Health Insurance Underwriting Ch. 7

Which mode of payment is NOT used by health insurance policies? Monthly premium Annual premium Single premium Semi-annual premium

Single premium

Which of the following BEST describes how pre-admission certifications are used? Used to assist in underwriting Used to prevent nonessential medical costs Used to minimize hospital lawsuits Used to help process claims

Used to prevent nonessential medical costs

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 a diabetes exclusion Issue the policy with an altered Time of Payment of Claims provision Issue the policy with a rating Decline the applicant

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 the initial premium back to the applicant Send a notice to the applicant that the coverage was declined Send a notice to the MIB that the applicant was declined Send a notice to the agent that the applicant was declined

Send a notice to the MIB that the applicant was declined The MIB does not need to be notified that coverage was denied.

Which of the following statements about the classification of applicants is INCORRECT? Substandard applicants are never declined by underwriters Substandard applicants are occasionally declined by underwriters Preferred risk applicants typically have better premium rates than standard risk applicants An applicant can be classified as substandard risk because of a hazardous job

Substandard applicants are never declined by underwriters A substandard risk is below the insurer's average risk guidelines. An individual can be rated substandard for a number of reasons and can even be rejected outright.

A producer 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 issue the policy only when the initial premium check has cleared determine if the applicant is insurable by investigating family health history issue the policy on a standard basis determine if the applicant is an acceptable risk by completing standard underwriting procedures

determine if the applicant is an acceptable risk by completing standard underwriting procedures