Life and Health Insurance Quiz Questions

Who is an insurance agent?

A person authorized to sell, solicit and negotiate insurance contracts

Which of the following individuals must pass the written examination to be licensed as an insurance agent

A producer previously licensed in New Jersey who is applying for a New York license 120 days after becoming a resident of this state

All of the following are correct about the required provisions of health insurance policy except

A reinstated policy provides immediate coverage for an illness.

Which of the following individuals must pass a written examination to be licensed a a life insurance agent

A resident of New York wishing to transact business in New York

Something of value exchanged between the insurer and the insured is considered a/an:

Consideration

Representations are written or oral statements made by the applicant that are

Considered to be true to the best of the applicant's knowledge

What are the tax implications for contributions to a Health Savings Accounts by the individual insured?

Contributions are tax deductible

The gatekeeper of an HMO helps

Control specialist costs

What are the five basic characteristics of managed care plans?

Controlled access to providers, comprehensive case management, preventive care, risk sharing, and high quality care

What is the main difference between coinsurance and copay?

Copay is a set dollar amount; coinsurance is a percentage of the expenses

Which of the following is NOT an essential element of an insurance contract?

Counteroffer

Which insurance principle states that if a policy allows for greater compensation than the financial loss incurred, the insured may only receive benefits for the amount lost?

Indemnity

A giant teed renewable health insurance policy allows the

Policyholder to renew the policy to a stated age, with the company having the right to increase premiums on the entire class

Who might receive dividends from a mutual insurer?

Policyholders

Under what type of care do insurers negotiate contracts with health care providers to allow subscribers have access to health care services at a favorable cost?

Preferred Provider Organization (PPO)

Can an insured who belongs to a POS plan has an out-of-network physician?

Yes but the copays and deductibles may be higher

Which of the following are the authorities that an agent can hold?

express and implied

Which of the following expenses is not covered by health insurance policy

funeral

How are HMO territories typically divided?

geographic areas

Comprehensive coverage

health insurance that provides coverage for most types of medical expenses

According to the Reinstatement provision, once a lapsed policy is reinstated, how soon will coverage be available for accidents?

immediately

When can an irreconcilable beneficiary be charged?

With the written consent of the beneficiary

What illegal act does a producer commit when the producer represents a policy in a more favorable light than the policy really is?

Misrepresentation

What is the maximum period that an insurer would pay benefits in accordance with an Additional Monthly Benefit rider

1 year

What are the three most important underwriting factors considered in accepting a health insurance applicant

1. Physical condition of the applicant and other insureds 2. Moral and morale hazards 3.occupation

If the insured pays a monthly premium for health insurance, how long would the grace period be on the policy?

10 days

Under the Affordable Care Act what percentage of preventive care must be covered without cost sharing

100%

The superintendent will not renew an agent or brokers license upon finding that the license has been used to write controlled business. Which of the following would be a violation of controlled business practices

15% of the agent's annual commission is from business sold to the agent's family.

Which of the following disability income policies would have the highest premium

15-day waiting period / 10-year benefit period

The time limit of certain defenses provision prohibits insurers from denying a claim due to misrepresentation, as long as the policy has been in force for at least

2 years

Following hospitalization because of an accident, Bill was confined in a skilled nursing facility. Medicare will pay full benefits in this facility for how many days?

20 days

The Medicare supplement renewable commissions paid in the third year must be as high as the commission of which year

2nd

What is the maximum age for qualifying for a catastrophic plan

30

If payment of a premium is required to provide health insurance coverage for a child of the insured, the insured may be required to notify the company of the child's birth and pay the premium within

30 days

What is the required free-look period for Medicare supplement policies?

30 days

Employer health plans must provide primary coverage for individuals with end-stage renal disease before Medicare becomes primary for how many months?

30 months

In addition to examinations that are specifically authorized by the insurance code the superintendent may examine each domestic life insurer as often as it is deemed necessary for the protection of the consumers. The code requires examination of domestic life insurers every

5 years

How long must insurers keep records of claims

6 years

At what age do individuals qualify for Medicare?

65

How long after the date of issue may an insurer cancel an accident and health policy

90 days

A tornado that destroys property would be an example of which of the following?

A Peril

What are the most common penalties for violations of insurance statutes?

A cease and desist order, a fine, and license suspension or revocation

What are two major perils covered in health insurance policies

Accidental bodily injury and sickness

Which of the following long term care benefits would provide coverage for care for functionally impaired adults on a less than 24 hour basis

Adult day care

In which Medicare supplemental policies are the core benefits found?

All plans (A-N)

What are the activités of daily living?

Mobility, bathing, dressing, eating, toileting, and continence

Who is considered a nonresident agent

An agent who resides and is licensed in another state, but who is authorized to transact insurance in this state

Copayment

An arrangement in which an insured must pay a specified amount for services "up front" and the provider pays the remainder of the cost.

Which of the following would not be considered an insurance producer

An insurer's officer

According to the time limit on certain defenses provision in health insurance policies, when can an insurer contest fraudulent misstatements on a health insurance application?

Any time while the policy is in force

All of the following qualify for Medicare Part A EXCEPT

Anyone who is willing to pay a premium.

An insurer that holds a Certificate of Authority in the state in which it transacts business is considered a/an:

Authorized Insurer

If an insurer holds a Certificate of Authority, it is known as what type of insurer?

Authorized or admitted

If an insurer meets the states financial requirements and is approved to transact business in the state, it is considered what type of insurer?

Authorized or admitted

What are usual/reasonable and customary charges based on?

Average charge for a given procedure in the specific geographic area

An individual's tendency to be dishonest would be indicative of a

Moral hazard

In which of the following scenarios will repayment of funds take place per the Medicaid estate recovery act

Before her death, a 23 year old was living in a long term nursing facility paid for with Medicaid funds

An insurance contract must contain all of the following to be considered legally binding EXCEPT:

Beneficiary's consent

To be eligible for tax credits under the ACA individuals must have income that is what percent of the federal poverty level

Between 100% and 400%

What type of licensee represents the insured?

Broker

Which of the following options best depicts how the eligibility of members for group health insurance is determined

By conditions of employment

How is Part B Medicare funded?

By monthly premiums and from the general revenues of the federal government

If the Commissioner/Superintendent finds a licensee engaging in an unfair method of competition or an unfair practice, what order will be issued?

Cease and desist order

How will changing one's occupation to be more hazardous affect the health insurance policy in force?

Claim benefits will be reduced to what the premium would have bought for a more hazardous occupation

A producer who fails to segregate premium monies from his own personal funds is guilty of:

Commingling

What are producers required to do in order to renew their license

Complete continuing education hours and pay a renewal fee

What type of health insurance plans cover all accidents and sicknesses that are not specially excluded in the policy

Comprehensive plans

What health policy provision allows the insurer to nonrenew health coverage if certain events occur

Conditionally renewable

A policy which covers medical costs related to a specific condition is called a

Dread Disease Policy

An insured has medical insurance coverage through 2 different providers, both covering the same expenses on an expense-incurred basis. Neither company knows in advance that the insured has coverage through any other insurers. The insured submits a claim to both insurers. How should the claim be handled

Each insured should pay a proportionate share of the claim

What benefits are provided by Medicare Part C?

Expanded benefits for a fee through private insurance programs such as HMO's or PPO's.

Which of the following acts provides an employee with 12 workweeks of leave to care for a son or daughter born to that employee

FMLA

How many pints of blood will be paid for by Medicare Supplement core benefits?

First 3 pints

For what reason can a temporary license be issued?

For continuation of business in case the licensed producer dies or becomes disabled

In disability income insurance the own occupation definition of disability applies

For the first two years of disability

How many parts does Medicare have?

Four: Parts A-D

An insurance company assures it's new policyholders that their premium costs will not increase for a period of at least five years. However due to increasing financial strain they plan to raise premium costs for all insureds by 10% over the next two years. Which term best describes this act

Fraud

What health policy provisions allows the insured a period of time to examine the policy and determine whether or not to keep it?

Free-look period

When are newborns covered in individual health insurance policies?

From the moment of birth

In new from the superintendent is appointed by and stays in office for a term as long as the

Governor is in office

What are two types of Flexible Spending Accounts

Health care accounts and dependent care accounts

Units with the same or similar exposure to loss are referred to as:

Homogenous

What are the three types of basic medical expense insurance?

Hospital, surgical and medical

What types of injuries and services will be excluded from major medical coverage?

Injuries caused by war, intentionally self-inflicted injuries, injuries covered by workers compensation, regular dental/vision/hearing care, custodial care, and elective cosmetic surgery

Medicare Part A will pay for what type of services?

Inpatient hospital care, skilled nursing facility care, home health care and hospice care

In general who can be excluded from producer licensing and examination requirements

Insurance company officers, directors, or any other employees who do not transact insurance and who do not receive commissions for their services (usually, their responsibilities include administrative, executive or clerical)

Which of the following entities protects policy owners, insureds, and bénéficiaires under insurance contracts when insurers fail to perform contractual obligations due to financial impairment

Insurance guaranty association

Which of the following entities has the authority to make changes to an insurance policy

Insurer's executive officer

Which of the following is correct about a group health insurance policy issued in New York

It cannot exclude newborn children from coverage

Which of the following is NOT true regarding a Certificate of Authority?

It is issued to group insurance participants

Which type of care if not covered by Medicare

Long term care

What is another name for the Medicare Supplement plans?

Medigap

Oh it's advertisement a company claims that it has funds in its possession that are in fact not available for the payment of losses or claims. What is the company guilty of

Misrepresentation

NAIC

National Association of Insurance Commissioners, an organization composed of insurance commissioners from all 50 states, the District of Columbia and the 4 U.S territories, formed to resolve insurance regulatory issues.

Can Alzheimer's disease be excluded from coverage under a long-term care policy?

No, organic cognitive disorders must be covered

What health policy provision defines the insured duty's to provide the insurer with reasonable notice in the event of a loss?

Notice of claim

Who may share in the commission from the sale of a life insurance policy?

Only producers properly licensed for the type of insurance transaction

What health policy renewability provision allows the insurer to terminate coverage for any reason and to increase the premiums for any class of insureds?

Optionally renewable

What Medicare part helps pay for inpatient hospital care, inpatient care in a skilled nursing facility, home health care and hospice care?

Part A

What part of Medicare is known as hospital insurance?

Part A

What Medicare part will cover lab services or diagnostic tests?

Part B

What part of Medicare is known as medical insurance?

Part B

Who is eligible for Part B Medicare?

Part B is optional, and is offered to everyone who enrolls in Part A

What is another name for Medicare Advantage plans?

Part C

What Medicare part provides a prescription drugs benefit?

Part D

What health policy provision states to whom the claim benefits must be paid?

Payment of Claims

Who qualifies for Medicare coverage

People age 65 or older, or anyone who has been entitled to Social Security disability income benefits for 2 years, or who has chronic kidney disease

What renewability provision will most likely appear on a travel accident policy?

Period of time

For the protection of public interest the superintendent may examine the books and records of any of the following except

Policy owners

In what type of health plans are providers paid for services in advance, regardless of the services provided?

Prepaid plans

Who issues Medigap policies?

Private insurers

Who can usually be granted a temporary license?

Producer's spouse or designee in case the licensed producer dies or becomes disabled

An agent offers a client free tickets to a sporting event in exchange for the purchase of an insurance policy. What is the agent guilty of

Rebating

Which of the following insurance options would be considered a risk-sharing arrangement?

Reciprocal

How can an HMO member see a specialist?

Referral by the primary care physician

What are medical expense benefits considered

Reimbursement benefits

What health policy provision describes the insured right to cancel coverage?

Renewability provision

What does the free-look period allow insured to do?

Return the policy for a full refund of premium within a specified time period (usually 10 days)

Which of the following is an example of a peril covered in an accident and health insurance policy

Sickness

Which of the following is monitored by ERISA

Stock profit-sharing plans

In major medical insurance policies when the insureds share of coinsurance reached a certain amount the insured is no longer obligated to pay it. This feature is known as

Stop-loss

Who must be notified of a producers change of address?

The Department of Insurance (Commissioner/Director/Superintendent)

Your client had a social insurance supplement rider on his disability policy. After he becomes disabled he receives payments from the company. Shortly thereafter he also begins receiving social security benefit payements. Which of the following will happen

The SIS payment will be reduced dollar-for-dollar by the Social Security benefit payment

Which of the following does not have to be disclosed on a long term care policy

The aggregate amount of premiums due

The insured on a health policy misstated his age on the insurance application. If the misrepresentation is discovered, what will happen to the policy?

The benefit amount payable under the policy will be adjusted to the insured's correct age.

If an individual is covered by Medicare, and is also covered by his employer's health plan, which plan would be considered primary?

The employer plan

In a disability policy the elimination (or waiting) period refers to the period between

The first day of disability and the day the insured starts receiving benefits

Who chooses a primary care physician in an HMO plan?

The individual member

Who decides what optional provisions would be included in a health policy?

The insurance company

Which of the following is not a feature of a noncancellable policy

The insurer may terminate the contract only at renewal for certain conditions.

Who is responsible for the costs associated with the examination of insurers?

The insurer who is being examined

What will determine the length of the grace period in a health insurance policy?

The mode of the premium payment

If a health insurance policy has a 31-day grace period, what does that mean?

The policy remains in effect for 31 days after the premium is due and not paid

What will happen to a health insurance policy if the premium has not been paid by the end of the grace period?

The policy will be cancelled

An individual applies for a life policy. Two years ago he suffered a head injury from an accident, so he cannot remember parts of his past, but is otherwise competent. He has also been hospitalized for drug use, but does not remember this when applying for insurance. The insurer issues the policy and learns of his history one year later. What will probably happen?

The policy will not be affected

Deductible

The portion of the loss that is to be paid by the insured before any claim benefits may be paid by the insurer.

How does a member of an HMO see a specialist?

The primary care physician refers the member

The amount of social security disability benefits is based upon the workers PIA which is calculated from their average indexed monthly earnings over which years? Which years of income may be deleted from calculation?

Their highest 35/lowest 5

What is another name for an administrative-services only arrangement

Third-party administrator An Administrative-Services Only is an arrangement whereby an insurer agrees to provide certain services to a self-insured entity, such as providing printed claim forms, and the processing and auditing of claims. The insurer does not provide any insurance protection under an ASO arrangement.

To whom may a certificate of authority be issued?

To an insurer authorized to transact business in this state

What is the role of the gatekeeper in an HMO plan?

To control costs for the services of specialists

What is the purpose of managed care health insurance plans?

To control health insurance claims expenses

What is the purpose of Medicare Supplement plans?

To fill the gaps in Medicare coverage

Why do HMOs encourage members to get regular checkups?

To help catch health problems early when treatment has the greatest chance for success (i.e. preventive care)

What is the purpose of a cease and desist order

To prevent a producer or insurer from further violating laws for transacting insurance

What is the purpose of the coinsurance provision in health insurance policies

To prevent overutilization of the policy benefits

What is the purpose of respite care in long-term care insurers?

To provide relief for a major caregiver

When an insurer issued an individual health insurance policy that is guaranteed renewable the insurer agrees

To renew the policy until the insured has reached age 65

Which of the following is a type of covered employment under the New York State disability benefit law

Trade organization employment

When an individual purchases insurance what risk management technique is he or she practicing?

Transfer

When an individual purchases insurance, what risk management technique is he or she practicing?

Transfer

Insolvent

Unable to meet financial obligations

What is a fee-for-service health plan?

Under a fee-for-service plan, providers receive payments for each service provided

A medical expense policy that establishes the amount of benefit paid based upon the prevailing charges which fall within the standard range of fees normally charged for a specific procedure by a doctor of similar training and experience in that geographic area is known as

Usual, customary and reasonable

When is the initial enrollment period for Medicare Part A?

When an individual first becomes eligible for Medicare, starting 3 months before turning age 65 and ending 3 months after the 65th birthday

According to the proof of loss provision which of the following must be specified in a contract that provides disability benefits

When and how an insured may prove a loss

When can the Commissioner or Director examine insurers?

Whenever deemed necessary, but at least once every few years (please check your state regulations for specific time requirement)

Riders

added to the basic insurance policy to add, modify or delete policy provisions

What type of license represents the insurance company

agent

What is the name of the act by the insured to voluntarily give up insurance?

cancellation

What provision provides for the sharing of expenses between the insured and the insurance company?

coinsurance

Pre-existing conditions

conditions for which the insured has received diagnosis, advice, care, or treatment during a specific time period prior to the application for health coverage

On a major medical insurance policy the amount that an insured must pay on a claim before the insurer will pay is known as

deductible

If a producer makes maliciously critical statements about another insurer, what is this illegal practice called?

defamation

Two individuals who are in the same risk and age class are charged different rates for their insurance policies due to an insignificant factor. What is this called?

discrimination

An insured with Medicare Part D has reached the initial benefit limit and must now pay a portion of prescription drug costs. What is the term for this gap in coverage?

donut hole

Which of the following factors about the insured determines the amount of disability benefit that the insured will receive

income

Who pays the expense for an autopsy under the physical examination and autopsy provision?

insurer

What health policy provision prevents the insured from bringing a lawsuit against the insurance company for at least 60 days after proof of loss is provided

legal actions

Under workers compensation, which of the following benefits are NOT included?

legal benefits

Under an individual disability income policy, the benefits must be paid on at least what schedule?

monthly

What is the main principle of an HMO plan?

preventive care

Which of the following is an entity that can be hired by an employer to handle all its employee management tasks

professional employer organization

Dependent

someone relying on the insured for support

Workers compensation benefits are regulated by which entity

state government

A person steps off a street car and trips and breaks his ankle. This type of injury can be described as

sudden, unforeseen

What type of misrepresentation persuades an insured, to his or her detriment, to cancel, lapse, or switch policies from one to another?

twisting