NC Accident and Health Final Exam Prep

N is covered under an individual Disability policy with a 30-day Elimination period and a monthly benefit of $500. N is totally disabled for 3 1/2 months. N's total benefit received on this claim is:

$1,250

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

The policyholder has how many days to return an Accident/Health Insurance Policy and receive a full refund on premiums?

10

A person is required to be AT LEAST how old before he or she is licensed as an agent in North Carolina?

18

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?

A recurrent disability

Under which of the following circumstances will the benefits under COBRA continuation coverage end?

All group health plans are terminated by the employer

All of the following statements regarding group health insurance is true, EXCEPT:

An individual policy is given to each member

Which of the following is the MOST important factor when deciding how much Disability Income coverage an applicant should purchase?

Applicant's monthly income

Before a health insurance policy is issued, which of these components of the contract is required?

Applicant's signature on application

Which of these circumstances is a Business Disability Buy-Sell policy designed to help in the sale of a business?

Business owner becoming disabled

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

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

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

Which health policy clause stipulates that an insurance company must attach a copy of the application to the policy to ensure that it is part of the contract?

Entire contract

After an insured gives notice of loss, what must he/she do if the insurer does not furnish forms?

File written proof of loss

A vacancy that occurs during the North Carolina Commissioner of Insurance's term of office MUST be filled by the

Governor

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?

Guaranteed Renewable

Which of the following types of organizations are prepaid group health plans, where members pay in advance for the services of participating physicians and hospitals that have agreements?

HMO

A medical care provider which typically delivers health services at its own local medical facility is known as a:

Health Maintenance Organization

J is a subscriber to a plan which contracts with doctors and hospitals to provide medical benefits at a predetermined price. What type of plan does J belong to?

Health Maintenance Organization

S wants to open a tax-exempt Health Savings Account. To qualify for this type of account, Federal law dictates that S must be enrolled in a:

High-deductible health plan

For which of the following expenses does a Basic Hospital policy pay?

Hospital room and board

Information obtained from a phone conversation to the proposed insured can be found in which of these reports?

Inspection report

Which of the following requires that an applicant for an individual Health Policy be notified of an investigation into his personal character, general reputation, and mode of living?

Insurance Information and Privacy Protection Act

An insurance broker in North Carolina is a representative of the

Insured

Which health policy clause specifies the amount of benefits to be paid?

Insuring

Which of the following health insurance policy provisions specifies the health care services a policy will provide?

Insuring clause

The fund that assures policyholders payment of death benefits on Life Policies, if the company is insolvent at the time of the claim, is called the

Life and Health Insurance Guaranty Association

The rules and regulations of the Life and Health Insurance Guaranty Association in North Carolina apply to

Life and Health Policies issued by companies authorized in North Carolina

Which type of plan normally includes hospice benefits?

Managed care plans

Which of these factors do NOT play a role in the underwriting of a health insurance policy?

Marital status

The health insurance program which is administered by each state and funded by both the federal and state governments is called:

Medicaid

Which of the following are NOT managed care organizations?

Medical Information Bureau (MIB)

Which of these statements concerning an individual Disability Income policy is TRUE?

Normally includes an Elimination period

S filed a written Proof of Loss for a Disability Income claim on September 1. The insurance company did not respond to the claim. S can take legal action against the insurer beginning:

November 1

On an Accidental Death and Dismemberment (AD&D) insurance policy, who is qualified to change the beneficiary designation?

Policyowner

How does group insurance differ from individual insurance?

Premiums are lower

Which of the following statements about a Guaranteed Renewable Health Insurance policy is CORRECT?

Premiums normally increase at time of renewal

What must the policyowner provide to the insurer for validation that a loss has occurred?

Proof of Loss

A Disability Income policyowner suffers a disability which was due to the same cause as a previous disability. Both disabilities occurred within a five-month period. The insurer may cover the second disability without a new elimination period under the:

Recurrent Disability provision

K failed to pay a renewal premium within the time granted by the insurer. K then sends in a payment which the insurer subsequently accepts. Which policy provision specifies that coverage may be restored in this situation?

Reinstatement

D is an architect receiving Disability Income benefits who is not able to return to work full time, but can work on a part-time basis. Which of these features would allow D to continue receiving benefits?

Residual Benefit clause

Which mode of payment is NOT used by health insurance policies?

Single premium

Which statement is TRUE regarding a group accident & health policy issued to an employer?

The employer receives the policy and each employee is issued a certificate

Which of the following statements is true about most Blue Cross/Blue Shield organizations?

They are nonprofit organizations

A person insured under a health policy is required to give the insurance company a Notice of Claim within how many days after a covered loss?

Twenty

The provision in a health insurance policy that suspends premiums being paid to the insurer while the insured is disabled is called the:

Waiver of Premium

Which parts of a health insurance policy are guaranteed to be true?

Warranty

The Commissioner of Insurance may examine the records of an insurance company in order to

determine the solvency of the company

Non-occupational disability coverage is designed for:

employees who suffer non-work related disabilities, since work-related disabilities are covered by Workers' Compensation

When L applies for a Health Insurance Policy, L unintentionally fails to list a previous visit to a cardiologist. If the insurance company contests the policy, it MUST do so within 2 years

from the date of issue

An agent who signs a blank contract application or policy of insurance

is guilty of a misdemeanor

All of the following are limited benefit plans, EXCEPT:

life insurance policies

Every Group Health Policy providing benefits for chemical dependency treatments must include, for the life of the contract, a

minimum benefit of $16,000

If a company accepts a renewal premium payment that would extend coverage beyond the policy's MAXIMUM age limit, the company

must continue the coverage to the end of the period of time for which the premium was accepted

An example of rebating would be

offering a client something of value not stated in the contract in exchange for their business

Consumer reports requested by an underwriter during the application process of a health insurance policy can be used to determine:

probability of making timely premium payments

No insurer shall refuse to insure an individual because of

race

All of the following actions are considered rebating EXCEPT

sharing commissions with other licensed and appointed agents

An individual Disability Income insurance applicant may be required to submit all of the following information, EXCEPT:

spouse's occupation

If the Commissioner of insurance finds that a licensed person has used fraudulent, coercive, or dishonest practices or has proved to be incompetent, untrustworthy, or financially irresponsible, the law allows the Commissioner to

suspend, revoke, or refuse to renew the agent's license

Essential Benefits without annual and lifetime limits are required on any health policy purchased:

through the Federal Marketplace

A disability elimination period is best described as a:

time deductible

Boycott, coercion, and intimidation that result in the unreasonable restraint of trade are prohibited under the North Carolina insurance laws covering

unfair trade practices

An insurance company formed under the laws of Canada would be known in North Carolina as

an alien company

Which of the following medical expenses does Cancer insurance NOT cover?

arthritis

Continuation of coverage of a group Hospital, Surgical, and Major Medical Policy MUST include

hospital expenses

If an insurance company issues a Disability Income policy that it cannot cancel or for which it cannot increase premiums, the type of renewability that best describes this policy is called:

noncancellable

According to the Information and Privacy Protection Act, when access to recorded personal information is requested following an adverse underwriting decision, the insurer must make the information available within how many business days?

30

In North Carolina, a health policy that is paid on a quarterly basis requires a grace period of

31 days

When is a Group Health policy required to provide coverage for a newborn child?

At the moment of birth

All of the following statements about Major Medical benefits are true, EXCEPT:

Benefits have no maximum limit

Which of the following reimburses its insureds for covered medical expenses?

Commercial insurers

Which contract permits the remaining partners to buy-out the interest of a disabled business partner?

Disability Buy-Sell

Which of the following statements BEST describes the intent of a Coinsurance clause in a Major Medical policy?

Discourages overutilization of the insurance coverage

In a Disability Income policy, which of these clauses acts as a deductible?

Elimination Period

What is the initial requirement for an insured to become eligible for benefits under the Waiver of Premium provision?

Insured must be under a physician's care

Which of the following claims are typically excluded from Medical expense policies?

Intentionally self-inflicted injuries

What kind of Accidental Death and Dismemberment (AD&D) insurance beneficiary requires his/her consent when a change of beneficiary is made?

Irrevocable beneficiary

In Major Medical Expense policies, what is the intent of a Stop Loss provision?

Limits an insured's out-of-pocket medical expenses

North Carolina requires that an insurance agent must complete __ hours of continuing education on the subject of law and ethics every two years.

3

Approved premium rates for group health insurance shall be guaranteed by the insurer for an initial period of not LESS than how many months?

12

An insured MUST submit a proof of loss on a health insurance claim within how many days after the date of loss?

180

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?

45 days

Every insurance agent/broker MUST maintain all records, books, and documents for insurance transactions for a period of not less than

5 years

Eligible employees must be added to group health coverage NO LATER than how many days after their first day of employment?

90

Which of the following characteristics is associated with a large group disability income policy?

No medical underwriting

J purchased a Disability Income Policy that ONLY J can terminate and on which the rates will never increase above those illustrated in the policy. Which of the following types of policies did J purchase?

Noncancelable

Which of these statements is INCORRECT regarding a Preferred Provider Organization (PPO)?

PPO's are NOT a type of managed care systems

What does Medicare Parts A and B cover?

Part A covers hospitalization; Part B covers doctor's services

M purchased an Accidental Death and Dismemberment (AD&D) policy and named his son as beneficiary. M has the right to change the beneficiary designation at anytime. What type of beneficiary is his son?

Revocable

Which of these terms accurately defines an underwriter's assessment of information on a health insurance application?

Risk classification

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?

Submit the claim in any form

Which of the following is the reimbursement of benefits for the treatment of a beneficiary's injuries caused by a third party?

Subrogation

Which of the following phrases refers to the fees charged by a healthcare professional?

Usual, customary, and reasonable expenses

The situation in which a group of physicians are salaried employees and conduct business in an HMO facility is called a(n):

closed panel

M completes an application for health insurance but does not pay the initial premium. All of these actions must occur before M's policy goes into effect, EXCEPT:

free-look period has expired

With Disability Income insurance, an insurance company may limit the monthly benefit amount a prospective policy holder may obtain because of the insured's:

gross income at the time of purchase

K works for XYZ Clothing Store from September through December each year. K works 45 hours a week for this period of time. The employer's Group Policy would consider K

not eligible for the insurance because as a seasonal employee K does not meet the definition of "employee" under North Carolina law

The Coordination of Benefits provision:

prevents an insured covered by two health plans from making a profit on a covered loss