Chapter 2 Health Insurance Basic

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.

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.

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.

The correct answer is "limited policy notice." This option states that the benefits of a policy are limited.

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.

A blanket policy is a group policy that provides accident and health coverage for a group of individuals being transported by a common carrier, without individually naming the insured persons. This type of policy is commonly used in situations where a large number of people are being transported together, such as on a tour bus or a school field trip. The blanket policy ensures that all members of the group are covered in the event of an accident or health issue during the transportation.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.