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Insurance Prac. Test
TN Accident & Health Insurance (Practice Test)
| Question | Answer |
|---|---|
| ERISA requires written rules for how claims must be filed and how participants can appeal if they are denied covered services. Claims appeals processes must be fair and timely. What is the function of ERISA called? | Claims, Procedures, and Appeals |
| What is a Medicare supplement plan of an insurance company that offers the policy's benefits through a network of doctors, hospitals, and health-care service providers called? | Medicare SELECT Plan |
| What are the differences between tax-qualified and non-tax-qualified long-term care insurance plans? | Medical necessity cannot be a benefit trigger under tax-qualified LTC plans. |
| Tiernne is displeased with a paragraph concerning pre-existing conditions. The agent agrees to strike out the offending paragraph and revise the policy. Can this be done? | No. It is prohibited under the terms of the policy. |
| The insuring clause does NOT..... | State the premium ranges for covered risks. |
| LaToya does not pay her premiums and Company A decides to cancel her policy as a result. How many days notice must Company A give to LaToya? | 10 Days |
| Which approach to paying disability benefits is most common in INDIVIDUAL policies? | Flat Approach |
| What is true about the sale of a Medicare supplement policy that results in the insured having additional coverage already provided under medicare? | it is prohibited in all cases. |
| How late in the year can flexible spending account (FSA) participants apply their contributions for any one year? | as late as March 15th of the following year. |
| Which statement about disability reducing term insurance policies is NOT correct? | The benefit payment under such policies increases over the policy's term. |
| Is Undria, who sells LIMITED LINES INSURANCE, required to be a licensed producer in Tennessee? | Yes |
| Long-term care insurance policies have benefit periods, which are the length of time benefits will be paid. What are common benefit periods? | 2 to 5 years |
| Which of the following is NOT an unfair claims settlement practice committed by an insurance company in Tennessee? | Failing to promptly settle a claim for which liability is uncertain. |
| What kind of managed care is distinct from HMO's? | PPO's |
| In addition to the fiduciary responsibility they have with all customer premiums and assets, producers are expected to do all the following EXCEPT.... | Seek opportunities to replace existing policies with newer products. |
| DJ participates in a group plan. His plan provides a pre-set level, or schedule, of benefits. A schedule of benefits does all of the following EXCEPT... | Allow individual selection |
| Which of the following statements about the underwriting of group health insurance is correct? | Insurers consider the risk characteristics of the group as a whole. |
| Under her indemnity plan, Terrian is free to... | choose her doctors and health-care providers |
| When the Commissioner denies an application for a license, he or she must notify the applicant in writing within how many days? | 30 Days |
| What is the term for the amount payable for DEATH under an accidental death and dismemberment (AD&D) insurance policy? | Principal Sum |
| What is the term for the amount payable for DISMEMBERMENT under an accidental death and dismemberment (AD&D) insurance policy? | Capital Sum |
| All of the following are reasons for the Commissioner to suspend or revoke an insurance producer's license EXCEPT... | Soliciting friends for insurance |
| Most insurance policies are personal contracts between the insurer and the policy owner, which cannot be transferred to a new owner. Which of the following is NOT a personal contract? | Life Insurance Policy |
| Is comparing policies in a way that reveals their different features, considered a misrepresentation? | NO |
| Is a conditional renewability provision found in a Long-Term Care policy? | NO |
| Health Insurance plans are divided into which TWO DISTINCT classes? | Indemnity Plans & Managed Care Plans |
| Medical expense policies cover a wide range of services and care. The way in which they cover the costs of these services and the way in which covered care services are delivered depends on what? | The plan or policy |
| Can the Commissioner in Tennessee order Community Service? | NO |
| The Royale Insurance Company, headquartered in Toronto, Canada, conducts business legally in New York, Royale is a(n)... | Alien Insurance Company |
| HMO's cover care to treat an illness or to recover from an injury already ongoing. What other type of care do HMO's emphasize? | Preventive care as a way to avoid more costly care to treat an illness. |
| What is a fast growing practice area for insurance practitioners? | The Retirement Market |
| The insurance company function that is responsible for EVALUATING the insurable risks and ASSIGNING appropriate premium rates.... | Underwriting Division |
| Which of the following best describes an agents responsibilities? | An agent has to act in the best interests of insureds, applicants, and insurers. |
| Which of the following statements about representations and warranties is correct? | Insurers can rescind (cancel) an insurance contract if a misrepresentation is discovered on the application during the contestability period. |
| Which of the following documents must an insurer provide to its group policyholders for delivery to each insured person? | Certificate of Coverage |
| What is the minimum level of inflation protection that long-term care policies in Tennessee must provide? | 5% compounded annually |
| Which of the following provisions defines the period during which the insured can take LEGAL ACTION against the insurer because it denied a claim? | The Legal Actions Provision |
| Tiphanie is under a noncancelable individual disability income policy from Slate Insurance Company. She submitted a disability claim, received benefits for one year, and then returned to work. Tiphanie would like to renew her policy. Is this possible? | Yes. Slate Insurance Company cannot refuse to renew Tiphanie's policy as long as she pays the premiums. |
| Which approach to paying disability benefits is most common in GROUP policies? | Percent-of-Earnings approach |
| The sale of a Medicare supplement policy that results in the insured having coverage that duplicates that what is already provided is..... | PROHIBITED IN ALL CASES. |
| For what purpose was Medicaid created? | Medicaid was established to provide health care and health-related services to people with low incomes. |
| What type of policies are guaranteed insurability riders typically associated with? | Disability income policies |
| A waiver of producer license continuation may be issued for what reason? | Long-term medical disability |
| Describe the IRS rule that applies to deductible medical expenses for persons under 65? | A person can deduct expenses exceeding 10% of his or her Adjusted Gross Income (AGI). |
| Tip's client wants to purchase a security but is not sure what the term means. Tip's line of authority is life, so she tells the client that all life insurance policies are securities. Is Tip violating Tennessee law? | Yes. She is misrepresenting the policy as a security. |
| An insurable risk can NOT be.... | Catastrophic |
| What is NOT a limited line in Tennessee? | Life Insurance |
| What provision requires that insurers must receive WRITTEN proof of loss within a certain number of days of the loss? | Proof of Loss Provision |
| When an insurance producer solicits or negotiates an application for insurance on behalf of an insurer, who does the producer represent? | The Insurer |
| Lil' Mouse is applying for her Tennessee insurance producer license under the life authority. What is required of Lil' Mouse? | She must have completed a pre-licensing course for life insurance. |
| When meeting with a prospect 2 discuss life insurance, a producer makes disparaging comments about the financial stability and reputation of a competitor 2 dissuade the prospect from purchasing its policies. Which unfair trade practice has the agent done? | Defamation |
| If Keva is eligible for Social Security disability benefits, what is her work status? | Fully insured |
| Why was the Pregnancy Discrimination Act of 1978 created? | So that pregnant women will be treated the same at work as non-pregnant women and will be offered the same fringe benefit programs. |
| Dana earns an ADDITIONAL 12 credit hours before her license renewal date. Can she carry over these additional hours to the next continuing education renewal cycle? | Yes. Except for hours earned in ethics courses. |
| What OPTIONAL provision addresses a situation in which an insured has coverage for the same risk and expenses with ANOTHER insurer but has NOT notified this insurer of other existing coverage? | Other insurance with "other" insurer provision |
| What does the Fair Credit Reporting Act require insurers to do? | Insurers must notify their applicants any time a consumer or investigative report has been requested. |
| If Brick Motors Co. offers a group disability income plan and pays all of the premiums, if an employee suffers a disabling injury, are the benefits that are paid to the employee taxable income? | Yes. benefits paid to the employee are taxable income to the employee. |
| Which of the following contract characteristics is unique to insurance contracts, but not ALL contracts? | Unilateral |
| Long Term Care benefit options do NOT include... | Benefit Periods |
| What is the reason why the insurer (within the bounds of the state law) may require that a certain percentage of eligible members participate in a group health insurance plan? | It protects the insurer against adverse selection and keeps the cost of coverage in line with the cost of administering the plan. |
| David is covered by his employer's group policy. What will the policy not cover? | Treatment for his wife's alcoholism |
| Under Tennessee insurance law, can an unlicensed agent give Whisper a $10 gift card for REFERRING her sister? | Yes. (As long as it is not over $25) |
| How long are benefit periods for SHORT-TERM disability income policies typically limited to? | 2 years or less |
| In general, contributory plans require what minimum percentage of eligible employees to participate? | 75% |
| What questions are commonly asked on a health insurance application? | 1. How are premiums to be paid 2. What past medical histories are to be covered 3. What are the names and sex of the persons to be covered by the policy |
| Derrica's major medical expense policy has a deductible under which the insured must pay separate deductibles for each seperate illness or each separate accident. What type of deductible does Derrica have? | Per cause deductible |
| How long is the standard free-look period? | 10 days |
| Which level of long-term care provides continuous 24 hour care delivered by licensed medical professionals, under the direct supervision of a doctor or physician? | Skilled Nursing Care |
| In Tennessee, who is considered an insurance producer? | A person who negotiates insurance |
| What is the problem with the Surgical Fee Schedule Approach? | surgical fee schedules are fixed, so as surgical fees increase, the individual is required to pay ever greater amounts toward his or her medical and surgical bills. |
| Two large insurance companies agree to temporarily set their premium rates low with the purpose of driving smaller competitors out of business. What act are they engaging in? | Coercion |
| Under the Legal Actions provision, when can an insured take legal action against an insurer? | The insured cannot take legal action against the insurer until atleast 60 days after the insured provides proof of loss to the insurer. |
| What is the cafeteria plan benefit through which employee withholdings fund premium contributions to an employer's group health plan on a before-tax basis? | pre-tax health insurance premium deductions |
| What risk management technique best describes the role of insurance? | Risk Transfer |
Created by:
Tiphanie_Dyme
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