CH5 VA State and Health Exam

Who must pay for the cost of a medical examination required in the process of underwriting? A) Insurer B) Applicant C) Underwriters D) Department of Insurance

A) Insurer

Underwriting is a major consideration when an insured wishes to replace her current policy for all of the following reasons EXCEPT A) Premiums always stay the same B) Due to age or health, the policy may change dramatically C) Pre-existing conditions that were previously covered may not be covered under the replacing policy D) Benefits may change

A) Premiums always stay the same

Which of the following would provide an underwriter with information concerning an applicant's health history/ A) The Medical Information Bureau B) A medical examination C) The agent's report D) The inspection report

A) The Medical Information Bureau

An insurer is attempting to determine the insurability of an applicant and decides to obtain medical information from several different sources. Which entity must be notified of the investigation? A) The applicant B) The Commissioner of Insurance C) The medical examiner D) The State Department of Insurance

A) The applicant

Under what conditions would a contract between an insurer and prospective insured be legal? A) The applicant has been convicted of a felony B) The applicant is drunk at the time of application C) The applicant is a 12-year-old student D) The applicant is high on methamphetamine's at the time of application.

A) The applicant has been convicted of a felony

Insurable interest can be best described by which of the following? A) The applicant must experience a financial loss due to an accident or sickness that befalls the insured. B) The insured must be genuinely interest in the life of the applicant C) All beneficiaries need to have notification of their status. D) It is not necessary for the insured to be aware of the insurable interest or give permission for the insurance that is to be written

A) The applicant must experience a financial loss due to an accident or sickness that befalls the insured.

When an insured makes truthful statements on the application for insurance and pays the required premium, it is known as which of the following? A) Acceptance B) Consideration C) Legal purpose D) Contract of adhesion

B) Consideration

Which of the following entities can legally bind coverage? A) Agent B) Insurer C) The insured D) Federal Insurance Board

B) Insurer

Who makes up the Medical Information Bureau? A) Doctors B) Insurers C) Hospitals D) Consumers

B) Insurers

Before a customer's agent delivers his policy, the insurer makes a last-minute change to the policy. The agent inform the customer of this change, and he accepts it. What must the agent do now? A) If the change would affect the premium, the agent must have the customer sign a statement acknowledging the change B) The agent should ask the customer to sign a statement acknowledging that he is aware of the change C) Nothing. After the explanation, the agent is not legally bound to do anything else D) The agent must notify the beneficiary of the change in policy

B) The agent should ask the customer to sign a statement acknowledging that he is aware of the change

An agent is in the process of replacing the insured's current health insurance policy with a new one. Which of the following would a proper action? A) The old policy must be cancelled before the new one can be issued B) The old policy should stay in force until the new policy is issued C) There should be at least a 10-day gap between the policies D) Policies must overlap to cover pre-existing conditions

B) The old policy should stay in force until the new policy is issued

An agenst makes a mistake on the application and then correct his mistake by physically entering the necessary information. Who must then initial that change? A) Insured B) Agent C) Applicant D) Executive officer of the company

C) Applicant

What is a definition of a unilateral contract? A) One author,; the company wrote it, they are stuck with it B) If one party makes a condition, the other party can counter-offer. C) One-sided; only one party makes an enforceable promise D) Two or more parties go into a contract understanding there may be an unequal exchange of value

C) One-sided; only one party makes an enforceable promise

If an applicant does not receive his or her policy, who would be held responsible? A) The insurer B) The applicant C) The agent D) The state

C) The agent

Which is true regarding obtaining underwriting sources? A) The insurer only needs to inform the applicant of how the information is being gathered; it is not necessary to disclose the sources B) It is illegal to obtain information from outside sources in order to determine an applicants insurability C) The applicant must be informed of the sources contacted and how the information is being gathered D) The insurer does not need to inform the applicant of how the information is gathered; informing only of the source is sufficient

C) The applicant must be informed of the sources contacted and how the information is being gathered

In forming an insurance contract, when does acceptance usually occur? A) When an insurer receives and application B) When an insurer accepts an application C) When an insurer approves a prepaid application D) When an insured receives the policy

C) When an insurer approves a prepaid application

Mr. R. purchases a health insurance policy for his daughter, who recently graduated from college. The daughter receives the required medical examination, and the insurance application. Who needs to sign the application? A.) The daughter since she is the proposed insured B.) Both Mr. R. and his daughter C.) The agent, Mr. R and his daughter D.) Mr. R. since he is purchasing the policy

C.) The agent, Mr. R and his daughter Mr. R. is the applicant, and his daughter is the proposed insured. Whenever the proposed insured is different from the applicant, both parties need to sign the application. The agent must also sign the contract.

In a replacement situation, all of the following must be considered EXCEPT A) benefits B) Limitations C) Exclusions D) Assets

D) Assets

An underwriter must review an applicant with an extensive medical history. Which document would give the underwriter a better understanding of how the insured was treated for various illnesses? A) Physician's Review B) Individual Medical Summary C) Comprehensive Medical History D) Attending Physician's Statement

D) Attending Physician's Statement

Which of the following best describes the MIB? A) Its a governmental agency that collects medical information on the insured from the insurance companies B) Its a member organization that protects insured against insolvent insurers C) Its a rating organization for health insurance. D) Its a nonprofit organization that maintains underwriting information on applicants for life an health insurance

D) Its a nonprofit organization that maintains underwriting information on applicants for life an health insurance

When a client is considering replacing existing health insurance, all of the following would be areas of concern eXCEPT A) Time limit on certain defenses B) Pre-existing conditions C) Waviers for impairments D) Reciprocity

D) Reciprocity

Which of the following is true regarding underwriting for a person with HIV? A.) The person may only be declined if he/she has symptoms. B.) The person may not be declined. C.) A person may be declined for HIV but not AIDS. D.) The person may be declined.

D.) The person may be declined.

What are the members of the Medical Information Burea required to report? A) Adverse medical information about individuals B) Any claims an individual has made C) Information about unpaid hospital bills D) Information about an individual's intentional injuries

A) Adverse medical information about individuals

An insurance contract must contain all of the following to be considered legally binding EXCEPT A) Beneficiary's consent B) Offer and acceptance C) Consideration D) Competent parties

A) Beneficiary's consent

A life insurance policy has a legal purpose if there are both A) Insurable interest and consent B) Beneficial interest and consent C) Underwriting interest and consent D) Actuarial interest and consent

A) Insurable interest and consent

The Medical Information Bureau, which is support by insurance companies, was designed to protect A) Insurance companies from adverse selection by high risk person. B) Insurance departments from suits by policyowners C) Insureds from unreasonable underwriting requirements by the insurance companies D) Medical examiners that perform insurance physical examniations

A) Insurance companies from adverse selection by high risk person.

What document 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 An Attending Physician's Statement (APS) is the best way for an underwriter to evaluate an insured's medical history. The report includes past diagnoses, treatments, length of recovery time, and prognoses.

When delivering a policy, which of the following is an agent's responsibility? A) Collect medical statement from physician B) Collect payment at time of delivery (if payment has not already been collected) C) Issue the policy if the applicant is present D) Approve or decline the risk

B) Collect payment at time of delivery (if payment has not already been collected)

An insurer neglects to pay a legitimate claim that is covered under the terms of the policy. Which of the following terms best describes what the insurer has violated? A.) Representation B.) Adhesion C.) Consideration D.) Good Faith

C.) Consideration The binding force in any contract is called "consideration". Consideration on the part of the insured is the payment of premiums and the health representations made in the application. Consideration on the part of the insurer is the promise to pay in the event of loss.