CH 9 Individual Health Insurance Policy General Provisions

Question 1

What health policy provision defines the insured’s duty to provide the insurer with reasonable notice in the event of a loss?

Answer 1

Notice of claim.

Question 2

What is the name of the act by the insured to voluntarily give up insurance?

Answer 2

Cancellation.

Question 3

What health policy provision prevents the insured from bringing a lawsuit against the insurance company for at least 60 days after proof of loss is provided?

Answer 3

Legal actions.

Question 4

What will happen to a health insurance policy if the premium has not been paid by the end of the grace period?

Answer 4

The policy will be canceled.

Question 5

What renewability provision will most likely appear on a travel accident policy?

Answer 5

Period of time.

Question 6

If the insured pays a monthly premium for health insurance, how long would the grace period be on the policy?

Answer 6

10 days.

Question 7

What health policy provision allows the insured a period of time to examine the policy and determine whether or not to keep it?

Answer 7

The free look period.

Question 8

What health policy renewability provision allows the insurer to terminate coverage for any reason, and to increase the premiums for any class of insureds?

Answer 8

Optionally renewable.

Question 9

Under an individual disability income policy, the benefits must be paid on at least what schedule?

Answer 9

Monthly.

Question 10

What health policy provision describes the insureds right to cancel coverage?

Answer 10

Renewability provision.

Question 11

How will changing one’s occupation to be more hazardous affect the health insurance policy in force?

Answer 11

Claim benefits will be reduced to what the premium would have bought for a more hazardous occupation.

Question 12

Who pays the expense for an autopsy under the physical examination and autopsy provision?

Answer 12

The insurer.

Question 13

What does the free look period allow the insured to do?

Answer 13

Return the policy for a full refund of premium within a specified time period (usually 10 days).

Question 14

What will determine the length of the grace period in a health insurance policy?

Answer 14

The mode of the premium payment.

Question 15

Who decides which optional provisions would be included in a health policy?

Answer 15

The insurance company.

Question 16

If a health insurance policy has a 31 day grace period, what does that mean?

Answer 16

The policy remains in effect for 31 days after the premium is due and not paid.

Question 17

According to the reinstatement provision, once a lapsed policy is reinstated, how soon will coverage be available for accidents

Answer 17

Immediately.

Question 18

When can an irrevocable beneficiary be changed?

Answer 18

With the written consent of the beneficiary.

Question 19

What health policy provision states to whom the claim benefits must be paid?

Answer 19

Payment of claims.

Question 20

According to the time limit on certain defenses provision in health insurance policies, when can an insurer contest fraudulent misstatements on a health insurance application?

Answer 20

Anytime while the policy is in force.

Question 21

What health policy provision allows the insurer to non-renew health coverage if certain events occur?

Answer 21

Conditionally renewable.

Question 22

The insured on a health policy misstated his age on the insurance application. If this misrepresentation is discovered, what will happen to the policy?

Answer 22

The benefit amount payable under the policy will be adjusted to the insureds correct age.

Question 23

According to the rights of renewability rider for cancellable policies, all of the following are correct about the cancellation of an individual insurance policy EXCEPT

A) The insurer must provide the insured a written notice of the cancellation
B) Claims incurred before cancellation must be honored
C) An insurance company may cancel the policy at any time
D) Unearned premiums are retained bu the insurance company

Answer 23

Unearned premiums are retained but the insurance company.

Question 24

When Linda suffered a broken hip, she notified her agent, in writing, within 12 days of the loss. However, her agent did not notify the insurance company until 60 days after the loss. Which of the following statements correctly explains how this claim would be handled?

A) The insurer is considered to be notified since the notification to agent equals notification to the insurer
B) The insurer may delay the payment of this claim for up to 6 months
C) The insurer may settle this claim for less than it otherwise would have has the notification been provided in a timely manner
D) The insurer may deny the claim since it was not notified withing the required 20 day time frame

Answer 24

The insurer is considered to be notified since the notification to agent equals notification to the insurer

Question 25

An insured misstated her age on an application for an individual health insurance policy. The insurance company found the mistake after the contestable period had expired. The insurance company will take which of the following actions regarding any claim that has been issued?

A) Deny any claims and cancel the policy
B) Deny paying a claim based on misrepresentation
C) Pay the full amount of a claim because the contestable period has ended
D) Adjust the claim benefit to reflect the insureds true age

Answer 25

Adjust the claim benefit to reflect the insureds true age.

Question 26

An insured submitted a notice of claim to the insurer, but never received claims forms. 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 must submit proof of loss to the Department of Insurance
B) The insured was in compliance with the policy requirements regarding claims
C) The claim most likely will not be paid since the official claims form was not submitted
D) The insurer will be fined for not providing the claims forms

Answer 26

The insured was in compliance with the policy requirements regarding claims.

Question 27

Which of the following does the insuring clause NOT specify?

A) The insurance company
B) The name of the insured
C) A list of available doctors
D) Covered perils

Answer 27

A list of available doctors.

Question 28

A guaranteed renewable health insurance policy allows the

A) Policyholder to renew the policy to a stated age and guarantees the premium for the same period
B) Policy to be renewed at time of expiration, but the policy can be canceled for cause during the policy term
C) Insurer to renew the policy to a specified age
D) Policyholder to renew the policy to a stated age, with the company having the right to increase premiums on the entire class

Answer 28

Policyholder to renew the policy to a stated age, with the company having the right to increase premiums on the entire class.

Question 29

Which renewability provision are you most likely to see on a travel accident policy?

A) Conditionally renewable
B) Period of time
C) Noncancellable
D) Optionally renewable

Answer 29

Period of time.

Question 30

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) Exclude coverage for on-the-job injury
B) Adjust the benefit in accordance with the increased risk
C) Cancel the policy
D) Increase the premium

Answer 30

Adjust the benefit in accordance with the increased risk.

Question 31

Under the mandatory uniform provision notice of claim, the first notice of injury or sickness covered under an accident and health policy must contain

A) A statement that is sufficiently clear to identify the insured and the nature of the claim
B) A statement from the insureds employer showing that the insured was unable to work
C) An estimate of the total amount of medical and hospital expense for the loss
D) A complete physician’s statement

Answer 31

A statement that is sufficiently clear to identify the insured and the nature of the claim.

Question 32

When Bob filled out an application for health insurance, he accidentally misstated the time period during which he was treated for acid reflux. If he had recorded this information correctly, his insurer would have charged a higher premium. When Bob is treated for erosive esophagitis 3 years after the policy’s effective date, the insurer discovers the error. Which of the following is most likely true?

A) Bob will be required to pay the “extra” premium that he would have been charged
B) Nothing, assuming that Bob’s misstatement is found to be an honest mistake
C) Bob will be required to pay all medical bills related to erosive esophagitis
D) Bob’s policy will be terminated

Answer 32

Nothing, assuming that Bob’s misstatement is found to be an honest mistake.

Question 33

The insuring clause of a disability policy usually states all of the following EXCEPT

A) That insurance against loss is provided
B) The types of losses covered
C) The method of premium payment
D) The identities of the insurance company and the insured

Answer 33

The method of premium payment.

Question 34

Under an individual disability policy, the MINIMUM schedule of time in which claim payments must be made to an insured is

A) Within 45 days
B) Weekly
C) Biweekly
D) Monthly

Answer 34

Monthly.

Question 35

An insured notifies the insurance company that he has become disabled. What provision states that claims must be paid immediately upon written proof of loss?

A) Incontestability
B) physical Exam and Autopsy
C) Legal Actions
D) Time of Payment of Claims

Answer 35

Time of payment of claims.

Question 36

A man in injured while robbing a convenience store. How does his major medical policy handle the payment of his claim?

A) 50% of claim will be paid
B) If the man is not convicted, he will get 75% of his claim
C) The claim will be paid in full
D) Claim is denied if his policy contains the illegal occupation provision

Answer 36

Claim is denied if his policy contains the illegal occupation provision.

Question 37

A policy with a 31-day grace period implies

A) The policy is incontestable after 31 days of delivery
B) The policy benefits must be paid within 31 days after a claim is submitted
C) The policy will not lapse for 31 days if the premium is not paid when due
D) The policyholder may return the policy for a full refund within 31 days

Answer 37

The policy will not lapse for 31 days if the premium is not paid when due