Aflac
Eligible employees must be added to group health coverage NO LATER than how many days after their first day of employment?
90 days
When an insurance application is taken by a producer, which of these statements is true?
Any changes made on the application require the applicant's initials
Which of the following reimburses its insureds for covered medical expenses?
Commercial insurers
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
Comprehensive Major Medical policies usually combine:
Major Medical with Basic Hospital/Surgical coverage
Which type of plan normally includes hospice benefits?
Managed care plans
Which of these is considered a mandatory provision?
Payment of Claims
What is the elimination period of an individual disability policy?
Time period a disabled person must wait before benefits are paid
In order to establish a Health Reimbursement Arrangement (HRA), it MUST:
be established by the employer
An insurance broker in North Carolina is a representative of the
insured
V is insured under an individual Disability Income policy with a 30-day Elimination period. On July 1, he is involved in an accident and temporarily disabled. He returns to work on December 1. How many months of benefit are payable?
4 months
Which of the following statements describes what an Accident and Health policyowner may NOT do?
Adjust the premium payments
When does a Probationary Period provision become effective in a health insurance contract?
At the policy's inception
Which of the following policy features allows an insured to defer current health charges to the following year's deductible instead of the current year's deductible?
Carryover provision
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
In a Disability Income policy, which of these clauses acts as a deductible?
Elimination Period
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 statements about Health Reimbursement Arrangements (HRA) is CORRECT?
If the employee paid for qualified medical expenses, the reimbursements may be tax-free
How would a contingent beneficiary receive the policy proceeds in an Accidental Death and Dismemberment (AD&D) policy?
If the primary beneficiary dies before the insured
The health insurance program which is administered by each state and funded by both the federal and state governments is called:
Medicaid
Which statement is true regarding a minor beneficiary?
Normally, a guardian is required to be appointed in the Beneficiary clause of the contract
Which of the following statements BEST describes dental care indemnity coverage?
Services are reimbursed after insurer receives the invoice
Which of the following statements BEST defines usual, customary, and reasonable (UCR) charges?
The maximum amount considered eligible for reimbursement by an insurance company under a health plan
Which of the following statements is true about most Blue Cross/Blue Shield organizations?
They are nonprofit organizations
The Consolidated Omnibus Budget Reconciliation Act (COBRA) gives workers (and their families) whose employment has been terminated the right to:
continue group health benefits
An insurance company MUST clearly specify questions designed to obtain information solely for marketing research
in any insurance transaction
In North Carolina, a health policy that is paid on a quarterly basis requires a grace period of
31 Days
Who is NOT required to sign a health insurance application?
Beneficiary
The clause in an Accident and Health policy which defines the benefit amounts the insurer will pay is called the:
Insuring clause
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
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
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
A temporary license is issued by the Commissioner of Insurance to allow
the personal representative of a deceased agent to provide service to existing policyowners
Every Group Health Policy providing benefits for chemical dependency treatments must include, for the life of the contract, a
$16,000
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
In North Carolina, which of the following is required in order to continue a resident insurance agent license?
Meeting continuing education requirements
According to the Time Payment of Claims provision, the insurer must pay Disability Income benefits no less frequently than which of the following options?
Monthly
K is the insured and P is the sole beneficiary on an Accidental Death and Dismemberment (AD&D) insurance policy. Both are involved in a fatal accident where K dies before P. Under the Common Disaster provision, which of these statements is true?
Proceeds will be paid to P's estate
Pre-hospitalization authorization is considered an example of:
managed care
No insurer shall refuse to insure an individual because of
race
Which of the following statements is correct regarding an employer/employee group health plan?
the employer receives a master policy and the employees receive certificates
Boycott, coercion, and intimidation that result in the unreasonable restraint of trade are prohibited under the North Carolina insurance laws covering
unfair trade practices
AT LEAST how many days before the effective date of a rate increase must an insurer provide written notice to individual accident and health policy owners?
30
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.
P and Q are married and have three children. P is the primary beneficiary on Q's Accidental Death and Dismemberment (AD&D) policy and Q's sister R is the contingent beneficiary. P, Q, and R are involved in a car accident and Q and R are killed instantly. The Accidental Death benefits will be paid to:
P only
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
A Disability Income policy owner 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
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
P is a new employee and will be obtaining non-contributory group Major Medical insurance from her employer. Which of the following actions must she take during the open enrollment period?
Sign an enrollment card
Which mode of payment is NOT used by health insurance policies?
Single premium
Which of the following is NOT a limited benefit plan?
life insurance policies
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
A Hospital/Surgical Expense policy was purchased for a family of four in March of 2013. The policy was issued with a $500 deductible and a limit of four deductibles per calendar year. Two claims were paid in September 2013, each incurring medical expenses in excess of the deductible. Two additional claims were filed in 2014, each in excess of the deductible amount as well. What would be this family's out-of-pocket medical expenses for 2013?
$1000
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
An individual has a Major Medical policy with a $5,000 deductible and an 80/20 Coinsurance clause. How much will the INSURED have to pay if a total of $15,000 in covered medical expenses are incurred?
$7,000
C was injured while deep sea diving and requires a hospital stay. C has a Major Medical policy with a 80/20 coinsurance clause and a $400 deductible. What is the MAXIMUM C will pay if the covered medical expenses are $2000?
$720
An agent that has been or is engaged in conduct that violates the Insurance Information and Privacy Protection Act shall be issued and served a statement of charges and notice of hearing by the Commissioner of Insurance. The date of such hearing shall be AT LEAST how many days after service of charges?
10
The policyholder has how many days to return an Accident/Health Insurance Policy and receive a full refund on premiums?
10
For an individual health policy that is paid for on a monthly basis, the Grace Period provision is a MINIMUM of how many days?
10 Days
What is the maximum Social Security Disability benefit amount an insured can receive?
100% of the insured's Primary Insurance Amount (PIA)
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
An insured MUST submit a proof of loss on a health insurance claim within how many days after the date of loss?
180
An insured must notify an insurer of a medical claim within how many days after an accident?
20
Under the Affordable Care Act (ACA), health coverage is provided for dependents up to the age of
26
Under a Group Health Insurance Policy, continuation shall be available only to an employee who has been insured immediately prior to the date of termination for a period of AT LEAST
3 months
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
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
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
North Carolina insurance law specifically allows the Commissioner to issue a temporary license to which of the following individuals?
A surviving spouse of a deceased agent
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
Under which of the following circumstances will the benefits under COBRA continuation coverage end?
All group health plans are terminated by the employer
Any changes made on an insurance application requires the initials of whom?
Applicant
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
An incomplete health insurance application submitted to an insurer will result in which of these actions?
Application will be returned to the writing producer
Which of the following medical expenses does Cancer insurance NOT cover?
Arthritis
When is a Group Health policy required to provide coverage for a newborn child?
At the moment of birth
Accidental Death coverage is provided to commercial airline passengers in which of the following types of policies?
Blanket Accident policy
The difference between group insurance and blanket health policies is:
Blanket health policies do not issue certificates
Defamation is BEST described as publishing or circulating which of the following types of information?
Brochures falsely criticizing the financial condition of an insurance company
N has a Major Medical policy that only pays a portion of N's medical expenses. N is responsible for paying the remaining balance. This provision is known as:
Coinsurance
Before a Health Policy is issued or delivered, the form, classification or risks, and premium rates MUST be filed with the
Commissioner of Insurance
Which of the following correctly explains the actions an agent should take if a customer wants to apply for an insurance policy?
Complete the application and review the information with the customer prior to obtaining the customer's signature, then send the application off to the insurance company
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
Which of the following BEST describes a Hospital Indemnity policy?
Coverage that pays a stated amount per day of a covered hospitalization
Which contract permits the remaining partners to buy-out the interest of a disabled business partner?
Disability Buy-Sell
A CEO's personal assistant suffered injuries at home and as a result, was unable to work for four months. Which type of policy will pay a monthly benefit to the personal assistant?
Disability Income
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
K becomes ill after traveling overseas and is unable to work for 3 months. What kind of policy would cover her loss of income?
Disability Income
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
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
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
Which of the following health policy provisions states that the producer does NOT have the authority to change the policy or waive any of its provisions?
Entire Contract
Which of the following policy provisions prohibits an insurance company from incorporating external documents into an insurance policy?
Entire Contract
When an insurance company sends a policy to the insured with an attached application, the element that makes the application part of the contract between the insured and the insurer is called the:
Entire Contract provision
Which of the following is NOT included in the policy face?
Exclusions
A Fraternal Benefit Society has each of the following characteristics EXCEPT
Exists For profit
After an insured gives notice of loss, what must he/she do if the insurer does not furnish forms?
File written proof of loss
What action should a producer take if the initial premium is NOT submitted with the application?
Forward the application to the insurer without the initial premium
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 date of issue
Which of these is considered a true statement regarding Medicaid?
Funded by both state and federal governments
An insurance company may NOT reject a prospective insured's insurance application on the basis of which of the following factors?
Gender
A vacancy that occurs during the North Carolina Commissioner of Insurance's term of office MUST be filled by the
Governor
Which of the following provisions specifies how long a policyowner's health coverage will remain in effect if the policyowner does not pay the premium when it is due?
Grace Period
A medical care provider which typically delivers health services at its own local medical facility is known as a:
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
An insurer receives proof of loss for an acceptable medical expense claim under an Individual Health Insurance Policy. Under the Time of Payment of Claims provision, the insurer MUST pay the benefits:
Immediately
Which of these actions should a producer take when submitting an insurance application to an insurer?
Inform insurer of relevant information not included on the application
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
If the insured and primary beneficiary are both killed in the same accident and it cannot be determined who died first, where are the death proceeds to be directed under the Uniform Simultaneous Death Act?
Insured's contingent beneficiary
T was treated for an ailment 2 months prior to applying for a health insurance policy. This condition was noted on the application and the policy was issued shortly afterwards. How will the insurer likely consider this condition?
Insurer will likely treat as a pre-existing condition which may not be covered for one year
Which of the following health insurance policy provisions specifies the health care services a policy will provide?
Insuring clause
A policyowner would like to change the beneficiary on an Accidental Death and Dismemberment (AD&D) insurance policy and make the change permanent. Which type of designation would fulfill this need?
Irrevocable
A policyowner's rights are limited under which beneficiary designation?
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
Which of the following statements BEST describes how a policy that uses the "accidental bodily injury" definition of an accident differs from one that uses the "accidental means" definition?
Less restrictive
T has Disability Income policy that pays a monthly benefit of $5000. If T becomes partially disabled, what can he likely expect?
Less than $5,000 per month benefit regardless of the cause
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
Z owns a Disability Income policy with a 30-day Elimination period. Z contracts pneumonia that leaves him unable to work from January 1 until January 15. Z then becomes disabled from an accident on February 1 and the disability lasts until July 1 the same year. Z will become eligible to receive benefits starting on:
March 1
Which of these factors do NOT play a role in the underwriting of a health insurance policy?
Marital status
Which of the following are NOT managed care organizations?
Medical Information Bureau (MIB)
Periodic health claim payments MUST be made at least:
Monthly
Which of the following BEST describes how a Preferred Provider Organization (PPO) is less restrictive than a Health Maintenance Organization (HMO)?
More physicians to choose from
Which of the following characteristics is associated with a large group disability income policy?
No medical underwriting
J has a Disability Income policy that does NOT provide benefits for losses occurring as the result of his employment. What kind of coverage is this?
Nonoccupational coverage
Which of the following BEST describes a short-term medical expense policy?
Nonrenewable
How does group insurance differ from individual insurance?
Premiums are lower
Which of these statements accurately describes the Waiver of Premium provision in an Accident and Health policy?
Premiums are waived after the insured has been totally disabled for a specified time period
Which of the following statements about a Guaranteed Renewable Health Insurance policy is CORRECT?
Premiums normally increase at time of renewal
What is the purpose of the Time of Payment of Claims provision?
Prevents delayed claim payments made by the insurer
The individual who provides general medical care for a patient as well as the referral for specialized care is known as a:
Primary Care Physician
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
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
What must the policyowner provide to the insurer for validation that a loss has occurred?
Proof of Loss
All of these are considered sources of underwriting information about an applicant, EXCEPT:
Rating Services
The percentage of an individual's Primary Insurance Amount (PIA) determines the benefits paid in which of the following programs?
Social Security Disability Income
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 of the following statements about the classification of applicants is INCORRECT?
Substandard applicants are never declined by underwriters
Medicare is intended for all of the following groups, EXCEPT:
Those enrolled as a full-time student
T files a claim on his Accident and Health policy after being treated for an illness. The insurance company believes that T misrepresented his actual health on the initial insurance application and is, therefore, disputing the claim's validity. The provision that limits the time period during which the company may dispute a claim's validity is called:
Time Limit on Certain Defenses
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?
Usual, customary, and reasonable expenses
What is the primary factor that determines the benefits paid under a disability income policy?
Wage
The provision in a Group Health policy that allows the insurer to postpone coverage for a covered illness 30 days after the policy's effective date is referred to as the:
Waiting Period
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/she ever becomes totally disabled?
Waiver of Premium rider
What type of rider would be added to an Accident and Health policy if the policyowner wants to ensure the policy will continue if he/she ever becomes totally disabled?
Waiver of Premium rider
Which parts of a health insurance policy are guaranteed to be true?
Warranty
If an individual has an Accidental Death and Dismemberment policy and dies, an autopsy can be performed in all these situations, EXCEPT:
When the state prohibits this by law
According to the Affordable Care Act (ACA), a dependent child's eligibility status is determined by
age
After notice and a hearing, the Insurance Commissioner may revoke an agent's license for all of the following reasons EXCEPT the
agent is found to be insolvent
Group/voluntary long-term care policy premiums are typically deducted from the employee's income and,
are less costly as compared to individual long term care coverage
One of the stated purposes of the Life and Health Insurance Guaranty Association is to
assist in the prevention of insurer insolvencies
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 following acts are examples of unfair methods of competition and deceptive practices in the business of insurance EXCEPT the use of
comparisons showing that a policy has higher benefits
A prospective insured completes and signs an application for health insurance but intentionally conceals information about a pre-existing heart condition. The company issues the policy. Two months later, the insured suffers a heart attack and submits a claim. While processing the claim, the company discovers the pre-existing condition. In this situation, the company will:
continue coverage but exclude the heart condition
All of the following statements about health coverage for newborns are correct EXCEPT
coverage during the first year is limited to congenital defects
A Business Overhead Expense policy:
covers business expenses such as rent and utilities
Circulation of any oral or written statement or any pamphlet, circular, article, or literature that is false or maliciously critical of or derogatory to the financial condition of an insurer is known as
defamation
An agent takes an individual Disability Income application, collects the appropriate premium, and issues the prospective insured a conditional receipt. The next step the insurance company will take is to:
determine if the applicant is an acceptable risk by completing standard underwriting procedures
Insurers organized under the laws of North Carolina are called
domestic companies
Non-occupational disability coverage is designed for:
employees who suffer non-work related disabilities, since work-related disabilities are covered by Workers' Compensation
Health insurance benefits NOT covered due to an act of war are:
excluded by the insurer in the contract provisions
A comprehensive major medical health insurance policy contains an Eligible Expenses provision which identifies the types of health care services that are covered. All of the following health care services are typically covered, EXCEPT for:
experimental and investigative services
An example of an unfair claims practice would be
failing to effectuate prompt, fair, and equitable settlements of a claim
The reason for a business having a Business Overhead Expense Disability Plan is to cover:
fixed business expenses
In North Carolina, an insurer licensed to conduct business in North Carolina, but domiciled in New Jersey, is called a(n)
foreign company
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 after it discovers the misstatement
from the date of issue
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
To be licensed as an accident and health insurance agent in North Carolina, the applicant MUST
have successfully completed at least 20 hours of instruction approved by the Commissioner of Insurance
The Health Insurance Portability and Accountability Act (HIPAA) gives privacy protection for:
health information
Continuation of coverage of a group Hospital, Surgical, and Major Medical Policy MUST include
hospital expenses
With a Basic Medical Expense policy, what does the hospitalization expense cover?
hospital room and board
The first portion of a covered Major Medical insurance expense that the insured is required to pay is called the:
initial deductible
The Insurance Information and Privacy Protection Act is designed to limit or direct the information collection activities of all of the following EXCEPT
insurance regulators
Which of these types of coverage is best described as a short term medical policy?
interim coverage
What is Medicare?
is a hospital and medical expense insurance program
The Commissioner of insurance may suspend, revoke, or refuse to renew the license of an agent who
is found guilty of misrepresentation or fraud in obtaining the license
The funds used by the Life and Health Insurance Guaranty Association to carry out its purpose are obtained from the
member companies
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
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
If an insurer has been notified by the Commissioner of Insurance that an individual Health Policy form does not comply with the state's laws, the insurer may
not issue the form in connection with any new application
The Notice of Claims provision requires a policyowner to:
notify an insurer of a claim within a specified time
An example of unfair discrimination would be
offering different terms of coverage for different policy owners having the same risk classification
Deductibles are used in health policies to lower:
overuse of medical services
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
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
During the Grace Period, the benefits of an individual health policy will remain in force if
the premium is paid
An assignment of benefits of a Health Policy:
transfers payments to someone other than the policy owner
