Life and Health - Chapter 8 Quiz - Health Basics

Eileen's health insurance had a $500 deductible and 80% / 20% coinsurance. Her first claim of the policy year amounted to $1,000, of which she paid $600. How much was her coinsurance? $500 $100 $400 $600

$100 The answer is $100. The other $500 she paid covers her policy deductible. Relevant content:8.5 Individual Health Insurance Underwriting

W has a health insurance policy with an 80/20 coinsurance provision and a $1,000 deductible that is payable each year. If in January W has an outpatient procedure that cost $900, how much will W have to pay, assuming a new deductible must be met? $180 $720 $200 $900

$900 W must satisfy the deductible every year starting in January before the co-insurance kicks-in. Since the deductible is $1,000, W must pay the entire $900. Relevant content:8.1 General Definitions

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

A side-by-side comparison of two policies issued by different insurers Comparisons of policies are not prohibited, but they must be complete, accurate, and fair. Relevant content:8.4 Producer Responsibilities in Individual Health Insurance

All of the following practices may never be used when advertising health insurance, except: Describing hospital indemnity benefits calculated and prorated daily, on a weekly or monthly basis Using words like 'only' or 'merely,' minimize the perception of policy restrictions Advertising a group's product endorsement, if the insurer has any control over the group Implying that an insurer's claim settlements are generous or liberal

Advertising a group's product endorsement, if the insurer has any control over the group An insurer may use the endorsement of a group over which it has some control, as long as it discloses that control in its advertising. Relevant content:8.4 Producer Responsibilities in Individual Health Insurance

Other than the applicant, which signature is required on an application? Agent Executive officer of the insurer Insurance commissioner Beneficiary

Agent The applicant and the agent are required to sign and application for insurance. If the insured is not the applicant and is not a minor, a signature is also required. Relevant content:8.5 Individual Health Insurance Underwriting

When Harry completed his insurance application, the agent discovered that he was under treatment for a chronic condition. In order to gather the necessary information, Harry's agent ordered a/an: A medical exam An inspection report A Medical Information Bureau report An attending physician statement

An attending physician statement An attending physician's statement is ordered when the application reveals the presence of a chronic or other condition for which additional information regarding treatment and prognosis is required. A medical exam is ordered based on a variety of factors including the age, and condition of the applicant as well as the amount of coverage requested. A Medical Information Bureau report will be ordered on all applicants as a matter of course. Relevant content:8.5 Individual Health Insurance Underwriting

When Harry completed his insurance application, the agent discovered that he was under treatment for a chronic condition. In order to gather the necessary information, Harry's agent ordered a/an: An attending physician statement A medical exam A Medical Information Bureau report An inspection report

An attending physician statement An attending physician's statement is ordered when the application reveals the presence of a chronic or other condition for which additional information regarding treatment and prognosis is required. A medical exam is ordered based on a variety of factors including the age, and condition of the applicant as well as the amount of coverage requested. A Medical Information Bureau report will be ordered on all applicants as a matter of course. Relevant content:8.5 Individual Health Insurance Underwriting

Which of the following terms and definitions do not match? Blanket insurance -- Insurance that provides payments made daily for a specified number of days Reimbursement -- Pays benefits directly to the insured Field Underwriting -- The agent's personal contact with the applicant Sickness -- An illness or disease that first manifests itself, or that is first diagnosed and treated, while the policy is in force

Blanket insurance -- Insurance that provides payments made daily for a specified number of days Blanket insurance provides a set maximum overall benefit limit with no itemizing. Relevant content:8.2 Principal Types of Losses and Benefits

Policy replacement is the process of: Lowering a policy premium Adding additional coverage Changing riders and exclusions Cancelling an existing policy and issuing a new policy

Cancelling an existing policy and issuing a new policy Replacement means cancelling an old policy and replacing it with new a new policy. Relevant content:8.6 Replacement Considerations

If premium is paid at the time of application, the agent will provide the applicant with a: Statement of good health Conditional receipt Claim form Free look notice

Conditional receipt The agent will provide a conditional receipt if the premium is paid by the applicant at the time of application. Relevant content:8.5 Individual Health Insurance Underwriting

If premium is paid at the time of application, the agent will provide the applicant with a: Statement of good health Free look notice Conditional receipt Claim form

Conditional receipt The agent will provide a conditional receipt if the premium is paid by the applicant at the time of application. Relevant content:8.5 Individual Health Insurance Underwriting

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

Coverage is issued, but there are limits on the insurer's obligation to pay Exclusions/limitations may be temporary or permanent, but in any case they limit the insurer's obligation to pay. Relevant content:8.5 Individual Health Insurance Underwriting

If questions are incomplete on an application and the insurer issues the policy, a claim is: Covered since the insurer issued the contract based on an incomplete application Covered only after the first 2 years Not covered and the policy is canceled due to fraud Not covered if discovered during the Incontestability period

Covered since the insurer issued the contract based on an incomplete application If a policy is issued with questions unanswered, the contract will be interpreted as if the question had not been asked, and is therefore waived by the insurer and covered. Relevant content:8.5 Individual Health Insurance Underwriting

Edward applies for a disability insurance policy. He pays the initial premium at the time of application and receives a conditional receipt. Three days after the insurance company conducts a medical examination, but before it issues a policy, Edward suffers a stroke. Upon reviewing the results of his medical exam, the company discovers that Edward has been diagnosed with high blood pressure and atherosclerosis. Under the terms of the conditional receipt, the insurance company: Pays a reduced benefit since the results of the medical exam show a pre-existing condition Denies the claim because the insurer would not have issued the policy as applied for as standard or better Pays the claim because a receipt has been provided Delays the effective date of the policy

Denies the claim because the insurer would not have issued the policy as applied for as standard or better The insurer will deny the claim, and will also deny the application, issue a rated policy, or issue a standard policy for which excludes all claims related to blood pressure and/or the condition of Edward's arteries. Relevant content:8.5 Individual Health Insurance Underwriting

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

Dental expense 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. Relevant content:8.2 Principal Types of Losses and Benefits

Which of the following would be considered a pre-existing condition? Diabetes The flu A sore throat A broken wrist

Diabetes Pre-existing conditions are prior medical conditions for which the applicant has received, or should have received, medical advice or treatment within a specified period before the effective date of a policy. The BEST answer is diabetes as it is considered a 'medical condition'. Relevant content:8.1 General Definitions

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

Disability income 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. Relevant content:8.2 Principal Types of Losses and Benefits

Field underwriting is very important: For policies that do not require home office underwriting Due to the risk of a moral hazard Due to the risk of morale hazard For individual insurance only

Due to the risk of a moral hazard An agent's personal contact and assessment of an individual or helps to confirm whether the information provided on an application is accurate. The possibility that an applicant might, for his or her own benefit, provide information that does not accurately reflect the level of risk, is considered a moral hazard. A morale hazard refers to indifferent attitude toward being involved in risky behavior while coverage is in force. Relevant content:8.5 Individual Health Insurance Underwriting

An applicant determined to have below average risk of loss would be: Issued a rated policy Issued a standard policy Issued a preferred policy Declined for coverage

Issued a preferred policy In this case, 'below average' is a good thing. A below average risk is preferred because there is less of a chance of a claim being made. Relevant content:8.5 Individual Health Insurance Underwriting

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? Outpatient Care Medicare Supplement Long-Term Care Retirement Benefits

Long-Term Care The question describes a Long-Term Care Policy. Relevant content:8.2 Principal Types of Losses and Benefits

Howard talks to his agent Jane about buying a critical illness policy from the XYZ insurance company to cover his wife Deborah, and naming his daughter Mary as the beneficiary in case of death. Jane told him that she would need signatures from all of the following, except: Howard Deborah Jane Mary

Mary Beneficiaries are not required to sign. The agent must sign on behalf of the company, and the insured, not being a minor, must give consent to being insured. The policy owner, who is also the applicant, must by definition sign the application. Relevant content:8.5 Individual Health Insurance Underwriting

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

Medical expense A Medical Expense contract covers the various expenses which an insured may incur due to an accident or sickness. Relevant content:8.2 Principal Types of Losses and Benefits

The chart that shows the chance of a disability at any given age is called a: Morbidity Table Chance of Loss Table Disability Table Mortality Table

Morbidity Table Morbidity Tables reflect the likelihood of disability. Mortality Tables reflect the likelihood of death. Relevant content:8.1 General Definitions

All of the following are factors used in the calculation of health insurance premiums, except: Morbidity Table Mortality Table Expense to administer the policy Interest earnings

Mortality Table The mortality table is used when determining life insurance rates. The morbidity table is used to determine health insurance rates. Relevant content:8.5 Individual Health Insurance Underwriting

Which of the following must be given to consumers under the provisions of the Fair Credit Reporting Act (FCRA)? Notice of Information Practices Application Receipts Disclosure at the Point of Sale Outline of Coverage

Notice of Information Practices The Notice of Information Practices describes the insurer's policy and practice when it comes to handling consumer information, which is the topic governed by the FCRA. Relevant content:8.5 Individual Health Insurance Underwriting

It is illegal for most telemarketers or sellers to call a number listed _____________. On the National Do Not Call Registry On the internet In a neighborhood association directory In a phone book

On the National Do Not Call Registry It is illegal for most telemarketers or sellers to call a number listed on the National Do Not Call Registry. Relevant content:8.4 Producer Responsibilities in Individual Health Insurance

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

Political affiliation and religious preference Religious preference and political affiliation are not factors used in underwriting individual health policies. Relevant content:8.5 Individual Health Insurance Underwriting

A medical condition that was treated prior to the effective date of a policy is a: Prescribed Condition Probationary Condition Pre-existing Condition Surgical Condition

Pre-existing Condition A pre-existing condition is one in which medical treatment was obtained or should have been obtained by the applicant prior to the effective date of the policy. Relevant content:8.1 General Definitions

A specified period that must elapse before new coverage goes into effect for a given condition is known as which of the following? Probationary period Waiting period Benefit period Exclusion

Probationary period 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. Relevant content:8.1 General Definitions

All of the following are modes of premium payment for health insurance, except: Annually Single pay Quarterly Monthly

Single pay Single pay is not considered a mode of premium payment for health insurance. Relevant content:8.5 Individual Health Insurance Underwriting

Accidental Injury is a: Predictable event Sudden, unexpected and unforeseen event Catastrophic loss Pre-existing condition

Sudden, unexpected and unforeseen event Accidental Injuries are events that are, sudden, unexpected and unforeseen. Relevant content:8.1 General Definitions

Which of the following items does not become part of the insurance contract as defined in the entire contract clause? The agent's report The application Information regarding hobbies The medical examination report

The agent's report The agent's report is neither part of the application, nor part of the insurance contract. The agent's report is a confidential communication between the agent and the insurer. Relevant content:8.5 Individual Health Insurance Underwriting

Which of the following items does not become part of the insurance contract as defined in the entire contract clause? The application The agent's report Information regarding hobbies The medical examination report

The agent's report The agent's report is neither part of the application, nor part of the insurance contract. The agent's report is a confidential communication between the agent and the insurer. Relevant content:8.5 Individual Health Insurance Underwriting

What is the primary source of underwriting information for an individual health insurance policy? The inspection report The agent's report The application A medical exam

The application The application is the primary source of underwriting information. All other sources are supplementary. Relevant content:8.5 Individual Health Insurance Underwriting

A premium is paid at the time of application and a conditional receipt is issued. If the policy is issued as applied for, coverage becomes effective: At the time the policy is issued The date of the conditional receipt After the free look expires Upon policy delivery

The date of the conditional receipt The conditional receipt is issued upon the premium being paid at the time of application. If the policy is issued as applied for, coverage is effective as of the date of the conditional receipt. Relevant content:8.5 Individual Health Insurance Underwriting

Which of the following statements regarding health insurance advertising is not correct? An agent must include the insurer's full name of when specifically advertising their product or product type Statistical information may be used as long as it is accurate and the source is named Insurers are responsible for the accuracy of their personal testimonials The history of very high or unique claim settlements if often used in agent advertising

The history of very high or unique claim settlements if often used in agent advertising A history of high or unique claim settlements may not be used by agents. Relevant content:8.4 Producer Responsibilities in Individual Health Insurance

When it comes to underwriting a health insurance policy, and HIV or AIDS: The insurer must approach the topic in a way that avoids unfair discrimination Refusing to undergo an HIV test may not be the sole reason one is denied coverage All applicants must be tested, with or without prior consent HIV and AIDS may not be discussed on an insurance application

The insurer must approach the topic in a way that avoids unfair discrimination Testing for HIV, and considering the impact of HIV and AIDS is an integral part of the underwriting process. A test may be required in order to receive coverage, but each applicant must give consent before testing. The potential for discrimination against groups with higher rates of infection is a concern. Relevant content:8.5 Individual Health Insurance Underwriting

If an application is submitted with a question left unanswered, which of the following should occur? The insurer would require an answer when a claim occurred The insurer would waive the question The insurer would require an answer before issuing a policy The insurer would deny the application

The insurer would require an answer before issuing a policy Any unanswered questions need to be answered before the policy is issued. Relevant content:8.5 Individual Health Insurance Underwriting

An applicant for accident and health insurance works for two different employers. Which of the applicant's occupations will be used to underwrite the policy? The most hazardous of the two The one with the most hours per week The occupation with which the applicant has the most experience The occupation with which the applicant has the least experience

The most hazardous of the two When one has two occupations, the most hazardous is used for rating, regardless of hours worked or experience in each. Relevant content:8.5 Individual Health Insurance Underwriting

The agent's primary underwriting role is: To determine insurability To collect information for marketing purposes No longer applicable in most situations To make sure the application provides the proper information

To make sure the application provides the proper information An agent does not determine insurability, but an agent does make sure the application accurately reflects the real nature of the risk. Relevant content:8.5 Individual Health Insurance Underwriting

Which Government health plan is available for military personnel? Tricare Social Security Disability Medicaid Medicare

Tricare Though all of the above are Government Insurance TRICARE covers military personnel. Relevant content:8.3 Classes of Health Policies

Home health care provides benefits for all of the following, except: Limited nursing services Light housekeeping Home health aide Vocational or job rehabilitation

Vocational or job rehabilitation Home health care provides services when an insured is unable to perform some of the daily duties at home or needs minimum nursing care. They will not provide benefits for job training. Relevant content:8.2 Principal Types of Losses and Benefits

Which is true regarding the advertising of Accident and Sickness Insurance? Sales talks and personal testimonials are not considered advertising When insurers advertise that a group endorses a certain health product, the public must be made aware of any control the insurer may have regarding the group When an agent misleads the public in an advertisement, only the agent is accountable Advertisements may use words or phrases such as 'all', 'complete', 'comprehensive'

When insurers advertise that a group endorses a certain health product, the public must be made aware of any control the insurer may have regarding the group Both the agent and the insurer are accountable for advertising content. Words such as all, complete, or comprehensive are not allowed. Sales talks and testimonials are considered advertising. Relevant content:8.4 Producer Responsibilities in Individual Health Insurance