Chapter 6 Pt 4

Question 1

L has major medical policy with 500 deductible and 80/20 coinsurance. L is hospitalized and sustains a 2500 loss. What is the maximum amount that l wil have to pay of deductible

500
1000 20% of entire bill
2500 entire bill
900 deductible +20% of bill after deductible (20% of 2000)

Answer 1

500 deductible out of remaining 2000
Insurer will pay 80% (1600)
Insured will pay 20% (400)

Question 2

Ray has individual major medical policy that requires coinsurance payment. Ray very rarely visits his physician and would prefer to pay the lowest premium possible. Which

80/20
90/10
50/50
75/25

Answer 2

50/50

Question 3

The less the insurer must pay with coinsurance payments the

Answer 3

Lower the payments will be

Question 4

If more than one family member covered under same major medical policy is injured in the same accident family only has to pay one deductible

Common accident provision
Integrated deductible
Carry over provision
Elimination period

Answer 4

Common accident provision

Question 5

Under this provision ony one deductible applies for all family members involved in same accident

Elimination period
Carryover provision
Common accident provision

Answer 5

Common accident provision

Question 6

Policy begins in January. His policy contains carryover provision. In November he has small claim less than his deductible. Which is true

Deductible will be waived
Insured is now eligible for an integrated deductible until new policy year
Insured may carry over amount of this year’s expenses to next year which will help satisfy next yera’s deductible

Answer 6

Insured may carry over amount of this year’s expenses to next year which will help satisfy next year’s deductible

Question 7

If insured did not incur sufficient medical costs during year to meet deductible any medical expenses incurred during last three months may be carried forward to next year offsetting total deductible costs for that year

Common accident provision
Flay deductible
Carryover provision

Answer 7

Carryover provision

Question 8

Insured is required to pay for each claim possibly resulting in more than one deductible being paid in given year

Flat deductible aka occurrence deductible
Common accident provision
Integrated deductible

Answer 8

Flat deductible aka per occcurrence deductible

Question 9

Main difference bwetween coinsurance and copayments

Copayment is set dollar amount
Coinsurance is set dollar amount
With copayments insured pays all of cost

Answer 9

Copayment is set dollar amount

Question 10

Which of following is not an exclusion in medical expense ins policies

Coverage for dependents
Military duty
Self inflicted injuries
Routine dental care

Answer 10

Coverage for dependents

Question 11

Which is true re coinsurance PAID By INSURED

Larger percentage paid by insured lower required premium
Larger percentage paid by insured higher required premium will be
Smaller percentage paid by insured lower premium will be
Smaller percentage paid by insured more consistent premium will be

Answer 11

Larger percentage paid by insured lower premium will be

Question 12

Items that insurer will not provide coverage for are found in

Insuring clause
Benefit payment clause
Exclusions

Answer 12

Exclusions

Question 13

Disability income and long term care policies usually have this in form of elimination period

Time deductible
Carryover provision
Reduction provision
Exclusion provision

Answer 13

Time deductible

Question 14

Decrease in benefits bc of certain specified conditions

Reductions
Exclusions
Eligible expenses

Answer 14

Reductions

Question 15

Ins company will pay an amount for a given procedure based upon average charge for procedure in specific geo area

Usual/reasonable/customary
Lifetime annual per cause
Impairment future guaranteed purchase

Answer 15

Usual reasonable customary

Question 16

Specifies benefit amount max policy will pay during lifetime of insured

Annual limit
Per cause limit
Lifetime limit

Answer 16

Lifetime limit

Question 17

Most a policy will pay each year policy is in force

Annual limit
Per cause limit
Lifetime limit

Answer 17

Annual limit

Question 18

Limit is most a policy will pay for expenses incurred from same or related causes

Annual limit
Lifetime limit
Per cause

Answer 18

Per cause limit

Question 19

May be attached to contract for purpose of eliminating coverage for specifically defined pre existing condition such as back injuries

Impairment
Future increase option
Guaranteed purchase option

Answer 19

Impairment/exclusion rider

Question 20

Which would not increase premium for policyowner

Multiple indemnity rider
Impairment rider
Payor benefit rider
Waiver of premium rider

Answer 20

Impairment rider

Question 21

Expense policy that establishes amount of benefit paid based on prevailing charges which fall within standard range of fees charged for specific procedure by doctor of similar training and experience in that geographic area

Usual customary reasonable
Relative value schedule
Benefit schedule

Answer 21

Usual customary reasonable

Question 22

Guaranteed renewable disability ins policy

Guaranteed to have a level premium for life of policy
Cannot be cancelled by insured before 65
Renewable at insured’s option to a specified age
Renewable at insured’s option to a specified age

Answer 22

Renewable at insured’s option to a specified age

Question 23

Deductible is

Specified dollar amount must be paid before ins co will pay policy benefits

Percentage of medical bill must be paid before services will be rendered

Insurer’s obligation to service provider

Nominal fee for use of insurer’s services

Answer 23

Specified dollar amount that insured must pay first before ins company will pay policy benefits

Question 24

Premium charged for exercising guaranteed instability rider is based upon insured’s

Attained age
Issue age
Assumed age
Average age

Answer 24

Attained age

Question 25

Which rider would not increase premium for policyowner

Multiple indemnity rider
Impairment rider
Payor benefit rider

Answer 25

Impairment rider

Question 26

In health ins if doctor chargers 50 more than what ins co considers usual customary and reasonable extra cost

Is not covered
Must be covered by insurer
Counts toward coinsurance

Answer 26

Is not covered

Question 27

Guaranteed renewable disability policy

Cannot be cancelled by insured before age 65
Is renewable at the insured’s option to a specified age
Is renewable at the option of insurer to specified age of insured

Answer 27

Is renewable at the insured’s option to a specified age

Question 28

Means that insured has right to keep policy until specific age

Noncancellable
Cancellable
Guaranteed renewable

Answer 28

Guaranteed renewable

Question 29

According to rights of renewability rider for cancellable policies, all of following are correct about cancellation of individual ins policy except

Unearned premiums are retained by ins company

Insurer must provide insured a written notice of cancellation

Claims incurred before cancellation must be honored

Answer 29

Unearned premiums are retained by ins company

Question 30

Purchased noncancellable health ins policy 1 year ago. Which would not be reason for ins company to cancel policy

Insured does not pay premium
Insured reaches maximum age limit specified in policy
Within two years of applicationinsurer discovers misrepresentation
Insured is an an accident and incurs a large claim

Answer 30

Insured is in an accident and incurs a large claim

Question 31

Insured purchased noncancellable insurance policy 1 year ago; which circumstance would not be reason for ins co to cancel policy?

Answer 31

Company may not cancel coverag due to covered claims; all reset are allowable reasons for insurer to terminate contract

In accident and incurs large claim

Question 32

Provision describes right to cancel coverage

Renewable provision
Cancellation provision
Policy duration provision

Answer 32

Renewal provision

Question 33

Included in each health ins contract and outlines both insurer and insured right to cancel or renew coverage

Cancellation provision
Renewal provision
Policy duration provision

Answer 33

Renewability provision

Question 34

Guaranteed insurability rider aka

Future increase option or guaranteed purchase option

Guaranteed renewable

Answer 34

Future increase option or guaranteed purchase option

Question 35

Will allow the insured to purchase additional amounts of disability income coverage without evidence of insurability; usually provided number of option dates on which additional purchase option may be exercised

Future decrease option
Guaranteed purchase option
Guaranteed renewable

Answer 35

Guaranteed purchase option

Question 36

Insurer will usually limit amount that may be purchased at each of the option dates to some specified amount such as 500 or 5000

Cancellable
Guaranteed insurability rider
Exclusion clause

Answer 36

Guaranteed insurability rider

Question 37

Must clearly state what conditions policy may be renewed

Face page

Cancellation page
Mandatory provisions page

Answer 37

Face page

Question 38

If insurer reserves right to refuse renewal they must delver or mail written notice of its intention not to renew policy beyond period premiums has been accepted

Noncancellable provisions clause
Face page
Guaranteed renewable

Answer 38

Face page

Question 39

Which of following is not a feature of noncancellable policy

Premiums cannot be increased beyond amount stated in policy
Guarantee to renew coverage usually applies until insured reaches certain age
Insured has right to renew policy for life of contract
Insurer may terminate contract only at renewal for certain conditions

Answer 39

Insurer may terminate contract only at renewal for certain conditions