Health Insurance Practice Exam

Hey, welcome back to InsuranceTestHelp.com. We are working on today just an exam for the health insurance exam. So this is going to be a practice test just for the health insurance exam. I know some people don't always take life and health combined. If you are ever thinking you might sell one and not the other, I do recommend the combo because it's just fewer questions of each one. So you just get it one and done. If you are just going into the health insurance market, this is one for you where we're just going over health questions. If you are doing life and health, good practice to make sure you've got all of those health questions nailed down. And there's a lot of definitions in here that are literally on every insurance exam. So here we go. Okay, getting right into it. What is a key feature of group disability insurance? A. It is a tax-deductible to the employee. B. Benefits are always tax-free. C. Evidence of insurability is usually not required. Or D. Only long-term benefits are offered. So think about it. Think about a group of like 500 people. Probably not going to get evidence of insurability for all 500 in the group. So C is the correct answer. Evidence of insurability is usually not required because group disability policies usually skip individual medical underwriting. So groups usually just can write your name down and you're in. So just remember that could be a really large group. That might be a way to remember it. Obviously the insurance company is not going to underwrite every single person in the group. The incontestability clause means A. Insurer may cancel at any time. B. Claims can be denied at will. C. Policy becomes incontestable after two years. Or D. Applicant cannot sue. Some of those options were crazy, so you should have been able to knock at least a couple of those out and come up with this one. C. The policy becomes incontestable after two years. If the insurance company hasn't found your misstatement in two years, it usually cannot void the policy for misstatements unless you are making fraudulent statements. If a disability income policy has a 60-day elimination period and a two-year benefit period, when do the benefits begin? A. Day 1. B. Day 31. C. Day 61. Or D. Day 90. Remember elimination period is how long you're going to wait before the benefits begin. 60-day elimination period means that benefits begin on day 61. So the correct answer was C. The act of withholding material information is known as A. Misrepresentation. B. Defamation. C. Concealment. Or D. Fraud. Correct answer here is going to be C. Concealment. Withholding material fax is concealment and can void your contract. Which of the following decides subrogation? This is a hard word for me to say today. A. The process of one insurance company seeking recovery from a responsible party. B. The total loss of the insured property. C. The act of cancelling an insurance policy. Or D. The payment of claims by the insurance company. Subrogation is going to be on every single insurance exam you're ever going to take. The answer is A. It is the process of one insurance company seeking recovery from a responsible party. Sometimes that's another insurance company. Sometimes that's a person. But subrogation is always the insurance company seeking recovery, usually through suing them, from a responsible party. Subrogation will always be on your insurance exam. So make sure you know it. Under COBRA, the insured typically pays what portion of the group premium? A. 0%. B. 50%. C. 100%. Or D. 102%. Correct answer here is going to be D. 102%. Doesn't seem fair that we take people who might have lost their jobs and ask them to but the 2% is an administrative fee for them allowing you to stay into the group. So COBRA allows insurers to charge 102% of the group premium to include that administration fee. The grace period for individual health insurance policies is A. 7 days for a weekly premium. B. 10 days for a monthly premium. C. 31 days for all other policies. Or D. All of the above. Correct answer here is going to be D. All of the above. Remember different payment modes have different grace periods. 7 days for weekly, 10 days for monthly, and 31 days for other premium modes like annual. You need to know your state specific. Your state may have specific rules that affect grace periods. So make sure you read up on the grace periods for your state in your state specific material. Okay, I had a specific request to do some calculations of the co-pay, the co-insurance. So let's do a couple of those. If someone had a medical bill of $12,000 with co-insurance of 80-20 and a deductible of $1,000, how much would the insurance company pay of the $12,000 bill? A. $8,800. B. $8,600. C. $10,000 or D. $12,000. You may want to hit pause here and do the calculations so that you have it all nailed down before we move on to the answer. Okay, the correct answer is going to be A. $8,800 and here's how we got there. Step 1. You're going to apply the deductible. Remember that was $1,000. So you're going to take $12,000 minus the deductible of $1,000. It gives you $11,000 as you move into step 2 where you're going to calculate the co-insurance. You can take that $11,000 times 80%. That's what the insurance company is going to pay. Insurance company pays 80%. Insured pays 20%. So that is how you get it. $11,000 times 80% is $8,800. The insured pays the deductible of $1,000 plus their 20% of the co-insurance. So they are going to pay $3,200 and the insurance company will pay $8,800. So just make sure you understand how those calculations work. This question seems to be on all exams and I don't know why, but it is. So make sure you know it. Which of the following types of licensee that is solely responsible for offering advice on insurance policies for a fee? A. An agent. B. A broker. C. A counselor. Or D. A sub-agent. This is going to be a counselor. C. If you are only advising on insurance policies, you are a counselor. So just make sure you know that. For some reason they really want you to know that for the exam. What is a free look period? A. Trial policy for uninsured individuals. B. A period to compare policies. C. Time to cancel a new policy for a full refund. Or D. A time to submit claims. Free look is C. The free look period allows a full refund if canceled within a set time period. Usually 10 days for health insurance policies. But make sure you understand your state specifics for this one. Free look is basically just a period to change your mind if you didn't want it. Defamation involves A. Misusing premiums. B. Lying about competitors. C. Falsifying policy benefits. Or D. Withholding commissions. The correct answer here is going to be B. Defamation is making malicious statements about another insurer or agent. You can't say bad things about your competitors. You can tell them you're better. But you can't tell things that are about your other insurance companies that, you know, make them look badly. So that is defamation. And there are an awful lot of definitions. I know a lot of people want to focus on really some of the specific things of the health insurance. You will do that once you are selling health insurance. But for the exam, understand that you can really do well on this exam knowing the definitions. So if you know all the definitions, all the parts of the policy, all of those things that seem kind of mundane, you really know them. That's going to be a huge chunk of this exam. So make sure that you really do know all of these definitions, even if you're like, I feel like I keep hearing them over and over again. But things like defamation, things like subrogation, things like rebatings, things like indemnity, those are all going to be on there. So just make sure you really know the definitions so that not only can you get the right answer, but you can move quickly through the exam because you just know that that's the right answer. It's time for another math one. If someone had a medical bill of $50,000 with co-insurance of 80-20 and a deductible of $5,000 and a max out-of-pocket of $7,000, how much would the insurance company pay of the $50,000 bill? A, $50,000, B, $40,000, C, $36,000, or D, $43,000. This is one of those read-the-full-question ones. The correct answer is D, $43,000. Always read the full question. This did not require any other calculations than knowing that your max out-of-pocket was $7,000. So if all you have to pay is $7,000, that means the insurance company has to pay the rest, whether they're paying the $43,000 in this case or they're paying $143,000. If your max out-of-pocket is a certain number, that's all you need to know for a question like this. The other ones were just noise to kind of get your brain thinking other things. So just make sure you read the whole question. You understand that, yes, if there's certain things, we do have to do the calculation. But in this case, no calculation was required. You just needed to know the max out-of-pocket was $7,000 and the rest belongs to the insurance company. The Fair Credit Reporting Act gives consumers the right to A, sue insurers, B, view and dispute credit information, C, change insurance laws, or D, require lower premiums. And the correct answer here is B, consumers can view and dispute their information in their credit report, and you will have when you become an agent at people asking you for that. So just make sure that for the test, you know that the Fair Credit Reporting Act gives them the right to view and dispute information in their credit report, because you're going to need that as an agent too. A unilateral contract means A, only one party can cancel, B, only one party makes a legally enforceable promise, C, the insurer and the insured must agree, or D, it has no consideration. A unilateral contract, all insurance contracts are unilateral, correct answer is B, only one party makes a legally enforceable promise, and that is the insurer, the insurance company is the only party bound to act, and that is to pay a claim if you have one. A dental plan offering scheduled coverage means A, unlimited benefits, B, coinsurance only, C, benefits listed by procedure with set dollar limits, or D, everything is covered 100%. Correct answer here is going to be C, benefits listed by procedures with set dollar limits, scheduled dental plans list fixed payouts per procedure. Disability income insurance is designed to A, replace lost income due to illness or injury, B, pay hospital bills, C, cover dental and vision, or D, pay death benefits. Correct answer here is going to be A, replace lost income due to illness or injury, disability income replaces income, not medical costs, so just remember that when the word is in there, disability income, short term disability income, long term disability income, income is the key word, so it is to replace your income, not to do anything else. A moral hazard is best described as A, intentional dishonesty, B, poor credit score, C, physical hazard, or D, a risk of accident. Correct answer here is going to be A, intentional dishonesty, moral hazards relate to your character, like dishonesty or filing false claims, you just have bad morals, that's a good kind of way that I like to remember it, moral hazard, not so great in the moral department. Under a non-contributory group plan, how many employees must participate? A, 0%, B, 25%, C, 75%, or D, 100%. D is the correct answer in a non-contributory plan, 100% employees must be covered, you cannot discriminate against people in a non-contributory plan, if you do then it becomes contributory, not non-contributory, because you have to be eligible for 100% of your employees, you can't just have it for like your executives or something, you know, as a perk, it has to be for everyone, so that would be what you need for a non-contributory plan. Which of the following would make a group ineligible for group insurance? A, 5 employees, B, employer pays 100% of the premium, C, a group formed solely to buy insurance, or D, employer provides a payroll deduction. So remember there could be all kinds of groups, right, you can have associations, you can have businesses, but one thing you can't have is a group that is solely formed for buying insurance, so the correct answer here is C, any groups formed solely for buying insurance are ineligible for group plans. What does insurable interest mean in an insurance policy? A, the insurer's financial risk in a policy, financial stake, sorry, in a policyholder's risk, B, the legal right to insure something because the insured would suffer financial loss if damaged, C, the policyholder's ability to increase their coverage at any time, or D, a third party's interest in a property owned by the policyholder. This is one of those general insurance questions about general things with insurance, everyone has to have an insurable interest to insure something, so you cannot insure something that you do not have an insurable interest in, so B, the legal right to insure something because you would suffer financial loss if damaged. So you can insure obviously your own health, you can insure the life of yourself or the life of someone else, you can insure your house, your car, but you can't go insure your neighbor's house, you can't go insure your neighbor's life, and you can't go insure your neighbor's health because none of those things would affect you if something bad happened. So insurable interest means that you will suffer if there is a loss, so you can obviously insure your own health to protect yourself. What is the primary purpose of coinsurance in major medical policies? A, reduce adverse selection, B, share costs between insurer and insured, C, increase insurer profits, or D, replace deductibles. Correct answer here is going to be B, share costs between insurer and insured. Coinsurance is the shared responsibility, for example, those 80-20 questions people are working on, and this prevents overutilization. Can you imagine if everything was covered and everything was free, how many people would just roll into the doctor for nothing, right? No copay, no coinsurance, no deductibles, just come on in and get every little ailment, every little boo-boo, every little sore looked at, so that is to prevent overutilization. You have to have some skin in the game, so that is your deductible, your copay, and your coinsurance, and the main purpose of coinsurance is to share in the costs. What is rebating? A, charging excessive premiums, B, offering a premium reduction or gift to induce purchase, C, replacing a policy dishonestly, or D, failing to disclose exclusions. Rebating is going to be on your exam. It is probably going to be in the form of whatever your limit is. Some states have a limit. You can give a little gift, but you have to have it be under a certain amount, so the answer is going to be B. Rebating is offering unauthorized inducements to buy insurance. Some states have limits. Some states, it's prohibited completely. Some states allow little swag and tchotchkes, like you can give them a pen, or you can give them a little water bottle. Other states allow you to go all the way up to $100 gift, so just know that rebating is offering unauthorized inducements to buy insurance, and for this one, it will 100% be on your exam, so know what the limits and restrictions are in your specific state, because I will guarantee rebating is on there. What does indemnity mean in the context of insurance? A, promised by the insurer to pay more than the policy limit, B, a guarantee that the insured will profit from a loss, C, compensation for loss or damage ensuring the insured is restored to their pre-loss position, or D, an insurance payout that doubles the original amount. Indemnity is the compensation for loss or damage ensuring the insured is restored to their pre-loss position, so this is making you whole again, not profiting from it, but also not leaving you in worse shape than you were, so indemnity is extremely testable. It's one of those definitions that the insurance test people love, so be sure you know that indemnity means restoring you to your pre-loss position. Who enforces insurance laws at the state level? A, NAIC, B, Commissioner of Insurance, C, Federal Trade Commission, or D, Medicaid. It's going to be B, Commissioner of Insurance. State insurance departments enforce regulation. Know who the guy in your state, what he's called. In my state, he is a Commissioner of Insurance. He is elected every four years. That may be different in your state. Make sure you know exactly what the head of your insurance department is called and how he gets his job. They're often elected officials. That is a highly testable question. I don't know why it's important, but the people that write insurance exams seem to think you need to know that he's an elected official, or maybe he isn't in your state. I don't know, but they want to make sure you know how he got his job and what he is called. What type of plan pays a flat amount per day regardless of actual medical costs? A, indemnity plan, B, PPO, C, HMO, or D, point of sale, POS. Is this going to be an indemnity plan? A, it pays a set amount regardless of actual costs. Some people have something called a hospital indemnity plan that pays a flat amount per day that you are in the hospital regardless of what your other insurance pays. It just pays you straight up cash. A lot of people know these plans as hospital indemnity, know that for your test, but an example of that that you may know in your real life is Aflac. It just pays you cash and you can do whatever you want with it. It's just a flat amount per day that they pay when something happens. A critical illness plan pays A, only hospital expenses, B, lifetime income, C, a lump sum upon diagnosis of a listed condition, or D, monthly benefits like a disability. Correct answer here is going to be C, a lump sum upon diagnosis of a listed condition. Critical illness insurance pays you a lump sum benefit. A lot of people have something like cancer insurance. If you have that and something happens, you get a lump sum because you will have so many medical bills. They don't go little bit by little bit. It's a critical illness insurance and it's a separate thing, so just know that that is a lump sum. What is the purpose of TRICARE? I did not see this on my exam, but I knew it from my husband being in the military for a really long time. It is A, to help veterans buy insurance, B, to provide coverage for military families, C, to cover mental health, or D, to pay workers' comp. For the health insurance exam, make sure you know the difference between TRICARE and the VA. TRICARE serves active duty and retired military and families. The VA is for veteran care for their service-related disabilities. They can also get their veteran medical care program there, but know that TRICARE is a little bit broader. It covers active duty and retired military and families, so if you are an active duty service member and you have a family, your family will be served by the TRICARE policy. Just know that if you see TRICARE on your exam, that is for military families. Flexible spending account, an FSA. Don't get it confused with anything else that might sound a little bit like this. A flexible spending account is funded by A, the insurer, B, the federal government, C, employee pre-tax contributions, or D, a third-party administrator. The correct answer here is going to be C, employee pre-tax contribution. FSAs are funded by employees through payroll deductions. Do not mix them up with HSAs. FSAs are funded by employees on their own through payroll deductions. Okay, twisting is an unethical practice that involves A, lying to increase sales, B, misrepresenting a policy to replace it, C, forging a signature, or D, denying a claim in bad faith. Correct answer here is going to be B, misrepresenting a policy to replace it. Twisting is a prohibited practice of replacing a policy using deception. Basically, you're convincing someone to get rid of a policy that might actually be better than the one you have and twisting their ideas and their thinking into buying it. You cannot do twisting. There are a lot of these unethical practices that will be highly testable, so make sure that you know all of them. Here's a simple, obvious one. What is the primary purpose of insurance? A, to eliminate risk, B, to reduce moral hazards, C, to transfer risk, or D, to avoid all types of losses. I will guarantee this one to be on the exam, and it's going to be C, the transfer of risk. Insurance shifts financial risk from the insured to the insurer. It doesn't reduce, it doesn't eliminate, it transfers risk. This one is highly testable. What is the minimum number of employees a business must have to be required to offer COBRA? A, 5, B, 10, C, 20, D, 50. Correct answer here is going to be C, COBRA applies to employers with 20 or more employees, and that is highly testable. Make sure you know the ins and outs of COBRA. There won't be a whole lot of questions on COBRA, but they will be very specific ones, and you don't want to give up an easy one just by not knowing it's 20 employees. Which of the following is not typically covered by basic medical expense insurance? A, hospital room and board, B, surgical services, C, intensive care, or D, prescription drugs. Remember that word basic in there, it's going to be D, prescription drugs are not covered by basic medical plans. I don't know who has these plans, but the insurance test people want to make sure you know all about basic medical plans that nobody has. But in the basic medical plans, they don't cover normally prescription drugs. All of the following are required elements of a legal contract except A, offer and acceptance, B, legal purpose, C, counteroffer, and D, competent parties. The answer is going to be C, counteroffer is not part of a contract. A contract requires offer and acceptance, consideration, legal purpose, and competent parties, but not counteroffers. Make sure you know this, this will be on your exam at least in one question. Usually the question is about consideration. What is consideration on your part? That's going to be the premium you pay. The consideration from the insurance company is going to be their promise to pay in the event of a claim. The other question, and I got this on my exam, was one about competent parties. Which one of these can you not sell insurance to? Someone who's drunk, someone who's a minor. It'll be a question like that. They'll try to accept a question or something like that, but there'll be something about somebody that's under the influence or somebody that's a minor that obviously is not a competent party. No people who are drunk, no people who are under the influence, no people who are mentally incapacitated, and no minors. Those can be competent parties. Just make sure you really know that for the exam. These are easy ones to get right if you just know them. You don't really have to calculate anything. It's just, yeah, it's that one. An easy win for you. Which clause states that the policy and application form the entire contract? A, entire contract clause. B, insuring clause. C, time limit on defenses. Or D, legal action clause. This is going to be A, the entire contract clause. The policy plus the application makes the entire agreement. Disability income benefits received from an individually owned policy are A, fully taxable. B, partially taxable. C, non-taxable. Or D, tax deferred. I think this is highly testable. And the key words here are individually owned. So make sure you read the whole question and read the whole answer when you're doing the actual exam. Correct answer here is going to be C, disability income from individual policies is not taxable. If you want a little background on that, that's because you paid for it with your after-tax money. So it is not taxable because you already paid the tax on it once upon a time when you bought the policy. So this is not taxable. Make sure you know that for individual policies. I think that is extremely testable. Which of the following triggers long-term care benefits? A, the inability to perform two or more ADLs. B, being unemployed. C, hospital confinement. Or D, diagnosis of a terminal illness. This is one of those ones where there sounded like a couple of those had good answers, but the correct one is A, the inability to perform two or more ADLs. Long-term care is intricately linked with ADLs. Those are your activities of daily living. If you don't know what they are, please look at some of our other videos to see what they are. But there are things like being able to feed yourself, dress yourself, shower. But triggering long-term care benefits usually requires needing help with two or more ADLs. The elimination period for Social Security disability is A, 30 days. B, 5 months. C, 6 months. Or D, 12 months. This is extremely testable. I will almost guarantee this question is going to be on your exam, so make sure you know the right answer. The correct answer is B, 5 months. The elimination period for Social Security disability is 5 months, but make sure you know that the first month you get your disability is the 6th month because that question could be twisted around either way. 5 months of elimination, no money. Money comes in the 6th month for Social Security disability. What does HIPAA protect? A, premium refunds. B, medical privacy and pre-existing condition rights. C, long-term care benefits. Or D, Medicare enrollment. Correct answer here is going to be medical privacy and pre-existing condition rights. HIPAA protects your privacy and ensures portability of all your medical stuff from one place to another so that you don't lose coverage in between. Make sure you fully understand that HIPAA is about privacy and patient's rights. COBRA coverage typically lasts A, 6 months. B, 12 months. C, 18 to 36 months. Or D, indefinitely. The correct answer is C, 18 to 36 months. COBRA allows extended group coverage after qualifying events, so things like divorce, death of the employee, you lost your job, stuff like that. Those are all COBRA things that you can get COBRA from your previous employer. What does an HMO require the insurer to select? A, a specialist physician. B, a gatekeeper or primary care physician. C, an independent adjuster. Or D, a PPO representative. Remember, HMOs are a gatekeeper model where the primary care physician determines all of your stuff. He manages and approves your care. So the correct answer is going to be B, gatekeeper or primary care physician. He's going to decide whether you can go see a specialist or not. What type of risk is insurable? A, pure risk. B, speculative risk. C, moral risk. Or D, investment risk. Correct answer is going to be A, risk. A, pure risk. Only pure risk. Loss only. No possible gain. So no gambling, no stock market. Those are not insurable. Only pure risk. Where you can only lose is insurable. This is one of those general insurance questions that is going to make up a huge part of your exam. So make sure you know all of the general definition questions for insurance. Which of the following is typically considered a presumptive disability? A, inability to work part time. B, loss or use of one finger. C, loss of hearing in both ears. Or D, mental exhaustion. Remember, presumptive disability is something that proves that you are disabled without having you actually approve it. Because it is something like loss of hearing in both ears, which is the correct answer. C, loss of hearing in both ears qualifies as a presumptive disability. So does blindness in one eye, both eyes. Sort of loss of a limb. Loss of a finger doesn't. So it is a disability that basically just in and of itself, without you having to prove you're disabled, proves a disability. The law of large numbers. Another general insurance question. The law of large numbers allows insurers to A, eliminate all risk. B, predict individual losses. C, predict overall group losses. Or D, avoid underwriting. The correct answer is going to be C, predict overall group losses. The law of large numbers allows insurers to predict claims more accurately across large groups. For health insurance, this is something like they know that smokers as a group have more lung related diseases, right? So the more smokers they have, to prove that, the more accurately they can predict the amount of disease. So law of large numbers is basically just that the larger the group, the more accurate the analysis for loss. Okay, another one of those calculation questions where you're going to calculate coinsurance in a deductible. I don't know if there's going to be any more than one of these on the exam. There might be a couple, but just so you know them backwards and forwards, let's do another one. If someone had a medical bill of $10,000 with coinsurance of 80-20 and a deductible $2,500, how much would the insurance company pay of the $10,000 bill? A, $8,000, B, $2,000, C, $6,000, or D, $7,500. Correct answer here is going to be C, $6,000. Let's run through the steps. Step one, apply the deductible. First step always. So that's going to be your $10,000 bill minus $2,500. Step two is going to be calculate the coinsurance after that. So insurance company pays the 80, insured pays the 20. So we're looking for the insurance company. So we're going to take 75,000 times 80% is $6,000. So this question could come out in either way where it's asking you what the insured and what the insurer pay. So just make sure you know how to do it for both the insurance company and the insured and also know how to do it where there is a maximum out of pocket, because that is the other variable that could toss this to be a little bit different. Medical Part B covers A, long-term care, B, hospital room and board, C, doctor service and outpatient care, and D, hospice care only. This is for Medicare Part B. Medicare Part B covers C, doctor services and outpatient care. Medicare Part B is outpatient and doctor services. I always like to think of Medicare Part A as being the stuff in the building, the hospital, room and board, that kind of stuff. And Medicare Part B being the people, the doctors, the services. So either way you want to break it down. And then I always remember credit card Part D for D for drugs. So however you want to break it down, make sure you understand fully all of the parts of Medicare. They're highly testable. Which plan is designed for groups like sports teams or students? A, blanket policy, B, group major medical, C, self-funded plan, or D, HMO. Correct answer here is going to be blanket policy, A. Blanket policies cover groups without naming the actual individuals. So it can just be a softball team if you want. It won't actually be all the people listed by name on that. It'll be just that blanket policy for that group. Like a camp, children's camp, you know, things like that. That'll be a blanket policy. A stop-loss limit is A, the point where the insured pays 100%, B, a cap on premium increases, C, the max out-of-pocket expense for the insured, or D, the deductible applied to dependent coverage. So the correct answer is C, the max out-of-pocket expense for the insured. Stop-loss is another way to say that max out-of-pocket. So just make sure you know that because they could twist some of your questions to have that included instead of max out-of-pocket expense. So stop-loss limit protects the insured from excessive costs. And basically just once you hit that number, you're done for the year. The insurance company will be paying everything after that, not you. A fiduciary responsibility means A, legal responsibility, B, a moral obligation, C, trust and care for clients' financial assets, or D, a tax obligation. So normally most insurance exams do have something on them about being a fiduciary. A fiduciary means you're managing your funds with integrity and care. It means you're not taking your insurance premiums and putting them in your own account. That is a prohibited practice called commingling. Basically, it just means you're being financially responsible with the money that actually belongs to the insurance company. So when you take your funds from your customer and you deposit them directly into the insurance company's account, not into your own and not taking forever to do it, but just being financially responsible. So it's just one of those things because they don't want you to be sketchy. It's basically all the moral stuff, all of the ethics on the exam is don't be a sketchy person. The coordination of benefits, the COB provision, pays double in all situations, B, prevents over-insurance when the insured is covered by multiple plans, C, coordinates with Medicare only, or D, prevents claims payments. Coordination of benefits prevents over-insurance when the insured is covered by multiple plans. It uses the concept of indemnity. It ensures that claims don't exceed the actual expenses. So if you have more than one insurance company, they're going to coordinate with each other about who is paying what. A health savings account HSA must be paired with A, Medicaid, B, high-deductible health plan, C, indemnity insurance, or D, dental-only coverage. Correct answer here is going to be B, a high-deductible health plan. HSAs are a tax advantage and must be paired with a qualified high-deductible plan. I think you will see a question about HSAs. Probably only one, and very well could be this, that it just has to be paired with a high-deductible health plan. What provision requires insurers to pay claims within a specified time? A, time limit on certain defenses, B, payment of claims, C, legal actions, or D, entire contract. Correct answer here is going to be B, the payment of claims provision governs how and when claims are paid. So you just need to know all of these provisions that are part of the legal part of health insurance. Medicare supplement, Medigap, is sold by A, Medicare, B, private insurers, C, Medicaid, or D, the VA. Correct answer here is going to be B, private insurers. Medigap policies are sold by private insurance companies to supplement Medicare. Highly testable. Know that Medigap policies go hand-in-hand with private insurance companies. What is a deductible? A, the maximum amount the insurance will pay for a loss, B, the amount the insured must pay out-of-pocket before the insurer pays a claim, C, the amount of premium the insured must pay, or D, the commission paid to the insurance agent. Deductible is going to be B, the amount the insured must pay out-of-pocket before the insurer pays a claim. If you have a $1,000 deductible, you're in it for the $1,000, then your insurance will kick in after that. Which of the following best describes the aleatory nature of the insurance contract? A, both parties are bound by all clauses of the contract, B, anything unclear is interpreted in favor of the insured, C, only one party is bound by the contract, or D, there is an exchange of unequal values. Aleatory is the exchange of unequal values, so the correct answer is D. All insurance contracts are aleatory. You pay an extremely small premium, even though it doesn't seem like, compared to what the insurance company could pay in the event of a loss. So if you were in the hospital and the bill was $50,000, which is not hard, it would be a very small amount, your premiums that you're paying of, say $500 a month, in order to make up that $50,000 that the insurance company would have to pony up. So all insurance companies are aleatory, and this is just one of those definitions that is highly testable, and I would know this one. Which disability rider increases benefits to keep pace with inflation? A, future increase option, B, waiver of premium, C, return of premium, or D, cost of living adjustment. Correct answer here is going to be D, cost of living adjustment. COLA riders increase disability benefits annually to match inflation. So if you have a COLA rider, that is a cost of living adjustment rider. What must an insurer provide to Medicare supplement buyers within 30 days? A, a refund, B, a guide to Medicare supplement insurance, C, an exam, or D, a Medicaid application. So this one, the correct answer is a buyer's guide must be given to Medicare supplement patients within 30 days of the sale. Everything with Medicare, as far as what you have to do, it's kind of easier to remember that you don't want to rip off grandma and be sketchy. And grandma needs to be as informed as she possibly can to buy her Medicare, right? Makes sense, right? So everything with elderly people is all about giving them all of the information. So if the question, if you don't know the answer on it, just think, what would I want with my grandma? Would I want somebody to tell her all the information? Would I want her to protect her from, you know, being scammed? So those things are pretty easy to think of if you just think of like your own grandparents and protection of the elderly. Which is true about group insurance? A, evidence of insurability is required. B, the employer receives the master contract. C, each member receives a separate policy. D, it is not renewable. The correct answer here is going to be B, employers receive the master policy in group insurance. Employees get certificates. They always want you to know with group insurance that people do not have individual policies. You have one group master policy and that is the employer gets that. The other thing, it's also seemed to be part of this question, is that they want you to know that as far as evidence of insurability. With group plans, especially group disability plans, there usually is no evidence of insurability. They just insure the whole group. You don't have to go to individual underwriting for each person to get a disability policy like you would for an individual. What part of a health insurance contract specifies the insurer's promise to pay covered claims? A, Consideration Clause. B, Insuring Clause. C, Conditions. Or D, Entire Contract Provision. This is going to be B, the Insuring Clause. This clause spells out the insurer's promise to pay benefits through claims. Make sure you do know exactly all of the parts of an insurance contract. Very important and extremely testable. All right, another calculation question. If someone had a medical bill of $18,000 with coinsurance of 80-20 and a deductible $2,500, they have already paid $1,200 earlier in the year toward the deductible and they have a maximum out of pocket expense of $7,000. How much would the insurance company pay of the $18,000 bill? Remember, you might want to hit pause here and run the calculation yourself. So this is going to be A, $5940. B, $14,400. C, $13,360. Or D, $4,640. I think you're going to only see a couple of these calculation questions. Just want you to have it so it's just really comfortable for you to work the calculations so you don't get all frazzled. They give you a piece of scratch paper at the exam and they also give you a calculator, either a handheld one or one on the computer you can use. So just so you're completely comfortable doing these calculations. Okay, correct answer here is going to be C, $13,360. Let's look at how we mapped that. Step one, apply the remaining deductible. They've already paid $1,200 of their $2,500. So it's $18,000 minus the $1,300 remaining. Step two, calculate the coinsurance. So that's the $16,700, what we got when we took off the $1,300 above. And then we multiply that by 80% to get what the insurance company pays. Remember, they pay the $80,000, patient pays the $20,000. So that comes out to $1,300, $360. So in this case, the maximum amount of pocket was not reached. So the insured pays the remaining deductible $1,300 and their 20%, $3,340. So they paid $4,640 and the insurance company paid $3,360. Their amount, the $4,640 and the $1,200 they already paid did not reach the $7,000 they have to pay in one year. So that number was just thrown in there to, you know, kind of throw you off, I guess. But there will be questions in your exam that are meant to kind of twist you around. Accept questions. All of these accept. Which one of these is not? Just questions where they're not worded in the way that they question. It's kind of like a double negative. So just be aware of all of those for the exam. And on this one, just math it out the way that you know how. And then if there is a maximum amount of pocket offered, just make sure they are not reaching that. Or if they are, that that's the cap. What federal program helps pay medical bills for individuals below the poverty line? A, Medicare. B, Medicaid. C, CHIP. Or D, TRICARE. This should have been an easy one. It's B, Medicaid. You should know all of those programs. Medicaid is for low-income individuals and families. We're at the end. I hope you did awesome on your exam. I hope you feel more prepared or at least more confident if you were already got all these right, that you're ready to just go smash that exam and come get a job in insurance with me. If you need more help on the definitions, please be sure to download our free PDF we have on all the definitions for the life. It's for the life and health exam. So you can just ignore the life ones if you're only doing health. And just really know those definitions. I really found, for me, it was like a third of the exam. I'm just new stuff because I had read through all of those, you know, consideration, aleatory, all of those words that you don't use in your regular world, but you're going to use in the insurance world. So get used to those terms. Really know them. And that could be the difference between a pass and a fail, just knowing a few of those. And, you know, go and watch some of our other videos. If you're still working on things, if you have any questions, I love a good comment. This episode is actually a suggestion of one of my subscribers who commented that she wanted something really health specific. So special shout out to her for suggesting this to me and for asking for it to have some of the calculations in there. I love having the subscribers and the feedback more than you could even know. So my best to her and my best to all of you. Good luck on your exams. See you next time.