Which of these may encourage adverse selection in an indemnity dental plan?

Having multiple or periodic open enrollment periods

Prepaid dental plans differ from most other types of dental plans in what way?

Closed panel of dentists can only be used

An example of endodontic treatment is a

root canal

All of the following are covered under most dental plans EXCEPT for

Mouth cancer

Which of these is NOT considered a preventative service in a dental plan?

Fillings

If a retiree on Medicare required five hospital stays in one year, which policy would provide the best insurance for excess hospital expenses?

Medicare Supplement

Which of the following phrases refers to the fees charged by a healthcare professional?

Usual, customary, and reasonable expenses

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?

Restoration of used benefit

All of the following statements about Major Medical benefits are true, EXCEPT:

Benefits have no maximum limit

Which of the following statements about Health Reimbursement Arrangements (HRA) is CORRECT?

If the employee paid for qualified medical expenses, the reimbursements may be tax-free

All of these are characteristics of a Health Reimbursement Arrangement (HRA) EXCEPT

HRA is entirely funded by the employee

The guarantee of insurability option provides a long-term care policyowner the ability to:

buy additional coverage at a later date

Life and health insurance policies are:

Unilateral contracts

For which of the following expenses does a Basic Hospital policy pay?

Hospital room and board

When must insurable interest be present in order for a life insurance policy to be valid?

When the application is made

Generally, how long is a benefit period for a Major Medical Expense Plan?

One year

Which of the following types of care is typically not covered in a Long-Term Care policy?

Acupuncture

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?

$2,100

Which of the following costs would a Basic Hospital/Surgical policy likely cover?

Surgically removing a facial birthmark

All of these are considered sources of underwriting information about an applicant, EXCEPT:

Rating Services

What type of rider would be added to an Accident and Health policy if the policyowner wants to ensure the policy will continue if he/she ever becomes totally disabled?

Waiver of Premium rider

Which of the following types of health coverage frequently uses a deductible?

Major Medical policy

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

Entire Contract

Nursing home benefits must be provided for at least 12 consecutive months in which of the following types of policies?

Long-Term Care

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.

6

Which of the following is NOT included in the policy face?

Exclusions

The clause in an Accident and Health policy which defines the benefit amounts the insurer will pay is called the:

Insuring clause

In order to establish a Health Reimbursement Arrangement (HRA), it MUST:

be established by the employer

When an insurance company sends a policy to the insured with an attached application, the element that makes the application part of the contract between the insured and the insurer is called the:

Entire Contract provision

M’s insurance company denied a reinstatement application for her lapsed health insurance policy. The company did not notify M of this denial. How many days from the reinstatement application date does the insurance company have to notify M of the denial before the policy will be automatically placed back in force?

45 days

Insurance contracts are known as ____ because certain future conditions or acts must occur before any claims can be paid.

conditional

Which of the following health insurance policy provisions specifies the health care services a policy will provide?

Insuring clause

Stranger Originated Life Insurance (STOLI) has been found to be in violation of which of the following contractual elements?

Legal Purpose (Insurable Interest)

Taking receipt of premiums and holding them for the insurance company is an example of:

Fiduciary responsibility

The Legal Actions provision of an insurance contract is designed to do all of the following, EXCEPT:

protect the producer

T is receiving $3,000/month from a Disability Income policy in which T's employer had paid the premiums. How are the $3,000 benefit payments taxable?

Benefits are taxable to T

Which of these arrangements allows one to bypass insurable interest laws?

Investor-Originated Life Insurance

Which of these would the Medical Information Bureau (MIB) identify?

Tobacco use from a previous screening

The sections of an insurance contract which limit coverage are called:

exclusions

When must insurable interest exist for a life insurance contract to be valid?

Inception of the contract

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?

The insured

What must the policyowner provide to the insurer for validation that a loss has occurred?

Proof of Loss

What type of renewability guarantees premium rates and renewability?

Noncancellable

Which type of policy would pay an employee's salary if the employer was injured in a bicycle accident and out of work for six weeks?

Business Overhead Expense

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:

Time Limit on Certain Defenses

All of the following are considered to be typical characteristics describing the nature of an insurance contract, EXCEPT:

Bilateral

Which of the following reimburses its insureds for covered medical expenses?

Commercial insurers

Which type of renewability best describes a Disability Income policy that covers an individual until the age of 65, but the insurer has the right to change the premium rate for the overall risk class?

Guaranteed Renewable

Q purchases a $500,000 life insurance policy and pays $900 in premiums over the first six months. Q dies suddenly and the beneficiary is paid $500,000. This exchange of unequal values reflects which of the following insurance contract features?

Aleatory

What is the purpose of the Time of Payment of Claims provision?

Prevents delayed claim payments made by the insurer

D the agent met with a prospect and ended up selling an insurance policy. While filling out the insurance application, D makes a mistake. In this situation, D MUST

correct the information and have the prospect initial the change

Statements made on an insurance application that are believed to be true to the best of the applicant's knowledge are called:

representations

When an insured has the same disability within a specified time period and the insurance company provides the same benefits without a new waiting period, the second disability is covered under which of the following benefits?

Recurrent Disability

Consumer reports requested by an underwriter during the application process of a health insurance policy can be used to determine:

probability of making timely premium payments

Which of the following statements about a Guaranteed Renewable Health Insurance policy is CORRECT?

Premiums normally increase at time of renewal

P is self-employed and owns an Individual Disability Income policy. He becomes totally disabled on June 1 and receives $2,000 a month for the next 10 months. How much of this income is subject to federal income tax?

$0

An insured pays premiums on an annual basis for an individual health insurance policy. What is the MINIMUM number of days for the Grace Period provision?

31

X is insured with a Disability Income policy that provides coverage until age 65. This policy allows the insurer to change the premium rate for the overall risk class assigned. Which of these renewability features does this policy contain?

Guaranteed Renewable

Which of these do NOT constitute policy delivery?

Policy issued with a rating

Non-occupational disability coverage is designed for:

employees who suffer non-work related disabilities, since work-related disabilities are covered by Workers' Compensation

When choosing a beneficiary, it's important for a policy owner to know that a _____ beneficiary designation will limit their rights as a policy owner.

irrevocable

What is the consideration given by an insurer in the Consideration clause of a life policy?

Promise to pay a death benefit to a named beneficiary

Which of the following BEST describes how a policy that uses the "accidental bodily injury" definition of an accident differs from one that uses the "accidental means" definition?

Less restrictive

When third-party ownership is involved, applicants who also happen to be the stated primary beneficiary are required to have:

insurable interest in the proposed insured

A(n) ___________ of benefits of a Health Policy transfers payments to someone other than the policyowner.

assignment

Health insurance benefits NOT covered due to an act of war are:

excluded by the insurer in the contract provisions

The policy provision that entitles the insurer to establish conditions the insured must meet while a claim is pending is:

Time Limit on Certain Defenses

Which type of plan normally includes hospice benefits?

Managed care plans

A disability elimination period is best described as a:

time deductible

Many small business owners worry how their business would survive financially if the owner becomes disabled. The policy which BEST addresses this concern is:

Business Overhead Expense

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?

$25,000

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:

noncancellable

When determining the monthly benefit amount for a Disability Income policy, the factor that limits the amount a prospective insured may purchase is:

income

Which of the following is the MOST important factor when deciding how much Disability Income coverage an applicant should purchase?

Applicant's monthly income

Which type of provider is known for stressing preventative medical care?

Health Maintenance Organizations (HMO's)

XYZ Company pays the entire premium for its group health plan. The MINIMUM percentage of eligible employees that must be covered is:

100%

Which of the following statements is true about most Blue Cross/Blue Shield organizations?

They are nonprofit organizations

Which of the following organizations would make reimbursement payments directly to the insured individual for covered medical expenditures?

Commercial insurer

Which of the following statements BEST describes what HIPAA portability rules offer a person who decides to change from one group medical plan to another group plan?

Limits the ability of a new employer plan to exclude coverage for preexisting conditions

What is issued to each employee of an employer health plan?

Certificate

When a health insurance policy includes a Mandatory Second Surgical Opinion provision, the insured must:

get a second opinion for specified elective surgeries

The situation in which a group of physicians are salaried employees and conduct business in an HMO facility is called a(n):

closed panel

Under which of the following circumstances will the benefits under COBRA continuation coverage end?

All group health plans are terminated by the employer

The provision in a Group Health policy that allows the insurer to postpone coverage for a covered illness 30 days after the policy's effective date is referred to as the:

Waiting Period

Taft-Hartley Trusts are also known as:

Negotiated Trusteeships

Pre-hospitalization authorization is considered an example of:

managed care

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?

36

In a 501(c)(9) Trust, the trust must be controlled by:

All of the above

P is an employee who quits her job and wants to convert her group health coverage to an individual policy. After the expiration of COBRA benefits, which of the following statements is TRUE?

She does NOT need to provide evidence of insurability

A group major medical policyholder that provides benefits on a self- funding basis may limit its total liability for claims by purchasing

A stop-loss contract