chapter 4 Flashcards by Hunter Marshall

Low frequency diseases can be exclusively covered by what kind of health insurance
policies?

✔️✔️-Limited policies

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Respite care is able to provide:

✔️✔️-temporary relief to the patient’s
primary caregiver

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Which of the following is NOT an example of utilization review?

✔️✔️-
Ongoing inspection of accident prone individuals

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What makes an insurance policy a unilateral contract?

✔️✔️-Only the
insurer is legally bound

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A producer who knowingly submits a FALSE statement in support of a claim may be
found guilty of:

✔️✔️-Fraud

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The type of policy where the insurer can send a notice to the insured that the policy has
been cancelled in the middle of the term is called:

✔️✔️-Cancelable

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All of the following plans allow for employee contributions to be taken on pre-tax basis
EXCEPT:

✔️✔️-Health Reimbursement Arrangement Plan

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All of these are typically sources of underwriting information for life or health insurance
EXCEPT:

✔️✔️-Disclosure authorization response

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Which would evidence ownership in a participating health insurance contract?

✔️✔️-Policy ownership

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Kathy pays a monthly premium on her health insurance policy. How long is her grace
period?

✔️✔️-10 days

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An individual can enroll in a Part C Medicare Advantage Plan at what time?

✔️✔️-When becoming eligible for Medicaid

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Under a contract of adhesion:

✔️✔️-the terms must be accepted or
rejected in full

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Richard owns an insurance policy that is renewable only at the option of the insurance
company. His policy is considered to be:

✔️✔️-Optionally renewable

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_______ is NOT an element of a valid contract:

✔️✔️-Countersignature

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What amount will be paid under a policy where the insured misstated his/her age?

✔️✔️-An amount the premium would have purchased at the correct age

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How are premiums paid by the insured for personally owned disability income insurance
treated for tax purposes?

✔️✔️-Not tax deductible

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How many employees must an employer have for a terminated employee to be eligible
for COBRA?

✔️✔️-20

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Frank is shopping for a disability income policy. Which of the following would have the
HIGHEST premium? -

✔️✔️-14 day waiting period / 10 year benefit
period

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Major Medical expense plans provide coverage for each of the following EXCEPT:

✔️✔️-Work-related injuries

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Medicare Part A covers

✔️✔️-Inpatient hospital stay

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What is not a function of an insuring clause?

✔️✔️-Primarily describes
the free-look period

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An example of rebating would be:

✔️✔️-returning a portion of a
premium as inducement to purchase insurance

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The term which describes the fact that both parties of a contract may NOT receive the
same value is referred to as:

✔️✔️-Aleatory

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Which is an organization that only sells insurance among its members?

✔️✔️-Fraternal benefit society

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When comparing an HMO to a PPO, the PPO:

✔️✔️-Provides a greater choice of providers

Who is a mutual insurance company owned by?

✔️✔️-Policyholders

The Contestable Period for a health insurance policy remains in effect for a MAXIMUM period of:

✔️✔️-Two years

Which of these will typically authorize treatment from a specialist?

✔️✔️-Gatekeeper

A producer who sells insurance in Arkansas but resides in another state is called a(n):

✔️✔️-Nonresident producer

A stock insurance company:

✔️✔️-Is owned exclusively by its shareholders

An indemnity plan:

✔️✔️-provides the insured a specific dollar amount for services

Group health plans may deny participation based upon the:

✔️✔️- Member's part-time employment status

What type of injury would NOT be covered under a health insurance policy?

✔️✔️-Work-related

In Arkansas, monthly-premium health insurance policies must provide a grace period of at least:

✔️✔️-10 days

The entire contract includes the actual policy and the:

✔️✔️-Application

An HMO that involves a partnership of physicians and other providers who practice out of a central facility is called a(n)

✔️✔️-Group HMO

What is NOT included as part of a contract in the entire contract provision?

✔️✔️-Changes made by the producer

Which disability policy provision would address any concerns of the value of the benefits decreasing over time?

✔️✔️-Cost of living benefit

Ron has a new employer and wishes to enroll in the company's group health plan. In determining whether his pre-existing health condition applies, Ron cannot have more than a _____ day gap without previous health insurance.

✔️✔️-63

A Medicare Supplement basic benefit is

✔️✔️-The first 3 pints of blood per year

Written proof of loss must be furnished to the health insurer within how many days after the date of loss?

✔️✔️-90 days

The reinstatement provision in a health insurance policy is:

✔️✔️- Mandatory

Which is not considered sources of information that can assist an underwriter in determining whether or not to accept a risk:

✔️✔️-National Association of Insurance Underwriters

Which is NOT a qualifying event for Medicare?

✔️✔️-Falling below the federal poverty level

Exclusions to continued coverage include:

✔️✔️-Dental care Vision care Prescription Drugs

Which type of business insurance is meant to cover the costs of continuing to do business while the owner is disabled?

✔️✔️-Business overhead expense policy

Without a Section 125 Plan in place, what would happen to an employee's payroll contribution to an HSA?

✔️✔️-It would be considered taxable income to the employee

A clause that allows an insurer the right to terminate coverage at any anniversary date is called a(n):

✔️✔️-Optional renewability clause

Credit Accident and Health Plans are designed to:

✔️✔️-Help pay off existing loans during periods of disability

Which of the following statements is CORRECT regarding an individual applying for life or health insurance?

✔️✔️-The applicant's medical history may be analyzed and reported

One or more necessary or appropriate diagnostic, preventive, therapeutic, rehabilitative, maintenance, or personal care services in a setting other than an acute care unit of a hospital is provided by:

✔️✔️-Long-term care insurance

The Federal Employees Benefit Program consists of two types of health plans for federal civilian employees. The two plans are fee-for-service and:

✔️✔️- Prepaid

An insurer's ability to make unpredictable payouts to policyowners is called:

✔️✔️-Liquidity

Why are dividends from a mutual insurer not subject to taxation?

✔️✔️- Because dividends are considered to be a return of premium

What is the elimination period of an individual disability policy?

Correct Answer ✔️✔️- Time period a disabled person must wait before benefits are paid

Defamation occurs when a producer makes a false statement intended to:

✔️✔️-Malign another insurer

Which situation would qualify an individual for receiving benefits from a qualifies long- term care policy?

✔️✔️-Becoming cognitively impaired

Which of the following is present when an applicant stands to lose value if the insured dies? -

✔️✔️-Insurable interest

A proposed insured for a health insurance policy was treated for heart disease within the past year. When applying for health insurance, the heart disease treatment:

✔️✔️-Indicates a pre-existing condition

Under a disability income policy, which provision would be payable if the cause of an injury is unexpected and accidental?

✔️✔️-Accidental bodily injury provision

A person covered with an individual health plan:

✔️✔️-is issued a policy

Field underwriting performed by the producer involves:

✔️✔️- Completing the application and collecting initial premium

When an insured has a major medical plan with first dollar coverage, how does this impact the benefits paid?

✔️✔️-No deductible payment is required

A Medicare Supplement Policy is

✔️✔️-Designed to fill in the gaps of Part A and Part B Medicare

An example of an unfair claims settlement practice is:

✔️✔️-Turning down a claim without providing the basis of denial

The difference between pre-certification and concurrent review is that pre-certification:

✔️✔️-Occurs before the treatment is provided

Which is NOT a qualification for establishing a health savings account (HSA)?

✔️✔️-Enrolled in a health plan with a prescription drug benefit

Which of the following actions may an insurance company NOT do in an health policy that contains a guaranteed renewable premium benefit?

✔️✔️-Increase the premiums on an individual basis

In an employer-sponsored group accident and health plan, a master contract is issued to the:z

✔️✔️-Employer

All of these are considered key factors in underwriting health insurance EXCEPT:

✔️✔️-Marital status

Karen is a producer who has obtained personal information about a client without having a legitimate reason to do so. Under the McCarran-Ferguson Act, what is the minimum penalty for this?

✔️✔️-$10,000

The election of COBRA for continuation of health coverage will:

✔️✔️- Maintain the same coverage and increase premium

A health insurance policy where the insurer has the right to terminate the policy for reasons other than the insured's health is called:

✔️✔️-Conditionally renewable

Bob and Tim start a business. Since each partner contributes an important element to the success of the business, they decide to take life insurance policies out on each other, and name each other as beneficiaries. Eventually, they retire and dissolve the business. Bob dies 12 months later. The policies continue in force with no change. Both partners are still married at the time of Bob's death. In this situation, who will receive Bob's policy proceeds?

✔️✔️-Tom