Chapter 2 quiz: Accident & Health Insurance Provisions

An insured has a primary group health plan and an excess plan, each covering losses up to $10,000. The insured suffered a loss of $15,000. Disregarding any copayments or deductibles, how much will the excess plan pay?

$5,000

What percentage of individually-owned disability income benefits is taxable?

0%

What percentage of individually owned disability income benefits is taxable?

0%

insurance companies are required to provide proof of loss forms to the claimant within how many days after receipt of notice of loss

15

Once the person meets the stringent requirements for disability benefits, how long is the waiting period under Social Security before any benefits will be paid?

5 months

Group health insurance is characterized by all of the following EXCEPT

Adverse selection

A nonpayment of premiums may result in a A. Canceled Policy B. Policy Transfer C. Nonrenewal D. Lapsed Policy

D. Lapsed Policv

All of the following statements concerning Accidental Death and Dismemberment coverage are correct EXCEPT

Death benefits are paid only if death occurs within 24 hours of an accident

Which provision allows the policyholder a period of time, while coverage is in force, to examine a health insurance policy and determine whether or not to keep it

Free look Period

An insured becomes disabled at age 22 and can no longer work. She meets the definition of total disability under Social Security. What other requirement must the insured have met to receive Social Security disability benefits?

Have accumulated 6 work credits in the past 3 years

Who makes up the Medical Information Bureau?

Insurers

The mode of premium payment

Is defined as the frequency and the amount of the premium payment.

Which renewal option does NOT guarantee renewal and allows the insurance company to refuse renewal of a policy at any premium due date?

Optionally renewable

Under a health insurance policy, benefits, other than death benefits, that have not otherwise been assigned, will be paid to

The Insured

Which of the following is NOT a feature of a guaranteed renewable provision

The insurer can increase the policy premium on a n individual basis

which of the following is not a feature of guaranteed renewable provision?

The insurer can increase the policy premium on an individual basis

Which of the following would provide an underwriter with information concerning an applicant's health history

The medical information Bureau

Premiums paid by self-employed sole proprietors or partners for medical expense insurance are

Totally tax deductible

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

Unilateral

An insured owes his insurer a premium payment. Since then, he insurers medical expenses. The insurer deducts the unpaid premium amount from the claim amount and pays the insured the difference what provision allows for this?

Unpaid Premium

An insured owes his insurer a premium payment. Since then, he incurs medical expenses. The insurer deducts the unpaid premium amount from the claim amount and pays the insured the difference. What provision allows for this?

Unpaid premium

what is the maximum period of time during which an insurer may contest fraudulent misstatements made in a health insurance applications

as long as the policy is in force

which of the following describes taxation of individual disability income insurance premiums and benefits

premiums are not tax deductible, and benefits are not taxable

If an insured changes his payment plan from monthly to annually, what happens to the total premium? A. Decreases B. Stays the Same C. Doubles D. Increase

A. Decreases

An insured has medical insurance coverage through 2 different providers, both covering the same expenses on an expense-incurred basis. Neither company knows in advance that the insured has coverage through any other insures. The insured submits a claim to both insurers. How should the claim be handled? A. Each insurer should pay a proportionate share of the claim B. One of the insures will pay fully, while the other will not pay any benefits C. Once the insures discover the duplicate coverage, the policies would most likely be cancelled, and no claim paid D. The insured should receive full benefits from each insurer

A. Each insurer should pay a proportionate share of the claim

In the event of loss, after a notice of claim is submitted to the insurer, who is responsible for providing claims forms and to which party? A. Insurer to the insured B. Insured to the insurer C. Insurer to the Department of insurance D. Insured to the Department of insurance

A. Insurer to the insured

An insured carries health insurance with two different providers and is covered on an expense incurred basis. He has an appendectomy and files the claims to both insurers. Neither company is notified in advance that the insurer has other coverage. What should each insurer pay? A. A proportionate amount B. Only one should pay the full amount C. Nothing. The insured lied about the dual nature of his coverage so the insurers are not responsible for covering the claims D. The full amount

A. Proportionate amount

An insured notifies the insurance company that he has become disabled. What provision states that claims must be paid immediately upon written proof of loss? A. Time of payment of claims B. Incontestability C. Physical Exam and Autopsy D. Legal Actions

A. Time of Payment of Claims

Which of the following provisions specifies the policyowner's right to transfer the policy's ownership?

Assignment

When Linda suffered a broken hip, she notified her agent, in writing, within 12 days of the loss. However, her agent did not notify the insurance company until 60 days after the loss. Which of the following statements correctly explains how this claim would be handled?

B) The insured is considered to be notified since the notification to agent equals notification to the insurer

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

Which of the following entitles has the authority to make changes to an insurance policy? A. Producer B. Insurer's executive officer C. Department of Insurance D. Broker

B. Insurer's executive officer

Which of the following provisions would prevent an insurance from paying a reimbursement claim to someone other than the policyowner? A. Proof of loss B. Payment of Claims C. Change of beneficiary D. Entire Contract Clause

B. Payment of Claims

Which of the following does the insuring clause NOT specify? A. The insurance company B. The named of the insured C. A list of available doctors D. Covered perils

C. A list of available doctors

Which of the following NOT a feature of a noncancelable policy? A. The guarantee to renew coverage usually applies until the insured reaches certain age B. The Insured has the right to renew the policy for the life of the contract C. The insurer may terminate the contract only at renewal for certain conditions D. The premiums cannot be increased beyond the amount stated in the policy

C. The insurer may terminate the contract only at renewal for certain conditions

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

In the event of a divorce, which of the following would allow a divorcee to continue receiving group health coverage under an insured spouse's plan for an additional 36 months?

COBRA

The relations of earnings too insurance provision allows the insurance company to limit the insured's benefits to his/her average income over the last A. 6 months B. 12 months C. 18 months D. 24 months

D. 24 months

Which of the following statements is true concerning the alteration of optional policy provisions? A. An Insurer may change the wording of optional provisions. regardless of its affect the policyholder B. An insurer may change the wording of optional policy provisions that would adversely affect the policyholder C. Once any kind of provision is written, it cannot be changed D. An insurer may change the wording of optional provisions, as long as the change does not adversely affect the policyholder.

D. An insurer may change the wording of optional provisions, as long as the change does not adversely affect the policyholder.

Which of the following provisions required that any policy language that is in conflict with the state statutes of the state in which the insured resides in automatically amended to conform with those of the state of residence? A. Incontestability B. Insurance with Other Insurers C. Legal actions D. Conformity with state statutes

D. Conformity With State Statutes

The provision in a health insurance policy that ensures that the insurer cannot refer to any document that is not contained in the contract is the

Entire contract clause

A health insurance policy lapses but is reinstated within an acceptable timeframe. How soon from the reinstatement date will coverage for accidents become effective?

Immediately

Which of the following best describes the MIB

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

An insured stated on her application for life insurance that she had never had a heart attack, when in fact she had a series of minor heart attacks last year for which she sought medical attention. Which of the following will explain the reason a death benefit claim is denied?

Material misrepresentation

An applicant for a health insurance policy returns a completed application to her agent along with a check for the first premium. she receives a conditional receipt two weeks later. Which of the following has the insurer done by this point

Neither approved the application nor issued the policy

An agent is completing an application of insurance for a client. The agent is required to provide the client a "notice of information practices" at ll of the following times EXCEPT

No notice is ever required at the initial completion of the application

The coverage provided by a disability income policy that does not pay benefits for losses occurring as the result of the insured's employment is called

Nonoccupational coverage

When an individual is covered under two health policies that have duplicate benefits which could make a claim for benefits because of an injury or illness profitable, it is called

Over insurance

Rose bought three policies from the same insurer. Her benefits have exceeded the maximum allowed by the insurer. Which of the following will happen?

Pro-rata benefit reduction

In respect to the consideration clause, which of the following is consideration on the part of the insurer?

Promising to pay in accordance with the contract terms

which is true regarding the Uniform Individual Accident and Sickness Policy Provisions Law?

Provisions may be reworded by the insurer

Todd has been informed that he has a hernia which requires repair. When Todd researches the cost, he learns that his insurance plan will cover 200 points worth of surgical expenses. Each point represents $10, which means that $2000 of his surgery will be covered by his insurance plan. What system is Todd's insurance company using?

Relative value

How soon following the occurrence of a covered loss must an insured submit written proof of such loss to the insurance company

Within 90 days or as soon as reasonably possible, but not to exceed 1 year

Premium paid by self employed sole proprietors or partners for medical expense insurance are

totally tax deductible