Insurance Ch 7

Question 1 of 15 An insured has endured multiple surgeries and hospitalizations for an illness during the summer months. Her insurer no longer bills her for medical expenses. What term best describes the condition she has met? A Stop-Loss Limit B Out-of-Pocket Limit C Maximum Loss Threshold D Maximum Loss Correct! A "stop-loss limit" is a specified dollar amount beyond which the insured no longer participates in the sharing of expenses. a

a

Question 10 of 15 Which of the following provisions is mandatory for health insurance policies? A Intoxicants and narcotics B Physical examination and autopsy C Illegal occupation D Unpaid premiums Correct! Physical examination and autopsy is a mandatory provision required by law. The other answer choices are optional provisions. b

a

Question 11 of 15 The Probationary Period is A The stated amount of time when benefits may be reduced under certain conditions. B The number of days that must expire after the onset of an illness before benefits will be earned. C A specified period of time that a person joining a group has to wait before becoming eligible for coverage. D The number of days the insured has to determine if he/she will accept the policy as received. Correct! The Probationary Period is the waiting period that new employees would normally have to satisfy before becoming eligible for benefits. c

a

Question 12 of 15 An insured submitted a notice of claim to the insurer, but never received claims forms. He later submits proof of loss, and explains the nature and extent of loss in a hand-written letter to the insurer. Which of the following would be true? A The insured must submit proof of loss to the Department of Insurance. B The insured was in compliance with the policy requirements regarding claims. C The claim most likely will not be paid since the official claims form was not submitted. D The insurer will be fined for not providing the claims forms. Correct! If claims forms are not furnished to the insured, the claimant is deemed to have complied with the requirements of the policy if he or she submits written proof of the occurrence, nature of the loss, and extent of loss to the insurer. b

a

Question 13 of 15 An insurance agent proposed an individual health insurance policy that is guaranteed renewable. If the applicant accepts this policy, the insurer agrees that A The insured will always be able to pay the premiums. B The company will continue to renew the policy until the insured has reached age 65. C The company will change the premium rate based upon the insured's health only. D The premium rate cannot be changed for any reason. Correct! As with the noncancellable policy, coverage is generally not renewable beyond the insured's age 65. b

a

Question 14 of 15 A guaranteed renewable health insurance policy allows the A Policyholder to renew the policy to a stated age and guarantees the premium for the same period. B Policy to be renewed at time of expiration, but the policy can be canceled for cause during the policy term. C Insurer to renew the policy to a specified age. D Policyholder to renew the policy to a stated age, with the company having the right to increase premiums on the entire class. Incorrect! Coverage is guaranteed, but rates can be adjusted for the entire class. d

a

Question 15 of 15 What is the main difference between coinsurance and copayments? A With coinsurance, the insurer pays all of the cost. B Coinsurance is a set dollar amount. C Copayment is a set dollar amount. D With copayments, the insured pays all of the cost. Incorrect! With both, copayment and coinsurance provisions, the insured shares part of the cost for services with the insurer. Unlike coinsurance, a copayment has a set dollar amount that the insured will pay each time certain medical services are used. c

a

Question 2 of 15 While a claim is pending, an insurance company may require A An independent examination as often as reasonably required. B The insured to be examined only within the first 30 days. C The insured to be examined only once annually. D An independent examination only once every 45 days. Correct! While a claim is pending, an insurance company may require an independent exam as often as reasonably required. a

a

Question 3 of 15 The premium charged for exercising the Guaranteed Insurability Rider is based upon the insured's A Average age. B Issue age. C Attained age. D Assumed age. Correct! The premium charged for the increase will be based upon the attained age of the insured. c

a

Question 4 of 15 Which of the following is true regarding elimination periods and the cost of coverage? A The shorter the elimination period, the lower the cost of coverage B The longer the elimination period, the higher the cost of coverage C Elimination periods have no effect on the cost of coverage. D The longer the elimination period, the lower the cost of coverage Correct! The "elimination period" is a period of days which must expire after the onset of an illness or occurrence of an accident before benefits will be payable. The longer the elimination period is, the lower the cost of coverage will be. d

a

Question 5 of 15 Under a health insurance policy, benefits, other than death benefits, that have not otherwise been assigned, will be paid to A The spouse of the insured. B The insured. C Creditors. D Beneficiary of the death benefit. Correct! Payments for loss of life benefits are to be made to the designated beneficiary. If no beneficiary has been named, payment proceeds are to be paid to the deceased insured's estate. Claims other than death benefits are to be paid to the insured or the insured's estate, unless otherwise assigned by the insured. b

a

Question 6 of 15 Which of the following riders would NOT increase the premium for a policyowner? A Waiver of premium rider B Multiple indemnity rider C Impairment rider D Payor benefit rider Correct! The impairment rider excludes a specified condition from coverage, therefore, reducing benefits. An insurance company will not charge extra for a rider that reduces benefits. c

a

Question 7 of 15 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 Unearned premiums are retained by the insurance company. B The insurer must provide the insured a written notice of the cancellation. C Claims incurred before cancellation must be honored. D An insurance company may cancel the policy at any time. Correct! This rider allows the insurer to cancel the policy at any time, or at the end of the policy period. Any unearned premium must be returned to the policyholder. If the insurer cancels, the unearned premium will be returned on a pro rata basis. a

a

Question 8 of 15 Ray has an individual major medical policy that requires a coinsurance payment. Ray very rarely visits his physician and would prefer to pay the lowest premium possible. Which coinsurance arrangement would be best for Ray? A 90/10 B 50/50 C 75/25 D 80/20 Correct! After the deductible has been paid, the insurance company will pay a specified amount for a physician's visit, while the insured pays the remaining percentage. This is called "coinsurance". Plans will often be listed in a fraction format, with the first number representing the amount that will be paid by the insurer. The less the insurer must pay with coinsurance payments, the lower the premiums will be. Therefore, Ray should choose the 50/50 plan. b

a

Question 9 of 15 A waiver of premium provision may be included with which kind of health insurance policy? A Basic medical B Hospital indemnity C Dread disease D Disability income Correct! A waiver of premium rider generally is included with guaranteed renewable and noncancellable individual disability income policies. It is a valuable provision because it exempts the insured from paying the policy's premium during periods of total disability. d

a