Health Insurance - Nc

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  • 1/89 Questions

    Any transaction that involves purchasing an insurance policy and terminating an existing policy is known as:

    • Replacement
    • Reinsurance
    • Reinstatement
    • Assignment
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Health Insurance Quizzes & Trivia
About This Quiz

This quiz focuses on key regulatory aspects of health insurance in North Carolina, assessing knowledge on policy replacement, agent licensing, penalties for non-compliance, disability income policies, coordination-of-benefits, and fraud investigation. It is crucial for professionals in the insurance sector.

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  • 2. 

    What does it mean if an agent's license is inactive ?

    • The agent can still transact insurance business in NC, but not in any other states until the license is reactivated

    • The agent can transact any insurance business with another agent's approval

    • The agent can transact any insurance business for which the agent is licensed

    • The agent cannot transact any insurance business for which a license is required.

    Correct Answer
    A. The agent cannot transact any insurance business for which a license is required.
    Explanation
    If an agent's license is inactive, it means that the agent is not authorized to transact any insurance business for which a license is required. This means that the agent cannot legally sell or provide insurance services until their license is reactivated.

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  • 3. 

    If the Commissioner issues a Notice of Seizure for documents and the individual fails to send those documents what is the penalty?

    • 1 year in jail

    • $1,000 fine

    • 1 year in jail and/or $1,000 fine

    • Each state handles discipline in its own way

    Correct Answer
    A. 1 year in jail and/or $1,000 fine
    Explanation
    If an individual fails to send the documents after receiving a Notice of Seizure from the Commissioner, the penalty is a possible combination of 1 year in jail and/or a $1,000 fine. This means that the individual may be sentenced to serve up to 1 year in jail, or they may be required to pay a fine of $1,000, or they may face both penalties depending on the decision of the court. The severity of the penalty is determined by the court based on the specific circumstances of the case.

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  • 4. 

    A disability income policy covers injuries suffered by an insured on or off the job is called?

    • An occupational policy

    • A non-occupational policy

    • A wraparound policy

    • Twenty-four-hour policy

    Correct Answer
    A. An occupational policy
    Explanation
    An occupational policy is a type of disability income policy that provides coverage for injuries suffered by an insured individual both on and off the job. This means that the policyholder will receive benefits in the event of a disability caused by an injury, regardless of whether the injury occurred in the workplace or outside of it. This type of policy is specifically designed to protect individuals who may be at risk of injury in their occupation, providing them with financial support in case of disability.

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  • 5. 

    Which of the following statement concerning the usual Coordination-of-Benefits provision are correct ?

    • When the plans both have the provision, coverage as an employee is primary to coverage paid to dependents

    • Coverage under COBRA is primary to other coverage paid to the employee

    • Medicare coverage is always primary to "medical coverage"

    • Coverage under any plan with the provision is primary to coverage under any plan without the provision

    Correct Answer
    A. When the plans both have the provision, coverage as an employee is primary to coverage paid to dependents
    Explanation
    When both plans have the Coordination-of-Benefits provision, the coverage for the employee takes precedence over the coverage for dependents.

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  • 6. 

    According to the code, all insurers must maintain a department to investigate:

    • Possible abuses of rating laws

    • Possible arson

    • Possible fraudulent claims from insureds

    • Possible fraud by insurers

    Correct Answer
    A. Possible fraudulent claims from insureds
    Explanation
    The code states that all insurers are required to have a department to investigate possible fraudulent claims from insureds. This means that insurers must have a specific team or division dedicated to examining and looking into any suspicious or potentially deceitful claims made by their policyholders. This is important to ensure that insurers can identify and prevent any fraudulent activities that may occur within their insured population, thereby protecting the integrity of the insurance system.

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  • 7. 

    Which two are Activities of Daily Living?

    • Eating and dressing

    • Speaking and Incontinence

    • Sleeping and walking

    • Bathing and hearing

    Correct Answer
    A. Eating and dressing
    Explanation
    Activities of Daily Living (ADLs) are basic self-care tasks that individuals perform on a daily basis to maintain their personal hygiene and independence. Eating and dressing are two examples of ADLs as they involve essential tasks related to nourishment and maintaining personal appearance. These activities are fundamental for individuals to meet their basic needs and carry out their daily routines.

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  • 8. 

    What does the Insurance Commissioner have the right to do if an agent lacks authority from an insurer named on a binder for coverage ?

    • Request his certificate of authority

    • Authorize agent with a certificate of convenience

    • Suspend or revoke the license of the agent

    • Fine the insurance company

    Correct Answer
    A. Suspend or revoke the license of the agent
    Explanation
    The Insurance Commissioner has the right to suspend or revoke the license of an agent if they lack authority from an insurer named on a binder for coverage. This means that if an agent is not authorized by the insurer to provide coverage, the Insurance Commissioner can take action against them by suspending or revoking their license. This is done to ensure that only authorized agents are selling insurance and to protect consumers from unauthorized or fraudulent practices.

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  • 9. 

    The likelihood of incurring disease or disability at any given time is:

    • Risk

    • Morbidity

    • Mortality

    • Hazard

    Correct Answer
    A. Morbidity
    Explanation
    Morbidity refers to the state of being diseased or the incidence of disease in a population. It is a measure of the likelihood of incurring disease or disability at any given time. Therefore, the correct answer is Morbidity.

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  • 10. 

    Twelve months ago, a man slipped and fell down a flight of stairs at his workplace.  As a result he has a paralysis for which he is not expected to recover.  This 46 year old person will probably be able to collect disability income benefits from:

    • Medicare

    • Workers Compensation

    • Medicaid

    • Social security

    Correct Answer
    A. Workers Compensation
    Explanation
    The man in the scenario slipped and fell down a flight of stairs at his workplace, resulting in paralysis. Since this injury occurred at his workplace, he will likely be able to collect disability income benefits from Workers Compensation. Workers Compensation is a form of insurance that provides benefits to employees who are injured or become ill as a result of their job. It covers medical expenses, rehabilitation costs, and a portion of lost wages for the injured worker.

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  • 11. 

    The mathematical rule that says that as the number of individual but similar exposure units increases the easier it is to predict losses is which of the following ?

    • Insurable interest standard

    • Contract law

    • The law of large numbers

    • Materiality

    Correct Answer
    A. The law of large numbers
    Explanation
    The law of large numbers is a mathematical rule that states that as the number of individual but similar exposure units increases, it becomes easier to predict losses. This means that by increasing the sample size, the average outcome becomes more predictable and stable. In the context of insurance, this principle allows insurers to accurately estimate the probability of losses occurring and set appropriate premiums.

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  • 12. 

    What happens to a license after the death of a natural person who holds a valid insurance license?

    • It always terminates

    • It may be transferred to another person

    • The license becomes inactive until the expiration date

    • The license must be returned to the Commisioner to cancel the license

    Correct Answer
    A. It always terminates
    Explanation
    After the death of a natural person who holds a valid insurance license, the license always terminates. This means that the license is no longer valid and cannot be transferred to another person. The death of the license holder automatically cancels the license and it cannot be used by anyone else.

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  • 13. 

    If the financial loss on a certain group of people occurring over a certain period of time defines the pricing of a disability policy, it is the pricing principle known as:

    • Rapidity

    • Security

    • Risk

    • Frequency

    Correct Answer
    A. Frequency
    Explanation
    The correct answer is Frequency. The pricing principle of a disability policy is determined by the financial loss occurring over a certain period of time. This means that the frequency of the occurrence of the disability and the resulting financial loss is taken into account when setting the pricing for the policy. The higher the frequency of disability claims, the higher the pricing of the policy to cover the potential financial losses.

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  • 14. 

    Which of the following are common insurance policy provisions?

    • Reinstatement, suicide, pre-existing conditions

    • Entire contract, grace period, reinstatement

    • Entire contract, incontestability, pre-existing conditions

    • Grace period, suicide right to return

    Correct Answer
    A. Entire contract, grace period, reinstatement
    Explanation
    The correct answer is "Entire contract, grace period, reinstatement." These are common insurance policy provisions. The entire contract provision states that the policy and any attached endorsements constitute the entire agreement between the insured and the insurer. The grace period provision allows the insured a specified period of time after the premium due date to make payment without the policy lapsing. The reinstatement provision allows the insured to reinstate a lapsed policy by paying any outstanding premiums and meeting any other requirements set by the insurer.

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  • 15. 

    With the cost of living rider, the life insurance policy holder:

    • Must increase or decrease the face value of the policy as the index increases or decreases

    • Gets the automatic increase in the face value if there is an increase in the cost of living index. There is an additional premium for the additional coverage

    • Gets the automatic increase in the face value if the index goes up. There is no charge except for the flat charge for the rider

    • All of the above are flase

    Correct Answer
    A. Gets the automatic increase in the face value if there is an increase in the cost of living index. There is an additional premium for the additional coverage
    Explanation
    The correct answer is that the life insurance policy holder gets an automatic increase in the face value if there is an increase in the cost of living index, and there is an additional premium for the additional coverage. This means that if the cost of living increases, the face value of the policy will also increase, providing the policyholder with more coverage. However, this increase in coverage comes at an additional cost, which is reflected in the form of a premium.

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  • 16. 

    Which of the following is not a standard level of care for a LTC policy ?

    • Intermediate care

    • Custodial care

    • Skilled nursing care

    • Convalescent care

    Correct Answer
    A. Convalescent care
    Explanation
    Convalescent care is not a standard level of care for a long-term care (LTC) policy. Convalescent care typically refers to the care provided to individuals who are recovering from an illness or surgery and need assistance with activities of daily living during the recovery period. In contrast, standard levels of care for LTC policies include intermediate care, which provides assistance with daily activities and supervision, custodial care, which includes assistance with activities of daily living, and skilled nursing care, which involves medical care provided by licensed healthcare professionals.

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  • 17. 

    Which of the following (recall) provisions of a disability contract is likely to change the contract least and cost the most ?

    • Continuous indemnity contract

    • Non-cancelable contract

    • Guaranteed renewable contract

    • Expense arrangement contract

    Correct Answer
    A. Non-cancelable contract
    Explanation
    A non-cancelable contract is likely to change the contract least and cost the most. This type of contract guarantees that the insurer cannot cancel or change the terms of the policy, including the premium, as long as the policyholder continues to pay the premiums on time. This provides the policyholder with stability and certainty in terms of coverage and premium rates. However, the cost of a non-cancelable contract is generally higher compared to other types of disability contracts due to the guaranteed benefits and protection it offers.

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  • 18. 

    The policy provision which prevents an insurer from voiding a policy for misstatements after 2 years is:

    • Incontestability

    • Indemnity

    • Misrepresentation

    • There is no such provision

    Correct Answer
    A. Incontestability
    Explanation
    Incontestability is the correct answer because it is a policy provision that prevents an insurer from voiding a policy for misstatements after a specific period of time, usually 2 years. This provision is designed to protect policyholders from having their coverage revoked based on innocent or unintentional misrepresentations made when applying for the policy. After the incontestability period expires, the insurer cannot use misstatements as a reason to cancel the policy or deny claims.

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  • 19. 

    Under a disability insurance policy, an insured is eligible for a waiver of premium benefit:

    • Under the age 65

    • After the first six months of disability

    • During maternity leave

    • During delayed retirement

    Correct Answer
    A. After the first six months of disability
    Explanation
    The correct answer is "After the first six months of disability." This means that the insured will be eligible for a waiver of premium benefit only after they have been disabled for at least six months. This benefit allows the insured to stop paying premiums for their disability insurance policy while they are disabled, providing financial relief during this period.

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  • 20. 

    An insurer organized under the laws of the State of North Carolina is a:

    • Domestic insurer

    • Foreign insurer

    • Non-alien insurer

    • Non-admitted insurer

    Correct Answer
    A. Domestic insurer
    Explanation
    A domestic insurer refers to an insurance company that is organized and operates under the laws of a specific state. In this case, the insurer is organized under the laws of the State of North Carolina, making it a domestic insurer.

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  • 21. 

    Which of the following applies to the social insurance program known as social security ?

    • Contributions are compulsory for most workers

    • Benefits are based upon a contract with the insured

    • Benefits are paid to each individual matching their contributions

    • All insured workers begin to receive benefits at age 65

    Correct Answer
    A. Contributions are compulsory for most workers
    Explanation
    The correct answer is "Contributions are compulsory for most workers." This means that most workers are required to make contributions to the social security program.

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  • 22. 

    Any person who diverts or misappropriates fiduciary funds is guilty of:

    • Misrepresentation

    • Forgery

    • Fraud

    • Theft

    Correct Answer
    A. Theft
    Explanation
    If a person diverts or misappropriates fiduciary funds, they are guilty of theft. Theft refers to the act of taking someone else's property or funds without their permission or lawful authority. In this case, the person is unlawfully taking fiduciary funds, which are funds held in trust for another person or entity. By diverting or misappropriating these funds, the person is essentially stealing them, making theft the appropriate charge in this scenario.

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  • 23. 

    A probationary period in a group health poliy is intended for people:

    • Who decline to join the group during the eligibility period

    • With other coverage after a qualifying event

    • With a pre-existing condition when they joined the group

    • Who joined the group after the effective date

    Correct Answer
    A. Who joined the group after the effective date
    Explanation
    The probationary period in a group health policy is intended for people who joined the group after the effective date. This means that individuals who become part of the group after the policy's effective date will have to go through a probationary period before they can fully access the benefits of the group health policy. During this period, their coverage may be limited or restricted in some way. This is to ensure that only eligible individuals who joined the group after the policy was in effect can fully benefit from the group health policy.

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  • 24. 

    An insurer owned by policyholders is:

    • Fraternal insurer

    • Capital stock insurer

    • Mutual insurer

    • Reciprocal exchange

    Correct Answer
    A. Mutual insurer
    Explanation
    A mutual insurer is an insurance company that is owned by its policyholders. This means that the policyholders are also considered the owners of the company and have a say in its operations and decision-making processes. In a mutual insurer, any profits made by the company are typically distributed back to the policyholders in the form of dividends or reduced premiums. This ownership structure is different from a capital stock insurer, where ownership is held by shareholders, and a fraternal insurer, which is a type of mutual insurer that operates on a nonprofit basis. A reciprocal exchange is a different type of insurance organization where policyholders exchange insurance contracts with one another.

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  • 25. 

    Physicians and surgeons services, whether provided in a hospital, or elsewhere:

    • Are covered by Medicare Part B. There is a charge for the coverage

    • Are covered by Medicare Part A. There is no charge for the coverage

    • Are covered by Medicare Part A. There is a charge for the coverage

    • Are covered by Medicare Part B. There is no charge for the coverage

    Correct Answer
    A. Are covered by Medicare Part B. There is a charge for the coverage
    Explanation
    Physicians and surgeons services are covered by Medicare Part B. This means that Medicare will pay for a portion of the cost of these services, but there will still be a charge for the coverage. Medicare Part B is the portion of Medicare that covers outpatient services, such as doctor visits and medical procedures. While Medicare Part A covers hospital stays, it does not cover physicians and surgeons services. Therefore, the correct answer is that these services are covered by Medicare Part B with a charge for the coverage.

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  • 26. 

    COBRA applies to employers with at least:

    • 80 employees

    • 20 employees

    • 40 employees

    • 60 employees

    Correct Answer
    A. 20 employees
    Explanation
    The correct answer is 20 employees because the Consolidated Omnibus Budget Reconciliation Act (COBRA) requires employers with at least 20 employees to offer continued health insurance coverage to employees and their dependents after they lose their job or experience a reduction in work hours. COBRA allows individuals to maintain the same level of coverage they had while employed, but they must pay the full premium themselves.

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  • 27. 

    All of the following are valid reasons for the Insurance Commissioner to suspend or revoke the applicant for an insurance license, except:

    • Licensee having been refused a license in another state

    • Licensee willfully misrepresented the provisions of an insurance policy

    • Licensee reported his change of address to the Commissioner in 8 days

    • Licensee mishandled funds received while transacting insurance business

    Correct Answer
    A. Licensee reported his change of address to the Commissioner in 8 days
    Explanation
    The Insurance Commissioner may suspend or revoke an applicant's insurance license for various reasons, including being refused a license in another state, willfully misrepresenting insurance policy provisions, and mishandling funds received during insurance transactions. However, reporting a change of address to the Commissioner in 8 days is not a valid reason for suspension or revocation.

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  • 28. 

    The Federal Act that is designed to protect group plan participants, establish pension equality, and mandates strict reporting and disclosure requirements is:

    • COBRA

    • DEFRA

    • TEFRA

    • ERISA

    Correct Answer
    A. ERISA
    Explanation
    ERISA stands for the Employee Retirement Income Security Act. It is a federal act that aims to protect participants in group retirement plans, such as pensions and 401(k) plans. ERISA ensures that employees receive the benefits they are entitled to and establishes rules for plan administration, fiduciary responsibilities, and reporting and disclosure requirements. This act plays a crucial role in promoting pension equality and transparency in the management of employee retirement plans.

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  • 29. 

    The person applying for coverage through an indemnity provider is:

    • Applicant

    • Policy owner

    • Insured

    • Beneficiary

    Correct Answer
    A. Insured
    Explanation
    The person applying for coverage through an indemnity provider is referred to as the insured. This term is used to describe the individual who is seeking insurance protection and will be covered under the policy. The insured is the one who will receive the benefits and financial protection provided by the indemnity provider in the event of a covered loss or claim.

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  • 30. 

    FYI Company's employee is injured while driving in the employ of the company.  Coverage for the employee comes from:

    • Employee's auto medical payments

    • FYI's Workers Compensation

    • FYI's Genral Liability

    • The employee's health policy

    Correct Answer
    A. FYI's Workers Compensation
    Explanation
    When an employee is injured while driving in the employ of the company, the coverage for the employee comes from the company's Workers Compensation policy. Workers Compensation insurance provides benefits to employees who are injured or become ill as a result of their job. It covers medical expenses, lost wages, and rehabilitation costs for the injured employee. General Liability insurance typically covers third-party claims for bodily injury or property damage, while the employee's health policy only covers personal medical expenses unrelated to work. Therefore, in this scenario, the correct answer is FYI's Workers Compensation.

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  • 31. 

    An individual might purchase LTC protection out of concern for all the following, except:

    • Ineligibility for Medigap coverage

    • Inevitable cost of health care

    • Increasing probability of needed services

    • Existing medical coverage

    Correct Answer
    A. Ineligibility for Medigap coverage
    Explanation
    An individual might purchase LTC protection out of concern for the inevitable cost of health care, the increasing probability of needed services, and existing medical coverage. However, ineligibility for Medigap coverage is not a concern that would typically drive someone to purchase LTC protection. Medigap coverage is a supplemental insurance policy that helps fill in the gaps of Medicare coverage, particularly for out-of-pocket costs. LTC protection, on the other hand, is specifically designed to cover long-term care expenses that are not typically covered by health insurance or Medicare. Therefore, ineligibility for Medigap coverage would not be a reason for someone to purchase LTC protection.

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  • 32. 

    How is the Insurance Commissioner selected ?

    • An annual meeting of insurance professionals in the state

    • Appointed by the governor

    • A group of qualified applicants voted on by the legislature

    • An election by the people

    Correct Answer
    A. An election by the people
    Explanation
    The Insurance Commissioner is selected through an election by the people. This means that the citizens of the state have the opportunity to vote for their preferred candidate for the position of Insurance Commissioner. This democratic process allows for the Commissioner to be chosen based on the will and choice of the people, ensuring that the position is held by someone who has gained the trust and support of the public.

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  • 33. 

    A policy is returned to the insurer within 10 days of the date the policy is delivered.  How much of the premium is returned to the applicant ?

    • None

    • 50%

    • 80%

    • 100%

    Correct Answer
    A. 100%
    Explanation
    If a policy is returned to the insurer within 10 days of its delivery, the applicant is entitled to a full refund of the premium paid. This means that 100% of the premium will be returned to the applicant in this scenario.

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  • 34. 

    A disability income policy social insurance supplement (SIS) benefit rider:

    • Pays a benefit if the insured is qualified for workers compensation benefits

    • Pays benefits regardless of any social insurance benefits provided

    • Provides benefit if the insured does not qualify for social insurance benefits

    • Provides a benefit only if the insured is totally disabled and qualifies for social insurance plan benefits

    Correct Answer
    A. Provides benefit if the insured does not qualify for social insurance benefits
    Explanation
    The correct answer is "Provides benefit if the insured does not qualify for social insurance benefits". This means that even if the insured does not qualify for any social insurance benefits, they will still receive a benefit from the disability income policy.

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  • 35. 

    HMOs are involved in all of the following, except:

    • Controlling costs by encouraging preventative care

    • Emphasizing the use of specialty physicians

    • Providing health care services

    • Providing health care financial coverage

    Correct Answer
    A. Emphasizing the use of specialty physicians
    Explanation
    HMOs, or Health Maintenance Organizations, are involved in controlling costs by encouraging preventative care, providing health care services, and providing health care financial coverage. However, they do not emphasize the use of specialty physicians. HMOs typically focus on primary care physicians and may require referrals from primary care doctors before seeing a specialist. This approach helps to manage costs and ensure that patients receive appropriate and necessary care.

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  • 36. 

    The guarantee insurability rider provides that the policy holder can purchase more insurance:

    • Any time during the policy owner's life, on his own life, without proof of insurability

    • On the lives of his dependants at certain specified ages

    • On his own life at specified ages provided the policy owner is insurable

    • At specified intervals without evidence of isurability

    Correct Answer
    A. At specified intervals without evidence of isurability
    Explanation
    The guarantee insurability rider allows the policy holder to purchase more insurance at specified intervals without the need to provide proof of insurability. This means that the policy holder can increase their coverage at predetermined times without having to go through the process of proving that they are insurable again. This can be beneficial for individuals who may experience changes in their health or other circumstances that could affect their insurability.

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  • 37. 

    Who has the right to change life insurance policy beneficiaries ?

    • The insurer

    • The beneficiary

    • The policyholder

    • The insured

    Correct Answer
    A. The policyholder
    Explanation
    The policyholder has the right to change life insurance policy beneficiaries. As the owner of the policy, they have the authority to make changes to the beneficiaries listed on the policy. This allows them to update or remove beneficiaries as needed, ensuring that the policy reflects their current wishes and circumstances. The policyholder has the power to make decisions regarding who will receive the life insurance benefits upon their death.

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  • 38. 

    Which is the most expensive LTC policy ?

    • 14 day elimination period, 3 year benefit period

    • 14 day elimination period, 5 year benefit period

    • 180 day elimination period, 5 year benefit period

    • 90 day elimination period, 5 year benefit period

    Correct Answer
    A. 14 day elimination period, 5 year benefit period
    Explanation
    The most expensive LTC policy is the one with a 14 day elimination period and a 5 year benefit period. The elimination period refers to the waiting period before the policy starts paying benefits, and a shorter elimination period typically results in a higher premium. The benefit period refers to the length of time the policy will pay benefits, and a longer benefit period also usually leads to a higher premium. Therefore, the combination of a shorter elimination period and a longer benefit period would generally result in a higher cost for the policy.

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  • 39. 

    A person who acts in a capacity that requires an active license without having a valid license, is guilty of a:

    • Fraud

    • Misdemeanor

    • Felony

    • Misrepresentation

    Correct Answer
    A. Misdemeanor
    Explanation
    When a person acts in a capacity that requires an active license without actually having a valid license, they are guilty of a misdemeanor. A misdemeanor is a lesser criminal offense that is typically punishable by fines, probation, community service, or a short period of incarceration. This offense is considered less serious than a felony, which involves more severe punishments. In this case, the person is engaging in an illegal activity by misrepresenting their qualifications and is therefore guilty of a misdemeanor.

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  • 40. 

    Which of the following is not an example of cost sharing in a health insurance policy ?

    • Coinsurance

    • Co-payment

    • Coordination

    • Deductible

    Correct Answer
    A. Coordination
    Explanation
    Coordination is not an example of cost sharing in a health insurance policy. Cost sharing refers to the portion of healthcare expenses that the insured individual is responsible for paying out of pocket. Coinsurance, co-payment, and deductible are all examples of cost sharing, where the insured individual contributes a certain percentage or fixed amount towards the cost of their healthcare services. However, coordination does not involve sharing the cost of healthcare expenses but rather refers to the process of managing and organizing healthcare services to ensure that they are provided efficiently and effectively.

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  • 41. 

    Under the Consolidated Omnibus Budget Reconsolidation Act (COBRA), which of the folowing is a qualifying event ?

    • Promotion

    • Divorce

    • Marriage

    • Relocation

    Correct Answer
    A. Divorce
    Explanation
    Under the Consolidated Omnibus Budget Reconciliation Act (COBRA), a qualifying event refers to certain life events that may cause an individual to lose their health insurance coverage. Divorce is considered a qualifying event as it often leads to a change in marital status, which can result in the loss of health insurance coverage provided by a spouse's employer.

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  • 42. 

    All of the following would be considered unfair trade practices, except:

    • Making a statement to the public about a person in the insurance business that is untrue or misleading

    • Making a recommendation to the customer after consulting on his/her needs

    • Filing with any public official a false statement of financial condition concerning an insurer

    • Making any statement misrepresenting terms of any policy

    Correct Answer
    A. Making a recommendation to the customer after consulting on his/her needs
    Explanation
    Making a recommendation to the customer after consulting on his/her needs would not be considered an unfair trade practice. This action is a normal part of the insurance business and is expected when providing services to customers. However, the other options listed in the question, such as making untrue or misleading statements, filing false financial statements, and misrepresenting policy terms, are all examples of unfair trade practices as they involve dishonesty and deception.

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  • 43. 

    All of the following would be considered unfair claim practices, except:

    • Failing to acknowledge communications regarding claims arising from an insurance policy

    • Misrepresenting to a claimant policy provisions relating to a claim

    • Directly advising a claimant to obtain the services of an attorney

    • Failure to affirm or deny coverage of claims within a reasonable time frame after proof of loss requirements have been met and submitted by the insured

    Correct Answer
    A. Directly advising a claimant to obtain the services of an attorney
    Explanation
    Directly advising a claimant to obtain the services of an attorney would not be considered an unfair claim practice. While the other options mentioned involve unfair practices such as failing to acknowledge communications, misrepresenting policy provisions, and delaying coverage decisions, advising a claimant to seek legal representation is not inherently unfair. In fact, it can be seen as a helpful suggestion to ensure the claimant's rights are protected and they receive proper legal guidance during the claims process.

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  • 44. 

    A feature of the Self-Insured (Self-Funded) Plan is :

    • It only applies to large companies

    • It is designed for entrepreneurs

    • No evidence of insurability is required

    • Claims are paid out of their own funds instead of funding claims through an insurer

    Correct Answer
    A. Claims are paid out of their own funds instead of funding claims through an insurer
    Explanation
    The feature of a Self-Insured (Self-Funded) Plan is that claims are paid out of their own funds instead of funding claims through an insurer. This means that the company takes on the financial risk of paying for their employees' healthcare expenses instead of relying on an insurance company to cover those costs. This can be advantageous for large companies or entrepreneurs who have the financial resources to manage and pay for these claims directly. Additionally, this type of plan typically does not require evidence of insurability, meaning employees do not need to provide proof of their health status to be eligible for coverage.

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  • 45. 

    If a person gives an erroneous statement on an application unintentionarlly, this is:

    • Fraud

    • False

    • Frivolous

    • Fair

    Correct Answer
    A. False
    Explanation
    If a person gives an erroneous statement on an application unintentionally, it is considered false. The term "false" refers to something that is not true or accurate. In this context, it means that the person made a mistake or provided incorrect information on the application without any intention to deceive or commit fraud.

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  • 46. 

    Which of the following would be considered a morale risk ?

    • Misstatement by an applicant

    • The insured is blind

    • The insured drives too fast

    • All of the above

    Correct Answer
    A. The insured drives too fast
    Explanation
    The insured driving too fast can be considered a morale risk because it reflects a lack of responsibility and disregard for safety. This behavior can have negative consequences, such as accidents or violations, which can impact the insured's reputation and potentially lead to higher insurance premiums. It also indicates a potential lack of judgment and self-control, which can be seen as a character flaw and affect the insured's overall trustworthiness.

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  • 47. 

    Senior citizens are given a 30 day free look to view a policy: 

    • At age 65

    • Under individual or group plans

    • At age 60 or older

    • All of the above

    Correct Answer
    A. At age 65
    Explanation
    The 30-day free look period is a feature of Medicare Supplement Insurance (Medigap) policies. When a senior citizen turns 65 and enrolls in Medicare Part B, they become eligible to purchase a Medigap policy. During the 30-day free look period, they can review their policy, determine whether it meets their needs, and if not, cancel the policy and receive a full refund. This 30-day free look period is specific to Medigap policies for individuals who are 65 years of age or older and not for those under individual or group plans or at age 60 or older.

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  • 48. 

    In which of the following plans are claim forms typically completed and submitted by the participant?

    • Indemnity

    • Preferred Provider Organizations

    • Point of Service

    • Health Maintenance organizations

    Correct Answer
    A. Indemnity
    Explanation
    In an indemnity plan, claim forms are typically completed and submitted by the participant. Unlike other types of plans such as Preferred Provider Organizations (PPO), Point of Service (POS), and Health Maintenance Organizations (HMO), where the provider or the insurance company may handle the claims process, in an indemnity plan, the participant takes responsibility for completing and submitting the claim forms themselves. This allows the participant to have more control and involvement in the claims process.

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  • 49. 

    Medicare Part A, begins automatically at age:

    • 55

    • 60

    • 62

    • 65

    Correct Answer
    A. 65
    Explanation
    Medicare Part A begins automatically at age 65. This is the age at which most individuals become eligible for Medicare benefits. Medicare Part A covers hospital insurance and helps to pay for inpatient hospital stays, skilled nursing facility care, hospice care, and some home health care services. It is important for individuals to enroll in Medicare Part A around their 65th birthday to ensure they have coverage when they become eligible.

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Quiz Review Timeline (Updated): Mar 22, 2023 +

Our quizzes are rigorously reviewed, monitored and continuously updated by our expert board to maintain accuracy, relevance, and timeliness.

  • Current Version
  • Mar 22, 2023
    Quiz Edited by
    ProProfs Editorial Team
  • Aug 15, 2016
    Quiz Created by
    Gohealth

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