Chapter 1: Health and Accident

Question 1

Which type of policy pays benefits to a policyholder covered under a hospital expense policy?

Answer 1

Reimbursement

Question 2

What kind of AD&D insurance beneficiary requires his/her consent when a change of beneficiary is made?

Answer 2

irrevocable beneficiary

Question 3

G is an accountant who has ten employees and is concerned how the business would survive financially if G became disabled. The type of policy which BEST addresses this concern is:

Answer 3

business overhead expense

Question 4

Group/voluntary long term care policy premiums are typically deducted from the employees income and

Answer 4

are less costly as compared to individual long term care coverage

Question 5

On AD&D insurance policy who is qualified to change the beneficiary designation?

Answer 5

policyowner

Question 6

What is issued to each employee of an employer health plan

Answer 6

certificate

Question 7

The benefits under a disability buy-out policy are

Answer 7

payable to the company or another shareholder

Question 8

An insurance company would MOST likely pay benefits under an AD&D policy for which of the following losses?

Answer 8

Loss of eyesight due to an accidental injury

Question 9

Which type of policy would pay an employee’s salary if the employer was injured in a bicycle accident and out of work for six weeks?

Answer 9

business overhead expense

Question 10

A business overhead expense policy

Answer 10

covers business expenses such as rent and utilities

Question 11

P 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?

Answer 11

Sign an enrollment card

Question 12

All of the following statements regarding group health insurance is true EXCEPT

Answer 12

an individual policy is given to each member

Question 13

P loses an arm in a farm accident and is paid $10,000 from his AD&D policy. This benefit is known as the

Answer 13

capital sum

Question 14

J has an AD&D policy with a principal sum of $50,000. While trimming the hedges, J cuts off one of his fingers. What is the MAXIMUM J will receive from his policy?

Answer 14

$25,000

Question 15

Which of the following is the reimbursement of benefits for the treatment of a beneficiary’s injuries caused by a third party?

Answer 15

subrogation

Question 16

Which of these circumstances is a business disability buy-sell policy designed to help in the sale of a business?

Answer 16

business owner becoming disabled

Question 17

Which statement is true regarding a minor beneficiary?

Answer 17

Normally, a guardian is required to be appointed in the Beneficiary clause of the contract

Question 18

The difference between group insurance and blanket health policies is:

Answer 18

blanket health policies do not issue certificates

Question 19

The fed income tax treatment of employer provided group medical expense insurance can be accurately described as

Answer 19

employee’s premiums paid by the employer is tax deductible to the employer as a business expenditure

Question 20

Which of the following statements is correct regarding an employer/employee group health plan?

Answer 20

the employer receives a master policy and the employees receive certificates

Question 21

Which of the following medical expenses does cancer insurance NOT cover

Answer 21

arthritis

Question 22

Which of the following claims are typically excluded from medical expense policies

Answer 22

intentionally self inflicted injuries.

Question 23

Which of the following BEST describes how a policy that uses the “accidental bodily injury” definition of an accident differs from one that uses the “accidental means” definition?

Answer 23

Less restrictive

Question 24

S is employed by a large corporation that provides group health coverage for its employees and their dependents. If S dies, the company must allow his surviving spouse and dependents to continue their group health coverage for a maximum of how many months under COBRA regulations?

Answer 24

36 months

Question 25

A business overhead expense policy would cover which of the following if a business owner becomes disabled?

Answer 25

utilities and office rent