kyla test 1 – Flashcards

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A medical care provider which typically delivers health services at its own local medical facility is known as a
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Health Maintenance Organization
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Which type of provider is known for stressing preventative medical care?
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Health Maintenance Organizations (HMO's)
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Which of the following BEST describes how a Preferred Provider Organization is less restrictive than a Health Maintenance Organization?
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More physicians to choose from
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The individual who provides general medical care for a patient as well as the referral for specialized care is known as a
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Primary Care Physician
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A 66 year-old is covered under a group health plan while employed with a business that has 40 employees. If she injures herself while walking in the park, what coverage would be considered primary?
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Her group health plan
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Medicare Part A and Part B do NOT pay for
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dental work
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The health insurance program which is administered by each state and funded by both the federal and state governments is called
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Medicaid
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M is insured under a basic Hospital/Surgical Expense policy. A physician performs surgery on M. What determines the claim M is eligible for?
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Determined by the terms of the policy
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J is a subscriber to a plan which contracts with doctors and hospitals to provide medical benefits at a preset price. What type of plan does J belong to?
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Health Maintenance Organization
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C was injured while deep sea diving and requires a hospital stay. C has a Major Medical policy with a 80/20 coinsurance clause and a $400 deductible. What is the MAXIMUM C will pay if the covered medical expenses are $2000?
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$720
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Which of these is considered a true statement regarding Medicaid?
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Funded by both state and federal governments
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If a retiree on Medicare required five hospital stays in one year, which policy would provide the best insurance for excess hospital expenses?
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Medicare Supplement
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Which of the following types of health coverage frequently uses a deductible?
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Major Medical policy
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S wants to open a tax-exempt Health Savings Account. To qualify for this type of account, Federal law dictates that S must be enrolled in a
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High-deductible health plan
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Which of the following will a Long Term Care plan typically provide benefits for?
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home health care
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The individual most likely to buy a Medicare Supplement policy would be a(n)
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68-year old male covered by Medicare
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Pre-hospitalization authorization is considered an example of
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managed care
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An agent takes an individual Disability Income application, collects the appropriate premium, and issues the prospective insured a conditional receipt. The next step the insurance company will take is to
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determine if the applicant is an acceptable risk by completing standard underwriting procedures
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Which of the following actions will an insurance company most likely NOT take if an applicant, who has diabetes, applies for a Disability Income policy?
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Issue the policy with an altered Time of Payment of Claims provision
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Which of the following statements about the classification of applicants is INCORRECT?
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Substandard applicants are never declined by underwriters
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Which of these options can an individual use their medical flexible spending account to pay for?
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Prescription drugs
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Which of the following situations does a Critical Illness plan cover?
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Leukemia
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A prepaid application for individual Disability Income insurance was recently submitted to an insurer. When the insurer received the Medical Information Bureau (MIB) report, the report showed that the applicant had suffered a stroke 18 months ago, something that was not disclosed on the application. Which of the following actions would the insurance company NOT take?
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Send a notice to the MIB that the applicant was declined
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Which of the following statements BEST describes dental care indemnity coverage?
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Services are reimbursed after insurer receives the invoice
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Which of the following BEST describes how pre-admission certifications are used?
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Used to prevent nonessential medical costs
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Major Medical policies typically
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contain a deductible and coinsurance
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Comprehensive Major Medical policies usually combine
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Major Medical with Basic Hospital/Surgical coverage
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Under what system do a group of doctors and hospitals in a designated area contract with an insurer to provide services at a prearranged cost to the insured?
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PPO
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Which of the following statements is true about most Blue Cross/Blue Shield organizations?
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They are nonprofit organizations
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Which of these statements is INCORRECT regarding a Preferred Provider Organization (PPO)?
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PPO's are NOT a type of managed care systems
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The first portion of a covered Major Medical insurance expense that the insured is required to pay is called the
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initial deductible
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Which of the following statements BEST describes the intent of a Coinsurance clause in a Major Medical policy?
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Discourages overutilization of the insurance coverage
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An individual has a Major Medical policy with a $5,000 deductible and an 80/20 Coinsurance clause. How much will the INSURED have to pay if a total of $15,000 in covered medical expenses are incurred?
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$7,000
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An insured covered by a group Major Medical plan is hospitalized after sustaining injuries that resulted from an automobile accident. Assuming the plan had a $1,000 deductible and an 80/20 Coinsurance clause, how much will the INSURED be responsible to pay with $11,000 in covered medical expenses?
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$3,000
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Which of the following policy features allows an insured to defer current health charges to the following year's deductible instead of the current year's deducitble?
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Carryover provision
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T was treated for an ailment 2 months prior to applying for a health insurance policy. This condition was noted on the application and the policy was issued shortly afterwards.How will the insurer likely consider this condition?
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Insurer will likely treat as a pre-existing condition which may not be covered for one year
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With a Basic Medical Expense policy, what does the hospitalization expense cover?
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hospital room and board
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N has a Major Medical policy that only pays a portion of N's medical expenses. N is responsible for paying the remaining balance. This provision is known as
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Coinsurance
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In Major Medical Expense policies, what is the intent of a Stop Loss provision?
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Limits an insured's out-of-pocket medical expenses
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Which of the following BEST describes a Hospital Indemnity policy?
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Coverage that pays a stated amount per day of a covered hospitalization
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Basic Medical Expense insurance
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has lower benefit limits than Major Medical insurance
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For which of the following expenses does a Basic Hospital policy pay?
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Hospital room and board
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M has a Major Medical insurance policy with a $200 flat deductible and an 80% Coinsurance clause. If M incurs a $2,200 claim for an eligible medical expense, how much will M receive in payment for this claim?
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$1,600
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A Hospital/Surgical Expense policy was purchased for a family of four in March of 2013. The policy was issued with a $500 deductible and a limit of four deductibles per calendar year. Two claims were paid in September 2013, each incurring medical expenses in excess of the deductible. Two additional claims were filed in 2014, each in excess of the deductible amount as well. What would be this family's out-of-pocket medical expenses for 2013?
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$1,000
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Which of the following statements about Health Reimbursement Arrangements (HRA) is CORRECT?
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If the employee paid for qualified medical expenses, the reimbursements may be tax-free
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Deductibles are used in health policies to lower
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overuse of medical services
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Basic Hospital and Surgical policy benefits are
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lower than the actual expenses incurred
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A characteristic of Preferred Provider Organizations (PPOs) would be:
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Discounted fees for the patient
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All of the following statements about Major Medical benefits are true EXCEPT
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Benefits have no maximum limit
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Which of these circumstances is a Business Disability Buy-Sell policy designed to help in the sale of a business?
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Business owner becoming disabled
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Many small business owners worry how their business would survive financially if the owner becomes disabled. The policy which BEST addresses this concern is
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Business Overhead Expense
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How does group insurance differ from individual insurance?
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Premiums are lower
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T is covered by two health insurance plans: a group plan through his employer and his spouse's plan as a dependent. When T submits a claim, his employer's plan is considered what type of carrier under the Model Group Coordination of Benefits provision?
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Primary carrier
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J has an Accidental Death and Dismemberment policy with a principal sum of $50,000. While trimming the hedges, J cuts off one of his fingers. What is the MAXIMUM J will receive from his policy?
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$25,000
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When an employee is required to pay a portion of the premium for an employer/employee group health plan, the employee is covered under which of the following plans?
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Contributory
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Which of the following statements is correct regarding an employer/employee group health plan?
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the employer receives a master policy and the employees receive certificates
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The federal income tax treatment of employer-provided group health insurance can be accurately described as
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Employee's coverage paid for by the employer is tax-deductible to the employer as a business expenditure
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Which of the following statements BEST describes how a policy that uses the "accidental bodily injury" definition of an accident differs from one that uses the "accidental means" definition?
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Less restrictive
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The reason for a business having a Business Overhead Expense Disability Plan is to cover
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fixed business expenses
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Which of the following characteristics are associated with a large group disability income policy?
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No medical underwriting
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Which contract permits the remaining partners to buy-out the interest of a disabled business partner?
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Disability Buy-Sell
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Which of the following statements does NOT accurately describe the tax treatment of premiums and benefits of individual Accident and Health insurance?
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Disability income policy premiums are tax-deductible
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XYZ Company pays the entire premium for its group health plan. The MINIMUM percentage of eligible employees that must be covered is
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100%
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The provision in a Group Health policy that allows the insurer to postpone coverage for a covered illness 30 days after the policy's effective date is referred to as the
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Waiting Period
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A Business Overhead Expense policy
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covers business expenses such as rent and utilities
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All students attending a large university could be covered by
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a blanket policy
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P received Disability income benefits for 3 months then returns to work. She is able to work one month before her condition returns, leaving her disabled once again. What would the insurance company most likely regard this second period of disability as?
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A recurrent disability
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R had received full disability income benefits for 6 months. When he returns to work, he is only able to resume half his normal daily workload. Which provision pays reduced benefits to R while he is not working at full capacity?
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Residual Disability
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B is a teacher who was injured in a car accident and cannot work. She is now receiving monthly benefits as a result of this accident. Which type of policy does B have?
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Disability Income
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M becomes disabled and is unable to work for six months. M dies soon after from complications arising from this disability. M has a Disability Income policy that pays $2,000 a month. Which of the following statements BEST describes what is owed to her estate?
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earned, but unpaid benefits
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Disability policies do NOT normally pay for disabilities arising from which of the following?
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War
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The provision in a health insurance policy that interrupts premiums being paid to the insurer while the insured is disabled is called the
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Waiver of Premium
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When an insured has the same disability within a specified time period and the insurance company provides the same benefits without a new waiting period, the second disability is covered under which of the following benefits?
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Recurrent Disability
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T has Disability Income policy that pays a monthly benefit of $5000. If T becomes partially disabled, what can he likely expect?
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Less than $5,000 per month benefit regardless of the cause
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With Disability Income insurance, an insurance company may limit the monthly benefit amount a prospective policy holder may obtain because of the insured's
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gross income at the time of purchase
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Which of the following is the MOST important factor when deciding how much Disability Income coverage an applicant should purchase?
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Applicant's monthly income
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When determining the monthly benefit amount for a Disability Income policy, the factor that limits the amount a prospective insured may purchase is
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income
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What does a Guaranteed Insurability rider provide a Disability Income policyowner?
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The ability to periodically increase the amount of coverage without evidence of insurability
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When a person returns to work after a period of total disability but cannot earn as much as he or she did before the disability, this situation is called which of the following?
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Residual disability
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An individual Disability Income insurance applicant may be required to submit all of the following information EXCEPT
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spouse's occupation
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A Disability Income policyowner suffers a disability which was due to the same cause as a previous disability. Both disabilities occurred within a five-month period. The insurer may cover the second disability without a new elimination period under the
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Recurrent Disability provision
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Which of the following health insurance policy provisions specifies the health care services a policy will cover?
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Insuring clause
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S filed a written Proof of Loss for a Disability Income claim on September 1. The insurance company not responded to the claim. S can take legal action against the insurer beginning
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November 1
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Which of the following provisions specifies how long a policyowner's health coverage will remain in effect if the policyowner does not pay the premium when it is due?
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Grace Period
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Health insurance benefits NOT covered due to an act of war are
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excluded by the insurer in the contract provisions
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The Notice of Claims provision requires a policyowner to
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notify an insurer of a claim within a specified time
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According to the Time Payment of Claims provision, the insurer must pay Disability Income benefits no less frequently than which of the following options?
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Monthly
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What should an insured do if the insurer does not send claims forms within the time period set forth in a health policy's Claims Forms provision?
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Submit the claim in any form
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Which health policy clause stipulates that an insurance company must attach a copy of the application to the policy to ensure that it is part of the contract?
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Entire Contract
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The provision that defines to whom the insurer will pay benefits to is called
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Payment of Claims
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When an insurance company sends a policy to the insured with an attached application, the element that makes the application part of the contract between the insured and the insurer is called the
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Entire Contract provision
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With Accidental Death and Dismemberment policies, what is the purpose of the Grace Period?
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Gives the policyowner additional time to pay past due premiums
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Which of the following statements describes the purpose of the Insuring clause in Health and Accident policies?
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States the scope and limits of the coverage
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What must the policyowner provide to the insurer for validation that a loss has occurred?
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Proof of Loss
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Which of these is considered a mandatory provision?
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Payment of Claims
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What is considered to be a characteristic of a Conditionally Renewable Health Insurance policy?
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Premiums may increase at time of renewal
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J, an Accidental Death and Dismemberment (AD&D) policy holder, dies after injuries sustained in an accident. J's age as stated on the application five years ago was found to be understated by ten years. Which of the following actions will the insurance company take?
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The insurer will adjust the benefit to what the premiums paid would have purchased at the insured's actual age
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M's insurance company denied a reinstatement application for her lapsed health insurance policy. The company did not notify M of this denial. How many days from the reinstatement application date does the insurance company have to notify M of the denial before the policy will be automatically placed back in force?
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45 days
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With Optionally Renewable Health policies, the insurer may
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review the policy annually and determine whether or not to renew it
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What type of renewability guarantees premium rates and renewability?
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Guaranteed renewable
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Which of the following BEST describes a short-term medical expense policy?
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Nonrenewable
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The clause in an Accident and Health policy which defines the benefit amounts the insurer will pay is called the
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Insuring clause
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Which of the following statements BEST describes what the Legal Actions provision of an Accident and Health policy requires?
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An insured must wait at least 60 days after Proof of Loss has been submitted before a lawsuit can be filed
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What is the purpose of the Time of Payment of Claims provision?
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Prevents delayed claim payments made by the insurer
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A Disability Income policyowner recently submitted a claim for a chronic neck problem that has now resulted in total disability. The original neck injury occurred before the application was taken 5 years prior. The neck injury was never disclosed to the insurer at the time of application. How will the insurer handle this claim?
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Claim will be paid and coverage will remain in force
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T files a claim on his Accident and Health policy after being treated for an illness. The insurance company believes that T misrepresented his actual health on the initial insurance application and is, therefore, disputing the claim's validity. The provision that limits the period during which the company may dispute a claim's validity is called
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Time Limit on Certain Defenses
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Which of these statements accurately describes the Waiver of Premium provision in an Accident and Health policy?
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Premiums are waived after the insured has been totally disabled for a specified time period
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G is involved in an automobile accident as a result of driving while intoxicated and suffers numerous injuries. According to the Intoxicants and Narcotics exclusion in G's policy, who is responsible for paying the medical bills?
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The insured
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P is a Major Medical policyowner who is hospitalized as a result of injuries sustained from participating in a carjacking. How will the insurer most likely handle this claim?
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Claim will be denied
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An insurance agent who convinces a prospective insured to purchase a policy by exaggerating the benefits of the policy may be found guilty of
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misrepresentation
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Under the Unfair Trade Practice law, agents may be found guilty of defamation if they make a false statement that is intended to
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malign another insurance company
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Which of the following violations is considered an unfair trade practice?
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Coercion
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An insurance company that publishes misleading information about insurance coverage may be found guilty of
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false advertising
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Anyone who makes a fraudulent statement on an insurance application in order to obtain money benefits from an insurance company has committed an act of
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misrepresentation
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Which of the following actions by an insurance company or an agent is considered rebating?
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Offering a prospect something of value that is not specified in a contract to induce the purchase of that contract
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If an agent tells an applicant that an insurance policy is like a share of stock, the agent may be guilty of
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misrepresentation
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Which of the following is an unfair claims practice?
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Failing to effectuate prompt, fair, and equitable settlements of claims
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A stock insurance company is BEST defined as an incorporated company that has its capital divided into shares and
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is owned exclusively by its shareholders
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Policyholders elect the governing bodies of which of the following types of insurance companies?
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Mutual
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Which of the following would be considered misrepresentation by an insurance agent?
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Stating that dividends are guaranteed
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Which of the following is an example of defamation?
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A brochure including an untrue statement regarding a competitor's ability to pay claims
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An insurance company licensed in Georgia and domiciled in Pennsylvania is known as
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a foreign company
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Inducing or attempting to induce any insured person through misrepresentation to lapse, forfeit, or surrender insurance is
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twisting
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All of the following actions are considered rebating EXCEPT
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sharing commissions with other licensed and appointed agents
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Which of the following actions by an insurance company is considered an unfair claims settlement practice?
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Denying an insured's claim without indicating the basis of denial under the policy
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A stock insurance company is owned by it's
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stockholders
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Which of the following is an example of rebating?
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returning a portion of a premium as inducement to purchase insurance
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An agent who tells claimants that their rights may be impaired if they fail to complete a release form within a given period of time could be guilty of
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coercion
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A creditor who requires a debtor to obtain insurance from a particular company or agent as a condition for a loan is guilty of
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coercion
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An agent who intentionally makes an untrue or incomplete statement in the course of an insurance transaction may be guilty of
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misrepresentation
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An insurance company that is organized or chartered in a country other than the United States is defined as
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alien
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Knowingly making misleading statements that would cause an insured to lapse, assign, or terminate an insurance policy in order to switch companies is an example of
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twisting
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Which of the following would be considered an unfair claim practice?
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Misrepresenting insurance policy provisions affecting a loss
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Before a licensed agent is eligible to transact insurance sales, they must be
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appointed by an insurance company
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The purpose of the Georgia Life and Health Insurance Guaranty Association is to
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ensure that claims filed against insolvent insurance companies will be paid
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An applicant for an insurance agent's license in Georgia MUST meet which of the following requirements?
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Be 18 years of age or older
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"Controlled business" is MOST ACCURATELY described as
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insurance placed by an agent on the agent's own life, property, or risks
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An agent of less than 20 years must complete 24 hours of Continuing Education every
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2 years
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Long-term care policies issued in Georgia must provide benefits for at least
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12 months
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Coverage of newborn children is provided by individual and group accident and health contracts from
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the moment of birth
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Georgia's Replacement Rule applies to all of the following situations EXCEPT
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the existing policy is kept in force and an additional policy is purchased from the same company
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What does Medicare Parts A and B cover?
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Part A covers doctor's services; Part B covers hospitalization
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Which of the following is the reimbursement of benefits for the treatment of a beneficiary's injuries caused by a third party?
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Subrogation
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S is employed by a large corporation that provides group health coverage for its employees and their dependents. If S dies, the company must allow his surviving spouse and dependents to continue their group health coverage for a maximum of how many months under COBRA regulations?
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36
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The Health Insurance Portability and Accountability Act (HIPAA) gives privacy protection for
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financial information
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How long is the typical free look period for Long Term care insurance policies?
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30 days
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Which of the following medical expenses does Cancer insurance NOT cover?
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Radiation treatment
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Which mode of payment is NOT used by health insurance policies?
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Single premium
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Which type of renewability best describes a Disability Income policy that covers an individual until the age of 65, but the insurer has the right to change the premium rate?
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Optionally Renewable
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D is an architect receiving Disability Income benefits who is not able to return to work full time, but can work on a part-time basis. Which of these features would allow D to continue receiving benefits?
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Residual Benefit clause
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