NJ HEALTH AND ACCIDENT INSURANCE FINAL EXAM STUDY GUIDE 2025/2026 COMPLETE QUESTIONS WITH VERIFIED CORRECT SOLUTIONS || 100% GUARANTEED PASS RECENT VERSION

NJ HEALTH AND ACCIDENT INSURANCE FINAL EXAM STUDY GUIDE 2025/2026 COMPLETE QUESTIONS WITH VERIFIED CORRECT SOLUTIONS || 100% GUARANTEED PASS RECENT VERSION 1. Health Insurance - ANSWER Insurance that protects against financial loss due to sickness or accidental bodily injury. 2. Disability Insurance - ANSWER Insurance that provides coverage for lost income in the event of a disability that prevents work. 3. Medical Expense Insurance - ANSWER Insurance that pays benefits for nonsurgical doctors' fees incurred during a hospital stay. 4. Interim Coverage - ANSWER A short-term insurance policy purchased when an individual is between jobs or waiting for a new policy to take effect. 5. Accidental Death and Dismemberment Insurance (AD&D) - ANSWER Insurance that provides a lump-sum benefit in the event of accidental death or dismemberment. 6. Nonparticipating Plan - ANSWER An insurance plan where the insured does not share in the company's divisible surplus. 7. Participating Plan - ANSWER An insurance plan where the policy owner receives shares of the company's divisible surplus. 8. Patient Protection and Affordable Care Act (ACA) - ANSWER Legislation that aims to increase the quality, affordability, and coverage of health insurance. 9. Group Health Insurance - ANSWER Insurance coverage provided to a group of individuals, typically employees, under a single contract. 10. Renewability Provisions - ANSWER Terms in an insurance policy that define the insurer's rights to cancel or renew the policy at different points. 11. Cancellable Policies - ANSWER Insurance policies that allow the insurer to cancel or terminate the policy at any time. 12. Optionally Renewable Policies - ANSWER Insurance policies that give the insurer the option to terminate the policy on a specified date. 13. Conditionally Renewable Policies - ANSWER Insurance policies that give the insurer the option to terminate the policy based on specified conditions. 14. Guaranteed Renewable Policies - ANSWER Insurance policies that specify the policy must be renewed, but premiums may increase. 15. Preexisting Conditions - ANSWER Illnesses or medical conditions that exist before the effective date of a policy. 16. Creditable Coverage - ANSWER Previous coverage under another insurance plan without any breaks in coverage. 17. Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) - ANSWER Legislation that extends group health coverage to terminated employees and their families. 18. Blanket Health Policies - ANSWER Insurance policies that cover a group exposed to the same risks, with constantly changing individuals. 19. Franchise Health Plans - ANSWER Insurance plans that provide health insurance coverage to association or professional society members. 20. Credit Policies - ANSWER Insurance policies that help insured individuals pay off a loan in the event of disability or death. 21. Nonoccupational Coverage - ANSWER Disability coverage that does not provide benefits for work-related losses. 22. Health Savings Accounts (HSAs) - ANSWER Tax-advantaged medical savings accounts for high-deductible health plans. 23. Accidental Means - ANSWER An unforeseen and unexpected cause of an accident. 24. Accidental Results - ANSWER The result of an injury that is unexpected and accidental. 25. Principal Sum - ANSWER The amount payable as a death benefit under an AD&D policy. 26. Capital Sum - ANSWER The amount payable for accidental loss of sight or dismemberment under an AD&D policy. 27. Limited Risk Policies - ANSWER Insurance policies that provide coverage for specific accidents or illnesses. 28. Beneficiary - ANSWER A person or entity designated to receive the death proceeds of an insurance policy. 29. Revocable Beneficiary - ANSWER A beneficiary that can be changed without notifying or obtaining permission. 30. Irrevocable Beneficiary - ANSWER A beneficiary that cannot be changed without written consent. 31. Per Stirpes - ANSWER Benefits paid to the heirs of a beneficiary if the beneficiary dies before the insured. 32. Per Capita - ANSWER Benefits evenly distributed among named living beneficiaries. 33. Simultaneous Death Act - ANSWER An assumption that the primary beneficiary died first in the case of a common accident. 34. Common Disaster Provision - ANSWER A provision that ensures death benefits are paid to the contingent beneficiary in the case of short period deaths. 35. Spendthrift Clause - ANSWER A clause that requires benefits to be paid in fixed amounts or installments. 36. Noncancellable Policies - ANSWER Insurance policies that cannot be cancelled or have premium rates increased. 37. Medicare Supplement Policies - ANSWER A common type of guaranteed renewable policy that provides additional coverage for Medicare beneficiaries. 38. In order for insurance contracts to be legally binding, they must have 4 essential elements: - ANSWER 1. agreement 2. Consideration 3. Competent parties 4. legal purpose 39. consideration - ANSWER The binding force in a contract that requires something of value to be exchanged for the transfer of risk. The consideration on the part of the insured is the representations made in the application and the payment of premium; the consideration on the part of the insurer is the promise to pay in the event of loss. 40. conditional contract - ANSWER Certain conditions must be met by all parties to the contract when a loss occurs in order for the contract to be legally enforceable. 41. unilateral contract - ANSWER only one of the parties to the contract is legally bound to do anything; the insurer is legally bound to pay losses covered by a policy force 42. contract of adhesion - ANSWER prepared by the insurer and accepted or rejected by the other party 43. deductible - ANSWER Amount you must pay before you begin receiving any benefits from your insurance company 44. Carry Over Provision - ANSWER If the insured did not incur enough expenses during the year to meet the deductible, any expenses incurred during the last 3 months may be carried over to the next policy year to satisfy the new annual deductible 45. copayment - ANSWER a small fixed fee paid by the patient at the time of an office visit 46. A medicare supplement policy must NOT contain benefits which - ANSWER duplicate Medicare benefits 47. The Commissioner may - ANSWER establish continuing education requirements 48. Signatures for an insurance application MUST be obtained by the producer from all of the following sources EXCEPT - ANSWER the beneficiary 49. David submits a $500 claim for medical expenses. There is a past due amount owed for insurance premiums of $200. As a result, the insurer only pays $300 for the claim. The deduction came as a result of which provision? - ANSWER unpaid provision 50. Who is the individual paid on a fee-for-service basis? - ANSWER Provider 51. A producer's secretary who solicits prospects on the telephone - ANSWER must be licensed as a producer 52. Insurance advertisements in a local newspaper are regulated by? - ANSWER Department of Banking and Insurance 53. Johan the producer charged a fee to a sales prospect for analyzing insurance coverages. According to NJ law, a reasonable relationship must exist between the fee and the - ANSWER Substance of the services performed 54. What is the free-look period of a Medicare Supplement policy? - ANSWER 30 days 55. Which of the following is an example of defamation? - ANSWER Using derogatory about an insurance company's financial condition 56. All of the following are included as part of a contract in the entire contract provision EXCEPT the - ANSWER changes made by the producer 57. A health insurance policy that allows an insurer to change the policy owner's premiums, but NOT cancel the policy is called a(n) - ANSWER guaranteed renewable policy 58. Richard owns an insurance policy that is renewable only at the option of the insurance company. His policy is considered to be - ANSWER Optionally renewable 59. According to the principle of Utmost Good Faith, the insured will answer questions on the application to the best of their knowledge and pay the required premium, while the insurer will deal fairly with the insured and it's - ANSWER promise made 60. An insurer must furnish to a claimant forms for filling proof of loss within ____ days upon receiving a notice of claim - ANSWER 15 days 61. A person who is a nonsmoker, of average weight, and in excellent health would most likely be in which risk classification? - ANSWER Preferred 62. An agent is an individual that represents whom? - ANSWER Licensed producer who has written contract to represent an insurer 63. Disability Income plans which require that the insurer can NEVER change or alter premium rates are usually considered - ANSWER Noncancellable 64. In NJ, group health insurance may be offered to all of these groups EXCEPT - ANSWER College seminar participants 65. Jerry voluntarily terminated his producer's license. If he changes his mind, his license may be reinstate during the same license period IF - ANSWER he completes a new license application 66. An insured MUST submit proof of loss on a health insurance claim within how many days after the date of loss? - ANSWER 90 days 67. In contrast to a guaranteed renewable policy, a noncancellable policy - ANSWER may never raise premiums 68. A medical provider that accepts Medicare Assignment must - ANSWER accept payment based upon a defined Medicare schedule as payment in full 69. Fraternal Benefit Society has each of the following characteristics EXCEPT - ANSWER Exist For Profit 70. The New Jersey Life and Health Guaranty Association is - ANSWER funded by assessments on member companies 71. Who would make the final determination on whether or not an insurance advertisement is misleading? - ANSWER Banking and Insurance Commissioner 72. Which of these may NOT be used in a health insurance advertisements - ANSWER An insurance company's trademark instead of the company's actual name 73. Which of the following is NOT a common exclusion for a medical expense policy? - ANSWER Physical Therapy 74. Which of the following is NOT a duty of the Commissioner? - ANSWER Establish insurer rates 75. NJ insurance law requires eligible individuals to make an election to continue health insurance benefits within a MAXIMUM of _____ days after coverage termination - ANSWER 60 days 76. The Commissioner issues a subpoena to a producer. The producer decides not to respond. Which course of action must be taken by the Commissioner? - ANSWER Commissioner may impose an administrative penalty 77. All _____ policies must be guaranteed renewable. - ANSWER long term care 78. Which of the following situations would be suitable for a temporary work authority - ANSWER When an applicant passes a licensing examination and answers all background questions negatively 79. A newborn is required to be covered for _____ days from the moment of birth - ANSWER 30 days 80. An underwriter's primary responsibility to an insurer is to protect against - ANSWER adverse selection 81. Which type of coverage pay an amount per day for hospitalization directly to the insured regardless of the insured's other health insurance? - ANSWER Hospital indemnity 82. Producers selling insurance in NJ, while having a residence and business address outside of the state, are? - ANSWER Non-resident producers 83. A producer must notify the Commissioner within _____ days of a felony conviction. - ANSWER 30 days 84. In NJ, health insurance advertisements are required to contain the - ANSWER Insurance company's name 85. Which of the following is NOT considered advertising? - ANSWER A rating from a rating service company, such as A.M. Best 86. What is considered advertising - ANSWER An illustration A sales presentation Direct mailing from an agency 87. What is issued to each employee of an employer health plan? - ANSWER Certificate 88. What type of policy where the insurer can send a notice to the insured that the policy has been cancelled in the middle of the term is called - ANSWER Cancelable 89. In order to obtain a producer's license, the application must be received by the Department within what period of time listed below? - ANSWER 12 months after passing the state exam 90. Bryce purchased a disability income policy with a rider that guarantees him the option of purchasing additional amounts of coverage at predetermined times without requiring to provide evidence of insurability. What kind of rider is this? - ANSWER Guaranteed insurability rider 91. which of the following statements regarding group disability insurance is TRUE? - ANSWER it provides benefits for non occupational illnesses and injuries 92. what percentage of a participants income are group long term disability benefit amounts typically limited to? - ANSWER 60% 93. When the principle gives the agent authority in writing, it's referred to as - ANSWER express authority 94. Which of the following statements correctly regarding an individual applying for life or health insurance? - ANSWER The applicant's medical history may be analyzed and reported 95. An accident and health insurer has just received written proof of loss from one of its insureds. The insured must now w