Pearson Vue National Health Insurance Practice Test

An insurer must provide claim forms to an insured within a MAXIMUM of how many days after receiving notice of an Accident & Health claim?

A. Five

B. Fifteen

C. Twenty

D. Thirty

An insurer must provide claim forms to an insured within a MAXIMUM of how many days after receiving notice of an Accident & Health claim?

A. Five

B. Fifteen

C. Twenty

D. Thirty

b

Under a group health plan, an employer may offer additional benefits to classes of employees on the basis of all of the following factors EXCEPT:

A. length of employment

B. gender

C. salary grade

D. job category

b

Which of the following statements is CORRECT about a Waiver of Premium provision in a Disability Income policy?

A. It allows the insurer to deduct premiums due from the disabled insured's benefit payments.

B. It allows the insurer to increase the amount of premium during the insured's time of disability.

C. It allows the insured to extend the length of the Grace Period while disabled.

D. It allows the insured to maintain a policy in force while disabled and unable to pay premiums.

d

Suicide, pre-existing conditions and self-inflicted injuries are dealt with in which of the following policy features?

A. Extensions of coverage

B. Benefits clause

C. Riders

D. Exclusions

d

An insured becomes disabled three years after his Disability Income policy is issued. The disability is caused by a condition that existed prior to the policy issue date but was not specifically excluded from coverage. In this situation, the insurer will most likely take which of the following actions?

A. Pay the full claim

B. Pay the claim for a maximum of six months only

C. Deny the claim on the basis of misrepresentation

D. Deny the claim because it involves a pre-existing condition

a

A health care plan that reimburses a flat fee for medical care it provides at a clinic it owns and operates is referred to as:

A. Health Maintenance Organization

B. Medicaid

C. Medicare

D. Multiple Employer Trust (MET)

a

Which of the following laws requires an insurer to notify an applicant in writing that an investigative consumer report may be made on the applicant?

A. Uniform Provisions Law

B. Freedom of Information Act

C. Medical Information Bureau Disclosure Act

D. Fair Credit Reporting Act (Insurance Information and Privacy Protection Act)

d

Under a Guaranteed Renewable Accident & Health policy, an insurer retains the right to:
A.increase the premium rate for one insured without increasing the rate for others in the same class

A. increase the premium rate for one insured without increasing the rate for others in the same class

B. increase the premium rate for an entire class of insureds

C. increase the benefits for an individual insured

D. decrease benefits for one insured without decreasing benefits for others in the same class

b

An individual who has had a heart murmur since birth is likely to be issued an individual disability policy that includes:

A. Guaranteed Insurability rider

B. an Exclusionary/ Impairment rider

C. Waiver of Premium rider

D. Double Indemnity rider

b

Which of the following statements is CORRECT about coinsurance?
A.It applies to deductibles as well as to claim payments.

A. It applies to deductibles as well as to claim payments.

B.It helps control overutilization of benefits.

C. It is effective for the first claim payment and waived for future claims.

D. Insurance companies may adjust the coinsurance ratio after issuing a policy.

b

The insurance policy clause that identifies the contracting parties and defines the scope and limits of coverage is called the:

A. Insuring clause

B. Benefit clause

C. Consideration clause

D. Renewal clause

a

In an Accidental Death and Dismemberment (AD&D) policy, the term "capital sum" refers to:
A.the benefit paid for death caused by a dread disease

A. the benefit paid for death caused by a dread disease

B. the monthly disability income paid if an insured loses a limb or the sight in one or both eyes

C. a lump sum payment made when disease causes the amputation of an arm or a leg

D. a lump sum payment made for an accidental dismemberment

d

A group long-term disability plan is integrated with Social Security when which of the following statements is CORRECT?

A. Social Security and group benefits pay a combined maximum limit.

B. Full group benefits are paid in addition to Social Security benefits.

C. Full Social Security benefits are paid after group benefits are exhausted.

D. Half of the allowable Social Security benefits are paid after group benefits are exhausted.

a

Medicare Part A covers which of the following expenses?

A. Hospital room and board

B. Surgical expenses

C. Medications

D. Physicians' services

a

J has a physical impairment, attends school, and is incapable of self-sustaining employment and/ or self care. Which of the following statements is CORRECT about J's medical coverage under J's father's group plan?

A. J's coverage ceases, but J may apply for group student coverage.

B. J's coverage automatically discontinues at age twenty-six.

C. J's coverage continues only as long as J is a full-time student.

D. J's coverage continues as long as J is continually incapacitated and is financially dependent on J's father.

d

Medicare Supplement policies are primarily designed to:
A.offset the high cost of Medicare

A. offset the high cost of Medicare

B. provide additional retirement income to supplement Social Security retirement benefits

C. provide additional benefits beyond those provided by Medicare

D. provide a reinsurance network that spreads the Medicare risk among private insurance companies

c

A producer and an applicant complete an application for a health policy and submit it to the insurer for underwriting without any premium. The underwriter issues a policy and mails it to the producer for delivery to the applicant. The producer should take all of the following actions during the delivery of the policy to the applicant EXCEPT:

A. collect the initial premium payment

B. issue a conditional receipt

C. have the applicant complete a statement of continued good health

D. explain the Free Look provision which begins on the policy delivery date

b

M and N own a small interior design studio that employs six people. The owners are concerned about the financial continuation of the business if either of them should become permanently disabled. In this situation, a producer would MOST likely recommend which of the following types of contracts?

A. Basic Hospital

B. Disability Buy-Out

C. Comprehensive Major Medical

D. Short-Term Disability Income

b

Which of the following definitions of disability would cover a permanent partial disability?

A. Own occupation

B. Any occupation

C. Residual disability

D. Presumptive disability

c

Group health insurance specifies that what percentage of eligible individuals MUST be offered coverage under a noncontributory plan?

A. 25

B. 50

C. 75

D. 100

d

An Eligible Expenses provision in a comprehensive major medical policy commonly identifies all of the following types of covered health care services EXCEPT:

A. professional services of doctors and other medical practitioners

B. hospital charges for semi-private room and board

C. experimental and investigative services

D. pre-approved home health care

c

Which of the following provisions explains that a producer does not have the authority to waive the provisions of an insurance contract?

A. Legal actions

B. Reinstatement

C. Time limit on certain defenses

D. Entire Contract

d

Under the Claims Forms provision of a health policy, if the insurance company fails to send claim forms within the time period required, the insured should:

A. expect a full refund of all premiums paid plus interest

B. submit the claim in any form, which must be accepted by the company as adequate proof of loss

C. request the Department of Insurance mediate the claim settlement

D. wait for the claim form to arrive

b

The Coordination of Benefits clause found in group health master contracts is used to:
A.integrate Disability Income benefits with Major Medical benefits

A. integrate Disability Income benefits with Major Medical benefits

B. avoid double payment of benefits to an insured who has duplicate group coverages

C. investigate the claims history of an insured

D. avoid duplicate claims to an employer for the same employee

b

A precertification review prior to a nonemergency hospitalization is an example of:

A. managed care

B. Medicaid

C. Medicare

D. Disability Income

a

Five years ago, at age forty-five, X stated that he was forty years old on a disability income insurance application. X now submits a claim and the insurer discovers X's true age. The insurer will most likely take which of the following actions?

A. Deny the claim due to material misrepresentation on the application

B. Pay the claim as filed because the policy becomes incontestable after two years

C. Pay the claim and cancel the policy

D. Adjust the benefits downward according to the benefits that X would have been entitled to based on the premiums

d

When delivering a policy to a client, a producer should take all of the following actions EXCEPT:

A. collect any premiums due

B. fully explain all exclusions and/or riders

C. keep the policy in the producer's office for safe-keeping on behalf of the client

D. review all benefits provided by the policy

c

A married insured has an Accidental Death and Dismemberment (AD&D) policy that names his brother as the primary beneficiary and his son as the contingent beneficiary. If the insured and his brother are both killed instantly in a train accident, the policy proceeds would be paid to which of the following?

A. The insured's estate

B. The brother's estate

C. The insured's son

D. The insured's spouse

c

Which of the following definitions MOST accurately describes the Probationary Period?

A. The period of time from the date of the loss until the benefits begin

B. The period of time from the date of the loss until benefits are actually received by the policyowner

C. The waiting period a new hire must satisfy prior to becoming eligible for group health coverage

D. The period of time once a claim is received by the insurance company before it pays benefits to the policyowner

c

The Elimination Period in most Disability Income policies applies:

A. to each separate disability

B. to claims for accidents only

C. during the first 30 days of the contract

D. during short-term disabilities that are easily managed

a

The PRIMARY purpose of Medicaid is to:

A. pay for expenses not covered by Medicare

B. provide Disability Income benefits to people on Medicare

C. provide Medical Expense coverage to persons meeting certain minimum income requirements

D. provide funds for people injured in natural disasters

c

In which of the following health policies are both the renewability and the premiums guaranteed?

A. Noncancellable

B. Optionally Renewable

C. Guaranteed Renewable

D. Conditionally Renewable

a

An insured whose Disability Income policy contains a Change of Occupation clause takes a new job in a more hazardous occupation and fails to notify the insurer of the change. One year later, the insured becomes disabled. The insurer will most likely take which of the following actions?

A. Cancel the policy and refund one year's premiums

B. Settle the claim according to what the premiums would have purchased under the more hazardous occupation

C. Pay the claim in full and then cancel the policy

D. Pay the claim after deducting an extra one-year premium payment

b

Which of the following reports may include information obtained by a telephone call to the proposed insured?

A. Medical Information Bureau (MIB) report

B. Attending physician's report

C. Inspection report

D. Precertification Review

c

The purpose of the Medical Information Bureau (MIB) is to:

A. recommend the premium rates for health policies issued to substandard risks

B. share medical data among member companies

C. provide background data for large group health plans

D. provide actuarial data on dread diseases

b

An Accident and Health policy Notice of Claim provision requires that an insured give written notice to the insurer within a MAXIMUM of how many days after a loss?

A. 15

B. 20

C. 30

D. 45

b

The Consideration clause in an accident and health policy states the:

A. the applicant pays the initial premium

B. conditions under which benefits are paid

C.premiums will be refunded during the free look period

D. certain claims will be excluded under the policy

a

All of the following elements are required of a contract EXCEPT:

A. assignment

B. acceptance

C. legal capacity

D. legal purpose

a

Which of the following types of provisions guarantees renewability to a specified date or age unless certain specified events occur?

A. Noncancellable

B. Optionally Renewable

C. Guaranteed Renewable

D. Conditionally Renewable

d

On June 1, S purchased a Major Medical policy and paid the initial premium to Producer T. On July 1, Producer T received the policy from the insurance company. The policy contained a Ten-Day Free Look provision. On July 3, Producer T attempted to deliver the policy but found that S was not at home. On July 5, Producer T was able to deliver the policy to S. On July 7, S decided he did not want the policy. S had 10 days from which of the following dates to return the policy to the company and obtain a full premium refund?

A. July 1

B. July 3

C. July 5

D. July 7

c

The Social Security program provides all of the following benefits EXCEPT:

A. retirement

B. survivor

C. disability

D. workers compensation

d

Which of the following statements is CORRECT about a Disability Income policy with a Guaranteed Insurability rider?

A. The insured may periodically increase the amount of benefits payable under the policy.

B. The insured may assign the policy to a member of the insured's family.

C. The insurer is not permitted to cancel the policy.

D. The insurer will issue the policy without a medical examination.

a

An applicant for insurance submits an application to an insurer for underwriting but does not forward any premium payment with the application. Legally, the applicant is making:

A. an inquiry for an offer

B. an offer

C. a counteroffer

D. an acceptance

a

The Internal Revenue Service (IRS) considers Disability Income benefits paid under an employer-paid group Disability Income to be:

A.taxable for thirteen weeks only

B. nontaxable for twenty-six weeks only

C. fully taxable

D. exempt from taxation

c

Which of the following provisions designates to whom claim payments are made?

A. Time of Payment of Claims

B. Claim Forms

C. Notice of Claim

D.Payment of Claims

d

A Disability Income policy may provide benefits for which of the following losses?

A. Residual Disability

B. Catastrophic medical expenses

C. Long term care

D. Supplemental payments to Medicare

a

When periodic claim payments are required under a long-term disability income policy, an insurer MUST make payments to an insured at least once every:

A. month

B. three months

C. six months

D. year

a

Under an Accidental Death and Dismemberment (AD&D) policy, insurable interest must exist at which of the following times?

A. When a change of beneficiary is requested

B. At the inception of the policy

C. When a beneficiary other than a relative is named

D. At the time a claim is submitted

b

Health insurance policies are offered on a "take it or leave it" basis and referred to as which of the following types of contracts?

A. Aleatory Contracts

B. Valued Contracts

C. Unilateral Contracts

D. Contracts of Adhesion

d

Which of the following health policies requires a beneficiary designation?

A. Travel Accident

B. Medicare Supplement

C. Blanket

D. Long Term Care

a