Life & Health Chapter 10 Exam

d. Legal Actions. Legal Actions is a Mandatory Uniform Provision. All other responses are Optional Uniform Provisions.

All are Optional Provisions, except: a. Illegal Occupation. b. Change of Occupation. c. Misstatement of Age. d. Legal Actions.

d. Will be constructed as if it conformed to the Law. According to the Conformity with State Statutes Provision (an Optional Uniform Provision), any provision on the policy effective date that is in conflict with statutes of the state is automatically amended to meet state requirements.

A health policy not conforming to the Uniform Individual Accident and Sickness Policy Provision Law: a. May be voided. b. The insurer is fined and the policy corrected. c. Is invalid. d. Will be constructed as if it conformed to the Law.

d. Pay a reduced amount or deny any claim payment. Since Abigail's claim occurred during the Probationary Period, the insurer would likely deny any claim outright or at least pay a reduced amount.

Abigail has a preexisting condition noted in her new A & H policy. If she submits a claim for this condition within a specified time stated in the contract, what will the insurer do? a. Pay benefits in full. b. Reduce the benefits paid. c. Provide coverage only if this claim is nonoccupational. d. Pay a reduced amount or deny any claim payment.

b. Not pay since he was involved in an illegal act at the time of injury. Illegal Occupation/Act (an Optional Uniform Provision) allows the insurer the right to deny liability if the insured is injured while performing an illegal occupation or committing an illegal act.

Albert owns a printing business in which he, at times, prints counterfeit money. One day while processing funny money, his arm was severely damaged. His insurance will: a. Will pay but will cancel his contract when he is convicted of the crime. b. Not pay since he was involved in an illegal act at the time of injury. c. This is classified as a Workers' Compensation claim. d. Pay as he was injured on equipment normally used for legal purposes.

d. Create a less favorable meaning than the original wording. The insurer must assure that any variation must be at least as favorable as the original wording and no provision may be deleted.

All states have adopted the Uniform Individual Accident and Sickness Policy Provision Law. If an insurer changes any of these provisions, they must make sure it does not: a. Conform to NAIC requirements. b. Weaken the application wording. c. Cancel the law of large numbers. d. Create a less favorable meaning than the original wording.

d. No one without the applicant's written consent. Only the applicant may alter statements on the application.

An application for disability insurance may be altered by: a. The insurer b. The agent c. The Commissioner d. No one without the applicant's written consent.

c. 15 According to the Claim Forms Provision (a Mandatory Uniform Provision), the insured should receive the necessary claims forms within 15 days after notice of claim.

An insured should receive necessary claim forms within ____ days after notice of claim. a. 10 b. 20 c. 15 d. 5

c. Physical Exam & Autopsy According to the Physical Exam and Autopsy Provision (a Mandatory Uniform Provision), the insurer, at their own expense, has the right to request a physical exam or autopsy where not prohibited by law.

An insurer has the right to request a physical exam or an autopsy to determine the entitlement to benefits. The request is at the insurer's expense, due to which provision? a. Proof of Disability or Death b. Intoxicants and Narcotics c. Physical Exam & Autopsy d. Proofs of Loss

a. Reduce her normal benefits. If Anna does not comply with this provision, she may have her normal benefit level reduced.

Anna has a contract that includes the Non-Emergency Hospital Preauthorization Admissions Provision. For a scheduled hospital stay, she must first get preauthorization through her insurer. If she does not, the insurer may: a. Reduce her normal benefits. b. Pay the benefit, but send her a bill for additional premium. c. Check her out of the hospital. d. Cancel her contract.

c. Elimination Period The Elimination Period is a period of time that must expire after onset of an illness or occurrence of an accident before benefits will be payable.

Beth has a contract stating she must be disabled for 3 months before benefits will be paid. This is considered the: a. Probationary Period b. Grace Period c. Elimination Period d. Contingency Period

a. Yes, unless the beneficiary is irrevocable. The Change of Beneficiary Provision (a Mandatory Uniform Provision) establishes the insured's right to change the beneficiary, unless irrevocable.

Does the insured have the right to change beneficiary designations? a. Yes, unless the beneficiary is irrevocable. b. No, because there are no beneficiary designations in health policies. c. Yes, there is no such thing as irrevocable in health insurance contracts.

c. Continuation of the contract Each policy must express the conditions and provisions for renewal or continuation of coverage.

Each Health and Disability Income Policy must express the conditions and provisions for _______. a. Policy corrections b. Conditional coverage c. Continuation of the contract d. Refunds of premium at maturity

a. The insurer must refund the excess premiums Hank paid after his 70th birthday. Misstatement of Age (an Optional Uniform Provision) stipulates that since the misstatement of age led the insurer to provide coverage beyond the age limit, liability is limited to a refund of premiums.

Hank has medical coverage to age 70. He submits a claim for hospitalization. The insurer discovers Hank is actually 73, when his contract states he is 68. What will the insurer do? a. The insurer must refund the excess premiums Hank paid after his 70th birthday. b. The insurer must pay the claim, and then cancel the contract. c. The insurer pays what the premiums would have purchased at the correct age. d. The insurer must prove fraud to be relieved from making payments.

b. Within one year, unless he suffers legal incapacity. The Proof of Loss Provision (a Mandatory Uniform Provision) stipulates the insured is to prove their loss within 90 days of the loss, or in the shortest time possible, but not to exceed one year unless the insured suffers legal incapacity.

Harry was hospitalized in a coma for 6 months. Since no one knew about his health care coverage, when does proof of loss have to be submitted? a. An executor would be appointed by the courts to handle the necessary paperwork. b. Within one year, unless he suffers legal incapacity. c. Within two years, covered under the contestable period. d. Anytime, since he was in a coma and obviously could not submit a claim.

a. Cancellation Cancellation (an Optional Uniform Provision) establishes that the insurer may cancel, with written notice of 5 to 31 days, to the insured.

If an insurer cancels a contract, a written notice must be provided within 5 to 31 days. The contract must have which of the following provisions? a. Cancellation b. Conformity with State Statutes c. Entire Contract d. Legal Actions

b. 60 According to the Legal Actions Provision (a Mandatory Uniform Provision), the insured must wait at least 60 days after proof of loss before legal action can be brought against the insurer.

If an insurer makes a payment for a claim but you are dissatisfied, you must wait _____ days after proof of loss before you might take any legal action. a. 20 b. 60 c. 45 d. 90

c. Intoxicants and Narcotics Intoxicants and Narcotics (an Optional Uniform Provision) allows the insurer the right to deny liability if the insured is under the influence or intoxicated at the time of loss.

If liability is denied due to the insured being intoxicated or under the influence, it is because of which provision? a. Legal Actions b. Illegal Act c. Intoxicants and Narcotics d. Conformity with State Statutes

It is refunded on a pro rata basis. According to the Cancellation Provision (an Optional Uniform Provision), if the insurer cancels on the insured, unearned premiums are refunded on a pro rata basis.

If the insurer cancels an individual health plan, what happens to the unearned premium? a. The total is refunded. b. It is refunded on a pro rata basis. c. It is used to offset underwriting costs. d. It is refunded on a short rate basis.

b. Consideration Clause The other choices are Case Management Provisions designed to contain costs. The Consideration Clause stipulates that the payment of the first premium and statements in the application are the applicant's consideration, and the insurer's consideration is the promise to pay within the contract terms.

Insurers include provisions in contracts to help reduce unnecessary claims and the overpayment of claims. Which of the following is not one of those provisions? a. Ambulatory Services b. Consideration Clause c. Mandatory Second Surgical Option d. Concurrent Review

d. $3,500 Relations of Earnings to Insurance (a Optional Uniform Provision) establishes that disability benefits shall not exceed the monthly earnings of an insured at the time the disability commenced, or his/her average earnings for the two years immediately preceding a disability, whichever is greater.

Louise purchased a disability policy when her salary was $4,000 a month. Later, she lost that job and her salary was reduced to $2,000 a month. Three years ago, she became self-employed and now receives $3,500 a month. The maximum disability benefit she might expect, is which of the following? a. $4,000, the contract amount b. The average of her income over te life of the contract c. $2,000 d. $3,500 e. $3,500

d. 20 The insured under the Notice of Claim Provision (a Mandatory Uniform Provision) is required to notify the insurer, in writing, within 20 days of any loss.

Notice of claim is required within ____ days of loss. a. 90 b. 10 c. 15 d. 20

e. 10 days sickness and immediately for accidental injuries. Upon reinstatement, accidents are covered immediately, and sickness is covered after 10 days.

One of your clients just reinstated their Accident and Health policy. When is coverage effective for sickness and accident? a. Immediately for both accident and sickness. b. Cancel the law of large numbers. c. 30 days sickness, immediate coverage for accidents. d. 10 days accident and 48 hours for sickness. e. 10 days sickness and immediately for accidental injuries.

c. Insurer's The Optional Uniform Provisions are included at the insurer's option; however, if used they must conform to that state's Insurance Code.

Optional Uniform Provisions are included in the contract at the _____ option. a. No one's option, they are regulated by statute. b. Commissioner's c. Insurer's d. Insured's

d. Case Management Provisions They are included as Case Management Provisions or sometimes referred to as Cost Containment Provisions.

Precertification, Mandatory Second Surgical Opinion, and Concurrent Review are provisions in health insurance policies known as: a. Policy Abilities Provisions b. Protect Insurer Provisions c. Miscellaneous Provisions d. Case Management Provisions

c. 90 The Proof of Loss Provision (a Mandatory Uniform Provision) stipulates the insured is to prove their loss within 90 days of the loss, or in the shortest time possible, but not to exceed one year unless the insured suffers legal incapacity.

Proof of loss is required within _____ days of loss. a. 45 b. 60 c. 90 d. 180

a. Unpaid Premiums Unpaid Premiums (an Optional Uniform Provision) allows the insurer the option of deducting unpaid premiums from a claim.

Susan neglected to make her premium payment and she was injured in an accident. After she submitted the claim, she discovered that the insurer had subtracted $200 (the amount of premiums) from the claim. The insurer may do this because of which provision? a. Unpaid Premiums b. Payment of Claims c. Grace Period d. Reinstatement

a. Renewable with adjustable premiums, by classification only. The Guaranteed Renewable Provision does allow the insurer to adjust premiums upon renewal, but by classification only, not by individual.

The Guaranteed Renewable Provision states: a. Renewable with adjustable premiums, by classification only. b. Renewable only at the option of the insurer. c. Renewable with guaranteed premium. d. Renewable with adjustable premiums determined by frequency of claim.

a. Entire contract The Entire Contract Provision (a Mandatory Uniform Provision) stipulates that the policy, a copy of the application and any riders constitutes the entire contract between the insurer and insured.

The policy, a copy of the application, any riders and policy endorsements constitute the _____ _____. a. Entire contract b. Legal actions c. Whole policy d. Time limit

a. Only one policy will pay, the premiums for the other contracts will be returned. Other Insurance With This Insurer (an Optional Uniform Provision) stipulates that if the insured has more than one policy of the same type with the same insurer, the insured may elect the policy to be used, and excess premiums for the excess coverage will be returned.

Three years ago, Charles purchased a health policy from the QRS Company; he has purchased two additional contracts from the same insurer since. Each contract contains the Other Insurance With This Insurer Provision. What happens if Charles has a claim? a. Only one policy will pay, the premiums for the other contracts will be returned. b. The insurer will cancel all contracts because of intent to defraud. c. Each contract will pay in direct proportion to the loss. d. Benefits are paid in full by all contracts.

c. 7 days weekly, 10 days monthly, 31 all others According to the Grace Period Provision (a Mandatory Uniform Provision), this is the correct sequence.

What is the correct sequence of time for the grace period on an individual medical expense policy for each mode of premium? a. 10 days weekly, 15 days monthly, 31 all others b. 7 days weekly, 10 days monthly, 30 all others c. 7 days weekly, 10 days monthly, 31 all others d. 30 for individual contracts, 31 for group

a. Insuring Clause The Insuring Clause states who is covered, by whom, for how much, and for what period, against what peril.

Which clause in a contract states that Jim is covered by XYZ insurer for a lifetime maximum of $1,000,000, with a schedule of benefits for various expenses? a. Insuring Clause b. Entire Contract c. Consideration Clause d. Free Look Provision

a. Concurrent Review Once an insured is admitted to the hospital the insurer monitors the insured's hospital stay to make certain that everything is proceeding to schedule through the Concurrent Review Provision.

Which of the following is a Case Management Provision used by insurers to monitor hospital stays? a. Concurrent Review b. Case Management c. Precertification d. Managed Health Care

d. Waiver of Premium. Waiver of Premium is a provision that may or may not be included.

Which of the following is not a Mandatory Uniform Provision of an Accident and Health policy? a. Proof of Loss. b. Payment of Claims. c. Time limit on certain defenses. d. Waiver of Premium.

d. Conformity with State Statutes Conformity with State Statutes is an Optional Uniform Provision.

Which of the following is not a Mandatory Uniform Provision? a. Reinstatement b. Payments of Claims c. Physical Exam & Autopsy d. Conformity with State Statutes

b. Cancelable - the life of the policy is expressed and cannot be renewed.

Which of the following terms and definitions do not match? a. Guaranteed Renewable - guaranteed renewable without proof of insurability. b. Cancelable - the life of the policy is expressed and cannot be renewed. c. Noncancelable - guaranteed renewable and guaranteed premium to age 65. d. Optionally Renewable - renewable only at the option of the insurer.

d. Legal Actions The only response that is a Mandatory Uniform Provision is Legal Actions. All other responses are Optional Uniform Provisions.

Which provision is a Mandatory Uniform Provision? a. Illegal Occupation b. Misstatement of Age c. Conformity with State Statutes d. Legal Actions

b. Other Insurance With This Insurer Other Insurance With This Insurer is an Optional Uniform Provision. All other answers are Mandatory Uniform Provisions.

Which provision is an Optional Uniform Provision? a. Payment of Claims b. Other Insurance With This Insurer c. Claim Forms d. Physical Examination

c. Time of Payment of Claims Time of Payment of Claims (a Mandatory Uniform Provision) stipulates that claims are to be paid immediately upon written proof of loss.

Which provision states that the insurance company must pay claims immediately? a. Payment of Claims b. Relation of Earnings to Insurance c. Time of Payment of Claims d. Legal Actions

b. Mandatory Second Surgical Option is when the physician submits claim information prior to treatment, to know in advance if the procedure is covered. This is describing Precertification as opposed to Mandatory Second Surgical Opinion.

Which statement is false? a. A nonoccupational policy pays for injury or illness off the job. b. Mandatory Second Surgical Option is when the physician submits claim information prior to treatment, to know in advance if the procedure is covered. c. Changes in an Accident and Health contract may be completed only with the written consent of the insurer. d. When an insured owes back premiums but is still within the grace period, the Unpaid Premium Provision commences for claims submitted.

a. Insured must notify the insurer of a change of occupation, or policy will be cancelled. Failure to notify the insurer of a change of occupation will not result in cancellation of the policy.

Which statement is inaccurate regarding the Change of Occupation Provision? a. Insured must notify the insurer of a change of occupation, or policy will be cancelled. b. Change to a more hazardous occupation, upon claim, benefits will be reduced to that which premiums paid would have purchased at the more hazardous occupation. c. Change to a less hazardous occupation, insured may apply for a rate reduction. d. If the insured works at two occupations, rates for the most hazardous occupation will be charged.