Health Wrong Answers

What is Medicare?

A hospital and medical expense insurance program

Under a Long Term Care policy, which benefit would be typically excluded or limited?

Alcohol Rehabilitation

Which of the following is NOT to be disclosed to an applicant for health insurance?

Any contingent compensation received

P loses an arm in a farm accident and is paid $10,000 from his Accidental Death and Dismemberment policy. This benefit is known as the

Capital Sum

A Disability Income policy that only the policy owner can terminate and which the rates will never go up is considered to be

Noncancellable

All of these are considered sources of underwriting information about an applicant EXCEPT

Rating Services

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

Major Medical policies typically

contain a deductible and coinsurance

Basic Medical Expense Insurance

has lower benefit limits than Major Medical insurance

Statements made on an insurance application that are believed to be true to the best of the applicant's knowledge are called

representations

Which of the following services is NOT included under hospitalization expense coverage?

surgical fees

A disability elimination period is best described as a:

time deductible

An insurer must provide an insured with claim forms within __ days after receiving notice of a loss.

15

T calls to file a claim on his health insurance policy. Within how many days must the insurer provide T's proof of loss forms?

15 days

Insurers may request a hearing within ___ if their policy is rejected

20 Days

An insurer that terminates a producer's appointment must inform the Commissioner within how many days?

30

Which of the following is an example of misrepresentation?

Describing a universal life policy as a security

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

A medical care provider which typically delivers health services at its own local medical facility is known as a:

Health Maintenance Organization (HMO)

Which of the following types of organizations are prepaid group health plans, where members pay in advance for the services of participating physicians and hospitals that have agreements?

Health Maintenance Organizations (HMO)

A 66 year-old is covered under a group health plan while employed with a business that has 40 employees. If she injures herself while walking in the park, what coverage would be considered primary?

Her group health plan

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

In regards to representations or warranties, which of these statements is TRUE?

If material risk, false representations will void a policy

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

M has a Major Medical insurance policy with a $200 flat deductible and an 80% Coinsurance clause. If M incurs a $2,200 claim for an eligible medical expense, how much will M receive in payment for this claim?

$1,600

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

What is the maximum Social Security Disability benefit amount an insured can recieve?

100% of the insured's Primary Insurance Amount (PIA)

According to the Mandatory Uniform Policy Provisions, what is the maximum amount of time after the premium due date during which the policy remains in force even though the premium has not been paid?

31 days

A producer must remit premiums to the insurer within __ days after receipt.

45

A Disability Income policy-owner recently submitted a claim for a chronic neck problem that has now resulted in total disability. The original neck injury occurred before the application was taken 5 years prior. The neck injury was never disclosed to the insurer at the time of application. How will the insurer handle the claim?

Claim will be paid and coverage will remain in force. -After 2-3 years it enters the incontestable period in which the insurer may not deny the claim

When an employee is required to pay a portion of the premium for an employer/employee group health plan, the employee is covered under which of the following plans?

Contributory

A characteristic of Preferred Provider Organizations (PPOs) would be:

Discount fees for the patient

What type of policy would only provide coverage for specific types of illnesses (cancer, stroke, etc)?

Dread disease insurance

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

X is insured with a disability income policy that provides coverage until age 65. This policy allows the insurer to change the premium rate for the overall risk class assigned. Which of these renewability features does this policy contain?

Guaranteed Renewable

Which type of provider for stressing preventative medical care and routine physical examinations?

Health Maintenance Organizations (HMO's)

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

Information obtained from a phone conversation to the proposed insured can be found in which of these reports?

Inspection Report

A life insurance arrangement which circumvents insurable interest statutes is called

Investor-Originated Life Insurance

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

T has Disability Income policy that pays a monthly benefit of $5,000. If T becomes partially disabled, what can he likely expect?

Less than $5,000 per month benefit regardless of the cause

The health insurance program which is administered by each state and funded by both the federal and state governments is called:

Medicaid

If a retiree on Medicare required five hospital stays in one year, which policy would provide the best insurance for excess hospital expenses?

Medicare Supplement

Which of the following actions is required by an insured who leaves the primary area of medical coverage and seeks medical care?

Obtain prior approval from the insurer for the medical service

The insured and insurance company will share the cost of covered losses under which health policy feature?

Payment of Claims provision

Which of the following is considered to be the time period after a Health Policy is issued, during which no benefits are provided for illness?

Probationary Period

K failed to pay a renewal premium within the time granted by the insurer. K then sends in a payment which the insurer subsequently accepts. Which policy provision specifies that coverage may be restored in this situation?

Reinstatement

When a person returns to work after a period of total disability but cannot earn as much as he or she did before the disability, this situation is called which of the following?

Residual disability

M purchased an Accidental Death and Dismemberment (AD&D) policy and named his son as beneficiary. M has the right to change the beneficiary designation at anytime. What type of beneficiary is his son?

Revocable

The percentage of an individual's Primary Insurance Amount (PIA) determines the benefits paid in which of the following programs?

Social Security Disability Income

Which of the following statements about classification of applicants is INCORRECT?

Substandard applicants are never declined by underwriters

Which of the following costs would a Basic Hospital/Surgical policy likely cover?

Surgically removing a facial birthmark

What does a Guaranteed Insurability rider provide a Disability Income policyowner?

The ability to periodically increase the amount of coverage without evidence of insurability

T was insured under an individual Disability Income policy and was severely burned in a fire. As a result, T became totally disabled. The insurer began making monthly benefit payments, but later discovered that the fire was set by T in what was described as arson. What actions will the insurer take?

The insurer will rescind the policy, deny the claim, and recover all payments made

Which Accident and Health policy provision addresses preexisting conditions?

Time Limit on Certain Defenses

What is the elimination period of an individual disability policy?

Time period a disabled person must wait before benefits are paid

According to the Affordable Care Act (ACA), a dependent child's eligibility status is determined by

age

In order to establish Health Reimbursement Arrangement (HRA) it MUST:

be established by the employer

The situation in which a group of physicians are salaried employees and conduct business in an HMO facility is called a(n):

closed panel

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

Medicare Part A and Part B do NOT pay for

dental work

S is the policyowner of a Major Medical policy. The premiums are paid monthly and due on the 1st of each month. S fails to make September's payment and is hospitalized October 15th. When S files the claim for this hospitalization, the insurer will likely:

deny the claim

M completes an application for life insurance but does not pay the initial premium. All of these actions must occur before M's policy goes into effect EXCEPT

free-look period has expired

Under an individual Health Insurance policy, the Time Limit of Certain Defenses provisions states that non-fraudulent misstatements first become incontestable two years

from the date the policy was issued

What is the initial requirement for an insured to become eligible for benefits under the Waiver of Premium provision?

insured must be under a physicians care

An insurance company normally has 2 years to contest information provided on an accident and health application. This 2 year period begins on the date that the:

insurer dates the policy

J was reviewing her Health Insurance policy and noticed the phrase "This policy will only pay for a semi-private room". This phrase is considered to be a(n)

internal limit

Basic Hospital and Surgical policy benefits are

lower than the actual expenses incurred

Q purchases a $500,000 life insurance policy and pays $900 in premiums over the first six months. Q dies suddenly and the beneficiary is paid $500,000. This exchange of unequal values reflects which of the following insurance contract features?

Aleatory

Which of the following BEST describes a Hospital Indemnity Policy?

Coverage that pays a stated amount per day of a covered hospitalization

K completes an application for a disability policy but does not pay the initial premium. The company approves the policy standard and the agent delivers the policy. K then pays her initial premium 3 days later. At what point does K's policy take effect?

Date the initial premium is collected

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 physician opens up a new practice and qualifies for a $7,000/month Disability Income policy. What rider would the physician add if he wants the ability to increase his policy benefit as his practice and income grow?

Guaranteed Insurability Option rider

A catastrophic illness would be best covered by which of the following health insurance plans?

Major Medical

Which of the following types of health coverage frequently uses a deductible?

Major Medical policy

Comprehensive Major Medical policies usually combine:

Major Medical with Basic Hospital/Surgical coverage

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

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

P is a producer who notices 5 questions on a life application were not answered. What actions should P take?

Set up a meeting with the applicant to answer the remaining questions

The Commissioner may issue an emergency cease and desist order without a hearing for all of the following circumstances EXCEPT

Writing controlled business

Under a Guaranteed Renewable health insurance policy, the insurer

may cancel the policy for nonpayment only