Accident and Health Insurance Agent/Broker Practice Exam | 159 Questions with 100% Correct, Exams of Nursing

Download Accident and Health Insurance Agent/Broker Practice Exam | 159 Questions with 100% Correct and more Exams Nursing in PDF only on Docsity! Accident and Health Insurance Agent/Broker Practice Exam | 159 Questions with 100% Correct Answers P a g e 1 | 34 Accident and Health Insurance Agent/Broker Practice Exam | 159 Questions with 100% Correct Answers 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. Correct 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 Correct 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. Correct 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 Correct Answer: Intensive care 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? Accident and Health Insurance Agent/Broker Practice Exam | 159 Questions with 100% Correct Answers P a g e 2 | 34 1.$27,000 2.$18,000 3.$24,000 4.$17,000 Correct Answer: $24,000 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. Correct 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 Correct 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 Correct 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 2.The insured dies from natural causes 3.The insured dies from an accident 4.All of the above Correct Answer: The insured dies from an accident An insurance agent told a member of his church who had recently experienced several personal and financial losses that he could see that she got a more favorable rate on her insurance policies than her health and general circumstances would warrant. The woman had been his Accident and Health Insurance Agent/Broker Practice Exam | 159 Questions with 100% Correct Answers P a g e 5 | 34 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 Correct 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 Correct 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 Correct 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 "Cafeteria" wellness plans Annuitized wellness cooperatives Correct Answer: Health benefit plans No policy may be advertised, solicited, or issued as a Medicare supplement policy if the policy or certificate contains limitations or exclusions on coverage that are more restrictive than: Those of Medicare Those agreed to by the insured Those allowed by the Commissioner Those permitted under Medigap Part B Correct Answer: Those of Medicare Continuation of coverage for group medical plans shall continue for up to months after the date of death, divorce, or termination, subject to payment of premiums. Accident and Health Insurance Agent/Broker Practice Exam | 159 Questions with 100% Correct Answers P a g e 6 | 34 9 18 15 4 Correct Answer: 18 What provides affordable and accessible health insurance to support public and private initiatives for individuals without health insurance and promotes a health care system that meets the needs of all of the residents of its jurisdiction? Wellness maintenance associations Prepaid health service alliances Nonprofit health service plans Prepaid wellness cooperatives Correct Answer: Nonprofit health service plans To act as an insurer in the state of Maryland, an insurer must hold issued by the Commissioner. A compelling warrant of remuneration An applicable diploma of indemnity A valid certificate of authority A legitimate record of credibility Correct Answer: A valid certificate of authority 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? Non-critical Managed Free Supplemental Correct 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 Correct 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 Accident and Health Insurance Agent/Broker Practice Exam | 159 Questions with 100% Correct Answers P a g e 7 | 34 Non-critical Managed Supplemental Correct 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 Correct 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 Correct 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 Medically defined disability Correct 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 Correct 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 Correct Answer: Severance of a hand Accident and Health Insurance Agent/Broker Practice Exam | 159 Questions with 100% Correct Answers P a g e 10 | 34 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 Correct 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 Correct Answer: Misdemeanor 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 Correct Answer: 5 years As a disciplinary action, the Commissioner may assess penalties of . $400 to $800 $200 to $600 $100 to $500 $1000 to $5000 Correct Answer: $100 to $500 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 Correct 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. Accident and Health Insurance Agent/Broker Practice Exam | 159 Questions with 100% Correct Answers P a g e 11 | 34 8 4 32 16 Correct 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 Correct Answer: Termination Licenses expire on the anniversary of the date the license was issued? Every fifth year Every year Every other year Every third year Correct Answer: Every other year The Commissioner may require up to hours of continuing education per renewal period for producer licensed for less than 25 consecutive years. 4 8 16 32 Correct Answer: 16 Mrs. Brown has also signed up to be an insurance advisor, which will allow her to examine a policy and charge a fee for her expertise. All of the following are duties in her capacity of an advisor EXCEPT: 1. Offering alternative insurance products 2. Giving an applicant advice pertaining to an insurance product 3.Providing a recommendation on an insurance product 4.Explaining specifics/details of an insurance product Correct Answer: Offering alternative insurance products The Commissioner sets rules and regulations for minimum standards loss ratios based on claims experience and earned premiums in accordance with the . NAIC City Council Accident and Health Insurance Agent/Broker Practice Exam | 159 Questions with 100% Correct Answers P a g e 12 | 34 State Treasury FDA Correct Answer: NAIC Norbert was not making quota as set by his company. As a way of inducing more clients, Norbert offered to split his commissions, provide tickets to a sold out show and use of his vacation condo if they would purchase or renew a policy. This action is considered: Rebating Coercion Intimidation Twisting Correct Answer: Rebating 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 Correct 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 Correct Answer: Waiver of Premium All of the following provisions are required provisions for health policies EXCEPT: Grace Period Proof of loss Exclusions Reinstatement Correct 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 Correct Answer: National Association of Insurance Commissioners Accident and Health Insurance Agent/Broker Practice Exam | 159 Questions with 100% Correct Answers P a g e 15 | 34 An employer offers group insurance to his employees on a non-contributory basis. How many of his employees must be offered coverage under the group? 80% 75% 100% 90% Correct 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 Correct 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 Correct 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 Correct 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 Correct Answer: An employer Accident and Health Insurance Agent/Broker Practice Exam | 159 Questions with 100% Correct Answers P a g e 16 | 34 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) Correct 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 Correct 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 Correct 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 Correct 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 Correct Answer: Out patient prescription drugs An HMO will offer basic services to all members. All of the following services are offered as a basic service EXCEPT Accident and Health Insurance Agent/Broker Practice Exam | 159 Questions with 100% Correct Answers P a g e 17 | 34 1.Doctor services 2.Rehabilitation therapy 3.Durable equipment 4.Preventive and routine care like annual physical and immunizations Correct Answer: Durable equipment Mr. Frankston is concerned about the rising cost of health insurance premiums for the group health plan he provides for his employees. His accountant has calculated the premiums he pays vs. the claims his employees receive and finds that he might benefit by accepting some of the risk directly by his company. He wants to avoid premium taxes and minimize administrative expense. He will most likely find this type of plan through a: PPO plan HMO plan TPA arrangement ASO arrangement Correct Answer: TPA arrangement Any of the following is considered advertising for a health insurance company EXCEPT Prepared sales talks Material used to recruit new agents Magazine or Newspaper publications Morbidity Tables Correct Answer: Morbidity Tables An insurance policy is a legal contract, based on contract law. It is a contract where is exchanged for valuable consideration (i.e. premiums). A representation A warranty A promise of benefits An expectation Correct Answer: A promise of benefits A contract that heavily restricts one party while leaving the other free (as some standard form printed contracts), and implies inequality in bargaining power is: A contract of adhesion A conditional contract An aleatory contract A unilateral contract Correct 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: Accident and Health Insurance Agent/Broker Practice Exam | 159 Questions with 100% Correct Answers P a g e 20 | 34 The Patient Protection and Affordable Care Act does NOT require which of the following to provide Essential Health Benefits? Individual health insurance plans Basic health programs Small group health insurance plans Grandfathered health insurance plan Correct Answer: Grandfathered health insurance plan Who administers the PCIP? The federal government The counties The cities The states Correct Answer: The states The Patient Protection and Affordable Care Act defines "affordable" health insurance when the cost of the insurance is below what percentage of an employee's household income? 15% 9.5% 20% 7.5% Correct Answer: 9.5% The Patient Protection and Affordable Care Act requires a gold health insurance plan to meet what specific actuarial value? 80% 70% 90% 100% Correct Answer: 80% What is the maximum tax credit for a for-profit small business as provided by the Patient Protection and Affordable Care Act? 25% 35% 20% 50% Correct Answer: 35% Accident and Health Insurance Agent/Broker Practice Exam | 159 Questions with 100% Correct Answers P a g e 21 | 34 The Patient Protection and Affordable Care Act allows an employee's health insurance plan's coverage to be rescinded for which of the following reasons? Fraud Refusal to pay premiums Termination of the plan All of the above Correct Answer: All of the above What is the maximum tax credit for a tax-exempt small business as provided by the Patient Protection and Affordable Care Act? 35% 50% 20% 25% Correct Answer: 50% The Patient Protection and Affordable Care Act provides guaranteed insurance issue to children under what age? 18 19 20 21 Correct Answer: 19 The Patient Protection and Affordable Care Act provides a tax credit for a small business that meets all the following criteria except - 1. Pay Employees less than $50,000 average annual wages. 2. Pay at least 50% of each employee's health care insurance premium. 3.Have 25 or less full-time equivalent employees for the taxable year. 4.Have a net profit less than $5,000 times the number of employees Correct Answer: Have a net profit less than $5,000 times the number of employees Mr. Robinson is curious why the application for his health insurance policy is so important. His agent explains that all of the following reasons are important EXCEPT: 1.An application becomes part of the policy when it is attached to the policy 2.The application is part of the insuring clause when it is attached to the policy 3.The application helps to fully identify the applicant Accident and Health Insurance Agent/Broker Practice Exam | 159 Questions with 100% Correct Answers P a g e 22 | 34 4.The statements made in the application will become the basis for issuing a policy Correct Answer: .The application is part of the insuring clause when it is attached to the policy Uma is an agent, and she has completed an application for health insurance on a new customer. When she returns to the office, she notices that a few items have been left blank. Uma should: 1.Submit the application and let the underwriters correct it. 2.Have her manager initial the changes 3. Initial the application where she made changes 4. Go back to the customer to have them initial changes Correct Answer: Go back to the customer to have them initial changes A health insurance underwriter may deny coverage for which of the following reasons? 1.The applicant's history of alcohol abuse 2.The applicant's marital status 3.The sex or gender of the applicant 4.Genetic traits of the applicant Correct Answer: The applicant's history of alcohol abuse All of the following are considered moral hazards EXCEPT: Criminal activity Poor credit history Alcohol abuse Drug abuse Correct Answer: Poor credit history Larry, Moe and Curly are equal partners in a furniture company. They have recently had a business evaluation of $300,000 for the entire business. Their accountant has recommended that they consider a buy-out agreement in the event that one or more of the partners is disabled. What steps should Larry, Moe and Curly consider? 1.Have the attorney draft an agreement to eliminates the partnership for the disabled partner 2.Purchase individual disability plans in the amount of the partner's salary. 3. Have their attorney draft a disability buy-out agreement and insure each partner for $100,000 in disability payments to fund the agreement. 4. Have their attorney draft an agreement that allows the continuing partners to pay the disabled partner's spouse. Correct Answer: Have their attorney draft a disability buy-out agreement and insure each partner for $100,000 in disability payments to fund the agreement. Matthew is insured under his union plan. He develops End Stage Renal Disease, which culminates, with his need for dialysis. Mathew is eligible for Medicare at that point, but how long must his employer group be primary if he continues on dialysis? 1. Medicare will be primary after 90 days and the union plan is secondary. Accident and Health Insurance Agent/Broker Practice Exam | 159 Questions with 100% Correct Answers P a g e 25 | 34 State only Federal only Federal, state or county Correct Answer: Federal or state A Medicare supplement plan (Medigap) is designed to provide benefits for all of the following services EXCEPT: 1.A portion of the surgeon's bill not paid in full by Medicare 2.Hospital Deductibles 3.A portion of lab and x-ray tests not paid in full by Medicare 4.Custodial care facility Correct Answer: Custodial care facility Mr. Johnson has applied for Medicaid. Which of the following is required in order for him to be eligible for Medicaid? He must sell his home He must not have any income He must not have any personal property None of the above Correct Answer: None of the above The waiver of premium specifies that in the event of a disability, premiums be waived. When does this rider begin? 1.After a 30 day waiting period 2.After 60 days 3. At the moment of the disability 4. When the claim is filed Correct Answer: At the moment of the disability Medicare Part B provides benefits for all of the following services EXCEPT: Surgeon's fees Outpatient prescription drugs Durable equipment Diagnostic lab and x-ray Correct Answer: Outpatient prescription drugs Rick's grandmother has a long-term care policy (LTC). If she becomes disabled, or has a chronic disease, she can expect that it will provide benefits for nursing home, home-based care and respite care: 1. For 10 years 2. If services are provided under medical supervision 3.For as long as she can pay the premiums 4.All of the above Correct Answer: If services are provided under medical supervision Accident and Health Insurance Agent/Broker Practice Exam | 159 Questions with 100% Correct Answers P a g e 26 | 34 Herman and Velma are trying to find a plan that will provide home health care, assisted living and custodial benefits as they become older. All of the following plans may provide the benefits they require EXCEPT: 1.A life insurance policy with a long term care rider 2.A long term care policy with the appropriate options 3.Medicare Part A & B 4.An annuity with long term care waivers Correct Answer: Medicare Part A & B An example of an unfair claim settlement practice would include: 1. Denying the payment of a claim because it does not meet the conditions of the insurance contract 2. Denying the claim because it occurred after the cancellation of the policy. 3.Delaying the payment of a claim while it is investigated for possible fraud. 4.Advising a claimant of the possibility that, should the claimant reject a settlement offer, an arbitration award might be less than the offer. Correct Answer: Advising a claimant of the possibility that, should the claimant reject a settlement offer, an arbitration award might be less than the offer. An employer is the owner of a group contract. Does the employee retain any ownership rights under the contract? 1.Yes, the employee may change a beneficiary and make certain assignments 2.No, the employer owns all parts of the plan 3. No, the insurance company will not recognize the employee's standing 4. Yes, the employee may tailor make his individual plan. Correct Answer: Yes, the employee may change a beneficiary and make certain assignments The Fair Credit Reporting Act states that generally, consumer reports cannot contain the following information EXCEPT: 1. An individual's character 2. Tax liens older than seven years 3.An individual's criminal history 4.Adverse information about an individual that dates back over seven years Correct Answer: An individual's character Frank is covered under his local Blue Cross and Blue Shield plan. All of the following are true about Blue Cross and Blue Shield plans Except: 1.Blue Cross generally pays benefits for hospitals 2.Voluntary non-profit organizations Accident and Health Insurance Agent/Broker Practice Exam | 159 Questions with 100% Correct Answers P a g e 27 | 34 3. Both are exempt from insurance regulations Accident and Health Insurance Agent/Broker Practice Exam | 159 Questions with 100% Correct Answers P a g e 30 | 34 By the NAIC Correct Answer: In medical reference or literature Harold has received a new policy from his agent. After reviewing the contract Harold decides to return the policy under the free look provision. The company is required to do all of the following EXCEPT: 1.Handle the transaction promptly 2.Reimburse the agent for lost commissions 3.Cancel the policy 4.Refund all premiums paid to Harold Correct Answer: Reimburse the agent for lost commissions Which of the following statements is not true about a binding receipt? 1.It is referred to as a temporary insurance agreement 2.Coverage begins on the date of the application, even if the applicant is uninsurable. 3.Coverage lasts 120 days 4.It is referred to as an unconditional receipt. Correct Answer: Coverage lasts 120 days Sylvia did not pay her initial premium when the agent took her application. Because she paid the premium when he delivered her policy, the agent is required to obtain in order for the policy to be in effect. A binding receipt A statement of good health An inspection report All of the above Correct Answer: A statement of good health James feels he needs to purchase a disability income policy, since his employer does not offer this coverage. Which of the following features should James consider in his purchase of a disability income plan? 1.Review the number of states in which the company offers disability insurance. 2.Review the coordination of benefits provision to see what is appropriate. 3. Review the definition of disability outlined in the policy. 4. Review the tax deductibility of the premiums with his tax advisor Correct Answer: Review the definition of disability outlined in the policy. An individual disability will be characterized in all of the following ways EXCEPT: 1.The company may be able to increase premiums 2. The benefit may be paid annually 3. The premium is established by the insured's occupation and health status Accident and Health Insurance Agent/Broker Practice Exam | 159 Questions with 100% Correct Answers P a g e 31 | 34 4. The benefit is a stated dollar amount based on a percentage of income per month Correct Answer: The benefit may be paid annually Scott is a small business owner. He is concerned that is he becomes disabled it will impede his ability to continue the operation of his business. His agent has discussed a Business Overhead Expense Policy. If Scott becomes disabled, what expenses will not be reimbursed by the Business Overhead Expense Policy? 1.Lease payments for his personal automobile 2.Lease payments for his copy machine 3.Salaries for his clerical staff 4.Lease payments for his office space Correct Answer: Lease payments for his personal automobile The Pre-Existing Condition Insurance Plan (PCIP) offers coverage to people who have been without coverage for at least what length of time? 6 months 9 months 18 months 12 months Correct Answer: 6 months The period of time that must elapse from the onset of a disability before an insured can collect benefits is called: Elimination period The time deductible Both of the above Neither of the above Correct Answer: Both of the above John has been disabled for three years. He has been released to come back to work on a part- time basis. His policy contains a partial disability provision. If he qualifies for that benefit, he will receive what percent of his pre-disability wage from disability benefits in addition to his part time salary? 1.30% flat with no offsets. 2.70% if the part time wage is less per hour than his pre-disability wage 3.50%, but the total wage may not exceed his pre-disability wage 4.60% offset by Social Security Correct Answer: 50%, but the total wage may not exceed his pre-disability wage A change of occupation provision will allow the insurance company to do any of the following at the time of claim EXCEPT: Accident and Health Insurance Agent/Broker Practice Exam | 159 Questions with 100% Correct Answers P a g e 32 | 34 1. Increase the premiums for that individual 2. Pay a reduced benefit for a higher risk occupation 3.Pay the benefits stated in the policy 4.Require a doctor's statement confirming disability Correct Answer: Increase the premiums for that individual Olivia is employed by Affluent Mfg. Inc. When she came to work, her supervisor neglected to provide her enrollment material for the company's health plan, even though the company paid the full cost of the plan. Six months later Olivia suffers a severe accident in her home requiring hospitalization. What action will the insurance company take under these circumstances? 1.Olivia will have a reduced benefit, since the enrollment was not turned in on time. 2.Olivia should have inquired about her benefits; since she did not there is no coverage. 3.Olivia will be covered and Affluent Mfg. will be required to pay premiums from her date of eligibility. 4.Olivia will have to report this to the insurance commissioner and the will arbitrate a reasonable solution. Correct Answer: Olivia will be covered and Affluent Mfg. will be required to pay premiums from her date of eligibility. Matthew has purchased a special risk policy. Which of the following policies will fall into that category? Dread disease Travel Accident Cancer Hospital Indemnity Correct Answer: Dread disease Medicare Part A provides a benefit for skilled nursing care after a hospital stay. In order to qualify for the skilled nursing benefit, the patient must do all of the following EXCEPT: 1. Be limited to 20 days of custodial care 2. Be expected to show improvement in the condition being treated 3. Have a qualifying hospital stay prior to going to the skilled nursing facility 4. Be admitted to a Medicare approved facility Correct Answer: Be limited to 20 days of custodial care Premiums paid for Long Term Care policies are deductible from income tax under what circumstances? 1.Deduction of premiums may create taxable income when benefits are paid 2.Under no circumstances are premiums deductible 3.A plan can be converted to a deductible plan on any policy anniversary.