Health Insurance Exam
An insured has Medicare Part D coverage. Upon reaching the initial benefit limit , what percentage of the prescription drug cost is the insured responsible for paying ? A. 15% B. 16% C. 23% D. 25%
25%
What is the period of coverage for events such as death or divorce under COBRA A. 36 months B. 60 days C. 31 days D. 12 months
36 months
Most policies will pay the accident death benefits as long as the death is caused by the accident and occurs within _____ days
90 days
The transfer of an insured's right to seek damages from a negligent party to the insurer is found in which of the following clauses? A. Subrogation B. Arbitration C. Salvage D. Appraisal
A Subrogation After the insured accepts payment from the insurer, they have been indemnified. Insurance policies require the insured to transfer any right to recovery to the insurer so that they may seek recovery up to the amount they paid as loss.
What are the three basic coverages for medical expense insurance? A) Reimbursement, Preventive, Service B) Hospital, Surgical, Medical C) Basic, Major, Overhead D) Medical, Dental, Vision
A) Hospital, Surgical, Medical
In which of the following situations would Social Security Disability benefits NOT cease? A) The individual's son gets a part-time job to help support the family B) The individual reaches age 65 C) The individual dies D) The individual has undergone therapy and is no longer disable
A) The individual's son gets a part-time job to help support the family At death, family benefits will continue as survivor benefits. Benefits will continue for an adjustment period of three months if an individual no longer satisfies the definition of diability
Under the uniform required provisions, proof of loss under a health insurance policy normally should be filed within _____ days of a loss. A. 90 B. 20 C. 30 D. 60
A. 90 days of a loss
The free-look provision allows for which of the following? A. A right to return the policy for a full premium refund B. Immediate coverage when the application is submitted C. A guarantee that the policy will not lapse if the premium is overdue D. A guarantee that the policy will be issued
A. A period of time during which the insured may return the policy for a full premium refund
Which of the following long-term care benefits would provide coverage for care for functionally impaired adults on a less than 24-hour basis? A. Adult day care B. Residential care C. Assisted living D. Home health care
A. Adult day care
Under which condition would be an employees group medical benefits be exempt from income taxes? A. An employee's group medical benefits are generally exempt from taxation as income. B. An employee's group medical benefits are never exempt from taxation as income C. When the premiums and other unreimbursed medical expenses exceed 5% of the employee's adjusted gross income D. When the premiums and other unreimbursed medical expenses exceed 10% of the employee's adjusted gross income
A. An employee's group medical benefits are generally exempt from taxation as income.
An applicant for an individual health policy failed to complete the application properly before being able to complete the application and pay the initial premium she is confined to a hospital this will not be covered by the insurance because she has not met conditions specified in the A. Consideration clause B. Insuring clause C. Pre-existing conditions clause D. Eligibility clause
A. Consideration clause The consideration clause speicified that both parties to the contract must give some valuable consideration. The payment of the premium is the consideration given by the applicant. Because the applicant had not paid an initial premium, she is not covered by insurance
All of the following could be considered rebates if offered to an insured in the sale of insurance EXCEPT A. Dividends from a mutual insurer B. An offer of employment C. Stocks, securities, or bonds D. An offer to share in commissions generated by the sale
A. Dividends from a mutual insurer
Which of the following is generally NOT a limited health service included under an LHSO? (2 answers) A. Emergency services B. Dental care C. Ambulance D. Prescription drugs E. Clinical laboratory services F. Surgical services G. Vision care services
A. Emergency services F. Surgical services
How many pair of glasses in a 12-month period will a vision expense insurance plan cover? A. One B. Two C. Three D. Unlimited
A. One
Under what condition are group disability income benefits received by an employee not taxable as income? A. when the benefits received are equal or less than the employees contribution B. When the employer makes all the premium payments C. When the employee is 59.5 D. When the amount to the benefit is equal or less than the amount contributed by the employer
A. when the benefits received are equal or less than the employees contribution
In reference to the standard Medicare Supplement benefits plans, what does the term standard mean? A. Coverage options and conditions are developed for average individuals B. All providers will have the same coverage options and conditions for each plan C. Coverage options and conditions comply with the law, but will vary from provider to provider D. All plans must include basic benefits A-N
All providers will have the same coverage options and conditions for each plan
To comply with Fair Credit Reporting Act, when must a producer notify an applicant that a credit report may be requested?
At the time of the application
What document describes an insured's medical history, including diagnosis and treatments?
Attending physician's statement
**How many consecutive months of coverage (other than in an acute care unit of a hospital) must LTC insurance provide in this state? A) 6 B) 12 C) 24 D) 36
B) 12
Under workers compensation, which of the following benefits are NOT included? A) Medical and rehabilitation benefits B) Income benefits C) Death benefits D) Legal benefits
B) Legal benefits
Medicare Part A services do NOT include which of the following? A) Hospice Care B) Outpatient Hospital Treatment C) Post hospital Skilled Nursing Facility Care D) Hospitalization
B) Outpatient Hospital Treatment This is covered under plan B
An employee becomes insured under the PPO plan provided by his employer. If the insured decides to go to a physician who is not a PPO provider, which of the following will happen? A) the PPO will pay the same benefits as if the insured had seen the PPO physician B) The PPO will pay reduced benefits C) The PPO will not not pay any benefits at all D) The insured will be required to pay a higher deductible
B) The PPO will pay reduced benefits
Within how many days may a person who is being examined by the Director for non financial business practices request a hearing after receiving the examination report? A. 3 days B. 10 days C. 15 days D. 30 days
B. 10 days
If a licensed producer died, the Director may issue a temporary licensed to that producer's representative for an initial period of A. 60 days B. 180 days C. 9 months D. 1 year
B. 180 days
In which medicare supplemental policies are the core benefits found? A. Plans A-D only B. All plans C. Plans A and B only D. Plan A only
B. All plans
Which of the following is an eligibility requirement for Social Security disability income benefits? A. Currently employed status B. Fully insured status C. Experiencing at least one year of disability D. Being at least 50 years of age
B. Fully insured status Benefits are provided only after a 5-month waiting period
A guaranteed renewable disability insurance policy A. is renewable at the option of the insurer to a specified age of the insured B. Is renewable at the insureds option to a specified age C. Is guaranteed to have level premium for the life of the policy D. Cannot be cancelled by the insured before the age 65
B. Is renewable at the insureds option to a specified age
All policy applications must identify which of the following? A. Director B. Producer who solicited the applicant's business C. Conditions of acceptance D. MIB
B. Producer who solicited the applicant's business
Insurers may change which of the following on a guaranteed renewable health insurance policy? A. No changes are permitted B. Rates by class C. Coverage D. Individual rates
B. Rates by class
Which of the following would basic medical expense coverage NOT cover? A. Hospice B. Surgeon's services C. Mental Illness D. Maternity
B. Surgeon's services
Which of the following is NOT true regarding partial disability A. An insured would qualify if he couldn't perform some of his normal job duties B. This is a form of insurance that covers part-time workers C. The insured can still report to work and receive benefits D. Benefit payments are typically 50% of the total disability benefit
B. This is a form of insurance that covers part-time workers
Insurers usually do not reimburse claimants for 100% of income lost due to disability. What is the reason for insurer limitations on coverage amounts? A. To pay no more than 50% of the pre-disability income B. To provide an incentive for the insured to return to work C. To make sure there is enough money to reimburse all the claims D. To reimburse only for the premiums paid into the policy
B. To provide an incentive for the insured to return to work
Which of the following statements about occupational vs. nonoccupational coverage is TRUE? A Individual disability policies never cover nonoccupational injuries. B Only group disability income policies can be written on an occupational basis. C Disability insurance can be written as occupational or nonoccupational. D Group medical expense policies and individual medical expense policies always cover both occupational and nonoccupational injuries.
C Disability insurance can be written as occupational or nonoccupational.
Under an individual disability policy, the MINIMUM schedule of time which claim payments must be made to an insured is A) Weekly. B) Biweekly C) Monthly D) Within 45 days
C) Monthly
If a person is disabled at age 27 and meets Social Security's definition of total disability, how many work credits must he/she have earned to receive benefits? A. 6 credits B. 40 credits C. 12 credits D. 20 credits
C. 12 credits Persons disable between ages 24 and 31 can qualify for benefits if they have credit for having worked half of the time between age 21 and the start of the disability. For example, if Joe becomes disabled at age 27, he would need 12 credits (or 3 years' worth) out of the prior 6 years (between ages 21 and 27)
All of the following qualify for Medicare Part A EXCEPT A. Anyone who is at the end stage of renal disease B. Anyone who is over 65, not covered by Social Security, and is willing to pay premium C. Anyone who is willing to pay a premium D. Anyone that qualifies through Social Security
C. Anyone who is willing to pay a premium
The premium charged for exercising the Guaranteed Insurability Rider is based upon the insured's A. Average age B. Issue age C. Attained age D. Assumed age
C. Attained age
The provision that provides for the sharing of expenses between the insured and the insurance company is A. Deductible B. Divided cost C. Coinsurance D. Stop-loss
C. Coinsurance
An insurer neglects to pay a legitimate claim that is covered under the terms of the policy. Which of the following terms best describes what the insurer has violated? A. Representation B. Adhesion C. Consideration D. Good faith
C. Consideration
In a relative value system of determining coverage for a given procedure what term describes the total amount payable per point? A. Translation Factor B. Practical value C. Conversion factor D. Relative value
C. Conversion factor
Group disability income insurance premiums paid by the employer are A. Tax deductible by the employee B. Tax deferred to the employer C. Deductible by the employer as an ordinary business income D. Taxable to the employee
C. Deductible by the employer as an ordinary business income
An insured is hospitalized with a back injury. Upon checking his disability income policy, he learns that he will not be eligible for benefits for at least 30 days. This indicates that his policy is written with a 30 day what? A. Probation period B. Waiver of benefits period C. Elimination period D. Blackout period
C. Elimination period
All of the following statements concerning Medicaid are correct EXCEPT A. Individuals claiming benefits must prove they do not have the ability or means to pay for their own medical care B. Persons, at least 65 years of age, who are blind or disabled and financially unable to pay, may qualify for Medicaid Nursing Home Benefits C. Medicaid is a state funded program that provides health care to persons over age 65, only. D. Individual states design and administer the Medicaid program under broad guidelines established by the federal government
C. Medicaid is a state funded program that provides health care to persons over age 65, only.
Regarding the taxation of Business Overhead policies A. Premiums are not deductible but benefits are deductible B. Premiums are not deductible but expenses paid are deductible C. Premiums are deductible and benefits are taxed D. Premiums are not deductible and benefits are taxed
C. Premiums are deductible and benefits are taxed
All of the following long-term care coverages would allow an insured to receive care at home EXCEPT A. Respite care B. Home health care C. Skilled care D. Custodial care in insured's house
C. 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 of the following is NOT a feature of a guaranteed renewable provision? A. Coverage is not renewable beyond the insured's age 65 B. The insured's benefits cannot be reduced C. The insurer can increase the policy premium on an individual basis D. The insured has a unilateral right to renew the policy for the life of the contract
C. The insurer can increase the policy premium on an individual basis
Which of the following definitions would make it easier to qualify for a total disability benefits? A. The more liberal "any occupation" B. The more strict "own occupation" C. The more liberal "own occupation" D. The more strict "any occupation"
C. The more liberal "own occupation" Total disability is defined differently under some disability income policies. The more liberal "own occupation" definition of disability makes it easier to qualify for benefits
Manny has been injured in an accident. Although she is still receiving benefits from her policy, she does not have to pay premiums. Her policy includes... A. Benefit of Payment clause B. Waiver of Benefit rider C. Waiver of Premium rider D. Return of Premium rider
C. Waiver of Premium rider
A man is injured while robbing a convenience store. How does his major medical policy handle the payment of his claim?
Claim is denied if his policy contains the Illegal Occupation provision
Which of the following includes information regarding a person's credit, character, reputation, and habits? A. Agent's Report. B. Consumer Report. C. Consumer History. D. Insurability Report.
Consumer report
Contracts that are prepared by one party and submitted to the other party on a take-it-or-leave-it basis are classified as
Contracts of adhesion
Which of the following is NOT an essential element of an insurance contract? A) Agreement B) Legal Purpose C) Counteroffer D) Consideration
Counteroffer
Which of the following would best describe total disability? A A person's inability to perform one of the regular duties of his/her occupation. B A person's total loss of income. C A person's inability to qualify for insurance coverage. D A person's ability to work is significantly reduced or eliminated for the rest of his/her life.
D A person's ability to work is significantly reduced or eliminated for the rest of his/her life. While different policies might define "total disability" differently, any definition would imply that under a total disability a person's ability to work is significantly reduced or eliminated for the rest of his/her life.
A noncontributory group disability income plan has a 30-day waiting for period and offers benefits of $2,000 month. If any employee is unable to work for 7 months due to a covered disability, the employee will receive A. $14,000, none of which is taxable B. $14,000, all of which is taxable C. $12,000 none of which is taxable D. $12,000 all of which is taxable
D. $12,000 all of which is taxable
S is a sole business proprietor who owns a medical expense plan. What percentage of the cost of the plan may he deduct? A. 25% B. 50% C. 75% D. 100%
D. 100% Sole proprietors and partners may deduct 100% of the cost of a medical expense plan provided to them and their families because they are considered self-employed individuals, not employees
A producer failed to complete the required continuing education credit hours for this compliance period, and allowed his license to lapse. Within what time period after the deadline may the license be reinstated? A. 30 days B. 90 days C. 6 months D. 12 months
D. 12 months
If the insured under a disability income insurance policy changes to a more hazardous occupation after the policy has been issued, and a claim is filed, the insurance company should do which of the following? A. Cancel the policy B. Increase the premium C. Exclude coverage for on-the-job injury D. Adjust the benefit in accordance with the increased risk
D. Adjust the benefit in accordance with the increased risk
Which of the following is not true of Disability Buy-Sell coverage? A. The policies provide funds for the business organization to purchase the business interest of a disabled partner B. It is typically written to cover partners or corporate officers of a closely held business C. Premium payments are not deductible to the business D. Benefits are considered taxable income to the business.
D. Benefits are considered taxable income to the business.
All of the following are true regarding Key Employee Disability Income Insurance EXCEPT A. The employer owns the policy B. Benefits are paid to the employer to retrain a new person C. Premiums are not tax deducible for the employer D. Benefits are taxable to the employer
D. Benefits are taxable to the employer Key person disability income premiums are not deductible to the business, but the benefits are received income tax free by the business
The gatekeeper of an HMO helps A. Determine who will be allowed to enroll in an HMO program B. Prevent double coverage C. Determine which doctors can participate in an HMO plan D. Control specialist costs
D. Control specialist costs
Another term used to describe "no deductible" is A) First-dollar basis. B) Comprehensive. C) Total coverage. D) Immediate cooperative.
D. First-dollar basis
Which type of Medicare policy requires insured's to use specific health care providers and hospitals, except in emergency situation A. Medicare Advantage B. Medicare Part A C. Preferred D. Medicare SELECT
D. Medicare SELECT In return, the insured pays lower premium amounts
On its advertisement, a company claims that it has funds in its possession that are, in fact, not available for the payment of losses or claims. The company is guilty of A. Concealment B. Unfair claim practice C. Rebating D. Misrepresentation
D. Misrepresentation
Which statement regarding qualifications for Social Security disability benefits is NOT true? A. The individual must satisfy the waiting period. B. The individual must meet the definition of disability. C. The individual must have proper insured status. D. The individual must be at least 65 years old.
D. The individual must be at least 65 years old.
All of the following statements about Medicare supplement insurance policies are correct EXCEPT A. They cover Medicare deductibles and copayments B. They supplement Medicare benefits C. They are issued by private insurers D. They cover the cost of extended nursing home care
D. They cover the cost of extended nursing home care Medigap plans are designed to fill the gap in coverage attributable to Medicare's deductibles, copayment requirements, and benefit periods.
Points and conversion factorq
If the conversion factor was 10, then the policy would pay $2,000 for the appendectomy (200 x 10) and $10,000, the maximum benefit, for the open-heart surgery (1,000 x 10)
Which of the following defines the term "controlled business"?
Insurance written on the interests of the producer who solicits a policy
Which of the following statements is not true concerning Medicaid ? A. It is funded by state and federal taxes B. It is intended to provide medical assistance for certain categories of people who are needy C. It consists of 3 parts hospitalization, doctors, services, disability income D. It is a state program
It consists of 3 parts hospitalization, doctors, services, disability income
Which of the following best describes the MIB?
It is a nonprofit organization that maintains underwriting information on applicants for life and health insurance
Which of the following statements concerning Medicare Part B is correct? A. It pays 100% of Medicare's standards for reasonable charges B. It pays for physician services, diagnostic test, and physical therapy C. It is provided automatically to anyone who qualifies for Part A D. It pays on a first dollar basis
It pays for physician services, diagnostic test, and physical therapy For those who have purchased the coverage, Part B pays 80% of outpatient medical cost after a deductible has been met. Part B covers physician and outpatient hospital services, and other medical and health services, such as diagnostic tests, and physical therapy
Health Maintenance Organization (HMO)
Lower price Only see providers inside this network Prepaid plans Doctors are paid a salary Capitated plans - per person. The more people sign up for this doctor, the higher salary they will receive Stresses preventive care Emergency care is covered in and out of network Outpatient service Alternative care Primary care physician (PCP) or gatekeeper Smaller network - smaller # of doctors and hospitals to choose from
Qualified life event
Marital status Number of dependents Change of employment Change in dependent care provider Family medical leave
Health insurance broad coverage
One policy: Comprehensive coverage for hospital expenses (room and board, miscellaneous expenses, nursing services, physicians' services, etc.) Catastrophic medical expense protection Benefits for prolonged injury or illness
POS (Point of Service Plan)
Plan where patient has the option to use their PCP (HMO style) for care or self-refer (PPO style). Best of both worlds
A Medicare SELECT policy does all of the following EXCEPT? A. Provide for continuation of coverage in the event that Medicare SELECT policies are discontinued due to the failure of the Medicare SELECT program. B. Prohibit payment for regularly covered services if provided by non-network providers. C. Make full and fair disclosure in writing of the provisions, restrictions, and limitations of the Medicare SELECT policy to each applicant D. Provide payment for full coverage under the policy for covered services not available through network providers
Prohibit payment for regularly covered services if provided by non-network providers.
Two types of major medical policies available
Supplemental Major Medical Comprehensive Major Medical
Cancellation
The termination of an in-force insurance policy by either the insured or the insurer prior to the expiration date shown in the policy.
Flexible Spending Account (FSA)
Type of Section 125 plan that allows employees to use pretax dollars to pay for out-of-pocket health and dependent-care expenses. Use it or lose it rule Exempt from income taxes
PPO (Preferred Provider Organization)
Work with individual hospitals and physicians Larger network Can leave and see any provider No PCP referrals Will pay for in and out of network but will pay for more in network Fee for service plan
Lump sum
a payout method that pays the beneficiary the entire benefit in one payment
Deductible
a specified dollar amount that the insured must pay first before the insurance company will pay the policy benefits
Which of the following is NOT true regarding a Premium Fund Trust Account? a) It could be used as a claim payment account. b) It is a fiduciary account. c) It may be a depository for service fees and late charges. d) It is established to maintain all the premiums.
a) It could be used as a claim payment account. PFTA cannot be used as a general operation or a claim payment account. It is a fiduciary account into which all collected premiums or other monies, such as service fees, later charges and inspection fees must be deposited.
Riders
added to the basic insurance policy to add, modify or delete policy provisions
Sickness
an illness, which first manifests itself while the policy is in force
Accidental bodily injury
an unforeseen and unintended injury that resulted from an accident rather than a sickness
what is the term used for an applicant's written request to an insurer for the company to issue a contract, based on the information provided?
application
**In a group health policy, a probationary period is intended for people a) Who want lower premiums. b) Who joined the group after the effective date. c) Who had a pre-existing condition at the time they joined the group. d) Who have additional coverage through a spouse.
b) Who joined the group after the effective date
An applicant for a health insurance policy returns a completed application to her agent, along with a check for the first premium. She receives a conditional receipt two weeks later. Which of the following has the insurer done by this point? a) Approved the application b) Issued the policy c) Neither approved the application nor issued the policy d) Both approved the application and issued the policy
c) Neither approved the application nor issued the policy
In long-term care (LTC) policies, as the benefit period lengthens, the premium a) LTC premiums are not based on benefit periods. b) Decreases. c) Increases. d) Remains unchanged.
c) increases LTC policies define the benefit period for how long coverage applies, after the elimination period. The longer the benefit period, the higher the premium will be.
What is the main difference between coinsurance and copayments? a) With copayments, the insured pays all of the cost. b) With coinsurance, the insurer pays all of the cost. c) Coinsurance is a set dollar amount. d) Copayment is a set dollar amount.
d) copayment is a set dollar amount
Supplemental Major Medical
eliminates the insured from having to pay any deductible After basic policy, supplemental will provide coverage that was not paid
An insured becomes disabled at age 22 and can no longer work. She meets the definition of total disability under Social Security. What other requirement must the insured have met to receive Social Security disability benefits? ** A. Have accumulated 20 work credits in the past 10 years B. Have accumulated 40 work credits C. Have reached the age of 25 D. Have accumulated 6 work credits in past 3 years
have accumulated 6 work credits in past 3 years
Comprehensive Coverage
health insurance that provides coverage for most type of medical expenses
An insured stated on her application for life insurance that she had never had a heart attack, when in fact she had a series of minor heart attacks last year for which she sought medical attention. Which of the following will explain the reason a death benefit claim is denied?
material misrepresentation
Tax exempt
not subject to taxation
Underwriting
risk selection and classification process
Taxable
subject to taxation
Nonrenewal
termination of an insurance policy at its expiration date by not offering a continuation of the existing policy or a replacement policy
corridor deductible
the deductible between a basic and major medical policy
Cafeteria plan
type of employee benefit plan that allows insureds to choose between different types of benefits
