Chapter 3 Individual Health Insurance Policy General Provisions
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The illegal occupation uniform optional provision insures that the insurer is not liable for any losses occurred while the policy holder was:
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Under the influence
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Pursuing a criminal
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Not at work
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Partaking in an illegal activity
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This quiz assesses knowledge of general provisions in individual health insurance policies, focusing on legal implications of policyholder actions and insurer rights. It is crucial for understanding policy terms related to illegal activities, age misstatement, and claim procedures.
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- 2.
The physical exam and autopsy provision gives the insurer the right to examine the insured how many times?
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Three times
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As often as necessary
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Two times
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Once
Correct Answer
A. As often as necessaryExplanation
The physical exam and autopsy provision allows the insurer to examine the insured as often as necessary. This means that there is no specific limit to the number of times the insurer can conduct these examinations. The insurer can request multiple examinations if they deem it necessary to assess the insured's health and determine their risk level.Rate this question:
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- 3.
When an insured purchased her disability income policy, she misstated her age to the agent. She told the agent that she was 30, when in fact she was 37. If the policy contains the optional misstatement of age provision:
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Since the misstatement occurred more than 2 years ago, it has no effect
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Amounts payable under the policy will reflect her correct age
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The contract will be deemed void because of misstatement of age
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The elimination period will be extended 6 months foe each year of age misstatement
Correct Answer
A. Amounts payable under the policy will reflect her correct ageExplanation
The correct answer is that the amounts payable under the policy will reflect her correct age. This means that the insured will receive benefits based on her actual age of 37, rather than the age she misstated as 30. The misstatement of age provision allows for adjustments to be made to the policy based on the correct age of the insured.Rate this question:
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- 4.
Rick’s health insurance includes narcotics and intoxicants provision. Rick had been drinking alcohol before leaving his house and drove his car into a pole. After the police arrive on the scene, they determined that Rick had been drinking. Will Rick’s policy pay for his injuries?
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Yes, Rick will get full benefits
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Rick will receive the maximum extent of his injury
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Rick will receive no benefits
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Rick will only receive partial benefits
Correct Answer
A. Rick will receive no benefitsExplanation
Rick's health insurance policy includes a provision that excludes coverage for injuries caused while under the influence of narcotics and intoxicants. Since Rick had been drinking alcohol before the accident, the insurance company will not provide coverage for his injuries. Therefore, Rick will receive no benefits from his policy.Rate this question:
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- 5.
The policyholder is obligated to provide notification of claims to the insurer within how many days of a loss?
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30 days
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20 days
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10 days
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5 days
Correct Answer
A. 20 daysExplanation
The policyholder is obligated to provide notification of claims to the insurer within 20 days of a loss. This time frame allows the insurer to promptly investigate the claim and take necessary actions. It is important for the policyholder to notify the insurer within this time period to ensure a smooth claims process and to avoid any potential issues or delays in receiving the coverage benefits.Rate this question:
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- 6.
Under a health insurance policy, benefits other than death benefits, that have not otherwise been assigned, will be paid to
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The insured
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Creditors
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Beneficiary of the death benefit
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The spouse of the insured
Correct Answer
A. The insuredExplanation
Under a health insurance policy, benefits other than death benefits, that have not otherwise been assigned, will be paid to the insured. This means that if there are any benefits that the insured is entitled to, such as reimbursement for medical expenses or disability benefits, they will receive the payment. This is because the insured is the person who holds the insurance policy and is covered under it. The other options, such as creditors or the beneficiary of the death benefit, do not apply to benefits other than death benefits under a health insurance policy.Rate this question:
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- 7.
What clause identifies the agreement between the company and the insured?
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Consideration clause
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Insuring clause
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Benefits clause
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Conformity clause
Correct Answer
A. Insuring clauseExplanation
The insuring clause in an insurance policy is the clause that clearly outlines the agreement between the insurance company and the insured. It specifies the coverage provided by the policy, including the risks that are covered and the limits of coverage. It also states the obligations and responsibilities of both parties, such as premium payments and claims procedures. Therefore, the insuring clause is the clause that identifies the agreement between the company and the insured.Rate this question:
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- 8.
Which of the following clauses allows an insurer to elect to discontinue a policy on a premium due date?
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Guaranteed renewability clause
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Optional Renewability clause
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Conditional Renewability clause
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Monthly Renewability clause
Correct Answer
A. Optional Renewability clauseExplanation
The Optional Renewability clause allows an insurer to choose to discontinue a policy on a premium due date. This means that the insurer has the option to not renew the policy if they decide to do so. It provides flexibility for the insurer to make decisions regarding the continuation of the policy based on various factors such as the insured's claims history or changes in risk factors.Rate this question:
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- 9.
An insured owes his insurer a premium payment. Since then, he incurs medical expenses. The insurer deducts the unpaid premium amount from the claim amount and pays the insured the difference. What is the name of this provision?
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Net premium
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Unpaid premium
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Premium First
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Premium Differential
Correct Answer
A. Unpaid premiumExplanation
The provision in this scenario is called "Unpaid premium." This is because the insured has not yet paid the premium owed to the insurer, and the insurer deducts this unpaid amount from the claim amount before paying the insured the difference.Rate this question:
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- 10.
When Nancy 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?
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The insurer may delay the payment of this claim for up to 6 months
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The insurer may deny the claim since it was not notified within the required 20-day time frame
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The insurer may settle this claim for less than it otherwise would have had the notification been provided in a timely manner
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The insurer is considered to be notified since the notification to agent equals notification to the insurer.
Correct Answer
A. The insurer is considered to be notified since the notification to agent equals notification to the insurer. -
- 11.
A guaranteed renewable health insurance policy allows the
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Policyholder to renew the policy to a stated age, and guarantees the premium for the same period
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Policyholder to renew the policy to a stated age, with the company having the right to increase premiums on the entire class
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Policy is required to be renewed at time of expiration, but can be cancelled for cause during the policy term
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Insurer to renew the policy to a specified age
Correct Answer
A. Policyholder to renew the policy to a stated age, with the company having the right to increase premiums on the entire classExplanation
A guaranteed renewable health insurance policy allows the policyholder to renew the policy up to a specified age. However, the insurance company has the right to increase premiums for the entire class of policyholders. This means that the policyholder is guaranteed the option to renew their policy, but they may have to pay higher premiums in the future.Rate this question:
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- 12.
What clause gives the insured the right to expedite payments of urgently needed claims to a relative or individual that is entitled to the payment?
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Facility of Payment Clause
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Benefits Clause
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Time Limit Clause
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Equitably Entitled Clause
Correct Answer
A. Facility of Payment ClauseExplanation
The Facility of Payment Clause gives the insured the right to expedite payments of urgently needed claims to a relative or individual that is entitled to the payment. This clause allows the insured to bypass the usual claims process and directly pay the beneficiary in urgent situations where immediate payment is necessary.Rate this question:
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- 13.
Changes may only be made to a policy with
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Verbal permission
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A written agreement between the client and the company
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Only the company’s authorization
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Permission from the Commissioner
Correct Answer
A. A written agreement between the client and the companyExplanation
Changes to a policy can only be made with a written agreement between the client and the company. This means that both parties must agree and document any modifications or updates to the policy. Verbal permission is not sufficient as it can be easily disputed or forgotten. Only the company's authorization is also not enough as it does not involve the client's consent. Permission from the Commissioner may not be necessary for every policy change and would depend on the specific regulations and requirements in place.Rate this question:
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- 14.
Under the Uniform Required provisions, Proof of loss under a Health Insurance policy normally should be filed within
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20 days of a loss
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60 days of a loss
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90 days of a loss
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30 days of loss
Correct Answer
A. 90 days of a lossExplanation
Under the Uniform Required provisions, proof of loss under a Health Insurance policy normally should be filed within 90 days of a loss. This means that policyholders are required to submit all necessary documentation and evidence supporting their claim within this timeframe. Failing to do so may result in the denial of the claim. This ensures that insurance companies can timely assess the validity of the claim and process it accordingly.Rate this question:
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- 15.
Most insurers’ issue Health insurance policies for delivery in many states. Because each state regulates and mandates the requirement for policies delivered to their residents, instead of having a policy form for each state, the insurer attaches:
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A waiver of other states requirements
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The conformity with State Statutes provision
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Nothing. An insurer’s policy only needs to conform to the regulations of the state where the insurer is domiciled
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A miscellaneous Optional provision
Correct Answer
A. The conformity with State Statutes provisionExplanation
Insurers issue health insurance policies for delivery in multiple states. Each state has its own regulations and requirements for policies delivered to their residents. Instead of creating a separate policy form for each state, the insurer attaches a "conformity with State Statutes" provision. This provision ensures that the policy complies with the regulations of the state where it is being delivered, allowing the insurer to meet the requirements of multiple states with a single policy form.Rate this question:
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- 16.
The Guaranteed Renewable Provision states:
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Renewable with adjustablepremiums determined by frequency of claim.
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Renewable with guaranteed premium
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Renewable with adjustable premiums, by classification only, not by individual.
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Renewable only at the option of the insurer.
Correct Answer
A. Renewable with adjustable premiums, by classification only, not by individual.Explanation
The Guaranteed Renewable Provision allows the policy to be renewed with adjustable premiums, but only based on the classification of the insured individuals, not on an individual basis. This means that the premiums can be adjusted for a group of people who fall under a certain classification, but not for each individual within that group.Rate this question:
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- 17.
The insured should recieve necessary claim forms within_______days after notice of claim.
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5
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10
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15
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20
Correct Answer
A. 15Explanation
The insured should receive necessary claim forms within 15 days after notice of claim. This time frame allows the insurance company enough time to process the claim and provide the required forms to the insured. It ensures that there is a reasonable amount of time for the insured to complete and submit the necessary paperwork to initiate the claims process.Rate this question:
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- 18.
Does the insured have the right to change beneficiary designations
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No, because there are no beneficiary designations in health policies.
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Yes, unless the benficiary is irrevocable.
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Yes, there is no such things as irrevocable in health insurance contracts.
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No, only the insurer may request changes.
Correct Answer
A. Yes, unless the benficiary is irrevocable.Explanation
The insured does have the right to change beneficiary designations unless the beneficiary is irrevocable. This means that the insured can make changes to who will receive the benefits from the insurance policy, unless there is a specific provision stating that the beneficiary cannot be changed. In the context of health insurance contracts, there is no concept of irrevocable beneficiaries, so the insured generally has the ability to change the beneficiary designation if desired.Rate this question:
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- 19.
Jennifer neglected to make her premium payment and she was injured in an accident. After she submited the claim, she discovered that the insurer had substracted $200(the amount of the premiums) from the claim. The insurer may do this because of which provision?
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Unpaid premium
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Grace period
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Reinstatement
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Payment of Claims
Correct Answer
A. Unpaid premiumExplanation
The correct answer is "Unpaid premium." The insurer may subtract the amount of the unpaid premium from the claim because Jennifer neglected to make her premium payment. This provision allows the insurer to withhold the unpaid premium amount from any claims made by the insured.Rate this question:
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- 20.
Hank has medial coverage to age 70. He submits a claim for hospitalization. The insurer discovers Hank is actually 73, when he contract states he is 68. What will the insurer do?
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The insurer must prove fraud to be relieved from making payments
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The insurer must refund the excess premiums Hank paid after his 70th birthday.
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The insurer pays what the premium would have purchased at the correct age.
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The insurer must pay the claim, and then cancel the contract.
Correct Answer
A. The insurer must refund the excess premiums Hank paid after his 70th birthday.Explanation
The correct answer is that the insurer must refund the excess premiums Hank paid after his 70th birthday. This is because Hank's contract stated that he had coverage until age 70, but the insurer discovered that he is actually 73. Since Hank paid premiums for the years beyond his coverage age, the insurer is obligated to refund those excess premiums.Rate this question:
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Current Version
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Mar 22, 2023Quiz Edited by
ProProfs Editorial Team -
Mar 25, 2012Quiz Created by
Vivian Tayor
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