Field Underwriting Procedures Q&A

In health insurance, what is considered a sickness?

An illness that first arises while the policy is in force

What characteristics would qualify an applicant for health insurance as a substandard risk?

Poor health history or a dangerous occupation or avocation

What risk classification would typically qualify for lower premiums?

Preferred risk

Whose responsibility is it to determine that all the questions on an insurance application are answered?

agents

What type of health insurance would be most appropriate for a group of children in a summer camp?

blanket

What do limited health policies cover?

A specified accident or disease

What risk classification would require the highest premium for a health insurance policy?

substandard

Most health policies will pay the accidental death benefits if the death is caused by an accident and occurs within how many days?

90 days

What are the four elements of an insurance contract?

Agreement (offer and acceptance), consideration, competent parties, and legal purpose

What type of group health insurance is used to provide accident coverage on a group of persons that are participating in a particular activity, when the individual insureds are unknown, and are covered automatically?

Blanket

What type of health insurance plans cover all accidents and sicknesses that are not specifically excluded in the policy?

Comprehensive plans

In health insurance, the policy itself and the insurance application form what?

Entire Contract

During the application process for health insurance, a producer is trying to obtain creditable information about the applicant that would help underwriters determine is the risk is insurable. In what role is the producer acting?

Field underwriter

What entities make up the Medical Information Bureau?

Insurers

When must the Outline of Coverage be provided to the insured?

No later than policy delivery

What is adverse selection?

People who are more likely to submit insurance claims are seeking insurance more often than preferred risks.

How can health insurance policies be delivered to the insured?

Personally delivered by the agent or mailed

What are the three types of risk rating classifications in health insurance?

Standard, substandard and preferred

Whose responsibility is it to inform an applicant for health insurance about the insurer's information gathering practices?

agent

Whose responsibility is it to inform an applicant for health insurance about the insurer's information gathering practices?

The agent

How is the information obtained for an investigative consumer report?

Through interviews with the applicant's associates, friends and neighbors

What is the purpose of the Outline of Coverage in health insurance?

To provide the insured full and fair disclosure about the policy issued

During which stage in the insurance process do insurers evaluate information that identifies adverse selection risks?

Underwriting

Under a credit disability policy, payments to the creditor will be made for the insurer until what point in time?

Until the period of disability ends or until the debt is repaid

What are the common exclusions in most health insurance policies?

War, self-inflicted injuries, pre-existing conditions, elective cosmetic surgeries, injuries cause by participating in illegal activities, and workers compensation benefits.

In insurance, when is the offer usually made on a contract?

When the insurance application is submitted

In forming an insurance contract, when does an acceptance usually occur?

When the insurer approves a prepaid application

When should an agent obtain a Statement of Good Health from the insured?

When the premium was paid upon policy delivery and not at the time of application

If an agent makes a correction on the application for health insurance, who must initial the correct answer?

applicant

If an insurer decides to obtain medical information from different sources in order to determine the insurability of an applicant, who must be notified of the investigation?

applicant

Health contracts are prepared by insurers and must be accepted by the insured on an 'as is' basis. This describes what aspect of a health insurance contract?

contract of adhesion

Who is responsible for paying the cost of a medical examination required in the process of underwriting?

insurer

Health insurance contracts are unilateral. What does that mean?

only one party makes a legally enforceable promise

In insurance, what is the term used for cause of loss?

peril

In health insurance contracts, the insured is not legally bound to any particular action; however, the insurer is obligated to pay for losses covered by the policy. What contract element does this describe?

unilateral