Chapter 8: Health Insurance General

Question 1

TF:While life insurance covers the risk of loss caused by physical death, health insurance covers the risk of loss caused by a “living death.”

Answer 1

True

Question 2

Health insurance is intended to insure the risk of ____ _____ caused by accidental injury or illness and associated medical costs.

Answer 2

Income loss

Question 3

TF: Each state uses different terminology to refer to health insurance, such as “accident and health” or “accident and disability.”

Answer 3

True

Question 4

Two perils of health insurance?

Answer 4

Accidental Injury
Sickness (Medical condition, disease, or illness)

Question 5

Four basic types of losses and benefits for health insurance?

Answer 5

Loss of income from disability,
Medical expense,
Dental expense, and
Long-term care expense.

Question 6

Disability benefits are valued at a _______ of the insured’s lost income

Answer 6

percentage

Question 7

_____ _____ & ______ policies pay a lump sum payment if the insured dies in an accident, or loses major body parts in an accident.

Answer 7

AD&D

Question 8

_______ _________ insurance covers the cost of medical treatments, physician’s fees, hospitalization and other medical costs that ensue when the insured incurs an accidental injury or sickness

Answer 8

Medical Expense

Question 9

______ insurances provides coverage for small groups that are not large enough to apply for group coverage.

Answer 9

Franchise - each individual applicant undergoes underwriting

Question 10

Health insurances is provided by _____ and ______.

Answer 10

Private commercial carriers
the government

Question 11

Health insurance provided by the government is also called _____ insurance and includes (3 examples….)

Answer 11

Social
Medicare
Medicaid
Tricare

Question 12

_______ provides health insurance coverage to ppl over the age of 65

Answer 12

Medicare

Question 13

______is a state and federally funded medical assistance program for financially disadvantaged individuals

Answer 13

Medicaid

Question 14

______ replaced CHAMPUS, the Civilian Health and Medical Program of the Uniformed Services

Answer 14

TRICARE

Question 15

Three types of TRICARE plans available?

Answer 15

Prime
Extra
Standard

Question 16

______ version of TRICARE is the least costly and is like an HMO

Answer 16

Prime

Question 17

_____ version of TRICARE allows enrolees to receive medical care through a PPO arrangement

Answer 17

Extra

Question 18

_____ version of TRICARE allows enrollees to receive medical care from any medical provider, but is the most expensive

Answer 18

Standard

Question 19

Health insurance policies are renewable according to five renewability classes:

Cancellable,
?
?
?
Non-cancellable.

Answer 19

Optionally Renewable
Conditionally Renewable
Guaranteed Renewable

Question 20

Factors affecting health insurance premiums?

Answer 20

Interest,
Expense,
Morbidity, and
Benefits provided by the policy.

Question 21

________ is the rate people are expected to become disabled from accident or sickness in a year

Answer 21

Morbidity

Question 22

For health insurance, _____ policies are often participating, whereas _____ policies are often non-participating

Answer 22

Group
Individual

Question 23

_________ means the policyholder receives shares/dividends of the company surplus.

Answer 23

Participating

Question 24

Two types of reserves in health insurance?

Answer 24

Premium reserves and
Loss reserves (claims reserves).

Question 25

________ are considered a liability for insurers, NOT an asset

Answer 25

Reserves

Question 26

For health insurance claims, processes are slightly _______ complex than life insurance

Answer 26

more

Question 27

Medical expense contracts are _____________ based (meaning the benefit is based on the amount of loss incurred). Whereas life/AD&D and disability pay on a value basis, where a stated amount is paid out

Answer 27

Reimbursement

Question 28

Two types of medical plan basis’s?

Answer 28

Fee for service Basis
Prepaid Basis

Question 29

Basis: With a ______ basis, medical providers are compensated on a service basis rather than a dollar basis.

Answer 29

Prepaid Basis

Question 30

Basis: With a ________ Basis, providers are paid on a “dollar” basis for each service they provide

Answer 30

Fee for Service Basis

Question 31

Medical expense plans may be _______ coverage or limited policies, such as vision plans or cancer coverage.

Answer 31

Specified

Question 32

__________ polices provide broad health care coverage including preventive care, immunizations, outpatient and inpatient care. HMOs are a good example of this

Answer 32

Comprehensive

Question 33

Medical expense plans may pay benefits on a _____ in which coverage is specifically identified by procedure or treatment with a fixed amount.

Answer 33

Schedule

Question 34

Other plans may use the __________ method in which the insurer pays an amount for each procedure or treatment based on the average charges in that geographic area.

Answer 34

Usual, Reasonable, and Customary Charges

Question 35

TF: In an emergency situation, the insured is not limited to the provider list.

Answer 35

True

Question 36

_______ -The term insured refers to individuals who are covered by non-prepaid health plans.

Answer 36

Insured

Question 37

_______ - This term for a participant/member refers to individuals who receive health insurance benefits on prepaid or service plans.

Answer 37

Subscribers

Question 38

Nonparticipating health insurance policies (nonpar) pay dividends to _________, not policyholders.

Answer 38

Shareholders

Question 39

__________ policies tend to have higher premiums because insurers incorporate a deliberate overcharge as a safety margin.

Answer 39

Participating

Question 40

Medical expense insurance may cover all of the following, EXCEPT:
Select one:
a. Accidental injury
b. Physician’s fees
c. Prescriptions
d. Disability income

Answer 40

D

Question 41

TF: Medical expense insurance covers the cost of medical treatments, physician’s fees, hospitalization and other medical costs that ensue when the insured incurs an accidental injury or sickness. Disability income insurance pays a portion of the insured’s income while the insured is disabled and unable to work.

Answer 41

True

Question 42

Which health insurance policy pays periodic benefits to an insured?
Select one:
a. Medical expense
b. Disability income
c. Fee-for-service plans
d. Accidental death and dismemberment

Answer 42

B

Question 43

All of the following are specific types of government health insurance programs, EXCEPT:
Select one:
a. TRICARE
b. Medicare
c. Medicaid
d. HMO

Answer 43

D

Question 44

The principal losses related to accident and health insurance are:
Select one:
a. Loss of income from disability and medical expenses from the cost of medical treatments, physician’s fees, hospitalization and prescriptions
b. Loss of earning power caused by premature death
c. Loss of retirement income caused by prolonged life
d. All of the above

Answer 44

A

Question 45

Which payment method is used to pay medical providers for each service they provide, and only for the medical services insureds use?
Select one:
a. Fee-for-service basis
b. Prepaid basis
c. Service basis
d. Valued basis

Answer 45

A

Question 46

All of the following are type of benefits that are offered under health insurance, EXCEPT:
Select one:
a. Accidental death and dismemberment
b. Dental expense
c. Long-term care policy
d. Traditional IRAs

Answer 46

D

Question 47

Health insurance covers:
Select one:
a. The risk of loss caused by a living death
b. The risk of premature death
c. The risk of prolonged life
d. The risk of liability

Answer 47

A

Question 48

TF: While life insurance covers the risk of loss caused by physical death, health insurance covers the risk of loss caused by a living death.

Answer 48

True

Question 49

Which of the following is not true regarding medical expense policies?
Select one:
a. Covers the insured and the insured’s dependents
b. Perils covered include accidental injury and sickness
c. Benefits may include hospitalization costs and treatments
d. Pays loss of income benefits

Answer 49

D

Question 50

Why is disability insurable with health insurance?
Select one:
a. Because disability may prevent a person from earning an income.
b. Because disability is part of the natural aging process.
c. Because disabilities are costly.
d. Because disability is a life insurance risk.

Answer 50

A

Question 51

TF: Loss of income from disability occurs when an accidental injury or sickness prevents an insured from being able to work. Disability income insurance policies replace income lost while the insured is unable to work.

Answer 51

True