Free Health Examination Practice Questions

Sample Practice Questions

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

1. 1A family buys disability income insurance to protect against lost wages if a covered illness prevents work. Which risk-management method is the purchase using?

   1. A. Transfer the specified financial loss to an insurer in exchange for premiums.
   2. B. Retain the specified financial loss and pay it entirely from household savings.
   3. C. Avoid the possibility of illness by changing the family's activities.
   4. D. Reduce the possible wage loss solely by changing workplace safety practices.

   Answer: A

   Explanation: "transfers some or all of the financial consequences of the potential loss to the insurer" The policy shifts financial consequences of the contingent loss; it does not eliminate the event.

   Reference: IRS Risk Distribution — Risk shifting, PDF p. 7

2. 2An applicant signs an insurance application and offers the first premium, but the insurer has not accepted the proposed terms. Which conclusion about contract formation is supported?

   1. A. The application alone forms a contract because it contains an offer.
   2. B. A contract forms when the producer receives any premium payment.
   3. C. The offer still requires acceptance and mutual assent to essential terms.
   4. D. A contract exists because the insurer has not expressly rejected the offer.

   Answer: C

   Explanation: "To form a contract under Alabama law, there must be (1) an offer and acceptance, (2) consideration, and (3) and mutual assent to terms essential to the formation of the contract." The application is an offer; acceptance and assent have not yet occurred.

   Reference: U.S. District Court, Alabama contract formation — Contract formation discussion, PDF p. 5

3. 3A life insurance applicant pays the initial premium and receives a conditional receipt stating coverage begins only if the insurer finds the applicant insurable under its stated conditions. The condition has not been met. What is the receipt's effect?

   1. A. Payment alone creates unconditional coverage from the application date.
   2. B. Coverage remains conditional on the specified insurability requirement.
   3. C. The receipt replaces all underwriting requirements permanently.
   4. D. The policy becomes effective only after the first renewal premium.

   Answer: B

   Explanation: "Conditional receipt - A premium receipt given to an applicant that makes a life and health insurance policy effective only if or when a specified condition is met." The receipt does not turn payment alone into unconditional coverage.

   Reference: Tennessee Department of Commerce Insurance Glossary — Conditional receipt

4. 4A client wants broad insured protection for hospital, medical and surgical expenses, rather than a product paying only a fixed benefit for one event. Which coverage category best fits?

   1. A. Accidental death and dismemberment coverage.
   2. B. Specified disease coverage for one diagnosis.
   3. C. Hospital indemnity with a fixed daily payment.
   4. D. Comprehensive major medical coverage.

   Answer: D

   Explanation: "Comprehensive/Major Medical - policies that provide fully insured indemnity, HMO, PPO, or Fee for Service coverage for hospital, medical, and surgical expenses." Major medical is designed for broad hospital, medical and surgical expenses.

   Reference: NAIC Glossary of Insurance Terms — Comprehensive/Major Medical

5. 5A disabled engineer cannot perform engineering duties but can perform another gainful job for which she is qualified, with no reduction in earnings. Which disability definition is most likely to pay based on these facts?

   1. A. An any-occupation disability definition.
   2. B. An own-occupation disability definition.
   3. C. A residual-disability earnings provision.
   4. D. A presumptive-disability loss provision.

   Answer: B

   Explanation: "Some may pay benefits if you are unable to perform the duties of your occupation, while others may require that your disability keep you from any gainful employment for which you are qualified." An own-occupation standard can pay when the insured cannot perform her occupation, even if she can do other qualified work.

   Reference: NAIC Disability Insurance Consumer Insight — Disability definition

6. 6An individual Alabama disability income policy refers to endorsements and papers attached to it. Which documents comprise the entire insurance contract under the required provision?

   1. A. The issued policy, endorsements and papers attached to it.
   2. B. The issued policy, endorsements and every agent statement.
   3. C. The issued policy, endorsements and insurer underwriting notes.
   4. D. The issued policy, endorsements and later advertising material.

   Answer: A

   Explanation: "This policy, including the endorsements and the attached papers, if any, constitutes the entire contract of insurance." The required entire-contract provision defines the included documents.

   Reference: Alabama Code § 27-19-4 — Ala. Code § 27-19-4, Entire Contract

7. 7A primary and secondary group health plan coordinate payment on a $1,000 covered claim. What is the maximum total the two plans together may pay for that claim?

   1. A. $800 in combined plan payments.
   2. B. $900 in combined plan payments.
   3. C. $1,000 in combined plan payments.
   4. D. $1,200 in combined plan payments.

   Answer: C

   Explanation: "The plans won’t pay more than the total claim amount. You won’t get double the benefits if you have two health plans," Coordination prevents duplicate recovery beyond the total claim, while the secondary plan may cover remaining eligible costs.

   Reference: NAIC Using Your Health Plan — Coordination of Benefits, p. 15

8. 8A client has Original Medicare and wants extra private insurance to help pay their share of its deductibles, copayments and coinsurance. Which product fits that purpose?

   1. A. Medicare Supplement Insurance.
   2. B. Medicare Advantage.
   3. C. Stand-alone prescription drug plan.
   4. D. Hospital indemnity insurance.

   Answer: A

   Explanation: "Medicare Supplement Insurance (Medigap) is extra insurance you can buy from a private insurance company to help pay your share of out-of-pocket costs in Original Medicare," Medigap supplements Original Medicare cost sharing rather than replacing the underlying Medicare coverage.

   Reference: Medicare.gov Medigap Basics — Medigap basics

9. 9Which body of law does Alabama's producer-licensing regulation expressly implement for producer licensing and appointments?

   1. A. Chapter 7 of Title 27
   2. B. Chapter 19 of Title 27
   3. C. Chapter 21A of Title 27
   4. D. Chapter 55 of Title 27

   Answer: A

   Explanation: Rule 482-1-147-.01 says the chapter carries out "Chapter 7 of Ala. Code Tit. 27 relating to the licensing and appointment of insurance producers." That makes Chapter 7 the controlling body of law here.

   Reference: Chapter 482 1 147 — Rule 482-1-147-.01(1)

10. 10For an insured age 17 receiving covered autism-spectrum-disorder treatment under Alabama law, what visit limit may the plan impose solely because the treatment is for autism?

    1. A. 12 visits per year
    2. B. 20 visits per year
    3. C. 30 visits per year
    4. D. No visit limit

    Answer: D

    Explanation: Section 27-54A-2 bars limits on the number of visits an individual may make for autism-spectrum-disorder treatment.

    Reference: Chapter 482-1-013 Disability Insurance Advertisements and Other Similar Coverages — Section 27-54A-2(d)