Comprehensive Final Certification Exam: Illinois Health Insurance (Xcel Solutions)
What percentage of a participant's income are group long-term disability benefit amounts typically limited to?
60%
a disabled individual is eligible to receive benefits for a medicare supplement policy at age
65
__is NOT an element of a valid contract?
Countersignature
All of the following are examples of insurance advertisement EXCEPT
a memo from an employer announcing the availability of coverage for employees
Ted has a health insurance plan that requires him to pay a specific sum out of pocket before any benefits are paid in a calendar year. Which of these does his health plan have?
Calendar-year deductible
Which of these actions is the Director empowered to do?
administer insurance licensing exams
Which situation would qualify an individual for recieving benefits from a long-term care policy?
being cognitively impaired (mentally ill)
To be classified as a small employer in Illinois, an employer, an emloyer must employ
between 2 and 50 employees
The period in which there are no social security benefits for the surviving spouse
blackout period
Insurable interest does NOT occur in which of the following relationships?
business owner and business client
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
All of the following are included as part of a contract in the entire contract provision EXCEPT the
changes made by the producer
Q the producer gave his client a rebate as an enticement to purchase insurance. Q may be found guilty of a
class B misdemeanor
How does one qualify as a fully-insured individual under Social Security disability coverage?
individual has been credited with the appropriate number of quarters of coverage
J has been issued a temporary insurance producer license. How many of these licenses may J hold in a lifetime?
one
Long-term care policies sold in Illinois are required to contain cost disclosure information in bold print. Where does the law require this information to be located?
outline of coverage
Which of these is considered a mandatory provision?
payment of claims
Which of these is considered a mandatory provision?
payments of claims
An insurance aplicant with a below-average likelihood of loss typically considered to be a
preferred risk
All of the following are functions of an insuring clause EXCEPT
primarly describes the free-look period
Health Maintenance Organization (HMO)
provides prepaid health care
Which of these provisions is required under an inidvidual Accident and Health policy?
renewal, continuation, or nonrenewal provision
Which of these is NOT an unfair method of competition?
replace coverage written by another producer
Statements made by an insurance applicant on an application are considered to be
representations
Under the subrogation clause, legal action can be taken by the insurer against the?
responsible third party
Long-Term Care policies may provide coverage for claims arising from
senile dementia
Continuous 24-hour care provided by licensed medical professionals under the direct supervision of a physician is calle?
skilled nursing care
In an insurance contract, the applicatns "consideration" is the
statements made in the application and the 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
An insurer has the right to recover payment made to the insured from the negligent party. These rights are called?
subrogation
What is medicare part b also known as
supplementary medical insurance
This MANDATORY health policy provision states that the policy, including endorsements and attached papers, constitutes
the entire insurance contract between the parties
In which of the following situation would the insurer be liable for loss?
the insured suffered an injury as an innocent bystander during a bank robbery
The policy provision that entitles the insurer to establish conditions the insured must meet while a claim is pending is:
time Limit on Certain Defenses
A doctor who accepts medicare assignment agrees to which of the following
to charge no more than the amount Medicare pays for the service performed
what is the purpose of the medical information bureau (MIB)
to help underwriters evaluate risk
Which of the following pertains to the analysis of an applicant's personal information and determining whether insurance should be issued or declined?
underwriting
When does a health insurance policy typically become effective?
when initial premium is collected and policy is issued
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 by law
A 70-year old insured individual has suffered from kidney failure for the past 24 months. She is covered by her spouse's large-group employer plan. How will Medicare be utilized in this situation?
will be the secondary insurer and pay for claims not fully covered by the group plan
What determines the full amount of Social Security retirement beneits a qualified individual is entitled to recieve?
Primary Insurance Amount (PIA)
Which of the following is not included in the policy face?
exclusions
Tom has a home health care benefit and is confined to his home. Which of these benefits is NOT typically covered?
full-time nursing care
An insured's status under Social Security can be described as
fully described
All of the following are primary risk factors in underwriting individual health insurance policies EXCEPT
geographical location
An HMO that involves a partnership of physicians and other providers who practice out of a central facility is called a(n)
group HMO
Long-term care policies issued in Illinois MUST be
guaranteed renewable
What is the required renewability status of all medicare supplement policies
guaranteed renewable
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?
guaranteed renewable
An entity that acs as an insurance producer
has the same bond requirements as an individual producer
Which type of long-term care benefit would be most appropriate for a stroke victim who requires speech therapy administered at her home?
home health care
The power given to an individual producer that is not specifically addressed in his/her contract is considered what type of authority?
implied
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
Which of the following actions may an insurance company NOT do in a health policy that contains a guaranteed renewable premium benefit?
increase the premiums on an individual basis
A medicare supplement policyholder has __ days to return the policy and recieve a full premium refund
30
A policyowner decides to cancel an insurance policy within 90 days of the issue date. As a result of this cancellation, the producer is REQUIRED to refund a prorated portion of any fee charged within __ days of recieving the cancellation notice
30
J purchased a Medicare Supplement policy through a direct-response solication. J is allowed at LEAST __days after policy delivery to return the policy and recieve a full refund
30
The Director MUST be notified of a producer's change of home address within ___ days
30
The holder of a business entity registration is REQUIRED to notify the Director whtin __ days of a change in office location
30
To continue health coverage for a newborn, the policyowner must notify the insurer of birth and provide the first premium payment within _____ days of birth.
31
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
The MAXIMUM time period that pre-existing conditions can be excluded in long-term care policies is
6 months
When are group disability benefits considered to be tax-free to the insured?
When the recipient pays the premiums
Which statement would be prohibited in an Accident and Health advertisement?
"all hospital bills will be paid by your policy"
A policyholder has a major medical plan with a 80%/20% coinsurance and a deductible of $75. If the insured has previously met her deductible and receives a bill for $175, how much will the insurer pay?
$140
Kathy pays a monthly premium on her health insurance policy. How long is her grace period?
10 days
Lorenzo is self employed with an S corporation. He is unmarried and had a net profit for the tax year. What are the tax ramifications of his health insurance premiums paid for the year?
100% of his health insurance costs can be deducted from his gross income
A lapsed producer's license may be reinstated within _______ years of the license renewal date
12
T the producer has just collected premium monies from a client. T may personally hold these funds for a MAXIMUM of __ days before deposition them in a Premium Fund Trust Account
14
An insurer must furnish to a claimaint forms for filing proof of loss within __ days upon recieving a notice of claim
15
Which of these accounts are producer license fees deposited into
Insurance Producer Administration Fund
Which of the following typically does NOT provide a form of managed care?
Major medical indemnity plan
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
Joe is a Medicare participant who receives his benefits through a Managed Health Care Plan. Which Medicare plan does he have?
Part C
According to Illinois law, when must a producer deliver the Outline of Coverage to a Medicare Supplement applicant?
at the time of application
At what point may a health insurer modify coverage for an individual health policy?
at the time of coverage renewal
ABC insurance company would like to issue a small employer group policy in this state. Before doing so it is required
be authorized to write accident and health insurance in at this state
Jennifer is required to pay a specific sum out of pocket before any benefits are paid in a year. Her health policy most likely contains a(n)
deductible
A business entity wishes to become approved as a producer for soliciting insurance business. Before doing so, the business entity is required to submit to the Director a(n)
designated producer assigned for compliance with Illinois insurance laws
in a group health care what is the purpose of the coordination of benefits provision?
determines what is paid by the primary and secondary insurers in the event of a claim
It is acceptable to discriminate the amount of benefits for life and health policies between individuals of
different classes
Which of the following is considered an activity of daily living (ADL) as defined under a long-term care policy?
dressing
Benefits provided by a Medicare Supplement policy must NOT
duplicate Medicare benefits
Under group health insurance, a certificate of coverage is issued to the
employee
In an employer-sponsored group accident and health plan, a master contract is issued to the
employer
Which of the following policy provisions prohibits an insurance company from incorporation external documents into an insurance policy?
entire contract
The sections of an insurance contract which limit coverage are called
exclusions
Which of the following types of insurance may a limited lines producer sell?
industrial life
The clause identifying which losses resulting from an accident or sickness are insured by the policy is called the:
insuring clause
An applicant's character and personal habits can be obtained for underwriting purposes from which source?
investigatrive consumer report
All of the following statements correctly describe the purpose of Social Security EXCEPT
it provides a source of income for a meaningful standard of living during retirement
Without a Section 125 Plan in place, what would happen to an employee's payroll contribution to an HSA?
it would be considered taxable income to the employee
A(n) _____lines producer may sell Travel Accident insurance in Illinois
limited
Evidence of coverage issued by a Limited Health Service Organization (LHSO) MUST include a description of the
limited health services that the enrollee is entitled to receive
Which of these would NOT be considered a presumptive disability?
loss of a leg or arm
Which of these gaps in Medicare coverage is addressed with Medicare Supplemental Insurance?
medicare in-hospital deductable
Stating that dividends are guaranteed is considered to be
misrepresentation
When a producer submits an insurance applicaton, the application is REQUIRED to contain the producer's
name and address
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 desribes this policy is called
noncancellable
How are premiums paid by the insured for personally owned disability income insurance treated for tax purposes?
not tax deductible
