Question 1

What happens if an insurer violates the Medical Loss Ratio rule and spends too much money on administrative costs?

Options :

A :

Insurers that do not meet the Medical Loss Ratio standard will be required to provide rebates to their customers and reduce spending on their administrative costs.

B :

Insurers that do not meet the Medical Loss Ratio standard will pay a tax penalty to the Federal government, n

C :

Insurers that do not meet the Medical Loss Ratio standard will pay a tax penalty to the Health Benefits Exchange.

D :

Insurers that do not meet the Medical Loss Ratio standard will only be required to reduce their spending on administrative costs.

Answer: A

Question 2

A Hospital Confinement Indemnity insurance policy pays

Options :

A : the amount of the actual hospital expenses.

B : 100% of the covered medical expenses less the deductible and coinsurance percentage.

C : an indemnity to the insured for all expenses incurred when the insured is confined in a hospital.

D : the daily benefit dollar amount stated in the policy for each day the insured is confined ina hospital.

Answer: D

Question 3

The initial enrollment period for Medicare Part B ends how many months after the 65th birthday month?

Options :

A : One month.

B : Three months.

C : Five months.

D : Seven months.

Answer: D

Question 4

A life insurance application is important for all of the following reasons EXCEPT

Options :

A : statements made in the application are required to be true to the best of the applicant’s knowledge.

B : the beneficiary must sign the application before the insurer will issue the policy.

C : the application becomes a part of the policy, if a copy is attached.

D : the application contains essential information about the applicant.

Answer: B

Question 5

The total premium paid by a life policy owner for one policy year is

Options :

A : the same regardless of the frequency of payment.

B : less when paid quarterly than if paid semiannually.

C : greater if the premium is paid semiannually rather than annually.

D :

based on the assumption that the insured will pay policy premiums at the end of the policy year in one payment; if paid earlier in the policy year, a discount will be allowed.

Answer: C

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