Health Insurance Tricky Questions Review
Comprehensive Major Medical policies usually combine: - Major medical with Basic Hospital/Surgical coverage - Major medical with disability income coverage
Major medical with Basic Hospital/Surgical coverage
Which of the following BEST describes a short-term medical expense policy? - Noncancellable - Nonrenewable
Nonrenewable
Generally, how long is a benefit period for a Major Medical Expense Plan? - One year - Three years
One year
Under what system do a group of doctors and hospitals in a designated area contract with an insurer to provide services at a prearranged cost to the insured? - PPO - HMO
PPO
Which of these statements is INCORRECT regarding a PPO? - PPO's are NOT a type of managed care systems - Prices are negotiated in advance for PPO providers
PPO's are NOT a type of managed care systems
The insured and insurance company will share the cost of covered losses under which health policy feature? - Share clause - Payment of Claims provision
Payment of Claims provision
Which of the following correctly describes a certificate of authority? - Permits an agent to solicit insurance in Georgia - Permits an insurance company to transact business in Georgia
Permits an insurance company to transact business in Georgia
The reason for a business having a Business Overhead Expense Disability Plan is to cover: - fixed business expenses - all business-related expenses and salaries
fixed business expenses
Basic Medical Expense insurance: - normally has a deductible and coinsurance - has lower benefit limits than Major Medical insurance
has lower benefit limits than Major Medical insurance
T sends proof of loss to her insurer for an acceptable medical expense claim under her individual Health Insurance policy. Upon receipt, the insurer must pay the benefits: - immediately - within 3 months
immediately
T applied for a Disability Income policy and has a history of back injuries. The insurer issued the policy with a statement that excludes coverage for back injuries. This statement is called a(n): - back exclusion - impairment rider
impairment rider
Medicare Part B does NOT cover: - occupational therapy - inpatient hospital services
inpatient hospital services Medicare Part B is a voluntary program designed to provide supplementary medical insurance to cover physician services, medical services, and supplies not covered under Part A.
The ____ clause identifies which losses resulting from an accident or sickness are insured by the policy. - benefit - insuring
insuring
The clause in an Accident and Health policy which defines the benefit amounts the insurer will pay is called the: - insuring clause - consideration clause
insuring clause
J was reviewing her Health Insurance policy and noticed the phrase "This policy will only pay for a semi-private room". This phrase is considered to be a(n): - hidden deductible - internal limit
internal limit
Which of the following policy provisions prohibits an insurance comaony from incorporating external documents into an insurance policy? - incontestable - entire contract
entire contract
Which of the following is NOT included in the policy face? - free look provision - exclusions
exclusions
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 - $50,000
$25,000 The maximum sum payable would be the capital sum, or $25,000.
What is being delivered during a policy delivery? - Insurance contract to the proposed insured - Policy summary sheet and disclosure material to the proposed insured
Insurance contract to the proposed insured
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: - $1600 - $3600
$3600 $10,000 - $2000 (deductible) = $8000 then $8000 x 0.20 (his 20%) = $1600 then $1600 + $2000 (deductible)= $3600
In Georgia, monthly-premium accident and sickness insurance policies must provide a grace period of at least: - 7 days - 10 days
10 days
An insured must notify an insurer of a medical claim within _____ days after an accident. - 10 - 20
20
Insurers may request a hearing within ______ if their policy is rejected. - 20 days - 60 days
20 days
An insured pays premiums on an annual basis for an individual health insurance policy. What is the MINIMUM number of days for the Grace Period provision? - 7 - 31
31
S is employed by a large corporation that provides group health coverage for its employees and their dependents. If S dies, the company must allow his surviving spouse and dependents to continue their group health coverage for a maximum of how many months under COBRA regulations? - 36 - 18
36
M's insurance company denied a reinstatement application for her lapsed health insurance policy. The company did not notify M of this denial. How many days from the reinstatement application date does the insurance company have to notify M of the denial before the policy will be automatically placed back in force? - 30 - 45
45 days
A domestic insurance company MUST be examined by the commissioner every ________ years. - 5 - 2
5
What is Medicare? - A disability program - A hospital and medical expense insurance program
A hospital and medical expense insurance program
A "reimbursement policy" pays what amount of covered long-term care expenses? - Actual covered expenses up to the daily maximum. - The usual, customary, and reasonable expenses regardless of the policy limits
Actual covered expenses up to the daily maximum.
Which of the following type of care is typically not covered in a long term care policy? - Acupuncture - Custodial care
Acupuncture
Under which of the following circumstances will the benefits under COBRA continuation coverage end? - Employee has become uninsurable - All group health plans are terminated by the employer
All group health plans are terminated by the employer
All of the following statements regarding group health insurance is true, EXCEPT: - Premiums are usually determined by the claims experience of the group - An individual policy is given to each member
An individual policy is given to each member
Any changes made on an insurance application requires the initials of whom? - Insured - Applicant
Applicant
All of the following statements about Major Medical benefits are true, EXCEPT: - The deductible can be expressed as a fixed dollar amount - The benefit period begins only after a specified amount of expenses have accrued - Benefits are generally expressed as a percentage of eligible expenses - Benefits have no maximum limit
Benefits have no maximum limit
The difference between group insurance and blanket health policies is: - Blanket health policies do not issue certificates - Blanket health policies are sometimes called wholesale plans
Blanket health policies do not issue certificates
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 - Key Employee Life
Business Overhead Expense
P loses an arm in a farm accident and is paid $10,000 from his Accidental Death and Dismemberment policy. This benefit is known as the: - Dismemberment Sum -Capital Sum
Capital Sum
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 denied and coverage will be cancelled - Claim will be paid and coverage will remain in force.
Claim will be paid and coverage will remain in force. (After a policy has been in force for 2 (sometimes 3 years), it enters the incontestable period, in which the insurer may not deny a claim based on information not disclosed at the time of application.
Which of the following reimburses its insureds for covered medical expenses? - PPO - Commercial insurers
Commercial insurers
An insurance company receives E's application for an individual health policy. E did not complete all of the medical history questions because she could not remember the exact dates. E signed the policy and submitted it to the insurance company anyway. A few weeks later, E suffers a heart attack and is hospitalized without completing the medical history questions and paying the initial premium. E is not insured. Which of the following clauses details the conditions that E did not meet? - Insuring clause - Consideration clause
Consideration clause
Which of the following BEST describes a hospital indemnity policy? - Coverage that pays a stated amount per day of a coverage hospitalization - Coverage that pays for hospital room and board
Coverage that pays a stated amount per day of a coverage hospitalization
Which of the following statements does NOT accurately describe the tax treatment of premiums and benefits of individual Accident and Health Insurance? - Disability income policy premiums are tax-deductible - Disability income policy premiums are NOT tax-deductible
Disability income policy premiums are tax-deductible
What type of policy would only provide coverage for specific types of illnesses (cancer, stroke, etc)? - MEWA - Dread disease insurance
Dread disease insurance
M becomes disabled and is unable to work for six months. M dies soon after from complications arising from this disability. M has a Disability Income policy that pays $2,000 a month. Which of the following statements BEST describes what is owed to her estate? - Earned, but unpaid benefits. - Nothing
Earned, but unpaid benefits
In a disability income policy, which of these clauses acts as a deductible? - Elimination period - Deductible period
Elimination period
Long term care policies will usually pay for eligible benefits using which of the following methods? - Expense incurred - Fee of service
Expense Incurred
After an insured gives notice of loss, what must he/she do if the insurer does not furnish forms? - File a lawsuit - File written proof of loss
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 - Forward the application to the insurer after giving the applicant a conditional receipt
Forward the application to the insurer without the initial premium
Which type of renewability best describes a Disability Income policy that covers an individual until the age of 65, but the insurer has the right to change the premium rate for the overall risk class? - Conditionally renewable - Guaranteed renewable
Guaranteed renewable
A medical care provider which typically delivers health services at its own local medical facility is known as a: - HMO - PPO
HMO
All of these are characteristics of a health reimbursement arrangement (HRA) EXCEPT: - HRA is entirely funded by the employee - HRA is entirely funded by the employer
HRA is entirely funded by the employer
Which of the following statements about health reimbursement arrangements (HRA) is correct? - If the employee paid for qualified medical expenses, the reimbursements may be tax- free - If the employee had a qualified medical leave from work, lost wages can be reimbursed.
If the employee paid for qualified medical expenses, the reimbursements may be tax- free
What is the initial requirement for an insured to become eligible for benefits under the Waiver of Premium provision? - Insured must be hospitalized - Insured must be under a physician's care
Insured must be under a physician's care
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 require a higher deductible for any claims resulting from this condition - Insurer will likely treat as a pre-existing condition which may not be covered for one year.
Insurer will likely treat as a pre-existing condition which may not be covered for one year.
Which health policy clause specifies the amount of benefits to be paid? - Insuring - Payment mode
Insuring
Which of the following claims are typically excluded from Medical expense policies? - Treatment for alcohol addiction - Intentionally self-inflicted injuries
Intentionally self-inflicted injuries
Which type of policy would pay an employee's salary if the employer was injured in a bicycle accident and out of work for six weeks? - Business Overhead expense - Key employer disability
Key employer disability
Which of the following BEST describes how a policy that uses the "accidental bodily injury" definition of an accident differs from one that uses the "accidental means" definition? - Less restrictive - More Restrictive
Less restrictive
Which of the following is NOT a limited benefit plan? - Dental policy - Life insurance policy - Critical illness policy - Cancer policy
Life insurance policy
What is the purpose of the time of payment claims provision? - Requires the insured to wait 60 days after submitting Proof of Loss before filing a lawsuit - Prevents delayed claim payments made by the insurer
Prevents delayed claim payments made by the insurer
T is covered by two health insurance plans: a group plan through his employer and his spouse's plan as a dependent. When T submits a claim, his employer's plan is considered what type of carrier under the Model Group Coordination of Benefits provision? - Primary Carrier - Secondary Carrier
Primary Carrier
Which of the following is considered to be the time period after a Health Policy is issued, during which no benefits are provided for illness? - Incontestable Period - Probationary Period
Probationary Period
K is the insured and P is the sole beneficiary on a life 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 - Proceeds will be paid to K's estate
Proceeds will be paid to P's estate
What is the purpose of the Life and Health Insurance Guaranty Association? - Protects policyowners against insolvent insurance companies - Establishes underwriting guidelines for admitted insurers
Protects policyowners against insolvent insurance companies
Which type of policy pays benefits to a policyholder covered under a Hospital Expense policy? - Limited - Reimbursement
Reimbursement
Which of these terms accurately defines an underwriter's assessment of information on a life insurance application? - Risk classification - Inspection report
Risk classification
Which of the following statements BEST describes dental care indemnity coverage? - Services are reimbursed before the insurer receives the invoice - Services are reimbursed after insurer receives the invoice
Services are reimbursed after insurer receives the invoice
P is an employee who quits her job and wants to convert her group health coverage to an individual policy. After the expiration of COBRA laws, which of the following statements is TRUE? - She DOES need to provide evidence of insurability - She does NOT need to provide evidence of insurability
She DOES need to provide evidence of insurability
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 - Register with her state of residency
Sign an enrollment card
Upon delivery of a rated life insurance policy, the Producer must obtain each of the following EXCEPT: - Signed HIPPA disclosure - Signed statement of good health
Signed HIPPA disclosure
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? - File a lawsuit - Submit the claim in any form
Submit the claim in any form
Which of the following costs woulda Basic Hospital/Surgical policy likely cover? - Surgically removing a facial birthmark - Treating a wound from a soldier injured at war
Surgically removing a facial birthmark
Upon policy delivery, a signed good health statement is requested from the applicant. Why would this be necessary? - The applicant chose an annual premium mode - The initial premium was NOT submitted with the application
The initial premium was NOT submitted with the application
J, an Accidental Death and Dismemberment (AD&D) policy holder, dies after injuries sustained in an accident. J's age as stated on the application five years ago was found to be understated by ten years. Which of the following actions will the insurance company take? - The insurer will pay the original benefit stated in the policy - The insurer will adjust the benefit to what the premiums paid would have purchased at the insured's actual age
The insurer will adjust the benefit to what the premiums paid would have purchased at the insured's actual age
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. - Claim will be rejected because of this criminal act, but no recovery of payments will be made.
The insurer will rescind the policy, deny the claim, and recover all payments made.
Which of the following statements BEST defines usual, customary, and reasonable (UCR) charges? - The maximum premium an insurer can charge for their health insurance based on geography - The maximum amount considered eligible for reimbursement by an insurance company under a health plan
The maximum amount considered eligible for reimbursement by an insurance company under a health plan
Who would be eligible for a temporary license issued in Georgia? - An agent visiting Georgia to write a policy - The personal representative of a deceased agent to provide service to existing policyowners
The personal representative of a deceased agent to provide service to existing policyowners
The policy provision that entitles the insurer to establish conditions the insured must meet while a claim is pending is: - Entire contract - Time limit on certain defenses
Time limit on certain defenses
Why would the Commissioner examine an insurers records? - To determine the solvency of the insurer - To approve a rate increase by the insurer
To determine the solvency of the insurer
Life insurance companies are required to establish and maintain an anti-money laundering compliance program according to which federal regulation? - USA Patriot Act - Fair Credit Reporting Act
USA Patriot Act
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 - Elimination period
Waiting period
An agent gives a conditional receipt to a client for an insurance policy after collecting the initial premium. When will the policy become effective? - When the policy is issued - When the conditions of the receipt are met
When the conditions of the receipt are met
An applicant's medical information received from the Medical Information Bureau (MIB) may be furnished to the: - National Association of Insurance Commissioners (NAIC) - applicant's physician
applicant's physician
A(n) _____ of benefits of a Health Policy transfers payments to someone other than the policyowner. - assignment - transfer
assignment
Which of the following policy features allows an insured to defer current health charges to the following year's deductible instead of the current year's deductible? - Deferral provision - Carryover provision
carryover provision
The situation in which a group of physicians are salaried employees and conduct business in an HMO facility is called a(n): - closed panel - open panel
closed panel
The Consolidated Omnibus Budget Reconciliation Act (COBRA) gives workers (and their families) whose employment has been terminated the right to: - continue group health benefits - take out an individual health policy
continue group health benefits
S is the policyowner of a Major Medical policy. The premiums are paid monthly and due on the 1st of each month. S fails to make September's payment and is hospitalized October 15th. When S files the claim for this hospitalization, the insurer will likely: - pay the claim minus September and October's premium payments - deny the claim
deny the claim
A characteristic of Preferred Provider Organizations (PPOs) would be: - discounted fees for the patient - Not allowed to see out of network physicians
discounted fees for the patient
Which of the following statements BEST describes the intent of a coinsurance clause in a major medical policy? - discourages overutilization of the insurance coverage - minimizes the need for deductibles
discourages overutilization of the insurance coverage
Basic hospital and surgical policy benefits are: - lower than the actual expenses incurred - higher than the actual expenses incurred
lower than the actual expenses incurred
Periodic health claim payments MUST be made at least: - monthly - weekly
monthly
An accident policy will most likely pay a benefit for a(n) - on the job accident - off the job accident
off the job accident
An example of rebating would be: - a mutual insurance company paying dividends to its policyowners - offering a client something of value not stated in the contract in exchange for their business
offering a client something of value not stated in the contract in exchange for their business
The benefits under a Disability Buy-Out policy are - payable to the company or another shareholder - normally paid in installments
payable to the company or another shareholder
Which of the following services is NOT included under hospitalization expense coverage? - surgical fees - intensive care - miscellaneous expenses
surgical fees
Life insurance replacement regulation protects the interests of: - the policyowner - the agent - the insurer
the policyowner
A disability elimination period is best described as a: - time deductible - eligibility period
time deductible
A Business Disability Buyout plan policy is designed: - as an incurred expense plan - to pay benefits to the Corporation or other shareholders
to pay benefits to the Corporation or other shareholders
An agent's license can be suspended or revoked by: - writing primarily controlled business - replacing an existing insurance policy with a new one
writing primarily controlled business
