Arkansas State Health Insurance
What is the typical deductible for basic surgical expense insurance
$0
elements of insurable risk
-due to chance -definite and measurable -statistically predictable -not catastrophic -randomly selected -large loss exposure
Covers hospital room and board, and miscellaneous expenses, such as lab and x-ray charges and medicines while insured is confined to a hospital
Basic hospital expense coverage
Replaces lost income in the event of a disability
Disability income insurance
Funded by salary reduction and employer contributions
Flexible Spending Accounts
What are the 2 types of Flexible Spending Accounts
Health Care Accounts and Dependent Care Accounts
Used in coordination with MSAs, HSAs, or HRAs. Features higher annual deductibles and out of pocket limits than traditional health plans which means lower premiums
High deductible health plans (HDHPs) and Related Health Savings Accounts (HSAs)
The annual contribution limit of a Dependent Care Flexible Spending Account is set by
IRS
Concerning insurance, the definition of a fiduciary is
a producer/broker who handles insurer funds in a trust capacity
the larger the number of people with a similar exposure to loss, the more predictable actual losses will be
law of large numbers
decrease in the value of an asset
loss
reduction of value; basis of claim
loss
a fact that would lead to a different underwriting decision had the insurer known about it
material fact
causes of loss
perils
What percentage of individually owned disability income benefits is taxable
0%
A combination of HMO and PPO plans; employees not locked into one plan; allowed to choose depending on the need for medical services
Point-of-service plans (POS)
Group of physicians and hospitals that contract to provide medical care services at a reduced fee
Preferred Provider Organizations (PPOs)
Regarding the taxation of Business Overhead policies,
Premiums are deductible, benefits are taxed.
the federal fair credit reporting act
Regulates consumer reports
supplement or replace benefits payable under Social Security Disability
Social Insurance Supplement (SIS)
classification of risks
Standard, Preferred, Substandard, Declined
two types of major medical policies
Supplemental Major Medical Policies and Comprehensive Major Medical Policies
"first-dollar coverage"
The insured is not required to pay a deductible.
What is the purpose of coinsurance provisions
To help the insurance company to prevent overutilization of the policy
In forming an insurance contract, when does acceptance usually occur?
When an insurer's underwriter approves coverage
How soon following the occurrence of a covered loss must an insured submit written proof of such loss to the insurance company?
Within 90 days or as soon as reasonably possible, but not to exceed 1 year
based on the principals actions or words
apparent authority
Provides coverage for nonsurgical physician's services. also can be purchased to cover emergency accident benefits, maternity benefits, mental and nervous disorders, hospice care, home health care, outpatient care, and nurses' expenses
basic medical expense coverage
certain conditions must be met
conditional
info collected from employment records, credit reports, and other public resources
consumer report
A health insurance policy that pays a lump sum if the insured suffers a heart attack or stroke is known as
critical illness
between insurer and insured
personal
types of hazards
physical moral morale
In a group health policy, a probationary period is intended for people who
Join the group after the effective date
Under the Accidental Death and Dismemberment (AD&D) coverage, what type of benefit will be paid to the beneficiary in the event of the insured's accidental death?
Principal Sum
Can an individual who belongs to a POS plan use an out of network physician?
Yes, and they may use any preferred physician, even if not part of the HMO
a deductible is
a specified dollar amount that the insured must pay first before the insurance company will pay the policy benefits
similar to a consumer report, but additional info is obtained through an investigation and interviews with associates, friends, or neighbors of the consumer
investigative consumer report
state of mind that causes indifference toward loss
morale hazard ex. "if I'm insured why should I worry?" careless client
*issues participating policies, owned by policyowners, pays to policyowners (return of unused premiums)
mutual insurers
When an agent receives the application and issues a conditional receipt, the insurer has
not yet approved the application or issued the policy
individual characteristics that increase the chances of the cause of a loss
physical hazard ex. "I've been a smoker since I was 16"
no more than 6 months; must pay premium for all of those months
policy backdating
reduced risk of loss; covered at reduced rate
preferred risk
two types of risk
pure and speculative
specifies period of time during with the recurrence of an injury or illness will be considered a continuation of a prior disability
recurrent disability
statements that are true to the best of the applicants knowledge
representations
possibility that a loss could occur
risk
type of risk that is loss or gain, financial gain
speculative (gambling)
average exposures; covered at standard rate
standard risk
*types of insurers
stock and mutual
*issues nonparticipating policies, owned by stockholders, pays dividends to stock holders (taxable as ordinary income)
stock insurers
increased risk of loss; covered at increased rate
substandard risk
What provision states that claims must be paid immediately upon written proof
time of payment of claims
For what reasons can a temporary license be issued
to service existing business
risk selection and classification process
underwriting
one sided promise
unilateral
honesty on both parts
utmost good faith
absolutely true statements
warranties (breach of warranties can void the policy)
In forming an insurance contract, when does acceptance usually occur
when an insurer's underwriter approves coverage
Law of Agency
-agents represent the insurer -knowledge of the agents=knowledge of the insurer -the insurer is responsible for the agents actions -payment to the agents=payment to the insurer
Attending Physician's Statement (APS)
-greater risk -need to obtain specific medical info -helps determine likelihood of claims -less expensive than a medical exam
What is a required advance notice for a hearing held by the Commissioner of Insurance
10 days
consumer must be advised in writing about the investigative consumer report within ___ days of request
3
If a consumer requests additional information concerning an investigative consumer report, how long does the insurer or reporting agency have to comply?
5 days
Under the uniform required provisions, proof of loss under a health insurance policy normally should be filed within
90 days of a loss
Insuring of risks that are more prone to losses than the average risk
Adverse Selection
nonprofit trade organization comprised of member insurance companies; stores and shares medical information among member insurers; helps uncover misrepresentations and prevents concealment
Medical Information Bureau (MIB)
An insured wants to name her husband as the beneficiary of her health policy. She also wishes to retain all of the rights of ownership. The insured should have her husband named as what type of beneficiary?
Revocable
"take it or leave it"
adhesion
*certificate of authority; approved to transact insurance in a state
admitted; authorized insurer
unequal exchange
aleatory
*incorporated outside of the U.S.
alien insurer
In insurance, an offer is usually made when
an applicant submits an application to the insurer
Covers costs of surgeons' services, whether the surgery is performed in or out of the hospital
basic surgical expense coverage
intentional withholding of information of a material fact that is crucial in making an underwriting decision
concealment
states that coverage will be effective either on the date of application or the date of the medical exam, whichever occurs last, as long as the policy is issued as applied for
conditional receipt
too high a risk; not covered
declined risk
*incorporated in this state
domestic insurer
Agreement, consideration, competent parties, legal purpose
elements of a legal contract
The provision in a health insurance policy that ensures that the insurer can not refer to any document that is not contained in the contract is the
entire contract clause
written in contract
express authority
Agent Authority
express, implied, apparent
*incorporated in another state or territory
foreign insurer
intentional misrepresentation of a material fact, made with intent to deceive
fraud
3 parts of application
general information, medical information, agent's report
conditions that increase the probability of an insured loss
hazards
higher frequency of payment=_________ premium
higher
Which type of a hospital policy pays a fixed amount each day that the insured is in a hospital?
hospital indemnity
not written in contract, but assumed
implied authority
A life insurance policy has a legal purpose if both of which of the following elements exist? A. Insurable interest and consent B. Underwriting and reciprocity C. Offer and counteroffer D. Policyowners and named beneficiaries
insurable interest and consent
The transfer of risk
insurance
transfer of loss; protection
insurance
this type of insurance pays benefits for medical, surgical, and hospital costs
medical expense insurance
tendencies toward increased risk
moral hazard ex. "I lied on my insurance application" dishonest client
types of receipts
premium & conditional
the type of receipt that is issued when premiums are collected with the application
premium receipt
Specifies condition that qualify insured for full disability benefits
presumptive disability
serves as gatekeeper for HMOs
primary care physician
type of risk that is loss only, no financial gain
pure (insurance)