Insurance Policy Provisions and Regulations, Exams of Insurance Economics

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Accident and Health Insurance Exam Questions

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A basis of prepayment in which a fixed amount of money is prepaid per individual and found in some managed care plan is known as: A: Per Head Payment B: Fee for Service C: Salaried Amount D: Per Capita Prepaid - ANSD: Per Capita Prepaid A business can provide group insurance to their employees if: A: the purchase of insurance is incidental to the business B: the purchase of insurance is entirely made by the employer C: the purchase of insurance is made regardless of business ownership D: None of the Above - ANSA: the purchase of insurance is incidental to the business A CORRECT statement about benefits payable under a Disability Buy-Out policy that is owned by a business entity is that they are: A: related directly to salary B: paid in installments C: paid to the corporation D: paid directly to the employee - ANSC: paid to the corporation A Long Term Care Group policy that is converted has to be: A: conditionally renewable B: guaranteed renewable C: optionally renewable D: noncancelable - ANSB: guaranteed renewable A LTC policy that will only pay for ADL given occasionally by a licensed professional is: A: Skilled Care B: Intermediate Care C: Custodial Care D: None of the Above - ANSC: Custodial Care A mandatory provision in health policies that specifies when an insurer must send proof of loss forms to the insured within a certain amount of time from notice of claim is

known as? A: Claim Forms B: Time Limit on Certain Defenses C: Written Proof of Loss D: Notice of Claim - ANSA: Claim Forms A noncancelable policy means the company A: may not raise the premium or terminate the policy except for nonpayment of premium B: may not cancel before the insured reaches age 50 C: may pay limited benefits and cannot cancel all benefits D: can only terminate coverage if the insured switches occupations - ANSA: may not raise the premium or terminate the policy except for nonpayment of premium A policy that is issued at standard rates is an example of: A: Adverse Selection B: Risk Classification C: Substandard Risk D: None of the Above - ANSB: Risk Classification A producer earned a fee of $500 and a commission for the sale of an insurance product. Forty-five days after coverage began the insured cancelled the policy. What, if any, refund is the insured entitled to in this instance? A: No refund amount is due. B: $250 C: $500 D: $500 and the producer must return any commissions earned from the sale back to the insurance company. - ANSB: $250 A producer is served with a Cease and Desist Order for unfair competition and he violates the Order. The statutory fine for this action is A: 500 B: 1000 C: 2000 D: $100 per day up to a maximum of $5,000. - ANSB: 1000 A producer tells his client that his disability income policy will pay for all of his medical bills if disabled. The producer is guilty of A: Twisting B: Misrepresentation C: Defamation D: False Advertising - ANSB: Misrepresentation A producer violates the written order from the Director pertaining to their market conduct activities. What is the

maximum civil penalty that can be assessed by the Director against a producer in this circumstance? A: $10,000 B: $20,000 C: $50, D: $100,000 - ANSB: $20,000 A producer violates the written order from the Director pertaining to their market conduct activities. What is the maximum civil penalty that can be assessed by the Director against a producer in this circumstance? A: $10,000 B: $20,000 C: $50,000 D: $100,000 - ANSB: $20,000 A producer who makes misleading comparisons between a product an insured owns and a policy the producer is trying to sell as a replacement is an activity known as A: Misappropriation B: Twisting C: Defamation D: Rebating

• ANSB: Twisting A producer who places insurance with an insurer, either directly or indirectly, with whom the producer does not have an agent contract A: is grounds for license revocation. B: requires a special limited license. C: requires that the producer must post a surety bond in favor of the people of Illinois. D: must pay a state fee based on volume of business placed with such an insurer. - ANSC: requires that the producer must post a surety bond in favor of the people of Illinois. A provision in a health policy that stipulates that any medical impairments that occurred within a specific time before coverage began that will not be covered under a policy is known as: A: Exclusion B: Waiver of Coverage C: Preexisting Conditions D: All of the Above - ANSC: Preexisting Conditions All of the following are CORRECT about Medicare EXCEPT: A: An insured who is age 30 but collecting Social Security disability for the last two years is eligible for Medicare. B: An insured who is age 60 and is at the end stage of

renal failure is eligible for Medicare. C: An insured who turns age 65 and is still employed is eligible for Medicare. D: An insured who has Medicare Part A is eligible to enroll for Medigap policies within six months of enrolling in Part A. - ANSD: An insured who has Medicare Part A is eligible to enroll for Medigap policies within six months of enrolling in Part A. All of the following are CORRECT under advertising statutes EXCEPT: A: Insurers can use third party endorsements, but they must be genuine and factual. B: All ads, regardless of mediums, must be clear and complete. C: Details on PEC must be disclosed when replacement is involved. D: Advertisement files must be kept by the insurer for up to 3 years. - ANSD: Advertisement files must be kept by the insurer for up to 3 years. All of the following are CORRECT under Medicare supplement minimum standards EXCEPT: A: Policies must be issued as noncancelable. B: Payments on benefits may not be labeled as usual or customary. C: Supplements cannot pay benefits on losses resulting for sickness any differently than accidents. D: Except for replacement, it is illegal for an agent to sell a supplement to an insured that already owns one. - ANSA: Policies must be issued as noncancelable. All of the following are optional provisions EXCEPT: A: Physical Examination and Autopsy B: Illegal Occupation C: Change of Occupation D: None of the Above - ANSA: Physical Examination and Autopsy All of the following are qualifications that apply to a non-resident producer in Illinois, EXCEPT: A: The non-resident must be licensed in their home state for a minimum of 2 years before

Illinois will grant non-resident producer status. B: The non-resident must file an affidavit naming the Director to receive service of process on the non-resident's behalf. C: There is a $250 license fee due and payable every two years. D: The non-resident producer must be in good standing in their home state with reference to their resident producer status. - ANSA: The non-resident must be licensed in their home state for a minimum of 2 years before Illinois will grant non-resident producer status. All of the following are required disclosure forms at application EXCEPT: A: HIPAA B: HIV C: MIB D: None of the Above - ANSC: MIB All of the following are required disclosure forms at application EXCEPT: A: HIPAA B: HIV C: MIB D: None of the Above - ANSC: MIB All of the following are true regarding benefits under a Key Employee policy EXCEPT: A: Benefits may be paid monthly over a year period to make up employee salary. B: Benefits may be taxable or tax free depending on premium deduction by the payor. C: Benefits may be paid up to three times employee salary in a lump sum amount. D: None of the Above - ANSD: None of the Above All of the following are true regarding Social Security disability EXCEPT: A: A insured must wait 5 months before collecting benefits B: To qualify an insured must be unable to do any job in the American economy C: To qualify an insured must be disabled for a year or longer or die within a two year period. D: The insured must have a certain amount of Social Security credits based off age. - ANSC: To qualify an insured must be disabled for a year or longer or die within a two year period. All of

the following are true regarding Social Security disability EXCEPT: A: A insured must wait 5 months before collecting benefits B: To qualify an insured must be unable to do any job in the American economy C: To qualify an insured must be disabled for a year or longer or die within a two year period. D: The insured must have a certain amount of Social Security credits based off age. - ANSC: To qualify an insured must be disabled for a year or longer or die within a two year period. All of the following benefits may require a referral EXCEPT: A: A doctor seen in-network under a PPO B: A subscriber uses their point of service plan for a covered specialist C: A subscriber utilizes their HMO coverage for a cardiologist. D: None of the Above - ANSA: A doctor seen in-network under a PPO All of the following provisions found in a health policy are optional EXCEPT: A: Change of Occupation B: Illegal Occupation C: Intoxicant and Narcotic Usage D: None of the Above - ANSD: None of the Above All of the following statements are CORRECT about an Individual Disability policy EXCEPT: A: The income benefit is received tax free and therefore full salary coverage is unnecessary. B: The income benefit is received tax free at a reduced percentage of full salary to give incentive to return to work, once the insured has recovered from loss. C: The policy will be benefits immediately upon a covered loss. D: The longer the elimination period lasts, the less the premium will cost. - ANSC: The policy will be benefits immediately upon a covered loss. All of the following statements are CORRECT under law, of an HMO EXCEPT: A: A person who enters into a

contractual services for care with the HMO is known as a Subscriber. B: HMO's cannot refuse to pay for organ transplants just because they are experimental. C: If there is a complaint against an HMO, the provider must establish a system to handle complaints. D: If the Department of Insurance notifies the HMO of a complaint, the HMO has 31 days to respond in writing. - ANSD: If the Department of Insurance notifies the HMO of a complaint, the HMO has 31 days to respond in writing. All of the following statements are true about a specified disease plan EXCEPT: A: Cancer may be covered up to a fixed dollar benefit amount. B: A specified disease plan is a good substitute for a major medical policy because it is cheaper premiums. C: A specified disease plan will only cover one specific loss. D: No policy will cover a specified disease if diagnosed occurred before the policy was applied for. - ANSB: A specified disease plan is a good substitute for a major medical policy because it is cheaper premiums. All of the following statements are true about a specified disease plan EXCEPT: A: Cancer may be covered up to a fixed dollar benefit amount. B: A specified disease plan is a good substitute for a major medical policy because it is cheaper premiums. C: A specified disease plan will only cover one specific loss. D: No policy will cover a specified disease if diagnosed occurred before the policy was applied for. - ANSB: A specified disease plan is a good substitute for a major medical policy because it is cheaper premiums. All of the following statements regarding the Misstatement of Age provision is not correct EXCEPT: A:

Misstatement of Age is an optional provision B: Misstatement of Age is material and will void a policy C: Misstatement of age is not material and if found the insurer will adjust the premiums of the policy D: None of the Above - ANSA: Misstatement of Age is an optional provision All of the following statements regarding the Misstatement of Age provision is not correct EXCEPT: A: Misstatement of Age is an optional provision B: Misstatement of Age is material and will void a policy C: Misstatement of age is not material and if found the insurer will adjust the premiums of the policy D: None of the Above - ANSA: Misstatement of Age is an optional provision An agent tells his clients that the insurer they used to represent does not pay claims in a timely manner although the state has no such events on record. If prosecuted the maximum fine for such action is up to: A: $200 B: $5,000 C: $10,000 D: $20,000 - ANSD: $20,000 An agent told a prospective insured that he was a representative of Medicare there to sell a supplement directly from the government. The Director was notified of this action by the consumer and has decided to fine the producer the maximum amount under law. What would be the maximum fine for such an offense? A: $500 B: $5,000 C: $10,000 D: $15,000 - ANSB: $5,000 An example of a rider that deletes or limits coverage is an: A: Impairment Rider B: Preexisting Condition Rider C: Waiver of Premium D: Exclusion Rider - ANSA: Impairment Rider An insurer denies a claim under a LTC contract, the insurer must give an explanation to the insured within _____ of a request of the insured. A:

30 days B: 31 days C: 45 days D: 60 days - ANSD: 60 days An organization that arranges for one or more limited health care plans under a system which cause any part of limited health care delivery to be borne by the organization or its providers is known as: A: PPO B: Limited Plan C: LHSO D: HMO - ANSC: LHSO Another name for a Binder is: A: Conditional Receipt B: Unconditional Receipt C: Temporary Coverage Binder D: Pre-Conditional Receipt - ANSB: Unconditional Receipt B has an individual PPO contract. B suffered a covered loss but the company delayed the claims resolution process. B wants to file a lawsuit against an insurer, however, he want to wait a while to find the correct lawyer. What is the MAXIMUM time frame in which B can file legal action against the insurer? A: 90 days from the date of loss B: 3 years from the exact date of loss C: 3 years from when proof of loss is required D: 3 years from when notice of claim is required - ANSC: 3 years from when proof of loss is required B is covered under an HMO and just gave birth to her second daughter. B gave the HMO proper notice of birth but now is required to pay an extra premium to include her second child as a dependent under her plan. B has ______ days to pay the additional premium within the birth notification A: 15 B: 20 C: 30 D: 31 - ANSC: 30 B is covered under an HMO and just gave birth to her second daughter. B gave the HMO proper notice of birth but now is required to pay an extra premium to include her second child as a dependent under her plan. B has ______ days to pay the additional premium within the birth notification A: 15 B: 20 C: 30 D: 31 - ANSC: 30 B

lives in a long term care facility and owns a LTC policy. Three days per week skilled medical personnel attend to her needs. B is receiving: A: Skilled Care B: Intermediate Care C: Custodial Care D: Assisted Daily Living - ANSB: Intermediate Care B purchases a Traditional Long Term Care policy. Upon delivery the agent makes B aware that they have a certain amount of time to send the policy back for a refund if desired. The free look period that B has for her policy is: A: 10 days B: 20 days C: 30 days D: 45 days - ANSC: 30 days C has a LTC policy that cannot be terminated and has guaranteed premiums. C has which of the following rights of renewability? A: Noncancelable B: Guaranteed Renewable C: Cancelable D: Period of Time - ANSA: Noncancelable Company A has decided to cease group coverage in IL. On August 1, Company A notifies all group contract holders of discontinuation. How many days does the contract holder have to notify enrollees? A: 10 days B: 20 days C: 30 days D: 31 days - ANSA: 10 days Company Q, a health insurer headquartered in Indiana is advertising directly to Illinois residents about their health plans but Company Q is not a licensed insurance company in Illinois. Company Q is violating which of the following Illinois insurance regulations? A: False Advertising B: Twisting C: Misrepresentation D: Defamation - ANSC: Misrepresentation Consideration for the insurer is to: A: guarantee coverage B: cover losses that are excluded C: pay covered losses D: share in premium payment - ANSC: pay covered losses D and B own a business 50/50. D has suffered a total and permanent disability

and B is receiving a lump sum benefit to purchase D's share of the business. This policy is called a(an): A: Accidental Death and Dismemberment B: Cross Purchase Disability Buyout Agreement C: Key Person D: Entity Purchase Disability Buyout Agreement - ANSB: Cross Purchase Disability Buyout Agreement D has a group policy through his employer and has five children all under age 21. D's group policy will charge premiums: A: per child B: one amount for all children C: nothing D: None of the Above - ANSB: one amount for all children Doctors in a Preferred Provider Organization are paid: A: Capitation B: Fee for Service C: Salary D: Reimbursement - ANSB: Fee for Service Each of the following is true regarding a cancelable policy EXCEPT: A: The insured can cancel for any reason B: The insurer can cancel the policy at anytime C: The insurer can only terminate because of nonpayment of premium D: Cancelable is usually the most inexpensive renewability option. - ANSC: The insurer can only terminate because of nonpayment of premium Each of the following is true regarding pre-authorization and prior approval requirements EXCEPT: A: An insured must get permission before a planned hospital stay for coverage B: A member must give a statement on necessity prior to receiving care C: If an insured does not get pre-authorization before the loss, they can ask for reinstatement later for the benefit to be covered D: Pre- authorizations are generally found on Managed Care policies such as HMOs or PPOs - ANSC: If an insured does not get pre-authorization before the loss, they can ask for reinstatement later for the benefit

to be covered For what period of time must the fiscal or calendar year records of a Premium Fund Trust Account be kept? A: At least 7 years. B: At least 6 years. C: At least 5 years. D: At least 3 years. - ANSA: At least 7 years. Free Look for an agent delivered individual disability policy is A: 10 days B: 20 days C: 30 days D: 45 days - ANSA: 10 days G had his policy reinstated on August 1. On August 5, G falls ill and needs to spend a few nights in the hospital. Which of the following is most likely to happen? A: The insurer will pay full benefits for G's loss B: The insurer will not pay for G's loss C: G will have to pay more premium to have the loss covered D: None of the Above - ANSB: The insurer will not pay for G's loss H applied for a individual major medical policy. When H filed a claim within the first year of coverage and the underwriter noticed that the H's age on the claim form was different than what was listed on the application. The insurer will take which of the following actions regarding H's claim? A: Deny the claim and refund premiums B: Deny the claim, cancel the policy and keep all premiums C: Pay the claim in full and keep the policy as is D: Adjust the claim benefit amount to the insured's correct age - ANSD: Adjust the claim benefit amount to the insured's correct age H has Disability Insurance through her employer. H has suffered a covered disability and has been informed by the group insurer that she is eligible to received benefits for up to 3 years maximum. H has: A: Long-Term Group Benefits B: Short-Term Group Benefits C: Long-Term Care Benefits D: Short-Term Indemnity Benefits - ANSA: Long-Term Group Benefits H has had group LTC

coverage for the last 5 months. H has decided to leave his job and find a new career. Upon leaving his group, H would like to convert his group LTC policy to an individual plan. The insurer is most likely to: A: deny conversion B: allow conversion C: allow conversion, but they may increase the premium D: allow conversion as long as H converts within 30 days of leaving they group - ANSA: deny conversion H has had group LTC coverage for the last 5 months. H has decided to leave his job and find a new career. Upon leaving his group, H would like to convert his group LTC policy to an individual plan. The insurer is most likely to: A: deny conversion B: allow conversion C: allow conversion, but they may increase the premium D: allow conversion as long as H converts within 30 days of leaving they group - ANSA: deny conversion H has suffered a covered disability away from her job and will shortly begin collecting benefits. The insurer sends a letter to H stating that she will not receive any benefit amounts greater than her income. This clause is known as: A: Over-insurance clause B: free look C: relation of earning to insurance D: relation of economic value - ANSC: relation of earning to insurance H is 65 and enrolled into Part A and Part B of Medicare. Three months into enrollment H applies for a Medigap Plan A. Which of the following is most likely to happen? A: The insurer will deny the application B: The insurer will most likely approve the supplement, provided that H is insurable C: The insurer will rate the policy D: The Federal Government will have the final say

• ANSB: The insurer will most likely approve the supplement,

provided that H is insurable H is a legendary flamenco guitar player. If H would like to have only her fingers insured for $500,000 each, which of the following policies would be most likely to insure her potential loss? A: Accidental Death and Dismemberment B: Individual Disability Insurance C: Special Risk Policy D: Group Disability Insurance - ANSC: Special Risk Policy Health Care FSA contributions are limited to _______ per year. A: $5,000 B: $3,000 C: $2,700 D: $3,250 - ANSC: $2,700 HMOs must provide coverage for low-dose, baseline mammography for all women ages: A: 25-29 B: 31-36 C: 35-39 D: 40 or older - ANSC: 35-39 HMOs must provide coverage for low-dose, baseline mammography for all women ages: A: 25-29 B: 31-36 C: 35-39 D: 40 or older - ANSC: 35-39 How many days does the Director have to issue a final written order once a hearing has been held pertaining to a market conduct examination? A: Within 20 to 30 days B: 30 days C: 60 days D: 90 days - ANSD: 90 days How many days prior notice of cancellation must an surety, who has issued a producer surety bond, provide to the principal of the bond? A: 10 days B: 15 days C: 30 days D: 90 days - ANSC: 30 days How many separate accounts exist under the life and health guarantee association? A: 4: Variable, HMO, Life, and Health B: 3: Variable, Life, and Health C: 2: Life and Health D: 1: Life and Health - ANSC: 2: Life and Health If a business owner elects not to have coverage for workers under workers' compensation, they must have which of the following policies? A: Major Medical Policy B: 24-hour coverage C: 36-hour coverage D: Disability Insurance - ANSB: 24-

hour coverage If a carrier elects to discontinue all health coverage they must notify the director 180 prior to discontinuance. If the insurer then discontinues they are barred from reentry into the IL market for: A: 1 year B: 3 years C: 5 years D: forever - ANSC: 5 years If a carrier elects to discontinue all health coverage they must notify the director 180 prior to discontinuance. If the insurer then discontinues they are barred from reentry into the IL market for: A: 1 year B: 3 years C: 5 years D: forever - ANSC: 5 years If a carrier is terminating a individual policy because of an allowable reason under HIPAA regulations, how many days advance notice must they give the insured? A: 10 days B: 20 days C: 60 days D: 90 days - ANSD: 90 days If a company charges two separate prospective insureds a different premium rate without a sound actuarial basis, this is an example of A: an unfair trade practice. B: unfair discrimination C: an unfair claims practice D: insurance company prerogative. - ANSB: unfair discrimination If a Corporation owns a Disability Buyout policy on another Corporation they are partners will this is known as: A: A Cross-Purchase Agreement B: An Entity Purchase C: A Business Disability Buyout D: A Key Person Policy - ANSB: An Entity Purchase If a group policy is discontinued, the prior insurer is still liable for claims that occur during the grace period of the policy and: A: may charge premiums during the grace period B: may not charge premiums during the grace period C: may limit benefits D: None of the Above - ANSA: may charge premiums during the grace period If a long term care partnership policy allows the insurer to offer

inflation protection and it is not required under law, the insured must be: A: under age 61 B: at least 61 but less than 76 years old C: 76 years or older D: None of the Above - ANSC: 76 years or older If a person is insured under an AD&D policy and loses both of their arms they are considered to be: A: Permanently disabled B: Partially Disabled C: Presumptively Disabled D: Capitally Disabled - ANSC: Presumptively Disabled If a policy owner of a Medicare Supplement becomes eligible for Medicaid, a supplement can be suspended for up to ______ as long as they give the insurer notice within 90 days of being eligible for Medicaid. A: 6 months B: 12 months C: 24 months D: 36 months - ANSC: 24 months If a producer demands a hearing to challenge the reasonableness of a license suspension, when will the hearing take place? A: Within 20 to 30 days of the date the producer demands a hearing. B: A time to be determined by the Director with 20 days prior notice C: A time to be determined by the Director with 10 days prior notice D: The hearing takes place within 20 to 30 days from the date the Director's mailing of the hearing notification. - ANSD: The hearing takes place within 20 to 30 days from the date the Director's mailing of the hearing notification. If an agent has completed the initial continuing education for long term care, next renewal they must complete ongoing education that is ____ of continuing education. A: 4 hours B: 8 hours C: 12 hours D: 24 hours - ANSA: 4 hours If an agent has completed the initial continuing education for long term care, next renewal they must complete ongoing education that is ____ of continuing education. A: 4 hours B:

8 hours C: 12 hours D: 24 hours - ANSA: 4 hours If an agent wants to market a long term care policy, they must successfully complete a continuing education course on the partnership policy that contains how many CE hours? A: 4 B: 8 C: 12 D: 24 - ANSB: 8 If an applicant is under age 65, they must apply for a supplement within _______ of enrolling for Part B. A: 3 months B: 6 months C: 12 months D: 18 months - ANSB: 6 months If an applicant is under age 65, they must apply for a supplement within _______ of enrolling for Part B. A: 3 months B: 6 months C: 12 months D: 18 months - ANSB: 6 months If an applicant is under age 65, they must apply for a supplement within _______ of enrolling for Part B. A: 3 months B: 6 months C: 12 months D: 18 months - ANSB: 6 months If an employer is notified of discontinuance of a group carrier, the policyholder has ______ to notify covered enrollees. A: 5 days B: 10 days C: 15 days D: 20 days

• ANSB: 10 days If an insurance company issues deceptive statements about its assets, this action is A: false advertising. B: an unfair trade practice. C: unfair discrimination. D: falsification. - ANSB: an unfair trade practice. If an insured does not have a Medigap Supplement policy, Medicare only covers full hospitalization for the first ______ days A: 15 B: 30 C: 60 D: 90 - ANSC: 60 If an insured has a limited group plan and the carrier discontinues group benefits, as long as the insured has not used up all of their benefits under the policy, in the case of total disability, coverage applies up to ______ after discontinuation or end of disability, whichever occurs first. A: 30 days B: 60 days C: 90 days

D: 12 months - ANSC: 90 days If an insured is purchasing a LTC policy, an outline of coverage must be delivered by the agent at: A: time of solicitation B: underwriting C: delivery D: Any of the above - ANSA: time of solicitation If an insurer discontinues a group policy they are only liable for: A: their extent of benefits under the old contract B: half of the new carrier's covered losses C: nothing D: all losses up to a year - ANSA: their extent of benefits under the old contract If an LHSO is terminated prior to annual renewal for the contract, the provider must give the subscriber a: A: 30 day notice B: 31 day notice C: 45 day notice D: 60 day notice - ANSB: 31 day notice If the carrier has a reasonable charge that is below the providers contractual reasonable charge, the insured may be responsible for the difference of medical cost, this is known as: A: Balance Billing B: Reasonable Charges C: Usual Charges D: Customary Charge - ANSA: Balance Billing If there is a complaint against an LHSO with the Department of Insurance, the LHSO has ____ to respond in writing to the complaint. A: 21 days B: 30 days C: 31 days D: 45 days - ANSA: 21 days If there is a dispute on medical necessity under a HMO, there must be a system in place for a second opinion. If the second opinion determines that a covered service is in fact medically necessary, the HMO must provide service. The only way that benefits are paid for an out-of-network physician is: A: if a referral is given B: state law dictates when coverage out of area exists C: if it is an emergency D: None of the Above - ANSA: if a referral is given In a health insurance transaction,

an offer is made when: A: the insured pays the initial premium B: when an insured applies for coverage C: when an insurer has approved the policy D: when the insured provides payment in exchange for coverage - ANSB: when an insured applies for coverage In a health policy, the probationary period begins: A: upon issuance of a policy B: upon delivery of a policy C: when underwriting takes place D: upon payment of first premium - ANSA: upon issuance of a policy In a Health policy, the right of the policy owner to make an endorsement to the policy is found in the: A: Proof of Loss provision B: Time Limit on Certain Defenses C: Change of Beneficiary D: Change of Occupation - ANSC: Change of Beneficiary In a Long Term Care Partnership policy, inflation protection must be included under contract. If a policy is required to have a compounded rate of either 3% or 5%, the insured must be: A: under age 61 B: at least 61 but less than 76 years old C: 76 years or older D: None of the Above - ANSA: under age 61 In the Change of Occupation provision, if an insured switches to a less hazardous job and a claim occurs the insurer will: A: increase the premium of the policy B: increase the benefits of the policy C: decrease the benefits of the policy D: decrease the premium of the policy - ANSD: decrease the premium of the policy In the event of Group Health Insurance being discontinued or replaced, in the event of total disability, coverage must extend up to ______ in an HMO provided the insured still has benefit limits available under contract. A: 6 months B: 12 months C: 18 months D: 24 months - ANSB: 12

months It is the insured's responsibility to notify the principal about a claim under an Accident and Health policy within: A: 7 days B: 20 days C: 1 month D: 12 months - ANSB: 20 days J has an Accidental Death and Dismemberment policy that has a principal sum of $30,000. One day, J is in a horrific car accident and slips into a coma. Four months after the accident, J's family takes him off the ventilator and J dies. The insurer will pay J's beneficiary: A: $30, B: $15,000 C: $5,000 D: $0 - ANSD: $0 J has HMO coverage under his employer. J was notified that because of a payroll error, payment for this month's premium was not paid. The minimum possible grace period that J may have to prevent lapse is: A: 10 days B: 15 days C: 30 days D: 31 days - ANSA: 10 days J has medical benefits that provide a first dollar coverage but then also applies a deductible and coinsurance for major benefits. J has: A: Comprehensive Major Medical B: Combined Medical Policy C: Comparative Medical D: Major Medical - ANSA: Comprehensive Major Medical J let their health policy lapse. To reinstate the contract, the insurer is requiring J to reapply. J pays a new premium with the hope that she will get her policy back into force. The insurer has ______ days from receipt to deny reinstatement. A: 7 B: 10 C: 31 D: 45 - ANSD: 45 K has a basic policy along with a major medical policy. K suffers a loss and receives notice by the insurer that an additional $300 is owed before the major medical policy will pay for all of K's losses. K must satisfy: A: Deductible B: corridor deductible C: stop loss D: coinsurance - ANSB: corridor deductible K has a policy that covers doctors visits

but limits the number of visits per calendar year and pays a limited indemnification limit per visit. K has: A: Basic Medical Expense B: Physician Nonsurgical Coverage C: Basic Surgical Policy D: Basic Hospital Coverage - ANSB: Physician Nonsurgical Coverage K has a policy that will pay a lump sum tax free benefit if he is diagnosed and then survives cancer. K has a: A: Critical Illness Policy B: Specified Disease Plan C: Cancer Policy D: Major Medical - ANSA: Critical Illness Policy K has an industrial health policy and forgot to pay his premium. How many days does K have to pay his policy before it will lapse? A: 7 days B: 10 days C: 31 Days D: 45 Days - ANSA: 7 days K, an employee who is covered by Workers' Compensation and a group Major Medical plan is injured on the job. If K submits a claim to the group plan, the insurer will most likely: A: pay full benefits B: pay full benefits only after a 1-month elimination C: coordinate benefits with Workers' Compensation D: deny the claim - ANSD: deny the claim L has a major medical policy. Ten years ago, L survived cancer but was sick again five years ago and fully recovered. Unfortunately, L has just be notified that he has relapsed again. Although L has suffered through multiple catastrophic losses, the policy is still providing coverage. L most likely has a policy with: A: Lifetime Benefit Limit B: Annual Limit C: Per Cause Limit D: Indemnity Limit - ANSA: Lifetime Benefit Limit Lifetime, Per Cause, and Annual maximums are all examples of: A: Benefit Exclusions B: Benefit Limits C: Out of Pocket Expenses D: Contractual Losses - ANSB: Benefit Limits Lifetime, Per Cause, and Annual maximums are

all examples of: A: Benefit Exclusions B: Benefit Limits C: Out of Pocket Expenses D: Contractual Losses - ANSB: Benefit Limits Limited health services provided under an LHSO may provide benefits for all of the following EXCEPT: A: ambulance B: dental C: surgical D: None of the Above - ANSC: surgical Long Term Care coverage may be marketed to individuals or groups. A qualifying group that is considered to be an association plan must originate with at least how many members? A: 2 or more B: 20 or more C: 100 D: 500 - ANSC: 100 Medicaid is: A: State Subsidized and partially federally reimbursed B: Federally subsidized only C: Run By Congress D: None of the Above - ANSA: State Subsidized and partially federally reimbursed Most Accident and Health policies require that claims must be paid _________ upon written proof of loss. A: 30 days B: Immediately C: 60 days D: 90 days - ANSB: Immediately N has a disability policy and suffers a covered loss. After elimination, what is the maximum time the insurer has to make a claim payment under the Time Payment of Claims provision? A: Immediately B: 15 days C: 20 days D: 30 days - ANSD: 30 days N has a HMO and has a terrible sinus infection. N decides to go straight to an Ear, Nose and Throat specialist for an office visit. Which of the following is most likely to occur? A: The HMO will cover the doctor visit fully. B: The HMO will pay half of the visit because it is out of service area. C: The HMO will pay the claim if N pays extra premium. D: N will be declined to be seen by the specialist for this office visit. - ANSD: N will be declined to be seen by the specialist for

this office visit. N has a major medical policy through an insolvent insurer. The maximum the Guarantee Association will pay on N's losses is: A: $500,000 B: $300,000 C: $200,000 D: $100,000 - ANSA: $500,000 N has a PPO and has a terrible sinus infection. N decides to go straight to an in-network Ear, Nose and Throat specialist for an office visit. Which of the following is most likely to occur? A: The PPO will cover N's claim and give the best discount under the contract. B: The PPO will deny the claim even though it is in-network. C: The PPO will cover the claim as long as N has a referral at the time of service. D: The PPO will cover the claim with extra premium required. - ANSA: The PPO will cover N's claim and give the best discount under the contract. On March 1 C, who holds an Illinois non-resident license moves from Idaho to Iowa. By which date must C notify the Illinois Director of Insurance about this move? A: By March 31 B: C does not have to notify Illinois since he was a non- resident license holder. C: By May 1 D: By March 16 - ANSA: By March 31 On March 1 the Director mailed a notice of producer license suspension to R which he received on March 4. If R wishes to request a hearing on the matter, by which date must R make this demand in writing? A: 24-Mar B: 30-Mar C: 31-Mar D: 3-Apr - ANSC: 31-Mar On March 1 the Director mailed a notice of producer license suspension to R which he received on March 4. If R wishes to request a hearing on the matter, by which date must R make this demand in writing? A: 24-Mar B: 30-Mar C: 31-Mar D: 3-Apr - ANSC: 31-Mar Once a producer has been notified that her license has been

suspended by the Director, how many days does she have in which to request a hearing, in writing, from the date the Director mailed the termination notice? A: 10 days B: 15 days C: 20 days D: 30 days

• ANSD: 30 days Other than when an agent or insurer sells a supplement not approved by the director, all other violations may incur a maximum fine of: A: $500 B: $1,000 C: $5,000 D: $10,000 - ANSC: $5,000 Part A of Medicare covers: A: Hospital Care B: Inpatient skilled nursing and home health visits C: doctor visit D: Only Answers A and B - ANSD: Only Answers A and B Part B of Medicare covers all of the following benefits EXCEPT: A: Doctor's visit B: psychiatric care C: home health services D: None of the Above - ANSD: None of the Above Part B of Medicare covers all of the following benefits EXCEPT: A: Doctor's visit B: psychiatric care C: home health services D: None of the Above - ANSD: None of the Above Producer J has just received a policy offer from an insurer on behalf of an application J recently wrote. J must deliver the policy and collect the first premium payment. Within how many days must J accomplish this action without violating fiduciary duty? A: Within 10 days B: Within 30 days C: Within 90 days D: Within 20 days - ANSC: Within 90 days R has an individual major medical policy. On October 1 R has an accident causing $10,000 of damages. On October 31, the insurer is first notified by R that an accident occurred. Which of the following is most likely occur? A: The insurer will pay the full $10,000 B: The insurer will pay the loss minus any deductible that is required C: The insurer will deny the claim D: The

insurer will pay the loss minus deductible and coinsurance that is required - ANSC: The insurer will deny the claim Renewability of a Long Term Care policy must be at least: A: Noncancelable B: Guaranteed Renewable C: Cancellable D: A and B only - ANSD: A and B only Renewability of a Long Term Care policy must be at least: A: Noncancelable B: Guaranteed Renewable C: Cancellable D: A and B only - ANSD: A and B only Selling insurance without a license without misappropriating premium funds is a A: Class A misdemeanor B: Class C misdemeanor C: Class 4 felony D: not a crime - ANSA: Class A misdemeanor T has just returned back to work after a total disability but is only able to work half the day. T's policy pays the difference between what the employer pays T and what T earned prior to disability. T has: A: Own Occupation B: Residual Disability C: Partial Disability D: Any Occupation - ANSB: Residual Disability T has recently replaced her Medicare Supplement policy which was in force for 7 months. The contract has a probationary waiting period on all illness related losses for the first ten days of coverage. On day 5, T suffers an illness. The replacing insurer is most likely to: A: cover the loss B: deny the claim C: require T pay more premium to cover the loss D: None of the Above - ANSA: cover the loss T has recently replaced her Medicare Supplement policy which was in force for 7 months. The contract has a probationary waiting period on all illness related losses for the first ten days of coverage. On day 5, T suffers an illness. The replacing insurer is most likely to: A: cover the loss B: deny the claim C: require T pay