NJ Health and Accident Insurance Exam 2025
1. Which of the following is NOT considered a type of health insurance policy?
A. Major Medical Insurance
B. Disability Income Insurance
C. Whole Life Insurance
D. Hospital Indemnity Insurance
Correct Answer: C. Whole Life Insurance
Explanation: Whole Life Insurance is a form of life insurance, not health insurance.
2. What is the primary purpose of the coordination of benefits (COB) provision?
A. To reduce overinsurance
B. To increase premium costs
C. To eliminate the need for deductibles
D. To provide unlimited coverage
Correct Answer: A. To reduce overinsurance
Explanation: COB ensures that benefits do not exceed the actual expenses incurred.
3. In New Jersey, how long is the free-look period for individual health insurance
policies?
A. 5 days
B. 10 days
C. 15 days
D. 30 days
Correct Answer: B. 10 days
Explanation: The free-look period allows the policyholder to review and cancel the
policy within 10 days for a full refund.
4. What does the term “elimination period” refer to in disability income insurance?
A. The time between the onset of a disability and the start of benefit payments
B. The time during which premiums are waived
C. The period after benefits cease
D. The maximum benefit period
Correct Answer: A. The time between the onset of a disability and the start of
benefit payments
Explanation: The elimination period acts like a deductible, delaying benefit payments.
,5. Which of the following is true about group health insurance plans?
A. They are only available to employers with more than 100 employees
B. They typically require individual medical underwriting
C. They often provide coverage at a lower cost per person than individual plans
D. They cannot include dependents
Correct Answer: C. They often provide coverage at a lower cost per person than
individual plans
Explanation: Group plans spread risk over a larger pool, reducing per-person costs.
6. What is the main function of the New Jersey Life and Health Insurance Guaranty
Association?
A. To regulate insurance premiums
B. To pay claims if an insurer becomes insolvent
C. To license insurance agents
D. To set minimum coverage standards
Correct Answer: B. To pay claims if an insurer becomes insolvent
Explanation: The Guaranty Association protects policyholders if their insurer fails.
7. Which of the following is NOT typically covered by an accident-only insurance policy?
A. Broken bones from a car accident
B. Hospitalization due to illness
C. Emergency room visits after a fall
D. Accidental dismemberment
Correct Answer: B. Hospitalization due to illness
Explanation: Accident-only policies do not cover sickness or illness.
8. What is the purpose of a deductible in a health insurance policy?
A. To increase the insurer’s liability
B. To reduce the premium cost
C. To eliminate coinsurance
D. To provide unlimited coverage
Correct Answer: B. To reduce the premium cost
Explanation: Deductibles lower the insurer’s risk, which can reduce premiums.
9. Under the Affordable Care Act (ACA), which of the following is considered an
essential health benefit?
A. Cosmetic surgery
B. Pediatric services
,C. Private hospital rooms
D. Experimental treatments
Correct Answer: B. Pediatric services
Explanation: Pediatric services are one of the 10 essential health benefits under the
ACA.
10. In New Jersey, what is the minimum grace period for individual health insurance
policies with monthly premium payments?
A. 7 days
B. 10 days
C. 15 days
D. 31 days
Correct Answer: D. 31 days
Explanation: New Jersey requires a minimum 31-day grace period for monthly premium
payments.
. Employer-sponsored group health insurance provides coverage for which of the
following?
A. Self-inflicted injuries
B. Cosmetic surgery
C. Custodial care
D. Alcoholism
Correct Answer: D. Alcoholism
12. A Medicare supplement policy can be cancelled by the insurer for which reason?
A. Change in health status
B. Nonpayment of premium
C. Age of insured
D. Change in Medicare regulations
Correct Answer: B. Nonpayment of premium
13. Which entity is responsible for regulating insurance advertising in New Jersey?
A. Federal Trade Commission
B. New Jersey Department of Banking and Insurance
C. National Association of Insurance Commissioners
D. Insurance companies
Correct Answer: B. New Jersey Department of Banking and Insurance
14. Which of the following are retained at the expense of an insurance buyer to give
advice on insurance needed by the buyer?
A. Brokers and consultants
B. Insurance prospectors
C. Third-party administrators
D. Agents
Correct Answer: A. Brokers and consultants
, 15. Written notice for a health claim must be given to the insurer within how many days
after the occurrence of the loss?
A. 10 days
B. 20 days
C. 30 days
D. 60 days
Correct Answer: B. 20 days
16. In which of the following situations would the insurer be liable for a loss?
A. The insured skipped a payment beyond the 31-day grace period
B. The insured was injured while participating in an illegal occupation
C. The insured was given a notice of cancellation from the insurer
D. The insured suffered an injury as an innocent bystander during a bank robbery
Correct Answer: D. The insured suffered an injury as an innocent bystander during a
bank robbery
17. When a Medicare supplement policy is purchased during the open enrollment
period, what is true?
A. The policy can be denied for pre-existing conditions
B. The policy must be issued regardless of health status
C. The policy has a waiting period for coverage
D. The policy excludes prescription drugs
Correct Answer: B. The policy must be issued regardless of health status
18. In what form do disability income policies typically pay benefits?
A. Lump sum
B. Periodic income
C. Reimbursement of expenses
D. Medical bills only
Correct Answer: B. Periodic income
19. What is considered to be the primary reason for buying life insurance?
A. Provide retirement income
B. Provide death benefits
C. Pay medical bills
D. Cover property damage
Correct Answer: B. Provide death benefits
20. Which organization is responsible for collecting and sharing adverse medical
information among insurers?
A. National Association of Insurance Underwriters
B. Medical Information Bureau (MIB)
C. National Association of Insurance Commissioners
D. Department of Banking and Insurance
Correct Answer: B. Medical Information Bureau (MIB)
21. In New Jersey, health insurance advertisements are required to contain the:
A. Insurance company's name
B. Agent's license number
C. Policy premium rates
D. Company’s trademark only
1. Which of the following is NOT considered a type of health insurance policy?
A. Major Medical Insurance
B. Disability Income Insurance
C. Whole Life Insurance
D. Hospital Indemnity Insurance
Correct Answer: C. Whole Life Insurance
Explanation: Whole Life Insurance is a form of life insurance, not health insurance.
2. What is the primary purpose of the coordination of benefits (COB) provision?
A. To reduce overinsurance
B. To increase premium costs
C. To eliminate the need for deductibles
D. To provide unlimited coverage
Correct Answer: A. To reduce overinsurance
Explanation: COB ensures that benefits do not exceed the actual expenses incurred.
3. In New Jersey, how long is the free-look period for individual health insurance
policies?
A. 5 days
B. 10 days
C. 15 days
D. 30 days
Correct Answer: B. 10 days
Explanation: The free-look period allows the policyholder to review and cancel the
policy within 10 days for a full refund.
4. What does the term “elimination period” refer to in disability income insurance?
A. The time between the onset of a disability and the start of benefit payments
B. The time during which premiums are waived
C. The period after benefits cease
D. The maximum benefit period
Correct Answer: A. The time between the onset of a disability and the start of
benefit payments
Explanation: The elimination period acts like a deductible, delaying benefit payments.
,5. Which of the following is true about group health insurance plans?
A. They are only available to employers with more than 100 employees
B. They typically require individual medical underwriting
C. They often provide coverage at a lower cost per person than individual plans
D. They cannot include dependents
Correct Answer: C. They often provide coverage at a lower cost per person than
individual plans
Explanation: Group plans spread risk over a larger pool, reducing per-person costs.
6. What is the main function of the New Jersey Life and Health Insurance Guaranty
Association?
A. To regulate insurance premiums
B. To pay claims if an insurer becomes insolvent
C. To license insurance agents
D. To set minimum coverage standards
Correct Answer: B. To pay claims if an insurer becomes insolvent
Explanation: The Guaranty Association protects policyholders if their insurer fails.
7. Which of the following is NOT typically covered by an accident-only insurance policy?
A. Broken bones from a car accident
B. Hospitalization due to illness
C. Emergency room visits after a fall
D. Accidental dismemberment
Correct Answer: B. Hospitalization due to illness
Explanation: Accident-only policies do not cover sickness or illness.
8. What is the purpose of a deductible in a health insurance policy?
A. To increase the insurer’s liability
B. To reduce the premium cost
C. To eliminate coinsurance
D. To provide unlimited coverage
Correct Answer: B. To reduce the premium cost
Explanation: Deductibles lower the insurer’s risk, which can reduce premiums.
9. Under the Affordable Care Act (ACA), which of the following is considered an
essential health benefit?
A. Cosmetic surgery
B. Pediatric services
,C. Private hospital rooms
D. Experimental treatments
Correct Answer: B. Pediatric services
Explanation: Pediatric services are one of the 10 essential health benefits under the
ACA.
10. In New Jersey, what is the minimum grace period for individual health insurance
policies with monthly premium payments?
A. 7 days
B. 10 days
C. 15 days
D. 31 days
Correct Answer: D. 31 days
Explanation: New Jersey requires a minimum 31-day grace period for monthly premium
payments.
. Employer-sponsored group health insurance provides coverage for which of the
following?
A. Self-inflicted injuries
B. Cosmetic surgery
C. Custodial care
D. Alcoholism
Correct Answer: D. Alcoholism
12. A Medicare supplement policy can be cancelled by the insurer for which reason?
A. Change in health status
B. Nonpayment of premium
C. Age of insured
D. Change in Medicare regulations
Correct Answer: B. Nonpayment of premium
13. Which entity is responsible for regulating insurance advertising in New Jersey?
A. Federal Trade Commission
B. New Jersey Department of Banking and Insurance
C. National Association of Insurance Commissioners
D. Insurance companies
Correct Answer: B. New Jersey Department of Banking and Insurance
14. Which of the following are retained at the expense of an insurance buyer to give
advice on insurance needed by the buyer?
A. Brokers and consultants
B. Insurance prospectors
C. Third-party administrators
D. Agents
Correct Answer: A. Brokers and consultants
, 15. Written notice for a health claim must be given to the insurer within how many days
after the occurrence of the loss?
A. 10 days
B. 20 days
C. 30 days
D. 60 days
Correct Answer: B. 20 days
16. In which of the following situations would the insurer be liable for a loss?
A. The insured skipped a payment beyond the 31-day grace period
B. The insured was injured while participating in an illegal occupation
C. The insured was given a notice of cancellation from the insurer
D. The insured suffered an injury as an innocent bystander during a bank robbery
Correct Answer: D. The insured suffered an injury as an innocent bystander during a
bank robbery
17. When a Medicare supplement policy is purchased during the open enrollment
period, what is true?
A. The policy can be denied for pre-existing conditions
B. The policy must be issued regardless of health status
C. The policy has a waiting period for coverage
D. The policy excludes prescription drugs
Correct Answer: B. The policy must be issued regardless of health status
18. In what form do disability income policies typically pay benefits?
A. Lump sum
B. Periodic income
C. Reimbursement of expenses
D. Medical bills only
Correct Answer: B. Periodic income
19. What is considered to be the primary reason for buying life insurance?
A. Provide retirement income
B. Provide death benefits
C. Pay medical bills
D. Cover property damage
Correct Answer: B. Provide death benefits
20. Which organization is responsible for collecting and sharing adverse medical
information among insurers?
A. National Association of Insurance Underwriters
B. Medical Information Bureau (MIB)
C. National Association of Insurance Commissioners
D. Department of Banking and Insurance
Correct Answer: B. Medical Information Bureau (MIB)
21. In New Jersey, health insurance advertisements are required to contain the:
A. Insurance company's name
B. Agent's license number
C. Policy premium rates
D. Company’s trademark only
