Chapter 2 Health Insurance Basic

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| By Vivian Tayor
Vivian Tayor, Insurance & Finance
Vivian, with over a decade of financial and insurance leadership, founded Celevi CE, an elite continuing education organization, aiming to empower industry experts with trust and respect.
Quizzes Created: 19 | Total Attempts: 41,207
| Attempts: 2,230
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  • 1/20 Questions

    Mr. Johnson received medical treatment six months prior to his application for insurance. What is this called?

    • Exclusion
    • A pre-existing condition
    • A condition for a limited policy
    • A self inflicted injury
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About This Quiz

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.

Health Insurance Quizzes & Trivia

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  • 2. 

    What factors are not used in underwriting an individual health policy?

    • Health history and foreign travel

    • Age and Gender

    • Political affiliation and religious preference

    • Smoking and hobbies

    Correct Answer
    A. Political affiliation and religious preference
    Explanation
    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.

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  • 3. 

    Which of the following states “that benefits by a policy are limited”?  

    • Comprehensive notice

    • Government notice

    • Limited policy notice

    • Private notice

    Correct Answer
    A. Limited policy notice
    Explanation
    The correct answer is "limited policy notice." This option states that the benefits of a policy are limited.

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  • 4. 

    Accident and Health Insurane, insurers for two major perils, they are

    • Driving under the influence and driving while intoxicated.

    • On the job and off the job

    • Accidental injury and sickness

    • Automobile and home health care

    Correct Answer
    A. Accidental injury and sickness
    Explanation
    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.

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  • 5. 

    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

    • Specified disease policy

    • Activity policy

    • Blanket policy

    • Certificate of coverage policy

    Correct Answer
    A. Blanket policy
    Explanation
    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.

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  • 6. 

    Which of the following would be consideredan unintentional or unforseen injury that would cause bodily harm?

    • Illness

    • Uninsurable injury

    • High risk injury

    • Accidental bodily injury

    Correct Answer
    A. Accidental bodily injury
    Explanation
    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.

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  • 7. 

    Which of the following signatures are required on a Health application?  

    • Insured

    • Broker

    • Agent and proposed insured

    • Agent

    Correct Answer
    A. Agent and proposed insured
    Explanation
    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.

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  • 8. 

    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?

    • The representative

    • The underwriters

    • The agent

    • The insurer

    Correct Answer
    A. The insurer
    Explanation
    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.

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  • 9. 

    When must an outline of coverage be delivered?  

    • Never

    • At the time of application only

    • At the time the policy is delivered or the time of application

    • 30 days after the policy has been delivered

    Correct Answer
    A. At the time the policy is delivered or the time of application
    Explanation
    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.

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  • 10. 

    In a replacement situation, all the following must be considered except?  

    • Benefits

    • Assets

    • Exclusions

    • Limitations

    Correct Answer
    A. Assets
    Explanation
    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.

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  • 11. 

    What is an important feature of a Dental expense Insurance plan that is not typically found in a Medical Expense Insurance plan?

    • A low monthly premium

    • A broad coverage area

    • The inclusion of diagnostic and preventive care

    • Low cost deductibles

    Correct Answer
    A. The inclusion of diagnostic and preventive care
    Explanation
    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.

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  • 12. 

    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? 

    • Take out a personal plan of coverage

    • Exercise the COBRA option under his father's group

    • Sign up for the educational group activity plan

    • As a student, he is still covered with his father's group

    Correct Answer
    A. Exercise the COBRA option under his father's group
    Explanation
    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.

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  • 13. 

    Which of the following is an underwriting factor?  

    • Sexual orientation

    • Marital status

    • Genetic characteristics

    • Physical handicap

    Correct Answer
    A. Physical handicap
    Explanation
    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.

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  • 14. 

    A specified period before new coverage goes into effect or a specified condition is known as which of the following?

    • Waiting period

    • Exclusion

    • Probationary period

    • Morbidity table

    Correct Answer
    A. Probationary period
    Explanation
    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.

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  • 15. 

    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.

    • 20, 36

    • 25, 45

    • 15, 36

    • 20, 18

    Correct Answer
    A. 20, 36
    Explanation
    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.

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  • 16. 

    What makes up an entire contract?  

    • All parts of an application

    • Parts 1 and 2 of an application

    • An application and the policy

    • An application and the premium

    Correct Answer
    A. An application and the policy
    Explanation
    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.

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  • 17. 

    Which of the following is not false regarding a person with HIV?  

    • The person may be declined

    • The person may not be declined

    • The person may be declined only if they have symptoms

    • The person will definitely be declined

    Correct Answer
    A. The person may be declined
    Explanation
    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.

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  • 18. 

    When may an applicant be denied coverage, due to information found in their MIB report?  

    • Never

    • During an applicant’s application process

    • When it is discovered by an agent

    • Yearly

    Correct Answer
    A. Never
    Explanation
    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.

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  • 19. 

    What is incorrect regarding the group underwriting process

    • Adverse selection is not a concern for group contracts

    • New employees usually become eligible to enroll after a waiting period

    • Evidence of insurability is not required since premiums are adjusted annually by evaluating the group and the claims experience.

    • The insurer's office location is not a cost factor.

    Correct Answer
    A. Adverse selection is not a concern for group contracts
    Explanation
    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.

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  • 20. 

    When does credit disability insurance expire?  

    • 20 days after the loan is satisfied

    • 15 days after the loan is satisfied

    • 10 days after the loan is satisfied

    • 30 days after the loan is satisfied

    Correct Answer
    A. 15 days after the loan is satisfied
    Explanation
    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.

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Quiz Review Timeline (Updated): Mar 21, 2023 +

Our quizzes are rigorously reviewed, monitored and continuously updated by our expert board to maintain accuracy, relevance, and timeliness.

  • Current Version
  • Mar 21, 2023
    Quiz Edited by
    ProProfs Editorial Team
  • Mar 25, 2012
    Quiz Created by
    Vivian Tayor
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