KENTUCKY HEALTH INSURANCE
EXAM QUESTIONS AND ANSWERS.
VERIFIED 2025/2026.
What is Risk? - ANS Risk is the uncertainty or chance of loss occurring
What is a Peril? - ANS Perils are the causes of loss insured against in an insurance policy
What are the elements of risk? - ANS Loss must be (1) due to chance; (2) definite and
measurable; (3) statistical predictable; (4) not catastrophic; (5) with large loss exposure; and (6)
insurance cannot be mandatory.
What is the difference between a disability income and medical expense policy? -
ANS Medical expense policies cover the hospital and medical expenses of covered injures or
illnesses, whereas disability income policies actually pay income to a person who must miss
work as the result of an injury or illness.
Define accidental bodily injury - ANS Accidental bodily injury is a unforeseen and unintended
injury that resulted from an accident rather than a sickness
In what ways can accidental death and dismemberment coverage be written? - ANS AD&D
coverage can be written as a rider or a separate policy.
1 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
,Under accidental death and dismemberment coverage, when would the capital amount be
paid? When would the principal amount be paid? - ANS The principal sum is paid for
accidental death. In the case of loss of sight or accidental dismemberment, a percentage of that
principal sum will be paid by the policy, often referred to as the capital sum.
Explain the concept of coverage on first-dollar basis - ANS First-dollar coverage does not
require the insured to pay a deductible
What is the difference between reimbursement and scheduled benefit payment? - ANS In
reimbursement plans, the expenses are reimbursed directly to the insured for the services
provided. In scheduled benefits plans, the insurer pays up to a certain amount. for the services,
as determined on a schedule for the cost of each treatment.
What are some common exclusions and limitations in medical expense policies? - ANS War
and active duty military, intentionally self-inflicted injuries, pre-existing conditions, elective
cosmetic surgery, injuries as a result of participating in criminal activities, and conditions
covered by workers compensation or government plans.
What coverages are provided by a Major Medical Expense policy? - ANS After basic policy
pays, the supplemental major medical will provide coverage for expenses that were not covered
by the basic policy, and expenses that exceed the maximum. If the time limitation is used up by
the basic policy, the supplemental coverage will provide coverage thereafter.
How does restoration of benefits work? - ANS Major medical policies include a provision that
restores a specific dollar amount at certain intervals after the lifetime limit of coverage has been
exhausted if the insured maintains the policy claim-free for a given period of time.
Once a disability policy is paying a claim, how long will it pay? - ANS Disability income
insurance is designed to provide a reasonable and predetermined income to a disabled party for
a set period of time subject to a "time deductible" termed an elimination period.
2 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
, What is the difference between own occupation and any occupation? - ANS A policy that has
"any occupation" provision will only provide benefits when the insured is unable to perform any
occupation for which they are suited by reason of education, training, or experience. "own
occupation" is the more liberal definition and therefore provides a better benefit for the
insured.
What is the difference between occupational and nonoccupational coverage? -
ANS Occupational coverage provides benefits for disabilities resulting from accidents or
sickness that occur on or off the job. Nonoccupational coverage, on the other hand, only covers
disabilities that result from accidents or sickness occurring off the job.
What is the probationary period? How is it different from the elimination period? - ANS The
probationary period is a waiting period. Elimination period is a waiting period that is imposed
on the insured from the onset of disability until benefit payments commence (it is a deductible
measured in time instead of dollar amount)
What is the difference between confining and non-confining disabilty? - ANS A confining
disability requires that the affected individual remain indoors, whereas a non-confining
disability does not.
Describe residual disability - ANS Residual disability is the type of disability income policy that
provides benefits for loss of income when a person returns to work after a total disability, but is
still not able to work as long or at the same level he/she worked before becoming disabled.
What must a worker prove in order to receive benefits for a non disabling injury? - ANS That
treatment caused a loss of work time
What is the purpose of key person disability insurance? - ANS The key person's economic
value to the business is determined in terms of the potential loss of business income which
could occur as well as the expense of hiring and training a replacement for the key person.
3 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
EXAM QUESTIONS AND ANSWERS.
VERIFIED 2025/2026.
What is Risk? - ANS Risk is the uncertainty or chance of loss occurring
What is a Peril? - ANS Perils are the causes of loss insured against in an insurance policy
What are the elements of risk? - ANS Loss must be (1) due to chance; (2) definite and
measurable; (3) statistical predictable; (4) not catastrophic; (5) with large loss exposure; and (6)
insurance cannot be mandatory.
What is the difference between a disability income and medical expense policy? -
ANS Medical expense policies cover the hospital and medical expenses of covered injures or
illnesses, whereas disability income policies actually pay income to a person who must miss
work as the result of an injury or illness.
Define accidental bodily injury - ANS Accidental bodily injury is a unforeseen and unintended
injury that resulted from an accident rather than a sickness
In what ways can accidental death and dismemberment coverage be written? - ANS AD&D
coverage can be written as a rider or a separate policy.
1 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
,Under accidental death and dismemberment coverage, when would the capital amount be
paid? When would the principal amount be paid? - ANS The principal sum is paid for
accidental death. In the case of loss of sight or accidental dismemberment, a percentage of that
principal sum will be paid by the policy, often referred to as the capital sum.
Explain the concept of coverage on first-dollar basis - ANS First-dollar coverage does not
require the insured to pay a deductible
What is the difference between reimbursement and scheduled benefit payment? - ANS In
reimbursement plans, the expenses are reimbursed directly to the insured for the services
provided. In scheduled benefits plans, the insurer pays up to a certain amount. for the services,
as determined on a schedule for the cost of each treatment.
What are some common exclusions and limitations in medical expense policies? - ANS War
and active duty military, intentionally self-inflicted injuries, pre-existing conditions, elective
cosmetic surgery, injuries as a result of participating in criminal activities, and conditions
covered by workers compensation or government plans.
What coverages are provided by a Major Medical Expense policy? - ANS After basic policy
pays, the supplemental major medical will provide coverage for expenses that were not covered
by the basic policy, and expenses that exceed the maximum. If the time limitation is used up by
the basic policy, the supplemental coverage will provide coverage thereafter.
How does restoration of benefits work? - ANS Major medical policies include a provision that
restores a specific dollar amount at certain intervals after the lifetime limit of coverage has been
exhausted if the insured maintains the policy claim-free for a given period of time.
Once a disability policy is paying a claim, how long will it pay? - ANS Disability income
insurance is designed to provide a reasonable and predetermined income to a disabled party for
a set period of time subject to a "time deductible" termed an elimination period.
2 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
, What is the difference between own occupation and any occupation? - ANS A policy that has
"any occupation" provision will only provide benefits when the insured is unable to perform any
occupation for which they are suited by reason of education, training, or experience. "own
occupation" is the more liberal definition and therefore provides a better benefit for the
insured.
What is the difference between occupational and nonoccupational coverage? -
ANS Occupational coverage provides benefits for disabilities resulting from accidents or
sickness that occur on or off the job. Nonoccupational coverage, on the other hand, only covers
disabilities that result from accidents or sickness occurring off the job.
What is the probationary period? How is it different from the elimination period? - ANS The
probationary period is a waiting period. Elimination period is a waiting period that is imposed
on the insured from the onset of disability until benefit payments commence (it is a deductible
measured in time instead of dollar amount)
What is the difference between confining and non-confining disabilty? - ANS A confining
disability requires that the affected individual remain indoors, whereas a non-confining
disability does not.
Describe residual disability - ANS Residual disability is the type of disability income policy that
provides benefits for loss of income when a person returns to work after a total disability, but is
still not able to work as long or at the same level he/she worked before becoming disabled.
What must a worker prove in order to receive benefits for a non disabling injury? - ANS That
treatment caused a loss of work time
What is the purpose of key person disability insurance? - ANS The key person's economic
value to the business is determined in terms of the potential loss of business income which
could occur as well as the expense of hiring and training a replacement for the key person.
3 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED.
