Insurance Exam
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?
$1600
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?
$2100
J has an accidental death and dismemberment policy with a principal sum of $50,000. J cuts off one of his fingers. What is the MAX J will receive from his policy?
$25,000
B has a $100,00 accidental death and dismemberment policy that pays triple indemnity for common carrier death. B is called in an accident on a commercial flight, what will the policy pay?
$300,000
B has a $100,000 Accidental Death and Dismemberment policy that pays triple indemnity for common carrier death. If B is killed from an accident on a commercial flight, what will the policy pay B's beneficiary?
$300,000
XYZ Company pays the entire premium for its group health plan. The MINIMUM percentage of eligible employees that must be covered is
100%
What year was the McCarran-Ferguson Act enacted?
1945
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 months
Which of the following organizations would make reimbursement payments directly to the insured individual for covered medical expenditures
Commercial insurer
Insurance contracts are known as ___ because certain future conditions or acts must occur before any claims can be paid
Conditional
Insurance policies are offered on a "take it or leave it" basis, which makes them
Contracts of Adhesion
Which contract permits the remaining partners to buy-out the interest of a disabled business partner?
Disability buy-sell
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
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
Which of the following statements best describes the intent of coinsurance clause in a major medical policy?
Discourages over utilization of the insurance coverage
Which of the following does social security not provide benefits for?
Dismemberment
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
Which is not a characteristic of a health reimbursement arrangement (HRA)
Employee funds the the HRA entirely
What is the name of the law that requires insurers to disclose info gathering practices and where the info was obtained
Fair Credit Reporting Act
J is a subscriber to a plan which contracts with doctors and hospitals to provide medical benefits at a preset price. What type of plan does J belong to?
HMO
Which type of provider is known for stressing preventative medical care?
HMOs
which of the following types of organizations are prepaid group health plans, where members pay in advance for the services of participating physicians
HMOs
A medical care provider which typically delivers health services at its own local medical facility is known as a...
Health Maintenance Organization
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
When third-party ownership is involved, applicants who also happen to be the stated primary beneficiary are required to have:
Insurable interest in the proposed insured
A life insurance arrangement which circumvents insurable interest statutes is called
Investor -Originator life insurance
An insurance company would most likely pay benefits under an accidental death and dismemberment policy for which of the following losses
Loss of eyesight due to an accidental injury
Which of the following are NOT managed care organizations?
Medical Information Bureau
which of these statements concerning an individual disability income policy is true
Normally includes an elimination period
P and Q are married and have three children. P is the primary beneficiary on Q's Accidental Death and Dismemberment (AD&D) policy and Q's sister R is the contingent beneficiary. P, Q, and R are involved in a car accident and Q and R are killed instantly. The Accidental Death benefits will be paid to
P only
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
Which of these statements is false regarding a PPO
PPOs are NOT a type of managed care system
The individual who provides general medical care for a patient as well as the referral for specialized care is known as a
Primary care physician
A group-owned insurance company that is formed to assume and spread the liability of its members is known as
Risk retention group
Which of the following is the reimbursement of benefits for the treatment of a beneficiary's injuries caused by a third party?
Subrogation
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?
The daughter
Medicare is intended for all of the following groups EXCEPT
Those enrolled as a full-time student
In an insurance contract, the insurer is the only party who makes a legally enforceable promise - What contract is this?
Unilateral
At what point must a life insurance applicant be informed of their rights that fall under the Fair Credit Reporting Act
Upon completion of applicant
Disability policies do NOT normally pay for disabilities arising from which of the following?
War
This part of a life insurance policy guaranteed to be true is called a
Warranty
Which of these is considered a statement that is assured to be true in every aspect
Warranty
A contract where one party either accepts or rejects the terms of a contract written by another party is called a contract of
adhesion
Under which of the following circumstances will the benefits under COBRA continuation coverage end
all group health plans are terminated by the employer
which of the following is the MOST important factor when deciding how much disability income coverage an applicant should purchase
applicant's monthly income
Group/voluntary long-term care policy premiums are typically deducted from the employee's income and
are less costly as compared to individual long term care coverage
all of the following statements about major medical benefits are true except
benefits have no max limit
the difference between group insurance and blanket health policies is...
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
Which of these circumstances is a Business Disability Buy-Sell policy designed to help in the sale of a business?
business owner becoming disabled
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?
carryover provision
What is issued to each employee of an employer health plan?
certificate
The situation in which a group of physicians are salaried employees and conduce business in an HMO facility is called
closed panel
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
major medical policies typically...
contain a deductible and coinsurance
Which of these require an offer, acceptance, and consideration
contract
when an employee is required to pay a portion of the premium for an employer/employee group health plan, the employee is covered under which of the following plans?
contributory
Common exclusions to continuation of group coverage include:
dental care and other prescription drugs
M is insured under a basic Hospital/Surgical Expense policy. A physician performs surgery on M. What determines the claim M is eligible for?
determined by the terms of the policy
A characteristic of preferred provider organizations would be
discounted fees for patient ** this is your copay**
the federal income tax treatment of employer-provided group medical expense insurance can be accurately described as...
employee's premiums paid by the employer are tax-deductible to the employer as a business expenditure
a comprehensive major medical health insurance policy contains an eligible expenses provision which identifies the types of health care services are typically covered except for
experimental and investigative services
With disability income insurance, an insurance company may limit the monthly benefit amount a prospective policy holder may obtain because the insured's...
gross income at the time of purchase
Basic Medical Expense Insurance
has lower benefit limits than Major Medical insurance
HIPAA gives privacy protection for
health information
a 66 year-old is covered under a group health plan while employed with a business that has 40 employees. If she injures herself while walking in the park, what coverage would be considered primary?
her group health plan
What is Medicare?
hospital and medical expense insurance program
With a Basic Medical Expense policy, what does the hospitalization expense cover?
hospital room and board
The first portion of a covered Major Medical insurance expense that the insured is required to pay is called the
initial deductible
Who makes the legally enforceable promises in a unilateral insurance policy
insurance company
What kind of Accidental Death and Dismemberment (AD&D) insurance beneficiary requires his/her consent when a change of beneficiary is made?
irrevocable beneficiary
Which of the following statements 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
In major medical expense policies, what is the intent of a stop loss provision
limits an insured's out of pocket medical expenses
Dental care coverage is designed to cover the costs of all the following excepts:
loss of income
basic hospital and surgical policy benefits are
lower than the actual expenses incurred
comprehensive major medical policies usually combine...
major medical with basically hospital/surgical coverage (basically all inclusive policy)
which of the following best describes how a preferred provider organization is less restrictive than HMO
more physicians to choose from
Which of the following characteristics is associated with a large group disability income policy?
no medical underwriting
which of the following characteristics is associated with a large group disability income policy
no medical underwriting
J has a Disability Income policy that does NOT provide benefits for losses occurring as the result of his employment. What kind of coverage is this?
nonoccupational coverage
Deductibles are used in health policies to lower
overuse of medical services
When a policy pays dividends to its policyholders, it is said to be
participating
How does group insurance differ from individual insurance?
premiums are lower
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
Which of these is NOT a type of agent authority
principal
P received Disability income benefits for 3 months then returns to work. She is able to work one month before her condition returns, leaving her disabled once again. What would the insurance company most likely regard this second period of disability as?
recurrent disability
Which type of policy pays benefits to a policyholder covered under a Hospital Expense policy?
reimbursement
R had received full disability income benefits for 6 months. When he returns to work, he is only able to resume half his normal daily workload. Which provision pays reduced benefits to R while he is not working at full capacity?
residual disability
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
an individual disability income insurance applicant may be required to submit all of the following information except...
spouse's occupation
which of the following costs would a basic hospital/surgical policy likely cover?
surgically removing a facial birthmark
which statement is true regarding a group accident and health policy issued to an employer?
the employer receives the policy and each employee issued a certificate
A policy of adhesion can only be modified by whom
the insurance company
which of the following best defines UCR charges
the maximum amount considered eligible for reimbursement by an insurance company under a health plan
The consideration clause of an insurance contract includes
the schedule and amount of premium payments
life and health insurance policies are what type of contracts
unilateral contracts
which of the following phrases refers to the fees charged by a healthcare professional
usual, customary, and reasonable expenses
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
When must insurable interest be present in order for a life insurance policy be valid
when the application is made