Chapter 18: Health Insurance and Disability Insurance

Question 1

Disability

Answer 1

results from illness or accident perils

Question 2

Disability Insurance

Answer 2

protection replaces income not earned as employee unable to work long or short term from accident or illness

Question 3

Elimination Period

Answer 3

waiting period of individual after they become disabled before they are eligible to receive payments

Question 4

Two definitions of totally disabled

Answer 4

Worker is unable to perform the principal duties of their occupation <- choose not to work in any other occupation

Worker is unable to perform the principal duties of their occupation or any other replacement occupation

Question 5

Benefits and restrictions

Answer 5

dollar amount per week or month and restricted to 60-70% of workers salary using tier based percentage system

Question 6

Period

Answer 6

term but usually to age 65 or retirement

Question 7

Residual Disability Benefit

Answer 7

partial disability payment, allows payments to be made to person working only part time while recovering from disability (partial disability)

Question 8

Rehabilitation Benefit

Answer 8

formula used to compare pre-disability & post disability income to calculate payments making up the difference between the two

Question 9

Disability Income Rider

Answer 9

Secondary to acquire disability income protection on life insurance policies provide for payments such as 10$ for every 1000$ of life insurance

Question 10

Health Insurance Contractual policies

Answer 10

standard health policies do not exist and mandatory and optional provision are passed

Question 11

Entire Contract

Answer 11

written policy, application and endorsement constitute entire agreement

Question 12

Grace period

Answer 12

allows policy to remain in force for short period while premiums is past due. (31 days0

Question 13

When does policy terminate

Answer 13

premiums remain unpaid after grace period and insured is notified

Question 14

reinstatement lapsed contract process

Answer 14

insured provides application with past due premium and insurer issues conditional receipt for reinstatement

Question 15

Incontestable Clause

Answer 15

health insurance contracts contain time limit on certain defences or incontestable clause limiting insurers right to contest claim. After period can only contest claim fraud

Question 16

Claims

Answer 16

file for claim notice and submit incurred losses within time limit. Time limit to pay claim and period for investigation and validation of claim

Question 17

Renewability

Answer 17

most states restrict right to cancel health insurance policy

Question 18

Guaranteed Renewability

Answer 18

Allows insurer to raise premium charges,

Question 19

Noncancellable Health Insurance

Answer 19

insurer cannot increase premium during life of policy,

Question 20

Pre existing conditions

Answer 20

exclusion period in health insurance policy. No payment made for loses arising from health problems insured was treated for or new about. Loses covered after effective date