Chapter 9: Health Policy Exclusions, Restrictions, Riders and Prohibited Provisions

Question 1

TF: Occupational coverage provides for the payment of benefits for sickness or injury of the insured that occurred at work, while nonoccupational coverage excludes any conditions resulting from job-related activities.

Answer 1

True

Question 2

TF: Nonoccupational coverage is common for individuals with hazardous or extremely dangerous careers. The policy must state whether coverage extends to job-related injuries or illness and any related limitations or exclusions.

Answer 2

True

Question 3

TF: The consumption of alcohol or illegal drugs is an uncommon exclusion in most accident and health insurance policies.

Answer 3

False - it is COMMON

Question 4

TF: The insurer is not liable for any loss or injury in consequence of the insured’s being intoxicated or under the influence of any narcotic, unless administered on the advice of a physician.

Answer 4

True

Question 5

TF: Policies often exclude coverage for sickness or injury resulting from an act of war. Terrorist attacks are often considered a form of undeclared war. If coverage for conditions caused by an act of war is limited or excluded, the policy must define the terms of the limitation or exclusion.

Answer 5

True

Question 6

TF: Policies often exclude coverage for injury or illness of the insured resulting from the commission or attempt to commit a felony. Criminal conviction is required to exclude coverage for participation in a felony.

Answer 6

True

Question 7

Most states prohibit insurers from excluding pre-existing conditions for a period exceeding ____ ___ to ____ ___, depending on the state and policy.

Answer 7

6 months
2 years

Question 8

TF: Policies may exclude or limit coverage for injuries or illnesses resulting from suicide, attempted suicide, or other self-inflicted injury of the insured.

Answer 8

True

Question 9

TF: Most health insurance policies limit or exclude coverage for sickness or injury of the insured that would otherwise be covered by Workers’ Compensation. Workers’ Compensation is insurance that states require employers to carry for their employees.

Answer 9

True

Question 10

TF: Some health insurance policies may provide coverage for complications resulting from pregnancy or childbirth, but may exclude to cover services provided during the course of a normal pregnancy or childbirth.

Answer 10

True

Question 11

An insurance policy must contain a provision for ________ that is either noncancellable, guaranteed, conditionally, or optional.

Answer 11

Renewability

Question 12

A _________ policy provides the insured the right to continue coverage by making timely payment of premiums. The insurer cannot make changes to this kind of policy without the consent of the insured.

Answer 12

Noncancellable

Question 13

The noncancellable renewability provision is the same as the guaranteed renewable provision, except that premiums cannot be _______

Answer 13

increased

Question 14

TF: Guaranteed Renewable Provision = Coverage Guaranteed
Noncancellable Provision = Coverage AND premiums are are guaranteed

Answer 14

True

Question 15

A ______ ______ policy guarantees continuation of coverage for the insured until the insured reaches a specified age, as specified in the policy, but provides the insurer the right, at the time of renewal of a policy, to make changes in premium rates by classes of insureds, not individually.

Answer 15

Guaranteed Renewable

Question 16

For Guaranteed Renewable, Premiums can be increased on policy anniversary dates. The insurer can only cancel or refuse to renew coverage for _______ (long)

Answer 16

failure to pay premiums

Question 17

TF: Typically, health insurance policies stipulate that coverage cannot be renewed beyond the age of 65, because individuals are eligible for Medicare.

Answer 17

True

Question 18

TF: Disability income policies will not extend past the age 65 cutoffs, even if the insured can prove that he or she is currently employed full-time.

Answer 18

False - they can be extended past 65

Question 19

______ ______ policies allow the insurer the right not to renew the contract for a reason specified in the policy. An example of this is a change to a dangerous job.

Answer 19

Conditionally renewable

Question 20

_______ ________ policies provide the insurer the right not to renew the contract for any reason. Policies can only be non-renewed on a policy anniversary date or premium due date.

Answer 20

Optionally renewable

Question 21

TF: Optionally Renewable = Insured’s Option

Answer 21

false - Insurer’s option

Question 22

TF: Cancellable policies allow the insurer to cancel the policy at any time (some states require notice of at least 30 days), provided the insurer returns all unearned premiums. Cancellation does not limit, exclude, or in any other way affect processing of claims for the period in which the policy coverage was effective.

Answer 22

true

Question 23

_____ policies are only effective for a short period, after which period the insurer cancels the policy.

Answer 23

Term - Not renewable

Question 24

TF: The policy must state in the renewal provision the period of time provided to the insured to renew coverage.

Answer 24

True

Question 25

A ______ is an additional agreement between the insurer and the insured, and is attached to the policy. They can provide or waive additional benefits or coverage

Answer 25

Rider

Question 26

_______ riders exclude coverage for a specific condition that would otherwise be covered under the policy. These are often attached to policies when the insured has an existing or chronic medical condition.

Answer 26

Impairment

Question 27

The _____ ______ rider, also referred to as the future increase option, can be attached to disability income policies because the benefit amount is fixed, so costs remain level.

Answer 27

Guaranteed Insurability

Question 28

TF: The guaranteed insurability rider allows the insured to purchase additional disability income coverage at future dates regardless of insurability.

Answer 28

True

Question 29

The ____ _____ rider provides for payment of double or triple the accidental death or dismemberment benefits based on the cause of death or specific type of dismemberment.

Answer 29

Multiple Indemnity (Double, Triple)

Question 30

TF: Each state has a minimum standard for health insurance coverage, and policy provisions that reduce coverage below that minimum are prohibited.

Answer 30

True

Question 31

All of the following health insurance riders will increase the policy’s base premium, EXCEPT:
Select one:
a. Triple indemnity rider
b. Guaranteed insurability rider
c. Impairment rider
d. Riders do not increase the policy’s premium.

Answer 31

C

Question 32

A policy that permits the insurer to nonrenew coverage for any reason on a policy anniversary date is:
Select one:
a. Guaranteed renewable
b. Noncancelable
c. Conditionally renewable
d. Optionally renewable

Answer 32

D

Question 33

Which accident and health renewability provision is the same as the guaranteed renewable provision, except that premiums cannot be increased?
Select one:
a. Conditionally renewable
b. Optionally renewable
c. Noncancelable
d. Cancelable

Answer 33

C

Question 34

Amy purchases a health insurance policy. The renewability feature is specified as “guaranteed renewable until age 65.” All of the following statements are false, EXCEPT:

Select one:
a. Amy’s policy may be terminated at any time
b. Amy’s policy will continue in force until she is 65 years of age and her premiums will not be increased
c. Amy’s policy may be canceled if she develops certain medical conditions
d. Amy’s premiums may be increased on a class basis, and her policy may be terminated when she reaches the age of 65

Answer 34

D

Question 35

Workers’ Compensation is:
Select one:
a. AD&D coverage
b. Individual accident and health coverage
c. Nonoccupational coverage
d. Occupational coverage

Answer 35

D

Question 36

Of the following renewal provisions for health insurance, which is least favorable to the insured?
Select one:
a. Noncancelable
b. Conditionally renewable
c. Guaranteed renewable
d. Cancelable

Answer 36

D

Question 37

All of the following are typical policy exclusions for health insurance, EXCEPT:
Select one:
a. Self-inflicted injuries
b. Acts of war
c. Pre-existing conditions
d. Conformity with state statutes

Answer 37

D

Question 38

Which of the following health insurance exclusions/restrictions pays benefits for sickness or injury that occurs while the insured is not at work?
Select one:
a. Occupational coverage
b. Nonoccupational coverage
c. Worker’s Compensation
d. All of the above

Answer 38

B

Question 39

Health insurance exclusions/restrictions exclude coverage for losses resulting from:
Select one:
a. Participation in a felony
b. Self-inflicted injuries
c. Act of war
d. All of the above

Answer 39

D

Question 40

Under a guaranteed renewable accident and health policy, an insurer retains the right to:
Select one:
a. Increase the premium rate for one insured without increasing the rate for others in the same class
b. Increase the premium rate for an entire class of insureds
c. Increase the benefits for an individual insured
d. Decrease benefits for one insured without decreasing benefits for others in the same class

Answer 40

B