Ch.9

Adam fails to pay his premium for his health insurance policy before the end of the grace period. A couple months later, Adam decides he wants to reinstate his policy. He submits a policy application to the insurance company. Adam does not receive a reply from the insurer. If his application is accepted, when will the policy be reinstated?

45 days after the reinstatement application is submitted to the insurer

According to the cancelation provision for health insurance policies, the insurer has ____ days from the date written notice is delivered to the insured, to cancel a policy.

5

Which of the following terms means a transfer of benefits from the insured to the medical provider?

Assignment

Which of the following terms means the benefits or services eligible for coverage by a health insurance policy?

Eligible Expenses

The ____________ is the period of time from which accident, illness or disability begins, until benefits are paid.

Elimination period

The period of time between the onset of a disability and the time an insured is eligible for benefits is called:

Elimination period

Of the following health insurance provisions, which states that an insurance agent may not waive any provision or make any change in an insurance contract?

Entire contract

The NAIC Uniform Provisions Law applies to:

Individual health insurance policies

To which type of health insurance policies does the NAIC Uniform Provisions Law apply?

Individual health insurance policies

Insurers manage risk through a variety of policy provisions and clauses. Which of the following is NOT used to manage risk?

Insuring clause

Which clause under a health insurance policy describes the limits of coverage and identifies the parties to the contract?

Insuring clause

The policy face of a health insurance contract contains:

Insuring clause, name of the insured, insurer and a summary of the policy coverage

What happens to Jacob's policy if he does not pay the premium by the end of the grace period?

Jacob's policy will lapse.

All of the following are mandatory provisions for health and accident policies, EXCEPT:

Misstatement of age

When periodic claim payments are required under a long-term disability income policy, an insurer must make payments to an insured at least once every:

Month

Before paying a claim, an insurance company asks an insured to have a medical examination, at its expense. The insured:

Must comply with the request because the physical examination and autopsy clause requires it

Which of the following best describes the entire contract-changes provision?

Only an executive officer of the insurer may make changes to an insurance contract.

While investigating a current claim, an insurance company learns the insured claimant had not included their full medical history on the application and that the current claim results from a condition that was probably pre-existing 4 years ago, when the application was approved. The company will:

Pay the claim

Which of the following provisions designates the person to whom claim payments are to be made?

Payment of claims

A waiver of premium provision in a disability income policy:

Permits the insured to maintain a policy in force while disabled and unable to pay premiums

All of the following are optional provisions under the NAIC Uniform Provisions Law, EXCEPT:

Physical examination and autopsy

For health insurance policies, the consideration clause is contained in the:

Policy face

For health insurance policies, the insuring clause is contained in the:

Policy face

Which part of an accident and health insurance policy contains the renewability provision?

Policy face

"Conditions for which prior medical advice or treatment was received" refers to which of the following?

Pre-existing conditions

Which of the following terms best describes conditions for which prior medical advice or treatment was received?

Pre-existing conditions

The period of time between an employee's coming to work at a firm that offers group health insurance to its employees and the time when he or she is covered by that insurance is called:

Probation period

Which of the following is a way that insurers manage risk?

Probationary Period

The purpose of a pre-existing condition exclusion on a health insurance policy is to:

Protect against adverse selection

The benefit payment clause for health insurance policies is best described as the:

Provision that describes how and when benefits are paid

All of the following are true regarding recurrent disability, EXCEPT:

Recurrent disability means that the insured has a total disability and returns to work, but can only perform some of the duties they could perform prior to the disability.

An insurer may require all of the following to reinstate a health policy, EXCEPT:

Reinstatement application fee

For individual health insurance policies, an insurer may not request which of the following for a policy reinstatement?

Reinstatement fee

Mary submits a claim for an injury that she incurred while under the influence of non-prescription narcotics. What will her insurer do?

The insurer may deny payment of the claim.

Which of the following answers best describes the Interest on Claims Proceeds provision?

The insurer must pay interest on late claim payments to the insured.

Which of the following best describes the claims forms provision?

The insurer must supply claim forms to the insured within 15 days.

Ken purchases a health insurance policy. A few days later he looks over the policy he applied for and realizes it is not the coverage he intended to purchase. Ken decides to return the policy during the free look period. Three days later while the free look period is still in force, Ken is injured. What will the insurer do?

The insurer will return the initial premium to Ken.

Samuel Johnson pays his health insurance premium quarterly. If he fails to make payment on April 1, when will his grace period expire?

1-May

How long is the free look period in most health insurance policies?

10 days

How long is the grace period for health insurance policies with monthly-due premiums?

10 days

Upon receipt of a notice of claim, the insurer must provide the potential claimant the proper claims form within how many days?

15 days

How soon after a loss must an insured under a health insurance policy provide notice of claim to the insurer?

20 days

Notice of claim must be provided to the insurer within:

20 days of the date of loss

Marilyn Woodson has always paid her health insurance premium quarterly. She recently changed the payment period to weekly. What will the grace period be on the new cycle?

7 days

For individual health insurance policies, how soon must the insured submit proof of loss to the insurer?

90 days

This clause or provision requires the insured to share in the cost of medical care on a percentage basis:

A co-insurance clause

Which of the following statements regarding the elimination period is false?

A policy only has one elimination period.

Under this clause, the insured's health plan might not cover medication unless the insured's physician obtains approval from the health plan to prescribe a specific medication or perform a specific procedure.

A pre-authorization clause

What action will the insurer take if the insured has misstated their age on a health insurance application?

Adjust the benefits accordingly

The insurer discovers that Veronica misstated her age on the health insurance policy application. What will the insurer do?

Adjust the policy benefits

The entire contract includes:

All of the above

Which of the following best describes the purpose of the incontestability provision?

Allows the insurer to contest misrepresentations in the application during the first two policy years

If an individual misstates their age on the application and the company chooses to cover an illness, it will base coverage on the:

Amount of coverage the policy would provide at the individual's true age

A ___________ is the amount owed by the insured for benefits or services received before the insurer will pay benefits.

Deductible

The initial premium payment sent with an application constitutes what part of the insurance contract?

Consideration

Which health insurance provision/clause describes the promises exchanged between the insured and the insurer, as evidenced by premium payments and the insured's statements in the application, and the insurer's promise to pay benefits, as stated in the policy?

Consideration clause

What is the purpose of coinsurance?

Control overutilization of benefits

All of the following are true regarding copayments, EXCEPT:

Copayments are similar to deductibles, typically ranging in amount from $500 to $1,000.

What is the purpose of coinsurance and deductibles?

Cost-sharing

All of the following are provisions that relate to the filing of claims and payment of benefits in health insurance, EXCEPT:

Grace period

How are grace periods established for health insurance policies?

Grace periods are based on the premium payment mode.

Harold has a past due premium of $150 and a pending claim of $375. Which of the following is true?

The insurer may deduct the amount of the past due premium from the claim.

Marcy cancels her health insurance policy during the middle of the policy term. What will the insurer do?

Return a portion of Marcy's unearned premiums on a short rate basis

Adam realizes he purchased the wrong health policy. He decides to return the policy during the free look period. Two days later while the free look period is still in force, Adam is injured while painting his house. What will the insurer do?

Return the initial premium to Adam

All of the following are characteristics of the reinstatement provision for individual health insurance, EXCEPT:

Sicknesses are covered once a policy is reinstated.

The facility of payment clause:

States benefits are payable to an individual who is related to the deceased insured by blood or marriage

The consideration clause in a health insurance policy:

States the promises exchanged between the insured and the insurer

According to the claims form provision in a health insurance policy, what is the insured entitled to do if the insurance company does not send out the claim forms within the specified time period?

Submit the claim on any form, which the insurance company must accept as proof of loss

An insured requests a claim form from their insurer for a covered loss. The health insurer fails to send out claims forms to the insured within the time period required by the claims form provision. Under the claims form provision, the insured should:

Submit the claim using any form, which the insurer is obliged to accept as proof of loss

Which of the following best describes the Reduction in Coverage provision of a health policy?

The Reduction in Coverage Provision sets the terms and conditions under which the amount of coverage can be reduced.

Which of the following best describes coinsurance?

The agreed upon proportion for which the insurer and insured share payment of benefits under coverage

The consideration clause in an accident and health policy states that:

The applicant pays the initial premium

How long is the grace period for individual health insurance coverage paid on a monthly basis?

The correct answer is: 10 days

For how many days must an insured wait after filing a claim with an insurance company before filing a legal suit against the company?

The correct answer is: 60 days

All of the following are false regarding the reinstatement provision for individual health policies, EXCEPT:

The correct answer is: Accidents are covered immediately upon reinstatement, and sicknesses are covered after a 10-day waiting period.

If a company decides to reinstate a policy, when does coverage begin for losses caused by accident?

The correct answer is: Immediately

All of the following are required provisions under the NAIC Uniform Provisions Law, EXCEPT:

The correct answer is: Misstatement of age

The facility of payment clause is typically a part of which provision?

The correct answer is: Payment of Claims provision

The entire contract provision in a health and accident policy includes certain basic parts. These are:

The correct answer is: Policy and endorsements and application

An insured requests a claim form from their insurer for a covered loss. The health insurer fails to send out claims forms to the insured within the time period required by the claims form provision. Under the claims form provision, the insured should:

The correct answer is: Submit the claim using any form, which the insurer is obliged to accept as proof of loss

For individual health insurance policies, who is responsible for paying the cost of autopsy or examination of an insured, according to the physical examination and autopsy provision?

The correct answer is: The insurance company

Under the claim forms provision, what is the insured allowed to do, if the insurer does not provide claim forms within 15 days?

The correct answer is: The insured may submit the written proof of loss on any form or manner to the insurer.

How much time does an insured have after filing a claim with an insurance company in which to file a legal suit against the insurer?

The correct answer is: Three years from the date proof of loss is furnished

"Indemnities payable under this policy for any loss will be paid immediately upon receipt of due written proof of loss." This statement appears in the:

The correct answer is: Time of payment of claims provision

For individual health insurance policies, how soon must the insured/claimant submit proof of loss to the insurance company?

The correct answer is: Within 90 days of the date of loss

All of the following statements are true about the elimination period, EXCEPT:

The elimination period is the time between the effective date of the policy and the date coverage begins.

Eric, an executive assistant, has a disability income policy with the change of occupation provision. Eric quits his office job and becomes a construction worker. What would happen to Eric's policy if he becomes disabled after the job change?

The insurance company would pay the amount of disability income benefits that the premium purchased would have covered for Eric's more hazardous occupation.

According to the Physical Examination and Autopsy provision, who is responsible for paying the cost of examining the insured

The insurer

Which of the following best defines the probationary period in an accident and health insurance policy?

The period of time between the effective date of the policy and the date coverage begins

The probationary period of a health insurance policy begins:

Upon the policy effective date

When does the probationary period of a health insurance policy begin?

Upon the policy effective date

If an insured is approved for a specific medical procedure and is provided with the maximum amount the insurance company will pay for that procedure, it would be reasonable to assume their policy has this payment provision:

Usual, reasonable, and customary charges provision

An insured's disability insurance plan has a recurrent disability provision for six months. If the insured is disabled, this plan will:

Waive the elimination period for a disability claim made within six months of a previous claim

Which health insurance provision provides for continuation of coverage without payment of premiums, if the insured becomes totally and permanently disabled?

Waiver of premium

Fred has purchased a health policy with a waiver of premium provision. When can Fred expect to receive benefits from this provision?

When Fred becomes totally and permanently disabled

For individual health insurance policies, how soon must the insured/claimant provide the insurance company with notice of claim?

Within 20 days of the date of loss

This clause or provision requires the insured to pay a set or fixed dollar amount each time a particular medical service is used:

a co-play clause

If a company decides to reinstate a policy, when does coverage begin for losses caused by sickness?

a. Immediately

For individual health insurance policies, legal action may be taken against the insurer for up to ____ years from the date proof of loss is provided to the insurer.

three