Chapter 1 Health and accident

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 policy covers fixed business expenses in the event of the owner becoming unable to work due to an accident or illness

Common Disaster Clause

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

when 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.

Disability Buy Sell

allows the remaining partners to buy out the interest of the disabled business partner

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?

because the sole beneficiary outlived the insured the proceeds will be payable to the estate of the deceased beneficiary

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

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

the difference between group insurance and blanket health policies is

certificates are not issued in blanket policies

the benefits under a disability buy out policy are

payable to the company or another shareholder

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

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

Reimbursement

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. T is still alive and the sole primary beneficiary

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

an insurance company would most likely pay benefits under an accidental death and dismemberment policy for

AD&D policy will most likely pay benefits for loss of eyesight due to an accidental injury

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 a. grace period b. waiting period c. postponement period d. elimination period

B. Waiting period

which of the following claims are typically excluded from medical expense policies? a. treatment for alcohol addiction b. intentionally self inflicted injuries c. treatment for mental illness d. injuries sustained from an automobile accident

B. intentionally self inflicted injuries

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

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

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

continue group health benefits

a business overhead expense policy

covers business expenses such as rent and utilities

common exclusions to continuation of group coverage include

dental care, dental care, other prescription drugs

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 are not tax deductible. however, the benefits would be considered tax free to the individual.

group health insurance

each member receives a certificate of insurance not an individual policy

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

the health insurance portability and accountability (HIPPA) gives privacy protection for

health information

COBRA

if an employee dies the dependents may continue their group health coverage for up to 36 months

universal simultaneous death act

if both insured and primary beneficiaries 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

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

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

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

no medical underwriting

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

off the job accident

an insured covered by accidental death and dismemberment 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

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

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. Under

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 business disability buyout plan policy is designed

to pay benefits to the corporation or other shareholders