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Massachusetts Insurance License Exam
Questions and 100% Correct Answers
The "Use it or Lose it" rule applies to a. medical savings accounts b. health savings accounts c. health reimbursement accounts d. flexible savings accounts - ANSWER flexible savings accounts Julie is in need of assistance with one or two activities of daily living. She may be eligible for a(n) a. respite care facility b. hospice facility c. assisted living facility d. intermediate care facility - ANSWER assisted living facility Laura is a new employee and will be obtaining non-contributory group Major Medical insurance from her employer. Which of the following actions must she take during the open enrollment period? a. authorize for payroll deductions b. agree to a physical examination c. sign an enrollment card d. register with her state of residency - ANSWER sign an enrollment card
Pete is covered by a group health insurance plan which covers employees in multiple states. This plan is governed by the laws of which state? a. where the certificate of coverage was mailed to b. where most employees reside c. where the master contract was issued d. where the insurer's home office is located - ANSWER where the master contract was issued Which term describes the elimination of hazard? a. risk avoidance b. risk retention c. risk transference d. risk pooling - ANSWER risk avoidance In what situation would disability income insurance premiums be a deductible expense? a. partnership paying for group disability income coverage for the partners b. corporation paying for group disability income coverage for its employees c. individual paying for his/her own individual disability policy d. parent paying for a child's individual disability policy - ANSWER corporation paying for group disability income coverage for its employees Which statement concerning the Entire Contract provision in an individual accident and health insurance policy is TRUE?
b. removing uniform policy provisions c. declining applications d. issuing a policy at standard issue - ANSWER removing uniform policy provisions In a disability buy-sell agreement, the policies funding the agreement are owned by the a. business entity b. officers c. shareholders d. employees - ANSWER business entity Which of the following is NOT an allowable exclusion for long-term care insurance policies? a. self-inflicted injuries b. acute care c. custodial care outside the US d. care for incurable conditions - ANSWER care for incurable conditions A producer has received the first year commission paid on a Medicare Supplement policy. Renewal commissions must then be provided for at least ____ years after the first year. a. 2 b. 3 c. 4 d. 5 - ANSWER 5
Continued health insurance coverage is available for dependent children beyond the age of 26 IF the child a. cannot support themselves because of a handicap b. has declared bankruptcy c. cannot find gainful employment d. is a full-time student - ANSWER cannot support themselves because of a handicap What type of doctor-ordered care assists an individual with performing basic daily activities such as bathing, dressing, and eating? a. custodial care b. respite care c. family care d. domestic care - ANSWER custodial care If group Health benefits are too high, what could be the end result? a. underutilization of the plan b. over utilization of the plan c. normal utilization of the plan d. adverse selection - ANSWER over utilization of the plan An insured must notify an insurer of a medical claim within how many days after an accident?
d. protect against accidents - ANSWER protect against medical care costs and the loss of earning power What is the elimination period of an individual disability policy? a. time period an insured must wait before coverage begins b. time period a disabled person must wait before benefits are paid c. time period after the policy issue date in which the provisions are still contestable d. the point in time when benefits are no longer payable - ANSWER time period a disabled person must wait before benefits are paid Medicare Supplement insurance requires an individual to be at least how old for open enrollment? a. 59. b. 65 c. 70. d. no minimum age - ANSWER no minimum age Which of the following health insurance plans charges a premium that cannot be increased? a. guaranteed renewable b. cancelable c. non cancelable d. conditionally renewable - ANSWER non cancelable
A health insurance applicant is notified that a physical examination is required. Which of the following statements is correct? a. physical examinations are performed at the expense of the applicant b. physical examinations are performed at the expense of the insurer c. all applicants for group health insurance require a physical examination d. all applicants for health insurance do not require a physical examination - ANSWER physical examinations are performed at the expense of the insurer An arrangement where an individual is authorized to act on behalf of another person or company is established through a. estoppel b. the law of agency c. the law of adhesion d. an aleatory contract - ANSWER the law of agency Social Security disability income requirements state that in order to become fully insured on a permanent basis, you must have worked in a covered occupation for a. 10 quarters b. 20 quarters c. 30 quarters d. 40 quarters - ANSWER 40 quarters Statements made by an insured on an accident and health insurance application are considered to be
c. within 15 days of receipt of the notice of loss d. within 15 days of the actual loss - ANSWER within 15 days of receipt of the notice of loss Julie is an employee with a group health plan that contains the Mandatory Second Surgical Opinion provision. What is to be expected with this provision in place? a. mandatory second surgical opinions are required when emergency surgery is needed b. the second surgical opinion must always be accepted by the insured c. out of pocket expenses are higher when a second surgical opinion is obtained as opposed to having only one d. out of pocket expenses are lower when a second surgical opinion is obtained as opposed to having only one - ANSWER out of pocket expenses are lower when a second surgical opinion is obtained as opposed to having only one A comprehensive major medical health insurance policy contains an Eligible Expenses provision which identifies the types of health care services that are covered. All of the following health care services are typically covered except for a. hospital charges b. physician fees c. experimental and investigative services d. nursing services - ANSWER experimental and investigative services Giving up a known right on a voluntary basis is called a(n) a. disclaimer b. estoppel
c. waiver d. surrender - ANSWER waiver A prospective client was intimidated by a producer to purchase an insurance contract. The producer could be found guilty of a. coercion b. rebating c. defamation d. sliding - ANSWER coercion Which of these is a typical result of a concurrent review? a. the deductible amount is increased b. the length of time spent in the hospital is monitored c. the insured's premiums usually increase d. the coinsurance is waived - ANSWER the length of time spent in the hospital is monitored When does a producer give a premium receipt for an accident and health insurance application? a. when the application has been approved b. when the initial premium has been collected with the application c. during the medical exam d. when the completed application has been collected - ANSWER when the initial premium has been collected with the application
a. eligibility requirements b. required provisions c. minimum enrollment percentage d. continuation of coverage under COBRA - ANSWER continuation of coverage under COBRA COBRA is - ANSWER federal law that deals with continuation of group coverage Typically, working individuals age 65 or over must be a. offered the same Health benefits as the younger employees b. covered by Medicare exclusively c. paying a higher premium than younger employees d. covered by a medicare supplement policy - ANSWER offered the same Health benefits as the younger employees Which element of a contract constitutes a definite and unqualified proposal by one party to another? a. adhesion b. consideration c. acceptance d. offer - ANSWER offer Jonas is covered with disability insurance through his employer. The employer pays 75% of the premium, while Jonas pays the other 25%. What is Jonas' tax liability for any benefits paid from the disability plan?
a. taxes must be paid on all benefits received b. no taxes are payable on any benefits received c. taxes must be paid on 25% of the benefits received d. taxes must be paid on 75% of the benefits received - ANSWER taxes must be paid on 75% of the benefits received When the disclosure of an insured's nonpublic information is involved, what is the insurer obligated to do? a. Insurer is not obligated to take any action b. insurer is obligated to verify that the agent is in compliance c. give notice, explain, and allow opting out d. provide the proper NAIC paperwork - ANSWER give notice, explain, and allow opting out Medicare will cover a maximum of how many days per benefit period in a skilled nursing facility? a. 10 days b. 30 days c. 60 days d. 100 days - ANSWER 100 days After joining a health maintenance organization (HMO), subscriber will typically select a a. capitation level
Who is required to notify the Superintendent of a licensee's change of address? a. licensee b. beneficiary c. agency d. insurer - ANSWER licensee If an individual would like to enroll in Medicare or seek public information about Medicare, which federal agency handles it? a. Department of Health and Aging b. Social Security Administration c. Centers for Medicare and Medicaid Services d. Department of Homeland Security - ANSWER Social Security Administration The type of health insurance in which underwriting procedures are the most restrictive is a. accidental b. individual c. group d. employer-paid - ANSWER individual How does an underwriter take into account an applicant's marital status?
a. when determining if a policy will be issued b. when determining if an applicant is insurable c. when determining who is eligible for dependent coverage d. when determining if a rating will be placed on a policy - ANSWER when determining who is eligible for dependent coverage Non-qualified medical expense distributions from a Health Savings Account (HSA) have a tax penalty of a. 7.5% b. 10% c. 20% d. 30% - ANSWER 20% Which of the following involves sharing an uncertain risk with another similar group? a. transfer b. speculative c. operational d. physical - ANSWER transfer Dan has a major medical expense policy with a $200 deductible and an 80/ coinsurance provision. He incurs covered medical expenses of $100 in November and $400 in January. Under the carryover provision, what will the insurer pay? a. $ b. $
What qualifies as acceptance of an insurance contract offer? a. a declined policy b. an issued policy c. the application and initial premium d. the initial premium only - ANSWER an issued policy A Medicare Supplement policy is required to do which of the following? a. provide a 10 day free look period b. provide a 20 day free look period c. provide a 30 day free look period d. provide a 40 day free look period - ANSWER provide a 30 day free look period Under HIPAA, medical plan late enrollees may be excluded for pre-existing conditions for a maximum of a. 6 months b. 12 months c. 18 months d. 24 months - ANSWER 12 months Skilled nursing facility expenses are sometimes covered by _____, but only if the insured was hospitalized prior to entering the facility.
a. HMOS b. Medicare c. Medicaid d. Medicare Supplements - ANSWER Medicare Which of the following does a Medicare Advantage enrollee typically pay for? a. retainer fee b. annual deductibles c. small co-pay per visit or per service d. capitation - ANSWER small co-pay per visit or per service Medicare Part A typically covers a. inpatient drugs b. custodial care c. disability income d. respite care - ANSWER inpatient drugs Individuals covered with employer-paid group health plans will normally receive tax-free benefits under all of these plans EXCEPT a. disability income b. HMO c. Vision d. Major medical - ANSWER disability income
