Insurance Exam 1
S is a sole business proprietor who owns a medical expense plan. What percentage of the cost of the plan may he deduct?
100%
A temporary license is normally valid for a maximum period of?
180 Days
Following hospitalization because of an accident, Bill was confined in a skilled nursing facility. Medicare will pay full benefits in this facility for how many days?
20
Within how many days of requesting an investigative consumer report must an insurer notify the consumer in writing that the report will be obtained?
3 Days
If a child attends college full-time, he or she may be considered a dependent until age?
30
All of the following individuals may qualify for Medicare health insurance benefits EXCEPT
A retired person age 50
How often must a Certificate of Authority be renewed?
Annually
All of the following qualify for Medicare Part A EXCEPT
Anyone who is willing to pay a premium
Which type of insurance is based on mutual agreements among subscribers?
Reciprocal insurance
Which of the following is an example of a peril covered in an accident and health insurance policy?
Sickness
Regarding health insurance premiums, all of the following statements are true EXCEPT
Substandard risks are not insurable and are always rejected
Which of the following is NOT covered under Plan A in Medigap insurance?
The Medicare Part A deductible
In comparison to consumer reports, which of the following describes a unique characteristic of investigative consumer reports?
The customer's associates, friends, and neighbors provide the report's data
An employee insured under a group health policy is injured in a car wreck while performing her duties for her employer. This results in a long hospitalization period. Which of the following is true?
The group plan will not pay because the employee was injured at work.
Under health insurance policy, benefits, other than death benefits, that have not otherwise been assigned, will be paid to?
The insured
Which of the following is NOT a feature of a guaranteed renewable provision?
The insurer can increase the policy premium on an individual basis
In a noncontributory health insurance plan, what percentage of eligible employees must participate in the plan before the plan can become effective?
100%
An insured pays a monthly premium of $100 for her health insurance. What would be the duration of the grace period under her policy?
10 Days
Because an agent is using stationery 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?
Apparent
Each of the following factors is a significant consideration in the underwriting of individual health insurance risks EXCEPT
Applicant's geographic location
All of the following are requirements of eligibility for Social Security disability income benefits EXCEPT
Being age 65
Which of the following is not true of Disability Buy-Sell coverage?
Benefits are considered taxable income to the business
It is mandatory that all new policies to include surgical and nonsurgical treatment for all of the following EXCEPT?
Broken cervical vertebrae
Which of the following options best depicts how the eligibility of members for group insurance be determined?
By conditions of employment
An insurance producer who by contract is bound to write insurance for only one company or group of companies is classified as a/an?
Captive Agent
What is the contract provision that allows the insurer to nonrenew health coverage if certain events occur?
Conditionally renewable
Something of value exchanged between the insurer and the insured is considered an?
Consideration
An applicant for an individual health policy failed to complete the application properly. Before being able to complete the application and pay the initial premium, she is confined to a hospital. This will not be covered by insurances because she as not met the conditions specified in the?
Consideration Clause
The gatekeeper of an HMO helps
Control specialist costs
Which of the following insurance providers must be nonprofit and sell insurance only to its members?
Fraternal
An association could buy group insurance for its members if it meets all of the following requirements EXCEPT
Has at least 50 members.
Events or conditions that increase the chances of an insured loss occurring are referred to as
Hazards
Which of the following is INCORRECT concerning taxation of disability income benefits?
If paid by the individual, the premiums are tax deductible
Guarantee of insurability option in long-term care policies allows the insured to?
Increase benefit levels without providing proof of insurability
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
Increase benefits for a period of one year
What is the benefit of experience rating?
It allows employers with low claims experience to get lower premiums
Concerning Medicare Part B, which statement is INCORRECT?
It is fully funded by Social Security taxes (FICA)
All of the following statements describe a MEWA EXCEPT?
MEWAs are groups of at least 3 employers
All the Following are true regarding the Medical Information Bureau (MIB) EXCEPT
MIB reports are based upon information supplied by doctors and hospitals
An individual wants to replace his existing long-term care policy with another one offered by the same company. What will the waiting period most likely be?
None
The part of Medicare that helps pay for inpatient hospital care, inpatient care in a skilled nursing facility, home health care and hospice care, is known as?
Part A
Which of the following do the Standard and Preferred risk categories share?
Premiums are not elevated
Which of the following describes taxation of individual disability income insurance premiums and benefits?
Premiums are not tax deductible, and benefits are not taxable.
All the following are true regarding key person disability income insurance EXCEPT?
Premiums are tax deductible as a business expense
Under a disability income policy, the insurer does not pay a monthly benefit that is equal to the insured's previous income. The reason for paying a benefit amount that is less than the insured's income is to?
Prevent overutilization and malingering
In respect to the consideration clause, which of the following is consideration on the part of the insurer?
Promising to pay in accordance with the contract terms
What would a physician utilize if he/she wanted to know if a treatment is covered under an insured's plan and at what rate it will be paid?
Prospective review
In insurance policies, contract ambiguities are automatically ruled in the favor of the insured. What privilege does the insurer have in order to balance this?
The right to determine the wording of a policy
An insured makes regular contributions to his Health Savings Account. How are those contributions treated in regards to taxation?
They are tax deductible.
When employees are actively at work on the date coverage can be transferred to another insurance carrier, what happens to coinsurance and deductibles?
They carry over from the old plan to the new plan
Which of the following is true regarding limited health insurance policies?
They only cover specific accidents or diseases.
Which provision states that the insurance company must pay Medical Expense claims immediately?
Time of Payment of Claims
Federal law makes it illegal for any individual convicted of a crime involving dishonesty or breach of trust to work in the business of insurance affecting interstate commerece
Without receiving written consent from an insurance regulatory authority
An employee is injured in a construction accident, rendering him unable to work for a year. Which of the following plans would provide him with medical expense coverage and income assistance?
Workers compensation
An applicant is considered to be high-risk, but not so much that the insurer wants to deny coverage. Which of the following is NOT true?
the insurer will issue a conditional coverage
