1- Health and Accident Insurance

The Health Insurance Portability and Accountability Act (HIPAA) gives privacy protection for

The Health Insurance Portability and Accountability Act (HIPAA) provides privacy protection for health information.

Which mode of payment is NOT used by health insurance policies?

The correct answer is "Single premium". Single premium is not used when paying for health insurance policies.

XYZ Company pays the entire premium for its group health plan. The MINIMUM percentage of eligible employees that must be covered is

100% Most noncontributory group health plans require 100% participation by eligible employees.

Which of these types of coverage is best described as a short term medical policy?

A short term medical policy is best described as interim coverage.

What is issued to each employee of an employer health plan?

Certificate

Which of the following statements is correct regarding an employer/employee group health plan?

the employer receives a master policy and the employees receive certificates

All of the following statements regarding group health insurance is true EXCEPT

An individual policy is given to each member In group health insurance, each member receives a certificate of insurance, not an individual policy.

Accidental Death coverage is provided to commercial airline passengers in which of the following types of policies?

Blanket Accident policy A Blanket Accident policy provides Accidental Death coverage to airplane passengers.

The difference between group insurance and blanket health policies is

Blanket health policies do not issue certificates

The federal income tax treatment of employer-provided group Medical Expense insurance can be accurately described as

Employee's premiums paid by the employer is tax-deductible to the employer as a business expenditure Premiums paid by an employer for an employee's coverage are deductible by the employer as a business expense.

How would a contingent beneficiary receive the policy proceeds in an Accidental Death and Dismemberment (AD&D) policy?

If the primary beneficiary dies before the insured A contingent beneficiary will receive the policy proceeds if the primary beneficiary dies before the insured's death.

Which of the following characteristics is associated with a large group disability income policy?

No medical underwriting A large group disability income policy can be distinguished by no medical underwriting.

How does group insurance differ from individual insurance?

Premiums are lower

T is covered by two health insurance plans: a group plan through his employer and his spouse's plan as a dependent. Under the Model Group Coordination of Benefits provision, when T files a claim, his employer's plan is considered the

Primary carrier In double coverage situations, the insurer covering the employee who has the claim is called the primary insurance company. The primary company must pay as much of the claim as the policy limits permit.

K is the insured and P is the sole beneficiary on an Accidental Death and Dismemberment (AD&D) insurance policy. Both are involved in a fatal accident where K dies before P. Under the Common Disaster provision, which of these statements is true?

Proceeds will be paid to P's estate Because the sole beneficiary outlived the insured, the proceeds will be payable to the estate of the deceased beneficiary.

Which of the following is the reimbursement of benefits for the treatment of a beneficiary's injuries caused by a third party?

Subrogation

Which of the following is the reimbursement of benefits for the treatment of a beneficiary's injuries caused by a third party?

Subrogation Subrogation is the right for an insurer to pursue a third party that caused an insurance loss to the insured. This is done as a means of recovering the amount of the claim paid to the insured for the loss.

The reason for a business having a Business Overhead Expense Disability Plan is to cover

The correct answer is "fixed business expenses". The reason for a business having a Business Overhead Expense Disability Plan is to cover fixed business costs in the event the owner becomes disabled.

Which statement is TRUE regarding a group accident & health policy issued to an employer?

The employer receives the policy and each employee is issued a certificate With a group accident and health plan, a master policy is issued to the employer and each employee receives a certificate of insurance.

A Business Overhead Expense policy would cover which of the following if a business owner becomes disabled?

Utilities and office rent A Business Overhead Expense policy is designed to cover certain overhead expenses (rent, taxes, utility bills, employee's salaries etc) that continue when the business owner is disabled.

Group/voluntary long-term care policy premiums are typically deducted from the employee's income and

are less costly as compared to individual long term care coverage The premiums on a group/voluntary policy are usually deducted from an employee's wages and are generally lower than the premiums on an individual policy.

An accident policy will most likely pay a benefit for a(n)

off-the-job accident

T and S are named co-primary beneficiaries on a $500,000 Accidental Death and Dismemberment policy insuring their father. Their mother was named contingent beneficiary. Five years later, S dies of natural causes and the father is killed in a scuba accident shortly afterwards. How much of the death benefit will the mother receive?

$0 The mother receives $0 because T is still alive and the sole primary beneficiary, while the mother is still the contingent beneficiary.

When an employee is required to pay a portion of the premium for an employer/employee group health plan, the employee is covered under which of the following plans?

Contributory Group plans where employees pay a portion of the premiums are called contributory plans.

K has an Accidental Death and Dismemberment (AD&D) insurance policy where her husband is beneficiary and her daughter is contingent beneficiary. Under the Common Disaster clause, if K and her husband are both killed in an automobile accident, where would the death proceeds be directed?

Daughter With a common disaster provision, a policyowner can be sure that if both the insured and the primary beneficiary die within a short period of time, the death benefits will be paid to the contingent beneficiary.

Which type of policy pays benefits to a policyholder covered under a Hospital Expense policy?

Reimbursement When benefits are paid to a policyowner covered under a Hospital Expense policy, the policy is known as reimbursement.

T is covered by an Accidental Death and Dismemberment (AD&D) policy that has an irrevocable beneficiary. What action will the insurance company take if T requests a change of beneficiary?

Request of the change will be refused An irrevocable designation may not be changed without the written consent of the beneficiary.

M purchased an Accidental Death and Dismemberment (AD&D) policy and named his son as beneficiary. M has the right to change the beneficiary designation at anytime. What type of beneficiary is his son?

Revocable With a revocable beneficiary designation, the policyowner may change the beneficiary at any time without notifying or getting permission from the beneficiary.

P is a new employee and will be obtaining non-contributory group Major Medical insurance from her employer. Which of the following actions must she take during the open enrollment period?

Sign an enrollment card A new employee must sign an enrollment card during the open enrollment period.

J has an Accidental Death and Dismemberment policy with a principal sum of $50,000. While trimming the hedges, J cuts off one of his fingers. What is the MAXIMUM J will receive from his policy?

The maximum sum payable would be the capital sum, or $25,000.

The provision in a Group Health policy that allows the insurer to postpone coverage for a covered illness 30 days after the policy's effective date is referred to as the

The waiting period in a Group Health policy gives an insurance company the rights to delay coverage for a covered sickness for a specified number of days after the effective date of the policy.

All students attending a large university could be covered by

a blanket policy Blanket health insurance is issued to cover a group who may be exposed to the same risks, but the composition of the group (the individuals within the group) are constantly changing.

The Consolidated Omnibus Budget Reconciliation Act (COBRA) gives workers (and their families) whose employment has been terminated the right to

continue group health benefits

S is employed by a large corporation that provides group health coverage for its employees and their dependents. If S dies, the company must allow his surviving spouse and dependents to continue their group health coverage for a maximum of how many months under COBRA regulations?

The correct answer is "36". Under COBRA, if an employee dies, the dependents may continue their group health coverage for up to 36 months.

P and Q are married and have three children. P is the primary beneficiary on Q's Accidental Death and Dismemberment (AD&D) policy and Q's sister R is the contingent beneficiary. P, Q, and R are involved in a car accident and Q and R are killed instantly. The Accidental Death benefits will be paid to

P only In this situation, benefits will be paid to P because P survived the accident and is the primary beneficiary.

An insured covered by Accidental Death and Dismemberment (AD&D) insurance has just died. What will happen if the primary beneficiary had already died before the insured and contingent beneficiary?

Proceeds will go to the contingent beneficiary

A Business Disability Buyout plan policy is designed

to pay benefits to the Corporation or other shareholders

G is an accountant who has ten employees and is concerned about how the business would survive financially if G became disabled. The type of policy which BEST addresses this concern is

Business Overhead Expense A Business Overhead Expense policy's purpose is to cover certain overhead expenses that continue when the business owner is disabled.

An insurance company would MOST likely pay benefits under an Accidental Death and Dismemberment policy for which of the following losses?

Loss of eyesight due to an accidental injury

Which of these circumstances is a Business Disability Buy-Sell policy designed to help in the sale of a business?

Business owner becoming disabled A Business Disability Buy-Sell policy is designed to assist in the sale of a business when one of the owners becomes disabled.

Which statement is true regarding a minor beneficiary?

Normally, a guardian is required to be appointed in the Beneficiary clause of the contract In most cases, insurers require that a guardian be appointed in the Beneficiary clause of the policy or that a guardian be designated in the will.

The benefits under a Disability Buy-Out policy are

payable to the company or another shareholder

If the insured and primary beneficiary are both killed in the same accident and it cannot be determined who died first, where are the death proceeds to be directed under the Uniform Simultaneous Death Act?

Insured's contingent beneficiary Under the Uniform Simultaneous Death Act, if both insured and primary beneficiary are killed in the same accident and there is insufficient evidence to show who died first, policy proceeds will be paid as if the insured died last. In other words, the proceeds will be paid to the secondary or contingent beneficiary.

Which of the following claims are typically excluded from Medical expense policies?

Intentionally self-inflicted injuries Medical expense policies usually EXCLUDE coverage for claims resulting from treatment of intentionally self-inflicted injuries.

A policyowner would like to change the beneficiary on an Accidental Death and Dismemberment (AD&D) insurance policy and make the change permanent. Which type of designation would fulfill this need?

Irrevocable

A policyowner's rights are limited under which beneficiary designation?

Irrevocable

Which of the following statements BEST describes how a policy that uses the "accidental bodily injury" definition of an accident differs from one that uses the "accidental means" definition?

Less restrictive A policy that uses the "accidental bodily injury" definition of an accident is less restrictive than the one that uses the "accidental means" definition.

P is an employee who quits her job and wants to convert her group health coverage to an individual policy. After the expiration of COBRA laws, which of the following statements is TRUE?

The correct answer is "She does NOT need to provide evidence of insurability". Under COBRA, conversion of group accident and health coverage to an individual policy does not require evidence of insurability.

Under which of the following circumstances will the benefits under COBRA continuation coverage end?

All group health plans are terminated by the employer One of the disqualifying events that can result in the termination of continuing coverage under COBRA is when the employer terminates all group health plans.

Which of the following medical expenses does Cancer insurance NOT cover?

Arthritis

Many small business owners worry how their business would survive financially if the owner becomes disabled. The policy which BEST addresses this concern is

Business Overhead Expense A Business Overhead Expense policy's purpose is to cover certain overhead expenses that continue when the businessowner is disabled.

Which type of policy would pay an employee's salary if the employer was injured in a bicycle accident and out of work for six weeks?

Business Overhead Expense A Business Overhead Expense policy covers fixed business expenses in the event of the owner becoming unable to work due to an accident or illness.

Which contract permits the remaining partners to buy-out the interest of a disabled business partner?

Disability Buy-Sell A disability buy-sell plan allows the remaining partners to buy out the interest of the disabled business partner.

Which of the following statements does NOT accurately describe the tax treatment of premiums and benefits of individual Accident and Health insurance?

Disability income policy premiums are tax-deductible Premiums paid by individuals for Disability income policies are NOT tax-deductible. However, the benefits would be considered tax-free to the individual.

On an Accidental Death and Dismemberment (AD&D) insurance policy, who is qualified to change the beneficiary designation?

Policyowner The policyowner has the right to change the beneficiary designation. However, consent may needed by the current beneficiary if designated as irrevocable.

A Business Overhead Expense policy

covers business expenses such as rent and utilities

The Coordination of Benefits provision

prevents an insured covered by two health plans from making a profit on a covered loss

B has a $100,000 Accidental Death and Dismemberment policy that pays triple indemnity for common carrier death. If B is killed from an accident on a commercial flight, what will the policy pay B's beneficiary?

the policy will pay $300,000.

What kind of Accidental Death and Dismemberment (AD&D) insurance beneficiary requires his/her consent when a change of beneficiary is made?

Irrevocable beneficiary An irrevocable designation may not be changed without the written consent of the beneficiary.