CHAPTER 1 STUDY GUIDE HEALTH INS.

if a consumer request additional information concerning an investigative consumer report, how long does the insurer or reporting agent have to comply? 1 seven days 2 ten days 3 three days 4 five days

5 days

insurance policies are not drawn up through negotiations and an insured has little to say abut its provisions. What contract characteristics does this describe? 1 conditional 2 personal 3 adhesion 4 unilateral

Adhesion

An insured pays a $100 premium every month for his insurance coverage, yet the insurer promises to pay $10,000 for a covered loss. What characteristic of an insurance contract does this describe?

Aleatory

which of the following best describes the aleatory nature of an insurance contract? 1 only of the parties being legally bound by the contract 2 ambiguities are interpreted in favor of the insured 3 policies are submitted to the insured on a take-it-or-leave-it basis 4 exchange of unequal values

Exchange of unequal values

which of the following entities can legally bind coverage? 1. Federal insurance boards. 2 agent 3 insurer 4 the insured

Insurer

which of the following best describes the MIB

It is a nonprofit organization that maintains underwriting information on applicants for life and health insurance.

if only one part to an insurance contract has made a legal enforceable promise, wha kind of contract is it?

Unilateral

which of the following is a statement that is guaranteed to be true, and if untrue, may be breach an insurance contract? 1 Concealment 2 indemnity 3 representation 4 warranty

Warranty

what is a material misrepresentation? 1 any misstatement by the producer 2 concealment 3 a statement by the applicant that upon discovery, would affect the underwriting decision of the insurance company 4 any misstatement made by an applicant for insurance.

a statement by the applicant that upon discovery, would affect the underwriting decision of the insurance company

an insurance contract must contain all of the following to be considered legally binding EXCEPT. 1 consideration 2 competent parties 3 beneficiary's consent 4 offer and acceptance

beneficiary's consent

an insurance contact requires that both the insured and the insurer meet certain conditions in order for the contract to be enforceable. What contract characteristics does this describe. 1 contingent 2 aleatory 3 unilateral 4 conditional

conditional

Because an insurance policy is a legal contract, it must conform to the state laws governing contracts which require all of the following elements EXCEPT

conditions

An insurer neglects to pay a legitimate claim that is covered under the terms of the policy. Which of the following insurance principles has the insurer violated? 1 adhesion 2 consideration 3 good faith 4 representation

consideration

The medical information Bureau was created to protect - 1 insureds from unreasonable underwriting requirements but the insurance companies 2 medical examiners that perform insurance physical examinations. 3 insurance companies from adverse selection by high risk persons 4 insurance departments from lawsuits by policy owners.

insurance companies from adverse selection by high risk persons

an application for a health insurance policy returns a completed application to her agent, along with a check for the first premium. She receives a conditional receipt two weeks later. Which of the following has the insurer done by this point? 1 approved the app 2 insured the policy 3 neither approved the app nor issued the policy. 4 both approved the app and issued the policy.

neither approved the app nor issued the policy

Which of the following is NOT the consideration in a policy? 1 the application give to a prospective insured 2 something of value exchange between parties 3 the premium amount pain at the time of application 4 the promise to pay covered.

the application give to a prospective insured

An insured is upset that her new health insurance policy was delivered to her by certified mail and not through her agent. Which of the following is true? 1 the policy will not be legal until it is delivered by an agents 2 there is nothing wrong with this from of policy delivery 3 the insured should complain to the insurer 4 the insured should ask for a new policy to be delivered.

there is nothing wrong with this from of policy delivery

an insurance policies, the insured is not legally bound to any particular action in the insurance contract, but the insurer is legally obligated to pay losses coveted by the policy. What contract element does this describe? 1 conditional 2 unilateral 3 unidirectional 4 aleatory

unilateral