NC health insurance final exam practice pt 2

Dana is covered by TD Industries' group long-term disability plan; the company pays 80 percent of the premium, and Dana pays the remainder. Dana becomes disabled and receives $2,000 a month in benefits for three months. How much of Dana's benefits are subject to income tax?

$1,600

An insurer must notify its current customers of its privacy policies or practices at least once every how often?

12 months

Bob had been working at Sunset Airlines for ten years when he was laid off on June 1. How long can Bob continue his health insurance coverage under Sunset's group plan?

18 months

A claimant on a health insurance policy must give written notice of the claim to the insurer within how many days following a loss?

20

How long from contract signing and issue does an insurance company have to discover and void an insurance policy due to fraud?

24 months

If a group health insurance policy terminates, an employee can elect to continue coverage provided he or she has been insured under the plan for how long before it terminates?

3 months

Eric fails to pay the annual premium on his major medical insurance policy. The grace period provision allows him to pay the premium within how many days after the due date?

31

An insurer intends to terminate the group health plan of ABC Company. Generally, how much advance notice is required before the termination?

90 days

Which statement about the coverage of chemical dependency under a group health insurance policy is CORRECT?

A group policyholder must have the option to purchase coverage for chemical dependency treatment.

Which of the following statements are true about group insurance?

A.A master contract is issued. B.Underwriting is on a group, not an individual, basis. D.The cost is lower than it is for individual policies.

Which statements about health insurance plans for business are correct?

A.Business health insurance plans provide a number of benefits for the employers who offer them. C.A benefit of business health insurance is the plan owner's ability to receive favorable tax treatment. D.The tax treatment of business health insurance contracts varies, based on the type of contract.

All of the following statements about the Medicare program are correct

A.For those eligible for Social Security retirement benefits, Part A coverage is free. B.Medicare Part A coverage is free to those under age 65 who are receiving Social Security disability benefits or anyone who has been diagnosed with permanent kidney failure. C.Parts B, C, and D, if elected, require the payment of monthly premiums, which may be deducted automatically from a person's Social Security retirement benefits.

Which statements about Allen's individually owned medical expense insurance are correct?

A.The premiums are not deductible expenses. B.Any benefits Allen's health insurance policy pays are not taxable income to the insured. C.The insurance is intended to cover losses that the insured incurred.

Abbott Inc. and Taylor LLP each applied for the same group PPO plan through National Insurers. Abbott has 500 employees, and Taylor has 75 employees. Which statement is correct?

Abbott's policy will probably cost less per member than Taylor's policy.

Emily solicits policies and accepts premiums from the public but is not licensed as an agent. She then turns over the applications and premiums to her husband, who is licensed. Which statement is correct?

Emily has committed a Class 1 misdemeanor.

Which of the following statements is not true about group insurance?

Exclusions and riders are written for the most at-risk members.

Denny is covered by a PPO. What is the result if he receives non-emergency medical treatment from an out-of-network physician?

He will pay a higher amount for the medical care.

Alicia wants to buy a disability income policy that will provide her with a $1,000 monthly benefit. If she chooses a 30-day elimination period instead of a 90-day elimination period, what impact will this have on the premium?

Her annual premium will be higher.

Mark works at XYZ Industries and is covered by its group HMO plan. He is also covered by his wife's group PPO plan. How will benefits be paid if he incurs $300 in medical expenses?

His employer's plan will pay benefits first.

Which of the following best characterizes how overinsurance affects insurers?

If many insurers are insuring for the same risk, it limits the liability of any one insurer's policy to the proportion of the total benefits it assumes.

Sara just purchased a disability income policy and is reading the fine print. Assuming she meets the policy's definition of disability, in which of the following scenarios will coverage under her policy apply?

In a freak accident, she is struck by lightning and is paralyzed.

If an agent is selling insurance for a company that does not have a certificate of authority to operate in that state, what is the status of the company in that state?

It is a non-admitted company

Zelda, a producer selling health insurance, assures a prospective applicant that the insurance company she represents is backed by the protections of the North Carolina Life and Health Insurance Guaranty Association. Which of the following statements is correct regarding this kind of assurance?

It is prohibited at all times.

Before delivering a health insurance policy to a client, the agent alters the insuring clause in a way that he believes will benefit the insurance company. Which of the following statements is correct regarding this alteration?

It is prohibited by the entire contract provision.

Debbie, Lisa, Greta, and Jessica apply for individual health insurance policies. At the end of the underwriting process, the insurer classified them as follows: Debbie as substandard, Lisa as standard, and Jessica as preferred. Greta's application was declined. Which of the following statements is correct?

Jessica's policy will be issued with the lowest premium rate.

Emil, an agent licensed in North Carolina, moves to a new home on April 30. He is required to notify the North Carolina Department of Insurance by what date?

May 10

Which of the following accurately describes differences between taxqualified and non-taxqualified long-term care insurance plans?

Medical necessity cannot be a benefit trigger under tax-qualified LTC plans.

Selene just turned 65 and is overwhelmed by the Medicare program. She knows that part of her coverage is provided at no charge and that she will pay for other parts. Which of the following coverages will she have to buy through a private insurer?

Medicare Advantage

Abby received $15,000 of benefits this year under her group HMO plan. Which of the following statements is correct?

She is not required to include any part of the benefits in her income.

Becky works as an agent for Delta Insurance Company, which is located in North Carolina. What must Becky do in order to sell life insurance on behalf of Delta to U.S. military personnel who are stationed in Germany?

She must obtain a restricted license.

Which statement about disability reducing term insurance policies is NOT correct?

The benefit payment under such policies increases over the policy's term.

Abby, age 66, just purchased an individual health insurance policy. On what basis can the insurer exclude coverage for diabetes, a condition that Abby was diagnosed with one year ago?

The insurer may limit coverage only if Abby's pre-existing condition was specifically defined in the policy

What is the goal of the relation of earnings to insurance provision?

The relation of earnings to insurance provision avoids overinsurance

Which statement benefit triggers under a taxqualified plan is correct?

They are more stringent than those for a non-tax qualified plan.

In general, long-term care insurance policies issued can limit or exclude coverage with respect to which of the following?

Treatment for conditions covered by Medicaid

A disability income policy's benefit period is the maximum period during which monthly benefits are paid for an insured's ongoing disability. Which of the following statements about benefit periods is NOT correct?

While benefit periods can vary, they cannot last for the duration of the insured's life.

Harvey's health insurance policy covers only treatment for cancer. What type of insurance policy does Harvey have?

a dread disease policy

Which of the following can be used either to limit or expand coverage by adding optional benefits?

a health insurance policy rider

Roy has an insurance policy that pays a fixed sum directly to him for each day he spends in a hospital. What type of insurance policy does Roy have?

a hospital indemnity policy

What are the premiums that Allen pays for his individually owned medical expense insurance?

a personal expense

During the application process, insurance coverage can be provided under a conditional receipt or which of the following?

a temporary insurance receipt

Dr. Sanjay has agreed to become part of the Alliance PPO. When PPO enrollees come to his office for care, Dr. Sanjay must then

accept the PPO's negotiated fee as full payment for services

Bill believes he has a cause of action against his health insurer for its refusal to pay benefits on a claim. He filed written proof of loss on April 1. Not having received a response by May 1, he decides to take legal action. What will his attorney probably do?

advise him to wait

In the case of an insurer that employs agents in the field, which of the following has primary responsibility for delivering a new policy to the policyholder?

agent

Delta Vacation Cruises wants to purchase group health coverage for its passengers. Which type of insurance should Delta purchase?

blanket policy

Dave owns a small business. He wants disability coverage that would pay routine business expenses if a disability should cause him to be unable to work for a while. What kind of insurance does Dave probably want?

business overhead expense insurance

Delta Inc. pays the premiums on a disability buyout policy, a business overhead policy, and a key executive disability policy. For which policies can it take an income tax deduction for the premiums it pays?

business overhead policy

Beatrice is a member of the Supreme Lodge fraternal benefit society. What must Beatrice do before she can sell insurance on its behalf?

comply with the same general licensing requirements that apply to resident agents

What is the term for deliberately withholding material facts when applying for insurance?

concealment

What are the other insurance with this insurer provision and the other insurance with other insurer(s) provision examples of?

coordination of benefits

Comprehensive major medical plans provide a broad range of coverage. They most likely cover all of the following, EXCEPT:

cosmetic surgery, experimental procedures or treatment, and alcohol and drug abuse treatment

Insurers can sell both qualified and non-qualified LTC policies. What can those who buy qualified policies do?

deduct their premium payments from their federal income taxes within certain specified limits

Workers' compensation plans offer all of the following benefits to covered workers EXCEPT

expenses of running a business until a disabled worker can return to work

Which of the following is NOT an unfair claims settlement practice if committed by an insurance company in North Carolina?

failing to promptly settle a claim for which liability is uncertain

If an insurer issues a disability income policy that pays a set monthly benefit of $500, which approach is the insurer using?

flat-rate approach

Betsy's policy states that the insurer can increase premium rates by class of insureds, but it cannot make any other changes to the policy, and the policy can be canceled only if Betsy fails to pay her premiums. What type of policy does Betsy have?

guaranteed renewable

Contributions are tax deductible and accumulate tax free, with taxfree distributions for qualified medical expenses under which of the following?

health savings accounts (HSAs)

Greg's basic hospital plan provides for hospital room and board for a maximum of 30 days with a maximum benefit of $3,000. If Greg also had a supplementary major medical policy, what would that supplementary plan cover?

hospital room and board beginning on the 31st day and costs above $3,000

An insurance company can exclude coverage for a specific medical condition by including which type of rider in a health insurance policy?

impairment

Country Insurers issued a noncancelable individual disability income policy to Paul, a doctor. The amount of benefits that Country Insurers will pay is based on a percentage of Paul's income. In this case, Country Insurers is using which approach to paying benefits?

income-formula approach

To encourage employer-provided health-care coverage, the federal government has enacted laws that provide new and innovative ways to finance the costs of medical care. These methods include all of the following EXCEPT:

individual retirement accounts (IRAs)

Medicare Part A hospital insurance covers, within certain limits, all of the following expenses

inpatient hospital costs, home health-care costs, hospice costs.

Which of the following is not required to be covered under a group health insurance policy issued in North Carolina?

mammograms every year beginning at age 30

What do group short-term disability income plans generally limit coverage to?

non-occupational disabilities

Under which of the following type(s) of plans does cognitive impairment NOT require substantial assistance from another person to qualify as a benefit trigger?

non-tax-qualified LTC plans

Statewide Insurers wants to obtain an investigative consumer report about an applicant because of questions it has regarding the individual's credit history. What must Statewide do before it can obtain a report?

notify the applicant that he has the right to be interviewed in connection with the report

Employer group health plans are prohibited from offering Medicarecovered employees or spouses coverage under a Medicare supplement plan that

pays for services covered by Medicare

Which of the following techniques is not used during the utilization review process?

preventive care review

The amount of benefits that a disabled person can expect to receive from Social Security is based on which of the following?

primary insurance amount at the time the disability occurred

An employee who suffers a short-term job-related injury may look to his or her employer to do which of the following?

provide coverage through workers' compensation insurance

Which of the following must employer group plans offer enrollees in a group plan when they are over age 65?

same coverage that is provided to younger employees

Gracie owns a Medicare Advantage policy and requires emergency care while visiting her daughter, but there are no network providers nearby. What should Gracie do?

see a nonnetwork provider

Jim applied for a health insurance policy. The insurer attached a waiver to the policy that excludes any loss associated with cardiac illness. How has Jim's application been classified?

substandard

All of the following entities mandate the size of a group health insurance plan

the IRS, the group's home state, the insurer underwriting the plan

The 12 mandatory provisions included in all health policies originated with which of the following?

the NAIC Uniform Accident and Sickness Policy Provision Law

Susanna has been diagnosed with cancer. She has health insurance but wonders how much she will have to pay for her care and treatments. What is the maximum amount she would have to pay under the terms of her policy?

the out-of-pocket maximum

Medical expense policies cover a wide range of services and care. The way in which they cover the cost of these services and the way in which covered care services are delivered depends on which of the following?

the plan or policy

Coverage under an insurance policy typically takes effect when

the premium has been collected.

Which of the following represents consideration under the terms of an insurance policy contract?

the premium paid

Which of the following optional provisions applies to policies that provide income payments if the insured becomes disabled?

the relation of earnings to insurance provision

Harold has short-term disability income policy. Were he to become disabled, benefits would typically be payable for no more than

two years

Acme Insurance and Apogee Insurance agree to offer different premium rates for persons of equal risk within a particular class. They also agree to limit benefits paid to insureds within this class if the insureds live in certain counties of North Carolina. What are Acme and Apogee engaging in?

unfair and prohibited business practices

As required by the Patient Protection and Affordable Care Act, essential health benefits (EHBs) are best described as:

various medical services that include pediatric, laboratory, preventive, rehabilitative, and emergency care services that are not subject to benefit limits

Which of the following is not one of the 12 required provisions for health insurance policies set forth by the NAIC?

waiver of premium provision