Chapter 1

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?

$300,000

T is covered by two health insurance plans: a group plan through his employer and his spouse's plan as a dependent. When T submits a claim, his employer's plan is considered what type of carrier under the Model Group Coordination of Benefits provision?

Primary carrier - insurer covering the employee who has the claim is called primary and must pay as much of the claim as the policy limits permit

All students attending a large university could be covered by

a blanket policy

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

all group health plans are terminated by the employer

all of the following statements regarding group health insurance is true, EXCEPT:

an individual policy is given to each member

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

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

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

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

business owner becoming disabled

the consolidated omnibus budget reconciliation act (COBRA) gives workers (and their families) whose employment has been terminated the right to:

continue group health benefits

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

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

disability buy-sell

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 - the benefits would be considered tax-free to the individual

the federal income tax treatment fo 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

the reason for a business having a business overhead expense disability plan is to cover:

fixed business expenses - covers fixed expenses in the event the owner becomes disabled

the health insurance portability and accountability act (HIPAA) gives privacy protection for:

health information

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

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

intentionally self-inflicted injuries

A policyowner would like to change the beneficiary on an accidental death and dismemberment insurance policy and make the change permanent. Which type of designation would fulfill this need?

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

which statement is true regarding a minor beneficiary?

normally, a guardian is required to be appointed in the beneficiary clause of the contract

an accident policy will most likely pay a benefit for an:

off the job accident

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

policyowner

the coordination of benefits provision

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

K is the insured and P is the sole beneficiary on a life 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

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

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 change will be refused

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?

she does NOT need to provide evidence of insurability

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

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

waiting period - gives rights to delay coverage for covered sickness for a specified number of days after the date of the policy