NJ Accident And Health 2 Flashcards
Which feature in a health insurance policy is primarily designed to address the problem of adverse selection?
Preexisting conditions limitations
On an application for a disability income policy, which misrepresentation would NOT be considered material risk?
Lying about the number of your dependents
The right to change the beneficiary or dispose of the policy or its benefits in any manner one chooses is reserved to the policyowner UNLESS which of the following is true?
The policyowner has named an irrevocable beneficiary.
The national do not call list pertains what type of calls?
Unsolicited sales calls
Which federal law provides for the continuation of group medical expense coverage for departing employees and their dependent in the same group plan?
COBRA
In comparing Medicare supplement policies, what is the difference between A and Plan G?
Plan G offers more benefits
The group conversion option is allowed for all of the following Except
During the annual benefits enrollment period
Medicare supplements policies can exclude coverage on preexisting conditions for up to how many months?
6
Which health policy required provision requires action to be initiated by the policy owner?
Proof of Loss
A business disability buy-sell policy is designed to assist in the sale of a business for the
Disability of a businessowner
Which is NOT a benefit of a long-term care policy?
Acute hospital care
To be valid, all life insurance and health insurance contracts must include which of the following elements?
Consideration
Whose responsibility is it to make sure that the company is notified of a death claim at the earliest possible opportunity (in most cases)?
The producer
Which statement is TRUE concerning long-term care policy?
The policy may be issued on a guaranteed renewable basis.
Which benefit exists solely to encourage a disabled policy owner to attempt to return to work?
Recurrent Disability
Which health coverage could provide reimbursement for medical expenses incurred as the result of a broken arm?
Basic Hospital
Which health policy features first dollar (no deductible) coverage?
Base Plan
What does a hospital indemnity policy pay?
A stated amount for each day the insured is hospitalized
Which describes the tax consequences of a key employee disability policy?
Premiums are not tax deductible, and benefits are untaxed.
Compared to basic hospital, medical, and surgical policies, which type of insurance provides broader coverage, fewer gaps, higher individual benefits, and higher policy maximums?
Major Medical insurance
Which principle holds that the insurer relies on the truthfulness of the applicant and in return promises and has the ability to pay claims?
Good Faith
What is the Health insurance policy clause that identifies the contracting parties and briefly states the company’s responsibilities under the contract?
Insuring Clause
Which insuranplans are commonly offered through the worksite (employer sponsored)?
Medicare
How many years must credit information be retained?
7 years
A producer accepted a life insurance application without the initial premium. Once the underwriting process was completed, the company issued the policy by mailing it to the producer. What is the producer’s responsibility?
The producer should personally deliver the policy to collect the premium, explain the coverages, and obtain a signed statement of good health.
A producer is asked to collect money from a policy owner when delivering the policy. What else might the producer be asked to collect?
A statement of continued good health
When several members of a family insured under the same Major Medical policy are injured in the same accident, what does the policy typically require?
Only one individual deductible to be paid
All of the following can be used to qualify for Medicare A and B except
Financial Need
What do medical expense policies use to reduce adverse selection
Pre-existing conditions limitations
Lynn owns a Comprehensive Major Medical policy with a $1,000 Base Plan, a $500 Corridor Deductible, and an 80/20 Coinsurance Clause. If she incurs medical billsof $5,500 following a covered illness, how much will the company pay?
$4,200
A basic vision care package includes all of the following EXCEPT
- Safety glasses
The package does include eye exam/lenses and frames/and contact lenses.
A life insurance application is considered to be incomplete if it is missing whose signature?
The proposed adult insured
Which is a policy purchased by a school or a camp to cover anyone present?
Blanket Health
Which of the following is a characteristic of preferred provider organizations (PPOs)?
Physicians are paid a fee-for-service.
Chris is driving at a high rate of speed when the vehidle leaves the road, colludes with a tree, and causes Chris to be treated at the hospital. This is an example of which of the following perils that health insurance is designed to cover?
Accident
What is the minimum level of renewability that can be offered on a Medicare supplement policy or a long-term care policy?
Guaranteed Renewable
Under a Medicare Supplement Policy, preexisting conditions CANNOT be excluded after how many months from the effective date of the policy?
6 months
How do insurance companies protect themselves against adverse selection when underwriting individual health insurance policies?
They pay for Aids testing of all applicants
A claimant must complete and return the claim forms within how many days of the loss or as soon thereafter as reasonably possible?
Proof of loss = 90 Days
Which of the following is TRUE of a point of service plan?
A patient’s in-network care is coordinated by a primary care physician.
Dr. Martin purchases a $20,000 per month Own Occupation Disability Income policy, and Dr. Foster buys an identical policy. Dr. Martin loses his right hand in a boating accident at age 35 and is paid $240,000 per year for the rest of his life. Dr. Foster pays his premium until age 65 and never files a disability claim. This clearly demonstrates that insurance policies are what kind of contracts?
Aleatory Contract
Disability benefits are based upon which factor?
Loss of income
Which rating provides the least expensive premium?
Preferred
A family of four is covered under a family Major Medical plan. They adopt a young child with Down’s Syndrome. When will the adopted child be covered under their policy?
Date of placement
Which of the following, by definition, provides benefits for expenses incurred as a result of in-hospital medical treatment and surgery as well as certain outpatient expenses such as doctor’s visits, laboratory tests, and diagnostic services?
Hospitalization Insurance
Which is NOT an essential benefit required under the affordable care act?
Adult oral and vision care
“Essential health benefits are required in ALL plans in order to be compliant with the ACA.”
Which of the following determines whether a person passes the financial test to qualify for Medicaid?
State Law
The primary purpose of Health Reimbursement Accounts (HRAs) is to assist
covered employees with the payment of medical expenses on a high deductible plan funded through pre-tax contributions.
What is a partial truth on an application called?
Concealment
Under the Uniform Individual Health Policy Provisions law, which provision does NOT establish a timeframe in which the insurance company must act?
Legal Action
Which of the following statements is CORRECT about the Coordination of Benefits Provision?
It prevents an insured covered by two health plans from making a profit on a covered loss.
Which factor is NOT important in life insurance underwriting?
Martial Status
Evan’s Major Medical policy is reinstated on February 1. When he suffers a heart attack on February 6th, he files a claim. How should the company handle the claim?
The claim is denied due to a 10-Day probationary period.
What is the minimum grace period for a monthly premium Medical Expense policy?
10 days
Which of the following is covered by a dread disease policy?
Illness that do not occur frequently but incur significant costs when they do occur
How do warranties differ from representations?
A warranty is guaranteed to be true, a representation is believed to be true to the best of one’s knowledge.
A medical expense policy, newborns are covered only if
Any required premium is paid within 31 days of the birth.
The Affordable Care Act offers cost-sharing reductions such as lower co-payment, coinsurance, and out-of-pocket limits to insureds in what metal tier plan category?
Silver
Which underwriting feature is the most important in disability insurance?
Occupation
All life insurance and health insurance contracts contain all of the following EXCEPT
- Immaterial representation
What it contains:
Policy fate
Insuring clause
Conditions
Which was NOT established under the Patient Protection and Affordable Care Act (ACA)?
High deductible health plans (HDHP)
Disability income benefits are normally limited to a percentage of which income?
Earned income
The ability of an applicant to meet an insurer’s underwriting requirements is also known as
Insurability
In which of the following does a covered employee agree to a reduction in compensation so the amount can be used to cover medical expenses?
Flexible spending account (FSA)
Which statement concerning Group Health plans is TRUE?
Group Major Medical plans typically exclude coverage for occupational losses.
If a health insurance policy lapses due to nonpayment of premium, coverage will be reinstated after an application is submitted, premium is paid, and thecoverage is not refused within how many days?
45 days
Upon the issuance of a conditional receipt for a renewal when the premium is paid AFTER the time granted by the insurer, what is the maximum amount of time for reinstatement of the policy?
45 days
What coverage is designed for the inability to perform the activities of daily living (ADLs)?
Long Term Care
Ted owns a Disability Income policy with a Change of Occupation provision that will pay a $4.000 per month benefit. When he changes from a low-risk occupationto a high-risk occupation, he fails to tell his insurance company. How will Ted’s company respond to a covered loss?
Pay somewhat less than $4000 per month
Which of the following is NOT recognized as consideration in an insurance contract?
Services rendered by the producer
