Nc Health Insurance Exam 4

Front 1

An agreement by which the insurer is obligated to pay money as an indemnity for the destruction, loss or injury of something in which the insured has an interest

Back 1

Contract of Insurance

Front 2

A person has violated a provision of the insurance law, the Commissioner may do what?

Back 2

Apply to the superior court of any county for a restraining order and injunction to restrain the violation.

Front 3

Every licensee will give written notification to the Commissioner of any change of residential address within what period of time?

Back 3

10 business days

Front 4

The Commissioner may place on probation, suspend, revoke, or refuse to renew any license for what reason?

Back 4

1) Providing materially incorrect, misleading, incomplete or materially untrue information in the license application.
2) Having been convicted of a felony or a misdemeanor involving dishonesty or a breach of trust.
3) Knowingly accepting brokered insurance business from an individual who is not licensed to broker that kind of insurance.

Front 5

Every insurer and/or its agents must maintain a log of all written complaints for how long?

Back 5

Should be kept for at least three years.

Front 6

Prizes, goods, merchandise or property in excess of $25; special favors or advantages for credit cards or other premium payment options

Back 6

Inducements

Front 7

Any statement which is false, critical, or derogatory to the financial condition of any person and which is calculated to injure a person.

Back 7

Defamation

Front 8

Unless a policy has been surrendered or its cash surrender value has been exhausted, the policy will be reinstated at any time within?

Back 8

5 years of premium default

Front 9

Any incorporated society, order or supreme lodge, without capital stock, conducted solely for the benefit of its members and their beneficiaries, non-profit, operated on a lodge system with ritualistic form of work, having a representative form of government, and which provides benefits is hereby declared to be a what?

Back 9

Fraternal Benefits Society

Front 10

All of the following must be described and disclosed in order for the policy to be delivered except

1) The considerations are expressed.
2) The time it takes effect and terminates is expressed.
3) It contains no provision excluding coverage claims that are subject to Individual Disability insurance.
4) The exceptions and reductions of indemnity are set forth in the policy.

Back 10

If the policy contains no provision excluding coverage claims that are subject to Individual Disability insurance.

Front 11

Indemnities payable on accident and health policies for any loss other than loss for which this policy provides any periodic payment will be paid _________

Back 11

Is paid immediately upon receipt of due written proof of a loss on accident and health policies

Front 12

For women ages 40-49, how often is a mammogram permitted?

Back 12

once every other year

Front 13

What involves only the possibility of loss. There is not an opportunity to gain or profit.

Back 13

Pure Risks

Front 14

What occurs as a result of an individual’s moral decision to do something wrong? It is based largely on a person’s character or values.

Back 14

Moral Hazard

Front 15

Insurance is the most common way to do what?

Back 15

Transfer Risk

Front 16

What is a Captive Insurance Company? Explain.

Back 16

An insurance company that only insures all or part of the risks of it's parent company. It is a closely held insurance company whose insurance business is primarily supplied by and controlled by its owners, and in which the originally insureds are the principal beneficiaries.

Front 17

A society of members, both corporate and individual, who underwrite in syndicates on whose behalf professional underwriter’s accept risk. Provides a meeting facility and administrative services to its members. Capital is provided by investment institutions, specialist investors, international insurance companies and individuals.

Back 17

Lloyd’s Association

Front 18

What type of contract is an insurance contract?

Back 18

A one-sided contract, because the policy is legally binding on the insurance company only.

Front 19

Legally, contracts of adhesion are generally interpreted in favor of _________ if the insurer used any
ambiguous (doubtful, uncertain, or obscure) language in writing the contract.

Back 19

The Insured

Front 20

Statements of fact that are guaranteed to be true.

Back 20

Warranties

Front 21

What are the responsibilities of the producer when filling out an application?

Back 21

To complete it completely and accurately, and obtain the necessary signatures; collect the initial premium; issue a receipt to the insured for the initial premium payment.

Front 22

What are risks that are below the standard level. Typical reasons for this rating are poor health, dangerous occupations or hobbies, tobacco usage, and obesity.

Back 22

Substandard Risks

Front 23

A pre-existing condition can be defined as a medical condition that already existed on the policy’s effective date, or existed during the past _________ that caused the insured to received medical advice or treatment, or caused symptoms for which a prudent person would have sought medical advice or treatment.

Back 23

6 months

Front 24

The period after the premium due date in which premiums may still be paid before the policy lapses. The policy is in full force during this period and benefits for covered loss will be paid, minus the premium due.

Back 24

Grace Period

Front 25

What can an insurance company request of the insured, at the insurance company's own expense, at reasonable intervals during a claim period?

Back 25

A Physical Examination

Front 26

If the insured has additional policies with other insurers providing benefits on an expense-incurred basis for the same loss, and the other insurers have not been given written notice prior to the claim that duplicate coverages existed, the insurers are required to pay how much?

Back 26

Only a Proportionate Share (pro-rata) of the medical expense claim.

Front 27

What does the insuring clause contain?

Back 27

1. The general scope of coverage.
2. The conditions under which benefits will be paid.
3. The definitions.

Front 28

The consideration clause contains which of the following:
1. The full maximum premium required
2. The warranties made in the policy
3. The effective date of the policy

Back 28

1. The full maximum premium required
2. The warranties made in the policy
3. The effective date of the policy

Front 29

Each of these of these is an important factor for underwriting health insurance except:
1. Applicant’s physical Condition
2. Applicant’s number of dependents
3. Moral and morale hazards
4. Applicant’s occupation

Back 29

2. Applicant’s number of dependents

Front 30

When a policy is being replaced, the new policy should...

Back 30

contain benefits equal to or exceed the benefits in the policy being replaced.

Front 31

An insurance policy is incontestable after it has been in force for two years, except for _______________
which would allow the insurer to void the contract or deny the claim.

Back 31

Fraudulent Misstatements

Front 32

To reinstate a lapsed policy, an applicant is usually required to show what?

Back 32

Proof of Insurability

Front 33

If reasonably
possible, a written proof of loss must be provided to the insurance company within how many days of the loss?

Back 33

90 days

Front 34

If any policy provision conflicts with a state statute on the date the policy provision is effective, what happens?

Back 34

It automatically conforms to all of the appropriate state statutes.

Front 35

Guaranteed issue policies do not allow an insurer to decline to offer coverage to, or deny enrollment of, an
individual applying for coverage. Also, an insurer may not do what?

Back 35

The insurer may not impose any pre-existing condition exclusion for that coverage.

Front 36

Health plans that offer coverage for pharmaceutical services, including prescription drug coverage cannot do what?

Back 36

The Health plans cannot prevent any beneficiary from choosing the pharmacy or pharmacist of his or her choice. And the pharmacist must be licensed by the state to furnish these services.

Front 37

Group policies must provide all of the following additional benefits for individuals who suffer from a mental
illness or nervous condition except:
1. Inpatient services
2. Bio feedback
3. Day treatment services
4. Outpatient services

Back 37

2. Bio feedback

Front 38

What must every health benefit plan that provides maternity coverage, provide for the insureds?

Back 38

All medically necessary inpatient care for a mother and her newborn child as determined by the mother’s
prenatal physician, obstetrician-gynecologist, certified nurse midwife, or the child’s attending physician.

Front 39

What is disability income insurance designed to provide an individual with?

Back 39

An income in the event of a disability from an illness or an accident.

Front 40

Presumptive disabilities include all of the following except:
1. Total and permanent blindness in one eye.
2. Loss of hearing.
3. Loss of speech.
4. Loss of at least two limbs.

Back 40

1. Total and permanent blindness in one eye.

Front 41

Disability income benefits are typically based on what percentage of the insured’s income?

Back 41

50 to 60%

Front 42

Normally, for a specified period of time, how long does the waiver of premium require that the insured be disabled?

Back 42

3 to 6 months

Front 43

Social Security defines Disability as what?

Back 43

The inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or that has lasted or is expected to last for a continuous period of not less than 12 months.

Front 44

What is the waiting period for social security disability benefits?

Back 44

5 months

Front 45

Managed care plans such as HMOs generally refer to persons receiving benefits as what?

Back 45

Subscribers

Front 46

An open-panel HMO allows who to join?

Back 46

Any qualified physician who accepts the HMO’s contract.

Front 47

The purpose of concurrent reviews is to do what?

Back 47

Control costs and make sure that only necessary care is being provided to the patient.

Front 48

If an individual files an itemized return, medical expense premium payments are deductible as a medical
expense to the extent that when added to all other unreimbursed medical expenses, the total amount does not exceed what amount of the individual's gross income?

Back 48

7.5% of the individual’s adjusted gross income.

Front 49

If disability premiums are tax deductible for the employer as a business expense, then the disability payments are taxable for what amount?

Back 49

The first $5000.

Front 50

Typically in FSAs, what happens to any amount not spent by the end of the year?

Back 50

It is forfeited.

Front 51

What is the premium charged for exercising the Guaranteed Insurability Rider based upon?

Back 51

Attained Age

Front 52

Who is a third-party owner?

Back 52

A policy owner who is not the insured.

Front 53

Marsha pays her Major Medical Insurance annually on March 1st, each year. Last March she forgot to mail her premium to the company. On March 19th, Marsha had an accident and broke her leg. Her insurance company would do what?

Back 53

Pay the Claim

Front 54

What happens when a premium has not yet been paid and an accident occurrs during the grace period?

Back 54

The insurance company will pay the claim.

Front 55

What is deemed to be consideration on part of the applicant, in respect to the Consideration Clause?

Back 55

The Payment of Premium

Front 56

What are the two modes of consideration on the part of the applicant, dictated by the consideration clause.

Back 56

The premium payments and the statements (representations) made on the application.

Front 57

What insurance coverage would be allowed with an MSA?

Back 57

Workers compensation.

Front 58

What is HSA?

Back 58

Health Savings Account

Front 59

Explain High deductible health plans (HDHP).

Back 59

They're often used in coordination with MSAs, HSAs, or HRAs.
HDHP features higher annual deductibles and out-of pocket limits than traditional health plans, which means lower premiums.

Front 60

In respect to the consideration clause, which of the following is consideration on the part of the insurer?

Back 60

Promising to pay in accordance with the contract terms.

Front 61

Whose responsibility is it to provide a copy of the Important Notice Regarding Replacement of a policy?

Back 61

It is the producer's responsibility.

Front 62

What insurance arrangement will be appropriate for a parent buying a life insurance policy on a child?

Back 62

Third-party ownership

Front 63

HMOs may pay for services not covered by Medicare, such as

Back 63

Prescriptions or Eye Exams

Front 64

Pete is hospitalized with a back injury. Upon checking his disability income policy, Pete learns that he will not be eligible for benefits for at least 30 days. This would indicate that his policy was probably written with a 30 day what?

Back 64

Elimination Period

Front 65

What is premium mode?

Back 65

It is the manner or frequency that the policy owner pays the policy premium.

Front 66

Pre-admission assessment aims to do what?

Back 66

Optimise a patient’s health status prior to admission.

Front 67

What is a MSA?

Back 67

Mecical Savings Account - Its an employer funded account linked to a high deductible medical insurance plan.

Front 68

A medical condition that already existed on the policy’s effective date, or existed during the past 6 months that caused the insured to received medical advice or treatment, or caused symptoms for which a prudent person would have sought medical advice or treatment.

Back 68

A pre-existing condition

Front 69

What is a FSA?

Back 69

Flex Spending Account

Front 70

Explain a FSA?

Back 70

It is a salary reduction cafeteria plan that uses employee funds to provide various types of health care benefits.

Front 71

What are the benefits of an FSA?

Back 71

Contributions made by your employer can be excluded from your gross income; No employment or federal income taxes are deducted
from the contributions; Withdrawals may be tax free if you pay qualified
medical expenses; You can withdraw funds from the account to pay qualified medical expenses even if you have not yet placed the funds in the account.

Front 72

What is the major draw-back of a FSA?

Back 72

Flexible spending accounts are “use-it-or-lose-it” plans.
This means that amounts in the account at the end of the plan year cannot be carried over to the next year. Although it can provide for a grace period of up to 2 1/2
months after the end of the plan year for qualified medical expenses incurred.