BUSINESS INSURANCE XCEL 2-15 LIFE,
HEALTH & INSURANCE PRACTICE EXAM
REVISION STUDY QUESTIONS AND
ACCURATE SOLUTIONS FLORIDA STATE
UNIVERSITY.
Disability & Health Insurance Policies
1. When will Z become eligible to receive benefits if he has a Disability Income policy
with a 30-day elimination period and experiences two separate disabilities?
o Answer: March 1st
o Explanation: Since Z's first disability (pneumonia) only lasted from January 1st to
January 15th, it does not meet the 30-day elimination period, so no benefits are
payable. However, his second disability (from an accident) started on February
1st and lasted until July 1st. After the 30-day elimination period (ending March
1st), he becomes eligible for benefits.
2. Which clause in a disability income policy act as a deductible?
o Answer: Elimination Period
o Explanation: The elimination period is the waiting time before benefits start. It
functions like a deductible because the insured must absorb the initial costs
before the policy begins paying out.
3. Which benefit is typically excluded or limited in a Long-Term Care (LTC) policy?
o Answer: Alcohol Rehabilitation
o Explanation: LTC policies generally do not cover treatments related to substance
abuse, self-inflicted injuries, or mental health disorders that are not organic (e.g.,
dementia is covered, but alcohol rehab is not).
4. How long may a Qualified Long-Term Care policy consider an applicant’s pre-existing
conditions?
, o Answer: 6 months prior to the effective date of coverage
o Explanation: Insurers may review an applicant’s medical history for up to six
months before coverage begins to determine pre-existing conditions.
5. Which type of care is typically not covered in a Long-Term Care Policy?
o Answer: Acupuncture
o Explanation: Alternative treatments such as acupuncture and experimental
therapies are usually excluded from LTC policies.
6. What type of care does a Long-Term Care plan typically provide benefits for?
o Answer: Home Health Care
o Explanation: Many LTC policies cover in-home care services, including nursing
care, physical therapy, and assistance with daily activities.
7. Who is eligible for Medicare Part C?
o Answer: Individuals enrolled in Medicare Part A and Part B
o Explanation: Medicare Part C, also known as Medicare Advantage, requires
individuals to be enrolled in both Parts A and B before they can switch to an
Advantage plan.
Insurance Policy Provisions & Legal Considerations
8. Which health policy clause requires an insurance company to attach a copy of the
application to the policy to ensure it is part of the contract?
o Answer: The Entire Contract Clause
o Explanation: This clause ensures that the policyholder receives a copy of the
contract, including the application, to prevent future disputes.
9. What does the legal actions provision of an Accident & Health policy require?
o Answer: An insured must wait at least 60 days after submitting Proof of Loss
before filing a lawsuit.
o Explanation: This provision prevents lawsuits from being filed prematurely and
gives insurers time to investigate claims.
10. What must a policy owner provide to validate that a loss has occurred?
, o Answer: Proof of Loss
o Explanation: The insured must submit official documentation of their claim
within a specified timeframe for the insurer to process the claim.
11. How will an insurer handle a claim if a policyholder is injured while committing an
illegal act (e.g., carjacking)?
o Answer: The claim will be denied.
o Explanation: Health insurance policies typically exclude coverage for injuries
sustained while committing illegal acts.
12. What is required by the Notice of Claims provision?
o Answer: The policy owner must notify the insurer of a claim within a specified
time.
o Explanation: This provision ensures timely reporting of claims, allowing the
insurer to assess and process them efficiently.
13. What action may a policy owner NOT take under an Accident & Health policy?
o Answer: Adjust the premium payments
o Explanation: Only the insurer can change premiums, usually due to policy
renewal, changes in risk classification, or regulatory adjustments.
14. When must an insurer pay benefits for an approved claim under an individual Health
Insurance policy?
o Answer: Immediately
o Explanation: Once a claim is deemed valid, benefits must be disbursed without
unnecessary delay.
15. Which section of an insurance contract defines coverage limitations?
o Answer: Exclusions
o Explanation: The exclusions section details what is not covered under the policy,
such as pre-existing conditions, self-inflicted injuries, or certain high-risk
activities.
16. If an insured had a pre-existing but undisclosed neck injury five years before applying
for disability income insurance and now submits a claim for total disability due to the
injury, how will the insurer handle the claim?
HEALTH & INSURANCE PRACTICE EXAM
REVISION STUDY QUESTIONS AND
ACCURATE SOLUTIONS FLORIDA STATE
UNIVERSITY.
Disability & Health Insurance Policies
1. When will Z become eligible to receive benefits if he has a Disability Income policy
with a 30-day elimination period and experiences two separate disabilities?
o Answer: March 1st
o Explanation: Since Z's first disability (pneumonia) only lasted from January 1st to
January 15th, it does not meet the 30-day elimination period, so no benefits are
payable. However, his second disability (from an accident) started on February
1st and lasted until July 1st. After the 30-day elimination period (ending March
1st), he becomes eligible for benefits.
2. Which clause in a disability income policy act as a deductible?
o Answer: Elimination Period
o Explanation: The elimination period is the waiting time before benefits start. It
functions like a deductible because the insured must absorb the initial costs
before the policy begins paying out.
3. Which benefit is typically excluded or limited in a Long-Term Care (LTC) policy?
o Answer: Alcohol Rehabilitation
o Explanation: LTC policies generally do not cover treatments related to substance
abuse, self-inflicted injuries, or mental health disorders that are not organic (e.g.,
dementia is covered, but alcohol rehab is not).
4. How long may a Qualified Long-Term Care policy consider an applicant’s pre-existing
conditions?
, o Answer: 6 months prior to the effective date of coverage
o Explanation: Insurers may review an applicant’s medical history for up to six
months before coverage begins to determine pre-existing conditions.
5. Which type of care is typically not covered in a Long-Term Care Policy?
o Answer: Acupuncture
o Explanation: Alternative treatments such as acupuncture and experimental
therapies are usually excluded from LTC policies.
6. What type of care does a Long-Term Care plan typically provide benefits for?
o Answer: Home Health Care
o Explanation: Many LTC policies cover in-home care services, including nursing
care, physical therapy, and assistance with daily activities.
7. Who is eligible for Medicare Part C?
o Answer: Individuals enrolled in Medicare Part A and Part B
o Explanation: Medicare Part C, also known as Medicare Advantage, requires
individuals to be enrolled in both Parts A and B before they can switch to an
Advantage plan.
Insurance Policy Provisions & Legal Considerations
8. Which health policy clause requires an insurance company to attach a copy of the
application to the policy to ensure it is part of the contract?
o Answer: The Entire Contract Clause
o Explanation: This clause ensures that the policyholder receives a copy of the
contract, including the application, to prevent future disputes.
9. What does the legal actions provision of an Accident & Health policy require?
o Answer: An insured must wait at least 60 days after submitting Proof of Loss
before filing a lawsuit.
o Explanation: This provision prevents lawsuits from being filed prematurely and
gives insurers time to investigate claims.
10. What must a policy owner provide to validate that a loss has occurred?
, o Answer: Proof of Loss
o Explanation: The insured must submit official documentation of their claim
within a specified timeframe for the insurer to process the claim.
11. How will an insurer handle a claim if a policyholder is injured while committing an
illegal act (e.g., carjacking)?
o Answer: The claim will be denied.
o Explanation: Health insurance policies typically exclude coverage for injuries
sustained while committing illegal acts.
12. What is required by the Notice of Claims provision?
o Answer: The policy owner must notify the insurer of a claim within a specified
time.
o Explanation: This provision ensures timely reporting of claims, allowing the
insurer to assess and process them efficiently.
13. What action may a policy owner NOT take under an Accident & Health policy?
o Answer: Adjust the premium payments
o Explanation: Only the insurer can change premiums, usually due to policy
renewal, changes in risk classification, or regulatory adjustments.
14. When must an insurer pay benefits for an approved claim under an individual Health
Insurance policy?
o Answer: Immediately
o Explanation: Once a claim is deemed valid, benefits must be disbursed without
unnecessary delay.
15. Which section of an insurance contract defines coverage limitations?
o Answer: Exclusions
o Explanation: The exclusions section details what is not covered under the policy,
such as pre-existing conditions, self-inflicted injuries, or certain high-risk
activities.
16. If an insured had a pre-existing but undisclosed neck injury five years before applying
for disability income insurance and now submits a claim for total disability due to the
injury, how will the insurer handle the claim?
