Chap 2 Health Insurance Basics

Which report contains information gained from interviews with an applicant's friends and neighbors? A. Medical Information Bureau Report B. Attending Physician's Report C. Agent's Report D. Investigative Consumer Report

D. Investigative Consumer Report The Investigative Consumer Report is very detailed and it contains information gathered from friends and neighbors.

Which of the following is a rated risk? A. Preferred B. Standard C. Declined D. Substandard

D. Substandard A Substandard risk is paid with a rated up premium.

If an Accident and Health policy covers only a specified illness, what must its advertisement prominently display? A. A statement that the policy is limited B. A schedule of the policy's benefits C. A list of the policy's premium guarantee D. A list of the policy's exclusions

A. A statement that the policy is limited When an Accident and Health policy covers only a specified illness, the advertisement must display a statement that the policy is limited.

John has more than one occupation. His insurance company uses his occupations as a means to classify his risk. How will his insurer classify him? A. By using his most hazardous occupation B. By averaging his occupations C. By the using his longest employment time D. By using the geographic locations of his employers

A. By using his most hazardous occupation The most hazardous occupation will be the rating for the risk.

Riley's policy's premium is higher than a standard premium. What could be a valid reason for this to happen? A. He did not meet certain underwriting characteristics B. He is not a member of the NAIC C. He has not paid his association dues D. He is over age 65

A. He did not meet certain underwriting characteristics Occasionally policy premiums are higher than the standard premium because an individual does not meet certain underwriting requirements.

Which of the following uses coded information in their underwriting process? A. MIB B. NAIC C. Genetic Coverage D. Standard

A. MIB The MIB is a non-profit organization that contains coded Medical information as an underwriting source.

What organization can help insurers compare information given by an applicant on their previous insurance applications? A. Medical Information Bureau B. National Insurance Commission C. Life and Health Guaranty Association D. Underwriting Association

A. Medical Information Bureau The MIB gains information reported by its members to compare previous insurance information gathered on an applicant.

Statements on a Health insurance application are legally known as what term? A. Representations B. Offers C. Warranties D. Guaranties

A. Representations Statements on an application are legally known as representations.

Which of the following is not false regarding a person with HIV? A. The person may be declined B. The person may not be declined C. The person may be declined only if they have symptoms D. The person will definitely be declined

A. The person may be declined A person with HIV may be declined coverage due to their individual circumstances.

When may an application be the primary and only source of Medical underwriting information? A. When an applicant's Medical background is flawless B. Always C. Never D. When an applicant does have a pre existing Medical condition

A. When an applicant's Medical background is flawless An application can be a primary source for underwriting if an applicant's Medical background is flawless.

A typical Accidental Death and Dismemberment policy would cover all of the following except: A. Life B. Income C. Limb D. Eyesight

B. Income An Accidental Death and Dismemberment policy pays for the loss of a single body part, multiple body parts or death.

When may an agent disclose personal information about an insured? A. Never B. With the written permission from an insured C. Always D. After a probationary period

B. With the written permission from an insured Written permission from an insured is required before an agent may disclose their personal information.

Charles is flying on ACT Airlines from Baltimore to Florida. What policy did he purchase for his trip? A. A Basic Policy B. An Accident Only Policy C. A Travel Policy D. A Blanket Policy

C. A Travel Policy A Travel policy can be purchased to cover a trip.

How does a Hospital Income plan pay an insured? A. It covers all costs associated with a hospital stay, and the amount is paid directly to the hospital B. It covers the costs associated with only prescription drugs related to a hospital stay, and the amount is paid to an insured C. A specific dollar amount is directly paid to an insured for each day he or she is in the hospital D. A specific dollar amount is paid directly to the hospital covering all costs associated with the stay

C. A specific dollar amount is directly paid to an insured for each day he or she is in the hospital A Hospital Indemnity policy pays an amount directly to an insured while being hospitalized.

An applicant is a substandard risk. Which of the following will most likely be true? A. A Medical exam each year will be necessary B. Their premium will be a discounted rate C. An extra charge will apply D. That applicant will be declined

C. An extra charge will apply An individual with a substandard risk will pay more for their coverage.

Who must sign the application, in addition to the agent? A. Executive officer B. Commissioner C. Applicant D. Underwriter

C. Applicant An agent and an applicant both sign an application.

When must an Outline of Coverage be delivered? A. Never B. At the time an application is completed C. At the time a policy is delivered or the time of an application D. 30 days after a policy has been delivered

C. At the time a policy is delivered or the time of an application An Outline of Coverage must be delivered at the time of the application or upon delivery of the policy.

Due to the history of cancer in her family, Sue purchased a policy that specifically covers the expense of treating cancer. Her policy would be classified as what type of policy? A. Term Health B. Family Cancer Policy C. Dread Disease Policy D. Specified Health Policy

C. Dread Disease Policy A Dread Disease policy will cover specific conditions like Heart Disease or Cancer.

Which of the following would most likely apply to the right to screen an applicant for HIV? A. Insurer can inquire about sexual orientation of applicant B. Insurer can inquire about sexual behavior of an applicant C. Insurer can require a blood test D. Insurer can use a Consumer Report to determine sexual orientation

C. Insurer can require a blood test An insurer may require a blood test.

Which of the following is not an alternative an insurer may use when asked to insure a substandard risk? A. Attach a rider to the policy excluding certain conditions B. Decline the risk C. Issue the policy with a probationary period and then cancel the policy D. Charge a different premium

C. Issue the policy with a probationary period and then cancel the policy With a substandard risk an insurer may decline it, exclude certain coverage and/or increase the insured's premium.

Which of the following applies to a change in an insurance application? A. It must be approved by the insurer B. It must be approved through the NAIC C. It must be initialed by the applicant D. It must be approved by the MIB

C. It must be initialed by the applicant Any change in an application must be initialed by the applicant.

What kind of information makes up Part 2 of an application? A. General information B. Geographic location C. Medical information D. Premium information

C. Medical information Part 2 of an application includes the Medical information of an applicant.

What document helps to insure full and fair disclosure to the recipient of their policy? A. Policy Summary B. Field Underwriting C. Outline of coverage D. Sales presentation

C. Outline of coverage The Outline of Coverage is the full disclosure of a policy's features.

In regard to the disclosure of an insured's personal medical information, when is it not permitted? A. By consent of insured B. An order by the court C. Public interest D. An order by law enforcement

C. Public interest An insured's personal medical information may not be disclosed for the public's interest.

In a Dental Expense Plan, what treatments do not require a deductible? A. All treatments B. Treatments to repair an injury C. Routine and Diagnostic treatments D. None of the treatments

C. Routine and Diagnostic treatments Routine and diagnostic treatments do not require deductible payments.

When an applicant signs an application form, which of the following describes the action of the individual? A. Requesting a policy to be issued B. Swearing to pay for their policy when it is issued C. Swearing to the accuracy of the information contained in the application D. Swearing to follow their policy's provisions

C. Swearing to the accuracy of the information contained in the application An applicant's signature on their application is their oath that their information is correct.