Life and Health Insurance Final Exam

Mary has a Major Medical policy with a $200 deductible and 80/20 coinsurance allocation. If she suffers a covered loss of $8200, how much will Mary be required to pay for this loss?

$1800

Using the information above, how much would Jack's policy pay?

$2000

Both Jack and Jill's plan contains a $1000 deductible and 80/20 coinsurance. If Jill sustains a covered loss of $6000, how much will her policy pay?

$4000

Charlie owns a Comprehensive Major Medical policy with a $1000 Base plan, a $500 deductible and 80/20 coinsurance. If he suffers a covered loss of $9500, how much will the company pay?

$7400

If the COBRA qualifying event is death or divorce, benefits may be extended up to ____ months.

12

The Incontestable Provision gives companies _______ to legally contest the validity of a contract or deny a claim on the basis of misstatement in the application.

2 Years

COBRA is available for departing employees of plans which insure more than

20 employees.

The Affordable Care Act allows dependents to remain on a parent/guardian's healthcare plan until age

26

The annual blood deductible under Parts A and B is _____ pints.

3

An MSP must offer a Free Look period of ____ days.

30

If the Social Security qualifications for Disability are met within 60 days of employment termination, COBRA may be extended for an extra _____ months

6

COBRA extends coverage for you and your dependents for up to

6 months

MSP's are allowed to classify medical diagnoses and treatments as preexisting if occuring withing _____ of the policy date and excluded for _______ of the policy date.

6 months; 6 months

Generally, policy limits are limited to _____% or ____% of your earned income.

60%;80%

A policyowner may sue their company for nonpayment of a claim after ____ days of submitting claim forms but no more than ____ years.

60; 3.

Timely entry is defined under HIPAA as no more than

63 days.

Generally, Group MSP's should have a loss ratio of ______ and Individual MSP's of _____.

75%; 65%

Standard premium plan Grace Periods are: _______ days for weekly; ______ days for monthly; ______ days for all other premium payment plans.

7;10;31

Under Part B of Medicare, what % of the costs does Medicare pay after the deductible?

80%

MSP's must be notified of Medicaid eligibillity within _____ days.

90

Hospital insurance is found in Medicare Part

A

__________ will pay the estimated Social Security Disability benefit while Social Security is determining eligibility.

Additional Monthly Benefit

The Coordination of Benefits provision in a Group Medical Expense policy is designed to

Allow the insured to collect some benefits from each of the plans of two employed spouses

All of the following characterizes basic medical EXCEPT

Ancillary expenses

________ requires the insured to be unable to perform any occupation they would be reasonably suited to do based on education, training or work experience in order to receive disability income benefits from the policy.

Any Occupation

Which of the following would be the least expensive structure for a Disability Income policy?

Any Occupation with 30 day elimination period

Which is the correct order of the basic claim calculation?

Apply the base plan; subtract the deductible; allocate the coinsurance; check by adding

________ is a health insurance policy that only covers room and board if the insured stays overnight in a hospital and the miscellaneous expenses that occur because of that stay.

Basic Hospital Expense

________ is a health insurance policy that only covers physician services and procedures. Proves first dollar benefits by the insurer, but low coverage limits.

Basic Medical Expense

________ is a health insurance policy that only covers surgeries, surgeons and anesthesiologists. It provides first dollar benefits by the insurer, but low limits.

Basic Surgical Expense

Which of the following does not qualify a person for Medicare?

Being impoverished

A policyowner has the right to name, change and designate _____________.

Beneficiaries.

A policy owned by a business that can pay on a reimbursement basis for actual costs incurred during the disability of the owner/operator is called

Business overhead expense

If you are terminated from your employment, you may be able to continue Group Health coverage under

COBRA.

_______________ allow cancellation with ____ days written notice.

Cancellable Policies; 5

_________________ most be transmitted to the policyowner/insured within 15 days of claim or claim notification.

Claim Forms

_________ is a type of traditional medical expense insurance designed to reimburse the policyowner for out of pocket medical expenses. It is characterized by typically low deductibles (100-500), coinsurance, and stop loss limits.

Comprehensive Major Medical

__________ provides that if a policy is issued in a state that does not conform to state law, it will be interpreted as if it did.

Conformity with State Statutes

The amount of loss paid by the policyowner before the health insurance policy pays the claims is known as..

Deductible

Which of the following do Medical Expense companies utilize to eliminate small claims?

Deductibles

______ provide that the terminology used in an MSP can be defined no more restrictively than it is defined by Medicare.

Definitions

Disability Income benefits are intended to pay for all of the following EXCEPT

Doctors

_________ provides that an MSP may not simply duplicate Medicare benefits.

Duplication

A Disability Income Policy deductible is expressed in time and known as an

Elimination Period

You own a Major Medical policy with a $500 deductible and 80/20 coinsurance. You suffer a covered loss of $4500 and calculate that the company will pay $3200 towards your loss. The company only pays $3019.78. Which of the following could NOT account for the difference?

Elimination Period

_______ is a health insurance policy that does not have a deductible. The company pays first when a claim is submitted.

First Dollar Coverage

Any period exceeding ___ years is considered long term.

Five

Which of the following statements about Group Medical Expense contracts is NOT true?

Group insurers do not like employee turnover.

______ provides that individuals over 65 who have just enrolled in Medicare Plan B for the first time cannot be refused an MSP or rated if they apply for coverage within 6 months of the Part B enrollment.

Guaranteed Income

_______ provides hat an MSP may not be classified on the sole basis of age or deterioration of health.

Guaranteed Renewable

What type of facility exists to serve the needs of the terminally ill?

Hospice

If __________ or __________ not prescribed by a doctor are linked directly to a loss then the claim may be denied.

Intoxicants or Narcotics

Jack and Jill are married, each has employer-sponsored Major Medical Coverage for the entire family. Jack was born on June 13, 1979 and Jill on April 1, 1981. Whose plan is primary for the children?

Jill's

A policy used as a salary continuation plan for a disabled individual employee is

Key Employee

_______ is a type of health insurance that provides stated benefits for long-term care services typically taking place in a nursing home or home health care.

Long Term Care Policy

Which policy would be covered with the rights of a dependent child?

Major Med

______ is a health insurance policy that offers broad coverage and high benefits for hospitalization, surgeries, and physician services subject to deductibles and coinsurance.

Major Medical Expense

What federally funded, state administered Medical Expense program is designed to serve the poor?

Medicaid

________________ provides that companies may coordinate benefits, but you still only get paid once.

Medical/Disability Expense Coverage with Multiple Companies

If you are still covered by Group Major Medical plan at age 67, what is considered to be the secondary payer?

Medicare

________ is the federal government sponsored health care program for individuals age 65+, suffering from renal failure, or recognized by Social Security as disabled and collected 24 months of Social Security Disability benefits.

Medicare

________ is teh compulsory hospitalization insurance funded by all workers through FICA taxation that provides coverage for inpatient care.

Medicare Part A

_______ is a voluntary coverage for supplementary medical insurance to pay some of the costs of physician and medical services on an outpatient basis; a monthly fee is paid by beneficiary.

Medicare Part B

_________ is a program that offers a variety of Medicare managed care choices.

Medicare Part C

_______ is the prescription drug benefit program offered to Medicare beneficiaries who pay a monthly premium and an annual deductible to share the cost of prescription drugs with Medicare.

Medicare Part D

______ is a health insurance policy offered by commercial health insurers to fill the gaps in Medicare coverage.

Medicare Supplemental Policy

_______ provides that changes in Medicare will automatically trigger a change in an MSP.

Mirroring Medicare

______________ is an exception to the Incontestable Clause.

Misstatement of age or gender

________________ provision requires companies to be notified of a loss within 20 days or as soon thereafter as reasonably possible.

Notice of Claim

______ is the key rating factor for Disability policy

Occupation

______________ provision provides that you only get paid once regardless of the number of policies with the same company.

Other Insurance with This Insurer

______ details the benefits, coverages, rights of renewal and premium increase provisions.

Outline of Coverage

________ requires that the insured to be unable to perform the duties of his or her own occupation in order to receive disability income benefits.

Own Occupation

A Business Overhead Expense policy would NOT pay for

Owner's salary

Which part of Medicare provides nursing home coverage?

Part A

__________ an illness of injury that prevents an insured from performing one or more of the important duties of their job, but not all of the occupational duties.

Partial Disability

Claims are paid to the _________.

Policyowner

Which of the following do Medical Expense companies use to reduce adverse selection?

Preexisting conditions limitations

What type of disability requires no proof of loss of time or duties?

Presumptive Disability

________________ must be returned to the company within 90 days of the loss or as soon thereafter as reasonably possible.

Proof of Loss

__________ is a disability income policy provision that specifies after a period of time if the same disabling condition reoccurs, the stated benefit will be paid without an elimination period. The reoccurrence will be treated as a continuation of the prior claim.

Recurrent Disability Provision

Coinsurance does which of the following?

Reduces the deductible

Companies are under no contractual obligation to _______ a lapsed policy, but may do so at their discretion.

Reinstate

______________ means that if you earn less at the time of the claim than you did when you bought the contract, your benefits may be reduced within limits set by state statute.

Relation of Earnings to Insurance

_________ is a disability income payment based on the proportion of mission employer income.

Residual disability benefit

________ promises to pay the amount Social Security would have paid if Social Security Disability would have been approved.

Social Security Rider

What feature of Major Medical policy requires 100% payment of covered expenses after the insured's claim cost reaches a certain level?

Stop Loss

Short term disability is ______ year(s) or less.

Two

_____________ is deducted from a claim payment if the loss is incurred during the grace period.

Unpaid Premium

Which plan is primary if two employer-sponsored spouses share the same birthday?

Whichever has been in effect the longest.

The Entire Contract is comprised of

application and policy

Claims incurred while in the commission of a _______ or while engaged in an ___________ can be denied.

felony; illegal occupation

Medical expense claims must be paid ___________ and Disability Income no less frequently than __________.

immediately; monthly

Mentally or physically handicapped dependent children can remain on their parents plans

indefinitely

The individual who controls a Major Medical policy, pays the premiums and is authorized to receive any benefits from the contract is known as the

owner

The company has the right to conduct a __________ and _________ to validate an accidental death claim.

physical exam; autopsy

Failure to notify a Disability Income carrier of a change to a higher risk occupation will result in a __________ of benefits.

reduction

Benefits paid to employees under a Group nonparticipating Disability Income policy are

taxable.

A COBRA qualifying event does NOT include:

termination due to gross misconduct

Group policies create a contract between the organizing entity of the group and

the insurance company