KEY FACTS **** STUDY IF ALL ELSE FALLS

Question 1

The earliest that coverage would start would be the day of the application, Assuming the applicant paid the premium, no conditions to fulfill, and had not lied.

Answer 1

Field Underwriting Procedures

Applications, Premiums, Underwriting:

Question 2

An incomplete application is usually returned. This being said, should the underwriter approve it as it is, coverage begins. If this occurs, the company gives up some of its ability to contest a claim.

Answer 2

Field Underwriting Procedures

Applications, Premiums, Underwriting:

Question 3

The Medical Information Bureau (MIB) collects claims information.

Answer 3

Field Underwriting Procedures

Applications, Premiums, Underwriting:

Question 4

Coverage can never begin unless the premium has been paid. Even though the premium has been paid, coverage will NOT start until the applicant has satisfied all of the conditions of the conditional receipt, if any.

Answer 4

Field Underwriting Procedures

Applications, Premiums, Underwriting:

Question 5

The underwriter determines the final rating classification, not the producer.

Answer 5

Field Underwriting Procedures

Applications, Premiums, Underwriting:

Question 6

A buyer’s guide and policy summary must be left with the applicant prior to accepting the initial premium.

Answer 6

Field Underwriting Procedures

Applications, Premiums, Underwriting:

Question 7

Although the producer must sign the application, he or she is not a party to the contract.

Answer 7

Field Underwriting Procedures

Applications, Premiums, Underwriting:

Question 8

It is the responsibility of the producer to explain the policy provisions, riders, and exclusions to the policyowner and/or insured

Answer 8

Field Underwriting Procedures

Applications, Premiums, Underwriting:

Question 9

The applicant’s consideration is both the answers on the application and the premium. In return, the insurance company promises coverage. Consideration does not have to be equal

Answer 9

Field Underwriting Procedures

Contract Law:

Question 10

Insurable interest may be based on economics or family relationships

Answer 10

Field Underwriting Procedures

Contract Law:

Question 11

An absolute guarantee of truth is called a warranty.

Answer 11

Field Underwriting Procedures

Contract Law:

Question 12

Permanent disability does not go away (such as loss of a limb)

Answer 12

Types of Health Policies

Disability Income

Question 13

Short-term disability policies have shorter elimination periods than long-term disability policies

Answer 13

Types of Health Policies

Disability Income

Question 14

Premiums paid by the insured on an individual disability income policy are not tax deductible, but any benefits received would be received tax free.

Answer 14

Types of Health Policies

Disability Income

Question 15

A blanket disability policy may be written to cover passengers on a common carrier, an employee group, a student group, a debtor group, or a sports team. Blanket policies do not require individual applications, nor are certificates of insurance insured to those covered.

Answer 15

Types of Health Policies

Disability Income

Question 16

Business overhead insurance will cover the ongoing business expenses of a self-employed person, such as rent or salaries, while the self-employed person is disabled.

Answer 16

Types of Health Policies

Business Disability Insurance

Question 17

Key person disability insurance indemnifies the business for the loss of services of a key employee due to disability.

Answer 17

Types of Health Policies

Business Disability Insurance

Question 18

On an AD&D policy, loss of eyesight due to an accident is covered. Loss of hearing is not covered, nor is loss of use of a limb.

Answer 18

Types of Health Policies

Accidental Death and Dismemberment

Question 19

Limited health insurance policies (like AD&D) only cover limited perils and amounts.

Answer 19

Types of Health Policies

Accidental Death and Dismemberment

Question 20

Base plans cover in-hospital only. There is no deductible or coinsurance on a base plan.

Answer 20

Types of Health Policies

Medical Expense Insurance

Question 21

When calculating how much the company will pay on a claim, always subtract the deductible first, and then apply the coinsurance percentage

Answer 21

Types of Health Policies

Medical Expense Insurance

Question 22

Medical expense policies cover both accident and sickness

Answer 22

Types of Health Policies

Medical Expense Insurance

Question 23

Basic medical expense policies provide first dollar coverage without a deductible

Answer 23

Types of Health Policies

Medical Expense Insurance

Question 24

Health insurance exludes war, self-inflicted injury and cosmetic surgery.

Answer 24

Types of Health Policies

Medical Expense Insurance

Question 25

Health insurance underwriters may discriminate based on and applicant’s health history

Answer 25

Types of Health Policies

Medical Expense Insurance

Question 26

A surgical expense policy will pay a claim up to the policy limit. They are only health insurance policies that may use a relative value schedule

Answer 26

Types of Health Policies

Medical Expense Insurance

Question 27

Major medical and Medicare Part B policies have both deductibles and coinsurance requirements

Answer 27

Types of Health Policies

Medical Expense Insurance