Question 1

Which of the following laws requires an insurer to notify an applicant in writing that an investigative consumer report may be made on the applicant?  -Uniform Provisions Law.  -Freedom of Information Act.  -Medical Information Bureau Disclosure Act  -Fair Credit Reporting Act (Insurance Information and Privacy Protection Act)

Accepted Answer

Fair Credit Reporting Act (Insurance Information and Privacy Protection Act)

Question 2

Group health insurance specifies that what percentage of eligible individuals MUST be offered coverage under a noncontributory plan?  -25  -50  -75  -100

Accepted Answer

100

Question 3

Under an Accidental Death and Dismemberment (AD&D) policy, insurable interest must exist at which of the following times?  -When a change of beneficiary is requested  -At the inception of the policy  -When a beneficiary other than a relative is named  -At the time a claim is submitted

Accepted Answer

At the inception of the policy

Question 4

When periodic claim payments are required under a long-term disability income policy, an insurer MUST make payments to an insured at least once every:  -month  -three months  -six months  -year

Accepted Answer

month

Question 5

M and N own a small interior design studio that employs six people. The owners are concerned about the financial continuation of the business if either of them should become permanently disabled. In this situation, a producer would MOST likely recommend which of the following types of contracts?  -Basic Hospital  -Disability Buy-Out  -Comprehensive Major Medical  -Short-Term Disability Income

Accepted Answer

Disability Buy-Out

Question 6

Which of the following health policies requires a beneficiary designation?  -Travel Accident  -Medicare Supplement  -Blanket  -Long Term Care

Accepted Answer

Travel Accident

Question 7

Suicide, pre-existing conditions and self-inflicted injuries are dealt with in which of the following policy features?  -Extensions of coverage  -Benefits clause  -Riders  -Exclusions

Accepted Answer

Exclusions

Question 8

An insured whose Disability Income policy contains a Change of Occupation clause takes a new job in a more hazardous occupation and fails to notify the insurer of the change. One year later, the insured becomes disabled. The insurer will most likely take which of the following actions?  -Cancel the policy and refund one year\'s premiums  -Settle the claim according to what the premiums would have purchased under the more hazardous occupation  -Pay the claim in full and then cancel the policy  -Pay the claim after deducting an extra one-year premium payment

Accepted Answer

Settle the claim according to what the premiums would have purchased under the more hazardous occupation

Question 9

Which of the following definitions of disability would cover a permanent partial disability?  -Own occupation  -Any occupation  -Residual disability  -Presumptive disability

Accepted Answer

Residual disability

Question 10

When delivering a policy to a client, a producer should take all of the following actions EXCEPT:  -Collect any premiums due  -fully explain all exclusions and/or riders  -keep the policy in the producer\'s office for safe-keeping on behalf of the client  -review all benefits provided by the policy

Accepted Answer

keep the policy in the producer\'s office for safe-keeping on behalf of the client

Question 11

The Social Security program provides all of the following benefits EXCEPT:  -Retirement  -survivor  -disability  -workers compensation

Accepted Answer

workers compensation

Question 12

Which of the following definitions MOST accurately describes the Probationary Period?  -The period of time from the date of the loss until the benefits begin  -The period of time from the date of the loss until benefits are actually received by the policyowner  -The waiting period a new hire must satisfy prior to becoming eligible for group health coverage  -The period of time once a claim is received by the insurance company before it pays benefits to the policyowner

Accepted Answer

The waiting period a new hire must satisfy prior to becoming eligible for group health coverage

Question 13

Under a group health plan, an employer may offer additional benefits to classes of employees on the basis of all of the following factors EXCEPT:  -length of employment  -gender  -salary grade  -job category

Accepted Answer

gender

Question 14

An insured becomes disabled three years after his Disability Income policy is issued. The disability is caused by a condition that existed prior to the policy issue date but was not specifically excluded from coverage. In this situation, the insurer will most likely take which of the following actions?  -Pay the full claim  -Pay the claim for a maximum of six months only  -Deny the claim on the basis of misrepresentation  -Deny the claim because it involves a pre-existing condition

Accepted Answer

Pay the full claim

Question 15

On June 1, S purchased a Major Medical policy and paid the initial premium to Producer T. On July 1, Producer T received the policy from the insurance company. The policy contained a Ten-Day Free Look provision. On July 3, Producer T attempted to deliver the policy but found that S was not at home. On July 5, Producer T was able to deliver the policy to S. On July 7, S decided he did not want the policy. S had 10 days from which of the following dates to return the policy to the company and obtain a full premium refund?  -July 1  -July 3  -July 5  -July 7

Accepted Answer

July 5

Question 16

Five years ago, at age forty-five, X stated that he was forty years old on a disability income insurance application. X now submits a claim and the insurer discovers X\'s true age. The insurer will most likely take which of the following actions?  -Deny the claim due to material misrepresentation on the application  -Pay the claim as filed because the policy becomes incontestable after two years  -Pay the claim and cancel the policy  -Adjust the benefits downward according to the benefits that X would have been entitled to based on the premiums

Accepted Answer

Adjust the benefits downward according to the benefits that X would have been entitled to based on the premiums

Question 17

All of the following elements are required of a contract EXCEPT:  -assignment  -acceptance  -legal capacity  -legal purpose

Accepted Answer

assignment

Question 18

Which of the following types of provisions guarantees renewability to a specified date or age unless certain specified events occur?  -Noncancellable  -Optionally Renewable  -Guaranteed Renewable  -Conditionally Renewable

Accepted Answer

Conditionally Renewable

Question 19

In an Accidental Death and Dismemberment (AD&D) policy, the term \"capital sum\" refers to:  -the benefit paid for death caused by a dread disease  -the monthly disability income paid if an insured loses a limb or the sight in one or both eyes  -a lump sum payment made when disease causes the amputation of an arm or a leg  -a lump sum payment made for an accidental dismemberment

Accepted Answer

a lump sum payment made for an accidental dismemberment

Question 20

The PRIMARY purpose of Medicaid is to:  -pay for expenses not covered by Medicare  -provide Disability Income benefits to people on Medicare  -provide Medical Expense coverage to persons meeting certain minimum income requirements  -provide funds for people injured in natural disasters

Accepted Answer

provide Medical Expense coverage to persons meeting certain minimum income requirements

Question 21

A health care plan that reimburses a flat fee for medical care it provides at a clinic it owns and operates is referred to as:  -Health Maintenance Organization  -Medicaid  -Medicare  -a Multiple Employer Trust (MET)

Accepted Answer

Health Maintenance Organization

Question 22

A health care plan designed to combine small employers together into a group to purchase medical expense insurance for their employees is called a:  -risk retention group  -Multiple Employer Trust (MET)  -Preferred Provider Organization (PPO)  -Third Party Administrator (TPA)

Accepted Answer

Multiple Employer Trust (MET)

Question 23

Medicare Supplement policies are primarily designed to:  -offset the high cost of Medicare  -provide additional retirement income to supplement Social Security retirement benefits  -provide additional benefits beyond those provided by Medicare  -provide a reinsurance network that spreads the Medicare risk among private insurance companies

Accepted Answer

provide additional benefits beyond those provided by Medicare

Question 24

An applicant for insurance submits an application to an insurer for underwriting but does not forward any premium payment with the application. Legally, the applicant is making  -an inquiry for an offer  -an offer  -a counteroffer  -an acceptance

Accepted Answer

an inquiry for an offer

Question 25

Which of the following statements is CORRECT about a Waiver of Premium provision in a Disability Income policy?  -It allows the insurer to deduct premiums due from the disabled insured\'s benefit payments.  -It allows the insurer to increase the amount of premium during the insured\'s time of disability.  -It allows the insured to extend the length of the Grace Period while disabled.  -It allows the insured to maintain a policy in force while disabled and unable to pay premiums.

Accepted Answer

It allows the insured to maintain a policy in force while disabled and unable to pay premiums.

Question 26

Which of the following provisions explains that a producer does not have the authority to waive the provisions of an insurance contract?  -Legal actions  -Reinstatement  -Time limit on certain defenses  -Entire Contract

Accepted Answer

Entire Contract

Question 27

Which of the following statements is CORRECT about a Disability Income policy with a Guaranteed Insurability rider?  -The insured may periodically increase the amount of benefits payable under the policy.  -The insured may assign the policy to a member of the insured\'s family.  -The insurer is not permitted to cancel the policy.  -The insurer will issue the policy without a medical examination.

Accepted Answer

The insured may periodically increase the amount of benefits payable under the policy.

Question 28

An insurer must provide claim forms to an insured within a MAXIMUM of how many days after receiving notice of an Accident & Health claim?  -Five  -Fifteen  -Twenty  -Thirty

Accepted Answer

Fifteen

Question 29

J has a physical impairment, attends school, and is incapable of self-sustaining employment and/ or self care. Which of the following statements is CORRECT about J\'s medical coverage under J\'s father\'s group plan?  -J\'s coverage ceases, but J may apply for group student coverage.  -J\'s coverage automatically discontinues at age twenty-six.  -J\'s coverage continues only as long as J is a full-time student.  -J\'s coverage continues as long as J is continually incapacitated and is financially dependent on J\'s father.

Accepted Answer

J\'s coverage continues as long as J is continually incapacitated and is financially dependent on J\'s father.

Question 30

The insurance policy clause that identifies the contracting parties and defines the scope and limits of coverage is called the:  -Insuring clause  -Benefit clause  -Consideration clause  -Renewal clause

Accepted Answer

Insuring clause

Question 31

Under a Guaranteed Renewable Accident & Health policy, an insurer retains the right to:  -increase the premium rate for one insured without increasing the rate for others in the same class  -increase the premium rate for an entire class of insureds  -increase the benefits for an individual insured  -decrease benefits for one insured without decreasing benefits for others in the same class

Accepted Answer

increase the premium rate for an entire class of insureds

Question 32

The Internal Revenue Service (IRS) considers Disability Income benefits paid under an employer-paid group Disability Income to be  -taxable for thirteen weeks only  -nontaxable for twenty-six weeks only  -fully taxable  -exempt from taxation

Accepted Answer

fully taxable

Question 33

A producer and an applicant complete an application for a health policy and submit it to the insurer for underwriting without any premium. The underwriter issues a policy and mails it to the producer for delivery to the applicant. The producer should take all of the following actions during the delivery of the policy to the applicant EXCEPT:  -collect the initial premium payment  -issue a conditional receipt  -have the applicant complete a statement of continued good health  -explain the Free Look provision which begins on the policy delivery date

Accepted Answer

issue a conditional receipt

Question 34

A married insured has an Accidental Death and Dismemberment (AD&D) policy that names his brother as the primary beneficiary and his son as the contingent beneficiary. If the insured and his brother are both killed instantly in a train accident, the policy proceeds would be paid to which of the following?  -The insured\'s estate  -The brother\'s estate  -The insured\'s son  -The insured\'s spouse

Accepted Answer

The insured\'s son

Question 35

An individual who has had a heart murmur since birth is likely to be issued an individual health policy that includes:  -a Guaranteed Insurability rider  -an Exclusionary/ Impairment rider  -a Waiver of Premium rider  -a Double Indemnity rider

Accepted Answer

an Exclusionary/ Impairment rider

Question 36

In which of the following health policies are both the renewability and the premiums guaranteed?  -Noncancellable  -Optionally Renewable  -Guaranteed Renewable  -Conditionally Renewable

Accepted Answer

Noncancellable

Question 37

Medicare Part A covers which of the following expenses?  -Hospital room and board  -Surgical expenses  -Medications  -Physicians\' services

Accepted Answer

Hospital room and board

Question 38

The Notice of Claim provision in an Accident and Health policy requires that an insured give written notice to the insurer within a MAXIMUM of how many days after a loss?  -7  -10  -15  -20

Accepted Answer

20

Question 39

Under the Claims Forms provision of a health policy, if the insurance company fails to send out the claim forms within the time period required by the provision, the insured should:  -demand a full refund of all premiums paid plus interest  -submit the claim in any form, which must be accepted by the company as adequate proof of loss  -request the state Department of Insurance to act as umpire in settling the claim  -do nothing until the claim form arrives

Accepted Answer

submit the claim in any form, which must be accepted by the company as adequate proof of loss

Question 40

Which of the following provisions designates the person to whom claim payments are to be made?  -Time of Payment of Claims  -Entire Contract  -Notice of Claim  -Payment of Claims

Accepted Answer

Payment of Claims

Question 41

The Consideration clause in an accident and health policy states that:  -the applicant pays the initial premium  -insurable interest must exist between the parties involved  -any attachments to the policy constitute the entire contract of insurance  -certain claims will be excluded under the policy

Accepted Answer

the applicant pays the initial premium

Question 42

The Elimination Period in most Disability Income policies applies:  -to each separate disability  -to claims for accidents only  -only the first time the insured is disabled  -during the first 30 days of the contract

Accepted Answer

to each separate disability

Question 43

Which of the following statements is CORRECT about coinsurance?  -It applies to the deductible as well as to claim payments.  -It helps control overutilization of benefits.  -Insurance companies generally charge more for a policy that contains a Coinsurance provision than for one that does not.  -Insurance companies may revise the coinsurance ratio after issuing a policy.

Accepted Answer

It helps control overutilization of benefits.

Question 44

An Eligible Expenses provision in a comprehensive major medical health insurance policy commonly identifies all of the following types of health care services as being covered by that policy EXCEPT:  -professional services of doctors and other medical practitioners  -hospital charges for semi-private room and board  -experimental and investigative services  -services of Registered Nurses

Accepted Answer

experimental and investigative services

Question 45

A group long-term disability plan is integrated with Social Security when which of the following statements is CORRECT?  -Social Security and group benefits pay a combined maximum limit.  -Group benefits are paid only after Social Security benefits are exhausted.  -Full Social Security benefits are paid only after group benefits are exhausted.  -Half of the allowable Social Security benefits are paid after group benefits are exhausted.

Accepted Answer

Social Security and group benefits pay a combined maximum limit.

Question 46

The Coordination of Benefits clause found in group health master contracts is used to:  -integrate Disability Income benefits with Medical Expense benefits  -avoid double payment of benefits to an insured who has duplicate group coverages  -investigate the claims history of an insured and his dependents  -avoid duplicate premium charges to an employer for the same employee

Accepted Answer

avoid double payment of benefits to an insured who has duplicate group coverages

Question 47

A prehospitalization authorization program (pre-certification) is a good example of:  -managed care  -traditional indemnity  -Medicare  -Workers\' Compensation

Accepted Answer

managed care

Question 48

Which of the following reports may include information obtained by a telephone call to the proposed insured?  -Medical Information Bureau (MIB) report  -Attending physician\'s report  -Inspection report  -Producer\'s report

Accepted Answer

Inspection report

Question 49

The purpose of the Medical Information Bureau (MIB) is to:  -recommend the premium rates that should be charged for health policies issued to substandard risks  -share medical data among member companies  -provide background data used to experience-rate large group health plans  -provide actuarial information to participating members on dread diseases

Accepted Answer

share medical data among member companies

Question 50

Because health insurance policies are offered on a \"take it or leave it\" basis, they are referred to as which of the following types of contracts?  -Aleatory Contracts  -Executory Contracts  -Unilateral Contracts  -Contracts of Adhesion

Accepted Answer

Contracts of Adhesion

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