Insurance stuff
In an employer-sponsored group accident and health plan, a master contract is issued to the
Employer
Key Person Disability Insurance pays benefits to the
Employer
A common exclusion or limitation on a dental policy is
Endodontics
All of the following are qualifications for establishing a health savings account (HSA) EXCEPT
Enrolled in a health plan with a prescription drug benefit
Nate's dependent son is physically handicapped, but not eligible for Medicare. How long may the son remain on Nate's health coverage after the age of 26?
Coverage remains with written proof of disability and dependency
Which of the following does restorative dental treatment cover?
Crowns
A producer's insurance license may ONLY be revoked by the
Department of Insurance and Financial Services (DIFS)
In group health care, what is the purpose of the coordination of benefits provision?
Determines what is paid by the primary and secondary insurers in the event of a claim
A doctor who accepts Medicare Assignment agrees to which of the following?
Doctor cannot charge more than Medicare's scheduled coverage
Disability Income plans which require that the insurer can NEVER change or alter premium rates are usually considered
Noncancellable
Which of these actions would NOT result in a producer's license revocation?
Not maintaining an adequate level of sales
Which of the following provides Medicare supplement policies?
Private insurance companies
What is the purpose of a Disability Income Benefit?
Provide money for living expenses
A rehabilitation benefit is intended to
Prepare the insured to return to employment
Claims payable to a Disability Income insured, even when the insured can continue to work, are the result of a
Presumptive disability
Who is the individual paid on a fee-for-service basis?
Provider
Premiums paid that exceed 7 1/2% of an insured's Adjusted Gross Income (AGI) are tax-deductible when paid for which of the following plans?
Qualified Long-term Care plan
The role of the federal government was expanded when Medicaid was established by allowing the state to
Receive matching funds to expand public assistance programs
Which of the following actions is REQUIRED by a producer who is replacing an existing life insurance policy?
Submit to the replacing insurer a list of the policies to be replaced
Justin is receiving disability income benefits from a group policy paid for by his employer. How are these benefits treated for tax purposes?
Taxable income
Which of the following is typically NOT eligible for coverage in a group health policy?
Temporary employee
Craig submits a $500 claim for medical expenses. With a past due premium of $100, the insurer pays $400. Which of the Uniform Optional Provisions covers this situation?
Unpaid premium
The purpose of the Coordination of Benefits provision in group accident and health plans is to
avoid overpayment of claims
Which of the following is NOT a required provision in an accident and health insurance policy?e
change in occupation
All of the following are included as part of a contract in the entire contract provision EXCEPT the
changes made by the producer
A medicare supplement policy is
designed to fill in the gaps of Part A and Part B Medicare
Benefits provided by a Medicare Supplement policy must NOT
duplicate Medicare benefits
All of these are characteristics of a major medical expense policy EXCEPT
elimination periods
The limited period of time given to all members to sign up for a group health plan is called the
enrollment period
The waiting period for a disability insurance policy
excludes payments for a short-term illness or injury
Which of the following is considered to be an act of misrepresentation?
falsifying the terms, benefits, advantages, or conditions of an insurance policy
Premium mode is a term used to describe the
frequency of the premium payment
A group Disability Income plan that pays tax-free benefits to covered employees is considered
fully contributory
A health insurance policy that allows an insurer to change the policyowner's premiums, but NOT cancel the policy is called a(n)
guaranteed renewable policy
An indemnity plan
provides the insured a specific dollar amount for services
Which of the following is NOT a valid reason for an insurer to refuse renewal of a small employer group plan?
Claims were higher than expected
Which disability policy provision would address any concerns of the value of the benefits decreasing over time?
Cost of living benefit
A producer may give an insurance applicant an article of merchandise having an invoice value of ______ or less
$5
Kate has a Major Medical Plan with a 75/25 coinsurance and a deductible of $25. How much will she have to pay if she, not having met any of her deductible, visits the doctor and receives a bill for $125?
$50
If an employee contributes 50% toward the disability plan premium provided by an employer, what would be considered the taxable income of a $1,000 monthly disability benefit?
$500
Kim has health insurance with a deductible of $500 and an 80/20 coinsurance. How much will she pay if she incurs a loss of $1,500?
$700
Kathy pays a monthly premium on her health insurance policy. How long is her grace period?
10 days
Sole proprietors are permitted tax deductions for health costs paid from their earnings in the amount of
100% of costs
Lorenzo is self employed with an S corporation. He is unmarried and had a net profit for the tax year. What are the tax ramifications of his health insurance premiums paid for the year?
100% of his health insurance costs can be deducted from his gross income
Frank is shopping for a disability income policy. Which of the following would have the HIGHEST premium?
14 day waiting period / 10 year benefit period
An insurer must furnish to a claimant forms for filing proof of loss within ___ days upon receiving a notice of claim.
15
To be eligible for a small employer group coverage, an employee must work a MINIMUM of ____ hours in a typical week
17.5
Written notice for a health claim must be given to the insurer ___ days after the occurrence of the loss.
20
In Michigan, legal action can be taken for up to _____ year(s) against an insurer for failure to pay health claims after proof of loss was submitted
3
Michigan requires that a licensee complete _____ hours of continuing education on the subject of ethics every reporting period.
3
The acceptance of a credit life application requires the submission of a certificate of insurance to the insured within _____ days
30
A life insurance applicant in Michigan may backdate the application for up to _____ month(s)
6
In Michigan, legal action may be taken against an insurer for up to _____ years for failing to pay a life insurance claim after proof of loss was submitted
6
What percentage of a participant's income are group long-term disability benefit amounts typically limited to?
60%
The open enrollment period for Medicare Supplements begins at age
65
A 10% excise tax is normally applied to an early withdrawal from an IRA. According to HIPAA, this tax will not be applied if the withdrawal is used for medical expenses that exceed ______ of the individual's adjusted gross income
7.5%
How much does Medicare Part B pay for physician fees?
80%
Part A Hospital expense coverage provided under Medicare is automatically made available to each of the following EXCEPT
A 70-year old NOT eligible for Social Security
HIPAA considers which of the following as "individually identifiable health information"?
A person's health claim information
Under Michigan Law, which of the following would NOT be considered an illegal inducement?
A promotional item with the producer's name and address valued at $5
Under a disability income policy, which provision would be payable if the cause of an injury is unexpected and accidental?
Accidental bodily injury provision
At what age will a person normally enroll with an insurance carrier under a Part C Medicare Advantage Plan?
Age 65
The waiver of premium does NOT include which provision?
All future premiums are waived if the insured recovers from the disability
What amount will be paid under a policy where the insured misstated his/her age?
An amount the premium would have purchased at the correct age
Which of the following is included inn the entire contract according to the entire contract provision?
Application
Bill requires some nursing care and supervision but NOT full-time care. Which of these nursing home options would best serve him?
Assisted Living
Which of the following nursing home options would BEST suit an individual who needs some nursing care and supervision but NOT full-time care?
Assisted living facilities
An insured dies from what appears to be accidental causes. When confirming the cause of death, which of these actions by the insurer takes precedence?
Autopsy
Which of the following is NOT taken into consideration when determining eligibility for Medicare benefits?
Income
A disability policyowner is injured and becomes totally disabled. The benefits pay for 2 years, starting from the date of the injury. What is this time period called?
Benefit period
Which type of business insurance is meant to cover the costs of continuing to do business while the owner is disabled?
Business overhead expense policy
Ted has a health insurance plan that requires him to pay a specific sum out of pocket before any benefits are paid in a calendar year. Which of these does his health plan have?
Calendar-year deductible
Maria is a Preferred Provider Organization (PPO) subscriber and received care from an out-of-network provider. Which of the following is the likely result?
Care is covered
Which of the following is a requirement for ANY change in an insurance application?
Change must be initialed by the applicant
When an insured changes to a more hazardous occupation, which disability policy provision allows an insurer to adjust policy benefits and rates?
Change of occupation provision
One of the most important considerations when replacing health insurance would be the
Exclusions on a new policy
Which of these is NOT a qualifying event for Medicare?
Falling below the federal poverty level
After an insured gives notice of loss, what must he/she do if the insurer does not furnish forms?
File written proof of loss
Paul the producer has provided a false statement in relation to an insurance claim. Which illegal act has been committed?
Fraud
Which of these statements about Medicaid is CORRECT?
Funded by federal, state, and local taxes
Which of these will typically authorize treatment from a specialist?
Gatekeeper
How is Medicare Part B funded?
General tax revenue and user premiums
A master contract and certificate of coverage can be found in which type of policy?
Group
Which type of long-term care benefit would be most appropriate for a stroke victim who requires speech therapy administered at her home?
Home health care
Which type of coverage pays an amount per day for hospitalization directly to the insured regardless of the insured's other health insurance?
Hospital indemnity
Which of the following is NOT included under a health benefit plan?
Hospital indemnity plan
A Medicare Supplement policy issued in the state of Michigan is required to provide each of the following EXCEPT
It must include outpatient prescription drug coverage
Without a Section 125 Plan in place, what would happen to an employee's payroll contribution to an HSA?
It would be considered taxable income to the employee
The open enrollment period for Medicare Part B is
January 1 through March 31
Donna and Mary were racing bicycles in a store parking lot while being cheered on by fellow employees. Mary ran into John, another employee, who happened to be taking out the garbage. Both Mary and John are injured. Who would most likely be covered under Workers' Compensation?
John
The time limit for filing claim disputes is addressed in which provision of an accident and health policy?
Legal actions
Someone needing custodial care at home would require which type of coverage?
Long-term care
Coming from an insurance point of view, which of the following is the main risk associated with disability?
Loss of income
Which of the following is an example of the illegal act of defamation?
Making a statement that is false or maliciously critical of the financial condition of an insurer
Which of the following is considered to be a point of service (POS) plan?
Managed care plan
Tyler purchased a disability policy with a waiver of premium rider on April 1. He is disabled on May 1. On June 1, he receives proof of permanent and total disability, and submits a claim. He begins receiving benefits on June 15. When are his premiums waived?
May 1
Sonya applied for a health insurance policy on April 1. Her agent submitted the info to insurance company on April 6. She paid the premium on May 15 with the policy indicating the effective date being May 30. On which date would Sonya have coverage?
May 30th
Shirley has a Medigap policy, which is designed to pay costs associated with
Medicare Parts A and B
The purpose of Medicare Supplement Insurance is to address gaps in Medicare coverage, which can include
Medicare in-hospital deductible
Mark continues working after the age of 65 and is covered through his employer's group health plan. Which of the following statements is TRUE?
Medicare is the secondary payer
Which type of plan would be most appropriate for an individual on Medicare and is concerned that Medicare will NOT pay for charges exceeding the approved amount?
Medicare supplement Plan F
How does one become eligible for Part D: Prescription Drug coverage?
Must have Medicare coverage
Which of the following is NOT covered under Workers' Compensation?
Pain and suffering
Joe is a Medicare participant who receives his benefits through a Managed Health Care Plan. Which Medicare plan does he have?
Part B
According to the Health Insurance Portability and Accountability Act (HIPAA), when can a group health policy renewal be denied?
Participation or contribution rules have been violated
Which of these factors is NOT taken into consideration when determining the cost of a long-term care policy?
Personal income
Which of the following is NOT a common exclusion for a medical expense policy?
Physical therapy
Coordination of Benefits regulation applies to all of the following plans EXCEPT
Preferred Provider Organization plan
Which of the following is an example of a producer's fiduciary duty?
Recording receipt and remittance of premiums due to the insurance company
Which of these BEST describes the illegal act of twisting?
Replacing an insurance policy from one insurer to another based on misrepresentation
Upon finding a producer guilty of forgery, the Commissioner may take all of the following actions EXCEPT?
Require the producer to notify his/her clients
Continuous 24-hour care provided by licensed medical professionals under the direct supervision of a physician is called
Skilled nursing care
Generally speaking, which three levels of care are Long-term Care policies provided with?
Skilled nursing, intermediate, and custodial care
Bill the producer is collecting the initial premium on a health policy. Which of the following statements is true?
The contract is not in force without the initial premium being paid
In which of the following situations would the insurer be liable for a loss?
The insured suffered an injury as an innocent bystander during a bank robbery
What is the elimination period of an individual disability policy?
Time period a disabled person must wait before benefits are paid
A 70-year old insured individual has suffered from kidney failure for the past 24 months. She is covered by her spouse's large-group employer plan. How will Medicare be utilized in this situation?
Will be the secondary insurer and pay for claims not fully covered by the group plan
What type of injury would NOT be covered under a health insurance policy?
Work-related
Major medical expense plans provide coverage for each of the following EXCEPT
Work-related injuries
Continues coverage under COBRA would be provided to all of the following EXCEPT
a covered employee is terminated for gross misconduct
A medical provider that accepts Medicare Assignment must
accept payment based upon a defined Medicare schedule as payment in full
A long-term care policy typically provides all of the following levels of care EXCEPT
acute care
Loss of income insurance provides
an individual the means to replace wages
Medical Expense insurance would cover
an injury occurring at the insured's residence
A newborn must be covered under an existing health policy
at the moment of birth
Credit Accident and Health plans are designed to
help pay off existing loans during periods of disability
HMO plans are REQUIRED to provide
home health care
A proposed insured for a health insurance policy was treated for heart disease within the past year. When applying for health insurance, the heart disease treatment
indicates a preexisting condition
Medicare Part A covers
inpatient hospital stay
An accident and health policy that provides reimbursement benefits makes them payable to the
insured
An example of a primary care physician would be a(n)
internist
A foreign insurance company doing business in Michigan
is a company domiciled under the laws of another state
Upon receiving a producer complaint, the Commissioner may immediately
issue a cease and desist order
An insured was injured as an innocent bystander when someone committed a felony. The insurer is
liable for the loss
Producer commissions may NOT be paid to
licensed producers not appointed by an insurer
A dread disease policy is considered to be a type of
limited health insurance policy
Under Michigan Insurance Code, Chapter 45, financial loss can be defined as
loss of income
An insurer would be committing Unfair Discrimination if coverage was denied based upon
marital status
The focus of major medical insurance is providing coverage for
medical and hospitalization expenses
A beneficiary change can occur:
normally at any time during the policy term
Which of these characteristics of an applicant is NOT taken into consideration when assessing risk for Disability coverage?
number of children
Paul is an employee who caught a disease unique to the trade to which he was exposed to. Paul has a(n)
occupational disease
The difference between pre-certification and concurrent review is that pre-certification
occurs before the treatment is provided
A clause that allows an insurer the right to terminate coverage at any anniversary date is called a(n)
optional renewability clause
Richard owns an insurance policy that is renewable only at the option of the insurance company. His policy is considered to be:
optionally renewable
The monthly benefit for an individual disability income policy is usually limited to a percentage of the insured's income in order to avoid
over insurance
States that have "no loss no gain" laws require a replacing policy to
pay for ongoing claims under the policy it replaces
Medicaid is intended for
poverty stricken people
Which of the following does Medicare Part D cover?
prescription drugs
A health insurance policy will typically cover
preventative health services
When comparing an HMO to a PPO, the PPO
provides a greater choice of providers
A life insurance application may be backdated to
save on premiums
Health insurance involves two perils, accident and __________.
sickness
A(n) ________ company is owned exclusively by shareholders
stock
An insurer has the right to recover payment made to the insured from the negligent party. These rights are called
subrogation
What is Medicare part B also known as?
supplementary medical insurance
In a Long-term Care policy, activities of daily living (ADL's) can be each of the following EXCEPT
talking
Distributions from a Health Savings Account (HSA) for qualified medical expenses are
tax-free
A Medicare Supplement basic benefit is
the first 3 pints of blood per year
"Maximum benefits" refers to the
the upper limit of the total lifetime benefits the insurance company will pay
A disability elimination period is best described as a
time deductible
According to the Taft-Hartley Act, group insurance premium payments made by an employer MUST be paid to the
trust
A life insurance policy sold in Michigan may be contested by the insurer ONLY during the first _____ year(s) of the contract
two
An example of intimidation is
using threat or force to restrict fair trade in the transaction of insurance
A Universal Life policyowner must receive a notice of cash surrender value at LEAST every
year