Chapter 6

An insured's long-term care policy is scheduled to pay a fixed amount of coverage of $120 per day. The long-term care facility only charged $100 per day. How much will the insurance company pay?

$120 a day

Benefit periods for individual short-term disability policies will usually continue from

6 months to 2 years

A small company offers group health insurance to its employees, but recently has decided to terminate the health insurance contract, leaving the workers without insurance. What can the employees do regarding their insurance?

Convert to an individual health policy

Which of the following types of LTC is NOT provided in an institutional setting?

Home health care (home health care is given in the home, but skilled nursing, intermediate, and custodial care may all be provided in an institutional setting)

After a person's employment is terminated, it is possible to obtain individual health insurance after losing the group health coverage provided by the employer. Which of the following is NOT true?

Incorrect: By law, the new, individual policy must provide the same benefits as the group insurance policy Correct: the employee can convert from group to individual insurance within 31 days of termination; the premium of the individual health insurance policy can be higher than the original policy; continuation of group coverage need not include dental, vision, or prescription drug benefits

Which of the following answers does NOT describe the principal goal of the Preferred Provider Organization.

Incorrect: Provide medical services only from physicians in the network Correct: provide the subscriber a choice of hospitals; provide medical services at a reduced cots; provide the subscriber a choice of physicians

All of the following are true about group disability income insurance EXCEPT

Incorrect: coverage applies both on and off the job (*Employees who are injured on the job are covered by Workers Compensation insurance. Group disability Income Insurance is designed to cover employees only while they are off the job, so the coverage is considered to be nonoccupational in nature*) Correct: the waiting period starts at the onset of the injury or sickness; the longer the waiting period, the lower the premium; benefits are usually short term

Which is true regarding HMO coverage?

It is divided into geographic territories

Which of the following is considered a presumptive disability under a disability income policy?

Loss of two limbs

Certain conditions, such as dismemberment or total and permanent blindness, will automatically qualify the insured for full disability benefits. Which disability policy provision does this describe?

Presumptive disability (presumptive disability is a provision that is found in most disability income policies which specifies the conditions that will automatically qualify the insured for full disability benefits)

What type of care is Respite care?

Relief for a major care giver

Which of the following would an accident-only policy not cover?

Surgery to repair a wrist damaged by tendonitis

Hospital indemnity/hospital confinement indemnity policy will provide payment based on

The number of days confined in a hospital

What is the purpose of COBRA?

To provide continuation of coverage for terminated employees

lump sum

a payout method that pays the beneficiary the entire benefit in one payment

deductible

a specified dollar amount that the insured must pay first before the insurance company will pay the policy benefits

riders

added to the basic insurance policy to add, modify or delete policy provisions

sickness

an illness, which first manifests itself while the policy is in force

accidental bodily injury

an unforeseen and unintended injury that resulted from an accident rather than a sickness

comprehensive coverage

health insurance that provides coverage for most types of medical expenses

Regarding long-term care coverage, as the elimination period gets shorter, the premium

increases

tax exempt

not subject to taxation

underwriting

risk selection and classification process

taxable

subject to taxation

cancellation

termination of an in-force insurance policy, by6 either the insured or the insurer, prior to the expiration date shown in the policy

nonrenewal

termination of an insurance policy at its expiration date by not offering a continuation of the existing policy or a replacement policy

cafeteria plan

type of employee benefit plan that allows insureds to choose between different types of benefits