Intro to Health Insurance

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? $0 $100,000 $25,000 $50,000

$25,000, the capital sum

All of the following statements regarding group health insurance is true EXCEPT -Premiums are usually determined by the claims experience of the group -A master contract is issued for the group -An individual policy is given to each member -Group health insurance premiums are typically lower than individual health insurance premiums

An individual policy is given to each member

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? Joint Noncontributory Contributory Participating

contributory

A Business Overhead Expense policy -covers any loss of income by the business owner -covers business expenses such as rent and utilities -covers employee wages only -reimburses the company for any reduction in sales due to the owner's disability

covers business expenses such as rent and utilities

Which contract permits the remaining partners to buy-out the interest of a disabled business partner? Group Disability Business Continuation Disability Buy-Sell Key Person Disability

disability buy-sell

Which of the following is the reimbursement of benefits for the treatment of a beneficiary's injuries caused by a third party? Indemnity Subrogation Legal action Consideration

"Subrogation". 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.

Accidental Death coverage is provided to commercial airline passengers in which of the following types of policies? Disability Income policy Accident Reimbursement Accounts Accident Savings Plans Blanket Accident policy

blanket accident policy

The difference between group insurance and blanket health policies is -Blanket health policies do not issue certificates -Group health policies do not issue certificates -Group health plans may be issued to an airline to cover its passengers -Blanket health policies are sometimes called wholesale plans

blanket health policies do not issue certificates

Group/voluntary long-term care policy premiums are typically deducted from the employee's income and -are approximately the same premium as compared to individual long term care coverage -are more expensive as compared to individual long term care coverage -are less costly as compared to individual long term care coverage -are substantially more costly as compared to the premiums for individual long term care coverage

are less costly as compared to individual long term care coverage

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 -Disability Income -Key Employee Life -Contributory

business overhead expenese

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 -Disability Income -Key Employee Life -Contributory

business overhead expense

Which of these circumstances is a Business Disability Buy-Sell policy designed to help in the sale of a business? -Company becoming insolvent -Death of the business owner -Business owner becoming disabled -Key employee becoming disabled

business owner becoming disabled

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 Principal carrier Surplus carrier Primary carrier Secondary carrier

primary carrier

An accident policy will most likely pay a benefit for a(n) self-inflicted injury critical illness on-the-job accident off-the-job accident

off-the-job accident

P and Q are married and have three children. P is the primary beneficiary on Q's Accidental Death and Dismemberment (AD&D) policy and Q's sister R is the contingent beneficiary. P, Q, and R are involved in a car accident and Q and R are killed instantly. The Accidental Death benefits will be paid to R's estate Q's estate P and Q's estate P only

p only

The benefits under a Disability Buy-Out policy are -normally paid in installments -taxable to the beneficiary -payable to the company or another shareholder -normally paid after a short elimination period

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? Payer Primary beneficiary Policyowner Insurer

policyowner

How does group insurance differ from individual insurance? -Evidence of insurability is required -Premiums are higher -Premiums are lower -Pre-existing conditions not covered

premiums are lower

Which of these types of coverage is best described as a short term medical policy? interim coverage provisional coverage transitional coverage conversion coverage

interim coverage

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? $1,000,000 $500,000 $250,000 $0

$0, because T is still alive and the sole 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? $100,000 $200,000 $300,000 $400,000

$300,000

XYZ Company pays the entire premium for its group health plan. The MINIMUM percentage of eligible employees that must be covered is 25% 50% 75% 100%

100%

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 18 15 6

36 months

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? Tertiary Irrevocable Revocable Contingent

revocable

All students attending a large university could be covered by a blanket policy a franchise policy a jumbo group policy a commercial insurance policy

a blanket policy(*issued to an airline or bus company, or to a school for its students)

Under which of the following circumstances will the benefits under COBRA continuation coverage end? -Employee has become uninsurable -All group health plans are terminated by the employer -Employer moves headquarters to another state -Employee becomes permanently disabled

all group health plans are terminated by the employer

Which of the following medical expenses does Cancer insurance NOT cover? Chemotherapy Radiation treatment Physician visit Arthritis

arthritis

What is issued to each employee of an employer health plan? Provision Receipt Policy Certificate

certificate (of insurance)

A policyowner's rights are limited under which beneficiary designation? Revocable Tertiary Contingent Irrevocable

irrevocable

Which of the following statements is correct regarding an employer/employee group health plan? -each employee receives a duplicate policy from the insurer -the employer receives a master policy and the employees receive certificates -the employer and the employees both receive actual policies -the employer receives the master policy and the employees receive a summary of benefits

the employer receives a master policy and the employees receive certificates

Which statement is TRUE regarding a group accident & health policy issued to an employer? -Neither the employer or employee are policyowners -The employer is issued a certificate of coverage and each employee receives a policy -The employer receives the policy and each employee is issued a certificate -Both the employer and employee are policyowners

the employer receives the policy and each employee is issued a certificate

A Business Disability Buyout plan policy is designed -as an incurred expense plan -with a very short Elimination period -to pay benefits to the Corporation or other shareholders -to pay benefits to the insured's spouse

to pay benefits to the Corporation or other shareholders

A Business Overhead Expense policy would cover which of the following if a business owner becomes disabled? -Contributions to employee retirement plans -Utilities and office rent -Owner's salary -Meals and entertainment

utilities and office rent

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 Grace Period Waiting Period Postponement Period Elimination Period

waiting period

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? -Authorize for payroll deductions -Agree to a physical examination -Sign an enrollment card -Register with her state of residency

sign an enrollment card

Which mode of payment is NOT used by health insurance policies? Monthly premium Annual premium Single premium Semi-annual premium

single premium

Which of the following is the reimbursement of benefits for the treatment of a beneficiary's injuries caused by a third party? Indemnity Subrogation Legal action Consideration

subrogation

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 Disability Income Key Employee Life Contributory

business overhead expense

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? Key Employer Disability Disability Income Business Overhead Expense Worker's Compensation

business overhead expense

The Coordination of Benefits provision -allows an insured covered by two health plans to make a profit on a covered loss -prevents an insured covered by two health plans from making a profit on a covered loss -allows an insurer to defer paying a claim for a work-related injury until Workers' Compensation Benefits have expired -prevents an insured to change insurers during a claim for a covered loss

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? Limited Special risk Reimbursement Blanket

reimbursement

The Consolidated Omnibus Budget Reconciliation Act (COBRA) gives workers (and their families) whose employment has been terminated the right to -continue group health benefits -take out an individual health policy -transfer their coverage to another insurer -convert to disability coverage

continue group health benefits

K has an Accidental Death and Dismemberment (AD&D) insurance policy where her husband is beneficiary and her daughter is contingent beneficiary. Under the Common Disaster clause, if K and her husband are both killed in an automobile accident, where would the death proceeds be directed? Daughter Husband's estate K's estate Trust fund

daughter

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 NOT tax-deductible -Disability income policy premiums are tax-deductible -Major medical policy benefits are normally not taxed -Disability income policy benefits are normally not taxed

disability income policy premiums are tax-deductible

The federal income tax treatment of employer-provided group Medical Expense insurance can be accurately described as -Employee's coverage paid for by the employer is considered taxable income to the employee -Employee's premiums paid by the employer is tax-deductible to the employer as a business expenditure -Employer is given tax credits for contributions made to an employer-provided group health plan -Benefits are taxable to the employee

employee's premiums paid by the employer is tax-deductible to the employer as a business expenditure

The reason for a business having a Business Overhead Expense Disability Plan is to cover -the cost of providing group disability insurance to the employees -fixed business expenses -the owner's loss of income -all business-related expenses and salaries

fixed business expenses

The Health Insurance Portability and Accountability Act (HIPAA) gives privacy protection for insolvency health information financial information overinsurance

health information

How would a contingent beneficiary receive the policy proceeds in an Accidental Death and Dismemberment (AD&D) policy? -If the primary beneficiary is a minor at the time of the insured's death -If the primary beneficiary dies before the insured -If the insured died of accidental causes -If the insured died of natural causes

if the primary beneficiary dies before the insured

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? -Primary beneficiary's estate -Primary beneficiary's next of kin -Insured's estate -Insured's contingent beneficiary

insured's contingent beneficiary

Which of the following claims are typically excluded from Medical expense policies? -Treatment for alcohol addiction -Intentionally self-inflicted injuries -Treatment for mental illness -Injuries sustained from an automobile accident

intentionally self-inflicted injuries

A policyowner would like to change the beneficiary on an Accidental Death and Dismemberment (AD&D) insurance policy and make the change permanent. Which type of designation would fulfill this need? Revocable Contingent Irrevocable Primary

irrevocable

What kind of Accidental Death and Dismemberment (AD&D) insurance beneficiary requires his/her consent when a change of beneficiary is made? Irrevocable beneficiary Tertiary beneficiary Primary beneficiary Revocable beneficiary

irrevocable beneficiary

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? Double indemnity Benefits are taxable More restrictive Less restrictive

less restrictive

An insurance company would MOST likely pay benefits under an Accidental Death and Dismemberment policy for which of the following losses? -Loss of life due to a heart attack -Loss of eyesight due to an accidental injury -Loss of the spleen due to an accidental injury -Partial paralysis due to a stroke

loss of eyesight due to an accidental injury

Which of the following characteristics is associated with a large group disability income policy? No waiting periods No medical underwriting No elimination periods No limit of benefits

no medical underwriting

Which statement is true regarding a minor beneficiary? -Normally, the death proceeds are required to be held in trust until the beneficiary reaches the age of 21 -Normally, a guardian is required to be appointed in the Beneficiary clause of the contract -The minor must pay the debts of the insured's estate before receiving any of the proceeds -The minor is entitled to receive the death proceeds immediately

normally, a guardian is required to be appointed in the beneficiary clause of the contract

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 -Proceeds will be divided equally between K's and P's estate -Proceeds will be paid to K's estate -The courts will decide who will receive death benefits

proceeds will be paid to P's estate

An insured covered by Accidental Death and Dismemberment (AD&D) 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 primary beneficiary's estate -Probate will decide who receives proceeds -Proceeds will go to the contingent beneficiary -Proceeds will go to the insured's estate

proceeds will go to the contingent beneficiary

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 will be accepted only if in writing by the insured -Change will be made only if premiums are paid current -Change will be made immediately -Request of the change will be refused

request of the change will be refused

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 need to provide evidence of insurability -She does NOT need to provide evidence of insurability -She will have up to 6 months to convert to an individual policy -She will be paying exactly the same premium for the individual plan as she did the group plan

she DOES NOT need to provide evidence of insurability in order to convert to an individual policy