Health Policy Provisions, Clauses, and Riders

Which of the following is NOT a feature of a noncancellable policy? A. The insurer may terminate the contract only at renewal for certain conditions. B. The premiums cannot be increased beyond the amount stated in the policy. C. The guarantee to renew coverage usually applies until the insured reaches certain age. D. The insured has the right to renew the policy for the life of the contract.

A. The insurer may terminate the contract only at renewal for certain conditions.

An insured pays a monthly premium of $100 for her health insurance. What would be the duration of the grace period under her policy? A. 7 days B. 10 days C. 31 days D. 60 days

B. 10 days

Which renewability provision allows an insurer to terminate a policy for any reason, and to increase the premiums for any class of insureds? A. Guaranteed renewable B. Optionally renewable C. Conditionally renewable D. Cancellable

B. Optionally renewable

What is the main difference between coinsurance and copayments? A. With copayments, the insured pays all of the cost. B. With coinsurance, the insurer pays all of the cost. C. Coinsurance is a set dollar amount. D. Copayment is a set dollar amount.

D. Copayment is a set dollar amount.

Which of the following statements is true regarding coinsurance? A. The larger the percentage that is paid by the insured, the higher the required premium will be. B. The smaller the percentage that is paid by the insured, the lower the required premium will be. C. The smaller the percentage that is paid by the insured, the more consistent the required premium will be. D. The larger the percentage that is paid by the insured, the lower the required premium will be.

D. The larger the percentage that is paid by the insured, the lower the required premium will be.

How soon following the occurrence of a covered loss must an insured submit written proof of such loss to the insurance company? A. As soon as possible B. Within 20 days C. Within 60 days D. Within 90 days or as soon as reasonably possible, but not to exceed 1 year

D. Within 90 days or as soon as reasonably possible, but not to exceed 1 year

L has a major medical policy with a $500 deductible and 80/20 coinsurance. L is hospitalized and sustains a $2,500 loss. What is the maximum amount that L will have to pay? A. $900 (deductible + 20% of the bill after the deductible [20% of $2,000]) B. $500 (amount of deductible) C. $1,000 (deductible + 20% of the entire bill) D. $2,500 (the entire bill)

A. $900 (deductible + 20% of the bill after the deductible [20% of $2,000])

Under the uniform required provisions, proof of loss under a health insurance policy normally should be filed within A. 90 days of a loss. B. 20 days of a loss. C. 30 days of a loss. D. 60 days of a loss.

A. 90 days of a loss.

Under the mandatory uniform provision Notice of Claim, the first notice of injury or sickness covered under an accident and health policy must contain A. A statement that is sufficiently clear to identify the insured and the nature of the claim. B. A statement from the insured's employer showing that the insured was unable to work. C. An estimate of the total amount of medical and hospital expense for the loss. D. A complete physician's statement.

A. A statement that is sufficiently clear to identify the insured and the nature of the claim.

Which health insurance provision describes the insured's right to cancel coverage? A. Renewal provision B. Policy duration provision C. Insuring clause D. Cancellation provision

A. Renewal provision

Which of the following will vary the length of the grace period in health insurance policies? A. The mode of the premium payment B. The length of any elimination period C. The length of time the insured has been insured D. The term of the policy

A. The mode of the premium payment

Insured Z's health insurance policy year begins in January. His policy contains a carry-over provision. In November, he has a small claim which is less than his deductible. Which of the following is true? AThe insured may carry over the amount of this year's expenses to next year, which will help satisfy next year's deductible. BThe deductible will be waived. CThe insured is now eligible for an integrated deductible until the new policy year. DThe insured must satisfy this year's deductible, but next year's deductible will begin when or if he makes a claim in the following calendar year.

AThe insured may carry over the amount of this year's expenses to next year, which will help satisfy next year's deductible.

Ray has an individual major medical policy that requires a coinsurance payment. Ray very rarely visits his physician and would prefer to pay the lowest premium possible. Which coinsurance arrangement would be best for Ray? A. 90/10 B. 50/50 C. 75/25 D. 80/20

B. 50/50

All of the following are correct about the required provisions of a health insurance policy EXCEPT A. The entire contract clause means the signed application, policy, endorsements, and attachments constitute the entire contract. B. A reinstated policy provides immediate coverage for an illness. C. Proof-of-loss forms must be sent to the insured within 15 days of notice of claim. D. A grace period of 31 days is found in an annual pay policy.

B. A reinstated policy provides immediate coverage for an illness.

Which of the following is true regarding a term health policy? A. It is noncancellable. B. It is nonrenewable. C. It is conditionally renewable. D. It is guaranteed renewable.

B. It is nonrenewable.

In a group health policy, a probationary period is intended for people who A. Want lower premiums. B. Join the group after the effective date. C. Have a pre-existing condition at the time they join the group. D. Have additional coverage through a spouse.

B. Join the group after the effective date.

Which of the following provisions would prevent an insurance company from paying a reimbursement claim to someone other than the policyowner? A. Proof of Loss B. Payment of Claims C. Change of beneficiary D. Entire Contract Clause

B. Payment of Claims

What is the purpose of coinsurance provisions? A. To share liability among different insurance companies B. To help the insurance company to prevent overutilization of the policy C. To have the insured pay premiums to more than one company. D. To ensure payment to the doctors and hospitals

B. To help the insurance company to prevent overutilization of the policy

What statement best describes the free look provision? A. It allows the company to obtain an inspection and medical examination on the proposed insured prior to issuing the policy. B. It allows for the proposed insured to carefully look over the policy before applying for it. C. It allows the insured to return the policy within 10 days for a full refund of premiums if dissatisfied for any reason. D. It allows the proposed insured to carefully look over the application prior to filling it out.

C. It allows the insured to return the policy within 10 days for a full refund of premiums if dissatisfied for any reason.

A guaranteed renewable health insurance policy allows the A. Policy to be renewed at time of expiration, but the policy can be canceled for cause during the policy term. B. Insurer to renew the policy to a specified age. C. Policyholder to renew the policy to a stated age, with the company having the right to increase premiums on the entire class. D. Policyholder to renew the policy to a stated age and guarantees the premium for the same period.

C. Policyholder to renew the policy to a stated age, with the company having the right to increase premiums on the entire class.

Under a health insurance policy, benefits, other than death benefits, that have not otherwise been assigned, will be paid to A. Beneficiary of the death benefit. B. The spouse of the insured. C. The insured. D. Creditors.

C. The insured.

Which of the following is NOT a feature of a noncancellable policy? A. The guarantee to renew coverage usually applies until the insured reaches certain age. B. The insured has the right to renew the policy for the life of the contract. C. The insurer may terminate the contract only at renewal for certain conditions. D. The premiums cannot be increased beyond the amount stated in the policy.

C. The insurer may terminate the contract only at renewal for certain conditions.

According to the rights of renewability rider for cancellable policies, all of the following are correct about the cancellation of an individual insurance policy EXCEPT A. Claims incurred before cancellation must be honored. B. An insurance company may cancel the policy at any time. C. Unearned premiums are retained by the insurance company. D. The insurer must provide the insured a written notice of the cancellation.

C. Unearned premiums are retained by the insurance company.

All of the following are correct about the required provisions of a health insurance policy EXCEPT A. Proof-of-loss forms must be sent to the insured within 15 days of notice of claim. B. A grace period of 31 days is found in an annual pay policy. C. The entire contract clause means the signed application, policy, endorsements, and attachments constitute the entire contract. D. A reinstated policy provides immediate coverage for an illness.

D. A reinstated policy provides immediate coverage for an illness.

If the insured under a disability income insurance policy changes to a more hazardous occupation after the policy has been issued, and a claim is filed, the insurance company should do which of the following? A. Cancel the policy B. Increase the premium C. Exclude coverage for on-the-job injury D. Adjust the benefit in accordance with the increased risk

D. Adjust the benefit in accordance with the increased risk

Which of the following is NOT an exclusion in medical expense insurance policies? A. Military duty B. Self-inflicted injuries C. Routine dental care D. Coverage for dependents

D. Coverage for dependents

In an optionally renewable policy, the insurer has which of the following options? A. Increase the grace period B. Alter the due date so the policy can be cancelled sooner C. Shorten the notice that the insured receives D. Increase premiums

D. Increase premiums

Which of the following entities has the authority to make changes to an insurance policy? A. Department of Insurance B. Broker C. Producer D. Insurer's executive officer

D. Insurer's executive officer

A guaranteed renewable disability insurance policy A. Is renewable at the option of the insurer to a specified age of the insured. B. Is guaranteed to have a level premium for the life of the policy. C. Cannot be cancelled by the insured before age 65. D. Is renewable at the insured's option to a specified age.

D. Is renewable at the insured's option to a specified age.