Guaranteed Exam Prep

The Commissioner conducts an investigation regarding a possible misconduct. At a hearing, the licensee is found guilt for knowingly violating a cease and desist order. What is a likely penalty?

$5,000 for each violation - If a person violated a cease and desist order, the Commissioner can turn the matter over to the NJ Superior Court for further legal action and can assess a fine of up to $5,000 for each violation. -

The benefits in Medical expense insurance are received...

Income tax free by the individual.

What is provided by skilled medical personnel to those who need occasional medical assistance or rehabilitative care?

Intermediate care. - Intermediate care is occasional nursing and rehabilitative care that is order by a physician and provided by skilled medical personnel for such things as changing a bandage or administering medications. -

If some of an electronically submitted claim cannot be adjudicated due to missing data, the insurer must electronically notify the health provider within what period of time?

7 days of that determination. - If any required data is missing for an electronically submitted claim, the insurer must electronically notify the health care provider or its agent within 7 days of that determination and request any information required to complete adjudication of the claim. -

Under the mandatory uniform provision Proof of Loss, the claimant must submit proof of loss within what time period after the loss?

90 days. - The Proof of Loss provision limits the time within which the insured may file a written proof of loss. A proof of loss must be filed within 90 days of loss, or in the case of a continuing loss, within 90 days after the end a period for which the insurer is liable. -

What best describes a rebate?

A producer returning part of her commission to her client, as an inducement to buy. - Returning part of a commission to a client as an inducement to buy is considered rebating. Requiring an insured to buy insurance as a condition to a loan is coercion. Selling insurance primarily to oneself, family and friends is known as controlled business. Misrepresenting policy provision or coverages at issue is an unfair claims practice. -

Which of the following statements is NOT true regarding health insurance policy provisions?

All additional provisions written by insurers are categorized by their respective states. - All health insurance policies required to contain Uniform Mandatory Provisions, which are specific provisions that are required to be in every health insurance contract. An insurer may add provisions that are not in conflict with the uniform provisions, provided that provision is approved by the state in which the policy is delivered. These additional provisions are not catalogued. -

What is not a feature of a health insurance plan purchased on the health insurance marketplace?

Dollar Limits on essential benefits. - Health plans are restricted from applying a dollar limit on ESSENTIAL benefits, nor can they establish a dollar limit on the amount of benefits paid during the course of an insured's lifetime. -

Regarding health insurance, all of the following are tax-deductible EXCEPT:

Employee paid group disability income. - When the employer pays for group premiums, they are tax-deductible to the employer. When the employee pays for a portion of the group disability premiums, they are not tax-deductible to the employee. -

An insurer incorporated under the laws of another state but doing business in this state is considered

Foreign - A foreign insurer is an insurance company that is incorporated in another state or territorial possession. -

An example of an alien insurer doing business in this state is one formed under the laws of

Mexico

What best describes agreement as it relates to insurance contracts?

One party accepts the exact terms of the other party's offer. - In insurance contracts, there must be a definite offer by one party, and this offer must be accepted in its exact terms by the other party. Agreement includes both an offer and its acceptance. -

Insureds have the right to do which of the following if they have NOT received the proper claims forms within 15 days of their notice to the insurer of a covered loss under major medical policy?

Submit the description in their own words on a plain sheet of paper. - Insureds have the right to submit the description in their own words on a plain sheet of paper if a proper form is not supplied. This is a mandatory provision in all individual health insurance polices. -

What statement is INCORRECT regarding the definition of total disability?

Total disability is the inability to perform partial duties of any occupation for which a person is suited by reason of education, training or experience. - Total disability is defined differently under some disability income policies. Some policies use a relatively strict definition such as the any occupation definition, similar to Social Security. Other insurers have adopted a more liberal definition. -

A husband and wife both incur expenses that are attributed to a single major medical insurance deductible. What type of deductible for they have in their policy?

Family - With family deductible, expenses for two or more family members can satisfy a common deductible in a given year, regardless of the amount of expenses incurred by other family members. -

An individual is approaching retirement age and is concerned about having proper coverage should he have to be placed in a LTC facility. His agent told him that LTC policies would provide necessary coverage at all of the following levels EXCEPT

Acute. - Acute care is provided by Medical Insurance. -

In addition to participation requirements, how does an insurer guard against adverse selection when underwriting group health?

By requiring that the insurance be incidental to the group. - The group must form for a reason other than buying group insurance. -

A Major Medical Expense policy would exclude coverage for treatments EXCEPT

Drug Addiction. - Treatment for drug and alcohol addiction is provided on a limited basis. -

Which of the following is NOT correct concerning taxation of disability income benefits?

If paid by the individual, the premiums are tax deductible. - Premium payments on personally owned disability income policies are non-deductible by the individual. However, disability income benefits are received income tax free by the individual. -

Riley reads an agreement on the first page of her policy which includes a list of losses that will be covered by her insurer. What is the name of this aggreement?

Insuring Clause. - The Insuring Clause lists the insured, insurance company, what kind of losses are covered, and how much the losses would be compensated. -

An agreement that is enforceable by law is known as what kind of contract?

Legal - Contracts that contain all essential elements required. by the state are enforceable in a court of law. Because insurance policies meet these requirements, they are enforceable as legal contract. -

All of the following are excluded from coverage in individual health insurance policy EXCEPT:

Mental Illness. - Mental illness is covered, with some limitations. -

An insurer can decide to not renew an Optional Renewable policy

On premium due dates. - Optional Renewability policies allow the insurer to cancel a policy for any reason whatsoever. Policies can only be cancelled on the policy anniversary or premium due date (renewal date). If the insurer elects to renew coverage, it can also increase the policy premium. -

What is NOT mandatory under the Uniform Provisions Law as applied to accident and health polices?

Probationary Period. - Probationary Period is an OPTIONAL provision. -

An insured had a heart attack while jogging, but is expected to return to work in approx. 6 weeks. The insured's Disability Income policy will...

Replace a percentage of his lost income.

There is a particular type of insurance that no insurer in NJ offers. In order for NJ residents to obtain this insurance, they will need to be covered by:

Surplus Lines Insurers - A surplus lines agent is allowed to write business in NJ for insurance companies that do not posses a certificate of authority in NJ, assuming that no authorized insurers in NJ offer the specific type of insurance in question. -

If a licensee wants to transact insurance under a different name than that listed on his or her producer's license, what must occur?

The change must be filed with the Department. - Prior to the use of the fictitious name. -

What services will NOT be provided by an HMO?

Unlimited coverage for treatment for drug rehabilitation.

When can an insured initiate legal action against the insurer?

60 days after submitting proof of loss. - The insured must wait 60 days after submitting written proof of loss before legal action can be taken. -

An elimination (waiting) period may NOT have to be satisfied for a disability in which of the following?

An insured suffers a relapse of a prior disability within 6-months of the initial covered disability. -An insured suffering a relapse from the same disability with a 6-month period will be covered as a continuation of the prior disability. -

The guaranteed purchase option is also referred to as the:

Future Increase options

What is NOT true regarding an optionally renewable policy?

Insurer can only cancel the policy for reasons stipulated in the contract. - Optionally renewable policies are similar renewable, except that the insurer may cancel the policy for any reason whatsoever. - - Optional renewable policies TRUE statements: Nonrenewal can happen on the policy anniversary date, policy premiums can increase at renewal, Renewability is at the option of the insurer, and the insurer can cancel at anytime for any reason. -

A core Medicare supplemental policy (Plan A) will cover all of the following expenses EXCEPT:

Part A deductible. - Plan A is the core benefits only and does not include coverage for Part A deductibles. -

What is consideration on the part of the INSURER?

Paying a claim - The binding force in any contract is consideration. Consideration on the part of the insured is the payment of premiums and the health representations made in the application. Consideration on the part of the INSURER is the promise to pay in the event of loss. -

Producer licenses will NOT be issued to business entities in which of the following cases?

One partner's license was revoked in the previous 5 years.

Under the mandatory uniform provision "Notice of Claim"; written notice of a claim must be submitted to the insurer within what time parameters?

Within 20 days - This mandatory provision requires the insured to give the insurer, or its agent, written notice of claim within 20 days of the loss or as soon as reasonably possible. If the nature of disability is such that the insured is legally incapacitated, this requirement is waived. -

What is the purpose of a benefit schedule?

To state what and how much is covered in the plan. - Some medical expense insurance plans contain a benefits schedule, which very specifically states exactly what is covered in the plan and for how much. -

A producer's license can be suspended or revoked for all actions EXCEPT:

Failure to generate commissions. - Can be suspended or revoked for: Offering rebates while transacting insurance, failure to pay state income taxes, failure to pay child support. -

Which of the following is NOT a Medicaid qualifier?

Insurability. - Medicaid is a program operated by the State, with some Federal funding, to provide medical care for those in need. To qualify for Medicaid, a person must be poor or become poor, be a U.S. citizen or permanent resident alien, and must meet other qualifiers, some of which are blind, disabled, pregnant, over 65, or caring for children receiving welfare benefits. -

Guaranteeing future dividends is considered to be an unfair or deceptive act known as....

Misrepresentation. - It is considered to be misrepresentation to make any false or misleading statements regarding the dividends to be received on any insurance policy. -

For a contract to be enforceable by law, the purpose of the contract must be...

Legal and not against public interest. - The purpose of a contract must be legal and not against public policy for the contract itself to be enforceable by law (or legal). -

Elaine's Basic Hospital Expense policy has a $500 per day limit for room and board in a hospital for a maximum of 5 days. Elaine got sick and had to spend 3 days in the hospital at $650 a day. How much will Elaine have to pay to cover the rest of her room and board charges?

$450. - Basic Hospital expense policies cover hospital room and board while the insured is confined in a hospital. There is no deductible and the limits on room and board are set at a specified dollar amount per day up to a maximum number of days. For example, if a hospital expense benefit was $500 per days, and the hospital actually charged $650 per day, the insured would be responsible for the additional $150 per day. -

Within how long of completed an approved prelicensing education course must a candidate submit a license application?

2 years - Unless exempt, candidates must submit the licensing application within 2 years of completing an approved prelicensing education course. -

The Uniform Provision Law that prevents insurance company from altering its agreement with a policyholder by referring to documents or other items not contained is the policy is called:

Entire Contract Provision. - A copy of the application becomes a part of the contract. Items that are not disclosed in the application are not a part of the contract. -

If a basic medical insurance plan's benefits are exhausted, what type of plan will the begin covering those losses?

Supplementary major medical. - Supplementary Major Medical Policies are used to supplement the coverage payable under a basic medical expense policy. After the basic policy pays, the supplemental major medical will provide coverage for expenses that were not covered by the basic policy, and expenses that exceed the maximum. If the time limitation is used up in the basic policy, the supplemental coverage will provide coverage thereafter. -

All of the following are minimum standards of Medicare supplements EXCEPT

They may duplicate coverage provided by medicare. - Although Medicare supplements may be cancelled or non renewed for nonpayment or material misrepresentations, they cannot be cancelled or non renewed solely on the grounds of age or deterioration of health. -

An insurance agent visits a potential client and explains various types of policies. The customer displays a lack of interest, so the agent guarantees higher dividends thank he knows would be possible. Which term best describes what the agent has done?

Misrepresentation. - Misrepresentation is the act of portraying sales material that is false, misleading or deceptive as to policy benefits or terms, the payment of dividends, etc. This refers to all forms of communication. -