Test Questions 2
What is medicare?
A hospital and medical expense insurance program
Many small business owners worry how their business would survive financially if the owner becomes disabled. The policy which BEST addresses this concern is:
Business overhead expense
An insurer must provide an insured with claim forms within __ days after receiving notice of a loss
15
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 BEST describes how a PPO is less restrictive than an HMO?
More physicians to choose from
S filed a written proof of loss for a disability income claim on sept 1. The insurace company did not respond to the claim. S can take legal action beginning:
Nov 1
All of the following statements regarding group health insurance is true EXCEPT:
an individual policy is given to each member
The federal income tax treatment of employer provided group medical expense insurance can be accurately described as:
employee's premiums paid by the employer is tax deductible to the employer as a business expenditure
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
B is a teacher who was injured in a car accident and cannot work. She is now receiving monthly benefits as a result of this accident. Which type of policy does B have?
disability income
Which of the following does SS NOT provide benefits for?
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?
earned, but unpaid benefits
In a disability income policy, which of these clauses acts as a deductible?
elimination period
Non occupational disability coverage is designed for:
employees who suffer non work related disabilities, since work related disabilities are covered by workers' comp
Health insurance benefits NOT covered due to an act of war are:
excluded by the insurer in the contract provisions
The sections of an insurance contract which limit coverage are called
exclusions
Which of the following actions may NOT be taken by an insurance company to insure a substandard applicant for disability income coverage?
lengthen the contestability period
The individual most likely to buy a medicare supplement policy would be a(n);
68 year old male covered by medicare
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 MAX amount he would receive for an approved claim?
$1,250
Q is hospitalized for 3 days and receives a bill for $10,100. Q has a major medical policy with a $100 deductible and 80/20 insurance. How much will Q be responsible for paying on this claim?
$2,100
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 in medical expenses?
$3,000
P is self employed and owns an individual disability income policy. He becomes totally disabled on June 1 aand receives $2,000 a month for the next 10 months. How much of his income is subject to federal income tax?
0
XYZ company pays the entire premium for its group health plan. The MINIMUM percentage of eligible employees that must be covered is:
100%
What is the maximum SS disability benefit amount an insured can receive?
100% of the insured's primary insurance amount
What is the minimum number of activities of daily living (ADL) an insured must be unable to perform to qualify for long term care benefits?
2
Insurers may request a hearing within ____ if their policy is rejected
20 days
According to the mandatory uniform policy provisions, what is the max amount of time after the premium due date during which the policy remains in force even though the premium has not been paid?
31 days
S is employed by a large corporation that provides group health coverage for its employees and their dependents. If S dies, the company must allow his surviving spouse and dependents to continue their group health coverage for a maximum of how many months under COBRA regulations?
36
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 app date does the insurance company have to notify M of the denial before the policy will be automatically placed back in force?
45 days
A "reimbursement policy" pays what amount of covered long term care expenses?
Actual covered expenses up to the daily maximum
Medicare part C is:
Available to those who arre enrolled in medicare part A and B
Which of the following reimburses its insureds for covered medical expenses?
Commercial providers
Which contract permits the remaining partners to buy out theinterest of a disabled business partner?
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 tax deductible
Which of the following types of organizations are prepaid group health plans, where members pay in advance for the services of participating physicians and hopitals that have agreements?
HMO
All of these are characteristics of a health reimbursement arrangement (HRA) EXCEPT:
HRA is entirely funded by the employee
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
Which of the following are not managed care organizations?
MIB
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?
PPO
What does medicare parts A and B cover?
Part A covers hospitalization; B covers doctor's services
Which Long Term Care insurance statement is true?
Pre-existing ccondittions must be covered after the coverage has been in force for six months
J, an AD&D policy holder, dies after injuries sustained in an accident. J's age, as stated on the app five years ago, was found to be understated by 10 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
Which of the following statements describes what an accident and health policy owner may NOT do?
adjust the premium payments
A(n) ____ of benefits of a health policy transfers payments to someone other than the policy owner
assignment
In order to establish a Health Reimbursement Arrangement (HRA), it MUST:
be established by the employer
Medicaid was designed to assist individuals who are:
below a specific income limit
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
Which type of policy would pay an employee's salary if the employer was injured in a bicycle accident and out of work for six weeks?
business overhead expense
P loses an arm in a farm accident and is paid $10,000 from his AD&D policy. This benefit is known as the
capital sum
The situation in which a group of physicians are salaried employees and conduct business in an HMO facility is a(n):
closed panel
Which of the following correctly explains the actions an agent should take if a customer wants to apply for an insurance policy?
complete the app and review the info with the customer prior to obtaining the customer's signature, then send the app off to the insurance company
Which of the following BEST describes a hospital indemnity policy?
coverage that pays a sstated amount per day of a covered hospitalization
A business overhead expense policy:
covers business expenses such as rent and utrilities
K has an AD&D policy where her husband is beneficiary and her daughter is contingent beneficiary. Under the common disaster clause, if K and her husband are both killed in an automobile accident, where would the death proceeds be directed?
daughter
Medicare part A and B do NOT pay for:
dental work
S is the policy owner of a major medical policy. The premiums are paid monthly and due on the first of each month. S fails to make September's payment and is hospitalized Oct 15th. When S files the claim for this hospitalization, the insurer will likely
deny the claim
An agent takes an individual disability income app, collects the appropriate premium, and issues the propective insured a conditional receipt. The next step the insuurance company will take is to:
determine if the applicant is an acceptable risk by completing standard underwriting procedures
After an insured gives notice of loss, what must he do if the insurer does not furnish forms?
file written proof of loss
With AD&D policies, what is the purpose of the grace period?
gives the policy owner additional time to pay overdue premiums
Which of the following provisions specifies how long a policy owner's health coverage will remain in effect if he does not pay the premium when it is due?
grace period
K has a health policy that must be renewed by the insurer and the premiums can only be increased if applied to the entire class of insureds. This type of policy is considered:
guaranteed renewable
Basic medical expense insurance:
has lower benefit limits than major medical insurance
The health insurance portability and accountability act gives privacy protection for:
health information
A 66 year old is covered under a group health plan while employed with a business that has 40 employees. If she injures herself while walking in the park, what coverage would be considered primary?
her group health plan
S wantts to open a tax-exempt health savings account. To qualify for this tyepe of account, federal law dictates that S must be enrolled in a:
high deductible health plan
Under a basic medical expense policy, what does the hospitalization expense portion cover?
hospital room and board
How would a contingent beneficiary receive the policy proceeds in an AD&D policy?
if the primary beneficiary dies before the insured
T sends proof of loss to her insurer for an acceptable medical expense claim under her individual health insurance policy. Upon receipt the insurer must pay the benefits:
immediately
The first portion of a covered major medical insurance expense that the insued is required to pay is called the
initial deductible
Info obtained from a phone call to the proposed insured can be found in which of these reports?
inspection report
An insurance company normally has 2 years to contest info provided on an accident and health app. This 2 year period begins on the date that the:
insurer dates the policy
The clause in an accident and health policy which defines the benefit amounts the insurer will pay is called the
insuring clause
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
A policy owner would like to change the beneficiary on an AD&D insurance policy and make the change permanent. Which type of designation would fulfill this need?
irrevocable
Which of the following actions will an insurance company most likely not take if an applicant who has diabetes applies for a disability income policy?
issue the policy with an altered time of payment of claims provision
Comprehensive major medical expenses usually combine:
major medical with basic hospital/surgical coverage
What type of plan normally includes hospice benefits?
managed care plans
Which of the following characteristics si associatted with a large group disability income policy?
no medical underwriting
What type of renewability guarantees premium rates and renewability?
noncancellable
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 themedical service
The provision that defines to whom the insurer will pay benefits to is called:
payment of claims
Which of the following statements about a guaranteed renewable health insurance policy is correct?
premiums normally increase at the time of renewal
Which of these options can an individual use their medical flexible spending account to pay for?
prescription drugs
T is covered by two health insurance plans: a group plan through his employer and his spouse's plan as a dependent. Under the model group coordination of benefits provision, when T files a claim, his employer's plan is considered the:
primary carrier
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?
probationary period
An insured covered by 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
The legal actions provision of an insurance contract is designed to do all of the following EXCEPT:
protect the producer
A major medical policy typically:
provides benefits for reasonable and necessary medical expenses, subject to policy limits
T is covered by an 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
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?
restoration of used benefit
Agent J takes an app and initial premium from an applicant and sends the app and premium check to the insurance company. The insurance company retturns the check back to J because the check is made out to J instead of the company. What action should J take?
return to the customer, collect a new check made out to the insurance company, and send the new check out to the insurance company
With optionally renewable health policies, the insurer may:
review the policy annually and determine whether or not to renew it
P is an employee who quits her job and wants to convret her group health coverage to an individual policy. After the expiration of COBRA benefits, which of the following statements is TRUE?
she DOES need to provide evidence of insurability
Which mode of payment is NOT usedd by health insurance policies?
single premium
An individual disability income insurance applicant may be required to submit all of the following information EXCEPT:
spouse's occupation
The insuring clause
states the scope and limits of the coverage
Which of the following statements about the classification of applicants is incorrect?
substandard applicants are never declined
Which of the following services is NOT included under hospitalization expense coverage?
surgical fees
Which statement is TRUE regarding a grroup accident and health policy issued to an employer?
the emplloyer receives the policy and each employee is issued a certificate
Which of the following statements is true about most blues organizations?
they are nonprofit organizations
Medicare is intended for all of the following groups EXCEPT
those enrolled as a full time student
A business disability buyout plan policy is designed:
to pay benefits to the corporation or other shareholders
R becomes disabled and owns an individual disability income policy. When is R eligible to receive disability benefits?
upon satisfying the elimination period requirement
Which of the followiing BEST describes how pre admission certificattion is used?
used to prevent nonessential medical costs
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
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 ever becomes totally disabled?
waiver of premium rider
Disability policies do NOT normally pay for disabilities arising from which of the following?
war
