Health Insurance Mastery Exam
All of the following would be considered activities of daily living (ADLs) for the purpose of a long-term care policy EXECPT
mobility
In a conditionally renewable policy, the insurance company can
non-renew only for reasons in the contract
The most important factor in underwriting disability income insurance is
occupation
Preferred provider organizations (PPOs) are typically
open-panel entities
A short-term medical expense policy
pays a flat dollar amount per each day of hospitalization
What is the definition that describes the inability to perform any or all of the duties of an insured's normal occupation?
presumptive disability
In a Medicare managed care plan, the role of the gatekeeper is performed by the insured's
primary physician
In major medical policies, the coinsurance provision
requires the insured to pay a percentage of medical expenses
All of the following requirements are necessary in order for a nonresident to be granted a nonresident insurance license EXCEPT
she lives in a state that awards nonresident producer licenses on a reciprocal basis
According to insurance law, an agent
solicits, negotiates, procures, or effects insurance on behalf of the insurer
With an optionally renewable policy, the company reserves the right to
terminate coverage at any policy anniversary date
The period in which an insured must pay for care before the policy benefits begin is called
the elimination period
All of the following are covered by Medicare Part A EXECPT
the first 3 pints of blood
The cost-of-living adjustment (COLA) rider found in many disability income policies automatically increases the monthly benefit when
the insured is disabled and receiving benefits
A business overhead expense policy will indemnity the business for all of the following EXECPT
the owner's salary
A misrepresentation or false warranty by an insured will NOT void the policy unless
there was an intent to deceive or if it materially affects acceptance of the risk by the company
If an insured is unable to perform any duties of the job, this is defined as
total disability
What policy feature eliminates the need to pay premiums during a period of disability?
waiver of premium
A Medicare supplement policy is returned to the issuing insurer 10 days after the policy delivery. What portion of the premium will be refunded to the policyowner?
100% of the amount paid to the insurer
Under the terms of the notice of claims provision in a health insurance policy, a claimant normally must notify the insurance company of loss within how many days after the loss occurs?
20 days
An insured lets a health policy lapse, and he wishes to reinstate. If a conditional receipt is issued with the reinstatement application, after how many days will the policy be considered reinstated if the insurance company takes no action?
45 days
The waiting period to qualify for Social Security disability benefits is
5 months
How many days must the insured wait to take legal action against a health insurer after submitting written proofs of loss if the insurer refuses to pay?
60 days
Which of the following health insurance providers is most commonly associated with prepaid plans for subscribers?
Health maintenance organizations
A licensed producer may share commissions with
Her highest performing employee, who is licensed
Which of the following policies pays a fixed hospital benefit directly to the insured, regardless of the actual hospital expenses incurred?
Hospital indemnity policy
The Medical Information Bureau provides information about
Individual health insurance applicants
Which of the following characteristics is NOT considered by underwriting when underwriting group insurance?
Individual medical histories
Comprehensive major medical expense insurance covers all of the following EXCEPT
Loss of income due to sickness
A program that provides federal funds for state medical public assistance plans describes
Medicaid
Medicare coverage is divided into 4 parts. Part B covers
Medical care provided by the physicians and other medical services
Which of the following private insurance carriers has a contractual relationship with doctors and hospitals?
Medicare
Which type of health insurance policy prevents the insurer from changing the premium rate or modifying the coverage in any way?
Noncancelable policy
The Fair Credit Reporting Act
Obligates insurers that use third-party source to acquire credit information to inform applicants who have been denied coverage of the identity of that source
Which of the following is accurate with regards to partial disability benefits and residual disability benefits?
Partial disability benefits and residual disability benefits mean the same thing
Who are the owners of a mutual insurance company?
Policyowners
Which one of the following is NOT an agent responsibility?
Prepaying the initial premium
An insured is covered under a group health insurance plan by her employer, and she is also covered by her spouse's plan. Under the Model Coordination of Benefits Act, what is the insured's policy considered?
Primary
Joe offers a pair of tickets to the sold-out basketball game in exchange for the person to purchase her insurance with him. This is known as
Rebating
All statements and descriptions in any applications for an insurance policy by an insured are deemed to be
Representations and not warranties
The purpose of a health savings account (HSA) is to
Serve as a tax-favored way to accumulate funds to cover medical expenses
HMOs provide
Services on a prepaid basis
Under COBRA, the right to continue existing group health coverage is NOT available to an individual who
is a covered dependent who reaches the age of ineligibility
Which provision states that the application is part of the contract?
Entire contract clause
Jeff has a policy that will pay expenses he incurs as the result of in-hospital medical treatment, as well as some of the expenses he incurs on an outpatient basis. Jeff probably has
A medical expense policy
What is the definition of a fiduciary?
A person in a position of trust and confidence who handles the affairs and funds of others
Which of the following is NOT an element of a valid contract?
Adhesion
Under the misstatement of age provision in a health insurance policy, what will an insurer do if it discovers that an insured gave the wrong age at the time of the application?
Adjust the benefits payable under the policy
States give an insurer permission to transact insurance with a certificate of
Authority
The Commissioner, Director or Superintendent gives approval to an insurer to do business in that state in a certificate of
Authority
Which term best describes the maximum length of time disability income benefits will be paid to the disabled insured?
Benefit period
Which cost-sharing feature has the insured pay a certain percentage of medical expenses after the deductible has been met?
Coinsurance
Which of the following factors may an insurer not consider when deciding whether to require AIDS testing during underwriting?
Coverage amounts
The Health Insurance Portability and Accountability Act (HIPPA) imposes requirements on health care providers with respect to
Disclosure of protected health information
Which of the following actions may result in license suspension or revocation?
Disobeying a cease-and-desist order
Major medical policies that pay 100% of covered expenses above a specified amount contains what kind of provision?
Stop loss provision
When a group disability insurance plan is paid entirely by the employer, benefits paid to disabled employees are
Taxable income to the employee
Jackie's monthly premium on her health insurance policy is due on July 1. She forgets to pay the premium and suffers a loss on July 10, for which she files a claim. How will the insurer handle the situation?
The claim will be paid, but the premium amount due will be deducted from the benefits paid
If an employee of a large employer is over age 65 and is eligible for both Medicare and group health insurance, which will be the primary payor?
The group will be the primary
Dwayne becomes disabled and is forced to leave his job for 4 months, during which time he received benefits under his disability income policy. 3 months after returning to work, he is disabled again from the same cause. Which of the following statements is CORRECT?
The original benefit period will resume as if Dwayne had not returned to work
Which of the following most accurately describes the probationary period in a health insurance policy?
The period that must elapse after a policy is issued before any benefits for illnesses are payable
In which type of contract is only one party's promises enforced?
Unilateral contract
1. When an insurer charges a higher rate for insurance based on an insured's race, religion, or national origin, it is considered
Unlawful discrimination
When would a Statement of Continued Good Health be required of a health insurance applicant?
When the premium is not paid until delivery
All of the following would be acceptable sources of information for health insurance underwriting EXECPT
a genetic test conducted in a medical lab without full disclosure
ABC Insurance Company's health insurance contract contains a 2-year time limit on certain defenses provision. This means that
after a policy has been in force for 2 years, ABC cannot deny claims on the basis of misinformation given in an application for insurance
Which of the following statements regarding a future increase option rider is INCORRECT?
allows insured to increase policy benefits
All of the following are provisions in individual health insurance policies EXECPT
automatic premium loan
Insured losses are covered immediately after a policy is reinstated when
claim forms are submitted with proof of loss & hospitalization is required
Forcing a person to buy insurance through a particular company or producer is
coercion
Circulation of a maliciously critical statement about any insurer's financial condition in order to injure the insurer is called
defamation
The period immediately following the onset of a disability, during which time benefits are not payable, is called the
elimination period
Flexible spending arrangements (FSA) are
funded by employee contributions made on a pretax basis
Medicare supplement policies must be
guaranteed renewable
