This is your insurance test 1302

How many eligible employees must be included in a contributory plan?

75%

A long-term care shopper's guide must be presented at what point?

At the point of the application

#97. All of the following are ways in which a Major Medical policy premium is determined EXCEPT

The average age of the group.

#74. Which provision states that the insurance company must pay Medical Expense claims immediately?

Time of Payment of Claims

#10. When an insurer offers services like preadmission testing, second opinions regarding surgery, and preventative care, which term would best apply?

d) Case management provision

#6. In forming an insurance contract, when does acceptance usually occur?

a) When an insurer's underwriter approves coverage

88. How often must a Certificate of Authority be renewed?

annually

director is

appointed by the governor

#44. How is emergency care covered for a member of an HMO?

b) A member of an HMO can receive care in or out of the HMO service area, but care is preferred in the service area.

#6. Which of the following hospice expenses would NOT be covered in a cost-containment setting?

b) Antibiotics

#66. Occasional visits by which of the following medical professionals will NOT be covered under LTC's home health care?

b) Attending physician

#28. Which of the following does NOT have to be disclosed in a long-term care (LTC) policy?

b) The aggregate amount of premiums due

#14. Which of the following is a characteristic of a Reciprocal Insurance Exchange?

d) The chief administrator of the insurer is called an "attorney-in-fact".

#38. Which of the following is a characteristic of a Reciprocal Insurance Exchange?

d) The chief administrator of the insurer is called an "attorney-in-fact".

#38. For an individual who is eligible for Medicare at age 65, and who is still employed and covered under the employer's plan, which of the following is true?

d) The employer plan is primary coverage, and Medicare is secondary coverage.

#97. Under a health insurance policy, benefits, other than death benefits, that have not otherwise been assigned, will be paid to

the insured

An insurer hires a representative to advertise its company at a local convention. The representative lies about the details of some of the policies, in an attempt to secure more business for the company. Who is responsible for the representative's claims?

the insurer

#51. An insured owes his insurer a premium payment. Since then, he incurs medical expenses. The insurer deducts the unpaid premium amount from the claim amount and pays the insured the difference. What provision allows for this?

unpaid premium

What is the maximum fine for each violation of the Utilization Review Act, provided the violation was deliberate?

$15,000

#21. In which Medicare supplemental policies are the core benefits found?

All plans

Long-term care policies MUST cover

Alzheimer's disease.

#86. Which of the following insurance options would be considered a risk-sharing arrangement?

Reciprocal

When an insurer combines two periods of disability into one, the insured must have suffered a

Recurrent disability.

#68. Which of the following is NOT provided by an HMO?

reimbursement

#19. A producer's license is revoked for a violation of the Insurance Producers Licensing Act. The producer may also be required to pay a fine of up to

$1,000.

The insured's health policy only pays for medical costs related to accidents. Which of the following types of policies does the insured have?

Accident-only

#55. When an insured makes truthful statements on the application for insurance and pays the required premium, it is known as which of the following?

) Consideration

#64. Which of the following is an example of an unfair claims settlement practice?

) Failure to promptly settle a claim when liability has been clearly established

#17. In the event of loss, after a notice of claim is submitted to the insurer, who is responsible for providing claims forms and to which party?

) Insurer to the insured

#79. Which act bars agents, brokers, and companies from disclosing health, financial, or other information gathered in the underwriting process about the consumer to any 3rd party without the consent of the consumer?

) Privacy of Insurance Consumer Information Act

89. An HSA holder who is 65 years old decides to use the money in the account for a nonhealth expense. Which of the following is true?

) There will be a tax.

#31. 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

2. 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

#79. For how many days of skilled nursing facility care will Medicare pay benefits?

100

#58. An employee insured under a group health plan has been paying $25 monthly premium for his group health coverage. The employer has been contributing $75, for the total monthly cost of $100. If the employee leaves the company, what would be his maximum monthly premium for COBRA coverage?

102%

hippa applies to groups of

2 or more

Every small employer carrier must actively offer to small employers at least how many health benefit plans?

2 plans

#79. How long must an insurer retain an advertisement for its long-term care policies?

3 years

#30. One of the differences between group underwriting and individual underwriting is that there is little or no medical information required regarding plan participants in groups of

50 or more.

#32. Which of the following does the Insuring Clause NOT specify?

A list of available doctors

Which of the following does the Insuring Clause NOT specify?

A list of available doctors

#46. If an insurance company makes a statement that its policies are guaranteed by the existence of the Insurance Guaranty Association, that would be considered

An unfair trade practice.

In disability income insurance, if an insured is considered disabled if they cannot perform any job they are suited for by prior education, training or experience, they fall under which definition of total disability?

Any occupation

#11. An individual is insured under his employer's group Disability Income policy. The insured suffered an accident while on vacation that left him unable to work for 4 months. If the disability income policy pays the benefit, which of the following would be true?

Benefits that are attributable to employer contributions are fully taxable to the employee as income.

#54. An insurer neglects to pay a legitimate claim that is covered under the terms of the policy. Which of the following insurance principles has the insurer violated?

Consideration

#63. All of the following are true about group disability Income insurance EXCEPT

Coverage applies both on and off the job.

Which types of insurance companies marketing long-term care insurance coverage must establish procedures to assure that any comparison of policies by its agents will be fair and accurate

Every company is required to establish marketing procedures.

Which types of insurance companies marketing long-term care insurance coverage must establish procedures to assure that any comparison of policies by its agents will be fair and accurate?

Every company is required to establish marketing procedures.

#54. What option allows the insured to periodically increase benefit levels without providing evidence of insurability?

Guarantee of insurability

Which of the following entities protects policyowners, insureds, and beneficiaries under insurance contracts when insurers fail to perform contractual obligations due to financial impairment?

Insurance Guaranty Association

#74. In the event of loss, after a notice of claim is submitted to the insurer, who is responsible for providing claims forms and to which party?

Insurer to the insured

#55. All of the following are characteristics of a Major Medical Expense policy EXCEPT

Low maximum limits.

#25. All of the following statements describe a MEWA EXCEPT

MEWAs are groups of at least 3 employers.

#87. An insured does not have to pay coinsurance or deductibles on a full-series mouth x-ray, but does have to pay a deductible to get his cavities filled. Which dental plan does he have?

Nonscheduled

Shortly after a replacement transaction on a Medicare supplement policy, the insured decided to cancel the policy, but is unsure whether the free-look provision applies. The insured could find that information in the

Notice Regarding Replacement.

In long-term care insurance, what type of care is provided with intermediate care?

Occasional nursing or rehabilitative care

69. Which of the following is the most common time for errors and omissions to occur on the part of an insurer?

Policy delivery

#69. Which of the following describes taxation of individual disability income insurance premiums and benefits?

Premiums are not tax deductible, and benefits are not taxable.

A long-term care shopper's guide must be presented at what point?

Prior to the time of application

#68. Which of the following is NOT provided by an HMO?

Reimbursement

An insurer wishes to compare the information given in an insurance application with previous insurance applications by the same applicant but for different companies. What organization can help the insurer accomplish this?

The Medical Information Bureau

#77. Which of the following does NOT have to be disclosed in a long-term care (LTC) policy?

The aggregate amount of premiums due

#9. All of the following are ways in which a Major Medical policy premium is determined EXCEPT

The average age of the group.

#49. Which of the following statements concerning group health insurance is CORRECT?

The employer is the policyholder.

#34. For an individual who is eligible for Medicare at age 65, and who is still employed and covered under the employer's plan, which of the following is true?

The employer plan is primary coverage, and Medicare is secondary coverage.

#81. For an individual who is eligible for Medicare at age 65, and who is still employed and covered under the employer's plan, which of the following is true?

The employer plan is primary coverage, and Medicare is secondary coverage.

Which of the following does NOT have to be disclosed in a long-term care (LTC) policy?

The meaning of the terms "reasonable" and "customary"

#59. Which of the following will vary the length of the grace period in health insurance policies?

The mode of the premium payment

#65. Which of the following will vary the length of the grace period in health insurance policies?

The mode of the premium payment

#82. 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

#84. An insured is upset that her new health insurance policy was delivered to her by certified mail and not through her agent. Which of the following is true?

There is nothing wrong with this form of policy delivery.

#58. An insured owes his insurer a premium payment. Since then, he incurs medical expenses. The insurer deducts the unpaid premium amount from the claim amount and pays the insured the difference. What provision allows for this?

Unpaid premium

#68. How is emergency care covered for a member of an HMO?

a) A member of an HMO can receive care in or out of the HMO service area, but care is preferred in the service area.

#51. Which of the following is not true of Disability Buy-Sell coverage?

a) Benefits are considered taxable income to the business.

#41. It is mandatory for all new policies to include surgical and nonsurgical treatment for all of the following EXCEPT

c) Broken cervical vertebrae.

A man works for Company A and his wife works for Company B. The spouses are covered by health plans through their respective companies that also cover the other spouse. If the husband files a claim,

d) The insurance through his company is primary.

1. Under which of the following employer-provided plans are the benefits taxable to an employee in proportion to the amount of premium paid by the employer?

disability income

#87. The period of time immediately following a disability during which benefits are not payable is

elimination period

#95. In which of the following health plans are benefit payments attributed to employer contributions taxable to the employee?

group disability income

#72. The section of a health policy that states the causes of eligible loss under which an insured is assumed to be disabled is the

insuring clause

#98. Medicare Part A services do NOT include which of the following?

outpatient hospital treatment

#51. All of the following are marketing arrangements used by insurers EXCEPT

) Reinsurance System.

7. All of the following are ways in which a Major Medical policy premium is determined EXCEPT

) The average age of the group.

#55. What is the maximum period that an insurer would pay benefits in accordance with an Additional Monthly Benefit rider?

1 year

What is the maximum period that an insurer would pay benefits in accordance with an Additional Monthly Benefit rider?

1 year

#100. Any licensed person whose activities affect interstate commerce and who knowingly makes false material statements related to the business of insurance may be imprisoned for up to

10 years

Any licensed person whose activities affect interstate commerce and who knowingly makes false material statements related to the business of insurance may be imprisoned for up to

10 years

#43. Under the Affordable Care Act, what percentage of preventive care must be covered without cost sharing?

100%

To be eligible under HIPAA regulations, for how long should an individual converting to an individual health plan have been covered under the previous group plan?

18 months

#20. What is the maximum number of required continuing education requirements for a producer within a given 2-year period?

24

#85. 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

#82. The Director denies an application, and the applicant requests a hearing to contest the decision 25 days later. Within how many days must the hearing occur?

30

A Director denies a license application. 15 days later, the applicant notifies the Director that he wants a hearing to be conducted regarding the decision. Within how many days must the hearing be held?

30

An insured is the recipient of an Accidental Death and Dismemberment (AD&D) policy purchased by his employer. The policy pays triple indemnity in case of accidental death. If the insured died as a result of an accident stipulated in the policy, how will the benefits paid be taxed?

Benefits received are considered income tax free.

Which of the following is NOT required to be stated in the outline of coverage provided with a long-term care policy?

a) Basic information about supplementary policies

#66. As it pertains to group health insurance, COBRA stipulates that

a) Group coverage must be extended for terminated employees up to a certain period of time at the former employee's expense.

#47. What option allows the insured to periodically increase benefit levels without providing evidence of insurability?

a) Guarantee of insurability

#9. Which of the following is INCORRECT concerning taxation of disability income benefits?

a) If paid by the individual, the premiums are tax deductible.

John owns a medical expense policy that he purchased for his family. John's employer purchased a Group Disability Income policy for John and all eligible employees. John subsequently suffered an accident on the job that left him unable to work for four months. If John receives benefits from his disability income policy, which of the following would be true?

b) Benefits received that are attributable to employer contributions are fully taxable to the employee as income.

#53. Which of the following would NOT be considered a misrepresentation on the part of the insurer?

c) Backdating policies to secure a lower premium for the insured

#64. What is an important feature of a dental expense insurance plan that is NOT typically found in a medical expense insurance plan?

c) Diagnostic and preventive care

#5. Under which of the following disability income plans would the benefits be subject to income tax?

c) Group

#55. In order for an insured under Medicare Part A to receive benefits for care in a skilled nursing facility, which of the following conditions must be met?

c) The insured must have first been hospitalized for 3 consecutive days.

#30. Under a credit disability policy, until what point will payments to the creditor be made for the insured?

c) Until the disability ends or the debt is satisfied, whichever is sooner

#98. A husband and wife are insured under group health insurance plans at their own places of employment, and as dependents under their spouse's coverage. If one of them incurs hospital expenses, how will those expenses likely be paid?

d) The benefits will be coordinated.

#40. Issue age policy premiums increase in response to which of the following factors?

increased benefit

Who is responsible for making sure that agents are properly trained in the use of the suitability standards for LTC policies?

insurer

#92. Which of the following provisions would prevent an insurance company from paying a reimbursement claim to someone other than the policyowner?

payment of claims

#36. When health care insurers negotiate contracts with health care providers or physicians to provide health care services for subscribers at a favorable cost, it is called

ppo

#14. Which of the following is NOT provided by an HMO?

reimbursement

#5. When twin brothers applied for life insurance from Company A, the company found that while neither of them smoked and both had a very similar lifestyle, one of the twins was in a much stronger financial position than the other. Because of this, the company charged him a higher rate for his insurance. This practice is considered

Discrimination.

Under most dental plans, what limitations are posed for denture replacement?

Once every 5 years

#25. When does Medicare cover nursing home care?

Only if it is part of treatment for a covered illness or injury

#96. Which renewal option does NOT guarantee renewal and allows the insurance company to refuse renewal of a policy at any premium due date?

Optionally renewable

#76. Which of the following is correct regarding the taxation of group medical expense premiums and benefits?

Premiums are tax deductible and benefits are not taxed.

Events in which a person has both the chance of winning or losing are classified as

Speculative risk.

#53. Which of the following is NOT covered under Plan A in Medigap insurance?

The Medicare Part A deductible

#61. Regarding the return of premium option for LTC policies, what happens to the premium if the policy lapses?

The insurer will return a percentage of the premiums paid.

#43. An agent is in the process of replacing the insured's current health insurance policy with a new one. Which of the following would be a proper action?

The old policy should stay in force until the new policy is issued.

An individual applies for a life policy. Two years ago he suffered a head injury from an accident, so he cannot remember parts of his past, but is otherwise competent. He has also been hospitalized for drug abuse, but does not remember this when applying for insurance. The insurer issues the policy and learns of his history one year later. What will probably happen?

The policy will not be affected.

Regarding Medicare SELECT policies, what are restricted network provisions?

They condition the payment of benefits.

#16. Which of the following describes taxation of individual disability income insurance premiums and benefits?

Premiums are not tax deductible, and benefits are not taxable.

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 of the following are covered by Part A of Medicare EXCEPT

Rebates are allowed if it's in the best interest of the client.

#23. In a noncontributory health insurance plan, what percentage of eligible employees must participate in the plan before the plan can become effective?

100%

small employer must have at least 2 but no more than 50 workers actively engaged in business for at least how many of the working days during the preceding calendar quarter?

50%

Which of the following is not true of Disability Buy-Sell coverage?

Benefits are considered taxable income to the business.

An individual is insured under his employer's group Disability Income policy. The insured suffered an accident while on vacation that left him unable to work for 4 months. If the disability income policy pays the benefit, which of the following would be true?

Benefits that are attributable to employer contributions are fully taxable to the employee as income.

#83. How are state Insurance Guaranty Associations funded?

By their members - authorized insurers

#50. 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.

#39. An insured is involved in a car accident. In addition to general, less serious injuries, he permanently loses the use of his leg and is rendered completely blind. The blindness improves a month later. To what extent will he receive Presumptive Disability benefits?

c) No benefits

#17. All of the following are covered by Part A of Medicare EXCEPT

c) Physician's and surgeon's services.

#25. All of the following are regulated areas of the insurance industry EXCEPT

commisions

82. In a group prescription drug plan, the insured typically pays what amount of the drug cost?

copayment

#60. In reference to the standard Medicare Supplement benefits plans, what does the term standard mean?

d) All providers will have the same coverage options and conditions for each plan.

All of the following are true regarding Key Employee Disability Income insurance EXCEPT

d) Benefits are taxable to the employer.

#15. 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?

d) Prospective review

#12. An agent offers his client free tickets to a sporting event in exchange for the purchase of an insurance policy. The agent is guilty of

rebating

An insured owes his insurer a premium payment. Since then, he incurs medical expenses. The insurer deducts the unpaid premium amount from the claim amount and pays the insured the difference. What provision allows for this?

unpaid premium

#74. Which of the following insurance options would be considered a risk-sharing arrangement?

Reciprocal

he following is the closest term to an authorized insurer?

Admitted

In reference to the standard Medicare Supplement benefits plans, what does the term standard mean?

All providers will have the same coverage options and conditions for each plan.

#81. What is the benefit of experience rating

It allows employers with low claims experience to get lower premiums.

#81. Which of the following is true regarding health insurance?

It could provide payments for loss of income.

Which of the following is NOT true regarding a Certificate of Authority?

It is issued to group insurance participants.

A 55-year-old employee has worked part-time for his new employer for 3 months now, but has not been offered health insurance. What factor has limited the employee's eligibility?

Number of hours worked per week

#73. Which renewability provision allows an insurer to terminate a policy for any reason, and to increase the premiums for any class of insureds?

Optionally renewable

Which renewability provision allows an insurer to terminate a policy for any reason, and to increase the premiums for any class of insureds?

Optionally renewable

Which of the following statements is INCORRECT concerning Medicare Part B coverage?

Part B coverage is provided free of charge when an individual turns age 65.

#77. 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

Which of the following is NOT covered under Plan A in Medigap insurance?

The Medicare Part A deductible

#79. 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 commerce

Without receiving written consent from an insurance regulatory authority.

#14. What option allows the insured to periodically increase benefit levels without providing evidence of insurability?

a) Guarantee of insurability

#45. Which of the following statements is NOT correct concerning the COBRA Act of 1985?

a) It requires all employers, regardless of the number or age of employees, to provide extended group health coverage.

#56. Which of the following statements is INCORRECT concerning Medicare Part B coverage?

a) Part B coverage is provided free of charge when an individual turns age 65.

#67. A patient has severe gingivitis and is seeking treatment from his dentist. Which type of dental treatment is this?

a) Periodontics

#66. A long-term care shopper's guide must be presented at what point?

a) Prior to the time of application

#40. 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?

a) The insurer will issue a conditional coverage.

#38. How do employer contributions to a Health Savings Account affect the insured's taxes?

b) The employer contributions are not included in the individual insured's taxable income.

#50. Who is the beneficiary in a credit health policy?

b) The lending institution

#40. An individual is insured under his employer's group Disability Income policy. The insured suffered an accident while on vacation that left him unable to work for 4 months. If the disability income policy pays the benefit, which of the following would be true?

c) Benefits that are attributable to employer contributions are fully taxable to the employee as income.

rer. #60. When an insurer offers services like preadmission testing, second opinions regarding surgery, and preventative care, which term would best apply?

c) Case management provision

#13. All of the following are true about group disability Income insurance EXCEPT

c) Coverage applies both on and off the job.

#27. The section of a health policy that states the causes of eligible loss under which an insured is assumed to be disabled is the

c) Insuring clause.

#48. When does Medicare cover nursing home care?

c) Only if it is part of treatment for a covered illness or injury

#20. Which renewability provision allows an insurer to terminate a policy for any reason, and to increase the premiums for any class of insureds?

c) Optionally renewable

#33. What type of information is NOT included in a certificate of insurance?

c) The cost the company is paying for monthly premiums

#52. Which is NOT true regarding an insured who is considered to be a standard risk?

c) The insured may have to pay slightly higher premiums.

#49. The proposed insured makes the premium payment on a new insurance policy. If the insured should die, the insurer will pay the death benefit to the beneficiary if the policy is approved. This is an example of what kind of contract?

conditional

#76. The proposed insured makes the premium payment on a new insurance policy. If the insured should die, the insurer will pay the death benefit to the beneficiary if the policy is approved. This is an example of what kind of contract?

conditional

#82. Which of the following is the term for the specific dollar amount that must be paid by an HMO member for a service?

copayment

#53. Regarding a PPO, which of the following is correct when selecting a primary care physician?

d) All of the above are correct

#75. Which of the following is INCORRECT concerning taxation of disability income benefits?

d) If paid by the individual, the premiums are tax deductible.

#43. In long-term care insurance, what type of care is provided with intermediate care?

d) Occasional nursing or rehabilitative care

#86. All of the following are true regarding key person disability income insurance EXCEPT

d) Premiums are tax deductible as a business expense.