Chapter Exam - Health Underwriting

Which of the following actions will an insurance company most likely NOT take if an applicant, who has diabetes, applies for a disability income policy?

Issue the policy with an altered time of payment of claims provision. ( the insurance company may take all of these actions EXCEPT issue the policy with altered time of payment of claims provision.)

T is receiving $3,000/month from a Disability Income policy in which T's employer had paid the premiums. How are the $3,000 benefit payments taxable?

Benefits are taxable to T. (when a disability income insurance plan is paid for entirely by the employer, the premium are deductible to the employer. the benefits, in turn, are taxable to the recipient.)

Which of the following correctly explains the actions an agent should take if a customer wants to apply for an insurance policy?

Complete the application and review the information with the customer prior to obtaining the customers signature, then send the application off the insurance company.

Information obtained from a phone conversation to the proposed insured can be found in which of these reports?

Inspection report (An inspection report may include information obtained by a telephone called to the proposed insured.)

Pre-hospitalization authorization is considered an example of

Managed care. (pre-hospitalization authorization is the insurer's approval of an insured entering a hospital. May health polices require this as part of an effort to manage costs.)

Agent J takes an application and initial premium from an applicant and sends the application and premium check to the insurance company. The insurance company returns the check back to J because the check is made out to J instead of the insurance company. What action should J take?

Return to the customer, collect a new check made out to the insurance company, and send he new check out to the insurance company

A prepaid application for individual disability income insurance was recently submitted to an insurer. when the insurer received the medical information Bureau (MIB) report, the report showed that the applicant had suffered a stroke 18 months ago, something that was not disclosed on the application. Which of the following actions would the insurance company NOT take?

Send a notice to the MIB that the applicant was declined. (The MIB does not need to be notified that coverage was denied.)

Which mode of payment is NOT used by health insurance policies?

Single Premium (single premium is not used when paying for health insurance policies.)

Which of the following BEST describes how pre-admission certifications are used?

Used to prevent nonessential medical costs. (pre-admission certification is used to prevent unnecessary medical costs)

An agent take an individual disability Income application, collects the appropriate premium, and issues the prospective insured a conditional receipt. The next step the insurance company will take is to :

Determine if the applicant is acceptable risk by completing standard underwriting procedures (With a conditional receipt, the insurance company will complete standard underwriting procedures before making a decision about whether to insure the applicant.)