Ch 1 Health/Accident Insurance

What is issued to each employee of an employer health plan?

Certificate

The federal income tax treatment of employer-provided group Medical Expense insurance can be accurately described as:

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

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?

Irrevocable

A policyowner's rights are limited under which beneficiary designation?

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

Which statement is TRUE regarding a group accident & health policy issued to an employer?

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

Group/voluntary long-term care policy premiums are typically deducted from the employee's income and,

are less costly as compared to individual long term care coverage

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 tax-deductible

All students attending a large university could be covered by:

a blanket policy

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

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

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

Which contract permits the remaining partners to buy-out the interest of a disabled business partner?

Disability Buy-Sell

An accident policy will most likely pay a benefit for a(n):

off-the-job accident

The benefits under a Disability Buy-Out policy are:

payable to the company or another shareholder

XYZ Company pays the entire premium for its group health plan. The MINIMUM percentage of eligible employees that must be covered is:

100%

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

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

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?

$300,000

a blanket policy

Request of the change will be refused

A Business Disability Buyout plan policy is designed:

to pay benefits to the Corporation or other shareholders

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

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

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

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

Business owner becoming disabled

How would a contingent beneficiary receive the policy proceeds in an Accidental Death and Dismemberment (AD&D) policy?

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?

Insured's contingent beneficiary

Which of the following claims are typically excluded from Medical expense policies?

Intentionally self-inflicted injuries

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?

Less restrictive

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

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 contingent beneficiary

The Coordination of Benefits provision:

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?

Reimbursement

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

All group health plans are terminated by the employer

All of the following statements regarding group health insurance is true, EXCEPT:

An individual policy is given to each member

Which of the following medical expenses does Cancer insurance NOT cover?

Arthritis

Accidental Death coverage is provided to commercial airline passengers in which of the following types of policies?

Blanket Accident policy

An insurance company would MOST likely pay benefits under an Accidental Death and Dismemberment policy for which of the following losses?

Loss of eyesight due to an accidental injury

Which of the following characteristics is associated with a large group disability income policy?

No medical underwriting

Which statement is true regarding a minor beneficiary?

Normally, a guardian is required to be appointed in the Beneficiary clause of the contract

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:

P only

On an Accidental Death and Dismemberment (AD&D) insurance policy, who is qualified to change the beneficiary designation?

Policyowner

How does group insurance differ from individual insurance?

Premiums are lower

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

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

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 NOT need to provide evidence of insurability

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?

Sign an enrollment card

Which mode of payment is NOT used by health insurance policies?

Single premium

Which of the following is the reimbursement of benefits for the treatment of a beneficiary's injuries caused by a third party?

Subrogation

A Business Overhead Expense policy would cover which of the following if a business owner becomes disabled?

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:

Waiting Period

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

continue group health benefits

A Business Overhead Expense policy:

covers business expenses such as rent and utilities

The reason for a business having a Business Overhead Expense Disability Plan is to cover:

fixed business expenses

The Health Insurance Portability and Accountability Act (HIPAA) gives privacy protection for:

health information

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

interim coverage

Which of the following statements is correct regarding an employer/employee group health plan?

the employer receives a master policy and the employees receive certificates