Insurance MCQ

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? Answer: Consideration clause

According to the Time Payment of Claims provision, the insurer must pay Disability Income benefits no less frequently than which of the following options? Answer: Monthly

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? Answer: 31

Health insurance benefits NOT covered due to an act of war are Answer: excluded by the insurer in the contract provisions

What type of renewability guarantees premium rates and renewability? Answer: Guaranteed renewable

Which Accident and Health policy provision addresses preexisting conditions? Answer: Time Limit on Certain Defenses

What is the purpose of the Time of Payment of Claims provision? Answer: Prevents delayed claim payments made by the insurer

With Accidental Death and Dismemberment policies, what is the purpose of the Grace Period? Answer: Gives the policyowner additional time to pay past due premiums

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? Answer: Claim will be paid and coverage will remain in force

With Optionally Renewable Health policies, the insurer may Answer: review the policy annually and determine whether or not to renew it

If an insurance company issues a Disability Income policy that it cannot cancel or for which it cannot increase premiums, the type of renewability that best desribes this policy is called Answer: noncancellable

Which of the following statements BEST describes what the Legal Actions provision of an Accident and Health policy requires? Answer: An insured must wait at least 60 days after Proof of Loss has been submitted before a lawsuit can be filed

T files a claim on his Accident and Health policy after being treated for an illness. The insurance company believes that T misrepresented his actual health on the initial insurance application and is, therefore, disputing the claim's validity. The provision that limits the time period during which the company may dispute a claim's validity is called Answer: Time Limit on Certain Defenses

J, an Accidental Death and Dismemberment (AD&D) policy holder, dies after injuries sustained in an accident. J's age as stated on the application five years ago was found to be understated by ten years. Which of the following actions will the insurance company take? Answer: The insurer will adjust the benefit to what the premiums paid would have purchased at the insured's actual age

What must the policyowner provide to the insurer for validation that a loss has occurred? Answer: Proof of Loss

What is considered to be a characteristic of a Conditionally Renewable Health Insurance policy? Answer: Premiums may increase at time of renewal

Which of these statements accurately describes the Waiver of Premium provision in an Accident and Health policy? Answer: Premiums are waived after the insured has been totally disabled for a specified time period

When an insurance company sends a policy to the insured with an attached application, the element that makes the application part of the contract between the insured and the insurer is called the Answer: Entire Contract provision

When does a Probationary Period provision become effective in a health insurance contract? Answer: At the policy's inception

Which of the following BEST describes a short-term medical expense policy? Answer: Nonrenewable