Insurance Exam: health (field underwriting procedures)
insurance policies are not drawn up through negotiations, and an insured has little to say about its provisions. what contract characteristic does this describe A) unilateral B) conditional C) personal D) adhesion
adhesion
in insurance, an offer is usually made when A) the agents hands the policy to the policyholder B) an agent explains a policy to a potential applicant C) an applicant submits an application to the insurer D) the insurer approves the application and receives the initial premium
an applicant submits an application to the insurer
An agent makes a mistake on the application and then corrects his mistake by physically entering the necessary information. Who must then initial that change? A) executive officer of the company B) insured C) agent D) applicant
applicant
in a replacement situation, all of the following must be considered EXCEPT A) assets B) benefits C) limitations D) exclusions
assets
an insurance contract must contain all of the following to be considered legally binding EXCEPT A) offer and acceptance B) consideration C) competent parties D) beneficiary consent
beneficiary consent
When an insured makes truthful statements on the application for insurance and pays the required premium, it is known as which of the following? A) consideration B) legal purpose C) contract of adhesion D) acceptance
consideration
Representations are written or oral statements made by the applicant that are A) guaranteed to be true B) found to be false after further investigation C) immaterial to the actual acceptance of the insurance contract D) considered true to the best of the applicants knowledge
considered to be true to the best of the applicants knowledge
which of the following includes information regarding a persons credit, character, reputation and habits A) insurability report B) agents report C) consumer report D) consumer history
consumer report
which of the following reports will provide the underwriter with the information about an insurance applicants credit A) agents report B) any federal report C) consumer report D) inspection report
consumer report
contracts that are prepared by one party and submitted to the other party on a take it or leave it basis are classified as A) aleatory contracts B) binding contracts C) contracts of adhesion D) unilateral contracts
contracts of adhesion
which of the following is NOT an essential element of an insurance contract A) legal purpose B) counteroffer C) consideration D) agreement
counteroffer
Before an agent delivers a policy, the insurer makes a last-minute change to the policy. The agent informs the insured of this change, and he accepts it. In response, the agent must A) deliver the policy without further confirmation from the insured B) have the insured sign a statement of acknowledgment only if the change affect the premium amount C) notify the policy beneficiary of the change D) have the insured sign a statement acknowledging that he is aware of the change
have the insured sign a statement acknowledging that he is aware of the change
a life insurance policy has a legal purpose if both of which of the following elements exist A) underwriting reciprocity B) offer and counteroffer C) policy owners and named beneficiaries D) insurable interest and consent
insurable interest and consent
the medical information bureau(MIB) was created to protect A) medical examiners that perform insurance physical examination B) insurance companies from adverse selection by high risk person C) insurance departments from lawsuits by policyowners D) insureds from unreasonable underwriting requirements by the insurance companies
insurance companies from adverse selection by high risk persons
Who must pay for the cost of a medical examination required in the process of underwriting? A) department of insurance B) insurer C) applicant D) underwriters
insurer
which of the following entities can legally bind coverage A) insurer B) the insured C) federal insurance board D) agent
insurer
Who makes up the Medical Information Bureau? A) hospitals B) former insured C) physicians and paramedics D) insurers
insurers
which of the following best describes the MIB A) it is a member organization that protects insured against insolvent insurers B) it is a rating organization for health insurance C) it is a nonprofit organization that maintains underwriting information on applicants for life and health insurance D) it is a government agency that collects medical information on the insured from the insurance companies
it is a nonprofit organization that maintains underwriting information on applicants for life and health insurance
underwriting is a major consideration when an insured wishes to replace her current policy for all of the following reasons EXCEPT A) pre existing conditions that were previously covered may not be covered under the replacing policy B) benefits may change C) premiums always stay the same D) due to age or health, the policy may change dramatically
premiums always stay the same
what is the best way to change an application A) erase the previous answer and replace it with the new answer B) white out the previous answer C) draw a line through the incorrect answer and insert the correct one D) start over with a fresh application
start over with a fresh application
whose responsibility is it to determine if all of the questions on an application have been answered A) the beneficiary B) the agent C) the insurer D) the applicant
the agent
An agent is in the process of replacing the insured's current health insurance policy with a new one. Which of the following would be a proper action? A) there should be at least a 10 day gap between the policies B) policies must overlap to cover pre existing conditions C) the old policy must be cancelled before the new one can be issued D) the old policy should stay in for until the new policy is issued
the old policy should stay in force until the new policy is issued
when both parties to a contract to a contract must perform certain duties and follow rules of conduct to make the contract enforceable, the contract is A) personal B) unilateral C) conditional D) aleatory
conditional
in insurance policies, the insured is not legally bound to any particular action in the insurance contract, but the insurer is legally obligated to pay losses covered by the policy what contract element does this describe A) conditional B) unilateral C) unidirectional D) aleatory
unilateral
which of the following would provide an underwriter with information concerning an applicants health history A) a medical examination B) the agents report C) the inspection report D) the medical information bureau
the medical information bureau
within how many days of requesting an investigative consumer report must an insurer notify the consumer in writing that the report will be obtained A) 3 days B) 5 days C) 10 days D) 14 days
3 days
an insured pays a $100 premium every moth 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 A) aleatory B) good health C) adhesion D) conditional
aleatory
which of the following best describes the concept that the insured pays a small amount of premium for a large amount of risk on the part of the insurance company A) subrogation B) warranty C) aleatory D) adhesion
aleatory
what is the term used for an applicants written request to an insurer for the company to issue a contract, based on the information provided A) application B) policy request C) insurance request form D) request for insurance
application
An agent is ready to deliver a policy to an applicant but has not yet received payment. Upon delivery, the agent collects the applicant's premium check, answers any questions the applicant may have, and then leaves. What did he forget to do? A) collect a late payment B) ask her to sign a statement of good health C) offer her a secondary policy D) ask the applicant to sign a statement that acknowledges that the policy had been delivered
ask her to sign a statement of good health
to comply with fair credit reporting act, when must a producer notify an applicant that a credit report may be requested A) at the time of application B) when the applicants credit is checked C) when the policy is delivered D) at the initial interview
at the time of the application
what document describes an insured medical history, including diagnoses and treatments A) attending physicians statement B) physicians review C) individual medical summary D) comprehensive medical history
attending physicians statement
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? A) representation B) adhesion C) consideration D) good faith
consideration
when would a misrepresentation on the insurance application be considered fraud A) the the application is incomplete B) any misrepresentation is considered fraud C) if it is intentional and material D) never; statements by the applicant are only representations
if it is intentional and material
on a health insurance application, a signature is required from all of the following individuals EXCEPT A) the spouse of the policyowner B) the proposed insured C) the policy owner D) the agent
the spouse of the policyowner
if a consumer requests additional information concerning an investigative consumers report how long does the insurer or reporting agency have to comply A) 5 days B) 7 days C) 10 days D) 3 days
5 days
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 applicants A) ancestry B) credit history C) habits D) prior insurance
ancestry
because an insurance policy is a legal contract, it must conform to the state laws governing contracts which require all of the following EXCEPT A) conditions B) consideration C) legal purpose D) offer and acceptance
conditions
what phase begins after a new policy is delivered A) free look period B) insurability period C) elimination period D) grace period
free look period
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 A) approved the application B) issued the policy C) neither approved the application nor issued the policy D) both approved the application and issued the policy
neither approved the application nor issued the policy
which of the following would qualify as a competent party in an insurance contract A) the applicant is a 12 year old student B) the applicant is under the influence of a mind imparting medication at the time of application C) the applicant has a prior felony conviction D) the applicant is intoxicated at the time of application
the applicant has a prior felony conviction
insurable interest can be described by which of the following A) all beneficiaries need to have notification of their status B) it is not necessary for the insured to be aware of the insurable interest or give permission for the insurance that is to be written C) the applicant must experience a financial loss due to an accident or sickness that befalls the insured D) the insured must be genuinely interested in the life of the applicant
the applicant must experience a financial loss due to an accident or sickness that befalls the insured
which of the following is true about the requirements regarding HIV exams A) prior informed oral consent is required from the applicant B) HIV exams may not be used as a basis for underwriting C) the applicant must give prior informed written consent D) results may be disclosed to the agent and the underwriter
the applicant must give prior informed written consent
which of the following is NOT the consideration in a policy A) the premium amount paid at the time of application B) the promise to pay covered losses C) the application given to a prospective insured D) something of value exchanged between parties
the application given to a prospective insured
an insured is upset that her new health insurance policy was delivered to her by certified main 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
which of the following is a statement that is guaranteed to be true, and if untrue, may breach an insurance contract A) representation B) warranty C) concealment D) indemnity
warranty
in forming an insurance contract, when does acceptance usually occur? A) when an insure delivers the policy B) when an insure receives an application C) when an insured submits an application D) when an insurers underwriter approves coverage
when an insurers underwriter approves coverage
the federal fair credit reporting act A) prevents money laundering B) regulates consumer reports C) protects customer privacy D) regulates telemarketing
regulates consumer reports
If only one party to an insurance contract has made a legally enforceable promise, what kind of contract is it? A) conditional B) a legal (but unethical) contract C) unilateral D) adhesion
unilateral
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? A) estoppel B) material misrepresentation C) waiver D) utmost good faith
material misrepresentation
Under the Privacy Rule for HIPAA, protected information includes all individually identifiable health information A) held in a computer format B) self or transmitted in paper form C) held or transmitted in any form D) transmitted electronically only
help or transmitted any form
what is a material misrepresentation A) any misstatement made by an applicant for insurance B) any misstatement by the producer C) concealment D) a statement by the applicant that, upon discovery, would affect the underwriting decision of the insurance company
a statement by the applicant that, upon discovery, would affect the underwriting decision of the insurance company
an insurance contract requires that both the insured and the insurer meet certain conditions in order for the contract to be enforceable. what contract characteristics does this describe A) aleatory B) unilateral C) conditional D) contingent
conditional
the propose 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 A) personal B) unilateral C) conditional D) adhesion
conditional
the insurance policy, together with the policy application and any added riders from what is know as A) entire contract B) certificate of coverage C) contract of adhesion D) whole life policy
entire contract
which of the following best describes the aleatory nature of an insurance contract A) only one of the parties being legally bound by the contract B) ambiguities are interpreted in favor of the insured C) policies are submitted to the insurer on a take it or leave it basis D) exchange of unequal values
exchange of unequal values
what is a definition of unilateral contract A) two or more parties go into a contract understanding there may be an unequal exchange of value B) one author. the company wrote the contract; the insured must accept it as written C) if one party make a condition the other party can counteroffer D) one-sided; only one party makes an enforceable promise
one sided; only one party makes an enforceable promise
in comparison to consumer reports, which of the following describes a unique characteristic of investigative consumer reports A) they provide additional information form an outside source about a particular risk B) they provide information about a consumers character and reputation C) the customer has no knowledge of this action D) the customer associates, friends and neighbors provide the reports data
the customers associates, friends, and neighbors provide the reports data
which of the following protects consumers against the circulation of inaccurate or obsolete personal or financial information A) consumer privacy act B) the fair credit reporting act C) unfair trade practice law D) the guaranty association
the fair credit reporting act
In terms of parties to a contract, which of the following does NOT describe a competent party? A) the person must be mentally competent to understand the contract B) the person must have at least completed secondary education C) the person must not be under the influence of drugs or alcohol D) the person must be of legal age
the person must have at least completed secondary education