2-40 Health and Accident Insurance State Exam Prep

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?

$2,100

Which required disclosure helps a buyer choose the amount and type of insurance to buy, and how to save money by comparing the cost of similar policies?

Buyers Guide

Long Term Care policies will usually pay for eligible benefits using which of the following methods?

Expense incurred

This type of deductible provision waives the deductible for all family members after some of them have satisfied individual deductibles within the same year

Family maximum deductible

Which organization was established to provide funds to protect an insured in the event of an insurer's insolvency?

Florida Insurance Guaranty Fund Association

In Florida, when agents recommend changes be made for existing coverage, the agent must follow established procedures. The name of this rule is called the

Florida Replacement Rule

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

The reason for a business having a Business Overhead Expense Disability Plan is to cover

fixed business expenses

In Florida agents are allowed to engage in rebating if

offered to all insureds in the same actuarial class

Upon reaching the limiting age, a handicapped child can extend their health insurance coverage as a dependent

only if the child is incapable of employment and chiefly dependent on the policyowner

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

31 days

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

Florida requires that insurance agent must complete ______ hours of continuing education on the subject of Law and Ethics every two years

5

Qualified Long-Term Care policies may take into consideration an applicant's pre-existing conditions for a maximum of not more than __ month(s) prior to the effective date of coverage.

6

The waiting period for a pre-existing condition under a Medicare Supplement policy may NOT go beyond

6 months

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

closed panel

One definition of replacement is "the act of replacing an existing insurance policy with another". Replacement is

closely regulated and requires full disclosure

Omitting information that affects the issuance or the rate of an insurance contract is called

concealment

Health insurance benefits NOT covered due to an act of war are

excluded by the insurer in the contract provisions

Which type of insurance company allows their policywoners to elect a governing body?

Mutual

Within how many days must a licensee notify the Department of Financial Services of a change of address?

30

What is the required minimum percentage of employee participation for a noncontributory group health insurance plan according to Florida Law?

0%

XYZ Company pays the entire premium for its group health plan. The MINIMUM percentage of eligible employees that must be covered is

100%

Florida requires that coverage for newborns begins "from the moment of birth" and continues for

18 months

Employers with less than __ employees are affected by Florida's Health Insurance Coverage Continuation Act (Mini COBRA).

20

Agents that have been licensed for less than six years must complete __ hours of continuing education every two years.

24

How many hours of continuing education must a newly licensed agent complete every two years?

24

In Florida, which of the following practitioners normally do NOT receive payment from health insurance policies?

Naturopaths

What do families pay that are covered by the Florida Healthy Kids Corporation?

A portion of the premium

What do Dread Disease policies cover?

A specific disease or illness

Under a Long Term Care policy, which benefit would be typically excluded or limited?

Alcohol rehabilitation

What type of insurance company is domiciled in England, but conducts business in Florida?

Alien

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

Applicants monthly income

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

At the moment of birth

According to Florida law, when must an agent deliver the Outline of Coverage to a Medicare Supplement applicant?

At the time of application

Which of the following acts is an agent NOT authorized to do on behalf of an insurer?

Authorize claim payments

T is receiving $3,000/month from a Disability Income policy in which T's employer had paid the premiums. How are the $3,000 benefit payments taxable?

Benefits are taxable to T

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

P is a Major Medical policyowner who is hospitalized as a result of injuries sustained from participating in a carjacking. How will the insurer most likely handle this claim?

Claim will be denied

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 the application. How will the insurer handle this claim?

Claim will be paid and coverage will remain in force

As a condition for a bank loan, a bank requires the borrower to purchase credit insurance from a specific company. What is the bank guilty of?

Coercion

J is an agent who recently told a claimant that his rights might be impaired if he does not complete a release form within a specified time. What could this agent be found guilty of?

Coercion

Which of the following is an example of an Unfair Trade Practice?

Coercion

Which of the following correctly explains the actions an agent should if a customer wants to apply for an insurance policy?

Complete the application and review the information with the customer prior to obtaining the customer's signature, then send the application off to the insurance company

Which of the following BEST describes a Hospital Indemnity policy?

Coverage that pays a stated amount PER DAY of a covered hospitalization

A CEO's Personal assistant suffered injuries at home and as a result, was unable to work for four months. Which type of policy will pay a monthly benefit to the personal assistant?

Disability Income

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

Discourages overutilization of the insurance coverage

S takes out a health insurance policy which contains a provision that states that the agent does not have the authority to change the policy or waive any of its provisions. Which health policy provision is this?

Entire Contract

All of these are prerequisite for becoming a licensed agent EXCEPT

Graduate from high school

Multiple Employer Welfare Arrangement (MEWA) provides what type of benefits?

Insurance

If the insured and primary beneficiary are both killed in the same accident and it cannot be determined who died first, where are the death proceeds to be directed under the Uniform Simultaneous Death Act?

Insured's contingent beneficiary

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

Intentionally self-inflicted injuries

Which of these arrangements allows one to bypass insurable interest laws?

Investor-Originated Life Insurance

Which of the following actions will an insurance company most likely NOT take if an applicant, who has diabetes, applies for a Disability Income policy?

Issue the policy with an altered Time of Payment of Claims provision

Under Florida law, which of the following provisions is NOT required in a Medicare Supplement policy?

Limitation on pre-existing conditions for up to12 months

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

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

What is the main reason for regulating the insurance industry?

Maintain the solvency of insurance companies

Deformation occurs when an agent makes a false statement intended to

Malign another insurer

Which type of plan normally includes hospice benefits?

Managed care plans

During the course of an insurance transaction, if an agent makes a false or incomplete statement, he/she could be found guilty of

Misrepresentation

Which Unfair Trade Practice involves an agent suggesting that an insurance policy is like a share of stock?

Misrepresentation

Which Unfair Trade Practice involves an agent telling a prospective client that a policy's dividends are guaranteed?

Misrepresentation

According to the Time Payment of Claims provision, the insurer must pay Disability Income benefits no less frequently than which of the following options?

Monthly

Under an Individual Disability policy in Florida, what is the minimum schedule of time in which claims must be made to an insured?

Monthly

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 department oversees 'Market Conduct Examinations' in Florida?

Office of Insurance Regulation

Generally, how long is a benefit period for a Major Medical Expense Plan?

One year

How can an agent-in-charge have more than one location?

Only if the agent-in-charge is present when insurance activity occurs

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

The provision that defines to whom the insurer will pay benefits to is called

Payment of Claims

Which of the following types of insureds are life insurance companies allowed to make policy rate discrimination against?

People that smoke

An insured covered by Accidental Death and Dismemberment (AD&D) insurance has just died. What will happen if the primary beneficiary had already died before the insured and the contingent beneficiary?

Proceeds will go to the contingent beneficiary

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 provision allows a portion of any used medical benefits to be restored following a particular amount of benefits has been used, or after the policy has been in effect for a particular period of time?

Restoration of used benefit

A prepaid application for individual Disability Income insurance was recently submitted to an insurer. When the insurer received the Medical Information Bureau (MIB) report, the report showed that the applicant had suffered a stroke 18 months ago, something that was not disclosed on the application. Which of the following actions would the insurance company NOT take?

Send a notice to the MIB that the applicant was denied

Which of the following provisions is NOT required in HMO contracts/certificates?

Seven-day grace period

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

Single premium

What is required in the Florida Employee Health Care Access Act?

Small group benefit plan are to be issued on a "guarantee-issue" basis

A mutual insurance company and a stock insurance company have one main difference between them. What is the Major contrast?

Stock company is owned by its shareholders. Mutual company is owned by its policyholders.

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

Subrogation

An agent selling Medicare Supplement policies must provide every applicant with a(n)

Suitability form

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

According to Florida Law, in which of the following situations would a dependent handicapped child NOT be covered under a Family Health policy?

The premiums for the handicapped child are not paid

What is the elimination period of an individual disability policy?

Time period a disabled person must wait before benefits are paid

J is an agent who has induced an insured through misrepresentation to surrender an existing insurance policy. What is J guilty of?

Twisting

Disability policies do NOT normally pay for disabilities arising from which of the following?

War

What must an insurer obtain to conduct an HIV test?

Written consent

A stock life insurance company that issues both participating and nonparticipating policies is doing business on

a mixed plan

All of the following will result in suspension of an agents' license EXCEPT

acting with fiduciary responsibility

In Florida, the underwritting and issuance of a master group health policy requires that all employees

are eligible to participate, regardless of their individual health history

The coordination of benefits (COB) provision exists in order to

avoid duplication of benefit payments

In order to establish a Health Reimbursement Arrangement (HRA), it MUST

be established by the employer

The guarantee of insurability option provides a long-term care policyowner the ability to

buy additional coverage at a later date

Who makes the legally enforceable promises in a unilateral insurance policy?

insurance company

A license may be denied, suspended, or revoked if the licensee

is found guilty of misrepresentation

Pre-hospitalization authorization is considered an example of

managed care

If a policyowner does not pay the premium by the due date, the

policyowner can make the premium payment during the grace period

A long-term care lapse notice must be delivered to both the applicant and

secondary addressee

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

spouse's occupation

An assignment of benefits of a Health Policy

transfers payments to someone other than the policyowner