Chapter 2 Health Insurance Basic
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A group policy used to provide accident and health coverage on a group of persons being transported by a common carrier, without naming the insured persons individually is called
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Specified disease policy
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Activity policy
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Blanket policy
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Certificate of coverage policy
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Explore key aspects of health insurance policies with this quiz from Chapter 2. Topics include blanket policies, contract components, coverage outlines, and policy limitations. Ideal for learners seeking to understand insurance mechanics and compliance.
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- 2.
What makes up an entire contract?
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All parts of an application
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Parts 1 and 2 of an application
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An application and the policy
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An application and the premium
Correct Answer
A. An application and the policyExplanation
An entire contract is made up of an application and the policy. This means that both the application, which contains the information provided by the applicant, and the policy, which outlines the terms and conditions of the contract, are necessary components for a complete contract.Rate this question:
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- 3.
When must an outline of coverage be delivered?
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Never
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At the time of application only
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At the time the policy is delivered or the time of application
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30 days after the policy has been delivered
Correct Answer
A. At the time the policy is delivered or the time of applicationExplanation
An outline of coverage must be delivered either at the time the policy is delivered or at the time of application. This means that the insurance company is required to provide the outline of coverage to the insured either when they receive the policy or when they submit their application for insurance. This ensures that the insured has access to important information about the coverage they are purchasing and can make informed decisions about their insurance policy.Rate this question:
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- 4.
Which of the following states “that benefits by a policy are limited”?
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Comprehensive notice
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Government notice
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Limited policy notice
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Private notice
Correct Answer
A. Limited policy noticeExplanation
The correct answer is "limited policy notice." This option states that the benefits of a policy are limited.Rate this question:
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- 5.
In a replacement situation, all the following must be considered except?
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Benefits
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Assets
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Exclusions
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Limitations
Correct Answer
A. AssetsExplanation
In a replacement situation, benefits, exclusions, and limitations are all factors that need to be considered. However, assets are not typically a consideration in this context. Assets refer to the financial resources or properties that an individual or organization owns, and they are not directly related to the decision-making process in a replacement situation. Therefore, assets are not included in the list of factors that must be considered.Rate this question:
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- 6.
When does credit disability insurance expire?
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20 days after the loan is satisfied
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15 days after the loan is satisfied
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10 days after the loan is satisfied
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30 days after the loan is satisfied
Correct Answer
A. 15 days after the loan is satisfiedExplanation
Credit disability insurance typically expires 15 days after the loan is satisfied. This means that once the loan is paid off, the insurance coverage for any disability-related claims will continue for an additional 15 days before it expires. This allows for a short grace period in case any disability-related issues arise after the loan has been fully paid.Rate this question:
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- 7.
Which of the following is an underwriting factor?
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Sexual orientation
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Marital status
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Genetic characteristics
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Physical handicap
Correct Answer
A. Physical handicapExplanation
An underwriting factor is a characteristic that insurance companies consider when determining the risk associated with insuring an individual. In this case, physical handicap is an underwriting factor because it can affect a person's health and potentially increase the likelihood of them needing medical treatment or making a claim. Insurance companies may take into account the severity of the handicap and its impact on the individual's overall health when assessing the risk and determining the premium for the insurance policy.Rate this question:
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- 8.
Mr. Johnson received medical treatment six months prior to his application for insurance. What is this called?
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Exclusion
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A pre-existing condition
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A condition for a limited policy
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A self inflicted injury
Correct Answer
A. A pre-existing conditionExplanation
The correct answer is "a pre-existing condition." This term refers to a medical condition that existed before the individual applied for insurance. In this case, Mr. Johnson had received medical treatment six months prior to his insurance application, which means he had a pre-existing condition. Insurance companies often exclude coverage for pre-existing conditions or may charge higher premiums to cover the potential costs associated with them.Rate this question:
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- 9.
Which of the following signatures are required on a Health application?
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Insured
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Broker
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Agent and proposed insured
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Agent
Correct Answer
A. Agent and proposed insuredExplanation
The required signatures on a Health application are from the agent and the proposed insured. This means that both the insurance agent and the person applying for the health insurance policy need to sign the application. This ensures that both parties have agreed to the terms and conditions of the policy and have provided their consent for the insurance coverage. The signatures of the insured and the broker are not mentioned as necessary in this context.Rate this question:
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- 10.
Which of the following is not false regarding a person with HIV?
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The person may be declined
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The person may not be declined
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The person may be declined only if they have symptoms
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The person will definitely be declined
Correct Answer
A. The person may be declinedExplanation
A person with HIV may be declined for certain services or opportunities, such as life insurance or organ transplantation, due to the potential health risks associated with the virus. However, it is not always the case that they will be declined, as each situation is assessed on an individual basis. Factors such as the person's overall health, treatment plan, and adherence to medication can also play a role in determining whether they will be declined or not.Rate this question:
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- 11.
When may an applicant be denied coverage, due to information found in their MIB report?
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Never
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During an applicant’s application process
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When it is discovered by an agent
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Yearly
Correct Answer
A. NeverExplanation
An applicant may never be denied coverage due to information found in their MIB report. The MIB report is used by insurance companies to gather information about an applicant's medical history and is not used as a sole basis for denying coverage. Other factors such as current health status and underwriting guidelines are taken into consideration when determining coverage eligibility.Rate this question:
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- 12.
An insurer hires a representative to advertise its company at a local convention. The representative lies about the details of some of the policies, in an attempt to secure more business for the company. Who is responsible for the representative?
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The representative
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The underwriters
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The agent
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The insurer
Correct Answer
A. The insurerExplanation
The insurer is responsible for the representative because they hired and employed the representative to represent their company at the local convention. As the employer, the insurer is accountable for the actions and behavior of their employees, including any misrepresentation or dishonesty in advertising the policies.Rate this question:
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- 13.
Which of the following would be consideredan unintentional or unforseen injury that would cause bodily harm?
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Illness
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Uninsurable injury
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High risk injury
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Accidental bodily injury
Correct Answer
A. Accidental bodily injuryExplanation
Accidental bodily injury refers to an injury that occurs unexpectedly and unintentionally. It is an injury that is not caused by illness or pre-existing conditions, but rather by an accident or unforeseen event. This type of injury can happen due to various reasons such as falls, car accidents, or sports injuries. It is considered unintentional because it is not deliberately caused by the individual, and it results in physical harm to the body.Rate this question:
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- 14.
What is an important feature of a Dental expense Insurance plan that is not typically found in a Medical Expense Insurance plan?
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A low monthly premium
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A broad coverage area
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The inclusion of diagnostic and preventive care
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Low cost deductibles
Correct Answer
A. The inclusion of diagnostic and preventive careExplanation
An important feature of a Dental expense Insurance plan that is not typically found in a Medical Expense Insurance plan is the inclusion of diagnostic and preventive care. This means that dental insurance plans often cover regular check-ups, cleanings, and X-rays, which help in identifying and preventing dental issues before they become major problems. Medical expense insurance plans, on the other hand, focus more on covering the costs of treatments and procedures for existing medical conditions.Rate this question:
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- 15.
What factors are not used in underwriting an individual health policy?
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Health history and foreign travel
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Age and Gender
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Political affiliation and religious preference
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Smoking and hobbies
Correct Answer
A. Political affiliation and religious preferenceExplanation
Underwriting an individual health policy involves assessing the risk factors associated with the applicant's health. Factors such as health history, foreign travel, age, gender, smoking, and hobbies are commonly used in underwriting decisions as they provide insight into the individual's overall health and lifestyle. However, political affiliation and religious preference are not relevant or indicative of an individual's health risks, and therefore, they are not used in underwriting an individual health policy.Rate this question:
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- 16.
Accident and Health Insurane, insurers for two major perils, they are
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Driving under the influence and driving while intoxicated.
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On the job and off the job
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Accidental injury and sickness
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Automobile and home health care
Correct Answer
A. Accidental injury and sicknessExplanation
The correct answer is accidental injury and sickness. Accident and Health Insurance provides coverage for unexpected injuries and illnesses that may occur to an individual. Accidental injuries refer to injuries that are caused by sudden and unexpected events, such as falls or accidents, while sickness refers to illnesses or diseases that may be contracted. This type of insurance helps individuals cover medical expenses, hospitalization costs, and other related expenses that may arise due to accidental injuries or sickness.Rate this question:
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- 17.
What is incorrect regarding the group underwriting process
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Adverse selection is not a concern for group contracts
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New employees usually become eligible to enroll after a waiting period
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Evidence of insurability is not required since premiums are adjusted annually by evaluating the group and the claims experience.
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The insurer's office location is not a cost factor.
Correct Answer
A. Adverse selection is not a concern for group contractsExplanation
The explanation for the given correct answer is that adverse selection is a concern for group contracts. Adverse selection refers to the situation where individuals with a higher risk of making a claim are more likely to seek insurance coverage. In the context of group contracts, if adverse selection is not considered, it can lead to an imbalance in the risk pool and potentially higher premiums for the entire group. Therefore, it is important for insurers to assess the risk profile of the group and take measures to mitigate adverse selection.Rate this question:
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- 18.
A specified period before new coverage goes into effect or a specified condition is known as which of the following?
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Waiting period
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Exclusion
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Probationary period
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Morbidity table
Correct Answer
A. Probationary periodExplanation
A probationary period refers to a specific timeframe before new coverage takes effect or before a certain condition is known. During this period, the individual may not be eligible for certain benefits or coverage. This period allows the insurance company to assess the risk associated with the individual or condition before providing full coverage.Rate this question:
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- 19.
J.J. Jr is going to college and just recently came off his father's 40 employee group health plan. He is 26 years of age and wants to keep the same coverage until he earns his degree in approximately 24 months. What actions would you suggest J. J. Jnr take?
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Take out a personal plan of coverage
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Exercise the COBRA option under his father's group
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Sign up for the educational group activity plan
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As a student, he is still covered with his father's group
Correct Answer
A. Exercise the COBRA option under his father's groupExplanation
J.J. Jr should exercise the COBRA option under his father's group. COBRA allows individuals to continue their group health coverage for a limited period of time after they lose access to it. Since J.J. Jr wants to keep the same coverage until he earns his degree in approximately 24 months, exercising the COBRA option would be the most suitable choice for him. This way, he can maintain the same coverage without having to take out a personal plan or sign up for a different group plan.Rate this question:
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- 20.
COBRA is a federal law requiring employers with ___ or more employees to provide the option to continue the employee's existing health coverage for dependents for up to ____ months following qualifying events.
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20, 36
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25, 45
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15, 36
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20, 18
Correct Answer
A. 20, 36Explanation
COBRA is a federal law that mandates employers with 20 or more employees to offer the choice of extending an employee's current health coverage for dependents for a maximum of 36 months after certain qualifying events. This allows individuals to maintain their health insurance even if they experience a qualifying event such as job loss, reduction in work hours, or divorce.Rate this question:
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Current Version
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Mar 21, 2023Quiz Edited by
ProProfs Editorial Team -
Mar 25, 2012Quiz Created by
Vivian Tayor
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