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Sample Practice Questions

Try these 10 sample questions from the Health practice bank. Each includes the answer and explanation. Continue with the interactive practice above to review the full question set.

  1. 1A self-employed therapist wants coverage that replaces personal earnings if an illness prevents her from working. Which policy best addresses that need?

    1. A. Individual disability income policy
    2. B. Business overhead expense policy
    3. C. Disability buy-sell insurance policy
    4. D. Key employee disability insurance policy

    Answer: A

    Explanation: The NAIC says disability insurance is designed to "replace income or other expenses." Here the therapist needs replacement of her own earnings, so individual disability income is the matching product.

    Reference: NAIC Small Business Insurance — What is disability insurance?

  2. 2After issuance of an individual accident and sickness policy, a producer orally promises a different exclusion. What is required for a valid policy change under the entire-contract provision?

    1. A. The producer's oral assurance, documented in the agency file
    2. B. Executive-officer approval endorsed on or attached to the policy
    3. C. The insured's oral acceptance recorded during a service call
    4. D. A later claim adjustment applying the producer's new promise

    Answer: B

    Explanation: The model provision says "No agent has authority to change this policy" and requires insurer executive-officer approval endorsed or attached. The producer's oral promise alone cannot alter the contract.

    Reference: NAIC Accident and Sickness Insurance Minimum Standards Model Act 180 — Required Provision 1 / Entire Contract; Changes

  3. 3A Medicare beneficiary asks which part of Original Medicare generally helps cover outpatient physician services. Which part is it?

    1. A. Medicare Part A
    2. B. Medicare Part B
    3. C. Medicare Part C
    4. D. Medicare Part D

    Answer: B

    Explanation: Medicare.gov lists "Services from doctors and other health care providers" under Part B (Medical Insurance). Outpatient physician care is therefore a Part B service.

    Reference: Medicare Parts A, B, C, and D — Part B (Medical Insurance) / covered services

  4. 4A disabled consultant can still work limited hours, but earnings fall substantially. Which disability policy feature addresses the income reduction while some work continues?

    1. A. An elimination period before benefit payments
    2. B. A waiver of premiums during covered disability
    3. C. A benefit solely for accidental dismemberment
    4. D. A residual disability benefit for reduced income

    Answer: D

    Explanation: The NAIC says residual coverage "fills the gap in income if you are partially disabled, resulting in reduced income." It applies when some work remains but income falls.

    Reference: NAIC Disability Insurance Guidance — Residual Benefit(s)

  5. 5A producer discovers an incorrect written health-application answer after the applicant signed. The producer wants to correct it before submission. What authorization is required for the producer to alter the answer?

    1. A. The applicant's written consent to the alteration
    2. B. The producer's initials beside the changed answer
    3. C. The agency manager's oral approval of the change
    4. D. The medical examiner's signature after review

    Answer: A

    Explanation: The NAIC model states that no one other than the applicant may alter a written application "without his written consent," apart from clearly marked insurer administrative insertions. A producer changing an answer needs the applicant's written consent.

    Reference: NAIC Accident and Sickness Insurance Minimum Standards Model Act 180 — Section 5.B / Written application alterations

  6. 6A New Jersey applicant asks what source controls the statutory qualifications for a resident producer license. Which source supplies those qualifications?

    1. A. The New Jersey Insurance Producer Licensing Act
    2. B. The insurer's underwriting manual
    3. C. The producer's agency contract
    4. D. The NAIC model act without state enactment

    Answer: A

    Explanation: The Act says, "This act governs the qualifications and procedures for the licensing of insurance producers." N.J.S.A. 17:22A-32 supplies the resident qualifications.

    Reference: Njsa Producer Act 13213 — N.J.S.A. 17:22A-27 and 17:22A-32

  7. 7Before a New Jersey health producer completes a sale, what compensation information must be disclosed to the purchaser in writing?

    1. A. The amount of compensation the producer will receive
    2. B. Every employee salary paid by the insurer
    3. C. The insurer's total national advertising budget
    4. D. Every claim paid under the policy form

    Answer: A

    Explanation: A health producer "shall notify the purchaser of the insurance, in writing, of the amount" of compensation resulting from the sale, solicitation, or negotiation.

    Reference: 17:22A-41.1 Notification by insurance producer to purchaser of compensation received by producer. — N.J.S.A. 17:22A-41.1(a)

  8. 8A sole proprietor becomes disabled and needs insurance proceeds to keep the firm's rent and staff payroll current. What is the intended use of a business overhead expense provision?

    1. A. Replace the proprietor's personal salary during recovery
    2. B. Meet the firm's recurring operating expenses during recovery
    3. C. Finance purchase of the proprietor's ownership interest
    4. D. Pay the firm's recruitment costs after a key employee is disabled

    Answer: B

    Explanation: The NAIC identifies "standard business expenses such as payroll, utilities" as overhead coverage. Rent and staff payroll are operating expenses; the provision is not the owner's personal income replacement.

    Reference: NAIC Small Business Insurance — Disability insurance / business overhead

  9. 9A monthly-premium individual accident and sickness policy has the model grace clause, and no timely nonrenewal notice was sent. Seven days after a renewal premium due date, it remains unpaid. What is the policy's status?

    1. A. It lapsed at the renewal premium due date
    2. B. It is suspended until the insurer approves reinstatement
    3. C. It remains in force during the monthly-premium grace period
    4. D. It continues only if the insurer approves reinstatement before a claim

    Answer: C

    Explanation: The model grants at least ten days for monthly premiums and states that "the policy shall continue in force" during that grace period. Seven days after a renewal due date is within it.

    Reference: NAIC Accident and Sickness Insurance Minimum Standards Model Act 180 — Required Provision 3 / Grace Period

  10. 10A 68-year-old Medicare beneficiary continues working and has nontribal group health coverage through an employer with 25 employees. For a covered claim, which payer order applies?

    1. A. Medicare pays first, then the employer group plan
    2. B. The employer group plan pays first, then Medicare
    3. C. Both programs split the primary payment equally
    4. D. The employer plan alone pays, with no Medicare role

    Answer: B

    Explanation: Medicare.gov states that for a nontribal employer with "20 or more employees, the non-tribal group health plan pays first, and Medicare pays second." The stated 25-employee plan is primary.

    Reference: Medicare Who Pays First — Who Pays First / nontribal employer coverage, 20 or more employees

Topics in this practice bank

These topics describe the available practice for Health. Review the examination outline and its sources for scope and allocation details.

  • I.0 Types of Policies (14 Items)
    • 1.1 Disability Income
    • 1.1 Disability Income / Individual disability income policy
    • 1.1 Disability Income / Business overhead expense policy
    • 1.1 Disability Income / Business disability buyout policy
    • 1.1 Disability Income / Group disability income policy
    • 1.1 Disability Income / Key employee/partner policies
    • 1.2 Accidental Death and Dismemberment
    • 1.3 Medical Expense Insurance
    • 1.3 Medical Expense Insurance / Basic hospital, medical, and surgical policies
    • 1.3 Medical Expense Insurance / Major medical policies
    • 1.3 Medical Expense Insurance / Comprehensive major medical policies
    • 1.3 Medical Expense Insurance / Health Maintenance Organizations (HMOs)
    • 1.3 Medical Expense Insurance / Preferred Provider Organizations (PPOs)
    • 1.3 Medical Expense Insurance / Service organizations (Blue Plans)
    • 1.3 Medical Expense Insurance / Point of Service(POS) plans
    • 1.3 Medical Expense Insurance / Medical Savings Accounts (MSAs)
    • 1.3 Medical Expense Insurance / Flexible Spending Accounts (FSAs)
    • 1.3 Medical Expense Insurance / Health Reimbursement Accounts (HRAs)
    • 1.3 Medical Expense Insurance / High Deductible Health Plans (HDHPs) and related Health Savings Accounts (HSAs)
    • 1.3 Medical Expense Insurance / Consumer Driven Health Plans (CDHPs)
    • 1.4 Medicare Supplement Policies
    • 1.5 Group Insurance
    • 1.5 Group Insurance / Group conversion
    • 1.5 Group Insurance / Differences between individual and group contracts
    • 1.5 Group Insurance / General concepts
    • 1.5 Group Insurance / COBRA
    • 1.5 Group Insurance / HIPAA
    • 1.6 Long Term Care
    • 1.6 Long Term Care / Individual LTC contracts
    • 1.6 Long Term Care / Group/voluntary LTC contracts
    • 1.6 Long Term Care / Service days vs. calendar days
    • 1.7 Cancer (for specified diseases) Plans
    • 1.8 Critical Illness Plans
    • 1.9 Worksite (employer-sponsored) Plans
  • 2.0 Policy Provisions, Clauses, and Riders (20 Items)
    • 2.1 Mandatory Provisions
    • 2.1 Mandatory Provisions / Entire contract
    • 2.1 Mandatory Provisions / Time limit on certain defenses (incontestable)
    • 2.1 Mandatory Provisions / Grace period
    • 2.1 Mandatory Provisions / Reinstatement
    • 2.1 Mandatory Provisions / Notice of claim
    • 2.1 Mandatory Provisions / Claim forms
    • 2.1 Mandatory Provisions / Proof of loss
    • 2.1 Mandatory Provisions / Time of payment of claims
    • 2.1 Mandatory Provisions / Payment of claims
    • 2.1 Mandatory Provisions / Physical examination and autopsy
    • 2.1 Mandatory Provisions / Legal actions
    • 2.1 Mandatory Provisions / Change of beneficiary
    • 2.2 Optional Provisions
    • 2.2 Optional Provisions / Change of occupation
    • 2.2 Optional Provisions / Misstatement of age
    • 2.2 Optional Provisions / Illegal occupation
    • 2.3 Other Provisions and Clauses
    • 2.3 Other Provisions and Clauses / Insuring clause
    • 2.3 Other Provisions and Clauses / Free look (10-day, 20-day, etc.)
    • 2.3 Other Provisions and Clauses / Consideration clause
    • 2.3 Other Provisions and Clauses / Probationary period
    • 2.3 Other Provisions and Clauses / Elimination period
    • 2.3 Other Provisions and Clauses / Waiver of premium
    • 2.3 Other Provisions and Clauses / Exclusions
    • 2.3 Other Provisions and Clauses / Preexisting conditions
    • 2.3 Other Provisions and Clauses / Recurrent disability
    • 2.3 Other Provisions and Clauses / Coinsurance
    • 2.3 Other Provisions and Clauses / Deductibles
    • 2.3 Other Provisions and Clauses / Eligible expenses
    • 2.3 Other Provisions and Clauses / Copayments
    • 2.3 Other Provisions and Clauses / Pre-authorizations and prior approval requirements
    • 2.3 Other Provisions and Clauses / Usual, reasonable, and customary (URC) changes
    • 2.3 Other Provisions and Clauses / Lifetime, annual or per cause maximum benefit limits
    • 2.4 Riders
    • 2.4 Riders / Impairment rider
    • 2.4 Riders / Guaranteed insurability rider
    • 2.4 Riders / Multiple indemnity rider (double, triple)
    • 2.5 Rights of Renewability
    • 2.5 Rights of Renewability / Noncancelable
    • 2.5 Rights of Renewability / Cancelable
    • 2.5 Rights of Renewability / Guaranteed renewable
    • 2.5 Rights of Renewability / Conditionally renewable
    • 2.5 Rights of Renewability / Optionally renewable
    • 2.5 Rights of Renewability / Period of time for renewal
  • 3.0 Social Insurance (3 Items)
    • 3.1 Medicare
    • 3.1 Medicare / Primary, secondary payor
    • 3.1 Medicare / Medicare Parts A,B,C,D
    • 3.2 Medicaid
    • 3.3 Social Security Benefits
  • 4.0 Other Insurance Concepts (4 Items)
    • 4.1 Total, Partial, and Residual Disability
    • 4.2 Owner’s Rights
    • 4.3 Dependent Children Benefits
    • 4.4 Primary and Contingent Beneficiaries
    • 4.5 Modes of Premium Payments (annual, semiannual, etc.)
    • 4.6 Nonduplication and Coordination of Benefits (e.g., primary vs. excess)
    • 4.7 Occupational vs. Nonoccupational
    • 4.8 Tax Treatment of Premiums and Proceeds of Insurance Contracts (e.g., disability income and medical expenses, etc.)
    • 4.9 Managed Care
    • 4.10 Workers Compensation
    • 4.11 Subrogation
  • 5.0 Field Underwriting Procedures (9 Items)
    • 5.1 Completing application and obtaining necessary signatures
    • 5.2 Explaining sources of insurability information (e.g., MIB Report, Fair Credit Reporting Act, etc.)
    • 5.3 Initial premium payment and receipt and consequences of the receipt (e.g. medical examination, etc.)
    • 5.4 Submitting application (and initial premium if collected) to company for underwriting
    • 5.5 Assuring delivery of policy and related documents to client
    • 5.6 Explaining policy and its provisions, riders, exclusions, and ratings to clients
    • 5.7 Replacement
    • 5.8 Contract law
    • 5.8 Contract law / Requirements of forming a contract
    • 5.8 Contract law / Insurable interest
    • 5.8 Contract law / Warranties and representations
    • 5.8 Contract law / Unique aspects of the health contract
    • 5.8 Contract law / Unique aspects of the health contract / Conditional
    • 5.8 Contract law / Unique aspects of the health contract / Unilateral
    • 5.8 Contract law / Unique aspects of the health contract / Adhesion
  • 6.0 New Jersey Laws, Rules, and Regulations Common to Life, Accident and Health, Property, and Casualty Insurance (25 Items)
    • 6.1 State Regulatory Jurisdiction (4 Items)
    • 6.1 State Regulatory Jurisdiction (4 Items) / Legislation
    • 6.1 State Regulatory Jurisdiction (4 Items) / Legislation / State Laws
    • 6.1 State Regulatory Jurisdiction (4 Items) / Legislation / Court Action
    • 6.1 State Regulatory Jurisdiction (4 Items) / Legislation / Court Action / Interpretations
    • 6.1 State Regulatory Jurisdiction (4 Items) / Legislation / Court Action / Effect on Law and Policy Forms
    • 6.1 State Regulatory Jurisdiction (4 Items) / Legislation / Related Federal Laws and court Cases
    • 6.1 State Regulatory Jurisdiction (4 Items) / Legislation / Related Federal Laws and court Cases / Paul v. Virginia
    • 6.1 State Regulatory Jurisdiction (4 Items) / Legislation / Related Federal Laws and court Cases / US v. South-Eastern Underwriters Assoc.
    • 6.1 State Regulatory Jurisdiction (4 Items) / Legislation / Related Federal Laws and court Cases / McCarran-Ferguson Act/Public Law 15
    • 6.1 State Regulatory Jurisdiction (4 Items) / Commissioner/Dept. of Banking and Insurance
    • 6.1 State Regulatory Jurisdiction (4 Items) / Commissioner/Dept. of Banking and Insurance / Broad Powers of Commissioner
    • 6.1 State Regulatory Jurisdiction (4 Items) / Commissioner/Dept. of Banking and Insurance / Notice and Hearing
    • 6.1 State Regulatory Jurisdiction (4 Items) / Commissioner/Dept. of Banking and Insurance / Penalties
    • 6.2 Definitions (4 Items)
    • 6.2 Definitions (4 Items) / Insurance-related conduct
    • 6.2 Definitions (4 Items) / Domestic, foreign, and alien companies
    • 6.2 Definitions (4 Items) / Stock and mutual
    • 6.2 Definitions (4 Items) / Reinsurance
    • 6.2 Definitions (4 Items) / Certificate of authority
    • 6.2 Definitions (4 Items) / A producer acting as:
    • 6.2 Definitions (4 Items) / A producer acting as: / Insurance Agent
    • 6.2 Definitions (4 Items) / A producer acting as: / Insurance Broker
    • 6.2 Definitions (4 Items) / A producer acting as: / Insurance Consultant
    • 6.2 Definitions (4 Items) / “Sell, Solicit, and Negotiate”
    • 6.3 Licensing (8 Items)
    • 6.3 Licensing (8 Items) / Types of licenses/authorities/requirements
    • 6.3 Licensing (8 Items) / Types of licenses/authorities/requirements / Producer
    • 6.3 Licensing (8 Items) / Types of licenses/authorities/requirements / Business entity
    • 6.3 Licensing (8 Items) / Types of licenses/authorities/requirements / Nonresident
    • 6.3 Licensing (8 Items) / Types of licenses/authorities/requirements / Nonresident / Producer
    • 6.3 Licensing (8 Items) / Types of licenses/authorities/requirements / Nonresident / Business Entity
    • 6.3 Licensing (8 Items) / Types of licenses/authorities/requirements / Prelicensing requirements
    • 6.3 Licensing (8 Items) / Types of licenses/authorities/requirements / Surplus lines
    • 6.3 Licensing (8 Items) / Types of licenses/authorities/requirements / Temporary work authority
    • 6.3 Licensing (8 Items) / Contractual relationships
    • 6.3 Licensing (8 Items) / Contractual relationships / Company/producer
    • 6.3 Licensing (8 Items) / Contractual relationships / Producer substituting for or taking over the business of a disabled/deceased producer
    • 6.3 Licensing (8 Items) / Maintenance and duration of license
    • 6.3 Licensing (8 Items) / Maintenance and duration of license / Renewal
    • 6.3 Licensing (8 Items) / Maintenance and duration of license / Certification of license status
    • 6.3 Licensing (8 Items) / License refusal/termination
    • 6.3 Licensing (8 Items) / License refusal/termination / Denial
    • 6.3 Licensing (8 Items) / License refusal/termination / Cancellation/reinstatement
    • 6.3 Licensing (8 Items) / License refusal/termination / Revocation/suspension
    • 6.4 Trade Practices (6 Items)
    • 6.4 Trade Practices (6 Items) / Prohibited practices
    • 6.4 Trade Practices (6 Items) / Licensee responsibilities (Reporting information to the Department of Banking and Insurance)
    • 6.4 Trade Practices (6 Items) / Licensee responsibilities (Reporting information to the Department of Banking and Insurance) / Business names (including fictitious)
    • 6.4 Trade Practices (6 Items) / Licensee responsibilities (Reporting information to the Department of Banking and Insurance) / Branch offices
    • 6.4 Trade Practices (6 Items) / Licensee responsibilities (Reporting information to the Department of Banking and Insurance) / Change of address
    • 6.4 Trade Practices (6 Items) / Licensee responsibilities (Reporting information to the Department of Banking and Insurance) / Standards of conduct
    • 6.5 Guaranty Associations (1 item)
    • 6.6 Ethics
    • 6.6 Fraud (2 items)
    • 6.7 Information Privacy
  • 7.0 New Jersey Laws, Rules, and Regulations Pertinent to Accident and Health Insurance Only (13 Items)
    • 7.1 Marketing Methods and Practices
    • 7.1 Marketing Methods and Practices / Solicitation
    • 7.1 Marketing Methods and Practices / Advertising
    • 7.1 Marketing Methods and Practices / Discrimination based on genetic characteristics
    • 7.2 Policy Clauses and Provisions
    • 7.2 Policy Clauses and Provisions / Minimum standards, claims notices, and standard provisions
    • 7.2 Policy Clauses and Provisions / New Jersey Mandated Benefits
    • 7.2 Policy Clauses and Provisions / Coordination of benefits
    • 7.2 Policy Clauses and Provisions / Prompt payment of claims
    • 7.3 Medicare supplement plans
    • 7.4 Temporary disability law
    • 7.5 Health Insurance Reform Markets
    • 7.5 Health Insurance Reform Markets / Individual
    • 7.5 Health Insurance Reform Markets / Small employer
    • 7.6 The Health Care Claims Authorization Processing and Payment Act
    • 7.7 Group Health Coverage

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These are independent study questions, not actual examination items. For examination requirements and official information, view Health details.