1. In a health insurance contract, changes may be made:
A. Only when approved in writing by an officer of the insuring company Correct
B. Only when approved by the agent
C. Only if the insured does so within five years from the date of issue
D. Only if the insured provides evidence of insurability
Explanation
Health insurance contracts are formal agreements, and changes require written approval from an authorized company officer to ensure legal validity and prevent unauthorized modifications. Agents lack authority for alterations, time limits or insurability evidence are not standard requirements for changes. This protects both parties from disputes. It maintains contract integrity under insurance regulations.
2. All of the following would be covered by an accidental death and dismemberment insurance policy EXCEPT:
A. A chemical burn to the eyes resulting in blindness
B. Death resulting from the crash of a commercial airplane
C. Suicide while sane by any method or means Correct
D. Loss of both legs in a motor vehicle collision
Explanation
Accidental death and dismemberment policies cover unintentional injuries or death, excluding suicide as it is intentional. Chemical burns, plane crashes, and vehicle losses are accidental if unintentional. This standard exclusion prevents moral hazard. It defines 'accidental' narrowly in policy terms.
3. Medicare Part B covers all of the following expenses EXCEPT:
A. Inpatient hospital laboratory tests Correct
B. Home health care services of a physician
C. Cost of medically necessary prosthetic devices
D. Medical services performed in an outpatient clinic
Explanation
Medicare Part B covers outpatient services, physician care, prosthetics, and some home health, but inpatient hospital lab tests fall under Part A. This distinction separates hospital stays (Part A) from ambulatory care (Part B). It affects beneficiary costs. It reflects Medicare's structure.
4. An individual health insurance deductible is:
A. A coinsurance amount
B. A payor factor used by hospitals
C. The amount deducted from each employee's paycheck to pay for medical coverage
D. The amount an individual must pay before the insurance company will make any benefit payments Correct
Explanation
A deductible is the initial amount the insured pays out-of-pocket before insurer payments begin, reducing premiums and sharing risk. Coinsurance is post-deductible sharing, payroll deductions fund group plans, hospital factors unrelated. This encourages cost awareness. It is a key policy feature.
5. In a noncancelable disability income policy:
A. The premium cannot be increased above the schedule specified in the policy Correct
B. The premium can be increased at the insurer's will
C. The insured has no renewal rights
D. The insurer can refuse to renew the policy
Explanation
Noncancelable policies guarantee premiums cannot rise beyond the scheduled rate and coverage continues if premiums paid. Other options describe guaranteed renewable or optional policies. This provides maximum protection. It ensures stable costs for insureds.