Health Insurance - Basics

Question 1

Health Insurance

Answer 1

Broadly covers may risks, such as loss of income because of disability; the costs of medical care and treatment; and the costs of care not covered by government plans.

Question 2

The common perils which health insurance insures against:

Answer 2

1. ) Accidental Injury;

2. ) Illness

Question 3

Types of health insurance

Answer 3

1. ) Disability Income Insurance;
2. ) Medical Expense Insurance;
3. ) Accidental Death and Dismemberment (AD&D);
4. ) Medicare Supplement
5. ) Long-Term Care;
6. ) Limited Benefit policies (e.g., visions, dental, prescription, etc.)

Question 4

Providers of health insurance

Answer 4

1. ) Commercial insurance companies;
2. ) Health and managed care service providers;
3. ) Governmental insurance providers.

Question 5

Sponsor

Answer 5

The owners of a group health insurance policy (i.e., the employer or association).

Question 6

Certificate of Insurance

Answer 6

Document received by participating members of a group health insurance policy specifying the terms of coverage.

Question 7

Producer’s Role in the Health Insurance Sale

Answer 7

1. ) Asking for insurance applications;
2. ) Providing advice;
3. ) Completing, Accepting and Submitting Applications;
4. ) Scheduling the medical exam (if applicable);
5. ) Collecting Premium payments;
6. ) Issuing receipts
7. ) Delivering the Policy

Question 8

Field Underwriting

Answer 8

The activities that a producer performs when seeking applications for insurance, including requesting information about prospective insureds and helping people fill out applications of coverage.

Question 9

Agent’s Report

Answer 9

Section of a health insurance application documenting a producer’s notes regarding information about an applicant that will be helpful for underwriting.

Question 10

Providing a policy receipt when premiums are paid.

Answer 10

When the applicant submits an initial premium with his or her application, the producer must give the applicant a policy receipt. The receipt indicates the insurer’s liability and its responsibility during the underwriting period before the policy is actually issued.

Question 11

Binding Receipt (Temporary Insurance Agreement)

Answer 11

Guarantees coverage from the time the applicant completes the application (or the medical exam) during the underwriting process.

Question 12

Conditional Receipt

Answer 12

Provides conditional coverage beginning on the date of the application or medical exam so long as the insurer determines the applicant is insurable.

Question 13

Policy of

Information Practices

Answer 13

Informs the applicant of the insurer’s right to collect information from sources other than the application. In addition, it states how the insurer can share that information with third parties.

Question 14

Buyer’s Guide

Answer 14

Explains the applicant’s rights and responsibilities with regard to the type of insurance coverage being applied for.

Question 15

Policy Summary

Answer 15

Outlines the coverages and benefits of the specific policy being applied for.

Question 16

State Insurance Guaranty Fund

Answer 16

Most states maintain a life and health insurance guaranty fund that provides limited financial relief to policyholders in the event their insurer becomes insolvent. In virtually every state with such a fund, producers are prohibited from mentioning it during their marketing and sales activities. The purpose for this requirement is to prevent producers from enhancing a product’s appearance by implying that it is guaranteed by the government.