Chapter 6
An insured's long-term care policy is scheduled to pay a fixed amount of coverage of $120 per day. The long-term care facility only charged $100 per day. How much will the insurance company pay?
$120 a day
Benefit periods for individual short-term disability policies will usually continue from
6 months to 2 years
A small company offers group health insurance to its employees, but recently has decided to terminate the health insurance contract, leaving the workers without insurance. What can the employees do regarding their insurance?
Convert to an individual health policy
Which of the following types of LTC is NOT provided in an institutional setting?
Home health care (home health care is given in the home, but skilled nursing, intermediate, and custodial care may all be provided in an institutional setting)
After a person's employment is terminated, it is possible to obtain individual health insurance after losing the group health coverage provided by the employer. Which of the following is NOT true?
Incorrect: By law, the new, individual policy must provide the same benefits as the group insurance policy Correct: the employee can convert from group to individual insurance within 31 days of termination; the premium of the individual health insurance policy can be higher than the original policy; continuation of group coverage need not include dental, vision, or prescription drug benefits
Which of the following answers does NOT describe the principal goal of the Preferred Provider Organization.
Incorrect: Provide medical services only from physicians in the network Correct: provide the subscriber a choice of hospitals; provide medical services at a reduced cots; provide the subscriber a choice of physicians
All of the following are true about group disability income insurance EXCEPT
Incorrect: coverage applies both on and off the job (*Employees who are injured on the job are covered by Workers Compensation insurance. Group disability Income Insurance is designed to cover employees only while they are off the job, so the coverage is considered to be nonoccupational in nature*) Correct: the waiting period starts at the onset of the injury or sickness; the longer the waiting period, the lower the premium; benefits are usually short term
Which is true regarding HMO coverage?
It is divided into geographic territories
Which of the following is considered a presumptive disability under a disability income policy?
Loss of two limbs
Certain conditions, such as dismemberment or total and permanent blindness, will automatically qualify the insured for full disability benefits. Which disability policy provision does this describe?
Presumptive disability (presumptive disability is a provision that is found in most disability income policies which specifies the conditions that will automatically qualify the insured for full disability benefits)
What type of care is Respite care?
Relief for a major care giver
Which of the following would an accident-only policy not cover?
Surgery to repair a wrist damaged by tendonitis
Hospital indemnity/hospital confinement indemnity policy will provide payment based on
The number of days confined in a hospital
What is the purpose of COBRA?
To provide continuation of coverage for terminated employees
lump sum
a payout method that pays the beneficiary the entire benefit in one payment
deductible
a specified dollar amount that the insured must pay first before the insurance company will pay the policy benefits
riders
added to the basic insurance policy to add, modify or delete policy provisions
sickness
an illness, which first manifests itself while the policy is in force
accidental bodily injury
an unforeseen and unintended injury that resulted from an accident rather than a sickness
comprehensive coverage
health insurance that provides coverage for most types of medical expenses
Regarding long-term care coverage, as the elimination period gets shorter, the premium
increases
tax exempt
not subject to taxation
underwriting
risk selection and classification process
taxable
subject to taxation
cancellation
termination of an in-force insurance policy, by6 either the insured or the insurer, prior to the expiration date shown in the policy
nonrenewal
termination of an insurance policy at its expiration date by not offering a continuation of the existing policy or a replacement policy
cafeteria plan
type of employee benefit plan that allows insureds to choose between different types of benefits