Chapter 6. Types of Health Insurance Policies

Question 1

What does the amount of disability benefit that an insured can receive depend on?

Answer 1

The insured’s income at the time of policy application

Question 2

In group insurance, what is the name of the policy?

Answer 2

Master policy

Question 2

What is the primary purpose of disability income insurance?

Answer 2

To replace income lost due to a disability

Question 3

What do individual insureds receive as proof of their group health coverage?

Answer 3

Certificate of Insurance

Question 4

In order to be eligible for coverage by an HSA, an individual must also be covered by what type of health plan?

Answer 4

High Deductible Health Plan (HDHP)

Question 5

Who are the parties in a group health contract?

Answer 5

The employer and the insurer

Question 6

What is the main principle of an HMO plan?

Answer 6

Preventive care

Question 7

What type of hospital policy pays a fixed amount each day that the insured is in the hospital?

Answer 7

Hospital indemnity

Question 8

What is the purpose of COBRA?

Answer 8

To allow continuation of health insurance coverage for terminated employees

Question 8

What is the capital sum in Accidental Death and Dismemberment (AD&D) coverage?

Answer 8

A percentage of the principal sum

Question 8

What types of groups are eligible for group health insurance?

Answer 8

Employer-sponsored and association-sponsored groups

Question 9

What is a fee-for-service health plan?

Answer 9

Under a fee-for-service plan, providers receive payments for each service provided

Question 10

Can Alzheimer’s disease be excluded from coverage under a long-term care policy?

Answer 10

No, organic cognitive disorders, such as Alzheimer’s or Parkinson’s must be covered

Question 10

What is the role of the gatekeeper in an HMO plan?

Answer 10

To control costs for the services of specialists

Question 10

What types of injuries and services will be excluded from major medical coverage?

Answer 10

Injuries caused by war, intentionally self-inflicted injuries, injuries covered by workers compensation, regular dental/vision/hearing care, custodial care, and elective cosmetic surgery

Question 11

What are the three types of basic medical expense insurance?

Answer 11

Hospital, surgical and medical

Question 11

What is the purpose of respite care in long-term care insurance?

Answer 11

To provide relief for a major caregiver (usually a family member)

Question 12

Can an insured who belongs to a POS plan use an out-of-network physician?

Answer 12

Yes, but the copays and deductibles may be higher

Question 13

How are HMO territories typically divided?

Answer 13

Geographic areas

Question 14

In what type of health plans are providers paid for services in advance, regardless of the services provided?

Answer 14

Prepaid plans

Question 15

What is the purpose of a buy-sell agreement for health insurance policies?

Answer 15

To specify how the business will pass between owners when one of them dies or becomes disabled

Question 15

With key person disability insurance, who pays the policy premiums?

Answer 15

The business (employer)

Question 16

What type of health insurance would pay for hiring a replacement for an important employee who becomes disabled?

Answer 16

Key-person disability insurance

Question 17

In health insurance, what is considered a sickness?

Answer 17

An illness that first arises while the policy is in force

Question 17

What are the two types of Flexible Spending Accounts?

Answer 17

Health care accounts and dependent care accounts

Question 18

Who chooses a primary care physician in an HMO plan?

Answer 18

The individual member

Question 19

Under what type of care do insurers negotiate contracts with health care providers to allow subscribers access to health care services at a favorable cost?

Answer 19

Preferred Provider Organization (PPO)

Question 20

How can an HMO member see a specialist?

Answer 20

Referral by the primary care physician

Question 21

What is the term for a period of time immediately following a disability during which benefits are not payable?

Answer 21

Elimination period

Question 22

Why do HMOs encourage members to get regular checkups?

Answer 22

To help catch health problems early when treatment has the greatest chance for success (i.e., preventive care)