Insurance MCQ

How may an insurer pay a claim settlement? a. The Actual Cash Value only b. The insurer may pay to repair, to replace, or pay the Actual Cash Value c. The cost to repair only d. The cost to replace only Answer: B

The notification for cancelling a homeowner's policy requires which of the following? a. 45 days notification b. 90 days notification c. 60 days notification d. 30 days notification Answer: A

In which situation can the insurer not settle a lawsuit without the permission of the insured? a. When the insured is covered under an Errors and Omissions policy. b. When the insured is guilty. c. When the lawsuit is for more than the policy limits. d. When the insured is covered under a property policy. Answer: A

Vicarious Liability arises out of which type of negligence? a. Strict Negligence b. Proximate Cause c. Absolute Negligence d. Imputed Negligence Answer: D

When more than one company insures a risk, how is a claim paid? a. Limit of liability b. Excess insurance c. Primary insurance d. Pro rata Answer: D

Which section of the insurance policy identifies the insurance company's responsibilities? a. Exclusions & Endorsements b. Conditions c. Declarations d. Insuring Agreement Answer: D

Which of the following are NOT part of the insured's duties after a loss? a. Provide proof of loss. b. Pay for a police investigation into the loss. c. Take reasonable steps to prevent further loss. d. Fully cooperate with the insurance investigation, settlement, or defense of a claim. Answer: B

Which of the following federal laws provides a backstop for defined acts of terrorism and imposes certain obligations on insurers? a. Terrorism Risk Insurance Act of 2002 b. Fair Credit Reporting Act c. Gramm Leach Bliley Act d. Workers Compensation Act Answer: A

Which legal doctrine states that an individual can be held liable even if negligence does not exist or cannot be proven? a. Absolute/Strict Liability b. Employer Liability c. Proximate Cause d. Vicarious Liability Answer: A

Which of the following is the best description of subrogation? a. The insurer has the responsibility to defend the insured against lawsuits or liability claims. b. The insurer has the right to pursue legal action against a third party who is liable for a loss that has been paid to an insured by the insurer. c. The insured cannot declare something a total loss and turn it over to the insurer and demand payment without the insurer's consent. d. The insurer can change the same type of policy the insured owns in any way, providing for more coverage without additional premium. The insured's original policy will be extended for those coverages without need for additional forms or premium. Answer: B

Which of the following individuals/groups CAN be held negligent? a. The mentally ill b. A college student c. Charitable institutions d. Infants Answer: B

The Standard Fire Policy insures against all of the following perils except: a. lightning. b. removal of property to protect from further damage. c. fire. d. hail. Answer: D

Which of the following best describes statutes of limitations? a. The injured party would collect damages even if he/she had contributory negligence. b. The time limit set on how long an injured person can sue the insurer for damages c. The defendant who is least at fault is not required to pay for any of the damages. d. Any defendant who is partly at fault must pay in proportion to their share of the fault. Answer: B

Which of the following best describes Proximate Cause? a. Employers being held liable for the negligent acts of employees while those employees are acting within the scope of their employment b. An event in which one individual becomes liable for the negligent behavior of another c. An event considered to be the primary cause of a loss d. A legal doctrine that states that an individual can be held liable even if negligence does not exist or cannot be proven Answer: C

An act of terrorism must be certified as such by: a. The President of The United States. b. The U.S. Secretary of the Treasury, as approved by the U.S. Congress. c. The U.S. Secretary of the Treasury, the Secretary of State and the U.S. Attorney General. d. The Secretary of State and the U.S. Attorney General. Answer: C

Alice's insurance policy only provides coverage for the perils specifically listed in her policy. What type of policy does she have? a. Named Peril Policy b. Special Peril Policy c. Open Peril Policy d. Title Peril Policy Answer: A

Which of the following is an example of Experience Rating? a. Separating risks into category groupings or classes b. Evaluating the individual risk to determine probability of loss, the extent of that possible loss, and the premium that would need to be charged to cover any possible claims c. Taking the individual's past three years of risk history and comparing it to the average claim experience for similar risks d. Modifying a manual rating by taking the individual's risk into account Answer: C

Before Shelly's insurance will pay for her loss, she has to pay a small amount toward the loss. This amount is known as: a. Primary insurance b. Limit of liability c. Excess insurance d. The deductible Answer: D

With what coverage does the federal government share the risk of loss due to Acts of War? a. Life Insurance b. Workers' Compensation c. Liability Insurance d. Property Insurance Answer: B

The Dwelling Under Construction form is also known as: a. Builder's Risk Form b. Road Theft c. Automatic Increase d. Major Coverages Answer: A

Which form of a Builder's Risk policy is best described as determining the amount of coverage based on the projected value of the building when it is completed? a. Personal liability form b. Pro rata form c. Reporting form d. Completed value form Answer: D

How long must the premises be vacant before Vandalism and Malicious Mischief (V&MM) is no longer applicable? a. 15 consecutive days b. 45 consecutive days c. 90 consecutive days d. 30 consecutive days Answer: D

Which of the following is NOT covered under the Dwelling Basic Form (DP-1)? a. The eight (8) extended coverage perils b. Vandalism and malicious mischief c. Earthquake d. The three (3) standard fire perils Answer: C

In which of the following situations could a Dwelling Policy form not be used? a. There is only one family living in the building, and the wife does hairstyling in the basement. b. There are three families, and two of them have a non-family member living with them c. The owner does not live in the building. d. Five families live in the building, but there are no boarders. Answer: D

Which of the following situations would NOT be excluded from coverage in a DP-1 form policy? a. The building falls into a sinkhole that was located under it. b. The home next door to the insured building catches fire and the resulting smoke causes damage to the insured building. c. The building has been vacant for 40 days. d. A flood causes damage to the building's basement. Answer: B

The Fair Rental Value coverage form provides which of the following? a. It covers the cost of finding a new renter once repairs from a covered peril have been made. b. It covers the loss of rents due to covered damage to the rented property. c. It covers the hotel costs for the renters. d. It covers the repairs to a rented property. Answer: B

Jim and Barb own a rental house and insure it under a DP-2 policy. Which of the following situations would NOT be covered? a. A hailstorm damages the roof of the building. b. Children playing baseball in the lot next door hit a ball through the front window of the house. c. A factory next door to the building spills chemicals that get into the drinking water of the insured building. d. The kitchen ceiling caves in under the pressure of snow after a severe snowstorm. Answer: C

Broad Theft does not cover which of the following? a. 15 foot Sailboats b. Vandalism to the premises interior c. Malicious mischief d. Paintings Answer: A

How long does the insured have to bring legal action against the insurer? a. Two (2) years b. Five (5) years c. There is no limit of time. d. One (1) year Answer: A

The RWE Safe Condominium Association is sued for liability damages when a visitor drowns in the association's pool. The amount of damages awarded is above the liability limits of the association's policy. Which of the following would give the individual association owners coverage for their share of the amount in excess of the association's policy? a. Liability coverage b. Replacement cost c. Additional living expense d. Loss assessment Answer: D

Which of the following perils is NOT covered by an Special Peril/Open Peril policy? a. Artificially generated currents b. Weight of ice, snow, and sleet c. Any specifically excluded in the policy d. Glass breakage Answer: C

Under what basis is personal property covered under an HO-3 policy? a. Open Peril b. Special Peril c. Named Peril d. Contingency Peril Answer: C

Ray has an HO-5 all-risk policy. He came home one day to find his house burglarized with $800 stolen. If Ray had a $500 deductible, how much would the insurer pay to indemnify him? a. $550 b. $0 c. $800 d. $300 Answer: B

Gene and Dee have an HO-3 policy with the building insured for $100,000. How much coverage of personal property do Dee and Gene have for property they keep stored at a second residence they own? a. $250 b. $0 c. $10,000 d. $1,000 Answer: B

Which of the following perils would NOT be covered under an HO-2? a. Eight (8) extended coverage perils b. Burglary c. Three (3) standard fire perils d. All are covered. Answer: D

In which of the following situations would a condo owner be best suited for a renters' policy rather than a condo policy? a. The condo's association covers just the common areas. b. The condo's association covers all parts of or attachments to the building. c. The condo's association covers just the exterior walls. d. A condo owner would never want a renter's policy. Answer: B

How long will Coverage D- Loss of Use be available to the insured? a. Payment will last 30 days, regardless of the actual time to repair or replace. b. Payment will be for the shortest time required to repair, replace, or for the household to settle elsewhere. c. Payment will last 15 days, regardless of the actual time to repair or replace. d. Payment will last 60 days, regardless of the actual time to repair or replace. Answer: B

Pritika and Allan bought a home built in the 1880's in a small town for $85,000 that would cost $235,000 to rebuild if destroyed because of the ornate molding and windows. What type of Homeowners policy would BEST cover their needs if Pritika and Allan would be willing to rebuild the home with functionally equivalent materials and modern techniques? a. HO-3 b. HO-5 c. HO-2 d. HO-8 Answer: D

The Controlled Substance exclusion is best described as which of the following? a. Bodily injury or property damage arising out of the transmission of a communicable disease by the insured b. Liability to an insured's employee, which should be covered by Workers' Comp c. Bodily injury or property damage arising out of the sale, manufacture, delivery, transfer, or possession of any person legitimately using prescription drugs under the care of a licensed physician d. Bodily injury or property damage arising out of the sale, manufacture, delivery, transfer, or possession of any person of a controlled substance Answer: D

The amount of personal property coverage in an HO-6 policy form is: a. 50% of the Coverage A amount. b. a stated amount. c. Personal Property is not covered on an HO-6 policy. d. 10% of the Coverage A amount. Answer: B

What is the standard amount of coverage for Separate Structures on a Homeowners Policy? a. 20% of Coverage B b. 10% of Coverage B c. 10% of Coverage A d. 20% of Coverage A Answer: C

If a single item in a pair or set is lost or destroyed, how will the insurer handle this loss? a. Pay 25% because it is part of their personal property b. Pay 10% because it is part of their personal property c. Pay the value of the lost part, or pay the difference between the ACV of the set before and after the loss d. Pay the total loss of the pair or set Answer: C

Earthquake endorsements usually have a separate deductible that is often set at: a. $75,000. b. A percentage of the total loss. c. $25,000. d. $50,000. Answer: B

Which coverage will provide coverage for damage due to soot, vapor, and fumes from a boiler, furnace, or similar equipment? a. Smoke coverage b. Ordinance or law c. Grave markers d. Debris removal Answer: A

Sally's $5,000 ring was destroyed in a house fire. If she has the standard deductible, how much will her insurer reimburse for the ring? a. $5,000 b. $0 c. $1,500 d. $750 Answer: A

Coverage C of a homeowners policy includes which of the following items? a. Furniture b. The dwelling c. Detached garage d. Above ground removable swimming pool Answer: A

Debra's Victorian home has ornate wood banisters along a winding staircase, as well as intricate moldings around the windows. If a fire destroys the house and the insurance company replaces the woodwork with standard material and work, which of the following types of coverage does Debra have? a. Stated value b. Replacement cost c. Functional replacement cost d. Guaranteed replacement cost Answer: C

Which of the Homeowners forms would offer the least coverage, but still cover damage caused by a deer breaking the front window of the insured building? a. HO-2 b. HO-1 c. HO-5 d. HO-3 Answer: D

Which of the following must be true for damage to be covered by the Limited Fungi, Wet or Dry Rot, or Bacteria Coverage? a. Damage was caused by flooding. b. Damage must be hidden in the walls, ceilings, or beneath the floors, or above the ceilings of a covered structure. c. Damage must be on the seen drywall of the inside of the building. d. Damage was not caused by the accidental discharge or overflow of water or steam. Answer: B

Included within the Each Occurrence Limit is a special Limit of Insurance, which is the most the insurer will pay because of statutorily imposed vicarious liability for the actions of a child or minor. What is the limit? a. $10,000 b. $5,000 c. $25,000 d. $20,000 Answer: A

Which of the following would exclude a carrier from liability in the event the shipper did not pack the cargo well? a. Inherent vice b. Released Bills of Lading c. Neglect of the Shipper d. Motor Truck Cargo-Shipper's form Answer: C

Equipment Dealers coverage form insures the stock in trade of which of the following? a. Aircraft equipment b. Motorcycles c. Mobile agricultural equipment d. Automobile repair equipment Answer: C

Which coverage policy covers most machines and equipment used to contain pressure or generate/transmit power and which are subject to accidental breakdown that could destroy or damage a large part of that machine? a. Equipment dealers b. Commercial/contractor's equipment floater c. Installation floater d. Equipment breakdown coverage Answer: D

How much co-insurance is required for the Mobile Agricultural Machinery and Equipment Coverage form? a. 80% co-insurance b. 40% co-insurance c. 90% co-insurance d. 60% co-insurance Answer: A

Farmers can insure their crops through all of the following EXCEPT: a. Unscheduled farm property insurance b. Crop hail insurance c. Multi-peril crop insurance d. The FCIC Answer: A

Which condition outlines that if two (2) of a policy's coverages apply to the same loss or damage, the insurer will not pay more than the actual amount of loss or damage? a. Insurance under two (2) or more coverages b. Legal action against the insurer c. No Admission of Liability with Medical Payments d. Other insurance Answer: A

The General Aggregate limit is the most an insurer will pay for the sum of which of the following? a. Damages under Coverage H, and medical expenses under Coverage J b. Regardless of the number of insureds, claims made or suits brought, or persons or organizations making claims or bringing suits c. Damages under Coverage H or I, or medical expenses under Coverage J d. Damages under Coverage I, and medical expenses under Coverage H Answer: C

Which of the following best describes the Suspension Provision? a. None are correct. b. Coverage is suspended if protective safeguards that are required are not in active working order. c. The insurer has no right to suspend coverage for any reason. d. The insurer has the right to suspend coverage or cancel the policy if equipment is found to be in bad or dangerous condition. Answer: D

What must a business do to qualify for Business Interruption coverage? a. Allow the insured access to their accounting books for the 5 years previous to the loss b. Report net annual sales and other earnings and profits each year c. There are no qualifications for Business Interruption. d. Allow the insured access to their accounting books the year of the loss Answer: B

The Nationwide Marine Definition includes six coverage types. Which of the following is NOT one of those types? a. Exports b. Personal property floaters and pleasure craft c. Domestic shipping (trucking) d. Commercial auto Answer: D

Krismis Goodies has increased merchandise in stock in November and December of each year. What coverage would give them the best coverage for their stock during this period of time? a. Value Reporting b. Peak Season c. Commercial Property d. Personal Effects Answer: B

For up to how much is a newly acquired building covered for in a Commercial policy? a. $300,000 b. $100,000 c. $500,000 d. $250,000 Answer: D

Which Coverage(s) provide coverage for farm machinery whether on or away from the described premises as well as mules, swine, and sheep? a. Coverage E & F b. Coverage A & B c. Coverage G d. Coverage C Answer: A

A building was purchased 10 years ago for $50,000. It has a current replacement cost of $100,000. If the building is insured for $80,000, with an 80% coinsurance requirement, how much would the insured get from a loss claim of $60,000? a. $100,000 b. $60,000 c. $48,000 d. $64,000 Answer: B

Chloe's Rent A Storage Unit facility was broken into and had some furniture stolen from their office valued at $3,900. If they have the BOP standard deductible, how much will the insurer cover? a. $3,900 b. $250 c. $3,400 d. $3,590 Answer: C

The Protective Safeguards endorsement is best described as which of the following? a. It covers loss of business income and extra expense due to utility service interruption. b. It is a list of services the insured must maintain as a condition for coverage. c. The endorsement covers loss or damage to scheduled property caused by an interruption of water, communication, or power service. d. It states that the policy will change to meet updated state regulations. Answer: B

How long a period does an insured have to bring a lawsuit against an insurer for failure to provide payment for a covered loss? a. Two years b. Three years c. There is no time limit. d. One year Answer: A

While the BOP Special Form is a special peril/all-risk policy, which of the following is an exclusion on the policy? a. Burglary b. Damage from birds or insects c. There are no exclusions on a special peril/all-risk policy. d. Fire Answer: B

For a small contractor to be eligible for a BOP, what is the limit of their annual sales? a. Less than $5 million b. Less than $2.5 million c. Less than $1 million d. Less than $3 million Answer: D

Which of the following coverages are available for an extra premium? a. Employee dishonestly b. Outdoor glass c. All are correct. d. Burglary and robbery Answer: C

Which of the following characteristics will make a business ineligible for a BOP? a. Auto-type business b. All are correct. c. One or two family dwellings d. Financial institutions Answer: B

A Standard Form coverage offered on a BOP policy that is not covered on an HO-2 policy is: a. lightning b. sprinkler leakage c. riot or civil commotion d. fire Answer: B

Which of the following are Additional Coverages that are included in the BOP policy? a. All are correct. b. Debris removal c. Property preservation d. Forgery and alteration Answer: A

June has two buildings on her property, for which she wants to get Flood coverage. One is her main dwelling and the other is her guest house. How will her policies be set up? a. Her main dwelling will be covered fully, while her guest house will be under Coverage B. b. She can get coverage for her guest house through an endorsement. c. Each building needs its own policy. d. Flood coverage protects all buildings on the land. Answer: C

Juan and Katy's home is built in an area where mines were dug years ago. The mines have long since been closed, but there is the possibility that homes built in the area may be built over one of these abandoned mines. What coverage should Juan and Katy purchase to protect their home from the risk of sinking into one of these abandoned mines? a. HO-5 Comprehensive coverage b. Sinkhole coverage c. Mine subsidence coverage d. Earthquake coverage Answer: C

Which of the following is best described as covering to a specific limit any cause of loss that leaves the property in a different condition than it was before, excluding fire and extended coverage perils? a. Mine Subsidence Insurance b. Joint Reinsurance Pool c. Risk Management Agency (RMA) d. Difference in Conditions Answer: D

Which of the following properties would be eligible for a NFIP policy? a. Structures that are mainly containers or storage units for gas or liquid storage b. Walled and roofed buildings that are fixed to a permanent site, and are mainly above ground c. Newly constructed buildings that are in, on, or above the water d. Underground structures and equipment, such as wells and septic tanks Answer: B

Which Aviation Insurance covers the insured in the event of the insured's negligent acts and/or omissions which result in a loss? a. Aircraft hull b. Aircraft liability c. Aviation cargo d. Aviation insurance Answer: B

The maximum amount a single-family residence can be assured under the NFIP is: a. $185,000. b. $250,000. c. $ 35,000. d. $100,000. Answer: B

Which of the following are covered under Boatowner's insurance? a. Theft b. Damage to the boat, hull and propeller c. All are correct. d. Liability from use of the boat Answer: C

Freight Insurance indemnifies the ship owner from loss of income that would have been earned: a. If the ship owner could have made a 15% profit. b. If the ship had completed its voyage. c. If the ship owner only owns the one ship. d. If the ship only sails in the Pacific. Answer: B

Which is not covered in a definition of flood? a. wind blown rain b. mudslide c. Shoreline erosion d. river overflow Answer: A

What will make an individual/property ineligible to be included in a FAIR Plan? a. They must have a structural problem making some risk more likely. b. Property must be an insurable risk. c. Owner must have made an attempt to obtain insurance through the private market and been denied coverage. d. Property must be located in a specific area. Answer: A

Which of the following would not be considered a limited coverage health policy? a. long term care policy b. hospital indemnity policy c. credit disability policy d. accident policy Answer: A

When discussing coinsurance clauses, a number such as 70/30 would mean what? a. The insurer will begin full payment of costs after the insured has paid an amount that can vary depending on circumstances. b. The insured pays 70% of total costs and the insurer pays the other 30%, to a set amount. c. The insurer will begin full payment of costs after the insured has paid a certain set amount. d. The insurer pays 70% of total costs and the insured pays the other 30%, to a set amount. Answer: B

In a Major Medical policy with a family deductible, a family of six with a $500 individual deductible would need to pay how much for all family members combined? a. $2,500 b. $1,500 c. $500 d. $3,000 Answer: B

A family deductible is a feature of what type of insurance policy? a. Residual Disability b. Disability Income c. Basic Medical d. Major Medical Answer: D

Which organization does not usually cover medical fees incurred by services rendered outside the network? a. FIO b. PPO c. POS d. HMO Answer: D

A major medical policy that has a calendar year deductible provision requires that: a. The deductible be met only once during the calendar year. b. The insured must pay a deductible for each claim submitted during the year. c. The insured must pay a deductible only for those expenses submitted on a claim during the first year, but not for any expenses into the next calendar year. d. Claims submitted during the first calendar year of the policy do not have a deductible applied against them. Answer: A

B has a medical policy that will pay for his hospital, surgery and physician expenses when he is admitted to a hospital because of a stroke. What type of policy does he have? a. AD & D b. Major Medical c. Basic Surgeon Expense d. Accident insurance Answer: B

Which of the following types of companies does NOT underwrite health insurance? a. Life insurance companies. b. Annuity companies c. Casualty companies d. Mono-line companies Answer: B

C quit her job after 11 years, where she had group health insurance, and began working at another company the following week. She had developed chronic asthma which flared up again one week after she started her new job. Which of the following federal acts would prohibit the new company's insurer from excluding coverage for C's problem? a. USDA b. HIPAA c. Tricare d. The Worker's Compensation Act of 1933 Answer: B

What is the maximum number of full-time employees an employer may have to participate in an HSA? a. There is no maximum number. b. 150 c. 75 d. 100 Answer: A

Which insurance delivery systems provides both the insurance and the health care service to the insured? a. HMO b. PPO c. POS systems d. Traditional Insurers Answer: A

A medical plan in which the insured chooses at the time medical services are needed whether they will go to a provider with in or outside the plan network is called a: a. Preferred Provider Organization b. Point of Service Plan c. Health Medical Organization. d. Producer Cooperative. Answer: B

H has a Basic Medical policy with coverage of $3,000, and a Major Medical policy with $2 million in lifetime benefits, a $700 deductible, and 80/20 coinsurance. If there are actual costs of $25,000, H will owe how much? a. $4,960 b. $4,400 c. $4,260 d. $5,100 Answer: A

Which of the following is not an example of a fee-for-service plan? a. Producer cooperatives b. PPO c. HMO d. Traditional InsurersD. Answer: C

Which of the following statements is not true of service organizations? a. Benefits are available only for individuals working for nonprofit agencies. b. They are also called producers' cooperatives. c. Benefits are paid directly to the producer rather than the subscriber. d. They were initially started to guarantee payment to physicians and hospitals. Answer: A

When an HMO limits the number of health care providers its subscribers can use, the HMO subscribers must choose their physician from those within: a. the capitation network. b. the admitted provider network. c. the open panel. d. the closed panel. Answer: D

Which of the following is not a common exclusion to health and disability policies? a. Vision Correction b. Suicide c. Pre-Existing Conditions d. Pregnancy Complications Answer: D

The Health Insurance Portability and Accountability Act (HIPAA) of 1996 protects the health insurance coverage for workers when they have a new dependant if they have already been covered for how many months before the change? a. 9 months b. 6 months c. 12 months d. 18 months Answer: C

The medical expense policy provision that requires the insurer to pay 100% of covered expenses over a certain specified amount after the insured has paid the policy deductible is called the: a. Stop-gap. b. Co-insurance maximum. c. Policy umbrella. d. Stop-loss. Answer: D

All of the following are considered health care cost containment measures except for: a. Medical Cost Management. b. Managed Care. c. Policy Design. d. Proliferated Care. Answer: C

The monitoring and evaluation process that attempts to insure that the patient's stay in the hospital is adequate for treatment, but of the shortest duration possible, is called: a. conditional review b. cost containment c. mandatory review. d. concurrent review Answer: D

primary care physician in an HMO is called the what? a. Gatekeeper b. Steward c. Guardian d. Administrator Answer: A

Gene, the manager of FHE, Inc., provides a group health plan for his employees. If the plan is a contributory one, and Gene has 100 employees, how many of his employees need to participate? a. 75 b. 70 c. 51 d. 67 Answer: A

Stone, owner of Barrington Sleuths, wants to offer additional benefits to some of his employees. Under a group health plan, he could use all of the following factors to decide who should get benefits EXCEPT: a. Sex b. Job category c. Salary grade d. Length of employment Answer: A

Which of the following statements about a group health plan's Summary Plan Description (SPD) is not correct? a. All plan participants must be notified of any changes in the SPD. b. The SPD describes the benefits that plan participants have through the plan. c. The SPD explains the rights of plan participants. d. The SPD is not given to plan participants, but is kept by the plan administrator. Answer: D

What is a deductible carryover? a. It is an optional rider in an individual disability insurance policy that allows the insured to continue receiving benefits in a second calendar year if the full deductible was met during the first year. b. It is a provision in a group health insurance contract that allows an insured to count payments made during the last quarter of one year as being made toward the deductible of the following calendar year if the deductible was not met during the first year. c. It is a provision in an individual health insurance contract that allows an insured to count payments toward a deductible for two different years of the contract. d. It is a required provision in a group health insurance policy that allows the insured to count any payments made in the last quarter of one year toward both the first and second year's deductible. Answer: B

Benefits of group insurance over individual insurance include all of the following EXCEPT: a. Group policies often offer a wider range of benefits. b. Premiums are generally less expensive. c. Pre-existing conditions can never be taken into account for group policies. d. Individual members of a group cannot be turned down. Answer: C

L's employer provides group medical coverage for employees. The employer also sponsers dental and/or vision coverage, but L must pay the premium for these coverages. Dental and vision coverage would be considered: a. blanket policies b. special risk plans c. optional coverages d. worksite plans Answer: D

In group insurance policies, the process of using a group's past premium and claims experience to calculate premium rates is what? a. Expansion Rating b. Group Rating c. Experience Rating d. Community Rating Answer: C

A group health benefit plan administrator does not need to do which of the following? a. Provide all participants and beneficiaries with a summary of any material changes to the plan. b. File an annual report regarding the plan's operation. c. Provide all participants and beneficiaries with a summary plan description. d. Submit a report on used benefits each calendar year to each plan participant. Answer: D

COBRA coverage would not be allowed in which of the following situations? a. Divorce b. Death c. Changing jobs and eligibility for another group plan d. Employment termination Answer: C

________ is always available under group health plans. a. Workers Compensation b. AD&D c. Maternity coverage d. Disability income coverage Answer: C

How many months of full-time employment status does an employee usually need before they will be eligible to participate in group insurance plans? a. 6 months b. 2-4 months c. 3 months d. 1-3 months Answer: D

Allan is one of 15 employees who work at FUN Toys. If he decides to seek employment elsewhere, how long does he have under COBRA to convert his group coverage to individual coverage? a. 31 days b. 20 days c. 30 days d. None of these Answer: D

Which of the following is a correct statement concerning group health insurance plans? a. Plans issued by stock insurance companies usually provide for refunds on an experience-rating basis. b. Group health plans are generally non-participating. c. Dividend refunds are guaranteed in a group insured by a mutual insurer. d. If a group policy is experience-rated, any premium reductions are not retroactive. Answer: A

What is the purpose of the deductible carryover? a. It allows an insured to carry any unmet portion of the deductible that the insured runs up in the last quarter of the year over to the next year. b. It allows an insured to use the deductible paid for one family member to also count toward another family member. c. It allows a group to have a decreased deductible amount if benefits are kept below a certain amount during a calendar year. d. It allows the insured to accumulate deductible payments between family members so that a maximum of three family members pay a deductible. Answer: A

Which of the following is an example of a deductible carryover? a. S has a $500 deductible and paid $450 during the first quarter but had no medical claims during the rest of the year. S only needs to pay $50 the next year to meet that year's deductible. b. K has a $500 individual deductible for her family with a maximum three individual payment. K has 5 family members and three of the meet the deductible this year, so the other two do not need to pay money toward the deductible. c. C has a $500 deductible and paid $700 this year with the deductible and coinsurance. C can carry over $200 towards any deductibles needed next year. d. P has a $500 deductible and had no medical claims in the first part of the year, but ran up $350 worth of claims in November. P only needs to pay $150 the next year to meet that year's deductible. Answer: D

The open enrollment period in a group insurance policy is how long? a. 31 days b. 70 days c. 50 days d. 45 days Answer: A

Group coverage is terminated in all but which of the following situations? a. The group cancels coverage b. The group changes coverage but one individual cannot obtain coverage with the new company c. An individual decides to take insurance through his/her spouse's company's health plan d. An individual changes employment Answer: B

M has a worksite plan. Which of the following would not be true about his plan? a. M determines his own level of protection b. M purchased a life insurance policy c. The cost is paid by the employer d. M's purchased vision and dental coverage Answer: C

Which is not guaranteed under COBRA? a. Premiums b. Any of these c. Renewability d. Benefits Answer: C

Under federal law, if a member of a group policy terminates their membership in a group of 20 or more employees, they have the right to purchase a temporary plan covering them individually up to 18 months after they leave the place of employment, at a maximum premium of how much more than their previous premium? a. 2% b. 5% c. 4% d. 3% Answer: A

L was injured at work when a shelving unit fell on top of him and will not be able to work for at least one year, perhaps permanently. Which of the following policies would BEST cover L's bills as a result of this accident? a. Disability insurance b. LTC c. Accident Insurance d. Worker's Compensation Answer: D

What is a group called in which several employers pool their risks and self-insure? a. Multiple Employer Trust b. Combined Risk Pool c. Small Business Blanket Organization d. Multiple Employer Welfare Association Answer: A