Types Of Health Policies
An association could buy group insurance for its members if it meets all of the following requirements EXCEPT
-Has a constitution and by-laws. -Holds annual meetings. -Is contributory. - Has at least 50 members. All of the above characteristics would make an association group eligible for buying group insurance, except the group must have at least 100 members.
A client has a new individual disability income policy with a 20-day probationary period and a 30-day elimination period. Ten days later, the client breaks their leg and is off work for 45 days. How many days of disability benefits will the policy pay?
15 Days ( A probationary period refers to the amount of time that coverage is not available for illness-related disabilities, so it would not apply to a broken leg. The elimination period, however, is the time that must elapse between the onset of the disability and when benefits will start being paid. In this case, the individual is considered disabled for 45 days, and the benefits will start to be paid after 30 days. So, the client will receive benefits for 15 days.)
Which of the following disability income policies would have the highest premium?
15-day waiting period / 10-year benefit period The waiting, or elimination, period is the time from the onset of disability the insured must wait before becoming eligible for benefits. The shorter the waiting period, the higher the premium. After the insured satisfies the waiting period, they will receive benefits from the insurer for a limited benefit period. The longer the benefit period, the higher the premium. A disability income policy that includes the shortest waiting period and the longest benefit period would be most expensive.
A health insurance policy that pays a lump sum if the insured suffers a heart attack or stroke is known as
A critical illness policy covers multiple illnesses, such as heart attack, stroke, renal failure, and pays a lump-sum benefit to the insured upon the diagnosis (and survival) of any of the illnesses covered by the policy.
What is the capital sum in Accidental Death and Dismemberment (AD&D) coverage?
A percentage of the principal sum
Which is NOT a characteristic of group health insurance?
A policy is issued to each insured individual. The actual policy, called the "master contract", is issued to the group sponsor only; the individuals covered under the policy are issued certificates of insurance as proof that they are covered under the master contract. Dependents are covered under group plans. If the group contract is terminated, insureds may convert to individual policies without having to provide proof of insurability.
In health insurance, what is considered a sickness?
An illness that first arises while the policy is in force
A small hardware store owner is involved in a car accident that renders him totally disabled for half a year. Which type of insurance would help him pay for expenses of the company during the time of his disability?
Business Overhead Expense (BOE) Policy insurance is sold to small business owners for the purpose of reimbursing the policyholder for various business overhead expenses during a period of total disability. Expenses such as rent, utilities, and employee salaries are covered.
What types of groups are eligible for group health insurance?
Employer-sponsored and association-sponsored groups
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?
Employers are no longer forced to offer HMO plans. The HMO Act of 1973 forced employers with more than 25 employees to offer an HMO plan as an alternative to their regular health plans. The part of the act requiring dual choice has expired and has not been reinstated.
Long-term care coverage may be available as any of the following options EXCEPT
Endorsement to a health policy. Long-term care insurance policies may be purchased on an individual or group basis, or as an endorsement to a life insurance policy.
An insured is involved in an accident that renders him permanently deaf, although he does not sustain any other major injuries. The insured is still able to perform his current job. To what extent will he receive Presumptive Disability benefits?
Full Benefits (Presumptive Disability plans offer full benefits for specified conditions. These policies typically require the loss of at least two limbs (Loss of use does not qualify in some policies.), total and permanent blindness, or loss of speech or hearing. Benefits are paid, even if the insured is able to work.)
What are the two types of Flexible Spending Accounts?
Health care accounts and dependent care accounts
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.
What are the three basic coverage?
Hospital Surgical Medical
What type of hospital policy pays a fixed amount each day that the insured is in the hospital?
Hospital indemnity
What are the three types of basic medical expense insurance?
Hospital, surgical and medical
In which of the following locations would skilled care most likely be provided
In an institutional setting
In which of the following locations would skilled care most likely be provided?
In an institutional setting
A typical Accidental Death & Dismemberment policy covers all of the following losses EXCEPT
Income Accidental Death & Dismemberment policies cover loss of body parts or life only.
Regarding long-term care coverage, as the elimination period gets shorter, the premium
Increases ( LTC policies also define the benefit period for how long coverage applies, after the elimination period. The benefit period is usually 2 to 5 years, with a few policies offering lifetime coverage. Obviously the longer the benefit period, the higher the premium will be; and the shorter the elimination period, the higher the premium will be.)
What type of injuries and services will be excluded from major medical coverage?
Injuries caused by war intentionally self-inflicted injuries injuries covered by workers compensation regular dental/vision/hearing care custodial care elective cosmetic surgery
Insurance that would pay for hiring a replacement for an important employee who becomes disabled is called
Key employee disability insurance The business is the contract holder and would receive benefits if a specified key employee became disabled.
In group insurance, what is the name of the policy?
Master policy
An insured is involved in a car accident. in addition to general, less serious injuries, he permanently loses the use of his leg and is rendered completely blind. The blindness improves a month later. To what extent will he receive presumptive disability payments?
No benefits
An insured is covered by a disability income policy that contains an accidental means clause. The insured exits a bus by jumping down the steps and breaks an ankle. What coverage will apply?
No coverage will apply, since the injury could have been foreseen. An accidental means clause states that if the insured meant to do whatever caused their injury, no coverage applies since the resulting injury should have been foreseen.
Can Alzheimer's disease be excluded from coverage under a long-term care policy?
No, organic cognitive disorders, such as Alzheimer's or Parkinson's must be covered
All of the following are the most common variations in a Long-Term Care policy EXCEPT
Number of family dependents. Long-Term Care policies can vary in the number of days of confinement covered, the number of home health visits covered, the amount paid for nursing home care, and other contract provisions.
Don has both a basic expense and a major medical policy. He is injured in an accident, which requires several major surgeries. This quickly exhausts Don's basic expense policy. What must Don do before his major medical policy can pick up where the basic expense policy left off?
Pay a special deductible on his major medical policy Before a major medical policy pays benefits not covered under an exhausted basic medical policy, the insured must pay a corridor deductible
Under what type of care do insurers negotiate contracts with health care providers to allow subscribers access to health care services at a favorable cost?
Preferred Provider Organization (PPO)
Under the Accidental Death and Dismemberment (AD&D) coverage, what type of benefit will be paid to the beneficiary in the event of the insured's accidental death?
Principal sum
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 is the period of time after a policy is in effect before claims arising out of an illness are covered. This is to prevent adverse selection, persons waiting until they have been exposed to a cause of loss before purchasing coverage.
Which of the following is NOT provided by an HMO?
Reimbursement Traditionally the insurance companies have provided the financing while the doctors and hospitals have provided the care. The HMO concept is unique in that the HMO provides both the financing and the patient care for its members. The HMO provides benefits in the form of services rather than in the form of reimbursement for the services of the physician or hospital.
What type of care is Respite care?
Relief for a major care giver Respite Care is designed to provide relief to the family care giver, and can include a service such as someone coming to the home while the care giver takes a nap or goes out for a while. Adult day care centers also provide this type of relief for the caregiver.
What is the purpose of COBRA?
The Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) requires any employer with 20 or more employees to extend group health coverage to terminated employees and their families after a qualifying event.
An employee becomes insured under a PPO plan provided by his employer. If the insured decides to go to a physician who is not a PPO provider, which of the following will happen?
The PPO will pay reduced benefits. The group health plan will not pay the full amount charged by the non-PPO doctor.
With key person disability insurance, who pays the policy premiums?
The business (employer)
Question 3 of 15 In a Disability Income policy, all of the following are considered presumptive disabilities EXCEPT
The definition of a presumptive disability varies by company, but generally includes a total loss of sight, speech, hearing or the use of any two limbs.
Who are the parties in a group health contract?
The employer and the insurer
Which of the following statements concerning group health insurance is CORRECT?
The employer is the policyholder.
Who chooses a primary care physician in an HMO plan?
The individual member
What does the amount of disability benefit that an insured can receive depend on?
The insured's income at the time of policy application
What is the period of coverage for events such as death or divorce under COBRA?
The maximum period of coverage under COBRA is 36 months, in the event of the covered employee's death or divorce.
Which statement is true about hospital, surgical, and medical coverage packages?
The three basic packages can be sold separately and package
Which of the following is true regarding optional benefits with long-term care policies?
They are available for an additional premium. Optional benefits, such as guarantee of insurability and return of premium, are available with Long-Term Care policies for an additional premium.
What is the role of the gatekeeper in an HMO plan?
To control costs for the services of specialists
Why do HMOs encourage members to get regular checkups?
To help catch health problems early when treatment has the greatest chance for success (i.e. preventive care)
Insurers usually do not reimburse claimants for 100% of income lost due to disability. What is the reason for insurer limitations on coverage amounts?
To provide an incentive for the insured to return to work.
What is the purpose of respite care in long-term care insurance?
To provide relief for a major caregiver (usually a family member)
What is the purpose of a buy-sell agreement for health insurance policies?
To specify how the business will pass between owners when one of them dies or becomes disabled
What is a fee-for-service health plan?
Under a fee-for-service plan, providers receive payments for each service provided
Social Security Supplement (SIS) or Social Security Riders would provide for the payment of income benefits in each of the situations below EXCEPT
When the amount payable under Social Security is more than the amount payable under the rider.
Can an insured who belongs to a POS plan use an out-of-network physician?
Yes, but the copays and deductibles may be higher
types of coverage do not require the insured to pay a deductible
first-dollar coverage
How are HMO territories typically divided?
geographic areas
What is the main principle of an HMO plan?
preventive care
Health care insurers (carriers) include
stock mutual insurance companies, Blue Cross/Blue Shield, health maintenance organizations (HMOs) preferred provider organizations (PPOs)