Lesson 11 Health Insurance Underwriting

Question 1

Insurance companies reserve the right to have individual underwriting within certain group policies because:

Answer 1

they look at small groups more closely. if there is one “very risky” person among the group the whole group may be required to make high premiums payments to compensate.

Question 2

3 most important factors in classifying risks

Answer 2

1. physical condition
2. moral hazards
3. occupation

Question 3

4 Risk ratings

Answer 3

• Preferred- low premium, better than average
• Standard- Normal premium, standard terms and rates
• Substandard- high premium, higher risk
• Uninsurable- decline coverage altogether

Question 4

3 Primary Factors involved in establishing premiums

Answer 4

1. Morbidity
2. Interest
3. Expenses

Question 5

True or False:

In individual plans, premiums paid for personal income insurance by an individual are taxed.

Answer 5

True

Question 6

Are disability benefits tax free to recipients?

Answer 6

Yes

Question 7

In group plans, are premiums paid by for disability income insurance by employers considered tax deductible?

Answer 7

Yes

Question 8

True or False:

If a person is self employed all medical care including premiums is tax deductible

Answer 8

True

Question 9

Are premiums for employees that are also family members fully deductible ?

Answer 9

Yes

Question 10

Treatments that can be considered deductible medical expenses include:

Answer 10

prescriptions

• insulin
• hospital expenses
• physician/surgeon fees
• nursing care
• dental care
• rehabilitative treatments
• medical insurance premiums

Question 11

Medical Cost Management utilizes 4 general approaches:

Answer 11

1. Mandatory 2nd opinions
2. Pre-Certification Review
3. Ambulatory surgery
4. Case management

Question 12

Ambulatory Surgery

Answer 12

performed on outpatient basis

Question 13

Case Management

Answer 13

professional arrangement and coordination of health services.

Question 14

Disability Income Insurance

Answer 14

Health coverage that provides regular, periodic incomeif insured is disabled or ill

Question 15

Mandatory 2nd opinion

Answer 15

cost control measure, to be eligible for benefits they must get 2nd opinion before before receiving non life threatening surgery

Question 16

Medical Cost Management

Answer 16

controlling how policy holders utilize their policies

Question 17

Medical Expense Insurance

Answer 17

pays benefits for non surgical dr fee’s rendered in hospital. sometimes pays for home and office calls

Question 18

Pre-Certification

Answer 18

insurers approval of insured entering hospital. many policies require this to keep costs down

Question 19

Premium Factors

Answer 19

morbidity, interest, expenses

Question 20

Risk Factors

Answer 20

physical condition, moral hazards, occupation

Question 21

Substandard Risk

Answer 21

under average or impaired insurance risk due to physical condition, family history, occupation, dangerous habits, etc.