Chapter 1 - 2 - 3 - 4

Which of these circumstances is a Business Disability Buy-Sell policy designed to help in the sale of a business?

Business owner becoming disabled

A catastrophic illness would be best covered by which of the following health insurance plans

Major Medical

Many small business owners worry how their business would survive financially if the owner becomes disabled. The policy which BEST addresses this concern is

business overhead expense

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

This type of deductible provision states that should more than one family member be involved in a common accident, or suffer the same illness, only one individual deductible amount shall be applied

common accident deductible

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

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 months

Under what system do a group of doctors and hospitals in a designated area contract with an insurer to provide services at a prearranged cost to the insured?

PPO

Which of these statements is INCORRECT regarding a preferred provider organization (PPO)

PPOs are NOT a type of managed care systems

A prospective insured completes and signs an application for health insurance but intentionally conceals information about a pre-existing heart condition. The company issues the policy. Two months later, the insured suffers a heart attack and submits a claim. While processing the claim, the company discovers the pre-existing condition. In this situation, the company will

continue coverage but exclude the heart condition

The COBRA Act gives workers (and their families) whose employment has been terminated the right to

continue group health benefits

Which of the following BEST describes a Hospital Indemnity policy

coverage that pays a stated amount per day of a covered hospitalization

A Business Overhead Expense policy

covers business expenses such as rent and utilities

A physician opens up a new practice and qualifies for a $7,000/month Disability Income policy. What rider would the physician add if he wants the ability to increase his policy benefit as his practice and income grow?

guaranteed insurability option rider

S wants to open a tax-exempt Health Savings Account. To qualify for this type of account, Federal law dictates that S must be enrolled in a

high-deductible health plan, not covered by other health insurance (besides accident, disability, dental, vision, long-term care), not eligible for Medicare, not claimed as dependent

For which of the following expenses does a Basic Hospital policy pay

hospital room and board

The first portion of a covered Major Medical insurance expense that the insured is required to pay is called the

initial deductible

T was treated for an ailment 2 months prior to applying for a health insurance policy. This condition was noted on the application and the policy was issued shortly afterwards.How will the insurer likely consider this condition?

insurer will likely treat as a pre-existing condition which may not be covered for one year

J was reviewing her Health Insurance policy and noticed the phrase "This policy will only pay for a semi-private room". This phrase is considered to be an

internal limit

Which of the following is NOT a limited benefit plan

life insurance policy

Basic Hospital and Surgical policy benefits are

lower than the actual expenses incurred

Which of the following characteristics is associated with a large group disability income policy

no medical underwriting

The benefits under a Disability Buy-Out are

payable to the company or another shareholder

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

R had received full disability income benefits for 6 months. When he returns to work, he is only able to resume half his normal daily workload. Which provision pays reduced benefits to R while he is not working at full capacity?

residual disability

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

The percentage of an individual's Primary Insurance Amount (PIA) determines the benefits paid in which of the following programs?

social security disability income

Which of the following statements BEST defines usual, customary, and reasonable (UCR) charges

the maximum amount considered eligible for reimbursement by an insurance company under a health plan

A disability elimination period is best described as a

time deductible

What is the elimination period of an individual disability policy

time period a disabled person must wait before benefits are paid

A Business Disability Buyout plan policy is designed

to pay benefits to the corporation or other shareholders

The provision in a health insurance policy that interrupts premiums being paid to the insurer while the insured is disabled is called the

waiver of premium