CH 1 VA State Health and Insurance Exam

What do individuals use to transfer their risk of loss to a larger group? A) Exposure B) Indemnity C) Insurance D) Insurable interest

C) Insurance

Which of the following terms describe the fee a person pays an insurance company to receive coverage? A) Commission B) Benefit C) Premium D) Installment

C) Premium

All of the following factors, which are indentifies on the application, play a vital role in determining the insured's insurability EXCEPT A) Age B) Gender C) Occupation D) Education

D) Education

A prospective insured receives a conditional receipt and dies before the policy is issued. The company will A) Not pay the policy proceeds under any circumstances. B) Automatically pay the policy proceeds C) Pay the policy proceeds only if it would have issued the policy D) Pay the policy proceeds up to an establish limit.

C) Pay the policy proceeds only if it would have issued the policy When a conditional receipt is give, the applicant and the company form what might be call a conditional contract, contingent upon conditions that exist at the time the application is signed, or when the medical exam is completed, if required. Unless the insurer can show a reason why the policy would not have been issued, or would have been in any way different that applied for, the coverage begins when the application was signed, or the date of the medical exam, whichever is later.

An insurer writes a Disclosure Authorization Notice. Before it is distributed to insureds, what must the insurer do? A) Submit the form to the Department of Insurance for approval B) Register the notice with the state government C) Submit to the Insurance Regulation Commission D) Nothing; after the notice is created, it can be distributed to the insured.

A) Submit the form to the Department of Insurance for approval

Which of the following is NOT included on Part I of the application for insurance? A) Applicant's medical background B) Applicant's gender C) Applicant's occupation D) Applicant's marital status

A) Applicant's medical background Part I of the application includes general questions about the applicant, including name, age, adress, birth date, gender, income, marital status, and occupation. The applicant's medical background is addressed in Part II.

Insurance is a contract by which one seeks to protect another from A) Loss B) Exposure C) Uncertainty D) Hazards

A) Loss

What process do insurance companies use to determine whether or not a particular applicant is insurable? A) Underwriting B) Adverse Selection C) Marketing D) Solicitation

A) Underwriting

Part II of the application provides questions regarding all of the following EXCEPT A) Recent surgeries. B) Other insurance coverages C) Family health history D) Alcohol and tobacco consumption

B) Other insurance coverages Part II of the application contains questions regarding the applicants' health history. Part I of the application includes questions regarding current coverage being applied for as well as any other insurance covereage with the same or other insurers.

An individual applied for an insurance policy and paid the initial premium. Fives days later her had to submit to a medical exam, after which the insurer issued a conditional receipt. If the policy is issued, what would be the policy's effective date? A) The date of issue. B) The date of application C) The date of medical exam D) The date of delivery

C) The date of medical exam

If the applicant for a life insurance policy and person to be insured by the policy are two different people, the underwriter would be concerned about A) The type of policy requested B) Which individual will pay the premium C) Whether an insurable interest exists between the individuals D) The gender of the applicant

C) Whether an insurable interest exists between the individuals An insurable interest must exist at the time the policy is issued.

Which of the following is a term for a person who seeks insurance from an insurer? A) Agent B) Insured C) Beneficiary D) Applicant

D) Applicant

What is the special significance of a conditional receipt? A) It guarantees the applicant that a policy will be issued in the amount applied for in the application B) It serves as proof that the agent has determine the applicant to be fully insurable for coverage by the insurance company. C) It is given by the agent only to applicant who fully prepay all scheduled premiums in advance of policy issue. D) It is intended to provide coverage on a date earlier than the date of the issuance of the policy.

D) It is intended to provide coverage on a date earlier than the date of the issuance of the policy. Coverage commences on the date of the application or the date of a medical examination, whichever is later, on the condition that the applicant is determined to be insurable at the rate applied for.

An insurer wants to obtain information from investigators regarding an insured. What must the insurer do in order to legally acquire this information? A) Present the insured with a Disclosure Authorization Notice B) Receive written permission from the Department of Insurance C) Receive a signed statement from the insured which authorizes the investigation D) Sign a waiver that the information will be kept confidential

A) Present the insured with a Disclosure Authorization Notice Before an insurer can obtain information from investigators regarding an insured, it must first present the insured with a Disclosure Authorization Notice. This notice states the insurer's information collection practices and how the information will be used.

If an agent fails to obtain an applicant's signature on the application, the agent must A) Send the application to the insurer with a note explaining the absence of signature B) Return the application to the applicant for a signature C) Sign the application for the applicant D) Sign the application, statis it was by the agent.

B) Return the application to the applicant for a signature