Insurance Quiz 5

G is involved in an automobile accident as a result of driving while intoxicated and suffers numerous injuries. According to the Intoxicants and Narcotics exclusion in G’s policy, who is responsible for paying the medical bills?

• The reinsurer

• The insured

• The insurer

• The Guaranty Association

Select the appropriate response: Which of the following health insurance policy provisions specifies the health care services a policy will provide?

• Insuring clause

• Usual, Customary, and Reasonable clause

• Consideration clause

• Benefit clause

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?

• Claim will be paid and coverage will remain in force

• Claim will be denied and coverage will remain in force

• Claim will be denied and coverage will be cancelled

• Claim will be denied, the coverage cancelled, and all premiums paid will be refunded

When does a Probationary Period provision become effective in a health insurance contract?

• At the policy's inception

• 30 days after the policy's inception

• When a claim is submitted

• When a covered loss occurs

Agent J takes an application and initial premium from an applicant and sends the application and premium check to the insurance company. The insurance company returns the check back to J because the check is made out to J instead of the insurance company. What action should J take? Select the appropriate response.

• Deposit the applicant's check into his account and make a personal check out to the insurance company from his personal account

• Return to the customer, collect a new check made out to the insurance company, and send the new check out to the insurance company

• Cross off his name on the 'pay to' portion of the check, write the name of the insurance company, and send the check back to the insurance company

• Deposit the check in to his personal account, use the funds to purchase a cashiers check, and send the new cashiers check back to the insurance company

Which of the following actions will an insurance company most likely NOT take if an applicant, who has diabetes, applies for a Disability Income policy?

• Issue the policy with a diabetes exclusion

• Issue the policy with an altered Time of Payment of Claims provision

• Issue the policy with a rating

• Decline the applicant

Which of the following correctly explains the actions an agent should take if a customer wants to apply for an insurance policy?

• Have the customer sign a blank application, then take the application back to his office to complete prior to sending it off to the insurance company

• Complete the application over the phone with the customer, sign the application for the customer, then send the application off to the insurance company

• Complete the application and review the information with the customer prior to obtaining the customer's signature, then send the application off to the insurance company

• Have the customer fill out the application and send it to his office for him to sign, then send it off to the insurance company

T is receiving $3,000/month from a Disability Income policy in which T's employer had paid the premiums. How are the $3,000 benefit payments taxable? Select the appropriate response.

• Benefits are taxable to T

• Benefits are tax-free to T

• Benefits are partially taxable to T

• Benefits are taxable to T's employer

Information obtained from a phone conversation to the proposed insured can be found in which of these reports?

• Agent's report

• MIB report

• Inspection report

• Attending physician's report

A prepaid application for individual Disability Income insurance was recently submitted to an insurer. When the insurer received the Medical Information Bureau (MIB) report, the report showed that the applicant had suffered a stroke 18 months ago, something that was not disclosed on the application. Which of the following actions would the insurance company NOT take?

• Send the initial premium back to the applicant

• Send a notice to the applicant that the coverage was declined

• Send a notice to the MIB that the applicant was declined

• Send a notice to the agent that the applicant was declined