17 Free Massachusetts Life & Health Practice Questions: Accident & Health Concepts, Field Underwriting and State A&H Law (2026)
How This Set Fits the Exam
This set covers the last parts of the Accident, Health, or Sickness exam: Other Insurance Concepts (Section IV, 5 scored items), Field Underwriting Procedures (Section V, 8 items) and the Massachusetts laws and regulations pertinent to accident, health or sickness insurance only (Massachusetts Specific Section II, 15 items). The required and optional provisions are in G.L. c. 175 §108(3), the individual mandate is c. 111M with 956 CMR 5.00, and the outline also names Medicare supplement, long-term care and mental health parity rules.
The questions mix concept, procedure and state law, so they are a good test of whether you have connected the general rules to the Massachusetts statutes.
Practice Questions 1-6: Coordination of Benefits, Claims Provisions and the Individual Mandate
Coordination of benefits, required claim provisions, the Massachusetts individual mandate, reinstatement and the optional illegal occupation provision.
Question 1 (Chapter 6)
Under Massachusetts law, which of the following statements is true regarding the coordination of benefits (COB) for an individual covered under both an employer-sponsored group health plan and a spouse's employer-sponsored group health plan?
- A) The plan that has covered the individual for the longer period of time is always the primary plan.
- B) For a dependent child, the plan of the parent whose birthday falls earlier in the calendar year is primary under the birthday rule.
- C) The individual's own employer-sponsored plan is primary, and the spouse's plan is secondary, regardless of other factors.
- D) COB does not apply in Massachusetts; the individual can receive full benefits from both plans simultaneously.
Show answer & explanation
Answer: B
For dependent children covered under both parents' group health plans, standard coordination-of-benefits rules use the 'birthday rule': the plan of the parent whose birthday (month and day) falls earlier in the calendar year is primary. Option A is incorrect because length of coverage is not the determining factor; the birthday rule is used unless specific plan terms state otherwise. Option C is incorrect as it ignores the birthday rule and other COB determinants like custody arrangements. Option D is false; COB prevents over-insurance and ensures total benefits do not exceed allowable expenses.
Question 2 (Chapter 6)
Under Massachusetts law, which of the following is a required provision in an individual accident and health insurance policy regarding claims procedures?
- A) Notice of claim must be given to the insurer within 20 days after a loss.
- B) Claims must be paid immediately upon oral notice of loss.
- C) The insurer has 60 days to investigate a claim before any payment is due.
- D) Proof of loss must be submitted within 90 days after the time such loss is required to be proved.
Show answer & explanation
Answer: D
Massachusetts law, specifically G.L. c. 175 §108(3)(a)(5), requires that individual health policies include a claim procedures provision stating that proof of loss must be filed within 90 days after the time such loss is required to be proved. Option A is incorrect; while notice of claim must be given within a reasonable time (often 20 days is typical in policies, the law requires notice within a reasonable time, not strictly 20 days). Option B is incorrect as claims are not paid immediately upon oral notice; proof of loss is required. Option C is not a standard required provision; the 90-day proof of loss period is the correct timeframe.
Question 3 (Chapter 6)
Under the Massachusetts individual mandate for minimum creditable coverage (MCC), which of the following statements is true regarding the requirement for residents?
- A) Residents must have coverage that includes at least the essential health benefits defined under the ACA, with no additional state requirements.
- B) The mandate applies only to residents over the age of 65 who are enrolled in Medicare.
- C) Residents must maintain a health insurance plan that meets the state's minimum creditable coverage standards to avoid a state tax penalty.
- D) Residents can satisfy the mandate by purchasing any accident-only insurance policy.
Show answer & explanation
Answer: C
Massachusetts law (G.L. c. 111M and 956 CMR 5.00) requires residents to maintain minimum creditable coverage (MCC) or face a state tax penalty. MCC is a state-specific standard that may include benefits beyond the ACA's essential health benefits. Option A is incorrect because MCC has additional requirements beyond the ACA's essential health benefits. Option B is incorrect as the mandate applies to all residents, not just those over 65. Option D is incorrect because accident-only policies do not meet MCC standards, which require comprehensive coverage including inpatient and outpatient services.
Question 4 (Chapter 6)
Under Massachusetts law, which of the following is true regarding the reinstatement provision in an individual accident and health insurance policy?
- A) The policy can be reinstated at any time without evidence of insurability if premiums are paid.
- B) Reinstatement is not permitted for health insurance policies in Massachusetts.
- C) The insurer must automatically reinstate a policy if the lapse was due to the insurer's error in billing.
- D) To reinstate a lapsed policy, the insured must provide evidence of insurability and pay all overdue premiums, plus interest if required by the insurer.
Show answer & explanation
Answer: D
The reinstatement provision (required under G.L. c. 175 §108(3)(a)(4)) allows a lapsed policy to be restored upon satisfactory evidence of insurability and payment of all overdue premiums, with interest if required by the insurer. Option A is incorrect because evidence of insurability is required. Option B is incorrect as reinstatement is permitted. Option C is incorrect; while the insurer may reinstate due to its error, it is not automatic and depends on the circumstances and policy terms.
Question 5 (Chapter 6)
A Massachusetts producer is explaining the concept of 'occupational vs. non-occupational' coverage to a client. Which statement accurately describes a key difference between these two types of coverage in accident and health insurance?
- A) Occupational coverage only applies to injuries sustained while working for the insured's employer, while non-occupational coverage applies to injuries occurring outside of work.
- B) Non-occupational coverage typically has higher benefit limits than occupational coverage.
- C) Occupational coverage is required by Massachusetts law for all employers, while non-occupational coverage is optional.
- D) Benefits under occupational coverage are paid only if the insured is hospitalized, whereas non-occupational benefits are paid for any disability.
Show answer & explanation
Answer: A
A is correct because occupational coverage specifically applies to injuries or sickness arising out of and in the course of employment, while non-occupational coverage applies to injuries or sickness occurring outside of work. This distinction is fundamental in accident and health insurance. B is incorrect as benefit limits are not inherently higher for non-occupational coverage; they vary by policy. C is incorrect because Massachusetts law does not require occupational coverage for all employers; workers' compensation laws govern occupational injuries, but this is separate from individual health insurance. D is incorrect because occupational coverage benefits are not contingent on hospitalization; they are payable for disability resulting from occupational injuries or sickness.
Question 6 (Chapter 6)
In Massachusetts, a producer is explaining the 'illegal occupation' optional provision in an individual accident and health insurance policy. What does this provision typically do?
- A) It denies benefits if the disability occurs while the insured is engaged in an illegal occupation at the time of the injury or sickness.
- B) It excludes coverage for disabilities resulting from the insured's regular occupation if it is deemed illegal by law.
- C) It reduces the benefit amount by 50% if the insured has a criminal record.
- D) It allows the insurer to cancel the policy if the insured is arrested for any offense.
Show answer & explanation
Answer: A
A is correct because the illegal occupation optional provision stipulates that no benefit is payable if the disability results from the insured engaging in an illegal occupation at the time of the injury or sickness. This is a standard optional provision under Massachusetts law (G.L. c. 175, §108(3)(b)(8)). B is incorrect because it refers to the regular occupation being illegal, not the activity at the time of disability. C is incorrect as the provision does not relate to criminal records or automatic benefit reduction. D is incorrect because it does not allow policy cancellation based on arrest; it only affects benefit eligibility for disabilities occurring during illegal occupational activity.
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Practice Questions 7-12: Subrogation, Pregnancy, Taxes and Required Provisions
Subrogation, how to handle an application from a pregnant applicant, S-corporation owner health premiums, waiver of premium, misstatement of age and the physical exams provision.
Question 7 (Chapter 6)
In Massachusetts, a producer is explaining the concept of 'subrogation' to a client who has received a disability benefit payment under their health insurance policy. Which statement accurately describes subrogation in this context?
- A) The insured has the right to sue a third party for damages and keep any settlement, regardless of the insurance benefit received.
- B) The insurer must obtain the insured's permission before paying any benefit if a third party might be liable.
- C) Subrogation allows the insured to double-dip by collecting both the insurance benefit and full damages from a liable third party.
- D) If the disability was caused by a third party's negligence, the insurer may step into the insured's shoes to recover the amount it paid in benefits from that third party.
Show answer & explanation
Answer: D
D is correct because subrogation allows the insurer, after paying a benefit, to pursue recovery from a third party responsible for the loss. The insurer steps into the insured's legal position to claim damages up to the amount of the benefit paid. This prevents the insured from receiving a double recovery. A is incorrect because the insured cannot keep a full settlement if the insurer has subrogation rights; any recovery must first reimburse the insurer. B is incorrect because the insurer does not need permission to pay benefits; subrogation occurs after payment. C is incorrect because subrogation prevents, not allows, double recovery; the insured must typically reimburse the insurer from any third-party recovery up to the benefit amount.
Question 8 (Chapter 6)
A Massachusetts producer is completing an application for an individual health insurance policy. The applicant discloses that they are currently pregnant. Which statement accurately reflects how the producer must handle this information under Massachusetts and federal law?
- A) The producer must decline the application because pregnancy is considered a pre-existing condition that is automatically excluded from coverage.
- B) The producer can accept the application, but the insurer may impose an exclusion for maternity-related benefits for the first 12 months of the policy.
- C) The producer must accept the application, and the insurer cannot deny coverage or impose a pre-existing condition exclusion for pregnancy-related benefits under the ACA and Massachusetts law.
- D) The producer must refer the applicant to MassHealth, as private insurers in Massachusetts are prohibited from covering pregnant individuals.
Show answer & explanation
Answer: C
Under the Affordable Care Act (ACA) and Massachusetts law, which incorporates ACA protections, pregnancy is considered a pre-existing condition, but insurers are prohibited from denying coverage or imposing pre-existing condition exclusions for pregnancy-related benefits. This applies to individual health insurance policies sold in Massachusetts. The producer must process the application normally; declining the application or allowing a maternity exclusion would violate federal and state law. Option A is incorrect because denial based on pregnancy is prohibited. Option B is incorrect because maternity exclusions are not permitted. Option D is incorrect because pregnant individuals are eligible for private health insurance, and MassHealth is just one option among others.
Question 9 (Chapter 6)
In Massachusetts, a producer is discussing the tax treatment of health insurance with a client who is an S-corporation shareholder-employee owning more than 2% of the company. Which statement accurately describes the federal income tax treatment of health insurance premiums paid by the S-corporation for this shareholder-employee?
- A) The premiums are deductible by the S-corporation and excluded from the shareholder-employee's gross income.
- B) The premiums are not deductible by the S-corporation and are included in the shareholder-employee's gross income as wages.
- C) The premiums are not deductible by the S-corporation and are excluded from the shareholder-employee's gross income.
- D) The premiums are deductible by the S-corporation but are included in the shareholder-employee's gross income as wages.
Show answer & explanation
Answer: D
For S-corporation shareholder-employees owning more than 2% of the stock, health insurance premiums paid by the corporation are deductible as a business expense by the S-corporation. However, these premiums are treated as wages and must be included in the shareholder-employee's gross income for federal income tax purposes, subject to income tax withholding. They are not excludable from income like they are for common-law employees or partners in a partnership. Option A incorrectly states the premiums are excluded from income. Option B incorrectly states the premiums are not deductible by the corporation. Option C is incorrect on both counts.
Question 10 (Chapter 6)
A Massachusetts producer is explaining the 'waiver of premium' optional provision to a client who is considering an individual disability income policy. Which statement accurately describes how this provision functions?
- A) It allows the insured to skip premium payments during a period of disability, with the unpaid premiums added to the policy balance and accruing interest.
- B) It provides a lump-sum payment to the insured equal to the total premiums paid if they recover from disability within a specified period.
- C) It excuses the insured from paying premiums while they are receiving disability benefits under the policy, maintaining the policy in force without payment.
- D) It reduces the disability benefit amount by the amount of premium that would have been due during the disability period.
Show answer & explanation
Answer: C
The waiver of premium provision in a disability income policy excuses the insured from paying premiums while they are disabled and receiving benefits under the policy. This keeps the policy in force and prevents lapse due to nonpayment during disability. Option A is incorrect because unpaid premiums are not added to a policy balance or accruing interest; they are simply waived. Option B describes a return of premium feature, not waiver of premium. Option D is incorrect because the provision does not reduce the benefit amount; it only affects premium obligations.
Question 11 (Chapter 6)
A Massachusetts resident is covered under an individual health insurance policy that includes a 'misstatement of age' optional provision. If it is discovered that the insured's age was understated at the time of application, which statement accurately describes how the insurer will typically adjust the benefits or premiums under this provision?
- A) The insurer will refund all premiums paid, as the policy is considered void from inception due to the misstatement.
- B) The insurer will increase the premium retroactively to collect the difference for all past years of coverage.
- C) The insurer will deny any claims that occur after the misstatement is discovered, regardless of the cause.
- D) The insurer will adjust the benefit amount to what the premiums paid would have purchased at the correct age.
Show answer & explanation
Answer: D
Under the 'misstatement of age' optional provision, if the insured's age is misstated (either overstated or understated), the insurer will adjust the benefit amount to what the premiums paid would have purchased at the correct age. This is the standard approach to maintain the actuarial equivalence of the contract. Option A is incorrect because the policy is not voided; it is adjusted to reflect the correct age. Option B is incorrect because premiums are not typically increased retroactively; instead, the benefit is adjusted. Option C is incorrect because claims are not denied based on age misstatement; the benefit is recalculated.
Question 12 (Chapter 6)
Under Massachusetts law, which of the following statements is true regarding the 'physical exams and autopsy' provision required in an individual accident and health insurance policy?
- A) The insured must undergo a physical exam at the insurer's expense whenever they file a claim, regardless of the claim type.
- B) The insured can refuse any physical exam or autopsy requested by the insurer without affecting their claim.
- C) The insurer has the right to request a physical exam or autopsy at its own expense as often as reasonably necessary while a claim is pending, and the insured must comply.
- D) The provision only applies to life insurance policies and has no relevance in accident and health insurance.
Show answer & explanation
Answer: C
Massachusetts law (M.G.L. c. 175 §108(3)(a)(6)) requires that individual accident and health insurance policies include a provision stating that the insurer has the right to have the insured examined by a physician of its choice, as often as reasonably necessary while a claim is pending, and to have an autopsy made in case of death, unless forbidden by law. The insurer bears the expense of such exams or autopsies. Option A is incorrect because exams are not required for every claim; they are at the insurer's discretion and must be reasonable. Option B is incorrect because refusal to comply with a reasonable request can affect the claim, as the insurer may need the exam to assess validity. Option D is incorrect because the provision is explicitly required in accident and health insurance policies in Massachusetts.
Practice Questions 13-17: Optional Provisions and Reinstatement
Waiver of premium, change of occupation, reinstatement and legal actions, the provisions that close out a policy contract.
Question 13 (Chapter 6)
A Massachusetts producer is explaining the tax treatment of health insurance premiums and benefits to a client who is self-employed. Which statement is accurate regarding federal income tax treatment?
- A) Premiums paid for individual health insurance are never deductible for self-employed individuals.
- B) Self-employed individuals may deduct 100% of health insurance premiums as an adjustment to income, subject to certain limits.
- C) Benefits received from a health insurance policy are always taxable as ordinary income.
- D) Only premiums for policies covering dependents are deductible; premiums for the self-employed individual are not deductible.
Show answer & explanation
Answer: B
Under federal tax law, self-employed individuals can deduct 100% of their health insurance premiums (including medical, dental, and long-term care) as an adjustment to income on Form 1040, provided they are not eligible to participate in an employer-sponsored plan. This deduction is taken whether or not the taxpayer itemizes. Option A is incorrect because the deduction is available. Option C is incorrect because health insurance benefits for medical expenses are generally not taxable. Option D is incorrect because the deduction covers premiums for the self-employed individual, spouse, and dependents.
Question 14 (Chapter 6)
Under Massachusetts law, which of the following statements is true regarding the 'change of occupation' optional provision in an individual accident and health insurance policy?
- A) If the insured changes to an occupation classified as more hazardous by the insurer, the premium may be increased or the coverage adjusted, subject to the terms of the provision.
- B) The policy automatically terminates if the insured changes to any occupation classified as more hazardous by the insurer.
- C) The insured must notify the insurer within 10 days of any occupation change, or the policy is void.
- D) This provision only applies if the new occupation is less hazardous than the original.
Show answer & explanation
Answer: A
The 'change of occupation' optional provision in an individual accident and health insurance policy states that if the insured changes to an occupation that the insurer classifies as more hazardous than the one stated in the application, the insurer may, at its option, increase the premium or modify the coverage, subject to the specific terms of the provision. The policy does not automatically terminate (Option B is incorrect). While notification is typically required, there is no universal 10-day rule that voids the policy (Option C is incorrect). The provision applies specifically to changes to more hazardous occupations, not less hazardous ones (Option D is incorrect).
Question 15 (Chapter 6)
In Massachusetts, a producer is explaining the 'change of occupation' optional provision in an individual accident and health insurance policy to a client. What does this provision typically allow the insurer to do?
- A) Deny the claim if the insured's disability results from the new occupation.
- B) Increase the premium or adjust the coverage if the insured changes to an occupation classified as more hazardous by the insurer.
- C) Automatically terminate the policy if the insured changes occupations.
- D) Guarantee that benefits will remain unchanged regardless of occupational changes.
Show answer & explanation
Answer: B
B is correct: The change of occupation optional provision, permitted under M.G.L. c. 175 §108(3)(b)(1), allows the insurer to increase the premium or adjust the coverage (e.g., reduce benefits) if the insured changes to an occupation classified as more hazardous by the insurer. A is incorrect because the provision does not allow denial of claims based on occupation; it allows premium or coverage adjustments. C is incorrect because it does not automatically terminate the policy. D is incorrect because benefits are not guaranteed to remain unchanged; they may be adjusted based on the new occupation's risk.
Question 16 (Chapter 6)
A Massachusetts resident is covered under a health insurance policy that includes a provision stating that the insurer has the right to examine the insured at its expense as often as reasonably necessary while a claim is pending. This provision is known as:
- A) The time limit on certain defenses provision.
- B) The change of beneficiary provision.
- C) The entire contract provision.
- D) The physical examination and autopsy provision.
Show answer & explanation
Answer: D
The physical examination and autopsy provision (required under Massachusetts law for individual health policies) gives the insurer the right, at its own expense, to have the insured examined by a physician of its choice as often as reasonably necessary while a claim is pending, and to undergo an autopsy in case of death, unless prohibited by law. Option A refers to the time limit on certain defenses (e.g., incontestability clause). Option B allows the policyowner to change the beneficiary. Option C states that the policy and application constitute the entire contract between the parties.
Question 17 (Chapter 6)
A Massachusetts resident is covered under an individual health insurance policy with a 'legal actions' provision. What does this provision stipulate?
- A) The insured must provide written notice to the insurer before initiating any legal action regarding a claim.
- B) No legal action can be brought against the insurer until at least 60 days after proof of loss has been furnished.
- C) The insured may bring legal action against the insurer in any state, regardless of where the policy was issued.
- D) Legal action against the insurer is prohibited if the insured has not exhausted the insurer's internal appeals process.
Show answer & explanation
Answer: B
The 'legal actions' provision in individual health insurance policies, as required by Massachusetts law (G.L. c. 175, §108), stipulates that no legal action can be brought against the insurer until at least 60 days after proof of loss has been furnished. This allows the insurer time to investigate and pay the claim without immediate litigation. It does not require notice before action, restrict the state where action can be brought, or mandate exhaustion of internal appeals.
The Mistakes That Cost Marks
Memorizing a notice or proof-of-loss deadline from practice. The question usually tests the required provision and its stated period, not what a particular policy happens to say.
Treating pregnancy as grounds to decline. The producer processes the application normally, and a maternity exclusion is not permitted.
Reading subrogation as the insured's right to double recovery. It is the insurer's right to recover from a responsible third party after paying a benefit.
Confusing reinstatement with automatic revival. Reinstatement of a lapsed policy typically needs evidence of insurability, and paying the overdue premium alone is not enough.
Mixing up the waiver concepts. A waiver of premium stops the premium bills during disability; it does not waive the deductible or pay a lump sum.
Overlooking the tax angle. Premium treatment for owner-employees and for employer-paid plans appears in these questions as well.
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