Lesson 4 Health and Accident Insurance Flashcards
Health Insurance is available on an…..
Individual Basis through a Group Plan
Federal Gov’t plans:
Medicare, Medicaid, SS system
______ is considered the purist form of accident insurance and is typically sold through group insurance plans.
AD&D (Accidental Death and Dismemberment)
True of False:
Most employee sponsored health insurance plans also carry an optional AD&D Benefit.
True
Examples of Valued Contracts
Life Insurance
AD&D
Disability Income
Medical Expense insurance is based on a contract of_________
Reimbursement
pays benefits for nonsurgical dr’s fees rendered in a hospital. sometimes pays for home and office calls.
Most Individual health insurance policies are written on ________ basis and require an application and usually evidence of insurability
Non Participating
Group Insurance Policies are written on a _______ basis.
Participating
In North Carolina, who is eligible for group health insurance
small business owners with as few as 2 taxable full time employees
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.
True
In a cancelable policy, the insurer must produce written notification of contract termination ____ days in advance.
45
Optionally Renewable Policy
give the insurer the option to terminate policies by class, however, only on a specific date as stated in the contract
Conditionally Renewable Policy
allows that policies can be renewed unless one or more stipulated conditions occur, excluding and condition pertaining to the insured’s health.
Guaranteed Renewable Policy
State the policy must be renewed as long as premiums are paid or until a specified age
NonCancelable Policy
Cannot be canceled, nor can the premiums be changed. Benefits are predetermined as a fixed amount
Main Factors that influence computation of health insurance premiums:
Interest Expenses Types of benefits Morbidity Claims Experience Insured's age and occupation
Group health insurance issued by mutual companies pays_____
dividends
Stock companies issue_____
experience rated refunds
2 major factors used to determine whether dividends or refunds will be issued…
- Expenses
2. Claims Costs
Premium Reserve Funds
Represent the insurers liability for losses that have NOT occurred but for which premiums have been paid.
Loss Reserve Funds
Represent the insurers liability for losses that HAVE occurred but for which settlement is not yet complete.
Section 125 plans are also called______
Cafeteria Plans
B.O.E.
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
B.O.E. Insurance provides payments for such things as:
- employee salaries
- mortgage or rent
- company owned autos and auto insurance
- utilities
- property and liability insurance premiums
- leased equipment
Disability buy-outs can be paid in a lump sum or can be designated for periodic payments. They also have a lengthy_____
elimination period, as long as 2 years to establish that disabled person will not be returning to company
Fictitious Group
group that has gathered together strictly for purpose of obtaining insurance
Contributory Plan
employee must contribute to premium payments
generally 75% of eligible employees must be insured
How long are conversion privileges typically:
30-31 days in which participant must make the conversion
COBRA
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
Group Basic Medical Insurance
provides for hospital, surgical, and physicians expenses.
Group Major Medical Insurance
differ from individual major medical plans with respect to the benefits. Groups can provide much larger base of coverage and provide a lower deductible.
True or False:
North Carolina Law requires group medical plans to provide maternity benefits
TRUE
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
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.
Accidental Death and Dismemberment Insurance
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
Disability Income Insurance
type of health insurance coverage. provides regular, periodic income should the insured become disabled from illness or injury
Master Policy
issued to employer under group plan. contains insuring clauses defining employee benefits. employees recieve individual certificates
Noncontributory Plans
employer pays all
NonParticipating Policies
insurance where insured is not entitled to share in the divisible surplus of company.
Participating Policies
policy owner receives shares of divisible surplus of company
Reimbursement Contract
payment of health policy benefits to insured based on actual medical expenses incurred
Renewability Provisions
Options that allow the policy owner to renew a policy before its termination date
Reserves
funds held by company to help fulfill future claims
Valued Contract
contract of insurance that pays a stated amount in the event of a loss.
