Application Filling Guidelines Quiz

Questions and Answers

Which document provides the most comprehensive review of a patient's medical history for underwriting purposes?

Attending Physician's Statement (correct)

Individual Medical Summary

Comprehensive Medical History

Physician's Review

What key information is typically included in an Attending Physician's Statement?

Current policy details

Insurance premium costs

Past diagnoses and treatments (correct)

Patient's lifestyle choices

Which action is essential for an agent when replacing a health insurance policy?

Avoid discussing the benefits of the new policy

Ensure the new policy aligns with the insured's needs (correct)

Cancel the old policy without notifying the insured

Only provide a summary of the old policy

Which document would NOT typically be used to evaluate an individual's medical history in underwriting?

Medical Expense Report Signup and view all the answers

What is the primary function of an Attending Physician's Statement in the underwriting process?

To evaluate the insured's medical history Signup and view all the answers

What is the recommended method for correcting an application when changes are necessary?

Starting over with a fresh application Signup and view all the answers

Which of the following methods for changing incorrect answers is generally unacceptable?

White-out the previous answer Signup and view all the answers

What initial action is recommended if a mistake is made while filling out an application?

Start over with a fresh application Signup and view all the answers

What is the critical step after drawing a line through an incorrect answer?

Initial the correction made Signup and view all the answers

When is it advisable to use a fresh application instead of making corrections?

Only when multiple errors are present Signup and view all the answers

Which factor is NOT considered in a replacement situation?

Assets Signup and view all the answers

What action does an insurer take when a completed application and first premium check are submitted?

A conditional receipt is provided. Signup and view all the answers

What is a primary concern for agents during the replacement of a policy?

Ensuring the client is fully informed about the new policy. Signup and view all the answers

Why might limitations be significant in a replacement insurance evaluation?

They help in comparing coverage options. Signup and view all the answers

What does a conditional receipt signify for an applicant after submitting her premium?

The application is still under review. Signup and view all the answers

What type of contract requires both parties to fulfill obligations for it to be enforceable?

Conditional Signup and view all the answers

Which characteristic best describes a personal contract?

It relies on specific individual qualities. Signup and view all the answers

In the context of insurance, which term describes a contract where the outcome is uncertain?

Aleatory Signup and view all the answers

What is a critical feature of an aleatory contract?

The contract may lead to unequal performances. Signup and view all the answers

Which document primarily contains an insured's comprehensive medical history?

Medical report Signup and view all the answers

What occurs when a health insurance applicant submits a completed application and first premium check?

The insurer reviews the application before issuing a policy. Signup and view all the answers

What does a conditional receipt indicate to a policy applicant?

The application is under review. Signup and view all the answers

Which statement describes the status of a policy after an applicant receives a conditional receipt?

The application has not been fully approved or a policy issued. Signup and view all the answers

What is a common misunderstanding regarding conditional receipts?

They provide immediate coverage without conditions. Signup and view all the answers

What is the outcome if an insurer has not issued a policy after a conditional receipt is given?

The application may still be under consideration. Signup and view all the answers

What is the primary binding force in an insurance contract?

Consideration Signup and view all the answers

Which principle of insurance involves the obligation to act honestly?

Good faith Signup and view all the answers

What does the insurer promise to provide in an insurance agreement?

Payment in the event of loss Signup and view all the answers

Which term describes the insured's payment of premiums and representations made during application?

Consideration Signup and view all the answers

Which principle focuses on the interpretation favoring the insured in ambiguities?

Adhesion Signup and view all the answers

What is essential to ensure when replacing an insured's health insurance policy?

The current policy should remain active until the new policy is issued. Signup and view all the answers

Which statement regarding the gap between health insurance policies is accurate?

No gap is required if the new policy has a waiting period. Signup and view all the answers

What must an agent do before issuing a new health insurance policy?

Hold the old policy in force until approval of the new one. Signup and view all the answers

Which action is NOT recommended when transitioning to a new health insurance policy?

Allow the current policy to lapse before the new policy is issued. Signup and view all the answers

Which of the following is crucial for insuring continuous health coverage?

Ensure the old policy is in force during the transition. Signup and view all the answers

What must happen for a conditional insurance contract to be valid?

Both parties must meet agreed terms. Signup and view all the answers

What distinguishes a unilateral contract from a conditional contract?

Only one party is bound to perform in a unilateral contract. Signup and view all the answers

Which of the following is NOT a characteristic of a conditional contract?

Payment guarantees coverage immediately. Signup and view all the answers

Which term best describes a contract where one party makes a promise that the other can only accept?

Unilateral Signup and view all the answers

In what scenario would a conditional contract become void?

If the insured dies before the policy is issued. Signup and view all the answers

Which term describes untrue statements made by insureds that could change the underwriting decision?

Material misrepresentations Signup and view all the answers

What impact do material misrepresentations have on an insurance application?

They can result in policy denial or alteration. Signup and view all the answers

Which of the following is not considered a material misrepresentation?

Unintentional errors in an application Signup and view all the answers

In the context of insurance applications, what is the potential consequence of submitting material misrepresentations?

Cancellation of the policy after issuance Signup and view all the answers

Which statement best defines 'warranties' in the context of insurance applications?

Statements that must be true at the time of the contract. Signup and view all the answers

Study Notes

Application Changes

Best practice for changing an application is to start over with a fresh application.
If starting anew isn't feasible, draw a line through the incorrect answer, write the correct answer, and have the applicant initial it.
Applications typically must be filled out in ink to ensure integrity.

Contract Types

A conditional contract requires both parties to perform specific duties to be enforceable.
Unlike unilateral contracts, a conditional contract relies on the fulfillment of stated conditions.

Medical History Documentation

The Attending Physician's Statement (APS) is critical for underwriters to assess an insured's medical history.
APS includes past diagnoses, treatments, recovery durations, and prognoses.

Health Insurance Policy Replacement

Ensure the current policy remains active until the new policy is issued to cover any pre-existing conditions.
A proper procedure during replacement does not include a cancellation of the old policy before the new one being active.

Replacement Considerations

Important factors in a replacement policy situation include benefits, limitations, and exclusions.
Comparison of these elements between the existing and proposed policies is essential; assets are not a primary consideration.

Insurance Application Process

Upon receiving a completed application and premium check, issuing a conditional receipt does not mean the insurer has approved the application or issued the policy.
The insurer has reviewed the application, but final decisions are pending.

Material Misrepresentation

A material misrepresentation is an untrue statement on the application that could affect the insurer's underwriting decision.
Distinction made between unintentional misrepresentation versus fraudulent statements.

Insurance Principles

Binding force in contracts is based on consideration, which includes premium payments by the insured and the insurer's promise to pay upon loss.
Neglecting to pay a legitimate claim contravenes the principle of consideration.

Conditional Contracts in Insurance

A conditional contract requires both the insurer and policyowner to meet specific conditions for execution.
Example scenario: death benefit payable to the beneficiary upon premium payment, pending policy approval, exemplifies conditional terms.

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Description

Test your knowledge on the correct methods of changing an application. This quiz will cover best practices for handling mistakes in application forms and companies' requirements. Ensure you understand how to properly amend an application.