HEALTH INSURANCE EXAM CORRECT
QUESTIONS & ANSWERS 2025 LATEST
UPDATE
health insurance - ANSWER broadly covers many risks, such as the loss of income
because of disability; the costs of medical care and treatment; and the costs of care not
covered by government plans
hazards - ANSWER a condition that increases the number of or the severity of losses
managed care providers - ANSWER provide their insured with health care directly
through a network of health care providers
government plans - ANSWER in relation to health insurance, government plans are a
third health insurance option after commercial insurers and managed care plans,
government plans include Medicare, Medicaid, Social Security, and Worker's Comp
Medicare - ANSWER a federal government program that provides hospital and medical
insurance to people age 65 and older.
Medicaid - ANSWER a state public assistance program (with some federal support) that
provides health care benefits for the poor of any age.
Social Security (Disability) - ANSWER provides disability income to people under age
65 who become totally disabled.
State workers' compensation - ANSWER provides benefits to workers who become sick
or injured because of a job-related event.
group plan sponsor - ANSWER the policy owner and premium payor
Patient Protection and Affordable Care Act (PPACA) - ANSWER Affordable Care Act
(ACA)
EHBs - ANSWER Essential health benefits
coinsurance - ANSWER a provision in most major medial policies that requires the
insured to pay a certain percentage of the covered costs in addition to the deductible,
usually 20-30%
catastrophic plans - ANSWER available to persons who are younger than 30 years and
cannot afford any other health insurance, or who are willing to accept minimal coverage
in exchange for a high deductible and a low premium.
,deductible - ANSWER a stated sum of money that the insured must pay before any
major medical policy benefits are paid
Medical Los Ratio (MLR) - ANSWER The PPACA compels insurers to spend a
minimum percentage of premium dollars on providing health care coverage and
improving the quality of health care. The MLR ensures consumers that their premiums
are spent primarily on health care coverage, and not on insurers' administrative and
overhead business costs.
Individual Coverage Mandate - ANSWER Beginning in 2014, all individuals are required
to obtain health insurance coverage or pay a penalty. The penalty will start at $95 per
person for 2014 and increase each year. (It increases to $325 in 2015 and to $695, or
up to 2.5 percent of income, in 2016.) Families will pay half the penalty amount for
children, up to a cap of $2,250 per family. Individuals may be eligible for an exemption
from the penalty if they cannot obtain affordable coverage.q
Employer Coverage Mandate - ANSWER Employers with 50 or more employees that do
not offer a medical plan face a penalty if any of those employees receives a government
subsidy, of any form, to buy individual coverage. The penalty amount is up to $2,000
annually for each full-time employee. Moreover, employers who do offer coverage, but
whose employees receive tax credits nonetheless, will be subject to a fine of $3,000 for
each worker receiving a tax credit.
Reimbursement contracts - ANSWER base the amount of benefit on the loss that is
actually incurred. For instance, a policy that pays 80 percent of the covered loss is a
reimbursement contract. Medical expense policies are reimbursement contracts, as are
disability income policies (which reimburse lost income).
Valued contracts - ANSWER pay a stipulated sum as set forth in the contract, without
regard for actual expenses. Accidental death and dismemberment insurance policies
are valued contracts, as are life insurance policies. "Dread disease" policies that pay a
stated value upon loss are valued contracts.
statement of continued good health - ANSWER stating that no change to his or her
health has occurred since the application was first signed.
Notice of Information Practices - ANSWER informs the applicant of the insurer's right to
collect information from sources other than the application. In addition, it states how the
insurer can share that information with third parties.
Buyer's Guide - ANSWER explains the applicant's rights and responsibilities with regard
to the type of insurance coverage being applied for.
Policy Summary - ANSWER outlines the coverages and benefits of the specific policy
being applied for.
, errors and omissions, or E&O, insurance - ANSWER covers injuries and damages that
occur due to professional services a producer rendered or failed to render.
entire contract provision - ANSWER states that the policy, attached riders, and
endorsements make up the entire contract. Any other agreements outside of the
contract, either written or oral, are not considered part of the contract.
time limit on certain defenses provision - ANSWER limits the time an insurer can void a
contract or deny a claim for material misrepresentations on the application.
reinstatement provision - ANSWER allows a policyowner to reinstate a policy that has
lapsed. The policy is considered to be lapsed if the premium was not paid by the end of
the grace period.
physical examination and autopsy provision - ANSWER allows the insurer to require the
insured to take a physical exam during the claims investigation process, at the insurer's
expense. This is especially common with disability income claims. If the claim is related
to the insured's death, this provision also allows the insurer to order an autopsy, also at
the insurer's expense, to determine the cause of death.
legal actions provision - ANSWER defines the period of time during which the insured
can take a legal action against the insurer because it didn't pay a claim to the insured's
satisfaction. Under this provision, the insured cannot take legal action against the
insurer until at least 60 days after the insured provides proof of loss to the insurer.
Moreover, the insured cannot take legal action against the insurer more than three
years after proof of loss was required. In other words, the period during which legal
action can be taken ranges from 60 days after proof of loss has been provided to three
years after proof was provided.
change of beneficiary provision - ANSWER applies to those cases where the policy
provides a death benefit and a beneficiary has been designated. This provision states
that the policyowner has the right to change beneficiaries. However, a beneficiary can
be changed only if he or she had been designated revocable.
payment of claims provision - ANSWER details how claims are paid out. If loss of life is
involved, then the insurer pays the claims to the insured's beneficiary. If the insured did
not specify a beneficiary, then the insurer pays the claim to the insured's estate. The
insurer must also pay claims that are not death benefits.
notice of claim provision - ANSWER requires that the insured notify the insurer within 20
days after he or she has a covered loss. In some cases, it may not be possible for the
insured policyowner to notify the insurer within those 20 days. As a result, the clause is
modified and softened by adding the language ". . . or as soon as reasonably possible."
A notice of claim simply alerts the insurer that the insured will be making a claim against
QUESTIONS & ANSWERS 2025 LATEST
UPDATE
health insurance - ANSWER broadly covers many risks, such as the loss of income
because of disability; the costs of medical care and treatment; and the costs of care not
covered by government plans
hazards - ANSWER a condition that increases the number of or the severity of losses
managed care providers - ANSWER provide their insured with health care directly
through a network of health care providers
government plans - ANSWER in relation to health insurance, government plans are a
third health insurance option after commercial insurers and managed care plans,
government plans include Medicare, Medicaid, Social Security, and Worker's Comp
Medicare - ANSWER a federal government program that provides hospital and medical
insurance to people age 65 and older.
Medicaid - ANSWER a state public assistance program (with some federal support) that
provides health care benefits for the poor of any age.
Social Security (Disability) - ANSWER provides disability income to people under age
65 who become totally disabled.
State workers' compensation - ANSWER provides benefits to workers who become sick
or injured because of a job-related event.
group plan sponsor - ANSWER the policy owner and premium payor
Patient Protection and Affordable Care Act (PPACA) - ANSWER Affordable Care Act
(ACA)
EHBs - ANSWER Essential health benefits
coinsurance - ANSWER a provision in most major medial policies that requires the
insured to pay a certain percentage of the covered costs in addition to the deductible,
usually 20-30%
catastrophic plans - ANSWER available to persons who are younger than 30 years and
cannot afford any other health insurance, or who are willing to accept minimal coverage
in exchange for a high deductible and a low premium.
,deductible - ANSWER a stated sum of money that the insured must pay before any
major medical policy benefits are paid
Medical Los Ratio (MLR) - ANSWER The PPACA compels insurers to spend a
minimum percentage of premium dollars on providing health care coverage and
improving the quality of health care. The MLR ensures consumers that their premiums
are spent primarily on health care coverage, and not on insurers' administrative and
overhead business costs.
Individual Coverage Mandate - ANSWER Beginning in 2014, all individuals are required
to obtain health insurance coverage or pay a penalty. The penalty will start at $95 per
person for 2014 and increase each year. (It increases to $325 in 2015 and to $695, or
up to 2.5 percent of income, in 2016.) Families will pay half the penalty amount for
children, up to a cap of $2,250 per family. Individuals may be eligible for an exemption
from the penalty if they cannot obtain affordable coverage.q
Employer Coverage Mandate - ANSWER Employers with 50 or more employees that do
not offer a medical plan face a penalty if any of those employees receives a government
subsidy, of any form, to buy individual coverage. The penalty amount is up to $2,000
annually for each full-time employee. Moreover, employers who do offer coverage, but
whose employees receive tax credits nonetheless, will be subject to a fine of $3,000 for
each worker receiving a tax credit.
Reimbursement contracts - ANSWER base the amount of benefit on the loss that is
actually incurred. For instance, a policy that pays 80 percent of the covered loss is a
reimbursement contract. Medical expense policies are reimbursement contracts, as are
disability income policies (which reimburse lost income).
Valued contracts - ANSWER pay a stipulated sum as set forth in the contract, without
regard for actual expenses. Accidental death and dismemberment insurance policies
are valued contracts, as are life insurance policies. "Dread disease" policies that pay a
stated value upon loss are valued contracts.
statement of continued good health - ANSWER stating that no change to his or her
health has occurred since the application was first signed.
Notice of Information Practices - ANSWER informs the applicant of the insurer's right to
collect information from sources other than the application. In addition, it states how the
insurer can share that information with third parties.
Buyer's Guide - ANSWER explains the applicant's rights and responsibilities with regard
to the type of insurance coverage being applied for.
Policy Summary - ANSWER outlines the coverages and benefits of the specific policy
being applied for.
, errors and omissions, or E&O, insurance - ANSWER covers injuries and damages that
occur due to professional services a producer rendered or failed to render.
entire contract provision - ANSWER states that the policy, attached riders, and
endorsements make up the entire contract. Any other agreements outside of the
contract, either written or oral, are not considered part of the contract.
time limit on certain defenses provision - ANSWER limits the time an insurer can void a
contract or deny a claim for material misrepresentations on the application.
reinstatement provision - ANSWER allows a policyowner to reinstate a policy that has
lapsed. The policy is considered to be lapsed if the premium was not paid by the end of
the grace period.
physical examination and autopsy provision - ANSWER allows the insurer to require the
insured to take a physical exam during the claims investigation process, at the insurer's
expense. This is especially common with disability income claims. If the claim is related
to the insured's death, this provision also allows the insurer to order an autopsy, also at
the insurer's expense, to determine the cause of death.
legal actions provision - ANSWER defines the period of time during which the insured
can take a legal action against the insurer because it didn't pay a claim to the insured's
satisfaction. Under this provision, the insured cannot take legal action against the
insurer until at least 60 days after the insured provides proof of loss to the insurer.
Moreover, the insured cannot take legal action against the insurer more than three
years after proof of loss was required. In other words, the period during which legal
action can be taken ranges from 60 days after proof of loss has been provided to three
years after proof was provided.
change of beneficiary provision - ANSWER applies to those cases where the policy
provides a death benefit and a beneficiary has been designated. This provision states
that the policyowner has the right to change beneficiaries. However, a beneficiary can
be changed only if he or she had been designated revocable.
payment of claims provision - ANSWER details how claims are paid out. If loss of life is
involved, then the insurer pays the claims to the insured's beneficiary. If the insured did
not specify a beneficiary, then the insurer pays the claim to the insured's estate. The
insurer must also pay claims that are not death benefits.
notice of claim provision - ANSWER requires that the insured notify the insurer within 20
days after he or she has a covered loss. In some cases, it may not be possible for the
insured policyowner to notify the insurer within those 20 days. As a result, the clause is
modified and softened by adding the language ". . . or as soon as reasonably possible."
A notice of claim simply alerts the insurer that the insured will be making a claim against
