While the content of practice tests is not the same as the content of the actual exam, the questions are representative of the types of questions you will see on the exam and are specific to health insurance. The exam contains 50 items related . Before an insurer will pay any loss under a policy, what is usually required from the insured? The present cash value of the policy equals $250,000. Some companies offer an annuity option in the nonforfeiture clause. This option fulfills his need for increased coverage in the coming years as he starts his family. The correct answer is: Accumulation at interest Susan neglected to make her premium payment and she was injured in an accident. A Disability Income policyowner recently submitted a claim for a chronic neck problem that has now resulted in total disability. In which of the following examples would a contract between an insurer and a prospective insured be legal? If a policy is canceled prior to the expiration date, the insurer is required to refund any premium difference thats due. To protect the insurance company, insuring clauses almost always include exclusions. The purpose of the Grace Period is to give the policyowner additional time to pay overdue premiums. according to the mandatory uniform policy provisions what is the maximum amount if time after the premium due dare during which the policy remains in force even though the premium has bot been paid? Notice of claim is required within _____ days of loss. Which one of these is NOT considered to be an element of an insurable risk. A) 90 B) 15 C) 20 D) 10 Answer C is correct. How much will company A pay for a $24,000 loss? If the policyowner cannot be reached, premium payments have ceased, and the policy's cash value is eliminated, the insurer will automatically use the extended term option. Which of the following is a method of claim settlement used when the insured and insurer cannot agree on how to settle a claim? When the state prohibits this by law (Correct.) States the scope and limits of the coverage ( "States the scope and limits of the coverage". The death benefit would be. He is a CFA charterholder as well as holding FINRA Series 7, 55 & 63 licenses. Which nonforfeiture option is the "automatic" option? Term 1 / 7 Section A: Incident Response Costs Click the card to flip Definition 1 / 7 we will pay on YOUR behalf any reasonable sums incurred by YOU or on YOUR behalf as a direct result from a CYBER EVENT first DISCOVERED by YOU during the policy period: - access to our 24/7 cyber incident response line Each contract contains the Other Insurance With This Insurer Provision. An insuring clause is a part of insurance policies that defines how much risk will be taken on by the insurance company. Which of the following statements BEST describes what the Legal Actions provision of an Accident and Health policy requires? When an insured changes to a more hazardous occupation which disability policy provision allows an insurer to adjust policy benefits and rates? Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield, Fundamentals of Financial Management, Concise Edition, states that the insurer agrees to provide life insurance protection for the named insured which will be paid to a designated beneficiary when proof of death is received by the insurer, declarations, insuring agreements, definitions, exclusions and conditions, cancel immediately, not renew at the renewal date, or increase premiums on a policyholder under certain conditions, appeal the decision and have it reviewed by a third party. An insured must notify an insurer if a medical claim within how many days after an accident? The word team gets bandied about so loosely that many managers are oblivious to its real meaningor its true potential. When a mortgagee is named in a mortgagee clause attached to a fire or other direct damage policy, -The loss reimbursement will be paid to the mortgagee as their interest may appear - The mortgagee's rights of recovery will not be defeated by any act or neglect of the insured - The mortgagee may bring a suit in their own name to recover damages to covered property, Which of the following would modify the original insurance contract by either adding or removing coverage a. endorsement b. additional coverage form c. condition d. flexible policy. The Entire Contract provision states that the health insurance policy, together with a copy of the signed application and attached riders and amendments, constitutes the entire contract. Mass customization is a marketing and manufacturing technique that Essie S. asked 10/04/16 Hi, everyone. All of the following are ownership rights, EXCEPT: Only an authorized officer of the insurer can make changes to the policy; however, a policyowner can request a policy change. Which of the following risks Cannot be covered by insurance? And mass customization are forcing companies to find flexible ways to meet customer demand. Resources to help you adapt to the realities of COVID-19. Investopedia requires writers to use primary sources to support their work. Which of these statements accurately describes the waiver of premium? How Cash Value Builds in a Life Insurance Policy, Payout Options Under a Nonforfeiture Clause, Accumulation Option: Definition, Types, and Comparisons, Whole Life Insurance Definition: How It Works, With Examples, Term Life Insurance: What It Is, Different Types, Pros and Cons, What Is Cash Value in Life Insurance? What should an insured do if the insurer does not send claims? He currently researches and teaches economic sociology and the social studies of finance at the Hebrew University in Jerusalem. Return any premiums to the insured b. "Time Limit on Certain Defenses". Which of the following is a guarantee that is required by law to be a part of life insurance polices that build cash value? Consideration b. competent parties c. beneficiary's consent d. offer and acceptance, An insurer neglects to pay a legitimate claim that is covered under the terms of the policy. If a policyowner covered under an accident and health policy wanted to ensure the policy will continue if they ever become totally disabled, they would want to add a waiver of premium rider. If 24 workers can build a wall in 15 days, how many days will 8 workers take to build a similar wall. The extended term option permits the policyowner to use the policy's cash values to buy paid-up term insurance. The part of the insurance contract that describes the covered perils and the nature of coverage of the contractual agreement between the insurer and the insured is called the, Which of the following is a statement that is guaranteed to be true, and if untrue, may breach an insurance contract a. concealment b. indemnity c. representation d. warranty, All of the following are found in the declarations section of a policy EXCEPT the a. Exclusions b. Predictability of losses will be improved, A business becoming incorporated is an example of risk. Which of the following may Eddie not use? Consider consulting a financial advisor who can guide you on choosing an option that will best fit your circumstances. What is the MINIMUM number of days for the Grace Period provision? However, the cash surrender option does not allow the policy to be reinstated because the policy has been surrendered for its cash value, and no coverage remains. 15 ( "15". Payment of Claims (Correct.) Can you briefly explain ? Firefighter glove sizing. Nonforfeiture clauses offer protection in the event a policyholder stops paying their premium. The policyholder must Prevents delayed claim payments made by the insurer (Correct.) In insurance: Liability insurance. Premiums are waived after the insured has been totally disabled for a specified time period (Correct.) Consideration clause (Correct.) 2003-2023 Chegg Inc. All rights reserved. The applicant is intoxicated at the time of application b. Which of the following options would best suit his needs? What type of risk involves the potential for loss AND the possibility for gain? Only one policy will pay, the premiums for the other contracts will be returned. Select one: a. When assessing a client with partial-thickness burns over 60% of the body, which finding should the nurse report immediately? Their main purpose is dictating how losses P is a major medical policyowner who is hospitalized as a result of injuries sustained from participating in a carjacking. Cancellation provision clauses require the party that chooses to cancel the policy to send written notice to the other party. Which of the following may Eddie not use? need to pay if a claim is made against the insured. Every Health and Disability Income Policy must express the conditions and provisions for _______. He or she will: This is the formula for determining whether the amount of insurance you have purchased (the limit of insurance) meets your coinsurance requirement:Value of the property x Coinsurance percentage = Minimum insurance amount requiredHere are two examples of how coinsurance works based on a replacement cost value basis.Scenario 1: Coinsurance requirement is satisfied:The building limit is $90,000The value of the building at the time of the loss is $100,000The coinsurance percentage is 90%The limit of insurance should be at least $100,000 x 90% = $90,000Because the building limit meets the minimum amount of insurance required under the coinsurance clause, the amount due on a claim is not affected:The cost to repair the covered damage is $20,000The deductible is $500The amount payable based on Replacement Cost Value (RCV) is $19,500This amount represents 100% of the cost to repair the covered damage minus the deductible.Scenario 2: Coinsurance requirement is not satisfied:The building limit is only $45,000The value of the building at the time of loss is $100,000The coinsurance percentage is 90%The limit of insurance should be at least $100,000 x 90% = $90,000Because the amount of insurance purchased is only 50% of the amount required ($45,000/$90,000), coverage is afforded for only 50% of the repair cost:The cost to repair the covered damage is $20,00050% of the repair cost is 20,000 x .50 is $10,000The deductible is $500The amount payable based on RCV is $9,500. Cash surrender value is the accumulated portion of a permanent life insurance policy's cash value that is available to the policyholder upon surrender of the policy. Insurers take on a certain amount of risk when providing an insurance policy, and the risk the company assumes is stipulated in an insuring clause. What should an insured do if the insurer does not send claims forms within the time period set forth in a health policy's claims forms provision? Cookies collect information about your preferences and your devices and are used to make the site work as you expect it to, to understand how you interact with the site, and to show advertisements that are targeted to your interests. What is the initial requirement for an insured to become eligible for benefits under the waiver of premium provision? The security requirements must allow work to be accomplished while One is the insuring clause, in which the insurer agrees to pay on behalf of the insured all sums that the insured shall become legally obligated to pay as damages because of bodily injury, sickness or disease, wrongful death, or injury to another person's property. E is not insured. Which of these statements accurately describes the Waiver of Premium provision in an Accident and Health policy? In this situation, the insured is liable for the medical bills. A few weeks later E suffers a heart attack and is hospitalized without completing the medical history questions and paying the initial premium. The person must have completed at least secondary education c. The person must not be under the influence of drugs or alcohol d. Th person must be of legal age, B. What nonforfeiture option allows the policyowner to purchase paid-up whole life coverage at a reduced face amount based on the policy's existing cash value? What insurance policy provision defines how the policy will respond if there is more than 1 insurance policy written on the same risk? Which provision is a Mandatory Uniform Provision? With Optionally Renewable Health policies, the insurer may. K then sends in a payment which the insurer subsequently accepts. Depending on the age of the policy, the cash surrender value could be less than theactual cash value. For example, if you purchase a policy when you were 20 and you paid until age 55, you would receive a term policy that is less than 35 years. Which of the following statements describes what an Accident and Health policyowner may NOT do? The company did not notify M of this denial. Basics of an Insuring Clause Insurers take on a certain amount of risk when providing an insurance policy, and the risk the company assumes is stipulated in an insuring clause. Insuring Clause The insuring clause (or insuring agreement) sets forth the basic agreement between the insurer and the insured. Diffusion Let us complete them for you. Loss Settlement clause c. appraisal Clause d. Loss payment clause, The other insurance provision that limits the liability of the insurer to a portion of the loss no greater than the amount the insurer bears to all the insurance covering the property is called. When this provision is inserted into an insurance contract, the insurer is agreeing to Extended-term insurance is often thedefault non-forfeiture option. If a property is covered by company A for $20,000 and company B covers the same property for $40,000. A nonforfeiture clause is an insurance policy clause stipulating that an insured party can receive full or partial benefits or a partial refund of premiums after a lapse due to nonpayment.. Which of the following statements describes what an accident and health policyowner may not do? (Check all that apply) - Armstrong played trumpet in a higher register than anyone else - He popularized scat singing - Armstrong created original and inspiring .