Chapter 1 Health and Accident Insurance

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

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 is the primary beneficiary while the mother is still the contingent beneficiary)

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

All group health plans are terminated by the employer

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?

$25,000 (The maximum sum payable would be the capital sum, which is $25,000)

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?

36

The difference between group insurance and blanket health policies is:

Blanket health policies do not issue certificates

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

Business owner becoming disabled

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

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

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

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

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

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

continue group health benefits

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

interim coverage

A Business Disability Buyout plan policy is designed:

to pay benefits to the Corporation or other shareholders