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Test 1

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Which law protects the coverage of individuals and their families when they change or lose their jobs?

The Health Insurance Portability and Accountability Act (HIPAA) was passed by Congress in 1996 to protect the coverage of individuals and their families when they change or lose their jobs.

Incorrect

 

Which of the following best describes creditable coverage?

Creditable coverage is prior health insurance coverage, which is used to establish eligibility under HIPAA.

Incorrect

 

IPAA requires that hospital stay benefits are provided to mothers for ___ hours after a normal vaginal delivery.

HIPAA requires that hospital stay benefits are provided to mothers for 48 hours after a normal vaginal delivery and 96 hours after a cesarean delivery.

 

Of the following accident and health insurance provisions, which specifies the person or entity to which claims are paid?

The payment of claims provision specifies how and to whom claim payments are made.

 

How long is the grace period for individual health insurance coverage paid on a monthly basis?

Based on the NAIC required provision #3, the grace period for individual health insurance paid on a monthly basis is 10 days.

 

How old must a person be to obtain a license as insurance producer in Maryland?

No individual may act as an insurance producer in the state of Maryland without a license. The minimum requirement to obtain a license is that the applicant must be at least 18 years of age.

 

Licenses expire ___________on the anniversary of the date the license was issued?

Licenses expire every other year on the anniversary of the license issue date.


What is the earliest month a covered worker may begin to receive Social Security disability benefits?

At the earliest, a disabled covered worker may be eligible to receive Social Security disability benefits upon the sixth month of disability.

 

The principal losses related to accident & health insurance are:

The principal types of losses dealt with in accident and health insurance are medical expenses and loss of income caused by disability.

 

Noncommercial organizations offer strictly:

Unlike commercial insurers, noncommercial organizations are nonprofit entities offering strictly health insurance coverage.

 

Which of the following insurers cannot be categorized as “commercial”?

Blue Cross and Blue Shield are noncommercial organizations. However, they are not technically “insurers” are better described as service organizations.


Joel cancels his health insurance policy. How will the insurer return his unearned premium?

If the insured cancels the policy, the unearned premium will be returned on a short-rate basis.


 

Which base plan covers surgical costs including surgeon fees, anesthesia, and post-surgery recovery?

The basic surgical expense plan pays surgical costs including surgeon fees, anesthesia, and post-surgery recovery.

 

Which of the following health organizations provides both the medical coverage and services?

Health maintenance organizations provide both the medical coverage and medical services.

 

What action will the life insurance company most likely take when an applicant for a life insurance policy is discovered to be substandard risk?

When the insurance company discovers an applicant to be substandard risk, the insurance company will typically require the applicant pay an additional premium.

 

Which of the following best describes the consideration clause in a health insurance policy?

The consideration clause describes the promises exchanged between the insured and the insurer as evidenced by the payment of premiums and statements made by the insured in the application, and the insurer’s promise to pay benefits under the terms of the policy. The consideration clause is usually on the policy face.

 

DEF insurer is nonadmitted. All of the following are possible explanations for why DEF insurer cannot sell insurance in a state EXCEPT:

Excess and surplus lines insurers are unauthorized, or nonadmitted, but are still permitted to sell excess and surplus lines insurance.

 

Sam submits an application with initial premium for a life insurance policy on July 6th. The agent issues Sam a conditional receipt at this time. Sam takes the required medical exam on July 10th. The insurer approves the policy on August 1st, and the agent delivers the policy to Sam on August 10th. Which day did Sam's coverage begin?

Coverage begins at the later of the conditional receipt or medical exam.

 

Which accident & health renewability provision gives the insurer the right not to renew the contract for any reason?

Optionally renewable policies provide the insurer the right not to renew the contract for any reason. Policies can only be non-renewed on a policy anniversary date or premium due date. Policy premiums can be increased.

 

Which of the following health insurance exclusions/restrictions pays benefits for sickness or injury that occurs while the insured is not at work?

Occupational coverage provides for the payment of benefits for sickness or injury of the insured that occurred at work, while nonoccupational coverage excludes any conditions resulting from job-related activities.

 

All of the following are false regarding representations EXCEPT:

The applicant’s statements made in an insurance application are held to be representations – statements made to the best of his/her knowledge.

 

What type of HMO is non-profit?

For-profit HMOs are producers’ cooperatives which are owned and managed by the HMO physicians. Nonprofit HMOs are consumers’ cooperatives in which physicians are employees of the HMO.


Which definition of total disability is most restrictive?

The own occupation definition of disability is more lenient than the "any occupation" definition, and is reserved for individuals with specialized training, such as surgeons.

 

All of the following statements are false regarding the waiver of premium provision in a disability income policy EXCEPT:

If the insured becomes disabled, the waiver of premium rider waives premiums beginning at the onset of the disability. This means any premiums paid during the elimination period will be refunded. Insurers typically require the disability be total and permanent.