Health Portion of XCEL

Major Medical policies typically: Pay 100% of covered expenses. Contain a deductible and coinsurance. Require use of in-network facilities only. Do not contain a deductible and coinsurance.

Contain a deductible and coinsurance.

A prospective insured completes and signs an application for health insurance but intentionally conceals information about a pre-existing heart condition. The company issues the policy. Two months later, the insured suffers a heart attack and submits a claim. While processing the claim, the company discovers the pre-existing condition. In this situation, the company will: Continue coverage but request a corrected application. Deny coverage and increase premiums. Continue coverage but exclude the heart condition. Rescind the coverage and return the premiums.

Continue coverage but exclude the heart condition.

A catastrophic illness would be best covered by which of the following health insurance plans? Major Medical. Limited. Indemnity. Surgical Expense.

Major Medical.

Pre-hospitalization authorization is considered an example of: Managed care. PPO care. Medicaid. Major medical insurance.

Managed care: The insurer's approval of an insured entering a hospital. Many health policies require this as part of an effort to managing costs.

Z owns a Disability Income policy with a 30-day Elimination period. Z contracts pneumonia that leaves him unable to work from January 1 until January 15. Z then becomes disabled from an accident on February 1 and the disability lasts until July 1 the same year. Z will become eligible to receive benefits starting on: Jan 1. Jan 15. Feb 1. March 1.

March 1.

Periodic health claim payments MUST be made at least: Monthly. Weekly. Daily. Annually.

Monthly.

Which of the following BEST describes how a Preferred Provider Organization (PPO) is less restrictive than a Health Maintenance Organization (HMO)? Typically not subject to deductibles. Not regulated by the federal government. More benefits available. More physicians to choose from.

More physicians to choose from.

J has a Disability Income policy that does NOT provide benefits for losses occurring as the result of his employment. What kind of coverage is this? Limited coverage. Workers' Comp coverage. Occupational coverage. Nonoccupational coverage.

Nonoccupational coverage.

Which of the following BEST describes a short-term medical expense policy? Conditionally renewable. Non-cancellable. Guaranteed renewable. Non-renewable.

Nonrenewable.

The Notice of Claims provision requires a policyowner to: Provide proof of loss to an insurer within a specified time. Notify an insurer of a claim within a specified time. Wait 60 days after filing a claim to initiate a lawsuit against an insurer. Notify their physician of a claim within a specified time.

Notify an insurer of a claim within a specified time.

J's Major Medical policy has a $2,000 deductible and an 80/20 Coinsurance clause. If J is hospitalized and receives a bill for $10,000, J would pay: $4k $3600 $1k $2200

$3600

T and S are named co-primary beneficiaries on a $500,000 Accidental Death and Dismemberment policy insuring their father. Their mother was named contingent beneficiary. Five years later, S dies of natural causes and the father is killed in a scuba accident shortly afterwards. How much of the death benefit will the mother receive? $1 MM $500k $250k $0

$0: T is still alive and is the other primary beneficiary.

An insured owns an individual Disability Income policy with a 30-day Elimination Period for sickness and accidents and a monthly indemnity benefit of $500. If the insured is disabled for 3 1/2 months, what is the MAXIMUM amount he would receive for an approved claim? $500 $1k $1250 $1750

$1250

A Hospital/Surgical Expense policy was purchased for a family of four in March of 2013. The policy was issued with a $500 deductible and a limit of 4 deductibles per calendar year. Two claims were paid in September 2013, each incurring medical expenses in excess of the deductible. Two additional claims were filed in 2014, each in excess of the deductible amount as well. What would be this family's out-of-pocket medical expenses for 2013? $500 $1k $2k $1500

$1k

An insured covered by a group Major Medical plan is hospitalized after sustaining injuries that resulted from an automobile accident. Assuming the plan had a $1,000 deductible and an 80/20 Coinsurance clause, how much will the INSURED be responsible to pay with $11,000 in covered medical expenses? 0 $3k $8k $11k

$3k

Licensee must complete _____ hours of continuing education every two years. 12 16 20 24

16

Typical free-look period for Long Term Care insurance? 20 days 30 days 40 days 50 days

30 days

According to the Mandatory Uniform Policy Provisions, what is the maximum amount of time after the premium due date during which the policy remains in force even though the premium has not been paid? 7 days. 10 days. 31 days. 60 days.

31 days.

V is insured under an individual Disability Income policy with a 30-day Elimination period. On July 1, he is involved in an accident and temporarily disabled. He returns to work on December 1. How many months of benefit are payable? 6 months. 5 months. 4.5 months. 4 months.

4 months: After the 30-day elimination period has been satisfied, there will be 4 months of benefit payments.

Which of these individuals may not be compensated from an insurance company? A producer appointed by the company An administrative assistant to the CEO of the insurer A licensed producer not appointed by the company A retired insurance agency owner

A licensed producer not appointed by the company

ALL of the following statements regarding group health insurance is true, EXCEPT: Premiums are usually determined by the claims experience of the group. A master contract is issued for the group. An individual policy is given to each member. Group health insurance premiums are typically lower than individual health insurance premiums.

An individual policy is given to each member.

A(n) ________ of benefits of a Health Policy transfers payments to someone other than the policyowner. Assignment. Transfer. Allocation. Designation.

Assignment.

When does a Probationary Period provision become effective in a health insurance contract? At the policy's inception. 30 days after the policy's inception. When a claim is submitted. When a covered loss occurs.

At the policy's inception.

Medicare part C is: Government insurance. Available to those who are enrolled in a Medicare Supplement Plan with income under $12,000 per year. Original Part A and B Medicare. Available to those who are enrolled in medicare part A and B.

Available to those who are enrolled in medicare part A and B.

Group health plans typically contain a coordination of benefits (COB) provision. This prevision's purpose is to: Avoid the duplication of benefit payments. Assure the policyowner that no changes will be made to the contract. Limit the time during which an insurer may contest the validity of an insurance claim. Give the policyowner additional time to pay overdue premiums.

Avoid the duplication of benefit payments.

B's policy provides coverage on an in-hospital basis only and contains a limited daily room and board benefit. Which of these policies does B have? Comprehensive Major Medical Basic Hospital Critical Illness Basic Surgical

Basic Hospital

Medicaid was designed to assist individuals who are: Federal employees. Disabled. In poor health. Below a specific income limit.

Below a specific income limit.

All of the following statements about Major Medical benefits are true EXCEPT: The deductible can be expressed as a fixed dollar amount. The benefit period begins only after a specified amount of expenses have accrued. Benefits are generally expressed as a percentage of eligible expenses. Benefits have no max limit.

Benefits have no max limit.

Accidental Death coverage is provided to commercial airline passengers in which of the following types of policies? Disability income policy. Accident reimbursement accounts. Accident savings plans. Blanket accident policy.

Blanket accident policy.

G is an accountant who has ten employees and is concerned about how the business would survive financially if G became disabled. The type of policy which BEST addresses this concern is: Business overhead expense. Disability income. Key employee life. Contributory.

Business overhead expense.

The guarantee of insurability option provides a long-term care policyowner the ability to: Buy additional coverage at a later date. Add the insured's spouse at a later date. Pay the same premium for life. Cancel the policy at any time.

Buy additional coverage at a later date.

P loses an arm in a farm accident and is paid $10k from his accidental death and dismemberment (AD&D) policy. This benefit is known as the: Dismemberment sum. Capital sum. Principal sum. Remnant sum.

Capital sum: Amount payable for the accidental loss of eyesight or for an accidental dismemberment. It is usually a percentage of the principal sum and varies according to the severity of the injury.

Which of the following organizations would make reimbursement payments directly to the insured individual for covered medical expenditures? Administrative-services-only plan. Commercial insurer. Preferred provider organization. Health maintenance organization.

Commercial insurer: These companies use the reimbursement approach, which allows policyowners to seek medical treatment then submit the charges to the insurer for reimbursement.

Which of the following reimburses its insureds for covered medical expenses? Health maintenance organizations. Preferred provider organizations. Commercial insurers. Service providers.

Commercial insurers: Function on the reimbursement approach. Policyowners obtain medical treatment from whatever source they feel is most appropriate and submit their charges to their insurer for reimbursement.

Medicare Part A and B do NOT pay for: Dental work. Hospitalization. Skilled nursing care. Physical therapy.

Dental work.

Which contract permits the remaining partners to buy-out the interest of a disabled business partner? Group disability. Business continuation. Disability Buy-sell. Key Person disability.

Disability Buy-sell

Which of the following statements does NOT accurately describe the tax treatment of premiums and benefits of individual Accident and Health insurance? Disability income policy premiums are NOT tax-deductible. Disability income policy premiums are tax-deductible. Major medical policy benefits are normally not taxed. Disability income policy benefits are normally not taxed.

Disability income policy premiums are tax-deductible.

In the event of an illness, a(n) _______ _______ policy would reimburse an insured for loss of earnings. Earnings indemnity. Family income. Medicare supplement. Disability income.

Disability income.

Which of the following does Social Security NOT provide benefits for? Survivorship. Dismemberment. Disability. Retirement.

Dismemberment.

M becomes disabled and is unable to work for six months. M dies soon after from complications arising from this disability. M has a Disability Income policy that pays $2,000 a month. Which of the following statements BEST describes what is owed to her estate? $2k A lump sum of six times the monthly benefit. Nothing. Earned, but unpaid benefits.

Earned, but unpaid benefits.

In a disability income policy, which of these clauses acts as a deductible? Elimination period. Waiver period. Deductible period. Probationary period.

Elimination period.

Non-occupational disability coverage is designed for: 24 hour protection. Those who are exempt from Workers' Comp coverage. Sole proprietors and self-employed individuals. Employees who suffer non-work related disabilities, since work-related disabilities are covered my Workers' Comp.

Employees who suffer non-work related disabilities, since work-related disabilities are covered my Workers' Comp.

When an insurance company sends a policy to the insured with an attached application, the element that makes the application part of the contract between the insured and the insurer is called the: Entire contract provision. Insuring clause. Time limit on certain defense provision. Legal contract clause.

Entire contract provision.

The sections of an insurance contract which limit coverage are called: Waivers. Riders. Exclusions. Limitations.

Exclusions.

A comprehensive Major Medical Health insurance policy contains an Eligible Expenses provision which identifies the types of health care services that are covered. All of the following health care services are typically covered, EXCEPT for: Hospital charges. Physician fees. Experimental and investigative services. Nursing services.

Experimental and investigative services.

This type of deductible provision waives the deductible for all family members after some of them have satisfied individual deductibles within the same year: Individual deductible Corridor deductible Family max deductible Common accident deductible

Family max deductible

After an insured gives notice of loss, what must he/she do if the insurer does not furnish forms? File a lawsuit. Contact the insurer again requesting the forms. Nothing. File written proof of loss.

File written proof of loss.

The reason for a business having a Business Overhead Expense Disability Plan is to cover: The cost of providing group disability insurance to the employees. Fixed business expenses. The owner's loss of income. All business-related expenses and salaries.

Fixed business expenses: In the event the owner becomes disabled

Under an individual health insurance policy, the time limit of certain defenses provision states that nonfraudulant misstatements first become incontestable two years: From the date that the policy was issued. From the date that the application was signed. From the date initial premium was collected. From the date of the sales appointment.

From the date that the policy was issued.

Which of the following provisions specifies how long a policyowner's health coverage will remain in effect if the policyowner does not pay the premium when it's due? Grace period. Consideration. Waiver of premium. Reinstatement.

Grace period.

Which of the following types of organizations are prepaid group health plans, where members pay in advance for the services of participating physicians and hospital that have agreements? PPO HMO MEWA POS

HMO

All of these are characteristics of a Health Reimbursement Arrangement (HRA) EXCEPT: HRA is entirely funded by the employee. HRA is entirely funded by the employer. Reimbursement for eligible medical expenses are allowed. HRA can be offered with other health plans.

HRA is entirely funded by the employee.

Basic Medical Expense insurance: Normally has a deductible and coinsurance. Covers an illness but not an accident. Pays for lost wage while hospitalized. Has lower benefit limits than Major Medical insurance.

Has lower benefit limits than Major Medical insurance.

J is a subscriber to a plan which contracts with doctors and hospitals to provide medical benefits at a preset price. What type of plan does J belong to? Multiple employer welfare arrangement. Multiple employer trust. Health maintenance organization (HMO). Co-op arrangement.

Health maintenance organization (HMO).

S wants to open a tax-exempt Health Savings Account. To qualify for this type of account, Federal law dictates that S must be enrolled in a: Low-deductible health plan. Medicare supplement. High-deductible health plan. Flexible savings plan.

High-deductible health plan: To be eligible for a tax-exempt heath Savings Account, they must be enrolled in a high-deductible health plan, must not be covered by other health insurance, must not be eligible for medicare, and cant; be claimed as a dependent on someone else's tax return.

For which of the following expenses does a Basic Hospital policy pay? Hospital room and board. Prescription medication. Surgical fees. Physician's fees.

Hospital room and board: Pays expenses for hospital room and board, as well as other miscellaneous medical expenses incurred during hospitalization.

Which of the following statements about Health Reimbursement Arrangements (HRA) is CORRECT? If the employee had a qualified medical leave from work, lost wages can be reimbursed. If the employee paid for qualified medical expenses, the reimbursements may be tax-free. Any unused amounts are added to employee's gross income. Health insurance premiums can be reimbursed to the employee.

If the employee paid for qualified medical expenses, the reimbursements may be tax-free.

An insurance company normally has 2 years to contest information provided on an accident and health application. This 2 year period begins on the date that the: Medical examination is given. Producer completed the application. Insurer dates the policy. The first premium is made.

Insurer dates the policy.

Which of the following health insurance provisions specifies the health care services a policy will provide? Insuring clause. Usual, customary, and reasonable clause. Consideration clause. Benefit clause.

Insuring clause.

Which of these types of coverage is best described as short term medical policy? Interim coverage. Provisional coverage. Transitional coverage. Conversion coverage.

Interim coverage.

J was reviewing her Health Insurance policy and noticed the phrase "This policy will only pay for a semi-private room". This phrase is considered to be a(n): Hidden deductible. Internal limit. Restricted provision. Stop loss.

Internal limit: Certain types of expenses may have limits placed on the dollar amount of certain services or on the type of service provided.

Which of the following situations does a Critical Illness plan cover? Asthma. Leukemia. Alcohol rehabilitation. Severe car accident.

Leukemia.

Which of the following is NOT a limited benefit plan? Dental policy. Life insurance policy. Critical illness policy. Cancer policy.

Life insurance policy.

Nursing home benefits must be provided for at least 12 consecutive months in which of the following types of policies? Blanket custodial. Long-term care. Critical illness. Medicare supplements.

Long-term care.

An insurance company would MOST likely pay benefits under an AD&D policy for which of the following losses? Loss of life due to a heart attack. Loss of eyesight due to an accidental injury. Loss of the spleen due to an accidental injury. Partial paralysis due to a stroke.

Loss of eyesight due to an accidental injury.

Dental care coverage is designed to cover the costs of all of the following EXCEPT: Oral surgery. Preventative Care. Orthodontia. Loss of income.

Loss of income.

An accident policy will most likely pay a benefit for a(n): Self-inflicted injury. Critical Illness. On-the-job accident. Off-the-job accident.

Off-the-job accident.

Under what system do a group of doctors and hospitals in a designated area contract with an insurer to provide services at a prearranged cost to the insured? HMO PPO EOP PLHSO

PPO

Which of these statements is INCORRECT regarding a PPO? PPO's normally have more providers to choose from as compared to an HMO. Prices are negotiated in advance for PPO providers. In-network PPO providers offer members better coverage of incurred expenses. PPO's are NOT a type of managed care system.

PPO's are NOT a type of managed care system.

The provision that defines to whom the insurer will pay benefits to is called: Entire contract. Proof of loss. Claim forms. Payment of claims.

Payment of claims.

Which of these is considered a mandatory provision? Payment of claims. Insurance with other insurers. Misstatement of age. Change of occupation.

Payment of claims.

On an AD&D insurance policy, who is qualified to change the beneficiary designation? Payer. Primary beneficiary. Policyowner. Insurer.

Policyowner.

Which Long Term Care insurance statement is true? Inflation protection is usually not offered. Benefits are usually payable for alcohol rehabilitation. Can only be offered to individuals under the age of 70. Pre-existing conditions must be covered after the coverage has been in force for 6 months.

Pre-existing conditions must be covered after the coverage has been in force for 6 months.

Which of the following is considered to be the time period after a Health Policy is issued, during which no benefits are provided for illness? Incontestable period. Probationary period. Trial period. Subrogation period.

Probationary period.

K is the insured and P is the sole beneficiary on an Accidental Death and Dismemberment (AD&D) insurance policy. Both are involved in a fatal accident where K dies before P. Under the Common Disaster provision, which of these statements is true? Proceeds will be paid to P's estate. Proceeds will be divided equally between K;s and P's estate. Proceeds will be paid to K's estate. The courts will decide who will receive death benefits.

Proceeds will be paid to P's estate.

Which of the following statements best describes dental care indemnity coverage? Services are reimbursed before the insurer receives the invoice. Services are reimbursed after the insurer receives the invoice. In-network dentists must always be used. Very limited list of providers.

Services are reimbursed after the insurer receives the invoice.

An insured covered by Accidental Death and Dismemberment (AD&D) insurance has just died. What will happen if the primary beneficiary had already died before the insured and contingent beneficiary? Proceeds will go to the primary beneficiary's estate. Probate will decide. Proceeds will go to the contingent beneficiary. Proceeds will go to the insured's estate.

Proceeds will go to the contingent beneficiary.

What must the policyowner provide to the insurer for validation that a loss has occurred? Proof of coverage. Proof of claim. Proof of loss. Proof of payment.

Proof of loss.

The Legal Actions provision of an insurance contract is designed to do all of the following, EXCEPT: Provide the insurer adequate time to research a claim. Protect the insured fro having claim research delayed. Protect the producer. Give the insured guidelines for pursuing legal action against an insurer.

Protect the producer.

A major medical policy typically: Provides benefits for surgical expenses only, subject to policy limits. Contains more limitations than a basic hospital, medical, or surgical policy. Contains a 60-day elimination period for losses due to accident Provides benefits for reasonable and necessary medical expenses, subject to policy limits

Provides benefits for reasonable and necessary medical expenses, subject to policy limits

When an insured has the same disability within a specified time period and the insurance company provides the same benefits without a new waiting period, the second disability is covered under which of the following benefits? Residual. Presumptive. Recurrent. Repeat.

Recurrent.

Which type of policy pays benefits to a policyholder covered under a Hospital Expense policy? Limited. Special risk. Reimbursement. Blanket.

Reimbursement.

K failed to pay a renewal premium within the time granted by the insurer. K then sends in a payment which the insurer subsequently accepts. Which policy provision specifies that coverage may be restored in this situation? Free-look. Reinstatement. Grace period. Consideration.

Reinstatement.

D is an architect receiving Disability Income benefits who is not able to return to work full time, but can work on a part-time basis. Which of these features would allow D to continue receiving benefits? Residual benefit clause. Waiver benefit clause. Concurrent benefit clause. Guaranteed benefit clause.

Residual benefit clause.

Which provision allows a portion of any used medical benefits to be restored following a particular amount of benefit has been used, or after the policy has been in effect for a particular period of time? Reimbursement benefit. Restoration of unused benefit. Restoration of used benefit. Medical offset benefit.

Restoration of used benefit.

Which of the following is the reimbursement of benefits for the treatment of beneficiary's injuries caused by a third party? Indemnity. Subrogation. Legal action. Consideration.

Subrogation: Is the right for an insurer to pursue a third party that caused an insurance loss to the insured. This is done as a means of recovering the amount of the claim paid to the insured for the loss.

Which of the following services is NOT included under hospitalization expense coverage? Daily room and board. Surgical fees. Intensive care. Miscellaneous expenses.

Surgical fees.

Which of these statements regarding health coverage for physically handicapped dependence is false? The dependent must have been over 10 years of age when the handicap was incurred. The dependent must have been covered under the insured's policy at the time the handicap was incurred. The dependent must rely chiefly on the policy owner for support and maintenance. The dependent must agree to periodic medical examinations at the request of the insurance company.

The dependent must have been over 10 years of age when the handicap was incurred.

Which of the following statements is correct regarding an employer/employee group health plan? The employer receives a certificate and the employee receives a master policy. The employer receives a master policy and the employee receives a certificate. The employer receives both the certificate and the master policy. The employees receive both the certificate and the master policy.

The employer receives a master policy and the employee receives a certificate.

T was insured under an individual Disability Income policy and was severely burned in a fire. As a result, T became totally disabled. The insurer began making monthly benefit payments, but later discovered that the fire was set by T in what was described as arson. What actions will the insurer take? The insurer will rescind the policy, deny the claim, and recover all payments made. Due to the policy not being post-claim underwritten, the insurer must continue to pay this claim. Claim will be rejected because of the criminal act but no recovery of payments will be made. Claim will be denies but the policy will remain in force without further premium payments due to the insured's total disability.

The insurer will rescind the policy, deny the claim, and recover all payments made.

The policy provision that entitles the insurer to establish conditions the insured must meet while a claim is pending is: Grace period. Physical examination and autopsy. Entire contract. Time limit on certain defenses.

Time limit on certain defenses.

What is the elimination period of an individual disability policy? Time period an insured must wait before coverage begins. Time period a disabled person must wait before benefits are paid. Time period after the policy issue date in which the provisions are still contestable. The point in time when benefits are no longer payable.

Time period a disabled person must wait before benefits are paid.

A business disability buyout plan policy is designed: As an incurred expense plan. With a very short elimination period. To pay benefits to the corporation or other shareholders. To pay benefits to the insured's spouse.

To pay benefits to the corporation or other shareholders.

The provision in a health insurance policy that suspends premiums being paid to the insurer while the insured is disabled is called the: Probation period. Grace period. Waiver of premium. Elimination period.

Waiver of premium.

Disability policies do NOT normally pay for disabilities arising from which of the following? Accidents. War. Negligence. Sickness.

War.