CHAPTER 3: HEALTH & ACCIDENT

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

C: a reinstated policy provides immediate coverage for an illness

what is the contract provision that allows the insurer to non renew health coverage if certain events occur: A: non cancellable B: guaranteed renewable C: conditionally renewable D: optionally renewable

C: conditionally renewable

a waiver of premium provision may be included with which kind of health insurance policy: A: hospital indemnity B: dread disease C: disability income D: basic medical

C: disability income

the provision that states that both the printed contract and a copy of the close application from the contract between the policy owner and the insurer is called: A: aleatory contract B: master policy C: entire contract D: certificate of insurance

C: entire contract

which of the following is true regarding a term health policy: A is it guaranteed renewable B: it is non cancellable C: it is nonrenewable D: it is conditionally renewable

C: it is nonrenewable

which of the following statements is most correct concerning the changing of the irrevocable beneficiary: A: they can never be changed B: they may be charged only on the anniversary date of the policy C: they can be changed only with the written consent of that beneficiary D: they may be changed at any time

C: they can be changed only with the written consent of that beneficiary

when an insurer issues an individual health insurance policy that is guaranteed renewable, the insure agrees: A: not to change the premium rate for any reason B: to renew the policy indefinitely C: to renew the policy until the insured has reached age 65 D: to charge a lower premium every year the policy is renewed

C: to renew the policy until the insured has reached age 65

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

D: 90 days of a loss

which of the following provisions would prevent an insurance company from paying a reimbursement claim to someone other than the policy owner: A: change of beneficiary B: entire contract clause C: proof of loss D: payment of claims

D: payment of claims

the provision which prevents the insured from bringing any legal action against the company for at least 60 days after proof of loss is known as: A: legal actions B: time limit on certain defenses C: payment of claims D: proof of loss

A: legal actions

which of the following riders will provide benefits above the base policy amount: A: multiple indemnity rider B: impairment rider C: guaranteed insurability rider D: loss of time benefit rider

A: multiple indemnity rider

which renewability provision allows an insurer to terminate a policy for any reason, and increase the premiums for any class of insureds: A: optionally renewable B: conditionally renewable C: cancellable D: guaranteed renewable

A: optionally renewable

insurers may change which of the following on a guaranteed renewable health insurance policy: A: rates by class B: coverage C: individual rates D: no changes are permitted

A: rates by class

under a health insurance policy, benefits, other than death benefits, that have not otherwise been assigned, will be paid to: A: the insured B: creditors C: beneficiaries of the death payment D: the spouse of the insured

A: the insured

which of the following entities has the authority to make changes to an insurance policy: A: broker B: producer C: insurer's executive officer D: department of insurance

C: insurer's executive officer

an insured submitted a notice of claim to the insurer, but never received claims form. he later submits proof of loss, and explains the nature and extent of loss in a hand-written letter to the insurer. which of the following would be true: A: the insured was in compliance with the policy requirements regarding claims B: the claim most likely will not be paid since the official claims form was not submitted C: the insurer will be fined for not providing claims forms D: the insured must submit proof of loss to the department of insurance

A: the insured was in compliance with the policy requirements regarding claims

while a claim is pending, an insurance company may require: A: the insured to be examined only within the first 30 days B: the insured to be examined only once annually C: an independent examination only once every 45 days D: an independent examination as often as reasonably required

D: an independent examination as often as reasonably required

which of the following is true regarding a term health policy: A: it is non cancellable B: it is non renewable C: it is conditionally renewable D: it is guaranteed renewable

B: it is non renewable

under an individual disability policy, the MINIMUM schedule of time in which claim payments must be made to an insured is: A: biweekly B: monthly C: within 45 days D: weekly

B: monthly

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

B: policyholder to renew the policy to a stated age, with the company having the right to increase premiums on the entire class

which health insurance provision describes the insured's right to cancel coverage: A: cancellation provision B: renewal provision C: policy duration provision D: insuring clause

B: renewal provision

which of the following is NOT a feature of a guaranteed renewable provision: A: the insured's benefits cannot be reduced B: the insurer can increase the policy premium on an individual basis C: the insured has a unilateral right to renew the policy for the life of the contract D: coverage is not renewable beyond the insured's age 65

B: the insurer can increase the policy premium on an individual basis

which of the following riders would NOT increase the premium for a policy owner: A: waiver of premium rider B: multiple indemnity rider C: impairment rider D: payor benefit rider

C: impairment rider

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

C: is renewable at the insured's option to a specified age

an insured is killed when a drunk drivers car slams into his truck. his beneficiary receives triple the amount of the stated death benefit. what provision allowed this: A: irrevocable beneficiary B: other insurance in this insurer C: multiple indemnity rider D: guaranteed insurability

C: multiple indemnity rider

an insured pays her major medical insurance annually on March 1st. last march she forgot to mail her premium to the company. on march 19th she had an accident and broke her leg. the insurance company would: A: deny the claim B: pay half of her claim because the insured had an outstanding premium C: pay the claim D: hold the claim as pending until the end of the grace period

C: pay the claim

which renewability provision are you most likely to see on a travel accident policy: A: optionally renewable B: conditionally renewable C: period of time D: non cancellable

C: period of time

L has a major medical policy wit 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: $500 (amount of deductible) B: $1,000 (deductible + 20% of the entire bill C: $2,500 (the entire bill) D: $900 (deductible + 20% of the bill after the deductible [ 20% of $2,000]

D: $900 (deductible + 20% of the bill after the deductible [ 20% of $2,000]

when an insured purchased her disability income policy, she misstated her age to the agent. she told the agent that she was 30 years old., when in fact, she was 37. if the policy contains the optional misstatement of age provision: A: the contract will be deemed void because of the misstatement of age B: the elimination period will be extended 6 months for each year of age misstatement C: because the misstatement occurred more than 2 years ago, it has no effect D: amounts p under the policy will reflect the insured's correct age

D: amounts p under the policy will reflect the insured's correct age

a deductible is: A: a specified dollar amount that the insured must pay first before the insurance company will pay the policy benefits B: a percentage of the medical bill the insured must pay before services will be rendered C: an insurer's obligation to the service provider D: a nominal fee for the use of an insurer's services

A: a specified dollar amount that the insured must pay first before the insurance company will pay the policy benefits

in group health policy, a probationary period is intended for people who: A: join the group after the effective date B: have a pre- existing condition at the time they join the group C: have additional coverage through a spouse D: want lower premiums

A: join the group after the effective date

a man is injured while robbing a convenience store. how does his major medical policy handle the payment of his claim: A: the claim is paid in full B: claim is denied if his policy contains the illegal occupation provision C: 50% of the claim will be paid D: if the man is not convicted, he will get 75% of his claim paid

B: claim is denied if his policy contains the illegal occupation provision

an applicant for an individual health policy failed to complete the application properly. before being able to complete the application and pay the initial premium, she is confined to a hospital. this will not be covered by insurance because she has not met conditions specified in: A: eligibility clause B: consideration clause C: insuring clause D: pre-existing conditions clause

B: consideration clause

what is he main difference between coinsurance and copayments: A: coinsurance is a set dollar amount B: copayment is a set dollar amount C: with copayments, the insured pays all of the cost D: with coinsurance, the insurer pays all of the cost

B: copayment is a set dollar amount

which of the following riders would NOT increase the premium for a policy owner: A: multiple indemnity rider B: impairment rider C: payor benefit rider D: waiver of premium rider

B: impairment rider

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: 80/20 B: 90/10 C: 50/50 D: 75/25

C: 50/50

the free-look provision allows for which of the following: A: a guarantee that the policy will not lapse if the premium is overdue B: a guarantee that the policy will be issued C: a right to the return the policy for a full premium refund D: immediate coverage when the application is submitted.

C: a right to the return the policy for a full premium refund

which of the following does the insuring clause NOT specify: A: covered perils B: the insurance company C: the name of the insured D: a list of available doctors

D: a list of available doctors

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

what is the maximum period of time during which an insurer may contest fraudulent misstatements made in a health insurance application: A: 90 days after the effective policy date B: 6 months after the effective policy date C: 1 year after the effective policy date D: as long as the policy is in force

D: as long as the policy is in force

items stipulated in the contract that the insurer will not provide coverage for are found in the: A: insuring clause B: benefit payment clause C: consideration clause D: exclusions

D: exclusions

which provision concerns the insured's duty to provide the insurer with reasonable notice in the event of a loss: A: loss notification B: claims initiation C: consideration D: notice of claim

D: notice of claim

an insured had endured multiple surgeries and hospitalizations for an illness during the summer months. her insurer no longer bills her for medical expenses. what term best describes the condition she has met: A: maximum loss B: stop-loss limit C: out-of-pocket limit D: maximum loss threshold

B: stop-loss limit

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: A: the deductible will be waived B: the insured is now eligible for an integrated deductible until the new policy year C: the insured must satisfy this year's deducible, but next year's deductible will begin when or if he makes a claim in the following calendar year D: the insured may carry over the amount of this year's expenses to next year, which will help satisfy next year's deductible

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

what is the purpose of coinsurance provisions: A: to have the insured pay premiums to more than one company B: to ensure payment to the doctors and hospitals C: to share liability among different insurance companies D: to help the insurance company to prevent over utilization of the policy

D: to help the insurance company to prevent over utilization of the policy

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