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Pre-Licensing Education Assessment Study Guide

Agent/Producer A legal representative of an insurance company; the classification of producer usually includes agents and brokers; agents are the agents of the insurer.
Applicant A person Applying for Insurance.
Proposed Insured A person applying for insurance.
Consent Permission to do something.
Insurable interest The policy owner facing the possibility of losing something of value in the event of the loss.
Insurance Policy A contract between a policy owner, (And/or insured) and an insurance company which agrees to pay the insured or the beneficiary for loss caused by specific events.
Insured Person covered by the insurance policy; may or may not be the policy owner.
Insurer(Principal) The company who issues an insurance policy.
Policy Owner The personal entitled to exercise the rights and privileges of the policy.
Premium The money paid to the insurance company for the insurance policy.
Elements of a contract: In order for insurance contracts to be legally binding they must have 4 essential elements- A_____. B Consideration. C: Competent parties; D: Legal Purpose. Agreement.
Elements of a contract: In order for insurance contracts to be legally binding they must have 4 essential elements- A: Agreement. B Consideration. C: Competent parties; D: Legal Purpose. Consideration.
Elements of a contract: In order for insurance contracts to be legally binding they must have 4 essential elements- Agreement. B Consideration. C: __________; D: Legal Purpose. Competent parties.
Elements of a contract: In order for insurance contracts to be legally binding they must have 4 essential elements- Agreement. B Consideration. C: Competent parties; D: ______. Legal Purpose
Acceptence There must be a definite offer by one party; and the other party must accept this offer in its exact terms. In insurance, the applicant usually makes the OFFER when submitting the application. ______ takes place when an insurer's underwriter approves.
________ Is the something of value that each party gives to the other. The ____ on the part of the insured is the payment of premium and the representations made in the application. __ on the part of the insurer is the promise to pay in the event loss. Consideration.
parties to contact The ____ must be capable of entering a contact in the eyes of the law. Generally, this requires that both parties be of legal age, mentally competent to understand contract, and not under the influence of drugs and alcohol.
The purpose of the contract must be __ and not against public policy, for example it must be both: insurable interested and consent. A contract with out ___ purpose is considered boice and cannot be enforced by any party. Legal
____ is a proven by love and affection, economic, or financial loss. IN the life and health insurance, it is required at the time of policy insurance. Insurable interest.
A __ is an absolutely true statement upon which the validity of the insurance policy depends. Breach of warranties can be considered grounds for voiding the policy or a return of premium. Because of such a strict definition, voiding the policy. Warranty
Because of strict definitions, statements made by applicants for life and health insurance policies, for example, are the are usually not considered ___ except in cases of fraud. Warranties
_______ are statements believed to be true to the best of one's knowledge, but they are not guaranteed to be true. For insurance purposes, representations are the answers the insured gives to the questions on on the insurance application. Representations
Untrue statements on the application are considered __ and could voice the contract. A material __ is a statement that, if discovered, would alter the underwriting decision on the insurance company. Furthermore, if the material _ are intentional, is fraud Misrepresentations
As the name implies, a __ __ requires that certain conditions must be met by the policy owner, and the company in order for a contract to be executed. Before each party fulfills obligations.+ provide proof of loss in order for the insurer to cover a claim Conditional contract
IN a _ _ only one of the parties to the contract is legally bound to do anything. The insured makes no legally binding promises. However, an insurer is legally bound to pay losses covered by a policy in force. Unilateral contract
A _ _ _ is prepared by one of the parties(insurer) and accepted or rejected by the other party(insured). INsurance policies are not dawn up through negotiations, and insured has little say about its provisions. Contract Adhesion.
____ are offered on a take-it-or- leave-it basis by an insurer. Insurance contracts
Insurance contracts are _, which means there is an exchange of unequal amounts of values. The premium paid by the insured is small in relation to the amount that will be paid by the insurer in the event of loss. Aleatory
IF john only had the policy 2 months, which means he only paid 200 in premiums, and he unexpectedly died his beneficiary will receive 100k. A 200 contribution on the part of the insured in exchange for 100k beneift from the insurer illustrates an __ _ Aleatory Contract
The __ is the applicants written request to the insurance company to issue a policy or contract based on the info contained in the __. Application
If the _ is issued, a copy of this application is stapled in the back of the policy and it becomes part of the entire contract. policy
An application for insurance begins with a form provided by the company and completed by an agent as questions are asked of the applicant and the applicants's responses are recorded. This form is called a __. App
__ must be issued to all applicants for health insurance coverage. This notice informs the applicant that a credit report will be ordered concerning his or her past history and any other health insurance for which they have previously applied. Notice to the applicant.
Notice to the applicant. The agent must leave this notice with the applicant.
The agent must take special care with the accuracy of the application in the interest of both the company and the insured. Because the applicant is often the main source of underwriting information. True.
It is the agents _ to make certain that the application is filled out completely, correctly, and to the best of the applicants knowledge. Responsibility
Every health insurance application required the of the proposed insured, the policy owner. (IF different then the insured), and the agent who solicits the insurance. Signature
Because the application is so important, most companies require that is be filled out with ink. The agent might make a mistake when filling out the app or the applicant might answer the question incorrectly and want to __ it. Change
There are two ways to correct an application. The first and best is to simply start over with a __ __. Fresh Application
The second way to correct an application, if a fresh one is not applicable is _____ ___ __- The Applicant must initial the correct answer. Draw a line through the incorrect answer and insert the correct one.
Generally, an initial premium is collected for a health insurance policy and sent to the insurer with the application. A conditional receiot is given to the applicant by the agent. Agents cannot bind coverage so the coverage does not begin until- the insurer has approved the application and issued the policy.
In cases where the _ did not accompany the application for insurance upon delivery the agent must collect the premium and obtain a statement of the agent must collect the __ and obtain a statement of continued good health from the applicant before release Premium
The agent is obligation to check the application to make certain that all _ have been answered and all necessary signatures have been collected. The agent then sends the application to the insurer. Questions
IN order to determine insurability of the applicant the insurer may use several sources, such as __ __ __ report, for gathering used and how the information gathered. Medical Information Bureau. (MIB)
All sources used to verify insurability must adhere to the __ __ __ __. Fair Credit Reporting Act.
If the underwriter deems it ncesessary, an attending physician statements APS will be sent to the applicants doctor to be completed. This source of information is best for accurate info on the applicants ___ ___. Medical History
The physician can explain exactly what the applicant was treated for, the treatment required, the length of treatment and recover, and the ___ Prognosis.
Medical examinations, when required by the insurance company, are conducted by physicians are paramedics at the insurance companies ___. Expense.
Usually exams are not required with regard to health insurance, thus stressing the importance of the agent in recording medical information on the app. The medical exam requirement is more common with life insurance ___ underwriting.
If an insurer requests a medical examination, the insurer is responsible for the cost of the __. Exam.
If Insurer required applicant to take an HIV test, the insurer must first obtain applicants _ _ for the test. The consent form must explain the purpose of the test, and inform the applicant about the results. Written Consent
____ for HIV or aids is permitted as long as it's not unfairly discriminatory. An adverse __ decision is not permitted if based solely upon the presence of symptoms, but only HIV is confirmed in relation to the symptoms. Underwriting
Insurance companies must maintain strict __ regarding HIV- related tests results or diagnosis. confidentiality
For policies with higher amounts of coverage or if the application raised additional questions concerning the prospective insured's health, the underwriter may required a _ _ for the insured. medical exam
The insurer may only request a __ __ which is completed by a paramedic or a registered nurse. paramedical report
The underwriter may required an __ ___ ___ from a medical practitioner who treated the applicant for a prior medical problem. Attending the Physician's Statement (APS)
In addition to an attending physician's report, the underwriter will usually request a __ __ __. Medical information Bureau MIB
The MIB is a membership corporation owned by member insurance companies. It is a _ _ _. Which received adverse medical info from insurance companies to compare info they have collected on a potential insured and maintains confidentiality. Non-profit organization.
It is a ___ method for companies to compare the info they have collected on a potential insured with info from other insurers may have discovered. systematic
The __can be used only as an aid in helping the insurers know what areas of impairment they might need to investigate further. An applicant cannot be refused simply because of some adverse information discovered through___.. MIB
The _ _ _ _ established procedures that consumer-reporting agencies must follow in order to ensure that records are confidential accurate, relevant, and properly used. Fair Credit Reporting Act
The law also protects consumers against the __ of inaccurate or obsolete personal or financial information. Circulation
Consumer Reports and Investigative reports, can only be used by someone with a legitmate business purpose, Including __ __,, employment screening, and credit transactions. Insurance underwriting.
___ ___ include the written and/or oral information regarding a consumer's credit, character, reputation, or habits collected by a reporting agency from employment screening, and credit transactions. Consumer Reports
___ ___ ___ are similar to consumer reports in that they also provide information on the consumer's chracter, reputation, and havits. The primary difference is that the information is obtained through an investigation and interviews with associates, etc. Investigative Consumer Reports
Investigative Consumer Reports- these reports cannot be made unless the consumer is advised in writing about the report withing __ days of the date the report was requested. 3
Also in Investigative Consumer Reports- the consumers must be advised that they have the right to request additional info concerning the report, and the insurer or reporting agency has ___ days to provide the consumer with the additional info. 5
Under the __ __ for HIPAA, protected information includes all "individually identifiable health information" held or transmitted by a covered entity or its business associate, in any form of media whether electronic, paper or oral. Privacy Rule
PHI stands for Protected Health Information. It means Protected information is protected under HIPAA.
Policy Delivery may be accomplished without physically delivering it in the policy owners possession, an agent should personally deliver policies whenever possible. Once the DELIVERY OF A POLICY IS MADE, THE __-__ period begins. free- look
___ ____ ___ ____ including demographic date that relates to past, present, and future physical or mental health or condition or payment info that oculd easily identify a person. Individually Identifiable Health Information
A covered entity must obtain the individual's written _____ to disclose information that is not for treatment, payment or health care operators. authorization
The Agent has the responsibility to provide the insured with an explanation of the policies principal benefits and provisions. If policy is issued without change or amendments, then the agent is required to explain changes and obtains insured ___. Signature
Obtaining the insured's signature knowledge the receipt of ___ made on the policy. amendments
When a agent attempts to replace the insured's current health insurance policy with a new one, the agent needs to be careful not to mislead the insured or provide coverage that is to the insure's __. Detriment
It's is the agents responsibility to to carefully __ __, limitations, and exclusions found in the current and the proposed replacement policy. Compare Benefits
It's is the agents responsibility to to carefully compare benefits, ___, and exclusions found in the current and the proposed replacement policy. Limitations
It's is the agents responsibility to to carefully compare benefits, limitations, and ___ found in the current and the proposed replacement policy. Exclusions
The agent also must make sure that the current policy is not ____ before the new policy is issued. Cancelled.
__ __ __ are very important considerations when replacing a policy. A __ __ __ is a medical condition for which the insured sought medical advice or treatment within a specified period of time prior to the policy issue. Pre-Existing Conditions
__ __ covered under the current policy may not be covered under the new policy because of the pre-existing condition limitations, or new waiting periods may be required in a new policy. Health Conditions
When Robert a Non smokers applies for insurance at 25, ___ health problems he should have a different premium than if he applies for replacing policy at the age of 45, after suffering a heart attack and having smoked 15 years. Without
Which of the following is not an essential element of an insurance contract? A. Agreement B. Legal Purpose C. Counteroffer D. Consideration Counteroffer
In Insurance policies, insured isn't legally bound to any particular action in insurance contract, but the insurer is legally obligated to paylosses coveredbypolicy. WhatContract Element does this describe? Aleatory Conditional Unilateral Unidirectional Unilateral
In forming an insurance contract, when does acceptance usually occur? A.When a insurer receives an app B.When a insured submits an app C.When an insurer's underwriter approves coverage D.When an insurer delivers the policy When an insurer's underwriter approves coverage.
Contracts that are prepared by one party and submitted to the other party on a take it or leave it basis are classified as" A,Unilateral Contracts. B.Aleatory Contracts. C.Binding Contracts. D.Contracts of Adhesion. Contracts of Adhesion.
In insurance, an offer is usually made when An agent explains a policy to a potential applicant The completed application is submitted The Insurer approves the application and receives the initial premium TheAgentHands the policy to the policy holder The completed application and receives the initial premium.
Created by: MellonKanon
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