Types of Policies [Health]

Question 1

Entire Contract

Answer 1

the policy, provisions, copy of the application, riders, and waivers; changes made to the policy must be requested in writing and signed by the insurer

Question 2

Time Limit on Certain Defenses

Answer 2

Misstatements on an application cannot be used to deny a claim after the policy has been in force for 2 years

Question 3

Grace Period

Answer 3

period of time after the premium due date, that the policy owner has to pay the premium before the policy lapses.; 7 days - weekly premium, 10 days - monthly premium, 31 days - all other premium modes (quarterly, bi-annually, annually)

Question 4

Reinstatement

Answer 4

A policy can be restored within a specified period of time with proof of insurability; if the insurer does not reject the late payment within 45 days, the policy automatically goes back into effect

Question 5

Individual disability income policy

Answer 5

pays an income benefit when the insured is unable to work due to a covered illness or injury; typically paid monthly and is 60-70% of the insureds current net earnings

Question 6

Business overhead expense policy

Answer 6

provides funds to cover the overhead expenses of a business when the owner becomes disabled; office rent, utilities, employee labor, not the owner’s income loss

Question 7

Group disability income policy

Answer 7

weekly or monthly cash payments to employees disabled from accidents or illness/ benefits percentage of worker’s income, policy flat amount/ employee worked for 30 to 90 days/ some plans limit to non-occupational disabilities

Question 8

Key employee policy

Answer 8

if a key employee becomes disabled,this policy pays a benefit by helping pay for a replacement, train a new employee, or replace loss of revenue

Question 9

Basic hospital

Answer 9

Coverage that provides benefits for room, board and miscellaneous hospital expenses for a certain number of days during a hospital stay.

Question 10

Major medical policies

Answer 10

provides benefits for catastrophic and prolonged injury or illness. High max. limit. Deductible-amount insured must meet per year before benefits are paid. Family Deductible; Carryover Provision; Common Accident

Question 11

Health Maintenance Organizations (HMOs)

Answer 11

managed care plan; services on a prepaid basis with little out of pocket cost; Members are SUBSCRIBERS within a specific geographic region called SERVICE AREA; service providers are paid a capitation fee per enrollee; Coverage not provided outside area except for emergencies. Emphasize preventive care; PCP is gatekeeper

Question 12

Preferred Provider Organizations (PPOs)

Answer 12

managed Care plans arranged through a network of providers; providers perform services to subscribers and charge a discounted fee negotiated in advance; subscribers can use in or out of network provider; no gatekeeper

Question 13

Point of Service (POS) plan

Answer 13

managed care plan; Combines HMO and PPO benefits; subscriber can choose which plan to use; within network, benefits paid as an HMO with a PCP or gatekeeper; out of network services will have higher out of pocket costs like PPO, with no PCP

Question 14

Flexible Spending Accounts (FSAs)

Answer 14

can only be offered through employment; employer contributions are made on a pretax basis; withdraws pay for qualified medical and dental expenses; USE IT OR LOSE IT

Question 15

High Deductible Health Plans (HDHPs) and related Health Savings Accounts (HSAs)

Answer 15

premiums are significantly low; Higher deductible and higher out of pocket limits

Question 16

Medicare supplement policies

Answer 16

called Medigap; fill in the coverage gaps of Original Medicare; plans A - N; plan A is the core benefits; plans B - N must include benefits of plan A

Question 17

Individual Contracts

Answer 17

insured receives a policy, provides evidence of insurability, can be purchased at any time, lower limits and higher deductibles

Question 18

Group Contracts

Answer 18

the employer receives the master policy, employees receive a certificate of insurance a summary of benefits; no evidence of insurability needed; underwriting is based on experience and community ratings; purchased after a probationary period during the open enrollment, higher limits, and lower out of pocket costs; more comprehensive

Question 19

Hospital indemnity

Answer 19

pays a specified dollar amount per day to the insured during hospitalization

Question 20

Short-term medical

Answer 20

temporary coverage that provides limited benefits for 30 days to 12 months. Designed as “interim plans” to immediately fill gaps due to lost coverage

Question 21

Accident

Answer 21

provides benefits for accidental injuries associated with specific events, such as foreign travel, cruise, airplane, etc.; provides blanket coverage for large groups

Question 22

Disability Income Insurance

Answer 22

This is designed to replace lost income in the event of a disability

Question 23

Probationary Period

Answer 23

This is another type of waiting period that is imposed under some disability income policies that adds onto the elimination period

Question 24

How many days after the accident must the death occur within for the accidental death benefit to be payed?

Answer 24

90 days

Question 25

Limited Risk Policy

Answer 25

This policy defines the specific risk in which accidental death or dismemberment benefits will be payed

Question 26

Special Risk Policy

Answer 26

This policy will cover unusual types of risks that are not normally covered under AD&D policies

Question 27

Skilled Care

Answer 27

This is daily nursing and rehabilitative care that can only be provided by medical personnel, under direction of physician. This is ONLY care that can be given by professional staff

Question 28

Respite Care

Answer 28

This is designed to provide relief to the family caregiver, and can include a service such as someone coming to the home while the caregiver takes a nap or goes out for awhile

Question 29

To convert group health to individual insurance, how soon must it be initiated after termination?

Answer 29

31 days

Question 30

Under COBRA, how long must coverage normally be extended?

Answer 30

up to 18 months

Question 31

Under COBRA, for events such as death or divorce, how long must coverage be extended for dependents?

Answer 31

36 months

Question 32

Basic medical

Answer 32

coverage for nonsurgical services a physician provides/ limits on visits, cost, hospital stays/ Covers emergency accidents, maternity benefits, mental and nervous disorders, hospice care, nurses expenses

Question 33

Basic Surgical

Answer 33

Covers costs of surgeons’ services, whether the surgery is performed in or out of the hospital/ No deductible but cost limited/ may assign relative value/ Written in conjunction w/ hospital exp. policies.