Accident and Health Insurance Basics
How many types of losses and benefits are there?
4
What are the two major perils under a health insurance policy?
Accidental Injury and Sickness
What are the types of loss and benifits?
Loss of income from Disability, Medical Expense, Dental expense, and long term care expenses
Medical Information Bureau (MIB) contu....
MIB can request a report on an applicant and recieve coded information from any other Applications for insurance submitted to other MIB members.
Outline of Coverage
Must be delivered at the time of application or upon delivery of the policy.
What details best describe the underwriting process for life insurance
Selection, classification, and rating of risks
What are the majority of health insurance claims coming from?
Sickness rather than accidental injury
Standard risk
Standard risks reflect average exposures and may be insured at standard rates and premiums
Who must pay for the cost of a medical examination required in the process of underwriting?
The Insurer
What is the proper process when replacing the insured's current insurance policy with a new one?
The old policy should stay in force until the new policy is issued
Accidental Death and Dismemberment policies pay what to the Principal(insured) if the insurer has an accidental death?
The principal sum
What are Life and Health Guaranty Associations designed for?
To protect policy owners, insured, and beneficiaries against insolvent insurer within certain limitations.
Benefits, Limitations and Exclusions
When an agent attempts to replace the insured's current health insurance policy with a new one, the agent needs to be careful not to mislead the insured or provide coverage that is to the insured's detriment.
The most The Insurance Guaranty Association will pay for net cash surrender values is?
$100,000
If an agent misrepresents the details of an insured's new insurance contract that will be replacing the current contract? What would most likely happen to the agent?
A suspension of license
Which term describes a situation in which people who are the most likely to have claims are also the most likely to seek insurance?
Adverse selection
What does an Investagative Consumer (Inspection) Report include
Information on the applicant's Character, General reputation, Personal habits and mode of living that is obtained through investigation.
Who is involved in completing the agents report?
Only the agent
Medical Information Bureau (MIB)
Report on previous insurance information can be obtained from here
What does preferred status indicate?
That the insured is in excellent physical condition and employs a healthy lifestyle and habits.
What is the agents responsibility in regards to Benefits, Limitations and Exclusions
To compare the benefits, limitations and exclusions found in the current and the proposed replacement policy.
What is the definition of Sickness?
an illness, which manifests itself while the policy is in force
What is an Accidental bodily injury?
an unforseen and unintended injury that resulted from an accident rather than a sickness
Routine and major restorative care
includes such as treatments of cavities, oral surgaries, bridges and dentures. These procedures are covered up to a specific maximim, subject to an annual deductible per insured family member and a coinsurance
What can cause an applicant to be rated substandard?
poor health history or a dangerous vocation or avocation
Classifications of Risks
Once the umderwriters have collected and reviewed all the necessary information on the applicant, they will make a decision to either accept or decline the applicant for insurance.
What happens once the delivery of a policy is made?
The free-look period begins
What is NOT true regarding an insured who is considered to be a standard risk?
The insurer may have to pay slightly higher premiums
A hospital indemnity policy will pay
A benefit for each day the insured is in a hospitial
Accidental Death and Dismemberment policies pay what to the Principal(insured)if the insured was to loss a limb or eye?
A capital amount
An Outline of coverage must include all of the following
A description of the benifits and coverage A statement of the exclusions, reductions, and limitations A statement of the terms under which the policy or certificate my be continued enforce or discontinued
Specified (Dread) Disease
A dread disease, or limited risk, policy provides a variety of benefits for a specific disease such as cancer policy or heart disease policy
Why is it essential for an insurer to document all correspondence with an insured?
Errors and omissions
Orthodontic care
If included, will have a separate maximum and a separate deductible, which may differ from the deductible for restorative care
What are the Three categories to Classifications of Risks?
Preferred, stamndard or substandard
Which of the following do the Standard and Preferred risk categories share?
Premiums are not elevated
What does a Standard rating indicate?
That an individual represents a similar level of health and lifestyle quality as other members of the same age cohort
Common Situations for Errors/Omissions
The SALES INTERVIEW AND THE POLICY DELIVERY are the most common occasions for errors and omissions situuations.
Attending Physician Statement(APS)
This source of information is best for accurate information on the applicant's medical history.
What are Substandard risks?
Those that reflect an increased risk of loss(ie. DUIs Smoking ect.)