Health Insurance Practice

The insurance policy clause that identifies the contracting parties and defines the scope and limits of coverage is called the:

Insuring clause

Which of the following definitions of disability would cover a permanent partial disability?

Residual disability

Group health insurance specifies that what percentage of eligible individuals MUST be offered coverage under a noncontributory plan?

100

An Accident and Health policy Notice of Claim provision requires that an insured give written notice to the insurer within a MAXIMUM of how many days after a loss?

20

Five years ago, at age forty-five, X stated that he was forty years old on a disability income insurance application. X now submits a claim and the insurer discovers X's true age. The insurer will most likely take which of the following actions?

Adjust the benefits downward according to the benefits that X would have been entitled to based on the premiums

Under an Accidental Death and Dismemberment (AD&D) policy, insurable interest must exist at which of the following times?

At the inception of the policy

Which of the following types of provisions guarantees renewability to a specified date or age unless certain specified events occur?

Conditionally Renewable

Health insurance policies are offered on a "take it or leave it" basis and referred to as which of the following types of contracts?

Contracts of Adhesion

M and N own a small interior design studio that employs six people. The owners are concerned about the financial continuation of the business if either of them should become permanently disabled. In this situation, a producer would MOST likely recommend which of the following types of contracts?

Disability Buy-Out

Which of the following provisions explains that a producer does not have the authority to waive the provisions of an insurance contract?

Entire Contract

Suicide, pre-existing conditions and self-inflicted injuries are dealt with in which of the following policy features?

Exclusions

Which of the following laws requires an insurer to notify an applicant in writing that an investigative consumer report may be made on the applicant?

Fair Credit Reporting Act (Insurance Information and Privacy Protection Act)

An insurer must provide claim forms to an insured within a MAXIMUM of how many days after receiving notice of an Accident & Health claim?

Fifteen

Medicare Part A covers which of the following expenses?

Hospital room and board

Which of the following reports may include information obtained by a telephone call to the proposed insured?

Inspection report

Which of the following statements is CORRECT about a Waiver of Premium provision in a Disability Income policy?

It allows the insured to maintain a policy in force while disabled and unable to pay premiums.

Which of the following statements is CORRECT about coinsurance?

It helps control overutilization of benefits.

J has a physical impairment, attends school, and is incapable of self-sustaining employment and/ or self care. Which of the following statements is CORRECT about J's medical coverage under J's father's group plan?

J's coverage continues as long as J is continually incapacitated and is financially dependent on J's father.

On June 1, S purchased a Major Medical policy and paid the initial premium to Producer T. On July 1, Producer T received the policy from the insurance company. The policy contained a Ten-Day Free Look provision. On July 3, Producer T attempted to deliver the policy but found that S was not at home. On July 5, Producer T was able to deliver the policy to S. On July 7, S decided he did not want the policy. S had 10 days from which of the following dates to return the policy to the company and obtain a full premium refund?

July 5

A health care plan designed to combine small employers together into a group to purchase medical expense insurance for their employees is called a:

Multiple Employer Trust (MET)

In which of the following health policies are both the renewability and the premiums guaranteed?

Noncancellable

An insured becomes disabled three years after his Disability Income policy is issued. The disability is caused by a condition that existed prior to the policy issue date but was not specifically excluded from coverage. In this situation, the insurer will most likely take which of the following actions?

Pay the full claim

Which of the following provisions designates to whom claim payments are made?

Payment of Claims

An insured whose Disability Income policy contains a Change of Occupation clause takes a new job in a more hazardous occupation and fails to notify the insurer of the change. One year later, the insured becomes disabled. The insurer will most likely take which of the following actions?

Settle the claim according to what the premiums would have purchased under the more hazardous occupation

A group long-term disability plan is integrated with Social Security when which of the following statements is CORRECT?

Social Security and group benefits pay a combined maximum limit.

Which of the following statements is CORRECT about a Disability Income policy with a Guaranteed Insurability rider?

The insured may periodically increase the amount of benefits payable under the policy.

A married insured has an Accidental Death and Dismemberment (AD&D) policy that names his brother as the primary beneficiary and his son as the contingent beneficiary. If the insured and his brother are both killed instantly in a train accident, the policy proceeds would be paid to which of the following?

The insured's son

Which of the following definitions MOST accurately describes the Probationary Period?

The waiting period a new hire must satisfy prior to becoming eligible for group health coverage

Which of the following health policies requires a beneficiary designation?

Travel Accident

A health care plan that reimburses a flat fee for medical care it provides at a clinic it owns and operates is referred to as:

a Health Maintenance Organization

In an Accidental Death and Dismemberment (AD&D) policy, the term "capital sum" refers to:

a lump sum payment made for an accidental dismemberment

An individual who has had a heart murmur since birth is likely to be issued an individual health policy that includes:

an Exclusionary/ Impairment rider

An applicant for insurance submits an application to an insurer for underwriting but does not forward any premium payment with the application. Legally, the applicant is making:

an inquiry for an offer

All of the following elements are required of a contract EXCEPT:

assignment

The Coordination of Benefits clause found in group health master contracts is used to:

avoid double payment of benefits to an insured who has duplicate group coverages

An Eligible Expenses provision in a comprehensive major medical policy commonly identifies all of the following types of covered health care services EXCEPT:

experimental and investigative services

The Internal Revenue Service (IRS) considers Disability Income benefits paid under an employer-paid group Disability Income to be:

fully taxable

Under a group health plan, an employer may offer additional benefits to classes of employees on the basis of all of the following factors EXCEPT:

gender

Under a Guaranteed Renewable Accident & Health policy, an insurer retains the right to:

increase the premium rate for an entire class of insureds

A producer and an applicant complete an application for a health policy and submit it to the insurer for underwriting without any premium. The underwriter issues a policy and mails it to the producer for delivery to the applicant. The producer should take all of the following actions during the delivery of the policy to the applicant EXCEPT:

issue a conditional receipt

When delivering a policy to a client, a producer should take all of the following actions EXCEPT:

keep the policy in the producer's office for safe-keeping on behalf of the client

A precertification review prior to a nonemergency hospitalization is an example of:

managed care

When periodic claim payments are required under a long-term disability income policy, an insurer MUST make payments to an insured at least once every:

month

The PRIMARY purpose of Medicaid is to:

provide Medical Expense coverage to persons meeting certain minimum income requirements

Medicare Supplement policies are primarily designed to:

provide additional benefits beyond those provided by Medicare

The purpose of the Medical Information Bureau (MIB) is to:

share medical data among member companies

Under the Claims Forms provision of a health policy, if the insurance company fails to send claim forms within the time period required, the insured should:

submit the claim in any form, which must be accepted by the company as adequate proof of loss

The Consideration clause in an accident and health policy states the:

the applicant pays the initial premium

The Elimination Period in most Disability Income policies applies:

to each separate disability

The Social Security program provides all of the following benefits EXCEPT:

workers compensation