North Carolina Health Insurance
License Test 2025 Preparation Test
Bank With 200 Questions and Correct
Detailed Answers for Actual Exam
Practice| NC Health Insurance Exam
Prep Test Bank (Latest)
A client has a new individual disability income policy with a
20-day probationary period and a 30-day elimination
period. Ten days later, the client breaks their leg and is off
work for 45 days. How many days of disability benefits will
the policy pay?
a)10 days
b)15 days
c)25 days
d)45 daysCorrect Answer b)15 days
A probationary period refers to the amount of time that
coverage is not available for illness-related disabilities, so
it would not apply to a broken leg. The elimination period,
however, is the time that must elapse between the onset
of the disability and when benefits will start being paid. In
this case, the individual is considered disabled for 45
days, and the benefits will start to be paid after 30 days.
So, the client will receive benefits for 15 days.
,An insured misstated her age on an application for an
individual health insurance policy. The insurance company
found the mistake after the contestable period had
expired. The insurance company will take which of the
following actions regarding any claim that has been
issued?
a)Adjust the claim benefit to reflect the insured's true age
b)Deny any claims and cancel the policy
c)Deny paying a claim based on misrepresentation
d)Pay the full amount of a claim because the contestable
period has endedCorrect Answer a)Adjust the claim
benefit to reflect the insured's true age
The Misstatement of Age provision says that if a client has
misstated her age, whether intentional or unintentional,
they will adjust the benefit being paid. It doesn't matter
when the mistake was found.
When an individual is covered under two health insurance
policies that have duplicate benefits which could make a
claim for benefits because of an injury or illness profitable,
it is called
a)Pro-rata coverage.
b)Overinsurance
c)Double indemnity coverage.
d)Fraternal coverage.Correct Answer b)Overinsurance
,Overinsurance is a term used to describe the situation that
is created when an individual purchases duplicating
coverage with the intent to collect from each policy for a
single loss.
A brain surgeon has an accident and develops tremors in
her right arm. Which disability income policy definition of
total disability will cover her for all losses?
a)"Any occupation" - more restrictive than other definitions
b)"Own occupation" - less restrictive than other definitions
c)"Own occupation" - more restrictive than other definitions
d)"Any occupation" - less restrictive than other
definitionsCorrect Answer b)"Own occupation" - less
restrictive than other definitions
In theory, the brain surgeon could find other work, but
because her disability income policy specifies that she is
covered for her own occupation, she would be wholly
covered.
All of the following are true regarding key person disability
income insurance EXCEPT
a)The employee is the insured.
b)Premiums are tax deductible as a business expense.
c)The employer receives the benefits if the key person is
disabled.
d)The employer pays the premiums.Correct Answer
b)Premiums are tax deductible as a business expense.
, In key person disability insurance, the contract is owned
by the business, the premium is paid by the business, and
the business is the beneficiary. The key person is the
insured, and the business must have the key person's
consent to be insured in writing.
Which of the following is NOT a feature of a guaranteed
renewable provision?
a)The insured has a unilateral right to renew the policy for
the life of the contract.
b)Coverage is not renewable beyond the insured's age 65.
c)The insured's benefits cannot be reduced.
d)The insurer can increase the policy premium on an
individual basis.Correct Answer d)The insurer can
increase the policy premium on an individual basis.
Guaranteed renewable provision has all the same features
that the noncancellable provision does, with the exception
that the insurer can increase the policy premium on the
policy anniversary date. However, the premiums can only
be increased on a class basis, not on an individual policy.
Which of the following is NOT a feature of a
noncancellable policy?
a)The insured has the right to renew the policy for the life
of the contract.
b)The insurer may terminate the contract only at renewal
for certain conditions.
License Test 2025 Preparation Test
Bank With 200 Questions and Correct
Detailed Answers for Actual Exam
Practice| NC Health Insurance Exam
Prep Test Bank (Latest)
A client has a new individual disability income policy with a
20-day probationary period and a 30-day elimination
period. Ten days later, the client breaks their leg and is off
work for 45 days. How many days of disability benefits will
the policy pay?
a)10 days
b)15 days
c)25 days
d)45 daysCorrect Answer b)15 days
A probationary period refers to the amount of time that
coverage is not available for illness-related disabilities, so
it would not apply to a broken leg. The elimination period,
however, is the time that must elapse between the onset
of the disability and when benefits will start being paid. In
this case, the individual is considered disabled for 45
days, and the benefits will start to be paid after 30 days.
So, the client will receive benefits for 15 days.
,An insured misstated her age on an application for an
individual health insurance policy. The insurance company
found the mistake after the contestable period had
expired. The insurance company will take which of the
following actions regarding any claim that has been
issued?
a)Adjust the claim benefit to reflect the insured's true age
b)Deny any claims and cancel the policy
c)Deny paying a claim based on misrepresentation
d)Pay the full amount of a claim because the contestable
period has endedCorrect Answer a)Adjust the claim
benefit to reflect the insured's true age
The Misstatement of Age provision says that if a client has
misstated her age, whether intentional or unintentional,
they will adjust the benefit being paid. It doesn't matter
when the mistake was found.
When an individual is covered under two health insurance
policies that have duplicate benefits which could make a
claim for benefits because of an injury or illness profitable,
it is called
a)Pro-rata coverage.
b)Overinsurance
c)Double indemnity coverage.
d)Fraternal coverage.Correct Answer b)Overinsurance
,Overinsurance is a term used to describe the situation that
is created when an individual purchases duplicating
coverage with the intent to collect from each policy for a
single loss.
A brain surgeon has an accident and develops tremors in
her right arm. Which disability income policy definition of
total disability will cover her for all losses?
a)"Any occupation" - more restrictive than other definitions
b)"Own occupation" - less restrictive than other definitions
c)"Own occupation" - more restrictive than other definitions
d)"Any occupation" - less restrictive than other
definitionsCorrect Answer b)"Own occupation" - less
restrictive than other definitions
In theory, the brain surgeon could find other work, but
because her disability income policy specifies that she is
covered for her own occupation, she would be wholly
covered.
All of the following are true regarding key person disability
income insurance EXCEPT
a)The employee is the insured.
b)Premiums are tax deductible as a business expense.
c)The employer receives the benefits if the key person is
disabled.
d)The employer pays the premiums.Correct Answer
b)Premiums are tax deductible as a business expense.
, In key person disability insurance, the contract is owned
by the business, the premium is paid by the business, and
the business is the beneficiary. The key person is the
insured, and the business must have the key person's
consent to be insured in writing.
Which of the following is NOT a feature of a guaranteed
renewable provision?
a)The insured has a unilateral right to renew the policy for
the life of the contract.
b)Coverage is not renewable beyond the insured's age 65.
c)The insured's benefits cannot be reduced.
d)The insurer can increase the policy premium on an
individual basis.Correct Answer d)The insurer can
increase the policy premium on an individual basis.
Guaranteed renewable provision has all the same features
that the noncancellable provision does, with the exception
that the insurer can increase the policy premium on the
policy anniversary date. However, the premiums can only
be increased on a class basis, not on an individual policy.
Which of the following is NOT a feature of a
noncancellable policy?
a)The insured has the right to renew the policy for the life
of the contract.
b)The insurer may terminate the contract only at renewal
for certain conditions.
