NORTH CAROLINA HEALTH INSURANCE
STATE EXAM PREP
2 VERSIONS (A and B) QUESTIONS AND
ANSWERS LATEST UPDATE 2026/2027
VERSION A
All of the following are true regarding Key Employee Disability Income insurance
EXCEPT
A) Premiums are not tax deductible for the employer.
B) Benefits are taxable to the employer.
C) The employer owns the policy.
D) Benefits are paid to the employer to retrain a new person. - CORRECT
ANSWER ✔✔- B) Benefits are taxable to the employer.
Key person disability income premiums are not deductible to the business, but the
benefits are received income tax free by the business.
How is emergency care covered for a member of an HMO?
A) A member of an HMO can receive care in or out of the HMO service area, but
care is preferred in the service area.
B) A member of an HMO may receive care at any emergency facility, at the same
cost as if in his or her own service area.
C) HMOs have salaried member physicians, but they do not cover emergency care.
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,D) An HMO emergency specialist will cover the patient. - CORRECT ANSWER
✔✔- A. A member of an HMO can receive care in or out of the HMO service area,
but care is preferred in the service area.
Emergency care must be provided for the member in or out of the HMO's service
area. If emergency care is being provided for a member outside the service area,
the HMO will be eager to get the member back into the service area so that care
can be provided by salaried member physicians.
After appointing an agent, how long does an insurer have to file with the
Commissioner the form detailing the agent's name, address, and other needed
information?
A) 15 days
B) 30 days
C) 45 days
D) 60 days - CORRECT ANSWER ✔✔- B) 30 days
Insurers have 30 days to file, in a form prescribed by the Commissioner, the
names, addresses, and other information required by the Commissioner for its
newly appointed agents.
Bethany studies in England for a semester. While she is there, she is involved in a
train accident that leaves her disabled. If Bethany owns a general disability policy,
what will be the extent of benefits that she receives? - CORRECT ANSWER ✔✔-
None
Which of the following are the main factors taken into account when calculating
residual disability benefits?
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,a)Present earnings and earnings prior to disability
b)Earnings prior to disability and the length of disability
c)Employee's full-time status and length of disability
d)Present earnings and standard cost of living - CORRECT ANSWER ✔✔-
a)Present earnings and earnings prior to disability
Residual disability will help pay for loss of earnings by making up the difference
between the employee's present earnings and what they were earning prior to
disability.
How can a new physician be added to the PPO's approved list?
a)Fill out the appropriate paperwork and wait the 12 month pre-certification
period.
b)Pay an annual fee for being on the PPO list.
c)New physicians are only added once a year, and are selected by the PPO's Board
of Directors.
d)Agree to follow the PPO standards and charge the appropriate fees. - CORRECT
ANSWER ✔✔- d)Agree to follow the PPO standards and charge the appropriate
fees.
Any physician or hospital that qualifies for and agrees to follow the PPO's
standards and charges the established fees can be added to the PPO's approved list
at any time. The providers may withdraw their name from the list at any time, as
well.
Under the uniform required provisions, proof of loss under a health insurance
policy normally should be filed within
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, a)90 days of a loss.
b)20 days of a loss.
c)30 days of a loss.
d)60 days of a loss. - CORRECT ANSWER ✔✔- a)90 days of a loss.
Under the Uniform Required Provisions, proof of loss under a health insurance
policy normally should be filed within 90 days of a loss.
Which of the following must an insurer obtain in order to transact insurance within
a given state?
a)Business entity license
b)Insurer's license
c)Certificate of authority
d)Producer's certificate - CORRECT ANSWER ✔✔- c)Certificate of authority
All insurers (domestic, foreign, or alien) must obtain a certificate of authority
before transacting insurance within a given state.
According to the Future Increase Option Rider (FIO), which of the following is
NOT a qualifying event to increase an insured's benefit level?
a)Death of a spouse
b)Age 40
c)Marriage
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STATE EXAM PREP
2 VERSIONS (A and B) QUESTIONS AND
ANSWERS LATEST UPDATE 2026/2027
VERSION A
All of the following are true regarding Key Employee Disability Income insurance
EXCEPT
A) Premiums are not tax deductible for the employer.
B) Benefits are taxable to the employer.
C) The employer owns the policy.
D) Benefits are paid to the employer to retrain a new person. - CORRECT
ANSWER ✔✔- B) Benefits are taxable to the employer.
Key person disability income premiums are not deductible to the business, but the
benefits are received income tax free by the business.
How is emergency care covered for a member of an HMO?
A) A member of an HMO can receive care in or out of the HMO service area, but
care is preferred in the service area.
B) A member of an HMO may receive care at any emergency facility, at the same
cost as if in his or her own service area.
C) HMOs have salaried member physicians, but they do not cover emergency care.
1|Page
,D) An HMO emergency specialist will cover the patient. - CORRECT ANSWER
✔✔- A. A member of an HMO can receive care in or out of the HMO service area,
but care is preferred in the service area.
Emergency care must be provided for the member in or out of the HMO's service
area. If emergency care is being provided for a member outside the service area,
the HMO will be eager to get the member back into the service area so that care
can be provided by salaried member physicians.
After appointing an agent, how long does an insurer have to file with the
Commissioner the form detailing the agent's name, address, and other needed
information?
A) 15 days
B) 30 days
C) 45 days
D) 60 days - CORRECT ANSWER ✔✔- B) 30 days
Insurers have 30 days to file, in a form prescribed by the Commissioner, the
names, addresses, and other information required by the Commissioner for its
newly appointed agents.
Bethany studies in England for a semester. While she is there, she is involved in a
train accident that leaves her disabled. If Bethany owns a general disability policy,
what will be the extent of benefits that she receives? - CORRECT ANSWER ✔✔-
None
Which of the following are the main factors taken into account when calculating
residual disability benefits?
2|Page
,a)Present earnings and earnings prior to disability
b)Earnings prior to disability and the length of disability
c)Employee's full-time status and length of disability
d)Present earnings and standard cost of living - CORRECT ANSWER ✔✔-
a)Present earnings and earnings prior to disability
Residual disability will help pay for loss of earnings by making up the difference
between the employee's present earnings and what they were earning prior to
disability.
How can a new physician be added to the PPO's approved list?
a)Fill out the appropriate paperwork and wait the 12 month pre-certification
period.
b)Pay an annual fee for being on the PPO list.
c)New physicians are only added once a year, and are selected by the PPO's Board
of Directors.
d)Agree to follow the PPO standards and charge the appropriate fees. - CORRECT
ANSWER ✔✔- d)Agree to follow the PPO standards and charge the appropriate
fees.
Any physician or hospital that qualifies for and agrees to follow the PPO's
standards and charges the established fees can be added to the PPO's approved list
at any time. The providers may withdraw their name from the list at any time, as
well.
Under the uniform required provisions, proof of loss under a health insurance
policy normally should be filed within
3|Page
, a)90 days of a loss.
b)20 days of a loss.
c)30 days of a loss.
d)60 days of a loss. - CORRECT ANSWER ✔✔- a)90 days of a loss.
Under the Uniform Required Provisions, proof of loss under a health insurance
policy normally should be filed within 90 days of a loss.
Which of the following must an insurer obtain in order to transact insurance within
a given state?
a)Business entity license
b)Insurer's license
c)Certificate of authority
d)Producer's certificate - CORRECT ANSWER ✔✔- c)Certificate of authority
All insurers (domestic, foreign, or alien) must obtain a certificate of authority
before transacting insurance within a given state.
According to the Future Increase Option Rider (FIO), which of the following is
NOT a qualifying event to increase an insured's benefit level?
a)Death of a spouse
b)Age 40
c)Marriage
4|Page
