NJ Health Insurance Exam (XCEL
Solutions) Correct Answers
Which of the following statements regarding Group Disability Income Insurance is
TRUE? - ANSWER-it provides benefits for nonoccupational illnesses and injuries
An example of a presumptive disability would be - ANSWER-deafness
A policyowner suffers an injury that renders him incapable of performing one or more
important job duties. Any decrease in income resulting from this injury would make
him eligible for benefits under which provision? - ANSWER-partial disability
Jonas has disability insurance through his employer. The employer pays 75% of the
premium, and Jonas pays the other 25%. What is Jonas's tax liability for any benefits
paid from the disability plan? - ANSWER-taxes must be paid on the 75% of the
benefits received
Chris is an insured bricklayer who severed his left hand in an automobile accident.
Although his primary duty cannot be performed, Chris is also a substitute high school
teacher. He collects a full disability income check every month. How does his policy
define total disability? - ANSWER-own occupation
Frank is shopping for a disability income policy. Which of the following would have
the HIGHEST premium?
14 day waiting period/5 year benefit period
14 day waiting period/10 year benefit period
28 day waiting period/5 year benefit period
28 day waiting period/10 year benefit period - ANSWER-14 day waiting period/10
year benefit period
A rehabilitation benefit is intended to - ANSWER-prepare the insured to return to
employment
Tom has a rider on his disability income policy that guarantees the right to increase
his benefits without a medical exam. What kind of rider is this? - ANSWER-
guaranteed insurability rider
A disability income policy can prevent an insured from earning a higher income than
if he/she were working by utilizing - ANSWER-benefit limits
In what form do disability income policies typically pay benefits? - ANSWER-periodic
income
Bryce purchased a disability income policy with a rider that guarantees him the
option of purchasing additional amounts of coverage at predetermined times without
requiring to provide evidence of insurability. What kind of rider is this? - ANSWER-
guaranteed insurability rider
,A disability policyowner is injured and becomes totally disabled. The benefits pay for
2 years, starting from the date of the injury. What is this time period called? -
ANSWER-benefit period
Tyler purchased a disability policy with a waiver of premium rider on April 1. He is
disabled on May 1. On June 1, he receives proof of permanent and total disability,
and submits a claim. He begins receiving benefits on June 15. When are his
premiums waived? - ANSWER-May 1
Claims payable to a Disability Income insured, even when the insured can continue
to work, are the result of a - ANSWER-presumptive disability
Which of these would NOT be considered a presumptive disability? - ANSWER-loss
of a leg or arm
Major medical expense plans provide coverage for each of the following EXCEPT
medically necessary surgery
diagnostic tests
blood and urine lab screens
work-related injuries - ANSWER-work-related injuries
Medical Expense Insurance would cover - ANSWER-an injury occurring at the
insured's residence
Major medical insurance will typically cover medical expenses that result from -
ANSWER-a negative reaction to prescribed medication
Ted has a health insurance plan that requires him to pay a specific sum out of pocket
before any benefits are paid in a calendar year. Which of these does his health plan
have? - ANSWER-Calendar-year deductible
Jennifer is required to pay a specific sum out of pocket before any benefits are paid
in a year. Her health policy most likely contains a(n) - ANSWER-deductible
An insured has a health plan that pays established amounts in accordance with a list
of injuries, surgical procedures, or other losses. This list is called a - ANSWER-
benefit schedule
Which type of coverage pays an amount per day for hospitalization directly to the
insured regardless of the insured's other health insurance? - ANSWER-hospital
indemnity
A health insurance policy will typically cover - ANSWER-preventative health services
Which of the following is NOT included under a health benefit plan?
major medical policy
basic hospital policy
hospital indemnity plan
surgical expense policy - ANSWER-hospital indemnity plan
, "Maximum benefits" refers to the - ANSWER-upper limit of the total lifetime benefits
the insurance company will pay
A dread disease policy is considered to be a type of - ANSWER-limited health
insurance policy
When an insured has a major medical plan with first dollar coverage, how does this
impact the benefits paid? - ANSWER-no deductible payment is required
What type of policy would only provide coverage for specific types of illnesses
(cancer, stroke, etc)? - ANSWER-dread disease insurance
Amy has a group medical policy through her employer with a $500 deductible and a
90% coinsurance provision. She incurs $1,500 in covered health care services. How
much will her group insurance carrier pay? - ANSWER-$900
Low frequency diseases can be exclusively covered by what kind of health insurance
policies? - ANSWER-limited policies
The focus of major medical insurance is providing coverage for - ANSWER-medical
hospitalization expenses
A proposed insured for a health insurance policy was treated for heart disease within
the past year. When applying for health insurance, the heart disease treatment -
ANSWER-indicates a preexisting condition
Which of the following statements is NOT true regarding a Critical Illness Plan?
pays a lump sum to the insured upon the diagnosis of a critical illness
the insurer may have a list of critical illnesses they will cover
coverage is limited to a single devastating disease
also known as specified disease plans - ANSWER-coverage is limited to a single
devastating disease
An example of elective cosmetic surgery would be - ANSWER-removing excess fat
from an insured's waistline
Kate has a Major Medical Plan with a 75/25 coinsurance and a deductible of $25.
How much will she have to pay if she, not having met any of her deductible, visits the
doctor and receives a bill for $125? - ANSWER-$50
An insured has a stop-loss limit of $5,000, a deductible of $500, and an 80/20
coinsurance. The insured incurs $25,000 of covered losses. How much will the
insured have to pay? - ANSWER-$5,000
Which oft he following types of deductibles would apply a single deductible to both
medical and dental insurance coverage? - ANSWER-integrated deductible
An indemnity plan - ANSWER-provides the insured a specific dollar amount for
services
Solutions) Correct Answers
Which of the following statements regarding Group Disability Income Insurance is
TRUE? - ANSWER-it provides benefits for nonoccupational illnesses and injuries
An example of a presumptive disability would be - ANSWER-deafness
A policyowner suffers an injury that renders him incapable of performing one or more
important job duties. Any decrease in income resulting from this injury would make
him eligible for benefits under which provision? - ANSWER-partial disability
Jonas has disability insurance through his employer. The employer pays 75% of the
premium, and Jonas pays the other 25%. What is Jonas's tax liability for any benefits
paid from the disability plan? - ANSWER-taxes must be paid on the 75% of the
benefits received
Chris is an insured bricklayer who severed his left hand in an automobile accident.
Although his primary duty cannot be performed, Chris is also a substitute high school
teacher. He collects a full disability income check every month. How does his policy
define total disability? - ANSWER-own occupation
Frank is shopping for a disability income policy. Which of the following would have
the HIGHEST premium?
14 day waiting period/5 year benefit period
14 day waiting period/10 year benefit period
28 day waiting period/5 year benefit period
28 day waiting period/10 year benefit period - ANSWER-14 day waiting period/10
year benefit period
A rehabilitation benefit is intended to - ANSWER-prepare the insured to return to
employment
Tom has a rider on his disability income policy that guarantees the right to increase
his benefits without a medical exam. What kind of rider is this? - ANSWER-
guaranteed insurability rider
A disability income policy can prevent an insured from earning a higher income than
if he/she were working by utilizing - ANSWER-benefit limits
In what form do disability income policies typically pay benefits? - ANSWER-periodic
income
Bryce purchased a disability income policy with a rider that guarantees him the
option of purchasing additional amounts of coverage at predetermined times without
requiring to provide evidence of insurability. What kind of rider is this? - ANSWER-
guaranteed insurability rider
,A disability policyowner is injured and becomes totally disabled. The benefits pay for
2 years, starting from the date of the injury. What is this time period called? -
ANSWER-benefit period
Tyler purchased a disability policy with a waiver of premium rider on April 1. He is
disabled on May 1. On June 1, he receives proof of permanent and total disability,
and submits a claim. He begins receiving benefits on June 15. When are his
premiums waived? - ANSWER-May 1
Claims payable to a Disability Income insured, even when the insured can continue
to work, are the result of a - ANSWER-presumptive disability
Which of these would NOT be considered a presumptive disability? - ANSWER-loss
of a leg or arm
Major medical expense plans provide coverage for each of the following EXCEPT
medically necessary surgery
diagnostic tests
blood and urine lab screens
work-related injuries - ANSWER-work-related injuries
Medical Expense Insurance would cover - ANSWER-an injury occurring at the
insured's residence
Major medical insurance will typically cover medical expenses that result from -
ANSWER-a negative reaction to prescribed medication
Ted has a health insurance plan that requires him to pay a specific sum out of pocket
before any benefits are paid in a calendar year. Which of these does his health plan
have? - ANSWER-Calendar-year deductible
Jennifer is required to pay a specific sum out of pocket before any benefits are paid
in a year. Her health policy most likely contains a(n) - ANSWER-deductible
An insured has a health plan that pays established amounts in accordance with a list
of injuries, surgical procedures, or other losses. This list is called a - ANSWER-
benefit schedule
Which type of coverage pays an amount per day for hospitalization directly to the
insured regardless of the insured's other health insurance? - ANSWER-hospital
indemnity
A health insurance policy will typically cover - ANSWER-preventative health services
Which of the following is NOT included under a health benefit plan?
major medical policy
basic hospital policy
hospital indemnity plan
surgical expense policy - ANSWER-hospital indemnity plan
, "Maximum benefits" refers to the - ANSWER-upper limit of the total lifetime benefits
the insurance company will pay
A dread disease policy is considered to be a type of - ANSWER-limited health
insurance policy
When an insured has a major medical plan with first dollar coverage, how does this
impact the benefits paid? - ANSWER-no deductible payment is required
What type of policy would only provide coverage for specific types of illnesses
(cancer, stroke, etc)? - ANSWER-dread disease insurance
Amy has a group medical policy through her employer with a $500 deductible and a
90% coinsurance provision. She incurs $1,500 in covered health care services. How
much will her group insurance carrier pay? - ANSWER-$900
Low frequency diseases can be exclusively covered by what kind of health insurance
policies? - ANSWER-limited policies
The focus of major medical insurance is providing coverage for - ANSWER-medical
hospitalization expenses
A proposed insured for a health insurance policy was treated for heart disease within
the past year. When applying for health insurance, the heart disease treatment -
ANSWER-indicates a preexisting condition
Which of the following statements is NOT true regarding a Critical Illness Plan?
pays a lump sum to the insured upon the diagnosis of a critical illness
the insurer may have a list of critical illnesses they will cover
coverage is limited to a single devastating disease
also known as specified disease plans - ANSWER-coverage is limited to a single
devastating disease
An example of elective cosmetic surgery would be - ANSWER-removing excess fat
from an insured's waistline
Kate has a Major Medical Plan with a 75/25 coinsurance and a deductible of $25.
How much will she have to pay if she, not having met any of her deductible, visits the
doctor and receives a bill for $125? - ANSWER-$50
An insured has a stop-loss limit of $5,000, a deductible of $500, and an 80/20
coinsurance. The insured incurs $25,000 of covered losses. How much will the
insured have to pay? - ANSWER-$5,000
Which oft he following types of deductibles would apply a single deductible to both
medical and dental insurance coverage? - ANSWER-integrated deductible
An indemnity plan - ANSWER-provides the insured a specific dollar amount for
services
