EXAMFX Health Policy Provisions 2 — Questions and Answers
Question 1: Under the Entire Contract provision, which documents must be included to form the complete insurance contract?
- The policy and all attached riders and endorsements
- The policy, application, and all attached riders and endorsements (Correct answer)
- The policy and the application only
- The policy, application, and agent's notes
Correct answer: The policy, application, and all attached riders and endorsements
The Entire Contract provision requires the policy, the signed application, and any attached riders or endorsements to constitute the full agreement.
Question 2: A health policy's Grace Period provision typically allows how many days for an individual policy after a missed premium?
- 7 days
- 10 days
- 31 days (Correct answer)
- 60 days
Correct answer: 31 days
Individual health insurance policies generally provide a 31-day grace period during which the policy remains in force even if the premium is not paid on time.
Question 3: Which provision prevents an insurer from denying a claim by citing a misrepresentation in the application after the policy has been in force for two years?
- Incontestability provision
- Entire Contract provision
- Reinstatement provision
- Time Limit on Certain Defenses provision (Correct answer)
Correct answer: Time Limit on Certain Defenses provision
The Time Limit on Certain Defenses (incontestability) provision bars the insurer from voiding the policy or denying claims based on misrepresentations after the policy has been in force for a specified period, typically two years.
Question 4: If an insured submits a proof of loss for a health claim, within how many days must the insurer pay the claim under a standard Claim Settlement provision?
- 30 days
- 45 days
- 60 days (Correct answer)
- 90 days
Correct answer: 60 days
Under the standard Claims Settlement provision, the insurer must pay the claim within 60 days of receiving a satisfactory proof of loss.
Question 5: The Reinstatement provision in a health policy requires that a reinstated policy cover which type of loss immediately?
- All losses including sickness
- Accidental injury only (Correct answer)
- Both injury and sickness after a 30-day waiting period
- Only losses that were previously approved
Correct answer: Accidental injury only
Upon reinstatement, accidental injury losses are covered immediately, while losses due to sickness are typically subject to a 10-day waiting period.
Question 6: Under the Change of Beneficiary provision, who generally has the right to change a revocable beneficiary?
- The beneficiary only
- The policyowner without the beneficiary's consent (Correct answer)
- Both the policyowner and the beneficiary jointly
- The insurer upon written request from either party
Correct answer: The policyowner without the beneficiary's consent
A revocable beneficiary designation can be changed by the policyowner at any time without the beneficiary's consent.
Question 7: When a health policy contains a Misstatement of Age provision and the insured's age was understated, the insurer will typically:
- Void the policy immediately
- Pay the claim in full without adjustment
- Adjust the benefit to what the correct premium would have purchased (Correct answer)
- Refund all premiums paid and cancel the policy
Correct answer: Adjust the benefit to what the correct premium would have purchased
If age was misstated, the insurer adjusts benefits to the amount that the paid premiums would have purchased at the correct age rather than voiding the policy.
EXAMFX Health Policy Provisions 2
Under the Entire Contract provision, which documents must be included to form the complete insurance contract?