Accident & Health 1 Flashcards
A health insurance contract that does not permit an increase in premiums, modifications to policy provisions, and is not cancelable best describes a(n):
(A) Non-cancelable and guaranteed renewable policy
(B) Guaranteed renewable policy
(C) Optionally renewable policy
(D) Conditionally renewable policy
Non-cancelable and guaranteed renewable policy
All of the following are required uniform policy provisions EXCEPT: (A) Change of beneficiary (B) Claims forms (C) Time limit on certain defenses (D) Conformity with state statutes
Conformity with state statutes
The NAIC model law requires Medicare supplement (Medigap) policies to have a: (A) 60 day free look (B) 45 day free look (C) 30 day free look (D) 10 day free look
30 day free look
All of the following statements are true with regard to accident and health field underwriting procedures EXCEPT:
(A) A notice to the applicant must be given to an applicant upon completion of an application for accident & health insurance
(B) An agent must explain the policy and its provisions and riders involved upon policy delivery
(C) The agents report must be signed and agreed to by the insured
(D) The application is the primary source of information
The agents report must be signed and agreed to by the insured
Mary doesn't know she is pregnant when she starts her group health plan. Upon examination 2 months later, Mary discovers she is 4 months pregnant. The insurance company would typically: (A) Cover all pregnancy expenses (B) Cover none of the pregnancy expenses (C) Cover 50% of the pregnancy expenses (D) None of the above
Cover none of the pregnancy expenses
.The NAIC model law requires Medicare supplement policies to be issued on what basis: (A) Non-cancelable guaranteed renewable (B) Guaranteed renewable (C) Optionally renewable (D) Conditionally renewable
Guaranteed renewable
Al has a major medical policy with a $500 deductible and a coinsurance clause of 80/20. If he incurs medical expenses of $4,500, the insurer would pay: (A) $800 (B) $900 (C) $3,200 (D) $3,600
$3,200
All of the following statements concerning the coordination of benefits provision found in the Accident & Health policies are true EXCEPT it:
(A) Guards against duplication of benefits
(B) Prevents an insured from profiting from an illness or injury
(C) This provision does not apply to group policies
(D) Premiums would be higher without this provision
This provision does not apply to group policies
A dentist has a Disability Income Policy. If, after being injured, he works only part time for 5 months, what allows him to receive income based on a percentage of his loss? (A) Partial disability (B) Residual disability (C) Recurrent disability (D) None of the above
Residual disability
In an Accident & Health policy, an elimination period provision refers to the period:
(A) Between the first day of disability and the actual receipt of payment for the disability incurred
(B) During which any specific accident or illness is excluded from coverage
(C) Between the first day of disability and the day to which the disability must continue before it can result in the insured receiving any benefits
(D) Between the effective date of the policy and the date on which payments under the policy become due
Between the first day of disability and the day to which the disability must continue before it can result in the insured receiving any benefits
Which of the following is excluded under a medical expense or disability income contract?
(A) Loss of income as a result of illness
(B) Self inflicted injuries
(C) A heart attack
(D) Injuries caused by accidents
Self inflicted injuries
A guaranteed renewable Accident & Health policy gives the insurer the right to:
(A) Alter premiums on a class basis
(B) Alter policy provisions during the policy term
(C) Reduce the amount of insurance after each claim
(D) Cancel the policy due to the filing of numerous claims
Alter premiums on a class basis
An insured must wait how many days after submitting a proof of loss before taking legal actions against an insurer (A) 20 (B) 30 (C) 60 (D) 90
60
Tom submits his initial premiums to his agent and receives a conditional receipt. When will Tom’s policy go into effect?
(A) When his check is received by the insurance companies home office
(B) When the policy is delivered
(C) When Tom’s check clears the bank
(D) When Tom takes his required medical exam, the premium is received and the policy is approved by underwriting
When Tom takes his required medical exam, the premium is received and the policy is approved by underwriting
Bob owns a disability income policy paying $1,500 per month in the event that he becomes totally disabled. The policy has a 30-day elimination period. Bob is involved in a traffic accident and is totally disabled for 105 days. How much will his disability income policy pay? (A) $2,250 (B) $3,750 (C) $4,500 (D) $5,250
$3,750
Which of the following is accurate with regards to the misstatement of age provisions?
(A) If an applicant unintentionally misstates his age on the application, no action will be taken by the insurer
(B) Any misstatement of age occurs on an application will result in a benefit adjustment
(C) If a misstatement of age occurs on an application, a pro rate refund of premium will be made to the insured
(D) None of the above
Any misstatement of age occurs on an application will result in a benefit adjustment
The pre existing condition exclusion found in an Accident & Health policy is designed to protect the insurer against: (A) Adverse selection (B) Over insurance (C) Malingering (D) Compliance
Adverse selection
Which of the following statements regarding surgical expense benefits is CORRECT?
(A) Benefits are typically subject to deductibles of $250 or more
(B) The amount on the benefit schedule is typically expressed in terms of the maximum benefit payable
(C) Coverage is usually provided for rehabilitation costs following surgery
(D) A small amount, usually no more than $350, is paid for incidentals while hospitalized
The amount on the benefit schedule is typically expressed in terms of the maximum benefit payable
A comprehensive medical expense insurance policy combines which of the following coverages under one contract?
(A) Major medical coverage and accidental death
(B) Disability income and accidental death
(C) Basic hospital and surgical coverage with major medical coverage
(D) Disability income with basic hospital and surgical coverages
Basic hospital and surgical coverage with major medical coverage
Which of the following is an eligibility requirement in order to receive full social security disability benefits:
(A) PIA insured status must be achieved
(B) Fully insured status must be obtained
(C) An individual must be at least 54 years old
(D) The recipient must be disabled for at least 12 months before benefits may be received
Fully insured status must be obtained
Long term care insurance provides all of the following coverages EXCEPT: (A) Skilled nursing care (B) Private room accommodations (C) intermediate (rehabilitative) care (D) Custodial care
Private room accommodations
The time limit that an insured has for returning accident and health claim forms to the insurer is known as: (A) Payment of claims (B) Claim forms (C) Grace period (D) Proof of loss
Proof of loss
A death benefit provided under an accident and health contract is limited to deaths caused by: (A) Limited perils (B) Accidental causes (C) Accidental causes or illness (D) None of the above
Accidental causes
Which of the following statements regarding Part A of Medicare is CORRECT:
(A) The insured must pay a deductible
(B) The insured must pay the full premium
(C) Benefits are paid directly to the insured
(D) To participate, an individual must be covered by Social Security
The insured must pay a deductible
All of the following statements concerning Part B of Medicare are correct EXCEPT:
(A) A coinsurance feature of 80/20 is included to cover changes after a deductible is satisfied
(B) There is an annual Deductible
(C) Annual physical exams are covered
(D) There is a premium charge by Social Security
Annual physical exams are covered
Dan owns an individual disability income policy paying $800 per month with a 60-day waiting period. If he becomes disabled for 45 days, how much will his policy pay? (A) Nothing (B) $200 (C) $400 (D) $800
Nothing
The period of time which must elapse before monthly disability income benefits begin is referred to as the: (A) Probationary period (B) Conversation period (C) Elimination period (D) Holding period
Elimination period
An insured must give a written notice of a claim to the insurer within\_\_\_days of the claim: (A) 5 (B) 10 (C) 15 (D) 20
20
After receiving notice of a claim from an insured, the company must provide claim forms to that insured within\_\_\_days of the request: (A) 5 (B) 10 (C) 15 (D) 20
15
Carl's health insurance policy pays benefits according to a list showing the amount payable for each covered treatment or procedure. Carl's policy provides benefits on a: (A) Scheduled basis (B) Reimbursement basis (C) Service basis (D) Cash basis
Scheduled basis
Steve's $100,000 Accidental Death & Dismemberment policy paid him $50,000 for the accidental loss of his left hand. He received the: (A) Primary amount (B) Principal amount (C) Capital amount (D) Contributory amount
Capital amount
If an insurance company fails to notify an applicant that his reinstatement application was not approved, coverage will automatically be reinstated in how many days? (A) 15 (B) 30 (C) 45 (D) 60
45
Medicare benefit periods end when a person has been released from a hospital or skilled nursing facility for a period of: (A) 6 months (B) 60 days (C) 90 days (D) 12 months
60 days
Responses to questions given by applicants on an accident & health insurance application are considered to be: (A) Warranties (B) Misrepresentations (C) Entitlement (D) Representations
Representations
Blue Cross organizations were originally organized to:
(A) Aid physicians in billing insureds
(B) Encourage the prepayment of hospital expenses
(C) Provide tax benefits
(D) Function in the same manner as a private insurer
Encourage the prepayment of hospital expenses
Under the guaranteed insurability benefit or option, an insured automatically qualifies for additional disability income protection without: (A) Submitting further premiums (B) Receiving a new contact (C) Filling out an application (D) Providing evidence of insurability
Providing evidence of insurability
A disability benefit which pays more than 50% of an insured's monthly income in the event that the insured cannot perform all of their important duties best describes: (A) Residential disability (B) Partial disability (C) Total disability (D) Recurrent disability
Residential disability
Which of the following statements is CORRECT regarding the change of occupation provision in a disability income policy?
(A) It states the rights and obligations of the insurer and insured if the insured engages in a more hazardous or less hazardous occupation
(B) It voids the policy if the insured suffers an otherwise compensable loss while engaged in an illegal occupation
(C) It requires that the insurer deny benefits if the insured changes his or hers occupation following the policy effective date
(D) It provides a formula by which adjustments are made in policy premiums if the insured changes to a higher risk occupation
It states the rights and obligations of the insurer and insured if the insured engages in a more hazardous or less hazardous occupation
Each of the following is an optional uniform health insurance policy provision EXCEPT: (A) Reinstatement (B) Change of occupation (C) Conformity with state statutes (D) Unpaid premiums
Reinstatement
What advantage does the recurrent disability provisions provide to the insured under a disability income policy?
(A) It eliminates the imposition of a second elimination period for the same disability
(B) It provides the insured with lifetime disability benefits
(C) It eliminates the imposition of an elimination period for a separate disability
(D) None of the above
It eliminates the imposition of a second elimination period for the same disability
The total amount payable under an Accident Death & Dismemberment policy is referred to the: (A) Capital sum (B) Principal sum (C) Accidental sum (D) Dismemberment benefit
Principal sum
Lois is covered by a group major medical plan provided through her employer. Her employer contributes 75% of the premium and Lois contributes 25%. If Lois received a $1,000 benefit from this policy, how much of this benefit would be taxed as income? (A) $1,000 (B) $750 (C) $250 (D) $0
$0
Bryan is self-employed and has purchased an individual disability income policy. The premium is $75 per month and the policy pays a monthly benefit of $800 after a 180-day elimination period. What is the income tax treatment of premium and benefit?
(A) Premium is deductible/benefit is tax free
(B) Premium is not deductible/benefit is tax free
(C) Premium is deductible/benefit is taxed as income
(D) Premium is not deductible/benefit is taxed as income
Premium is not deductible/benefit is tax free
When Laura suffered a broken hip, she notified her agent in writing within 12 days of the loss. However , her agent did not notify the insurance company until 60 days after the loss. Which of the following statements correctly explains how this claim would be handled?
(A) The insurer may deny the claim since it was not notified within the required 20-day time frame.
(B) The insurer is considered to be notified since the notification to their agent equals notification to the insurer
(C) The insurer may delay the payment of this claim for up to 6 months
(D) The insurer may settle this claim for less than it otherwise would had the notification been provided in timely manner
The insurer is considered to be notified since the notification to their agent equals notification to the insurer
How long must group health coverage be continued for the terminated employee under COBRA rules? (A) 12 months (B) 18 months (C) 24 months (D) 36 months
18 months
Nonoccupational accident and health contracts usually exclude coverage for:
(A) Employment related injuries or illnesses
(B) Injuries sustained while away from the workplace
(C) Accidental injuries only
(D) Individuals changing from a more hazardous to a less hazardous type of job
Employment related injuries or illnesses
Sarah wants a policy that will provide coverage for basic medical expenses on a first dollar basis yet will provide more coverage in the event of a catastrophic illness or injury. As her agent you might recommend the purchase of a:
(A) Supplement major medical policy
(B) Comprehensive major medical policy
(C) Medical and surgical expense policy combined
(D) Blanket health policy
Comprehensive major medical policy
Which of the following contracts would provide a key employee with the opportunity to purchase a business in the event that the owner becomes permanently and totally disabled?
(A) A life insurance funded buy-sell agreement
(B) Major medical expense contract
(C) Disability buy-sell agreement
(D) Credit disability income agreement
Disability buy-sell agreement
Company A receives a health insurance application from Don with a prepaid premium. One week later, they receive the MIB report indicating a prior heart condition. Company A will most likely:
(A) Disregard the MIB report
(B) Return Dons premium and decline coverage
(C) Cover the applicant
(D) Cover the applicant excluding the pre-existing condition
Cover the applicant excluding the pre-existing condition
Which of the following statements about the agents duties and responsibilities at the time of the application are NOT true?
(A) To probe beyond the stated questions if he feels the applicant is misrepresenting or concealing information
(B) To check to make sure that there are no unanswered questions on the application
(C) To change an incorrect statement on the application by personally initialing next to the corrected statement
(D) To explain the nature and type of any receipt he is giving to the applicant
To change an incorrect statement on the application by personally initialing next to the corrected statement
