Kansas Insurance Practice Exam Answers

Kansas Insurance Practice Exam Answers

 

The consideration clause in an accident and health policy states the

 

applicant pays the initial premium

 

 

Which of the following reports may include information obtained by a telephone call to the proposed insured?

 

Inspection report

 

 

Health insurance policies are offered on a “take it or leave it” basis and referred to as

 

Contracts of Adhesion

 

 

The insurance policy clause that identifies the contracting parties and defines the scope and limits of coverage is called

 

Insuring clause

 

Which of the following statements is CORRECT about a Waiver of Premium provision in a Disability Income Policy?

 

It allows the insured to maintain a policy in force while disabled and unable to pay premiums.

 

 

The coordination of benefits clause found in group health master contracts is used to

 

avoid double payment of benefits to an insured who has duplicate group coverages

 

 

Which of the following provisions designates to whom claim payments are made?

 

Payment of Claims

 

Medicare supplement policies are primarily designed to

 

provide additional benefits beyond those provided by Medicare

 

A married insured has an AD&D policy that names his brother as the primary beneficiary and his son as the contingent beneficiary. If the insured and his brother are both killed instantly in a train accident, the policy proceeds would be paid to which of the following?

 

The insured’s son

 

Group health insurance specifies that what percentage of eligible individuals MUST be offered coverage under a noncontributory plan?

 

100

 

Under a Guaranteed Renewable Accident and Health policy, an insurer retains the right to

 

increase the premium rate for an entire class of insureds

 

 

A group long-term disability plan is integrated with SS when which of the following statements is CORRECT?

 

Social Security and group benefits pay a combined maximum limit.

 

On June 1, S purchased a major medical policy and paid the initial premium to producer T. Only July 1, Producer T received the policy from the insurance company. The policy contained a Ten-Day Free Look provision. On July 3, Producer T attempted to deliver the policy but found that S was not at home. On July 5, T was able to deliver the policy to S. On July 7, S decided he did not want the policy. S had 10 days from which day?

 

July 5

 

The purpose of the MIB is to

 

share medical data among member companies

 

What law requires an insurer to notify an applicant in writing that an investigative consumer report may be made on the applicant?

 

Fair Credit Reporting Act

 

What definition MOST accurately describes the Probationary Period?

 

The waiting period a new hire must satisfy prior to becoming eligible for group health coverage

 

An insurer must provide claim forms to an insured within a MAXIMUM of how many days after receiving notice of an Accident & Health Claim?

 

Fifteen

 

Under a group health plan, an employer may offer additional benefits to classes of employees on the basis of all of the following factors except

 

Gender

 

What definition of disability would cover a permanent partial disability?

 

Residual disability

 

Which of the following statements is CORRECT about a disability income policy with a Guaranteed Insurability rider?

 

The insured may periodically increase the amount of benefits payable under the policy

 

The IRS considers disability income benefits paid under an employer-paid group disability income to be

 

fully taxable

 

M and N own a small interior design studio that employs six people. The owners are concerned about the financial continuation of the business if either of them should become permanently disabled. In this situation, a producer would MOST likely recommend what contract?

 

Disability Buy-Out

 

What statement is correct about coinsurance

 

it helps control over-utilization of benefits

 

5 years ago, at age 45, X stated that he was 40 years old on a disability income insurance application. X now submits a claim and the insurer discovers X’s true age. The insurer will most likely take which of the following actions?

 

Adjust the benefits downward according to the benefits that X would have been entitled to based on the premiums.

 

An insured becomes disabled three years after his Disability Income Policy is issued. The disability is caused by a condition that existed prior to the policy issue date but was not specifically excluded from coverage. In this situation, the insurer will most likely take which action?

 

Pay the full claim

 

Element required on a contract

 

Assignment

 

An individual who has had a heart murmur since birth is likely to be issued an individual disability policy that includes

 

an Exclusionary/ Impairment rider

 

Medicare Part A covers which of the following expenses?

 

Hospital room and board

 

When periodic claim payments are required under a long-term disability income policy, an insurer MUST make payments to an insured at least once every

 

month

 

The PRIMARY purpose of medicaid is to

 

provide Medical Expense coverage to persons meeting certain minimum income requirements

 

A health care plan that reimburses a flat fee for medical care it provides at a clinic it owns and operates is referred to as

 

Health Maintenance Organization

 

Under an AD&D policy, insurable interest must exist at what time?

 

At the inception of the policy

 

J has a physical impairment, attends school, and is incapable of self-sustaining employment and/or self care. What statement is CORRECT about J’s medical coverage under J’s fathers group plan?

 

J’s coverage continues as long as J is continually incapacitated and is financially dependent on J’s father

 

What type of provision guarantees renewability to a specified date or age unless certain specified events occur?

 

Conditionally Renewable

 

A precertification review prior to a nonemergency hospitalization is an example of

 

managed care

 

Under the Claims Forms provision of a health policy, if the insurance company fails to send out the claim forms within the time period required by the provision, the insured should

 

submit the claim in any form, which must be accepted by the company as adequate proof of loss

 

In which of the following health policies are both the renewability and the premiums guaranteed?

 

Noncancellable

 

A disability income policy may provide benefits for what loss?

 

Residual Disability

 

An A&H policy Notice of Claim provision requires that an insures give written notice to the insurer within a MAXIMUM of how many days after a loss?

 

20

 

Which of the following health policies requires a beneficiary designation

 

Travel Accident

 

In an AD&D policy, the term “capital sum” refers to

 

a lump sum payment made for an accidental dismemberment

 

The SS program provides all of the following benefits except

 

workers compensation

 

An insured whose disability income policy contains a change of occupation clause takes a new job in a more hazardous occupation and fails to notify the insurer of the change. One year later, the insured becomes disabled. The insurer will most likely take which of the following actions?

 

Settle the claim according to what the premiums would have purchased under the more hazardous occupation

 

When delivering a policy to a client, a producer should take all of the following actions except

 

keep the policy in the producers office for safe-keeping on behalf of the client

 

The Elimination Period in most Disability Income policies applies

 

to each separate disability

 

An application for insurance submits an application to an insurer for underwriting but does not forward any premium payment with the application. Legally, the applicant is making

 

an inquiry for an offer

 

Suicide, pre-existing conditions and self-inflicted injuries are dealt with in what policy feature

 

Exclusions

 

A producer and an applicant complete an application for a health policy and submit it to the insurer for underwriting w/o any premium. The underwriter issues a policy and mails it to the producer for delivery to the applicant. The producer should take all of the following actions except

 

issue a conditional receipt

 

An eligible expenses provision in a comprehensive major medical policy commonly identifies all of the following types of covered health care services except

 

experimental and investigative services

 

Which of the following provisions explains that a producer does not have the authority to waive the provisions of an insurance contract

 

entire contract

 

The major difference between a mutual insurer and a stock insurer is the

 

form of ownership each company is permitted

 

An individual who, for the purpose of collection premiums, acts for another in negotiating a contract of insurance is considered to be

 

a producer

 

Which of the following statements is CORRECT about medicare supplement coverage

 

duplication of Medicate benefits is specifically prohibited

 

A group policy issued to a newspaper or other publisher to cover its carriers is referred to as which of the following types of policies

 

Blanket A&H

 

Which of the following statements is CORRECT about health coverage for an insureds newborn child?

 

It is provided without notice or additional payment for 31 days after birth

 

A claim for a pre-existing condition may NOT be denied after a major medical policy has been in effect for a minimum of

 

2 years

 

An individual may obtain a temporary insurance license producers license without passing the licensing examination if the individual

 

is a deceased licensed producers next of kin

 

Credit A&H insurance MUST provide coverage for a loss caused by

 

disability

 

Which of the following persons is authorized to enforce state insurance laws?

 

The insurance commissioner

 

An insurer doing business in this state must operate under

 

a certificate of authority

 

Any company that furnishes health care services to enrolled members in return for a fixed sum of prepaid premium is defined as

 

a health maintenance organizer

 

which of the following situations is considered rebating?

 

a producer returns a portion of a commission to the insured.

 

Each long term care policy must state that the applicant has the right to return the policy and have the premium refunded if the applicant is not satisfied for any reason within 10 days of the date that the

 

policy was delivered to the applicant

 

An individual appointed by an insurer to solicit applications for a policy of insurance on its behalf is known as

 

an insurance producer

 

When taking an application for a medicare supplement policy, a producer must provide the applicant with

 

an outline of coverage

 

An insurance producer who makes false statements that harm the reputation of another insurer is guilty of

 

defamation

 

Which of the following statements is prohibited in A&H insurance advertisements

 

“This plan is accredited by an agency of the federal government”

 

A producer may be guilty of misrepresentation if the producer:

 

tells an insured the deductible on a policy is less than it actually is

 

In order for nonresident applicants to be eligible for an insurance producer license in this state, they MUST:

 

hold a like license in another state

 

Which of the following statements is correct about insurance producers who fail to satisfy the continuing education requirements

 

their license will be terminated

 

The insurance commissioner may revoke or suspend a producers license if the producer

 

has forged another persons name on an insurance application

 

The Insurance Commissioner may examine the records of an insurer at which times?

 

at any time the insurance commissioner sees fit

 

Under a group health policy, an employee who has been covered under a company’s group health plan for 6 months and is terminated for cause MUST be permitted to

 

continue the group coverage by paying the required premium

 

An insurer formed under the law of a state of the United States other than the state where it is licensed, domiciled and chartered is:

 

a foreign company

 

Controlled business is defined as insurance a producer writes on all of the following individuals EXCEPT the producers

 

neighbors

 

In life insurance, the Free Look provision begins on the

 

policy deliver date

 

An insurance producer takes an application for a life insurance policy but does not collect the initial premium. On delivery of the policy to the proposed insured, the producer must collect the initial premium and which of the following?

 

The insureds signed statement of continued good health

 

The primary purpose of an inspection report is to assess an applicants

 

personal characteristics

 

A life policy is usually contestable due to material misrepresentation on the application for a period of:

 

2 years

 

 

A contract that has as its basic function the systematic liquidation of accumulated assets through periodic payments is called

 

annuity

 

if an insured commits suicide after the suicide clause in the insureds life insurance policy has expired, the insurer will take which of the following actions?

 

Pay the death benefit

 

A producer takes applications from identical twins who want to buy the same type of policy in the same amount. The insurer issues the policies as applied for, but charges a 25% higher premium for one of the policies. The difference in premiums is probably due to which of the following factors?

 

Risk Classification

 

Which of the following group life plans requires at least 75% of the eligible members to participate?

 

Contributory

 

In the event of an insured’s death, which of the following provides an income for the family during a designated period of time followed by a lump sum death benefit?

 

Family income ride

 

Which of the following annuities would best suit the needs of a 35 year old factory worker who is concerned about inflation and wants to establish a retirement plan

 

a flexible premium variable annuity

 

When a producer submits an insurance application to the company, the producer must take all of the following actions EXCEPT

 

submit a completed medical information report

 

Which of the following statements is CORRECT about group life conversion privileges

death during the conversion period is covered even if the departing employee chose not to convert

 

the policy

 

The primary reason for selecting a variable whole life policy instead of a traditional whole life policy is that the variable whole life policy

 

has the potential to earn a higher rate of return on the cash value

 

Under the Social Security Retirement benefits, all of the following factors will influence how much a retiring individual will receive as a monthly income benefit except the individuals

 

sex

 

which of the following policy provisions states that the application is part of the policy

 

entire contract

 

if life insurance policy applicant is classified as a substandard risk, the insurance company will MOST likely

 

charge an extra premium

 

The right to change a beneficiary designation is reserved for the

 

policy owner

 

If an applicant for life insurance submits a completed application to a producer without paying the first premium, coverage becomes effective when the

 

policy is delivered and the premium paid

 

If a policy contains a Guaranteed Insurability rider, the insured has the right to purchase:

 

additional coverage whenever the insured changes jobs

 

The Waiver of Premium provision of a life policy allows the insurer to take which of the following actions?

 

Waive an insureds premiums if the insured becomes totally disabled before a certain age

 

An employer can deduct premium payments as an ordinary business expense for which of the following life coverages?

 

Group

 

A client needs a substantial amount of protection but has limited financial resources. Which of the following insurance policies would BEST meet the client’s needs?

 

Term Life

 

What refers to the transfer of some or all of the ownership rights of a life insurance policy from one individual to another

 

Assignment

 

A payor benefit rider provides which of the following benefits?

 

A temporary waiver of premium should the payor die, until the insured reaches a predetermined age

 

 

What retirement plan is tax-qualified

 

defined contribution