Exam 9.9.20
Which of the following is the closest term to an authorized insurer? Certified Licensed Legal Admitted
Admitted Insurers who meet the state's financial requirements and are approved to transact business in the state are considered authorized or admitted into the state as a legal insurer.
The most the Insurance Guaranty Association will pay for net cash surrender values is $250,000. $500,000. $1,000,000. $100,000.
$100,000. The Insurance Guaranty Association will not pay more than $100,000 for net cash surrender and net cash withdrawal values.
When a person applies for Medicare supplement insurance, whose responsibility is it to confirm that the applicant does not already have accident or sickness insurance in force? Agent Insurer State government Active physician
Insurer Although it is illegal for an applicant to intentionally misrepresent himself in an insurance application, it is the insurer's ultimate responsibility to make sure that the applicant does not already have another accident or sickness policy in force
What type of benefit helps to pay for accidental injuries that are not severe enough to qualify as disabilities? Accidental Death & Dismemberment Medical Reimbursement Benefit Partial Disability Basic Accidental Injury
Medical Reimbursement Benefit Medical Reimbursement Benefits help to pay medical costs for accidental injuries that are not considered to be disabling.
The reduction, decrease, or disappearance of value of the person or property insured in a policy by a peril insured against is known as Exposure. Hazard. Risk. Loss.
Loss. Loss is the reduction, decrease, or disappearance of value of the person or property insured in a policy by a peril insured against.
* The relation of earnings to insurance provision allows the insurance company to limit the insured's benefits to his/her average income over what period of time? 18 months 2 years 6 months 1 year
2 years The relation of earnings to insurance provision allows the insurance company to limit the insured's benefits to his/her average income over the last 24 months.
Under the uniform required provisions, proof of loss under a health insurance policy normally should be filed within 90 days of a loss. 20 days of a loss. 30 days of a loss. 60 days of a loss.
90 days of a loss. Under the Uniform Required Provisions, proof of loss under a health insurance policy normally should be filed within 90 days of a loss.
When the policy premium wasn't submitted with the application, what should the agent obtain from the insured upon policy delivery? A conditional contract A unilateral contract A statement of good health A medical report
A statement of good health In many cases, the initial premium is not paid until the policy is delivered. Most insurance companies require that when the agent collects the premium, he or she must also obtain a statement signed by the insured testifying to the continued good health
Which of the following provisions must be included on the first page of a Medicare supplement policy, which states the insurer's right to change premium amounts? Insurer's rights Coverage limitations Continuation provision Premium provision
Continuation provision The renewal provision, also known as a continuation provision, must be included on the first page of Medicare supplement policies. This provision explains the right of the insurer to alter premium amounts.
In a group prescription drug plan, the insured typically pays what amount of the drug cost? Copayment None Full amount until a deductible is met, then nothing for the rest of the year Full amount until a deductible is met, then a small copay
Copayment Under a group drug prescription plan, the insured typically pays a copay, and the insurer pays the balance. There is generally a limit to the quantity of drugs that can be purchased at one time.
* In a disability policy, the probationary period refers to the time During which illness-related disabilities are excluded from coverage. Between the first day of disability and the day the disability must continue before the insured receives any benefits. Between the 10th day of an illness-related disability and the first payment. Between the first day of disability and the actual receipt of payment for the disability incurred.
During which illness-related disabilities are excluded from coverage. The probationary period limits coverage on new policies for certain illness-related conditions.
All of the following statements are true of a Combination Dental Plan EXCEPT It covers diagnostic and preventive care on the usual, customary, and reasonable basis. It uses a fee schedule for other dental services. It is also known as the Superimposed Plan. It is basically a combination of a scheduled and nonscheduled dental plan.
It is also known as the Superimposed Plan. A combination plan is basically a combination of the scheduled and nonscheduled plan. The combination plan covers diagnostic and preventive services on the usual, customary and reasonable basis but uses a fee schedule for other dental services.
In which of the following situations is it legal to limit coverage based on marital status? It is never legal to limit coverage based on marital status. Excessive number of divorces, as defined by the Insurance Code Legal separation during the application process Divorce within the last six months of applying for insurance
It is never legal to limit coverage based on marital status. Availability of insurance benefits or coverage may not be denied based on sex or marital status. Marital status may be considered for the purpose of defining persons eligible for dependent benefits.
Which of the following statements pertaining to Medicare Part A is correct? Each individual covered by Medicare Part A is allowed one 90-day benefit period per year. Medicare Part A is automatically provided when an individual qualifies for Social Security benefits at age 65. For the first 90 days of hospitalization, Medicare Part A pays 100% of all covered services, except for the initial deductible. Individuals with ESRD do not qualify for Part A.
Medicare Part A is automatically provided when an individual qualifies for Social Security benefits at age 65 Workers who have paid FICA taxes automatically qualify for Medicare Part A at age 65. Part A has been prepaid through the FICA taxes. Workers who qualify for Part A are also eligible for Part B; however, it requires that a monthly premium is withheld from Social Security benefits.
An insured purchased an insurance policy 5 years ago. Last year, she received a dividend check from the insurance company that was not taxable. This year, she did not receive a check from the insurer. From what type of insurer did the insured purchase the policy? Reciprocal Nonprofit service organization Stock Mutual
Mutual Funds not paid out after paying claims and other operating costs are returned to the policyowners in the form of a dividend. If all funds are paid out, no dividends are paid
* Prior to purchasing a Medigap policy, a person must be enrolled in which of the following? All four parts of Medicare Any private insurance policy Only Part A of Medicare Parts A and B of Medicare
Parts A and B of Medicare To buy a Medigap policy, the applicant must generally have both Medicare Part A and Part B
* A Medicare SELECT policy does all of the following EXCEPT Make full and fair disclosure in writing of the provisions, restrictions, and limitations of the Medicare SELECT policy to each applicant. Provide payment for full coverage under the policy for covered services not available through network providers. Provide for continuation of coverage in the event that Medicare SELECT policies are discontinued due to the failure of the Medicare SELECT program. Prohibit payment for regularly covered services if provided by non-network providers.
Prohibit payment for regularly covered services if provided by non-network providers A Medicare SELECT policy issued in this state must not restrict payment for covered services provided by non-network providers if the services are for symptoms requiring emergency care and it is not reasonable to obtain such services through a network provider.
Which of the following is NOT true regarding partial disability? This is a form of insurance that covers part-time workers. The insured can still report to work and receive benefits. Benefit payments are typically 50% of the total disability benefit. An insured would qualify if he couldn't perform some of his normal job duties.
This is a form of insurance that covers part-time workers. Partial disability covers full-time-working insureds who are unable to perform some, but not all, of their regular job duties or can no longer work full-time, which ultimately results in a loss of income. Payment from partial disability is typically 50% of the total disability benefit.
What is the maximum period that an insurer would pay benefits in accordance with an Additional Monthly Benefit rider? For the duration of the disability or the contract, depending on which ends first 1 month 1 year 2 years
1 year The Additional Monthly Benefit rider stipulates that the insurer will pay benefits comparable to what Social Security would pay. After a year's time, the insurer ends the benefit and assumes that Social Security will then begin benefit payment
How is emergency care covered for a member of an HMO? A member of an HMO can receive care in or out of the HMO service area, but care is preferred in the service area. A member of an HMO may receive care at any emergency facility, at the same cost as if in his or her own service area. HMOs have salaried member physicians, but they do not cover emergency care. An HMO emergency specialist will cover the patient.
A member of an HMO can receive care in or out of the HMO service area, but care is preferred in the service area. Emergency care must be provided for the member in or out of the HMO's service area. If emergency care is being provided for a member outside the service area, the HMO will be eager to get the member back into the service area so that care can be provided by salaried member physicians.
When must the Medicare supplement policy issued provide the applicant the Guide to Health Insurance for People with Medicare? Within 30 days of policy delivery When the prospective policyholder inquires about a policy or at the time of application, depending on which occurs first. At the time of application When the policy is delivered
At the time of application The Guide to Health Insurance for People with Medicare must be provided to the applicant at the time of application.
* Under HIPAA, which of the following is INCORRECT regarding eligibility requirements for conversion to an individual policy? The gap of coverage for eligibility is a period of 63 or less days. An individual who was previously covered by group health insurance for 6 months is eligible. An individual who has used up COBRA continuation coverage is eligible. An individual who doesn't qualify for Medicare may be eligible.
An individual who was previously covered by group health insurance for 6 months is eligible. All of these eligibility requirements are correct, except an individual who was previously covered for at least 6 months. HIPAA requires that the individual have a previous continuous creditable health coverage for at least 18 months.
Which of the following is NOT considered a misrepresentation as it pertains to unfair trade practices? Exaggerating the benefits provided in the policy Stating that the competitors will arbitrarily increase their premiums each year Making comparisons between different policies Stating that the insurance policy is a share of stock
Making comparisons between different policies Making accurate comparisons of policies is not illegal.
All of the following long-term care coverages would allow an insured to receive care at home EXCEPT Home health care. Skilled care. Custodial care in insured's house. Respite care.
Skilled care. Custodial care, respite care, home health care, and adult day care are all coverages used to reduce the necessity of admission into a care facility. Skilled care is almost always provided in an institutional setting.
Which statement regarding insurable risks is NOT correct? The insurable risk needs to be statistically predictable. An insurable risk must involve a loss that is definite as to cause, time, place and amount. Insureds cannot be randomly selected. Insurance cannot be mandatory.
Insureds cannot be randomly selected. Granting insurance must not be mandatory, selecting insureds randomly will help the insurer to have a fair proportion of good risks to poor risks. All other statements are true.
Maximum benefits for a major medical plan are usually lifetime Open panel. Closed panel. Minimums. Maximums.
Maximums. Major medical plans have high maximum benefits such as $1,000,000 or $2,000,000. Maximum benefits are usually lifetime maximums.
Which of the following describes taxation of individual disability income insurance premiums and benefits? Premiums are tax deductible, and benefits are taxable. Premiums are not tax deductible, and benefits are not taxable. Premiums are not tax deductible, but benefits are taxable. Premiums are tax deductible, but benefits are not taxable.
Premiums are not tax deductible, and benefits are not taxable In individual disability income, benefits are not taxable, and premiums are not tax deductible
When the insured initiates the cancellation of a policy, the unearned premium will be refunded on a Short rate basis. Extended term basis. Pro rata basis. Per occurrence basis.
Short rate basis. When a policy is cancelled at the insured's request, the amount of returned unearned premium will be calculated on the short rate table that the insurer has filed with the insurance department. This allows the insurer to retain some of its cost of issuing the policy and providing service.
Which of the following is NOT a characteristic of a group long-term disability plan? The benefit can be up to 66 and 2/3% of one's monthly income. The benefit can be up to 50% of one's yearly income. The elimination period is the same as in the short-term plan's benefit period. The benefit period may be to age 65.
The benefit can be up to 50% of one's yearly income. The maximum benefit is based upon monthly income.
Peril is most easily defined as Something that increases the chance of loss. The cause of loss insured against. An unhealthy attitude about safety. The chance of a loss occurring.
The cause of loss insured against. Perils are the causes of loss insured against in an insurance policy.