17 Free Iowa Life & Health Practice Questions: Social Insurance, Other Concepts and Field Underwriting (2026)
How to Use This Social Insurance and Field Underwriting Set
This set spans three blocks of the Accident & Health exam's general-knowledge section: social insurance (Medicare, Medicaid and Social Security), 6 scored items; other insurance concepts, 5; and field underwriting procedures, 8. Together that is 19 of the exam's 80 scored items. Iowa tests Accident & Health on its own exam, separate from Life, and this set belongs to it.
These 17 questions come from LanePrep's Iowa L&H quiz bank and are of three kinds: public programs, where you match a situation to Medicare Part A or B, Medicaid or Social Security disability; underwriting and disclosure, from the application interview to the MIB and consumer reports; and the working concepts of health insurance, such as coordination of benefits, subrogation, consideration and managed care.
Ask who pays and who is eligible: age or need, the employer or the individual, the first plan or the second. Most questions are really asking one of those.
Practice Questions 1-6: Medicare, Medicaid, Social Security Disability and Taxed Benefits
Matching a situation to the right public program, the strict Social Security definition of disability, a recurrent disability, and how disability income benefits are taxed depending on who paid the premium.
Question 1 (Chapter 7)
A 68-year-old retiree in Des Moines is hospitalized for five days following a major surgery. Which part of the federal Medicare program will primarily cover the room and board expenses for this inpatient stay?
- A) Medicare Part B
- B) Medicare Part C
- C) Medicare Part D
- D) Medicare Part A
Show answer & explanation
Answer: D
Medicare Part A is Hospital Insurance, which covers inpatient hospital care, including semi-private rooms, meals, and nursing services. Part B covers outpatient and doctor services; Part C is Medicare Advantage (private plans); and Part D covers prescription drugs.
Question 2 (Chapter 7)
An individual is considering enrolling in Medicare Part B but is concerned about the cost. Which of the following is a true statement regarding Part B premiums and enrollment?
- A) Part B is premium-free for anyone who has worked 40 quarters of Social Security-covered employment.
- B) Part B requires a monthly premium and is optional, though a penalty may apply for late enrollment.
- C) Part B is mandatory for all citizens over age 65.
- D) Part B premiums are paid entirely by the state of Iowa for all residents.
Show answer & explanation
Answer: B
Medicare Part B (Medical Insurance) is optional and requires a monthly premium. If an individual does not enroll when first eligible and does not have creditable coverage elsewhere, they may face a lifetime late-enrollment penalty.
Question 3 (Chapter 7)
A low-income resident of Cedar Rapids requires long-term nursing home care but has exhausted their personal savings. Which program is specifically designed to provide health coverage based on financial need rather than age?
- A) Medicare
- B) Social Security Retirement
- C) Workers Compensation
- D) Medicaid
Show answer & explanation
Answer: D
Medicaid is a joint federal and state program (needs-based) designed for individuals with limited income and resources. Medicare is primarily age-based (65+) or disability-based.
Question 4 (Chapter 7)
To qualify for Social Security Disability (SSDI) benefits, a worker must meet a very strict definition of disability. Which of the following best describes this requirement?
- A) The inability to engage in any substantial gainful activity due to a physical or mental impairment expected to last at least 12 months or result in death.
- B) The inability to perform the duties of one's own specific occupation for at least 6 months.
- C) A 20% reduction in income due to a partial physical impairment.
- D) The inability to perform at least two Activities of Daily Living (ADLs).
Show answer & explanation
Answer: A
Social Security uses a 'total disability' definition: the impairment must prevent the person from doing any substantial gainful work and must be expected to last at least 12 months or end in death. There is also a 5-month waiting period before benefits begin.
Question 5 (Chapter 7)
A worker suffers a back injury, receives disability benefits for three months, and returns to full-time work. Two months later, the same back injury flares up, and the worker is disabled again. If the policy treats this as a continuation of the first claim without a new waiting period, it is called a:
- A) Residual Disability
- B) Partial Disability
- C) Permanent Disability
- D) Recurrent Disability
Show answer & explanation
Answer: D
A Recurrent Disability provision defines a period of time (usually 6 months) during which the recurrence of a previous disability is treated as a continuation of the prior claim, meaning the insured does not have to satisfy a new elimination (waiting) period.
Question 6 (Chapter 7)
A business owner in Ames purchases an individual Disability Income policy and pays the premiums personally with after-tax dollars. If the owner becomes disabled, how will the benefit payments be taxed?
- A) The benefits are 100% taxable as ordinary income.
- B) The benefits are 50% taxable.
- C) The benefits are received income tax-free.
- D) The benefits are tax-deferred until retirement.
Show answer & explanation
Answer: C
When an individual pays the premiums for a disability income policy with after-tax dollars, the benefits received are not subject to federal income tax.
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Practice Questions 7-12: Field Underwriting, the MIB, Coordination of Benefits and Contract Basics
What the producer discloses at the application, what the Medical Information Bureau does, which plan pays first for a child covered twice, how an insurer recovers from a negligent third party, what counts as consideration, and what must happen at delivery when the first premium has not been paid.
Question 7 (Chapter 7)
During the application process, a producer provides the applicant with a document that explains how the insurer will use the applicant's personal information and their rights under the Fair Credit Reporting Act. This is part of:
- A) Field Underwriting and Disclosure
- B) The MIB report
- C) The Policy Summary
- D) The Free-Look provision
Show answer & explanation
Answer: A
Field underwriting involves the producer gathering information and providing required disclosures, such as HIPAA privacy notices and Fair Credit Reporting Act (FCRA) disclosures, to the applicant at the time of application.
Question 8 (Chapter 7)
An underwriter notices that an applicant for health insurance has a history of heart disease that was not fully disclosed on the application. The underwriter likely discovered this through a non-profit trade association that maintains medical impairment information. This association is the:
- A) NAIC
- B) Iowa Insurance Division
- C) Medical Information Bureau (MIB)
- D) Consumer Reporting Agency
Show answer & explanation
Answer: C
The MIB (Medical Information Bureau) is a member-owned corporation that operates a database of medical information shared among life and health insurers to uncover misrepresentations and prevent fraud.
Question 9 (Chapter 7)
Under the 'Coordination of Benefits' provision in group health insurance, if a child is covered under both parents' group plans, which plan is typically primary?
- A) The plan of the parent whose birthday falls earlier in the calendar year.
- B) The plan of the parent who is older.
- C) The plan with the higher deductible.
- D) The plan that has been in force the longest.
Show answer & explanation
Answer: A
The 'Birthday Rule' is the standard coordination of benefits method for dependent children. The primary plan is the one belonging to the parent whose birthday (month and day) occurs earliest in the year.
Question 10 (Chapter 7)
An insurer pays a $10,000 medical claim for an insured who was injured by a negligent third party. The insurer then exercises its right to sue the third party to recover the $10,000. This process is known as:
- A) Nonduplication of benefits
- B) Assignment of benefits
- C) Subrogation
- D) Arbitration
Show answer & explanation
Answer: C
Subrogation is the legal process by which an insurer, after paying a loss, seeks recovery from a third party who was responsible for the loss. This prevents the insured from collecting twice (once from insurance and once from the negligent party).
Question 11 (Chapter 7)
In an insurance contract, the 'Consideration' given by the applicant consists of:
- A) The completed application and the initial premium payment.
- B) The promise to follow all policy provisions.
- C) The insurable interest in the life of the insured.
- D) The medical examination results.
Show answer & explanation
Answer: A
Consideration is a required element of a legal contract. For the insured, consideration is the statements made in the application and the payment of the premium. For the insurer, it is the promise to pay benefits.
Question 12 (Chapter 7)
A producer delivers a health insurance policy to a client but did not collect the initial premium at the time of application. What must the producer obtain from the client at the moment of delivery to make the coverage effective?
- A) A signed Statement of Good Health and the initial premium.
- B) A new application.
- C) A waiver of the free-look period.
- D) A copy of the MIB report.
Show answer & explanation
Answer: A
If the premium is not paid with the application, the policy is not in force. Upon delivery, the producer must collect the premium and a signed Statement of Good Health to ensure the applicant's condition hasn't changed since the application was taken.
Practice Questions 13-17: Workers' Compensation, Managed Care, Replacement and Consumer Reports
Who pays for a work injury, what occupational coverage means, the gatekeeper in managed care, what to warn a client who is replacing health coverage, and a consumer's rights after an adverse decision based on a consumer report.
Question 13 (Chapter 7)
A worker is injured while performing their job duties at a manufacturing plant in Davenport. Which of the following would typically be the primary payor for the medical expenses and lost wages?
- A) The worker's individual health insurance
- B) Social Security Disability
- C) Workers Compensation
- D) Medicare Part B
Show answer & explanation
Answer: C
Workers Compensation is a state-mandated program that provides benefits for job-related injuries or diseases. It is almost always primary over other health and disability insurance for occupational losses.
Question 14 (Chapter 7)
A health insurance policy that covers accidents and sicknesses occurring both on and off the job is referred to as:
- A) Non-occupational coverage
- B) Occupational coverage
- C) Full-indemnity coverage
- D) Workers Compensation
Show answer & explanation
Answer: B
Occupational coverage provides benefits for disabilities or illnesses resulting from both work-related and non-work-related causes. Non-occupational coverage only covers accidents or illnesses that occur outside of work.
Question 15 (Chapter 7)
An HMO (Health Maintenance Organization) utilizes a specific physician to coordinate all of a member's healthcare and provide referrals to specialists. This physician is known as the:
- A) Medical Director
- B) Gatekeeper
- C) Underwriter
- D) Adjudicator
Show answer & explanation
Answer: B
In many managed care plans (HMOs), the Primary Care Physician (PCP) acts as a 'gatekeeper' to control costs by overseeing the member's care and determining when a specialist is necessary.
Question 16 (Chapter 7)
A producer is helping a client replace an existing health insurance policy. The producer should warn the client that 'replacement' may result in:
- A) Automatic coverage for all previous conditions.
- B) A new probationary period or pre-existing condition exclusion.
- C) A lower premium regardless of age.
- D) The inability to ever buy insurance again.
Show answer & explanation
Answer: B
When replacing a policy, the insured may be subject to new waiting periods, probationary periods, or exclusions for pre-existing conditions that were already covered under the old policy.
Question 17 (Chapter 7)
Under the Fair Credit Reporting Act, if an applicant is denied insurance because of information contained in a consumer report, the applicant has the right to:
- A) Sue the insurer for defamation.
- B) Obtain the name and address of the reporting agency and a summary of the report.
- C) Demand that the insurer issue the policy anyway.
- D) Have the producer rewrite the report.
Show answer & explanation
Answer: B
The FCRA gives consumers the right to be notified if a report is used against them and provides the right to know the source of the information and to challenge inaccurate data.
The Mistakes That Cost Marks
Reaching for the wrong Medicare part. Part A is hospital insurance, including the inpatient stay. Part B is medical insurance for doctor and outpatient services; it is optional, carries a monthly premium and can carry a late-enrollment penalty. Part C is Medicare Advantage and Part D is prescription drugs. Medicaid is the needs-based program, not the age-based one.
Using the wrong disability definition. Social Security asks whether you can do any substantial gainful work, with an impairment expected to last at least 12 months or end in death. A private policy can be written differently, and the question will say which one applies.
Forgetting who paid the premium. Disability income benefits are income-tax-free when the individual paid the premiums with after-tax dollars. The tax result follows the premium, not the benefit.
Mixing up recovery and priority. Subrogation lets the insurer, after paying a loss, pursue the responsible third party. It is not coordination of benefits, which decides which of two plans pays first, and it is not assignment of benefits. The birthday rule compares the month and day of the parents' birthdays, not the year, and the earlier one's plan pays first for the child.
Skipping the delivery steps. When the first premium was not paid with the application, coverage is not in force until delivery, when the producer collects the premium and a signed Statement of Good Health. Disclosure notices, the MIB and consumer reports each have their own purpose; know which rights follow an adverse decision based on a consumer report.
Treating a replacement as free. Replacing health coverage can bring a new waiting or probationary period or new pre-existing-condition exclusions.
Your Next Step
Try the free preview of LanePrep's Iowa Life & Health course and hear the material on the road, or work through all the free Iowa Life & Health practice questions. The next Accident & Health set covers the state section: Iowa accident and health insurance law.
Question counts and content weighting come from Pearson VUE's Iowa Insurance Content Outlines, effective January 1, 2026. Checked October 2026.
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