Introduction To Health Insurance

Question 1

Health insurance is designed to cover two perils

Answer 1

Accident (unintentional bodily injury caused by an unforeseen event)

Sickness (a need for medical care do to a cause other than an accident)

Question 2

Hospital/medical expense coverage

Answer 2

Helps pay doctor and hospital bills

Question 3

Disability income insurance

Answer 3

Pays a stated amount of income to the insured when an accident or sickness leaves them unable to work

Question 4

Dental expanse insurance

Answer 4

Similar to medical expense coverage except that it pays dental bills

Question 5

Long term care insurance

Answer 5

Provides coverage for medical and non medical care for individuals (chronic illness, cognitive impairment,…)

Question 6

Federal health insurance programs

Answer 6

Tricare (active duty and retired military personnel)

Veterans Benefits (discharged military service)

Medicare (healthcare primarily for senior citizens and recipients of social security)

Medicaid (health care for individuals and families who are or become poor)

Social Security Disability (for eligible individuals who become totally and permanently disabled)

Question 7

Limited vs Comprehensive coverage

Answer 7

Comprehensive policies offer broad coverage health care services

Limited policies provide benefits for one type of loss

Question 8

Limited plans can be characterized by

Answer 8

Limited perils (only one type of peril or situation)

Limited benefits (limited to a stated amount)

Price to proposed insured (must have a prominent thing on first page stating the coverage is limited)

Question 9

Accident-Only Policy

Answer 9

Only cover accidents and exclude any other kind of sickness or disease

Question 10

Specified or dread disease

Answer 10

Policies were originally developed to cover one or one type of catastrophic illness like cancer or heart disease

Today these policies may cover a lot of life threatening illnesses

Policy cover lllnesses that are unlikely to affect everyone everyone, but are very expensive for those diagnosed

Question 11

Hospital income (indemnity) insurance

Answer 11

Pays a flat dollar amount as a daily benefit for each day that the insured is hospitalized as an impatient

Question 12

Credit disability insurance

Answer 12

If the consumer (debtor) becomes disabled, the policy’s benefit is paid to the creditor (lender) to pay off the loan

When lenders extend credit for a large purchase they often require this

Question 13

Blanket coverage

Answer 13

Group insurance where the group members are identified as all the persons engage in similar activity (company picnic, passengers on plane, players/spectators of sporting event, etc)

Question 14

Prescription drug coverage

Answer 14

Insureds are reimbursed for their prescription drug expenses using standard claim forms

Question 15

Vision care

Answer 15

Covers eye exams
Cost of lenses and frames
Cost of contact lenses
Other corrective items

Question 16

Hearing insurance

Answer 16

Limited plan covers cost of hearing exams and some or all of the cost of hearing aids

Question 17

Common health insurance exclusion

Answer 17

Intentional self inflicted injuries
War
Elective cosmetic surgery 
Worker’s compensation 
Attempted felony