chap. 3 Flashcards
Q: What health policy provision allows the insurer to nonrenew health coverage if certain events occur?
A: Conditionally renewable
What is the contract provision that allows the insurer to nonrenew health coverage if certain events occur?
Conditionally renewable
Q: How will changing one’s occupation to be more hazardous affect the health insurance policy in force?
A: Claim benefits will be reduced to what the premium would have bought for a more hazardous occupation
Q: What health policy provision states to whom the claim benefits must be paid?
A: Payment of claims
Q: What health policy provision allows the insured a period of time to examine the policy and determine whether or not to keep it?
A: Free-look period
Q: When can an irrevocable beneficiary be changed?
A: With the written consent of the beneficiary
Q: Who pays the expense for an autopsy under the physical examination and autopsy provision?
A: The insurer
Q: What renewability provision will most likely appear on a travel accident policy?
A: Period of time
Q: What does the free-look period allow the insured to do?
A: Return the policy for a full refund of premium within a specified time period (usually 10 days)
The free-look provision allows for which of the following?
A right to return the policy for a full premium refund
Which provision allows the policyholder a period of time, while coverage is in force, to examine a health insurance policy and determine whether or not to keep it?
Free Look Period
Q: If the insured pays a monthly premium for health insurance, how long would the grace period be on the policy?
A: 10 days
Q: What will happen to a health insurance policy if the premium has not been paid by the end of the grace period?
A: The policy will be cancelled
Q: What health policy provision defines the insured’s duty to provide the insurer with reasonable notice in the event of a loss?
A: Notice of claim
Which provision concerns the insured’s duty to provide the insurer with reasonable notice in the event of a loss?
Notice of Claim
Q: What health policy renewability provision allows the insurer to terminate coverage for any reason, and to increase the premiums for any class of insureds?
A: Optionally renewable
Which renewability provision allows an insurer to terminate a policy for any reason, and to increase the premiums for any class of insureds?
A: Optionally renewable
Which renewal option does NOT guarantee renewal and allows the insurance company to refuse renewal of a policy at any premium due date?
Optionally renewable
Q: According to the Reinstatement provision, once a lapsed policy is reinstated, how soon will coverage be available for accidents?
A: Immediately
Q: What health policy provision describes the insured’s right to cancel coverage?
A: Renewability provision
Q: Who decides which optional provisions would be included in a health policy?
A: The insurance company
Q: What will determine the length of the grace period in a health insurance policy?
A: The mode of the premium payment
Which of the following will vary the length of the grace period in health insurance policies?
The mode of the premium payment
Q: Under an individual disability income policy, the benefits must be paid on at least what schedule?
Q: Under an individual disability policy, the MINIMUM schedule of time in which claim payments must be made to an insured is
A: Monthly
Insurers may include a provision stipulating that – if the insured suffers loss-of-time due to a disability – that insured must provide notice of the continuance of their disability
Once every 6 months.
Q: The insured on a health policy misstated his age on the insurance application. If this misrepresentation is discovered, what will happen to the policy?
A: The benefit amount payable under the policy will be adjusted to the insured’s correct age.
When an insured purchased her disability income policy, she misstated her age to the agent. She told the agent that she was 30 years old, when in fact, she was 37. If the policy contains the optional misstatement of age provision
Amounts payable under the policy will reflect the insured’s correct age.
Q: What is the name of the act by the insured to voluntarily give up insurance?
A: Cancellation
Q: According to the Time Limit on Certain Defenses provision in health insurance policies, when can an insurer contest fraudulent misstatements on a health insurance application?
A: Any time while the policy is in force
Q: If a health insurance policy has a 31-day grace period, what does that mean?
A: The policy remains in effect for 31 days after the premium is due and not paid
Q: What health policy provision prevents the insured from bringing a lawsuit against the insurance company for at least 60 days after proof of loss is provided?
A: Legal actions
How soon following the occurrence of a covered loss must an insured submit written proof of such loss to the insurance company?
Within 90 days or as soon as reasonably possible, but not to exceed 1 year
Under the uniform required provisions, proof of loss under a health insurance policy normally should be filed within
90 days of a loss.
In respect to the consideration clause, which of the following is consideration on the part of the insurer?
Promising to pay in accordance with the contract terms
With respect to the Consideration Clause, which of the following would be considered consideration on the part of the applicant for insurance?
Payment of premium
Which of the following entities has the authority to make changes to an insurance policy?
Insurer’s executive officer
If the insured under a disability income insurance policy changes to a more hazardous occupation after the policy has been issued, and a claim is filed, the insurance company should do which of the following?
Adjust the benefit in accordance with the increased risk
An insured owes his insurer a premium payment. Since then, he has incurred medical expenses. The insurer deducts the unpaid premium amount from the claim amount and pays the insured the difference. What provision allows for this?
Unpaid premium
How many days of notice must insurers provide when canceling accident and health policies?
30
Which of the following statements is true concerning the alteration of optional policy provisions?
An insurer may change the wording of optional provisions, as long as the change does not adversely affect the policyholder.
Which of the following is true regarding health insurance underwriting for a person with HIV?
The person may not be declined for medical coverage solely based on HIV status.
The insurance policy, together with the policy application and any added riders form what is known as
Entire contract
When an insurer issues an individual health insurance policy that is guaranteed renewable, the insurer agrees
To renew the policy until the insured has reached age 65.
When an individual is covered under two health insurance policies that have duplicate benefits which could make a claim for benefits because of an injury or illness profitable, it is called
Overinsurance
The section of a health policy that states the causes of eligible loss under which an insured is assumed to be disabled is the
Insuring clause.
Which health insurance provision describes the insured’s right to cancel coverage?
Renewal provision
Which of the following provisions requires that any policy language that is in conflict with the state statutes of the state in which the insured resides is automatically amended to conform with those of the state of residence?
Conformity with State Statutes
Which provision states that the insurance company must pay Medical Expense claims immediately?
Time of Payment of Claims
An insured is involved in a car accident. After the accident is determined to be her fault, the police give her a breathalyzer test to determine whether or not she had been drinking alcohol before the accident. Her blood alcohol level is over the legal limit. What type of health benefits will her health insurance policy pay for her injuries if the policy includes the narcotics and intoxicants provision?
No benefits
An insured carries health insurance with two different providers and is covered on an expense incurred basis. He has an appendectomy and files the claims to both insurers. Neither company is notified in advance that the insurer has other coverage. What should each insurer pay?
A proportionate amount
An insured has medical insurance coverage through 2 different providers, both covering the same expenses on an expense-incurred basis. Neither company knows in advance that the insured has coverage through any other insurers. The insured submits a claim to both insurers. How should the claim be handled?
Each insurer should pay a proportionate share of the claim.
Rose bought three policies from the same insurer. Her benefits have exceeded the maximum allowed by the insurer. Which of the following will happen?
Pro rata benefit reduction
Which of the following is NOT a feature of a noncancellable policy?
The insurer may terminate the contract only at renewal for certain conditions.
An insured purchased a noncancellable health insurance policy 1 year ago. Which of the following circumstances would NOT be a reason for the insurance company to cancel the policy?
The insured is in an accident and incurs a large claim.
An applicant for an individual health policy failed to complete the application properly. Before being able to complete the application and pay the initial premium, she is confined to a hospital. This will not be covered by insurance because she has not met the conditions specified in the
Consideration Clause.
Which of the following is NOT a feature of a guaranteed renewable provision?
The insurer can increase the policy premium on an individual basis.
An insured pays her Major Medical Insurance premium annually on March 1. Last March she forgot to mail her premium to the company. On March 19, she had an accident and broke her leg. The insurance company would
Pay the claim.
While a claim is pending, an insurance company may require
An independent examination as often as reasonably required.
A man is injured while robbing a convenience store. How does his major medical policy handle the payment of his claim?
Claim is denied if his policy contains the Illegal Occupation provision.
An insured notifies the insurance company that he has become disabled. What provision states that claims must be paid immediately upon written proof of loss?
Time of Payment of Claims
The insuring clause of a disability policy usually states all of the following EXCEPT
The method of premium payment.
If a claimant decides to bring a legal action against an insurance company for a loss claimed under a policy, the action must be brought
Within 2 years.
Under the mandatory uniform provision Notice of Claim, the first notice of injury or sickness covered under an accident and health policy must contain
A statement that is sufficiently clear to identify the insured and the nature of the claim.
Insurers may change which of the following on a guaranteed renewable health insurance policy?
Rates by class
A guaranteed renewable health insurance policy allows the
Policyholder to renew the policy to a stated age, with the company having the right to increase premiums on the entire class.
All of the following are correct about the required provisions of a health insurance policy EXCEPT
A reinstated policy provides immediate coverage for an illness.
