Health 6 Flashcards
What is the term for a period of time immediately Following a disability during which benefits are not payable?
Elimination Period
Why: The elimination period is a waiting period imposed on the insured from the onset of disability until benefit payments commence. The purpose of the elimination period is to avoid coverage for short-term disabilities.
In Health insurance contracts, the insured is not legally bound to any particular action; however, the insurer is obligated to pay for losses covered by the policy. What contract characteristic does the describe?
Unilateral
Why: In a unilateral contract, only one of the parties is legally bound to fulfill its obligations. The insured makes no legally binding promises. The insurer, however, must pay losses covered by the policy.
What is the main difference between coinsurance and copay?
Copay is a set dollar amount; coinsurance is a percentage of the expenses
Why: A copayment has a set dollar amount that the insured pays each time certain medical services are provided. Coinsurance is a portion of the expenses that the insured and the insurer shares and is expressed as a percentage.
What type of hospital pays a fixed amount each day that the insured is in the hospital?
Hospital Indemnity
Why: A hospital indemnity policy pays a fixed amount each day the insured is hospitalized, regardless of the medical expenses incurred.
When must the Outline of Coverage be provided to the insured?
No later than policy delivery
Why: An Outline of Coverage must be delivered to the applicant at the time of application or upon delivery of the policy.
What are the common exclusions in most health insurance policies?
War, self-inflicted injuries, elective cosmetic surgeries, injuries caused by participating in illegal activities and workers compensations benefits
Why: Most health insurance policies exclude coverage for war and military service, elective cosmetic surgery, injuries caused by participating in illegal activities and self-inflicted injuries. Conditions covered by workers compensation insurance and government plans are also excluded.
What type of health insurance plans cover all accidents and sickness that are not specifically excluded in the policy?
Comprehensive Plans
Why: Comprehensive health plans cover all accidents and sicknesses, with the exception of those conditions specifically stated in policy exclusions.
What are two types of expenses that are covered by health insurance?
Medical expenses and expenses that compensate for loss of income
Why: Health insurance includes coverage for expenses related to health care and for payments for loss of income caused by sickness or an accident.
In health insurance, what is considered a sickness?
An illness that first arises while the policy is in force
Why: Sickness is defined as an illness which first manifests itself while the policy is in force.
What is the entire contract in health insurance underwriting?
The policy with riders and endorsements, plus the copy of the application
Why: The policy, a copy of the application and any endorsements or amendments constitute the entire contract.
what are three types of basic medical expense insurance
Hospital, surgical and medical
Why: The three basic medical expense coverages are hospital, surgical and medical and may be purchased separately or as a package. Basic medical expense coverages usually do not require the insured to pay any deductibles.
Who must sign a health insurance application?
The policyowner, the insured (if different) and the agent
Why: The agent and the policyowner must both sign the application. If the policyowner is not the insured, then the insured must also sign the health insurance application.
If an agent makes a correction on the application for health insurance, who must initial the correct answer?
The applicant
Why: Any changes to information on an application must be initialed by the applicant.
How can health insurance policies be delivered to the insured?
Personally delivered by the agent or mailed
Why: Whenever possible, an agent should personally deliver the policy to the insured; however, it is also acceptable to mail the policy.
What report is used to assess risk associated with a health insurance applicant’s lifestyle and character?
Investigative Consumer Report
Why: An investigative consumer report is used in the underwriting process to assess non medical risk factors related to the applicant’s character, habits and lifestyle. The applicant must be informed of the report in writing.