Insurance Policy Provisions Quiz

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Questions and Answers

What is the key function of an Impairment Rider?

It increases the coverage amount automatically.

It removes coverage for a specified pre-existing condition. (correct)

It allows for coverage adjustments based on health status.

It guarantees coverage regardless of health changes.

How does the premium for additional coverage work under the Guaranteed Insurability Rider?

It is determined by the market rate at the time of purchase.

It is calculated based on the insured's attained age at exercise. (correct)

It is based on the insured's initial age at policy purchase.

It remains constant regardless of age.

Which of the following statements is true about the Impairment Rider?

It can be either temporary or permanent in nature. (correct)

It permanently excludes all health conditions from coverage.

It allows for coverage of any health condition.

It includes all pre-existing conditions without exception.

What is a significant benefit of the Guaranteed Insurability Rider?

It allows purchasing additional coverage without evidence of insurability. Signup and view all the answers

Which of the following best describes a pre-existing condition as it relates to the Impairment Rider?

An injury or condition the insured has before obtaining the policy. Signup and view all the answers

What is the primary purpose of the grace period in a policy?

To prevent policy lapse after the premium due date Signup and view all the answers

Which statement accurately describes policy reinstatement?

It requires proof of insurability within a specific time frame Signup and view all the answers

What is the difference between a revocable and an irrevocable beneficiary?

Irrevocable beneficiaries cannot be changed without consent Signup and view all the answers

When must a claimant submit proof of loss?

Within 90 days of the loss occurring Signup and view all the answers

How long does an insured typically have to provide notice of a claim after a loss?

20 days following the incident Signup and view all the answers

What right does the insurer have regarding the physical examination of the insured?

The insurer can examine the insured as often as necessary during a claim Signup and view all the answers

What is the purpose of the 'Free Look' provision in an insurance policy?

Refund of premium within a specified time period Signup and view all the answers

In the context of insurance policies, what does the 'Deductible' refer to?

The specified amount the insured pays before benefits are paid Signup and view all the answers

What does the 'Waiver of Premium' provision entail?

Coverage continues without premium payments during disability Signup and view all the answers

What does 'Coinsurance' signify in an insurance policy?

Sharing of expenses expressed as a percentage after the deductible Signup and view all the answers

Which clause specifies that coverage does not apply to prior conditions?

Pre-existing Conditions Signup and view all the answers

What is meant by 'Recurrent Disability' in an insurance policy?

A provision that allows additional benefits for repeated incidents within a specific time Signup and view all the answers

What does an Impairment Rider specifically eliminate coverage for?

Specified pre-existing conditions Signup and view all the answers

Which of the following describes a Guaranteed Insurability Rider?

It allows the insured to increase their coverage without documentation. Signup and view all the answers

Which right allows the insurer to cancel a policy at any time?

Cancellable Signup and view all the answers

What is a characteristic of a Noncancellable policy?

Premiums cannot be raised beyond stated amounts. Signup and view all the answers

Under which renewal condition can the insurer raise premiums on a class basis?

Guaranteed Renewable Signup and view all the answers

Study Notes

Policy Provisions

Entire contract includes the policy, riders, amendments, and application copy.
Grace period allows a specified time post-premium due date to prevent policy lapse.
Reinstatement permits policy restoration with proof of insurability within a set timeframe.
Change of beneficiary:
- Revocable can be modified anytime by the policyowner.
- Irrevocable requires beneficiary consent for any changes.
Notice of claim mandates insured to inform insurer within 20 days post-loss or as soon as possible.
Claim form provision requires the insurer to provide claim forms within a designated period.
Proof of loss must be submitted by claimant within 90 days of the loss.
Time of payment of claims outlines immediate claim settlement upon written proof of loss.
Payment of claims specifies the recipient of claims payouts.
Physical examination and autopsy clause allows insurers to examine the insured while a claim is pending.

Mandatory Provisions

Insuring clause establishes the fundamental agreement between the insurer and policyowner.
Free Look allows policy return for a refund within a defined timeframe.
Consideration involves exchange of value between contracting parties.
Probationary period must elapse before specific coverage initiates.
Elimination period defines the waiting days post-illness or accident onset for benefit eligibility in disability income policies.
Waiver of premium ensures premium payments are suspended during total, permanent disability.
Pre-existing conditions clause excludes coverage for conditions prior to the policy.
Recurrent disability sets a time frame required between two illnesses for new benefits.
Deductible refers to the amount the insured must pay prior to the insurer covering benefits.
Coinsurance involves expense sharing, expressed as a percentage after the insured pays the deductible.
Copayments outline cost-sharing in a fixed dollar amount.

Riders

Impairment Rider removes coverage for designated pre-existing conditions (e.g., back injuries) and may be temporary or permanent.
Guaranteed Insurability Rider allows additional coverage purchase without evidence of insurability, with premiums based on the insured's age at the time of option exercise.

Rights of Renewability

Noncancellable means the insurer cannot cancel or increase premiums beyond what is stated in the policy.
Cancellable permits the insurer to cancel the policy anytime or at the end of the policy period with written notice and refund of unearned premium.
Guaranteed renewable allows insurer to raise premiums (only on a class basis) on policy anniversary, while giving the insured the right to renew for the contract's life.

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Description

Test your knowledge of the essential provisions related to insurance policies. This quiz covers topics such as grace periods, claim processes, beneficiary changes, and mandatory provisions. Perfect for anyone looking to deepen their understanding of insurance contracts.