Review questions

The relation of earnings to insurance provision allows the insurance company to limit the insurance benefits to his or her average income over the last A. Six months B.12 months C.18 months D. 24 months

24 months

A business wants to make sure that if a key employee becomes disabled, the business will be protected from any resulting loss. Which kind of insurance will protect the business? A. Business disability B. Individual disability C. Management loss D. Business loss

A

All of the following identify purposes of the insurance information and privacy act except A. To establish fair and marketable advertisement procedures B. Do establish standards for collections, use and disclosure of information C. To minimize intrusiveness of insurance collection practices D. Tell him at the disclosure of information collected in connection With insurance

A

And insured purchased a non-cancelable health insurance policy one year ago. Which of the following circumstances would not be a reason for the insurance company to cancel the policy? A. The insured is in an accident and incurs a large claim B. The insured does not pay the premium C. The insured reaches the maximum age limit specified in the policy D. Within two years of the application the insurer discovers a misrepresentation

A

Social Security supplement or Social Security writers would provide for the payment of income benefits in each situation below except A. When the amount payable under Social Security is more than the amount payable under the rider B. When used to replace or supplement benefits payable under other social insurance programs C. When the insured is eligible for Social Security benefits but before the benefits begin D. If the insured has been denied coverage under Social Security

A

The patient protection and affordable care act includes all of the following provisions except A. Individual tax deduction for premiums paid B. The right to appeal C. No lifetime dollar limits D. Cover for preventive benefits

A

The patient protection and affordable care act includes all of the following provisions except A. Individual tax deductions for premiums paid B. Right to appeal C. No lifetime dollar limits D. Coverage for preventive benefits

A

What is the initial period of time specified in a disability income policy that must pass, after the policy is in force, before the loss can be covered? A. Probationary period B. Contestable period C. Elimination period D. Grace period

A

When Linda suffered a broken hip, she notified her agent, in writing, within 12 days of the loss. However, her agent did not notify the insurance company until 60 days after the loss. Which of the following statements correctly explains how this claim would be handled? A. The insurer is considered to be notified since the notification to agent equals notification to the insurer B. The insurer may delay the payment of this claim for up to six months C. The insurer may settle this claim for less than it otherwise would have had the notification been provided in a timely manner D. The insurer may deny the claim since it was not notified within The required 20 day timeframe

A

Which of the following would not be considered unfair discrimination by insurers? A.Discriminating in benefits and coverages based on the insured's habits and lifestyles B.Charging applicants with similar health history is different premiums based on their ethnicity C. Canceling individual coverage based on the insured's marital status D. Assigning different risk classifications to applicants based on gender identity

A

Which benefit is based on a persons primary insurance amount (pia) A. Social Security disability benefit B. Death benefit in a universal life policy C. Accidental death benefit D. Long term care benefit

A The amount of Social Security disability benefit will be based on the persons primary insurance amount. The PIA is based on the persons average indexed earnings on which Social Security taxes have been paid

Which of the following would best describe total disability? a) A person's total loss of income. b) A person's inability to qualify for insurance coverage. c) A person's ability to work is significantly reduced or eliminated for the rest of his/her life. d) A person's inability to perform one of the regular duties of his/her occupation.

A person's ability to work is significantly reduced or eliminated for the rest of his/her life.

A man works for company and his wife works for company B. The spouses are covered by health plans through their respective companies that also cover the other spouse. If the husband files a claim, A.Both plans will pay the full amount of the claim B.The insurance through his company is primary C.The insurance through his wife company is primary D. The insurance plans will split the coverage evenly

B

A private investigator has been hired by an insurance company to obtain a character record on an insurance applicant. The investigator contact the applicant and request an interview stating that he is conducting research for a publication. The applicant permits the interview and unknowingly gives information that will be used in the underwriting decision. Which of the following does this scenario describe A. Misrepresentation B. Pretext interview C. Investigative consumer report D. Insurance information investigation

B

A waiver of premium provision may be included with which kind of health insurance policy? A. Dread disease B. Disability income C. Basic medical D. Hospital indemnity

B

According to the Future increase option rider (fio), which of the following is not a qualifying event to increase the insurance benefit level? A. Marriage B. Birth of a child C. Death of a spouse D. Age 40

B

All of the following are true about group disability income insurance except A. The longer the waiting period, the Lower The premium B. Coverage applies both on and off the job C.Benefits are usually short term D.The waiting period starts at the onset of injury or sickness

B

And insured is covered by a disability income policy that contains an accidental means clause. The insured exits a bus by jumping down the steps and breaks and ankle. What coverage will apply? A. coverage will apply, but Will be reduced by 50% B. No coverage will apply, since The injury could have been foreseen C. No coverage will apply, since disability income policies cover sickness only D. Coverage will apply since the break was accidental

B

In order to get a nonresident license in North Carolina an agent must A. Surrender their license to the state Of residence B. Submit the request for licensure in the form prescribed by the commissioner and pay the applicable fees C. Pass the non-resident state exam and satisfy continuing education requirements D. Represent an agency located In the state

B

In which of the following situations would Social Security disability is not cease? A. And individual has undergone therapy and is no longer disabled B. The individual son gets a part-time job to help support the family C. The individual reaches age 65 D. The individual dies

B

The provision which prevents the insured from bringing any legal action against the company for at least 60 days after proof of loss is known as A. Proof of loss B.Legal actions C.Time limit on certain defenses D. Payment of claims

B

What is a license suspension period for a second offense of violating state rules regarding records and reports A. Up to six months B.Up to a year C. Up to three years D. Permanently

B

What is the initial period of time specified in a disability income policy that must pass, after the policy is in force, before a loss can be covered A. Grace period B. Probationary period C. Contestable period D. Elimination period

B

Which Premium statement accurately describes group disability income insurance? A. Short term plans provide benefits for up to a year B. The extent of benefits is determined by the insured's income C. In long-term plans, monthly benefits are limited to 75% of the insured's income D. There are no participation requirements for employees

B

Which of the following is not The consideration in a policy A. The promise to pay covered losses B. The application given to a prospective insured C. Something of value exchange between parties D. The premium amount paid at the time of application

B

Which one of the following is an eligibility requirement for Social Security disability income benefits? A. Currently employed status B. Fully insured C. Experiencing at least one year of disability D. Being at least 50 years of age

B

Which writer, when added to a disability income policy, provides for changes in the benefits payable based on changes in consumer price index A.Guaranteed insurability rider B. Cost of living adjustment rider C.Waiver of premium rider D. Social Security rider

B

Who's responsibility is it to determine all of the questions on an application have been answered? A. Beneficiary B. The agent C. The insurer D. The applicant

B

The client has a new individual disability income policy with a 20 day probationary period and a 30 day elimination period. 10 days later, the client breaks their leg and is off work for 45 days. How many days of disability benefits will the policy pay? A.10 days B. 15 days C. 25 days D. 45 days

B A probationary period refers to the amount of time that coverage is not available for illness related disabilities, so it would not apply to a broken leg. The elimination period, however, is the time that must elapse between the onset of the disability and when the benefits will start being paid. In this case, the individuals considered disabled for 45 days, and the benefits will start to be paid up to 30 days. So, the client will receive benefits for 15 days.

After a person's employment is terminated, it is possible to obtain individual health insurance after losing the group health coverage provided by the employer. Which of the following is NOT true? A. The employee can convert from group to individual insurance within 30 days of termination B. The premium of the individual health insurance policy can be higher than the original policy C. By law, the new, individual policy must provide the same benefits as the group insurance policy D. None of the above. All are true

C

An employer responsible for paying part or all of the premium for a group life or group health plan cannot willfully fail to pay the premium without first giving them players how many days advance notice A. 15 B. 30 C. 45 D. 60

C

And employee becomes insured under a PPO plan provided by his employer. If the insured decides to go to a physician who is not a PPO provider, which of the following will happen? A. The PPO will pay the same benefits as if the insured had seen a PPO position B. The PPO will pay Reduced benefits C. The PPO will not pay any benefits at all D.The insured will be required to pay a higher deductible

C

And employer responsible for paying part or all of the premium for a group life our group health plan cannot willfully fail to pay the premium without first giving the employees how many days advance notice? A. 15 B. 30 C. 45 D. 60

C

Guaranteed renewable health insurance policy allows the A. Policy to be renewed at the time of expiration, but the policy can be canceled for cars during the policy term B. Insurer to renew the policy to a specified age C. Policyholder to renew the policy to her stated age, with the company having the right to increase premiums on the entire class. D. Policyholder to renew the policy to a stated age and guarantees the premium for the same period

C

If the commissioner denies an initial application for an agent, how long does the application have to request a review after receiving notification of denial? A.10 days B.20 days C.30 days D.45 days

C

In disability income insurance, the time between the onset of an injury or sickness and when benefits begin as known as the A.Enrollment period B.Probationary period C.elimination period D.Qualification period

C

In respect to the consideration clause, which of the following is consideration on the part of the issuer? A. Offering an unconditional contract B. Explaining policy revisions to the applicant C. Promising to pay in accordance with the contract terms D. Offering a secondary policy to the applicant

C

In the event of a loss, business overhead insurance will pay for A. Salary of the business owner B. Medical bills of the Business owner C. Rent D. Lots of profits

C

Insured Z's health insurance policy year begins in January. His policy contains a carryover provision. In November, he has a small claim which is less than his deductible. Which of the following is true? A. The Insured is now eligible for an integrated deductible until the new policy year B. The insured must satisfy this year's deductible, but next year's deductible will begin when or if he makes a claim in the following calendar year C. The insured may carry over the amount of this year's expenses to next year, which will help Satisfy next year's deductible D. The deductible will be waived

C

Which document describes an insured's medical history, including diagnoses and treatments? A. Individual medical summary B. Comprehensive medical History C.Attending physician statement D.Physicians review

C

Which of the following applies to partial disability benefits? A. Payment is based on termination of employment B. Benefits are reduced once an insured is no longer under a doctors care C. Payment is limited to a certain period of time D. An insured is entitled to a principal sum benefit for the partial loss of a limb

C

Which of the following is not a characteristic or a service of an HMO plan A. Encouraging an early treatment B. Providing care on an outpatient basis C. Contracting with insurance companies D. Providing free annual check ups

C

Which of the following would best describe total disability? A.A persons total loss of income B.A persons inability to qualify for insurance coverage C. A persons ability to work is significantly reduced or eliminated for the rest of his or her life D.A persons inability to perform one of the regular duties of his or her occupation

C

Which renewability provision allows an insurer to terminate a policy for any reason, and to increase the premiums for any class of insureds? A. Cancellable B. Guaranteed renewable C. Optionally renewable D. Conditionally renewable

C

Which renewal Option does not guarantee renewal and allows the insurance company to refuse renewal of a policy at any premium due date A. Guaranteed renewable B. Noncancellable C. Optionally renewable D. Conditionally renewable

C

Which statement regarding qualifications for Social Security disability benefits is not true? A. The individual must meet the definition of disability B. The individual must have proper insurance status C.The individual must be at least 65 years old D.The individual must satisfy the waiting period

C

An agent has completed a total of 30 hours of continuing education during a license renewal Period. How many of these hours may the agent apply toward the next CE compliance period? A. None B. No more than three C.Six D. 12

C All agents must complete 24 hours of CE every two years. They may also carry over an unlimited number of hours into the next licensing period. In this case, the agent has satisfied his 24 hour requirement and has completed six extra hours.

Which of the following will vary the links of the grace period in health insurance policies A. The length of time the insured has been insured B. The term of the policy C.The mode of the premium payment D. The length of any elimination period

C The grace period is seven days on a policy within a weekly premium mode; 10 days if a monthly premium mode; and 31 days on other premium modes

The sole proprietor of a business makes the salary of $50,000 a year. This year, his medical expenses have reached a total of $75,000. What amount may the sole proprietor deduct in regards to his medical expenses? A. $10,000 B.$25,000 C.$50,000 D.$75,000

C The proprietors of a business may deduct the cost of a medical expense plan because they are considered to be self-employed individuals instead of employees. The deduction cannot legally exceed the taxpayers earned income for the year even if the cost of the medical expense plan exceeds this amount

Which of the following provisions would prevent an insurance company from paying a reimbursement claim to someone other than the policy owner A. Payment of claims B. Change of beneficiary C. Entire contract clause D. Proof of loss

Change of beneficiary

What is the contract provision that allows the insured to nonrenew health coverage if certain events occur A.Guaranteed renewable B.Conditionally renewable C.Optionally renewable D.Non-cancelable

Conditionally renewable

An applicant for an individual health policy failed to complete the application properly. Before being able to complete the application and pay the initial premium, she is confined to the hospital. This will not be covered by insurance because she has not met the condition specified in the A. Eligibility clause B. Consideration clause C. Insuring clause D. Pre-existing conditions clause

Consideration clause

A Non-contributory group disability income plan has 30 day waiting period and offers benefits of $2000 a month. If an employee is unable to work for seven months due to a covered disability, the employee will receive A. $14,000 none of which is taxable B.$14,000 all of which is taxable C.$12,000 none of which is taxable D.$12,000 all of which is taxable

D

According to the PPACA rules, what percentage of healthcare cost will be covered under a bronze plan? A. 10% B. 30% C. 40% D. 60%

D

All statements of the insured in any application for policy of insurance are deemed A. Either warranties or representations dependent on the context in which they were written B. Contractual considerations and must be unilaterally binding for the insured C. Warranties D. Representations

D

And insured is hospitalized with a back injury. Upon checking his disability income policy, he learns that he will not be eligible for benefits for at least 30 days. Which would indicate that his policy was written with a 30 day A. Black out period B. Probationary period C. Disability period D. Elimination period

D

As it pertains to Group health insurance, cobra stipulates that A. Retiring employees must be allowed to convert their group coverage to individual policies B. Terminated employees must be allowed to convert the group coverage to individual policies C. Group coverage must be extended for terminated employees up to a certain period of time at the employers expect D. Group coverage must be extended for terminated employees up to a certain period of time at the former employees expense

D

Circulating deceptive sales material to the public is what type of unfair trade practice? A. Defamation B. Coercion C. Misrepresentation D. False advertising

D

If an individual is covered by a policy that includes an accidental death and dismemberment rider, what term describes the maximum benefits he will receive if he loses sight in both eyes as a result of a fire? A. Reciprocal amount B. Capital sum C. Percentage of a full amount D. Principal sum

D

In a disability income insurance, the time between the onset of an injury or sickness and when the benefits begin is known as the A. Qualification period B. Enrollment period C. Probationary period D. Elimination period

D

In an optionally renewable policy, the insurer has which of the following options? A.Increase the grace period B.Alter the due date so the policy can be canceled sooner C.Shorten the notice that the insured receives D.Increase premiums

D

In order to get a nonresident license in North Carolina and agent must A. Pass the nonresident state exam and satisfy continuing education requirements B. Represent an agency located in this state C. Surrender their license in the state of residence D. Submit a request for licensure in the form prescribed by the commissioner and pay the applicable fees

D

Insurers may change which of the following in a guaranteed renewable health insurance policy? A. Coverage B. Individual rates C. No changes are permitted D. Rates by class

D

The mode of premium payment A. Is the factor that determines the amount of dividends in the policy B. Is the method used to compute the cash surrender value of the policy C. Does not affect the amount of premium paid D. Is defined as the frequency And the amount of the premium payment

D

The patient protection and affordable care act includes all of the following provisions except A. Right to appeal B.No lifetime Dollar limits C.Coverage for preventative benefits D.Individual tax deductions for premium paid

D

Under the affordable care act, what percentage of preventive care must be covered without cost sharing? A. 25% B. 50% C. 80% D. 100%

D

Under the physical exam an autopsy provision, how many times can an inch or have the insured examined, at its own expense, while a claim is pending? A.None at all B.One examination per week of the claim processing period C. To examinations per week of the claim processing period D. Unlimited

D

What is the initial period of time specified in a disability income policy that must pass, after the policy is in force, before a loss can be covered? A. Contestable period B. Elimination period C. Grace period D. Probationary period

D

What is the maximum period of time during which an insurer may contest fraudulent misstatement made in a health insurance application A. 90 days after the effective policy date B. Six months after the effective policy date C. One year after the effective policy date D. As long as the policy is in force

D

Which of the following is not true regarding partial disability? A. The insured can still report to work and receive benefits B. Benefit payments are typically 50% of the total disability benefit C. And insured would qualify if he couldn't perform some of his normal job duties D. This is a form of insurance that covers part time workers

D

Which of the following provisions specifies the policy owners right to transfer the policies ownership? A. Right to examine B. Consideration C. Modifications D. Assignment

D

With respect to the consideration clause, which of the following would be considered consideration on the part of the applicant for insurance? A. Promise to renew the policy at the end of the policy period B. Providing warrantees on the application C. Notice of policy cancellation D. Payment of premium

D

disability income policy can provide coverage for loss of income when returning to work only part time after recovering from a total disability. What is the benefit that is based on the insured's loss of earnings after recovery from a disability? A. Recurrent disability B. Partial disability C. Income replacement D. Residual disability

D

The purpose of managed care health insurance plans is to A. Provide for the continuation of coverage when an employee leaves the plan B. Give the insured an unlimited choice of providers C. Coordinate benefits D. Control health insurance claims expenses

D Managed care is a system of delivering healthcare and healthcare services, characterized by arrangements with selected providers, programs of ongoing quality control and utilization review and financial incentives for members to use providers and procedures covered by the plan

If an insured changes his payment plan from monthly to annually, what happens to the total premium? A. Decreases B. Stays the same C. Doubles D. Increases

Decreases

A 37-year-old owns a policy with a guaranteed insurability rider. The policy owner would like to increase the benefit amount offered by the policy. What documentation will be required A. No documentation B. Proof of insurability C. Medical records D. Attending physicians report

No documentation

Premium payments for personally owned disability income policies are A. Eligible for tax credits B. Tax deductible C. Tax deductible to the extent that they exceed 10% of the adjusted gross income of those itemizing deductions D. Not tax deductible

Not tax deductible

And insured pays for her major medical insurance premium annually on March 1. Last night she forgot to pay her premium in the company. On March 19, she had an accident and broke her leg. The insurance company would A. Hold the claim as pending until the end of the grace period B. Deny the claim C. Pay half of her claim because the insured had an outstanding premium D. Pay the claim

Pay the claim

All of the following are true regarding rebates except A. Rebates are only allowed if specifically stated in the policy B. Remaining can be anything of economic value, given as an inducement to buy C. Dividends are not considered to be rebates D. Rebates are allowed if it's in the best interest of the client

Rebates Are allowed if it's in the best interest of the client

The Patient Protection and Affordable Care Act includes all of the following provisions EXCEPT a) Individual tax deduction for premiums paid. b) Right to appeal. c) No lifetime dollar limits. d) Coverage for preventive benefits.

a) Individual tax deduction for premiums paid.

A guaranteed renewable health insurance policy allows the a) Policyholder to renew the policy to a stated age, with the company having the right to increase premiums on the entire class. b) Policyholder to renew the policy to a stated age and guarantees the premium for the same period. c) Policy to be renewed at time of expiration, but the policy can be canceled for cause during the policy term. d) Insurer to renew the policy to a specified age.

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

Which one of the following is an eligibility requirement for Social Security disability income benefits? a) Currently employed status b) Fully insured status c) Experiencing at least one year of disability d) Being at least 50 years of age

b) Fully insured status

What is the period of coverage for events such as death or divorce under COBRA? a) 60 days b) 31 days c) 12 months d) 36 months

d) 36 months

The purpose of managed care health insurance plans is to a) Provide for the continuation of coverage when an employee leaves the plan. b) Give the insured an unlimited choice providers. c) Coordinate benefits. d) Control health insurance claims expenses.

d) Control health insurance claims expenses.