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Agent/Broker Practice Exam with
complete solutions.
Accident and Health Insurance
Agent/Broker Practice Exam with
complete solutions.
Sally is considering her Medicare options. She understands that to enroll in Medicare Part B, she will have to pay a monthly premium. Since she is healthy, she is considering delaying her enrollment until later. Will she be able to enroll at a later date? 1.Yes, she can enroll at anytime in the future 2.Yes, however; she would have a permanent premium penalty when she does enroll 3.No, this is a take or leave it situation 4.Yes, but she would have to show evidence of good health. - Answer = Yes, however; she would have a permanent premium penalty when she does enroll Under Medicare Part A, a spell of illness begins again and is subject to a new deductible for another admission when: 1.The patient has been discharged from a prior stay and 45 days have elapsed 2.The patient has been discharged from a prior stay and 30 days have elapsed 3.The patient has been discharged from a prior stay and 60 days have elapsed 4.The patient has been discharged from a prior stay and 90 days have elapsed - Answer = The patient has been discharged from a prior stay and 60 days have elapsed What type of insurer retains risk? 1.Government insurance. 2.Reinsurers. 3.Self insurers. 4.Assessment insurers. - Answer = Self insurers. A variety of types of care are provided under a long-term care policy. All of the following are types of care generally provided EXCEPT: 1.Home health care 2.Intensive care 3.Custodial care 4.Skilled care - Answer = Intensive care
Agent/Broker Practice Exam with
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Melvin has a long-term care policy with a 30-day elimination period. The policy has a daily benefit of $100/day. The policy has a 3-year benefit period. If Melvin is confined to a nursing home for 9 months, how much in benefits will his policy pay? 1.$27, 2.$18, 3.$24, 4.$17,000 - Answer = $24, Martin and his friends were at a local tavern celebrating his birthday. Martin left the bar to drive home, but unfortunately, he was involved in a fatal accident, killing himself and two other individuals. An autopsy reveals that Martin was well above the legal limit on his blood alcohol test. Martin's family will receive the following from his Accidental Death and Dismemberment policy: 1.His family will receive reduced benefits since other deaths were involved. 2.His family will receive the principal sum since this was death 3.His family will receive no benefits, since he was in the act of committing a felony 4.His family will receive no benefits since there was no dismemberment involved. - Answer = His family will receive no benefits, since he was in the act of committing a felony An exclusion that always appears in a health policy is: 1.No coverage for drug or alcohol related illness 2.Hernia from an accident 3.Travel outside of the USA 4.Injury in the act of committing a felony - Answer = Injury in the act of committing a felony Bruce owns a plan that pays $100 daily benefit for a hospital stay with no deductible. This kind of policy is known as a (an): 1.Major medical plan 2.Basic plan 3.Indemnity plan 4.Reimbursement plan - Answer = Indemnity plan Under what conditions is the death benefit (principal sum) payable under an Accidental Death and Dismemberment (AD&D) policy? 1.The insured dies from a grave illness
Agent/Broker Practice Exam with
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2.Subrogation 3.Concealment 4.Utmost good faith - Answer = Subrogation Insurance contracts sometimes contain ambiguities. Which of the following has not been taken to court for further interpretation? 1.Reasonable expectations 2.Subrogation 3.Ambiguities in a contract of adhesion 4.Utmost good faith - Answer = Subrogation There are various optional provision for health policies. Which of the following is not an optional provision? 1.Intoxicants and narcotics 2.Conformity with state statutes 3.Reinstatement 4.Illegal occupation - Answer = Reinstatement Tony (the insured) cancelled his health policy by submitting a written notice to the insurer. How are unearned premiums handled? 1.Returned to the insured using a pro-rata basis 2.They are returned to the agent 3.The insurer gets to keep them 4.Returned to the insured using a short-rate basis - Answer = Returned to the insured using a short-rate basis The Patient Protection and Affordable Care Act allows states to combine their SHOP exchange with - 1.Commercial insurance companies 2.Their Medicaid recipients 3.Their exchange for individual consumers 4.All of the above - Answer = Their exchange for individual consumers o elect continuation of coverage, the insured must request continuation during the election period (45 days after the date of the _____). Employers must provide the proper forms for election within 14 days of receipt of request of election. 1.Arraignment, annulment, or release on bond
Agent/Broker Practice Exam with
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2.Indictment, cancellation, or invalidation
- incarceration, or arraignment 4.Death, divorce, or termination - Answer = Death, divorce, or termination Insurers must maintain an advertising file of all material printed, published, or distributed advertisements of policies for _____, subject to examination by the Commissioner. 1.No more than five years 2.No less than four years 3.No more than two years 4.No less than three years - Answer = No less than three years For dependents that were not previously eligible for enrollment in the Maryland Health Connection, how much time must they be given to enroll after being sent a notice that they are now eligible? 1.30 days 2.45 days 3.60 days 4.90 days - Answer = 30 daya Individuals covered under a Medicare Supplement policy may suspend benefits and premiums for up to _____ months if the individual applies and is determined to be eligible for Social Security disability benefits. 40 24 10 52 - Answer = 24 Home health care services are long-term care benefits: 1.For medical and non-medical services 2.Provided to the ill, injured, or disabled individuals in their home 3.That includes those of a homemaker, and assistance with activities of daily living 4.All of the Above - Answer = All of the Above What provides hospital or medical policies or plans, nonprofit health service policies or plans, and health maintenance organizations? Health benefit plans Wellness cooperative plans
Agent/Broker Practice Exam with
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Managed Free Supplemental - Answer = Managed Long-term care insurers may require a physical examination of any applicant: Age 70 or older Age 65 or older Age 75 or older Age 80 or older - Answer = Age 80 or older Which type of care is a system of cost containment methods used by insurers or their agents to control cost and access to health care services, where insurers and providers review and preauthorize treatment plans? Free Non-critical Managed Supplemental - Answer = Managed An insurer is anyone who acts as a/an __________in the business of entering into insurance contracts. Surety Indemnity Contractor All of the Above - Answer = All of the Above very Medicare supplement insurer must establish marketing procedures that any comparison of policies is fair and accurate, and _____ is not sold or issued. An unwarranted annuity Excessive insurance Prepaid insurance A disproportionate annuity - Answer = Excessive insurance Some policies require that the insured be confined to his/her home and be under a doctor's care. This type of policy is called a: Recurrent disability Nonoccupational Residual disability
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Medically defined disability - Answer = Medically defined disability Insurance companies use which of the following to limit claims from pre-existing disabilities or to control adverse selection? Recurrent disability clauses Reduced benefits Elimination periods Probationary periods - Answer = Probationary periods An example of presumptive disability might be any of the following EXCEPT: Severance of a hand Complete loss of hearing Amputation of a leg at the hip Total Blindness - Answer = Severance of a hand The government is one of three primary types of insurers. Government insurance provides protections against fundamental risks. Which of the following is an example of a government insurance program? Social Security Blue Cross Lloyd's Associations All of the above - Answer = Social Security Medicaid is a needs tested program. It provides medical benefits for the poor and indigent. It is funded as follows: 1.Employer taxes based on payroll 3.Payroll taxes from the employed 4.Part of Medicare 5.Jointly funded by individual states and the federal government - Answer = Jointly funded by individual states and the federal government A Medicare Supplement policy is issued with a "Free Look" period. This is usually a minimum of: 10 days 45 days 30 days 20 days - Answer = 30 days
Agent/Broker Practice Exam with
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Mark is a producer and has authority to sell life and health insurance, but is not associated with ACME Insurance company, but they can accept applications from him if: 1.The insurer can issue the insurance, but it must contain a rider which clearly states the relationship between the insurer and producer 2.The insurer cannot accept applications from producers not associated with the company until after they have been appointed 3.The insurer can issue the insurance and appoint the producer immediately if his license was issued in the state of Maryland 4.If the insurer appoints him as a producer and updates the register within 30 days of the application date - Answer = If the insurer appoints him as a producer and updates the register within 30 days of the application date Under which of the following circumstances will the Commissioner not waive the license application requirements for an applicant who is not a resident of Maryland? 1.The applicant has a valid license in his/her home state 2.The applicant pays applicable nonresident license fees 3.The applicant's home state does not award nonresident licenses 4.The applicant submits the home state application - Answer = The applicant's home state does not award nonresident licenses Joey would try and lure prospective clients to purchase a policy from him by manipulation. He would subtly suggest or offer to recommend the client for membership to a selective country club if the person purchases a particular policy from Joey. This type of practice is called: 1.Intimidation 2.Bait and switch 3.Discrimination 4.Coercion - Answer = Coercion In addition to any greater penalty provided under the law, violation of Maryland insurance laws and regulations is a ________offense, subject to a fine up to $100,000. 1.Federal 2.Felony 3.Misdemeanor 4.None of the Above - Answer = Misdemeanor
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The Commissioner is given broad powers to establish insurance rules, hold hearings and issue orders, take disciplinary action, and assess penalties and fines. He may examine and investigate individuals or entities as deemed necessary, but must conduct examinations at least every ¬¬¬¬____________: 18 months 2 years 5 years 48 months - Answer = 5 years As a disciplinary action, the Commissioner may assess penalties of ________. $400 to $ $200 to $ $100 to $ $1000 to $5000 - Answer = $100 to $ Martha is issued her license on October 17, 2012. When will she need to renew her license? On or before October 17, 2015 By midnight on December 31, 2014 On or before October 17, 2014 By midnight on December 31, 2015 - Answer = On or before October 17, 2014 The Commissioner may require up to __ hours of continuing education per renewal period for producer licensed for less than 25 consecutive years. 8 4 32 16 - Answer = 16 Insurers must report _________of a producer and update the producer register with the Commissioner within 30 days of the effective date. Termination Resignation Appointment Hiring - Answer = Termination
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If a producer is terminated, the Insurer must notify the Commissioner if the termination was a result, in part or whole, by the producer's violation of Maryland insurance laws and regulations. How many days does the Insurer have to notify the Commission of the termination? Within 30 days 7 working days Immediately Up to 21 days - Answer = Within 30 days The Uniform Provisions Law requires all of the following as mandatory EXCEPT: Grace Period Waiver of Premium Physical examination and autopsy Entire Contract - Answer = Waiver of Premium All of the following provisions are required provisions for health policies EXCEPT: Grace Period Proof of loss Exclusions Reinstatement - Answer = Exclusions The N.A.I.C. proposes many pieces of model legislation in order to help standardize policy wordings, regulations and required benefits. The initials NAIC stand for: 1.National Association of Insurance Commissioners 2.National Association of International Companies 3.National Association of Interlocking Consortiums 4.National Association of Insurance Companies - Answer = National Association of Insurance Commissioners Medicare is funded primarily from which of the following sources? 1.It comes from a payroll tax ear marked for Medicare 2.Loans from China provide most of the funding 3.The premiums that retirees pay provides most of the funding 4.It comes from the general revenue fund from all tax sources - Answer = It comes from a payroll tax ear marked for Medicare
Agent/Broker Practice Exam with
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Which of the following characterizes risk pooling? none of the above spreading risk over a small number of people spreading risk over a large number of people dissimilar risks - Answer = spreading risk over a large number of people Peter is covered by a hospital expense policy that has specified benefits. His plan allows $100 for daily room and board and $1,000 maximum for ancillary expenses. The surgical expense allows $500 maximum on a scheduled basis. Peter is hospitalized for 10 days with a surgeon's fee of $2,000. How much of the total expense for this hospital stay will Peter's insurance provide? The room rate is $200 and the ancillary expense is $1, $5, $1, $2, $3,500 - Answer = $2, Ken has a medical plan through his employer that provides a schedule of benefits and payment allowances for those benefits in his employee group certificate booklet. Ken most likely in enrolled in a: Point of Service Plan PPO Plan Basic Surgical Expense Plan HMO Plan - Answer = Basic Surgical Expense Plan Your disability policy states that you will qualify for benefits in the event you are not able to perform the essential duties that you are qualified by prior experience, training or education as a result of a sickness or accident. You have experienced an accident, but you can work part time as you recover fully. What benefits might you expect? 1.Regular benefits for the first six months and a reduced benefit thereafter. 2.A delayed benefit if your condition does not improve. 3.Partial benefits based on ability to perform certain duties 4.No benefits, since you can perform some of the duties of your occupation - Answer = No benefits, since you can perform some of the duties of your occupation Sam is involved in a serious accident. He will not be able to return to his job as an instructor for an undetermined amount of time. He also has training as a welder. His disability policy states that Sam will be considered disabled in the event he is not able to
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90% - Answer = 100% Insurers that offer insurance to people through the individual market are called private insurers. Which of the following does not fall in the private insurer category? Stock companies Mutual companies Noncommercial organizations Self-insurers - Answer = Self-insurers In addition to a cafeteria plan, how many other plans offer employees a choice between taxable and nontaxable benefits without the choice causing the benefits to become taxable? Six One None Two - Answer = None Isaac is enrolled in his employer's group plan on a non-contributory basis. He contract pneumonia and is hospitalized. Isaac is reimbursed for the medical expense he incurred less a $500 deductible. How much of his benefits will be taxed? 1.Isaac will have to include only the benefits that exceed 7.5% of his adjusted gross income in his income. 2.Isaac will have to include benefits in his income if his adjusted gross income is more than $65,000. (He is single) 3.Isaac will have no tax liability, as medical benefits are not taxable. 4.Isaac will have to include all benefits beyond the $500.00 deductible - Answer = Isaac will have no tax liability, as medical benefits are not taxable. Who maintains a cafeteria plan? An employer The state in which the plan was purchased The federal government An insurance company - Answer = An employer
Agent/Broker Practice Exam with
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Various riders and provisions affect how, when and how much the insured received in benefits. The _____________ limits income benefits based on the insured's income for the past two years. Impairment rider Future increase option (FIO) Relation of earnings Cost of living adjustment (COLA) - Answer = Relation of earnings Waiver of premium is a common benefit or option for which of the following types of policies: Disability and long term care plans Disability and medical plans Limited benefit plans Dread disease policies - Answer = Disability and long term care plans The Acme Manufacturing Company has decided to change the insurer for their group policy. Which of the following is a major concern with this type of change? 1.Termination of coverage 2.Eligibility of coverage 3.Coordination of benefits 4.Carryover of probationary period, coinsurance and deductibles - Answer = Carryover of probationary period, coinsurance and deductibles Seth failed to enroll his spouse in his group health plan when she was eligible. She had lost her plan at her employer due to a reduction in hours. Seth's group plan will: 1.Require a completed health statement and use an accept or reject method to determine eligibility 2.Offer COBRA since she has lost coverage as a result of a reduction in hours 3.Give the spouse credit for time served under the other plan and let her enroll 4.Require her to wait until the anniversary of the group plan - Answer = Require a completed health statement and use an accept or reject method to determine eligibility An HMO will generally cover all of the following services from a hospital EXCEPT: Out patient surgery Out patient prescription drugs In patient care, including ancillary services X-ray and laboratory - Answer = Out patient prescription drugs
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A unilateral contract - Answer = A contract of adhesion There are number of clauses in an insurance contract. One of the clauses identifies the contracting parties (the insured and the insurance company) and also the scope and limits of coverage. This clause is referred to as: Time limit on certain defenses clause Benefit outline clause Renewability Clause Insuring Clause - Answer = Insuring Clause The insuring clause in a health policy will deal with all of the following EXCEPT: 1.Specifies that benefits are subject to policy provisions 2.The insurer's promise to pay benefits for defined losses 3.A definition of losses not covered by the policy 4.Identifies the insurance company and the insured - Answer = A definition of losses not covered by the policy What is the purpose of the Fair Credit Reporting Act?
- rule that insurance is primarily regulated on a state-level with minimal federal oversight. 2.To rule that insurance transactions crossing state lines are not treated as interstate commerce. 3.To rule that insurance transactions crossing state lines are interstate commerce. 4.To regulate the way credit information is collected and used. - Answer = To regulate the way credit information is collected and used. Most insurers do not generally sell individual dental coverage. It is usually included in a group plan. Which of the following is not a common benefit in a dental plan? Fillings X-rays Implants Cleaning - Answer = Implants Solomon Huebner fostered the idea of human life value. In the case of health insurance, the insured is protected against all of the following EXCEPT: Accident Illness
Agent/Broker Practice Exam with
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Living too long Injury - Answer = Living too long Sally has stomach problems and her doctor puts her in the hospital for tests. It is discovered that she has a bleeding ulcer. This type of peril is considered: Accidental Recurring Temporary Sickness - Answer = Sickness A hazard is best defined as: a peril. a loss. something that increases the chance of loss. a legal hazard. - Answer = something that increases the chance of loss The term describing the insured's notification to the insurer requesting payment for a covered loss is: Premium. Deductible. Claim. Limit of liability. - Answer = Claim. Which of the following types of policies combine multiple benefits and provides a broader range of coverage? 1st Dollar plan Hospital Expense Comprehensive Major Medical Hospital Indemnity - Answer = Comprehensive Major Medical Yvonne has been hospitalized and is presented with a bill for $19,500. She is covered by a major medical play that imposes a $500 deductible and pays 80% thereafter. Yvonne is limited to $2,500 for out-of-pocket expense. What will Yvonne have to pay for her part of the bill? $3, $4, $3,
