Health Final

An accident and health insurance contract that gives the insured the right to continue the policy in force for a substantial period of time, as specified in the contract, subject to the right of the insurer to change the premium for a whole class of insureds represented by the contract, is called a(n): A)Optionally renewable. B)Guaranteed renewable. C)Provisionally renewable. D)Conditionally renewable.

B)Guaranteed renewable.

The out-of-pocket expense paid by the insured before Major Medical policies begin paying benefits is known as the: A)Corridor provision. B)Deductible. C)Indemnity. D)Stop-loss clause.

B)Deductible.

"S" has a major medical policy with a $1,000,000 aggregate limit. The deductible is $250.00, participation is set at 80/20 and stop-loss is set at $2,000. "S" has an eligible medical expense of $8,000. How much will "S" pay on this claim? A)$1,500. B)$1,550. C)$1,600. D)$1,800.

B)$1,550.

The insured has a $2,000 per month disability income policy with residual benefits. The insured has gone back to work after being totally disabled for several months. Currently, the insured is earning only 40% of their previous income. How much will the policy pay? A)$800. B)$1,000. C)$1,200. D)$2,000.

A)$800. ???

"S" became totally disabled two years ago. During the first year of disability, the insurance company sent "S" $1,000 each month. The next year, it was increased to $1,050 and this year the payment will be $1,100. "S" had purchased which of the following riders? A)A Cost of Living rider. B)The Guaranteed Purchase Option rider. C)The Social Security rider. D)The Waiver of Premium rider.

A)A Cost of Living rider.

What is the purpose of the "Other Insurance In Other Insurers" provision? A)To determine the amount payable by multiple insurance contracts. B)To allow the insurer to recover any outstanding unpaid premiums from the benefit payment. C)To prohibit cancellation of a policy by the insurance company. D)To protect the insurance company from liability if the insured is engaged in an illegal activity.

A)To determine the amount payable by multiple insurance contracts. ???

The employer pays 60% of the premiums for a group disability income policy. How much of the benefits payable for an occurrence would be taxable to the employee? A)100%. B)60%. C)40%. D)Disability income payments are not taxable because they are not considered earned income.

B)60%.

The purpose of the Life, Accident and Health Insurance Guaranty Association is to: A)Guarantee fair treatment to policyholders in this state. B)Maintain public confidence in the insurance industry by assuming responsibility for policies issued by insolvent insurers. C)Develop non-discriminatory rates for life, accident and health insurance policies. D)Promote public interest in purchasing amounts of coverage that will guarantee indemnification of covered losses.

B)Maintain public confidence in the insurance industry by assuming responsibility for policies issued by insolvent insurers. ?

The stop-loss provision in a Major Medical Policy allows: A)The insurer to postpone benefit payments if loss ratios exceed a designated percentage. B)The insured to limit the amount of co-insurance "out-of-pocket" expense for major occurrences. C)The insured to suspend premium payments if medical expenses exceed the stop-loss limit. D)The insurer to limit the amounts payable for procedures according to reasonable charges.

B)The insured to limit the amount of co-insurance "out-of-pocket" expense for major occurrences.

Typical case management provisions may allow: A)The insurer to require the insured to leave a hospital setting if the insurer can arrange for less expensive care in a nursing facility. B)The insurer to reduce or eliminate policy benefits for elective surgical procedures that are not approved in advance. C)That second surgical opinions be obtained at the insured's expense in order to get a price comparison for the procedure. D)Denial of benefits for hospital stays that exceed the diagnostic related group (DRG) allocation of in-patient days for that particular illness.

B)The insurer to reduce or eliminate policy benefits for elective surgical procedures that are not approved in advance. ???

Which of the following statements is FALSE concerning managed care plans? A)Access to medical care specialists is unrestricted in a HMO. B)Maintaining wellness is an important cost containment measure for a HMO. C)"Gatekeepers" are primary care physicians who make decisions regarding specialized care. D)PPO's provide a financial incentive to seek treatment from a "network" provider.

C)"Gatekeepers" are primary care physicians who make decisions regarding specialized care.

The Notice of Claim mandatory provision describes the time period allowed the insured in which to provide notice that a claim is to be filed. What is the minimum time period allowable? A)10 days. B)15 days. C)20 days. D)90 days.

C)20 days.

"S" is concerned because the semi-annual premium notice for their individual accident and health policy arrived while they were on vacation. They are afraid that the policy has lapsed as a result of their failure to pay the premium when it was due. The agent informs "S" that they have a grace period of: A)20 days. B)30 days. C)31 days. D)60 days.

C)31 days.

North Carolina law requires that accident and health coverage for children must: A)Be provided by separate policies. B)Exclude congenital defects so as not to increase premiums for "normal" children. C)Be continued beyond normal termination age if the child is not self-sustaining due to mental handicap. D)Be initially covered on the parent or guardians' policy after 30 day from birth.

C)Be continued beyond normal termination age if the child is not self-sustaining due to mental handicap.

All states, including North Carolina, have adopted the uniform provisions developed by the National Association of Insurance Commissioners. There are twelve of these provisions that must be included in every accident and health insurance policy. These provisions are designed to: A)Protect the insurance companies from unfair claims by consumers. B)Lay the foundation for federal regulation of the health insurance industry. C)Establish a consistent base for determining premiums. D)Protect the insured by establishing a consistent set of policy terms.

C)Establish a consistent base for determining premiums.

Hospital expenses policies provide coverage in all of the following areas EXCEPT: A)Hospital room and board. B)Surgeon's fees for procedures performed while hospitalized. C)Out-patient prescription drugs. D)Intensive care coverage.

C)Out-patient prescription drugs.

The practice of misrepresenting an insurance product in order to induce a client to cancel an existing contract is commonly called: A)Rebating. B)Misrepresentation. C)Twisting. D)Coercion.

C)Twisting.

Which of the following statements regarding the Commissioner of Insurance is FALSE? A)The Commissioner may administer oaths to witnesses in an investigation. B)The Commissioner is unable to regulate the activities of alien insurance companies. C)The Commissioner is an elected official of state government. D)The Commissioner may suspend an agent's license without hearing if the public is felt to be at risk.

D)The Commissioner may suspend an agent's license without hearing if the public is felt to be at risk.

North Carolina Accident and Health Regulations require: A)Benefits to be denied if services are provided by chiropractors. B)10 days prior written notice be provided to the insured before lapsing any accident and health insurance policy. C)Issuance of accident and health insurance to be refused because of mental illness to make the coverage more affordable. D)Accident and health insurance coverage for a physically impaired child insured under family coverage to extend beyond age 26.

D)Accident and health insurance coverage for a physically impaired child insured under family coverage to extend beyond age 26.

Which policy provision stipulates the number of days that must pass after the insured has become disabled before policy benefits will be paid? A)Preexisting conditions. B)Probationary period. C)Corridor deductible. D)Elimination period.

D)Elimination period.

A Major Medical Policy will: A)Exclude from coverage medical treatment received from a Veterans Administration hospital. B)Cover maternity care on the same basis as any physical injury or illness after a 10 month probationary period. C)Provide first dollar coverage on medical expenses. D)Exclude coverage for screening mammography and pap smears as a preventive medicine measure.

D)Exclude coverage for screening mammography and pap smears as a preventive medicine measure.

The least restrictive definition of total disability is the: A)Inability to perform any of the duties of the disabled person's own occupation. B)Inability to perform the duties of any occupation. C)Temporary confinement to home or in a hospital. D)Inability to perform the duties of an occupation for which the disabled person is reasonably suited.

D)Inability to perform the duties of an occupation for which the disabled person is reasonably suited.

Group accident and health insurance has certain requirements imposed either by state statute or policy provision. Which of the following examples would NOT be correct for this product? A)Insurability of participants in an employer-sponsored group of at least 50 may not be required if coverage is requested within 31 days of becoming eligible .B)If the group policy provides coverage for dependent children, such coverage must begin within 21 days of the birth of the child. C)Individuals leaving the group may continue the group coverage for up to 18 months. D)Individuals leaving the group may be charged up to 102% of the rate charged for the coverage under the group.

D)Individuals leaving the group may be charged up to 102% of the rate charged for the coverage under the group. ???

The Health Maintenance Organization (HMO) approach to providing health care benefits includes: A)Providing benefits for preventative health care such as smoking cessation to reduce the cost of health care. B)Unrestricted access to health care providers to encourage subscribers to find lower cost care. C)Allowing "closed panel" HMO providers to see non-HMO subscribers to offset expenses. D)Making specialty care available to any subscriber to reduce the overall number of doctor visits.

D)Making specialty care available to any subscriber to reduce the overall number of doctor

Which of the following statements concerning group accident and health insurance is FALSE? A)100% participation is required in all non-contributory plans. B)Each certificate holder must be given 45 days advance notice of any rate increase. C)Employees must become eligible for the group coverage no later than 90 days after beginning employment. D)Physical examination can never be required of any participant in a group health insurance plan.

D)Physical examination can never be required of any participant in a group health insurance plan.