Health Insurance Florida 2-40 Practice Exam Questions, Exams of Finance

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Health Insurance Florida 2-40 Practice

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

• an inquiry for an offer
• an offer
• a counteroffer
• an acceptance - ✔️ ✔️ an inquiry for an offer

A health care plan that reimburses a flat fee for medical care it provides at a clinic it owns and operates is referred to as:

• Health Maintenance Organization
• Medicaid
• Medicare
• a Multiple Employer Trust (MET) - ✔️ ✔️ Health Maintenance Organization

Social Security and group benefits pay a combined maximum limit.

Group benefits are paid only after Social Security benefits are exhausted.

Full Social Security benefits are paid only after group benefits are exhausted.

Half of the allowable Social Security benefits are paid after group benefits are exhausted. - ✔️ ✔️ Social Security and group benefits pay a combined maximum limit.

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

The insured's estate

The brother's estate

The insured's son

The insured's spouse - ✔️ ✔️ The insured's son

A prehospitalization authorization program (pre-certification) is a good example of:

Managed care Traditional indemnity Medicare Workers' Compensation - ✔️ ✔️ Managed care

A group long-term disability plan is integrated with Social Security when which of the following statements is CORRECT?

A producer and an applicant complete an application for a health policy and submit it to the insurer for underwriting without any premium. The underwriter issues a policy and mails it to the producer for delivery to the applicant. The producer should take all of the following actions during the delivery of the policy to the applicant EXCEPT:

Collect the initial premium payment

Issue a conditional receipt

Have the applicant complete a statement of continued good health

Explain the Free Look provision which begins on the policy delivery date - ✔️ ✔️ Issue a conditional receipt

All of the following elements are required of a contract EXCEPT:

• assignment
• acceptance
• legal capacity
• legal purpose - ✔️ ✔️ assignment

Which of the following types of provisions guarantees renewability to a specified date or age unless certain specified events occur?

• Noncancellable
• Optionally Renewable
• Guaranteed Renewable
• Conditionally Renewable - ✔️ ✔️ Conditionally Renewable

An Eligible Expenses provision in a comprehensive major medical health insurance policy commonly identifies all of the following types of health care services as being covered by that policy EXCEPT:

• professional services of doctors and other medical practitioners

• hospital charges for semi-private room and board
• experimental and investigative services
• services of Registered Nurses - ✔️ ✔️ experimental and investigative services

An individual who has had a heart murmur since birth is likely to be issued an individual health policy that includes:

A Guaranteed Insurability rider

An Exclusionary/ Impairment rider

A Waiver of Premium rider

A Double Indemnity rider - ✔️ ✔️ An Exclusionary/ Impairment rider

An insured becomes disabled three years after his Disability Income policy is issued. The disability is caused by a condition that existed prior to the policy issue date but was not specifically excluded from coverage. In this situation, the insurer will most likely take which of the following actions?

• Pay the full claim
• Pay the claim for a maximum of six months only
• Deny the claim on the basis of misrepresentation
• Deny the claim because it involves a pre-existing condition - ✔️ ✔️ Pay the full claim

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

• Five
• Fifteen
• Twenty
• Thirty - ✔️ ✔️ Fifteen

Because health insurance policies are offered on a "take it or leave it" basis, they are referred to as which of the following types of contracts?

Aleatory Contracts Executory Contracts Unilateral Contracts Contracts of Adhesion - ✔️ ✔️ Contracts of Adhesion

Five years ago, at age forty-five, X stated that he was forty years old on a disability income insurance application. X now submits a claim and the insurer discovers X's true age. The insurer will most likely take which of the following actions?

• Deny the claim due to material misrepresentation on the application
• Pay the claim as filed because the policy becomes incontestable after two years
• Pay the claim and cancel the policy

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

Group health insurance specifies that what percentage of eligible individuals MUST be offered coverage under a noncontributory plan?

• 25
• 50
• 75
• 100 - ✔️ ✔️ 100

In an Accidental Death and Dismemberment (AD&D) policy, the term "capital sum" refers to:

• the benefit paid for death caused by a dread disease
• the monthly disability income paid if an insured loses a limb or the sight in one or both eyes
• a lump sum payment made when disease causes the amputation of an arm or a leg
• a lump sum payment made for an accidental dismemberment - ✔️ ✔️ a lump sum payment made for an accidental dismemberment

In which of the following health policies are both the renewability and the premiums guaranteed?

Non-cancellable

Optionally Renewable

Guaranteed Renewable

Conditionally Renewable - ✔️ ✔️ Non-cancellable

J has a physical impairment, attends school, and is incapable of self-sustaining employment and/ or self care. Which of the following statements is CORRECT about J's medical coverage under J's father's group plan?

• J's coverage ceases, but J may apply for group student coverage.
• J's coverage automatically discontinues at age twenty-six.
• J's coverage continues only as long as J is a full-time student.
• J's coverage continues as long as J is continually incapacitated and is financially dependent on J's father. - ✔️ ✔️ J's coverage continues as long as J is continually incapacitated and is financially dependent on J's father.

M and N own a small interior design studio that employs six people. The owners are concerned about the financial continuation of the business if either of them should become permanently disabled. In this situation, a producer would MOST likely recommend which of the following types of contracts?

• Basic Hospital

• Disability Buy-Out
• Comprehensive Major Medical
• Short-Term Disability Income - ✔️ ✔️ Disability Buy-Out

Medicare Part A covers which of the following expenses?

Hospital room and board

Surgical expenses

Medications

Physicians' services - ✔️ ✔️ Hospital room and board

Medicare Supplement policies are primarily designed to:

• offset the high cost of Medicare
• provide additional retirement income to supplement Social Security retirement benefits
• provide additional benefits beyond those provided by Medicare
• provide a reinsurance network that spreads the Medicare risk among private insurance companies - ✔️ ✔️ provide additional benefits beyond those provided by Medicare

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

• July 1
• July 3
• July 5
• July 7 - ✔️ ✔️ July 5

Person who is considered an under-average or impaired insurance risk because of physical conditions family or personal history of disease, occupation, residence in unhealthy climate or dangerous habits. - ✔️ ✔️ Substandard Risk

Suicide, pre-existing conditions and self-inflicted injuries are dealt with in which of the following policy features?

• Extensions of coverage
• Benefits clause
• Riders
• Exclusions - ✔️ ✔️ Exclusions

The Consideration clause in an accident and health policy states that:

The applicant pays the initial premium

Insurable interest must exist between the parties involved

Any attachments to the policy constitute the entire contract of insurance

Certain claims will be excluded under the policy - ✔️ ✔️ The applicant pays the initial premium

The Coordination of Benefits clause found in group health master contracts is used to:

Integrate Disability Income benefits with Medical Expense benefits

Avoid double payment of benefits to an insured who has duplicate group coverage

Investigate the claims history of an insured and his dependents Avoid duplicate premium charges to an employer for the same employee - ✔️ ✔️ Avoid double payment of benefits to an insured who has duplicate group coverages

The Elimination Period in most Disability Income policies applies:

To each separate disability

To claims for accidents only

Only the first time the insured is disabled during the first 30 days of the contract - ✔️ ✔️ To each separate disability

The insurance policy clause that identifies the contracting parties and defines the scope and limits of coverage is called the:

• Insuring clause
• Benefit clause
• Consideration clause
• Renewal clause - ✔️ ✔️ Insuring clause

The Internal Revenue Service (IRS) considers Disability Income benefits paid under an employer-paid group Disability Income (generally) to be:

Taxable for thirteen weeks only

Non-taxable for twenty-six weeks only

Fully taxable

Non-taxable - ✔️ ✔️ Non-taxable

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

7

10

15

20 - ✔️ ✔️ 20

The PRIMARY purpose of Medicaid is to:

• pay for expenses not covered by Medicare
• provide Disability Income benefits to people on Medicare
• provide Medical Expense coverage to persons meeting certain minimum income requirements
• provide funds for people injured in natural disasters - ✔️ ✔️ provide Medical Expense coverage to persons meeting certain minimum income requirements

The purpose of the Medical Information Bureau (MIB) is to:

• recommend the premium rates that should be charged for health policies issued to substandard risks
• share medical data among member companies
• provide background data used to experience-rate large group health plans
• provide actuarial information to participating members on dread diseases - ✔️ ✔️ share medical data among member companies

The Social Security program provides all of the following benefits EXCEPT:

• Retirement
• survivor
• disability
• workers compensation - ✔️ ✔️ workers compensation

Under a group health plan, an employer may offer additional benefits to classes of employees on the basis of all of the following factors EXCEPT:

• length of employment
• gender
• salary grade
• job category - ✔️ ✔️ gender

Under a Guaranteed Renewable Accident & Health policy, an insurer retains the right to:

Increase the premium rate for one insured without increasing the rate for others in the same class

Increase the premium rate for an entire class of insured, only on the anniversary date

Increase the benefits for an individual insured

Decrease benefits for one insured without decreasing benefits for others in the same class - ✔️ ✔️ Increase the premium rate for an entire class of insured, only on the anniversary date

Under an Accidental Death and Dismemberment (AD&D) policy, insurable interest must exist at which of the following times?

• When a change of beneficiary is requested
• At the inception of the policy
• When a beneficiary other than a relative is named
• At the time a claim is submitted - ✔️ ✔️ At the inception of the policy

Under the Claims Forms provision of a health policy, if the insurance company fails to send out the claim forms within the time period required by the provision, the insured should:

Demand a full refund of all premiums paid plus interest

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

Request the state Department of Insurance to act as umpire in settling the claim

Do nothing until the claim form arrives - ✔️ ✔️ Submit the claim in any form, which must be accepted by the company as adequate proof of loss

When delivering a policy to a client, a producer should take all of the following actions EXCEPT:

• Collect any premiums due
• fully explain all exclusions and/or riders
• keep the policy in the producer's office for safe-keeping on behalf of the client
• review all benefits provided by the policy - ✔️ ✔️ keep the policy in the producer's office for safe-keeping on behalf of the client

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

• month
• three months
• six months
• year - ✔️ ✔️ month

Which of the following definitions MOST accurately describes the Probationary Period?

• The period of time from the date of the loss until the benefits begin

• The period of time from the date of the loss until benefits are actually received by the policyowner
• The waiting period a new hire must satisfy prior to becoming eligible for group health coverage
• The period of time once a claim is received by the insurance company before it pays benefits to the policyowner - ✔️ ✔️ The waiting period a new hire must satisfy prior to becoming eligible for group health coverage

Which of the following definitions of disability would cover a permanent partial disability?

• Own occupation
• Any occupation
• Residual disability
• Presumptive disability - ✔️ ✔️ Residual disability

Which of the following health policies requires a beneficiary designation?

• Travel Accident
• Medicare Supplement
• Blanket
• Long Term Care - ✔️ ✔️ Travel Accident

Which of the following laws requires an insurer to notify an applicant in writing that an investigative consumer report may be made on the applicant?

• Uniform Provisions Law.
• Freedom of Information Act.
• Medical Information Bureau Disclosure Act
• Fair Credit Reporting Act (Insurance Information and Privacy Protection Act) - ✔️ ✔️ Fair Credit Reporting Act (Insurance Information and Privacy Protection Act)

Which of the following provisions designates the person to whom claim payments are to be made?

Time of Payment of Claims

Entire Contract

Notice of Claim

Payment of Claims - ✔️ ✔️ Payment of Claims

Which of the following provisions explains that a producer does not have the authority to waive the provisions of an insurance contract?

• Legal actions
• Reinstatement
• Time limit on certain defenses
• Entire Contract - ✔️ ✔️ Entire Contract

Which of the following reports may include information obtained by a telephone call to the proposed insured?

Medical Information Bureau (MIB) report Attending physician's report Inspection report Producer's report - ✔️ ✔️ Inspection report

Which of the following statements is CORRECT about a Disability Income policy with a Guaranteed Insurability rider?

• The insured may periodically increase the amount of benefits payable under the policy.
• The insured may assign the policy to a member of the insured's family.
• The insurer is not permitted to cancel the policy.
• The insurer will issue the policy without a medical examination. - ✔️ ✔️ The insured may periodically increase the amount of benefits payable under the policy.

Which of the following statements is CORRECT about a Waiver of Premium provision in a Disability Income policy?

• It allows the insurer to deduct premiums due from the disabled insured's benefit payments.
• It allows the insurer to increase the amount of premium during the insured's time of disability.
• It allows the insured to extend the length of the Grace Period while disabled.
• It allows the insured to maintain a policy in force while disabled and unable to pay premiums. - ✔️ ✔️ It allows the insured to maintain a policy in force while disabled and unable to pay premiums.

Which of the following statements is CORRECT about coinsurance?

It applies to the deductible as well as to claim payments.

It helps control overutilization of benefits.

Insurance companies generally charge more for a policy that contains a Coinsurance provision than for one that does not.

Insurance companies may revise the coinsurance ratio after issuing a policy. - ✔️ ✔️ It helps control overutilization of benefits. An insured whose Disability Income policy contains a Change of Occupation clause takes a new job in a more hazardous occupation and fails to notify the insurer of the change. One year later, the insured becomes disabled. The insurer will most likely take which of the following actions?

• Cancel the policy and refund one year's premiums
• Settle the claim according to what the premiums would have purchased under the more hazardous occupation
• Pay the claim in full and then cancel the policy

• Pay the claim after deducting an extra one-year premium payment - ✔️ ✔️ Settle the claim according to what the premiums would have purchased under the more hazardous occupation

A health care plan designed to combine small employers together into a group to purchase medical expense insurance for their employees is called a:

• risk retention group
• Multiple Employer Trust (MET)
• Preferred Provider Organization (PPO)
• Third Party Administrator (TPA) - ✔️ ✔️ Multiple Employer Trust (MET)