Life and Health - Chapter 11 Quiz

Louise purchased a disability policy when her salary was $4,000 a month. Later, she lost that job and her salary was reduced to $2,000 a month. Three years ago, she became self-employed and now receives $3,500 a month. The maximum disability benefit she might expect will be based on which salary amount? The weighted average of her income levels over the life of the contract $3,500 $2,000 $4,000

$3,500 Relations of Earnings to Insurance (an Optional Uniform Provision) establishes that disability benefits may not exceed the monthly earnings of an insured at the time the disability commenced, or his/her average earnings for the 2 years immediately preceding the disability, whichever is greater. Relevant content:11.2 Optional Uniform Provisions

An insured should receive necessary claim forms within _____ days after notice of claim. 5 15 20 10

15 According to the Claim Forms Provision (a Mandatory Uniform Provision), the insured should receive the necessary claim forms within 15 days after notice of claim. Relevant content:11.1 Mandatory Uniform Provisions

The Legal Actions provision preserves the insured's right to bring suit against his/her own insurer, but the insured must wait at least _____ days after filing a proof of loss before pursuing this action. 45 60 90 30

60 The insured must wait at least 60 days following the filing of a proof of loss before pursuing any legal action against the insurer. Relevant content:11.1 Mandatory Uniform Provisions

Which of the following is the correct number of days in the grace period for each premium mode? 10 days for weekly, 15 for all others 10 days for weekly, 15 days for monthly, 31 for all others 7 days for weekly, 10 days for monthly, 31 for all others 7 days for weekly, 10 days for monthly, 28 for all others

7 days for weekly, 10 days for monthly, 31 for all others According to the Grace Period Provision (a Mandatory Uniform Provision), this is the correct response. Relevant content:11.1 Mandatory Uniform Provisions

If an insurer cancels a contract, written notice must be provided to the insured within a certain period of time. This is a requirement under which of the following provisions? Cancellation Entire Contract Legal Actions Conformity with State Statutes

Cancellation Cancellation (an Optional Uniform Provision) establishes that the insurer may cancel a policy with written notice to the insured of between 5 and 31 days, depending on the policy. Relevant content:11.2 Optional Uniform Provisions

Precertification, Mandatory Second Surgical Opinion, and Concurrent Review are provisions in health insurance policies known as: Case Management Provisions Extra-Legal Actions Provisions Miscellaneous Provisions Oversight Provisions

Case Management Provisions They are included as Case Management Provisions or sometimes referred to as Cost Containment Provisions. Relevant content:11.5 Cost Containment in Health Care Delivery

Optional Uniform Provisions are included in the contract at the _______ option. Insured's Insurer's Beneficiary's Commissioner's

Insurer's The Optional Uniform Provisions are included at the insurer's option. However, if used, they must conform to that state's insurance code. Relevant content:11.2 Optional Uniform Provisions

One of your clients just reinstated an Accident and Health policy. When is coverage effective for sickness and accident? Immediately for both accident and sickness In 30 days for sickness, immediate coverage for accidents In 10 days for sickness and immediately for accidental injuries In 10 days for accident and in 48 hours for sickness

In 10 days for sickness and immediately for accidental injuries Upon reinstatement, accidents are covered immediately, and sickness is covered after 10 days. Relevant content:11.1 Mandatory Uniform Provisions

Mandatory uniform provisions found in health insurance policies are designed to protect the: Agency Insured Insurer Producer

Insured The mandatory uniform provisions are designed to protect the insured's interests. Relevant content:11.1 Mandatory Uniform Provisions

Which provision in a health insurance policy allows a claim to be denied due to the insured being intoxicated or under the influence of narcotics? Conformity with State Statutes Legal Actions Illegal Act Intoxicants and Narcotics

Intoxicants and Narcotics Intoxicants and Narcotics (an Optional Uniform Provision) allows the insurer the right to deny liability if the insured is under the influence of narcotics or intoxicated at the time of loss. Relevant content:11.2 Optional Uniform Provisions

Albert owns a printing business in which he, at times, prints counterfeit money. One day while processing counterfeit bills, his arm is severely damaged. His insurance will: Not cover the claim since he was involved in an illegal act at the time of injury Not cover the claim because this would be covered under Workers' Compensation Cover the claim because he was injured on equipment normally used for legal purposes Cover the claim for this injury, but cancel his policy

Not cover the claim since he was involved in an illegal act at the time of injury The Illegal Occupation/Act Provision (an Optional Uniform Provision) allows the insurer to deny liability if the insured is injured while engaged in an illegal occupation or committing an illegal act. Relevant content:11.2 Optional Uniform Provisions

The Guaranteed Renewable Provision states that the policy is: Renewable with adjustable premiums determined by frequency of claims Renewable with premiums that may be increased for entire classes of insureds Renewable with no increase in premium Renewable only at the option of the insurer

Renewable with premiums that may be increased for entire classes of insureds The Guaranteed Renewable Provision allows the insurer to adjust premiums upon renewal, but by classification only, not for particular individuals. Relevant content:11.4 Policy Renewal Provisions

Which statement is inaccurate regarding the Change of Occupation Provision? If the insured works at two occupations, rates for the most hazardous occupation will be charged If the insured changes to a less hazardous occupation, he/she may apply for a rate reduction The insured must notify the insurer of a change of occupation, or the policy will be cancelled If the insured changes to a more hazardous occupation, benefits will be reduced to the amount which the premiums paid would purchase at the more hazardous occupation

The insured must notify the insurer of a change of occupation, or the policy will be cancelled Failure to notify the insurer of a change of occupation will not result in cancellation of the policy. Relevant content:11.2 Optional Uniform Provisions

Under the Uniform Individual Accident and Sickness Policy Provisions, what happens when a health policy contains provisions that have gone out of compliance because of changes in state law? The insurer will be fined and the policy reissued The policy is invalid The policy may be voided by the insurer The policy will be construed as if it conformed to the law

The policy will be construed as if it conformed to the law According to the Conformity with State Statutes Provision (an Optional Uniform Provision), any provision on the policy effective date that is in conflict with state statutes is automatically amended to meet state requirements. Relevant content:11.2 Optional Uniform Provisions

Which provision states that the insurance company must pay claims immediately? Legal Actions Relation of Earnings to Insurance Time of Payment of Claims Payment of Claims

Time of Payment of Claims Time of Payment of Claims (a Mandatory Uniform Provision) stipulates that claims are to be paid immediately upon written proof of loss. Relevant content:11.1 Mandatory Uniform Provisions

If an insurer makes a payment for a claim but the insured is dissatisfied with it, the insured must wait _____ days after proof of loss before taking any legal action. 90 20 45 60

60 According to the Legal Actions Provision (a Mandatory Uniform Provision), the insured must wait at least 60 days after proof of loss before legal action can be brought against the insurer. Relevant content:11.1 Mandatory Uniform Provisions

Insurers include provisions in contracts to help reduce unnecessary claims and the overpayment of claims. Which of the following is not one of those provisions? Concurrent Review Consideration Clause Mandatory Second Surgical Option Ambulatory Services

Consideration Clause The other choices are Case Management Provisions designed to contain costs. The Consideration Clause stipulates that the payment of the first premium and the statements in the application are the applicant's consideration, and the insurer's consideration is the promise to pay within the contract terms. Relevant content:11.3 Other Standard Provisions and Clauses

Every Health and Disability Income Policy must express the conditions and provisions for _______. Conditional coverage Refunds of premium at maturity Continuation of the contract Policy corrections

Continuation of the contract Each policy must express the conditions and provisions for renewal or continuation of coverage. Relevant content:11.4 Policy Renewal Provisions

All states have adopted the Uniform Individual Accident and Sickness Policy Provision Law. If an insurer changes any of these provisions, it must make sure that the change does not: Create a meaning that is less favorable to the insured than the original wording Violate legal precedent Weaken its grounds to void the policy Nullify the law of large numbers

Create a meaning that is less favorable to the insured than the original wording The insurer must assure that any variation must be at least as favorable as the original wording and no provision may be deleted. Relevant content:11.1 Mandatory Uniform Provisions

All of the following are Optional Provisions, except: Illegal Occupation Change of Occupation Misstatement of Age Legal Actions

Legal Actions Legal Actions is a Mandatory Uniform Provision. All of the other responses are Optional Uniform Provisions. Relevant content:11.1 Mandatory Uniform Provisions

Which of the following is not a Mandatory Uniform Provision of an Accident and Health policy? Proof of Loss Time Limit on Certain Defenses Waiver of Premium Payment of Claims

Waiver of Premium The other choices are Mandatory Uniform Provisions. Waiver of Premium is a provision that may or may not be included. Relevant content:11.1 Mandatory Uniform Provisions

Does the insured have the right to change the beneficiary designation of a health insurance policy? Yes, the beneficiary designation is always revocable in health policies Yes, unless the beneficiary is designated as irrevocable No, only the insurer has that right in health policies No, the beneficiary designation in health policies is always irrevocable

Yes, unless the beneficiary is designated as irrevocable The Change of Beneficiary Provision (a Mandatory Uniform Provision) establishes the insured's right to change the beneficiary, unless it is designated as irrevocable. Relevant content:11.1 Mandatory Uniform Provisions

Which of the following is a Case Management Provision used by insurers to monitor hospital stays? Concurrent Review Managed Health Care Precertification Prospective Review

Concurrent Review Once an insured is admitted to the hospital, the insurer monitors the insured's hospital stay to make certain that everything is proceeding on schedule through the Concurrent Review Provision. Relevant content:11.5 Cost Containment in Health Care Delivery

Which of the following is a Case Management Provision used by insurers to monitor hospital stays? Concurrent Review Prospective Review Precertification Managed Health Care

Concurrent Review Once an insured is admitted to the hospital, the insurer monitors the insured's hospital stay to make certain that everything is proceeding on schedule through the Concurrent Review Provision. Relevant content:11.5 Cost Containment in Health Care Delivery

Insurers include provisions in contracts to help reduce unnecessary claims and the overpayment of claims. Which of the following is not one of those provisions? Ambulatory Services Concurrent Review Mandatory Second Surgical Option Consideration Clause

Consideration Clause The other choices are Case Management Provisions designed to contain costs. The Consideration Clause stipulates that the payment of the first premium and the statements in the application are the applicant's consideration, and the insurer's consideration is the promise to pay within the contract terms. Relevant content:11.3 Other Standard Provisions and Clauses

Beth has a contract stating she must be disabled for 3 months before benefits will begin to be paid. This 3-month period is known as the: Contingency Period Probationary Period Elimination Period Grace Period

Elimination Period The Elimination Period is a period of time that must elapse after onset of a disability before benefits begin to be paid. Relevant content:11.3 Other Standard Provisions and Clauses

If the insurer cancels an individual health plan, what happens to the unearned premium? It is refunded on a short rate basis It is refunded on a pro rata basis It is used to offset underwriting costs The total is refunded

It is refunded on a pro rata basis According to the Cancellation Provision (an Optional Uniform Provision), if the insurer cancels a policy, unearned premiums are refunded on a pro rata basis. Relevant content:11.2 Optional Uniform Provisions

Which provision is a Mandatory Uniform Provision? Legal Actions Illegal Occupation Misstatement of Age Conformity with State Statutes

Legal Actions The only response that is a Mandatory Uniform Provision is Legal Actions. All of the other responses are Optional Uniform Provisions. Relevant content:11.1 Mandatory Uniform Provisions

Which statement is false? Changes in an Accident and Health contract may be completed only with the written consent of the insurer A nonoccupational policy pays for injury or illness off the job Mandatory Second Surgical Opinion is when the physician submits claim information prior to treatment, to determine in advance if the procedure is covered When an insured owes back premiums but is still within the grace period, the Unpaid Premium Provision is operative for any claims submitted

Mandatory Second Surgical Opinion is when the physician submits claim information prior to treatment, to determine in advance if the procedure is covered This describes Precertification, not Mandatory Second Surgical Opinion. Relevant content:11.5 Cost Containment in Health Care Delivery

Kirk has just reinstated an individual A&H policy that had lapsed and wants to know how soon coverage will be in effect for any accident or sickness. You, the agent, would say: Sickness immediately, accidents after 10 days Sickness immediately, accidents after 30 days Accidents immediately, sickness after 10 days Accidents immediately, sickness after 30 days

Accidents immediately, sickness after 10 days Upon reinstatement, accidents are covered immediately, and sickness after 10 days. This prevents insureds from reinstating a policy when they are already sick. Relevant content:11.1 Mandatory Uniform Provisions

Three years ago, Charles purchased a health policy from the QRS Company; he has purchased two additional contracts from the same insurer since. Each contract contains the Other Insurance With This Insurer Provision. What happens if Charles has a claim? Only one policy will pay, the premiums for the other contracts will be returned The insurer will cancel all contracts because of intent to defraud Each contract will pay in direct proportion to the loss Benefits are paid in full by all contracts

Only one policy will pay, the premiums for the other contracts will be returned Other Insurance With This Insurer (an Optional Uniform Provision) stipulates that if the insured has more than one policy of the same type with the same insurer, the insured may elect the policy to be used, and excess premiums for the excess coverage will be returned. Relevant content:11.2 Optional Uniform Provisions

Which provision is an Optional Uniform Provision? Physical Examination Payment of Claims Other Insurance With This Insurer Claim Forms

Other Insurance With This Insurer Other Insurance With This Insurer is an Optional Uniform Provision. All of the other answers are Mandatory Uniform Provisions. Relevant content:11.2 Optional Uniform Provisions

An insurer has the right to request a physical exam or an autopsy to determine its liability to pay benefits. This request may be made under which provision? Proof of Disability or Death Intoxicants and Narcotics Physical Exam & Autopsy Proofs of Loss

Physical Exam & Autopsy According to the Physical Exam and Autopsy Provision (a Mandatory Uniform Provision), the insurer, at its own expense, has the right to request a physical exam or autopsy where not prohibited by law. Relevant content:11.1 Mandatory Uniform Provisions

The Insuring Clause under an individual A&H policy would contain all the following, except: Premium or rate calculations The name of the insured and insurer The length of the policy period What perils are covered

Premium or rate calculations Premiums or rates would be part of the Consideration Clause. All of the other answers would be part of the Insuring Clause. Relevant content:11.3 Other Standard Provisions and Clauses

Anna has a contract that includes the Non-Emergency Hospital Preauthorization Admissions Provision. For a scheduled hospital stay, she must first get preauthorization through her insurer. If she does not, the insurer may: Check her out of the hospital Pay the benefit, but send her a bill for additional premium Cancel her contract Reduce her normal benefits

Reduce her normal benefits If Anna does not comply with this provision, she may have her normal benefit level reduced. Relevant content:11.5 Cost Containment in Health Care Delivery

Susan neglected to make her premium payment and she was injured in an accident. After she submitted the claim, she discovered that the insurer had subtracted $200 (the amount of the overdue premium) from the claim. The insurer may do this under which provision? Unpaid Premiums Reinstatement Payment of Claims Grace Period

Unpaid Premiums Unpaid Premiums (an Optional Uniform Provision) allows the insurer the option of deducting unpaid premiums from a claim. Relevant content:11.2 Optional Uniform Provisions

Which of the following is not a Mandatory Uniform Provision of an Accident and Health policy? Payment of Claims Waiver of Premium Time Limit on Certain Defenses Proof of Loss

Waiver of Premium The other choices are Mandatory Uniform Provisions. Waiver of Premium is a provision that may or may not be included. Relevant content:11.1 Mandatory Uniform Provisions

Harry was hospitalized and in a coma for 6 months. When does proof of loss for this claim have to be submitted? An executor would be appointed by the courts to handle the necessary paperwork Within 2 years, covered under the contestable period Within 1 year, unless he suffers legal incapacity Anytime, since he was in a coma and obviously could not submit a claim

Within 1 year, unless he suffers legal incapacity The Proof of Loss Provision (a Mandatory Uniform Provision) stipulates that the insured must provide proof of the loss within 90 days of the loss, or within in the shortest time possible, but not to exceed 1 year unless the insured suffers legal incapacity. Since Harry was in a coma for 6 months, it would not have been possible for him to file a claim within the 90-day time period. Relevant content:11.1 Mandatory Uniform Provisions