Florida Health and Accident Insurance State Exam Simulator Flashcards
Under an individual Health Insurance policy, the Time Limit of Certain Defenses provision states that nonfraudulent misstatements first become incontestable two years
A. from the date that the policy was issued
B. from the date that the application was signed
C. from the date initial premium was collected
D. from the date of the sales appointment
A. from the date that the policy was issued
Under the Time Limit of Certain Defenses provision in an Individual Health Insurance Policy, nonfraudulent misstatements first become incontestable two years from the date of the policy was issued.
Q is hospitalized for 3 days and receives a bill for $10,100. Q has a Major Medical policy with a $100 deductible and 80/20 coinsurance. How much will Q be responsible for paying on this claim?
A. $2,100
B. $2,020
C. $2,000
D. $100
A. $2,100
In this situation, $10,000 x 20% coinsurance + $100 deductible = $2,100.
K has a health policy that must be renewed by the insurer and the premiums can only be increased if applied to the entire class of insureds. This type of policy is considered:
A. optionally renewable
B. conditionally renewable
C. guaranteed renewable
D. noncancellable
C. guaranteed renewable
Guaranteed renewable is best described as a policy that must be renewed and premium rate increases can only be applied if for an entire class of insureds.
Which of the following acts is an agent NOT authorized to do on behalf of an insurer?
A. Accept premiums from policyowners
B. Complete insurance applications
C. Authorize claim payments
D. Ask health related questions
C. Authorize claim payments
Agents do not authorize payment of claims.
Which statement is TRUE regarding a group accident & health policy issued to an employer?
A. Neither the employer or employee are policyowners
B. The employer is issued a certificate of coverage and each employee receives a policy
C. The employer receives the policy and each employee is issued a certificate
D. Both the employer and employee are policyowners
C. The employer receives the policy and each employee is issued a certificate
With a group accident and health plan, a master policy is issued to the employer and each employee receives a certificate of insurance.
Which of the following is NOT included in the policy face?
A. Free Look provision
B. Name of the insured
C. Name of the insurer
D. Exclusions
D. Exclusions
The exclusions section is NOT included in the policy face (first page of an insurance policy).
Which of these statements accurately describes the Waiver of Premium provision in an Accident and Health policy?
A. Past due premiums on a lapsed policy are waived and coverage is restored
B. The insured is paid a monthly benefit to keep insurance premiums current in the event of total disability
C. Premiums are waived after the insured has been unemployed for a specified time period
D. Premiums are waived after the insured has been totally disabled for a specified time period
D. Premiums are waived after the insured has been totally disabled for a specified time period
The Waiver of Premium provision waives the payment of premiums after the insured has been totally disabled for a specified period of time.
How many hours of continuing education must a newly licensed agent complete every two years?
A. 4
B. 8
C. 16
D. 24
D. 24
A newly licensed agent must complete 24 hours of continuing education every 2 years.
Any changes made on an insurance application requires the initials of whom?
A. Insured
B. Producer
C. Applicant
D. Beneficiary
C. Applicant
When an applicant makes a mistake in the information given to a producer in completing the application, the applicant can have the producer correct the information, but the applicant must initial the correction.
Which of these actions should a producer take when submitting an insurance application to an insurer?
A. Issue a binding receipt to applicant if no initial premium is submitted
B. Disclose to the applicant the amount of commissions to be earned on this transaction
C. Inform insurer of relevant information not included on the application
D. Arrange for a copy of the Attending Physician Statement (APS) to be sent to the producer
C. Inform insurer of relevant information not included on the application
One of the actions a producer should take when submitting an application is to advise the insurer of any other relevant information not contained in the application.
Upon reaching the limiting age, a disabled child may extend their health insurance coverage as a dependent
A. only if the child is incapable of employment and chiefly dependent on the policyowner
B. for up to an additional 10 years only
C. only if physically disabled
D. only if mentally disabled
A. only if the child is incapable of employment and chiefly dependent on the policyowner
Coverage may be extended if the handicapped child is incapable of employment and chiefly dependent on the policyowner.
Which of these is NOT a type of agent authority?
A. Express
B. Implied
C. Principal
D. Apparent
C. Principal
Agent authority is what an agent is authorized to do on behalf of his company. The three types of agent authority include express, implied, and apparent authority.
J has a Disability Income policy that does NOT provide benefits for losses occurring as the result of his employment. What kind of coverage is this?
A. Limited coverage
B. Workers’ Compensation coverage
C. Occupational coverage
D. Nonoccupational coverage
D. Nonoccupational coverage
The coverage provided by a Disability Income policy that does not provide benefits for losses occurring as the result of the insured’s employment is called nonoccupational coverage.
During the course of an insurance transaction, if an agent makes a false or incomplete statement, he/she could be found guilty of
A. sliding
B. replacement
C. misrepresentation
D. twisting
C. misrepresentation
An agent who intentionally makes an untrue or incomplete statement during the course of an insurance transaction may be guilty of misrepresentation.
The guarantee of insurability option provides a long-term care policyowner the ability to:
A. buy additional coverage at a later date
B. add the insured’s spouse at a later date
C. pay the same premium for life
D. cancel the policy at anytime
A. buy additional coverage at a later date
In long-term care insurance, the guarantee of insurability option provides the insured with the ability to purchase additional insurance at a later date without evidence of insurability.
Health insurance benefits NOT covered due to an act of war are:
A. excluded by the insurer in the contract provisions
B. assigned to a reinsurer
C. given a longer probationary period
D. charged a higher premium
A. excluded by the insurer in the contract provisions
An exclusion is a provision that entirely eliminates coverage for a specified risk, such as an act of war or aviation.
When is it acceptable to share commissions with another agent?
A. as long as both agents are licensed for the same lines of insurance
B. as long as both agents work for the same insurance company
C. as long as both agents are licensed in the same state
D. it is never acceptable
A. as long as both agents are licensed for the same lines of insurance
It is acceptable to share commissions as long as both agents are licensed for the same lines of insurance.
All of the following are eligibility requirements for an association group EXCEPT
A. Group must have been in existence for two years
B. Contributory plans require a minimum of 25 participants
C. Group must hold regular meetings at least on an annual basis
D. Must have been organized for some reason other than to obtain group insurance
B. Contributory plans require a minimum of 25 participants
This is inaccurate. At least 100 members must participate if the premium is contributory.
A licensed agent must be appointed by an insurance company to solicit insurance in Florida. The agent’s license will terminate if a certain period of time elapses without being appointed. How long is this period of time?
A. 12 months
B. 24 months
C. 36 months
D. 48 months
D. 48 months
An agent’s license will terminate if the agent allows 48 months to elapse without being appointed for the class or classes of insurance listed on the license.
A Business Overhead Expense policy would cover which of the following if a business owner becomes disabled?
A. Contributions to employee retirement plans
B. Utilities and office rent
C. Owner’s salary
D. Meals and entertainment
B. Utilities and office rent
A Business Overhead Expense policy is designed to cover certain overhead expenses (rent, taxes, utility bills, employee’s salaries etc) that continue when the business owner is disabled.
Under Florida law, which of the following provisions is NOT required in a Medicare Supplement policy?
A. Suitability form
B. Guaranteed issue
C. Free-look period of 30 days
D. Limitation on pre-existing conditions for up to 12 months
D. Limitation on pre-existing conditions for up to 12 months
There is only a 6-month limitation on pre-existing conditions for Medicare Supplements.
M completes an application for health insurance but does not pay the initial premium. All of these actions must occur before M’s policy goes into effect, EXCEPT:
A. policy is delivered
B. free-look period has expired
C. insurance company issues policy
D. initial premium is collected
B. free-look period has expired
In this situation, the policy will go into effect after all these actions occur EXCEPT the expiration of the free-look period.
J has an Accidental Death and Dismemberment 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?
A. $0
B. $100,000
C. $25,000
D. $50,000
C. $25,000
The maximum sum payable would be the capital sum, or $25,000.
N is covered under an individual Disability policy with a 30-day Elimination period and a monthly benefit of $500. N is totally disabled for 3 1/2 months. N’s total benefit received on this claim is:
A. $2,000
B. $1,750
C. $1,500
D. $1,250
D. $1,250
After the 30-day Elimination period has been satisfied, the total benefit paid on this claim is $1,250 ($500+$500+$250).
Common exclusions to the continuation of group coverage include:
A. Dental Care
B. Vision Care
C. Other Prescription Drugs
D. All of the above
D. All of the above
Common exclusions to the continuation of group coverage include Dental Care, Vision Care, and Other Prescription Drugs.
What is the purpose of the Insurance Guaranty Fund Association?
A. Enforces Florida’s insurance regulations
B. Underwrites high-risk insurance applicants
C. Protects policyowners against insolvent insurance companies
D. Establishes underwriting guidelines for admitted insurers
C. Protects policyowners against insolvent insurance companies
The Insurance Guaranty Fund Association is an association that protects policyowners against insolvent insurance companies.
“A producer does not have the authority to change a policy or waive any of its provisions”. The health provision that best describes this statement is called the
A. Grace Period
B. Incontestable
C. Entire Contract
D. Time Limit on Certain Defenses
C. Entire Contract
The Entire Contract provision states that the producer does NOT have the authority to change the policy or waive any of its provisions.
When does a Probationary Period provision become effective in a health insurance contract?
A. At the policy’s inception
B. 30 days after the policy’s inception
C. When a claim is submitted
D. When a covered loss occurs
A. At the policy’s inception
The probationary period begins when a policy goes into effect. During this period, no benefits will be paid under the policy.
Bryce purchased a disability income policy with a rider that guarantees him the option of purchasing additional amounts of coverage at predetermined times without requiring to provide evidence of insurability. What kind of rider is this?
A. Guaranteed insurability rider
B. Additional coverage rider
C. Paid-up option rider
D. Extended insurability rider
A. Guaranteed insurability rider
A guaranteed insurability rider guarantees the insured the option of purchasing additional amounts of disability income coverage at predetermined times without requiring the insured to provide evidence of insurability.
Insurance policies are considered aleatory contracts because
A. they are “take it or leave it” contracts
B. both parties consent to the contract
C. performance is conditioned upon a future occurrence
D. the contract is voidable upon proof of fraud
C. performance is conditioned upon a future occurrence
Insurance contracts are aleatory. This means there is an element of chance and potential for unequal exchange of value or consideration for both parties. An aleatory contract is conditioned upon the occurrence of an event.
The benefits under a Disability Buy-Out policy are:
A. normally paid in installments
B. taxable to the beneficiary
C. payable to the company or another shareholder
D. normally paid after a short elimination period
C. payable to the company or another shareholder
Benefits payable under a Disability Buy-Out policy are paid to the company or another shareholder.
X owns a Disability Income policy. X recently suffered a disability which was due to the same cause as a previous disability. These disabilities both occurred over a four-month span. Which of the following provisions allows X’s second disability to be covered without a new elimination period?
A. Delayed Disability
B. Partial Disability
C. Recurrent Disability
D. Residual Disability
C. Recurrent Disability
In this situation, the insurer will provide the same benefits without a new elimination period under the Recurrent Disability provision. Most policies provide for recurrent disabilities by specifying a period of time during which the recurrence of a disability is considered a continuation of the prior disability.
M purchased an Accidental Death and Dismemberment (AD&D) policy and named his son as beneficiary. M has the right to change the beneficiary designation at anytime. What type of beneficiary is his son?
A. Tertiary
B. Irrevocable
C. Revocable
D. Contingent
C. Revocable
With a revocable beneficiary designation, the policyowner may change the beneficiary at any time without notifying or getting permission from the beneficiary.
An insurer must provide an insured with claim forms within ____ days after receiving notice of a loss.
A. 5
B. 10
C. 15
D. 20
C. 15
Under the Claims Forms provision, an insurer must provide an insured with claim forms within a MAXIMUM of 15 days after receiving notice of a loss.
Why is an applicant’s signature required on a health insurance application?
A. To attest that the statements on the application are warranties
B. To attest that the statements on the application are accurate to the best of the applicant’s knowledge
C. To give Power of Attorney to the producer if needed
D. To attest that all statements on the application are guaranteed to be true
B. To attest that the statements on the application are accurate to the best of the applicant’s knowledge
An applicant’s signature represents that the statements on the application are true to the best of the applicant’s knowledge.
A policy of adhesion can only be modified by whom?
A. The agent
B. The applicant
C. The primary beneficiary
D. The insurance company
D. The insurance company
A policy of adhesion is best described as a policy which only the insurance company can modify.
An agent takes an individual Disability Income application, collects the appropriate premium, and issues the prospective insured a conditional receipt. The next step the insurance company will take is to:
A. issue the policy only when the initial premium check has cleared
D. determine if the applicant is insurable by investigating family health history
C. issue the policy on a standard basis
D. determine if the applicant is an acceptable risk by completing standard underwriting procedures
D. determine if the applicant is an acceptable risk by completing standard underwriting procedures
With a conditional receipt, the insurance company will complete standard underwriting procedures before making a decision about whether to insure the applicant.
P is a Major Medical policyowner who is hospitalized as a result of injuries sustained from participating in a carjacking. How will the insurer most likely handle this claim?
A. Claim will be denied and policy terminated
B. Claim will be partially paid
C. Claim will be paid
D. Claim will be denied
D. Claim will be denied
If a person is injured while committing an illegal act, health insurance will not cover the expense of the injury.
An insurance company receives E’s application for an individual health policy. E did not complete all of the medical history questions because she could not remember the exact dates. E signed the policy and submitted it to the insurance company anyway. A few weeks later, E suffers a heart attack and is hospitalized without completing the medical history questions and paying the initial premium. E is not insured. Which of the following clauses details the conditions that E did not meet?
A. Entire Contract clause
B. MIB clause
C. Insuring clause
D. Consideration clause
D. Consideration clause
A health insurance contract is valid only if the insured provides consideration in the form of the full minimum premium and the statements made in the application.
Accidental Death coverage is provided to commercial airline passengers in which of the following types of policies?
A. Disability Income policy
B. Accident Reimbursement Accounts
C. Accident Savings Plans
D. Blanket Accident policy
D. Blanket Accident policy
A Blanket Accident policy provides Accidental Death coverage to airplane passengers.
Agent J takes an application and initial premium from an applicant and sends the application and premium check to the insurance company. The insurance company returns the check back to J because the check is made out to J instead of the insurance company. What action should J take?
A. Deposit the applicant’s check into his account and make a personal check out to the insurance company from his personal account
B. Return to the customer, collect a new check made out to the insurance company, and send the new check out to the insurance company
C. Cross off his name on the “pay to” portion of the check, write the name of the insurance company, and send the check back to the insurance company
D. Deposit the check in to his personal account, use the funds to purchase a cashiers check, and send the new cashiers check back to the insurance company
B. Return to the customer, collect a new check made out to the insurance company, and send the new check out to the insurance company
If an agent receives a check made out to them instead of the insurance company, they should return the check to the customer and collect a new check properly made out to the insurance company.
In Florida, an element of an insurance transaction would be
A. ordering an MIB report
B. setting up the sales appointment
C. issuing an insurance contract
D. determining how much coverage is needed
C. issuing an insurance contract
The issuance of an insurance contract is considered to be an element of an insurance transaction.
According to Florida law, which of the following statements accurately describes an admitted mail order insurance company?
A. It may solicit insurance business by mail without the assistance of a licensed agent
B. It may solicit insurance business by mail only with the assistance of a licensed Florida agent
C. Admitted mail order insurance companies are illegal in Florida
D. Admitted mail order insurance companies cannot solicit insurance business outside the state of Florida
B. It may solicit insurance business by mail only with the assistance of a licensed Florida agent
An admitted mail order insurance company may solicit and accept business by mail only with the assistance of a licensed Florida agent.
A Business Disability Buyout plan policy is designed:
A. as an incurred expense plan
B. with a very short Elimination period
C. to pay benefits to the Corporation or other shareholders
D. to pay benefits to the insured’s spouse
C. to pay benefits to the Corporation or other shareholders
A Business Disability Buyout plan policy is designed to pay benefits to the Corporation or other shareholders.
A policyowner would like to change the beneficiary on an Accidental Death and Dismemberment (AD&D) insurance policy and make the change permanent. Which type of designation would fulfill this need?
A. Revocable
B. Contingent
C. Irrevocable
D. Primary
C. Irrevocable
An irrevocable designation may not be changed without the written consent of the beneficiary.
Which of the following can an agent provide to help a prospective client understand and purchase the most appropriate product?
A. Policy summary
B. Conditional receipt
C. Buyer’s guide
D. Illustration
C. Buyer’s guide
Agents can help prospective insureds understand and purchase the most appropriate product by delivering a buyer’s guide.
If the insured and primary beneficiary are both killed in the same accident and it cannot be determined who died first, where are the death proceeds to be directed under the Uniform Simultaneous Death Act?
A. Primary beneficiary’s estate
B. Primary beneficiary’s next of kin
C. Insured’s estate
D. Insured’s contingent beneficiary
D. Insured’s contingent beneficiary
Under the Uniform Simultaneous Death Act, if both insured and primary beneficiary are killed in the same accident and there is insufficient evidence to show who died first, policy proceeds will be paid as if the insured died last. In other words, the proceeds will be paid to the secondary or contingent beneficiary.
Which required disclosure helps a buyer choose the amount and type of insurance to buy, and how to save money by comparing the cost of similar policies?
A. Buyer’s Guide
B. Policy Summary
C. Outline of Coverage
D. Certificate of Coverage
A. Buyer’s Guide
Buyer’s Guide provides basic information about an insurance policy. It helps a buyer choose the amount and type of insurance to buy, and how to save money by comparing the cost of similar policies. It is required.
In Florida, deceptive advertising is considered to be
A. a form of coercion
B. a form of sliding
C. a form of rebating
D. a form of misrepresentation
D. a form of misrepresentation
According to Florida law, deceptive advertising is considered a form of misrepresentation.
This type of deductible provision waives the deductible for all family members after some of them have satisfied individual deductibles within the same year:
A. Individual deductible
B. Corridor deductible
C. Family maximum deductible
D. Common accident deductible
C. Family maximum deductible
A family maximum deductible provision waives the deductible for all family members after some of them have satisfied individual deductibles within the same year.
An individual has a Major Medical policy with a $5,000 deductible and an 80/20 Coinsurance clause. How much will the INSURED have to pay if a total of $15,000 in covered medical expenses are incurred?
A. $2,000
B. $5,000
C. $7,000
D. $10,000
C. $7,000
In this situation, $5,000 + 20% of the remaining bill = $7,000
Insurers may request a hearing within ___ if their policy is rejected
A. 20 Days
B. 30 Days
C. 60 Days
D. 90 Days
A. 20 Days
Insurers may request a hearing within 20 Days if their policy is rejected.
The Consolidated Omnibus Budget Reconciliation Act (COBRA) gives workers (and their families) whose employment has been terminated the right to:
A. continue group health benefits
B. take out an individual health policy
C. transfer their coverage to another insurer
D. convert to disability coverage
A. continue group health benefits
The Consolidated Omnibus Budget Reconciliation Act (COBRA) gives workers (and their families) whose employment has been terminated the right to continue group health benefits.
Which of the following statements is correct regarding an employer/employee group health plan?
A. The employer receives a certificate and the employees receive a master policy
B. The employer receives a master policy and the employees receive certificates
C. The employer receives both the certificates and master policy
D. The employees receives both the certificates and master policy
B. The employer receives a master policy and the employees receive certificates
Under an employer/employee group health plan the employer receives a master policy and the employees receive certificates.
What is the required minimum percentage of employee participation for a noncontributory group health insurance plan according to Florida Law?
A. 0%
B. 25%
C. 75%
D. 100%
A. 0%
Most noncontributory group health plans require 100% participation by eligible members. Under Florida law, there is no specific minimum percentage participation for employees covered by employee group health insurance.
If a retiree on Medicare required five hospital stays in one year, which policy would provide the best insurance for excess hospital expenses?
A. Long-term care
B. Indemnity
C. Medicare Supplement
D. Medicaid
C. Medicare Supplement
In this situation, a Medicare Supplement policy would provide the subscriber the best coverage for excess charges.
Group health plans typically contain a coordination of benefits (COB) provision. This provision’s purpose is to
A. avoid the duplication of benefit payments
B. assure the policyowner that no changes will be made to the contract
C. limit the time during which an insurer may contest the validity of an insurance claim
D. give the policyowner additional time to pay overdue premiums
A. avoid the duplication of benefit payments
The purpose of the coordination of benefits (COB) provision, found only in group health plans, is to avoid duplication of benefit payments and over-insurance when an individual is covered under more than one group health plan.
M has a Major Medical insurance policy with a $200 flat deductible and an 80% Coinsurance clause. If M incurs a $2,200 claim for an eligible medical expense, how much will M receive in payment for this claim?
A. $2,000
B. $1,760
C. $1,600
D. $400
C. $1,600
In this situation, $2,200 - $200 deductible x 80% = $1,600.
An insurance company would MOST likely pay benefits under an Accidental Death and Dismemberment policy for which of the following losses?
A. Loss of life due to a heart attack
B. Loss of eyesight due to an accidental injury
C. Loss of the spleen due to an accidental injury
D. Partial paralysis due to a stroke
B. Loss of eyesight due to an accidental injury
In this situation, an Accidental Death and Dismemberment policy will most likely pay benefits for loss of eyesight due to an accidental injury.
Consumer reports requested by an underwriter during the application process of a health insurance policy can be used to determine:
A. driving history
B. probability of making timely premium payments
C. if applicant is a tobacco user
D. overall health of the applicant
B. probability of making timely premium payments
The purpose of these reports is to provide a picture of an applicant’s general character and reputation, mode of living, finances, and any exposure to abnormal hazards.
An example of an unfair claims settlement practice is
A. making it mandatory that proof of loss be provided for each claim
B. requiring a time limit for submitting a claim
C. paying a claim in a timely matter
D. turning down a claim without providing the basis of denial
D. turning down a claim without providing the basis of denial
Denying an insured’s claim without indicating the basis of denial under the policy is considered an unfair claim settlement practice.
Pre-hospitalization authorization is considered an example of:
A. managed care
B. PPO care
C. Medicaid
D. Major Medical insurance
A. managed care
Pre-hospitalization authorization is the insurer’s approval of an insured entering a hospital. Many health policies require this as part of an effort to manage costs.
The reason for a business having a Business Overhead Expense Disability Plan is to cover:
A. the cost of providing group disability insurance to the employees
B. fixed business expenses
C. the owner’s loss of income
D. all business-related expenses and salaries
B. fixed business expenses
The reason for a business having a Business Overhead Expense Disability Plan is to cover fixed business costs in the event the owner becomes disabled.
A CEO’s personal assistant suffered injuries at home and as a result, was unable to work for four months. Which type of policy will pay a monthly benefit to the personal assistant?
A. Disability Income
B. Major Medical
C. Key Employee
D. Business Overhead Expense
A. Disability Income
In this situation, a Disability Income policy would pay monthly benefits.
Under a Guaranteed Renewable health insurance policy, the insurer
A. may refuse to continue coverage upon policy renewal
B. is permitted to require proof of insurability upon policy renewal
C. will typically decrease the premium upon policy renewal
D. may cancel the policy for nonpayment only
D. may cancel the policy for nonpayment only
Under a Guaranteed Renewable health insurance policy, the insurer may cancel the policy for nonpayment of premium only.
Who makes the legally enforceable promises in a unilateral insurance policy?
A. Beneficiary
B. Insurance company
C. Insured
D. Applicant
B. Insurance company
Under a unilateral insurance policy, the insurance company makes the legally enforceable promises.
In order for a domestic, foreign, or alien insurance company to conduct business, it must be authorized by whom?
A. The National Association of Insurance Commissioners (NAIC)
B. The state where they are conducting business
C. The attorney general in the state where they are domiciled
D. Homeland Security
B. The state where they are conducting business
Domestic, foreign, or alien companies must be authorized by each state where they conduct business.
Which of the following statements about Health Reimbursement Arrangements (HRA) is CORRECT?
A. If the employee had a qualified medical leave from work, lost wages can be reimbursed
B. If the employee paid for qualified medical expenses, the reimbursements may be tax-free
C. Any unused amounts are added to employee’s gross income
D. Health insurance premiums can be reimbursed to the employee
B. If the employee paid for qualified medical expenses, the reimbursements may be tax-free
Under a Health Reimbursement Arrangement, reimbursements may be tax free if the employee paid for qualified medical expenses.
Which of the following is NOT an unfair claim settlement practice?
A. Failing to acknowledge and act promptly with respect to an insurance claim
B. Compelling an insured to initiate a lawsuit by offering less on an insurance claim
C. Failing to accept or deny a claim within reasonable time after proof of loss is submitted
D. Needing written documentation of claim details
D. Needing written documentation of claim details
All of these are unfair claim settlement practices except “Needing written documentation of claim details”.
T files a claim on his Accident and Health policy after being treated for an illness. The insurance company believes that T misrepresented his actual health on the initial insurance application and is, therefore, disputing the claim’s validity. The provision that limits the time period during which the company may dispute a claim’s validity is called:
A. Insuring
B. Time Limit on Certain Defenses
C. Grace Period
D. Free-look
B. Time Limit on Certain Defenses
The Time Limit on Certain Defenses (Incontestability) provision limits the time during which the insurance company may challenge the validity of an insurance claim on the basis of a misstatement made on the insured’s application.
The Coordination of Benefits provision:
A. allows an insured covered by two health plans to make a profit on a covered loss
B. prevents an insured covered by two health plans from making a profit on a covered loss
C. allows an insurer to defer paying a claim for a work-related injury until Workers’ Compensation Benefits have expired
D. prevents an insured to change insurers during a claim for a covered loss
B. prevents an insured covered by two health plans from making a profit on a covered loss
The Coordination of Benefits prevents an insured covered by two health plans from making a profit on a covered loss.
Which of the following health insurance policy provisions specifies the health care services a policy will provide?
A. Insuring clause
B. Usual, Customary, and Reasonable clause
C. Consideration clause
D. Benefit clause
A. Insuring clause
The insuring clause identifies the specific type of health care services that are covered by that policy.
The insured and insurance company will share the cost of covered losses under which health policy feature?
A. Subrogation clause
B. Assignment provision
C. Share clause
D. Payment of Claims provision
D. Payment of Claims provision
In a health policy, the Payment of Claims provision states that the insured and insurance company will share the cost of covered losses.
Which of the following statements about the classification of applicants is INCORRECT?
A. Substandard applicants are never declined by underwriters
B. Substandard applicants are occasionally declined by underwriters
C. Preferred risk applicants typically have better premium rates than standard risk applicants
D. An applicant can be classified as substandard risk because of a hazardous job
A. Substandard applicants are never declined by underwriters
“Substandard applicants are never declined by underwriters”. This is false. An individual can be rated substandard for a number of reasons and can even be rejected outright.
Which of these arrangements allows one to bypass insurable interest laws?
A. Concealment
B. Indemnity contract
C. Contract of adhesion
D. Investor-Originated Life Insurance
D. Investor-Originated Life Insurance
Investor-originated life insurance (or IOLI), sometimes called stranger-originated life insurance (or STOLI) is used to circumvent state insurable interest statutes. This is done when an investor (or stranger) persuades an individual to take out life insurance specifically for the purpose of selling the policy to the investor. The investor compensates the insured and makes the premiums, then collects the death benefit when the insured dies.
How would a contingent beneficiary receive the policy proceeds in an Accidental Death and Dismemberment (AD&D) policy?
A. If the primary beneficiary is a minor at the time of the insured’s death
B. If the primary beneficiary dies before the insured
C. If the insured died of accidental causes
D. If the insured died of natural causes
B. If the primary beneficiary dies before the insured
A contingent beneficiary will receive the policy proceeds if the primary beneficiary dies before the insured’s death.
The policy provision that entitles the insurer to establish conditions the insured must meet while a claim is pending is:
A. Grace Period
B. Physical Examination and Autopsy
C. Entire Contract
D. Time Limit on Certain Defenses
D. Time Limit on Certain Defenses
This provision limits the period during which an insurer can deny a claim based on a misstatement made by the insured.
Which of the following statements is true about most Blue Cross/Blue Shield organizations?
A. They are the same as private insurance companies
B. They are federally sponsored
C. They are nonprofit organizations
D. They are owned by hospitals and physicians
C. They are nonprofit organizations
Most Blue Cross/Blue Shield organizations are considered to be nonprofit.
When determining the monthly benefit amount for a Disability Income policy, the factor that limits the amount a prospective insured may purchase is:
A. occupation
B. income
C. age
D. medical condition
B. income
When determining the monthly benefit amount for a Disability Income policy, the factor that limits the amount a prospective insured may purchase is income.
Comprehensive Major Medical policies usually combine:
A. Major Medical with Disability Income coverage
B. Major Medical with Basic Hospital/Surgical coverage
C. Basic Hospital/Surgical with Accidental coverage
D. Basic/Hospital/Surgical with Disability Income coverage
B. Major Medical with Basic Hospital/Surgical coverage
A Comprehensive Major Medical Policy combines Basic Hospital/Surgical and Major Medical insurance.
Which of the following characteristics is associated with a large group disability income policy?
A. No waiting periods
B. No medical underwriting
C. No elimination periods
D. No limit of benefits
B. No medical underwriting
A large group disability income policy can be distinguished by no medical underwriting.
A medical care provider which typically delivers health services at its own local medical facility is known as a:
A. Health Maintenance Organization
B. Regional Provider
C. Multiple Employer Trust
D. Preferred Provider Organization
A. Health Maintenance Organization
Health Maintenance Organizations (HMO’s) traditionally provide services to its members at its own local health care facilities.
An applicant’s medical information received from the Medical Information Bureau (MIB) may be furnished to the:
A. producer
B. applicant’s spouse
C. National Association of Insurance Commissioners (NAIC)
D. applicant’s physician
D. applicant’s physician
Information received from the Medical Information Bureau about a proposed insured may be released to the proposed insured’s physician.
K is the insured and P is the sole beneficiary on an Accidental Death and Dismemberment (AD&D) insurance policy. Both are involved in a fatal accident where K dies before P. Under the Common Disaster provision, which of these statements is true?
A. Proceeds will be paid to P’s estate
B. Proceeds will be divided equally between K’s and P’s estate
C. Proceeds will be paid to K’s estate
D. The courts will decide who will receive death benefits
A. Proceeds will be paid to P’s estate
Because the sole beneficiary outlived the insured, the proceeds will be payable to the estate of the deceased beneficiary.
The insurer must provide a prospective buyer with a(n)
A. Buyer’s Guide and Policy Summary
B. A.M. Best report
C. actuarial table
D. copy of the application
A. Buyer’s Guide and Policy Summary
The insurer must provide a prospective buyer with a Buyer’s Guide and Policy Summary.
Nonprofit life insurance providers that are covered by a special section in the Florida insurance code are called
A. Fraternal life insurance organizations
B. Domestic life insurance organizations
C. Unauthorized insurers
D. Mutual life insurers
A. Fraternal life insurance organizations
The correct answer is “Fraternal life insurance organizations”. A fraternal life insurance organization is a nonprofit provider of life insurance that is covered by a special section of the Florida insurance code.
A catastrophic illness would be best covered by which of the following health insurance plans?
A. Major Medical
B. Limited
C. Indemnity
D. Surgical Expense
A. Major Medical
Major Medical health insurance coverage is best suited for meeting catastrophic illness expenses.
A “reimbursement policy” pays what amount of covered Long-Term Care expenses?
A. All expenses regardless of the policy limits
B. Actual covered expenses up to the daily maximum
C. A daily dollar amount regardless of the actual incurred expenses
D. The usual, customary, and reasonable expenses regardless of the policy limits
B. Actual covered expenses up to the daily maximum
A “reimbursement policy” pays the actual covered expenses up to the daily maximum.
Which health policy clause stipulates that an insurance company must attach a copy of the application to the policy to ensure that it is part of the contract?
A. Consideration
B. Entire Contract
C. Free-look
D. Insuring
B. Entire Contract
The Entire Contract provision states that the health insurance policy, together with a copy of the signed application and attached riders and amendments, constitutes the entire contract.
According to Florida Law, in which of the following situations would a dependent handicapped child NOT be covered under a Family Health policy?
A. The handicapped child has reached the limiting age
B. The premiums for the handicapped child are not paid
C. The handicapped child becomes a full-time student
D. The family moves outside the provider network
B. The premiums for the handicapped child are not paid
Under a Family Health policy issued in Florida, a handicapped child must continue to be covered in all of these situations EXCEPT when premium payments cease to be paid.
S takes out a health insurance policy which contains a provision that states that the agent does not have the authority to change the policy or waive any of its provisions. Which health policy provision is this?
A. Legal Actions
B. Insurance with other insurers
C. Entire Contract
D. Reinstatement
C. Entire Contract
The Entire Contract provision states that the agent does NOT have the authority to change the policy or waive any of its provisions.
Which Unfair Trade Practice involves an agent suggesting that an insurance policy is like a share of stock?
A. Twisting
B. Intimidation
C. Misrepresentation
D. Sliding
C. Misrepresentation
If an agent tells an applicant that an insurance policy is like a share of stock, the agent may be guilty of misrepresentation.
What action should a producer take if the initial premium is NOT submitted with the application?
A. Keep the application until premium is paid
B. Forward the application to the insurer after giving the applicant a binding receipt
C. Forward the application to the insurer without the initial premium
D. Forward the application to the insurer after giving the applicant a conditional receipt
B. Forward the application to the insurer after giving the applicant a binding receipt
. In this situation, the producer should submit the application to the insurance company without the premium. However, if a premium is not paid with the application, the policy will not become valid until the initial premium is collected.
Why must an Accident & Health insurance applicant answer all questions on the application?
A. Statements and representations on the application are part of the consideration for issuing a policy
B. The National Association of Insurance Commissioners (NAIC) requires all questions be answered
C. The Medical Information Bureau (MIB) requires this for an insurer to be a member
D. Statements and representations are considered guarantees
A. Statements and representations on the application are part of the consideration for issuing a policy
The application statements and representations are part of the consideration for issuing a policy.
P is insured under a basic cancer plan. Which of the following conditions would be covered under this plan?
A. Stroke
B. Operation for a malignant tumor
C. Broken leg
D. Heart Attack
B. Operation for a malignant tumor
A basic cancer plan would pay the claim if the insured needed surgery for a malignant tumor.
Every resident agent must have and maintain at their place of business the usual and customary records pertaining to transactions under their license for at least how long?
A. 1 year
B. 3 years
C. 5 years
D. 7 years
C. 5 years
Every resident agent must have and maintain at their place of business the usual and customary records pertaining to transactions under their license for at least 5 years following the final settlement or final adjudication of a criminal proceeding, civil litigation, or an administrative proceeding. Any person found to be in violation may be subject to a fine.
A Disability Income policyowner recently submitted a claim for a chronic neck problem that has now resulted in total disability. The original neck injury occurred before the application was taken 5 years prior. The neck injury was never disclosed to the insurer at the time of application. How will the insurer handle this claim?
A. Claim will be paid and coverage will remain in force
B. Claim will be denied and coverage will remain in force
C. Claim will be denied and coverage will be cancelled
D. Claim will be denied, the coverage cancelled, and all premiums paid will be refunded
A. Claim will be paid and coverage will remain in force
After a policy has been in force for 2 (sometimes 3) years, it enters the incontestable period, in which the insurer may not deny a claim based on information not disclosed at the time of application.
Under a Basic Medical Expense policy, what does the hospitalization expense portion cover?
A. hospital room and board
B. hospital administration expenses
C. surgeon’s fees
D. physician fees
A. hospital room and board
The hospitalization expense of a Basic Medical Expense policy pays for hospital room and board.
____________can be defined as “using the contract values of an existing policy to purchase a new policy with an existing insurer”.
A. Churning
B. Defamation
C. Misrepresentation
D. Twisting
A. Churning
Churning can be defined as “using the contract values of an existing policy to purchase a new policy with an existing insurer”.
B’s policy provides coverage on an in-hospital basis only and contains a limited daily room and board benefit. Which of these policies does B have?
A. Comprehensive Major Medical
B. Basic Hospital
C. Critical illness
D. Basic Surgical
B. Basic Hospital
A Basic Hospital policy typically contains a limited daily room and board benefit and provides coverage on an in-hospital basis only.
M becomes disabled and is unable to work for six months. M dies soon after from complications arising from this disability. M has a Disability Income policy that pays $2,000 a month. Which of the following statements BEST describes what is owed to her estate?
A. $2,000
B. A lump sum of six times the monthly benefit
C. Nothing
D. Earned, but unpaid benefits
D. Earned, but unpaid benefits
In this situation, any earned but unpaid benefits will be paid.
Which of the following is an example of an Unfair Trade Practice?
A. Shared commissions
B. Fiduciary
C. Replacement
D. Coercion
D. Coercion
Coercion is considered an unfair trade practice in this state.
Before a health insurance policy is issued, which of these components of the contract is required?
A. Applicant’s signature on application
B. Beneficiary’s signature
C. A conditional receipt
D. Attending Physician Statement (APS)
A. Applicant’s signature on application
A signature on an application is required before a health policy will be issued.
Proceed
If an individual is covered under an Accidental Death Policy and dies, an autopsy can be performed in all these situations, EXCEPT:
A. When the cause of death is unknown
B. When the state prohibits this by law
C. When consent for the autopsy is not obtained
D. When foul play was a contributing factor
B. When the state prohibits this by law
Applicable state laws that prevent an autopsy take precedence.
Insurers/agents must, in Florida, offer and issue all small employer health plans on a ____
basis:
A. fair
B. nonrenewal
C. discounted
D. guaranteed-issue
D. guaranteed-issue
Insurers/agents must, in Florida, offer and issue all small employer health plans on a guaranteed-issue basis.
What is the primary factor that determines the benefits paid under a disability income policy?
A. Education level
B. Wages
C. Type of occupation
D. Age
B. Wages
The major factor in determining the benefit amount paid under a disability income policy is wages.
Which of the following involves analyzing a case before admission to determine what type of treatment is necessary?
A. Concurrent Review
B. Prospective Review
C. Retrospective Review
D. Utilization Review
B. Prospective Review
Prospective Review involves analyzing a case before admission to determine what type of treatment is necessary.
J’s Major Medical policy has a $2,000 deductible and an 80/20 Coinsurance clause. If J is hospitalized and receives a bill for $10,000, J would pay:
A. $1,600
B. $2,000
C. $3,600
D. $8,000
C. $3,600
In this situation, $2,000+ 20% of the remaining bill = $3,600.
An example of rebating would be
A. a mutual insurance company paying dividends to its policyowners
B. reducing the premiums across the board for a specific risk class
C. offering a client something of value not stated in the contract in exchange for their business
D. using intimidation in order to restrain or monopolize the business of insurance.
C. offering a client something of value not stated in the contract in exchange for their business
Rebating can be defined as offering a prospect something of value that is not specified in a contract in order to induce the purchase of that contract.
K applies for a health insurance policy on herself and submits the initial premium with the application. She is given a receipt by the producer stating that coverage begins immediately if the application is approved. What kind of receipt was used?
A. Binding
B. Initial Premium
C. Conditional
D. Contingent
C. Conditional
A conditional receipt indicates that certain conditions must be met in order for the insurance coverage to go into effect.
When is a Group Health policy required to provide coverage for a newborn child?
A. When the policyowner notifies the insurance company
B. At the moment of birth
C. When the required additional premium is paid
D. No more than 10 days after date of birth
B. At the moment of birth
A Group Health policy is required to provide coverage for a newborn child at the moment of birth.
Long Term Care policies will usually pay for eligible benefits using which of the following methods?
A. Delayed
B. Fee for service
C. Expense incurred
D. Respite
C. Expense incurred
Most long-term care policies pay on a reimbursement (or expense-incurred) basis, up to the policy limits.
The Notice of Claims provision requires a policyowner to:
A. provide proof of loss to an insurer within a specified time
B. notify an insurer of a claim within a specified time
C. wait 60 days after filing a claim to initiate a lawsuit against an insurer
D. notify their physician of a claim within a specified time
B. notify an insurer of a claim within a specified time
The Notice of Claims provision spells out the insured’s duty to provide the insurer with reasonable notice in the event of a loss.
Agents that have been licensed for less than six years must complete ____ hours of continuing education every two years.
A. 8
B. 20
C. 24
D. 36
C. 24
Florida agents licensed less than six years are required to complete 24 hours of continuing education.
An agent selling Medicare Supplement policies must provide every applicant with a(n)
A. MIB form
B. COBRA form
C. Suitability form
D. Signed consent form
C. Suitability form
Every agent soliciting Medicare Supplements must provide a suitability form.
Which entity approves the insurance policy forms used in Florida?
A. National Association of Insurance Commissioners (NAIC)
B. Department of Financial Services (DFS)
C. Financial Services Commission (FSC)
D. Office of Insurance Regulation (OIR)
D. Office of Insurance Regulation (OIR)
The insurance policy forms used in Florida are approved by the Office of Insurance Regulation (OIR).
Which of these would the Medical Information Bureau (MIB) identify?
A. Testing positive for marijuana use from a previous screening
B. Existing life insurance coverage with other carriers
C. Credit scores
D. Primary physician
A. Testing positive for marijuana use from a previous screening
The Medical Information Bureau (MIB) report will identify marijuana use determined by a previous screening.
An individual Disability Income insurance applicant may be required to submit all of the following information, EXCEPT:
A. medical history
B. gross income
C. occupation
D. spouse’s occupation
D. spouse’s occupation
In this situation, a spouse’s occupation is not necessary for the application.
A long-term care lapse notice must be delivered to both the applicant and
A. secondary addressee
B. beneficiary
C. personal physician
D. MIB
A. secondary addressee
An insurer must mail a long-term care lapse notice at least 30 days prior to the effective date of cancellation to both the policyholder and a specified secondary addressee.
What is required in the Florida Employee Health Care Access Act?
A. Small group benefit plans are to be issued on a “conditionally-issue” basis
B. Small group benefit plans are to be issued on a “guarantee-issue” basis
C. All small group benefit plans have a 60 day grace period
D. All small group benefit plans have no lifetime benefit limits
B. Small group benefit plans are to be issued on a “guarantee-issue” basis
The provisions of the Florida Employee Health Care Access Act require that all small group health benefit plans be issued on a “guaranteed-issue” basis.
Which of these statements is INCORRECT regarding a Preferred Provider Organization (PPO)?
A. PPO’s normally have more providers to chose from as compared to an HMO
B. Prices are negotiated in advance for PPO providers
C. In-network PPO providers offer members better coverage of incurred expenses
D. PPO’s are NOT a type of managed care systems
D. PPO’s are NOT a type of managed care systems
This is incorrect. PPO’s ARE considered to be a managed health care system.
An insured must notify an insurer of a medical claim within ___ days after an accident.
A. 10
B. 20
C. 30
D. 40
B. 20
Notice of a claim is typically required within 20 days after the occurrence or a commencement of the loss.
Which of the following consists of an offer, acceptance, and consideration?
A. Warranty
B. Estoppel
C. Contract
D. Representation
C. Contract
Offer, acceptance, and consideration are all elements of a contract.
All students attending a large university could be covered by:
A. a blanket policy
B. a franchise policy
C. a jumbo group policy
D. a commercial insurance policy
A. a blanket policy
Blanket health insurance is issued to cover a group who may be exposed to the same risks, but the composition of the group (the individuals within the group) are constantly changing.
What type of insurance company is domiciled in England, but conducts business in Florida?
A. Foreign
B. Domestic
C. Alien
D. Transatlantic
C. Alien
An insurance company that is domiciled in any country other than the United States is known as an alien insurance company.
M is insured under a basic Hospital/Surgical Expense policy. A physician performs surgery on M. What determines the claim M is eligible for?
A. Claim payment is equal to physician’s actual charges
B. Claim payment is negotiated between physician and patient
C. Determined by the schedule of benefits from the hospital
D. Determined by the terms of the policy
D. Determined by the terms of the policy
Under a basic hospital/surgical expense policy, the amount of the patient’s claim payment will be based on the terms of the policy.
Which of the following correctly explains the actions an agent should take if a customer wants to apply for an insurance policy?
A. Have the customer sign a blank application, then take the application back to his office to complete prior to sending it off to the insurance company
B. Complete the application over the phone with the customer, sign the application for the customer, then send the application off to the insurance company
C. Complete the application and review the information with the customer prior to obtaining the customer’s signature, then send the application off to the insurance company
D. Have the customer fill out the application and send it to his office for him to sign, then send it off to the insurance company
C. Complete the application and review the information with the customer prior to obtaining the customer’s signature, then send the application off to the insurance company
If a customer wants to apply for an insurance policy, the agent should complete the application and review the information with the customer prior to obtaining the customer’s signature, then send the application off to the insurance company.
What does Medicare Parts A and B cover?
A. Part A covers hospitalization; Part B covers long-term care
B. Part A covers doctor’s services; Part B covers hospitalization
C. Part A covers hospitalization; Part B covers doctor’s services
D. Part A covers prescription drugs; Part B covers disability
C. Part A covers hospitalization; Part B covers doctor’s services
Medicare Part A covers hospital benefits. Part B covers physician’s services.
In Florida, monthly-premium health insurance policies must provide a grace period of at least
A. 7 days
B. 10 days
C. 14 days
D. 31 days
B. 10 days
In Florida, monthly-premium health insurance policies must provide a grace period of at least 10 days.
T has a Disability Income policy that pays a monthly benefit of $5000. If T becomes partially disabled, what can he likely expect?
A. $5,000 per month benefit
B. $10,000 per month benefit if the cause was accidental
C. More than $5,000 per month benefit if cause was work-related
D. Less than $5,000 per month benefit regardless of the cause
D. Less than $5,000 per month benefit regardless of the cause
In a $5,000 per month Disability Income Policy, a covered partial disability will typically result in less than $5,000 per month regardless of the nature of the disability.
This type of deductible provision states that should more than one family member be involved in a common accident, or suffer the same illness, only one individual deductible amount shall be applied.
A. Individual deductible
B. Corridor deductible
C. Family maximum deductible
D. Common accident deductible
D. Common accident deductible
A common accident deductible provision states that should more than one family member be involved in a common accident, or suffer the same illness, only one individual deductible amount shall be applied.
Which of the following MUST be included in a Medicare Supplement policy’s Outline of Coverage?
A. The policy’s projection of future costs
B. The policy’s limitations and exceptions
C. The agent’s contact information
D. A copy of the MIB report
B. The policy’s limitations and exceptions
A Medicare Supplement’s Outline of Coverage MUST include the policy’s exceptions and limitations.
G is involved in an automobile accident as a result of driving while intoxicated and suffers numerous injuries. According to the Intoxicants and Narcotics exclusion in G’s policy, who is responsible for paying the medical bills?
A. The reinsurer
B. The insured
C. The insurer
D. The Guaranty Association
B. The insured
In this situation, the insured is liable for the medical bills.
The Florida Employee Health Care Access Act was established to make
A. group health insurance available to employers with up to 50 employees
B. health insurance affordable for families with children
C. individual health insurance available to all Floridians
D. health insurance affordable to retired individuals
A. group health insurance available to employers with up to 50 employees
The purpose of the Florida Employee Health Care Access Act is to make group health insurance available to employers with 50 or fewer employees.
An insured covered by a group Major Medical plan is hospitalized after sustaining injuries that resulted from an automobile accident. Assuming the plan had a $1,000 deductible and an 80/20 Coinsurance clause, how much will the INSURED be responsible to pay with $11,000 in covered medical expenses?
A. $0
B. $3,000
C. $8,000
D. $11,000
B. $3,000
In this situation, the insured is responsible for $1,000 deductible + 20% of the remaining bill = $3,000.
A Multiple Employer Welfare Arrangement (MEWA) provides what type of benefits?
A. Unemployment
B. Banking
C. Retirement
D. Insurance
D. Insurance
A Multiple Employer Welfare Arrangement (MEWA) provides insurance benefits.
If an insurance company issues a Disability Income policy that it cannot cancel or for which it cannot increase premiums, the type of renewability that best describes this policy is called:
A. noncancellable
B. conditionally renewable
C. cancellable
D. guaranteed renewable
A. noncancellable
A noncancellable policy is one which the insurance company cannot cancel and which premiums cannot be increased.
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?
A. 36
B. 18
C. 15
D. 6
A. 36
Under COBRA, if an employee dies, the dependents may continue their group health coverage for up to 36 months.
P is a producer who notices 5 questions on a health application were not answered. What actions should P take?
A. Mail incomplete application to applicant to be completed and returned to the agent
B. Submit the application as-is to the insurer
C. Call the applicant and complete application over the phone
D. Set up a meeting with the applicant to answer the remaining questions
D. Set up a meeting with the applicant to answer the remaining questions
In this situation, the producer should schedule another appointment with the applicant to complete the unanswered questions.
Qualified Long-Term Care policies may take into consideration an applicant’s pre-existing conditions for a maximum of not more than _____ month(s) prior to the effective date of coverage.
A. 1
B. 6
C. 12
D. 24
B. 6
If a pre-existing condition waiting period applies, the policy must not exclude coverage for any pre-existing conditions that occurred more than 6 months prior to the effective date of coverage. These conditions cannot be excluded beyond 6 months after the policy is issued.
Which of the following reimburses its insureds for covered medical expenses?
A. Health maintenance organizations
B. Preferred provider organizations
C. Commercial insurers
D. Service providers
C. Commercial insurers
Commercial insurance companies function on the reimbursement approach. Policyowners obtain medical treatment from whatever source they feel is most appropriate and submit their charges to their insurer for reimbursement.
Which of the following situations does a Critical Illness plan cover?
A. Asthma
B. Leukemia
C. Alcohol rehabilitation
D. Severe car accident
B. Leukemia
Leukemia is a type of cancer and would be covered under a Critical Illness plan.
The difference between group insurance and blanket health policies is:
A. Blanket health policies do not issue certificates
B. Group health policies do not issue certificates
C. Group health plans may be issued to an airline to cover its passengers
D. Blanket health policies are sometimes called wholesale plans
A. Blanket health policies do not issue certificates
Certificates are not issued in blanket policies.
After an insured gives notice of loss, what must he/she do if the insurer does not furnish forms?
A. File a lawsuit
B. Contact the insurer again requesting forms
C. Nothing
D. File written proof of loss
D. File written proof of loss
The insured may file written proof of loss in any form if the insurer does NOT furnish forms after the insured gives notice of loss.
According to Florida law, when must an agent deliver the Outline of Coverage to a Medicare Supplement applicant?
A. At the time of application
B. At the time of policy delivery
C. Within 14 days of the time of application
D. Within 14 days of policy delivery
A. At the time of application
Florida insurance law requires that if a Medicare Supplement policy is sold, the agent must deliver an Outline of Coverage to the applicant no later than when the application is taken.
Which of these factors do NOT play a role in the underwriting of a health insurance policy?
A. Avocations
B. Credit status
C. Marital status
D. Occupation
C. Marital status
Marital status does not affect the underwriting of a health insurance policy.
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
C. experimental and investigative services
All of these services are typically covered under a comprehensive major medical health insurance policy EXCEPT for “experimental and investigative services”.
Which of these circumstances is a Business Disability Buy-Sell policy designed to help in the sale of a business?
A. Company becoming insolvent
B. Death of the business owner
C. Business owner becoming disabled
D. Key employee becoming disabled
C. Business owner becoming disabled
A Business Disability Buy-Sell policy is designed to assist in the sale of a business when one of the owners becomes disabled.
Which statement is true regarding a minor beneficiary?
A. Normally, the death proceeds are required to be held in trust until the beneficiary reaches the age of 21
B. Normally, a guardian is required to be appointed in the Beneficiary clause of the contract
C. The minor must pay the debts of the insured’s estate before receiving any of the proceeds
D. The minor is entitled to receive the death proceeds immediately
B. Normally, a guardian is required to be appointed in the Beneficiary clause of the contract
In most cases, insurers require that a guardian be appointed in the Beneficiary clause of the policy or that a guardian be designated in the will.
Which of the following is NOT required on every insurance application sold in Florida?
A. Insurer’s name
B. Agent’s license number
C. Agent’s name
D. Address and phone number of the agent
D. Address and phone number of the agent
All of these must be shown on every insurance application sold in Florida EXCEPT “Address and phone number of the agent”.
In Florida, an insurer licensed to conduct business in Florida, but domiciled in New Jersey, is called a(n)
A. non-admitted company
B. foreign company
C. domestic company
D. alien company
B. foreign company
An insurance company that is domiciled in New Jersey and licensed to conduct business in Florida is referred to in Florida as a foreign company.
Statements made on an insurance application that are believed to be true to the best of the applicant’s knowledge are called:
A. representations
B. consideration
C. warranties
D. guarantees
A. representations
Statements made on an insurance application that are believed to be true to the best of the applicant’s knowledge are called representations.
Which type of policy pays benefits to a policyholder covered under a Hospital Expense policy?
A. Limited
B. Special risk
C. Reimbursement
D. Blanket
C. Reimbursement
When benefits are paid to a policyowner covered under a Hospital Expense policy, the policy is known as reimbursement.
Which of the following types of insureds are life insurance companies allowed to make policy rate discriminations against?
A. People of different religions
B. People that are married
C. People that smoke
D. People of different races
C. People that smoke
A life insurance company may make policy rate discriminations against people that smoke.
Which of the following phrases refers to the fees charged by a healthcare professional?
A. Deductible
B. Coinsurance
C. Usual, customary, and reasonable expenses
D. Hospital expense
C. Usual, customary, and reasonable expenses
The insurance phrase which considers a particular fee charged by a physician, dentist, or other health professional is usual, customary, and reasonable expenses.
A characteristic of Preferred Provider Organizations (PPOs) would be:
A. Discounted fees for the patient
B. Not allowed to see out-of-network physicians
C. Physicians are paid on a capitation basis
D. A primary care physician is required
A. Discounted fees for the patient
Under Preferred Provider Organizations, patient fees are discounted in return for using listed providers.
Which provision allows a portion of any used medical benefits to be restored following a particular amount of benefit has been used, or after the policy has been in effect for a particular period of time?
A. Reimbursement benefit
B. Restoration of unused benefit
C. Restoration of used benefit
D. Medical offset benefit
C. Restoration of used benefit
A restoration of used benefit provision allows a portion of any used medical benefits to be restored following a particular amount of benefit has been used, or after the policy has been in effect for a particular period of time
In the event of an illness, a(n)______ _____ policy would reimburse an insured for loss of earnings.
A. Earnings Indemnity
B. Family Income
C. Medicare Supplement
D. Disability Income
D. Disability Income
A Disability Income policy would reimburse an insured for loss of earnings due to sickness.
Which of these is considered a mandatory provision?
A. Payment of Claims
B. Insurance with Other Insurers
C. Misstatement of Age
D. Change of Occupation
A. Payment of Claims
Payment of Claims is considered a mandatory provision and directs where the claim benefits will go. The others are considered optional provisions.
As a condition for a loan, a bank requires the borrower to purchase credit insurance from a specific company. What is the bank guilty of?
A. Coercion
B. Defamation
C. Rebating
D. Misrepresentation
A. Coercion
A creditor who requires a debtor to obtain insurance from a particular company or agent as a condition for a loan is guilty of coercion.
All of the following are considered to be typical characteristics describing the nature of an insurance contract, EXCEPT:
A. Bilateral
B. Unilateral
C. Aleatory
D. Adhesion
A. Bilateral
Unilateral, aleatory, and adhesion are all special features of insurance contracts. Bilateral is not.
What type of policy would only provide coverage for specific types of illnesses (cancer, stroke, etc)?
A. MEWA
B. Blanket insurance
C. Dread disease insurance
D. Disability insurance
C. Dread disease insurance
Dread disease insurance provides benefits for ONLY specific types of illnesses such as cancer or stroke.
