NC Accident and Health Final Exam Prep
N is covered under an individual Disability policy with a 30-day Elimination period and a monthly benefit of $500. N is totally disabled for 3 1/2 months. N's total benefit received on this claim is:
$1,250
B has a $100,000 Accidental Death and Dismemberment policy that pays triple indemnity for common carrier death. If B is killed from an accident on a commercial flight, what will the policy pay B's beneficiary?
$300,000
The policyholder has how many days to return an Accident/Health Insurance Policy and receive a full refund on premiums?
10
Approved premium rates for group health insurance shall be guaranteed by the insurer for an initial period of not LESS than how many months?
12
A person is required to be AT LEAST how old before he or she is licensed as an agent in North Carolina?
18
An insured MUST submit a proof of loss on a health insurance claim within how many days after the date of loss?
180
North Carolina requires that an insurance agent must complete __ hours of continuing education on the subject of law and ethics every two years.
3
According to the Information and Privacy Protection Act, when access to recorded personal information is requested following an adverse underwriting decision, the insurer must make the information available within how many business days?
30
In North Carolina, a health policy that is paid on a quarterly basis requires a grace period of
31 days
M's insurance company denied a reinstatement application for her lapsed health insurance policy. The company did not notify M of this denial. How many days from the reinstatement application date does the insurance company have to notify M of the denial before the policy will be automatically placed back in force?
45 days
Every insurance agent/broker MUST maintain all records, books, and documents for insurance transactions for a period of not less than
5 years
Eligible employees must be added to group health coverage NO LATER than how many days after their first day of employment?
90
P received Disability income benefits for 3 months then returns to work. She is able to work one month before her condition returns, leaving her disabled once again. What would the insurance company most likely regard this second period of disability as?
A recurrent disability
Under which of the following circumstances will the benefits under COBRA continuation coverage end?
All group health plans are terminated by the employer
All of the following statements regarding group health insurance is true, EXCEPT:
An individual policy is given to each member
Which of the following is the MOST important factor when deciding how much Disability Income coverage an applicant should purchase?
Applicant's monthly income
Before a health insurance policy is issued, which of these components of the contract is required?
Applicant's signature on application
When is a Group Health policy required to provide coverage for a newborn child?
At the moment of birth
All of the following statements about Major Medical benefits are true, EXCEPT:
Benefits have no maximum limit
Which of these circumstances is a Business Disability Buy-Sell policy designed to help in the sale of a business?
Business owner becoming disabled
When an insured changes to a more hazardous occupation, which disability policy provision allows an insurer to adjust policy benefits and rates?
Change of occupation provision
Which of the following reimburses its insureds for covered medical expenses?
Commercial insurers
When an employee is required to pay a portion of the premium for an employer/employee group health plan, the employee is covered under which of the following plans?
Contributory
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
Which contract permits the remaining partners to buy-out the interest of a disabled business partner?
Disability Buy-Sell
Which of the following statements BEST describes the intent of a Coinsurance clause in a Major Medical policy?
Discourages overutilization of the insurance coverage
In a Disability Income policy, which of these clauses acts as a deductible?
Elimination Period
Which health policy clause stipulates that an insurance company must attach a copy of the application to the policy to ensure that it is part of the contract?
Entire contract
After an insured gives notice of loss, what must he/she do if the insurer does not furnish forms?
File written proof of loss
A vacancy that occurs during the North Carolina Commissioner of Insurance's term of office MUST be filled by the
Governor
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
Which of the following types of organizations are prepaid group health plans, where members pay in advance for the services of participating physicians and hospitals that have agreements?
HMO
A medical care provider which typically delivers health services at its own local medical facility is known as a:
Health Maintenance Organization
J is a subscriber to a plan which contracts with doctors and hospitals to provide medical benefits at a predetermined price. What type of plan does J belong to?
Health Maintenance Organization
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:
High-deductible health plan
For which of the following expenses does a Basic Hospital policy pay?
Hospital room and board
Information obtained from a phone conversation to the proposed insured can be found in which of these reports?
Inspection report
Which of the following requires that an applicant for an individual Health Policy be notified of an investigation into his personal character, general reputation, and mode of living?
Insurance Information and Privacy Protection Act
An insurance broker in North Carolina is a representative of the
Insured
What is the initial requirement for an insured to become eligible for benefits under the Waiver of Premium provision?
Insured must be under a physician's care
Which health policy clause specifies the amount of benefits to be paid?
Insuring
Which of the following health insurance policy provisions specifies the health care services a policy will provide?
Insuring clause
Which of the following claims are typically excluded from Medical expense policies?
Intentionally self-inflicted injuries
What kind of Accidental Death and Dismemberment (AD&D) insurance beneficiary requires his/her consent when a change of beneficiary is made?
Irrevocable beneficiary
The fund that assures policyholders payment of death benefits on Life Policies, if the company is insolvent at the time of the claim, is called the
Life and Health Insurance Guaranty Association
The rules and regulations of the Life and Health Insurance Guaranty Association in North Carolina apply to
Life and Health Policies issued by companies authorized in North Carolina
In Major Medical Expense policies, what is the intent of a Stop Loss provision?
Limits an insured's out-of-pocket medical expenses
Which type of plan normally includes hospice benefits?
Managed care plans
Which of these factors do NOT play a role in the underwriting of a health insurance policy?
Marital status
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?
Medical Information Bureau (MIB)
Which of the following characteristics is associated with a large group disability income policy?
No medical underwriting
J purchased a Disability Income Policy that ONLY J can terminate and on which the rates will never increase above those illustrated in the policy. Which of the following types of policies did J purchase?
Noncancelable
Which of these statements concerning an individual Disability Income policy is TRUE?
Normally includes an Elimination period
S filed a written Proof of Loss for a Disability Income claim on September 1. The insurance company did not respond to the claim. S can take legal action against the insurer beginning:
November 1
Which of these statements is INCORRECT regarding a Preferred Provider Organization (PPO)?
PPO's are NOT a type of managed care systems
What does Medicare Parts A and B cover?
Part A covers hospitalization; Part B covers doctor's services
On an Accidental Death and Dismemberment (AD&D) insurance policy, who is qualified to change the beneficiary designation?
Policyowner
How does group insurance differ from individual insurance?
Premiums are lower
Which of the following statements about a Guaranteed Renewable Health Insurance policy is CORRECT?
Premiums normally increase at time of renewal
What must the policyowner provide to the insurer for validation that a loss has occurred?
Proof of Loss
A Disability Income policyowner suffers a disability which was due to the same cause as a previous disability. Both disabilities occurred within a five-month period. The insurer may cover the second disability without a new elimination period under the:
Recurrent Disability provision
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?
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
M purchased an Accidental Death and Dismemberment (AD&D) policy and named his son as beneficiary. M has the right to change the beneficiary designation at anytime. What type of beneficiary is his son?
Revocable
Which of these terms accurately defines an underwriter's assessment of information on a health insurance application?
Risk classification
Which mode of payment is NOT used by health insurance policies?
Single premium
What should an insured do if the insurer does not send claims forms within the time period set forth in a health policy's Claims Forms provision?
Submit the claim in any form
Which of the following is the reimbursement of benefits for the treatment of a beneficiary's injuries caused by a third party?
Subrogation
Which statement is TRUE regarding a group accident & health policy issued to an employer?
The employer receives the policy and each employee is issued a certificate
Which of the following statements is true about most Blue Cross/Blue Shield organizations?
They are nonprofit organizations
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
Which of the following phrases refers to the fees charged by a healthcare professional?
Usual, customary, and reasonable expenses
The provision in a health insurance policy that suspends premiums being paid to the insurer while the insured is disabled is called the:
Waiver of Premium
Which parts of a health insurance policy are guaranteed to be true?
Warranty
An insurance company formed under the laws of Canada would be known in North Carolina as
an alien company
Which of the following medical expenses does Cancer insurance NOT cover?
arthritis
The situation in which a group of physicians are salaried employees and conduct business in an HMO facility is called a(n):
closed panel
The Commissioner of Insurance may examine the records of an insurance company in order to
determine the solvency of the company
Non-occupational disability coverage is designed for:
employees who suffer non-work related disabilities, since work-related disabilities are covered by Workers' Compensation
M completes an application for health insurance but does not pay the initial premium. All of these actions must occur before M's policy goes into effect, EXCEPT:
free-look period has expired
When L applies for a Health Insurance Policy, L unintentionally fails to list a previous visit to a cardiologist. If the insurance company contests the policy, it MUST do so within 2 years
from the date of issue
With Disability Income insurance, an insurance company may limit the monthly benefit amount a prospective policy holder may obtain because of the insured's:
gross income at the time of purchase
Continuation of coverage of a group Hospital, Surgical, and Major Medical Policy MUST include
hospital expenses
An agent who signs a blank contract application or policy of insurance
is guilty of a misdemeanor
All of the following are limited benefit plans, EXCEPT:
life insurance policies
Every Group Health Policy providing benefits for chemical dependency treatments must include, for the life of the contract, a
minimum benefit of $16,000
If a company accepts a renewal premium payment that would extend coverage beyond the policy's MAXIMUM age limit, the company
must continue the coverage to the end of the period of time for which the premium was accepted
If an insurance company issues a Disability Income policy that it cannot cancel or for which it cannot increase premiums, the type of renewability that best describes this policy is called:
noncancellable
K works for XYZ Clothing Store from September through December each year. K works 45 hours a week for this period of time. The employer's Group Policy would consider K
not eligible for the insurance because as a seasonal employee K does not meet the definition of "employee" under North Carolina law
An example of rebating would be
offering a client something of value not stated in the contract in exchange for their business
The Coordination of Benefits provision:
prevents an insured covered by two health plans from making a profit on a covered loss
Consumer reports requested by an underwriter during the application process of a health insurance policy can be used to determine:
probability of making timely premium payments
No insurer shall refuse to insure an individual because of
race
All of the following actions are considered rebating EXCEPT
sharing commissions with other licensed and appointed agents
An individual Disability Income insurance applicant may be required to submit all of the following information, EXCEPT:
spouse's occupation
If the Commissioner of insurance finds that a licensed person has used fraudulent, coercive, or dishonest practices or has proved to be incompetent, untrustworthy, or financially irresponsible, the law allows the Commissioner to
suspend, revoke, or refuse to renew the agent's license
Essential Benefits without annual and lifetime limits are required on any health policy purchased:
through the Federal Marketplace
A disability elimination period is best described as a:
time deductible
Boycott, coercion, and intimidation that result in the unreasonable restraint of trade are prohibited under the North Carolina insurance laws covering
unfair trade practices