stimulate exam 2

An employee insured under a group health plan has been paying $25 monthly premium for his group health coverage. The employer has been contributing $75, for the total monthly cost of $100. If the employee leaves the company, what would be his maximum monthly premium for COBRA coverage?

$102

An insured's long-term care policy is scheduled to pay a fixed amount of coverage of $120 per day. The long-term care facility only charged $100 per day. How much will the insurance company pay? 1. 20% of the total cost 2. $120 a day 3. $100 a day 4. 80% of the total cost

$120 a day

Bill's license was revoked 2 years ago. How much longer will he have to wait in order to request his license to be reinstated?

3 years

What is the maximum age for qualifying for a catastrophic plan?

30

How long is the free-look period with a Medicare supplement policy?

30 days

How is the Insurance Guaranty Association funded?

By its members - authorized insurers

What is the contract provision that allows the insurer to nonrenew health coverage if certain events occur?

Conditionally renewable

What is the main difference between coinsurance and copayments?

Copayment is a set dollar amount

When twin brothers applied for life insurance from Company A, the company found that while neither of them smoked and both had a very similar lifestyle, one of the twins was in a much stronger financial position than the other. Because of this, the company charged him a higher rate for his insurance. This practice is considered

Discrimination

All of the following would be covered under the Temporary Disability Law EXCEPT 1. Fred suffered a compound fracture of his arm because of a forklift accident at work. 2. Bob had to have his leg amputated after suffering from a snake bite while vacationing in a national forest. 3. George suffered a concussion after falling off of his roof while doing maintenance work on his house. 4. All of the above would be covered.

Fred suffered a compound fracture of his arm because of a forklift accident at work

The Medical Information Bureau (MIB) was created to protect

Insurance companies from adverse selection by high risk persons

An insurer goes bankrupt and is unable to pay on any of its insureds' claims. Which of the following will happen?

The claims will be paid by the state Life and Health Guaranty Association

What program was established by New Jersey to guarantee access to health coverage for individuals and small employers, regardless of health status, age, claims history, or other risk factors?

The individual health care coverage program

In which of the following situations would Social Security Disability benefits NOT cease? 1. The individual reaches age 65 2. The individual dies 3. The individual has undergone therapy and is no longer disabled 4. The individual's son gets a part-time job to help support the family

The individual's son gets a part-time job to help support the family

Which of the following statements is true regarding coinsurance?

The larger the percentage that is paid by the insured, the lower the required premium will be

According to the rights of renewability rider for cancellable policies, all of the following are correct about the cancellation of an individual insurance policy EXCEPT 1. Claims incurred before cancellation must be honored. 2. An insurance company may cancel the policy at any time. 3. Unearned premiums are retained by the insurance company. 4. The insurer must provide the insured a written notice of the cancellation.

Unearned premiums are retained by the insurance company

Who can provide skilled nursing care?

a doctor

Which of the following is the legal name of a corporation or partnership under which a licensee conducts insurance business?

business name

Which of the following establishes minimum standards for any policy that will be marketed as a Medicare supplement policy?

commissioner

A health insurance policy that pays a lump sum if the insured suffers a heart attack or stroke is known as

critical illness

Which of the following is considered a qualifying event under COBRA?

divorce

Items stipulated in the contract that the insurer will not provide coverage for are found in the

exclusions

When an insurance agency published an advertising brochure, it emphasized the company's financial stability and sound business practices. In reality, its financial health is terrible, and the company will soon have to file for bankruptcy. Which of the following terms best describes the advertisement?

false financial statement

In insurance terms, if a person has a chromosomal defect that may predispose him/her to a disease, this is called

genetic characteristic

Who makes up the Medical Information Bureau?

insurers

Under the Accidental Death and Dismemberment (AD&D) coverage, what type of benefit will be paid to the beneficiary in the event of the insured's accidental death?

principal lump sum

An insured has endured multiple surgeries and hospitalizations for an illness during the summer months. Her insurer no longer bills her for medical expenses. What term best describes the condition she has met?

stop-loss limit

Whose responsibility is it to determine if all of the questions on an application have been answered?

the agent

The insuring clause of a disability policy usually states all of the following EXCEPT 1. The types of losses covered. 2. The method of premium payment. 3. The identities of the insurance company and the insured. 4. That insurance against loss is provided.

the method of premium payment

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, reasonable

A producer was found guilty of a 3rd violation of the Insurance Code. What would be the monetary penalty he will have to pay?

$10,000

What is the maximum allowed value of a gift that an agent can give to an insured without violating the regulation on rebating?

$100

The maximum the Insurance Guaranty Association will pay to an individual for life insurance death benefits is

$500,000

In order to become a producer in New Jersey, after submitting a licensing application, candidates must pass a licensing examination within

1 year

An insured pays a monthly premium of $100 for her health insurance. What would be the duration of the grace period under her policy?

10 days

What is the period of coverage for events such as death or divorce under COBRA?

36 months

A Medicare supplement policy cannot deny or limit coverage for a claim for losses incurred more than how many months from the effective date of coverage?

6 months

Medicare supplement policies cannot establish a new deductible or waiting period for the recurrence of a condition for which treatment was given within

6 months

Benefit periods for individual short-term disability policies will usually continue from

6 months to 2 years

An insured is visited by a physical therapist and an occupational therapist, in a joint effort at his home. How many of these team visits may the insured have in a year?

60

According to the PPACA rules, what percentage of health care costs will be covered under a bronze plan?

60%

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? 1. The employee can convert from group to individual insurance within 31 days of termination. 2. The premium of the individual health insurance policy can be higher than the original policy. 3. By law, the new, individual policy must provide the same benefits as the group insurance policy 4. Continuation of group coverage need not include dental, vision, or prescription drug benefits.

By law, the new, individual policy must provide the same benefits as the group insurance policy

Because of the history of cancer in her family, Julie purchased a policy that specifically covers the expense of treating cancer. Her policy would be classified as what type of policy? 1. Family History Cancer Policy 2. Specified Health Policy 3. Term Health Policy 4. Dread Disease Policy

Dread Disease policy

An insured becomes disabled at age 22 and can no longer work. She meets the definition of total disability under Social Security. What other requirement must the insured have met to receive Social Security disability benefits?

Have accumulated 6 work credits in the past 3years

To become licensed as a nonresident producer in this state, a producer must do which of the following? 1. Spend at least 25% of his or her working hours in New Jersey. 2. Hold a resident license in good standing in the producer's home state. 3. Have been licensed as a producer for at least 3 years before applying in New Jersey. 4. Be a member of the New Jersey Insurance Guaranty Association.

Hold a resident license in good standing in the producer's home state

What significance did U.S. vs. South-Eastern Underwriters have on the insurance industry?

It reversed the decision of Paul vs. Virginia, determining that insurance is interstate commerce and should be regulated federally

What significance did Paul vs. Virginia have on the insurance industry?

It was decided that insurance was not interstate commerce and could not be regulated by the federal government

In a group health policy, a probationary period is intended for people who

Join the group after the effective date

Through which branch(es) of the government is insurance currently regulated?

Legislative, Judicial, Executive (all of them)

Which of the following is NOT considered a misrepresentation as it pertains to unfair trade practices? 1. Exaggerating the benefits provided in the policy 2. Stating that the competitors will arbitrarily increase their premiums each year 3. Making comparisons between different policies 4. Stating that the insurance policy is a share of stock

Making comparisons between different policies

A woman's health insurance policy dictates which doctors she is allowed to see. Her health providers share an assumed risk for their patients and encourage preventive care. What best describes the health system that the woman is using? 1. Managed care 2. Comprehensive health 3. Major medical 4. Group health

Managed care

What is a definition of a unilateral contract?

One-sided: only one party makes an enforceable promise

Which of the below statements is FALSE regarding the process of completing and signing an application? 1. Only the insured is required to sign the application. 2. If the applicant and insured are two different people, both need to sign the application. 3. If a policy is issued, the application becomes a part of the contract. 4. The application itself is completed by an agent and medical examiner (if required).

Only the insured is required to sign the application

The Paul vs. Virginia case was decided in 1869. To what extent does the Supreme Court's decision still apply to insurance today?

The decision has changed. Insurance is considered to be interstate commerce, and is subject to regulation by the federal government

Long-term care insurance policies must cover which of the following? 1. Alzheimer's disease 2. All mental disorders 3. Treatment of alcoholism 4. Injuries caused by an act of war

alzheimer's disease

If an insurance company makes a statement that its policies are guaranteed by the existence of the Insurance Guaranty Association, that would be considered

an unfair trade practice

An insurer cancelled a contract with a producer on April 1st. By what date must the insurer notify the Commissioner of this action?

april 15th

In a replacement situation, all of the following must be considered EXCEPT 1. Assets. 2. Benefits. 3. Limitations. 4. Exclusions.

assets

Which of the following is INCORRECT concerning Medicaid? 1. It pays for hospital care, outpatient care, and laboratory and X-ray services. 2. The federal government provides about 56 cents for every Medicaid dollar spent. 3. It is solely a federally administered program. 4. It provides medical assistance to low-income people who cannot otherwise provide for themselves.

it is solely a federally administered program

An insured is covered under a Medicare policy that provides a list of network healthcare providers that the insured must use to receive coverage. In exchange for this limitation, the insured is offered a lower premium. Which type of Medicare policy does the insured own?

medicare SELECT

Insurance is regulated

mostly on a state level

An applicant for a health insurance policy returns a completed application to her agent, along with a check for the first premium. She receives a conditional receipt two weeks later. Which of the following has the insurer done by this point?

neither approved the application nor issued the policy

Which renewability provision allows an insurer to terminate a policy for any reason, and to increase the premiums for any class of insureds?

optionally renewable

An insured pays her Major Medical Insurance premium annually on March 1. Last March she forgot to mail her premium to the company. On March 19, she had an accident and broke her leg. The insurance company would

pay the claim

Which renewability provision are you most likely to see on a travel accident policy?

period of time

Who might receive dividends from a mutual insurer? 1. Stockholders 2. Agents 3. Policyholders 4. Subscribers

policyholders

It would be considered unfair discrimination to ask an insurance applicant about which of the following and then use that information as a rating factor to determine insurability?

sexual orientation

Which of the following would be a qualifying event as it relates to COBRA? 1. Termination of employment due to downsizing 2. Termination of employment for stealing 3. Eligibility for coverage under another group plan 4. Eligibility for Medicare

termination of employment due to downsizing

An agent makes a mistake on the application and then corrects his mistake by physically entering the necessary information. Who must then initial that change?

the applicant

An insured who has an Accidental Death and Dismemberment policy loses her left arm in an accident. What type of benefit will she most likely receive from this policy?

the capital amount in a lump sum

If a business wants to buy a disability income policy on a key employee, which of the following is considered the beneficiary?

the employer

Who does an insurance agent represent?

the insurer

A person is covered under the Temporary Disability Law for a given illness. The illness subsides but then relapses. What is the maximum number of days that can pass between the bouts of illness before the two illnesses are classified as having two different disability periods?

14 days

Under the New Jersey Temporary Disability Law, a "covered individual" is any person who is employed by a covered employer, or who has been out of work for less than

2 weeks

Which of the following individuals would most likely be issued a nonresident producer's license? 1. A Massachusetts resident who sells insurance full-time in Boston but wants to expand his customer base by becoming licensed in New Jersey. 2. A Pennsylvania resident who has an expired producer's license in Pennsylvania. 3. A New Jersey resident who will soon be moving to Washington and applies to the New Jersey Insurance Department for a nonresident license for Washington so she can sell insurance upon her arrival. 4. An individual who has only lived in New Jersey for 3 months applies to the Insurance Department for a nonresident license in New Jersey. He will receive his resident license after living in New Jersey for 1 year.

A Massachusetts resident who sells insurance full-time in Boston but wants to expand his customer base by becoming licensed in New Jersey

Presenting any written or oral statement in support of or in opposition to a claim payment, while knowing that the statement contains false or misleading information material to the claim, would be best considered 1. Grounds for license revocation. 2. A violation of the "Unsatisfied Claim and Judgment Fund Law." 3. A violation of the New Jersey Insurance Fraud Prevention Act. 4. A permissible act.

A violation of the New Jersey Insurance Fraud Prevention Act

Which of the following was created to protect policyowners, insureds, and beneficiaries under insurance contracts when insurers fail to perform contractual obligations due to financial impairment? 1. New Jersey Consumer Protection Organization 2. New Jersey Life and Health Guaranty Association 3. New Jersey Insurance Consumer Protectorate 4. New Jersey Insurance Solvency Association

New Jersey Life and Health Guaranty Association

Which renewal option does NOT guarantee renewal and allows the insurance company to refuse renewal of a policy at any premium due date?

Optionally renewable

An insured purchased a noncancellable health insurance policy 1 year ago. Which of the following circumstances would NOT be a reason for the insurance company to cancel the policy? 1. The insured is in an accident and incurs a large claim. 2. The insured does not pay the premium. 3. The insured reaches the maximum age limit specified in the policy. 4. Within two years of the application, the insurer discovers a misrepresentation.

The insured is in an accident and incurs a large claim

Which of the following is NOT a feature of a noncancellable policy? 1. The insurer may terminate the contract only at renewal for certain conditions .2. The premiums cannot be increased beyond the amount stated in the policy. 3. The guarantee to renew coverage usually applies until the insured reaches certain age. 4. The insured has the right to renew the policy for the life of the contract.

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

Which of the following is NOT true regarding partial disability? 1. The insured can still report to work and receive benefits. 2. Benefit payments are typically 50% of the total disability benefit. 3. An insured would qualify if he couldn't perform some of his normal job duties. 4. This is a form of insurance that covers part-time workers.

This is a form of insurance that covers part-time workers

Rob is being treated by a physical therapist in his apartment for a disorder which, if he were not treated there, would have to be treated on an inpatient basis in the hospital. What kind of care is this?

home health care

A Health insurance policy lapses but is reinstated within an acceptable timeframe. How soon from the reinstatement date will coverage for accidents become effective?

immediately

In the event of loss, after a notice of claim is submitted to the insurer, who is responsible for providing claims forms and to which party?

insurer to the insured

Which of the following is true regarding a term health policy? 1. It is conditionally renewable. 2. It is guaranteed renewable. 3. It is noncancellable. 4. It is nonrenewable.

it is nonrenewable

An employee is injured in a construction accident, rendering him unable to work for a year. Which of the following plans would provide him with medical expense coverage and income assistance? 1. Long-term Care 2. Social Security Disability 3. Workers Compensation 4. Major Medical Insurance

workers compensation

Which of the following provisions allows an insured to sue an insurance company for nonpayment of claim?

legal action

An agent is in the process of replacing the insured's current health insurance policy with a new one. Which of the following would be a proper action? 1. Policies must overlap to cover pre-existing conditions. 2. The old policy must be cancelled before the new one can be issued. 3. The old policy should stay in force until the new policy is issued. 4. There should be at least a 10-day gap between the policies.

the old policy should stay in force until the new policy is issued