Insurance Testing

Dread disease, travel accident, vision care, and hospital indemnity policies are all examples of?

Limited polices

Select the correct statement about ling-term care policies.

Present policies are more likely to pay benefits regardless of the level of care required by the insured.

According to Optional Provision 8, if the insurance company cancels a policy, on what basis must prepaid premiums be returned to the insured

Pro rata basis, which means all unearned premium is returned to the insured.

In a disablility income policy, there is a period during which no benefits will be paid for illness of any kind. This period usually does not apply to accidents, only to illness. The term that describes this interim is the:

Probationalry period

Some major medical policies begin with basic first dollar coverage that pays up to its limits, then the insured must pay a certain dollar amount of expenses before the major medical portion steps in. What term applies to the dollar amount the insured must pay between the basic policy and the major medical coverage?

Corridor deductible

A certain health insurance policy states that the insurer will not refuse to renew the policy and furthermore, the insurer may not cancel the policy. However, the insurer may change the premium by classes of insureds. This policy is:

a guaranteed renewable policy.

Which of the following qualifies as a compensable injury under Workers Compensation coverage?

A factory worker fractures an elbow while working overtime.

Which of the following most accurately and completely describes an application?

A written request from an applicant to an insurer requesting the insurer to issue a policy on the basis of the information in the application

Which of the follwing accurately describes the "free look" provision?

Allows the insured to look over the issued policy for a specific number of days and return it for a premium refund if desired.

A company that is licensed to sell insurance in a particular state is?

An Authorized company

What term describes the concept that the insurer and the insured share in the cost of medical expenses, with the insurer bearing the greater share?

Coinsurance

What term describes a situration where a policyowner transfers a portion of his or her rights in an insurance policy to another party in order to secure a debt to that party?

Collateral Assignment

The Optional short-term disability income benefit that pays a lump sum for specified injuries is called the?

Elective indemnity benefit

An applicant for insurance may pay the initial premium and receive a document from the agent indicating that if the policy is issued as requested, coverage begins on the date of the document. What is this document called?

Conditional receipt

In order to obtain group insurance without providing evidence of insurability, what do eligible individuals generally have to do?

Enroll within a specified eligibility period.

The factor in premium computation that has to do with the record keeping and statistical analysis insurance companies perform is?

Experience

A Health Maintenance Organization (HMO) in a certain city contracts with an independent medical group to provide services to HMO subscribers. The HMO pays the group organization, rather than paying the individual medical practitioners. What type of HMO structure is this?

Group model.

The type of health care provider that provides both the health care servies and the health care coverage is a?

Health Maintenance Organization

Which of the following waives the elimination period in a disability policy?

Hospital confinement rider.

Luis and Margarita Rodriguez have a family health policy that includes two riders. One rider excludes coverage for Margarita's existing diabetes. The other rider indicates that the couple may purchase additional disability income coverage at specified dates in the future without proving insurability. What two riders are attached to this policy?

Impairment and guaranteed insurability riders.

Which of the following represents certain consumer safeguards enacted by states and patterned after a model act developed by NAIC?

Information and Privacy Protection Act

An insured's disability income policy defines total disablitiy as "the insured's inablility to perform the duties of any occupation for which he or she is reasonable qualified by education, training or experience." This definition is known as the?

"any occupation" definition and is more restrictive than other definitions."

All of the following statements about non-cancellable policies are true:

1. A noncancellable policy is also called a noncancellable and guaranteed renewable policy. 2. The only right to cancel the noncancellable policy is for nonpayment of premiums. 3. The insurer may regain the right to cancel or not to renew when the insured reaches an age specified in the policy.

In noncontributory group plans, how many eligible employees must be covered by the plan?

100%

What is the minimum grace period, provided in Required Provision 3, for all policies other than monthly or weekly premium policies?

31 Days

Select the correct statement below.

COBRA protects dependents of employees by mandating for them the same extension and conversion privileges available to employees covered by group plans.

Which of the following premium payment modes will result in the highest total premium?

Monthly

A Medicare SELECT policy differs from a regular Medigap policy in that it:

Neither A or B

When may agents change a policy or waive its provisions according to Required Provision 1?

Never

Required Provision 7 indicates that except in the absence of the insured's legal capacity, if it was not reasonably possible for the insured to provide proof of loss as required in a policy, the latest time the proof of loss may be furnished is?

One year from the time proof is otherwise required.

Which part of Medicare requires premium payment by most eligible participants?

Part B, supplementary medical insurance.

Before Cranston was disabled, he was a full-time engineer earning about $70,000 annually. Now, tow years later, he is able o work part-time, earning about $25,000 annually. It is likely that Cranston would be classified as?

Partially disabled

Optional Provision 1 & 2, addressing changes of occupation and misstatement of age, permit the insurer to do which of the following?

Pay indemnities equal to benefits that would have been purchased at the premium paid had the insurer known the facts when the premium was established.

Which of the following are NOT eligible for Medicare coverage?

People with any life-threatening conditions.

Under Workers Compensation, a disability that is a permanent physical impairment leaving the individual incapable of performing the previous regular occupation, but capable of performing some other type of work, is a?

Permanent partial disability

Which of the following is not true concerning the notice of claim and claim forms according to Required Provisions 5 and 6?

The insured must file the notice of claim within 10 days or as soon as reasonably possible.

Under what circumstances do major medical policies usually provide for restoration of benefits?

Restoration usually occurs after a specified dollar amount of benefits has been exhausted and after the insured has proved insurability.

Primary support for Medicare Part A comes from?

Social Security payroll taxes

Many Major medical policies include a provision whereby when expenses reach a certain dollar amount, the insured no longer shares in the cost of expenses; the insurer pays 100% of remaining covered charges. This is referred to as the:

Stop/loss limit.

Under a credit health policy, what is the maximum amount of any accidental death benefit included?

The amount of outstanding indebtedness at any given time.

The usual payment arrangement under a Preferred Provider Organization contract is:

a fee for each service.

With regard to group insurance, who has the responsibility to apply for coverage, provide information about the group, maintain the policy, and pay premiums?

The master policyowner

Trent Bixley is named by the insured, Nancy Bixley, as the first in line to receive the death benefit provided by Nancy's accident policy. Their daughter Elaine is named as second in line to receive the benefit. Then this statement is true:

Trent is the primary beneficiary and Elaine is the contingent beneficiary.

When medical expense policies do not state specific dollar benefit amounts, but instead have payments upon the charges for like services in the same geographical area, benefits are designated as which of the following?

Usual, customary and reasonable charges.

The correct statement about converting from a family policy to an individual policy.

Usually, conversion may be made without evidence of insurability if the individual does so within 31 days after the family coverage ends.

A health insurance policy includes an endorsement indicating the insurer will allow the policy to continue in force without further premiums if the insured is totally and permanently disabled. What endorsement is attached to this policy?

Waiver of premium

The type of health insurance policy most likely used to cover all students attending a large university is:

a blanket policy.

Brenda names her husband as the beneficiary of the accidental death benefit in her health policy. She has relinquished her right to change the beneficiary designation. According to Required Provision 12, Brenda's husband is?

an irrevocable beneficiary

A health insurance policy that the insurer may choose not to renew only on the premium due date is called:

an optionally renewable policy

Optional Provisions 3, 4, 5, and 6 deal with situations where an insured can receive more money from loss of time benefits than from working , or more for reimbursement of medical expenses than these services cost. This is

called overinsurance and can be remedied by each insurer's paying proportionate benefits or a single insurer allowing the insured to choose the policy from which benefits will be paid.

Second surgical opoinions, precertification, oncurrent and retrospective reviews, and outpatient/ambulatory services are all elements of a cost-containment system commonly know as:

case management

Normally, Blue Cross/Blue Shield makes payments for medical expenses:

directly to the providers.

All Medicare supplement (or Medigap) policies must

have the same core benefits.

Jay, who is employed by Carson Company, is assigned to work temporarily in another state. While in the orther state, Jay is injured on the job. He is entitled to benefits of the Workers Compensation law in in the state in which he was hired even though his injury occurred in a different state. This indicates that the Workers Compensation law in the state where Jay was hired:

includes extraterritorial provisions.

A certian major medical policy states a maximum number of days for which convalecent care will be paid as well as a maximum number of X-rays that will be paid for under any one claim. These are examples of:

inside limits.

The Medical Information Bureau is a nonprofit organization supported by

insurance companies

All of the following are alternatives an insurer has when asked to insure a substandard risk EXCEPT:

issue the policy with a probationary period after which the insurer may continue or cancel the policy.

As compared to individual disability income policies, group disability income policies are generally?

less costly and have more liberal provisions.

Each of the following would be found in the insuring clause of an insurance policy EXCEPT:

name of the insured

A disability that is presumed to result from the same or a related cause of prior disability is called a

recurrent disability

When an insurer cedes part of an insured's coverage to another insurance company, retaining only part of the risk for itself, the insurer is engaging in

reinsurance

Employer-paid premiums for employee group health insurance are generally

tax-deductible to the employer, and nontaxable to the employees (both of the above).

Optional Provision 9, which deals with conformity to state stautes, provides

that policy provisions in conflict with state statutes where the insured resides are automatically amended to conform to the minimum requirements fo the law.

All of the following are reasons an application is important EXCEPT?

the application becomes part of the insuring clause when attached to the policy.