Chapter 9: Other Provisions and Clauses

Question 1

The ____ _____ is the insurer’s promise to pay benefits, located on the _____ _____.

Answer 1

Insuring Clause
Policy Face

Question 2

TF: Insuring clauses typically contain a statement that “benefits are subject to all the provisions, conditions, and exclusions of the policy.”

Answer 2

True

Question 3

The _____ ______ describes the promises exchanged between the insured and the insurer as evidenced by the payment of premiums, statements made by the insured in the application, and the insurer’s promise to pay benefits under the policy terms. This clause is usually found on the ____ ____ in the “Frequency of Premium Payments” provisions

Answer 3

Consideration Clause
Policy Face

Question 4

The _____ ______ ______ is the provision that describes how and when benefits are paid. Disability policies generally make periodic payments of disability income benefits, while hospital, medical, and accidental death and dismemberment policies make lump sum payments.

Answer 4

Benefit Payment Clause

Question 5

TF: 10 Day Free Look = Starts at Delivery

Answer 5

True

Question 6

TF: Some state have a 30 day Free Look from date of delivery for Long-term Care and Medicare Supplement policies.

Answer 6

True

Question 7

The ____ _____ provides the name of the insurer and insured, a summary of the policy coverage, conditions and exclusions, and the term of the policy, with expiration date. This also states whether or not and how the policy may be renewed.

Answer 7

Policy Face

Question 8

Policies containing a _____ ______ _____ or provision for suspension of coverage must state whether premiums are reduced or refunded or coverage is suspended for the period of military service.

Answer 8

Military Service Exclusion

Question 9

___-_____ _______ clauses protect the insurer from adverse selection

Answer 9

Pre-Existing Conditions

Question 10

___-____ _____ are conditions or the existence of symptoms for which medical advice, diagnosis, care, or treatment was recommended or received within no more than six months before the date of the enrollment of the policy.

Answer 10

Pre-Existing Conditions

Question 11

A _____ ______ is the time between the effective date of the policy and the date coverage begins for all or certain physical conditions. This protects the insurer from paying claims caused by an insured’s pre-existing conditions.

Answer 11

Probationary Period

Question 12

The _____ _______ is a type of deductible based on time, not dollars. Often confused with the probationary period, this is the period of time from which accident, illness, or disability begins, until benefits are paid.

Answer 12

Elimination Period

Question 13

A _____ of _____ provision provides for the continuation of coverage without payment of premiums if the insured becomes totally and permanently disabled.

Answer 13

Waiver of Premium

Question 14

_____ ______ occurs when the insured again becomes disabled from the same or related event or condition that caused the prior disability.

Answer 14

Recurrent Disability

Question 15

________ is the agreed upon proportions for which the insurer and the insured share payment of certain benefits or services under the policy coverage. These proportions are usually 80% for the insurer and 20% for the insured.

Answer 15

Coinsurance

Question 16

_________ are payments the insured makes for benefits or services provided under the policy coverage. These may be made to the insurer or the medical personnel or facility, depending on the policy.

Answer 16

Copayments

Question 17

TF: Coinsurance = Percentage
Copayments = Dollar Amounts

Answer 17

True

Question 18

A _______ is the amount owed by the insured for benefits or services received before the insurer will pay benefits. The policy must state the amounts for benefits or services under the policy coverage.

Answer 18

Deductible

Question 19

_____ ______ are the types of benefits or services provided under the policy coverage. The policy must state the types of benefits and services covered and the conditions and limitation on the coverage.

Answer 19

Eligible Expenses

Question 20

_______ or _____ ______ - A policy may require that the insured or medical providers obtain approval from the insurer before performing a medical procedure. Benefits or services which requiring these are payable only upon obtaining that approval.

Answer 20

Preauthorization
Preadmission Certificate

Question 21

____, ____ and _____ charges are where the insurer pays an amount for each procedure or treatment based on the average charges in that geographic area

Answer 21

Usual, Reasonable, and Customary

Question 22

TF: Lifetime, Annual or Per Cause Maximum Benefit Limits
A policy may set a limit on all or certain benefits on a lifetime, annual, or per cause basis. Once the insurer has paid benefits reaching or exceeding the limit, the insurer is no longer obligated to pay for those benefits.

Answer 22

True

Question 23

TF: Transplant coverage may be offered in some health insurance policies. It may be included in the policy coverage, or added as a rider.

Answer 23

True

Question 24

In medical expense insurance, the term _______ does not mean a transfer of ownership; instead it is a transfer of benefits from the policyowner to the medical provider. Under this arrangement, the insurer pays benefits directly to the medical providers.

Answer 24

Assignment

Question 25

TF: Assignment = Transfer of Ownership

Answer 25

False - transfer of BENEFITS

Question 26

TF: Insurers are required to pay on valid health insurance claims within a certain amount of time. If the insurer fails to do so, the insurer will be required to pay interest on the claim. Interest is calculated from the day the health insurance claim payment should have been made.

Answer 26

True

Question 27

The ____ of ______ provision lays out the terms and conditions under which the amount of coverage under the policy can be reduced. This provision must be clearly labeled in the policy.

Answer 27

Reduction of Coverage

Question 28

Which of the following best describes the Reduction in Coverage provision of a health policy?

Select one:
a. The Reduction in Coverage Provision sets the terms and conditions under which the amount of coverage can be reduced.
b. The Reduction in Coverage Provision sets the exact date coverage will be reduced in the future.
c. The Reduction in Coverage Provision prevents the insurer from ever reducing insurance coverage.
d. The Reduction in Coverage Provision prevents the insured from ever reducing insurance coverage.

Answer 28

A

Question 29

For health insurance policies, the insuring clause is contained in the:
Select one:
a. Consideration clause
b. Policy face
c. Benefit payment clause
d. Free look

Answer 29

B

Question 30

This clause or provision requires the insured to pay a set or fixed dollar amount each time a particular medical service is used:
Select one:
a. A co-pay clause
b. A co-insurance clause
c. A deductible clause
d. A maximum benefit clause

Answer 30

A

Question 31

Which of the following answers best describes the Interest on Claims Proceeds provision?

Select one:
a. The insurer must pay interest on late claim payments to the insured.
b. The insurer does not have to pay interest on any claim payments to the insured.
c. The insurer must pay interest on all claim payments to the insured.
d. The insurer is exempt from interest charges on late claim payments to the insured.

Answer 31

A

Question 32

All of the following are true regarding recurrent disability, EXCEPT:

Select one:
a. Recurrent disability occurs when the insured becomes disabled from the same or related event or condition that caused a prior disability.
b. Recurrent disability means that the insured has a total disability and returns to work, but can only perform some of the duties they could perform prior to the disability.
c. Disability income policies may consider a recurrent disability a new or existing claim, depending on the policy.
d. Waiting periods for a recurrent disability must be noted in the policy.

Answer 32

B

Question 33

What is the purpose of coinsurance and deductibles?
Select one:
a. Cost-sharing
b. Prevent adverse selection
c. Prevent malingering
d. Coordination of benefits

Answer 33

A

Question 34

Which of the following terms best describes conditions for which prior medical advice or treatment was received?
Select one:
a. Pre-existing conditions
b. Probationary period
c. Recurrent disability
d. Benefit payment clause

Answer 34

A

Question 35

The consideration clause in an accident and health policy states that:
Select one:
a. The applicant pays the initial premium
b. Insurable interest must exist between the parties involved
c. Any attachments to the policy constitute the entire contract of insurance
d. Certain claims will be excluded under the policy

Answer 35

A

Question 36

Which health insurance provision/clause describes the promises exchanged between the insured and the insurer, as evidenced by premium payments and the insured’s statements in the application, and the insurer’s promise to pay benefits, as stated in the policy?
Select one:
a. Insuring clause
b. Consideration clause
c. Policy face
d. Benefit payment clause

Answer 36

B

Question 37

The period of time between an employee’s coming to work at a firm that offers group health insurance to its employees and the time when he or she is covered by that insurance is called:
Select one:
a. Probation period
b. Grace period
c. Waiver period
d. Elimination period

Answer 37

A

Question 38

Which health insurance provision provides for continuation of coverage without payment of premiums, if the insured becomes totally and permanently disabled?
Select one:
a. Coinsurance
b. Copayment
c. Waiver of premium
d. Elimination period

Answer 38

C

Question 39

When does the probationary period of a health insurance policy begin?
Select one:
a. When the producer collects the completed application
b. When the insurer approves the application
c. Upon the policy effective date
d. Upon the date that coverage begins

Answer 39

C

Question 40

Which of the following is a way that insurers manage risk?

Select one:
a. Benefit Payment Clause
b. Consideration Clause
c. Probationary Period
d. Insuring clause

Answer 40

C

Question 41

All of the following statements are true about the elimination period, EXCEPT:
Select one:
a. The elimination period is the time between the effective date of the policy and the date coverage begins.
b. The elimination period is the period of time from the date of accident, illness or disability, until benefits are paid.
c. Benefits are not paid during the elimination period.
d. The elimination period is common in disability income and long-term care policies.

Answer 41

A

Question 42

TF: The elimination period is the period of time from which accident, illness or disability begins, until benefits are paid. Benefits are not paid during the elimination period. A probationary period is the time between the effective date of the policy and the date coverage begins for all or certain physical conditions.

Answer 42

True

Question 43

Which of the following best describes coinsurance?
Select one:
a. The agreed upon proportion for which the insurer and insured share payment of benefits under coverage
b. Payments the insured makes for benefits or services provided under policy coverage
c. The amount owed by the insured for benefits or services received before the insurer will pay benefits
d. Types of benefits provided by the policy

Answer 43

A