Health

Substandard Risk

reflect an increased risk of loss. can obtain coverage but at an increased premium. -due to poor health history or dangerous vocation or avocation

How do employer contributions to a Health Savings Account affect the insured's taxes?

the employer contributions are not included in the insured's taxable income

what is principal sum?

the sum you are paid for accidental death; usually equals the amount of coverage under the insurance contract, or the fact amount.

What is the first step in the process of insuring health risks? and why is it more important than life insurance?

underwriting/ field underwriting. it helps minimize the problem of adverse selection.

Limited Perils and Amounts

variety of health insurance policies providing limited coverage for specific accidents or sickness. These contracts must specify the type of accident or sickness covered, limited perils and amounts of coverage. benefits are paid on an expense-paid (reimbursement) or idemnity basis

at how many days will most policies pay the accidental death benefit as long as the death is caused by the accident within that many days??

within 90 days

Types of Losses and Benefits

- loss of income from disability -medical expense -dental expense -long-term care expense

Dental insurance Coverage is for

- routine and preventative maintenance- covered up to an annual maximum w/o a deductible or copayment. This coverage benefit usually includes routine exams, and teeth cleaning once a year and perhaps full mouth X rays once every 3 years. -routine and major restorative care- treatments for cavities, oral surgery, bridges and dentures. These procedures are covered up to a specific maximum, subject to an annual deductible per insured family member and a coinsurance. -orthodontic care- if included will have a separate maximum and a separate deductible, which may differ from the deductible for restorative care

Medical Examinations and Lab Tests (Including HIV consent)

-may be required by insurance conducted by physicians or paramedics at the insurance company's expense -usually not required with health insurance but this stresses the importance of the agent in recording medical information on the application. (usually more common with life insurance) -must obtain applicants written consent for the HIV test the consent form will explain the purpose of the test, and inform applicant about the confidentiality of results and how to notify the applicant

To be eligible under HIPAA regulations, for how long should an individual converting to an individual health plan have been covered under the previous group plan?

18 months

How many eligible employees must be included in a contributory plan??

75%

Medical Information Bureau (MIB)

A membership corporation owned by member insurance companies. NONPROFIT TRADE organization which receives adverse medical information from insurance companies and maintains confidential medical impairment information on individuals. reports from previous insurance information can be obtained from any other applications for insurance submitted to other MIB members. MIB information cannot be used in and of itself to decline a risk, but it can give the underwriter important additional information. information is reported in coded form

What does underwriting consider when writing a health insurance policy?

Age Gender Occupation Physical Condition Avocations Moral & Morale Hazards Financial Status of applicant

Which of the following answers does NOT describe the principal goal of a Preferred Provider Organization? A. Provide medical services at a reduced cost B. Provide medical services only from physicians in the network C. Provide the subscriber a choice of physicians D. Provide the subscriber a choice of hospitals

B. Provide medical services only from physicians in the network

when an insurer offers services like preadmission testing, second opinions regarding surgery, and preventative care what kind of provision is this?

Case management provision

Medical Expense

Contract that covers the various expenses which an insured may incur due to an accident or sickness

What term is the specific dollar amount that must be paid by an HMO member for a service?

Copayment

An insured is receiving hospice care. His insurer will pay for painkillers but not for an operation to reduce the size of a tumor. What term best fits this arrangement?

Cost-containment in Cost-containment: daily needs and pain relief are provided for hospice patients cut curative measures are not.

The HMO Act of 1973 required employers to offer an HMO plan as an alternative to regular health plans if the company had more than 25 employees. How has this plan since changed? A. The source of funding has changed. B. The minimum number of employees has decreased. C. The minimum number of employees has increased. D. Employers are no longer forced to offer HMO plans

D. Employers are no longer forced to offer HMO plans

Under the Affordable Care Act, which classification applies to health plans based on the amount of covered costs? a) Guaranteed and nonguaranteed b) Grandfathered and nongrandfathered c) Risk classification d) Metal level classification

D. Metal level classification

Dental Expense

Form of medical expense health insurance that covers the treatment, care and prevention of dental disease and injury to the insured's teeth.

What rider would not increase the premium for a policyowner?

Impairment rider the impairment rider excludes a specified condition from coverage, therefor, reducing benefits. An insurance company will not charge extra for a rider that reduces benefits.

Which of the following is NOT a metal level of coverage offered under the Patient Protection and Affordable Care Act? Bronze Iron Gold Silver

Iron

What is the benefit of experience rating?

It allows employers with low claims experience to get lower premiums.

The provision that prevents the insured from bringing any legal action against the company for at least 60 days after proof of loss is known as?

Legal actions provision

Loss of Income from Disability

Loss of income caused by accident and/or sickness causing an insured the inability to work and earn income is covered under disability income policies or coverages. Disability income insurance is a valued contract or stated amount that pays weekly or monthly benefits due to an injury or sickness. Benefits may be determined by the insured's past earnings and may be limited to a percentage of that income.

Underwriting for HIV or AIDS

permitted as long as it is not unfairly discriminatory. An adverse underwriting decision is not permitted if based solely upon the presence of symptoms but only if HIV is confirmed in relation to symptoms.

Per the Affordable Care Act what benefits are mandatory?

Pediatric vision.

the 3 Classification of Risks for health insurance

Preferred Standard Substandard

An insurer may change the wording of optional provisions, as long as the change does not adversely affect the policyholder. T/F?

TRUE

Producer report

The agent's report allows the agent to communicate with the underwriter and provide information about the applicant known by the agent that may assist in the underwriting process. It is only the agent/producer involved in this report. It asks questions about the applicants income, net worth and if the agent knows any reason the contract should not be issued. it DOES NOT become part of the entire contract.

What is true regarding METs?

They allow several small employers purchase less expensive insurance together.

Credit disability

This is a type of disability insurance sold by a lender that will cover the payment of a debt or other type of installment loan if the insured becomes disabled. Coverage is limited to the amount of the loan and decreases as the loan amortizes

A joining together by employers to provide health benefits for employee defines a Multiple Employer Welfare Arrangement T/F??

True

Premium with the application

Under terms of insurability conditional receipt, the insurance coverage becomes effective as the date of the receipt, provided the application is approved. The receipt provided is when the initial premium is paid at the time of application

hospital indemnity policy aka hospital fixed-rate policy

a limited hospital indemnity policy provides a specific amount on a daily, weekly or monthly basis while the insured is confined to a hospital. Payment under this type of policy is unrelated to the medical expense incurred, but based only on the number of days confined in a hospital.

Specified (Dread) Disease

a limited policy for a dread disease or limited risk policy provides a variety of benefits for a specific disease such as cancer policy or heart disease policy. Benefits are usually paid as a scheduled, fixed-dollar amount of indemnity for specified events or medical procedures, such as hospital confinement or chemotherapy.

critical illness

a limited policy that covers multiple illnesses (heart attack, stroke, renal failure) pays lump-sum benefit to the insured upon the diagnosis of any of the illnesses covered by the policy. this policy usually specifies a minimum number of days the insured must survive after the illness is first diagnosed

waiting period

a period of time that must pass after a loss occurs before the insurer start paying policy benefits

Preferred Risk

a reduced risk of loss and covered at a reduced rate ( nonsmokers)

What is the shortest possible elimination period for group short-term disability benefits provided by an employer? a. 0 days b. 30 days c. 60 days d. 90 days

a. 0 days

An insured misstated her age on an application for an individual health insurance policy. The insurance company found the mistake after the contestable period had expired. The insurance company will take which of the following actions regarding any claim that has been issued? a. adjust the claim benefit to reflect the insured's true age b. deny any claims and cancel the policy c. deny paying a claim based on misrepresentation d. pay the full amount of a claim because the contestable period has ended

a. adjust the claim benefit to reflect the insured's true age

in the event of a divorce which of the following would allow a divorcee to continue receiving group health coverage under an insured spouse's plan for an additional 36 months? a. cobra b. msa c.Hipaa d. social security

a. cobra

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 what? a. elimination period b. blackout period c. probationary period d. disability period

a. elimination period

In the event of loss, after a notice of a claim is submitted to the insurer, who is responsible for proving claims forms and to which party? a. insurer to insured b. insured to the insurer c. insurer to department of insurance d. insured to department of insurance

a. insurer to the insured upon receipt of claim, the company must supply claims forms to the insured within a specified number of days

Which of the following statements concerning group health insurance is CORRECT? a. the employer is the policy holder b. only the employer receives a certificate of insurance c. each employee receives a policy d. under group coverage, the insurer may reject certain individuals from coverage

a. the employer is the policy holder

An applicant is considered to be high-risk, but not so much that the insurer wants to deny coverage. Which of the following is NOT true? a. The insurer will issue a conditional coverage b. the insurer can increase the premium c. the insurer can add exclusions to the policy d. the insurer can rate- up the policy

a. the insurer will issue a conditional coverage If an applicant is considered to be too much of a risk, application can be denied. If however, the applicant's risks are not high enough to decline, two measures can be taken to protect the insurer: the policy can be rated-up, which means that the premiums will increase, and exclusions can be added, which means that the insurer will not have to cover conditions that make the applicant a high risk to insure.

Who is the beneficiary in a credit health policy? a. lending institution b. the insurer c. the estate of the borrower d. the federal government

a. the lending institution

A health insurance policy clause that prevents an insurance company from denying payment of a claim after a specified period of time is known as the a. Time limit on certain defenses clause b. Misstatement of age clause c. reinstatement clause d. insuring clause

a. the time limit on certain defenses clause

When an insurer issues an individual health insurance policy that is guaranteed renewable, the insurer agrees a. to renew the policy until the insured has reached age 65 b. to charge a lower premium every year the policy is renewed c. not to change the premium rate for any reason d. to renew the policy indefinitely

a. to renew the policy until the insured has reached age 65 the guaranteed renewable provision is similar to the noncancellable provision, with the exception that the insurer can increase the policy premium on the policy anniversary date. As with the noncancellable policy, coverage is generally not renewable beyond the insured's age 65.

two major losses/perils under Health insurance

accidental injury & sickness

Riders

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

examples of unfair discrimination between individuals of the same class

age or gender physical or mental impairment blindness or partial blindness genetic characteristics or testing sexual orientation/ or martial status

Delivery of the Policy

agent should review the insured's goals/needs, normally an agent should deliver it, once the policy is delivered if premium is not paid collect premium and get signature testifying to the insured's good health. free look period begins once policy is delivered.

Solicitation

an attempt to persuade a person to buy an insurance policy, and it can be done orally or in writing

accidental bodily injury

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

Sources of underwriting info

application producer report physician statement investigative consumer medical info bureau medical exams and lab test

Two ways to correct an application

application must be filled out in ink. the first and best it to simply start over with fresh application if that is not practical draw a line through the incorrect answer and insert the correct one. the applicant must initial the CORRECT answer.

Standard Risk

average exposure and may be insured at standard rates and premiums

Which of the following statements regarding business overhead expense policies is NOT true? a. any benefits received are taxable to the business b. benefits are usually limited to six months

b. Benefits are usually limited to six months Business Overhead Expense (BOE) insurance is sold to small business owners for the purpose of reimbursing the policyholder for business overhead expenses during a period of total disability. Premiums are tax-deductible for a business, but any benefits received are taxable as income. Overhead expenses, including equipment and employee salaries, are covered by the plan. Salaries and profits of the employer are not protected.

Insurance that would pay for hiring a replacement for an important employee who becomes disabled is called what? a. business overhead expense disability insurance b. key employee disability insurance c. blanket disability insurance d. long-term disability

b. Key employee disability insurance

Which of the following losses will be covered by a group medical expense policy? a. an elective cosmetic surgery b. a pre-existing condition c. an injury resulting from active military duty d. an intentionally self-inflicted injury

b. a pre-existing condition

Which of the following groups would probably be covered by blanket insurance? a. people who obtain temporary insurance b. a university's sports team c. a large family d. a publishing company

b. a univeristy's sports teams

Which rider, when added to a disability income policy, provides for changes in the benefits payable based on changes in the consumer price index? a. guaranteed insurability rider b. cost of living adjustment rider c. waiver of premium rider d. social security rider

b. cost of living adjustment rider

In an optionally renewable policy, the insurer has which of the following options? a. shorten the notice that the insured receives b. increase premiums c. increase the grace period d. alter the due date so the policy can be cancelled sooner

b. increase premiums

Which renewability provision are you most likely to see on a travel accident policy? a. conditionally renewable b. period of time c. noncancellable d. optionally renewable

b. period of time

Certain conditions, such as dismemberment or total and permanent blindness, will automatically qualify the insured for full disability benefits. Which disability policy provision allows for this? a. residual disability b. presumptive disability c. dismemberment disability d. partial disabilty

b. presumptive disability

Which of the following would be a qualifying event as it related to COBRA? a. eligibility for medicare b. termination of employment due to downsizing c. termination of employment for stealing d. eligibility for coverage under another group plan

b. termination of employment due to downsizing

Which of the following is NOT true regarding partial disability? a. an insured would qualify if he couldn't perform some of his normal job duties b. this is a form of insurance that covers part- time workers c. the insured can still report to work to receive benefits d. benefits payments are typically 50% of the total disability benefit

b. this is a form of insurance that covers part-time workers Partial disability covers full-time-working insureds who are unable to perform some, but not all, of their regular job duties or can no longer work full-time, which ultimately results in a loss of income. Payment from partial disability is typically 50% of the total disability benefit.

Application Procedure for health insurance

begins with a form provided by the company and completed by the agent as questions are asked of applicant, responses are recorded. submitted to insurance company for approval or rejection the application with be attached to policy if issued and will become a part of the entire contract agent is required to disclose all information about the products they are selling agents responsibility to make sur application is filled out completely, and correctly to the best of applicant's knowledge requires signature of the proposed insured , the policyowner, and agent

limited policy notice

by law the insurance company must state this is a limited policy on first page of policy so the insured is aware the policy's benefits are limited

All of the following are true about group disability income insurance EXCEPT a. The waiting period starts at the onset of the injury or sickness b. the longer the waiting period, the lower the premium c. coverage applies both on and off the job d. benefits are usually short term

c. Coverage applies both on and off the job

All of the following are requirements of eligibility for Social Security disability income benefits EXCEPT a. fully insured status b. waiting period of 5 months c. being age 65 d. inability to perform any gainful work

c. being age 65

A small business owner is the insured under a disability policy that funds a buy-sell agreement. If the owner dies or becomes disabled, the policy would provide which of the following? A. The business manager's salary B. Disability insurance for the owner C. Cash to the owner's business partner to accomplish a buyout D. The rent money for the building

c. cash to the owner's business partner to accomplish a buyout

A man is injured while robbing a convenience store. How does his major medical policy handle the payment of his claim? a. if the man is not convicted, he will get 75% of his claim paid b. the claim is paid in full c. claim is denied if his policy contains the illegal occupation provision d. 50% of the claim will be paid

c. claim is denied if his policy contains the illegal occupation provision

In order to be eligible for group health insurance, all of these are conditions an employee must meet EXCEPT a. Must be actively at work b. Must be a full-time employee c. Must have dependents d. Must be working in a covered classification

c. must have dependents

What provision can reduce the disability income benefit based upon the insured's current income? a. pro rate provision b. rehabilitation benefit c. relation of earnings to insurance d. waiver of monthly premium

c. relation of earnings to insurance

health and accident, hospital or medical service contracts, employee welfare benefit contracts cannot terminate, cancel, impose riders that exclude coverage, differentiate in premium rates or cost sharing for coverage, discriminate against an individual or family member on the basis of what kind of test??

prenatal test results

Which health insurance provision describes the insured's right to cancel coverage? a. insuring clause b. cancellation provision c. renewal provision d. policy duration provision

c. renewal provision renewability provisions are included in each health insurance contract and outlines both the insurer's and insured's right to cancel or renew coverage. This is considered to be a very important provision required by HIPAA, the federal Health Insurance Portability and Accountability Act of 1996.

In the event of a loss, business overhead insurance will pay for a. salary of the business owner b. medical bills of the business owner c. rent d. loss of profits

c. rent

Which of the following is NOT a characteristic of group long-term disability plan? A. The benefit period may be to age 65 b. the benefit can be up to 66 and 2/3 % of one's monthly income c. the benefit can be up to 50% of one's yearly income d. the elimination period is the same as in the short-term plan's benefit period

c. the benefit can be up to 50% of one's yearly income

In a group policy, who is issued a certificate of insurance? a. the insurance company b. the employer c. the individual insured d. the health care provider

c. the individual insured

According to the rights of renewability rider for cancellable policies, all of the following are correct about the cancellation of an individual insurance policy except? a. Claims incurred before cancellation must be honored. b. An insurance company may cancel a policy at any time. c. Unearned premiums are retained by the insurance company. d. The insurer must provide the insured with written notice of the cancellation.

c. unearned premiums are retained by the insurance company

Accidental Death & Dismemberment (AD &D)

can be written as a rider or as a separate policy usually in group life or group health plans it provides for the payment of a lump-sum benefit in the event that the insured dies from an accident, or loss of certain body parts caused by accident considered a pure form of accident insurance -principal sum is paid for accidental death -capital sum is paid for loss of sight or accidental dismemberment, it is a percentage of principal sum

If the insured under a disability income insurance policy changes to a more hazardous occupation after the policy has been issued, and a claim is filed, the insurance company should do which of the following? a. cancel the policy b. increase the premium c. exclude the coverage for on-the-job injury d. adjust the benefit in accordance with the increased risk

d. adjust the benefit in accordance with the increased risk

What is the contract provision that allows the insurer to nonrenew health converage if certain events occur? a. optionally renewable b. noncancellable c. guaranteed renewable d. conditionally renewable

d. conditionally renewable

The patient protection and affordable care act includes all of the following provisions EXCEPT: A. right to appeal B. no lifetime dollar limits C. coverage for preventative benefits D. individual tax deduction for premiums paid

d. individual tax deduction for premiums paid The Act does not offer tax deductions only tax credit

What type of health insurance policy provides an employer with funds to train a replacement if a value employee becomes disabled? a. key person disability b. group disability c. disability buy-sell d. business overhead

d. key person disability

The insuring clause of a disability policy usually states all of the following, EXCEPT? a. Identities of the insurance company and the insured b. That a loss must result directly from stated accidents or sickness c. That insurance against loss is provided d. The method of premium payment

d. the method of premium payment the insuring clause is usually on the first page and is a general statement that defines the insurance agreement and identifies the insured and the insurance company and states what kind of loss (peril) is covered

Health Savings Accounts (HSAs) are designed to do what

help individuals save for qualified health expenses

Attending Physician Statement

if the underwriter deems it necessary and APS will be sent to the applicant's doctor to be completed. It is to find accurate info on the applicant's medical history.

What is capital sum?

in case of loss of sight or accidental dismemberment, a percentage of the principal sum will be paid by the policy. This benefit varies according to the severity of the injury

Investigative Consumer (inspection)

includes information on an applicant's character, general reputation, personal habits, and mode of living that is obtained through an investigation. this report can include interviews with associates, friends, neighbors this report may not be performed unless applicant is clearly and accurately informed of the report in writing. the consumer report notification is usually part of the application. at the time that the application is completed, the agent will separate the notification and give it to the applicant.

Travel accident

limited policy that provides coverage for death or injury resulting from accidents occurring while a fare-paying passenger is on a common carrier. The benefits are only paid if the loss occurs during the time of travel.

Accident-only

limited policy that provides coverage for death, dismemberment, disability or hospital and medical care resulting from an accident. since it is limited it will only pay for losses resulting from accidents and not sickness

Long-term Care Expense

long term care policies provide benefits for medically necessary services which one receives in a nursing home or perhaps own home

sickness

normally defined as an illness which first manifests itself while the policy is in force

A participating insurance policy may do which of the following?

pay dividends to the policyowner