Life and Health Insurance

A disability income insurance policy was recently issued with a rating. What does this mean?

a. Policyowner will be charged an additional premium 

b. Policy will have specific illnesses excluded from coverage 

c. Policyowner will be charged a reduced premium 

d. Policy will have a longer waiting period

Lamont has a point-of-service plan and is seeking to obtain health services outside the network. What will likely be the end result?

a. Reduction in care given

b. Higher out-of-pocket costs

c. Increase in premiums

d. Denial of specialized services

What does the term "field underwriting" refer to in the health insurance industry?

a. A producer's contact with the applicant 

b. The interaction of an underwriter with the applicant 

c. The medical reports issued by the MIB 

d. An insurer conducting an investigative report

The disability income policy most likely to have been issued on a substandard basis is

a. Non-cancelable with a 60-day elimination period 

b. Conditionally renewable 

c. Non-cancelable with a health condition exclusion rider 

d. Guaranteed renewable with an inflation rider

A health insurance applicant is notified that a physical examination is required. Which of the following statements is correct?

a. Physical examinations are performed at the expense of the applicant 

b. Physical examinations are performed at the expense of the insurer 

c. All applicants for group health insurance require a physical examination 

d. All applicants for health insurance do not require a physical examination

Tim is in need of surgery. Before being hospitalized, he is referred to an outpatient clinic for diagnostic tests. What is this an example of?

a. Pre-admission testing 

b. Capitation 

c. Mandatory second opinion 

d. Concurrent review

Which of the following best describes a point-of-service (POS) plan?

a. A plan which combines medical health care with long-term care coverage 

b. A plan which combines indemnity plan features with those of an HMO 

c. A plan which does not allow treatment with non-network providers 

d. A plan which operates like a PPO plan without a gatekeeper

Which statement is true regarding hospital preadmission certification for emergency situations?

a. Notification is not required for emergency situations 

b. Insured cannot be admitted without preadmission certification 

c. Notification is required to be given before insured is admitted to the hospital 

d. Notification is required to be given after insured is admitted to the hospital

Kyle is an insured who disregarded an accident and health insurance policy provision that requires him to seek a second surgical opinion. What will the end result be?

a. He may be reimbursed for the surgical procedure at a reduced benefit level 

b. He may be reimbursed for the surgical procedure at a higher benefit level 

c. He will have to start paying higher premiums starting with the next billing cycle 

d. He will be ineligible to receive any benefits for this procedure

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?

a. Mandatory second surgical opinions are required when emergency surgery is needed 

b. The second surgical opinion must always be accepted by the insured 

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

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

Which of the following best describes the tax treatment of medical expense policies for the self-employed?

a. 100% of medical expense plan premiums are tax deductible 

b. 50% of medical expense plan premiums are tax deductible 

c. 7.5% of medical expense plan premiums are tax deductible 

d. 0% of medical expense plan premiums are tax deductible

Which of these is NOT a factor during the health insurance underwriting process?

a. Current residence 

b. Physical condition 

c. Occupation 

d. Former residence

Mary is the sole proprietor of her business and has a family health plan. She would like to deduct the premiums from her taxes. What percentage of her premiums are tax deductible?

a. 0% 

b. 50% 

c. 75% 

d. 100%

When a health insurance policy includes a Mandatory Second Surgical Opinion provision, the insured must

a. cover the cost of the second opinion 

b. seek a second opinion for all surgeries 

c. seek a second opinion for specified elective surgeries 

d. seek a second opinion for emergency surgery

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

 a. Accidental death 

b. Blanket health 

c. Major medical 

d. Disability income

The type of health insurance in which underwriting procedures are the most restrictive is

a. Accidental 

b. Individual 

c. Group 

d. Employer-paid

Which of these is a typical result of a concurrent review?

a. The deductible amount is increased 

b. The length of time spent in the hospital is monitored 

c. The insured's premiums usually increase 

d. The coinsurance is waived

Reductions in coverage are one feature of _______ in Health insurance policies.

a. optional provisions 

b. mandatory provisions 

c. cost containment 

d. the insuring clause

Which of the following distinguishes field underwriting from home office underwriting?

a. An agent has no contact with an applicant 

b. An agent has personal contact with an applicant 

c. An agent issues the policy for which the applicant applied

d. There is no difference between field and home office underwriting

A health insurance underwriter will most likely view alcohol abuse as a(n)

a. decreased exposure to risk 

b. increased exposure to risk 

c. condition which cannot be taken into account 

d. condition which results in an automatic rejection for coverage

Which of the following is NOT a basic underwriting action for accident and health insurance?

a. Excluding a particular health condition from coverage 

b. Removing uniform policy provisions 

c. Declining applications 

d. Issuing a policy at standard issue

What is normally the consequence for NOT obtaining preadmission certification prior to receiving inpatient medical care?

a. A reduction in benefits 

b. A delay in the payment of benefits 

c. A cancellation of coverage 

d. A taxation of benefits

An applicant for accident and health insurance has a risk factor that is similar to a majority of the insurer's other applicants. What will be the likely outcome of this applicant?

a. Issued with a below-standard premium rate

b. Issued with a standard premium rate 

c. Issued with an above-standard premium rate 

d. Declined coverage

What does a Mandatory Second Surgical Opinion provision provide to an employer-paid health insurance plan?

a. No pre-existing condition exclusions 

b. Higher employee retention 

c. Containment of the employer's premium cost 

d. Increase in surgical procedures

How is a community rating used for underwriting purposes?

a. Each member of a large group is individually underwritten 

b. Each individual and group plan in the same geographical area is individually underwritten 

c. The same rates are charged for individual and group plans in the same risk category 

d. The same rates are charged for individual and group plans in the same geographical area

Health care costs can be better controlled by utilizing preadmission testing. Preadmission testing can reduce the

a. surgeon's fees 

b. prescription drug charges 

c. length of hospitalization 

d. elimination period

In what situation would disability income insurance premiums be a deductible expense?

a. Partnership paying for group disability income coverage for the partners 

b. Corporation paying for group disability income coverage for its employees 

c. Individual paying for his/her own individual disability policy 

d. Parent paying for a child's individual disability policy

Who must sign a rider attached to a health insurance policy in order for it to be valid?

a. Producer only 

b. Insured only 

c. Insured and producer 

d. Insurance company underwriter

What is a Pap test designed to detect?

a. Cervical cancer 

b. Prostate cancer 

c. Oral cancer 

d. Breast cancer

Which of the following situations would a medical exam NOT be required for an individual health insurance applicant?

a. Applicant was recently hospitalized 

b. Applicant has not had a physical exam in a number of years 

c. Applicant's family members have a history of cancer 

d. Applicant has no prior health insurance

Which of these plans allow a participant to choose either a network or non-network provider at the time when medical care is needed?

a. HMO 

b. Medicare Supplement 

c. Point-of-service 

d. Limited benefit

Which of the following are used by most insurers when determining the premiums for large groups?

a. Large number rating 

b. Group rating 

c. Area rating 

d. Experience rating

Which of the following statements regarding hospital pre-admission authorization is NOT true?

a. No delays for emergency treatment 

b. It encourages weekend admission 

c. Non-emergency situations require notification to the insurance company 

d. Other types of treatment may be encouraged