Oregon Life and Health
Policy issue and delivery
-conditional receipt given when premium paid with application; coverage effective as of the date of application or medical exams whichever is later -statement of good health required if premium is paid at policy delivery
What are some benefits of POS (Point of Service) plan?
-employees do not have to make a decision between the HMO or PPO plans -allows employee to use an HMO provided doctor -allows employee to use a doctor not covered under the HMO -a different choice can be made every time a need arises for medical services
SIMPLE plans require:
-employees must receive a minimum of $5000 in annual compensation -no more than 100 employees (small businesses) -no other qualified plan can be used
consideration
-exchange of something of value -insurer: promise to pay a claim -insured: premium paid and statements on application
What are features of guaranteed renewable provision?
-insured has a unilateral right to renew the policy for the life of the contract -coverage is not renewable beyond insured's age 65 -insured's befits cannot be reduced -can increase policy premium on the policy anniversary date no a CLASS BASIS not individual
An applicant is considered to be high risk, but not so much that the insurer wants to deny coverage. Which of the following are true? -insurer will issue a conditional coverage -insurer can increase the premium -insurer can add exclusions to the policy -insurer can rate up the policy
-insurer can increase the premium -insurer can add exclusions to the policy -insurer can rate up the policy
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? -insurer will issue a conditional coverage -insurer can increase the premium -insurer can add exclusions to the policy -insurer can rate up the policy
-insurer will issue a conditional coverage
Which is TRUE regarding an annuity period -during this period of time the annuity payments grow interest tax deferred -it is also referred to as the accumulation period -is it the period of time during which the annuitant makes premium payments in the annuity -it may last for the lifetime of the annuitant
-it may last for the lifetime of the annuitant annuity period i the time where accumulated money is converted into an income stream, can be lifetime of annuitant or for shorter specified period of time depending on benefit payment option selected
What type of policy contains a coverage that is only activated upon the insured's losses reaching a certain level
-partially-funded plan coverage is only activated upon the insured's losses reaching a certain level, it may take the form of a maximum aggregate limit payable or a maximum limit payable for any one events
based on Human Life Value Approach, what is not used to calculate life value -predicted needs of the family after the insured's death -insured's current and future income -insured's annual expenses -effect of inflation on income over time
-predicted needs of the family after the insured's death uses income, inflation, future earnings, expenses, amount of time until retirement, and time value of money future needs are calculated in Needs Approach
Policy owner of an adjustable life policy can change
-premium -amount of insurance -length of coverage
a medicare SELECT policy does all of the following EXCEPT -provide payment for full coverage under the policy for covered services not available through network providers -provide for continuation of coverage in the event that Medicare select policies are discontinued due to the failure of the Medicare SELECT program -prohibit payment for regularly covered services if provided by non-network providers -make full and fair disclosure in writing off the provisions, restrictions, and limitations of the medicare select policy to each applicant
-prohibit payment for regularly covered services if provided by non-network providers cannot restrict payment for covered services provided by non-network providers if the services are for symptoms requiring emergency care and it is not reasonable to obtain such services through network provider
Which of the following answers does not describe the principal goal of a preferred provider organization (PPO)? -provide medical services only from physicians in the network -provide the subscriber a choice of physicians -provide the subscriber a choice of hospitals -provide medical services at a reduced cost
-provide medical services only from physicians in the network they want to provide choice while effecting same cost-savings by contracting with providers for such services
Insurers authority to transact business
1. admitted/authorized (have certificate of authority) 2. non admitted/unauathorized
insurance contract 4 required elements
1. agreement: offer and acceptance 2. consideration: exchange of something of value 3. competent parties: of legal age and mentally competent 4. legal purpose: must have insurable interest and consent
underwriting process steps
1. application (part 1 and 2) 2. company underwriting 3. risk classification
Ideally insurable risk
1. due to chance 2. definite and measurable 3. statistically predictable 4. not catastrophic 5. randomly selected from a large pool
process of issuing a policy
1. solicitation and sales presentations 2. underwriting (field and company) 3. premium determination 4. policy issue and delivery
An insurance company forwards fixed annuity premiums to their general account, where the money is invested. The guaranteed minimum interest is set at 3%. During an economic downswing, the investments only drew 2.5%. What interest rate will the insurer pay to its policy holders?
3% because they have a guaranteed minimum. If the policy were to draw more than 3% the company will pay the excess.
What is the maximum period of coverage under Oregon state continuation rules for group health insurance?
6 months, after that coverage would end if no application for continued coverage
How many eligible employees must be included in a contributory plan?
75%
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 what?
Adjust the benefit in accordance with the increased risk
Which option best depicts how the eligibility of members for group health insurance is determined?
By conditions of employment. Full time employees must have insurance coverage .
An insurer neglects to pay a legitimate claim that is covered under the terms of the policy. What insurance principle has the insurer violated?
Consideration (the binding force of the policy) the promise to pay in the event of a loss
What is NOT a benefit of a POS plan?
Does not allow guaranteed acceptance of all applicants
Shortly after a replacement transaction on a Medicare supplement policy, the insured decided to cancel the policy, but is insure whether the free-look provision applies. The insured could find that information in the
Notice regarding replacement
An insured pays $1200 annually for her life insurance premium. The insured applies this year's $300 worth of accumulated dividends to the next year's premium, thus reducing it to $900. What option does this describe?
Reduction of Premium
Which of the following is true about license reinstatement? -to reinstate a license a producer must pass a written examination -reinstatement fees may be double the unpaid renewal fee -a license can only be reinstated within 6 months from the renewal date -lapsed licenses cannot be reinstated
Reinstatement fees may be double the unpaid renewal fee
An HSA holder who is 65 years old decides to use the money in the account for a non health expense. What will happen
There will be a tax only due to his age. If younger than 65, he would pay a tax AND pay a 20% penalty
insurer
a company that issues an insurance policy
agent/producer
a legal representative of an insurance company
A tornado that destroys property would be an example of what?
a peril
applicant/proposed insured
a person applying for insurance
representation
a statement believed to be true to the best of one's knowledge
material misrepresentation
a statement that if discovered can alter the underwriting decision
law of agency
acts of the agents within the scope of their authority are deemed to be the acts of the insurer. 3 types of authority: express, implied, and apparent
When the insured purchased his health policy he was a window washer. He has since changed occupations and now manages a library. If the insurer is notified of the inured's change of occupation, the insurer should
adjust the benefit in accordance with the decreased risk if occupation provision allows
warranty
an absolutely true statement
misrepresentation
an untrue statement on the insurance application
alien insurer
another country
Reduction of premium allows policy holder to
apply policy dividends toward next year's premium. The dividend is subtracted from the premium amount, yielding the new premium due for the next year.
implied authority
assumed necessary to conduct business
solicitation of insurance
attempt to persuade a person to buy a policy
Occasional visits by which of the following medical professionals will NOT be covered under LTC's home health care? -community-based organization professionals -attending physician -registered nurses -licensed practical nurses
attending physician
apparent authority
based on agents words and actions
If the annuitant dies during the accumulation period, who will receive the annuity benefits
beneficiary; either the amount paid into the plan or the cash value, whatever is greater
personal contract
between an insurer and an individual
Who contributes in a contributory plan?
both employer and employee to premium payments
conditional
both parties must get certain conditions
Most scheduled plans provide first dollar benefits without
coinsurance and deductibles.
hazard
conditions that increase the probability of a loss; can be physical, moral, or morale; for example leaving matches in front of a child
An applicant for an individual health policy failed to complete the application properly. Before being able to complete the application and pay the initial premium, she is confined to a hospital. This will not be covered by insurance because she has not met the conditions specified in the
consideration clause
Which of the following provisions must be included on the first page of a Medicare supplement policy and states the insurer's right to change premium amounts?
continuation provision
adhesion contract
contracts are accepted by the applicants as is
aleatory contract
exchange of unequal values
premium determination
factors: mortality, interest and expense payment mode: annual, semi annual, quarterly, monthly.
insurable interest
financial interest in the life of another person or in a piece of property
buyer's guide
generic information about insurance policies
higher the frequency of premium payment
higher the premium
morale hazard
indifference to loss
Your client's employer does not offer a copay wide annuity contract. What type of annuity contract could your client obtain?
individual
Consideration (insured and insurer)
insured: promise to pay premiums and health representations made in the application insurer: promise to pay in the event of a loss
What is NOT a feature of guaranteed renewable provision?
insurer can increase the policy premium on an individual loss.
Which of the following ultimately determines the interest rates paid to the owner of a fixed annuity -investment performance of the insured -statewide predetermined annual interest rate -insurer's guaranteed minimum rate of interest -investment performance of the company
insurer's guaranteed minimum rate of interest. Must always pay minimum but if performs well they will pay higher rate
adverse selection
insuring of risks more prone to loss than average risk
The type of dental plan which is incorporated into a major medical expense plan is a
integrated dental plan
fraud
intentional act with the purpose of deceiving another party
concealment
intentional withholding of material information
What best describes annually renewable term insurance
level term insurance
All other factors being equal, what would the premium be like in a survivorship life policy as compared to the premium in a joint life policy?
lower because based on join age however pays on last death rather than first death, thus extending the life expectancy and lowering the premium
legal purpose
must have insurable interest and consent
If a nonresident producer for this state changes home address, what must the producer do to comply with the Oregon rules?
nothing, nonresident producer in OR does not have to notify the department of change of residence. Resident producers must notify Department within 30 days
competent parties
of legal age and mentally competent
agreement
offer and acceptance
unilateral contract
only one party is legally bound to a contract, most insurance contracts (the insurer is bound to promise)
Which renewal option does NOT guarantee renewal and allows the insurance company to refuse renewal of a policy at any premium due date?
optionally renewable
foreign insurer
out of state
physical hazard
physical conditions, such as smoking
illustrations
presentation of non guaranteed elements
A long term care shoppers guide must be presented at what point? Determined by the NAIC
prior to the time of application
indemnity
restoring the insured to the condition that existed before loss
underwriting
risk selection and classification
insurance transaction
solicitation, negotiations, or effectuation of a contract
policy summary
specific information about policy features and elements
types of ownership for insurers
stock mutual: dividends to policy owners
moral hazard
tendency toward increased risk
peril
the cause of loss; for example a fire
the limits of a health reimbursement account are set by
the employer
The limits of health reimbursement account are set by
the employer. They have no statutory limit, can rollover at the end of the year based on employer discretion.
law of large numbers
the larger the number of people with the same exposure to loss, the more predictable the actual loss will be
insured
the person covered by the insurance policy
policyowner
the person who has the rights and privileges in the policy
An Adjustable Life policy everything can be changed by the policy owner except
the type of investment
What is true concerning employer group dental plans
they seldom contain a conversion privilege they are dissimilar to group health plans
Domestic insurer
this state
insurance
transfer of risk of loss from an individual to an insurer
advertisements
truthful and not misleading
risk
uncertainty or change of loss, only insure pure risk, can't insure speculative risk
If a policy includes a free look period of at lest 10 days, the buyer's guide must be delivered to the applicant
with the policy. If no free look period, can be given prior to accepting the initial premium
express authority
written in the contract