NY SERIES 17-52 PRACTICE EXAM QUESTIONS
COMPLETE QUESTIONS WITH 100% CORRECT
ANSWERS
1. How many eligible employees must be included in a contributory
health insurance plan?
A) 25%
B) 50%
C) 75%
D) 100%
Correct Answer: B) 50%
Rationale: A contributory health insurance plan, where employees
share in the premium cost, typically requires participation from at least
50% of eligible employees to ensure adequate risk distribution.
2. When a husband and wife are covered under each other's
employer-sponsored health plans, which coverage is primary when
the husband files a claim?
A) The wife's plan through Company B
B) Both plans share the cost equally
C) The husband's plan through Company A
D) The plan with the higher deductible
Correct Answer: C) The husband's plan through Company A
Rationale: Under coordination of benefits rules, an individual's own
,employer-sponsored plan is primary. Therefore, Company A's plan is
primary for the husband's claims.
3. What is the COBRA continuation coverage period for qualifying
events such as death or divorce?
A) 18 months
B) 24 months
C) 36 months
D) 48 months
Correct Answer: C) 36 months
Rationale: COBRA allows for 36 months of continuation coverage for
qualifying events like death of the covered employee, divorce, or legal
separation from the covered employee.
4. A policyowner decides to return a health insurance policy 25 days
after delivery. What will happen?
A) The policyowner will receive a full refund
B) The policyowner will receive a prorated refund
C) The policyowner will not receive a refund because the free-look
period is over
D) The policyowner will receive a refund minus administrative fees
Correct Answer: C) The policyowner will not receive a refund because
the free-look period is over
Rationale: In New York, individual health policies typically have a 10-day
free-look period. At 25 days, this period has expired, so the policy is
binding.
5. An insured loses the use of a leg and is rendered blind in a car
accident. The blindness improves after one month. Will the insured
receive Presumptive Disability benefits for the blindness?
,A) Yes, for the entire month
B) Yes, but only for the period of blindness
C) No benefits
D) Yes, for permanent loss of leg only
Correct Answer: C) No benefits
Rationale: Presumptive Disability requires that the condition be
permanent and irreversible. Since the blindness improved, it is not
considered permanent.
6. For the purpose of insurance, risk is defined as:
A) The probability of a loss occurring
B) The uncertainty or chance of loss
C) The actual financial loss suffered
D) The total premium paid
Correct Answer: B) The uncertainty or chance of loss
Rationale: Insurance risk is the uncertainty regarding financial loss. It is
the possibility of a loss occurring, not the certainty.
7. Which is an example of a producer's fiduciary duty?
A) Recommending the most expensive policy
B) The trust that a client places in the producer in regard to handling
premiums
C) Guaranteeing investment returns
D) Sharing commissions with clients
Correct Answer: B) The trust that a client places in the producer in
regard to handling premiums
Rationale: Fiduciary duty involves handling client funds with the highest
degree of trust and care, including promptly forwarding premiums to
the insurer.
, 8. Which is NOT true of basic medical expense plans?
A) Coverage for hospital room and board
B) Coverage for surgical procedures
C) Coverage for catastrophic medical expenses
D) Coverage for in-hospital physician visits
Correct Answer: C) Coverage for catastrophic medical expenses
Rationale: Basic medical expense plans provide essential hospital,
surgical, and physician coverage but typically have low maximum
benefit limits and do not cover catastrophic expenses.
9. Which is NOT a feature of a noncancellable policy?
A) The insurer cannot cancel the policy
B) Premiums cannot be increased
C) The insurer may terminate the contract only at renewal for certain
conditions
D) The policy is guaranteed renewable
Correct Answer: C) The insurer may terminate the contract only at
renewal for certain conditions
Rationale: A noncancellable policy guarantees that the insurer cannot
cancel the policy or increase premiums for the life of the contract. The
option to terminate at renewal is a feature of other policy types.
10. What is the best way to correct an error on a life insurance
application?
A) Cross out the error and initial it
B) Start over with a fresh application
C) Submit a separate amendment form
D) Verbally inform the agent
Correct Answer: B) Start over with a fresh application
Rationale: To avoid any ambiguity or accusations of fraud, the best
COMPLETE QUESTIONS WITH 100% CORRECT
ANSWERS
1. How many eligible employees must be included in a contributory
health insurance plan?
A) 25%
B) 50%
C) 75%
D) 100%
Correct Answer: B) 50%
Rationale: A contributory health insurance plan, where employees
share in the premium cost, typically requires participation from at least
50% of eligible employees to ensure adequate risk distribution.
2. When a husband and wife are covered under each other's
employer-sponsored health plans, which coverage is primary when
the husband files a claim?
A) The wife's plan through Company B
B) Both plans share the cost equally
C) The husband's plan through Company A
D) The plan with the higher deductible
Correct Answer: C) The husband's plan through Company A
Rationale: Under coordination of benefits rules, an individual's own
,employer-sponsored plan is primary. Therefore, Company A's plan is
primary for the husband's claims.
3. What is the COBRA continuation coverage period for qualifying
events such as death or divorce?
A) 18 months
B) 24 months
C) 36 months
D) 48 months
Correct Answer: C) 36 months
Rationale: COBRA allows for 36 months of continuation coverage for
qualifying events like death of the covered employee, divorce, or legal
separation from the covered employee.
4. A policyowner decides to return a health insurance policy 25 days
after delivery. What will happen?
A) The policyowner will receive a full refund
B) The policyowner will receive a prorated refund
C) The policyowner will not receive a refund because the free-look
period is over
D) The policyowner will receive a refund minus administrative fees
Correct Answer: C) The policyowner will not receive a refund because
the free-look period is over
Rationale: In New York, individual health policies typically have a 10-day
free-look period. At 25 days, this period has expired, so the policy is
binding.
5. An insured loses the use of a leg and is rendered blind in a car
accident. The blindness improves after one month. Will the insured
receive Presumptive Disability benefits for the blindness?
,A) Yes, for the entire month
B) Yes, but only for the period of blindness
C) No benefits
D) Yes, for permanent loss of leg only
Correct Answer: C) No benefits
Rationale: Presumptive Disability requires that the condition be
permanent and irreversible. Since the blindness improved, it is not
considered permanent.
6. For the purpose of insurance, risk is defined as:
A) The probability of a loss occurring
B) The uncertainty or chance of loss
C) The actual financial loss suffered
D) The total premium paid
Correct Answer: B) The uncertainty or chance of loss
Rationale: Insurance risk is the uncertainty regarding financial loss. It is
the possibility of a loss occurring, not the certainty.
7. Which is an example of a producer's fiduciary duty?
A) Recommending the most expensive policy
B) The trust that a client places in the producer in regard to handling
premiums
C) Guaranteeing investment returns
D) Sharing commissions with clients
Correct Answer: B) The trust that a client places in the producer in
regard to handling premiums
Rationale: Fiduciary duty involves handling client funds with the highest
degree of trust and care, including promptly forwarding premiums to
the insurer.
, 8. Which is NOT true of basic medical expense plans?
A) Coverage for hospital room and board
B) Coverage for surgical procedures
C) Coverage for catastrophic medical expenses
D) Coverage for in-hospital physician visits
Correct Answer: C) Coverage for catastrophic medical expenses
Rationale: Basic medical expense plans provide essential hospital,
surgical, and physician coverage but typically have low maximum
benefit limits and do not cover catastrophic expenses.
9. Which is NOT a feature of a noncancellable policy?
A) The insurer cannot cancel the policy
B) Premiums cannot be increased
C) The insurer may terminate the contract only at renewal for certain
conditions
D) The policy is guaranteed renewable
Correct Answer: C) The insurer may terminate the contract only at
renewal for certain conditions
Rationale: A noncancellable policy guarantees that the insurer cannot
cancel the policy or increase premiums for the life of the contract. The
option to terminate at renewal is a feature of other policy types.
10. What is the best way to correct an error on a life insurance
application?
A) Cross out the error and initial it
B) Start over with a fresh application
C) Submit a separate amendment form
D) Verbally inform the agent
Correct Answer: B) Start over with a fresh application
Rationale: To avoid any ambiguity or accusations of fraud, the best
