HEALTH INSURANCE LICENSING EXAM
QUESTIONS WITH CORRECT ANSWERS
Blackout Period - Answer-Social Security pays a benefit to a surviving spouse left to
care for a child under the age of 16. That benefit stops when the child turns 16 and will
not resume until the surviving spouse is at least 60.
Misstatement of Age or Sex Provision - Answer-If the insured's age or sex is misstated
in an application for insurance, the benefit payable is adjusted to what the premiums
paid should have purchased.
Change of Occupation Provision - Answer-This provision is found in health insurance
stating if the insured changes to a more hazardous occupation, benefits are reduced; if
changing to a less hazardous occupation, premiums are reduced.
Fraud - Answer-An act of deceit; concealment or misrepresentation of material fact.
Medicare Supplement Policy - Answer-Health insurance that provides coverage to fill
the gaps on Medicare coverage.
Basic Medical Expense Policy - Answer-Health insurance policy that provides *first
dollar* coverage for specified (and limited) health care, such as hospitalization, surgery,
or physician services. Characterized by limited benefit periods and relatively low
coverage limits.
Own Occupation - Answer-A definition of total disability. The insured must be unable to
work at her own occupation. It is easier for the insured to receive benefits under policies
using this definition.
Aleatory - Answer-Insurance premiums will always be unequal to the benefits received.
Benefits will usually be larger than the premium.
Indemnity Approach - Answer-Payment based on a predetermined, fixed amount for the
medical services provided, regardless of the actual expenses incurred or
reimbursement received from other insurance.
Preferred, Standard, Substandard, or Decline - Answer-The four ways risks are
classified.
Limited Policies - Answer-Restrict benefits to specified accidents or diseases, such as
travel policies, dread disease policies, and so forth. (Ex. HITABCD)
Primary Insurance Amount (PIA) - Answer-Amount equal to a covered worker's full
Social Security retirement benefit or disability benefit.
, Recurrent Disability Provision - Answer-A disability income policy provision that
specifies the period of time during which the reoccurence of a disability is considered a
continuation of a prior disability.
Peril - Answer-The reason for the loss (fire, wind, hail, etc.).
Skilled Nursing Care - Answer-Medical care leading to recovery which is received on a
daily basis.
Open-Panel HMO - Answer-A network of physicians who work out of their own offices
and participate in the HMO on a part-time basis.
Medicare Part B - Answer-Covers physicians and outpatient treatment, subject to a
monthly premium, annual deductible, and coinsurance.
Accidental Means Provision - Answer-Accident policies require that claims must result
from an accident, rather than an illness. For example, a dismemberment policy will not
pay for amputation of a diseased limb.
Corridor Deductible - Answer-In *superimposed* or *comprehensive* major medical
plans, a deductible amount is not required until the insurer has paid coverage under the
*base plan*. The deductible then creates what looks like a corridor between the base
plan and the major medical benefits.
COBRA - Answer-Extends group health coverage to an employee who loses her job for
reasons other than gross misconduct. Coverage may also be extended to family
members who lose coverage for various reasons such as death or divorce.
Any Occupation - Answer-A definition of total disability. The insured must be unable to
perform any job for which he is "reasonably suited by reason of education, training, or
experience." It is more difficult for the insured to collect benefits under this definition.
Long-Term Care - Answer-Refers to the broad range of medical and personal services
for individuals (often the elderly) who need assistance with daily activities for an
extended period of time for chronic illnesses like arthritis, rheumatism, and so forth.
Intermediate Nursing Care - Answer-Medical care leading to recovery which is received
on an occasional basis as opposed to intense, daily care.
Medicare Part A - Answer-Hospitalization insurance that provides specified in-hospital
and related benefits. Hospital admissions are subject to deductible and possible co-
pays.
QUESTIONS WITH CORRECT ANSWERS
Blackout Period - Answer-Social Security pays a benefit to a surviving spouse left to
care for a child under the age of 16. That benefit stops when the child turns 16 and will
not resume until the surviving spouse is at least 60.
Misstatement of Age or Sex Provision - Answer-If the insured's age or sex is misstated
in an application for insurance, the benefit payable is adjusted to what the premiums
paid should have purchased.
Change of Occupation Provision - Answer-This provision is found in health insurance
stating if the insured changes to a more hazardous occupation, benefits are reduced; if
changing to a less hazardous occupation, premiums are reduced.
Fraud - Answer-An act of deceit; concealment or misrepresentation of material fact.
Medicare Supplement Policy - Answer-Health insurance that provides coverage to fill
the gaps on Medicare coverage.
Basic Medical Expense Policy - Answer-Health insurance policy that provides *first
dollar* coverage for specified (and limited) health care, such as hospitalization, surgery,
or physician services. Characterized by limited benefit periods and relatively low
coverage limits.
Own Occupation - Answer-A definition of total disability. The insured must be unable to
work at her own occupation. It is easier for the insured to receive benefits under policies
using this definition.
Aleatory - Answer-Insurance premiums will always be unequal to the benefits received.
Benefits will usually be larger than the premium.
Indemnity Approach - Answer-Payment based on a predetermined, fixed amount for the
medical services provided, regardless of the actual expenses incurred or
reimbursement received from other insurance.
Preferred, Standard, Substandard, or Decline - Answer-The four ways risks are
classified.
Limited Policies - Answer-Restrict benefits to specified accidents or diseases, such as
travel policies, dread disease policies, and so forth. (Ex. HITABCD)
Primary Insurance Amount (PIA) - Answer-Amount equal to a covered worker's full
Social Security retirement benefit or disability benefit.
, Recurrent Disability Provision - Answer-A disability income policy provision that
specifies the period of time during which the reoccurence of a disability is considered a
continuation of a prior disability.
Peril - Answer-The reason for the loss (fire, wind, hail, etc.).
Skilled Nursing Care - Answer-Medical care leading to recovery which is received on a
daily basis.
Open-Panel HMO - Answer-A network of physicians who work out of their own offices
and participate in the HMO on a part-time basis.
Medicare Part B - Answer-Covers physicians and outpatient treatment, subject to a
monthly premium, annual deductible, and coinsurance.
Accidental Means Provision - Answer-Accident policies require that claims must result
from an accident, rather than an illness. For example, a dismemberment policy will not
pay for amputation of a diseased limb.
Corridor Deductible - Answer-In *superimposed* or *comprehensive* major medical
plans, a deductible amount is not required until the insurer has paid coverage under the
*base plan*. The deductible then creates what looks like a corridor between the base
plan and the major medical benefits.
COBRA - Answer-Extends group health coverage to an employee who loses her job for
reasons other than gross misconduct. Coverage may also be extended to family
members who lose coverage for various reasons such as death or divorce.
Any Occupation - Answer-A definition of total disability. The insured must be unable to
perform any job for which he is "reasonably suited by reason of education, training, or
experience." It is more difficult for the insured to collect benefits under this definition.
Long-Term Care - Answer-Refers to the broad range of medical and personal services
for individuals (often the elderly) who need assistance with daily activities for an
extended period of time for chronic illnesses like arthritis, rheumatism, and so forth.
Intermediate Nursing Care - Answer-Medical care leading to recovery which is received
on an occasional basis as opposed to intense, daily care.
Medicare Part A - Answer-Hospitalization insurance that provides specified in-hospital
and related benefits. Hospital admissions are subject to deductible and possible co-
pays.
