****CA Life & Health Chapter 11 Accident and Health Insurance Multiple Choice
L has a major medical policy with a $500 deductible and 80/20 coinsurance. L is hospitalized and sustains a $2,500 loss. What is the maximum amount that L will have to pay? A) $900 (deductible + 20% of the bill after the deductible (20% of $2000)) B) $500 (amount of deductible) C) $1000 (deductible + 20% of the entire bill) D) $2500 (the entire bill)
A) $900 (deductible + 20% of the bill after the deductible (20% of $2000))
A guaranteed renewable health insurance policy allows the A) Policyholder to renew the policy to a stated age, with the company having the right to increase premiums on the entire class B) Policyholder to renew the policy to a stated age and guarantees the premium for the same period C) Policy to be renewed at the time of expiration, but the policy can be canceled for cause during the policy term D) Insurer to renew the policy to a specified age
A) Policyholder to renew the policy to a stated age, with the company having the right to increase premiums on the entire class
In health insurance, what is a copayment? A) A portion of the deductible the insured must pay for a treatment B) A specific amount paid by the insured when treatment is received C) A percentage of the cost of treatment paid for by the insured D) The amount the insurance company pays for the insured's treatment
B) A specific amount paid by the insured when treatment is received
A producer is acting in what capacity when he or she is trying to obtain credible information about an applicant for health insurance? A) Office underwriter B) General agent C) Consumer report investigator D) Field underwriter
D) Field underwriter
Why is it essential for an insurer to document all correspondence with an insured? A) Federal law B) Errors and omissions C) Statistics gathering D) State law
B) Errors and omissions
The factor added to the net premium to cover the costs of the insurer in obtaining and maintaining the business is called A) Expenses B) Legal reserve C) Dividend accumulation D) Premium tax
A) Expenses
What is franchise insurance? A) It is health insurance for small groups whose numbers are too small to qualify for true group insurance B) It provides insurance for franchises, such as a restaurant or hotel chain C) It is group insurance D) It is blanket insurance
A) It is health insurance for small groups whose numbers are too small to qualify for true group insurance
An insured purchased a noncancelable health insurance policy 1 year ago. Which of the following circumstances would NOT be a reason for the insurance company to cancel a policy? A) The insured is in an accident and incurs a large claim B) The insured does not pay the premium C) The insured reaches the maximum age limit specified in the policy D) Within two years of the application, the insurer discovers misrepresentation
A) The insured is in an accident and incurs a large claim
An insured who had a life insurance policy for $1 million died. In filing the claim, his wife and children discovered that there was no beneficiary named on the policy. What will happen to the death benefit in this case? A) The insurer will retain the benefit B) It will go to the insured's estate C) It will be divided among his children D) It will be automatically paid to the insured's surviving family
B) It will go to the insured's estate
Under a credit disability policy, until what point will payments to the creditor be made for the insured? A) Until age 65 B) Until the disability ends or the debt is satisfied, whichever is sooner C) Only for 6 months after the onset of disability D) Until the insurer cancels the policy
B) Until the disability ends or the debt is satisfied, whichever is sooner
All of the following can qualify as a trust EXCEPT? A) A group formed by two or more employers in the same field B) A group that has the Commissioner's permission to issue a group health insurance policy C) An employer insuring at least 5 employees for the benefit of that employer D) A labor union that insures at least 25 members
C) An employer insuring at least 5 employees for the benefit of that employer
The purpose of managed care health insurance plans is to A) Give the insured an unlimited choice of providers B) Coordinate benefits C) Control health insurance claims expenses D) Provide for the continuation of coverage when an employee leaves the plan
C) Control health insurance claims expenses
Hospital indemnity/ hospital confinement indemnity policy will provide payment based on A) The premiums paid into the policy B) The medical expense incurred C) The number of days confined in a hospital D) The type of illness
C) The number of days confined in a hospital
In which of the following cases would a credit disability policy be issued? A) If a person receives disability benefits, he or she is eligible for credits on their group policies for future disabilities B) A person receiving disability benefits cannot receive a credit disability policy C) If an inusred has filed bankruptcy and his premiums are waived, he can be issued a credit disability policy D) If an individual is in debt to a specific creditor, payments will be made for him/her until the return to work
D) If an individual is in debt to a specific creditor, payments will be made for him/her until the return to work
In a group health policy, a probationary period is intended for people who A) Have a pre-existing condition at the time they join the group B) Have additional coverage through a spouse C) Want lower premiums D) Join the group after the effective date
D) Join the group after the effective date
Which renewability provision allows an insurer to terminate a policy for any reason, and to increase the premiums for any class of insureds? A) Conditionally renewable B) Cancellable C) Guaranteed renewable D) Optionally renewable
D) Optionally renewable
An insurer wishes to compare the information given in an insurance application with previous insurance applications by the same applicant but for different companies. What organization can help the insurer accomplish this? A) The National Association of Insurance Commissioners B) The Medical Information Bureau C) The State Department of Insurance D) Social Security
B) The Medical Information Bureau
On a health insurance application, a signature is required from all of the following individuals EXCEPT A) The policyowner B) The agent C) The spouse of the policyowner D) The proposed insured
C) The spouse of the policyowner
Mortality - Interest + Expense = A) Benefits budget B) Operating expenses C) Net premium D) Gross premium
D) Gross premium
To comply with Fair Credit Reporting Act, when must a producer notify an applicant that a credit report may be requested? A) At the time of the application B) When the applicant's credit is checked C) When the policy is delivered D) At the initial interview
A) At the time of the application
What treatment describes an insured's medical history, including diagnoses and treatments? A) Attending physician's statement B) Physician's review C) Individual medical summary D) Comprehensive medical history
A) Attending physician's statement
Which type of a hospital policy pays a fixed amount each day that the insured is in a hospital? A) Indemnity B) Surgical C) Blanket D) Medigap
A) Indemnity
Which document is used to assess risk associated with an applicant's lifestyle and character? A) Investigative consumer report B) Character assessment C) Non-medical risk assessment D) Applicant lifestyle assessment
A) Investigative consumer report
Which of the following statements does NOT describe a Blue Cross and Blue Shield Plan? A) Services are paid for at the time of use B) The physicians and hospitals are considered to be the producers C) Most of the organizations are voluntary and not-for-profit D) Benefits are paid to the hospitals and physicians, not the insureds
A) Services are paid for at the time of use
A person steps off a street car and trips and breaks his ankle. This type of injury can be described as A) Sudden and unforeseen B) A recurrent injury C) Intentional D) Not covered
A) Sudden and unforeseen
Which of the following would an accident-only policy NOT cover? A) Surgery to repair a wrist damaged by tendonitis B) Hospitalization costs due to a boating accident C) Death from a motorcycle accident D) Amputation of a leg that was burned during a house fire
A) Surgery to repair a wrist damaged by tendonitis
Which of the following is NOT a feature of a noncancelable policy? A) The insurer may terminate the contract only at renewal for certain conditions B) The premiums cannot be increased beyond the amount stated in the policy C) The guarantee to renew coverage usually applies until the insured reaches certain age D) The insured has the right to renew the policy for the life of the contract
A) The insurer may terminate the contract only at renewal for certain conditions
The gatekeeper of an HMO helps to A) Determine which doctors can participate in an HMO plan B) Control specialist costs C) Determine who will be allowed to enroll in an HMO program D) Prevent double-coverage
B) Control specialist costs
A health insurance policy that pays a lump sum if the insured suffers a heart attack or stroke is known as A) Medical expense B) Critical illness C) Major medical D) AD&D
B) Critical illness
A waiver of premium provision may be included with which kind of health insurance policy? A) Dread disease B) Disability income C) Basic medical D) Hospital indemnity
B) Disability income
In group insurance, what is the policy called? A) Certificate of insurance B) Master policy C) Entire contract D) Certificate of authority
B) Master policy
Which of the following statements is true regarding coinsurance? A) The smaller the percentage is paid by the insured, the more consistent the required premium will be B) The larger the percentage that is paid by the insured, the lower the required premium will be C) The larger the percentage that is paid by the insured, the higher the required premium will be D) The smaller the percentage that is paid by the insured, the lower the required premium will be
B) The larger the percentage that is paid by the insured, the lower the required premium will be
All of the following are true regarding copayments, EXCEPT A) The insured pays a specific amount for a claim, regardless of the actual cost of the service B) They are expressed as a percentage of the cost C) They are typically due at the time of receiving service D) They are arrangements between the insured and insurer
B) They are expressed as a percentage of the cost
When an insurer issues an individual health insurance policy that is guaranteed renewable, the insurer agrees A) To renew the policy indefinitely B) To renew the policy until the insured has reached age 65 C) To charge a lower premium every year the policy is renewed D) Not to change the premium rate for any reason
B) To renew the policy until the insured has reached age 65
In a group health policy, a probationary is intended for people who A) Have additional coverage through a spouse B) Want lower premiums C) Join the group after the effective date D) Have a pre-existing condition at the time they join the group
C) Join the group after the effective date
Ray has an individual major medical policy that requires a coinsurance payment. Ray very rarely visits his physician and would prefer to pay the lowest premium possible. Which coinsurance arrangement would be best for Ray? A) 75/25 B) 80/20 C) 90/10 D) 50/50
D) 50/50
What document describes an insured's medical history, including diagnoses and treatments? A) Physician's review B) Individual medical summary C) Comprehensive medical history D) Attending physician's statement
D) Attending physician's statement
When is the insurability conditional receipt given? A) After the application has been approved and the premium has been paid B) When an insured individual needs to obtain an insurability receipt for tax purposes C) If the application is approved before the minimum is paid D) When the premium is paid at the time of application
D) When the premium is paid at the time of application
A hospital indemnity policy will pay A) A benefit for each day the insured is in a hospital B) Income lost while the insured is in the hospital C) All expenses incurred by the stay in the hospital D) Any expenses incurred by the stay in the hospital, minus coinsurance payments and deductibles
A) A benefit for each day the insured is in a hospital
In underwriting a substandard risk, which of the following is INCORRECT? A) A discounted premium would be charged B) The policy could be modified in the coverage or amount of coverage requested C) The applicant could be rejected for coverage D) Additional exclusions could be included to modify the underlying policy
A) A discounted premium would be charged
The insured's health policy only pays for medical costs related to accidents. Which of the following types of policies does the insured have? A) Accident-only B) Restrictive C) Accidental Death D) Comprehensive
A) Accident-only
What is the term used for an applicant's written request to an insurer for the company to issue a contract, based on the information provided? A) Application B) Policy Request C) Insurance Request Form D) Request for Insurance
A) Application
Which of the following is true regarding a term health policy? A) It is nonrenewable B) It is conditionally renewable C) It is guaranteed renewable D) It is noncancellable
A) It is nonrenewable
One of HMO's distinguishing features is that it A) Provides for both medical services and the method of financing of medical services B) Allows free selection of doctors but not hospitals C) Pays benefits directly to the providers D) Imposes no limit on the total cost of medical benefits
A) Provides for both medical services and the method of financing of medical services
An insured has endured multiple surgeries and hospitalizations for an illness during the summer months. Her insurer no longer bills her for medical expenses. What term best describes the condition she has met? A) Stop-loss limit B) Out-of-pocket limit C) Maximum threshold D) Maximum loss
A) Stop-loss limit
Insured Z's health insurance policy begins in January. His policy contains a carry-over provision. In November, he has a small claim which is less than his deductible. Which of the following is true? A) The insured may carry over the amount of this year's expenses to next year, which will help satisfy next year's deductible B) The deductible will be waived C) The insured is now eligible for an integrated deductible until the new policy year D) The insured must satisfy this year's deductible, but next year's deductible will begin when or if he makes a claim in the following calendar year
A) The insured may carry over the amount of this year's expenses to next year, which will help satisfy next year's deductible
Which of the following is NOT a feature of a guaranteed renewable provision? A) The insurer can increase the policy on an individual basis B) The insured has a unilateral right to renew the policy for the life of the contract C) Coverage is not renewable beyond the insured's age 65 D) The insured's benefits cannot be reduced
A) The insurer can increase the policy on an individual basis
In which of the following situations is it illegal for an insurer to disclose privileged information about an insured? A) An auditor for auditing purposes B) A researcher for marketing purposes C) The Department of Insurance to assess legal compliance D) Law enforcement authorities for law-oriented purposes
B) A researcher for marketing purposes
A deductible is A) A nominal fee for the use of an insurer's services B) A specified dollar amount that the insured must pay first before the insurance company will pay the policy benefits C) A percentage of the medical bill the insured must pay before services will be rendered D) An insurer's obligation to the service provider
B) A specified dollar amount that the insured must pay first before the insurance company will pay the policy benefits
The agent is known as the "Field Underwriter" because of the information he/she gathers for the insurer. This helps the insurer A) Reduce the number of staff underwriters B) Avoid adverse selection C) Comply with State law D) Learn about the underwriting process
B) Avoid adverse selection
The provision that provides for the sharing of expenses between the insured and the insurance company is A) Divided cost B) Coinsurance C) Stop-loss D) Deductible
B) Coinsurance
What is the contract provision that allows the insurer to nonrenew health coverage if certain events occur? A) Guaranteed renewable B) Conditionally renewable C) Optionally renewable D) Noncancellable
B) Conditionally renewable
What type of group rating do the Blue Cross and Blue Shield organizations use as a factor in developing the rates to be charged? A) Individual rating B) Experience rating C) District rating D) Community rating
B) Experience rating
Which of the following expenses is NOT covered by a health insurance policy? A) Dental B) Funeral C) Hospital D) Disability
B) Funeral
What is one way in which HMOs are different from traditional health insurance policies? A) there is no real difference between HMOs and traditional health insurance policies B) HMOs encourage preventative care C) Traditional policies encourage preventative care D) HMOs only cover an illness after it has manifested
B) HMOs encourage preventative care
In an optionally renewable policy, the insurer has which of the following options? A) Shorten the notice that the insured receives B) Increase premiums C) Increase the grace period D) Alter the due date so the policy can be cancelled sooner
B) Increase premiums
Which of the following is true concerning an Exclusive Provider Organization (EPO)? A) EPO members choose health care providers B) It has a very limited number of providers C) It's a type of HMO D) Provider's are EPO salaried employees
B) It has a very limited number of providers
A woman's health insurance policy dictates which doctors she is allowed to see. Her health providers share an assumed risk for their patients and encourage preventative care. What best describes the health system that the woman is using? A) Group health B) Managed care C) Comprehensive health D) Major medical
B) Managed care
Which of the following information regarding an insured is NOT included in an Investigative Consumer Report, which is requested by an underwriter? A) General reputation B) Medical history C) Applicant's character D) Personal habits
B) Medical history
Which renewal option does NOT guarantee renewal and allows the insurance company to refuse renewal of a policy at any premium due date? A) Noncancellable B) Optionally renewable C) Conditionally renewable D) Guaranteed renewable
B) Optionally renewable
Under which of the following organizations are the participating providers compensated on a fee-for-service basis? A) Open panel B) PPO C) HMO D) Blue Cross/ Blue Shield
B) PPO
Which of the following is the most common time for errors and omissions to occur on the part of an insurer? A) Application process B) Policy delivery C) Policy renewal D) Underwriting
B) Policy delivery
Which of the following do the Standard and Preferred risk categories share? A) Permanent coverage B) Premiums are not elevated C) More medical evaluations are required D) Possible modifications to include expanded coverage
B) Premiums are not elevated
Which of the following answers does NOT describe the principal goal of a Preferred Provider Organization? A) Provide medical services at a reduced cost B) Provide medical services only from physicians in the network C) Provide the subscriber a choice of physicians D) Provide the subscriber a choice of hospitals
B) Provide medical services only from physicians in the network
Insurers may change which of the following on a guaranteed renewable health insurance policy? A) No charges are permitted B) Rates by class C) Coverage D) Individual rates
B) Rates by class
What is the purpose of coinsurance provisions? A) To share liability among different insurance companies B) To help the insurance company to prevent overutilization of the policy C) To have the insured pay premiums to more than one company D) To ensure payments to the doctors and hospitals
B) To help the insurance company to prevent overutilization of the policy
All of the following are true regarding the Medical Information Bureau (MIB) EXCEPT A) MIB reports contain previous insurance information B) Insurer may not refuse to accept an application solely due to information in an MIB report C) MIB reports are based upon information supplied by doctors and hospitals D) MIB information is reported to underwriters in coded form
C) MIB reports are based upon information supplied by doctors and hospitals
An insurance company wants to obtain the insurance history of an applicant. Which source releases coded information to insurers regarding information included on previous insurance applications? A) Integrated insurer's support B) Federal bureau of investigation C) Medical information bureau D) Insurer's protection guild
C) Medical information bureau
Which renewability provision are you most likely to see on a travel accident policy? A) Optionally renewable B) Conditionally renewable C) Period of time D) Noncancellable
C) Period of time
Though the purpose of health insurance, as with all insurance, is to "indemnify" or restore the client to his/her pre-loss condition, there is a possibility that the insured will not be paid back the entire amount of the health-care expense. This occurs if the amount of the loss exceeds what? A) State statutory limits B) A stated percentage of the insurer's return on investment C) Policy limits D) The insurer's stop-loss
C) Policy limits
Which of the following is NOT a ratings classification that denotes the level of risk associated with a given insured? A) Preferred B) Standard C) Poor D) Substandard
C) Poor
An applicant for health insurance has not had a medical claim in 5 years. He exercises daily and does not smoke or drink. What classification do you assume the applicant would receive from his insurer? A) Standard B) Superior C) Preferred D) Low-risk
C) Preferred
When health care insurers negotiate with health care providers or physicians to provide health care services for subscribers at a favorable cost, it is called A) Indemnity plans B) Point of Service Plans (POS) C) Preferred Provider Organization (PPO) D) Managed care
C) Preferred Provider Organization (PPO)
Health insurance underwriting is best defined as A) Issuance of policies B) Reporting and rejection of risks C) Selection, classification, and rating of risks D) Transacting of insurance
C) Selection, classification, and rating of risks
Blue Cross and Blue Shield organizations are A) Liability organizations B) Preferred Provider Organizations (PPOs) C) Service organizations D) Health maintenance organizations (HMOs)
C) Service organizations
Which of the following is an example of a peril covered in an accident and health insurance policy? A) Smoking B) Death C) Sickness D) Alcoholism
C) Sickness
What is the best way to change an application? A) White-out the previous owner B) Draw a line through the incorrect answer and insert the correct one C) Start over with a fresh application D) Erase the previous answer and replace it with the new answer
C) Start over with a fresh application
Which of the following terms describes the specified dollar amount beyond which the insured no longer participates in the sharing of expenses? A) First-dollar coverage B) Corridor deductible C) Stop-loss limit D) Out-of pocket limit
C) Stop-loss limit
Which of the following is true about the requirements regarding HIV exams? A) Prior informed oral consent is required from the applicant B) HIV exams may not be used as a basis for underwriting C) The applicant must give prior informed written consent D) Results may be disclosed to the agent and the underwriter
C) The applicant must give prior informed written consent
Which is NOT true regarding an insured who is considered to be a standard risk? A) The insured's level of health is representative of others in the same age cohort B) Special restrictions on the policy are not necessary C) The insured may have to pay slightly higher premiums D) The insured's lifestyle is incorporated into this risk judgement
C) The insured may have tp pay slightly higher premiums
Which of the following is true regarding elimination periods and the cost of coverage? A) The longer the elimination period, the higher the cost of coverage B) Elimination periods have no effect on the cost of coverage C) The longer the elimination period, the lower the cost of coverage D) The shorter the elimination period, the lower the cost of coverage
C) The longer the elimination period, the lower the cost of coverage
Which of the following is true regarding METs? A) They provide insurance for larger corporations B) They provide insurance companies with medical information on applicants C) They allow several small employers purchase less expensive insurance together D) They make deals with local hospitals to provide low cost coverage to the needy
C) They allow several small employers purchase less expensive insurance together
Which characteristic does NOT describe managed care? A) Shared risk B) Preventative care C) Unlimited access to providers D) High-quality care
C) Unlimited access to providers
Manny has been injured in an accident. Although she is still receiving benefits from her policy, she does not have to pay premiums. Her policy includes A) Benefit of Payment clause B) Waiver of Benefit rider C) Waiver of Premium rider D) Return of Premium Rider
C) Waiver of Premium rider
A hospital indemnity will pay A) Income lost while the insured is in the hospital B) All expenses incurred by the stay In the hospital C) Any expenses incurred by the stay in the hospital, minus the coinsurance payments and deductibles D) A benefit for each day the insured is in a hospital
D) A benefit for each day the insured is in a hospital
Which of the following best describes the waiting period? A) Period of time the insurer has to wait for a claim to be submitted B) A period of time during which a policy can be returned to the insurer for a complete refund of the premium C) A period of time that needs to lapse before coverage for specified conditions goes into effect D) A period of time the insured has to wait before payments of benefits begin after a disability
D) A period of time the insured has to wait before payments of benefits begin after a disability
Which of the following are characteristics of a successful self-funded plan? A) A group large enough to reasonably predict future loss experience B) A stop-loss contract to assume losses beyond the insured's retention C) A third party administrator who services claims D) All of the above
D) All of the above
If an applicant for a health insurance policy is found to be a substandard risk, the insurance company Is most likely to A) Require a yearly medical examination B) Lower is insurability standards C) Refuse to issue the policy D) Charge an extra premium
D) Charge an extra premium
Concerning AIDS and HIV risks, all of the following acts may subject an insurer to liability claims or fines EXCEPT A) Not providing counseling contacts and educational information about HIV and AIDS B) Disclosing test results to third party without applicant's consent C) Requiring applicant to pay for HIV test in order to be underwritten D) Declining applicant for a positive HIV test result
D) Declining applicant for a positive HIV test result
A policy which covers medical costs related to a specific condition is called a A) Condition-specific policy B) Specific condition policy C) Limited coverage policy D) Dread disease policy
D) Dread disease policy
Because of the history of cancer in her family, Julie purchased a policy that specifically covers the expense of treating cancer. Her policy would be classified as what type of policy? A) Family history cancer policy B) Specified health policy C) Term health policy D) Dread disease policy
D) Dread disease policy
Which of the following plans offers a limited choice of health care providers? A) Indemnity plans B) HMO C) Dual choice plans D) EPO
D) EPO
An insured is hospitalized with a back injury. Upon checking his disability income policy, he learns that he will not be eligible for benefits for at least 30 days. This indicates that his policy is written with a 30-day A) Blackout period B) Probationary period C) Waiver of benefits period D) Elimination period
D) Elimination period
The insurance policy, together with the policy application and any added riders for what is known as A) Certificate of coverage B) Contract of adhesion C) Whole life policy D) Entire contract
D) Entire contract
Health coverage becomes effective when the A) Producer delivers the policy to the insured B) Medical examination has been completed and the premium paid C) First premium has been received in the insurance company's home office D) First premium has been paid and the application has been approved
D) First premium has been paid and the application has been approved
Which of the following is another name for a primary care physician in an HMO? A) Screener B) Tracking physician C) Router D) Gatekeeper
D) Gatekeeper
In which of the following cases would be a credit disability policy be issued? A) If a person receives disability benefits, he or she is eligible for credits on their group policies for future disabilities B) A person receiving disability benefits cannot receive a credit disability policy C) If an insured has filed bankruptcy and his premiums are waived, he can be issued a credit disability policy D) If an individual is in debt to a specific creditor, payments will be made for him/her until the return of work
D) If an individual is in debt to a specific creditor, payments will be made for him/her until the return of work
Upon the submission of a death claim under a life insurance policy, when should the insurer pay the policy benefit? A) On the next anniversary of the policy B) After the estate of the insured has been settled C) Within 2 years of the date of loss D) Immediately after receiving written proof of loss
D) Immediately after receiving written proof of loss
Who must pay for the cost of a medical examination in the process of underwriting? A) Applicant B) Underwriters C) Department of Insurance D) Insurer
D) Insurer
In franchise insurance, premiums are usually A) lower than individual policies or group policies B) Higher than individual policies or than group policies C) Higher than individual policies, but lower than group policies D) Lower than individual policies, but higher than group policies
D) Lower than individual policies, but higher than group policies
Which of the following terms most precisely fits the definition of "the incidence or probability of sicknesses or accidents within a given group of people?" A) Mortality B) Loss C) Risk D) Morbidity
D) Morbidity
Who is involved in completing the agent's report? A) The agent and the applicant B) Only the underwriter, if no agent C) Attending physician and the agent D) Only the agent
D) Only the agent
An HMO is regarded as an organized system of health care that provides a comprehensive array of medical services on a A) Closed-panel basis B) Per person basis C) Limited basis D) Prepaid basis
D) Prepaid basis
Regarding health insurance premiums, all of the following statements are true EXCEPT A) Rate policies can be issued by standard insurers B) Preferred risks may be given a discounted rate for being a non-smoker or a non-drinker C) Standard risks pay the regular premium for their classification D) Substandard risks are not insurable and are always rejected
D) Substandard risks are not insurable and are always rejected
An employee becomes insured under a PPO plan provided by his employer. If the insured decides to go to a physician who is not a PPO provider, which of the following will happen? A) The PPO will not pay any benefits at all B) The insured will be required to pay a higher deductible C) The PPO will pay the same benefits as if the insured had seen a PPO physician D) The PPO will pay reduced benefits
D) The PPO will pay reduced benefits
Which of the following describes the client which will benefit from Extension of Benefits? A) The client who was disabled prior to a policy discontinuance has recovered completely B) The client who was disabled and terminated from his job prior to policy discontinuance C) The client who was disabled within one month after policy discontinuance D) The client who was disabled prior to a policy discontinuance and remains disabled
D) The client who was disabled prior to a policy discontinuance and remains disabled
Bob applies for an insurance policy and, because of his medical history, is required to submit an attending physician's statement. He receives the evaluation, and the report is submitted. The underwriting department still has further questions but is unable to get further information from the physician. What will the insurer most likely do? A) The insurer can take the attending physician for his or her lack of willingness to conduct further examinations B) The insurer is out of options. It must do its best to make a decision based on the information that it currently has C) The insurer can require the insured to visit a different physician at the applicant's expense D) The insurer can require the insured to visit a different physician at the insurer's expense
D) The insurer can require the insured to visit a different physician at the insurer's expense
Which of the following is true regarding health insurance underwriting for a person with HIV? A) A person may be declined for HIV but not AIDS B) The person may be declined C) The person may only be declined if he/she has symptoms D) The person may not be declined for medical coverage solely based on HIV status
D) The person may not be declined for medical coverage solely based on HIV status
Which of the following is NOT true regarding Blue Cross and Blue Shield organizations? A) They are service organizations B) They establish contractual agreements with physicians and hospitals C) They are usually not-for-profit D) They are insurance companies
D) They are insurance companies
Which of the following statements regarding conditional receipts is true? A) They guarantee the insurer will approve the application B) They purchase temporary insurance, up to 6 months C) They become part of the policy D) They are temporary insuring agreements
D) They are temporary insuring agreements