CH 12

Louise purchased a disability policy when her salary was $4,000 a month. Later, she lost that job and her salary was reduced to $2,000 a month. Three years ago, she became self-employed and now receives $3,500 a month. The maximum disability benefit she might expect will be based on which salary amount?

$3,500 Relations of Earnings to Insurance (an Optional Uniform Provision) establishes that disability benefits may not exceed the monthly earnings of an insured at the time the disability commenced, or his/her average earnings for the 2 years immediately preceding the disability, whichever is greater.

One of your clients just reinstated his health insurance plan. When is coverage effective for sickness and accident?

10 days for sickness, and immediately for accidental injuries Upon reinstatement, accidents are covered immediately and sickness after 10 days.

An insured should receive necessary claim forms within _____ days after notice of claim.

15 According to the Claim Forms Provision (a Mandatory Uniform Provision), the insured should receive the necessary claim forms within 15 days after notice of claim.

The Time Limit on Certain Defenses (Incontestable) period is _____ years under individual health and disability contracts.

2 The Time Limit on Certain Defenses (Incontestable) period is 2 years.

Notice of claim is required within _____ days of loss.

20 Under the Notice of Claim Provision (a Mandatory Uniform Provision), the insured is required to notify the insurer, in writing, within 20 days of any loss.

The grace period for an individual health insurance policy being paid on a quarterly basis is:

31 days 7 days for weekly; 10 days for monthly; and 31 days for all other payment modes (quarterly, semi-annual, and annual).

If the insured is receiving regular disability income payments, the insurer can require notice of continuance of claim every ______ months.

6

If an insurer makes a payment for a claim but the insured is dissatisfied with it, the insured must wait _____ days after proof of loss before taking any legal action.

60 According to the Legal Actions Provision (a Mandatory Uniform Provision), the insured must wait at least 60 days after proof of loss before legal action can be brought against the insurer.

Under the Legal Actions Mandatory Uniform Provision, an insured must wait at least _____ days after providing proof of loss before he or she can take legal action against the insurer.

60 days An insured must allow a reasonable passage of time for an insurer to live up to its contractual obligations. In this case, reasonable is 60 days.

Kirk has just reinstated an individual A&H policy that had lapsed and wants to know how soon coverage will be in effect for any accident or sickness. You, the agent, would say:

Accidents immediately, sickness after 10 days Upon reinstatement, accidents are covered immediately, and sickness after 10 days. This prevents insureds from reinstating a policy when they are already sick.

All states have adopted the Uniform Individual Accident and Sickness Policy Provision Law. If an insurer changes any of these provisions, they must make sure it does not:

Alter the minimum requirements of any provision The insurer must assure that any variation must be at least as favorable as the original wording, and no mandatory provision may be deleted if applicable to the coverage.

Which of the following allows reimbursement benefits to be paid directly to medical providers?

Assignment of benefits When a policy pays on a reimbursement basis, benefits are paid directly to the insured. The exception to this is if the insured assigned benefits to the provider(s), in which case they would then be paid directly to the provider.

Which of the following is a Managed Care Provision used by insurers to monitor hospital stays?

Concurrent Review Once an insured is admitted to the hospital, the insurer monitors the insured's hospital stay to make certain that everything is proceeding on schedule through the Concurrent Review Provision.

Which of the following is not a Mandatory Uniform Provision?

Conformity with State Statutes Conformity with State Statutes is an Optional Uniform Provision.

When an individual is covered by more than one health plan and is injured, what provision determines which plan is that person's primary coverage?

Coordination of Benefits

All states have adopted the Uniform Individual Accident and Sickness Policy Provision Law. If an insurer changes any of these provisions, it must make sure that the change does not:

Create a meaning that is less favorable to the insured than the original wording The insurer must assure that any variation must be at least as favorable as the original wording and no provision may be deleted.

Beth has a contract stating she must be disabled for 3 months before benefits will begin to be paid. This 3-month period is known as the:

Elimination Period The Elimination Period is a period of time that must elapse after onset of a disability before benefits begin to be paid.

Once issued, the application becomes part of the ___________, when attached.

Entire contract To be regarded a part of the contract, the application for insurance must be included with the rest of the policy. It may not be incorporated 'by reference.'

The Minimum Benefit Standards under a qualified LTC policy include all of the following, except:

Every LTC policy must be issued as noncancellable LTC policies must contain a renewal provision that is no less favorable to the insured than guaranteed renewable, not noncancellable. All other possible answers are Minimum Benefit Standards to be met under LTC policies.

All of the following are examples of cost containment and managed health care, except:

Experimental drug treatment Experimental drug treatment is not a cost containment method.

Right to Examine is the same as:

Free Look Period Right to Examine, the Free Look Period, and the Owner's (or Insured's) Right of Rescission are all terms that means the same thing. A policy returned during the Free Look period is void, no claims are payable, and all premiums paid are refunded.

Attaching a(n) ___________ rider excludes coverage for a condition that would otherwise be covered.

Impairment Attaching an impairment rider excludes coverage for a condition that would otherwise be covered

Which rider would eliminate coverage for a preexisting condition?

Impairment Rider The Impairment Rider eliminates coverage for pre-existing conditions, but at the same time may make insurance available for an otherwise uninsurable person.

One of your clients just reinstated an Accident and Health policy. When is coverage effective?

In 10 days for sickness and immediately for accidental injuries

Mandatory uniform provisions found in health insurance policies are designed to protect the:

Insured The mandatory uniform provisions are designed to protect the insured's interests.

Optional Uniform Provisions are included in the contract at the _______ option.

Insurer's The Optional Uniform Provisions are included at the insurer's option. However, if used, they must conform to that state's insurance code.

Which clause in a contract would state that Jim is covered by XYZ insurer for a monthly benefit of $2,000 in the event of disability?

Insuring Clause The Insuring Clause states who is covered, by whom, for how much, for what period, and against what peril.

What is an impairment rider?

It excludes specific conditions that normally would cause the entire policy to be declined An impairment rider is a rider added to a policy that will exclude specific conditions that would normally cause a policy to be declined. The use of this rider allows an insured to qualify for a policy with the exclusion attached, where they would otherwise be declined altogether.

Which of these is a Mandatory Uniform Provision

Legal Action The only choice which is a Mandatory Uniform Provision is Legal Actions. All other responses are Optional Uniform Provisions.

All of the following are Optional Uniform Provisions, except:

Legal Actions

Precertification, Mandatory Second Surgical Opinion, and Concurrent Review are provisions in health insurance policies known as:

Managed Care Provisions They are included as Managed Care Provisions or sometimes referred to as Cost Containment Provisions

Based upon Optional Uniform Provisions, an insurer would have the right to deny claim payment in all of the following circumstances, except:

Misstatement of age on the application Misstatement of age would not avoid a claim, but could cause a reduced benefit to be paid. The Insurance With Other Insurers, Illegal Occupations and Actions, and Intoxicants and Narcotics are each optional provisions that could allow an insurer to avoid liability for a claim.

If Mr. Stanley is injured while attempting to escape from the police after committing a bank robbery, his A & H coverage will probably pay:

Nothing Since Mr. Stanley is injured while committing an illegal act, the Illegal Occupation/Act Provision (an Optional Uniform Provision) provides the insurer's right to deny liability.

An insurer has the right to request a physical exam or an autopsy to determine its liability to pay benefits. This request may be made under which provision?

Physical Exam & Autopsy According to the Physical Exam and Autopsy Provision (a Mandatory Uniform Provision), the insurer, at its own expense, has the right to request a physical exam or autopsy where not prohibited by law.

The Insuring Clause under an individual A&H policy would contain all the following, except:

Premium or rate calculations

Case managers do all of the following, except:

Providing the necessary care A case manager may be assigned to a case to determine the appropriate course of action for an insured. The case manager may require a referral or a second opinion before approving a procedure. The case manager will also manage the utilization review of a subscriber's stay in the hospital.

Eliza has a policy that allows her to deduct the premiums she pays that exceed 10% of her adjusted gross income. Once she turns 65, she can deduct the premiums that exceed 7.5% of her adjusted gross income. Which type of policy does Eliza have?

Qualified Long-Term Care The premiums paid for individual qualified LTC policies that exceed 10% of the individual's adjusted gross income may be tax deductible. For individuals age 65 or older, the premiums paid for individual LTC policies that exceed 7.5% of adjusted gross income may be tax deductible

Which provision is an Optional Uniform Provision?

Relation of Earnings to Insurance Relation of Earnings to Insurance is an Optional Uniform Provision. The other choices are Mandatory Uniform Provisions.

Guaranteed Renewable means:

Renewable with adjustable premiums, by classification only The Guaranteed Renewable Provision does allow the insurer to adjust premiums upon renewal, but by class only, not on an individual basis. A class of insureds is based on age or other uniform, nondiscriminatory method.

The Guaranteed Renewable Provision states that the policy is:

Renewable with premiums that may be increased for entire classes of insureds The Guaranteed Renewable Provision allows the insurer to adjust premiums upon renewal, but by classification only, not for particular individuals.

All of the following are modes of premium payment for health insurance, except:

Single pay

Which provision states that the insurance company must pay claims immediately?

Time of Payment of Claims Time of Payment of Claims (a Mandatory Uniform Provision) stipulates that claims are to be paid immediately upon written proof of loss.

Harry was hospitalized and in a coma for 6 months. When does proof of loss for this claim have to be submitted?

Within 1 year, unless he suffers legal incapacity The Proof of Loss Provision (a Mandatory Uniform Provision) stipulates that the insured must provide proof of the loss within 90 days of the loss, or within in the shortest time possible, but not to exceed 1 year unless the insured suffers legal incapacity. Since Harry was in a coma for 6 months, it would not have been possible for him to file a claim within the 90-day time period.

Does the insured have the right to change the beneficiary designation of a health insurance policy?

Yes, unless the beneficiary is designated as irrevocable The Change of Beneficiary Provision (a Mandatory Uniform Provision) establishes the insured's right to change the beneficiary, unless it is designated as irrevocable.

What do ADLs trigger?

long term care insurance Activities of Daily Living (ADLs) are triggers used to begin Long-Term Care Insurance benefits.