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Health And Accident Insurance > Test > Flashcards

Test Flashcards

1
Q

Commercial insurers

A

Private insurance companies

Sell for profit

Stock and mutual insurers

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2
Q

Multi-line insurer

A

Sell more than one line of insurance

Commercial insurers

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3
Q

Stock companies

A

Incorporated under state law
Make profit for stockholders

Nonparticipating insures:
Policy holders do not participate in receiving dividends or electing board members

Stock dividends paid to stockholders

Dividends are taxable Bc they’re profit

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4
Q

Mutual companies

A

Owned by their policyholders

Participating insurers:
Receive dividends and elect board members

Dividends are paid to policyholders

Not taxable- return of premium

Unless the dividends sit and collect interest… that is taxable

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5
Q

Mixed insurer

A

Both participating and nonparticipating

Dividends not guaranteed

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6
Q

Strong assessment mutual company

A

Classified by the way they charge premium

Pure assessment mutual company:
Loss-sharing: no premium payable in advance. Each member assessed an individual portion of losses that occur

Advance premium assessment mutual:
Premium charger- if too much then returned as dividends, if too little more paid up to a point

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7
Q

Fraternal benefit societies

A

Mutual

Nonprofit religious, ethnic or charitable organizations that provide insurance to its members

Can’t be just to obtain insurance

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8
Q

Risk retention groups

A

Mutual

Group of people in same profession or industry

Ex, pharmacists

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9
Q

Service providers

A

Offer benefits to subscribers in return for the payment of a premium

HMO and PPO

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10
Q

Reciprocal Insurers

A

Unincorporated groups of individual members that provide insurance for other member via indemnity contracts. Each member acts as the insurer and insured and managed by the Attorney in Fact

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11
Q

Reinsurers

A

Make arrangements with other insurance companies to transfer a portion of their risk to the re-insurer.
Transferring - Ceding company
Assuming - Reinsurer

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12
Q

Captive insurer

A

Insurer established and owned by the parent company to insure the parent company’s loss exposure.

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13
Q

Home service insurers

A

Industrial insurance

sold by home service or debt life insurance companies

Small face amounts, weekly paid premiums

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14
Q

Government insurance

A

Social insurance programs to protect against universal risks by redistributing income to help people who cannot afford the cost of incurring losses themselves

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15
Q

Social Security

A

Government insurance

OASDI - elderly, young child of dead parent, disability

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16
Q

Medicare

A

Government insurance

CARE for elderly

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17
Q

Medicaid

A

Government insurance

AID financially needy

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18
Q

SGLI and VGLI

A

Government insurance

Military life insurance

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19
Q

Tri-Care

A

Government insurance

Health insurance for members of military and their family

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20
Q

Self-Insurers

A

Retain risks and must have a large number of similar risks and enough money to pay claims.

Employer pays insurance benefits from a fund derived from the employer’s current revenues

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21
Q

Lloyd’s of London

A

Not a company

Members of an association form syndicates to underwrite and issue insurance

Group of investors who share in unusual risk

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22
Q

Distribution systems

A

Ways insurance is sold to public

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23
Q

Captive agents

A

Work for only one insurer

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24
Q

Independent agents

A

work for themselves or several insurers

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25
Q

Career Agency Systems

A

commercial insurers establish offices in certain locations and recruit career agents

Agents are captive - work for one

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26
Q

Personal Producing General Agency System

A

Agents work for an independent agency selling policies from several companies.

Work for the PPGA, not employees of an insurance company

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27
Q

Independent Agency system

American Agency System

A

Independent agents represent a number of insurance companies under separate contractual agreements

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28
Q

Managerial System

A

Branch offices are established in several locations.

Salaried branch manager with bonuses based on commission of sales

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29
Q

Mass Marketing

A

Direct selling:

agents not used ex. mail, tv, radio

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30
Q

Regulated by?

A

Regulated on a state-by-state basis

Minimum fed. oversight

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31
Q

1869 paul v virgina

A

Insurance transactions crossing state lines are NOT interstate commerce

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32
Q

1905 the armstrong investigation act

A

Gave the authority to the states to regulate insurance

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33
Q

1944 US v south-eastern underwriters association

A

Insurance transactions crossing state lines ARE interstate commerce and subject to fed. regulation

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34
Q

1945 the mccarran ferguson act

A

Fed. gov has the right the regulate the insurance industry, but it will not exercise that right if the insurance industry was regulated well at state levels

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35
Q

1970 fair credit reporting act

A

Insurance companies must notify applicants if a credit check will be made on them

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36
Q

1999 gramm-leach-bliley act

Financial services moderation act

A

Repealed glass-steagall act

allowed insurance companies to enter eachother’s line of business

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37
Q

2001 USA patriot act

A

detect and deter terrorsits and their funding by imposing anti-money laundering requirements

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38
Q

2003 national do not call registry

A

insurance calls are NOT exempt

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39
Q

2010 patient protection and affordable care act

PPACA

A

Affordable care act

One of the significant regulatory overhauls and expansion of coverage in US history

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40
Q

National Association of Insurance Commissioners

NAIC

A

Composed of insurance commissioners from all 50 states

Recommending appropriate laws
Responsible for the creation of the Advertising Code and Unfair Trade Practices Act and Medicare Supplement Insurance Minimal Standards Model Act

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41
Q

Advertising code

A

Code specifies certain words or phrases considered misleading and not to be used

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42
Q

Unfair trade practices act

A

Gives chief financial officer the power to investigate insurance companies and producers to impose penalties

Authority to seek a court injunction to restrain insurers from using methods believed to be unfair

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43
Q

NAIFA and NAHU

A

Members are life and health agents dedicated to supporting the industry and advancing the quality of service provided by insurance professionals

Cretaed a Code of Ethics

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44
Q

Ethics of selling 7

A
  1. Selling to needs
  2. Suitability of recommended
  3. Full disclosure
  4. Document everything
  5. Client services
  6. Give Buyer’s Guide
  7. Policy Summary
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45
Q

Reserves

A

Accounting measurement of an insurer’s future obligations to its policyholders.

Set aside by an insurance company and designated for payment of future claims

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46
Q

Liquidity

A

Insurers ability to make an unpredictable payout to policyowners

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47
Q

Guaranty Association

A

Established by all states to support insurers and protect consumers in case an insurer becomes insolvent or inability to pay claims up to a certain limit

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48
Q

Independent Rating Services

A

Credit rating agencies that rate or ‘grade’ the financial strength and stability of insurers based on claims, reserves and company profits

AM Best, Moody’s, Standard and Poor, Fitch Ratings

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49
Q

Hazard

A

condition or situation that creates or increases a chance of loss.
ex. icy roads

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50
Q

Loss

A

Unintentional decrease in the value of an asset due to a peril

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51
Q

Peril

A

Event which causes loss

Can be referred to as the accident itself

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52
Q

Risk

A

Potential for loss

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53
Q

Speculative Risk

A

Both the chance for loss or gain

Not insurable

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54
Q

Pure risk

A

only insurable risk

only potential for loss

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55
Q

Elements of insurable risk 6

A
  1. Due to chance
  2. Definite & Measurable
  3. Predictable
  4. Not catastrophic
  5. Loss exposure to insurer must be large
  6. Randomly selected
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56
Q

Law of large numbers

A

Larger amount of exposures that are combined into a group: more certainty there is to the amount of loss incurred in any given period

prediction of losses based on past experiences
increased accuracy in prediction

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57
Q

Loss exposure

A

any situation that presents the possibility of a loss

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58
Q

Homogeneous exposure units

A

similar objects of insurance that are exposed to the same group of perils

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59
Q

Adverse selection

A

Tendency for poorer than average risks to seek out insurance

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60
Q

Avoidance of risk

A

avoid the risk all together

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61
Q

Reduction of risk

A

minimizing severity of a potential loss

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62
Q

Retention of risk

self insure

A

accepting a risk and confronting it if it occurs

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63
Q

Transfer of risk

A

Make someone else responsible for a loss

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64
Q

Risk pooling

A

When a large group of people spread a risk for a small certain cost

ex. doctors pooling money for malpractice exposure

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65
Q

Reinsurance

A

A contractual arrangement that transfers exposure from one insurer to another insurer

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66
Q

Principle of Indemnity

A

Restoring the insured to the same condition as before the loss

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67
Q

Human life value approach

A

Method of determining the financial value of a person’s life based on computing the current value of a person’s future earnings

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68
Q

Needs based value approach

A

Method of determining the financial value of a person’s life based on the amount of money needed for current and future expenses

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69
Q

Insurance policies are…

A

legal contracts where a promise of benefits is exchanged for valuable consideration (premiums)

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70
Q

life insurance

A

insurance company agrees to pay a predetermined amount - face amount in exchange for the insured’s consideration (premium)

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71
Q

Health insurance

A

insurance company agrees to pay a percentage of the insured’s medical bills in exchange for the insured’s consideration (premium)

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72
Q

Consideration

A

Something of value that each interested party gives to each other

insured - premium
insurer - promise to pay

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73
Q

Legal purpose

A

insurable interest - cannot contain an illegal purpose

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74
Q

offer and acceptance

A

Offer: applicant submits application and initial premium

Offer accepted after approved by company’s underwriter

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75
Q

Competent parties

A

Must be of legal competence: legal age, mentally capable of understanding terms, not influenced by drugs or alcohol

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76
Q

Contract of adhesion

A

There is only one author (insurer)

If there is an ambiguity the courts always favor the insured

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77
Q

Aleatory contract

A

Unequal exchange

outcomes depend on certain events/chance

a legal bet

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78
Q

Unilateral contract

A

one sided agreement - only insurer is legally bound to do anything

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79
Q

personal contract

A

contracts between the insurance company and the individual

Health - cannot transfer without insurer okayed

life - can transfer

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80
Q

Conditional contract

A

certain conditions must be met by all parties in the contract

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81
Q

Valued contracts

A

pays a stated amount

ex. life insurance

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82
Q

Indemnity contracts

A

only reimburse the actual cost of the loss

ex. health insurance

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83
Q

Principle of Indemnity

A

Restore the insured to the same financial condition as what existed prior to the loss

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84
Q

Utmost good faith

A

No attempt to misrepresent, conceal or commit fraud

Full, honest disclosures

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85
Q

Warranties

A

Statements made by the applicant believed to be true are not part of the contract and need to be true only to the extent that they are material and related to risk

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86
Q

Concealment

A

withholding info or facts by the applicant

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87
Q

Insurable interest

A

Requires individual to have a valid concern for the continuation of the life/well-being of the person insured

Only needs to exist at the time of the application

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88
Q

Reasonable epectations

A

a concept which states that the insured is entitled to coverage under a policy that a sensible and prudent person would expect it to provide

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89
Q

stranger-oriented life insurance

A

A third party will purchase the consumers policy and receive proceeds as a profit upon death.

Typically illegal bc no insurable interest

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90
Q

Agent authority

A

Relationship in which one person is authorized to represent and act for another person or company is established through the law of agency.

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91
Q

Authorized agent

A

person who acts for another person and has the power to bind principal to contracts

Agents authority granted by insurer

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92
Q

Types of authority

A
  1. Express
  2. Implied
  3. Apparent
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93
Q

Fiduciary responsibility

A

Agent handles money - has a fiduciary responsibility

Someone in a position of trust and confidence

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94
Q

Fraud

A

Intentional misrepresentation or concealment of material fact

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95
Q

Waiver

A

Voluntarily giving up a known right.

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96
Q

Estoppel

A

Legal process of preventing one party from reclaiming a right that was waived

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97
Q

Parol evidence rule

A

Rule that prevents parties from changing the meaning of a written contract by introduction oral or written evidence made prior to the formation of the contract, but not part of it

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98
Q

Subrogation

A

right for an insurer to pursue a third party that caused an insurance loss to the insured

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99
Q

void contract

A

agreement that does not have legal effect and, thus, in not a contract

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100
Q

Voidable contract

A

valid contract which can be voided at the request of a party with the right to reject

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101
Q

Cancellation

A

voluntary act of terminating an insurance contract

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102
Q

Endorsement

A

Written form attached to an insurance policy that alters the policy’s coverage, terms or conditions

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103
Q

Brokers

A

Represents a number of insurance companies under separate contractual agreements

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104
Q

professional liability insurance

errors and omissions

A

professional liability for which producers can be sued for mistakes of putting a policy into effect.

Insurer agrees to pay sums that the agent legally is obligated to pay for injuries resulting from professional services that he rendered or failed to render

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105
Q

Health insurance

A

broad field of insurance plans that provide protection against the financial consequences of illness, accidents, injury and disability

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106
Q

Medical expense insurance

A

Reimbursing the insured in part or full

Reimbursement plans

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107
Q

Disability income insurance

A

Provide replacement income when wages are lost due to a disability

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108
Q

Accidental death and dismemberment insurance

A

Provides the insured with a lump-sum benefit amount in the event of accidental death or dismemberment

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109
Q

Interim Coverage

A

short-term policies that an be purchased on an interim basis when in between jobs or waiting for a new policy to start

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110
Q

How are health insurance policies paid for

A

year to year

premium calculated based on interest, expenses, types of benefits and morbidity

Not fixed

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111
Q

Business Continuation plans

A

Continue the operation of a business in the event of a disabling sickness or injury to a business owner or key employee

Day to day activities of business, not compensation for the owner

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112
Q

Employee benefit plans

A

help an employee in the event of a disabling sickness or injury

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113
Q

Disability buy-sell plans

aka Disability buy-outs

A

Assist in the sale of a business if the owner is disabled

Sets plan for selling and buying the share of the business

Funded with disability income policy - lump-sum

Benefits are tax-free bc premiums paid are not tax deductible

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114
Q

Key person disability insurance

A

monthly benefit to a business to cover expenses for additional help when a key person is disabled

Business is the owner and premium payer of the policy

Benefits are tax free

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115
Q

Group health insurance

A

Contract between the insurance company and the group (employer)

Provided through group master contracts

Employer responsible for premium payouts

higher benefit max. and lower deductibles

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116
Q

Probationary period

A

Period of time during which a new employee is ineligible for group health insurance coverage

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117
Q

Enrollment period

A

Limited period during which all members may sign up for a group plan

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118
Q

Coordination of Benefits

group health

A

Provision found in group health plans to avoid duplication of benefit payments and over insurance when an individual is covered under more than one group

Limits amount of claims to total allowable medical expenses

Establishes primary carrier

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119
Q

Overutilization

A

Occurs when health benefits are too high

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120
Q

is insuring under group or individual cheaper

A

group

Based on size of group, claims experience, ages and previous insurers

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121
Q

Noncontributory

A

Most require 100% participation by eligible members and employee does not contribute to paying bill

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122
Q

Contributory

A

Employee does contribute in paying bill

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123
Q

Shared funding arragement

A

Allows the employer to self-fund health care expenses up to a certain limit

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124
Q

Minimum premium arrangement

A

Allows employer to self-insure the normal and expected claims up to a given amount and the insurer funds only the excess amounts

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125
Q

Retrospective premium arrangement

A

Insurer agrees to collect a provisional premium but may collect additional premium or make refund at the end of the year based on the actual incurred losses

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126
Q

Self-funding arrangement

A

Large employers may elect to fully self-fund, but contract for administrative services only

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127
Q

Underwriting group insurance

A

Insurer evaluates the group as a whole rather than individuals within the group

Objective: avoid adverse selection

Based on group’s risk profile: accepted or rejected

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128
Q

July 1, 1997 - HIPPA

A

Limited ability of employer-sponsored groups and insurers to exclude individuals on the basis of preexisting conditions

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129
Q

Preexisting conditions limiting

A

limit conditions to those which medical advice was recommended or received within 6 months period ending on enrollment date and exclusions can extend for no more than 12 months

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130
Q

How many days must an employee enrolling in group insurance NOT have without health insurance for a preexisting condition

A

63 days

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131
Q

Creditable coverage

A

prior group health insurance that reduces the maximum preexisting condition exclusion period that a new group health plan can apply to that individual

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132
Q

HIPAA portability rules

A

Allow individuals who change from one group plan to another to eliminate any preexisting conditions excluded under the new plan

Allows an individual to be eligible for coverage upon hire when leaving one group plan to go to another with a different employer

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133
Q

Conversion Privilege

A

Allows insured to convert their group certificate to an individual medical expense policy with the same insurer

Insurer can charge an appropriate rate

Individual cannot be denied

Conversion must occur in 30-31 days

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134
Q

Individually identifiable health information

A

A person’s health claim information

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135
Q

How often must a Notice of information practices be given to a policyholder

A

every 3 years

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136
Q

What is HIPPA excluded for

A

workers compensation and disability income plans

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137
Q

According to HIPPA, do groups with 20 or more employees have to allow former employees to continue benefits under the employer’s group health insurance

A

yes

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138
Q

What percent of excise tax for early withdrawal from IRAs will not apply to the extent a withdrawal is used for medical expenses that exceed 7.5% of the individual’s adjusted gross income

A

10%

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139
Q

COBRA

A

Federal law that guarantees a continuation of their group coverage if their employment is terminated for reasons other than gross misconducts

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140
Q

COBRA requirememnts

A
  1. laid off, not hired
  2. 20 or more employees & continue coverage for terminated workers for 18 months
    Terminated employee may be required to pay up to 102% of premium
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141
Q

According to COBRA, 36 months of health coverage must be given for these circumstances (4)

A
  1. employee dies - goes to children
  2. Dependent children no longer qualify as ‘dependent children’ under a new plan
  3. employee eligible for Medicare
  4. Separates or divorces f
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142
Q

Pregnancy Discrimination Act

A

Act of 1978 amended the Civil Rights Act of 1964 to prohibit sex discrimination based on pregnancy

Treated as any other diability

Requires group plans covering 15 or more people to treat pregnancy related claims no differenty than any other allowable medical expense

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143
Q

Three standard forms of basic medical expense insurance

A

hospital, surgical, and physician’s expenses

Group basic medical expense plan can combine two or more types or only consist of one type

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144
Q

Group Major Medical Plans

A

Single, extensive plan

Participants usually required to satisfy an initial deductible with comprehensive plans

Benefits usually more extensive than individual plans

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145
Q

Dental care

A

Normal dental maintenance, oral surgery, root canal therapy, and orthodontia

Coverage may be on a ‘reasonable and customary charge’ basis or dollar-per-service schedule approach

deductible and coinsurance features are typical as are maximum yearly benefits

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146
Q

Vision care

A

Coverage usually pays for reasonable and customary charges incurred during eye exams by ophthalmologists and optometrists

Commonly exclude Lasik

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147
Q

Cafeteria Plans

A

Allows conversion of salary into non-taxable benefits

Pick and choose from benefits before taxes are deducted

Employees can contribute if benefits exceed allowance

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148
Q

What groups are exempt from ERISA regulations

A

Church

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149
Q

Group disability income plans

A

Specify benefits in terms of % of earnings

Most require a minimum period of service before being eligible for coverage

Short-term disability plans are characterized by max. benefit periods of rather short durations

Long-term disability plans provide for max. benefit periods of no more than 2 years

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150
Q

Group AD&D

A

Frequently offered in conjunction with group life insurance plans

Normally does not include a conversion privilege

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151
Q

Blanket health plans

A

Cover a group who may be exposed to the same risks, but the composition of the group are constantly changing

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152
Q

Franchise health plans

A

Coverage to members of an association of professional society

Individual policies are issued to individual members and the association or society simply serve as the sponser for the plan

Premium rates are usually discounted for franchise plans

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153
Q

Credit Accident and health plans

A

Designed to help the insured pay off a loan in the event they are disabled

Monthly benefit payments equal to the monthly loan payments due

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154
Q

Health Savings Accounts

A

tax-favored vehicle for accumulating funds to cover medical expenses

Under 65 are eligible

Annual contributions of up to 100% of an individual’s health plan deductible

55-65 year olds can make an additional catch-up contribution

Grow tax-free

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155
Q

Qualified health care expenses include amounts paid for 7

A
  1. doctor’s fees
  2. meds
  3. hospital services not paid for by insurance
  4. retiree health insurance premiums
  5. Medicare expenses
  6. Qulified long-term care services
  7. COBRA coverage
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156
Q

Non-occupational health plans

A

Policy that does not cover injuries sustained while at work because those injuries are covered by workers compensation

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157
Q

Can employers take tax deductions for premium contributions they make to a group plan?

A

yes

as long as they represent ‘ordinary and necessary business expense’

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158
Q

Are individual premium contributions tax-deductible?

A

Generally, no

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159
Q

Are benefits an individual receives under a medical expense plan considered taxable income?

A

No, because they provided to cover losses the individual incurred

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160
Q

Are disability benefit payments that are attributed to employee contributions taxable?

A

No, but benefit payments that are attributed to employer contributions are taxable

161
Q

Are sole proprietors permitted tax deductions for health costs paid from their earnings

A

Yes, in the amount of 100% of costs

162
Q

Are federal income taxes applied to death benefits paid to beneficiary of an insured under a health insurance policy

A

Not likely, but proceeds may still be included as part of the insured’s taxable estate

163
Q

AD&D insurance

A

Primary form of pure accident coverage

Provides a stated lump-sum benefit

164
Q

Principal Sum AD&D

A

The amount of insurance purchased

Represents the maximum amount the policy will pay

165
Q

Capital Sum AD&D

A

Amount payable for the accidental loss of sight or dismemberment

Specified amount, which varies according to the severity of the injury

166
Q

Accidental means

A

Cause and result of accident to be unintentional

167
Q

Limited risk policies

A

Set forth specific risk and provide benefits to cover death or dismemberment due to that risk

168
Q

Special risk policies

A

Covers unusual hazards normally not covered under ordinary accident and health insurance

169
Q

Commercial insurance companies function on the reimbursement approach

A

Right of assignment built in which allows policy owners to assign payments from the insurer directly to the health care provider

170
Q

Service providers

A

offer benefits to subscribers in return for the payment of a premium. Benefits are in the form of services

171
Q

Blue cross and blue shield

A

Dominant health insurers of the US. (prepaid plans)

Provides the majority of their benefits on a service basis rather than a reimbursement basis

Doctors agree to specific cost for services to subscribers

Nonprofit

172
Q

Health maintenance organizations HMO

A

Prepaid health care services to subscribing members

Organize and deliver health services at its own local health care facilities

Health care services only given by physicians and hospitals that participate in that HMO

Payment to physician: capitation

Stress preventive care

173
Q

Preferred provider organizations PPO

A

Collection of health care providers who offer their services to certain groups at prearranged discount prices. In return, the group refers it members to the preferred providers for healthcare

fee-for-service

More choice (often private) in physicians

174
Q

Ambulatory care

A

personal care consultation, treatment, or intervention using advanced medical technology or procedures delivered on an outpatient basis

outpatient surgury
physicals
immunizations

175
Q

Medicare

A

Fed. funded to provide hospital and medical expense insurance protection to 65+.
Also those with chronic kidney disease, receiving SSI

Administered by The Centers for Medicare and Medicaid Services

176
Q

Medicare part A

A

Hospital insurance: covers impatient care in hospitals and skilled nursing facilities, and it covers care provided in a hospice and some care provided at home

Drug administration as part of inpatient treatment

Day of hospital entrance is the first day of benefit period

Skilled nursing facility expenses only covered if insured was hospitalized shortly before entering the facility
Max of 100 days per benefit perios

177
Q

What is the lifetime psychiatric inpatient care limit for medicare part A

A

190 days

178
Q

Primary financing of medicare part A

A

Federal payroll and self-employment taxes

179
Q

Participating providers

A

Physicians that agree to accept assignment on ALL medicare claims

180
Q

Medicare part B

A

Medical insurance: provides med. insurance for required doctor’s services, outpatient services and medical supplies

181
Q

Excess charge

A

The difference between the physician’s actual charges and Medicare’s approved amount

182
Q

Is falling below the poverty line a qualifying event for medicare?

A

no

183
Q

When is open enrollment for Medicare part B

A

Jan 1 - March 31

184
Q

How is medicare part B funded?

A

General tax revenue and user premiums

185
Q

How to become eligible for Medicare part D

A

Prescription drug coverage

Must have Medicare coverage

186
Q

SSDI

A

Provides services other than survivor ship and retirement benefits

187
Q

How to be eligible for SSDI

A

40 quarter credits

Must be so mentally of physically disabled that he cannot preform any substantial gainful work

Impairment must be expected to last at least 12 month or result in an earlier death

188
Q

Max. SSDI benefit

A

100% of the insureds Primary Insurance Amount

189
Q

SSDI waiting period before and individual will qualify for benefits

A

5 months

190
Q

Medicaid

A

Provide matching federal funds to states for their medical public assistance plans to help needy persons regardless of age

191
Q

Who is eligable to medicaid

A

low income who are blind or disabled or minors

192
Q

How id Medicaid funded

A

financed by both federal and state governments

193
Q

What is required by Medicaid for the payment of nursing home expenses?

A

Financial nees

194
Q

TRI-CARE

A

Federal government accident and health plan which provides accident and health coverage to military families

195
Q

Federal Employees Health Benefits Program

A

system of ‘managed competition’ through which employee health benefits are provided to civilian government employees and annuities of the US gov.

Two types:

  1. fee-for-service
  2. HMO
196
Q

State workers’ compensation program

A

compensate employees for lost wages and medical expenses due to occupational accidents

Employers are responsible for providing to employees

Losses that are covered by workers’ comp. are generally excluded from coverage

197
Q

Self-insurance

A

Administered by insurance companies that are paid a fee for handling the paperwork and processing the claims.

Some groups adopt a min prepaid plan MPP

198
Q

Multiple Employer trusts

A

Marketing group benefits to employers who have a small number of employees. Usually part of the same industry.

Participants are issued a joiner agreement

Employer’s premium payments are directed into a trust from which the plan’s benefits and claims are paid

Often self-funded and use insurance company for administration

199
Q

Multiple employer welfare arrangements

A

Type of MET

Consists of small employers who have joined to provide health insurance to their employees, often self-insured

tax-except

Employment-related common bond

200
Q

Disability income insurance

A

provide an individual with a stated amount of periodic income in the event of a disabling condition

individual or group

201
Q

Guaranteed renewable policy disability plan

A

most common individual disability income policy:

adjusts the premium on an annual basis and provides benefits for nonoccupational illnesses and injuries

202
Q

Disability income benefits

A

Insured’s income limits the amount of the monthly benefit that an insured may select

benefits paid as monthly income payments

203
Q

Highest premium under the disability income policy is…

A

14 day waiting period and a 10 year benefit period

204
Q

Percent-of-earnings approach

A

determines benefits using a percentage of the insured’s pre-disability earnings and considers other sources of disability income

205
Q

flat amount method

A

Policy specifies a flat income benefit amount that will be paid if the insured becomes totally disabled

206
Q

What happens if someone with disability income insurance dies?

A

Earned but unpaid benefits will be paid to the insured’s estate

207
Q

What percent of a participants income does group long-term disability benefits limit?

A

60%

208
Q

Disability Defined

A

totally disabled before benefits under a disability income policy are payable

Often considers the insured’s edu, training and experience

209
Q

Any occupation Def of total disability

A

unable to preform any occupation for which they are reasonably suited per edu, training and experience

210
Q

Own occupation Def of total disability

A

insured is unable to preform the insured’s current occupation

Better for policyowner

211
Q

Presumptive disability

A

Conditions that automatically qualify the insured for the full benefit because the severity of the conditions presumes the insured is totally disabled even if they can work

Include: 
blind
deaf
loss of speech
loss of 2+ limbs

Waives the usual requirements for total disability benefits

212
Q

Partial Disability

A

Inability of the insured to preform 1 or more important duties of the job OR the inability to work at a full-time basis

Normally payable only if the policy owner has first been totally disabled

213
Q

Flat amount benefit

A

set amount stated in the policy

Usually 50% of full time disability benefit

214
Q

Residual Amount benefit

A

Normally used after a full disability payment has been paid and the insured is back to work with a REDUCED workload

Benefit is based on the proportion of income lost due to the partial disability

Multiply the % lost by the stated monthly benefit for total disability

215
Q

Rehabilitation Benefit

A

Facilitates vocational training to prepare the insureds for a new new occupation

Helps disabled return to work

216
Q

Accidental means

A

CAUSE of injury must have been unexpected and accidental

217
Q

Accidental bodily injury provision

A

RESULT of the injury has to be unexpected and accidental

Far less restrictive

218
Q

Probationary Period

A

Period of time which must elapse following the effective date of the policy before benefits are payable

One-time

Ends 15 or 30 days after policy begins

Excludes preexisting sickness and protects insurer against adverse selection

Does not apply to accidents

219
Q

Elimination period

A

Time immediately after the start of a disability when benefits are not payable

Eliminate claims for short-term disability

‘waiting period’

220
Q

Benefit Period

A

Max. length of time that disability income benefits will be paid

Longer period- higher cost of policy

221
Q

How long do individual short-term policies provide benefit periods for disability income benefits?

A

6 months to 2 years

222
Q

How long do individual long-term policies provide benefit periods for disability income benefits?

A

more than 2 years

5, 10 or 20

223
Q

Delay disability provision

A

Certain amount of time during which a total disability may result from an accident and the insured will still be eligible for benefits

May be 30, 60 or 90 days…

224
Q

Recurrent disability provision

A

Period of time during which the recurrence of a disability is considered a continuation of the prior disability

No new elimination period

225
Q

Change of occupation provision

A

In an individual covered under a disability income policy is injured in an occupation more hazardous that stated in the policy, the result will be a reduced benefit level. Increased if less hazardous.

226
Q

Nondisabling injury

A

For when a person covered by disability income insurance is injured, but does not qualify for income benefits

Provision for a medical expense benefit that pays the actual cost of medical treatment for non-disabling injuries from an accident

227
Q

Elective Indemnity

A

Some short term disability income policies provide an optional lump-sum payment for certain named injuries

228
Q

Waiver of Premium Rider

A

Generally included with guaranteed renewable and noncancelable individual disability income policies

Exempts policyowners from paying premiums during periods of total disability
-Beginning at the date of disability

Must experience total disability for more than a specified period
-usually 3 or 6 months

229
Q

Social Security Rider

A

Provides payment for additional income when the insured is eligible for social insurance benefits, but those benefits have not yet begun, have been denied, or is given in a lesser amount

230
Q

Cost-of-Living Adjustment (COLA) Rider

A

Provides for indexing the monthly or weekly benefit payable under a disability policy to changes in the Consumer Price Index

Benefit amount is adjusted on each disability anniversary

231
Q

Guaranteed Insurability Rider

A

The right to purchase additional amounts of disability income coverage at predetermined times in the future without evidence of insurability

232
Q

Exclusion Rider

A

Specified disease or body part is not afforded coverage

233
Q

How long of a term is individual medical insurance typically written for?

A

1 year term

234
Q

Basic medical expense plans

A

‘first dollar insurance’
Provides benefits up front without having to satisfy a deductible

lower benefit limit, benefits are lower than actual expenses incurred

235
Q

Categories of medical care in Basic Medical Expense Plans

A
  1. hospital expense
  2. surgical expense
  3. Pysician’s expense
236
Q

usual, customary and reasonable expense

A

Fee charged by a physician or other health care professional

max amount the issuer will consider eligible for reimbursement

based on geographical area

237
Q

Hospital expense policies

A

Cover hospital room and board, miscellaneous hospital expenses, medicines, use of operating rooms and supplies

No deductible and limits on room and board are set at a specified dollar amount per day up to a max number

238
Q

Concurrent review

A

Method of utilization review that takes place on-site when a patient is confined to a hospital

Typical result is monitoring the length of stay

239
Q

What is preadmission testing meant to do?

A

Helps control health care costs primarily by reducing the length od hospitalization

240
Q

Basic Surgical expense coverage

A

In conjunction with hospital expense policies

pay for cost of surgeons

241
Q

Surgical Schedule approach

A

Every procedure is assigned a dollar amount by the insurer

242
Q

Reasonable and Customary apporach

A

Surgical expense is compared to what is deemed reasonable and customary for the geographical part of the country

243
Q

Relative Value approach

A

Similar to surgical schedule - assigning values to procedures

Instead of a flat dollar amount - a specified set of units is assigned

244
Q

Basic physician expense coverage

A

Basic Physicians Nonsurgical Expense Coverage

Can be purchased to cover emergency accident benefits, maternity benefits, mental and nervous disorders, hospice care, home health care, outpatient care, and nurses expenses

Offer only limited benefits that are subject to time limitations

245
Q

Nurses’ expense benefits

A

Pay only for private duty nursing care according to doctor’s order while the insured is a hospital patient

246
Q

Convalescent care facility benefits

A

Provide a daily benefit for confinement in a skilled nursing facility for a limited recovery period following discharge from a hospital

247
Q

Pharmacy benefits

A

Limited to meds and med therapy management activities required by individual state boards of pharmacy

A controlled substance list is a pharmacy benefit that covers prescription drugs

248
Q

Major medical expense plans

A

Picks up where basic medical insurance leaves off

either a supplement to a basic plan OR a comprehensive stand alone plan

249
Q

Major medical expense plans provide benefits to:

A

reasonable and necessary medical expenses, subject to policy limits

catastrophic medical expense protection

Both in and out patient expenses

hospice

Drug formulary

250
Q

Major medical expense plans requirements and tax info

A

usually carry deductibles

Coinsurance requirements

Large benefit maximums

251
Q

Supplementary Major medical

A

Supplement coverage payable under basic medical expense policy

If there is a time limit on the basic policy, the supplemental coverage will provide coverage thereafter

252
Q

Comprehensive Major Medical

A

Combines the features of basic expense coverage and major medical coverage, sold as one policy

ex. Major medical policy

Includes a deductable and coinsurance

253
Q

Lifetime max. benefit

A

Limits insurers total exposure under a contract

254
Q

per cause max. benefit

A

Limits the medical expenses covered for each cause

255
Q

Deductable

A

Stated initial dollar amount that the individual insured is required to pay before insurance benefits are paid

256
Q

Flat deductable

A

Stated dollar amount that applies to a covered loss.

Applied per occurrence, per individual

257
Q

Corridor deductable

A

Covers the gap between basic coverage and major medical

258
Q

Integrated deductable

A

Used when a major medical plan is supplementing basic coverage

259
Q

Per-cause deductable

A

The insured must satisfy a deductible for each accident or illness

260
Q

All-cause deductible

A

The insured only has to meet the deductable amount once during the benefit period

261
Q

Calendar-year deductable

A

Begins on Jan 1st and ends on Dec 31st

Requires a specific lump-sum out of pocket before any benefits are paid in a calender year

262
Q

Carryover provision

A

Permits expenses incurred during the last 3 months of the calendar year to be carried over into the new year

263
Q

Coinsurance

A

Insurance pays a high % of additional expenses and the insured pays the rest

Usually 80/20

264
Q

Stop-Loss

A

Limit the amount of expense the insured may be exposed to in a policy year

The insured has paid a specified amount and the insurer will pay the remaining 100% up to max. policy limit

265
Q

Pre-existing conditions

A

Contain a benefit limit on them

When considering the replacement of an individual accident and health policy, a preexisting condition exclusion in the new contract may reduce benefits

266
Q

Internal Limits

A

Certain types of expenses may have limits placed on the dollar amount of certain services or the type of service

267
Q

Health Savings Accounts HSA

A

tax-advantaged medical savings account for individuals with a high-deductible plan

not subject to income tax and roll over if not spent

Tax deductable

Pay for out-of-pocket medical expenses

Contributions by an employer are not taxable income

268
Q

In Health Savings Accounts, distributions other than for qualified medical expenses to a Heath Savings Account are taxable at what %

A

20%

269
Q

Health reimbursment arrangements

A

must be established by employer and funded by employer

reimburse employees for out-of-pocket medical expenses and individual health insurance premiums

Reimbursements may be tax-free if the employee paid for qualified medical expenses or a qualified medical plan

270
Q

Medical Savings Account

A

Created to help employees of small employers to pay for medical care expenses

Tax-free accounts set up with financial institutions

271
Q

Qualified medical sac=vings accounts are available for employers of what size

A

no more than 50

272
Q

Flexable savings accounts

A

tax-advantaged accounts that can be set up via cafeteria plan of an employer

Allows employees to set aside a portion of earnings to pay for qualified medical expenses as established in cafeteria plan

273
Q

Medicare supplement

Medigap

A

Individuals 65 who enrolled in medicare, however, anyone currently receiving Medicare part A and B is eligible to participate

Sold by private

Do not pay costs for part c and d

274
Q

How many standardized Medigap plans are there?

A

10
a, b, c, d, f, g, k, l, m, n

Standardized by National Association of Insurance Commissioners

Standard in Medicare Supplement Insurance Minimum Standards Model Act

275
Q

Who cannot be refused or rated for a Medicare supplement policy

A

Individuals over 65 who enrolled in Medicare part B for the first time

Cannot be rated within 6 months of enrollment

276
Q

What is the only reason a medicare supplement insurance can be canceled

A

Canceled by insurer for nonpayment of the premium

277
Q

What is included in most medicare supplement insurances

A

Hospice care

Coverage for foreign travel

278
Q

Medicare supplement plans f and g

A

cover costs known as medicare part Bexcess charges

279
Q

How many days must medicare supplements have for a ‘free-look’

A

30 day

280
Q

Core benefits of Medicare Supllement insurance

A

Part A: hospice coinsurance or copayment

Part B: coinsurance or copayment

first 3 pints of blood as an inpatient

281
Q

Medicare select

A

Supplement coverage through a preferred provider organization PPO

Thus, pays a lower premium

282
Q

Medicare and managed care MCO

A

Many MCOs contracted with the Health Care Financing Administration to provide part A and B services to recipients.

Offered by private companies

Can be limited by state or counties

283
Q

Medicare part c

A

Provided by an approved HMO or PPO

Offer additional benefits

Can choose a Private Fee For Service plan

In addition to the premium, enrollees must pay a small copayment per visit, or per service

does NOT cover long-term care

284
Q

Medicare part D

A

Prescription drug plan administered by private insurance companies

Requires payment of a premium and a deductable

285
Q

Long term care insurance

A

Often covers nursing home care

Care for an extended period (over 90 days)

Fixed dollar amount

286
Q

Long term care coverages

A

Pay benefits when at least two ADLs cannot be preformed

287
Q

Categories of long-term care

A
  1. Skilled nursing care
  2. Intermediate nursing care
  3. Custodial care
288
Q

Home and Community based services

A

Home health care is care provided in the insured’s home, usually on a part time basis

289
Q

Adult day care

A

For those that require assistance with various ADLs while their caregivers are absent

290
Q

Respite care

A

Provide a short rest period for a family caregiver

291
Q

Continuing Care

A

Provide a benefit for elderly individuals who live in a continuing care retirement community

292
Q

Taxation of long term care benefits

A

Excluded from income

293
Q

Long term care partnership plan

A

federally supported, state operated initiative that allows individuals who purchase a qualified long-term care insurance policy to protect a portion of their assets that they would typically need to spend down prior to qualifying for Medicaid coverage

294
Q

National association of insurance commissioner

A

establish uniform or model terms, provisions, and wording standards for inclusion in all individual health insurance contracts

295
Q

Entire contract

A

includes policy and application

Nothing outside the contract can be considered part of the contract

No changes will be made to the contract or waive any provisions after issued

Executive officer of the insurance company must make changes

296
Q

Time limit on certain defenses

A

Limits the time during which the insurance company may challenge the validity of a claim based on a misstatement made on the application

A fraudulent statement on a health insurance application is grounds for contest at any time, unless it is guaranteed renewable

297
Q

Grace Period

A

Additional time to pay overdue premiums

7 for weekly
10 for monthly
31 for annual

Money is taken out of claims for unpaid premiums if they are filed

298
Q

Reinstatement

A

If an insured fails to pay a renewal premium within the time granted but the insurer subsequently accepts the premium, coverage may be restored

No action on the application is needed for 45 days

for 10 days after reinstatement, sickness is not covered

299
Q

Notice of claim

A

policyowner’s obligation to notify the insurance company of a claim in a reasonable period of time

usually 20 days after the occurance

300
Q

Claim forms

A

Company must supply a claim form to an insured within 15 days of receiving notice of claim

If not, any claim form must be accepted

301
Q

Proof of loss

A

Statement given to the insurance company to show that a loss occurred

Claimant has 90 days to submit proof of loss

302
Q

Time of payment of claims

A

Provides for immediate payment of the claim after the insurer receives notification and proof

Prevent delaying payments

303
Q

Payment of claims

A

Provision in health insurance contract which specifies how and to whom claim payments are to be made

Loss of life: beneficiary

304
Q

Physical exam and autopsy

A

Entitles a company, at its own expense, to make physical exams of the insured at reasonable intervals, unless forbidden by state law

305
Q

Legal actions

A

The insured cannot take legal action against the company in a claim dispute until after 60 days from submission of proof of loss

Limit to no more than 5 years

306
Q

Change of Beneficiary

A

The insured may change the beneficiary designation at any time unless a beneficiary has been named irrevocably

307
Q

Change of occupation

A

Allows the insurer to reduce max benefits if job is more hazardous

Reduce premium rate if less hazardous

308
Q

Misstatement of age

A

Allows insurer to adjust the benefit payable if the age of the insured was misstated when policy application was made

309
Q

Other insurance with this insurer

A

Total amount of coverage to be underwritten by a company for one person is restricted to a specified max amount

Protects insurer form over insurance

310
Q

insurance with other insurers

A
  1. Benefits payable for expenses incurred will be prorated in cases where the company accepted the risk without being notified of other existing coverage for the same risk
  2. Allows an insurer to pay benefits to the insured on a pro-rata basis when the insurer was not notified prior to the claim of other health insurance
311
Q

Relation of earnings to insurance

A

If disability income benefits from all disability income policies for the same loss exceed the insured’s monthly earnings at the time of disability, the relation of earnings provision states that the insurer is liable only for that proportionate amount of benefits as the insured’s earning bear to the total benefits under all such coverage

312
Q

Unpaid premiums

A

If there is an unpaid premium at the time of the claim becomes payable, the amount of the premium is deducted from the sum payable

313
Q

Cancellation

A

Gives the company the right to cancel the policy at any time with 45 days; written notice

Notice must be given with refusal to renew a policy or change premium rates

10 day notice must be given is cancellation is for nonpayment of premium

Insured can cancel at any time with written notice

314
Q

Conformity with state statues

A

Any policy that is in conflicted with state statues in the state where the insured lived at the time are automatically amended to conform with the minimum statutory requirements

315
Q

illegal occupation

A

Insurer is not liable for losses attributed to the insured’s being connected with a felony or illegal occupation

316
Q

Intoxicants and narcotics

A

Insurer is not liable for any loss attributed to the insured while intoxicated or under the influence of narcotics

Also losses from committing a felony

317
Q

The policy face

A

Contains a summary of the type of policy and the coverage provided by the policy
Identifies the insured, terms, renewal

318
Q

Insuring clause

A

States the kind of benefits provided and circumstances of payment

Specify the scope of limits

319
Q

Consideration clause

A

Insurer: promises in policy

Insured: Premium, application

320
Q

Probatinary period

A

Number of days after a policy issue date during which coverage is not afforded for sickness

beins at inception of policy

321
Q

Conversion privilege for dependents

A

All must provide dependent coverage up to age 26

322
Q

Mandatory second surgical opinion premium

A

requires the insured to seek a second opinion for surgeries that are on a list of elective surgeries

323
Q

Waiver of premium

A

Waives the payment of premiums after the insured has been totally disabled for the specified period of time

324
Q

owner’s rights provision

A

defines the person who may name and change beneficiaries, select options available under the policy, and receive any financial benefits

325
Q

Free-look provision

A

Gives the policyowner the right to return the policy for a full refund within a limited period of time after the delivery of the polcy

326
Q

Assignment provision

A

transfer of ownership in life insurance policy

new owner: assignee

327
Q

Absolute assignment

A

The transfer is complete and irrevocable

asignee recieves full rights and control

328
Q

Collateral assignment

A

Policy is assigned to a creditor as security, or collateral, for a debt.

The rest is given to a benficiary

329
Q

Beneficiary designation

A

Policyowner indicates who is to receive the proceeds

330
Q

Settlement options

A

The ways in which the proceeds can be paid out or settled are explained

331
Q

Discretionary provision

A

Limits the way a court can review a claim denial and makes it difficult for the court to conduct a fair review of the claim

Designed to protect insurance company

332
Q

Maternity benefits

A

Provide a fixed amount for childbirth or a benefit based upon a specified multiple of thedaily hosptal room benefit

333
Q

Payor provision rider

A

provides waiver of premiums if the adult premium-payor should die or, become totally disabled

334
Q

Accidental death benefit rider

A

Provides an additional amount of insurance usually equal to the face amount of the base policy if the cause of death was an accident

335
Q

Return of premium rider

A

in the event of death of the insured within a specified period of time, the policy will pay, in addition to the face amount, an amount equal to the sum of all premiums paid to date

336
Q

Cost of living rider

A

Gives applicants the ability to guard against the eroding effects of inflation

337
Q

long term care rider

A

Helps safeguard against the financial burden of long-term care.

Provides an acceleration of the death benefit to help pay for costs involved with long-term care

338
Q

Coomon restrictions

A 
war
self-inflicted/suicide
hernia
riots
use of drugs
felony
foreign stays
at work
339
Q

preexisting conditions

A

usually exclude paying benefits for losses due to preexisting conditions

Exclusions are subject to ‘time limit on certain defenses’ provision

340
Q

Waivers for impairments

A

When an insurance company does not cover a loss due to a specific condition the insured has

Waiver is removed when condition improves

341
Q

Renewable provision

A

Allows insurer to cancel insurance at different points during the life of the policy

342
Q

Cancelable policies

A

May be terminated by either party

Allow the insurer to increase premium

the ONLY type an insurer can cancel anytime

343
Q

Optionally renewable policies

A

Gives the insurer the option to terminate the policy in a date specified in the contract

344
Q

Conditionally renewable policies

A

Allows insurer to terminate coverage but only in the event one or more conditions stated in the contract

Can increase premiums at time of renewal

345
Q

Guarenteed renewable policies

A

Policy must be renewable until a certain age

Usually have increasing premiums

If rates are increased on a guaranteed renewable policy, they must be increased for an entire class

346
Q

Nonrenewable policies

A

Normally associated with short term health insurance

Established policy lengths of a year or less and are considered temporary

347
Q

noncancelable policies

A

A noncancelable policy cannot be cancelled nor can can its premium rates be increased under any circumstances

348
Q

Underwriting

A

Process of risk selection to determine whether or not an applicant is insurable and how much to charge premiums

Material facts matter

Avoid adverse selection

349
Q

Application

A

Insurable interest must exist between the policyowner and the insured when it is made

General info

Health info

Agents personal observations

credit report

applicant statements

Medical report

Inspection reports

Medical Info Bureau

Special Questionnaires

350
Q

Field underwriting procedures

A

Completed by the agent

  • Making sure application is correct and complete
  • Collecting initial premium
  • forwarding application to insurer
  • seeking additional info
  • notifying insurer of suspected misstatements
  • delivering the policy
351
Q

Application errors

A

Applicant must initial errors

Incomplete applications are returned to agent

352
Q

Signatures

A

Agent and applicant need to sign

If insurance is not for applicant, unless a minor, the insured must sign
That’s third party ownership

353
Q

US patriot act

A

Requires companies to establish formal anti-money laundering programs

To detect and deter terorism

354
Q

Buyer’s guide

A

Provides general info about types of insurance available

355
Q

Policy summary

A

Provides specific info about policy purchased

356
Q

Suitability form

A

Ensures that the customer is best suited for the policy they’re buying

357
Q

Applicant ratings and classification

A

risk classification

Privacy notice must be given to applicant if personal info is disclosed and passed along

Preferred
Standard
Substandard
Uninsurance

Lower risk, lower premium

358
Q

What can be done for a substandard risk

A
  1. Attaching an exclusion rider or waiver
  2. extra premium
  3. limiting type or coverage
359
Q

Risk factors

A

physical condition

moral hazards

occupation

age

sex

history (med/fam)

avocations

Insurable interest

360
Q

Premium factors

A

besides risk factors, there are many other standard items that impact the cost of premium for a health insurance policy

361
Q

Morbidity

A

Expected incidence of sickness or disability within a group in a given period

362
Q

Interest

A

A large portion of every premium recieved is invested to earn interest

Reduce the premium amount

363
Q

Expenses

A

The cost to run a business

364
Q

Benefits

A

number and kinds of benefits provided by a policy affect the premium rate

More benefits: higher premuim

more risk: higher premium

365
Q

Claims experience

A

Tables based on past claims experience constructed for hospital expenses based on the amounts paid out in the past for the same type of expenses

Allows insurer to know what to expect for future claims

366
Q

Community rating

A

requires health insurance providers to offer health insurance policies within a given geographical area at the same price to all individual or group plans without medical underwriting, regardless of health status

367
Q

Initial premium

A

If the premium is not paid with the application, the agent should submit the application to the insurance company without the premium

Policy is not effective until paid

368
Q

Premium mode

A

permits the policyowner to select the timing of premium payments

May be more expensive if payed in increments

annual
semi annual
quarterly
monthly

no ‘single pay’ option for health but yes for life

369
Q

Receipts

A

The only time a customer will recieve a receipt is if they pay their initial premium rate at the time of the application

370
Q

Conditional receipt

A

Provider issues a conditional receipt to the applicant when the application and premium are collected

Denotes that coverage will be effective once the applicant proves to be insurable
‘when conditions are met’

371
Q

Binding receipt

A

Coverage is guaranteed until the insurer formally rejects the application

372
Q

Policy issue

A

when insurer ‘approves’ the application they are ‘issuing the policy’

373
Q

Effectve date of coverage

A

identifies when the coverage is effective and establishes the date by which future annual premiums must be paid

Application, premium, statement of continued good health signed

374
Q

Statement of good health

A

Verifies the insured has not become ill, injured or disabled during policy approval process

Used when premiuum was not submitted with application

Also used when reinstating a policy

375
Q

Policy delivery

A

Means of delivery: mailing policy to agent, mailing policy to applicant, personally delivering policy

376
Q

Personal delivery

A

Allows producer to explain the coverage to the insured

Builds trust and reinforces the need for coverage

377
Q

Constructive delevery

A

insurance company intentionally relinquishes all control over the policy and turns it over to someone acting for the policyowner

If the company instructs the agent not to deliver the policy unless the applicant is in good health, there is no constructive delivery

378
Q

When are premiums taxable

A

paid before the paycheck is taxed or removed from taxtable income when filing taxes

379
Q

When are premiums not taxable

A

paid after your paycheck is taxed and not removed from taxable income

380
Q

taxation of disability income insurance

A

premiums paid are not deductible by the individual insured, but benefits are tax free

for group paid by employer:
premiums are deductible by the employer, thus, taxable to recipient

If an employee contributes:
benefits will be tax-free in proportion to the premium contributed

381
Q

taxation of medical expense insurance

A

Incurred medical expenses that are reimbursed by insurance may not be deducted from federal income tax

expenses not reimbursed are only deductible to the extent that they exceed 7.5% of the insured’s adjusted income

100% of premium is tax deductable for self-employed

382
Q

Group insurance premium taxatio

A
  1. premiums paid by employer are tax deductible to the employer
  2. Premiums paid by the employr are NOT tax deductable to the employee
383
Q

Policy design

A

Design or structure of a policy and its provisions can impact insurer’s cost containment efforts

high deductible will help limit claims

Coinsurance means sharing medical cost

Shortened benefit periods

384
Q

Medical cost management

A

Process of controlling how policy owners utilize their policies

Four approaches

  • mandatory 2nd opinions
  • precertification review
  • ambulatory surgery
  • case management
385
Q

Precertification review

A

Obtain approval from the insurer before entering a hospital for an elective surgery

Determines if the treatment is medically necessary

Evaluating an individual’s overall health prior to being hospitalized for surgery

386
Q

Concurrent (utilization) review

A

health insurance company’s opportunity to review a request for medical treatment to confirm that the plan provides coverage for the medical services

Health care is reviewed as it is being provided

387
Q

Ambulatory surgery

A

procedures on an outpatient basis where once an overnight hospital stay was required

388
Q

Case management

A

a specialist within the insurance company who reviews a potentially large claim as it develops to discuss treatment alternatives with the insured

389
Q

point of service plans

A

allows insured to choose either an in-network or an out-of-network provider when care is needed

Care is coordinated by primary care physician

More expensive to insured for out-of-network

390
Q

commissioner

A

administration and enforcing WI insurance laws

Appointed by governor

Gives permission for examination of records

391
Q

Twisting

A

misrepresentations or inaccurate comparisons to induce a person to terminate or borrow against their current insurance policy to take out an insurance policy with another insurer

392
Q

Cold lead advertising

A

Falling to disclose that the purpose of the marketing effort is insurance solicitation

393
Q

Restorative dental

A

Restoring function and integrity of a missing tooth structure
ex. fillings, crowns and dental bridges

394
Q

Endodontics

A

Diseases of the dental pulp

root canals

395
Q

Periodontics

A

Prevention, diagnosis and treatment of disease

396
Q

Prosthodontics

A

Replacement of missing parts

Bridgework or dentures

397
Q

Integrated deductible

A

Single deductible for medical and dental

398
Q

What selection of dentists is used in pre-paid plans

A

closed panel of dentists

Health And Accident Insurance (1 decks)

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