6 – Health Insurance Policy Provisions (Test only has 10 Questions)

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Health insurance benefits NOT covered due to an act of war are

excluded by the insurer in the contract provisions (Correct.) An exclusion is a provision that entirely eliminates coverage for a specified risk, such as an act of war or aviation.

Which of the following statements describes what an Accident and Health policyowner may NOT do?

Adjust the premium payments (Correct.) The owner of an Accident and Health policy may not change the premium amount.

Which of the following statements describes the purpose of the Insuring clause in Health and Accident policies?

States the scope and limits of the coverage ( "States the scope and limits of the coverage". The purpose of the insuring clause is to specify the scope and limits of the coverage provided.

If an individual has an Accidental Death and Dismemberment policy and dies, an autopsy can be performed in all these situations EXCEPT

When the state prohibits this by law (Correct.) Applicable state laws that prevent an autopsy take precedence.

M’s insurance company denied a reinstatement application for her lapsed health insurance policy. The company did not notify M of this denial. How many days from the reinstatement application date does the insurance company have to notify M of the denial before the policy will be automatically placed back in force??

45 days (

With Optionally Renewable Health policies, the insurer may

review the policy annually and determine whether or not to renew it ( "review the policy annually and determine whether or not to renew it". With an Optionally Renewable policy, the insurance company may review the policy annually and choose whether or not to renew it.

Which of the following statements BEST describes what the Legal Actions provision of an Accident and Health policy requires?

An insured must wait at least 60 days after Proof of Loss has been submitted before a lawsuit can be filed ( "An insured must wait at least 60 days after Proof of Loss has been submitted before a lawsuit can be filed".

Which of these statements accurately describes the Waiver of Premium provision in an Accident and Health policy?

Premiums are waived after the insured has been totally disabled for a specified time period (Correct.) The Waiver of Premium provision waives the payment of premiums after the insured has been totally disabled for a specified period of time.

Which type of renewability best describes a Disability Income policy that covers an individual until the age of 65, but the insurer has the right to change the premium rate?

Guaranteed Renewable ( "Guaranteed Renewable". The renewal provision in a guaranteed renewable policy specifies that the policy must be renewed (as long as premiums are paid) until the insured reaches a specified age. These usually have increasing premiums.

An insurer must provide an insured with claim forms within __ days after receiving notice of a loss.

15 ( "15". Under the Claims Forms provision, an insurer must provide an insured with claim forms within a MAXIMUM of 15 days after receiving notice of a loss.

Which Accident and Health policy provision addresses preexisting conditions?

Time Limit on Certain Defenses (Correct.) The Time Limit on Certain Defenses provision limits the period during which an insurer can deny a claim on the basis of a preexisting condition. "Time Limit on Certain Defenses". The Time Limit on Certain Defenses provision limits the period during which an insurer can deny a claim on the basis of a preexisting condition.

With Accidental Death and Dismemberment policies, what is the purpose of the Grace Period?

Gives the policyowner additional time to pay past due premiums ( "policyowner additional time to pay overdue premiums". The purpose of the Grace Period is to give the policyowner additional time to pay overdue premiums.

Which of these is considered a mandatory provision?

Payment of Claims (Correct.) Payment of Claims is considered a mandatory provision and directs where the claim benefits will go. The others are considered optional provisions.

When does a Probationary Period provision become effective in a health insurance contract?

At the policy’s inception (Correct.) The probationary period begins when a policy goes into effect. During this period, no benefits will be paid under the policy.

What is the purpose of the Time of Payment of Claims provision?

Prevents delayed claim payments made by the insurer (Correct.) The purpose of the Time of Payment of Claims provision is to prevent the insurance company from delaying claim payments.

A Disability Income policyowner recently submitted a claim for a chronic neck problem that has now resulted in total disability. The original neck injury occurred before the application was taken 5 years prior. The neck injury was never disclosed to the insurer at the time of application. How will the insurer handle this claim?

Claim will be paid and coverage will remain in force (Correct.) After a policy has been in force for 2 (sometimes 3) years, it enters the incontestable period, in which the insurer may not deny a claim based on information not disclosed at the time of application.

P is a Major Medical policyowner who is hospitalized as a result of injuries sustained from participating in a carjacking. How will the insurer most likely handle this claim?

Claim will be denied ( "Claim will be denied". If a person is injured while committing an illegal act, health insurance will not cover the expense of the injury.

Which health policy clause specifies the amount of benefits to be paid?

Insuring ( "Insuring". In an Accident & Health policy, the insuring clause states the amount of benefits to be paid.

In health insurance policies, a waiver of premium provision keeps the coverage in force without premium payments

After an insured has become totally disabled as defined in the policy ( "After an insured has become totally disabled as defined in the policy". The waiver of premium provision keeps the coverage in force without premium payments if the insured has become totally disabled as defined in the policy.

When an insured changes to a more hazardous occupation, which disability policy provision allows an insurer to adjust policy benefits and rates?

Change of occupation provision (Correct.) The change of occupation provision allows an insurer to adjust policy benefits and/or rates if the insured has changed to a more hazardous occupation.

An insurance company receives E’s application for an individual health policy. E did not complete all of the medical history questions because she could not remember the exact dates. E signed the policy and submitted it to the insurance company anyway. A few weeks later, E suffers a heart attack and is hospitalized without completing the medical history questions and paying the initial premium. E is not insured. Which of the following clauses details the conditions that E did not meet?

Consideration clause (Correct.) A health insurance contract is valid only if the insured provides consideration in the form of the full minimum premium and the statements made in the application.

An insured pays premiums on an annual basis for an individual health insurance policy. What is the MINIMUM number of days for the Grace Period provision?

31 (Correct.) The grace period is a minimum of 31 days for policies that are paid for on an annual basis.

Which Accident and Health policy provision addresses preexisting conditions?

Time Limit on Certain Defenses (Correct.) The Time Limit on Certain Defenses provision limits the period during which an insurer can deny a claim on the basis of a preexisting condition.

Which health policy clause stipulates that an insurance company must attach a copy of the application to the policy to ensure that it is part of the contract?

Entire Contract (Correct.) The Entire Contract provision states that the health insurance policy, together with a copy of the signed application and attached riders and amendments, constitutes the entire contract.

The provision that defines to whom the insurer will pay benefits to is called

Payment of Claims (Correct.) The Payment of Claims provision in a Health Insurance policy states to whom claims will be paid.

What is the purpose of the Time of Payment of Claims provision?

Prevents delayed claim payments made by the insurer (Correct.) The purpose of the Time of Payment of Claims provision is to prevent the insurance company from delaying claim payments.

A Disability Income policyowner recently submitted a claim for a chronic neck problem that has now resulted in total disability. The original neck injury occurred before the application was taken 5 years prior. The neck injury was never disclosed to the insurer at the time of application. How will the insurer handle this claim?

Claim will be paid and coverage will remain in force (Correct.) After a policy has been in force for 2 (sometimes 3) years, it enters the incontestable period, in which the insurer may not deny a claim based on information not disclosed at the time of application.

G is involved in an automobile accident as a result of driving while intoxicated and suffers numerous injuries. According to the Intoxicants and Narcotics exclusion in G’s policy, who is responsible for paying the medical bills?

The insured (Correct.) In this situation, the insured is liable for the medical bills.

Which of the following is NOT included in the policy face?

Exclusions ( "Exclusions". The exclusions section is NOT included in the policy face (first page of an insurance policy).

What type of rider would be added to an Accident and Health policy if the policyowner wants to ensure the policy will continue if he/she ever becomes totally disabled?

Waiver of Premium rider ( "Waiver of Premium rider". If a policyowner covered under an accident and health policy wanted to ensure the policy will continue if they ever become totally disabled, they would want to add a waiver of premium rider.

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