Comprehensive Final Certification Exam: Illinois Health Insurance (Xcel Solutions)

What percentage of a participant's income are group long-term disability benefit amounts typically limited to?

60%

a disabled individual is eligible to receive benefits for a medicare supplement policy at age

65

__is NOT an element of a valid contract?

Countersignature

All of the following are examples of insurance advertisement EXCEPT

a memo from an employer announcing the availability of coverage for employees

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

Which of these actions is the Director empowered to do?

administer insurance licensing exams

Which situation would qualify an individual for recieving benefits from a long-term care policy?

being cognitively impaired (mentally ill)

To be classified as a small employer in Illinois, an employer, an emloyer must employ

between 2 and 50 employees

The period in which there are no social security benefits for the surviving spouse

blackout period

Insurable interest does NOT occur in which of the following relationships?

business owner and business client

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

All of the following are included as part of a contract in the entire contract provision EXCEPT the

changes made by the producer

Q the producer gave his client a rebate as an enticement to purchase insurance. Q may be found guilty of a

class B misdemeanor

How does one qualify as a fully-insured individual under Social Security disability coverage?

individual has been credited with the appropriate number of quarters of coverage

J has been issued a temporary insurance producer license. How many of these licenses may J hold in a lifetime?

one

Long-term care policies sold in Illinois are required to contain cost disclosure information in bold print. Where does the law require this information to be located?

outline of coverage

Which of these is considered a mandatory provision?

payment of claims

Which of these is considered a mandatory provision?

payments of claims

An insurance aplicant with a below-average likelihood of loss typically considered to be a

preferred risk

All of the following are functions of an insuring clause EXCEPT

primarly describes the free-look period

Health Maintenance Organization (HMO)

provides prepaid health care

Which of these provisions is required under an inidvidual Accident and Health policy?

renewal, continuation, or nonrenewal provision

Which of these is NOT an unfair method of competition?

replace coverage written by another producer

Statements made by an insurance applicant on an application are considered to be

representations

Under the subrogation clause, legal action can be taken by the insurer against the?

responsible third party

Long-Term Care policies may provide coverage for claims arising from

senile dementia

Continuous 24-hour care provided by licensed medical professionals under the direct supervision of a physician is calle?

skilled nursing care

In an insurance contract, the applicatns "consideration" is the

statements made in the application and the premium

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

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

This MANDATORY health policy provision states that the policy, including endorsements and attached papers, constitutes

the entire insurance contract between the parties

In which of the following situation would the insurer be liable for loss?

the insured suffered an injury as an innocent bystander during a bank robbery

The policy provision that entitles the insurer to establish conditions the insured must meet while a claim is pending is:

time Limit on Certain Defenses

A doctor who accepts medicare assignment agrees to which of the following

to charge no more than the amount Medicare pays for the service performed

what is the purpose of the medical information bureau (MIB)

to help underwriters evaluate risk

Which of the following pertains to the analysis of an applicant's personal information and determining whether insurance should be issued or declined?

underwriting

When does a health insurance policy typically become effective?

when initial premium is collected and policy is issued

If an individual has an accidental death and dismemberment policy and dies, an autopsy can be performed in all these situations, EXCEPT:

when the state prohibits by law

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 determines the full amount of Social Security retirement beneits a qualified individual is entitled to recieve?

Primary Insurance Amount (PIA)

Which of the following is not included in the policy face?

exclusions

Tom has a home health care benefit and is confined to his home. Which of these benefits is NOT typically covered?

full-time nursing care

An insured's status under Social Security can be described as

fully described

All of the following are primary risk factors in underwriting individual health insurance policies EXCEPT

geographical location

An HMO that involves a partnership of physicians and other providers who practice out of a central facility is called a(n)

group HMO

Long-term care policies issued in Illinois MUST be

guaranteed renewable

What is the required renewability status of all medicare supplement policies

guaranteed renewable

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?

guaranteed renewable

An entity that acs as an insurance producer

has the same bond requirements as an individual producer

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

The power given to an individual producer that is not specifically addressed in his/her contract is considered what type of authority?

implied

T owns an Accident & Health policy and notifies her insurance company that she has chosen a less hazardous occupation. Under the Change of Occupation provision, which of the following actions may her insurance company take?

increase her policy's coverage amount

Which of the following actions may an insurance company NOT do in a health policy that contains a guaranteed renewable premium benefit?

increase the premiums on an individual basis

A medicare supplement policyholder has __ days to return the policy and recieve a full premium refund

30

A policyowner decides to cancel an insurance policy within 90 days of the issue date. As a result of this cancellation, the producer is REQUIRED to refund a prorated portion of any fee charged within __ days of recieving the cancellation notice

30

J purchased a Medicare Supplement policy through a direct-response solication. J is allowed at LEAST __days after policy delivery to return the policy and recieve a full refund

30

The Director MUST be notified of a producer's change of home address within ___ days

30

The holder of a business entity registration is REQUIRED to notify the Director whtin __ days of a change in office location

30

To continue health coverage for a newborn, the policyowner must notify the insurer of birth and provide the first premium payment within _____ days of birth.

31

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

The MAXIMUM time period that pre-existing conditions can be excluded in long-term care policies is

6 months

When are group disability benefits considered to be tax-free to the insured?

When the recipient pays the premiums

Which statement would be prohibited in an Accident and Health advertisement?

"all hospital bills will be paid by your policy"

A policyholder has a major medical plan with a 80%/20% coinsurance and a deductible of $75. If the insured has previously met her deductible and receives a bill for $175, how much will the insurer pay?

$140

Kathy pays a monthly premium on her health insurance policy. How long is her grace period?

10 days

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

A lapsed producer's license may be reinstated within _______ years of the license renewal date

12

T the producer has just collected premium monies from a client. T may personally hold these funds for a MAXIMUM of __ days before deposition them in a Premium Fund Trust Account

14

An insurer must furnish to a claimaint forms for filing proof of loss within __ days upon recieving a notice of claim

15

Which of these accounts are producer license fees deposited into

Insurance Producer Administration Fund

Which of the following typically does NOT provide a form of managed care?

Major medical indemnity plan

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

Joe is a Medicare participant who receives his benefits through a Managed Health Care Plan. Which Medicare plan does he have?

Part C

According to Illinois law, when must a producer deliver the Outline of Coverage to a Medicare Supplement applicant?

at the time of application

At what point may a health insurer modify coverage for an individual health policy?

at the time of coverage renewal

ABC insurance company would like to issue a small employer group policy in this state. Before doing so it is required

be authorized to write accident and health insurance in at this state

Jennifer is required to pay a specific sum out of pocket before any benefits are paid in a year. Her health policy most likely contains a(n)

deductible

A business entity wishes to become approved as a producer for soliciting insurance business. Before doing so, the business entity is required to submit to the Director a(n)

designated producer assigned for compliance with Illinois insurance laws

in a 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

It is acceptable to discriminate the amount of benefits for life and health policies between individuals of

different classes

Which of the following is considered an activity of daily living (ADL) as defined under a long-term care policy?

dressing

Benefits provided by a Medicare Supplement policy must NOT

duplicate Medicare benefits

Under group health insurance, a certificate of coverage is issued to the

employee

In an employer-sponsored group accident and health plan, a master contract is issued to the

employer

Which of the following policy provisions prohibits an insurance company from incorporation external documents into an insurance policy?

entire contract

The sections of an insurance contract which limit coverage are called

exclusions

Which of the following types of insurance may a limited lines producer sell?

industrial life

The clause identifying which losses resulting from an accident or sickness are insured by the policy is called the:

insuring clause

An applicant's character and personal habits can be obtained for underwriting purposes from which source?

investigatrive consumer report

All of the following statements correctly describe the purpose of Social Security EXCEPT

it provides a source of income for a meaningful standard of living during retirement

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

A(n) _____lines producer may sell Travel Accident insurance in Illinois

limited

Evidence of coverage issued by a Limited Health Service Organization (LHSO) MUST include a description of the

limited health services that the enrollee is entitled to receive

Which of these would NOT be considered a presumptive disability?

loss of a leg or arm

Which of these gaps in Medicare coverage is addressed with Medicare Supplemental Insurance?

medicare in-hospital deductable

Stating that dividends are guaranteed is considered to be

misrepresentation

When a producer submits an insurance applicaton, the application is REQUIRED to contain the producer's

name and address

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 desribes this policy is called

noncancellable

How are premiums paid by the insured for personally owned disability income insurance treated for tax purposes?

not tax deductible