chapter 1 quiz

which of the following wild provide an underwriter with information concerning an applicants health history ? a. medical examination b. the agents report c. the section report d. the medical information bureau

the medical information bureau

which of the following best describes the concept that the insured pays a small amount go premium for a large amount go risk on the part of the insurance company ?

aleatory

representations are written or oral statements made by the applicant that are

considered true to the best of the applicant's knowledge

in insurance, an offer is usually made when ?

an applicant submits an application to the insurer

what document describe an insured's medical history including diagnoses and treatments ?

attending physician's statement

which of the following reports will provide the underwriter with the information about an insurance applicant's credit ?

consumer report

which of the following is not an essential element of an insurance contract ?

counteroffer

which of the following entities can legally bind coverage ?

insurer

what does the federal fair credit reporting act do?

regulates consumer reports

an agent is in the process of replacing the insured's current health insurance policy with a new one. what would be the proper action ?

the old policy should stay in for force until the new policy is issued

If a consumer requests additional information concerning an investigative consumer report, how long does the insurer or reporting agency have to comply?

5 days

what is a material misrepresentation ?

A statement by the applicant that, upon discovery, would affect the underwriting decision of the insurance company

under the privacy rule for HIPPA, protected information includes all individually identifiable health information ?

Held or transmitted in any form

which of the following best describes the MIB ?

It's a nonprofit organization that maintains underwriting information on applicants for life and health insurance.

what is the definition of a unilateral contract ?

One-sided: only one party makes an enforceable promise

what is not the consideration in a policy ?

The application given to a prospective insured

in a replacement situation, all of the following must be considered EXCEPT ? a. limitations b. exclusions c. assets d. benefits

aasets

insurance polices are not drawn up through negations snd am insured has little to say about its provision. what contract characteristic does this describe ?

adhesion

an insured pays a 100 premium every month for his insurance coverage, yet the insurer promises to pay $10,000 for a covered loss. what characteristic of an insurance contract does this describe ?

aleatory

Because an insurance policy is a legal contract, it must conform to the state laws governing contracts which require all of the following elements EXCEPT a. conditions b. consideration c.legal purpose

conditions

An insurer neglects to pay a legitimate claim that is covered under the terms of the policy. Which of the following insurance principles has the insurer violated?

consideration

When an insured makes truthful statements on the application for insurance and pays the required premium, it is known as which of the following?

consideration

whose responsibility is it to determine if all of the questions on an application have been answered ?

the agent

what is true about the requirements regarding HIV exams

the applicant must give prior informed written consent

In comparison to consumer reports, which of the following describes a unique characteristic of investigative consumer reports?

the customer's associates, friends, and neighbors provide the report's data

an insurance contract must contain all of the following to be considered legal binding Except? a. Offer and acceptance b. consideration c. competent parties d. beneficiary's consent

beneficiary's consent

if an insurance company wished to order a consumer report on an applicant to assist in the underwriting process and if a notice of insurance information practices has been provided , the report may contain all of the following information EXCEPT the applicant's ? a. habits b. prior insurance c. ancestry d. credit history

ancestry

an insurance contact requires that both the insured and the insurer Meer certain conditions in order for the contract to be enforceable. what contract characteristic does this describe ?

conditional

what best describes the aleatory nature of an insurance contract?

exchange of unequal values

Who must pay for the cost of a medical examination required in the process of underwriting?

insurer

If only one party to an insurance contract has made a legally enforceable promise, what kind of contract is it?

unilateral

which of the following is a statement that is guaranteed to be true, and if untrue may breach an insurance contract?

warranty

in forming an insurance contract , when does acceptance usually occur ?

when an insurer's underwriter approves coverage

the proposed insured makes the premium payment on a new insurance policy. if the insured should die, the insurer will pay the death benefit to the beneficiary if the policy is approved. this is an example of what kind of contract ?

conditional

a life insurance policy has a legal purpose if both of which of the following elements exist ?

insurable interest and consent

the medical information bureau (MIB) was created to protect ?

insurance companies from adverse selection by high risk persons

what protects consumers against the circulation of inaccurate or obsolete personal or financial information?

the fair credit reporting act

what is true regarding health insurance underwriting for a person with HIV?

the person may not be defined for medical coverage solely based on HIV status

in terms of parties to a contract, what does not describe a competent party ?

the person must have at least completed secondary education

An insured is upset that her new health insurance policy was delivered to her by certified mail and not through her agent. Which of the following is true? A There is nothing wrong with this form of policy delivery. B The insured should complain to the insurer. C The insured should ask for a new policy to be delivered. D The policy will not be legal until it is delivered by an agent.

there is nothing wrong with this form of policy delivery