not sustain any other major injuries. The insured is still able to perform his current job. To what extent will he receive Presumptive Disability benefits?

Full Benefits

When an insurer requires a written proof of loss after notice of such loss has been given by the insured or beneficiary, the company must

Furnish a blank form to be used for that purpose

As it pertains to group health insurance, COBRA stipulates that

Group coverage must be extended for terminated employees up to a certain period of time at the employee's expense.

When would a misrepresentation on the insurance application be considered fraud?

If it is intentional and material

What is an incorrect statement concerning taxation of disability income benefits?

If paid by the individual, the premiums are tax deductible

What is not correct concerning taxation of disability income benefits?

If paid by the individual, the premiums are tax deductible

An insurer devises an intimidation strategy in order to corner a large portion of the insurance market. Which of the following best describes this practice?

Illegal

A health insurance policy lapses but is reinstated within an acceptable timeframe. How soon from the reinstatement date will coverage for accidents become effective?

Immediately

Which type of a hospital policy pays a fixed amount each day that the insured is in a hospital?

Indemnity

What is true regarding HMO coverage?

It is divided into geographic territories

The provision which prevents the insured from bringing any legal action against the company for at least 60 days after proof of loss is known as

Legal Actions

What is an example of a presumptive disability under a disability income policy?

Loss of two limbs

During a sales presentation a producer intentionally makes a statement which may mislead the insurance applicant. This describes

Misrepresentation

An insured is involved in a car accident. In addition to general, less serious injuries, he permanently loses the use of his leg and is rendered completely blind. The blindness improves a month later. To what extent will he receive Presumptive Disability benefits?

No benefits

An insured purchased a disability income policy with a 10 year benefit period. The policy stated a 20 day probationary period for illness. If the insured is hospitalized with an illness 2 weeks after the policy was issued, how much will the policy pay?

Nothing, illness is not covered during the firs t20 days of the contract

Which renewability provision allows an insurer to terminate a policy for any reason, and to increase the premiums for any class of insureds?

Optionally renewable

Don has both a basic expense and a major medical policy. He is injured in an accident, which requires several major surgeries. This quickly exhausts Don's basic expense policy. What must Don do before his major medical policy can pick up where the basic expense policy left off?

Pay a special deductible on his major medical policy

Which of the following provisions would prevent an insurance company from paying a reimbursement claim to someone other than the policyowner?

Payment of Claims

What provision is mandatory for health insurance policies?

Physical examination and autopsy

What is not an example of a exception to the notice requirements?

When an agent discloses a policy holder's medical information to an insurer

Social Security Supplement (SIS) or Social Security Riders would provide for the payment of income benefits in each of the situations below EXCEPT

When the amount payable under Social Security is more than the amount payable under the rider

Rebates are not

allowed if its in the best interest of the client

The section of a health policy that states the causes of eligible loss under which an insured is assumed to be disabled is the

insuring clause

The insuring clause of a disability policy usually does NOT state

the method of premium payment

How soon following the occurrence of a covered loss must an insured submit written proof of such loss to the insurance company?

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