Accident and Health Insurance
Agent/Broker Practice Exam
Sally is considering her Medicare options. She understands that to enroll in Medicare Part B,
she will have to pay a monthly premium. Since she is healthy, she is considering delaying her
enrollment until later. Will she be able to enroll at a later date?
1.Yes, she can enroll at anytime in the future
2.Yes, however; she would have a permanent premium penalty when she does enroll
3.No, this is a take or leave it situation
4.Yes, but she would have to show evidence of good health. - ANSYes, however; she would
have a permanent premium penalty when she does enroll
Under Medicare Part A, a spell of illness begins again and is subject to a new deductible for
another admission when:
1.The patient has been discharged from a prior stay and 45 days have elapsed
2.The patient has been discharged from a prior stay and 30 days have elapsed
3.The patient has been discharged from a prior stay and 60 days have elapsed
4.The patient has been discharged from a prior stay and 90 days have elapsed - ANSThe
patient has been discharged from a prior stay and 60 days have elapsed
What type of insurer retains risk?
1.Government insurance.
2.Reinsurers.
3.Self insurers.
4.Assessment insurers. - ANSSelf insurers.
A variety of types of care are provided under a long-term care policy. All of the following are
types of care generally provided EXCEPT:
1.Home health care
2.Intensive care
3.Custodial care
4.Skilled care - ANSIntensive care
Melvin has a long-term care policy with a 30-day elimination period. The policy has a daily
benefit of $100/day. The policy has a 3-year benefit period. If Melvin is confined to a nursing
home for 9 months, how much in benefits will his policy pay?
1.$27,000
,2.$18,000
3.$24,000
4.$17,000 - ANS$24,000
Martin and his friends were at a local tavern celebrating his birthday. Martin left the bar to drive
home, but unfortunately, he was involved in a fatal accident, killing himself and two other
individuals. An autopsy reveals that Martin was well above the legal limit on his blood alcohol
test. Martin's family will receive the following from his Accidental Death and Dismemberment
policy:
1.His family will receive reduced benefits since other deaths were involved.
2.His family will receive the principal sum since this was death
3.His family will receive no benefits, since he was in the act of committing a felony
4.His family will receive no benefits since there was no dismemberment involved. - ANSHis
family will receive no benefits, since he was in the act of committing a felony
An exclusion that always appears in a health policy is:
1.No coverage for drug or alcohol related illness
2.Hernia from an accident
3.Travel outside of the USA
4.Injury in the act of committing a felony - ANSInjury in the act of committing a felony
Bruce owns a plan that pays $100 daily benefit for a hospital stay with no deductible. This kind
of policy is known as a (an):
1.Major medical plan
2.Basic plan
3.Indemnity plan
4.Reimbursement plan - ANSIndemnity plan
Under what conditions is the death benefit (principal sum) payable under an Accidental Death
and Dismemberment (AD&D) policy?
1.The insured dies from a grave illness
2.The insured dies from natural causes
3.The insured dies from an accident
4.All of the above - ANSThe insured dies from an accident
An insurance agent told a member of his church who had recently experienced several personal
and financial losses that he could see that she got a more favorable rate on her insurance
policies than her health and general circumstances would warrant. The woman had been his
kindergarten teacher and was a pillar in the community's life. He wanted to help her. Which of
the following is FALSE?
,1.The agent was breaking the law.
2.The agent is compassionate.
3.The agent was engaging in unfair discrimination.
4.The agent was engaging in twisting. - ANSThe agent was engaging in twisting.
Which of the following is NOT considered to be an unfair claims settlement practice?
1.Knowingly misrepresenting policy provisions.
2.Replacing one insurance policy with another.
3.Failing to promptly acknowledge pertinent communications.
4.Refusing to pay claimants without conducting a reasonable investigation. - ANSReplacing one
insurance policy with another.
The practice of using misrepresentation to induce a policyholder to replace a policy issued by
the insurer the producer represents is called:
1.twisting.
2.churning.
3.intimidation.
4.misrepresentation. - ANSchurning.
All of the following acts are considered unfair trade practices EXCEPT:
1.replacement.
2.misrepresentation
3.coercion.
4.rebating. - ANSreplacement.
What gives the insurance company the right to assume rights of the insured in order to sue a
responsible third party when damages are inflicted on the insured?
1.Warranties
2.Subrogation
3.Concealment
4.Utmost good faith - ANSSubrogation
Insurance contracts sometimes contain ambiguities. Which of the following has not been taken
to court for further interpretation?
1.Reasonable expectations
2.Subrogation
3.Ambiguities in a contract of adhesion
4.Utmost good faith - ANSSubrogation
, There are various optional provision for health policies. Which of the following is not an optional
provision?
1.Intoxicants and narcotics
2.Conformity with state statutes
3.Reinstatement
4.Illegal occupation - ANSReinstatement
Tony (the insured) cancelled his health policy by submitting a written notice to the insurer. How
are unearned premiums handled?
1.Returned to the insured using a pro-rata basis
2.They are returned to the agent
3.The insurer gets to keep them
4.Returned to the insured using a short-rate basis - ANSReturned to the insured using a
short-rate basis
The Patient Protection and Affordable Care Act allows states to combine their SHOP exchange
with -
1.Commercial insurance companies
2.Their Medicaid recipients
3.Their exchange for individual consumers
4.All of the above - ANSTheir exchange for individual consumers
o elect continuation of coverage, the insured must request continuation during the election
period (45 days after the date of the _____). Employers must provide the proper forms for
election within 14 days of receipt of request of election.
1.Arraignment, annulment, or release on bond
2.Indictment, cancellation, or invalidation
3. incarceration, or arraignment
4.Death, divorce, or termination - ANSDeath, divorce, or termination
Insurers must maintain an advertising file of all material printed, published, or distributed
advertisements of policies for _____, subject to examination by the Commissioner.
1.No more than five years
2.No less than four years
3.No more than two years
4.No less than three years - ANSNo less than three years
Agent/Broker Practice Exam
Sally is considering her Medicare options. She understands that to enroll in Medicare Part B,
she will have to pay a monthly premium. Since she is healthy, she is considering delaying her
enrollment until later. Will she be able to enroll at a later date?
1.Yes, she can enroll at anytime in the future
2.Yes, however; she would have a permanent premium penalty when she does enroll
3.No, this is a take or leave it situation
4.Yes, but she would have to show evidence of good health. - ANSYes, however; she would
have a permanent premium penalty when she does enroll
Under Medicare Part A, a spell of illness begins again and is subject to a new deductible for
another admission when:
1.The patient has been discharged from a prior stay and 45 days have elapsed
2.The patient has been discharged from a prior stay and 30 days have elapsed
3.The patient has been discharged from a prior stay and 60 days have elapsed
4.The patient has been discharged from a prior stay and 90 days have elapsed - ANSThe
patient has been discharged from a prior stay and 60 days have elapsed
What type of insurer retains risk?
1.Government insurance.
2.Reinsurers.
3.Self insurers.
4.Assessment insurers. - ANSSelf insurers.
A variety of types of care are provided under a long-term care policy. All of the following are
types of care generally provided EXCEPT:
1.Home health care
2.Intensive care
3.Custodial care
4.Skilled care - ANSIntensive care
Melvin has a long-term care policy with a 30-day elimination period. The policy has a daily
benefit of $100/day. The policy has a 3-year benefit period. If Melvin is confined to a nursing
home for 9 months, how much in benefits will his policy pay?
1.$27,000
,2.$18,000
3.$24,000
4.$17,000 - ANS$24,000
Martin and his friends were at a local tavern celebrating his birthday. Martin left the bar to drive
home, but unfortunately, he was involved in a fatal accident, killing himself and two other
individuals. An autopsy reveals that Martin was well above the legal limit on his blood alcohol
test. Martin's family will receive the following from his Accidental Death and Dismemberment
policy:
1.His family will receive reduced benefits since other deaths were involved.
2.His family will receive the principal sum since this was death
3.His family will receive no benefits, since he was in the act of committing a felony
4.His family will receive no benefits since there was no dismemberment involved. - ANSHis
family will receive no benefits, since he was in the act of committing a felony
An exclusion that always appears in a health policy is:
1.No coverage for drug or alcohol related illness
2.Hernia from an accident
3.Travel outside of the USA
4.Injury in the act of committing a felony - ANSInjury in the act of committing a felony
Bruce owns a plan that pays $100 daily benefit for a hospital stay with no deductible. This kind
of policy is known as a (an):
1.Major medical plan
2.Basic plan
3.Indemnity plan
4.Reimbursement plan - ANSIndemnity plan
Under what conditions is the death benefit (principal sum) payable under an Accidental Death
and Dismemberment (AD&D) policy?
1.The insured dies from a grave illness
2.The insured dies from natural causes
3.The insured dies from an accident
4.All of the above - ANSThe insured dies from an accident
An insurance agent told a member of his church who had recently experienced several personal
and financial losses that he could see that she got a more favorable rate on her insurance
policies than her health and general circumstances would warrant. The woman had been his
kindergarten teacher and was a pillar in the community's life. He wanted to help her. Which of
the following is FALSE?
,1.The agent was breaking the law.
2.The agent is compassionate.
3.The agent was engaging in unfair discrimination.
4.The agent was engaging in twisting. - ANSThe agent was engaging in twisting.
Which of the following is NOT considered to be an unfair claims settlement practice?
1.Knowingly misrepresenting policy provisions.
2.Replacing one insurance policy with another.
3.Failing to promptly acknowledge pertinent communications.
4.Refusing to pay claimants without conducting a reasonable investigation. - ANSReplacing one
insurance policy with another.
The practice of using misrepresentation to induce a policyholder to replace a policy issued by
the insurer the producer represents is called:
1.twisting.
2.churning.
3.intimidation.
4.misrepresentation. - ANSchurning.
All of the following acts are considered unfair trade practices EXCEPT:
1.replacement.
2.misrepresentation
3.coercion.
4.rebating. - ANSreplacement.
What gives the insurance company the right to assume rights of the insured in order to sue a
responsible third party when damages are inflicted on the insured?
1.Warranties
2.Subrogation
3.Concealment
4.Utmost good faith - ANSSubrogation
Insurance contracts sometimes contain ambiguities. Which of the following has not been taken
to court for further interpretation?
1.Reasonable expectations
2.Subrogation
3.Ambiguities in a contract of adhesion
4.Utmost good faith - ANSSubrogation
, There are various optional provision for health policies. Which of the following is not an optional
provision?
1.Intoxicants and narcotics
2.Conformity with state statutes
3.Reinstatement
4.Illegal occupation - ANSReinstatement
Tony (the insured) cancelled his health policy by submitting a written notice to the insurer. How
are unearned premiums handled?
1.Returned to the insured using a pro-rata basis
2.They are returned to the agent
3.The insurer gets to keep them
4.Returned to the insured using a short-rate basis - ANSReturned to the insured using a
short-rate basis
The Patient Protection and Affordable Care Act allows states to combine their SHOP exchange
with -
1.Commercial insurance companies
2.Their Medicaid recipients
3.Their exchange for individual consumers
4.All of the above - ANSTheir exchange for individual consumers
o elect continuation of coverage, the insured must request continuation during the election
period (45 days after the date of the _____). Employers must provide the proper forms for
election within 14 days of receipt of request of election.
1.Arraignment, annulment, or release on bond
2.Indictment, cancellation, or invalidation
3. incarceration, or arraignment
4.Death, divorce, or termination - ANSDeath, divorce, or termination
Insurers must maintain an advertising file of all material printed, published, or distributed
advertisements of policies for _____, subject to examination by the Commissioner.
1.No more than five years
2.No less than four years
3.No more than two years
4.No less than three years - ANSNo less than three years
