Insurance Policy Provisions and Definitions, Exams of Nursing

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FLORIDA HEALTH INSURANCE PRACTICE EXAM QUESTIONS WITH VERIFIED CORRECT ANSWERS 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) - answer Fair Credit Reporting Act (Insurance Information and Privacy Protection Act) Group health insurance specifies that what percentage of eligible individuals MUST be offered coverage under a noncontributory plan? -25 -50 -75 -100 - answer 100 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 - answer At the inception of the policy 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 - answer month 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 - answer Disability Buy-Out Which of the following health policies requires a beneficiary designation? -Travel Accident -Medicare Supplement -Blanket -Long Term Care - answer Travel Accident 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 - answer Exclusions -July 1 -July 3 -July 5 -July 7 - answer July 5 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 - answer Adjust the benefits downward according to the benefits that X would have been entitled to based on the premiums All of the following elements are required of a contract EXCEPT: -assignment -acceptance -legal capacity -legal purpose - answer 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 - answer Conditionally Renewable 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 - answer a lump sum payment made for an accidental dismemberment 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 - answer provide Medical Expense coverage to persons meeting certain minimum income requirements 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) - answer Health Maintenance Organization 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) - answer Multiple Employer Trust (MET) 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 - answer provide additional benefits beyond those provided by Medicare 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 - answer an inquiry for an offer 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. - answer It allows the insured to maintain a policy in force while disabled and unable to pay premiums. 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 - answer Entire Contract 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 - answer Issue a conditional receipt 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 - answer The insured's son 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 - answer An Exclusionary/ Impairment rider In which of the following health policies are both the renewability and the premiums guaranteed? Non-cancellable Optionally Renewable Guaranteed Renewable Conditionally Renewable - answer Non-cancellable Medicare Part A covers which of the following expenses? Hospital room and board Surgical expenses Medications Physicians' services - answer Hospital room and board 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 - answer 20 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 - answer Submit the claim in any form, which must be accepted by the company as adequate proof of loss Which of the following provisions designates the person to whom claim payments are to be made? Time of Payment of Claims Entire Contract 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 - answer Avoid double payment of benefits to an insured who has duplicate group coverages A prehospitalization authorization program (pre-certification) is a good example of: Managed care Traditional indemnity Medicare Workers' Compensation - answer Managed care 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 - answer Inspection report 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 - answer share medical data among member companies 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 - answer Contracts of Adhesion 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. - answer Substandard Risk