Insurance MCQ

Which one of the following regarding the Life and Health Insurance Guaranty Association of North Carolina is false? A. It is funded by the State through the collection of insurance premium taxes B. It protects residents, who have rights under a contract providing benefits of life or health or both, against financial loss due to insurer impairment or insolvency C. It consists of all authorized insurers writing Life and Health policies in North Carolina D. It assists in detecting and preventing insurer impairment or insolvency Answer: A.

An insurer must pay interest on death benefits not paid within _____ days after receiving proof of loss. A. 60 B. 45 C. 90 D. 30 Answer: D.

A person must be at least ______ years of age to enter into an insurance contract or an annuity. A. 18 B. 17 C. 16 D. 15 Answer: D.

Which one of the following types of policies are exempt from standard policy replacement rules? A. Universal life insurance policies B. 30-year renewable term life insurance policies C. Traditional whole life insurance policies D. Non-convertible, non-renewable term policies with less than 5 years of coverage remaining Answer: D.

Which of the following is a requirement for continuation coverage under a group health policy? A. The premium to continue coverage may not exceed 105% the group rate B. The employee must first secure comparable coverage within 31 days after termination of coverage under the group policy C. Continuation coverage includes medical, drugs, dental, and vision coverage D. Continuation of coverage lasts up to 18 months, so long as the (former) employee pays premiums Answer: D.

The viator may rescind the viatical settlement contract within _____ business days after receiving the viatical settlement proceeds. A. 15 B. 10 C. 20 D. 30 Answer: B.

All of the following are duties of the producer when involved in a replacement transaction, except: A. Notify each existing insurer within 5 business days and, upon request, furnish a copy of any proposals and comparison statements B. Submit a signed statement about whether the applicant has existing policies C. Leave a copy of all sales material with the applicant D. Obtain a notice regarding replacement signed by the applicant Answer: A.

Which of the following properly states a requirement of a group health policy? A. An association group must have 100 members and be in existence for at least 5 years B. If a group policy is replaced within 15 days of being terminated, the replacing insurer must cover everyone covered under the policy being replaced C. An employer group may cover executives only D. A credit policy may require evidence of individual insurability if less than 75% of new debtors become insured Answer: B.

Which of the following is not a required health policy coverage? A. Nervous Disorders B. Screening for prostate cancer C. Birth defects D. Screening for cervical cancer Answer: C.

Which of the following is NOT an acceptable grace period for late premium payments? A. 7 days for weekly premiums B. 31 days for quarterly premiums C. 61 days for annual premiums D. 10 days for monthly premiums Answer: C.

Which of the statements about a utilization review is FALSE? A. The insurer must notify an insured and the provider of a claim denial within 5 business days B. The insurer must disclose utilization review procedures to insureds C. The review may not request information that is unnecessary to certify the health care services under review D. Utilization reviews must be overseen by the accounting department Answer: D.

Which of the following rules regarding PPOs is INCORRECT? A. A PPO contract is considered approved if not disapproved by the Commissioner within 90 days of filing B. A new PPO must give all health care providers in its market at least 30 days to request to be preferred providers C. A PPO must disclose to the Commissioner the relationship between the insurer and preferred providers on an annual basis D. A PPO may make exclusive contracts with health care providers so that they don't sign up with other PPOs Answer: D.

Which of the following would be a violation of a health plan policyholder's right to choose the provider of service? A. The plan denies a claim because the services were performed by a registered nurse B. The plan requires the use of a network provider to obtain a higher level of benefits C. The plan requires certification of a disability by a duly licensed medical professional before approving a disability claim D. The plan pays for treatment by a licensed chiropractor Answer: A.

A viatical settlement broker is required to inform the viator of all of the following, except: A. Proceeds may jeopardized eligibility for Medicaid B. Proceeds are exempt from creditor claims C. Proceeds could be subject to tax liability D. Accelerated death benefits or policy loans are possible alternatives to a viatical settlement Answer: B.

Z is terminally ill and is looking to find someone who will buy Z's life insurance policy to get funds to pay for care. Z is a: A. Viator B. Viatical settlement provider C. Viatical settlement broker D. Viatical settlement purchaser Answer: A.

Which of the following situations is subject to the replacement rules? A. Agent Nathaniel is working with a client to upgrade her policy with a new policy from the same insurer B. Agent Roman's client is in the last 2 years of a 10-year non-convertible, non-renewable term policy C. Agent Steve is recommending that his client take a policy loan from an existing policy to buy a new one from a different insurer D. Agent Jessica is making a presentation to employees covered by group life insurance Answer: C.

How long must an insurer keep a Policy Summary? A. Until the Commissioner issues the final report of the next examination after issuance B. 5 years after first use C. 3 years after issuance D. 3 years after last use Answer: D.

Which of the following has an insurable interest in the other? A. One business partner in his/her partner B. Life insurance company in an independent agent C. An employee in a fellow employee (nonkey, nonmanagerial) D. An employee in an officer or director of his/her employer Answer: A.

All of the following are standard provisions of an individual life insurance policy, except: A. A lapsed policy may be reinstated within 5 years B. The policy is incontestable after 2 years C. The grace period for late payment of premiums is 45 days D. Errors in age or gender of the insured may be corrected by adjusting premiums or benefits Answer: C.

Which of the following is covered by the Life and Health Insurance Guaranty Association? A. J has an a nonguaranteed contract with LMNO Insurance, which becomes insolvent B. E has submitted a claim for $500,000 of medical expenses when GHI Insurance becomes insolvent C. Employer XYZ hires 123 Health Co. to administer its self-insured health plan for employees and 123 Health Co. becomes insolvent D. Employer XYZ hires 123 Health Co. to administer its self-insured health plan for employees and 123 Health Co. becomes insolvent Answer: B.