Other Health Insurance Concepts

S is a sole business proprietor who owns a medical expense plan. What percentage of the cost of the plan may he deduct?

100%

When a disabled dependent child reaches the age limit for coverage, how long does the policyowner have to provide proof of dependency in order for the dependent to remain covered under the policy?

31 days

Under which of the following employer-provided plans are the benefits taxable to an employee in proportion to the amount of premium paid by the employer? A. Disability Income B. Major Medical C. Dental Expense D. Basic Medical Expense

Disability Income

All of the following statements concerning workers compensation are correct EXCEPT A. All states have workers compensation B. Benefits include medical, disability income, and rehabilitation coverage C. A worker receives benefits only if the work related injury was not his/her fault D. Workers compensation laws are established by each state.

A worker receives benefits only if the work related injury was not his/her fault

Alexander has a policy with his ex-wife as its beneficiary. What provision allows him to change the beneficiary to his new wife?

Change of beneficiary

What type of insurance is sold to small business owners that must meet overhead expenses such as rent or utilities following a disability?

Business overhead expense

The mode of premium payment

Is defined as the frequency and the amount of the premium payment.

Workers Compensation benefits are regulated by which entity?

State government

Which of the following premium modes would result in the highest annual cost for an insurance policy? monthly, quarterly, semi-annual, annual

Monthly

Which of the following applies to partial disability benefits? A. Payment is based on termination of employment B. Benefits are reduced once an insured is no longer under a doctor's care C. Payment is limited to a certain period of time D. An insured is entitled to a principal sum benefit for the partial loss of a limb

Payment is limited to a certain period of time

A brain surgeon has an accident and develops tremors in her right arm. Which disability income policy definition of total disability will cover her for all losses?

"Own occupation" - less restrictive than other definitions

A noncontributory group disability income plan has a 30-day waiting period and offers benefits of $2,000 a month. If an employee is unable to work for 7 months due to a covered disability, the employee will receive

$12,000, all of which is taxable noncontributory - employer pays the entire cost, so income benefits are taxed to the employee

An insured has a primary group health plan and an excess plan, each covering losses up to $10,000. The insured suffered a loss of $15,000. Disregarding any copayments or deductibles, how much will the excess plan pay?

$5,000

For group medical and dental expense insurance, what percentage of premium paid by the employer is deductible as a business expense?

100%

Disability income coverage specifies that the policy covers the insured if he is unable to perform any job for which he is qualified. In this case, total disability is defined as

Any occupation - more restrictive than other definitions

Which of the following statements about occupational vs. nonoccupational coverage is TRUE? A. Individual disability policies never cover nonoccupational injuries. B. Only group disability income policies can be written on an occupational basis. C. Disability insurance can be written as occupational or nonoccupational. D. Group medical expense policies and individual medical expense policies always cover both occupational and nonoccupational injuries.

Disability insurance can be written as occupational or nonoccupational.

Which of the following describes taxation of individual disability income insurance premiums and benefits? A. Premiums are not tax deductible, but benefits are taxable. B. Premiums are tax deductible, but benefits are not taxable. C. Premiums are tax deductible, and benefits are taxable. D. Premiums are not tax deductible, and benefits are not taxable.

Premiums are not tax deductible, and benefits are not taxable.

Which of the following is CORRECT regarding Business Overhead Expense insurance? A. Benefits received are received tax free. B. Benefits received are taxable income to the employee. C. Premiums are not tax deductible. D. Premiums are tax deductible.

Premiums are tax deductible.

Which of the following are the main factors taken into account when calculating residual disability benefits? A. Present earnings and standard cost of living B. Present earnings and earnings prior to disability. C. Earnings prior to disability and the length of disability. D. Employee's full-time status and length of disability.

Present earnings and earnings prior to disability.

A provision found in insurance policies which prevents the insured from collecting twice for the same loss is called

Subrogation

The legal process that gives the insurer, after payment of a loss, the right to seek recovery from a third party that was responsible for the loss is known as

Subrogation

Which of the following definitions would make it easier to qualify for total disability benefits? A. The more liberal "own occupation" B. The more strict "any occupation" C. The more liberal "any occupation" D. The more strict "own occupation"

The more liberal "own occupation"

Which of the following statements regarding the Change of Beneficiaries Provision is false? A. The policyowner has the right to change beneficiaries in any case. B. A policyowner can change beneficiaries without the consent of the former revocable beneficiary. C. The policyowner cannot change beneficiaries if he/she has chosen to have an irrevocable beneficiary, unless the policyowner has the permission of the irrevocable beneficiary. D. All policies that allow a death benefit must at least provide the option of a change of beneficiary provision.

The policyowner has the right to change beneficiaries in any case.

A policyowner names his five children as primary beneficiaries and his wife as a contingent beneficiary. If the policyowner and one of his children die, who would receive policy benefits?

The remaining 4 primary beneficiaries

Which of the following is NOT true regarding partial disability? A. The insured can still report to work and receive benefits B. Benefit payments are typically 50% of the total disability benefit C. An insured would qualify if he couldn't perform some of his normal job duties D. This is a form of insurance that covers part-time workers

This is a form of insurance that covers part-time workers. partial disability only covers full time workers

Which of the following determines whether disability insurance benefits are taxed? A. Whether the premiums were tax deductible B. State statutes C. Contract provisions D. If the total of benefits paid meets the minimum state taxation standard

Whether the premiums were tax deductible

Workers compensation insurance covers a worker's medical expenses resulting from work related sickness or injuries and covers loss of income from

Work-related disabilities

An employee is injured in a construction accident, rendering him unable to work for a year. Which of the following plans would provide him with medical expense coverage and income assistance? A. Long-term care B. Social Security Disability C. Workers Compensation D. Major Medical Insurance

Workers Compensation

The purpose of managed care health insurance plans is to

control health insurance claims expenses.

If an insured changes his payment plan from monthly to annually, what happens to the total premium?

decreases

The coverage provided by a disability income policy that does not pay benefits for losses occurring as the result of the insured's employment is called

nonoccupational coverage