Final Exam

L has a major medical policy with a $500 deductible and 80/20 coinsurance. L is hospitalized and sustains a $2,500 loss. What is the maximum amount that L will have to pay?

$900 (deductible + 20% of the bill after the deductible [20% of $2,000])

A group insurance policy issued to a nonprofit industrial association must cover at least how many employees at the date of issue?

1,000

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

To be eligible to purchase a group insurance policy, a nonprofit industrial association must be incorporated for how long?

10 years

What is the maximum aggregate civil penalty that may be imposed by the Commissioner for violations of laws of fair trade practices?

10,000$

A client has a new individual disability income policy with a 20-day probationary period and a 30-day elimination period. Ten days later, the client breaks their leg and is off work for 45 days. How many days of disability benefits will the policy pay?

15 days

A producer must complete a new set of continuing education hours every

3 years

A producer earns 38 continuing education credit hours during his the 3-year period of his license. He then renews his license. How many continuing education credit hours will he need to complete during the new 3-year period?

36

If an insurance company writing individual health benefit plans in Iowa decides to nonrenew all written health benefit plans in Iowa, they will be prohibited from re-entering the market for a period of at least

5 years

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

A dread disease policy

Which of the following would be required to obtain a producer's license in this state?

A trustee of an employee trust plan that is compensated indirectly by the company issuing the contract

An insured purchased a policy to provide coverage on himself, his wife, and their two children. Three years later, the insured's wife gave birth to another child. When will the newborn child be covered by the current policy?

At the moment of birth

When an insured makes truthful statements on the application for insurance and pays the required premium, it is known as which of the following?

Consideration

Which of the following is NOT a characteristic or a service of an HMO plan?

Contracting with insurance companies

What is the main difference between coinsurance and copayments?

Copayment is a set dollar amount

All of the following statements concerning Accidental Death and Dismemberment coverage are correct EXCEPT

Death benefits are paid only if death occurs within 24 hours of an accident

In which of the following cases would a credit disability policy be issued?

If an individual is in debt to a specific creditor, payments will be made for him/her until the return to work.

Which of the following riders would NOT increase the premium for a policy-owner?

Impairment rider

Which of the following statements is true regarding coverage for prescription contraceptives in group health policies issued in this state?

It is a mandatory coverage.

Concerning Medicare Part B, which statement is INCORRECT?

It is fully funded by Social Security taxes (FICA)

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

Legal actions.

Which of the following is NOT a mandatory coverage in health insurance policies in Iowa?

Maternity benefits

Bethany studies in England for a semester. While she is there, she is involved in a train accident that leaves her disabled. If Bethany owns a general disability policy, what will be the extent of benefits that she receives?

None

An applicant is discussing his options for Medicare supplement coverage with his agent. The applicant is 65 years old 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 issue basis

Each individual and group health insurance policy must provide coverage for low-dose screening mammograms for determining the presence of breast cancer. How much coverage must be provided for women age 40 to 49?

One biennial mammogram

Paul is a producer in Kansas and wants to become a producer in Iowa. The Department will waive certain examination requirements, provided that Kansas would waive these same requirements if an Iowa producer sought licensure in Kansas. What term is used to describe this phenomenon?

Reciprocity

An insured has endured multiple surgeries and hospitalizations for an illness during the summer months. Her insurer no longer bills her for medical expenses. What term best describes the condition she has met?

Stop-Loss Limit

A husband and wife are insured under group health insurance plans at their own places of employment, and as dependents under their spouse's coverage. If one of them incurs hospital expenses, how will those expenses likely be paid?

The benefits will be coordinated.

An insured who has an Accidental Death and Dismemberment policy loses her left arm in an accident. What type of benefit will she most likely receive from this policy?

The capital amount in a lump sum

Which statement accurately describes group disability income insurance?

The extent of benefits is determined by the insured's income

Which of the following is NOT a feature of a guaranteed renewable provision?

The insurer can increase the policy premium on an individual basis.

When Linda suffered a broken hip, she notified her agent, in writing, within 12 days of the loss. However, her agent did not notify the insurance company until 60 days after the loss. Which of the following statements correctly explains how this claim would be handled?

The insurer is considered to be notified since the notification to agent equals notification to the insurer.

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

The more liberal "own occupation"

An agent is in the process of replacing the insured's current health insurance policy with a new one. Which of the following would be a proper action?

The old policy should stay in force until the new policy is issued

Which of the following is true regarding health insurance underwriting for a person with HIV?

The person may not be declined for medical coverage solely based on HIV status.

An insured notifies the insurance company that he has become disabled. What provision states that claims must be paid immediately upon written proof of loss?

Time of Payment of Claims

Which provision states that the insurance company must pay Medical Expense claims immediately?

Time of Payment of Claims

Under a credit disability policy, until what point will payments to the creditor be made for the insured?

Until the disability ends or the debt is satisfied, whichever is sooner

In forming an insurance contract, when does acceptance usually occur?

When an insurer's underwriter approves coverage

Under what circumstances must an insurer provide benefits for adopted children?

When the policy provides coverage for dependent children of the insured

An insured woman wants to know when insurance will start covering mammograms without a referral from a physician. What would you tell her?

age 35

An insured pays a $100 premium every month for his insurance coverage, yet the insurer promises to pay $10,000 for a covered loss. What characteristic of an insurance contract does this describe?

aleatory

An insurer neglects to pay a legitimate claim that is covered under the terms of the policy. Which of the following insurance principles has the insurer violated?

consideration

Circulating deceptive sales material to the public is what type of Unfair Trade Practice?

false advertising

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?

foregin

Which of the following types of LTC care is NOT provided in an institutional setting?

home health care

Under workers compensation, which of the following benefits are NOT included?

legal benefits

With respect to the Consideration Clause, which of the following would be considered consideration on the part of the applicant for insurance?

payment of premium

Giving a client an inducement to a sale not stated in the policy is an unlawful practice known as

rebating

A producer in another state wants to become a producer in Iowa. The other state gives the same privileges to Iowa producers wanting to be licensed in that state as it does its own producers. Iowa therefore extends the privileges of its producers to the prospective producer of the other state. What is this called?

reciprocity

Which of the following is a statement that is guaranteed to be true, and if untrue, may breach an insurance contract?

warranty