11/3 Quiz: OTHER PROVISIONS

Which of the following best describes the consideration clause in a health insurance policy?

The consideration clause describes the promises exchanged between the insured and the insurer, as evidenced by the payment of premiums and statements made by the insured in the application, and the insurer's promise to pay benefits under the terms of the policy. The consideration clause is usually on the policy face. The correct answer is: The insurer's promise to pay benefits

The purpose of a pre-existing condition exclusion on a health insurance policy is to:

Pre-existing condition exclusions protect the insurance company from adverse selection. The correct answer is: Protect against adverse selection

The period of time between the onset of a disability and the time an insured is eligible for benefits is called:

The elimination period may be thought of as a deductible period for the policy. It ranges from 30 to 720 days, with the cost of premiums decreasing with the longer length. The correct answer is: Elimination period

Which of the following statements regarding the elimination period is false?

An elimination period must be fulfilled each time the insured enters a benefit period, unless the policy has a recurrent disability provision. The correct answer is: A policy only has one elimination period.

Which of the following terms means the benefits or services eligible for coverage by a health insurance policy?

Eligible expenses are benefits or services provided under the policy coverage. The correct answer is: Eligible Expenses

Which of the following answers best describes the Interest on Claims Proceeds provision?

Insurers are required to pay on valid health insurance claims within a certain amount of time. If the insurer fails to do so, the insurer will be required to pay interest on the claim. Interest is calculated from the day the health insurance claim payment should have been made. The correct answer is: The insurer must pay interest on late claim payments to the insured.

The initial premium payment sent with an application constitutes what part of the insurance contract?

It is part of the _something of value_ provided by the applicant. Their statements on the form are also considered _valuable._ The correct answer is: Consideration

Which of the following best defines the probationary period in an accident and health insurance policy?

The probationary period in an accident and health insurance policy is the period of time between the effective date of the policy and the date coverage begins. The correct answer is: The period of time between the effective date of the policy and the date coverage begins

Which of the following terms means a transfer of benefits from the insured to the medical provider?

Assignment is the transfer of benefits from the insured to the medical provider. The correct answer is: Assignment

What is the purpose of coinsurance and deductibles?

Coinsurance and deductible are cost-sharing tools which discourage abuse of an insurance policy. The correct answer is: Cost-sharing

Which of the following best describes coinsurance?

Coinsurance is the agreed upon proportions for which the insurer and the insured share payment of certain benefits or services under the policy coverage. Coinsurance proportions are usually 80% for the insurer and 20% for the insured. The policy must state what benefits or services are subject to coinsurance and the proportion for which each party is responsible. The correct answer is: The agreed upon proportion for which the insurer and insured share payment of benefits under coverage

What is the purpose of coinsurance?

Coinsurance is used to share the cost of medical care between the insured and the insurance company. It is intended to prevent the insured from using health insurance unnecessarily. The correct answer is: Control overutilization of benefits

How long is the free look period in most health insurance policies?

The free look period is typically 10 days for accident and health insurance policies. The correct answer is: 10 days

The consideration clause in an accident and health policy states that:

The Consideration clause in an accident and health policy states that something of value (a _consideration_) must be exchanged between insurer and insured, specifically that the insured must pay an initial payment of premium to activate the contract. The correct answer is: The applicant pays the initial premium

Which of the following best describes the Reduction in Coverage provision of a health policy?

The Reduction in Coverage Provision sets the terms and conditions under which the amount of coverage can be reduced. Reduction in Coverage provisions must be clearly labeled in the policy. The correct answer is: The Reduction in Coverage Provision sets the terms and conditions under which the amount of coverage can be reduced.

The consideration clause in a health insurance policy:

The consideration clause describes the promises exchanged between the insured and the insurer. The correct answer is: States the promises exchanged between the insured and the insurer

Which part of an accident and health insurance policy contains the renewability provision?

The face also states whether or not and how the policy may be renewed. The correct answer is: Policy face

The policy face of a health insurance contract contains:

The policy face contains the names of the insurer and the insured, policy exclusions, summary of coverage, policy term and expiration date. The correct answer is: Insuring clause, name of the insured, insurer and a summary of the policy coverage

The probationary period of a health insurance policy begins:

The probationary period is the time period from the policy effective date until the date that coverage begins. The correct answer is: Upon the policy effective date

A ___________ is the amount owed by the insured for benefits or services received before the insurer will pay benefits.

A deductible is the amount owed by the insured for benefits or services received before the insurer will pay benefits. The correct answer is: Deductible

Which health insurance provision provides for continuation of coverage without payment of premiums, if the insured becomes totally and permanently disabled?

A waiver of premium provision provides for the continuation of coverage without payment of premiums if the insured becomes totally and permanently disabled. The correct answer is: Waiver of premium

This clause or provision requires the insured to share in the cost of medical care on a percentage basis:

Co-insurance is sometimes called _percentage participation._ Under an 80/20 co-insurance provision, for instance, the plan pays 80 percent of eligible medical charges above any deductible. The insured must pay the remaining 20 percent. The correct answer is: A co-insurance clause

This clause or provision requires the insured to pay a set or fixed dollar amount each time a particular medical service is used:

Co-pay clauses include a schedule for what the insured must pay for various medical services each time he or she uses those. The amount is usually modest. The correct answer is: A co-pay clause

Fred has purchased a health policy with a waiver of premium provision. When can Fred expect to receive benefits from this provision?

If Fred becomes totally and permanently disabled, the insurance company will waive all premiums during the period of disability. The correct answer is: When Fred becomes totally and permanently disabled

The ____________ is the period of time from which accident, illness or disability begins, until benefits are paid.

Often confused with the probationary period, the elimination period is the period of time from which accident, illness or disability begins, until benefits are paid. Benefits are not paid during the elimination period. The correct answer is: Elimination period

Under this clause, the insured's health plan might not cover medication unless the insured's physician obtains approval from the health plan to prescribe a specific medication or perform a specific procedure.

Pre-authorization or prior approval requirements require physicians to require approval from the plan provider for medical procedures or treatments. Without this prior approval, the health plan might not provide coverage. The correct answer is: A pre-authorization clause

"Conditions for which prior medical advice or treatment was received" refers to which of the following?

Pre-existing conditions are conditions or symptoms for which medical advice, diagnosis, care, or treatment was recommended or received within no more than six months before the date of the enrollment of the policy. The correct answer is: Pre-existing conditions

Which health insurance provision/clause describes the promises exchanged between the insured and the insurer, as evidenced by premium payments and the insured's statements in the application, and the insurer's promise to pay benefits, as stated in the policy?

The consideration clause describes the promises exchanged between the insured and the insurer, as evidenced by the payment of premiums and statements made by the insured in the application, and the insurer's promise to pay benefits under the terms of the policy. The consideration clause is usually on the policy face. The correct answer is: Consideration clause

The period of time between an employee's coming to work at a firm that offers group health insurance to its employees and the time when he or she is covered by that insurance is called:

The probation period is the time between the time an individual is employed by a company and the date at which he or she becomes eligible for group health and life insurance. The correct answer is: Probation period

When does the probationary period of a health insurance policy begin?

The probationary period is the time period from the policy effective date until the date that coverage begins. The correct answer is: Upon the policy effective date

An insured's disability insurance plan has a recurrent disability provision for six months. If the insured is disabled, this plan will:

The recurrent disability insurance provision is designed to make sure that a person does not have to go through more than one elimination period within a certain period of time. The correct answer is: Waive the elimination period for a disability claim made within six months of a previous claim

A waiver of premium provision in a disability income policy:

The waiver of premium provision in a disability income policy keeps the policy active while the insured is unable to pay premiums during a disability. The insurer will deduct the amount of missed premium payments from the benefit payments. The correct answer is: Permits the insured to maintain a policy in force while disabled and unable to pay premiums

All of the following are true regarding recurrent disability, EXCEPT:

Recurrent disability occurs when the insured again becomes disabled from the same or related event or condition that caused the prior disability. Policies must state the terms for or whether a recurrent disability is considered an existing or new claim, as well as, any waiting or elimination periods associated with payment of benefits. The correct answer is: Recurrent disability does not begin a new elimination period.

The benefit payment clause for health insurance policies is best described as the:

The benefit payment clause is the provision that describes how and when benefits are paid. The correct answer is: Provision that describes how and when benefits are paid

All of the following statements are true about the elimination period, EXCEPT:

The elimination period is the period of time from which accident, illness or disability begins, until benefits are paid. Benefits are not paid during the elimination period. A probationary period is the time between the effective date of the policy and the date coverage begins for all or certain physical conditions. The correct answer is: The elimination period is the time between the effective date of the policy and the date coverage begins.

Adam realizes he purchased the wrong health policy. He decides to return the policy during the free look period. Two days later while the free look period is still in force, Adam is injured while painting his house. What will the insurer do?

The insurer will not pay the claim because Adam canceled the policy by returning it to the insurer during the free look period. Any initial premium Adam had paid would be returned, if it had not already been returned. The correct answer is: Return the initial premium to Adam

Insurers manage risk through a variety of policy provisions and clauses. Which of the following is NOT used to manage risk?

The insuring clause states the insurer's commitment to pay benefits, and is not a risk management tool. The correct answer is: Insuring clause

All of the following are true regarding copayments, EXCEPT:

Copayments are payments the insured makes for benefits or services provided under the policy coverage. Copayments (or _copays_) may be made to the insurer or the medical personnel or facility, depending on the policy. The policy must state the amount for each copayment for benefits and services under the policy coverage. Copayments are usually small dollar amounts, ranging from $5 to $40. The correct answer is: Copayments are similar to deductibles, typically ranging in amount from $500 to $1,000.

Which of the following terms best describes conditions for which prior medical advice or treatment was received?

Pre-existing conditions are conditions or symptoms for which medical advice, diagnosis, care, or treatment was recommended or received within no more than six months before the date of the enrollment of the policy. The correct answer is: Pre-existing conditions

Which of the following is a way that insurers manage risk?

The insuring clause states the insurer's commitment to pay benefits. The benefit payment clause is the provision that describes how and when benefits are paid. The consideration clause describes the promises exchanged between the insured and the insurer as evidenced by the payment of premiums . The Probationary Period is a risk management tool. The probationary period protects the insurer from paying claims caused by an insured's preexisting conditions. The correct answer is: Probationary Period

If an insured is approved for a specific medical procedure and is provided with the maximum amount the insurance company will pay for that procedure, it would be reasonable to assume their policy has this payment provision:

The usual, reasonable, and customary charges provision takes into consideration the costs of medical services in a given region at the current time to establish what a company should set as a maximum payment for those services. The correct answer is: Usual, reasonable, and customary charges provision

For health insurance policies, the consideration clause is contained in the:

The consideration clause is usually on the policy face. The correct answer is: Policy face

Ken purchases a health insurance policy. A few days later he looks over the policy he applied for and realizes it is not the coverage he intended to purchase. Ken decides to return the policy during the free look period. Three days later while the free look period is still in force, Ken is injured. What will the insurer do?

The insurer will not pay the claim because Ken canceled the policy by returning it to the insurer during the free look period. Any initial premium Ken had paid would be returned, if it had not already been returned. The correct answer is: The insurer will return the initial premium to Ken.

Which clause under a health insurance policy describes the limits of coverage and identifies the parties to the contract?

The insuring clause states the scope of coverage, the promise to pay benefits under the terms of the policy, any conditions within the policy, and any definitions required by law. The correct answer is: Insuring clause

For health insurance policies, the insuring clause is contained in the:

Typically, the insuring clause is on the policy face. The correct answer is: Policy face