KENTUCKY HEALTH INSURANCE EXAM
QUESTIONS AND CORRECT ANSWERS
UPDATED
Question 1
Under the Accidental Death and Dismemberment (AD&D) coverage, what type of
benefit will be paid to the beneficiary in the event of the insured's accidental death?
a)Refund of premiums
b)Principal sum
c)Capital sum
d)Double the amount of the death benefit
Correct Answer
b)Principal sum
Accidental Death and Dismemberment coverage only pays for accidental losses and
is thus considered a pure form of accident insurance. The principal sum is paid for
accidental death. In case of loss of sight or accidental dismemberment, a
percentage of that principal sum will be paid by the policy, often referred to as the
capital sum.
Question 2
Which of the following is true of a PPO?
1. Claim forms are completed by members on each claim.
2. No copayment fees are involved.
3. Its goal is to channel patients to providers that discount services.
4. The most common type of PPO is the staff model.
Correct Answer
3. Its goal is to channel patients to providers that discount services.
Page 1 of 326
,Question 3
For group medical and dental expense insurance, what percentage of premium paid
by the employer is deductible as a business expense?
1. 50%
2. 60%
3. 90%
4. 100%
Correct Answer
4. 100%
Question 4
Which of the following provisions would prevent an insurance company from paying
a reimbursement claim to someone other than the policyowner?
1. Entire Contract Clause
2. Proof of Loss
3. Payment of Claims
4. Change of beneficiary
Correct Answer
3. Payment of Claims
Key word paying.
Question 5
The free-look provision allows for which of the following?
1. A guarantee that the policy will be issued2. A right to return the policy for a full
premium refund3. Immediate coverage when the application is submitted4. A
guarantee that the policy will not lapse if the premium is overdue
Correct Answer
2. A right to return the policy for a full premium refund
Page 2 of 326
,Question 6
When an insurer offers services like preadmission testing, second opinions regarding
surgery, and preventative care, which term would best apply?
1. Cost reduction
2. Claims reduction
3. Claims discrimination
4. Case management provision
Correct Answer
d)Case management provision Cost-saving services, also known as "case
management provisions", include the following: controlled access of providers, large
claim management, preventive care, hospitalization alternatives, second surgical
opinions, preadmission testing, catastrophic case management, risk sharing, and
providing high quality of care.
Question 7
A request from the Commissioner for a person to stop committing a violation is called
1. A suspension.
2. A desist order.
3. An estoppel.
4. A hearing.
Correct Answer
2. A desist order.
Question 8
In reference to the standard Medicare Supplement benefits plans, what does the term
standard mean?
a)Coverage options and conditions are developed for average individuals
.b)All providers will have the same coverage options and conditions for each plan.
c)Coverage options and conditions comply with the law, but will vary from provider to
provider.
d)All plans must include basic benefits A-N.
Correct Answer
.b)All providers will have the same coverage options and conditions for each plan.
In reference to the standard Medicare Supplement benefits plans, the term
"standard" implies that all providers will have the same coverage options and
conditions for each plan.
Page 3 of 326
, Question 9
Why do group health providers usually require a certain amount of participation in
the plan by eligible employees?
a)To ensure the employer is being fair to employees
b)To guard against adverse selection and reduce cost
c)To promote preventive care
d)To ensure a higher profit for the insurer
The reason for the minimum participation requirement is to guard against adverse
selection and to reduce administrative costs for the insurer.
Correct Answer
b)To guard against adverse selection and reduce cost
The reason for the minimum participation requirement is to guard against adverse
selection and to reduce administrative costs for the insurer.
Question 10
All of the following are correct about the required provisions of a health insurance
policy EXCEPT
a)The entire contract clause means the signed application, policy, endorsements, and
attachments constitute the entire contract
.b)A reinstated policy provides immediate coverage for an illness.
c)Proof-of-loss forms must be sent to the insured within 15 days of notice of claim.
d)A grace period of 31 days is found in an annual pay policy.
Correct Answer
b)A reinstated policy provides immediate coverage for an illness.
Accidental injury is covered immediately, but to protect the insurer against adverse
selection, losses resulting from sickness are covered only if the sickness occurs at
least 10 days after the reinstatement date.
Page 4 of 326
QUESTIONS AND CORRECT ANSWERS
UPDATED
Question 1
Under the Accidental Death and Dismemberment (AD&D) coverage, what type of
benefit will be paid to the beneficiary in the event of the insured's accidental death?
a)Refund of premiums
b)Principal sum
c)Capital sum
d)Double the amount of the death benefit
Correct Answer
b)Principal sum
Accidental Death and Dismemberment coverage only pays for accidental losses and
is thus considered a pure form of accident insurance. The principal sum is paid for
accidental death. In case of loss of sight or accidental dismemberment, a
percentage of that principal sum will be paid by the policy, often referred to as the
capital sum.
Question 2
Which of the following is true of a PPO?
1. Claim forms are completed by members on each claim.
2. No copayment fees are involved.
3. Its goal is to channel patients to providers that discount services.
4. The most common type of PPO is the staff model.
Correct Answer
3. Its goal is to channel patients to providers that discount services.
Page 1 of 326
,Question 3
For group medical and dental expense insurance, what percentage of premium paid
by the employer is deductible as a business expense?
1. 50%
2. 60%
3. 90%
4. 100%
Correct Answer
4. 100%
Question 4
Which of the following provisions would prevent an insurance company from paying
a reimbursement claim to someone other than the policyowner?
1. Entire Contract Clause
2. Proof of Loss
3. Payment of Claims
4. Change of beneficiary
Correct Answer
3. Payment of Claims
Key word paying.
Question 5
The free-look provision allows for which of the following?
1. A guarantee that the policy will be issued2. A right to return the policy for a full
premium refund3. Immediate coverage when the application is submitted4. A
guarantee that the policy will not lapse if the premium is overdue
Correct Answer
2. A right to return the policy for a full premium refund
Page 2 of 326
,Question 6
When an insurer offers services like preadmission testing, second opinions regarding
surgery, and preventative care, which term would best apply?
1. Cost reduction
2. Claims reduction
3. Claims discrimination
4. Case management provision
Correct Answer
d)Case management provision Cost-saving services, also known as "case
management provisions", include the following: controlled access of providers, large
claim management, preventive care, hospitalization alternatives, second surgical
opinions, preadmission testing, catastrophic case management, risk sharing, and
providing high quality of care.
Question 7
A request from the Commissioner for a person to stop committing a violation is called
1. A suspension.
2. A desist order.
3. An estoppel.
4. A hearing.
Correct Answer
2. A desist order.
Question 8
In reference to the standard Medicare Supplement benefits plans, what does the term
standard mean?
a)Coverage options and conditions are developed for average individuals
.b)All providers will have the same coverage options and conditions for each plan.
c)Coverage options and conditions comply with the law, but will vary from provider to
provider.
d)All plans must include basic benefits A-N.
Correct Answer
.b)All providers will have the same coverage options and conditions for each plan.
In reference to the standard Medicare Supplement benefits plans, the term
"standard" implies that all providers will have the same coverage options and
conditions for each plan.
Page 3 of 326
, Question 9
Why do group health providers usually require a certain amount of participation in
the plan by eligible employees?
a)To ensure the employer is being fair to employees
b)To guard against adverse selection and reduce cost
c)To promote preventive care
d)To ensure a higher profit for the insurer
The reason for the minimum participation requirement is to guard against adverse
selection and to reduce administrative costs for the insurer.
Correct Answer
b)To guard against adverse selection and reduce cost
The reason for the minimum participation requirement is to guard against adverse
selection and to reduce administrative costs for the insurer.
Question 10
All of the following are correct about the required provisions of a health insurance
policy EXCEPT
a)The entire contract clause means the signed application, policy, endorsements, and
attachments constitute the entire contract
.b)A reinstated policy provides immediate coverage for an illness.
c)Proof-of-loss forms must be sent to the insured within 15 days of notice of claim.
d)A grace period of 31 days is found in an annual pay policy.
Correct Answer
b)A reinstated policy provides immediate coverage for an illness.
Accidental injury is covered immediately, but to protect the insurer against adverse
selection, losses resulting from sickness are covered only if the sickness occurs at
least 10 days after the reinstatement date.
Page 4 of 326
