Life & Health Insurance Practice Test
Insurance Health Insurance Basics Practice Questions
Health Insurance Basics makes up 5 of every 50 questions on a Tigertest Insurance practice test. Here are 10 of the 20 questions on it, each with the answer and the reason.
Updated by the Tigertest team. General portion only, on the NAIC model and standard prelicensing texts. Your state portion is separate.
1. Health insurance policies protect against losses caused by which two perils?
- A.Sickness and old age
- B.Accident and sickness
- C.Accident and premature death
- D.Death and disability
Answer: B. Health insurance covers the perils of accident and sickness, which cause medical expenses and lost income. Premature death is the peril covered by life insurance.
2. A carpenter wants a policy that replaces part of his paycheck if an injury or illness keeps him from working. He needs:
- A.Major medical insurance
- B.Accidental death and dismemberment insurance
- C.Hospital indemnity insurance
- D.Disability income insurance
Answer: D. Disability income insurance replaces a portion of earnings lost to accident or sickness. Major medical pays medical bills, not lost income.
3. An HMO member wants to see a dermatologist for a skin condition. Under a typical HMO, the member must first:
- A.Get a referral from her primary care physician
- B.Pay the full cost, then file a claim
- C.Meet a separate specialist deductible
- D.Choose any dermatologist, in or out of the network
Answer: A. The HMO primary care physician acts as a gatekeeper, and specialist visits require a referral. HMOs usually charge copays rather than requiring members to pay in full and file claims.
4. An HMO pays each primary care physician a fixed monthly amount per enrolled member, regardless of services used. This method is called:
- A.Usual, customary and reasonable
- B.Fee-for-service
- C.Capitation
- D.Coinsurance
Answer: C. Capitation pays providers a set amount per member per month, giving them an incentive to keep members healthy. Fee-for-service, used by indemnity plans, pays for each service performed.
5. A PPO member sees an out-of-network specialist without any referral. How will the plan typically treat the claim?
- A.It requires a PCP referral before paying
- B.It denies the claim entirely
- C.It pays benefits, but at a lower level
- D.It pays the same as in-network care
Answer: C. PPOs allow out-of-network care without referrals, but the member pays more through higher deductibles and coinsurance. Denying out-of-network care except emergencies is typical of an HMO or EPO, not a PPO.
6. Which plan type lets members decide at each visit between gatekeeper network care and out-of-network care at higher cost?
- A.Point-of-service plan
- B.Exclusive provider organization
- C.Traditional indemnity plan
- D.Closed-panel HMO
Answer: A. A point-of-service plan blends HMO and PPO features: members use a primary care gatekeeper in network but may go out of network for lower benefits. An EPO generally does not cover out-of-network care at all.
7. A family wants to see any doctor or hospital with no network, paying a deductible and coinsurance. Which plan type fits?
- A.Health maintenance organization
- B.Exclusive provider organization
- C.Point-of-service plan
- D.Traditional indemnity plan
Answer: D. An indemnity plan reimburses covered charges from any provider after the deductible and coinsurance, with no network. HMOs and EPOs restrict members to network providers except for emergencies.
8. An applicant for an individual disability income policy wants to lower the premium. Which change would do that?
- A.Adding a cost-of-living rider
- B.Lengthening the elimination period
- C.Choosing an own-occupation definition
- D.Lengthening the benefit period
Answer: B. A longer elimination period works like a higher deductible in time, so the premium drops. A longer benefit period, added riders and a broader own-occupation definition all increase the premium.
9. An applicant with diabetes applies for an ACA-compliant individual major medical plan during open enrollment. The insurer may:
- A.Charge her more because of her health
- B.Not decline her or exclude the condition
- C.Decline her for the preexisting condition
- D.Exclude diabetes for the first 12 months
Answer: B. ACA major medical plans are guaranteed issue with no preexisting condition exclusions, and premiums may vary only by age, tobacco use, location and family size. Health-based rating is not permitted.
10. An applicant with a heart condition applies for individual disability income insurance. Unlike ACA major medical, the insurer may:
- A.Issue coverage only during open enrollment
- B.Not consider her medical history at all
- C.Consider only age, tobacco use, location and family size
- D.Rate, exclude the condition, or decline coverage
Answer: D. Guaranteed issue applies to ACA major medical, but disability income and long-term care are still medically underwritten. The insurer may charge more, exclude the condition with a rider, or decline the risk.
Practice all 20 health insurance basics questions, and the rest of the 200-question bank, in the free Insurance training sets. Questions you miss come back until you have mastered them.
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