Guarentee Exam #1 3/1
If an individual willfully violates provision of the Fair Credit Reporting Act, what is the maximum civil penalty?
- $2,500
Which of the following statements is INCORRECT?
- Medicare and Medigap polices provide coverage for long-term custodial or nursing home care
What is the purpose of a disability buy-sell agreements?
- to allow the business buyout in case of the owner's disability
To qualify for disability income benefits under Social Security, an individual disability must be expected to result in death or last for at least
- 12 years
A disability income policy has a writing period of 7 days. If the insured is disabled for 15 days, how many days of benefits will the policy pay?
- 8 days
According to the mental level classification of health plans, what percentage of health care costs will be covered under a gold plan?
- 80%
An employee dies having 6 quarters of coverage during the previous 13-quarter period. What status of coverage does the employee have under Social Security?
- Currently insured
How long is a newborn covered without notification to the insurer?
- From the moment of birth, and the insurer must be notified withing 31 days
What is the major difference between private and government insurance programs?
- Government insurance programs are partially or totally funded by taxes
Which act was introduced to reduce the cost of health care by utilizing preventive care?
- HMO act of 1973
What is the purpose of a benefit schedule?
- To state what and how much is covered in the pain
A producer receives premium money from his clients, and instead of forwarding the money to the insurer, he keeps it for himself. This is called
- commingling
An individual covered under a group Dental Expense plan needs to have bridgework done. Bridgework is covered as
- Prosthodontics
A producer is another state wants to become. producer in Nebraska. The other state gives the same privileges to Nebraska producers wanting to be licensed in that state as it does its won producers. Nebraska therefore extends the privileges of its producers to the prospective producer of the other state. What is this called?
- Reciprocity
If the insurance premiums were not tax deductible, what other taxation will this affect? a) Taxation of interest b) Taxation of the policy's cash value c) Federal tax income d) Taxation of benefits
- Taxation of benefits
Which of the following Medicare parts provides prescription drugs benefit?
- part d
In insurance, what is the term used for the cause of a loss?
- peril
A self-employed mechanic operate his own shop. He is considering purchasing health insurance that would protect him finacially in the event of a serious sickness or accident. He feels that he can handle any small health care expenses. What type of policy would likely meet this person's needs?
- major medical
What guarantees that the information explained in the insurance contract is true?
- a warranty
With a conditionally renewable policy, the premiums are more likely to be
- increased
A man is an attorney when he applies for a health policy. He decides to become a professional bungee jumper. He files a claim. What should happen?
- The insurance company will pay the claim according to the benefits available if the correct premium had been paid
If an insured decides to reduce the coinsurance amount on her major medical insurance, what can the insured expect?
- a higher monthly premium
Which policy rider added to a disability income policy may require that a benefit be paid as a "capitol" sum?
- accidental death and dismemberment
Which of the following are considered activities of daily living in most long-term care policies? 1) hearing and seeing 2) eating and dressing 3) bathing and sleeping 4) walking and running
- eating and dressing
An insured's hospital policy states that it will pay him a flat fee of $75 per day he is hospitalized. The policy pays benefits on what basis?
- indemnity
An insurance agent who represents multiple companies on a nonexclusive basis and earns commissions on personal sales is working in what kind of marketing system?
- independent agency system
All advertisements, regardless of their source of creation, are responsibility of the
- insurer
Which of the following is provided by skilled medical personnel to those who need occasional medical assistance or rehabilitative care?
- intermediate care
Which of the following statements is true regarding advertisement of the fact that the Insurance Guaranty Association would assure payment of benefits in the event of insurer insolvency?
- it is illegal to mention the Association in advertisements
The Omnibus Budget Reconciliation Act of 1990 requires
- large group health plans must provide primary coverage for disabled individuals under age 65 who are not retired
In health insurance, the length of the grace period varies according to the
- mode of premium
Which of the following is a preferred solution for reducing the cost of hospitalization?
- outpatient services
Which of the following does NOT need to be included on the first page of a Medicare supplement policy?
- premium rates
Under the Payment of Claims provision, when are benefits typically payable after proof of loss is received?
- the insured's primary beneficiary
Every Medicare supplement policy must have a Notice to Buyer on the front page that states which of the following?
- this policy may not cover all of your medical expenses
What is it called when a doctor accepts the Medicare approved amount?
- assignment
If an applicant's health is poorer than that of an average applicant, the policy may be issued
- substandard
Premiums paid by an employer for group health insurance are
- tax deducible to employer
Which entity has the option of including optional provision in a health insurance policy?
- the insurer
Insurance provides a mean to
- transfer a loss
According to the Time Limit on Certain Defenses provision, statements or misstatements made in the application at the time of issue cannot be used to deny a claim after the policy has been in force for a minimum of how many years?
- 2 years
Which of the following provisions gives an employee the right to exchange group insurance for an individual policy within a certain number of days from termination employment?
- conversion provision
If an agent follows the rules and terms of his agent contract, he is exercising his a) Apparent authority b) Contractual authority c) Implied authority d) Express authority
- express authority
How long is the free-look period of a Medicare Supplement policy?
- 30 days
Which of the following types of care could be provided at a community center?
- Adult day care
What is the purpose of the gatekeeper in a HMO?
- controlling cost
An insurance agent visits a potential client and explains various types of policies. The costumer displays a lack of interest, so the agent guarantees higher dividends than he knows would be possible. Which term describes what the agent has done?
- misrepresentation
Which of the following best depicts the law of large numbers?
- the larger the pool of risks under study, the more accurate the predictions will be
An agent's first-year commissions CANNOT exceed what percentage of the renewal commission for serving a Medicare Supplement policy in its second year?
- 200%
Which of the following advises people (for a fee) regarding the provisions of their insurance polices?
- consultants
If they are enrolled in school on a full-time basis, children are considered to be dependent though age
- 26
Which of the following describes the relationship between a capitol sum and principal sum?
- capital sums are percentage of principal sums
If the Director suspects that someone is violation a provision of the Insurance Code, he or she will probably issue a
- cease a desist order
Which of the following meets the insured personal needs, and is provided by non medical personnel?
- custodial care
Which of the following is NOT correct concerning taxation of disability income benefits?
- if paid by the individual, the premiums are tax deducible
Which rider, when added to a disability income policy, pays income during the six-month waiting period before Social Security benefits can begin?
Additional Monthly Renefit
To be acceptable to insurance companies, what percentage of eligible employees must be enrolled under a contributory group health insurance plan? a) 65% b) 75% c) 100% d) 50%
- 75%
Which of the following statements is NOT true regarding a noncancellable policy?
- insurer can increase the premium above what is stated in the policy if claims experience is greater than expected
The type of dental which is incorporated into a major medical expense plan is a
- integrated dental plan
An elimination (waiting) period may NOT have to be satisfied for a disability in which of the following?
- An insured suffers a relapse of a prior disability within 6-months of the intial covered disability
Which of the following is NOT a common exclusion found in most health policies 1) Workers comp. claims 2) War or act of war 3) Self-inflicted injuries 4) Dental procedure due to birth defect
- Dental procedure due to birth defect
The Uniform Provision Law that prevents an insurance company from altering its agreement with a policyholder by referring to documents or other items not contained in the policy is called the
- Entire Contract Provision
An insured has a routine exam, blood work, and a follow-up appointment with a specialist. The insured receives a bill for each service provided. What type of plan does the insured have?
- Fee for service
Which of the following time periods is the general enrollment period for Medicare Part B?
- Jan 1st to Mar 31st every year
An applicant completes an application for a disability pays the initial premium. The producer gives the applicant a conditional receipt. Insurance coverage for the applicant will become effective when
- the insurance company accepts the risk
All of the following are characteristics of group health insurance plans EXCEPT
- the parties that hold a group health insurance contract are the employees and the employer
Which of the following best defines the unfair trade practice of rebating?
- offering an inducement of something of value not specified in the policy
An insurer can decide to not renew an Optionally Renewable policy
- on the premium due dates
When may HIV-related test results. be provided to the MIB?
- only if the individual is not identified
The benefits in Medical Expense Insurance are
- received income tax free by the individual
An insured recently had a new home built and insisted on having smoke detectors installed in multiple places in the house. What method of handling risk if the insured using?
- reduction
Which of the following is NOT a characteristic of a Manged Care Plan?
- risk retention
What does the application of contract of adhesion mean?
- since the insured does not participate in preparing the contract, any ambiguities would be resolved in flavor or the insured
An employee may enroll in an employer's group health plan when he/she initially becomes eligible without proof of instability. Should he/she enroll at another time, evidence of inscrutability is required EXCEPT at
- the annual open enrollment period
Who determines if a particular group of employees can be excluded from group health coverage?
- the employer
In a group policy, all of the following can be the policyholder EXCEPT
- the insurance company
Ed is covered under a health plan provided by his employer. He was told that his insurance would pay the majority of the covered expenses if he would choose to see a provider in his plan's list. If Ed chose to be treated by a provider who was not on the lost, his portion of the bill would be greater. Ed is covered under a
- PPO
An insured needs ongoing treatment for a diabetic condition. Under the PPACA, which of the following is correct? a) The condition is covered if the insured's plan specifies the condition b) Treatment is subject to pre-existing conditions exclusion c) Treatment is subject to an annual dollar maximum d) The condition must be covered under the insured's plan
- The condition must be covered under the insured's plan
All of the following health insurance disability benefits are income tax free EXPECT 1) Key-person disability benefits 2) Personally-owned individual disability insurance 3) Employer-paid group disability 4) Employee-paid group disability
- employer-paid group
The presumptive disability provision assumes that he insured is totally disabled upon loss of all of the following EXCEPT
- feeling
All of the following could qualify as a group for the purpose of purchasing group health insurance EXCEPT
- an association of 35 people
Which of the following programs was created to protect the insureds whose employment is terminated?
- COBRA
Which of the following best describes a rebate?
- a producer returning part of her commission to her client, as a inducement to buy
Your client is sole proprietor and wishes to include his family on a medical expense plan. How much of the cost of the medical expense plan can be deducted (since he is considered self-employed)?
- 100%
Medicare Part B covers all of the following EXCEPT
- Long-term care services
Medicare is a health insurance program for all the following individuals EXCEPT
- Those with low income and low assets
An employee is covered under COBRA. His previous premium payment was $100 per month. His employer now collects $102each month. Why does the employer collect an extra $2?
- to cover the employer's administration costs
An employee that becomes ineligible for group coverage because of termination of employment or change in status, must exercise extension of benefits under COBRA
- within 60 days
Policy delivery refers to the delivery of the
Completed insurance policy to the policy owner
If the insured's dependent child reaches the maximum age for dependent but is still dependent on the insured, the insured must provide proof of dependency to the insurer to continue coverage for the child. How soon after the child reaches the age limit must the initial proof be given to the insurer?
- 31 days
According to the Fair Credit Reporting Act, all of the following statements are true EXCEPT
- if an applicant is declined for an insurance policy, he or she has no right to know what was in the report
What is the main difference between franchise and group insurance?
- in franchise insurance underwriting is done for each person
Under the mandatory uniform provision Proof of Loss, the claimant must submit proof of loss within what time period after the loss?
- 90 days
Answers to question in an insurance application are called representations and, as such, they are
- Believed to be true to the best of the applicant's knowledge
In an employer group health insurance plan, the covered employee receives
- Certificate of insurance
Darryl is involved in an automobile accident with another motorist. Darryl was at fault. Darryl was injured and hospitalized for 2 months. The other motorists suffered $15,000 of medical expenses as a result of the accident. Darryl's disability income policy will pay
- Darryl's loss of income
Which of the following is NOT one of the independent rating services that publishes guides to insurance companies financial integrity? 1) NAIC 2) Fitch 3) AM Best 4) Moody's
- NAIC
HMOs are known as what type of plans? a) Service b) Health savings c) Consumer driven d) Reimbursement
- Service
