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#3. Bill is approaching retirement age
and is concerned about having proper coverage should he have to be placed in
a Long Term Care facility. Bill's agent told him that LTC policies would
provide necessary coverage at all of the following levels, EXCEPT
Acute care is provided by Medical Insurance.
#5. If a basic medical insurance
plan's benefits are exhausted, what type of plan will then begin covering those losses?
a) Social security
B) SUPPLEMENTARY MAJOR MEDICAL
c) Supplementary basic medical
d) None. Once benefits are exhausted for a given benefit period, the insurer is responsible for covering the remainder of the expenses.
- Supplementary Major Medical
- Policies are used to supplement the coverage payable under a basic medical
- expense policy. After the basic policy pays, the supplemental major medical
- will provide coverage for expenses that were not covered by the basic policy,
- and expenses that exceed the maximum. If the time limitation is used up in
- the basic policy, the supplemental coverage will provide coverage thereafter.
#6. Which of the following is NOT a
d) Income level
Medicaid is a program operated by the State, with some Federal funding, to provide medical care for those in need. To qualify for Medicaid, a person must be poor or become poor, be a U.S. citizen or permanent resident alien, and must meet other qualifiers, some of which are blind, disabled, pregnant, over 65, or caring for children receiving welfare benefits.
Which entity has the option of including optional provisions in a health insurance policy?
a. The state
The federal government
The insurer has the option of
including optional provisions in the health insurance policy.
#12. In order for an alumni association
to be eligible to purchase group health insurance for its members, all of these statements must be true EXCEPT when the association
a) Is organized for reasons other than buying insurance.
b) Has at least 100 members.
c) HAS BEEN ACTIVE FOR FIVE YEARS MINIMUM.
d) Has a constitution, by-laws, and
must hold at least annual meetings.
To be eligible to purchase group health insurance, an association must be organized for reasons other than buying insurance, must have at least 100 members, have a constitution, by-laws, and must hold at least annual meetings. As association group must have been active for at least two years.
#17. Which of the following is NOT mandatory under the Uniform Provisions Law as applied to accident and health policies?
a) CHANGE OF OCCUPATION
b) Time Limit on Certain Defenses
c) Physical Examination and Autopsy
d) Entire Contract
Change of Occupation is an optional provision.
#18. A Medicare supplement must have a
"free look" provision of at least
a) 45 days.
b) 10 days.
c) 15 days.
d) 30 DAYS.
The "free look" on a Medicare supplement must be at least 30 days.
In health insurance, what is coinsurance?
The amount the insurance company
pays for the insured's treatment
A PERCENTAGE OF THE COST OF SERVICE THAT THE INSURED AND THE INSURER SHARE
A portion of the deductible the insured must pay for treatment
The amount an insured pays for treatment
- After an insured meets the deductible required by the policy, the insured and the insurer split the cost
- of additional expenses, up to a certain limit. This amount, the coinsurance, is presented as a percentage.
#27. What happens to an insurance
application after the policy is issued?
a) IT BECOMES PART OF THE CONTRACT.
b) It is discarded.
c) It is kept on file in the principal office of the insurer.
It is forwarded to the state
government, where it will be kept for 10 years.
- If a policy is issued, the
- application becomes a part of the contract.
#29. The guaranteed purchase option is
also referred to as the
a) Multiple indemnity rider.
b) Impairment rider.
c) Evidence of insurability rider.
d) FUTURE INCREASE OPTION.
- The guaranteed purchase option is
- also referred to as the future increase option.
#42. Which of the following is not true
of Long-term care for employer group health insurance?
a) Excessive benefits are taxable as ordinary income.
b) Any premium paid by the employer is deductible as a business expense.
c) Any premiums paid by the employee
are only deductible to the extent that the employee premium exceeds 7.5% of the taxpayer's adjusted gross income.
d) ANY PREMIUM PAID BY THE EMPLOYER, IF NOT USED, CAN BE POCKETED AT THE END OF THE YEAR AS GROSS
INCOME BY THE EMPLOYEE.
- Premiums paid by the employer are
- deductible as a business expense, but if not used, the funds are not for
- personal use by the employee.
#48. In addition to participation requirements, how does an insurer guard against adverse selection when underwriting group health?
a) BY REQUIRING THAT THE INSURANCE BE INCIDENTAL TO THE GROUP
b) By having each enrollee undergo a paramedical examination
c) By obtaining MIB reports on each enrollee
d) By imposing case management provisions
The group must form for a reason other than buying group insurance.
#51. Under HIPAA portability, which of
the following are NOT protected under required benefits?
a) GROUPS OF ONE OR MORE
c) Pregnant women
d) Mentally ill
- Legislation that took effect in July 1997, ensures "portability" of group insurance coverage, and
- includes various required benefits that affect small employers, the self-employed, pregnant women, and the mentally ill. HIPAA applies to groups
- of two or more.
#57. The benefits from a business
overhead expense insurance policy
a) Are only available upon the business owner’s death.
b) ARE LIMITED TO COVERED EXPENSES AND ARE TAXABLE TO THE BUSINESS.
c) Cover all business expenses but are taxable to the business owner.
d) Are received tax free.
The benefits from a BOE policy are usually limited to covered expenses incurred or the maximum monthly benefit stated in the policy, and are taxable to the business as received.
#59. An insured’s cancelable health insurance policy is being cancelled. One day before the policy is scheduled to end, he is involved in a major accident and is hospitalized for a week.
Which of the following best describes the coverage that he would receive?
a) One day of full benefits
b) Minimal benefits for the duration of the hospital stay
c) No benefits at all
d) FULL BENEFITS, AS IF THE POLICY WERE STILL COMPLETELY IN EFFECT
- An insurance company can cancel a
- cancelable health insurance policy at any time, with proper notice. If the insured is in the midst of a claim at the time of cancellation, the insurance
- company must continue to honor the claim.
#60. A producer’s spouse was issued a
temporary license after the death of the producer. She sold the insurance business 120 days later. What will happen to the temporary license?
a) IT WILL TERMINATE UPON THE SALE OF BUSINESS.
b) It will remain in effect for 30 days after the sale of business.
c) It will become permanent at the
d) It will remain valid for 60 more days.
A temporary license may not continue after the owner or the personal representative disposes of the business.
#61. What is the maximum number of employees in order for a company qualify as a small employer?
A small employer is any person, firm, corporation, partnership or association that employs no more than 50 eligible employees during on at least 50% of its working days during the preceding calendar year, with a normal work week of 30 or more hours.
#62. Which of the following policies is
required to provide coverage for new cancer therapies?
a) A dread disease policy
b) A GROUP MEDICAL EXPENSE POLICY
c) A Medicare supplement policy
d) A disability income policy
- Every individual or group hospital or medical expense insurance policy must provide coverage for new cancer therapies still under investigation as outlined in the Insurance Code.
- Medicare supplement policies, disability income, specified disease other than cancer and other limited benefit policies are exempt from this requirement.
#64. Coverage for the services of licensed midwives is
a) An optional benefit in group policies.
b) Excluded from coverage in medical
c) Covered in individual policies only.
d) A MANDATORY BENEFIT IN INDIVIDUAL AND GROUP POLICIES.
Every individual or group hospital or medical expense insurance policy must provide coverage for the services of licensed midwives.
#65. An important fact about the financial status of an insurer was deliberately withheld. Which of the
following terms best describes this action?
d) FALSE FINANCIAL STATEMENT
Statements of this kind – when used to put the company into a favorable light – are often called false financial statements.
#70. When is the producer required to disclose information about producer compensation to the insured?
a) After the policy is delivered
b) BEFORE THE INSURANCE TRANSACTION GOES IN EFFECT
c) No later than the time of insurance solicitation
d) Any time while the policy is in force.
The insured may be notified at any time during the sale, solicitation or negotiations of the insurance sale, as long as the insured receives that information prior to the effective date of the transaction.
#75. A portion of a patient’s open-heart surgery costs is paid by the organization that provided the surgery and post-operative care. Which type of organization is this?
d) Shared risk
- A Health Maintenance Organization (HMO) is any organization formed under the laws of Rhode Island to provide or arrange for one or more health care plans under a system which causes any
- part of the risk of health care delivery to be borne by the organization or its providers.
#82. A lender who conditions approval
of a loan on the condition that the borrower purchase insurance from that lender may be guilty of
b) Unfair discrimination.
c) Illegal inducement.
While a lender may require that the debtor have insurance, to condition a loan on purchasing insurance from a particular source is an unfair trade practice of coercion.
#84. Company C is developing its own
advertising script to be used in their radio advertising campaign for their LTC policies.
Which of the following words or phrases would be allowed?
d) 'BENEFITS PAID DIRECTLY TO YOU'
'Benefits paid directly to you' would be allowed if stated in the policy.
#85. A 40-year-old woman was treated for breast cancer 2 years ago. She is now covered under a nonprofit hospital service plan. How will this policy respond to claims related to mammography?
a) The insured will be covered for one screening per year.
b) The insured will not be covered for any screenings.
c) The insured will be covered for at
least 1 baseline screening before the age of 50.
d) THE INSURED WILL BE COVERED FOR 2 SCREENING MAMMOGRAMS EACH YEAR.
- Nonprofit hospital service plans must provide coverage for 2 screening mammograms per year when recommended by a physician for women who have been treated for breast cancer within the last
- 5 years, or who are at high risk of developing breast cancer.
#89. In an advertisement, an insurer stresses the poor financial situation of one of its competitors. This is an example of
d) False advertising.
- It is against the law for any person to make, publish, or circulate any oral or written statement or
- literature which is false, maliciously critical of or substantially misrepresents the financial condition of any insurer, and which is intended to injure any person engaged in the insurance business.
#90. An insurance producer is selling coverage that is not fully insured by any domestic or foreign company. The producer has properly disclosed the lack of coverage to the applicant. When
will the disclosure requirement NOT apply?
a) When coverage is solicited by a nonresident producer
b) When the applicant has other insurance coverage in force
c) When the applicant does not need the missing coverage
d) WHEN THE PRODUCER IS UNDER JURISDICTION OF ANOTHER DEPARTMENT OF THE STATE
- If the producer is under the jurisdiction of another department or subdivision of the state or the federal
- government, the lack of coverage disclosure requirement will not apply.