Chapter 3
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
On an Accidental Death and Dismemberment (AD&D) insurance policy, who is qualified to change the beneficiary designation?
Policyowner
Which statement is true regarding a group accident and health policy issued to an employer?
The employer is the policyowner and each employee receives a certificate of coverage
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 expect
An individual policy is given to each member
Group health plans typically contain a coordination of benefits (COB) provision. This provision purposes is
Avoid the duplication of benefit payments
Which of the following best describes how a policy that uses the "accidental bodily injury" definition of an accident differs from one that uses the "accidental means"
Less restrictive
Which of the following characteristics is associated with a large group disability income policy?
No medical underwriting
XYZ Company pays the entire premium for its group health plan. The MINIMUM percentage of eligible employees that must be covered is
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
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 statement is true regarding a minor beneficiary?
Normally, a guardian is required to be appointed in the Beneficiary clause of the contract
Accidental death coverage is provided to commercial airline passengers in which of the following type of policies?
Blanket accident policy
The difference between group insurance and blanket health policies are
Blanket health policies do not issue certificates
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
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
The federal income tax treatment of employer provided group medical expense insurance can be accurately describe as
Employees premiums paid by the employer is tax deductible to the employer as a business expenditure
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
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?
In this situation, the policy will pay $300,000.
T is covered by two health insurance plans: a group plan through his employer and his spouse's plan as a dependent. When T submits a claim, his employer's plan is considered what type of carrier under the Model Group Coordination of Benefits provision?
Primary carrier
K is the insured and P is the sole beneficiary on a life 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
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
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
P loses an arm in a farm accident and is paid $10,000 from his Accidental Death and Dismemberment policy. This benefit is known as the
capital sum
What is issued to each employee of an employer health plan?
certificate
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
A policy owner's rights are limited under which beneficiary designation?
irrevocable
A policyowner would like to change the beneficiary on a Life insurance policy and make the change permanent. Which type of designation would fulfill this need?
irrevocable
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
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
A Business Disability Buyout plan policy is designed
to pay benefits to the Corporation or other shareholders
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?
The mother receives $0 because T is still alive and the sole primary beneficiary, while the mother is still the contingent beneficiary.
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
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
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
How does group insurance differ from individual insurance?
Premiums are lower
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
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 of the change will be refused
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 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 injury's caused by a third party?
Subrogation
Common exclusions to continuation of group coverage include
all of the above
