Aflac Insurance Practice Exam

Making a statement that is false or maliciously critical of the financial condition of an insurer is known as

defamation

 

Which of the following statements regarding an examination of an insurer’s books and records by the Commissioner is true?

– An insurer has a right to delay an examination by the Commissioner for a period of not more than 15 days after notification
-The insurer must not impede an examination and is required to assist in the examination procedures
-Reports related to solicitors are not official records archived from insurance examinations
– The Commissioner only has the authority to examine domestic insurers

 

 

When an intermediary’s license is revoked for failure to meet continuing education requirements, the intermediary CANNOT

 

be present during the sale of insurance by another intermediary

 

 

Which type of policy pays benefits to a policyholder covered under a Hospital Expense policy?

 

reimbursement

 

Qualified long-term care policies must include all of the following provisions EXCEPT

– Nonforfeiture option
– Inflation protection
– Prior hospitalization
– Guaranteed renewability

 

John has a criminal record in which he was convicted of a felony that involved dishonesty. Under Federal law, how would John be able to engage in insurance transactions?

 

Given written consent by the state insurance regulatory agency

 

A Medicare Supplement insurance policy may EXCLUDE coverage for preexisting conditions for a maximum period of how many months after the policy goes into effect?

 

6

 

 

An insured’s statement of a policy’s benefits which is to be used in marketing materials is called a(n)

 

testimony

 

Jim is covered under a disability income policy. He is hurt while engaged in an occupation that is more hazardous than the occupation he specified in the policy. What action will the insurer likely take?

 

Reduce the benefit level

 

All of these are considered to be a violation of the Federal Fraud and False Statements Act EXCEPT

– Overvaluing land
– Abstracting funds
– False entries on reports
-Claims reimbursement

 

 

For group health plans covering employees in more than one state, the state regulatory jurisdiction established for the plan may affect any of the following aspects EXCEPT

– Minimum enrollment percentages
– Eligibility qualifications
– Required contract provisions
– COBRA continuation of coverage

 

 

A false statement made by an applicant that would influence an insurer in determining whether or not to accept the risk is

 

a material misrepresentation

 

 

Which parties are directly involved in a group accident and health insurance contract?

 

employer and insurer
(not employees)

 

Who determines the suitability of a disability (accident & health) policy to a potential insured?

 

Intermediary

 

Long Term Care policies will usually pay for eligible benefits using which of the following methods?

 

Expense Incurred

 

 

Greg applies for insurance and makes a false statement on the application that will influence whether or not the insurer will accept the risk. Greg’s false statement is called a(n)

 

material misrepresentation

 

 

Which of the following statements BEST describes a double indemnity provision in travel accident insurance?

 

Benefits are doubled under certain circumstances stated in the policy

 

A copy of all Medicare Supplement advertisements must be submitted for approval to

 

The Commissioner

 

Jill has a group health plan with an employer that covers employees in more than one state. Which of the following is NOT affected by the state regulatory jurisdiction established for this plan?

– Eligibility requirements
– Required provisions
– Minimum enrollment percentage
– Continuation of coverage under COBRA

 

 

Which of the following statements accurately describes the financial impact of total disability?

 

The financial impact may be worse than that of death

 

In long-term care insurance, what is the length of time for which claims will be paid?

 

Benefit period

 

All of these are used to prevent adverse selection in a group dental plan EXCEPT

– Provide evidence of insurability
– Probationary periods
– Waiting periods
– Decreased employee participation

 

 

Group accident and health insurance may be offered by an insurer when the sponsoring group

 

provides an employer-employee relationship

 

 

A major medical expense policy typically does NOT

 

pay surgeon fees on a first-dollar basis (basic or surgical)

 

 

In regards to health insurance, employees age 65 or older are typically required to

 

be offered the same group health benefits offered to the younger employees

 

 

An insurer may cancel a policy midterm for all of the following reasons EXCEPT when the insured

– fails to pay the premium when due
– makes a material misrepresentation
– makes a substantial breach of policy conditions or contractual duties
– has a change in marital status

 

 

Continuation privileges of insureds under group disability (accident and health) insurance policies are

 

designed to allow an insured to continue coverage for up to eighteen months

 

 

When dealing with long-term care coverage, which of the following are classified as ADLs?

 

Eating, bathing, dressing, and mobility

 

 

How does an underwriter take into account an applicant’s marital status?

 

When determining who is eligible for dependent coverage

 

 

Under a disability (accident and health) policy, which of the following statements is CORRECT about coverage of a physically or mentally handicapped child who has reached the limiting age in the policy?

 

if the child is chiefly dependent on the primary insured and is incapable of self-sustaining employment

 

 

Laura is a new employee and will be obtaining non-contributory group Major Medical insurance from her employer. Which of the following actions must she take during the open enrollment period?

 

Sign an enrollment card

 

 

Under Federal Law, which of the following actions may result in a producer becoming imprisoned?

 

Producer embezzling funds from an insurer

 

 

Which of the following statements is INCORRECT about why the government provides insurance?

– Stimulate economic development
– Reduce fraudulent claims
– Ensure social needs are being met
– Increase availability of health coverage

 

 

When group benefits under COBRA have expired, a fully insured group policy can be converted to a(n)

 

individual health policy

 

 

An insurer has a contractual agreement which transfers a portion of its risk exposure to another insurer. What type of contractual arrangement is this?

 

Reinsurance contract

 

 

Disability (accident and health) policies that cover hospital expenses for adults MUST include coverage for

 

skilled nursing care

 

 

If the intermediary’s biennial license fee is not paid by the expiration date, the intermediary’s license

 

is revoked by the Insurance Commissioner

 

 

Which of the following is available ONLY if the consumer purchases coverage in the health insurance exchange?

– Access to premium tax credits and reduced cost sharing
– Immediate coverage for pre-existing condition limitations
– Coverage for essential health benefits
– No annual or lifetime limits for essential health benefits

 

 

When an intermediary has a change of mailing address, the intermediary MUST notify the

 

Office of the Commissioner of Insurance in writing of the address change within a maximum of thirty days

 

 

Which of the following would permit an insurer to delay a covered disability policy claim?

 

Elimination period

 

 

How do birthing centers reduce medical costs?

 

Using certified nurse midwives

 

 

What do Limited accident and health policies normally cover?

 

A specific illness or event

 

 

Screening for lead poisoning is required for disability (accident & health) policies for children under

 

6 years

 

 

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

-X rays
-tooth extraction
-cleanings
-mouth cancer

 

 

According to the Affordable Care Act, coverage may be rescinded

 

if intentionally false statements were offered

 

 

An intermediary must complete how many hours of approved training in order to sell long-term care products?

 

8 hours

 

 

Major Medical policies are typically characterized by which of the following?

 

flat deductibles

 

 

The Wisconsin Insurance Security Fund was established to protect consumers in the event of an insurer’s

 

insolvency

 

 

Which of the following types of insurers limits the exposures it writes to those of its owners?

 

Captive Insurer

 

 

Which of these is typically regarded as a major treatment in an indemnity dental plan?

 

Dentures

 

 

When does the producer give a premium receipt for an accident and health insurance application?

 

When the initial premium has been collected with the application

 

 

Nonqualified distributions from a health savings account (HSA) have a tax penalty of

 

20%

 

 

Which of the following does NOT meet the requirements of “skilled nursing care”?

– Must be ordered by a doctor
– Must require daily care
– Must be provided exclusively in a hospital
– Must be provided by skilled medical practitioners

 

 

Which individual would be best suited for Medicare Supplement insurance?

– Medicare enrollee
– Medicaid enrollee
– Social Security recipient
– HMO subscriber

 

 

Which of these would NOT likely qualify as a presumptive disability?

– Loss of sight in one eye– Loss of both hands
– Loss of hearing
– Loss of speech

 

 

Which of the following would NOT have a restricted ability to enter into a contract?

– Mentally ill person
– Minor
– Person under the influence of alcohol
– Small employer

 

 

What is the federal income tax liability of a death benefit paid from a health insurance policy to a named beneficiary?

 

benefits are not taxable

 

 

Under what circumstance does an accident and health insurer have the right to request an autopsy?

 

When not prohibited by state law

 

 

The purpose of licensing insurance intermediaries is to show to the satisfaction of the Commissioner all of the following EXCEPT that the applicant

– intends, in good faith, to do business as an intermediary
– is competent and trustworthy
– has not filed for bankruptcy within the last 3 years
– intends to abide by Wisconsin Insurance Law in writing controlled business

 

 

Mary is an employee who is covered with a disability income policy through her employer. She pays for the portion of the premium attributable to the cost of residual disability benefits, while her employer pays for the remainder. What are the tax implications of this policy?

 

Residual benefits will be received income tax-free

 

 

Which of the following statements is NOT true concerning the relationship between group health insurance plans and Medicare? (assuming the business has more than 20 employees)

– Group health coverage is NOT available for workers over the age of 65
– Group health coverage is available to workers over the age of 65
-An active employee’s group health plan is primary and Medicare is secondary, unless the employee chooses otherwise
– Group health coverage is available to an employee’s spouse that also happens to be Medicare-eligible

 

 

Starting in 2016, businesses with up to ___ employees will be defined by the ACA as a “small business”.

 

100

 

 

Which of these is NOT a factor that influences group health insurance underwriting?

– Physical exams of group members
– Number of individuals in the group
– Group’s claims experience
– Type of occupation group is involved in

 

 

An insurance company’s failure to enforce a contract’s provision is called a(n)

 

waiver

 

 

The PRIMARY purpose of the replacement rule is to

 

protect policyowners from misrepresentations and loss of benefits

 

 

A family counseling benefit is typically offered under which of these coverages?

 

Hospice Care

 

 

Kelly purchases a health insurance policy issued on a conditionally renewable basis. The insurance company has a right to decline renewal of the policy for

 

reasons stated in the contract

 

 

Which of the following describes the act of insuring a risk against possible loss?

 

risk transfer

 

 

Which statement is NOT true regarding the ability of an insured to return a disability (accident & health) policy?

– A “Right to Return” clause must be conspicuously attached to the first page of the policy
– Policy may be returned within 10 days for a full refund
– The right to return period begins with policy delivery
– The insured can return the policy at anytime for a full refund

 

 

Dan has a major medical expense policy with a $200 deductible and an 80/20 coinsurance provision. He incurs covered medical expenses of $100 in November and $400 in January. Under the carryover provision, what will the insurer pay?

 

240
500-200=300
300*.8=240

 

 

The Insurance Commissioner’s request for information from an insurance intermediary or other individual licensed under insurance law requires that

 

the individual reply promptly in writing or in any other designated form

 

 

How long can pre-existing conditions be excluded in long-term care policies?

 

6 months

 

 

James has individual health insurance with two different insurers. The “insurance with other insurers” provision states that an insurer can pay benefits on a pro-rata basis if

 

no notification was given to the insurer prior to the claim that the insured has other health coverage

 

 

The insurer is legally protected against actions in which an intermediary and a policyholder

 

acted together to deceive or defraud the company

 

 

All newly issued group disability (accident and health) policies MUST provide coverage for

 

treatment of alcoholism

 

 

Which of the following describes coverage for the Medicare Part B coinsurance?

 

A Medicare Supplement core benefit

 

 

Tonya has been diagnosed with kidney failure and has group accident and health insurance through her large employer. Which of these accident and health plans will be primary during the months following her diagnosis?

 

Her employer’s group accident and health plan

 

 

A licensee whose name or address changes must notify the Commissioner within

 

30 days by written notice

 

 

Who regulates an insurer’s claim settlement practices?

 

State insurance departments

 

 

If an intermediary’s license has been revoked for nonpayment of fees, the EARLIEST the intermediary may apply for reinstatement is

 

immediately after the revocation

 

 

Claims settlement practices of insurers are regulated by:

 

State insurance departments

 

 

Julie is in need of assistance with one or two activities of daily living. She may be eligible for a(n)

 

assisted living facility

 

 

A person who intentionally commits a criminal violation of an insurance law may be subject to a MAXIMUM fine of

 

$5,000

 

 

Health Maintenance Organization (HMO) wellness programs may include each of the following EXCEPT

– stress reduction
– routine physicals
– smoke cessation programs
– diagnostic services

 

 

A policyowner suffers an injury that renders him incapable of performing one or more important job duties. Any decrease in income resulting from this injury would make him eligible for benefits under which provision?

 

Partial disability

 

 

Who may terminate coverage under a cancelable health insurance policy?

 

The insurer or the insured

 

 

Which of the following is NOT one of the 10 essential health benefits that must be provided under a comprehensive health plan under the Affordable Care Act?

– emergency services
– maternity and newborn care
– preventative and wellness services
– an annual CAT scan

 

 

An accident and health insurance policy’s premium requirements are set forth in which of the following provisions?

 

Consideration clause

 

 

Splitting the commission with the buyer on a sale of insurance is known as

 

Rebating

 

 

The standard provisions of an accident and health insurance policy require that the

 

policy, endorsements, and attached papers constitute the “entire contract”

 

 

Emergency health care coverage for Medicare enrollees traveling abroad is

 

a Medicare Supplement additional benefit

 

 

Which of the following incidents would NOT be covered by an Accidental Death and Dismemberment policy?

 

suicide

 

 

Which of the following BEST describes a “partial disability”?

 

Unable to perform one or more job duties

 

 

Julie is an employee with a group health plan that contains the Mandatory Second Surgical Opinion provision. What is to be expected with this provision in place?

 

Out-of-pocket expenses are lower when a second surgical opinion is obtained as opposed to having only one

 

 

Which of these noncontributory group plans would a claim likely result in the payment of federal income taxes?

 

Disability

 

 

A preferred provider plan and an indemnity plan are similar in what way?

 

Both pay on a fee-for-service basis