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Questions and Answers
Which classification typically enjoys better premium rates?
Which classification typically enjoys better premium rates?
What happens to the policy if the initial premium is not collected with the application?
What happens to the policy if the initial premium is not collected with the application?
Which of the following actions should a producer take when the initial premium is not submitted with the application?
Which of the following actions should a producer take when the initial premium is not submitted with the application?
What might cause an applicant to be classified as substandard risk?
What might cause an applicant to be classified as substandard risk?
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Which statement regarding substandard applicants is correct?
Which statement regarding substandard applicants is correct?
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If an initial premium is not paid with the application, what must happen for the policy to become valid?
If an initial premium is not paid with the application, what must happen for the policy to become valid?
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Which receipt should not be given if the initial premium is not submitted with the application?
Which receipt should not be given if the initial premium is not submitted with the application?
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Which classification is most likely to be outright rejected by underwriters?
Which classification is most likely to be outright rejected by underwriters?
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Which of the following is not a reason for classifying an applicant as substandard?
Which of the following is not a reason for classifying an applicant as substandard?
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Which of the following is the correct action for a producer when an initial premium is not paid?
Which of the following is the correct action for a producer when an initial premium is not paid?
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If an incomplete health insurance application is sent to the insurer, what will happen to it?
If an incomplete health insurance application is sent to the insurer, what will happen to it?
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What is the standard procedure if an insurer finds an incomplete health insurance application?
What is the standard procedure if an insurer finds an incomplete health insurance application?
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How does an insurer typically handle an application that has incomplete information?
How does an insurer typically handle an application that has incomplete information?
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What will an insurer do when they detect that an application is missing crucial details?
What will an insurer do when they detect that an application is missing crucial details?
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Which of the following reflects the insurer's process for an incomplete health insurance application?
Which of the following reflects the insurer's process for an incomplete health insurance application?
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What information is NOT identified by the Medical Information Bureau (MIB)?
What information is NOT identified by the Medical Information Bureau (MIB)?
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Which of the following is identified by the Medical Information Bureau (MIB)?
Which of the following is identified by the Medical Information Bureau (MIB)?
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What does the Medical Information Bureau (MIB) check regarding insurance coverage?
What does the Medical Information Bureau (MIB) check regarding insurance coverage?
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Which type of medical history information does the Medical Information Bureau (MIB) provide?
Which type of medical history information does the Medical Information Bureau (MIB) provide?
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Which entity primarily uses information from the Medical Information Bureau (MIB)?
Which entity primarily uses information from the Medical Information Bureau (MIB)?
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What action should an insured take if the insurer fails to supply the necessary forms after notice of loss?
What action should an insured take if the insurer fails to supply the necessary forms after notice of loss?
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If an insurer does not furnish forms after notice of loss, the insured must:
If an insurer does not furnish forms after notice of loss, the insured must:
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Upon receiving no forms from the insurer after a loss notice, the insured is required to:
Upon receiving no forms from the insurer after a loss notice, the insured is required to:
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In the event that an insurer does not furnish forms after receiving a notice of loss, which is the correct process for the insured?
In the event that an insurer does not furnish forms after receiving a notice of loss, which is the correct process for the insured?
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After giving notice of loss, what is the insured expected to do if the forms are not provided by the insurer?
After giving notice of loss, what is the insured expected to do if the forms are not provided by the insurer?
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P is self-employed and owns an Individual Disability Income policy. He becomes totally disabled and starts receiving benefits. How much of the disability income is subject to federal income tax if P paid the premiums entirely on his own?
P is self-employed and owns an Individual Disability Income policy. He becomes totally disabled and starts receiving benefits. How much of the disability income is subject to federal income tax if P paid the premiums entirely on his own?
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How does the IRS treat disability income benefits received from an individual policy completely paid for by the policyholder?
How does the IRS treat disability income benefits received from an individual policy completely paid for by the policyholder?
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What is the key factor that determines the taxability of disability income benefits received by P?
What is the key factor that determines the taxability of disability income benefits received by P?
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If P had only paid part of the premiums for his Individual Disability Income policy, how would the tax treatment of his benefits change?
If P had only paid part of the premiums for his Individual Disability Income policy, how would the tax treatment of his benefits change?
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What amount of disability benefits received by P would be subject to federal income tax if the policy was partially employer-funded?
What amount of disability benefits received by P would be subject to federal income tax if the policy was partially employer-funded?
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In a health insurance application, which party is responsible for signing the document besides the policyowner?
In a health insurance application, which party is responsible for signing the document besides the policyowner?
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Which of the following is a requirement for a producer when submitting a health insurance application?
Which of the following is a requirement for a producer when submitting a health insurance application?
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If the beneficiary does not sign the health insurance application, what is the impact on the application's validity?
If the beneficiary does not sign the health insurance application, what is the impact on the application's validity?
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What distinguishes a beneficiary's role in the health insurance application process from that of the policyowner and adult insured?
What distinguishes a beneficiary's role in the health insurance application process from that of the policyowner and adult insured?
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Which statement correctly identifies the signature requirements for a health insurance application?
Which statement correctly identifies the signature requirements for a health insurance application?
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What action is an insurance company most likely to take if an applicant with diabetes applies for a Disability Income policy?
What action is an insurance company most likely to take if an applicant with diabetes applies for a Disability Income policy?
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What is NOT a common action taken by insurance companies when underwriting a Disability Income policy for an applicant with diabetes?
What is NOT a common action taken by insurance companies when underwriting a Disability Income policy for an applicant with diabetes?
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Which of the following actions is an insurance company least likely to perform when an applicant with diabetes seeks a Disability Income policy?
Which of the following actions is an insurance company least likely to perform when an applicant with diabetes seeks a Disability Income policy?
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Which action is least probable for an insurance company underwriting a Disability Income policy for a diabetic applicant?
Which action is least probable for an insurance company underwriting a Disability Income policy for a diabetic applicant?
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Which of these would an insurance company most likely avoid when processing a Disability Income policy application from a person with diabetes?
Which of these would an insurance company most likely avoid when processing a Disability Income policy application from a person with diabetes?
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When does the Time Limit of Certain Defenses provision make nonfraudulent misstatements incontestable?
When does the Time Limit of Certain Defenses provision make nonfraudulent misstatements incontestable?
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Which condition must be met for nonfraudulent misstatements to become incontestable under an Individual Health Insurance Policy?
Which condition must be met for nonfraudulent misstatements to become incontestable under an Individual Health Insurance Policy?
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What is the primary timeframe for the incontestability of nonfraudulent misstatements in a health policy?
What is the primary timeframe for the incontestability of nonfraudulent misstatements in a health policy?
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How long after the policy issue date do nonfraudulent misstatements become incontestable in an individual health insurance policy?
How long after the policy issue date do nonfraudulent misstatements become incontestable in an individual health insurance policy?
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Under the Time Limit of Certain Defenses provision, when do misstatements become incontestable?
Under the Time Limit of Certain Defenses provision, when do misstatements become incontestable?
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Who is responsible for paying the premiums in T's Disability Income policy?
Who is responsible for paying the premiums in T's Disability Income policy?
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What is the tax status of the benefit payments to T under the Disability Income policy?
What is the tax status of the benefit payments to T under the Disability Income policy?
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If T had paid all the premiums on the Disability Income policy, how would the benefits be taxed?
If T had paid all the premiums on the Disability Income policy, how would the benefits be taxed?
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Why are the benefits from the Disability Income policy taxable to T?
Why are the benefits from the Disability Income policy taxable to T?
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What is the tax benefit to the employer for paying the premiums on the Disability Income policy?
What is the tax benefit to the employer for paying the premiums on the Disability Income policy?
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Study Notes
Incomplete Health Insurance Applications
- An incomplete health insurance application will be returned to the writing producer.
- If the initial premium is not submitted with the application, the producer should forward the application to the insurer without the premium.
Classification of Applicants
- Substandard applicants are below the insurer's average risk guidelines and can be rated substandard for various reasons or even be rejected outright.
- Substandard applicants are not always declined by underwriters.
Medical Information Bureau (MIB)
- The MIB report will identify marijuana use determined by a previous screening.
Filing Proof of Loss
- If the insurer does not furnish forms after the insured gives notice of loss, the insured must file written proof of loss.
Taxation of Disability Income Benefits
- Disability income benefits from an individual policy paid entirely by the policyowner are not subject to federal income tax.
- When a disability income insurance plan is paid for entirely by the employer, the benefits are taxable to the recipient.
Insurance Company Actions
- An insurance company may decline an applicant with diabetes, issue a policy with a rating, or issue a policy with a diabetes exclusion, but will not issue a policy with an altered Time of Payment of Claims provision.
Signing a Health Insurance Application
- The beneficiary is not required to sign a health insurance application.
Time Limit of Certain Defenses Provision
- Nonfraudulent misstatements in an Individual Health Insurance Policy become incontestable two years from the date the policy was issued.
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Description
What happens to an incomplete health insurance application submitted to an insurer? Learn about the next steps in the application process.
