Insurance 2-40 200 question part 2

What is the maximum social security disability benefit amount an insured can receive?

100% of the insured's Primary Insurance Amount (PIA)

Employers with less than __ employees are affected by Florida's Health Insurance Coverage Continuation Act (Mini COBRA).

20

A group plan was recently terminated. In Florida, how many days are covered individuals guaranteed coverage after a group plan's termination?

31 days

In Florida, a health policy that is paid on a quarterly basis requires a grace period of

31 days

An insurance company must act on an accident and health insurance application for reinstatement within__days

45

How many days does an insurance company have to reject a reinstatement application before it is automatically reinstated?

45

In Florida, what is the maximum percentage of controlled business an agent may produce?

50%

What do Dread Disease policies cover? A specific disease or illness All diseases or illnesses Only terminal illnesses Only heart-related diseases

A specific disease or illness

A "reimbursement policy" pays what amount of covered long-term care expenses?

Actual covered expenses up to the daily maximum

In health insurance policies, a waiver of premium provision keeps the coverage in force without premium payments:

After an insured has become totally disabled as defined in the policy

An example of false advertising would be

An insurer exaggerating its dividends in a magazine advertisement

Which of the following is the MOST. Important factor when deciding how much disability income coverage an applicant should purchase

Applicant's monthly income

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

Which of the following acts is an agent NOT authorized to do on behalf of an insurer?

Authorize claim payments

Which type of policy would pay an employees salary is the employer was injured in a bicycle accident and out of work for six weeks?

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 insureds splice at a later date Pay the same premium for life Cancel the policy at anytime

But addition coverage at a later date

Which of the following policy features allows an insured to defer current health charges to the following year's deductible Instead of the current years deductible?

Carryover provision

S is the policyowner of a major medical policy. The premiums are paid monthly and due on the first of each month. S fails to make September's map meant and is hospitalized October 15th. When S files the claim for this hospitalization, the insurer will likely

Deny the claim. Because S failed to pay premium within the policy's 10-day grace period

In Florida, which agency is responsible for the rehabilitation or liquidation of insurers?

Department of Financial Services (DFS)

M is insured under a basic Hospital/Surgical Expense policy. A physician performs surgery on M. What determines the claim M is eligible for?

Determined by the terms of the policy

A characteristic of a preferred provider organizations (PPOs) would be:

Discounted fees for the patient

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

Elimination period

Which of the following policy provisions prohibits an insurance company from incorporating external documents into an insurance policy?

Entire Contract

Which of the following actions is required by an insured who leaves the primary area of medical coverage and seeks medical care?

Obtain prior approval from the insurer for the medical service

Which of these statements is INCORRECT regarding a preferred provider organization (PPO)

PPO's are NOT a type of managed care systems

What does a Guaranteed Insurability rider provide a Disability Income policyowner?

The ability to periodically increase the amount of coverage without evidence of insurability

At what point does an informal agreement become a binding contract?

When consideration is provided by one of the parties to the contract

When must insurable interest be present in order for a life insurance policy to be valid?

When the application is made

An example of sliding would be

charging for an additional product without the applicant's consent

One definition of replacement is "the act of replacing an existing insurance policy with another". Replacement is

closely regulated and requires full disclosure

K applies for a life insurance policy on herself and submits the initial premium with the application. She is given a receipt by the agent stating that coverage begins immediately if the application is approved. What kind of receipt was used?

conditional

Which of the following does social security NOT provide benefits for?

dismemberment

An underwriter determines that an applicant's risk should be recategorized due to a health issue. This policy may be issued with a(n)

exclusion for the medical condition

The reason for a business having a Business Overhead Expense Disability Plan is to cover

fixed business expenses

A medical care provider which typically delivers health services at its own local medical facility is known as a

health maintenance organization

A policy of adhesion can only be modified by whom?

insurance company

An insurance company normally has 2 years to contest information provided in an accident and health application. This 2 year period begins in the date that the:

insurer dates the policy

Basic Hospital and Surgical policy benefits are

lower than the actual expenses incurred

A disability income policy that only the policy owner can terminate and which the rates will never go up is considered to be

noncancellable

Which of the following BEST describes a short-term medical expense policy?

nonrenewable

K made a fraudulent statement on her health insurance policy application. In the event of a claim on this policy, the insurance company is required to pay

nothing

The Notice of Claims provision requires a policyowner to

notify an insurer of a claim within a specified time

The benefits under a Disability Buy-Out policy are

payable to the company or another shareholder

Which of these is NOT a type of agent authority?

principal

A major medical policy typically

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

A person insured under a health policy is required to give the insurance company a Notice of Claim within how many days after a covered loss?

twenty

M applies for a health insurance policy and pays the initial premium. When the agent completes the application, a conditional receipt is left with the applicant. The insurance company's underwriting department request's M's medical records and determines that M has had asthma for many years. All of the following are probable underwriting outcomes, EXCEPT: Sent coverage Approve with a higher premium Change the policy's provisions Attach a rider excluding specified coverages

Changing the policy's provisions

A disability income policy owner recently submitted a claim for a chronic neck problem that has now resulted in total disability. The original neck injury occurred before the application was taken 5 years prior. The neck injury was never disclosed to the insurer at the time of application. How will the insurer handle this claim?

Claim will be paid and coverage will remain in force

This type of deductible provision states that should more than one family member be involved in a common accident, or suffer the same illness, only one individual deductible amount shall be applied

Common accident deductible

Which of the following would be a likely candidate income insurance on a key employee? Company executive Hourly employee Common shareholder Secretary to the CEO

Company executive

An applicant who pays the initial premium at the time of application is typically given a(n)

Conditional receipt

An insurance company receives E's application for an individual health policy. E did not complete all of the medical history questions because she could not remember the exact dates. E signed the policy and submitted it to the insurance company anyway. A few weeks later, E suffers a heart attack and is hospitalized without completing the medical history questions and paying the initial premium. E is not insured. Which of the following clauses details the conditions that E did not meet?

Consideration Clause. A health insurance contract is valid only if the insured provides consideration in the form of the full minimum premium and the statements made in the application.

All of the following are eligibility requirements for an association group EXCEPT Group must have been in existence for two years Contributory plans require a minimum of 25 participants Group must hold meetings at least on an annual basis Must have been organized for some reason other than to obtain group insurance

Contributory plans require a minimum of 25 participants

Which of the following is NOT a consequence for placing business with an unauthorized insurer?

First degree misdemeanor

In Florida, when agents recommend changes be made for existing coverage, the agent must follow established procedures. The name of this rule is called the

Florida Replacement Rule

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

From the date the policy was issued

Which of these is considered a true statement regarding medicaid?

Funded by both state and federal governments

I the Florida employee health care access act was established to make

Group health insurance available to employers with up to 50 employees

Bryce purchased a disability income policy with a rider that guarantees him the option of purchasing additional amounts of coverage at predetermined times without requiring to provide evidence of insurability. What kind of rider is this?

Guaranteed insurability rider

Which type of renewability best describes a Disability Income policy that covers an individual until the age of 65, but the insurer has the right to change the premium rate for the overall risk class?

Guaranteed renewable

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

Which of the following statements about health reimbursement arrangements (HRA) is CORRECT?

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

T owns an Accident & Health policy and notifies her insurance company that she has chosen a less hazardous occupation. Under the Change of Occupation provision, which of the following actions may her insurance company take?

Increase her policy's coverage amount

The __clause identifies which losses resulting from an accident or sickness are insured by the policy

Insuring

Which of the following health insurance provisions specified the health care services a policy will provide?

Insuring clause

A life insurance arrangement which circumvents insurable interest statutes is called:

Investor-Originated Life Insurance

Which of these arrangements allows one to bypass insurable interest laws?

Investor-Originated Life Insurance

Stranger Originated Life Insurance (STOLI) has been found to be in violation of which of the following contractual elements? Consideration Competent parties Offer/acceptance Legal purpose (insurable interest)

Legal Purpose (Insurable Interest)

In Major Medical Expense policies, what is the intent of a Stop Loss provision?

Limits an insured's out-of-pocket medical expenses

Under a guaranteed renewable health insurance policy, the insurer

May cancel the policy for nonpayment only

Asset protection can be provided by a long-term care partnership policy if the policyholder qualifies for

Medicaid

The health insurance program which is administered by each state and funded by both the federal and state governments is called:

Medicaid

Which of the following are NOT managed care organizations? Point of service plan (POS) Preferred provider organization (PPO) Medical information bureau (MIB) Health maintenance organization (HMO)

Medical Information Bureau (MIB)

If a retiree on Medicare required five hospital stays in one year, which policy would provide the best insurance for excess hospital expenses?

Medicare Supplement

Which Unfair Trade Practice involves making a false statement on an insurance application in order to receive money from an insurer?

Misrepresentation

Which type of insurance company allows their policyowners to elect a governing body?

Mutual

Which statement is true regarding a minor beneficiary?

Normally, a guardian is required to be appointed in the Beneficiary clause of the contract

C is the policyowner of a comprehensive individual major medical policy. C pays an annual premium which is due September 1. If C forgets to pay the premium and is hospitalized September 10, how will the insurer handle this claim?

Pay the claim in full minus the premium due

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

Payment of claims

Insurance policies are considered aleatory contracts because They are "take it or leave it" contracts Both parties convent to the contract Performance is conditioned upon a future occurrence The contract is voidable upon proof of fraud

Performance is conditional upon a future occurrence

Which of these do NOT constitute policy delivery?

Policy issued with a rating

What is the purpose of the time of payment claims provision?

Prevents delayed claim payments made by the insurer

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 contingent beneficiary

All of these are considered sources of underwriting information about an applicant EXCEPT

Rating Services

T is covered by an Accidental Death and Dismemberment (AD&D) policy that has an irrevocable beneficiary. What action will the insurance company take if T requests a change of beneficiary?

Request of the change will be refused

S 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 cause

R had received full disability income benefits for 6 months. When he returns to work, he is only able to resume half his normal daily workload. Which provision pays reduced benefits to R while he is not working at full capacity?

Residual disability

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 these terms accurately defines an underwriters assessment of information on a health insurance application?

Risk classification

Which of these is NOT a legal entity for selling life insurance in Florida?

Risk management advisers

P is an employee who quits her job and wants to convert her group health coverage to an individual policy. After the expiration of COBRA laws, which of the following statements is TRUE?

She DOES need to provide evidence of insurability

N application for Medicare supplement coverage may NOT be denied by the insurer if the application was submitted within __month(s) after the applicant reaches the age of 65

Six months

What is required in the Florida employee health care access act?

Small group benefit plans are to be issued on a "guarantee-issue" basis

Which of the following services is NOT included under hospitalization expense coverage?

Surgical fees are not included

J, an Accidental Death and Dismemberment (AD&D) policy holder, dies after injuries sustained in an accident. J's age as stated on the application five years ago was found to be understated by ten years. Which of the following actions will the insurance company take?

The insurer will adjust the benefit to what the premiums paid would have purchased at the insured's actual age

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

J has an Accidental Death and Dismemberment policy with a principal sum of $50,000. While trimming the hedges, J cuts off one of his fingers. What is the MAXIMUM J will receive from his policy?

The maximum sum payable would be the capital sum, or $25,000.

Which of the following BEST describes how pre-admission certifications are used?

Used to prevent nonessential medical costs

Which of the following phrases refers to the fees charged by a healthcare professional? Deductible Coinsurance Usual,customary, and reasonable expenses Hospital expense

Usual, customary, and reasonable expenses

What type of rider would be added to an accident and health policy if the policy owner wants to ensure the policy will continue if he/she ever becomes totally disabled?

Waiver of premium rider