HEALTH INSURANCE Chapter Quiz Questions

CHAPTER 7 - DENTAL INSURANCE Which of the following would be considered a routine procedure? A) Annual check-up B) Endodontics C) Orthodontics D) Prosthodontics

A) Annual check-up

CHAPTER 4 - HEALTH INSURANCE PLANS Under the Affordable Care Act, what percentage of preventive care must be covered without cost sharing? A) 25% B) 50% C) 80% D) 100%

D) 100%

CHAPTER 3 - INDIVIDUAL ACCIDENT, HEALTH OR SICKNESS INSURANCE POLICY GENERAL PROVISIONS 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? A) Time of Payment of Claims B) Incontestability C) Physical Exam and Autopsy D) Legal Actions

A) Time of Payment of Claims

CHAPTER 8 - INSURANCE FOR SENIOR CITIZENS AND SPECIAL NEEDS INDIVIDUALS An insured's long-term care policy is scheduled to pay a fixed amount of coverage of $120 per day. The long-term care facility only charged $100 per day. How much will the insurance company pay? A) 20 % of the total cost B) $120 a day C) $100 a day D) 80% of the total cost

B) $120 a day Most LTC policies will pay the benefit amount in a specific fixed dollar amount per day, regardless of the actual cost of care.

CHAPTER 10 - INSURANCE REGULATION What is the license renewal period for a portable electronics insurance license? A) 6 months B) 1 year C) 2 years D) 4 years

C) 2 years

CHAPTER 8 - INSURANCE FOR SENIOR CITIZENS AND SPECIAL NEEDS INDIVIDUALS What is the duration of the free-look period for Medicare supplement policies? A) 10 days B) 15 days C) 30 days D) 60 days

C) 30 days All Medicare Supplement policies must contain a 30-day free look period where the insured may return the policy for a complete refund for any reason.

CHAPTER 8 - INSURANCE FOR SENIOR CITIZENS AND SPECIAL NEEDS INDIVIDUALS Which of the following is NOT covered by Medicare? A) Surgery B) Doctor bills C) Cosmetic surgery D) Outpatient expenses

C) Cosmetic surgery

CHAPTER 9 - FEDERAL TAX CONSIDERATIONS FOR HEALTH INSURANCE Premiums paid by self-employed sole proprietors or partners for medical expense insurance are A) Not tax deductible B) Partially tax deductible C) Totally tax deductible D) Taxable

C) Totally tax deductible Sole proprietors and partners may deducts 100% of the cost of a medical expense plan provided to them and their families because they are considered self-employed individuals, not employees.

CHAPTER 9 - FEDERAL TAX CONSIDERATIONS FOR HEALTH INSURANCE Premium payments for personally-owned disability income policies are A) Not tax deductible B) Eligible for tax credits C) Tax deductible D) Tax deductible to the extent that they exceed 10% of the adjusted gross income of those itemizing deductions.

A) Not tax deductible Premiums for personally-owned individual disability income policies are not deductible.

CHAPTER 2 - ACCIDENT, HEALTH OR SICKNESS INSURANCE BASICS Which of the following is an example of a peril covered in an accident and health insurance policy? A) Sickness B) Alcoholism C) Smoking D) Death

A) Sickness There are two major causes of loss (or perils) covered under a health insurance policy: sickness and accident. Smoking and alcoholism would be considered hazards that may cause a loss.

CHAPTER 7 - DENTAL INSURANCE All of the following coverages are usually included under a dental insurance plan EXCEPT A) Braces and appliances B) Teeth whitening C) Oral surgery D) Routine examinations

B) Teeth whitening Diagnostic care and preventative care are both included in a dental insurance plan, including oral surgery, routine examinations, and braces or other appliances

CHAPTER 9 - FEDERAL TAX CONSIDERATIONS FOR HEALTH INSURANCE For group medical and dental expense insurance, what percentage of premium paid by the employer is deductible as a business expense? A) 50% B) 60% C) 90% D) 100%

C) $3,000 For group medical and dental expense insurance any premium paid by the employer is deductible as a business expense.

CHAPTER 9 - FEDERAL TAX CONSIDERATIONS FOR HEALTH INSURANCE A noncontributory group disability income plan has a 30-day waiting period and offers benefits of $2,000 a month. If an employee is unable to work for 7 months due to a covered disability, the employee will receive A) $14,000, none of which is taxable B) $14,000, all of which is taxable C) $12,000, none of which is taxable D) $12,000, all of which is taxable

D) $12,000, all of which is taxable In noncontributory group health plans, the employer pays the entire cost, so the income benefits are included in the employee's gross income and taxed as ordinary income.

CHAPTER 1 - GENERAL INSURANCE An insurance producer who by contract is bound to write insurance for only one company is classified as a/an A) Solicitor B) Broker C) Independent produce D) Captive agent

D) Captive agent

CHAPTER 4 - HEALTH INSURANCE PLANS A man's physician submits claim information to his insurer before she actually performs a medical procedure on him. She is going this to see if the procedure is covered under the patient's insurance plan and for how much. This is an example of A) Concurrent review B) Claims-delayed C) Suspended treatment D) Prospective review

D) Prospective review Under the prospective review or precertification provision, the physician can submit claim information prior to providing treatment to know in advance if the procedure is covered under the insured's plan and at what rate it will be paid.

CHAPTER 9 - FEDERAL TAX CONSIDERATIONS FOR HEALTH INSURANCE Which of the following is not true of Disability Buy-Sell coverage? A) Benefits are considerably taxable income to the business B) It is typically written to cover partners or corporate officers of a closely held business C) Premium payments are not deductible to the business D) The policies provide funds for the business organization to purchase the business interest of a disabled partner

A) Benefits are considerably taxable income to the business The buy-sell coverage benefits are tax free

CHAPTER 10 - INSURANCE REGULATION The Federal Fair Credit Reporting Act A) Regulates consumer reports B) Protects customer privacy C) Regulated telemarketing D) Prevents money laundering

A) Regulates consumer reports

CHAPTER 4 - HEALTH INSURANCE PLANS An insured is receiving hospice care. His insurer will pay for painkillers but not for an operation to reduce the size of a tumor. What term best fits this arrangement? A) Claims Saving B) Cost-containment C) Selective Coverage D) Limited Coverage

B) Cost-containment In a cost-containment setting, daily needs and pain relief are provided for hospice patients, but curative measures are not.

CHAPTER 3 - INDIVIDUAL ACCIDENT, HEALTH OR SICKNESS INSURANCE POLICY GENERAL PROVISIONS Which of the following statements is true concerning the alteration of optional policy provisions? A) An insurer may change the wording of optional policy provisions that would adversely affect the policyholder but must first receive state permission before the change goes into effect B) Once any kind of provision is written, it cannot be changed C) An insurer may change the wording of optional provisions, as long as the change does not adversely affect the policyholder D) An insurer nay change the wording of optional provisions, regardless of its effect on the policyholder

C) An insurer may change the wording of optional provisions, as long as the change does not adversely affect the policyholder

CHAPTER 4 - HEALTH INSURANCE PLANS An insured has a major medical policy with a $500 deductible and a coinsurance clause of 80/20 A) $3,200 B) $3,500 C) $2,500 D) $2,800

D) $2,800 The insurer would pay 80% of covered expenses after the $500 deductible is satisfied

CHAPTER 9 - FEDERAL TAX CONSIDERATIONS FOR HEALTH INSURANCE S is in a sole proprietor who owns a medical expense plan. What percentage of the cost of the plan may he deduct? A) 25% B) 50% C) 75% D) 100%

D) 100% Sole proprietors and partners may deduct 100 of the cost of a medical expense plan provided to them and their families because they are considered self-employed individuals, not employees

CHAPTER 2 - ACCIDENT, HEALTH OR SICKNESS INSURANCE BASICS At what age may an individual make withdrawals from an HSA for non-health purposes without being penalized? A) 55 B) 59 1/2 C) 62 D) 65

D) 65 After age 65, a withdrawal from an HSA used for non-health purposes will be without a penalty, although taxed.

CHAPTER 7 - DENTAL INSURANCE Most scheduled plans provide first-dollar benefits without A) Coinsurance and deductibles B) Premiums C) Copays D) Exclusions and conditions

A) Coinsurance and deductibles Scheduled/basic plans pay benefits from a list of procedures up to the amount shown in the schedule. Most plans provide first-dollar benefits without coinsurance or deductibles.

CHAPTER 8 - INSURANCE FOR SENIOR CITIZENS AND SPECIAL NEEDS INDIVIDUALS All of the following statements about Medicare supplement insurance policies are correct EXCEPT A) They cover the cost of extended nursing home care B) They cover Medicare deductibles and copayments C) They supplement Medicare benefits D) They are issued by private insurers

A) They cover the cost of extended nursing home care Medicare supplement policies (Medigap) do not cover the cost of extended nursing home care. Medigap plans are designed to fill the gap in coverage attributes to Medicare's deductibles, copayment requirements, and benefit periods. These plans are issued by private insurance companies.

CHAPTER 10 - INSURANCE REGULATION For how long must producers maintain complete records or all complaints? A) 5 years B) 2 years C) 1 year D) 6 months

B) 2 years In this case, producers must maintain complete records of all complaints for periods for 2 years following their receipt.

CHAPTER 9 - FEDERAL TAX CONSIDERATIONS FOR HEALTH INSURANCE Nonqualified distributions from an MSA are included in the employee's gross income and subject to a penalty tax of A) 10% B) 20% C) 25% D) 50%

B) 20% Nonqualified distributions are included in the employee's gross income and subject to a penalty tax of 20%.

CHAPTER 9 - FEDERAL TAX CONSIDERATIONS FOR HEALTH INSURANCE All of the following are correct concerning a Medical Savings Account (MSA) EXCEPT A) If there is a balance left in the MSA, the balance can be carrier over to future years B) Amounts deposited for the employee have large taxes C) Amounts deposited for the employee are income tax deductible D) During the year, the employee may deduct from the MSA to cover out of pocket expenses such as deductibles and coinsurance

B) Amounts deposited for the employee have large taxes An MSA is used for smaller companies, and an MSA has accessible options for the employee.

CHAPTER 10 - INSURANCE REGULATION Which of the following includes information regarding a person's credit, character, reputation, and habits? A) Agent's report B) Consumer report C) Consumer history D) Insurability report

B) Consumer report

CHAPTER 7 - DENTAL INSURANCE All of the following are usually provided under an employer group dental insurance plan EXCEPT? A) The dental plan places limits on such procedures as braces and appliances B) Coverage for cosmetic treatment C) Preventative care for up to 2 visits per year D) The dental plan is typically written in conjunction with group health insurance

B) Coverage for cosmetic treatment Elective treatment for the improvement of the insured's appearance is not covered under the plan.

CHAPTER 8 - INSURANCE FOR SENIOR CITIZENS AND SPECIAL NEEDS INDIVIDUALS OBRA requires which disease to be covered by an employer for 30 months before Medicare becomes the primary mode of coverage? A) End-stage heart failure B) End-stage renal failure C) Black lung D) Leukemia

B) End-stage renal failure OBRA requires end-stage kidney (renal) failure to be covered by an employer for 30 months before Medicare becomes the primary mode of coverage

CHAPTER 8 - INSURANCE FOR SENIOR CITIZENS AND SPECIAL NEEDS INDIVIDUALS Regarding long-term care coverage, as the elimination period gets shorter, the premium? A) Gets lower B) Gets higher C) Remains constant D) Premiums are not based on elimination periods

B) Gets higher LTC policies also define the benefit period for how long coverage applies, after the elimination period. The benefit period is usually 2 to 5 years, with a few policies offering lifetime coverage. Obviously the longer the benefit period, the higher the premium will be; and the shorter the elimination period, the higher the premium will be.

CHAPTER 7 - DENTAL INSURANCE The type of dental plan which is incorporated into a major medical expense plan is a/an A) Blanket dental plan B) Integrated dental plan C) Supplemental dental plan D) Stand-alone dental plan

B) Integrated dental plan When dental coverage is covered under the benefits of a major medical plan, the dental coverage and medical coverage would be an integrated plan. Any deductible amount can be met by either dental or medical expenses.

CHAPTER 7 - DENTAL INSURANCE Which of the following is excluded in a dental insurance plan? A) Replacement of a stolen prosthetic device B) Lost dentures C) Treatment for the surrounding and supporting tissue of the teeth such as for gum disease D) Cosmetic treatment due to an accident

B) Lost dentures

CHAPTER 10 - INSURANCE REGULATION On its advertisement, a company claims that it has funds in its possession that are, in fact, not available for the payment of losses or claims. The company is guilty of A) Rebating B) Misrepresentation C) Concealment D) Unfair claim practice

B) Misrepresentation Issuing or circulating any sales material that is false or misleading would be considered misrepresentation and is illegal.

CHAPTER 8 - INSURANCE FOR SENIOR CITIZENS AND SPECIAL NEEDS INDIVIDUALS Which of the following is true regarding Medicare supplement policies? A) They must be available to those aged 60 and over B) They must be guaranteed renewable C) They must have a 15-day free-look period D) They must contain a minimum of Plans A and B

B) They must be guaranteed renewable

CHAPTER 8 - INSURANCE FOR SENIOR CITIZENS AND SPECIAL NEEDS INDIVIDUALS An insurer offers a policy very similar to Medicare, although it differs slightly. An agent tells an applicant that the policy is Medicare, since the policies are so similar anyway. Which of the following is true? A) This is illegal only is the policy is brought by the applicant B) This practice is illegal C) This is a legal practice D) This is legal as long as the applicant understands al the benefits

B) This practice is illegal A policy may not be advertised as Medicare supplement, Medigap, or Medicare Wrap-Around unless the policy is in full compliance of the law under such labels. In this instance, the insurer misrepresented the policy, which is an illegal practice.

CHAPTER 10 - INSURANCE REGULATION The Commissioner may require the temporary licensee to have a suitable sponsor who is a licensed producer or insurer and A) To report all insurance-related transactions to the sponsoring insurer on a weekly basis B) Who assumes responsibility for all acts of the temporary licensee C) May impose additional requirements designed to protect insurers who license them D) Will limit the duration of such license to a period not to exceed 120 days.

B) Who assumes responsibility for all acts of the temporary licensee The Commissioner may require the temporary licensee to have a suitable sponsor who is a licensed producer or insurer and who assumes responsibility for all acts

CHAPTER 8 - INSURANCE FOR SENIOR CITIZENS AND SPECIAL NEEDS INDIVIDUALS The Omnibus Budget Reconciliation Act of 1990 (OBRA) requires that large group health plans must provide primary coverage for disabled individuals under? A) Age 65 who are retired B) Age 59 1/2 who are retired C) Age 65 who are not retired D) Age 59 1/2 who are not retired

C) Age 65 who are not retired The Omnibus Budget Reconciliation Act of 1990 (OBRA) requires that large group health plans must provide primary coverage for disabled individuals under 65 who are not retired

CHAPTER 7 - DENTAL INSURANCE Which of the following is NOT applied toward the deductible under a nonscheduled plan? A) Wisdom tooth extraction B) Gingivitis treatment C) Annual dental exam D) Root canal

C) Annual dental exam Under nonscheduled plans, routine examinations and preventative care generally do not apply toward the deductible

CHAPTER 8 - INSURANCE FOR SENIOR CITIZENS AND SPECIAL NEEDS INDIVIDUALS Most LTC plans have which of the following features? A) Variable premiums B) Open enrollment C) Guaranteed renewability D) No elimination period

C) Guaranteed renewability The benefit amount payable under most LTC policies is usually a specific amount per day, and some policies pay the actual charge incurred per day. Most LTC policies are also guaranteed renewable; insurers do have the right to increase the premiums.

CHAPTER 8 - INSURANCE FOR SENIOR CITIZENS AND SPECIAL NEEDS INDIVIDUALS Which of the following entities must approve all Medicare supplement advertisements? A) Federal Association of Insurers B) Consumer Protection Agency C) Insurance Commissioner or Director D) NAIC

C) Insurance Commissioner or Director An insurance company must provide a copy of any Medicare Supplement advertisement intended to be used in this state to the Insurance Director for review or approval. Copies must e sent no sooner than 15 days before the distribution of the advertisement.

CHAPTER 7 - DENTAL INSURANCE All of the following statements are true of a Combination Dental Plan EXCEPT A) It covers diagnostic and preventive care on the usual, customary, and reasonable basis B) It uses a fee schedule for other dental services C) It is also known as the Superimposed Plan D) It is basically a combination of a scheduled and nonscheduled dental plan

C) It is also known as the Superimposed Plan A combination plan is basically a combination of the scheduled and nonscheduled plan. The combination plan covers diagnostic and preventative services on the usual, customary and reasonable basis but uses a fee schedule for other dental services

CHAPTER 7 - DENTAL INSURANCE If a dental plan is integrated, it is combined with what type of plan? A) Supplemental B) Life C) Medical D) Secondary dental

C) Medical Integrated plans allow for dental plans to be included in a medical plan, providing coverage for both under a single contract. Sometimes the deductibles are merged, but this does not have to be the case

CHAPTER 9 - FEDERAL TAX CONSIDERATIONS FOR HEALTH INSURANCE Which of the following is true regarding benefits paid to disabled employees? A) Tax withholding is required if the employee paid the premium B) Disability benefits are not taxed C) They may be subject to taxation if the premium was paid by the employer D) They are exempt from taxation if any portion of the premium was paid by the employee

C) They may be subject to taxation if the premium was paid by the employer Any portion of the benefit paid for and deducted by the employer will be considered taxable income to the employee.

CHAPTER 10 - INSURANCE REGULATION The Commissioner will grant a certificate of authority stating that the company has complied with all the conditions and provisions of the law once he/she is satisfied that the company? A) Is without liabilities (not including reasonable organization expenses), has employed a competent actuary, and that officers and directors are of good repute and competent to manage B) Has employed a competent accountant, claim manger, and underwriter C) Has complied with the laws of the state and has adopted a proper system of accounting D) All of the above are true

D) All of the above are true

CHAPTER 10 - INSURANCE REGULATION A business entity acting as an insurance producer is required to obtain A) A $10,000 bond prior to transacting insurance business B) Prior approval from the Department of Commerce C) 60 hours of continuing education for every 24 month licensing period D) An insurance producer license

D) An insurance producer license

CHAPTER 10 - INSURANCE REGULATION A Notice of Information Practices must be given to the applicants for an insurance policy at all of the following intervals EXCEPT A) At policy renewal B) At policy delivery C) Any time personal information is collected from additional sources other than the applicant D) At policy application

D) At policy application

CHAPTER 10 - INSURANCE REGULATION An insurance producer license will remain in effect unless revoked or suspended, as long as the licensing fee prescribed is paid and A) The producer adheres to the Commissioner's guidelines for all non-licensed producers B) The insurer chooses to continue such appointment with the producer C) The producer has filed a written report, upon the request by any insured, detailing the policyholder's rights to cancellation of any policy written by the producer D) Continuing eduction requirements for resident individual producers are met by the due date

D) Continuing eduction requirements for resident individual producers are met by the due date An insurance producer license will remain in effect unless revoked or suspended, as long as the licensing fee prescribed is paid and continuing education requirements for resident individual producers are met by the due date.

CHAPTER 10 - INSURANCE REGULATION Which of the following is an example of a producer being involved in an unfair trade practice of rebating? A) Inducing the insured to drop a policy in favor of another one when it is not in the insured's best interest B) Charging a client a higher premium for the same policy as another client in the same insuring class C) Making deceptive statements about a competitor D) Telling a client that his first premium will be waived if he purchases the insurance policy today

D) Telling a client that his first premium will be waived if he purchases the insurance policy today

CHAPTER 10 - INSURANCE REGULATION Which of the following protects consumers against the circulation of inaccurate or obsolete personal or financial information? A) Unfair Trade Practices Law B) The Guaranty Association C) Consumer Privacy Act D) The Fair Credit Reporting Act

D) The Fair Credit Reporting Act

CHAPTER 1 - GENERAL INSURANCE Installing deadbolt locks on the doors of a home is an example of which method of handling risk? A) Reduction B) Avoidance C) Transfer D) Self-insurance

A) Reduction

CHAPTER 2 - ACCIDENT, HEALTH OR SICKNESS INSURANCE BASICS On a health insurance application, a signature is required from all of the following individuals EXCEPT A) The spouse of the policyowner B) The proposed insured C) The policyowner D) The agent

A) The spouse of the policyowner

CHAPTER 5 - DISABILITY INCOME AND RELATED INSURANCE Social Security was created to provide all of the following benefits EXCEPT A) Unemployment income B) Survivor's benefits C) Disability income D) Retirement income

A) Unemployment income Social Security is designed to provide protection against financial loss due to old age, disability, or death. It also provides income during retirement.

CHAPTER 5 - DISABILITY INCOME AND RELATED INSURANCE All of the following benefits are available under Social Security EXCEPT A) Welfare benefits B) Old-age and retirement benefits C) Disability benefits D) Death benefits

A) Welfare benefits Social Security is an entitlement program, not a welfare program.

CHAPTER 3 - INDIVIDUAL ACCIDENT, HEALTH OR SICKNESS INSURANCE POLICY GENERAL PROVISIONS An insured pays a monthly premium of $100 for her health insurance. What would be the duration of the grace period under her policy? A) 7 days B) 10 days C) 31 days D) 60 days

B) 10 days The grace period is 7 days if the premium is paid weekly, 10 days if paid monthly, and 31 days for all other modes.

CHAPTER 5 - DISABILITY INCOME AND RELATED INSURANCE All of the following are requirements of eligibility for Social Security disability income benefits EXCEPT A) Fully insured status B) Waiting period of 5 months C) Being age 65 D) Inability to perform any gainful work

C) Being age 65 The term fully insured refers to someone who has earned 40 quarters of coverage (the equivalent of 10 years of work), and is therefore entitled to receive Social Security retirement, Medicare, and survivor benefits. The waiting, or elimination period for Social Security disability benefits is 5 months.

CHAPTER 5 - DISABILITY INCOME AND RELATED INSURANCE Workers Compensation benefits are regulated by which entity? A) Employer B) Insurer C) Federal government D) State government

D) State government The state government offers and regulates Workers Compensation benefits, which vary slightly from state to state

CHAPTER 2 - ACCIDENT, HEALTH OR SICKNESS INSURANCE BASICS What is franchise insurance? A) It is group insurance B) It is blanket insurance C) It is health coverage for small groups whose numbers are too small to qualify for true group insurance D) It provides insurance for franchises, such as a restaurant or hotel chain

C) It is health coverage for small groups whose numbers are too small to qualify for true group insurance Franchise insurance is not group insurance, since individual policies are issued for each participant. Individual underwriting is done for each person, submitting his or her own application and medical history. Premiums charged are generally less than for an individual policy, but more than group coverage.

CHAPTER 6 - GROUP HEALTH INSURANCE Which of the following factors would be an underwriting consideration for a small employer? A) Health Status B) Medical history of the employees C) Percentage of participation D) Claims experience

C) Percentage of participation Coverage under a small employer health benefit plan is generally available only if at least 75% of eligible employees elect to be covered.

CHAPTER 1 - GENERAL INSURANCE To legally transact insurance in this state, an insurer must obtain which of the follow? A) Certificate of Authority B) Power of Attorney C) Business entity license D) Certificate of Insurance

A) Certificate of Authority

CHAPTER 4 - HEALTH INSURANCE PLANS Who chooses a primary care physician in an HMO? A) The individual member B) HMO subscribers do not have a primary care physician C) The insurer D) A referral physician

A) The individual member When an individual becomes a member of the HMO, he or she will choose a primary care physician. Once chosen, the primary care physician will be regularly compensated for being responsible for the care of that member.

CHAPTER 6 - GROUP HEALTH INSURANCE All of the following cases show when a Small Employer Medical plan cannot be renewable EXCEPT A) When the employer chooses to renew the plan B) For nonpayment of required premiums C) When the Commissioner/Director finds that the continuation of the coverage would not be in the best interests of the policyholders or certificate holders or may impair the carrier's ability to meet its contractual obligations D) When the small employer carrier elects to nonrenew all of its health benefit plans delivered or issued for delivery to small employers

A) When the employer chooses to renew the plan As well as noncompliance with the carrier's minimum participation requirements, noncompliance with the carrier's employer contribution requirements, repeated misuse of a provider network provision, all of the above are exceptions to replacement.

CHAPTER 1 - GENERAL INSURANCE Pertaining to insurance, what is the definition of a fiduciary responsibility? A) Offering additional coverages to clients B) Promptly forwarding premiums to the insurance company C) Helping insureds to file claims D) Performing reviews of insured's coverage

B) Promptly forwarding premiums to the insurance company Fiduciary refers to a position of trust. When an agent is handling the premiums that belong to an insurance company, they are acting in a fiduciary capacity.

CHAPTER 3 - INDIVIDUAL ACCIDENT, HEALTH OR SICKNESS INSURANCE POLICY GENERAL PROVISIONS Under the uniform required provisions, proof of loss under a health insurance policy normally should be filed within A) 30 days of a loss B) 60 days of a loss C) 90 days of a loss D) 20 days of a loss

C) 90 days of a loss

CHAPTER 1 - GENERAL INSURANCE What is a foreign insurer? A) An insurer with licensed agents doing business in other countries B) An insurer with licensed agents who are citizens in more than one country C) An insurer with a home office in another state D) An insurer with a home office in another country

C) An insurer with a home office in another state A domestic insurer's home office is in this state, a foreign insurer's is in another state, and an alien insurer's is in another country.

CHAPTER 7 - DENTAL INSURANCE Which of the following is true concerning employer group dental plans? A) They always contain a conversion privilege B) They are only marketed as stand-alone plans C) They are exempt from COBRA laws D) They seldom contain a conversion privilege

D) They seldom contain a conversion privilege Most states have enacted laws requiring that when an employee leaves an employer health group plan, they may apply for an individual policy without evidence of insurability. Those laws do not apply to dental coverage.

CHAPTER 6 - GROUP HEALTH INSURANCE The Pregnancy Discrimination Act specifically prohibits pregnancy discrimination by employers with the minimum of how many employees? A) 15 B) 30 C) 45 D) 100

A) 15 Employers with 15 or more employees are prohibited from pregnancy discrimination.

CHAPTER 1 - GENERAL INSURANCE 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 organization? A) Fraternal benefit society B) Mutual company C) Stock company D) Reciprocal association

A) Fraternal benefit society Fraternal insurers operate on the basis of a lodge or charitable organization, but they may also sell formal insurance plans for the benefit of their members. Reciprocal insurers are also associations that provide insurance for their members, but they are formed only for the purpose of providing insurance.

CHAPTER 10 - INSURANCE REGULATION If a producer has administrative action taken against his license, he must report such action A) Within 30 days of the final disposition on such action B) Within 10 days of the pretrial hearing on such action C) Within 10 days of the final disposition on such action D)Within 30 days of the pretrial hearing on such action

A) Within 30 days of the final disposition on such action

CHAPTER 2 - ACCIDENT, HEALTH OR SICKNESS INSURANCE BASICS Which of the following will NOT be covered under an individual health insurance policy? A) The applicant's adopted child B) The applicant C) The applicant's spouse D) The applicant's house help

D) The applicant's house help

CHAPTER 1 - GENERAL INSURANCE For the purpose of insurance, risk is defined as A) The certainty of loss B) The cause of loss C) An event that increases the amount of loss D) The uncertainty or chance of loss

D) The uncertainty or chance of loss Risk, or the chance of loss occurring, is the basic reason for buying insurance.

CHAPTER 5 - DISABILITY INCOME AND RELATED INSURANCE In which of the following health plans are benefit payments attributed to employer contributions taxable to the employee? A) Group Disability Income B) AD&D C) Disability Buy Out D) Medical Expense

A) Group Disability Income Disability benefit payments that are attributed to employee contributions are not taxable, but benefits payments that are attributed to employer contributions are taxable to the employee.

CHAPTER 3 - INDIVIDUAL ACCIDENT, HEALTH OR SICKNESS INSURANCE POLICY GENERAL PROVISIONS Rose brought three policies from the same insurer. Her benefits have exceeded the maximum allowed by the insurer. Which of the following will happen? A) Pro rata benefit reduction B) Full distribution of each policy's benefit C) Termination of two of the policies D) Termination of all of the policies

A) Pro rata benefit reduction When an insured carries multiple policies from the same insurer and the benefits exceed the maximum allowed amount, the Other Insurance in this Insurer Provision provides for a pro rate benefit reduction and return of premium in order to prevent overinsurance.

CHAPTER 4 - HEALTH INSURANCE PLANS Under which provision can a physician submit claim information prior to providing treatment? A) Prospective Review B) Concurrent Review C) Anticipatory Treatment D) Suspended Treatment

A) Prospective Review Under the prospective review or precertification provision, the physician can submit claim information prior to providing treatment to know in advance if the procedure is covered under the insured's plan and at what rate it will be paid.

CHAPTER 7 - DENTAL INSURANCE Which clause allows both the insured and dentist to know in advance which benefits will be paid? A) Advanced Benefit Notification B) Fixed Rate C) Precertification D) Preadmission

C) Precertification The Predetermination of Benefits Clause, also known as "precertification" and "prior authorization", allows both the insured and dentist to know in advance which benefits will be paid. This clause is found in most dental plans.

CHAPTER 4 - HEALTH INSURANCE PLANS Which of the following answers does NOT describe the principal goal of a Preferred Provider Organization? A) Provide the subscriber a choice of hospitals B) Provide medical services at a reduced cost C) Provide medical services only from physicians in the network D) Provide the subscriber a choice of physicians

C) Provide medical services only from physicians in the network A Preferred Provider Organization attempts to provide subscribers with a choice of health care provider while effecting some cost-savings by contracting with providers for such services.

CHAPTER 8 - INSURANCE FOR SENIOR CITIZENS AND SPECIAL NEEDS INDIVIDUALS All of the following individuals may qualify for Medicare health insurance benefits EXCEPT? A) A retired person age 50 B) A healthy person age 65 C) A person age 45 who has a permanent kidney failure D) A person under age 65 who is receiving Social Security disability benefits

A) A retired person age 50 Under current federal laws, any of the described persons could qualify for Medicare, except for individuals under age 65 who have no special circumstances.

CHAPTER 1 - GENERAL INSURANCE What documentation grants express authority to an agent? A) Agent's contract with the principal B) Agent's insurance license C) Fiduciary contract D) State provisions

A) Agent's contract with the principal The principal grants authority to an agent through the agent's contract

CHAPTER 10 - INSURANCE REGULATION If an insurance company wishes to order a consumer report on an applicant to assist in the underwriting process, and if a notice of insurance information practices has been provided, the report may contain all of the following information EXCEPT the applicant's A) Ancestry B) Credit history C) Habits D) Prior insurance

A) Ancestry The Fair Credit Reporting Act regulates what information may be collected and how the information may be used. Consumer Reports include written and/or oral information regarding a consumer's credit, character, reputation, and habits collected by a reporting agency from employment records, credit reports, and other public sources. Ancestry is not a relevant factor assessed in these reports.

CHAPTER 9 - FEDERAL TAX CONSIDERATIONS FOR HEALTH INSURANCE All of the following are true of the Key Person disability income policy EXCEPT A) Benefits are considered taxable income to the business B) Premiums are not deductible to the business C) It is typically written to protect the company in the event a key employee becomes disabled and is unable to work D) The income may be used to find a replacement for the key employee

A) Benefits are considered taxable income to the business Key person disability benefits are not considered taxable income to the business

CHAPTER 1 - GENERAL INSURANCE The proposed insured makes the premium payment on a new insurance policy. If the insured should die, the insurer will pay the death benefit to the beneficiary if the policy is approved. This is an example of what kind of contract? A) Conditional B) Adhesion C) Personal D) Unilateral

A) Conditional

CHAPTER 1 - GENERAL INSURANCE Contracts that are prepared by one party and submitted to the other party on a take-it-or-leave-it basis are classified as A) Contracts of adhesion B) Unilateral contracts C) Aleatory contracts D) Binding contracts

A) Contracts of adhesion Insurance policies are written by the insurer and submitted to the insured on a take-it-or-leave-it basis. The insured does not have any input into the contract, but simply adheres to the contract.

CHAPTER 4 - HEALTH INSURANCE PLANS Which of the following is NOT true of basic medical expense plans? A) Coverage for catastrophic medical expenses B) No deductibles C) First-dollar coverage D) Low dollar limits

A) Coverage for catastrophic medical expenses Basic medical expense plans were characterized by first-dollar coverage (no deductible) and low dollar limits, which meant they afforded no protection to an individual or family against catastrophic medical expenses that could be financially disastrous.

CHAPTER 9 - FEDERAL TAX CONSIDERATIONS FOR HEALTH INSURANCE Which of the following statements is correct concerning taxation of long-term care insurance? A) Excessive benefits may be taxable B) Benefits may be taxable as ordinary income C) Premiums may be taxable as income D) Premiums are not deductible in any case

A) Excessive benefits may be taxable Regardless of whether or not the insured can deduct individual long-term care premiums, the benefits are received income tax free by the individual. Excessive benefits as determined by the statute are taxable as ordinary income.

CHAPTER 8 - INSURANCE FOR SENIOR CITIZENS AND SPECIAL NEEDS INDIVIDUALS Concerning Medicare Part B, which statement is INCORRECT? A) It is fully funded by Social Security taxes (FICA) B) It is known as medical insurance C) It offers limited prescription drug coverage D) It provides partial coverage for medical expenses not fully covered by Part A

A) It is fully funded by Social Security taxes (FICA) Part B is funded by monthly premiums and from the general revenues of the federal government.

CHAPTER 1 - GENERAL INSURANCE If a court ordered payment for a loss that was not covered in the policy even if it was clearly worded, it would be an example of which legal concept? A) Reasonable expectations B) Cease and desist C) Nonforfeiture D) Indemnity

A) Reasonable expectations If, because of advertising or sales literature or statements by an agent, an insured could reasonably expect the coverage, the courts have held that the insurer must provide that coverage.

CHAPTER 10 - INSURANCE REGULATION What is the minimum age required for an insurance producer in this state? A) 16 B) 18 C) 19 D) 21

B) 18 years old

CHAPTER 4 - HEALTH INSURANCE PLANS Insured health plans must provide mental health benefits on a nondiscriminatory basis for the diagnosis and treatment of biologically-based mental health disorders for children and adolescents under what age? A) 18 B) 19 C) 21 D) 25

B) 19 Massachusetts requires that insured health plans provide mental health benefits on a non a nondiscrimintory basis for the diagnosis and treatment of biologically-based mental health disorders, including non-biologically-based mental health disorders, including non-biologically-based disorders for rape-related incidents or for children and adolescents under the age of 19.

CHAPTER 1 - GENERAL INSURANCE Which of the following types of agent authority is also called "perceived authority"? A) Fiduciary B) Apparent C) Express D) Implied

B) Apparent

CHAPTER 2 - ACCIDENT, HEALTH OR SICKNESS INSURANCE BASICS At what point must an Outline of Coverage be delivered? A) Upon delivery of the policy only B) At the tie of application or upon delivery of the policy C) At any point up to 30 days after policy delivery D) At the time of application only

B) At the tie of application or upon delivery of the policy

CHAPTER 4 - HEALTH INSURANCE PLANS In health insurance, if a doctor charges $50 more than what the insurance company considers usual, customary and reasonable, the extra cost A) Counts toward coinsurance B) Is not covered C) Must be covered by the insurer D) Counts toward deducible

B) Is not covered An insurance company will pay the usual, reasonable, or customary amount for a given procedure based upon the average change for that procedure.

CHAPTER 9 - FEDERAL TAX CONSIDERATIONS FOR HEALTH INSURANCE Which of the following describes taxation of individual disability income insurance premiums and benefits? A) Premiums are tax deductible, and benefits are taxable B) Premiums are not tax deductible, and benefits are not taxable C) Premiums are not tax deductible, but benefits are taxable D) Premiums are tax deductible, but benefits are not taxable

B) Premiums are not tax deductible, and benefits are not taxable

CHAPTER 9 - FEDERAL TAX CONSIDERATIONS FOR HEALTH INSURANCE Which of the following determines whether disability insurance benefits are taxed? A) If the total of benefits paid meets the minimum state taxation standard B) Whether the premiums were tax deductible C) State statutes D) Contract provisions

B) Whether the premiums were tax deductible The taxation status of benefits is often determined by whether the premium has been tax deducted.

CHAPTER 9 - FEDERAL TAX CONSIDERATIONS FOR HEALTH INSURANCE An insured is covered by a partially contributory group disability income plan that pays benefits of $4,000 a month. If the insured pays 25% of the monthly premium, how much of the monthly benefit would be taxable? A) None B) $1,000 C) $3,000 D) $4,000

C) $3,000 On partially contributory group disability income insurance, only that portion of the benefits that are related to the premium paid by the employer is taxable to the employee. In this case, because the employer pays 75% of the premium, the employee will be taxed on 75% of the benefits.

CHAPTER 6 - GROUP HEALTH INSURANCE An insured has a primary group health plan and an excess plan, each covering losses up to $10,000. The insured suffered a loss of $15,000. Disregarding any copayments or deductibles, how much will the excess plan pay? A) $10,000 B) $7,500 C) $5,000 D) $0

C) $5,000 Once the primary plan has paid its full promised benefit, the insured submits the claim to the secondary, or excess, provider for any additional benefits payable.

CHAPTER 2 - ACCIDENT, HEALTH OR SICKNESS INSURANCE BASICS What document describes an insured's medical history, including diagnoses and treatments? A) Individual Medical Summary B) Comprehensive Medical History C) Attending Physician's Statement D) Physician's Review

C) Attending Physician's Statement An Attending Physician's Statement (APS) is the best way for an underwriter to evaluate an insured's medical history. The report includes past diagnoses, treatments, length of recovery time, and prognoses.

CHAPTER 3 - INDIVIDUAL ACCIDENT, HEALTH OR SICKNESS INSURANCE POLICY GENERAL PROVISIONS Which of the following provisions requires that any policy language that is in conflict with the state statutes of the state in which the insured resides is automatically amended to conform with those of the state of residence? A) Insurance with Other Insurers B) Legal actions C) Conformity with State Statutes D) Incontestability

C) Conformity with State Statutes Conformity with State Statutes provision states that any provision of the policy which, on its effective date, is in conflict with the statues of the state in which the insured resides on that date, is automatically amended to conform to the minimum requirement of the statutes.

CHAPTER 9 - FEDERAL TAX CONSIDERATIONS FOR HEALTH INSURANCE The benefits received by the business in a Disability Buy-Sell policy are A) Partially taxable B) Fully taxable C) Income tax free D) Tax deductible

C) Income tax free In disability buy-sell policies, whether cross purchase or entity, the benefits are received income tax free by the business, but the premiums are not deductible to the business.

CHAPTER 1 - GENERAL INSURANCE What is the term for the entity that an agent represents regarding contractual agreements with third parties? A) Designee B) Insured C) Principal D) Client

C) Principal An agent represents the principal, acting on the entity's behalf in contractual agreements with third parties.

CHAPTER 8 - INSURANCE FOR SENIOR CITIZENS AND SPECIAL NEEDS INDIVIDUALS What is the purpose of MassHealth? A) To offer residents a statewide HMO plan B) To provide comprehensive coverage to federal and state employees in this state C) To provide health insurance to low income state residents and families D) To provide comprehensive major medical insurance to state residents who are unable to get insurance from private insurers

C) To provide health insurance to low income state residents and families MassHealth is a public health insurance program for low-to-medium-income residents of Massachusetts.

CHAPTER 6 - GROUP HEALTH INSURANCE An employee insured under a group health plan has been paying $25 monthly premium for his group health coverage. The employer has been contributing $75, for the total monthly cost of $100. If the employee leaves the company, what would be his maximum ? A) $25 B) $25.50 C) $100 D) $102

D) $102 The employer is permitted to collect a premium from the terminated employee at a rate of no more than 102% of the individual's group premium rate (in this scenario, 102% of $100 total premium is $102. The 2% charge is to cover the employer's administrative costs

CHAPTER 8 - INSURANCE FOR SENIOR CITIZENS AND SPECIAL NEEDS INDIVIDUALS Which provision allows a person to return a Medicare supplement policy within 30 days for a full premium refund? A) Policy Review B) Trial Period C) Refund of Premium D) Free Look

D) Free Look All Medicare Supplement policies must contain a 30-day free look period where the insured may return the policy for a complete refund for any reason.

CHAPTER 3 - INDIVIDUAL ACCIDENT, HEALTH OR SICKNESS INSURANCE POLICY GENERAL PROVISIONS Under an individual disability policy, the MINIMUM schedule of time in which claim payments must be made to an insured is A) Within 45 days B) Weekly C) Biweekly D) Monthly

D) Monthly If a claim involves disability income benefits, the policy must pay those benefits not less frequently than monthly. In all other cases, the company may specify the time period of 45 or 60 days for payment of claims.

CHAPTER 6 - GROUP HEALTH INSURANCE Can a group that is formed for the sole purpose of obtaining group insurance qualify for group coverage? A) No, a group of individuals cannot apply for group coverage unless represented by an association or trust. B) Yes, any group can apply for group coverage C) Yes, but only if the group is over 35 people D) No, the group must be formed for a purpose other than obtaining group insurance.

D) No, the group must be formed for a purpose other than obtaining group insurance. The coverage must be incidental to the group.

CHAPTER 6 - GROUP HEALTH INSURANCE In a noncontributory health insurance plan, ? A) 100% B) 75% C) 50% D) 25%

A) 100%

CHAPTER 2 - ACCIDENT, HEALTH OR SICKNESS INSURANCE BASICS Qualified medical expenses paid for participants in a Medical Savings Account MSA) are A) Not taxable B) Taxable if they exceed the amount of the deductible C) Taxable for up to 50% of benefits paid D) Fully taxable

A) Not taxable Employees use the funds from an MSA to cover health insurance deductible during the year. MSA fund are taxable only when distributions are made for reasons other than qualified medical expenses.

CHAPTER 7 - DENTAL INSURANCE Which of the following is NOT considered to be a basic service, under a nonscheduled plan? A) Fillings B) Dentures C) Endodontics D) Oral surgery

B) Dentures There are two types of services under nonscheduled plans: basic and major. Basic services include treatments such as fillings, oral surgery, periodontics, and endodontics, while major services include treatments such as inlays, crowns, dentures and orthodontics.

CHAPTER 5 - DISABILITY INCOME AND RELATED INSURANCE Which agreement specifies how a business will transfer hands when one of the owners died or becomes disabled? A) Absolute assignment B) Transfer of Ownership C) Disability Buy-Sell D) Proprietary Transfer

C) Disability Buy-Sell The Disability Buy-Sell agreement specifies how a business will pass between business owners if one of the owners died or becomes disabled

CHAPTER 4 - HEALTH INSURANCE PLANS An applicant has a history of heart disease in his family, so he would like to buy a health insurance policy that strictly covers heart disease. What type of policy is this? A) Term health coverage B) Scheduled benefit coverage C) Dread disease coverage D) Single indemnity protection

C) Dread disease coverage Limited coverage policies, such as dread disease policies, only cover specific medical costs, geared to a particular illness, such as cancer, or a field, like prescription drug or dental care.

CHAPTER 1 - GENERAL INSURANCE In insurance policies, contract ambiguities are automatically rules in the favor of the insured. What privilege does the insurer have in order to balance this? A) The right to revoke the policy B) The right to raise premiums as a result of court rulings C) The right to determine the wording of a policy D) The right to refute the rulings

C) The right to determine the wording of a policy In contracts in which only the insurer has the right to determine the wording of a policy, the policyholder will receive benefits denied due to a contract ambiguity.

CHAPTER 6 - GROUP HEALTH INSURANCE Which state has jurisdiction over a group policy that covers individuals that reside in more than one state? A) All states in which covered individuals reside B) The state in which the majority of individuals live C) The state in which the policy was delivered D) The state of employer's choice

C) The state in which the policy was delivered Group insurance can often provide coverage for employees in more than one state. The state in which the coverage was delivered would have jurisdiction.

CHAPTER 4 - HEALTH INSURANCE PLANS An insured has been quoted an estimated cost for a procedure from their health carrier. This quote must include all of the following EXCEPT? A) The copayment amount B) The deductible amount C) An out-of-pocket D) An exact and final price of the procedure

D) An exact and final price of the procedure An estimated cost for a procedure for an insured from their health carrier will include any facility fee, copayment, deductible, coinsurance and out-of-pocket amount.

CHAPTER 2 - ACCIDENT, HEALTH OR SICKNESS INSURANCE BASICS An applicant for health insurance has not had a medical claim in 5 year. He exercises daily and does not smoke or drink. What classification do you assume the applicant would receive from his insurer? A) Superior B) Preferred C) Low-risk D) Standard

B) Preferred

CHAPTER 4 - HEALTH INSURANCE PLANS Most health maintenance contracts must provide benefits for dependent children of the insured under the age of? A) 18 B) 21 C) 25 D) 26

D) 26

CHAPTER 7 - DENTAL INSURANCE In order to minimize adverse selection, employer group dental plans may require employees who enroll after they were initially eligible to participate to do all of the following EXCEPT A) Increase benefits for a period of one year B) Submit evidence of insurability C) Satisfy a longer probationary period D) Reduce benefits for a period such as one year

A) Increase benefits for a period of one year Dental claims expenses are substantially higher in the group dental plan for the first year than in subsequent years. This is because individuals delay their dental needs until the dental plan becomes effective. To minimize the efforts of this adverse selection, the insurer will utilize methods to combat this first year expense.

CHAPTER 6 - GROUP HEALTH INSURANCE If an employer provides health insurance for its employees, which of the following is true regarding pregnancy coverage? A) It must be covered to the same extent as any other medical condition B) It can be excluded C) It must be considered a disability D) It can be grounds for requiring the employee to take leave

A) It must be covered to the same extent as any other medical condition The Pregnancy Discrimination Act states that pregnancy, childbirth and any related medical conditions must be covered to the same extent as any other medical condition under the policy

CHAPTER 5 - DISABILITY INCOME AND RELATED INSURANCE An insured is involved in a car accident. In addition to general, less serious injuries, he permanently loses the use of his leg and is rendered completely blind. The blindness improves a month later. To what extent will he receive Presumptive Disability benefits? A) No benefits B) Full benefits C) Partial benefits D) Full benefits until the blindness

A) No benefits A) No benefits Presumptive Disability plans offer full benefits for specified conditions. These policies typically require the loss of use of at least two limbs, total and permanent blindness, or loss of speech or hearing. Benefits are paid, even if the insured is able to work. Because the insured's blindness was only temporary and the loss of use in the only 1 leg, he does not qualify for presumptive disability benefits.

CHAPTER 5 - DISABILITY INCOME AND RELATED INSURANCE Which of the following are the main factors taken into account when calculating residual disability benefits? A) Present earnings and earnings prior to disability B) Earnings prior to disability and the length of disability C) Employee's full-time status and length of disability D) Present earnings and standard cost of living

A) Present earnings and earnings prior to disability Residual disability will help pay for loss of earnings by making up the difference between the employee's present earnings and what they were earning prior to disability

CHAPTER 5 - DISABILITY INCOME AND RELATED INSURANCE Certain conditions, such as dismemberment or total and permanent blindness, will automatically qualify the insured for full disability benefits. Which disability policy provision does this describe? A) Presumptive disability B) Dismemberment disability C) Partial disability D) Residual disability

A) Presumptive disability Presumptive disability is a provision that is found in most disability income policies which specifies the conditions that will automatically qualify the insured for full disability benefits

CHAPTER 6 - GROUP HEALTH INSURANCE Which of the following statements concerning group health insurance is CORRECT? A) The employer is the policyholder B) Only the employer receives a certificate of insurance C) Each employee receives a policy D) Under group insurance, the insurer may reject certain individuals from coverage

A) The employer is the policyholder The employer receives the master policy; each employee receives a certificate of insurance. All employees have the same coverage under the master contract.

CHAPTER 7 - DENTAL INSURANCE A dental plan that provides coverage based upon a specified maximum scheduled amount for each procedure and pays on a 'first dollar' basis with no deductible or coinsurance? A) Nonscheduled plan B) Basic or scheduled plan C) Combination plan D) Comprehensive plan

B) Basic or scheduled plan The basic or scheduled dental plan pays a scheduled amount which is typically below usual, customary and reasonable dental changes, causing the employees to bear a share of the cost of the procedure

CHAPTER 3 - INDIVIDUAL ACCIDENT, HEALTH OR SICKNESS INSURANCE POLICY GENERAL PROVISIONS An insured has medial insurance coverage through 2 different providers, both covering the same expenses on an expense-incurred basis. Neither company knows in advance that the insured has coverage through any other insurers. The insured submits a claim to both insurers. How should the claim be handled? A) The insured should receive full benefits from each insurer B) Each insurer should pay a proportionate share of the claim C) One of the insurers will pay fully, while the other will not pay any benefits D) Once the insurers discover the duplicate coverage, the policies would most likely be cancelled, and no claim paid

B) Each insurer should pay a proportionate share of the claim In the event that an insured is covered on an expense-incurred basis for the same expenses under multiple insurers and the insurers are not informed about the other sources of coverage before the loss, proportionate shares of the claims should be paid out.

CHAPTER 2 - ACCIDENT, HEALTH OR SICKNESS INSURANCE BASICS To be eligible for a Health Savings Account, an individual must be covered by a A) Health plan with no deductible B) High-deductible health plan C) Low-deductible health plan D) Non-qualified plan

B) High-deductible health plan To be eligible for an HSA, an individual must be covered by a high-deductible health plan.

CHAPTER 5 - DISABILITY INCOME AND RELATED INSURANCE Which of the following is considered a presumptive disability under a disability income policy? A) Loss of one hand or one foot B) Loss of two limbs C) Loss of one eye D) Loss of hearing in one ear

B) Loss of two limbs Presumptive disability is a provision that is found in most disability income policies that specifies conditions that will automatically qualify the insured for full disability benefits, such as the loss of two limbs.

CHAPTER 4 - HEALTH INSURANCE PLANS Which os the following is NOT a service providers plan? A) Blue Cross B) Medicare C) HMO D) PPO

B) Medicare Blue Cross, HMOs and PPOs are all service providers that operate on contractual agreements with physicians and hospitals. Medicare is a government insurance program.

CHAPTER 3 - INDIVIDUAL ACCIDENT, HEALTH OR SICKNESS INSURANCE POLICY GENERAL PROVISIONS When an individual is covered under two health insurance policies that have duplicate benefits which could make a claim for benefits because of a injury or illness profitable, it is called A) Pro-rate coverage B) Overinsurance C) Double indemnity coverage D) Fraternal coverage

B) Overinsurance Overinsurance is a term used to describe the situation that is created when an individual purchases duplicating coverage with the intent to collect from each policy for a single loss.

CHAPTER 2 - ACCIDENT, HEALTH OR SICKNESS INSURANCE BASICS An underwriter may reject an application for health insurance if the rejection is based upon which of the following? A) Genetic characteristics (such as sickle cell) B) Prescription usage C) Sexual preference D) Blindness

B) Prescription usage The selection criteria used in the underwriting process for health insurance policies must be based only on the considerations of age, gender, occupation, physical condition (except blindness or deafness), avocation, and moral and morale hazards, and not on genetic characteristics, marital status or sexual orientation.

CHAPTER 6 - GROUP HEALTH INSURANCE In a group policy, the contract is between A) The employee and the employer B) The employer and the insurance company C) The individual and the insurance company D) The employer and the union

B) The employer and the insurance company In a group policy, the contract is between the insurance company and the group sponsor (such as employer, union, trust, or other sponsoring organization)

CHAPTER 2 - ACCIDENT, HEALTH OR SICKNESS INSURANCE BASICS Which of the following is true regarding limited health insurance policies? A) They cover every need of a health insurance policy holder B) They only cover specific accidents or diseases C) They cover all sickness or accidents that are not specifically excluded D) They are limited to those enrolled in a group health plan

B) They only cover specific accidents or diseases

CHAPTER 2 - ACCIDENT, HEALTH OR SICKNESS INSURANCE BASICS Medicaid is sponsored by what kind of sources? A) Federal only B) State only C) Both state and federal D) Private companies

C) Both state and federal

CHAPTER 4 - HEALTH INSURANCE PLANS Which of the following is the term for the specific dollar amount that must be paid by an HMO member for a service? A) Premium B) Cost share C) Copayment D) Deductible

C) Copayment A copayment is a specific dollar amount of the cost of the care that must be paid by the member. For example, the member may be required to pay $5 or $10 for each office visit.

CHAPTER 5 - DISABILITY INCOME AND RELATED INSURANCE Under which of the following disability income plans would the benefits be subject to income tax? A) Key person B) Partnership buy-out C) Group D) Individual

C) Group In group disability income policies, benefit payments that are attributed to employee contributions are not taxable, but benefits payments that are attributed to employer contributions are taxable to the employee.

CHAPTER 6 - GROUP HEALTH INSURANCE As it pertains to group health insurance, COBRA stipulates that A) Terminated employees must be allowed to convert their group coverage to individual policies. B) Group coverage must be extended for terminated employees up to a certain period of time at the employer's expense C) Group coverage must be extended for terminated employees up to a certain period of time at the former employee's expense D) Retiring employees must be allowed to convert their group coverage to individual policies

C) Group coverage must be extended for terminated employees up to a certain period of time at the former employee's expense COBRA requires employers with 20 or more employees to continue group medical insurance for terminated workers and dependents for up to 18 months to 36 months. The employee can be required to pay up to 102% of the coverage's premium.

CHAPTER 4 - HEALTH INSURANCE PLANS A new employee who meets HIPAA eligibility requirements must be issued health coverage on what basis? A) Nondiscriminatory B) Indemnity C) Guaranteed D) Noncancellable

C) Guaranteed If a new employee is eligible, under HIPPA regulations, the new employer must offer coverage on a guaranteed issue basis.

CHAPTER 3 - INDIVIDUAL ACCIDENT, HEALTH OR SICKNESS INSURANCE POLICY GENERAL PROVISIONS In an optionally renewable policy, the insurer has which of the following options? A) Alter the due date so the policy can be cancelled sooner B) Shorten the notice that the insured receives C) Increase premiums D) Increase the grace period

C) Increase premiums Optionally renewable policies allow the insurer to cancel a policy for any reason whatsoever. Policies can only be cancelled by class on the policy anniversary or premium due date (renewal date). If the insurer elects to renew coverage, it can also increase the policy premium.

CHAPTER 7 - DENTAL INSURANCE Which type of service under a nonscheduled plan typically has large deductibles and pays around 50% for the services provided? A) Minor service B) Repair service C) Major service D) Basic service

C) Major service Major services under nonscheduled plans, which cover treatments such as inlays, crowns, dentures and orthodontics, either have large deductibles or the insured pays 50% of the cost

CHAPTER 2 - ACCIDENT, HEALTH OR SICKNESS INSURANCE BASICS An insurance company wants to obtain the insurance history of an applicant. Which source releases coded information to insurers regarding information included on previous insurance applications? A) Integrated Insurer's Support B) Federal Bureau of Investigation C) Medical Information Bureau D) Insurer's Protection Guild

C) Medical Information Bureau

CHAPTER 3 - INDIVIDUAL ACCIDENT, HEALTH OR SICKNESS INSURANCE POLICY GENERAL PROVISIONS With respect to the Consideration Clause, which of the following would be considered consideration on the part of the applicant for insurance? A) Providing warranties on the application B) Notice of policy cancellation C) Payment of premium D) Promise to renew the policy at the end of the policy period

C) Payment of premium The two types of consideration on the part of an insurance applicant are payment of premiums and representations on the application

CHAPTER 6 - GROUP HEALTH INSURANCE What type of information is NOT included in a certificate of insurance? A) The procedures for filing a claim B) The length of coverage C) The cost the company is paying for monthly premiums D) The policy benefits and exclusions

C) The cost the company is paying for monthly premiums The individuals covered under the insurance contract are issues certificates of insurance. The certificate tells what is covered in the policy, how to file a claim, how long the coverage will last, and how to convert the policy to an individual policy.

CHAPTER 3 - INDIVIDUAL ACCIDENT, HEALTH OR SICKNESS INSURANCE POLICY GENERAL PROVISIONS An insured purchased a noncancellable health insurance policy 1 year ago. Which of the following circumstances would NOT be a reason for the insurance company to cancel the policy? A) The insured reached the maximum age limit specified in the policy B) Within two years of the application, the insurer discovers a misrepresentation C) The insured is in an accident and incurs a large claim D) The insured does not pay the premium

C) The insured is in an accident and incurs a large claim The company may not cancel coverage due to covered claims. All the rest are allowable reasons for an insurer to terminate the contract.

CHAPTER 2 - ACCIDENT, HEALTH OR SICKNESS INSURANCE BASICS An insured is upset that her new health insurance policy was delivered to her by certified mail and not through her agent. Which of the following is true? A) The insured should ask for a new policy to be delivered B) The policy will not be legal until it is delivered by an agent C) There is nothing wrong with this form of policy delivery D) The insured should complain to the insurer

C) There is nothing wrong with this form of policy delivery Although it is advisable for an agent to personally deliver a policy, in order to answer any questions and insure delivery, it is legal for a policy to be effectively delivered without the presence of an agent. It is legal to deliver a policy through some types of mail.

CHAPTER 5 - DISABILITY INCOME AND RELATED INSURANCE When does a person qualify to receive disability-related income? A) When an injury is severe and the insured is not a dependent B) When an insured is hospitalized for more than one week C) When the insured is unable to perform his/her job duties D) When the disability reached a designated state of severity

C) When the insured is unable to perform his/her job duties A person must be unable to perform his/her occupation in order to be eligible for disability income benefits.

CHAPTER 4 - HEALTH INSURANCE PLANS Regarding a PPO, which of the following is correct when selecting a primary care physician? A) The insured is allowed to receive care from any provider, but if the insured selects a PPO provider, the insured will realize lower out-of-pocket costs. B) The insured is allowed to receive care from any provider, but if the insured selects a PPO provider, the insured will realize lower out-of-pocket costs C) If a non-network provider if used, the insured's out-of-pocket costs will be higher D) All of the above are correct

D) All of the above are correct In a PPO, the insured does not have to select a primary care physician. Conversely, in a PPO, all network providers are considered "preferred", and you can visit any of them, even specialists, with out first seeing a primary care physician. Certain services may require Plan precertification, an evaluation of the medical necessity of inpatient admissions and the number of days required to treat your condition

CHAPTER 1 - GENERAL INSURANCE Because an agent is using stationary with the logo of an insurance company, applicants for insurance assume that the agent is authorized to transact on behalf of that insurer. What type of agent authority does this describe? A) Express B) Implied C) Assumed D) Apparent

D) Apparent Apparent authority (also known as perceived authority) is the appearance or the assumption of authority based on the actions, words, or deeds of the principal or because of the circumstances the principal created.

CHAPTER 6 - GROUP HEALTH INSURANCE The classification "Small Employer" means any person actively engaged in a business that on at least 50% of its working days during the preceding year employed? A) At least 2 and not more than 15 persons B) At least 3 and not more than 25 persons C) At least 10 and not more than 100 persons D) At least 1 and not more than 50 persons

D) At least 1 and not more than 50 persons Classification rules established by the Insurance Code state that "Small Employer" means any person actively engaged in a business that on at least 50% of its working days during the preceding year employed at least 1 and not more than 50 persons

CHAPTER 6 - GROUP HEALTH INSURANCE All of the following are differences between individual and group health insurance EXCEPT A) In individual policies, the individual selects coverage options, while in a group plan all employees are covered for the same coverage which is chosen by the employer B) Individual coverage can be written on an occupational or nonoccupational basis, while group plans cover only nonoccupational C) Individual policies are renewable at the option of the insured, while group usually terminates when the individual leaves the group D) Individual insurance does not require medical examinations, while group insurance does require medical examinations.

D) Individual insurance does not require medical examinations, while group insurance does require medical examinations. In individual coverage, policies are issued based upon individual underwriting. In group plans, everyone is covered for the same coverage and there is no individual underwriting selection.

CHAPTER 3 - INDIVIDUAL ACCIDENT, HEALTH OR SICKNESS INSURANCE POLICY GENERAL PROVISIONS The section of a health policy that states the causes of eligible loss under which an insured is assumed to be disabled is the A) Incontestability clause B) Consideration clause C) Probationary period D) Insuring clause

D) Insuring clause

CHAPTER 5 - DISABILITY INCOME AND RELATED INSURANCE What type of health insurance policy provides an employer with funds to train a replacement if a valued employee becomes disabled? A) Group Disability B) Disability Buy-Sell C) Business Overhead D) Key Person Disability

D) Key Person Disability Key person disability is purchased by the employer on the life of a key employee to cover the expense of hiring and training a replacement for the key person

CHAPTER 3 - INDIVIDUAL ACCIDENT, HEALTH OR SICKNESS INSURANCE POLICY GENERAL PROVISIONS A guaranteed renewable health insurance policy allows the A) Policyholder to renew the policy to a stated age and guarantees the premium for the same period B) Policy to be renewed at the time of expiration, but the policy can be canceled for cause during the policy term C) Insurer to renew the policy to a specific age D) Policyholder to renew the policy to a stated age, with the company having the right to increase premiums on the entire class

D) Policyholder to renew the policy to a stated age, with the company having the right to increase premiums on the entire class

CHAPTER 5 - DISABILITY INCOME AND RELATED INSURANCE When a group disability insurance policy is paid entirely by the employer, benefits paid to disable employees are A) Deductible income to the employees B) Deductible business expense to the employer C) Taxable income to the employer D) Taxable income to the employee

D) Taxable income to the employee Disability benefit payments that are attributed to employee contributions are not taxable, but benefits payments that are attributed to employer contributions are taxable.

CHAPTER 5 - DISABILITY INCOME AND RELATED INSURANCE The amount of Social Security disability benefits is based upon the worker's primary insurance amount (PIA), which is calculated from their Average Indexed Monthly Earnings over which years? Which years of income may be deleted from calculation? A) Their highest 40; lowest 5 B) Their highest 15; lowest 4 C) Their highest 20; lowest 2 D) Their highest 35; lowest 5

D) Their highest 35; lowest 5 The amount of Social Security disability benefits is based upon the worker's Primary Insurance Amount (PIA), which is calculated from their Average Indexed Monthly Earnings over their highest 35 years. The lowest 5 years of income may be deleted from calculation.

CHAPTER 3 - INDIVIDUAL ACCIDENT, HEALTH OR SICKNESS INSURANCE POLICY GENERAL PROVISIONS How soon following the occurrence of a covered loss must an insured submit written proof of such loss to the insurance company? A) As soon as possible B) Within 20 days C) Within 60 days D) Within 90 days or as soon as reasonably possible, but not to exceed 1 year

D) Within 90 days or as soon as reasonably possible, but not to exceed 1 year The "proof of loss" provision states the claimant must submit a proof of loss within 90 days; however, if it is not possible to comply, the time parameter is extended 1 year. The one-year limit does not apply if the claimant is not legally competent to comply with this provision.