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Free South Carolina Accident and Health Insurance Producer Practice Questions

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Sample Practice Questions

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

  1. 1A self-employed consultant wants benefits that replace part of her personal earnings if illness prevents her from working. Which coverage addresses that loss?

    1. A. Business overhead expense disability coverage
    2. B. Individual disability income coverage
    3. C. Business disability buyout coverage
    4. D. Key employee disability coverage

    Answer: B

    Explanation: NAIC defines disability income as "a policy designed to compensate insured individuals for a portion of the income they lose because of a disabling injury or illness." The consultant seeks replacement of her own earnings; the other policies address business expenses, ownership buyout, or loss of a key worker.

    Reference: NAIC Glossary of Insurance Terms — Disability Income definition

  2. 2An agent tells an insured that the agent can amend an individual South Carolina accident and health policy by writing a change on the agent's copy. What approval is required for the change to be effective?

    1. A. Approval by a company officer noted on or attached to the policy
    2. B. Approval by the agent recorded in the agency's sales file
    3. C. Approval by the claims examiner after a loss has occurred
    4. D. Approval by the beneficiary on a separate consent form

    Answer: A

    Explanation: The required entire-contract provision says "No change in this policy is effective until approved by a company officer." It further requires that approval be noted on or attached to the policy and says an agent cannot change or waive policy provisions.

    Reference: South Carolina Code Title 38 Chapter 71 — S.C. Code §38-71-340(1), Entire Contract; Changes

  3. 3A Medicare beneficiary asks which part of Original Medicare generally helps cover inpatient hospital care. Which part should the producer identify?

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

    Answer: A

    Explanation: Medicare.gov states: "Part A helps cover inpatient care in hospitals, skilled nursing facility care, hospice care, and home health care." Part B is medical insurance, Part C is Medicare Advantage, and Part D concerns drug coverage.

    Reference: Medicare.gov, Parts of Medicare — Parts of Medicare, Part A (Hospital Insurance)

  4. 4A dependent child reaches the limiting age under an individual South Carolina medical expense policy. The child remains unable to support herself because of a physical handicap, remains chiefly dependent on the policyholder, and the required proof is timely furnished. What happens solely because of reaching that age?

    1. A. Coverage ends at the limiting age despite timely incapacity proof.
    2. B. Coverage continues while incapacity and dependency remain documented.
    3. C. Coverage continues only until the first renewal after limiting age.
    4. D. Coverage continues only if the insurer approves a separate new policy.

    Answer: B

    Explanation: South Carolina law says "attainment of the limiting age does not operate to terminate the coverage of the child" while the child is both incapable of self-sustaining employment because of intellectual disability or physical handicap and chiefly dependent, with timely proof. All conditions in the question are met.

    Reference: South Carolina Code Title 38 Chapter 71 — S.C. Code §38-71-350, dependent-child continuation

  5. 5A health plan needs to determine whether it may disclose a member's individually identifiable medical record without the member's authorization. Which federal rule sets the relevant use-and-disclosure limits?

    1. A. The HIPAA Privacy Rule
    2. B. The HIPAA Security Rule
    3. C. The Gramm-Leach-Bliley privacy rule
    4. D. The Fair Credit Reporting Act

    Answer: A

    Explanation: HHS explains that the HIPAA Privacy Rule "sets limits and conditions on the uses and disclosures that may be made of such information without an individual’s authorization." The Security Rule addresses electronic safeguards; the other named laws address financial or consumer-report information.

    Reference: HHS, HIPAA Privacy Rule — The HIPAA Privacy Rule, overview

  6. 6Which responsibility does South Carolina law assign to the Director of Insurance?

    1. A. Setting federal Medicare premiums
    2. B. Supervising and regulating each insurer's rates and service in the state
    3. C. Licensing physicians who perform insurance examinations
    4. D. Approving county tax millage

    Answer: B

    Explanation: Section 38-3-110 says the director shall “supervise and regulate the rates and service of every insurer in this State.” Thus B is the assigned insurance-regulatory duty.

    Reference: Code of Laws - Title 38 - Chapter 3- - INSURANCE — S.C. Code Section 38-3-110(1)

  7. 7What must an accident or health insurer deliver with each issued policy so that the whole contract appears?

    1. A. A copy of the insured's application
    2. B. The insurer's tax return
    3. C. The producer's employment contract
    4. D. The claimant's medical records

    Answer: A

    Explanation: Section 38-71-30 requires delivery of “a copy of the application made by the insured so that the whole contract appears in the application and policy.” A is correct.

    Reference: Code of Laws - Title 38 - Chapter 71- - INSURANCE — S.C. Code Section 38-71-30

  8. 8A sole proprietor expects to be unable to work for several months and wants coverage for office rent, utilities, and staff payroll while recovering. Which policy fits?

    1. A. Individual disability income coverage
    2. B. Key employee disability coverage
    3. C. Business overhead expense disability coverage
    4. D. Business interruption insurance

    Answer: C

    Explanation: NAIC says business overhead coverage "covers standard business expenses such as payroll, utilities, rent, etc., while the business owner recovers from a disability." This is a disability of the owner, not an ordinary interruption from property damage; personal income and key-employee coverage address other losses.

    Reference: NAIC Small Business Insurance — Disability Insurance, business overhead paragraph

  9. 9An individual South Carolina accident and health policy has been in force more than two years. A new covered loss begins after that period. Which application statement may still support voiding the policy or denying the claim under its required time-limit provision?

    1. A. An innocent mistake that was material to initial pricing
    2. B. An agent's verbal estimate of the applicant's future health
    3. C. A fraudulent misstatement made in the application
    4. D. Any omitted detail discovered after the policy was issued

    Answer: C

    Explanation: The statute provides: "After two years from the issue date only fraudulent misstatements in the application may be used to void the policy or deny any claim for loss incurred or disability that starts after the two-year period." Materiality alone or an oral estimate does not meet this specified later-loss exception.

    Reference: South Carolina Code Title 38 Chapter 71 — S.C. Code §38-71-340(2), Time Limit on Certain Defenses

  10. 10A family asks about health coverage for an eligible low-income adult through a program administered by states under federal requirements and funded jointly by states and the federal government. Which program is it?

    1. A. Original Medicare
    2. B. Social Security Disability Insurance
    3. C. Medicaid
    4. D. Medicare supplement insurance

    Answer: C

    Explanation: Medicaid.gov says "Medicaid is administered by states, according to federal requirements. The program is funded jointly by states and the federal government." Its eligible groups include low-income adults; the alternatives are different insurance or benefit programs.

    Reference: Medicaid.gov, Medicaid — Medicaid overview

Topics in this practice bank

These topics describe the available practice for South Carolina Accident and Health Insurance Producer. Review the examination outline and its sources for scope and allocation details.

  • General knowledge — I. TYPES OF POLICIES (16 scored items)
    • A. Disability income
    • A. Disability income / 1. Individual disability income policy
    • A. Disability income / 2. Business overhead expense policy
    • A. Disability income / 3. Business disability buyout policy
    • A. Disability income / 4. Group disability income policy
    • A. Disability income / 5. Key employee policy
    • B. Accidental death and dismemberment
    • C. Medical expense insurance
    • C. Medical expense insurance / 1. Basic hospital, medical, and surgical policies
    • C. Medical expense insurance / 2. Major medical policies
    • C. Medical expense insurance / 3. Health Maintenance Organizations (HMOs)
    • C. Medical expense insurance / 4. Preferred Provider Organizations (PPOs)
    • C. Medical expense insurance / 5. Point of Service (POS) plans
    • C. Medical expense insurance / 6. Flexible Spending Accounts (FSAs)
    • C. Medical expense insurance / 7. High Deductible Health Plans (HDHPs) and related Health Savings Accounts (HSAs)
    • C. Medical expense insurance / 8. Health Reimbursement Accounts (HRAs)
    • D. Medicare supplement policies
    • E. Group insurance
    • E. Group insurance / 1. Differences between individual and group contracts
    • E. Group insurance / 2. General characteristics
    • E. Group insurance / 3. COBRA
    • F. Individual/Group Long Term Care (LTC)
    • F. Individual/Group Long Term Care (LTC) / 1. Eligibility
    • F. Individual/Group Long Term Care (LTC) / 2. Levels of care
    • G. Other policies
    • G. Other policies / 1. Dental
    • G. Other policies / 2. Vision
    • G. Other policies / 3. Cancer
    • G. Other policies / 4. Critical illness or specified disease
    • G. Other policies / 5. Worksite (employer-sponsored)
    • G. Other policies / 6. Hospital indemnity
    • G. Other policies / 7. Short-term medical
    • G. Other policies / 8. Accident
  • General knowledge — II. POLICY PROVISIONS, CLAUSES, AND RIDERS (15 scored items)
    • A. Mandatory and optional provisions
    • A. Mandatory and optional provisions / 1. Entire contract
    • A. Mandatory and optional provisions / 2. Time limit on certain defenses (incontestable)
    • A. Mandatory and optional provisions / 3. Grace period
    • A. Mandatory and optional provisions / 4. Reinstatement
    • A. Mandatory and optional provisions / 5. Notice of claim
    • A. Mandatory and optional provisions / 6. Claim forms
    • A. Mandatory and optional provisions / 7. Proof of loss
    • A. Mandatory and optional provisions / 8. Time of payment of claims
    • A. Mandatory and optional provisions / 9. Payment of claims
    • A. Mandatory and optional provisions / 10. Physical examination and autopsy
    • A. Mandatory and optional provisions / 11. Legal actions
    • A. Mandatory and optional provisions / 12. Change of beneficiary
    • A. Mandatory and optional provisions / 13. Misstatement of age or gender
    • A. Mandatory and optional provisions / 14. Change of occupation
    • A. Mandatory and optional provisions / 15. Illegal occupation
    • A. Mandatory and optional provisions / 16. Relation of earnings to insurance
    • B. Other provisions and clauses
    • B. Other provisions and clauses / 1. Insuring clause
    • B. Other provisions and clauses / 2. Free look
    • B. Other provisions and clauses / 3. Consideration clause
    • B. Other provisions and clauses / 4. Probationary period
    • B. Other provisions and clauses / 5. Elimination period
    • B. Other provisions and clauses / 6. Waiver of premium
    • B. Other provisions and clauses / 7. Exclusions and limitations
    • B. Other provisions and clauses / 8. Preexisting conditions
    • B. Other provisions and clauses / 9. Coinsurance
    • B. Other provisions and clauses / 10. Deductibles
    • B. Other provisions and clauses / 11. Eligible expenses
    • B. Other provisions and clauses / 12. Copayments
    • B. Other provisions and clauses / 13. Pre-authorizations and prior approval requirements
    • B. Other provisions and clauses / 14. Usual, reasonable, and customary (URC) charges
    • B. Other provisions and clauses / 15. Lifetime, annual or per cause maximum benefit limits
    • C. Riders
    • C. Riders / 1. Impairment/exclusions
    • C. Riders / 2. Guaranteed insurability
    • C. Riders / 3. Future increase option
    • D. Rights of renewability
    • D. Rights of renewability / 1. Noncancelable
    • D. Rights of renewability / 2. Cancelable
    • D. Rights of renewability / 3. Guaranteed renewable
  • General knowledge — III. SOCIAL INSURANCE (6 scored items)
    • A. Medicare (Parts A, B, C, D)
    • B. Medicaid
    • C. Social Security benefits
  • General knowledge — IV. OTHER INSURANCE CONCEPTS (5 scored items)
    • A. Total, partial, recurrent and residual disability
    • B. Owner’s rights
    • C. Dependent children benefits
    • D. Primary and contingent beneficiaries
    • E. Modes of premium payments
    • F. Nonduplication and coordination of benefits (e.g., primary vs. excess)
    • G. Occupational vs. nonoccupational
    • H. Tax treatment of premiums and proceeds of insurance contracts (e.g., disability income and medical expenses, etc.)
    • I. Managed care
    • J. Workers Compensation
    • K. Subrogation
    • L. Cost containment
  • General knowledge — V. FIELD UNDERWRITING PROCEDURES (8 scored items)
    • A. Completing the application
    • B. Explaining sources of insurability and HIPAA privacy (e.g., MIB Report, Fair Credit Reporting Act, etc.)
    • C. Initial premium payment and receipt and consequences of the receipt (e.g., medical examination, etc.)
    • D. Submitting application (and initial premium if collected) to company for underwriting
    • E. Policy delivery
    • F. Explaining policy and its provisions, riders, exclusions, and ratings to clients
    • G. Replacement
    • H. Contract law
    • H. Contract law / 1. Elements of a contract
    • H. Contract law / 2. Insurable interest
    • H. Contract law / 3. Warranties and representations
    • H. Contract law / 4. Unique aspects of the insurance contract
    • H. Contract law / 4. Unique aspects of the insurance contract / a. Conditional
    • H. Contract law / 4. Unique aspects of the insurance contract / b. Unilateral
    • H. Contract law / 4. Unique aspects of the insurance contract / c. Adhesion
    • H. Contract law / 4. Unique aspects of the insurance contract / d. Aleatory
  • South Carolina specific — I. SOUTH CAROLINA LAWS AND REGULATIONS PERTINENT TO ALL LINES (18 scored items)
    • A. Insurance Department and Director
    • A. Insurance Department and Director / 1. Powers and duties Ref: 38-3-60, 110
    • A. Insurance Department and Director / 2. Examination of books and records Ref: 38-13-10–30; 38-43-250
    • A. Insurance Department and Director / 3. Investigations/Notice of hearing Ref: 38-3-170; 38-57-200
    • A. Insurance Department and Director / 4. Penalties and fines Ref: 38-2-10–30, 38-43-130
    • A. Insurance Department and Director / 5. Cease and desist orders Ref: 38-59-20, 270
    • B. General insurance definitions
    • B. General insurance definitions / 1. Domestic, foreign and alien insurers Ref: 38-1-20
    • B. General insurance definitions / 2. Admitted/Nonadmitted insurer Ref: 38-1-20; 38-5-80
    • B. General insurance definitions / 3. Sell, solicit, negotiate Ref: 38-1-20, 38-43-10
    • C. Licensing
    • C. Licensing / 1. Producer Ref: 38-43-10, 20, 30, 60
    • C. Licensing / 2. License fees and application Ref: 38-43-80, 100, 101
    • C. Licensing / 3. License probation, revocation, suspension, or denial of reissuance Ref: 38-43-130, 230
    • C. Licensing / 4. Temporary License Ref 38-43-102
    • C. Licensing / 5. Nonresident License Ref: 38-43-70
    • C. Licensing / 6. Agent appointment/termination of contract Ref: 38-43-40, 50, 55
    • C. Licensing / 7. Continuing education Ref: 38-43-106; Reg. 69-50
    • C. Licensing / 8. Change of Address/name change Ref: 38-43-10(C), 107
    • C. Licensing / 9. Reinstatement/license expiration Ref: 38-43-110(B)
    • D. Unfair and prohibited trade practices
    • D. Unfair and prohibited trade practices / 1. Rebating Ref: 38-57-130
    • D. Unfair and prohibited trade practices / 2. Defamation Ref: 38-57-90
    • D. Unfair and prohibited trade practices / 3. Unfair Discrimination Ref: 38-55-50; 38-57-120
    • D. Unfair and prohibited trade practices / 4. Misrepresentation Ref: 38-57-40
    • D. Unfair and prohibited trade practices / 5. False advertising Ref: 38-57-40, 50
    • D. Unfair and prohibited trade practices / 6. Boycott, coercion, and intimidation Ref: 38-57-100, 110
    • D. Unfair and prohibited trade practices / 7. Unfair claims settlement practices Ref: 38-59-10, 20
    • D. Unfair and prohibited trade practices / 8. Fraud Ref: 38-43-245
    • D. Unfair and prohibited trade practices / 9. False Financial Statements Ref: 38-57-80
    • D. Unfair and prohibited trade practices / 10. Prohibited inducements Ref: 38-57-130, 150,
    • E. Reporting and Disposition of Premiums
    • E. Reporting and Disposition of Premiums / 1. Fiduciary capacity; misappropriation of funds Ref: 38-43-130, 240, 420
    • E. Reporting and Disposition of Premiums / 2. Commissions and compensation/charges for extra services Ref: 38-43-200
    • E. Reporting and Disposition of Premiums / 3. Reporting of Actions Ref: 38-43-247
    • F. Life and Accident Health Insurance Guaranty Association Ref: 38-29-20, 30, 40, 50, 80, 130. 200
    • G. Consumer information privacy regulation Ref: Reg 69-58 Sec 1–16
  • South Carolina specific — II. SOUTH CAROLINA LAWS AND REGULATIONS PERTINENT TO ACCIDENT & HEALTH INSURANCE (7 scored items)
    • A. Individual and Group Accident and Health Insurance Ref: 38-71 et al
    • B. Medicare Supplement Ref: Reg 69-46 Sec 1– 8, 11– 13, 17– 24
    • C. Long Term Care Ref: Reg 69-44 Sec 1, 3 – 9 and 12 – 14

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These are independent study questions, not actual examination items. For examination requirements and official information, view South Carolina Accident and Health Insurance Producer details.