Insurance Basics & Policy Provisions
This flashcard set reviews key concepts related to health and life insurance policies, including policy types, underwriting, provisions, annuities, and regulatory rules. Ideal for exam prep or a quick refresher on insurance fundamentals.
B’s policy provides coverage on an in-hopsital basis only and contains a limited daily room and board benefit. which of these policies does B have
comprehensive major medical
basic hospital
critical illness
basic surgical
basic hospital
Key Terms
B’s policy provides coverage on an in-hopsital basis only and contains a limited daily room and board benefit. which of these policies does B have
comprehensive major medical
basic hospital
critical illness
basic surgical
basic hospital
every 12 months after the initial enrollment period, an HMO must hold an open enrollement period of
10 days
31
45
60
31 days
the insuring clause
-specifies the additional time given to pay past due premiums
-states the scope and limits of the coverage
-states the amount of premium to be collected
-prohibits the insured from suing the insurer for at least 60 days after filing a written proof of loss
-states the scope and limits of the coverage
which of the following provisions guarantees that premiums will be waived if a juvenile life policy owner becomes disabled
-family maintenance clause
-payor clause
-assignment provision
-automatic premium loan provision
payor clause
what is old age and survivors health insurance (OASDHI) also known as
-medicare
-social security
-medicaid
-FICA
Social secuity
T purchased a 100K single premium straight life annuity 5 years ago. he has received monthly payments since the inception of the annuity. if T dies the insurance company
-does not have to make any further payments
-must make full payments to the beneficiary
-must make half payments to beneficiary
does not have to make any further payments
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| Term | Definition |
|---|---|
B’s policy provides coverage on an in-hopsital basis only and contains a limited daily room and board benefit. which of these policies does B have comprehensive major medical | basic hospital |
every 12 months after the initial enrollment period, an HMO must hold an open enrollement period of | 31 days |
the insuring clause -specifies the additional time given to pay past due premiums | -states the scope and limits of the coverage |
which of the following provisions guarantees that premiums will be waived if a juvenile life policy owner becomes disabled -family maintenance clause | payor clause |
what is old age and survivors health insurance (OASDHI) also known as -medicare | Social secuity |
T purchased a 100K single premium straight life annuity 5 years ago. he has received monthly payments since the inception of the annuity. if T dies the insurance company -does not have to make any further payments | does not have to make any further payments |
S recently received a 500K lump sum retirement buyout from her employer. she would like to buy an annuity that will immediately furnish her with a guaranteed income for life. what type of anuity is best suited for her situation -403B plan | single premium will start providing income payments within the first year |
all students attending a large university could be covered by -a blanket policy | blanket policy |
insurers may request a hearing with _______ if their policy is rejected 20 | 20 days |
with optionally renewable health policies the insurer may -renew the policy only if no claims have been filed the previous year | -review the policy annually and determine whether or not to renew it |
T owns an accident and health policy and notifies her insurance company that she has chosen a less hazardous occupation. under the change of occupation provision, which of the following actions may her insurance company take -allow her to take a tax deduction on unearned premiums | increase her policys coverage amount |
on Aug 6, D submitted an application for 50K life insurance policy and did not pay the initial premium. on aug 18, D went to his doctor complaining of chest pains, and some tests were given by the doctor. the life policy was delivered by the producer on aug 20 and D explains what had recently taken place with the doctor. what action should the producer then take? -collect initial premium | -collect the intial premium along with a signed health statment |
which of these factors does not influence an applicant’s need for life insurance -lifestyle of the applicant | future educational costs |
what type of policy would only provide coverage for specific typees of illnesses (cancer stroke) | dread disease |
which of these is not an example of doing insurance business -selling shares of stock | receiving an insurance application |
XYZ company pays the entire premium for its group health plan. the minimum percentage of eligible employees that must be covered is | 100 |
when an employee is required to pay a portion of the premium for an employer/employee group health plan, the employee is covered under which of the following plans -joint | contributory |
K failed to pay a renewal premium within the time granted by the insurer. K then sends in a payment which the insurer subsequently accepts. which policy provision specifies that coverage may be restored in this situation -free look | reinstatment |
what is the initial source of underwriting for an insurance policy -application containing statements from the insured | application containing statements from the insured |
B an insurance agent tells his clients that their rights may be impaired if they fail to complete a release form within a given period of time. B may be found guilty of -boycotting | coercion |
which type of provider is known for stressing preventative medical care and routine physical examinations | HMO |
a primary beneficiary has died before the insured in a life insurance policy. a contingent beneficiary is also named in the policy, which of the following will occur when the insured dies -proceeds will go to the primary beneficiarys estate | -proceeds will go to the contingent beneficiary |
in order to sell an ________ life policy, a producer is required to register with the financial industry regulatory authority (FINRA) -variable | variable |
which of the following statements about health reimbursement arrangements HRA is correct -if the employee had a qualified medical leave from work, lost wages can be reimbursed | -if the employee paid for qualified medical expenses, the reimbursements may be tax free |
which of the following statments about health coverage for newborns is not true? -coverage includes treatment of congenital defects | -coverage is limited to only congenital defects |
with whome may an agent legally share commissions -the insured | -another agent with same line of insurance |
The policy provision that entitles the insurer to establish conditions the insured must meet while a claim is pending is -grace period | t`ime limit on certain defenses |
which of the following statements about the classification of applicants is incorrect -substandard applicants are never declined by underwriters | -substandard applicants are never declined by underwriters |
in a life insurance policy which provision states who may select policy options, designate and name a beneficiary, and be the recipient of any financial benefits from the policy | owners rights |
which of the following best describes a warranty | statement guaranteed to be true |
which premium schedule results in the lowest cost to the policy owner | annual |
during a sales presentation for a participating life insurance policy, an agent must | make a prospect understand that dividends are not guaranteed |
which of the following organizations would make reimbursement payments directly to the insured individual for covered medical expenditures commercial | commerical insurer |
periodic health claim payments must be made at least monthly | monthly |
under a long term care policy, which benefit would be typically excluded or limited intermediate nursing | alcohol rehab |
V is insured under and individual disability income policy with a 30-day elimination period. on july 1 he is involved in an accident and temporarily disabled. he returns to work on December 1. how many months of benefit are payable? 6 | 4 months |
T is covered by two health insurance plans: a group plan through his employer and his spouses plan as a dependent. under the model group coordination of benefits provision, when T files a claim, his employers plan is considered the: principal | primary |
medicare part c is -government insurance | available to those who are enrolled in medicare part a and b |
which of these is not considered to be a right given to a policyowner -surrendering the policys cash value | -modify a provision in the insurance contract |
which of these life products is not considered interest sensitive -modified whole life | modified whole life |
which of these actions is taken when a policyowner uses a life insurance policy as collateral for a bank loan -revocable assignment | -collateral assignment |
the percentage of an individuals primary insurance amount. (PIA) determines the benefits paid in which of the following programs -SS disability income | -SS disability income |
M's insurance company denied reinstatement application for her lapsed health insurance policy. the company did not notify M of this denial. how many days from the reinstatement application date does the insurance company have to notify M of the denial before the policy will be automatically placed back in force -10 days | 45 days |
an evidence of coverage form may be issued by a health maintenance organization HMO after being approved by the -attorny general | commissioner |
a life insurance application must be signed by all of these except -the policyowner | beneficiary |
what type of life policy covers two people and pays upon the death of the last insured? -shared | survivorship |
who is liable when an insured suffers a loss on a policy sold by an agent through an insurer not authorized to conduct business in texas -the insured | the agent |
what is considered to be a characteristic of a conditionally renewable health insurance policy -premiums may increase at time of renewal | premiums may increase at time of renewal |
which of the following consists of an offer, acceptance and consideration warranty | contract |
what type of life insurance are credit policies issued as whole | term |
if an individual is covered under an accidental death policy and dies, an autopsy can be performed in all these situations except when the cause of death is unknown | when the state prohibits this by law |
_ of continuing education MUST be completed in the classroom or classroom equivalent 20 | 50% |
an insured must notify an insurer of a medical claim within days after an accident 10 | 20 |
an insurer must provide an insured with claim forms within days after receiving notice of a loss 5 | 15 |
which of the following is an important underwritiing principal of group life insurance physical examinations are required | everyone must be covered in the group |
upon policy delivery, a signed good health statment is requested from the applicant. why would this be necessary? -the applicant chose an annual premium mode | -the initial premium was not submitted with the app |
which of the following is not a required provision in group life policies -free look | right to loan |
additional coverage can be added to a whole life policy by adding an payor rider | decreasing term rider |
a student pilot can pay regular premium costs for her life insurance policy with the addition of which of the following guaranteed insurability rider | aviation exclusion |
ABC insurance company is actively engaging in boycott, coercion, and intimidation that results in the unreasonable restraint of trade. abc is comitting a prohibited act under texas insurance laws covering twisting | unfair methods of competition |
what should an insured do if the insurer does not send claims forms within the time period set forth in a health policys claims forms provision -file a lawsuit | submit the claim in any form |
which of these are not an example of nonforfeiture option | life income |
whole life policies are guaranteed to provide all the following except cash value that will ultimately replace the death benefit | partial withdraw features beyond surrender of charge |
investment gains from a universa life policy go towards | the cash value |
what is considered to be a characteristic of a conditionally renewable health insurance policy premiums may increase at a time of renewal | premiums may increase at a time of renewal |
A Policy that becomes a MEC will loose many of its tax advantages | will loose many of its tax advantages |
free look provision begins upon receipt of the policy by policyowner | upon receipt of the policy by policyowner |
which of these statements concerning an individual disability income policy is true normally includes an elimination period | normally includes an elimination period |
all of these statments about the waiver of premium provision are true except individual must be eligible for SS disability for claim to be accepted | individual must be eligible for SS disability for claim to be accepted |
which of the following statments is true about a acceleerated death benefit must have a terminal illness to qualify | must have a terminal illness to qualify |
who elects the governing body of mutual insurance company policyholders | policyholders |
who owns a stock insurance company stockholders | stockholders |
less hazardous occupation under change of occupation which would the insurance comapny take increase policy coverage amount | increase policy coverage amount |
which of these is not a reason to purchase life insurance on life of a minor if both parents were to die it would provide death benefit to a child | if both parents were to die it would provide death benefit to a child |
when a person returns to work after a period of total disability but cannot earn as much as they did before the disability this situation is called which of the following residual disability | residual disability |
what type of life insurance are credit policies issued as term | term |
What type of insurance includes flexible premiums and an adjustable death benefit universal life | universal life |
pre hospital authorization is considered an example of managed care | managed care |
situation in which a group of physicians are salaried employees and conduct business in a hmo facility is closed panel | closed panel |