chap. 2 Flashcards
Q: In health insurance, what is considered a sickness?
A: An illness that first arises while the policy is in force
Q: If an applicant does not receive his or her insurance policy, who would be held responsible?
A: The agent
Q: 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?
A: The applicant
Q: Under a credit disability policy, payments to the creditor will be made for the insurer until what point in time?
A: Until the period of disability ends or until the debt is repaid
Q: Who must sign a health insurance application?
A: The policyowner, the insured (if different), and the agent
Q: What type of hospital policy pays a fixed amount each day that the insured is in the hospital?
A: Hospital indemnity
Q: Whose responsibility is it to determine that all the questions on an insurance application are answered?
A: The agent’s
Q: Most health policies will pay the accidental death benefits if the death is caused by an accident and occurs within how many days?
A: 90 days
Q: Who is responsible for paying the cost of a medical examination required in the process of underwriting?
A: Insurer
Q: When should an agent obtain a Statement of Good Health from the insured?
A: When the premium was paid upon policy delivery and not at the time of application
Q: In insurance, what is the term used for cause of loss?
A: Peril
Q: In health insurance, the policy itself and the insurance application form what?
A: The entire contract
Q: Whose responsibility is it to inform an applicant for health insurance about the insurer’s information gathering practices?
A: The agent
Q: What are the two types of expenses that are covered by health insurance?
A: Expenses related to health care, and expenses that compensate for loss of income
Which of the following is true regarding health insurance?
It could provide payments for loss of income.
Q: What do limited health policies cover?
A: A specified accident or disease
Q: What is the term used for a written request for an insurer to issue an insurance contract based on the provided information?
A: Application
Q: What is the entire contract in health insurance underwriting?
A: The application and the policy issued
Q: In medical expense contracts, what is the term that describes the payment method when the insured is responsible for paying the medical expenses, and then the insurer pays directly to the insured?
A: Reimbursement
Q: What is the capital sum in Accidental Death and Dismemberment (AD&D) coverage?
A: A percentage of the principal sum
An insured who has an Accidental Death and Dismemberment policy loses her left arm in an accident. What type of benefit will she most likely receive from this policy?
The capital amount in a lump sum
Q: 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?
A: Field underwriter
Q: Who is a field underwriter?
A: Agent/Producer
The agent is known as the “Field Underwriter” because of the information he/she gathers for the insurer. This helps the insurer
Avoid adverse selection.
Q: What is adverse selection?
A: People who are more likely to submit insurance claims are seeking insurance more often than preferred risks.
Q: If an agent makes a correction on the application for health insurance, who must initial the correct answer?
A: The applicant
Q: During which stage in the insurance process do insurers evaluate information that identifies adverse selection risks?
A: Underwriting
Which benefits would a disability plan most likely pay?
Income lost by the insured’s inability to work
Which is NOT true regarding an insured who is considered to be a standard risk?
The insured may have to pay slightly higher premiums.
An insurance company wants to obtain the insurance history of an applicant. Which source releases coded information to insurers regarding information included on previous insurance applications?
Medical Information Bureau
All of the following are true regarding the Medical Information Bureau (MIB) EXCEPT
MIB reports are based upon information supplied by doctors and hospitals.
Health coverage becomes effective when the
First premium has been paid and the application has been approved.
Which of the following expenses is NOT covered by a health insurance policy?
Funeral
Underwriting is a major consideration when an insured wishes to replace her current policy for all of the following reasons EXCEPT
Premiums always stay the same.
Which of the following will NOT be covered under an individual health insurance policy?
The applicant’s house help
When benefits are paid directly to the insured under a health insurance policy, the policy provides benefits on what type of basis?
Reimbursement
What is an important feature of a dental expense insurance plan that is NOT typically found in a medical expense insurance plan?
Diagnostic and preventive care
Hospital indemnity/hospital confinement indemnity policy will provide payment based on
The number of days confined in a hospital.
Medicaid is sponsored by what kind of sources?
Both state and federal
A hospital indemnity policy will pay
A benefit for each day the insured is in a hospital.
In underwriting a substandard risk, which of the following is INCORRECT?
A discounted premium would be charged.
An insurer has placed a notice on its advertising stating that its policies are protected by the Life and Disability Insurance Guaranty Fund. This practice is
Illegal: insurers cannot advertise protection by the Fund
If an insurance company makes a statement that its policies are guaranteed by the existence of the Insurance Guaranty Association, that would be considered
An unfair trade practice.
Which of the following losses will be covered by a group medical expense policy?
A pre-existing condition
A health insurance policy may cover all of the following risks EXCEPT
War-related injuries.
Where would Long-term care services be rendered?
A nursing home or one’s own home
Which of the following factors about the insured determines the amount of disability benefit that the insured will receive?
Q:
A typical Accidental Death & Dismemberment policy covers all of the following losses EXCEPT
Income
Which of the following statements regarding conditional receipts is true?
They are temporary insuring agreements.
Regarding health insurance premiums, all of the following statements are true EXCEPT
Substandard risks are not insurable and are always rejected.
Which of the following would an accident-only policy NOT cover?
Surgery to repair a wrist damaged by tendonitis.
Which of the following is true about the requirements regarding HIV exams?
The applicant must give prior informed written consent.
Which of the following is NOT required for a producer to tell a prospect?
What requirements the producer needed to meet to obtain the insurance license.
A health insurance plan that covers all accidents and sicknesses that are not specifically excluded from the policy is referred to as a
Comprehensive plan.
To comply with the Fair Credit Reporting Act, when must a producer notify an applicant that a credit report may be requested?
At the time of application
Who is involved in completing the agent’s report?
Only the agent
Because of the history of cancer in her family, Julie purchased a policy that specifically covers the expense of treating cancer. Her policy would be classified as what type of policy?
Q:A policy which covers medical costs related to a specific condition is called a
Dread Disease Policy
A health insurance policy that pays a lump sum if the insured suffers a heart attack or stroke is known as
Critical illness.
How many pairs of glasses in a 12-month period will a vision expense insurance plan cover?
One
Why is it essential for an insurer to document all correspondence with an insured?
Errors and omissions
An insurer hires a representative to advertise its company at a local convention. The representative lies about the details of some of the policies, in an attempt to secure more business for the company. Who is responsible for the representative’s claims?
The insurer
A person steps off a streetcar and trips and breaks his ankle. This type of injury can be described as
Sudden and unforeseen.
The Life and Disability Insurance Guaranty Fund protects insureds and policyholders if
Insurers lack money to pay off claims.
Under a typical health insurance policy, claims that result from injuries while the insured was intoxicated or under the influence of drugs are generally
Excluded
A policyowner is reading a statement on the first page of his health insurance policy, which says “this is a limited policy.” What is the name of this statement?
Limited Policy Notice
What is the minimum age for a person to obtain a life insurance on him- or herself?
15
All of the following statements concerning Accidental Death and Dismemberment coverage are correct EXCEPT
Death benefits are paid only if death occurs within 24 hours of an accident.
At what age does an individual qualify for Medicare?
65
Which of the following may NOT be included in an insurance company’s advertisement?
That its policies are covered by a state Guaranty Association
Which of the following could be considered an advertisement?
Prepared sales talks by authorized producers
