Health Insurance: Basics

Most health policies will pay the accidental death benefits is the death is caused by an accident and occurs within how many days?

90 days

What is the capital sum in Accidental Death and Dismemberment (AD and D) coverage?

A percentage of the principal sum

What do limited health policies cover?

A specified accident or disease

What information are the members of the MIB required to report?

Adverse medical information about the applicants or insured

At what age do individuals qualify for Medicare?

Age 65

Who is a field underwriter?

Agent/Producer

What are the four elements of an insurance contract?

Agreement, consideration, competent parties, and legal purpose

What is a warranty in an insurance contract?

An absolutely true statement upon which the validity of the insurance contract is based

In health insurance, what is considered a sickness

An illness that first arises while the policy is in force

What is the term used for a written request for an insurer to issue an insurance contract based on the provided information?

Application

If an underwriter requires extensive information about the applicant's medical history, what report will best serve this purpose?

Attending Physician's Statement

What type of group health insurance is used to provide accident coverage on a group of persons that are participating in a particular activity, when the individual insureds are unknown, and are covered automatically?

Blanket

What type of health insurance would be most appropriate for a group of children in a summer camp?

Blanket

What type of health insurance plans cover all accidents and sickness that are not specifically excluded in the policy?

Comprehensive plans

Health contracts are prepared by insurers and must be accepted by the insured on an 'as is' basis. This describes what aspect of a health insurance contract?

Contract of adhesion

What are the two types of expenses that are covered by health insurance?

Expenses related to health care, and expenses the compensate for loss of income

During the application process for health insurance, a producer is trying to obtain credibility information about the applicant that would help underwriters determine is the risk is insurable. In what role is the producer acting?

Field underwritier

What type of hospital policy pays a fixed amount each day that the insured is in the hospital?

Indemnity

Who is responsible for paying the cost of a medical examination required in the process of underwriting?

Insurer

What entities make up the Medical Information Bureau?

Insurers

What report is used to assess risk associated with a health insurance applicant's lifestyle and character?

Investigative Consumer Report

What entity provides underwriters with information concerning an applicant's health history?

MIB- Medical Information Bureau

When must the Outline of Coverage be provided to the insured?

No later than policy delivery

Health insurance contracts are unilateral. What does that mean?

Only one party makes a legally enforceable promise

What is adverse selection?

People who are more likely to submit insurance claims are seeking insurance more often than preferred risks

In insurance, what is the term used for cause of loss?

Peril

How can health insurance policies be delivered to the insured?

Personally delivered by the agent or mailed

What characteristics would qualify an applicant for health insurance as a substandard risk?

Poor health history or a dangerous occupation or avocation

What is the term used for a condition for which the insured has received diagnosis, care or treatment during a specified period of time prior to the health policy issue?

Pre-existing condition

What risk classification would typically qualify for lower premiums?

Preferred risk

In medical expense contracts, what is the term that describes the payment method when the insured is responsible for paying the medical expenses, and then the insurer pays directly to the insured?

Reimbursement

What are the three types of risk rating classifications in health insurance?

Standard, substandard, and preferred

What risk classification would require the highest premium for a health insurance policy?

Substandard

If an applicant does not receive his or her insurance policy, who would be held responsible?

The agent

Whose responsibility is it to inform an applicant for health insurance about the insurer's information gathering practices?

The agent

Whose responsibility is it to determine that all the questions on an insurance application are answered?

The agent's

If an agent makes a correction on the application for health insurance, who must initial the correct answer?

The applicant

If an insurer decides to obtain medical information from different sources in order to determine the insurability of an applicant, who must be notified of the investigation?

The applicant

What is the entire contract in health insurance underwriting?

The application and the policy issued

In health insurance, the policy itself and the insurance application form what?

The entire contract

Who must sign a health insurance application

The policy owner, the insured (if different), and the agent

How is the information obtained for an investigative consumer report?

Through interviews with the applicant's associates, friends and neighbors

What is the purpose of the Outline of Coverage in health insurance?

To provide the insured full and fair disclosure about the policy issued

During which stage in the insurance process do insurers evaluate information that identifies adverse selection risks?

Underwriting

In health insurance contracts, the insured is not legally bound to any particular action; however, the insurer is obligated to pay for losses covered by the policy. What contract element does this describe?

Unilateral

Under a credit disability policy, payments to the creditor will be made for the insurer until what point in time?

Until the period of disability ends or until the debt is repaid

What are the common exclusions in most health insurance policies?

War, self-inflicted injuries, pre-existing conditions, elective cosmetic surgeries, injuries cause by participating in illegal activities, and workers compensation benefits

In insurance, when is the offer usually made on a contract?

When the insurance application is submitted

In forming an insurance contract, when does an acceptance usually occur?

When the insurer approves a prepaid application

When should an agent obtain a statement of Good Health from the insured?

When the premium was paid upon policy delivery and not at the time of application