Chapter 7 (Health) Chapter Exam

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

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

which of the following are not managed care organizations?

Medical Information Bureau (MIB)

which of the following best describes how pre-admission certification is used?

Used to prevent nonessential medical costs

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

pre-hospitalization authorization is considered an example of

managed care

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 actions 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 comapny

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

Inspection report

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

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