North Carolina Health Insurance License Test 2025
Preparation Test Bank With 200 Questions and Correct
Detailed Answers for Actual Exam Practice| NC Health
Insurance Exam Prep Test Bank (Latest)
Question 1
What is the primary purpose of a deductible in a health insurance policy?
A) To increase the insurance company's profit margin.
B) To reduce the insured's monthly premium.
C) To discourage unnecessary medical care and share costs with the insured.
D) To cover expenses not typically paid by the insurer.
E) To determine the maximum out-of-pocket expenses for the insured.
Correct Answer: C) To discourage unnecessary medical care and share costs
with the insured
Rationale: A deductible is the amount of money the insured must pay
out-of-pocket before the insurance company begins to pay for
medical expenses. Its purpose is to reduce moral hazard by making
the insured share in the cost of care and thus potentially reduce
unnecessary utilization.
Question 2
In North Carolina, which type of health insurance plan typically requires
policyholders to choose a primary care physician (PCP) within its network and
obtain referrals for specialists?
A) Preferred Provider Organization (PPO)
B) Exclusive Provider Organization (EPO)
C) Health Maintenance Organization (HMO)
D) Point of Service (POS)
E) Indemnity Plan
Correct Answer: C) Health Maintenance Organization (HMO)
Rationale: HMOs are characterized by requiring members to select a
PCP from the network who then acts as a gatekeeper, providing
referrals to specialists within the plan's network. Out-of-network
care is generally not covered, except in emergencies.
,Question 3
Which term refers to the monthly fee paid to an insurance company for
health coverage?
A) Deductible
B) Coinsurance
C) Copayment
D) Premium
E) Claim
Correct Answer: D) Premium
Rationale: A premium is the amount an individual or group pays to an
insurance company for active coverage. It's typically a monthly
payment.
Question 4
In North Carolina, what is the maximum amount an insured will pay out-of-
pocket for covered medical expenses in a given year, after which the
insurance company pays 100% of remaining covered costs?
A) Deductible
B) Coinsurance
C) Copayment
D) Premium
E) Out-of-pocket maximum
Correct Answer: E) Out-of-pocket maximum
Rationale: The out-of-pocket maximum (or limit) is the most an
insured will have to pay for covered services in a plan year. Once
this limit is reached, the health plan pays 100% of the allowed
amount for covered benefits.
Question 5
Which federal law allows employees to continue their health insurance
coverage for a limited time after certain qualifying events, such as job loss or
reduction in hours?
,A) HIPAA (Health Insurance Portability and Accountability Act)
B) ACA (Affordable Care Act)
C) COBRA (Consolidated Omnibus Budget Reconciliation Act)
D) ERISA (Employee Retirement Income Security Act)
E) Medicare
Correct Answer: C) COBRA (Consolidated Omnibus Budget Reconciliation Act)
Rationale: COBRA gives workers and their families who lose their
health benefits the right to choose to continue group health
benefits provided by their group health plan for limited periods of
time under certain circumstances such as voluntary or involuntary
job loss, reduction in the hours worked, transition between jobs,
death, divorce, and other life events.
Question 6
What is the primary purpose of underwriting in health insurance?
A) To process claims efficiently.
B) To market insurance products to potential clients.
C) To assess and classify risk, and determine eligibility and premium rates.
D) To provide customer service to policyholders.
E) To manage investment portfolios for the insurance company.
Correct Answer: C) To assess and classify risk, and determine eligibility and
premium rates
Rationale: Underwriting is the process by which an insurance
company evaluates the risk of insuring a particular person or group.
It involves assessing health status, lifestyle, and other factors to
determine if coverage should be offered and at what premium rate.
Question 7
In North Carolina, which of the following is an example of a "cost-sharing"
provision in a health insurance plan?
A) Premium
B) Deductible
, C) Copayment
D) Coinsurance
E) All of the above
Correct Answer: E) All of the above
Rationale: Cost-sharing refers to the portion of medical expenses that
the insured is responsible for paying. This includes deductibles,
copayments, and coinsurance. Premiums are the cost of having the
insurance, but not directly a cost of using medical services.
Question 8
Which government program provides health insurance primarily to
individuals aged 65 or older, and younger people with certain disabilities?
A) Medicaid
B) CHIP (Children's Health Insurance Program)
C) Medicare
D) TRICARE
E) Affordable Care Act (ACA) Marketplace
Correct Answer: C) Medicare
Rationale: Medicare is a federal health insurance program for people
65 or older, certain younger people with disabilities, and people
with End-Stage Renal Disease.
Question 9
In North Carolina, when a health insurance policyholder pays a fixed dollar
amount for a covered service (e.g., $20 for a doctor's visit) at the time of
service, this is known as a:
A) Deductible
B) Coinsurance
C) Copayment
D) Premium
E) Service fee
Correct Answer: C) Copayment
Preparation Test Bank With 200 Questions and Correct
Detailed Answers for Actual Exam Practice| NC Health
Insurance Exam Prep Test Bank (Latest)
Question 1
What is the primary purpose of a deductible in a health insurance policy?
A) To increase the insurance company's profit margin.
B) To reduce the insured's monthly premium.
C) To discourage unnecessary medical care and share costs with the insured.
D) To cover expenses not typically paid by the insurer.
E) To determine the maximum out-of-pocket expenses for the insured.
Correct Answer: C) To discourage unnecessary medical care and share costs
with the insured
Rationale: A deductible is the amount of money the insured must pay
out-of-pocket before the insurance company begins to pay for
medical expenses. Its purpose is to reduce moral hazard by making
the insured share in the cost of care and thus potentially reduce
unnecessary utilization.
Question 2
In North Carolina, which type of health insurance plan typically requires
policyholders to choose a primary care physician (PCP) within its network and
obtain referrals for specialists?
A) Preferred Provider Organization (PPO)
B) Exclusive Provider Organization (EPO)
C) Health Maintenance Organization (HMO)
D) Point of Service (POS)
E) Indemnity Plan
Correct Answer: C) Health Maintenance Organization (HMO)
Rationale: HMOs are characterized by requiring members to select a
PCP from the network who then acts as a gatekeeper, providing
referrals to specialists within the plan's network. Out-of-network
care is generally not covered, except in emergencies.
,Question 3
Which term refers to the monthly fee paid to an insurance company for
health coverage?
A) Deductible
B) Coinsurance
C) Copayment
D) Premium
E) Claim
Correct Answer: D) Premium
Rationale: A premium is the amount an individual or group pays to an
insurance company for active coverage. It's typically a monthly
payment.
Question 4
In North Carolina, what is the maximum amount an insured will pay out-of-
pocket for covered medical expenses in a given year, after which the
insurance company pays 100% of remaining covered costs?
A) Deductible
B) Coinsurance
C) Copayment
D) Premium
E) Out-of-pocket maximum
Correct Answer: E) Out-of-pocket maximum
Rationale: The out-of-pocket maximum (or limit) is the most an
insured will have to pay for covered services in a plan year. Once
this limit is reached, the health plan pays 100% of the allowed
amount for covered benefits.
Question 5
Which federal law allows employees to continue their health insurance
coverage for a limited time after certain qualifying events, such as job loss or
reduction in hours?
,A) HIPAA (Health Insurance Portability and Accountability Act)
B) ACA (Affordable Care Act)
C) COBRA (Consolidated Omnibus Budget Reconciliation Act)
D) ERISA (Employee Retirement Income Security Act)
E) Medicare
Correct Answer: C) COBRA (Consolidated Omnibus Budget Reconciliation Act)
Rationale: COBRA gives workers and their families who lose their
health benefits the right to choose to continue group health
benefits provided by their group health plan for limited periods of
time under certain circumstances such as voluntary or involuntary
job loss, reduction in the hours worked, transition between jobs,
death, divorce, and other life events.
Question 6
What is the primary purpose of underwriting in health insurance?
A) To process claims efficiently.
B) To market insurance products to potential clients.
C) To assess and classify risk, and determine eligibility and premium rates.
D) To provide customer service to policyholders.
E) To manage investment portfolios for the insurance company.
Correct Answer: C) To assess and classify risk, and determine eligibility and
premium rates
Rationale: Underwriting is the process by which an insurance
company evaluates the risk of insuring a particular person or group.
It involves assessing health status, lifestyle, and other factors to
determine if coverage should be offered and at what premium rate.
Question 7
In North Carolina, which of the following is an example of a "cost-sharing"
provision in a health insurance plan?
A) Premium
B) Deductible
, C) Copayment
D) Coinsurance
E) All of the above
Correct Answer: E) All of the above
Rationale: Cost-sharing refers to the portion of medical expenses that
the insured is responsible for paying. This includes deductibles,
copayments, and coinsurance. Premiums are the cost of having the
insurance, but not directly a cost of using medical services.
Question 8
Which government program provides health insurance primarily to
individuals aged 65 or older, and younger people with certain disabilities?
A) Medicaid
B) CHIP (Children's Health Insurance Program)
C) Medicare
D) TRICARE
E) Affordable Care Act (ACA) Marketplace
Correct Answer: C) Medicare
Rationale: Medicare is a federal health insurance program for people
65 or older, certain younger people with disabilities, and people
with End-Stage Renal Disease.
Question 9
In North Carolina, when a health insurance policyholder pays a fixed dollar
amount for a covered service (e.g., $20 for a doctor's visit) at the time of
service, this is known as a:
A) Deductible
B) Coinsurance
C) Copayment
D) Premium
E) Service fee
Correct Answer: C) Copayment
