Insurance Test
73. All of the following are characteristics of group health insurance plans EXCEPT
the parties to a group health contract are the employer and the employees
16. There are _____ standard Medicare supplement policies.
8
26. All statements made by an applicant in an application for health insurance are considered to be
representations
18. Mr. Ritchie, a taxidermist, is insured under a business overhead expense policy that pays maximum monthly benefits of $2,000. Mr. Ritchie becomes disabled. His actual monthly expenses are $2,700. The monthly benefits payable under his policy will be
$2,000
After a week in the hospital, Lola receives a bill for $9,000 of covered expenses. Her major medical policy has a $250 deductible and a 75/25 coinsurance feature. How much of the total expense will Lola's policy cover?
$6,563
36. Alice has a major medical policy with a $500 deductible and an 80/20 coinsurance provision. If she receives a hospital bill for $7,500 of covered expenses, how much of that bill will she have to pay?
1,900
Under the notice of claims provision of a health insurance policy, a policy owner must provide notification of loss within a reasonable period of time, usually
20 days after an occurrence or a commencement of a loss
67. All of the following may administer self-insured plans except:
Actuaries
61. Which of the following is true about elimination periods and/or probationary periods in disability income policies?
An elimination period follows the start of a disability.
63. What is the basic source of information for life insurance underwriting and policy issue?
Application
10. What constitutes "consideration" for a health insurance policy?
Application and initial premium
77. Which of the following oversees the Bureau of Unclaimed Property?
Chief Financial Officer
40. Which of the following reimburses its insureds for covered medical expenses?
Commercial insurers
Beth's health insurance policy contains a provision that allows her to renew coverage up to age 65. However, the policy also states that should Beth lose her job, the insurance company will cancel the policy, regardless of Beth's age. In terms of renewability, what type of policy does Beth have?
Conditionally renewable
Florida law requires that all of the following be coverages be offered in health insurance policies EXCEPT
Coverage for women who have had a breast biopsy that reveals breast cancer
66. The Office of Insurance Regulation's major areas of regulation include all the following EXCEPT?
Enacting insurance laws
44. Which of the following factors determine whether policy dividends will be paid on a participating policy?
Expenses and claims costs
43. Harry, the owner of a convenience store, is the insured under a business overhead policy. Were Harry to become disabled, the policy would cover all of the following EXCEPT
Harry's salary
37. Which of the following is known for stressing preventive health care?
Health maintenance organizations
76. Which of the following is NOT a typical type of long-term care coverage?
Hospice care
80. Bill's medical expense policy states that it will pay him a flat $50 a day for each day he is hospitalized. The policy pays benefits on which basis?
Indemnity
70. Which of the following is CORRECT?
Insurance companies have to notify applicants within a few days that a consumer report has been requested.
83. Which of the following accurately describes the reimbursement approach?
Insurance companies reimburse insureds for hospital and doctor expenses.
13. What does the Buyer's Guide do?
It helps buyers choose the most suitable plan.
7. When may a health insurance company change the wording of a uniform policy provision?
It may only be changed if the new wording is not less favorable to the insured.
24. Which of the following is CORRECT about the Fair Credit Reporting Act?
It provides insurance companies the ability to view consumers credit history.
46. Which is the purpose of insurance?
It spreads financial risk over a large group.
78. Which of the following would probably NOT be considered in underwriting a health insurance risk?
Marital status
28. Florida law defines all of the following as a "physician" under Florida law EXCEPT
Massage therapist
41. All of the following statements about Medicare supplement (Medigap) policies are correct EXCEPT
Medigap policies over the cost of extended nursing home care
34. Which definition of total disability creates the highest premium for the insured?
Own occupation
39. Which of the following terms best describes risk as it pertains to the insurance industry?
Uncertainty regarding financial loss
30. Who performs the function of risk selection determining an individual's insurability for policy issue?
Underwriter
50. Which of the following legal terms indicates that an insurance contract contains the enforceable promises of only one party?
Unilateral
74. The parole evidence rule says
Written contracts cannot be changed by oral evidence.
A stop-loss feature in a major medical policy specifies the maximum
amount the insured must pay toward covered expenses
A basic surgical expense policy that covers surgeons' fees per a schedule approach
assigns a dollar amount to each surgical procedure
25. A reinsurer
assumes a portion of the risk from another insurer
47. Which of the following is an optional health insurance policy provision?
change of occupation
12. The time of payment of claims provision requires that
claims must be paid after the insurer is notified and receives proof of loss
Leonard owns a major medical health policy, which requires him to pay the first $200 of covered expenses each year before the policy pays its benefits. The $200 is the policy's
deductible
79. An insurance company may nonrenew or cancel a health insurance policy for all the following reasons except:
diagnosis of terminal illness
51. Basic hospital expense insurance provides coverage for all of the following EXCEPT
drugs and X-rays
64. Paul is hospitalized with a back injury and, upon checking his disability income policy, learns that he will not be eligible for benefits for at least 60 days. This would indicate that his policy probably has a 60-day
elimination period
22. Which of the following types of agent authority is specifically set forth in writing in the agent's contract?
express
55. Medicaid provides
funds to states to assist their medical public assistance programs
29. As it pertains to group health insurance, COBRA stipulates that
group coverage must be extended for terminated employees up to a certain period of time at the employee's expense
49. The State Guaranty Association
guarantees claims are paid if an insurer becomes insolvent
69. By most insurers' definitions, "partial disability" is the
inability of the insured to perform certain important duties of his or her job
56. Major risk factors in health insurance underwriting include all of the following EXCEPT
marital status
65. Basic surgical expense policies generally provide coverage for all of the following EXCEPT
miscellaneous expenses, such as lab fees and X-rays
60. Assume a home catches fire after it is struck by lightning and the fire destroys the structure and contents. By insurance definition, the fire is the
peril
33. Under the Affordable Care Act, which of the following may an insurance company increase and still maintain grandfathered status for a health insurance plan?
premium amount
38. An Outline of Coverage for health insurance policies outlines all the following EXCEPT
premium rates
45. All of the following statements regarding policy replacement are correct EXCEPT
premiums for replacement policies are generally lower than premiums for the existing policy they replace
75. The amount of money an insurer sets aside to pay future claims is called a(n)
reserve
62. A licensed agent legally represents
the insurer
68. All of the following approaches are used by insurers to determine benefits payable under basic surgical expense insurance EXCEPT
traditional net cost method
54. Which of the following is NOT included in the definition of "transacting insurance"?
underwriting a policy
21. All of the following benefits are available under Social Security EXCEPT
welfare benefits
57. Workers' compensation covers income loss resulting from
work-related disabilities
85. Judy suffers an occupational injury. Which of the following statements is correct?
Coverage under a group or individual plan may be reduced or excluded if worker's compensation benefits are paid.
17. Which of the following is a standard optional provision for health policies?
Misstatement of age
11. Which of the following violates the controlled business law?
More than half of an agent's new business is written on employees of a business owned by his or her mother.
20. Individual health insurance policies are typically written on which basis?
Nonparticipating
9. Which renewability provision allows an insurer to terminate a health insurance policy on any date specified in the policy and to increase the premium for any class of insureds?
Optionally renewable
52. All of the following statements are true of preferred provider organizations EXCEPT
PPOs operate on a prepaid basis
14. Which of the following risks are insurable?
Pure risks
19. On August 1st, Robert completed an application for a major medical policy, gave his agent a check for the initial premium and received an insurability receipt from the agent. On August 3rd, the agent submitted Roger's application and premium to the insurance company. On August 6th, Roger was involved in an accident and admitted to a hospital. On August 12th, the agent received Roger's policy from the insurance company. Which of the following statements concerning this situation is CORRECT?
Roger's coverage began when he received the insurability receipt.
53. Mary is enrolled in Medicare Parts A and B. She is hospitalized for two weeks and sent home. Four weeks later she is readmitted to the hospital for a separate issue and stays in the hospital for a week. Under her Medicare benefits, which of the following will happen during her second stay of a week?
She will pay neither a deductible nor a daily coinsurance amount.
31. Which of the following statements regarding morbidity tables is correct?
They indicate the average number of individuals from a given group who will become disabled.
84. Which of the following is an objective of Florida's Long Term Care Partnership Program?
To contain the growth of public expenditures by encouraging consumers to purchase long-term care coverage
35. Which of the following is true regarding the Florida Life and Health Guarantee Association?
The Association is funded by insurance company assessments.
27. Which of the following is CORRECT?
The MIB assists in the underwriting and claims of life insurance.
82. Which of the following insurance companies is owned by its policyholders?
Mutual insurer
59. What does the consideration clause identify?
Premium schedule
42. Which of the following may qualify for Social Security disability benefits?
Susan, whose disability resulted in her inability to work at all for at least 18 months.
32. Which of the following correctly describes a corridor deductible?
The insured has both basic medical expense and major medical expense. There is no deductible for the basic medical expense, and the insured pays the deductible for the major medical expense.
23. What must the insured do if the insurance company does not send a claim form within the appropriate time frame?
The insured should present proof of the loss in any written manner showing the nature of the loss, extent of loss and other information.
48. Which of the following statements regarding the National Association of Insurance Commissioners (NAIC) is correct?
the NAIC promotes uniformity in state insurance laws and regulations.
15. All of the following are elements of an insurable risk EXCEPT
the loss must be catastrophic
71. Health maintenance organizations are known for stressing the provision of
risk transference
81. The minimum number of persons to be insured under a group health insurance plan is established by
state law
58. When a group disability insurance plan is paid entirely by the employer, benefits paid to disabled employees are
taxable income to the employee