ARKANSAS HEALTH INSURANCE EXAM AND PRACTICE EXAM, Exams of Nursing

Download ARKANSAS HEALTH INSURANCE EXAM AND PRACTICE EXAM and more Exams Nursing in PDF only on Docsity! 1 | P a g e ARKANSAS HEALTH INSURANCE EXAM AND PRACTICE EXAM 2024- 2025 WITH ACTUAL CORRECT QUESTIONS AND VERIFIED DETAILED ANSWERS |FREQUENTLY TESTED QUESTIONS AND SOLUTIONS |ALREADY GRADED A+|NEWEST|GUARANTEED PASS |LATEST UPDATE An insurance applicant with a below-average likelihood of loss is typically considered to be a preferred risk subpar risk declined risk standard risk preferred risk Which of these characteristics of an applicant is NOT taken into consideration when assessing risk for Disability coverage? health of applicant gender of applicant number of children occupation of applicant number of children 2 | P a g e Which of the following would be a valid reason why a policy premium would be higher than the standard premium? The insurer is not a member of the MIB The agent quoted the wrong price The insured does not have the necessary financial reserves The insured does not meet established underwriting requirements The insured does not meet established underwriting requirements An insured was injured as an innocent bystander when someone committed a felony. The insurer is likely to void the policy partially liable for the loss not liable for the loss liable for the loss liable for the loss How are premiums paid by the insured for personally owned disability income insurance treated for tax purposes? partially tax deductible not tax deductible fully tax deductible tax deferred not tax deductible All of the following are primary risk factors in underwriting individual health insurance policies EXCEPT Geographical location Moral hazard Occupation Physical condition geographical location Field underwriting performed by the producer involves assigning a risk classification to the insured providing commission information to the applicant approving or declining an applicant completing the application and collecting initial premium completing the application and collecting initial premium A person who is a nonsmoker, of average weight, and in excellent health would most likely be in which risk classification? 5 | P a g e registered for the state insurance examination licensed by the state appointed by an insurer none of these Appointed by an insurer When the insured gives birth, coverage for eligible newly born children consists of coverage for injury or sickness including: delivery expenses mother's lost wages birth abnormalities mother's hospitalization birth abnormalities An insurance producer is BEST defined as: a person appointed by more than one insurance company to issue policies a person who has a contract with an insurance company to represent it a person who places insurance with nonadmitted companies an employee of an insurance company who has the authority to underwrite insurance a person who has a contract with an insurance company to represent it Which of the following is NOT a reason for the Commissioner to deny or refuse a producer license application? Recently convicted of a felony Engaged in fraudulent insurance practices Unintentionally misrepresented a material fact on the application Intentionally violated state insurance laws Unintentionally misrepresented a material fact on the application A producer who sells insurance in Arkansas but resides in another state is called a(n): unauthorized producer alien producer nonresident producer authorized producer Nonresident producer 6 | P a g e A licensed producer must report any administrative action taken against the licensee in another jurisdiction or by another agency department in Arkansas within how many days of the final disposition? 10 days 30 days 60 days 90 days 30 days Once a policy has been reinstated, the insured MUST wait what amount of time before coverage for sickness is covered? 45 days 15 davs 10 days 3 days 10 days Maria the insurance producer completes a sale by collecting the required signatures on the application and obtaining the initial premium. Afterwards, she deposits the check into her personal checking account. Maria has committed what crime? Coercion Twisting Fraud Defamation Fraud A producer replaced a client's insurance policy when it was not in the client's best interest. The producer could be found guilty of: coercion boycotting twisting rebating Twisting A sickness may have a probationary period of up to 30 days 60 days 90 days 120 days 7 | P a g e 30 days How long must the Commissioner maintain a complete record for every licensee in Arkansas for? 5 years as long as he/she deems necessary at least 5 years, but not beyond termination of the licensee the Commissioner is not required keep records for every licensee in Arkansas As long as he/she deems necessary Arkansas law requires that an insurer must notify the Commissioner of a producer appointment termination: within 30 days of termination 30 days prior to termination within 15 days of termination 15 davs prior to termination Within 30 days of termination Which is the best way to describe Controlled Business? Policies written at the direction of a manager Polices written then reviewed by the Superintendent Polices written for any group life insurance Policies written on people that a producer has influence over Policies written on people that a producer has influence over What is a certificate of authority? A document indicating an insurer's membership in the guarantee fund The approval by the department of insurance for an insurer to use its advertising The license required for an insurer to conduct business in the state An insurer's contract with its producers The license required for an insurer to conduct business in the state When a health policy requires payment of an additional premium to provide coverage for a newborn, how many days after the birth is the first payment due? 60 days 30 days 14 days 10 days 30 days 10 | P a g e Which of the following basics is a producer's fiduciary responsibility? Collecting premiums and paying them to the insurance company Maintaining a separate bank account for each insurance company the producer represents Acting as a referee in the event of a disagreement between an insured and the insurance company Advising prospective insureds of the lowest rates available Collecting premiums and paying them to the insurance company An insured may continue coverage under a group plan during their total disability if the premiums are paid for how long? 30 days 90 days 4 months 6 months 6 months A producer who sells insurance in Arkansas but resides in another state is called a(n) unauthorized producer alien producer nonresident producer authorized producer Nonresident producers An HMO must notify its subscribers of any change within 10 days 20 days 30 days 60 days 30 days Failing to promptly provide a reasonable explanation for the denial of a claim is considered to be a(n) Fiduciary act unfair claim settlement practice fraudulent act claim liability Unfair claim settlement practice An accident and health policy may NOT be contested by the insurance company after the policy has been in force for a MINIMUM of: 11 | P a g e one year two years three years four years Two years If a person is convicted of a crime stemming from a hearing, a fine up to $ ___ per violation may be imposed. $500 $1,000 $10,000 $50,000 $1,000 Which of the following constitutes grounds for suspending an Arkansas producer's license? Summary Action conviction Felony conviction Failure to comply with underwriting guidelines Failure to maintain insurance transaction records for at least 10 years Felony Conviction ___ is any insurance carrier providing disability benefit plans for a small employer's eligible employees. Employer Adjuster Employer Carrier Broker Employer Carrier A producer who knowingly submits a FALSE statement in support of a claim may be found guilty of: coercion twisting rebating fraud Fraud A producer's license CANNOT be revoked without: cease and desist order civil monetary penalty a prison sentence a hearing given to the producer 12 | P a g e A hearing given to the producer As of January 1, 2014, small group health insurance can be rated on the basis of: Claims experience Tobacco use Gender Health Tobacco use Fraternal Benefit Society has each of the following characteristics EXCEPT Incorporated Without capital stock Exist For profit Exist for the benefit of its members Exist For profit An insurer's ability to make unpredictable payouts to policyowners is called investment values liquidity assets capital liquidity A life insurance company has transferred some of its risk to another insurer. The insurer assuming the risk is called the mutual insurer reinsurer reciprocal insurer participating insurer reinsurer A nonparticipating company is sometimes called a(n) alien insurer mutual insurer reinsurer stock insurer stock insurer 15 | P a g e mutual Why are dividends from a mutual insurer not subiect to taxation? Because insurance premiums are tax-deductible Because dividends are already subject to capital gains Because dividends are payable directly to the policyholder Because dividends are considered to be a return of premium Because dividends are considered to be a return of premium Under the subrogation clause, legal action can be taken by the insurer against the responsible third party beneficiary policyowner State responsible third party Key Person Disability Insurance pays benefits to the hospital employee employer employee's creditors employer What is issued to each employee of an employer health plan? Provision Receipt Policy Certificate certificate Under the Consolidated Omnibus Budget Reconciliation Act (COBRA), a terminated employee's benefits must be less extensive and premium cannot exceed 102% be the same and the premium cannot exceed 102% be more extensive and the premium cannot exceed 102% be the same as well as the premium be the same and the premium cannot exceed 102% 16 | P a g e The election of COBRA for continuation of health coverage will increase the coverage and lower premium maintain the same coverage and increase premium increase out-of-pocket costs and lower premium decrease out-of-pocket costs and maintain same premium maintain the same coverage and increase premium Under group health insurance, a certificate of coverage is issued to the employer employee producer sponsor employee If an employee contributes 50% toward the disability plan premium provided by an employer, what would be considered the taxable income of a $1,000 monthly disability benefit? $100 $250 $500 $1,000 $500 How many employees must an employer have for a terminated employee to be eligible for COBRA? 20 30 40 50 20 Which of the following is typically NOT eligible for coverage in a group health policy? Full-time employee Temporary employee 17 | P a g e Business owner Partner in a partnership temporary employee Health insurance involves two perils, accident and ___ death sickness disability Liability sickness The purpose of the Coordination of Benefits provision in group accident and health plans is to avoid overpayment of claims reduce out-of-pocket costs reduce adverse selection lower the cost of premiums avoid overpayment of claims Sonya applied for a health insurance policy on April 1. Her agent submitted the information to the insurance company on April 6. She paid the premium on May 15 with the policy indicating the effective date being May 30. On which date would Sonya have coverage? April 1 April 6 May 15 May 30 May 30 A master contract and certificate of coverage can be found in which type of policy? Long-term Medicaid Group Medicare group 20 | P a g e April 1 May 1 June 1 June 15 May 1 David submits a $500 claim for medical expenses. There is a past-due amount owed for insurance premiums of $200. As a result, the insurer only pays $300 for the claim. This deduction came as a result of which provision? Unpaid provision Consideration clause Waiver of premium provision Reduced benefit clause Unpaid provision During hearing proceedings, if a person files a waiver of immunity or privilege, and the testimony is produced before court or jury, the person loses their license claim immunity appointment Immunity Tom has a rider on his disability income policy that guarantees the right to increase his benefits without a medical exam. What kind of rider is this? Waiver of premium rider Guaranteed benefit rider Payor benefit rider Guaranteed insurability rider Guaranteed insurability rider An insurer may pay commissions directly to any person for services as a producer provided the producer is licensed and insured appointed annointed registered Appointed 21 | P a g e An insurer has the right to recover payment made to the insured from the negligent party. These rights are called contributory indemnity estoppel subrogation Subrogation Which provision states that a group accident and health policy must provide a continuation of benefits for an individual insured if the policy is terminated or replaced? Continuation of Coverage Conversion Privilege Continuation Privilege Continuation of Benefits Continuation of Benefits The Arkansas Insurance Department may take each of the following actions EXCEPT: Issue Cease and Desist Order Impose fines Revoke licenses Incarceration Incarnation Bill the producer is collecting the initial premium on a health policy. Which of the following statements is true? The contract is not in force without the initial premium being paid A partial initial premium is acceptable The insured has no advantage to pay the initial premium at the time of application A claim must be honored by the insurer even if an initial premium is not paid The contract is not in force without the initial premium being paid In contrast to a guaranteed renewable policy, a noncancellable policy may cancel the policy only at renewal may raise premiums at policy renewal may raise premiums at anytime may never raise premiums may never raise premiums 22 | P a g e An individual can enroll in a Part C Medicare Advantage Plan at what time? When becoming eligible for Medicaid At age of retirement Age 59 1/2 When becoming eligible for Medicare When becoming eligible for Medicare If an agent has a combined agent/broker license, and recommends a particular insurer to a customer in which he/she is not appointed, in what capacity is the agent acting? as a broker as an agent as an adjuster as an underwriter As a broker Which of the following actions may an insurance company NOT do in a health policy that contains a guaranteed renewable premium benefit? Stop renewing policy when the insured reaches a specified age Cancel policy if premiums are not paid Increase the premiums on an individual basis Increase the premiums on the basis of an entire classification Increase the premiums on an individual basis Which of the following is NOT included under a health benefit plan? Major medical policy Basic hospital policy Hospital indemnity plan Surgical expense policy Hospital indemnity plan Which license is REQUIRED in order to solicit Long Term Care insurance in the State of Arkansas? Life Insurance Producer License Long Term Care Insurance Producer License Casualty Insurance Producer License Health Insurance Producer License Health Insurance Producer License A medical provider that accepts Medicare Assignment must 25 | P a g e guaranteed renewable conditionally cancelable Conditionally renewable ___ is any insurance carrier providing disability benefit plans for a small employer's eligible employees. Employer Adiuster Employer Carrier Broker Employer Carrier Which of the following is NOT a required provision in an accident and health insurance policy? legal actions grace period change of occupation reinstatement change of occupation Under long-term care insurance, which of the following MUST an insurer offer to each policyowner at the time of purchase? A decrease in annual benefit levels Lifetime minimum benefit levels An inflation protection feature Minimum benefit levels An inflation protection feature What amount will be paid under a policy where the insured misstated his/her age? The amount stated in the policy, only if the insured pays an additional premium No adiustments will be made An amount the premium would have purchased at the correct age No amount will be paid because the insured misstated his/her age An amount the premium would have purchased at the correct age Underwriters can acquire information from all of the following sources EXCEPT Medical Information Bureau (MIB) consumer reports 26 | P a g e attending physician's statements genetic testing genetic testing A beneficiary change can occur: only upon the request of the revocable beneficiary only on specified dates within the policy normally at any time during the policy term at no time normally at any time during the policy term To protect information systems, agents, brokers and insurance companies must implement and maintain a(n): cloud-based storage policy cybersecurity policy information superhighway policy biometrics recognition security policy Cybersecurity policy Ted has a health insurance plan that requires him to pay a specific sum out of pocket before any benefits are paid in a calendar year. Which of these does his health plan have? Calendar-year deductible Coinsurance provision Stop-loss feature Integrated deductible Calendar-year deductible This MANDATORY health policy provision states that the policy, including endorsements and attached papers, constitutes the partial insurance contract between the parties the entire insurance contract between the parties the conformity of state statutes the legal purpose of the contract the entire insurance contract between the parties Tyler purchased a disability policy with a waiver of premium rider on April 1. He is disabled on May 1. On June 1, he receives proof of permanent and total disability, and submits a claim. He begins receiving benefits on June 15. When are his premiums waived? April 1 27 | P a g e May 1 June 1 June 15 May 1 Donna and Mary were racing bicycles in a store parking lot while being cheered on by fellow employees. Mary ran into John, another employee, who happened to be taking out the garbage. Both Mary and John are injured. Who would most likely be covered under Workers' Compensation? John Mary John and Mary Neither of them John Which of the following would be a valid reason why a policy premium would be higher than the standard premium? The insurer is not a member of the MIB The agent quoted the wrong price The insured does not have the necessary financial reserves The insured does not meet established underwriting requirements The insured does not meet established underwriting requirements The entire contract includes the actual policy and the inspection report warranty statements provisions application application Which of these is likely to occur when life or health insurance is being applied for? The Medical Information Bureau (MIB) will determine the risk classification The agent is required to report all medical information to the Medical Information Bureau (MIB) Physical examinations are required Medical history from the insured may be reviewed and reported Medical history from the insured may be reviewed and reported 30 | P a g e Will be the primary insurer and pay for 100% of covered expenses Will be the secondary insurer and pay for claims not fully covered by the group plan Will not pay for any of the covered expenses Will be the primary insurer and the group plan will be secondary Will be the secondary insurer and pay for claims not fully covered by the group plan The Commissioner is empowered to: enforce state laws relating to insurance pass state laws relating to insurance write policy forms for mandatory insurance coverages set rates for mandatory insurance coverages Enforce state laws relating to insurance Rick owns an insurance policy that is renewable only at the option of the insurance company. His policy is considered to be cancelable guaranteed renewable conditionally renewable optionally renewable Optionally renewable The elimination period under a hospital indemnity plan is the period in which pre-existing conditions are not taken into consideration the period in which all deductibles are eliminated the specified number of days after an insurance policy's issue date during which coverage is not afforded for sickness the specified number of days an insured must wait before becoming eligible to receive benefits for each hospitalization the specified number of days an insured must wait before becoming eligible to receive benefits for each hospitalization After an insured gives notice of loss, what must he/she do if the insurer does not furnish forms? File a lawsuit Contact the insurer again requesting forms Nothing File written proof of loss File written proof of loss A licensee who is required to take continuing education must complete ___ hours of continuing education coursework? 31 | P a g e 20 24 30 34 24 A producer who knowingly submits a FALSE statement in support of a claim may be found guilty of: coercion twisting rebating fraud Fraud Once a policy has been reinstated, the insured MUST wait what amount of time before coverage for sickness is covered? 45 days 15 days 10 days 3 days 15 days HIPPA considers which of the following as "individually identifiable health information"? A person's employment history A person's net income A person's hire date A person's health claim information A person's health claim information A rehabilitation benefit is intended to prepare the insured to return to employment minimize the insurer's liability give the insured time to find a new career increase the overall benefits given to the insured prepare the insured to return to employment Intentional withholding of material facts that would affect an insurance policy's validity is called a(n) estoppel concealment 32 | P a g e adhesion misrepresentation concealment An insurer is best described as: individual, firm, limited liability company, or corporation which, for a fee, advises anyone as to their investment needs individual, firm, limited liability company, or corporation which, for a fee, advises anyone as to their insurance needs any person, corporation, association, or society that writes finance contracts any person, corporation, association, or society that writes insurance contracts any person, corporation, association, or society that writes insurance contracts Which type of plan would be most appropriate for an individual on Medicare and is concerned that Medicare will NOT pay for charges exceeding the approved amount? Medicaid Long-term care Medicare supplement Plan F Comprehensive major medical Medicare supplement Plan F A type of insurer that is owned by its policyowners is called domestic mutual stock in-house mutual According to life insurance contract law, insurable interest exists when any business relationship exists at the time of application at the time of death only when determined by a judge At the time of application Which of the following is NOT a common exclusion for a medical expense policy? 35 | P a g e Integrated deductible Which of the following typically does NOT provide a form of managed care? Preferred Provider Organization (PPO) Point-of-Service (POS) plan Major medical indemnity plan Health Maintenance Organization (HMO) Major medical indemnity plan According to the Health Insurance Portability and Accountability Act (HIPAA), when can a group health policy renewal be denied? There have been too many claims in the previous ear The size of the group has increased by more than 10% Participation or contribution rules have been violated Participation or contribution rules have been changed Participation or contribution rules have been violated Karen is a producer who has obtained personal information about a client without having a legitimate reason to do so. Under the McCarran-Ferguson Act, what is the minimum penalty for this? $0 $5,000 $10,000 $15,000 $10,000 A health insurance policy that allows an insurer to change the policyowner's premiums, but NOT cancel the policy is called a(n) guaranteed renewable policy conditionally renewable policy optionally renewable policy noncancelable policy guaranteed renewable policy In group health care, what is the purpose of the coordination of benefits provision? Determines where an insured goes to receive treatment Determines what is paid by the primary and secondary insurers in the event of a claim 36 | P a g e Ensures that a health provider receives the proper benefit amount owed Determines which parent's plan covers a dependent child Determines what is paid by the primary and secondary insurers in the event of a claim Jonas has disability insurance through his employer. The employer pays 75% of the premium, and Jonas pays the other 25%. What is Jonas's tax liability for any benefits paid from the disability plan? Taxes must be paid on all benefits received No taxes are payable on any benefits received Taxes must be paid on 25% of the benefits received Taxes must be paid on 75% of the benefits received Taxes must be paid on 75% of the benefits received When does a health insurance policy typically become effective? When the policy is issued When initial premium is collected and policy is issued When the application is completed and signed When the completed application is signed and initial premium is collected When initial premium is collected and policy is issued The type of policy where the insurer can send a notice to the insured that the policy has been cancelled in the middle of the term is called noncancelable conditionally renewable optionally renewable cancelable cancelable Fraternal Benefit Society has each of the following characteristics EXCEPT Incorporated Without capital stock Exist For profit Exist for the benefit of its members Exist For profit When an insurance company consistently fails to provide reasonable explanations for the denial of a claim, this is called a(n): 37 | P a g e breach of contract unfair claim settlement fraudulent claim practice Unlawful insurance act unfair claim settlement An example of a presumptive disability would be a stroke deafness diabetes cancer deafness David submits a $500 claim for medical expenses. There is a past-due amount owed for insurance premiums of $200. As a result, the insurer only pays $300 for the claim. This deduction came as a result of which provision? Unpaid provision Consideration clause Waiver of premium provision Reduced benefit clause Unpaid provision Who is the individual paid on a fee-for-service basis? Subscriber Administrator Insured Provider provider A master contract and certificate of coverage can be found in which type of policy? Long-term Medicaid Group Medicare group Bill requires some nursing care and supervision but NOT full-time care. Which of these nursing home options would best serve him? Nursing home 40 | P a g e 80% An insurance producer must notify the Commissioner within how many days of conviction of a crime? Ten Thirty Sixty Ninety Thirty Group health plans may deny participation based upon the member's claims history member's current age member's pre-existing condition member' part-time employment status member' part-time employment status Lorenzo is self employed with an S corporation. He is unmarried and had a net profit for the tax year. What are the tax ramifications of his health insurance premiums paid for the year? 50% of his health insurance costs can be deducted from his gross income 75% of his health care costs can be paid with pre-tax income 100% of his health insurance costs can be deducted from his gross income 100% of his health insurance costs can be paid with tax credits 100% of his health insurance costs can be deducted from his gross income All of the following are functions of an insuring clause EXCEPT States the conditions under which the policy will pay Outlines the kind of benefits provided Primarily describes the free-look period Provides the policy's scope and limits of coverage Primarily describes the free-look period What is the primary factor that determines the benefits paid under a disability income policy? Education level Wages Type of occupation Age wages 41 | P a g e An Arkansas temporary producer license may be issued for a period not to exceed: 30 days 45 days 90 days 180 days 180 days All of these are typically sources of underwriting information for life or health insurance EXCEPT Consumer reports Medical Information Bureau (MIB) reports Disclosure authorization response Attending physician's statement (APS) Disclosure authorization response Why are dividends from a mutual insurer not subiect to taxation? Because insurance premiums are tax-deductible Because dividends are already subject to capital gains Because dividends are payable directly to the policyholder Because dividends are considered to be a return of premium Because dividends are considered to be a return of premium The document that describes policy features, benefits, exclusions and riders in a Long-Term Care policy is known as the: Shopper's Guide Buyer's Guide Outline of Coverage MIB Report Outline of Coverage An accident and health insurer has just received written proof of loss from one of its insureds. The insured must now wait 60 days before submitting another claim bringing legal action against the insurer the insurer will pay the claim purchasing more insurance from this insurer bringing legal action against the insurer A child can stay on the parents insurance until what age? 42 | P a g e 21 years old 25 years old 26 years old 29 years old 26 years old A person covered with an individual health plan is issued a policy is issued a certificate of medical costs does not contract directly with the insurance company is not subject to medical underwriting Is issued a policy Which of the following is typically NOT eligible for coverage in a group health policy? Full-time employee Temporary employee Business owner Partner in a partnership Temporary Employee How many employees must an employer have for a terminated employee to be eligible for COBRA? 20 30 40 50 20 employees The election of COBRA for continuation of health coverage will increase the coverage and lower premium maintain the same coverage and increase premium increase out-of-pocket costs and lower premium decrease out-of-pocket costs and maintain same premium maintain the same coverage and increase premium 45 | P a g e help pay off existing loans during periods of disability Which of the following decisions would a Health Savings Account (HSA) owner NOT be able to make? The amount contributed by the employer The amount contributed by the owner The underlying account investments used The medical expenses paid for by the HSA The amount contributed by the employer Medicaid is a government-funded program designed to provide health care to all individuals over the age of 65 all individuals who carry Medicare supplemental insurance anyone who does not have a proper caregiver poor people poor people How does one become eligible for Part D: Prescription Drug coverage? Must meet certain underwriting guidelines Must have a valid prescription Must have Medicare coverage Must have Medicaid coverage Must have Medicare coverage Part A Hospital expense coverage provided under Medicare is automatically made available to each of the following EXCEPT A 50-year old individual who has qualified for SSDI in the last 24 months A 70-year old NOT eligible for Social Security A 55-year old suffering from kidney failure A 65-year old retiree A 70-year old NOT eligible for Social Security Which of these will typically authorize treatment from a specialist? Administrator Policyowner Insurance company Gatekeeper gatekeeper 46 | P a g e Which of the following is Medicare Part B also known as? Hospital insurance Medical insurance Long-term care insurance Medigap Medical Insurance Medicare Part B covers most medically necessary doctors' services, preventive care, durable medical equipment, hospital outpatient services, laboratory tests, x-rays, mental health care, and some home health and ambulance services. You pay a monthly premium for this coverage. Maria is a Preferred Provider Organization (PPO) subscriber and received care from an out-of-network provider. Which of the following is the likely result? Care is covered Care is not covered Care is only covered in a government facility Care is only covered if primary care physician gives a referral Care is covered At what age will a person normally enroll with an insurance carrier under a Part C Medicare Advantage Plan? Age 59 1/2 Age 60 Age 62 Age 65 age 65 Small employers who are sponsored by an insurer to provide group benefits to its employees are called Fraternal Benefit Society Surplus lines brokers Lloyd of London MEWA MEWA Which of the following is NOT taken into consideration when determining eligibility for Medicare benefits? 47 | P a g e Chronic kidney disease Income Age Social Security disability income The open enrollment period for Medicare Part B is January 1 through March 31 January 1 through April 30 January 1 through May 31 January 1 through June 30 January 1 through March 31 Ted has a health insurance plan that requires him to pay a specific sum out of pocket before any benefits are paid in a calendar year. Which of these does his health plan have? Calendar-year deductible Coinsurance provision Stop-loss feature Integrated deductible Calendar-year deductible A pharmacy benefit covers prescription drugs derived from a list called a(n) administrative drug list drug formulary controlled substance list generic benefit manager drug formulary An indemnity plan pays both the insured and health care provider provides the insured a specific dollar amount for services pays the health care provider directly for services rendered is typically issued as a group plan provides the insured a specific dollar amount for services Which of the following types of deductibles would apply a single deductible to both medical and dental insurance coverage? Standard deductible Combined deductible 50 | P a g e A health insurance policy will typically cover injuries obtained from war elective cosmetic surgery preventative health services work related injuries preventative health services What is the tax liability for emplover contributions in Health Savings Accounts (HSA's)? Taxable as regular income to the employee Tax-deductible expense to the employee No tax payment needed Taxable to the employee when they exceed 7 1/2 % AGI No tax payment needed Coming from an insurance point of view, which of the following is the main risk associated with disabilitv? Loss of limbs Loss of income Decreased work skills Decreased mobility Loss of income The waiting period for a disability insurance policy excludes payments for a short-term illness or injury is the period of time that must elapse following the effective date of the policy before benefits are payable helps the insurer determine if the claim is legitimate allows the insurer to collect medical information on the policyowner Excludes payment for a short-term illness or injury Frank is shopping for a disability income policy. Which of the following would have the HIGHEST premium? 14 day waiting period / 5 year benefit period 14 day waiting period / 10 year benefit period 28 day waiting period / 5 year benefit period 28 day waiting period / 10 year benefit period 14 day waiting period / 10 year benefit period 51 | P a g e A rehabilitation benefit is intended to prepare the insured to return to employment minimize the insurer's liability give the insured time to find a new career increase the overall benefits given to the insured prepare the insured to return to employment Which type of disability would be less than total impairment and equal to permanent impairment? Partial total disability Permanent partial disability Residual partial disability Temporary partial disability Permanent partial disability The factor used most often when underwriting a disability income policy is annual earnings sex of the insured marital status occupation annual earnings What percentage of a participant's income are group long-term disability benefit amounts typically limited to? 30% 40% 50% 60% 60% Which of these would NOT be considered a presumptive disability? Loss of vision and speech Loss of hearing Loss of a leg or arm Loss of a leg and arm Loss of a leg or arm 52 | P a g e A policyowner suffers an injury that renders him incapable of performing one or more important job duties. Any decrease in income resulting from this injury would make him eligible for benefits under which provision? Partial disability Nondisabling injury Presumptive disabilit Flat amount disability Partial Disability Claims payable to a Disability Income insured, even when the insured can continue to work, are the result of a Total disability Recurrent disability Presumptive disability Lengthy elimination period Presumptive Disability A presumptive disability provision specifies certain conditions that automatically qualify the insured for the full benefit because the severity of the conditions presumes the insured is totally disabled, even if the insured is able to work. All of the following are core benefits of Medicare Supplement Plan A EXCEPT Deductible payments for the first 60 days of hospitalization under Medicare hospitalization insurance Medicare Part A hospice coinsurance or copayment Medicare Part B coinsurance or copayment The first three pints of blood received Deductible payments for the first 60 days of hospitalization under Medicare hospitalization insurance Generally speaking, which three levels of care are Long-Term Care policies provided with? Disability, acute care, and hospitalization Accident, medical care, and rehabilitation Psychological, acute care, and assisted living Skilled nursing, intermediate, and custodial care Skilled nursing, intermediate, and custodial care The typical long-term care insurance policy is designed to provide a minimum of ___ year(s) of coverage. 1 3 55 | P a g e application An accident and health insurer has just received written proof of loss from one of its insureds. The insured must now wait 60 davs before submitting another claim bringing legal action against the insurer the insurer will pay the claim purchasing more insurance from this insurer Bringing legal action against the insurer Kathy pays a monthly premium on her health insurance policy. How long is her grace period? 10 days 7 davs 31 davs 45 days 10 days The time limit for filing claim disputes is addressed in which provision of an accident and health policy? Legal actions Entire contract Time of payment of claims Payment of claims legal actions All of the following are functions of an insuring clause EXCEPT States the conditions under which the policy will pay Outlines the kind of benefits provided Primarily describes the free-look period Provides the policy's scope and limits of coverage Primarily describes the free-look period The reinstatement provision in a health insurance policy is mandatory 56 | P a g e optional voluntary discretionary mandatory Which of the following actions may an insurance company NOT do in a health policy that contains a guaranteed renewable premium benefit? Stop renewing policy when the insured reaches a specified age Cancel policy if premiums are not paid Increase the premiums on an individual basis Increase the premiums on the basis of an entire classification Increase the premiums on an individual basis Written notice for a health claim must be given to the insurer ___ days after the occurrence of the loss. 10 20 31 60 20 days An insurer must furnish to a claimant forms for filing proof of loss within ___ days upon receiving a notice of claim. 10 15 20 25 15 When an insured changes to a more hazardous occupation, which disability policy provision allows an insurer to adjust policy benefits and rates? Relation of earnings to insurance provision Change of occupation provision Conformity of state statutes provision Modified occupation provision Change of occupation provision 57 | P a g e A health insurance policy that allows an insurer to change the policyowner's premiums, but NOT cancel the policy is called a(n) guaranteed renewable policy conditionally renewable policy optionally renewable policy noncancelable policy guaranteed renewable policy In which of the following situations would the insurer be liable for a loss? The insured skipped a payment beyond the 31 day grace period The insured was injured while participating in an illegal occupation The insured was given a notice of cancellation from the insurer The insured suffered an injury as an innocent bystander during a bank robbery The insured suffered an injury as an innocent bystander during a bank robbery All of the following are included as part of a contract in the entire contract provision EXCEPT the Riders application changes made by the producer policy Change made by the producer Signatures for an insurance application MUST be obtained by the producer from all of the following sources EXCEPT the producer the insured the policyowner the beneficiary the beneficiary Medicaid provides all of the following benefits EXCEPT: A-family planning services B-Income assistance for work-related injury C-Home health care services D-Eyeglasses B Concerning group Medical & Dental insurance, which of the following statements is incorrect? 60 | P a g e C what is the maximum period of time during which an insurer may contest fraudulent and misstatements made in the health insurance application? A-90 days after the effective policy date B-6 months after the effective policy date C-1 year after the effective policy date D-as long as the policy is in force D All of the following long-term care coverages would allow an insured to receive care at home EXCEPT: A-respite care B-home health care C-Skilled Care D-Custodial Care in insured's house C The provision in a health insurance policy that ensures that the insurer cannot refer to any document that is not contained inthe contract is the A) Legal action against us clause. B) Entire contract clause. C) Time limit on certain defenses clause. D) Incontestability clause. B When can an insured initiate legal action against the insurer? A-60 days after submitting proof of loss B-no later than 1 year from the loss C-at any time after the loss D-within 20 days after the loss A An insurance company has published a brochure that inaccurately portrays the advantages of a particular insurance policy. What is this an example of? A-False Advertising B-Unfair Claims C-Twisting D-Defamation A 61 | P a g e In a group health policy, a probationary period is intended for people a) Who want lower premiums. b) Who joined the group after the effective date. c) Who had a pre-existing condition at the time they joined the group. d) Who have additional coverage through a spouse. b An insured loses her left arm in an accident that is covered by her Accidental Death and Dismemberment policy. WHat kind of benefit will she most likely receive from this policy? A-Capital amount in monthly installments B-Principal amount in monthly installments C-Capital amount in a lump sum D-Principal amount in a lump sum C A husband and wife are insured under group health insurance plans at their places of employment. Because their employers pay for their plans, each is covered as a dependent under their spouse's coverage. If the husband is hospitalized, how are medical expenses likely paid? A) The husband can collect from each plan B) The husband will have to select a plan from which he wants to collect benefits C) The benefits will be coordinated. D) Neither plan would pay. C 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 preventative care. What best describes the health system that the woman is using? A) Major medical B) Group health C) Managed Care D) Comprehensive health C Under the Physical Exam and Autopsy provision, how many times can an insurer have the insured examined, at its own expense, while a claim is pending? a. unlimited b. 1 examination per week of the claim processing period c. none at all d. 2 examinations per week of the claim processeing period 62 | P a g e a An 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. This indicates that his policy is written with a 30- day A-elimination period B-Blackout period C-Probationary Period D-Waiver of Benefits period A Alexander has a policy with his ex-wife as its beneficiary. What provision allows him to change the beneficiary to his new wife? A-payment of claims B-change of beneficiary C-Absolute assignment D-Entire contract B The type of dental plan which is incorporated into a major medical expense plan is a/an A-stand-alone dental plan B-Blanket dental plan C-Integrated dental plan D-supplemental dental plan C In which of the following situations would Social Security Disability benefits NOT cease? A) The individual's son gets a part-time job to help support the family B) The individual reaches age 65 C) The individual dies D) The individual has undergone therapy and is no longer disable A A guaranteed renewable disability insurance policy A-Cannot be cancelled by insured before age 65 B-Is renewable at the insured's option to a specified age C-Is renewable at the option of the insurer to a specified age of the insured D-Is guaranteed to have a level premium for the life of the policy B 65 | P a g e A-attending physician's statement B-physician's review C-Individual medical summary D-Comprehensive medical history a an insured is covered under a medicare policy, that provides a list of network healthcare providers that he must use in order to receive coverage. in exchange for the inconvenience, he is offered a lower premium, which type of "medicare" policy does he own ? A-Medicare supplement B-Medicare Advantage C-Medicare SELECT D-Medicare Part A C A man is injured while robbing a convenience store. How does his major medical policy handle the payment of his claim? A-Claim is denied if his policy contains the Illegal Occupation provision B-50% of claim will be paid C-If the man isn't convicted, he will get 75% of his claim paid D-The claim is paid in full A The insured's health policy only pays for medical costs related to accidents. Which of the following types of policies does the insured have? A-accident only B-restrictive C-accidental death D-comprehensive A In order for an insured under Medicare Part A to receive benefits for care in a skilled nursing facility, which of the following conditions must be met? A) The insured must cover daily copayments B) The insured must have first been hospitalized for 3 consecutive days. C) The insured must have a Medicare supplement insurance policy D) There is no benefit provided under Medicare Part A for skilled nursing care B 66 | P a g e Which of the following statements is NOT correct concerning the COBRA Act of 1985? a) It requires all employers, regardless of the number or age of employees, to provide extended group health coverage. b) It covers terminated employees and/or their dependents for up to 36 months after a qualifying event. c) It applies only to employers with 20 or more employees that maintain group health insurance plans for employees. d) COBRA stands for Consolidated Omnibus Budget Reconciliation Act a Which of the following reports will provide the underwriter with the information about an insurance applicant's credit? A-inspection report B-agent's report C-any federal report D-Consumer report D Which of the following persons is required to hold a producer license? A-A person who takes messages related to claims B-A person who administers employee benefits C-A person who negotiates insurance contracts D-A person who creates insurance advertisements C In order to comply with Fair Credit Reporting Act, at which times must a producer notify an applicant that a credit report may be requested: A-at the time of application B-when the applicant's credit is checked c-when the policy is delivered D-at the initial interview a 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 67 | P a g e Another term used to describe "no deductible" is A-comprehensive B-total coverage C-immediate cooperative D-first-dollar basis D Whose responsbility is it to determine if all of the questions on an application have been answered? a-insurer b-applicant c-beneficiary d-agent d If a consumer requests additional information concerning an investigative consumer report, how long does the insurer or reporting agency have to comply? A-5 days B-7 days C-10 days D-3 days a An insured wants to name her husband as the beneficiary of her health policy. She also wishes to retain all of the rights of ownership. The insured should have her husband named as what type of beneficiary? A-revocable B-primary C-contingent D-irrevocable a A disability income policy is written with a 10-month benefit period, a 30-day elimination period and a 30-day probationary period. If the insured becomes disabled due to sickness 9 days after the effective date, the policy will pay benefits for a maximum of: A) 21 days B) 10 months 70 | P a g e A. the old policy must be cancelled before the new one can be issued B. the old policy should stay in force until the new policy is issued C. there should be at least a 10-day gap between the policies D. policies must overlap to cover pre-existing conditions b Which of the following Disability Income policies has the highest premium: A- 30 day waiting period / 5 year benefit period B- 30 day waiting period / 10 year benefit period C- 15 day waiting period / 5 year benefit period D- 15 day waiting period / 10 year benefit period D (the shorter the waiting period, the higher the premium. the longer the benefit period, the higher the premium) Many health insurance policies are required to provide Chlamydia screenings. At what age does this coverage end? a-30 b-35 c-25 d-29 d Which of the following is NOT covered under a long-term care policy? a-home health care b-acute care in a hospital c-adult day care d-hospice care b Any of the following would be considered an unfair trade practice, EXCEPT A-Attempting to settle a claim for less than the amount to which a reasonable person would have believed he was entitled by reference to written or printed advertising material used in the sale B-Attempting to settle a claim by the use of arbitration C-an insurer failing to affirm or deny coverage within a reasonable time after proof of loss statements have been recieved by the company D-attempting to settle a claim on the basis of an application which was altered without notice to, or knowledge and consent of the insured B 71 | P a g e Hospice care is intended for a-home health visits from a participating home health agency b-the caregiver c-the terminally ill d-people in need of acute care c A temporary license may be issued by the Commissioner for a period not to exceed how many days? a-90 b-120 c-180 d-365 c Which of the following would be required to complete prelicensing education? a-An accredited advisor in insurance who wants to sell property insurance b-a nonresident life insurance producer who is planning to transact property insurance c-a producer previously licensed in another state planning to transact the same line of insurance d-a chartered life underwriter planning to transact life insurance b What type of care is respite care? a-daily medical care, given by medical personnel b-institutional care c-24-hour care d-relief for a major care giver d As a condition for renewal of their licenses, how many hours of continuing education are required for all resident and nonresident insurance producers? a-24 b-12 c-10 d-20 a #17. Which of the following is NOT mandatory under the Uniform Provisions Law as applied to accident and health policies? 72 | P a g e a) Change of Occupation b) Time Limit on Certain Defenses c) Physical Examination and Autopsy d) Entire Contract a In order to be eligible for a producer's license in the state of tennesee, an applicant must meet all of the qualifiecations EXCEPT a-be a resident of tennessee or satisfy nonresident requirements b-complete 40 hours of prelicenscing education c-be competent, trustworthy, and good business reputation d-be 18 years or older b A dentist is off work for 4 months due to a disability. His dental assistant's salary would be covered by: A) Key Employee Disability B) Business Overhead Insurance C) Partnership Disability D) Disability Income b An agent delivers a policy to an applicant, who pays the initial premium but refuses to submit a Statement of Good Health. Which of the following best describes what the applicant has violated? A-adhesion B-contractual agreement c-consideration d-representation c The Time of Payment of Claims Provision requires that an insurance company pay Disability Income benefits no less frequently than: AMonthly BSemiannually CQuarterly D Annually a The policy provision that prevents an insurance company from altering its agreement with a policy owner by referring to documents or other items not contained in the policy is called the 75 | P a g e c-submit the description in their own words on a plain sheet of paper d-be reimbursed any copayment or deductible on the claim c A health care plan that is a hybrid of health maintenance organziations and preferred provider organizations that provide subscribers with freedom of choice of health care providers other than health maintance organizations are called.. a-gatekeeper plans b-point-of-service plan c-comprehensive care plans d-managed care plans b Which of the following actions does NOT constitute false advertising? a-misrepresenting the dividends of a policy b-using names that disguise the true nature of a polciy c-requiring applications more quickly than whats reasonable d-misrepresenting the terms of a policy c Ed is covered under a health plan provided by his employer. he was told that his insurance would pay the majority of the covered expenses if he would chooce to see a provider in his plan's list. If ed chose to be treated by a provider who wasn't on the list, his portion of the bill would be greater. Ed is covered under a/an a-limited health plan b-preferred provider plan c-coordinated plan d-HMO group plan b Which of the following MUST the commissioner do before suspending or revoking the licence of an agency? a-advice the agency of suspension in writing within 30 days b-assess a civil penalty of $100 to $1000 c-inform the NAIC d-hold a hearing to determine if a violation has been comitted d Which of the following would be required to complete the producer licensing requirements? 76 | P a g e a-customer service representtaive who discusses policies b-agency supervisor whose actions don;t include selling insurance c-a person whose activities are limited to insurance advertising d-an officer of an insurer who doesn't recieve commissions a On an accidental death and dismemberment policy, the death benefit payable is known as the a-capital sum b-policy limit c-principal sum d-face amount c An insured was diagnosed 2 years ago with kidney cancer. she was treated with surgeries and chemotherapy and is in remission. she also has a 30 year smoking history. she is now healthy enough to work and has started a full time job. Which describes the health insurance that she will likely recieve? a-she would be accepted under an insurance policy, provided that a rider excluding cancer related conditions is attached b-She would be covered under her employer's group health insurance plan, without higher premiums c-she would be covered under her employers group health insurance plan, but she would pay higher premiums d-she would be denied coverage due to the risk posed by her prior medical history b According to the Time Limit on Certain Defenses provision, statements or misstatements made in the application at the time of issue cannot be used to deny a claim after the policy has been in force for a minimum of how many years? a-1 year b-2 years c-3 years d-5 years b In addition to participation requirements, how does an insurer guard against adverse selection when underwriting group health? a-obtaining MIB reports on each enrollee b-by imposing case mangement provisions c-by requiring that the insurance be incidental to the group d-by having each enrollee undergo a paramedical examination 77 | P a g e c HMOS are known as what type of plans a-service b-health savings c-consumer driven d-reimbursement a A major medical expense polic would exclude coverage for all of the treatments except a-dental care b-cosmetic surgery c-drug addiction d-eye refractions c Under the mandatory uniform provision Proof of Loss, the claimant must submit proof of loss within what time period after the loss? a-60 days b-90 days c-two years d-30 days b What is the purpose of the benefit schedule? a-to include the average charges for procedures b-to provide the dates for the payment of benefits c-to list the insured's copayments and deductibles d-to state what and how much is covered in the plan d Tom purchase a health insurance policy with a renewability clause that staets the policy is Guaranteed Renewable. This means that as long as Tom pays the required premiums, the policy will continue until tom... a-reaches 100 b-becomes disabled c-reaches 65 d-dies c 80 | P a g e c-within 30 days d-within 60 days b All of the following are changes to health insurance plans introduced by the PPACA except: a-coverage for pre-existing conditions b-requirement for preventive care without deductibles or copays c-full cost coverage for all medical expenses d-limiting age for dependent children c Under the mandatory uniform provision Legal Actions, an insured is prevented from bringing a suit against the insurer to recover on a health policy prior to a- 90 DAYS AFTER WRITTEN PROOF OF LOSS HAS BEEN SUBMITTED B- 60 DAYS AFTER WRITTEN PROOF OF LOSS HAS BEEN SUBMITTED. C-ONE YEAR AFTER OCCURENCE OF DISABILITY D-30 DAYS AFTER THE LOSS B An insured has an individual disability income policy with a 30 day elimination period. He becomes disabled on june 1st for 15 days. when will he collect on his disability income payments? a-he wont collect anything b-he will collect 15 days of payment after 30 days c-he will begin collect on the 15th day d-hew ill begin collecting on june 1st a (he never fulfilled the elimination period) Which of the following statements is INCORRECT regarding the definition of total disability? a-inability to perform duties of ones own occupation b-inability to perform partial duties of any occpation for which a person is suited by reason of education, training or experience c-defined differently under certain disability income policies d-inability to perform any occupation for which a person is reasonably suited by reason of education, training or experience b Which of the following best describes a Major Medical Expense Policy? a-It provides coverage to an insured who is confied to a hospital with a daily benefit amount and a specified benefit period 81 | P a g e b-it provides catastrophic medical coverage beyond basic benefits on a usual, customary, and reasonable basis c-it provides surgical coverage to an insured with a schedule indicating charges for each procedure d-it provides coverage for in-hospital doctor visits that are of a nonsurgical nature b In a relative value system of determining coverage for a given procedure, what term describes the total amount payable per point? a) Relative value b) Translation factor c) Practical value d) Conversion factor d 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? a) Double the amount of the death benefit b) Refund of premiums c) Principal sum d) Capital sum c Long-term care insurance policies must cover which of the following? a) Injuries caused by an act of war b) Alzheimer's disease c) All mental disorders d) Treatment of alcoholism b If a resident insurance producer moves from Tennessee to another state, he/she must file a change of address and provide certification from the new resident state within how many days of the change of legal residence? a) 10 days b) 20 days c) 30 days d) 60 days c A Limited Insurance Representative is an individual, other than an insurance producer, who may solicit or negotiate contracts for certain types of insurance which includes all of the following EXCEPT 82 | P a g e a) Mortgage guaranty insurance. b) Automobile physical damage insurance. c) Crop hail insurance. d) Portable electronics insurance. b Which of the following provisions would prevent an insurance company from paying a reimbursement claim to someone other than the policyowner? a) Payment of Claims b) Change of beneficiary c) Entire Contract Clause d) Proof of Loss a Individual long-term care insurance policyholders have the right to return the policy within __ days of its delivery and to have the premium refunded if, after examination of the policy, the policyholder is not satisfied for any reason. a) 10 b) 20 c) 30 d) 60 c Before a customer's agent delivers his policy, the insurer makes a last-minute change to the policy. The agent informs the customer of this change, and he accepts it. What must the agent do now? a) Nothing. After the explanation, the agent is not legally bound to do anything else. b) The agent must notify the beneficiary of the change in policy. c) If the change would affect the premium, the agent must have the customer sign a statement acknowledging the change. d) The agent should ask the customer to sign a statement acknowledging that he is aware of the change. d Ray has an individual major medical policy that requires a coinsurance payment. Ray very rarely visits his physician and would prefer to pay the lowest premium possible. Which coinsurance arrangement would be best for Ray? a) 50/50