Chapter 11 Review:f

Upon policy delivery, which of the following must a producer have an applicant sign if no initial premium was collected with the health insurance application?

A good health statement

An attending physician's statement would be appropriate for which health insurance purpose?

At the request of the insurer to assist in the underwriting decision

XYZ Corp pays the tax-deductible insurance premiums for a key employee disability policy. Which of the following would be the appropriate tax consequence?

Benefits are fully taxable

How does a conditional receipt differ from a binding receipt?

Binding receipts always provide insurance which starts from the date of receipt

Which of the following is a requirement for ANY change in an insurance application?

Change must be initialed by the applicant

Which of the following would be considered an underwriting duty of an agent?

Completing all applications and collecting initial premiums

In which of the following processes will the insurer oversee the insured's hospital stay to confirm everything is going according to schedule and that the insured will be released as planned?

Concurrent review

All of these are typically sources of underwriting information for life or health insurance EXCEPT

Disclosure authorization response

Which of the following is NOT a risk classification that an underwriter would use?

Dividend risk

One of the most important considerations when replacing health insurance would be the

Exclusions on a new policy

XYZ Company has applied for group health insurance for its employees. What information would the insurer's underwriters likely use to determine the appropriate coverage and final premium rate given to the group?

Experience rating

An insurance company needs to obtain personal information from a third party concerning an applicant. Which law do all insurers and their producers need to comply with?

Fair Credit Reporting Act

How does rising morbidity rates affect health insurance?

Increased premiums

Which of the following signatures is not required on an individual insurance application?

Insurer

An applicant's character and personal habits can be obtained for underwriting purposes from which source?

Investigative consumer report

Which of the following is considered to be a point of service (POS) plan?

Managed care plan

All of these are considered key factors in underwriting health insurance EXCEPT

Marital status

Most U.S. life and health insurance companies belong to the

Medical Information Bureau

What are members of the Medical Information Bureau (MIB) required to report?

Medical ailments discovered during the underwriting process

Which of these is likely to occur when life or health insurance is being applied for?

Medical history from the insured may be reviewed and reported

All of these are considered sources of information that can assist an underwriter in determining whether or not to accept a risk EXCEPT

National Association of Insurance Underwriters

A person who is a nonsmoker, of average weight, and in excellent health would most likely be in which risk classification?

Preferred

All of the following factors would affect a health insurance policy's premium rate EXCEPT

Residential address of the insured

Bill the producer is collecting the initial premium on a health policy. Which of the following statements is true?

The contract is not in force without the initial premium being paid

Which of the following statements most aptly describes health insurance benefits?

The greater the benefits, the higher the premium.

Which of the following would be a valid reason why a policy premium would be higher than the standard premium?

The insured does not meet established underwriting requirements

What happens when an insurance policy is backdated?

The policy's effective date is earlier than the present

Which of the following is the purpose of medical cost management?

To control health claim expenses

What is the purpose of the Medical Information Bureau (MIB)?

To help underwriters evaluate risk

When does a health insurance policy typically become effective?

When initial premium is collected and policy is issued

An underwriter's primary responsibility to an insurer is to protect against

adverse selection

A change in an insurance application requires

an initial made by the applicant

Preferred risk policies with reduced premiums are issued by insurance companies because the insured has

better than average mortality or morbidity experience

When an insurance company requests an attending physician's report, the request must be accompanied by a

copy of the signed authorization

Premium mode is a term used to describe the

frequency of the premium payment

Underwriters can acquire information from all of the following sources EXCEPT

genetic testing

Jim is the insured on a health insurance policy and holds 2 jobs. If "occupation" is used to classify the risk, the insurer will most likely classify Jim according to the occupation that

is most hazardous

The Medical Information Bureau consists of

life and health insurance companies

Tara the producer is delivering a specified disease insurance policy to a new policyowner. Upon delivery, she may be expected to collect all of the following EXCEPT a(n)

modified application with a new signature

How are premiums paid by the insured for personally owned disability income insurance treated for tax purposes?

not tax deductible

Which of these characteristics of an applicant is NOT taken into consideration when assessing risk for Disability coverage?

number of children

The difference between pre-certification and concurrent review is that pre-certification

occurs before the treatment is provided

Which of the following is NOT an example of utilization review?

ongoing inspection of accident prone individuals

An insurance producer is often responsible for field underwriting during the application process. All of these are possible field underwriting roles EXCEPT

providing commission information to the applicant

Statements made by an insurance applicant on an application are considered to be

representations

Signatures for an insurance application MUST be obtained by the producer from all of the following sources EXCEPT

the beneficiary

A field underwriter's main task is

to ensure an applicant's medical information is accurate and complete

When an applicant applies for insurance, the process by which the insurer determines whether to issue a policy is called

underwriting