Chapter 7 Health Insurance Underwriting

T is receiving $3,000/month from a Disability Income policy in which T's employer had paid the premiums. How are the $3,000 benefit payments taxable?

Benefits are taxable to T When a disability income insurance plan is paid for entirely by the employer, the premiums are deductible to the employer. The benefits, in turn, are taxable to the recipient.

Information obtained from a phone conversation to the proposed insured can be found in which of these reports?

Inspection report

Which of the following are NOT managed care organizations?

Medical Information Bureau (MIB)

Agent J takes an application and initial premium from an applicant and sends the application and premium check to the insurance company. The insurance company returns the check back to J because the check is made out to J instead of the insurance company. What action should J take?

Return to the customer, collect a new check made out to the insurance company, and send the new check out to the insurance company

Pre-hospitalization authorization is considered an example of

managed care

Which of the following statements about the classification of applicants is INCORRECT?

Substandard applicants are never declined by underwriters

Which of the following correctly explains the actions an agent should take if a customer wants to apply for an insurance policy?

Complete the application and review the information with the customer prior to obtaining the customer's signature, then send the application off to the insurance company

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 a notice to the MIB that the applicant was declined

Which mode of payment is NOT used by health insurance policies?

Single premium

Which of the following BEST describes how pre-admission certifications are used?

Used to prevent nonessential medical costs