Ch 2 Accident and Health Insurance Basics

Question 1

KT

The two major perils covered and health insurance policies are:

Answer 1

Accidental bodily injury and sickness

Question 2

KT

Medical expense benefits are considered:

Answer 2

Reimbursement benefits

Question 3

KT

Limited policies cover a specific _______ or _________ only.

Answer 3

Sickness or accident only.

Question 4

KT

In AD&D policies, the principal sum means the full face amount (100%), and the capital sum is a percentage of the face amount.

Answer 4

True

Question 5

KT

A producer is the companies __________.

Answer 5

field underwriter.

Question 6

MIB

Answer 6

Medical information bureau

Question 7

What two major types of losses does health insurance cover?

Answer 7

Accidental bodily injury and sickness

Question 8

What are common exclusions from coverage and health insurance policies?

Answer 8

War injuries, intentionally self-inflicted injuries, elective cosmetic surgery

Question 9

What process helps minimize the problem of adverse selection?

Answer 9

Underwriting

Question 10

Who’s responsibility is it to inform an applicant for health insurance about the insurers information gathering practices?

Answer 10

The agent

Question 11

Who is the field underwriter?

Answer 11

Agent/producer

Question 12

What type of hospital policy pays a fixed amount each day that the insured is in the hospital?

Answer 12

Hospital indemnity

Question 13

What is the entire contract and health insurance underwriting?

Answer 13

The application in the policy issued

Question 14

What is the term used for a written request for an insured to issue an insurance contract based on the provided information?

Answer 14

Application

Question 15

When should an agent obtain a Statement of Good Health from the insured?

Answer 15

When the premium was paid upon policy delivery and not at the time of application

Question 16

During which stage in the insurance process do insurers evaluate information that identifies adverse selection risk?

Answer 16

Underwriting

Question 17

People who are more likely to submit insurance claims are seeking insurance more often than preferred risks.

Answer 17

adverse selection

Question 18

If an insurer decides to obtain medical information from different sources in order to determine the insurability of an applicant, who must be notified of the investigation?

Answer 18

The applicant

Question 19

In health insurance, what is considered a sickness?

Answer 19

an illness that first arises while the policy is in force

Question 20

Who must sign a health insurance application?

Answer 20

The policy owner, the insured (if different), and the agent

Question 21

What do limited health policies cover?

Answer 21

A specific accident or disease

Question 22

Under a credit disability policy, payments to the creditor will be made for the insurer until what point in time?

Answer 22

Until the period of disability ends or until the debt is repaid

Question 23

If an agent makes a correction on the application for health insurance who must initial the correct answer?

Answer 23

The applicant

Question 24

Who is responsible for paying the cost of a medical examination required in the process of underwriting?

Answer 24

Insurer

Question 25

Most health policies will pay the accidental death benefits if the death is caused by an accident and occurs within how many days?

Answer 25

90 days

Question 26

In insurance, what is the term used for a cause of loss?

Answer 26

Peril

Question 27

What is the capital sum in Accidental Death and Dismemberment (AD&D) coverage?

Answer 27

A percentage of the principal sum

Question 28

During the application process for health insurance, a producer is trying to obtain credible information about the applicant that would help underwriters determine if the risk is insurable. In what role is the producer acting?

Answer 28

Field underwriter

Question 29

Who’s responsibility is it to determine that all the questions on an insurance application are answered?

Answer 29

The agent’s

Question 30

In medical expense contracts, what is the term that describes a payment method when the insured is responsible for paying the medical expenses, and then the insurer pays directly to the insured?

Answer 30

Reimbursement

Question 31

What are the two types of expenses that are covered by health insurance?

Answer 31

Expenses related to healthcare, and expenses that compensate for loss of income

Question 32

If an applicant does not receive his or her insurance policy, who would be held responsible

Answer 32

The agent

Question 33

In health insurance, the policy itself and the insurance application form what?

Answer 33

The entire contract

Question 34

Which is NOT true regarding an insured who is considered to be a standard risk?
A the insured may have to pay slightly higher premiums
B the insurance lifestyle is incorporated into this risk judgment
C the insured’s level of health is representative of others in the same age cohort
D special restrictions on the policy are not necessary

Answer 34

The insured may have to pay slightly higher premiums

The “Standard” rating indicates that an individual represents similar level of health and lifestyle quality as other members of the same age cohort. These individuals do not need special policy restrictions or are not required to pay higher premiums.