Health Insurance Study Questions Flashcards
Define accidental bodily injury.
accidental bodily injury is an unforeseen and unintended injury that resulted from an accident rather than a sickness.
what are the 2 types of insurance included in the term “health insurance”?
one type provides coverage for expenses related to health care, and the second is designed to provide payments for “loss of income”
describe the difference between limited and comprehensive policies.
Limited health insurance policies only cover specific accidents or diseases. a comprehensive plan would cover all sickness or accidents that are not specifically exclused.
when is an outline of coverage not required to be delivered at the time of application?
an outline of coverage must be delivered at the time of application or upon delivery of the policy, except in the case of direct response sales because the insurer does not have an opportunity to provide the outline of coverage at the time of application.
who is the field underwriter?
the agent
in a replacement situation, how long must the current policy remain in force?
the current policy may not be cancelled before the new policy is issued so there is no gap in coverage.
what does Errors and Omissions insurance provide?
E & O provides protection against situations that may result in providing inadequate coverage or failure to maintain and service coverage.
what is included in the entire contract?
the entire contract provision states that the health insurance policy, together with a copy of the signed application and any attached endorsements, constitutes the entire contract.
who has the authority to change a policy provision?
only an executive officer of the company, not an agent, has authority to make any changes to the policy.
what are the grace periods for an individual policy?
In most cases the grace period can be not less than 7 days for weekly pay policyes (inudustrial policies), 10 days for monthly pay policies, and 31 days for all other modes.
if a premium has not been paid by the end of the grace period, what will happen to the policy?
coverage will continue in force during the grace period
which provision states to whom the claims are to be paid?
the payment of claims provision specifies to whom claims payments are to be made.
in what way could changing to a more dangerous occupation affect a person’s insurance policy?
if the insured makes a change to a more hazardous occupation, upon claim, benefits will be reduced to that which premiums paid would have purchased assuming the more hazardous occupation.
If the insured misstates his/her age, how will benefits be paid?
if the insured misstated his or her age at the time of the application, the benefits paid will be those, which the premium paid, that would have been purchased at the correct age.
what does other insurance with this insurer provision try to protect against?
this provision provides for a pro rata benefit reduction and return of premium in the event of multiple policies with the same company when the benefits exceed a stated amount.
what does the insurance with other insurers provision protect against?
if the insured has 2 or more policies from different companies that provide benefits on an expense-incurred basis and the policies cover the same expenses, and if the insurance companies were not notified that the other coverage existed, then each insurer will pay a proportionate share of any claim.
what is identified in the insuring clause?
it identifies the insured and the insurance company
where is the consideration clause usually located in the policy?
it is usually located on the first page of the policy.
what is the difference between a guaranteed renewable and noncancellable policy?
the guaranteed renewable provision is similar to the noncancellable provision, with the exception that the insurer can increase the policy premium on the policy anniversary date.
once a disability policy is paying a claim, how long will it pay?
disability income insurance is designed to provide a reasonable and predetermined income to a disabled party for a set period of time subject to a “time deductible” termed an elimination period.
what is the difference between own occupation and any occupation?
a policy that has an “any occupation” provision will only provide benefits when the insured is unable to perform any occupation for which they are suited by reason of education, training, or experience. “own occupation” is the more liberal definition and therefore provides a better benefit for the insured.
how long does an elimination period usually last?
the elimination periods found in most policies range from 30 days to 180 days.
if an insured is disabled and has the waiver of premium benefit, generally what happens to the premiums paid during the waiting period?
this benefit allows the insured, when disabled, to forego paying the premiums once he/she qualifies for benefits.
what is the difference between occupational and nonoccupational coverage?
occupational coverage provides benefits for disabilities resulting from accidents or sicknesses that occur on or off the job. nonoccupational coverage, on the other hand, only covers disabilities that result from accidents or sicknesses occurring off the job.
what is residual disability?
residual disability is the type of disability income policy that provides benefits for loss of income when a person returns to work after a total disability, but is still not able to work as long or at the same level he/she worked before becoming disabled.
what provision can reduce the disability benefit based upon the insured’s current income?
the relation of earnings to insurance provision allows the insurance company to limit the insured’s benefits to his/her average income over the last 24 months.
what is the purpose of a buy-sell agreement?
the buy-sell agreement specifies how the business will pass between owners when one of the owners dies or becomes disabled.
what is the purpose of key person disability insurance?
the key person’s economic value to the business is determined in terms of potential loss of business income which could occur as well as the expense of hiring and training a replacement for the key person.
with key person insurance, who pays the premium, who is the beneficiary and the insured?
the contract is owned by the business, so the premium is paid by the business, and the business is the beneficiary. the key employee would be the insured.
in regards to social security, what does the term “fully insured” mean?
it refers to someone who has earned 40 quarters of coverage, and is therefore entitled to receive Social Security retirement, Medicare, and survivor benefits.
How is the Social Security definition of disability different from that in most disability income policies?
Disability, under Social Security, is defined as the inability to engage in any substantially gainful activity by reason of a medically determinable physical or mental impairment that has lasted or is expected to last 12 months or result in early death. This definition is not as liberal as most definitions of disability found in policies marketed through insurance companies.
what policy covers an employee that is hurt on the job?
workers compensation
