Ch.7 health Flashcards
Adverse selection
a phenomenon where individuals at higher risk for health issues are more likely to engage with health insurance, potentially leading to higher costs and market instability
Age change
the date halfway between birthdays when the applicant’s age changes to the next higher age
Agent’s report
The agent’s report is where the agent records personal observations about the proposed insured. It is a confidential way for the agent to provide relevant underwriting information to the insurance carrier
Claims experience
an insured’s history of claims or rate of loss. The greater the claims experience, the higher the required premium
Community rating
Insurance carriers generally base community ratings on their overall claim experience and healthcare costs in a geographical area
Constructive delivery
occurs when an insurance carrier gives up all control of a policy and releases it for unconditional delivery to someone acting for the policyholder, including the company’s own agent
Delivery receipt
Insurance companies require producers to obtain signed delivery receipts as proof of delivery. The delivery receipt is important because it can designate the start of the policy’s free-look period
Earned premium
represents the amount of the insurance premium that corresponds to the time period for which the insurer has provided coverage
Unearned premium
the part of the insurance premium that covers future periods of coverage and is considered a liability until the insurer earns it over time as the policy period progresses
Health insurance premium formula
morbidity – interest + expenses
Information and Privacy Protection Act
Each insurer must conform with state and federal laws privacy. This act also prohibits insurers from basing their decisions solely on previous adverse underwriting decisions
Expense factor
also known as the “load,” or “loading factor,” factors the insurer’s operating expenses’ into the premiums. Some of these expenses include commissions, administrative costs, overhead, profits, and regulatory reserves
Inspection report
a report that contains general information regarding the health, habits, finances, and reputation of an applicant. This report is developed by a firm that specializes in rendering this type of service
Medical information Bureau
a service organization that collects medical data on life and health insurance applicants for member insurance companies
Medical report
may be needed to provide further underwriting information. This report may be based on a recent examination with the applicant’s physician or an examination conducted as part of the underwriting process
Moral Hazard
applicant habits or lifestyles that indicate a higher than average level of risk for the insurer. Such habits include excess drinking, recreational drug use, and dishonest business practices
Non-medical
This term refers to an application evaluated without a medical exam
Outline of coverage
describes the basic benefits, conditions, and other terms of an insurance policy without using industry jargon
Policy fee
a small transaction fee charged by some insurers for the first or subsequent policy years
Policy term
the period of time a policy will remain in existence when premiums are being paid. It can also be described as a single renewal period for renewable policies
Premium mode
the frequency of premium payments. If the policy has an annual premium, the insurer can assess an extra charge if premiums are paid quarterly, semiannually, or monthly
Replacement
A legal act, substituting an existing policy or asset with a new one, whether it’s a policy replacement, replacement of property after a loss, or changes in life insurance coverage
Special class
refers to coverage tailored for unique or higher-risk groups, such as individuals with chronic conditions or specific health needs. These policies often offer enhanced benefits and more specialized care compared to standard plans
Special questionnaire
gather more detailed information about a non-medical aspect of the applicant’s life—usually about an activity that often entails a greater than average level of risk
Trial application
an application submitted without the initial premium
Taxation of disability income insurance
if you pay disability insurance premiums with after-tax dollars, benefits are generally tax-free. If premiums are paid with pre-tax dollars or by your employer, the benefits are usually taxable
Taxation of medical expense insurance
premiums for medical expense insurance paid with after-tax dollars are generally tax-deductible and benefits are tax-free. Premiums paid with pre-tax dollars or by your employer usually result in tax-free benefits as well, though you cannot claim a deduction for those premiums again
Mandatory second options
generally include coverage for second medical opinions, alternative treatments, appeal processes, preventive care, and choices of healthcare providers, ensuring that policyholders have access to comprehensive and flexible care options
Pre-Certification review
a process where health insurance companies assess the need and coverage of specific medical services or treatments before they are provided, aiming to ensure appropriateness and manage costs
Ambulatory surgery
refers to surgical procedures that do not require an overnight stay in a hospital
Case management
involves coordinating and managing care for patients with complex needs to improve health outcomes, enhance efficiency, and control costs