Ch. 2 - Accident and Health Insurance Basics

Question 1

An unforseen and unintended injury that resulted from an accident rather than a sickness.

Answer 1

accidental bodily injury

Question 2

an agreement between an insurer and insured in which both parties are expected to pay a certain portion of the potential loss and other expenses

Answer 2

coinsurance

Question 3

health insurance that provides coverage for most types of medical expenses

Answer 3

comprehensive coverage

Question 4

an arrangement in which an insured must pay a specified amount for services “up front” and the provider pays the remainder of the cost

Answer 4

copayment

Question 5

the portion of the loss that is to be paid by the insured before any claim may be paid by the insurer

Answer 5

deductible

Question 6

someone relying on the insured for support

Answer 6

dependent

Question 7

a person enrolled in a health insurance plan, an insured (doesn’t include dependents of the insured)

Answer 7

enrollee

Question 8

unable to meet financial obligations

Answer 8

insolvent

Question 9

NAIC

Answer 9

national assoc. of insurrance commissioners

Question 10

an organizations composed of ins. commissioners from all 50 states, the distric of columbia and the US territories, formed to resolve insurance regulatory issues

Answer 10

NAIC

Question 11

conditions for which the insured has received diagnosis, advice, care, or treatment during a specific time period prior to the application for health coverage

Answer 11

pre-existing conditions

Question 12

added to the basic insurance policy to add, modify or delete policy provisions

Answer 12

riders

Question 13

an attempt to persuade a person to buy an insurance policy; it can be done orally or in writing

Answer 13

solicitation

Question 14

a period of time that mus pass after a loss occurs before the insurer starts paying policy benefits

Answer 14

waiting period

Question 15

an illness that first manifests itself while the policy is in force

Answer 15

sickness

Question 16

not premeditated, or intentional. unforseen unintended injury resulting from an accident vs illness

Answer 16

accident

Question 17

unequal exchange of values. you pay a small premium in exchange for possible a large claim. nature of health ins. contract

Answer 17

aleatory

Question 18

between insurer and insured; nature of health ins. contract

Answer 18

personal

Question 19

take it or leave it nature of health ins. contract. not negotiable

Answer 19

adhesion

Question 20

one - sided promise nature of health ins. contract

Answer 20

one-sided promise

Question 21

nature of health ins. contract where certain conditions must be met; all neccessry info must be obtained. typically through underwriting process.

Answer 21

conditional

Question 22

Most health policies will pay the accidental death benefits if the death is caused by an accident and occurs within how many days?

Answer 22

90 days

Question 23

In insurance, what is the term used for cause of loss?

Answer 23

Peril

Question 24

During the application process for health insurance, a producer is trying to obtain creditable information about the applicand that would help underwriters determine if the risk is insurable. In what role is the producer acting?

Answer 24

Field underwriter

Question 25

Under a credit disability policy, payments to the creditor will be made for the insurer until what point in time?

Answer 25

Until the period of disability ends or until the debt is repaid

Question 26

What are the two types of expenses that are covered by health insurance?

Answer 26

Expenses related to health care, and expenses that compensate for loss of ncome.

Question 27

What type of hospital policy pays a fixed amount each day that the insured is in the hospital?

Answer 27

Hospital indemnity

Question 28

Whose responsibility is it to inform an applicat for health insurance about the insurer’s information gathering practices

Answer 28

The Agent

Question 29

people who are more likely to submit insurance claims are seeking insurance more often than preferred risks.

Answer 29

Adverse Selection

Question 30

In health insurance, the policy itself and the insurance application form what?

Answer 30

The entire contract

Question 31

If an insurer decides to obtain medical info from different sources in order to determine the insurability of an applicant, who must be notified of the investigation.

Answer 31

The applicant

Question 32

If an agent makes a correction on the application for health insurance, who must initial the correct answer?

Answer 32

The applicant

Question 33

If an applicant does not receive his or her insurance policy, who would be held responsible?

Answer 33

The Agent

Question 34

When should an agent obtain a statement of good health from the insured?

Answer 34

When the premium was paid upon policy delivery and not at the time of application

Question 35

Who is a field underwriter

Answer 35

the agent/producer

Question 36

An illness that first arises while the policy is in force

Answer 36

Sickness

Question 37

What is the capital sum in accidental death and dismemberment (AD&D) coverage?

Answer 37

A percentage of the principal sum

Question 38

Who must sign a health insurance application?

Answer 38

The policy owner; the insured (if different), and the agent

Question 39

In medical expense contracts, what is the term that describes the payment method when the insured is responsible for paying the medical expenses, and the the insurer pays directly to the insured?

Answer 39

Reimbursement

Question 40

What is the entire contract in health insurance underwriting?

Answer 40

The application and the policy issued

Question 41

whose responsibility is it to determine that all the questions on an insurance application are answered?

Answer 41

The agents

Question 42

During which stage in the insurance process do insurers evaluate info that identifies adverse selection risks?

Answer 42

underwriting

Question 43

What is the term used for a written request for an insurer to issue an insurance contract based on the provided information?

Answer 43

Application

Question 44

Who is responsible for paying the cost of a medical exam required in the process of underwriting?

Answer 44

Insurer

Question 45

Under a credit disability policy, payments to the creditor will be made for the insurer until what point in time?

Answer 45

Until the period of disablity ends or until the debt is repaid.

Question 46

To comply with fair credit reporting act, when must a producer notify an applicant that a credit report may be requested?

Answer 46

At the time of application

Question 47

What type of hospital policy pays a fixed amount each day that the insured is in the hospital?

Answer 47

Indemnity

Question 48

An insurer wishes to compare the info given in an ins. app. with previous ins. app.s by the same applicant but for diff. companies. What organization will help the insurer accomplish this?

Answer 48

The Medical information Bureau (MIB)

Question 49

When is the insurability conditional receipt given?

Answer 49

When the premium is paid at the time of application

Question 50

a risk that is below the insurers standard of avg. risk guidelines for a number of reasons… poor health, dangerous occupation, dangerous avocations. Some are rejectted outright, while others will be accepted for coverage at a higher premium.

Answer 50

substandard risk

Question 51

Which benefits would a disabllity plan most likely pay?

Answer 51

income lost by insured’s inability to work

Question 52

A percentage of the principal amount

Answer 52

capital amount

Question 53

AD&D pay a _____ amount in a lump sum for the loss of sight in one eye or the loss of one limb.

Answer 53

Capital

Question 54

AD&D pays out the ____ amount in a lump sum for death or often the loss of both limbs or loss of sight in both eyes.

Answer 54

Prinicipal

Question 55

What is an important feature of a dental expense insurance plan that is NOT typically found in a medical expense insurance plan?

Answer 55

Diagnostic and preventive care

Question 56

Can a person with HIV be declined for medical coverage solely base on HIV status?

Answer 56

No

Question 57

The HIV ______ form provides the insurance company with authorization to test for the presence of the HIV virus

Answer 57

consent

Question 58

Under an AD&D policy, the death benefit will be paid if the accidental death occurs within ____ days of the accident.

Answer 58

90

Question 59

Who has the authority to make changes to an insurance policy?

Answer 59

insurers executive officer

Question 60

The provision in a health insurance policy that ensures that the insurer cannot refer to any document that is not contained in the contract

Answer 60

entire contract clause

Question 61

If an accident happens within the grace period will insurance pay?

Answer 61

yes

Question 62

defines the rights and duties of both the insurer and policy holder. Although wording may change from one insurer to another the provisions are essentially the same and are required by law to be included in all health policies. wording may be altered, provided the changes wouldn’t be detrimental to policy holder or beneficiary.

Answer 62

uniform individual accident and sickness provisions

Question 63

a mandatory provision of life insurance policies. The period of time after the premium date in which premiums may still be paid before the policy lapses for nonpayment of the premium.

Answer 63

31 day grace period

Question 64

under uniform required provisions, proof of loss under a health insurance policy normally should be filed within ___ days

Answer 64

90

Question 65

specifies that claims are to be paid immediately upon written proof of loss

Answer 65

time of payment claims

Question 66

Spells out the insured’s duty to provide the insurer with reasonale notice in the event of a loss

Answer 66

notice of claim

Question 67

upon receipt of a notice of claim, the company must supply what to the insured within a specified number of days?

Answer 67

claims forms

Question 68

Insurance code requires that each policy must include what be given to the insurer within 20 days after the occurrence or commencement of any loss covered by the policy or as soon thereafter as is reasonably possible

Answer 68

written notice of claim

Question 69

Which provision states that the insurance company must pay medical expense claims immediately

Answer 69

Time of payment claims

Question 70

Which provision concerns the insured’s duty to provide the insurer with reasonable notice in the event of a loss?

Answer 70

Notice of claim

Question 71

how soon, under the “proof of loss” provision, must the claimant submit a proof of loss

Answer 71

90 days

Question 72

If it is not possibly for a claimant to comply with the 90 day rule on providing proof of loss the time parameter may be extended to.. unless claimant is not legally competent to comply

Answer 72

1 year

Question 73

Payments for loss of life benefits are paid to the …

Answer 73

designated beneficiary

Question 74

If there is no designated beneficiary payment proceeds are to be paid to the deceased insured’s ___

Answer 74

estate

Question 75

Claims other than death benefits are to be paid to the _____ or the _____ estate, unless otherwise assigned.

Answer 75

Insured, insured’s

Question 76

The payment of claims provision states that the claims must be paid to _______ unless the death proceeds need to be paid to a beneficiary

Answer 76

the policy owner

Question 77

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?

Answer 77

unlimited

Question 78

under an individual disability policy the minimum schedule of time in which claim payments must be made to an insured is

Answer 78

Monthly

Question 79

A policy that covers medical costs for a particular medical condition such as cancer or heart disease

Answer 79

dread disease policy

Question 80

a health insurance policy that pays a lump sum if the insured suffers a heart attack or stroke is known as

Answer 80

critical illness

Question 81

hospital policy pays a fixed amount each day that the insured is in a hospital?

Answer 81

indemnity

Question 82

Health coverage becomes effective when

Answer 82

first premium has been paid and application has been approved

Question 83

with a conditional receipt, insurance coverage is effective the date of the receipt, so long as…

Answer 83

the application is approved

Question 84

What phase begins after a new policy is delivered

Answer 84

free-look period

Question 85

an underwrite may or may not reject an application based off genetic characteristics, marital status, or sexual orientation

Answer 85

may not

Question 86

temporary insuring agreements

Answer 86

conditional receipts

Question 87

The 3 rating classifications that denote the risk of the insured

Answer 87

standard
substandard
preferred

Question 88

True or false: MIB reports come from docs and hospitals

Answer 88

false

Question 89

agents observations about the applicant that can assist in underwriting

Answer 89

producer/agents report

Question 90

includes info on an applicant’s character, general reputation, personal habits, and mode of living that is obtained through investigation.

Answer 90

investigative consumer report

Question 91

Temporarily Covers members of a particular group

Answer 91

Blanket policy

Question 92

Limits coverage to one I’ll see or one limiting group of coverings; written as stand alone policies or as a part of major med.

Answer 92

Specified policy