CH 8 Health Insurance Basics Flashcards
What do limited health policies cover?
A specified accident or disease.
Most health policies will pay the accidental death benefits if the death is caused by an accident and occurs within how many days?
90 days.
In health insurance, what is considered a sickness?
An illness that first arises while the policy is in force.
Who is responsible for paying the cost of a medical examination required in the process of underwriting?
The insurer.
Whose responsibility is it to determine that all the questions on an insurance application or answered?
The agents.
If an agent makes a correction on the application for health insurance, who must initial the correct answer?
The applicant.
During which stage in the insurance process do insurers evaluate information that identifies adverse selection risks?
Underwriting.
Who’s responsibility is it to inform an applicant for health insurance about the insurers information gathering practices?
The agents.
During the application process for health insurance, a producer is trying to obtain credible information about the applicant that would help underwriters determine if the risk is insurable. What role is the producer acting?
Field underwriter.
In medical expense contracts, what is the term that describes the payment method when the insured is responsible for paying the medical expenses, and then the insured pays directly to the insured?
Reimbursement.
If an insurer decides to obtain medical information from different sources in order to determine the insurability of an applicant, who must be notified of the investigation?
The applicant.
What type of hospital policy pays a fixed amount each day that the insured is in the hospital?
Hospital indemnity.
Who is a field underwriter?
The agent/producer.
When should an agent obtain a statement of good health from the insured?
When the premium was paid upon policy delivery and not at the time of application.
What is the capital sum in Accidental Death and Dismemberment (AD&D) coverage?
A percentage of the principal sum.
What is the entire contract and health insurance underwriting?
The application and the policy issued.
In insurance, what is the term used for cause of loss?
Peril.
Who must sign a health insurance application?
The policy owner, the insured (if different), and the agent.
In health insurance, the policy itself and the insurance application form what?
The entire contract.
What is adverse selection?
People who are more likely to submit insurance claims are seeking insurance more often than preferred risks.
Under a credit disability policy, payments to the creditor will be made for the insurer until what point in time?
Until the period of disability ends or until the debt is repaid.
What is the term used for a written request for an insurer to issue an insurance contract based on the provided information?
Application.
What are the two types of expenses that are covered by health insurance?
Expenses related to healthcare, and expenses that compensate for loss of income.
If an applicant does not receive his or her insurance policy, who would be held responsible?
The agent.
The insureds health policy only pays for medical costs related to accidents. Which of the following types of policies does the insured have?
A) Accident only
B) Restrictive
C) Accidental death
D) Comprehensive
Accident only.
Which benefits would a disability plan most likely pay?
A) Medical expenses associated with a disability
B) Income lost by the insureds inability to work
C) Rehabilitation costs
D) Copayments
Income lost by the insureds inability to work.
All of the following would be factors in rating a health insurance policy EXCEPT
A) The deductible and copayment selected
B) The nationality of the applicant
C) The occupation of the applicant
D) Type of benefits provided in the contract
The nationaility of the applicant.
When is the insurability conditional receipt given?
A) After the application has been approved and the premium has been paid
B) When an insured individual needs to obtain an insurability receipt for tax purposes
C) If the applicant is approved before the premium is paid
D) When the premium is paid at the time of application
When the premium is paid at the time of application.
Which is generally true regarding insureds who have been classified as preferred risks?
A) They can borrow higher amounts off of their policies
B) They can decide when to pay their monthly premiums
C) They keep a higher percentage of any interest earned on their policies
D) Their premiums are lower
Their premiums are lower.
Medicaid is sponsored by what kind of sources?
A) Federal only
B) State only
C) Both state and federal
D) Private companies
State and federal
Which of the following is the most common time for errors and omissions to occur on the part of an insurer?
A) Application process
B) Policy delivery
C) Policy renewal
D) Underwriting
Policy delivery.
Which of the following would an accident-only policy NOT cover?
A) Amputation of a leg that was burned during a house fire
B) Surgery to repair a wrist damage by tendonitis
C) Hospitalization costs due to a boating accident
D) Death from a motorcycle accident
Surgery to repair a wrist damaged by tendonitis.
A health insurance plan that covers all accidents and sicknesses that are not specifically excluded from the policy is referred to as a
A) Broad plan
B) Comprehensive plan
C) General plan
D) Service plan
Comprehensive plan.
The agent is known as the “field underwriter” because of the information he/she gathers for the insurer. This helps the insurer
A) Reduce the number of staff underwriters
B) Avoid adverse selection
C) Comply with state law
D) Learn about the underwriting process
Avoid adverse selection.
Each of the following factors is a significant consideration in the underwriting of individual health insurance risks EXCEPT
A) Applicant’s physical condition
B) Applicant’s occupation
C) Applicant’s geographical location
D) Applicant’s age
Applicant’s geographical location.
Which is the primary source of information used for insurance underwriting?
A) Application
B) Applicant interviews
C) Medical records
D) Private investigations
Application.
What is the best way to change an application?
A) Erase the previous answer and replace it with the new answer
B) White-out the previous answer
C) Draw a line through the incorrect answer and insert the correct one
D) Start over with a new application
Start over with a new application.
If an applicant for a life insurance policy is found to be a substandard risk, the insurance company is most likely to
A) Charge a higher premium
B) Require a yearly medical examination
C) Lower its insurability standards
D) Refuse to issue the policy
Charge a higher premium.
What phase begins after a new policy is delivered?
A) Elimination period
B) Grace period
C) Free-look period
D) Insurability period
Free-look period
