Texas life and heath insurance
Guaranteed Insurability Rider
- Allows the insured to purchase additional amounts of coverage without evidence of insurability - Premium for additional amount is based on insured's attained age at the time option is exercised
Impairment Rider
- Eliminates coverage for a specifically defined pre-existing condition, such as back injuries - May be temporary or may become a permanent part of the policy
Personally Owned Health Insurance - premium payments _____ - benefits received tax---
- Premium payments nondeductible - Benefits received tax-free
Evidence of Coverage
- The HMO's name, address and phone number, including a toll-free number - A schedule of benefits, copayments, and deductibles - Policy cancellation and nonrenewal provisions, specifying the permissible grounds for cancellation and nonrenewal of coverage and the minimum notice period that will apply
To be eligible for a Health Savings Account, an individual must
- e covered by a High Deductible Health Plan (HDHP) - not be covered by other health insurance (except for...) - must not be eligible for Medicare - not be claimed as dependent on someone's tax return
What percentage of individually-owned disability income benefits is taxable?
0%
Sole proprietors and partners may deduct
100% of the cost of a medical expense plan provided to them and their families because they are considered self-employed individuals, not employees
An insurer must notify the consumer in writing that an investigative consumer report has been requested, within how many days of the initial request?
3 days
How many days' notice must an insurer provide to an insured regarding the lapse of a policy due to outstanding loans?
30 days
When a policy is cancelled for nonpayment of premium, the insurer is required to provide a
30-day written notice
A newborn baby will automatically be covered under a parent's health insurance plan for how many days?
31 days
Policy coverage is automatically reinstated if not refused within... how many days?
45 and is covered immediately following the reinstatement
Under an HMO, child immunization costs cannot be charged for children under what minimum age?
6
Benefit periods for individual short-term disability policies will usually continue from
6 months to 2 years
Most people who itemize their deductions can claim deductions for unreimbursed medical expenses (those that are not covered by health insurance) that exceed
7.5% of their adjusted gross income (AGI).
Insuring Clause
= usually located on the first page of the policy. It is simply a general statement that identifies the basic agreement between the insurance company and the insured identifies the insured and the insurance company and states what kind of loss (peril) is covered.
Which of the following is a feature of a disability buyout plan? A. Taxable benefits B. A short elimination period C. A lump-sum benefit payment option D. Tax deductible premiums
A lump-sum benefit payment option
Gatekeeper Model
A model of HMO and PPO organizations that uses the insured's primary care physician (the gatekeeper) as the initial contact for the patient for medical care and for referrals
Consideration Clause
A part of the insurance contract that states that both parties must give something of value for the transfer of risk, and specifies the conditions of the exchange
Which of the following statements is correct concerning taxation of long-term care insurance? A. Excessive benefits may be taxable. B. Benefits may be taxable as ordinary income. C. Premiums may be taxable as income. D. Premiums are not deductible in any case
A. Excessive benefits may be taxable.
How can a new physician be added to the PPO's approved list?
Agree to follow the PPO standards and charge the appropriate fees
While a claim is pending, an insurance company may require
An independent examination as often as reasonably required.
Under a Key Person disability income policy, premium payments made by ____ and are tax---
Are made by the business and are not tax-deductible.
What is the maximum period of time during which an insurer may contest fraudulent misstatements made in a health insurance application?
As long as the policy is in force
What is it called when a doctor accepts the Medicare approved amount?
Assignment
Managed Care
Attempts to contain costs by controlling participant behavior
Medical Expense Insurance
Basic hospital, surgical and medical policies, and major medical policies
What type of life policies requires a nonforfeiture provision?
Cash value
Which of the following is correct regarding the taxation of group medical expense premiums and benefits? A. Premiums are not tax deductible and benefits are taxed. B. Premiums are not tax deductible and benefits are not taxed. C. Premiums are tax deductible and benefits are taxed. D. Premiums are tax deductible and benefits are not taxed
D. Premiums are tax deductible and benefits are not taxed
Group disability income insurance premiums paid by the employer are
Deductible by the employer as an ordinary business expense.
Which agreement specifies how a business will transfer hands when one of the owners dies or becomes disabled?
Disability Buy-Sell
Health Reimbursement Account (HRA)
Employer-funded plan that reimburses employees only for eligible and substantiated health-care expenses.
T or F? : Short-term disability plans are renewable.
FALSE
The guaranteed purchase option is also referred to as the
Future increase option.
Which of the following is available to employers of all sizes?
HRAs
Carry Over Provision
If the insured did not incur enough expenses during the year to meet the deductible, any expenses incurred during the last 3 months may be carried over to the next policy year to satisfy the new annual deductible
Representation
In regards to insurance applications, representations are statements believed to be true to the best of one's knowledge, but they are not guaranteed to be true
Guaranteed Renewable
Insurer can increase the policy premium (on a class basis only) on the policy anniversary date; insured has the unilateral right to renew the policy for the life of the contract
Noncancellable
Insurer cannot cancel or raise premiums beyond amount stated in the policy
Cancellable
Insurer may cancel the policy at any time or at end of policy period with proper written notice and a refund of any unearned premium paid
Riley reads an agreement on the first page of her policy which includes a list of losses that will be covered by her insurer. What is the name of this agreement?
Insuring Clause
The section of a health policy that states the causes of eligible loss under which an insured is assumed to be disabled is the
Insuring clause
A guaranteed renewable disability insurance policy
Is renewable at the insured's option to a specified age.
Under workers compensation, which of the following benefits are included?
Medical, death, rehab, and income benefits
Which of the following is guaranteed under a variable whole life insurance policy?
Minimum death benefit
A rider attached to a life insurance policy that provides coverage on the insured's family members is called the
Other-insured rider = useful in providing insurance for more than one family member. The type of insurance offered by this rider is usually term insurance, with the right to convert to permanent insurance.
Policies written on a third-party ownership basis are usually written to cover which of the following?
Policyowner's minor children or business associates
Regarding the taxation of Business Overhead policies, premiums are ___ and benefits are tax__?
Premiums are deductible, and benefits are taxed.
What is the initial period of time specified in a disability income policy that must pass, after the policy is in force, before a loss can be covered?
Probationary period
Subrogation
Process by which an insurer seeks recovery of the amount paid to the insured from a third party who may have caused the loss
The annual contribution limit of a Dependent Care Flexible Spending Account is set by
The IRS
A corporation is the owner and beneficiary of the key person life policy. If the corporation collects the policy benefit, then the benefit is received tax free or taxable income?
The benefit is received tax free.
When Linda suffered a broken hip, she notified her agent, in writing, within 12 days of the loss. However, her agent did not notify the insurance company until 60 days after the loss. Which of the following statements correctly explains how this claim would be handled?
The insurer is considered to be notified since the notification to agent equals notification to the insurer. = Notice to the agent equals notice to the insurer. The agent is the insurer's representative.
An insured notifies the insurance company that he has become disabled. What provision states that claims must be paid immediately upon written proof of loss?
Time of Payment of Claims
Under the Physical Exam and Autopsy provision, how many times can an insurer have the insured examined, at its own expense, while a claim is pending?
Unlimited
An insured's flexible premium is invested into a separate account. What type of insurance product did he purchase?
Variable Universal Life
individual policies usually specify
a flat amount
Group disability plans usually specify the benefits based on
a percentage of the worker's income
Reinstatement
a policy can be restored within a specified period of time with proof of insurability
When an individual becomes a member of the HMO, he or she will choose
a primary care physician
Gatekeeper
a primary care physician (PCP) in an HMO plan
Copayments
a specific dollar amount or a percentage of the cost of care that must be paid by the member
In a relative-value approach,
a surgical procedure is assigned an amount of points relative to the maximum coverage allowed for a given surgery.
Deductibles
amounts that must be paid by the patient for medical services before the policy begins to pay
A Major Medical Expense policy would exclude coverage for all of the follow treatments EXCEPT a. Cosmetic surgery. b. Drug addiction. c. Eye refractions. d. Dental care.
b. drug addiction; Treatment for drug and alcohol addiction is provided on a limited basis.
In individual disability income, benefits tax and premiums are tax...?
benefits are not taxable, and premiums are not tax deductible
Stock insurers are owned
by their shareholders/stockholders
For group medical and dental expense insurance, what percentage of premium paid by the employer is deductible as a business expense? A. 50% B. 60% C. 90% D. 100%
d. 100
Health Reimbursement Arrangements (HRAs) are...
employer-funded group health plans from which employees are reimbursed tax-free for qualified medical expenses up to a fixed dollar amount per year
Physical examination and autopsy
gives the insurer the right to examine the insured as often as necessary while a claim is pending & is a mandatory provision required by law
Short-term disability (STD) group plans usually
have a benefit period of less than 2 years
The Time of Payment of Claims provision specifies that claims are to be paid
immediately upon written proof of loss.
Which of the following riders would NOT increase the premium for a policyowner? A. Payor benefit rider B. Waiver of premium rider C. Multiple indemnity rider D. Impairment rider
impairment rider excludes a specified condition from coverage, therefore, reducing benefits. An insurance company will not charge extra for a rider that reduces benefits.
Waiver of premium
in the event of permanent and total disability, premiums will be waived for the duration of the disability
Consumer reports
include written and/or oral information regarding a consumer's credit, character, reputation, or habits collected by a reporting agency from employment records, credit reports, and other public sources
Daily benefits from the LTC policy are received
income tax free
Key Employee Disability are tax...
income tax free
disability income benefits are received
income tax free by the individual
Notice of claim
insured must provide insurer with reasonable notice after loss. Notice is required within 20 days of loss, or as soon as possible
Stop-loss limit
is a specified dollar amount beyond which the insured no longer participates in the sharing of expenses
Family term
is created when a Children's Term Rider and Spouse Term Rider are combined into a single rider which is attached to a whole life policy. Under the Family Term Rider, the entire family is covered under the same policy.
Network model HMO
it contracts with two or more independent groups of physicians to provide medical services to its subscribers
Pre-authorization or prior approval
medical procedures, tests, or hospital stays for which the insured needs to get approval from the insurer
Individual coverage can be written on an occupational or nonoccupational basis; group plans cover only____.
nonoccupational
Major Medical Expense
offer a broad range of coverage under one policy: - Comprehensive coverage for hospital expenses (room and board and miscellaneous expenses, nursing services, and physicians' services); - Catastrophic medical expense protection; and - Benefits for prolonged injury or illness.
FSA benefits may be changed during
open enrollment, unless the circumstances are deemed a Qualified Life Event.
Consideration
parties to a contract exchange something of value
Long-term disability (LTD) group plans usually
pay benefits for 2 years or longer.
Entire contract
policy (with riders and amendments) and copy of the application
Regarding Key Employee Disability Income, premiums are... and benefits are tax,,,
premiums are not deductible to the business but benefits are received income tax free by the business.
Usual/reasonable/customary charges
specifies what amount the insurance company will pay for a given procedure
Employer contributions to Health Reimbursement Accounts are tax ___
tax deductible
The buy-sell coverage benefits are tax...
tax free
Disability Buy-Sell tax....
tax free!
The limits of a health reimbursement account (HRA) are set by
the employer
Health Savings Account (HSA) are owned by
the individual and can use the funds even after leaving job
per occurrence deductible or flat deductible
the insured is required to pay for each claim
Residual disability
the type of disability income policy that provides benefits for loss of income when a person returns to work after a total disability, but is still not able to work as long or at the same level he/she worked before becoming disabled
HMO services are limited for
treatment of mental, emotional or nervous disorders, including alcohol or drug rehabilitation or treatment.
The Health Reimbursement Arrangement (HRA) account allows roll-over of
unused balances at the end of the year at the employer's discretion
