XCEL Health Insurance Underwriting

P is self-employed and owns an Individual Disability Income policy. He becomes totally disabled on June 1 and receives $2,000 a month for the next 10 months. How much of this income is subject to federal income tax?

$0

An incomplete health insurance application submitted to an insurer will result in which of these actions?

application will be returned to the writing producer

When an insurance application is taken by a producer, which of these statements is true?

any changes made on the application require the applicant's initials

Any changes made on an insurance application requires the initials of whom?

applicant

An applicant's medical information received from the Medical Information Bureau (MIB) may be furnished to the

applicant's physician

Who is NOT required to sign a health insurance application?

beneficiary

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

An underwriter determines that an applicant's risk should be recategorized due to a health issue. This policy may be issued with a(n)

exclusion for the medical condition

Consumer reports requested by an underwriter during the application process of a health insurance policy can be used to determine:

probability of making timely premium payments

Which of the following involves analyzing a case before admission to determine what type of treatment is necessary?

prospective review

P is a producer who notices 5 questions on a life application were not answered. What actions should P take?

set up a meeting with the applicant to answer the remaining questions

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

single premium

From what authority derives the requirement that an insurance application contains a disclosure stating that an investigative consumer report may be obtained on an applicant?

Fair Credit Reporting Act

Which Federal law allows an insurer to obtain an inspection report on a potential insured?

Fair Credit Reporting Act

Which of the following are NOT managed care organizations?

Medical Information Bureau (MIB)

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 customer's signature, then send the application off to the insurance company

K applies for a health insurance policy on herself and submits the initial premium with the application. She is given a receipt by the producer stating that coverage begins immediately if the application is approved. What kind of receipt was used?

conditional

K completes an application for a disability policy but does not pay the initial premium. The company approves the policy standard and the agent delivers the policy. K then pays her initial premium 3 days later. At what point does K's policy take effect?

date the initial premium is collected

An agent takes 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 an acceptable risk by completing standard underwriting procedures

M completes an application for life insurance but does not pay the initial premium. All of these actions must occur before M's policy goes into effect EXCEPT

free-look period has expired

An insurance company may NOT reject a prospective insured's insurance application on the basis of which of the following factors?

gender

Which of these actions should a producer take when submitting an insurance application to an insurer?

inform insurer of relevant information not included on the application

What is being delivered during a policy deliver?

insurance contract to the proposed insured

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

All of these are considered sources of underwriting information about an applicant EXCEPT

rating services

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 the new check out to the insurance company

Which of these terms accurately defines an underwriter's assessment of information on a health insurance application?

risk classification

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

Which of the following statements about the classification of applicants is INCORRECT?

substandard applicants are never declined by underwriters

What would the Medical Information Bureau (MIB) identify?

testing positive for marijuana use from a previous screening

Why is an applicant's signature required on a life insurance application?

to attest that the statements on the application are accurate to the best of the applicant's knowledge

Which parts of health insurance policy are guaranteed to be true?

warranty

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

used to prevent nonessential medical costs

Before a health insurance policy is issued, which of these components of the contract is required?

applicant's signature on application

What action should a producer take if the initial premium is NOT submitted with the application?

forward the application to the insurer without the initial premium

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

inspection report

Pre-hospitalization authorization is considered an example of

managed care

Which type of plan normally includes hospice benefits?

managed care plans

Which of these factors do NOT play a role in the underwriting of a health insurance policy?

marital status

Which of these do NOT constitute policy delivery?

policy issued with a rating

M applies for a health insurance policy and pays the initial premium. When the agent completes the application, a conditional receipt is left with the applicant. The insurance company's underwriting department request's M's medical records and determines that M has had asthma for many years. All of the following are probable underwriting outcomes, EXCEPT:

changing the policy's provisions