Health Insurance

In comparison to a policy that uses the accidental means definition, a policy that uses the accidental bodily injury definition would provide a coverage that is:

Broader in general

In insurance, an offer is usually made when:

The completed application is submitted

When an insured makes truthful statements on the application for insurance and pays the required premium, it is known as:

Consideration

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 a $100 per day. How much will the insurance company pay?

$120 a day

How many consecutive months of coverage (other than in an acute care unit of a hospital) must LTC insurance provide in this state?

12

At what age may an individual make withdrawals from an HSA for nonhealth purposes without being penalized?

65, but it will be taxed

Under an Accidental Death and Dismemberment insurance policy, the death benefit will be paid if the accidental death occurs within how many days?

90

An insurer has made all of the decisions regarding the provisions included in the insured's policy. The insured finds an objectionable provision and wants to negotiate it with the insurer but is not allowed to do so. Her only options are to reject the policy or accept it as is. What contract feature does this describe?

Adhesion

When an insured purchased her disability income policy, she misstated her age to the agent. She told the agent that she was 30 years old, when in fact, she was 37. If the policy contains the optional misstatement of age provision:

Amounts payable under the policy will reflect the insured's correct age

When both parties to a contract must perform certain duties and follow rules of conduct to make the contract enforceable, the contract is:

Conditional

Kevin and Nancy are married; Kevin is the primary breadwinner and has a health insurance policy that covers both him and his wife. Nancy has an illness that requires significant medical attention. Kevin and Nancy decide to legally separate, which means that Nancy will no longer be eligible for health insurance coverage under Kevin. Which of the following options would be best for Nancy at this point?

COBRA

Contracts that are prepared by one party and submitted to the other party on a take-it-or-leave-it basis are classified as:

Contracts of adhesion

If an employee terminates her employment, which of the following provisions would allow her to continue health coverage under an individual policy, if requested within 31 days?

Conversion

In a relative value system of determining coverage for a given procedure, what term describes the total amount payable per point?

Conversion factor

A health insurance policy that pays a lump sum if the insured suffers a heart attack or stroke is known as:

Critical illness

When will an individual be eligible for COBRA benefits and for up to how many months?

If the employee and the dependent become legally separated or divorced, or if the employee dies, the dependent will be eligible for COBRA benefits for up to 36 months

All of the following statements concerning Accidental Death and Dismemberment coverage are correct EXCEPT:

Death benefits are paid only if death occurs within 24 hours of an accident

Which agreement specifies how a business will transfer hands when one of the owners dies or becomes disabled?

Disability Buy-Sell

A waiver of premium provision may be included with which kind of health insurance policy?

Disability income

What is the goal of the HMO?

Early detection through regular checkups

Regarding Health Reimbursement Accounts, what does the employer determine?

Eligibility and contribution limits

An insured is hospitalized with a back injury. Upon checking his disability income policy, he learns that he will not be eligible for benefits for at least 30 days. This indicates that his policy is written with a 30-day:

Elimination period

Health Reimbursement Accounts (HRAs) are open to:

Employees of companies of all sizes

A new employee who meets HIPAA eligibility requirements must be issued health coverage on what basis?

Guaranteed

How will most LTC policies pay the benefit amount?

In a specific fixed dollar amount, regardless of the actual cost of care

Which of the following entities can legally bind coverage?

Insurer

A guaranteed renewable disability insurance policy:

Is renewable at the insured's option to a specified age

Which of the following is true regarding a term health policy?

It is nonrenewable

Which of the following riders will provide benefits above the base policy amount?

Multiple Indemnity rider

An insured is killed when a drunk driver's car slams into his truck. His beneficiary receives triple the amount of the stated benefit. What provision allows this? A) Other insurance in this insurer B) Multiple indemnity rider C) Guaranteed insurability D) Irrevocable beneficiary

Multiple indemnity rider

What policy is it when it is the insurer's option as to whether to renew or not?

Optionally renewable

Which renewability provision allows an insurer to terminate a policy for any reason, and to increase the premiums for any class of insureds?

Optionally renewable

Which renewal option does NOT guarantee renewal and allows the insurance company to refuse renewal of a policy at any premium due date?

Optionally renewable

Contract of Adhesion

Prepared by only the insurer and the insured's only option is to accept or reject the policy as it is written

In respect to the consideration clause, which of the following is consideration on the part of the insurer?

Promising to pay in accordance with the contract terms

Your client wants to know what the tax implications are for contributions to a Health Savings Account. You should advise her that the contributions are:

Tax deductible

The renewability provision in an optionally renewable policy gives the insurer the option to:

Terminate the policy for any reason on the date specified in the contract and allows the insurer to increase the premium for any class of optionally renewable insureds

Whose responsibility is it to determine if all of the questions on an application have been answered?

The agent

Mr. R purchases a health insurance policy for his daughter, who recently graduated from college. The daughter receives the required medical examination, and the insurance application. Who needs to sign the application?

The agent, Mr. R and his daughter

Who determines the eligibility and contribution limits of an HRA?

The employer

Contributions by an employer are not included in:

The individual's taxable income

Under a health insurance policy, benefits, other than death benefits, that have not otherwise been assigned, will be paid to:

The insured

Which of the following is not a feature of a noncancellable policy?

The insurer may terminate the contract only at renewal for certain conditions

Which of the statements is true regarding coinsurance?

The larger the percentage that is paid by the insured, the lower the required premium will be.

An agent is in the process of replacing the insured's current health insurance policy with a new one. Which of the following would be a proper action?

The old policy should stay in force until the new policy is issued

In terms of parties to a contract, which of the following does NOT describe a competent party? A The person must not be under the influence of drugs or alcohol. B The person must be of legal age. C The person must be mentally competent to understand the contract. D The person must have at least completed secondary education.

The person must have at least completed secondary education.

An insured is upset that her new health insurance policy was delivered to her by certified mail and not through her agent. Which of the following is true? A There is nothing wrong with this form of policy delivery. B The insured should complain to the insurer. C The insured should ask for a new policy to be delivered. D The policy will not be legal until it is delivered by an agent.

There is nothing wrong with this form of policy delivery

An insured notifies the insurance company that he has become disabled. What provision states that claims must be paid immediately upon written proof of loss?

Time of Payment of Claims

What is the purpose of coinsurance provisions?

To help the insurance company to prevent overutilization of the policy

Which of the following is a statement that is guaranteed to be true, and if untrue, may breach an insurance contract?

Warranty