XCEL Chapter 10 - Health Insurance Underwriting

Which of the following statements is CORRECT regarding an individual applying for life or health insurance?

The applicant's medical history may be analyzed and reported

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

better than average mortality or morbidity experience

An insured was injured as an innocent bystander when someone committed a felony. The insurer is

liable for the loss

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

Lorenzo is self employed with an S corporation. He is unmarried and had a net profit for the tax year. What are the tax ramifications of his health insurance premiums paid for the year?

100% of his health insurance costs can be deducted from his gross income

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 life 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

A 10% excise tax is normally applied to an early withdrawal from an IRA. According to HIPAA, this tax will not be applied if the withdrawal is used for medical expenses that exceed ____ of the individual's adjusted gross income.

C) 7.5%

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

Pierre is covered by his employer's group major medical plan. His employer pays for 75% of the premium and he pays for 25%. How much would a $10,000 benefit be taxable as income under this plan?

D) $0

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

Disclosure authorization response

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

All of the following are primary risk factors in underwriting individual health insurance policies EXCEPT

Geographical location

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

The IRS allows a taxpayer to deduct medical expenses that exceed 7.5% of their adjusted gross income. Which of the following is considered a tax deductible medical expense under this rule?

Long Term Care insurance premiums

Which of the following typically does NOT provide a form of managed care?

Major medical indemnity plan

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

Managed care plan

which of the following would probably NOT be considered in underwriting a health insurance risk?

Marital Status

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

Martial status

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

Which of the following describes a person who is NOT acceptable by an insurer at standard rates because of health history, occupation, or hobbies?

Substandard risk

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. Policies that pay greater benefits normally command higher premiums.

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

Backdating an insurance policy occurs when

The policy's effective date is earlier than the present

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

Which of the following pertains to the analysis of an applicant's personal information and determining whether insurance should be issued or declined?

Underwriting

What guarantees that the statements supplied by an insurance applicant are true?

Warranty

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

Field underwriting performed by the producer involves

completing the application and collecting initial premium

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

An example of a primary care physician would be a(n)

internist

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 gatekeeper's role when used by an HMO is

obtaining referrals to specialists from primary care physicians

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 applicant with a below-average likelihood of loss is typically considered to be a

preferred risk

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