Chapter 5

An agent makes a mistake on the application and then corrects his mistake by physically entering the necessary information. who must initial that

(Applicant) Any changes made to the application must be initialed by the applicant.

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

(Application) An individual can submit an application to an insurer, which requests that the insurer review the information and issue an insurance contract.

To comply with Fair Credit Reporting Act when must a producer notify an applicant that a credit report may be requested

(At time of the application) A notice to the applicant must be issued to all applicants for health insurance coverage.

What phase begins after a new policy is delivered

(Free Look Period ) The Free-Look Period occurs after a policy is delivered. This period allows the insured to review the policy and return it for a refund of the premium within a certain time interval.

Under the Privacy Rule for HIPPA protected information includes all individually identifiable health information

(Held or transmitted in any form) Under the Privacy Rule for HIPAA, protected information includes all individually identifiable health information held or transmitted by a covered entity or its business associate in any form or media, whether electronic, paper or oral. This is called protected health information (PHI).

Which of the following entities can legally bind coverage

(Insurer) Only insurers, not agents, can bind coverage.

An applicant for a health insurance policy return 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

(Neither approved the application nor issued the policy) When the agent receives the application and issues a conditional receipt, the insurer has not yet approved the application and issued the policy.

What is the best way to change an application

(Start over a fresh application)

Before a customers agent delivers his policy, the insurer makes a last minute change to the policy. The agent informs the customer of this change, and he accepts it. What must the agent do now

(The agent should ask the customer to sign a statement acknowledging that he is aware of the change) If the insurer makes a change to the policy, the changes must be explained to the insured, and the insured must sign a statement acknowledging that the changes were explained.

An insurer is attempting to determine the insurability of an applicant and decides to obtain medical information from several different sources. which entity must be notified of the investigation

(The applicant) It is required by law that an insurer inform the applicant of all sources that will be contacted in determining the applicant's insurability, in addition to how the information will be gathered.

An agent is in the process of replacing the insured current health insurance policy with a new one. which of the following would be a proper action

(The old policy should stay in force until the new policy is issued ) The agent must make sure that the current policy is not cancelled before the new policy is issued.

Which of the following is true regarding health insurance underwriting for a person with HIV

(The person may not be declined for medical coverage solely based on HIV status)

The insurance policy together with the policy application and any added riders form what is known as

Entire Contract

which is true regarding obtaining underwriting sources

(The applicant must be informed of the sources contacted and how the information is being gathered) It is required by law that an insurer informs the applicant of all sources that will be contacted in determining the applicant's insurability, in addition to how the information will be gathered.

An insured is upset that her new health insurance policy was delivered to her by certified mail and not through her agent. which of the following is true

(there is nothing wrong with this form of policy delivery) Although it is advisable for an agent to personally deliver a policy, in order to answer any questions and insure delivery, it is legal for a policy to be effectively delivered without the presence of an agent. It is legal to deliver a policy through some types of mail.