Am Pro Chapter 24
An Insured who has suffered a loss will need to submit a Proof of Loss form within 90 days from? Select one: a.the date the Insurer sent a Proof of Loss form. b.the date the Insured received the Proof of Loss form. c.the date of the loss. d.the date the Insurer was notified of the loss.
the date of the loss.
Under a Health Insurance policy, an Insured who has suffered a loss must notify the company: Select one: a.within 20 days. b.promptly. c.within 30 days. d.within a reasonable time.
within 20 days.
Which of the following includes the promise by the Insurer to pay benefits if the Insured is totally disabled? Select one: a.Free Look Clause b.Ownership Clause c.Insuring Clause d.Consideration Clause
Insuring Clause is correct. Of course, this will apply only in a Disability Income policy (a type of Health insurance). The correct answer is: Insuring Clause
Chloe is injured while bowling. She notified the Insurer promptly in writing, but the Insurer failed to send her a Proof of Loss form. What should Chloe do? Select one: a.Refuse to pay any more premiums until the Proof of Loss form is delivered to her. b.Wait 60 days and then file a lawsuit if the company still hasn't responded. c.Submit the claim to the Insurer with a written statement in her own words describing the details of the claim. d.She should ask her health care provider to send the bills directly to the insurance company.
Submit the claim to the Insurer with a written statement in her own words describing the details of the claim.
If the Insured pays premiums monthly, the Grace Period for an individual health policy expires after: Select one: a.10 days b.20 days c.31 days d.45 days
10 days
What is the Grace Period for an INDIVIDUAL Health Insurance policy that has a monthly premium mode? Select one: a.7 days b.10 days c.14 days d.31 days
10 days
Jana has a Medical Expense policy and is injured playing rugby. She immediately and in writing notified her Insurer of the loss. How many days does the Insurer have to send her the Insurer's claim form documents? Select one: a.15 days b.20 days c.30 days d.60 days
15 days
Elijah accidentally overstated his age when applying for individual Health Insurance. Four years later, Elijah filed a claim after an auto accident. The Insurer then discovered Elijah's true age. The Insurer: Select one: a.Will pay part of the claim and increase the future premiums. b.Will pay the claim and increase the future premiums. c.Will pay the claim and reduce the future premiums. d.Will pay the claim, but cancel the policy.
The Time Period on Certain Defenses provision doesn't apply to a misstatement of age. The Insurer must pay the claim but Elijah will be entitled to a reduced future premium due to his younger age (Chapter 5). The correct answer is: Will pay the claim and reduce the future premiums.
If the beneficiary is a minor, a trustee or guardian should be named: Select one: a.by the minor beneficiary at the time of the claim. b.by the Owner when the policy is delivered.
by the Owner when the policy is delivered.
Each of the following will generally be part of an individual Health Insurance policy reinstatement process EXCEPT: Select one: a.A requirement that the applicant pay the next year's premium in advance. b.Payment of past due premiums for up to 60 days. c.A reinstatement application. d.Proof of Insurability (a medical exam).
A requirement that the applicant pay the next year's premium in advance.
An Insurer must send an Insured a Claim form within what time? Select one: a.90 days from receiving notification that a loss occurred. b.30 days from the date of the accident or illness. c.15 days from receiving notification that a loss occurred. d.20 days from the accident or illness.
15 days from receiving notification that a loss occurred.
Under the Claim Forms Provision, an insurance company must send a Proof of Loss form to the Insured within how many days of receiving notice of a loss? Select one: a.15 days. b.20 days. c.30 days. d.60 days.
15 days.
The Incontestable Clause limits the time that an insurance company can deny Individual Health Insurance claims on the basis of accidental errors in the application to: Select one: a.6 Months b.1 Year c.2 Years d.5 Years
2 Years
What is the grace period for an INDIVIDUAL Health Insurance policy that has a weekly premium mode? Select one: a.7 days b.10 days c.14 days d.31 days
7 days
The owner of an Individual Health Insurance policy has each of the following rights EXCEPT: Select one: a.The right to assign the policy benefits. b.The right to name and change beneficiaries. c.A 10-day Free Look provision which may result in a refund of the entire premium paid. d.The right to reinstate a lapsed policy within a reasonable time following lapsation.
Although the owner may ask for reinstatement, there is no "right" to reinstate an individual health policy. The correct answer is: The right to reinstate a lapsed policy within a reasonable time following lapsation.
Who can make changes to an insurance policy? Select one: a.The state insurance commissioner. b.An executive officer of the insurance company. c.The agent that sells the policy. d.The underwriter.
An executive officer of the insurance company.
Jillian forgot to pay the weekly premium for her individual Medical Expense policy that was due on April 25th. On June 1st she was hospitalized with a illness. What will the Insurer do when she files her claim? Select one: a.Pay the claim after deducting the past due premium. b.Deny the claim because of lapsation.
Deny the claim because of lapsation.
Emily lied about her age on her Individual Health Insurance application. Five years later she was injured in an accident. She filed a Health Insurance claim. The Insurer may: Select one: a.Deny the claim because accidents are not covered by Health Insurance policies. b.Adjust the benefits based on the Misstatement of Age Provision. c.Refund all premiums to the beneficiary without interest. d.Pay the claim because the misstatement of age was not discovered within the 2-year contestable period.
Does this concept sound vaguely familiar? This is a review of one of the basic concepts from Chapter 5 - when we have a claim that involves a misstatement of age, the Insurer will adjust the benefits. The correct answer is: Adjust the benefits based on the Misstatement of Age Provision.
Which of the following is a purpose of the Entire Contract Provision? Select one: a.To warn the Insured that any promises the agent makes will not be binding unless they are written on the front of the policy and signed by both the agent and the Insured. b.To notify the Insured that the application is considered to be part of the contract if attached thereto.
Even if the promises made by the agent are written and signed, they are not enforceable. The agent has no such authority. The correct answer is: To notify the Insured that the application is considered to be part of the contract if attached thereto.
Under what circumstances can a policy owner exercise the Free Look Provision? Select one: a.Only if the agent misrepresented the policy terms. b.For any reason as long as it is within the time period specified by state law. c.Only if the underwriting process takes more than four weeks and the Insured's mind has changed. d.Only if the Insured finds a replacement policy with better terms.
For any reason as long as it is within the time period specified by state law.
While on an extended vacation in Italy, Paul failed to pay his individual health policy premium that was due on August 6th. He was slightly burned by a lava flow on October 8th. The Insurer will: Select one: a.pay the claim only if the failure to pay the premium was unintentional. b.pay the claim, but then cancel the policy. c.pay the claim, but not before deducting the missed premium plus interest. d.deny the claim because the grace period expired without the premium being paid, causing policy lapsation.
If Paul had been paying his premium weekly, the policy lapsed after 7 days. If he had been paying his premium monthly, the policy lapsed after 10 days. If the he had been paying his premium quarterly or annually, the policy lapsed after 31 days. No matter what, this policy has lapsed so the Insurer will not pay the claim. The correct answer is: deny the claim because the grace period expired without the premium being paid, causing policy lapsation.
An applicant for individual Health Insurance is asked by the producer to waive the Grace Period Provision. Which is correct? Select one: a.It is not possible to waive a required provision. b.The applicant will need to sign a hold harmless agreement. c.Both the applicant and the agent need to sign a waiver of provision form. d.The applicant will need to sign a waiver.
It is not possible to waive a required provision.
Which of the following statements regarding the Time Limit on Certain Defenses Clause for an individual health policy is CORRECT? Select one: a.It prescribes the amount of time for the Insurer to cancel a policy due to accidental errors in the application. b.It requires an Insured to wait 60 days before bringing a lawsuit against the Insurer. c.It prevents lapsation during the 31-day grace period. d.It obligates the Insured to submit a properly completed Proof of Loss form within 90 days from the date of the loss.
It prescribes the amount of time for the Insurer to cancel a policy due to accidental errors in the application.
Under a Health Insurance policy, an Insured who has suffered a loss must notify the company: Select one: a.either orally or in writing b.by registered or certified mail c.orally d.in writing
My trick for remembering this is to think that I fell out of the 20th row bleacher at the Rose Parade, went to the hospital, and then had to send a post card to the Insurer within 20 days. Written notice within 20 days. The correct answer is: in writing
Does the Time Limit on Certain Defenses Provision apply to statements on the application regarding age? Select one: a.Yes, but it only applies to innocent misstatements of age. b.No, it does not. c.Yes, but the Insurer may only void the policy within 2 years. d.Yes, and the Insurer may void the policy for a fraudulent statement regarding age. Feedback
No, it does not.
Which of the following describes the Free Look Provision in an Individual Health Policy? Select one: a.A policy owner can return a policy within 10 days after delivery and get a pro-rated refund without providing a reason. b.A policy owner can return a policy within 10 days after delivery and get a full refund by providing a valid reason. c.A policy owner can return a policy within 10 days after delivery and get a full refund without providing a reason. d.A policy owner can return a policy within 10 days after submitting the application and get a full refund without providing a reason.
Note: Group Health policies don't have a Free Look provision - as we will see when we get to that chapter. The correct answer is: A policy owner can return a policy within 10 days after delivery and get a full refund without providing a reason.
Which of the following prohibits the Insurer from making claim payment to children at any time? Select one: a.Time Limit on Certain Defenses Provision b.Payment of Claims Provision Provision
Payment of Claims Provision Provision
An Insured who has suffered a loss will need to complete and return which form? Select one: a.A Statement of Accident or Illness form b.A receipt form for any claim monies paid by the Insurer. c.A Proof of Loss form d.A Notice of Claim form
Sneaky question. The form the Insurance Company sends to be completed is called a Claim Form. But when it is completed and sent back, it is called a Proof of Loss Form. The correct answer is: A Proof of Loss form
Which provision protects the policy owner by stating that the agreement cannot include company procedures and provisions not contained in the policy? Select one: a.The Consideration Clause b.The Entire Contract Clause c.The Ownership Clause d.The Insuring Clause
The Entire Contract Clause
Which provision provides the best line of defense for the Insurer if the agent made an unapproved policy alteration? Select one: a.The Entire Contract Clause b.The Incontestable Clause c.The Ownership Clause d.The Insuring Clause
The Entire Contract Clause
Which provision states that the application is part of the contract? Select one: a.The Insuring Clause. b.The Time Limit on Certain Defenses Clause. c.The Entire Contract Clause. d.The Consideration Clause.
The Entire Contract Clause.
Which of the following statements regarding reinstatement of a lapsed individual Health Insurance policy is CORRECT? Select one: a.Reinstatement is not permitted with Health Insurance. b.The insurance company must respond to a reinstatement application within 45 days or the policy will be automatically reinstated. c.The insurance company must reinstate a lapsed policy if the Insured submits the past due premiums within a reasonable time. d.The Company must reinstate if a request for reinstatement is submitted within one year of policy termination.
The Health Policy's reinstatement provision is so weak that it's barely worth the paper it's printed on. The Insured has no absolute right to reinstate unless the Insured requests reinstatement and the Insurer fails to respond to the request within 45 days. Weird provision! But regardless of how the reinstatement occurs, the Insured may be asked to pay past premiums for 60 days and have a 10-day waiting period for new illnesses, although accidents during the 10-day waiting period will be covered. The correct answer is: The insurance company must respond to a reinstatement application within 45 days or the policy will be automatically reinstated.
Under the Notice of Claim Provision, who provides the notice? Select one: a.The Insurer if the claim is denied. b.The health care provider at the time the service is provided. c.The Insured. d.The agent when so notified by the Insured.
The Insured.
What happens when the grace period expires? Select one: a.The insurance policy is automatically reinstated. b.The insurance company is required to pay only 50% of claims filed. c.Coverage continues but the insurance company will impose a penalty for late payment. d.The insurance policy lapses.
The insurance policy lapses.
The Payment of Claims provision specifies: Select one: a.The types of illnesses or accidents for which claims will be paid. b.The number of days in which the claim must be paid. c.The number of days the Insured has to file a request for claim payment. d.The name of the person to be paid on the claim.
The name of the person to be paid on the claim.
Which of the following is NOT one of the required policy provisions? Select one: a.The right to sue the Insurer within 3 years if the claim settlement is unsatisfactory. b.The right to return a policy within 10 days of policy delivery and to obtain a full refund. c.The right to a grace period. d.The right to obtain a copy of the consumer inspection report if the Insurer denies coverage based on information in the report.
The right to obtain a copy of the consumer inspection report if the Insurer denies coverage based on information in the report.
Which provision could allow the Insurer to cancel an individual health policy because of intentional material misstatements in the application? Select one: a.Payment of Claims Provision b.Time of Payment of Claims Provision c.Time Limit on Certain Defenses Provision d.Legal Action Provision
This is a rather vague description of the Contestable/Incontestable Provision which in a health policy is also known as the Time Limit on Certain Defenses Provision. The key point is to know that the Time Limit on Certain Defenses Clause is also called the Contestable Provision. The correct answer is: Time Limit on Certain Defenses Provision
Brynn is an accountant and also a rodeo clown on an occasional basis. She applied for a Disability Income policy and forgot to include the clown information on her application. Four years later, Brynn is totally disabled while working as a rodeo clown. How will the company handle her claim? Select one: a.Pay the claim and the policy will remain in force. b.Deny the claim, but the policy will remain in force. c.Pay the claim and cancel the policy. d.Deny the claim and cancel the policy.
This is an honest mistake and the Insurer could have contested the policy within the first two years under the Time Limit on Certain Defenses Provision. However, after the two years, the company cannot contest the policy. It must pay the claim and can't void the policy. The correct answer is: Pay the claim and the policy will remain in force.
Jana has a Medical Expense policy and is injured in a tragic Monopoly game accident. The policy will require her to notify the Insurer in writing of the loss within how many days of the loss? Select one: a.15 days b.20 days c.30 days d.90 days
This seems trivial, I know, but you have to remember 20 days to give the Insurer written notice of the claim. Then the Insurer must send you a claim form within _____ days and then you must return the completed form within _____ days of the loss. This missing numbers are fifteen and ninety. Big deal, we "gotta" know this! The correct answer is: 20 days
What is another name for the Incontestable Clause found in Health Insurance policies? Select one: a.Time Limit on Certain Defenses Provision b.Legal Action Provision c.Grace Period Provision d.Payment of Claims Provision
Time Limit on Certain Defenses Provision
What is the main purpose of the Time of Payment of Claims Provision? Select one: a.To obligate the Insurer to pay claims promptly. b.To prevent the Insured from filing a lawsuit for 60 days from submitting the Proof of Loss form.
To obligate the Insurer to pay claims promptly.
The purpose of the Grace Period Clause is: Select one: a.To prevent unintentional lapsation of the policy. b.To give the Insurer time to review the proof of loss form before responding. c.To allow a beneficiary to take some time to file a claim. d.To provide the first month of insurance free as a bonus.
To prevent unintentional lapsation of the policy.
What is the purpose of the Health Insurance Grace Period Clause? Select one: a.To prevent unintentional policy lapsation. b.To give the Insurer a reasonable time to pay claims. c.To provide the opportunity for reinstatement after lapsation. d.To give the policy owner a chance to cancel the agreement.
To prevent unintentional policy lapsation.
What is the main purpose of the Physical Exam and Autopsy Provision? Select one: a.To protect the Insured's right of privacy. b.To protect the Insurer from fraudulent claims.
To protect the Insurer from fraudulent claims.
What is the main purpose of the Payment of Claims Provision? Select one: a.To require the Insurer to pay the appropriate person. b.To obligate the Insurer to pay claims promptly.
To require the Insurer to pay the appropriate person.
Charlie falls down the stairs and has to visit the emergency room. He files a claim with his insurance company and the claim is denied. Charlie feels the claim was not handled fairly and decides to sue the Insurer. How long must he wait to file suit? Select one: a.60 days after submitting the proof of loss form. b.30 days after the date of loss. c.30 days after submitting the proof of loss form. d.60 days after the date of loss.
Under both life and health insurance, we must wait 60 days after filing a claim before we "lawyer up." That gives the Insurer a reasonable time to respond to our claim. Gotta wait 60 days to sue, but must sue within 3 years - same as the rule for life insurance. The correct answer is: 60 days after submitting the proof of loss form.
An Insurer suspects Alva has submitted a fraudulent claim. What should the Insurer do? Select one: a.Under the Physical Exam and Autopsy Provision, request that Alva submit to a doctor's exam at the company's expense. b.Under the Physical Exam and Autopsy Provision, demand that Alva submit to a medical exam at her expense. c.Exercise its rights under the Free Look Provision and demand that Alva to submit to a medical exam at her expense. d.Exercise its right under the Free Look Provision and force Alva to submit to a medical exam at the company's expense.
Under the Physical Exam and Autopsy Provision, request that Alva submit to a doctor's exam at the company's expense.
Dan was injured in a terrorist bomb explosion. His Health Insurer paid the claim. Six years later, the Insurer discovered that Dan had concealed the fact that he was the terrorist. What will the Insurer do? Select one: a.The Insurer may demand that Dan pay restitution under the Time Limit on Certain Defenses Provision. b.Nothing - it is too late for the Insurer to contest the claim payment.
Under the individual health policy's Time Limit on Certain Defenses Provision, there is no time limit for contesting a claim payment due to intentional concealment. The correct answer is: The Insurer may demand that Dan pay restitution under the Time Limit on Certain Defenses Provision.
An insurance company discovers that James committed fraud by concealing crucial information on his Individual Health Insurance application. The 2-year Contestable Period has passed. The Insurer may: Select one: a.Void the policy. b.Adjust the policy premium proportionally to what should have been charged. c.Do nothing because the contestable period has passed. d.Adjust the policy benefits proportionally to the actual premiums paid.
Unique rule for individual health policies - with an individual health policy, the Insurer may "contest" the policy any time fraud is discovered - even after the end of the 2-year Contestable Period. So, the Contestable Period only prevents the Insurer from canceling due to an honest mistake or omission after the 2-year period. However, on a Group Policy, the 2-year period will apply to all statements made by the Insured - both intentional and unintentional. Only the Individual Health policy permits the Insurer to void the policy after the 2-year period if intentional misstatements or omissions occurred. The correct answer is: Void the policy.
Does the Individual Health Policy's "Time Limit on Certain Defenses Provision" permit the Insurer to void the policy if it discovers fraudulent misstatement on the application 17 years after the policy was issued? Select one: a.Yes, but only if the misstatement regarded age. b.Yes, but only if the application was notarized. c.Yes. d.No, the Insurer must have discovered the fraud within 2 years.
With an individual health policy, there is no time limit for catching the applicant regarding a lie on the application. The correct answer is: Yes.
