Questions
Questions
1: How long after the date of issue may an insurer cancel an accident and health policy?
A 30 days
B 60 days
C 90 days
D Once a policy is issued, it cannot be cancelled unless the insurer finds a fraudulent misrepresentation in the application.
Once a policy is in effect, an insurer has 90 days to cancel a policy by written notice.
4: When a health insurance policy is purchased in the state of New York, the insured may return the policy to the insurer and receive a premium refund within the maximum period of
A 10 days.
B 20 days.
C 30 days.
D 90 days.
The free-look provision allows for an insured to review his/her policy once it has been delivered; if the insured decides to return it within a certain time period, the premium will be refunded. In New York, the insured can review the policy from anywhere between 10 and 20 days.
6: Which is true regarding the Uniform Individual Accident and Sickness Policy Provisions Law?
A The purpose of the provision is to define the right of the policyholder; there is a separate law outlining the rights of insurers.
B There are ten mandatory provisions.
C There are twelve optional policy provisions.
D Provisions may be reworded by the insurer.
The Uniform Individual Accident and Sickness Policy Provisions Law defines the rights and duties of both the insurer and the policyholder. Although the wording of the provisions may change from insurer to insurer, the provisions are essentially the same and are required by law to be included in all health insurance policies. The wording of the provisions may be altered, provided that the changes would not be detrimental to the policyholder or beneficiary.
Questions
2: The insuring clause of a disability policy usually states all of the following EXCEPT
A The types of losses covered.
B The method of premium payment.
C The identities of the insurance company and the insured.
D That insurance against loss is provided.
The insuring clause, usually on the first page of the policy, is the general statement that defines the insurance agreement and identifies the insured and the insurance company and states what kind of loss (peril) is covered.
9: All of the following are correct about the required provisions of a health insurance policy EXCEPT
A Proof-of-loss forms must be sent to the insured within 15 days of notice of claim.
B A grace period of 31 days is found in an annual pay policy.
C The entire contract clause means the signed application, policy, endorsements, and attachments constitute the entire contract.
D A reinstated policy provides immediate coverage for an illness.
Accidental injury is covered immediately, but to protect the insurer against adverse selection, losses resulting from sickness are covered only if the sickness occurs at least 10 days after the reinstatement date.
11: Which of the following is NOT a feature of a noncancellable policy?
A The insurer may terminate the contract only at renewal for certain conditions.
B The premiums cannot be increased beyond the amount stated in the policy.
C The guarantee to renew coverage usually applies until the insured reaches certain age.
D The insured has the right to renew the policy for the life of the contract.
The insurance company cannot cancel a noncancellable policy, nor can the premium be increased beyond what is stated in the policy. The insured has the right to renew the policy for the life of the contract; however, the guarantee to renew coverage usually only applies until the insured reaches age 65.
12: An applicant for an individual health policy failed to complete the application properly. Before being able to complete the application and pay the initial premium, she is confined to a hospital. This will not be covered by insurance because she has not met the conditions specified in the
A Consideration Clause.
B Insuring Clause.
C Pre-existing Conditions Clause.
D Eligibility Clause.
The consideration clause specifies that both parties to the contract must give some valuable consideration. The payment of the premium is the consideration given by the applicant. Because the applicant had not paid an initial premium, she is not covered by insurance.
7: Which of the following is NOT a feature of a noncancellable policy?
A The insured has the right to renew the policy for the life of the contract.
B The insurer may terminate the contract only at renewal for certain conditions.
C The premiums cannot be increased beyond the amount stated in the policy.
D The guarantee to renew coverage usually applies until the insured reaches certain age.
The insurance company cannot cancel a noncancellable policy, nor can the premium be increased beyond what is stated in the policy. The insured has the right to renew the policy for the life of the contract; however, the guarantee to renew coverage usually only applies until the insured reaches age 65.
Questions
6: Which health insurance provision describes the insured’s right to cancel coverage?
A Policy duration provision
B Insuring clause
C Cancellation provision
D Renewal provision
Renewability provisions are included in each health insurance contract and outlines both the insurer’s and insured’s right to cancel or renew coverage. This is considered to be a very important provision required by HIPAA, the federal Health Insurance Portability and Accountability Act of 1996.
8: Which of the following is NOT a feature of a noncancellable policy?
A The insured has the right to renew the policy for the life of the contract.
B The insurer may terminate the contract only at renewal for certain conditions.
C The premiums cannot be increased beyond the amount stated in the policy.
D The guarantee to renew coverage usually applies until the insured reaches certain age.
The insurance company cannot cancel a noncancellable policy, nor can the premium be increased beyond what is stated in the policy. The insured has the right to renew the policy for the life of the contract; however, the guarantee to renew coverage usually only applies until the insured reaches age 65.
8: An insured pays her Major Medical Insurance premium annually on March 1. Last March she forgot to mail her premium to the company. On March 19, she had an accident and broke her leg. The insurance company would
A Pay the claim.
B Hold the claim as pending until the end of the grace period.
C Deny the claim.
D Pay half of her claim because the insured had an outstanding premium.
Because the accident occurred during the grace period, the insurance company will pay the claim.
15: Which of the following is NOT a feature of a guaranteed renewable provision?
A The insured has a unilateral right to renew the policy for the life of the contract.
B Coverage is not renewable beyond the insured's age 65.
C The insured's benefits cannot be reduced.
D The insurer can increase the policy premium on an individual basis.
Guaranteed renewable provision has all the same features that the noncancellable provision does, with the exception that the insurer can increase the policy premium on the policy anniversary date. However, the premiums can only be increased on a class basis, not on an individual policy.
1: An insured carries health insurance with two different providers and is covered on an expense incurred basis. He has an appendectomy and files the claims to both insurers. Neither company is notified in advance that the insurer has other coverage. What should each insurer pay?
A Nothing. The insured lied about the dual nature of his coverage, so the insurers are not responsible for covering the claims.
B The full amount
C A proportionate amount
D Only one should pay the full amount.
In the event that an insured is covered on an expense-incurred basis for the same expenses under multiple insurers and the insurers are not informed about the other sources of coverage before the loss, proportionate shares of the claims should be paid.
6: Which of the following entities has the authority to make changes to an insurance policy?
A Producer
B Insurer's executive officer
C Department of Insurance
D Broker
Only an executive officer of the company, not an agent, has authority to make any changes to the policy. The insurer must have the insured's written agreement to the change.
8: Which of the following statements is true concerning the alteration of optional policy provisions?
A Once any kind of provision is written, it cannot be changed.
B An insurer may change the wording of optional provisions, as long as the change does not adversely affect the policyholder.
C An insurer may change the wording of optional provisions, regardless of its effect on the policyholder.
D An insurer may change the wording of optional policy provisions that would adversely affect the policyholder but must first receive state permission before the change goes into effect.
Optional policy provisions can be changed by an insurer, as long as the changes do not adversely affect the policyholder.
9: Twenty-five days after a health insurance policy is delivered, the policyowner decides that she would like to return the policy and receive a refund of premium. Which of the following is true?
A The policyowner will not receive a refund because once a policy is purchased, the premiums cannot be refunded.
B The insurer will provide a full refund.
C The insurer will provide a prorated refund.
D The policyowner will not receive a refund because the free-look period is over.
The free-look provision allows a policyowner to review a new health policy after it has been delivered. If the policyowner decides to return it within a certain time period, the full premium will be refunded. In New York, a free-look period cannot be longer than 20 days.
10: An insured pays a monthly premium of $100 for her health insurance. What would be the duration of the grace period under her policy?
A 7 days
B 10 days
C 31 days
D 60 days
The grace period is 7 days if the premium is paid weekly, 10 days if paid monthly, and 31 days for all other modes.