Question 1

J has an Accidental Death and Dismemberment policy with a principal sum of $50,000. While trimming the hedges, J cuts off one of his fingers. What is the MAXIMUM J will receive from his policy?

Accepted Answer

$25,000

Question 2

Which of the following statements BEST describes how a policy that uses the "accidental bodily injury" definition of an accident differs from one that uses the "accidental means" definition? Double indemnity Benefits are taxable More restrictive Less restrictive

Accepted Answer

Less restrictive. A policy that uses the "accidental bodily injury" definition of an accident is less restrictive than the one that uses the "accidental means" definition.

Question 3

Employee group health plans of fifty or more participants have all of the following characteristics EXCEPT employers submit the group premium to the insurance company employers receive master contracts employees receive certificates of insurance employees are required to take physical examinations before being enrolled

Accepted Answer

Employees are required to take physical examinations before being enrolled. Employee groups health plans of fifty or more participants do not require physical examinations before enrollment.

Question 4

An employer pays the premium for a health policy covering an employee. If the employee is disabled and unable to work, the employer will receive the policy benefits. This type of coverage is known as

Accepted Answer

Key Employee Disability Income

Question 5

An insured dies due to an accident. The insured's beneficiary receives $50,000. Under an Accidental Death and Dismemberment policy, this benefit is known as the

Accepted Answer

The Principal Sum. It's the amount under an AD&D policy that is payable as a death benefit if death is due to an accident.

Question 6

Which of the following statements about Business Overhead Expense Disability Insurance is INCORRECT? Overhead expenses include those usual necessary expenses incurred in the continuation of a business during the disability of the owner Premiums are tax deductible as a business expense Benefits are treated as taxable income Owner's salary and profits are part of the overhead expenses

Accepted Answer

Owner's salary and profits are part of the overhead expenses. Business Overhead Expense Disability Insurance does not consider the owner's salary and profits as part of the overhead expenses.

Question 7

Due to an accident, an insured receives $5,000 for the loss of an arm. Under an Accidental Death and Dismemberment policy, this benefit is known as the

Accepted Answer

The Capital Sum is the amount provided for accidental dismemberment or loss of eyesight.

Question 8

What is issued to each employee of an employer health plan?

Accepted Answer

Certificate

Question 9

Which of the following is the reimbursement of benefits for the treatment of a beneficiary's injuries caused by a third party? Indemnity Subrogation Legal action Consideration

Accepted Answer

Subrogation. Subrogation is the right for an insurer to pursue a third party that caused an insurance loss to the insured. This is done as a means of recovering the amount of the claim paid to the insured for the loss.

Question 10

The benefits under a Disability Buy-Out policy are

Accepted Answer

payable to the company or another shareholder

Question 11

Which of the following statements is correct regarding an employer/employee group health plan? Each employee receives a duplicate policy from the insurer The employer receives a master policy and the employees receive certificates The employer and the employees both receive actual policies The employer receives the master policy and the employees receive a summary of benefits

Accepted Answer

The employer receives a master policy and the employees receive certificates

Question 12

The federal income tax treatment of employer-provided group Medical Expense insurance can be accurately described as

Accepted Answer

Employee's premiums paid by the employer is tax-deductible to the employer as a business expenditure.

Question 13

Which contract permits the remaining partners to buy-out the interest of a disabled business partner?

Accepted Answer

Disability Buy-Sell

Question 14

An employer pays the premium for a health policy covering an employee. If the employee is disabled and unable to work, the employer will receive the policy benefits. This type of coverage is known as

Accepted Answer

Key Employee Disability Income. The type of coverage where an employer pays the premium for a health policy covering an employee and receives the policy benefits when an employee becomes disabled and is usable to work is known as Key Employee Disability Income.

Question 15

S is employed by a large corporation that provides group health coverage for its employees and their dependents. If S dies, the company must allow his surviving spouse and dependents to continue their group health coverage for a maximum of how many months under COBRA regulations?

Accepted Answer

36 Months

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Chapter 1 Health Flashcards

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