Health Basics

If no initial premium is paid, the application is considered: A. A trial application B. Void C. An offer D. A counter-offer

A. If no initial premium is paid, the application is considered a 'trial application.'

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

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

Health care providers are required to preserve patient confidentiality and protect health and medical information under the: A. Health and Human Services Act (HHSA) B. Health Insurance Portability and Accountability Act (HIPAA) C. Fair Credit Reporting Act (FCRA) D. National Association of Insurance Commissioners Underwriting Disclosure Model Act (NAICUDMA)

B. Health care providers are required to preserve patient confidentiality and protect health and medical information under the Health Insurance Portability and Accountability Act (HIPAA).

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. Exclusion C. Probationary period D. Benefit period

C. 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.

This type of coverage is used for replacing the insured's loss of earnings. A. Dental expense B. Medical expense C. Disability income D. Long-term care

C. Disability Income (Loss of Time or Income) is a valued contract that pays weekly or monthly benefits due to injury or sickness. The benefit is either a percentage of the insured's past earnings or a flat dollar amount.

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

D. Comparisons of policies are not prohibited, but they must be complete, accurate, and fair.

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

D. 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 an accident 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 intentional and breaking his leg was an accident

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

This type of policy covers the treatment and care of the insured's teeth. A. Dental expense B. Medical expense C. Disability income D. Long-term care

A. Dental Expense is a form of Medical Expense health insurance covering the treatment and care of dental disease and injury affecting the insured's teeth.

A medical exam required for underwriting on a proposed insured is paid for by the: A. Insurer B. Insured C. Producer D. Medical examiner

A. Medical exams are the insurer's expense.

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. Long-Term Care B. Medicare Supplement C. Retirement Benefits D. Outpatient Care

A. The question describes a Long-Term Care Policy.

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

A. 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.

Probing beyond the stated questions contained in the application as part of the field underwriting process is the responsibility of the: A. Paramedical examiner B. Producer C. Insurer D. Home office underwriter

B. It is the producer's responsibility to probe beyond the stated questions contained in the application as part of the field underwriting process

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

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

The primary source of information for an insurer underwriting a potential risk is the: A. Attending physician's statement B. Paramedical exam C. Application D. Agent's report

C. The application is the primary source of information for an insurer underwriting a potential risk.

Upon receipt of an application, the insurer's underwriter may issue the contract with exclusions or limitations. This means that: A. Coverage is issued at the rate that was quoted B. Coverage is issued, but at a higher rate than quoted C. Coverage is issued, but there are limits on the insurer's obligation to pay D. Coverage is not issued

C. Exclusions/limitations may be temporary or permanent, but in any case they limit the insurer's obligation to pay.

____________ is the initial step of the total process of insuring a health risk. A. The sales presentation B. Collecting the premium payment C. Field underwriting D. Completing medical exams

C. Field underwriting is the initial step of the total process of insuring a health risk.

If an application is submitted without a premium payment, coverage go into effect when the: A. Application is signed or any required medical exam is completed, whichever occurs later B. Insurer mails the policy to the agent C. Agent obtains a signed Statement of Good Health from the insured and the premium is collected at policy delivery D. Policy is issued

C. If an application is submitted without a premium payment there is no coverage until a signed Statement of Good Health and premium are collected at the time of policy delivery.

What factors are not used in underwriting an individual disability policy? A. Health history and foreign travel B. Age and gender C. Political affiliation and religious preference D. Smoking and hobbies

C. Religious preference and political affiliation are not factors used in underwriting individual health policies.

By signing an insurance application for disability insurance, the applicant is: A. Guessing that statements made on the application are true B. Warranting that statements made on the application are true C. Representing that statements made on the application are true D. Guaranteeing that statements made on the application are true

C. The applicant is representing that statements made on the application are true.

Which one of the following formulas best describe how disability premiums are determined? A. Morbidity + interest - expenses B. Interest + expenses + morbidity C. Morbidity - interest + expenses D. Expenses - interest - morbidity

C. The basic disability insurance premium formula is morbidity - interest + expenses.

With a conditional coverage receipt issued by the agent, the coverage is in effect: A. The date the insurer cashes the check B. The date the policy is issued C. The date of application, if it is accompanied by premium, or date of a completed medical exam, if required D. The date the insurer mails the policy to the agent

C. With a conditional coverage receipt issued by the agent the insurer will send the issued policy to the agent for delivery, but coverage is in effect as of the date of application, if it is accompanied by premium, or date of a completed medical exam, if required.

Which one of the following is the best underwriting class for disability insurance? A. Rejected B. Substandard C. Standard D. Preferred

D. Issued as a Preferred Risk means a lower rate will be used if the insured meets the insurance company's qualifications as a preferred risk (lower than average risk).

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

D. 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.

What is the name of the process in which an insurer selects, classifies, and determines the rate to be charged for the insurance applied for? A. Financing B. Marketing C. Auditing D. Underwriting

D. Underwriting is the process of selection, classification, and rating determining if someone is insurable, classifying the risk, and determining the rate or premium to be charged.