A.D Banker - Life Insurance Prep - Chapter 8

What should an agent do if the insured's health has changed since the date the application was signed? A Deliver the policy regardless if any premium was initially collected B Call the applicant and arrange for policy delivery at the agency C Return the policy to the insurer, or deliver the policy after the insurer grants permission D Hold onto the policy until the insured's health situation improves

A Deliver the policy regardless if any premium was initially collected If the applicant's health has changed since application, the policy should be returned to the insurer, or the producer may deliver the policy after the insurer grants permission.

When gathering information from a third party to use during underwriting, an insurance company must meet the requirements of the: A Fair Credit Reporting Act (FCRA) B Freedom of Information Act (FOIA) C Underwriting Information Act (UIA) D Social Security Act (SSA)

A Fair Credit Reporting Act (FCRA) An insurance company must meet requirements under the Fair Credit Reporting Act (FCRA) when gathering information from a third party to use during underwriting.

Accident and Health Insurance provides coverage for two major categories of perils. They are: A Driving under the influence and driving while intoxicated B Accidental injury and sickness C Automobile and home health care D On the job and off the job

B Accidental injury and sickness Accidental injury and sickness are the general perils insured. Intentional losses are excluded.

A client requests a Medical Expense Policy several months after the agent suggested the policy. The underwriter will most likely order which of the following? A Stress Test B Attending Physician's Statement C Consumer Report D Blood Test

B Attending Physician's Statement Agents do not have authority to recommend or suggest any underwriting requirements. At most, the agent could inform underwriting that the applicant was previously offered an opportunity to apply for insurance and declined. This would likely result in the underwriter ordering an APS.

If the insurer issues a policy after receiving an application for health insurance in which questions regarding preexisting conditions were left blank, what would be the consequence to the insured's coverage if a preexisting condition caused a claim shortly after the policy was issued? A The policy would be sent back to underwriting for approval B Coverage would be as stipulated in the policy because the company issued the policy even though the question was left blank C The policy would be cancelled D The policy would be reissued

B Coverage would be as stipulated in the policy because the company issued the policy even though the question was left blank If a policy is issued with questions unanswered, the contract will be interpreted as if the question had not been asked and is therefore waived by the insurer. However, if the insurer can demonstrate that an inadvertent omission is a material concealment, the policy may be voided, because intentional or unintentional concealment allows the insurer to void the policy.

A copy of an application becomes part of the entire contract: A If the policy is issued as applied for B If it is attached to the policy C When it is signed by the applicant D When it is mailed to the insurer by the producer

B If it is attached to the policy If attached to the policy, a copy of the application becomes part of the entire contract.

An individual jumps off a roof and breaks his leg. Which of the following statements is correct: A Jumping off the roof was intentional and breaking his leg was intentional B Jumping off the roof was intentional and breaking his leg was an accident C Jumping of the roof was an accident and breaking his leg was intentional D Jumping off the roof was an accident and breaking his leg was an accident

B Jumping off the roof was intentional and breaking his leg was an accident The individual jumping off a roof was a conscious decision and intentional; breaking his leg would be considered an accident.

What health insurance product is designed to provide coverage for necessary diagnostic, preventive, therapeutic, rehabilitative, maintenance, or personal care services provided in a setting other than an acute care unit of a hospital? A Retirement Benefits B Long-Term Care C Outpatient Care D Medicare Supplement

B Long-Term Care The question describes a Long-Term Care Policy

A product designed to provide coverage for necessary diagnostic, preventive, therapeutic, rehabilitative, maintenance, or personal care services provided in a setting other than an acute care unit of a hospital is called: A Medicare Supplement B Long-Term Care C Retirement Benefits D Outpatient Care

B Long-Term Care The question is describing a Long-Term Care Policy. Medicare Supplement covers acute care expenses and related post-hospitalization skilled nursing care only.

A specified period that must elapse before new coverage goes into effect for a given condition is known as which of the following? A Waiting period B Probationary period C Benefit period D Exclusion

B Probationary period A probationary period is a specified period of time after the effective date of a policy before new coverage goes into effect for specified conditions, such as losses due to a sickness or preexisting conditions.

Delivering the policy and explaining it so the insured understands the benefits, provisions, riders, exclusions, and ratings endorsements is the responsibility of the: A Agency B Producer C Producer's sales manager D Insurer

B Producer It is the producer's responsibility to deliver the policy and explain it so the insured understands the benefits, provisions, riders, exclusions, and ratings endorsements.

All of the following are alternatives an insurer may have when asked to insure a substandard risk, EXCEPT: A. Attach a rider to the policy excluding certain coverages or conditions C. Charge a higher than standard premium D. Limit the coverages of the policy

B. Issue the policy with a waiting period after which the insurer may cancel the policy If a policy is issued substandard, the insurer may charge a higher premium, limit the coverage, or attach an impairment rider which excludes specific conditions in the policy.

Which of the following is not a prohibited form of advertising? A An advertisement that uses the words 'only', 'just', 'merely', 'minimum', or similar words to imply a minimal imposition of restrictions and reductions B Advertisements for Medicare Supplements that create undue anxiety in the minds of prospects C A side-by-side comparison of two policies issued by different insurers D An advertisement that implies that claim settlements are generous

C A side-by-side comparison of two policies issued by different insurers Comparisons of policies are not prohibited, but they must be complete, accurate, and fair.

If the premium paid by the applicant is the Offer, then the policy issued by the insurer is the: A Underwriter's decision B Conditional acceptance C Acceptance D Counter-offer

C Acceptance The premium paid by the applicant is the Offer and the policy issued by the insurer is the Acceptance.

This type of policy covers various expenses that an insured may incur due to a routine accident or sickness. A Dental expense B Long-term care C Medical expense D Disability income

C Medical expense A Medical Expense contract covers the various expenses which an insured may incur due to an accident or sickness.

In the event a policy is delivered by an agent to the insured, and the premium payment is to be collected at the time of this delivery, normally what else must the agent obtain to make the delivery complete? A Postage and handling fees B An affidavit from the applicant C Additional payment reflecting lost interest D A statement of good health

D A statement of good health It is the agent's responsibility to deliver the policy and verify that the insured has remained in good health.

An application for health insurance is not required to be signed by the: A Producer B Applicant C Insured D Beneficiary

D Beneficiary The producer, applicant, and insured must sign the application.

Which one of the following is not a source of underwriting information? A Medical Information Bureau (MIB) B Medical exams C An inspection report D College transcripts

D College transcripts The sources of underwriting information include the application, medical exams, an Attending Physician's Statement, the Medical Information Bureau (MIB), an inspection report, and the agent's report.

A producer gathers information about the applicant for the insurer in order to avoid adverse selection. This is considered to be: A Law of large numbers B Application process C Principle of indemnity D Field underwriting

D Field underwriting The agent's primary underwriting role is to make sure the application provides proper information for the insurer.