Exam Practice Test and Random chapter Questions

Which of the following insurance providers must be nonprofit and sell insurance to its members:

fraternal

The office of insurance regulation is responsible for all of the following insurer activities except:

issues of securities

The provision which prevents insured from bringing any legal action against the company for lat least 60 days after proof of loss is known as:

legal action

On a participating insurance policy issued by a mutual insurance company, dividends paid to policyholders are:

not taxable since the IRS treats them as a return of a portion of the premium paid.

Something of value exchanged between the insurer and the insured is considered an:

Consideration is something of value that each party to an insurance contract gives to the other.

Bob the insurance producer just sold an insurance policy to his sister. What kind of business is this?/

Controlled

an important feature of a dental insurance plan, which is typically not found in a medical expense insurance plan:

Diagnostic and Preventitive

Which of the following would be an example of a limited accident and health insurance policy?

Dread disease policy

All of the following are correct about the required provisions of a health insurance policy

EXCEPT: A reinstated policy provides immediate coverage for an illness.

The insurance policy, together with the policy application and any added riders form what is known as...

Entire Contract

No insurance policy form can be issued, delivered, or used in this state unless it had been:/

filed with and approved by the office of insurance regulation

What term is used for replacing insurance policies for the sole purpose of making commissions?

Churning

An insured pays a monthly premium of $100 for her health insurance. What would be the duration of the grace period under her policy?

10 days

What is reinsurance:/

an agreement between a ceding insurer an assuming insurer

Which of the following factors would be an underwriting consideration for a small employer carrier?

/ Percentage of participation by the employees

while a claim is pending, an insurance company may require:

/ An independent examination as often as reasonably required.

In a disability policy, an Elimination (waiting) Period Provision refers to the period:

/ Between the first day of disability and the day to which the disability must continue before it can result in the insured receiving benefits

n applicant for an Individual Health policy failed to complete the responses to the Medical History questions because she had forgotten some important past treatment dates. She did, however, sign the application. Before being able to complete the responses and pay the initial premium, she was confined to a hospital for a condition that would ordinarily be covered by the policy. In this situation, she was not insured because she had not met the conditions specified in which of the following?

/ Consideration clause The consideration on an insurance policy is the premium paid by the insured and the statements they make on their application. There is never any coverage unless the premium has been paid.

Who can provide skilled nursing care?

/ Doctor

The law also protects consumers against the circulation of inaccurate or obsolete personal or financial information:

/ Fair Credit Reporting Act

How many pints of blood will be paid for by Medicare Supplement core benefits?

/ First 3

Which provision allows the policyholder a period of time, while coverage is in force, to examine a health insurance policy and determine whether or not to keep it?

/ Free Look Period

All small employer group health plans, in order to comply with the requirements of the Florida Employee Health Care Access Act, must be issued on what basis?

/ Guaranteed issue

An insured stated on her application for life insurance that she never had a heart attack, when in fact she had a series of minor heart attacks last year for which she sought medical attention. What would explain the reason a detah benefit claim is denied?:

/ Material Misrepresentation

A long-term care insurance shopper's guide must be provided in the format developed by the National Association of Insurance Commissioners (NAIC). The shopper's guide must be presented to the applicant prior to completing the application.:

/ NAIC

All of the following are true regarding rebates EXCEPT:

/ Rebates are allowed if it's in the best interest of the client.

Under the Physical Exam and Autopsy provision, how many times can an insurer have the insured examined, at its own expense, while a claim is pending?

/ a. unlimited

Which of the following is NOT true regarding a certificate of authiority:

/ it is issued to group insurance participants.

Bethany studies in England for a semester. While she is there, she is involved in a train accident that leaves her disabled:

/ none

A guaranteed renewable disability insurance policy:

/ renewable at the insureds option up to a certain age

Which of the following is NOT a responsibility of the office of insurance of regulation:

enacting new insurance laws

At what age are individuals become INELIGIBLE for Florida Healthy Kids coverage?/

19

In order for an employee to be considered eligible for small group insurance, he/she must work at least how many hours per week?/

25

The insuring clause in a health policy will deal with all of the following EXCEPT:

A definition of losses not covered by the policy

Which of the following is a feature of a disability buyout plan?/

A lump-sum benefit payment option

Insurance companies may be classified according to the legal form of their ownership. The type of company organized to return any surplus money to their policyholders is:

A mutual insurer

What is a material misrepresentation?/

A statement by the applicant that, upon discovery, would affect the underwriting decision of the insurance company

Under the mandatory uniform provision Notice of Claim, the first notice of injury or sickness covered under an accident and health policy must contain:/

A statement that is sufficiently clear to identify the insured and the nature of the claim

All of the following statements concerning workers compensation are correct EXCEPT:/

A worker receives benefits only if the work related injury was not his/her fault.

Which of the following is the closest term to an authorized insurer:

Admitted

What kind of LTC benefit would provide coverage for care for functionally impaired adults on a less than 24-hour basis?

Adult Day Care

Group health insurance is characterized by all of the following EXCEPT:/

Adverse selection.

How often must domestic insurance companies be examined by the chief financial officer in florida:

At least every 5 years

To comply with Fair Credit Reporting Act, when must a producer notify an applicant that a credit report may be requested?/

At the time of application

If an insurer meets the state's financial requirements and is approved to transact business in the state, it is considered what type of insurer?:

Authorized or Admitted

How are state Insurance Guaranty Associations funded?

By their members - authorized insurers

Kevin and Nancy are married, Kevin is the primary breadwinner and has a health insurance policy that covers both him and his wife. Nancy has an illness that requires significant medical attention. Kevin and Nancy decide to legally separate, which means that Nancy will no longer be eligible for health insurance coverage under Kevin. Which of the following options would be best for Nancy at this point?:/

COBRA

which of the following must an insurer obtain in order to transact insurance within a given state:

Certificate of Authority

In order for an insurer to legally transact insurance, it must obtain which of the following:

Certificate of authority

In order for an insurer to legally transact insurance, it must obtain?/

Certificate of authority

Which types of insurance companies marketing long-term care insurance coverage must establish procedures to assure that any comparison of policies by its agents will be fair and accurate?/

Every company is required to establish marketing procedures.

The requirement that agents not commingle insurance monies with their own funds is known as :

Fiduciary responsibility

When doing business in this state an insurance company that is formed under the laws of another state is known as which type of insurer?/

Foreign

Which of the following activities would be sufficient violation to warrant rejection, revocation, or suspension of an insurance agent's license?/

Forgery

Which of the following entities is not an insurer but an organization formed to provide insurance benefits for members of an affiliated lodge or religious group:

Fraternal benefit society

What phase begins after a new policy is deliver?/

Free

Which of the following is another name for a primary care physician in an HMO:

Gatekeeper

As it pertains to group health insurance, COBRA stipulates that:

Group coverage must be extended for terminated employees up to a certain period of time at the former employee's expense.

As it pertains to group health insurance, COBRA stipulates that:/

Group coverage must be extended for terminated employees up to a certain period of time at the former employee's expense.

All of following are the general qualifications for an agent's license EXCEPT:/

Have a high school diploma.

Which of the following entities protects policyowners, insureds, and beneficiaries under insurance contracts when insurers fail to perform contractual obligations due to financial impairment?

Insurance Guaranty Association

Which of the following entities can legally bind coverage?

Insurer

The section of a health policy that states the causes of eligible loss under which an insured is assumed to be disabled is the:

Insuring Clause

Which of the following best describes a misrepresentation?/

Issuing sales material with false statements about policy benefits

Which of the following is true regarding a risk retention group?

It is a liability insurance company owned by its members.

All of the following would be qualified as a Dependent Care Flexible Spending Account, EXCEPT?

Jeremy had to have both legs amputated, but has learned how to take care of himself and to get around in a wheelchair

Which of the following would NOT be considered a limited coverage policy?/

Major Medical Expense Insurance

All of the following statements concerning Medicaid are correct EXCEPT:

Medicaid is a state funded program that provides health care to persons over age 65, only.

An applicant for a health insurance policy returns a completed application to her agent, along with a check for the first premium. She receives a conditional receipt 2 weeks later. Which of the following has the insurer done by this point?/

Neither approved the application nor issued to policy.

Wat is the major difference between a stock company and a mutual company: ownership A participating insurance policy may do which of the following?

Pay dividends to the policy owner

A participating insurance policy may do which of the following?:

Pay dividends to the policyowner

which of the following applies to partial disability benefits:/

Payment is limited to a certain period of time

Which of the following provisions is mandatory for health insurance policies?

Physical examination and autopsy Physical examination and autopsy is a mandatory provision required by law.

In what way can an agent demonstrate a high standard of ethics?

Putting the client's best interest before their own

Sarah becomes disabled at age 22 and can no longer work. She meets the definition of total disability under Social Security. What other requirement must Sarah have met to receive Social Security disability benefits?

Sarah must have accumulated 6 work credits in the past 3 years

Which of the following insurers are owned by stockholders who have the usual rights of ownership, including the right of voting?

Stock

Which of the following terms describe the specified dollar amount beyond which the insured no longer participates in the sharing of expenses?:

Stop-loss limit

An employee becomes insured under a PPO plan provided by his employer. If the insured decides to go to a physician who is not a PPO provider, which of the following will happen?/

The PPO will pay reduced benefits

Which of the following does NOT have to be disclosed in a long-term care (LTC) policy?

The aggregate amount of premiums due

An employee insured under a group health policy is injured in a car wreck while performing her duties for her employer. This results in a long hospitalization period. Which of the following is true?/

The group plan will not pay because the employee was injured at work

Insured Z's health insurance policy year begins in January. His policy contains a carry-over provision. In November, he has a small claim which is less than his deductible. Which of the following is true:

The insured may carry over the amount of this year's expenses to next year, which will help satisfy next year's deductible

An insurer hires a representative to advertise its company at a local convention. The representative lies about the details of some of the policies, in an attempt to secure more business for the company. Who is responsible for the representative's claims:

The insurer

Which of the following is NOT a feature of a noncancelable policy?

The insurer may terminate the contract only at renewal for certain conditions.

The insuring clause of a disability policy usually states all of the following EXCEPT:/

The method of premium payment.

Which of the following definitions would make it easier to qualify for total disability benefits?

The more liberal "own occupation"

What are the 2 offices of the Financial services commission:

The office of financial regulation and the office of insurance regulation

A policy with 31 day grace period Implies?

The policy will not match for 31 days in the premium is not paid when due

Insurers usually do not reimburse the claimants for the full 100% of income lost due to disability. What is the reason for insurer limitations on coverage amounts?

To provide an incentive for the insured to return to work.

Under what circumstances can an agent's appointment be transferred to another person?/

Under no circumstances

If only one party to an insurance contract has made a legally enforceable promise, what kind of contract is it?

Unilateral

Manny has been injured in an accident. Although she is still receiving benefits from her policy, she does not have to pay premiums. Her policy includes :

Waiver of premium rider - the waiver of premium rider causes the insurer to waive future premiums when an accident or disease causes a disability lasting at least six months

Which of the following persons is required to hold a producer license:

a person who negotiates insurance contracts

an applicant is discussing his options for "Medicare supplement coverage" with his agent. He is 65 years and has just enrolled in "Medicare part A and part B". what is the insurance company obligated to do ?:

offer the supplement policy on a guaranteed basis

while a claim is pending, an insurance company may require: An independent examination as often as reasonably required. An independent examination as often as reasonably required.:

premiums always stay the same

Who examines the books and records of insurance companies in florida:/

the chief financial officer

Under a health insurance policy, benefits, other than death benefits, that have not otherwise been assigned, will be paid to:

the insured

Which of the following entities is responsible for agent licensing and administrative supervision:

the office of insurance regulation

An individual applies for a life policy. Two years ago he suffered a head injury from an accident, so he cannot remember parts of his past, but is otherwise competent. He has also been hospitalized for drug abuse, but does not remember this when applying for insurance. The insurer issues the policy and learns of his history 1 year later. What will probably happen?:/

the policy will not be affected