6: Health coverage becomes effective when the
A Producer delivers the policy to the insured.
B Medical examination has been completed and the premium paid.
C First premium has been received in the insurance company's home office.
D First premium has been paid and the application has been approved.
If the premium has been paid, coverage becomes effective when the company underwriter approves the application.
9: Medicaid is sponsored by what kind of sources?
A Federal only
B State only
C Both state and federal
D Private companies
Medicaid is sponsored at both the state and federal levels. Most other standard health insurance programs are provided by private insurance companies.
7: Which of the following is true regarding health insurance?
A Disability coverage is excluded.
B It provides death benefit coverage.
C It only covers expenses related to health care.
D It could provide payments for loss of income.
Health insurance is a generic term, encompassing several types of insurance contracts, which, though related, are designed to protect against different risks. It provides coverage for expenses related to health care, loss of income, and disability income.
6: Which document helps ensure that full and fair disclosure is provided to the recipient of a policy?
A Benefit Limitations
B Policy Summary
C Statute of Limitations
D Outline of Coverage
The Outline of Coverage is created to ensure full and fair disclosure to the recipient of a new policy. This document can be released at the time of application or upon delivery of the policy.
10: An agent misrepresents the details of an insured's new insurance contract that will be replacing the current contract. Which of the following will most likely happen?
A Charges of fraud against the agent
B Annulment of the policy
C Reduction in commissions
D Suspension of license
If an agent engages in misrepresentation during the replacement of a health insurance contract, he/she will be exposed to Errors and Omissions liability, which would result in either the suspension or revocation of the agent’s insurance license.
11: A policyowner is reading a statement on the first page of his health insurance policy, which says “this is a limited policy.” What is the name of this statement?
A Limited Policy Notice
B Policy Limitation Notice
C Statute of Limitations
D Limited Benefit Statement
It is required by law that a Limited Policy Notice must be printed on the first page of insurance policies. The statement reads “this is a limited policy,” which means that the benefits offered by the policy are limited.
12: When the policy premium wasn't submitted with the application, what should the agent obtain from the insured upon policy delivery?
A A medical report
B A conditional contract
C A unilateral contract
D A statement of good health
In many cases, the initial premium is not paid until the policy is delivered. Most insurance companies require that when the agent collects the premium, he or she must also obtain a statement signed by the insured testifying to the continued good health.