Lesson 4 Health and Accident Insurance

Question 1

Health Insurance is available on an…..

Answer 1

Individual Basis through a Group Plan

Federal Gov’t plans:

Medicare, Medicaid, SS system

Question 2

______ is considered the purist form of accident insurance and is typically sold through group insurance plans.

Answer 2

AD&D (Accidental Death and Dismemberment)

Question 3

True of False:

Most employee sponsored health insurance plans also carry an optional AD&D Benefit.

Answer 3

True

Question 4

Examples of Valued Contracts

Answer 4

Life Insurance
AD&D
Disability Income

Question 5

Medical Expense insurance is based on a contract of_________

Answer 5

Reimbursement

pays benefits for nonsurgical dr’s fees rendered in a hospital. sometimes pays for home and office calls.

Question 6

Most Individual health insurance policies are written on ________ basis and require an application and usually evidence of insurability

Answer 6

Non Participating

Question 7

Group Insurance Policies are written on a _______ basis.

Answer 7

Participating

Question 8

In North Carolina, who is eligible for group health insurance

Answer 8

small business owners with as few as 2 taxable full time employees

Question 9

True or False:

North Carolina law mandates that all group health insurance contracts make coverage for alcohol and drug rehabilitation , and mental and nervous disorders available for purchase.

Answer 9

True

Question 10

In a cancelable policy, the insurer must produce written notification of contract termination ____ days in advance.

Answer 10

45

Question 11

Optionally Renewable Policy

Answer 11

give the insurer the option to terminate policies by class, however, only on a specific date as stated in the contract

Question 12

Conditionally Renewable Policy

Answer 12

allows that policies can be renewed unless one or more stipulated conditions occur, excluding and condition pertaining to the insured’s health.

Question 13

Guaranteed Renewable Policy

Answer 13

State the policy must be renewed as long as premiums are paid or until a specified age

Question 14

NonCancelable Policy

Answer 14

Cannot be canceled, nor can the premiums be changed. Benefits are predetermined as a fixed amount

Question 15

Main Factors that influence computation of health insurance premiums:

Answer 15

Interest
Expenses
Types of benefits
Morbidity
Claims Experience
Insured's age and occupation

Question 16

Group health insurance issued by mutual companies pays_____

Answer 16

dividends

Question 17

Stock companies issue_____

Answer 17

experience rated refunds

Question 18

2 major factors used to determine whether dividends or refunds will be issued…

Answer 18

1. Expenses

2. Claims Costs

Question 19

Premium Reserve Funds

Answer 19

Represent the insurers liability for losses that have NOT occurred but for which premiums have been paid.

Question 20

Loss Reserve Funds

Answer 20

Represent the insurers liability for losses that HAVE occurred but for which settlement is not yet complete.

Question 21

Section 125 plans are also called______

Answer 21

Cafeteria Plans

Question 22

B.O.E.

Answer 22

Business Overhead Expense Insurance

A form of disability income coverage designed to pay necessary business overhead expenses, such as rent should the insuredowner become disabled.

premiums are tax deductible

Benefits are taxable as income

Question 23

B.O.E. Insurance provides payments for such things as:

Answer 23

• employee salaries
• mortgage or rent
• company owned autos and auto insurance
• utilities
• property and liability insurance premiums
• leased equipment

Question 24

Disability buy-outs can be paid in a lump sum or can be designated for periodic payments. They also have a lengthy_____

Answer 24

elimination period, as long as 2 years to establish that disabled person will not be returning to company

Question 25

Fictitious Group

Answer 25

group that has gathered together strictly for purpose of obtaining insurance

Question 26

Contributory Plan

Answer 26

employee must contribute to premium payments

generally 75% of eligible employees must be insured

Question 27

How long are conversion privileges typically:

Answer 27

30-31 days in which participant must make the conversion

Question 28

COBRA

Answer 28

requires employers with 20 more more employees to allow employees or family members to continue their group coverage at their own expense , but at group rates for at least 18 months

Question 29

Group Basic Medical Insurance

Answer 29

provides for hospital, surgical, and physicians expenses.

Question 30

Group Major Medical Insurance

Answer 30

differ from individual major medical plans with respect to the benefits. Groups can provide much larger base of coverage and provide a lower deductible.

Question 31

True or False:

North Carolina Law requires group medical plans to provide maternity benefits

Answer 31

TRUE

Question 32

true or false:

Group premium payments made by an employer are tax deductible to the employer and do not count as income to the employee

Answer 32

TRUE

if the insureds out of pocket expenses exceed 7.5% of individuals AGI a tax deduction can be taken for expenses over and above the 7.5% mark.

Question 33

Accidental Death and Dismemberment Insurance

Answer 33

provides payment if the insureds death results from an accident or if the insured accidentally severs a limb above above the wrist or ankle joints or totally and irreversibly loses his or her eyesight

Question 34

Disability Income Insurance

Answer 34

type of health insurance coverage. provides regular, periodic income should the insured become disabled from illness or injury

Question 35

Master Policy

Answer 35

issued to employer under group plan. contains insuring clauses defining employee benefits. employees recieve individual certificates

Question 36

Noncontributory Plans

Answer 36

employer pays all

Question 37

NonParticipating Policies

Answer 37

insurance where insured is not entitled to share in the divisible surplus of company.

Question 38

Participating Policies

Answer 38

policy owner receives shares of divisible surplus of company

Question 39

Reimbursement Contract

Answer 39

payment of health policy benefits to insured based on actual medical expenses incurred

Question 40

Renewability Provisions

Answer 40

Options that allow the policy owner to renew a policy before its termination date

Question 41

Reserves

Answer 41

funds held by company to help fulfill future claims

Question 42

Valued Contract

Answer 42

contract of insurance that pays a stated amount in the event of a loss.