Unit 23

Question 1

Susan is covered under her employer-sponsored disability group plan. The premium is $50 a month: Susan pays $10 and the employer pays $40. Assuming Susan were to become disabled and receive monthly disability benefits of $700 from the plan, how much, if any, of the monthly benefit would be taxable income?

(A) $0
(B) $70
(C) $140
(D) $560

Answer 1

(D) $560

Question 2

Assume the following individuals are issued health insurance policies with varying renewability provisions. All other factors being equal, who would pay the highest premium?

(A) Dan - cancellable
(B) Jim - optionally renewable
(C) Henry - conditionally renewable
(D) Jack - noncancellable

Answer 2

(D) Jack - noncancellable

Question 3

Which of the following is the purpose of medical cost management?

(A) To influence hospital charges and doctors’ fees
(B) To discourage individuals from utilizing health care services
(C) To control health claims expenses
(D) To encourage individuals to seek medical help only as a last resort

Answer 3

(C) To control health claims expenses

Question 4

All of the following are primary risk factors in underwriting individual health insurance policies EXCEPT:

(A) geographical location
(B) moral hazard
(C) occupation
(D) physical condition

Answer 4

(A) geographical location

Question 5

Which of the following statements most aptly describes health insurance benefits?

(A) Each policy offers a single type of benefit.
(B) Claims, not benefits, affect premium rates.
(C) Policyowners who have policies with identical benefits pay the same premiums.
(D) The greater the benefits, the higher the premium.

Answer 5

(D) The greater the benefits, the higher the premium.

Question 6

Which of the following would probably NOT be considered in underwriting a health insurance risk?

(A) Personal habits
(B) Credit rating
(C) Medical history
(D) Marital status

Answer 6

(D) Marital status

Question 7

All of the following factors would affect a health insurance policy’s premium rate EXCEPT:

(A) age of the insured
(B) occupation of the insured
(C) type of benefit provided
(D) residential address of the insured

Answer 7

(D) residential address of the insured

Question 8

Rick, who has no health insurance, experienced $3,000 in medical expenses this year. Assuming his adjusted gross income was $29,000, how much of those medical expenses can he deduct from his adjusted gross income, if any?

(A) $0
(B) $825
(C) $2,175
(D) $3,000

Answer 8

(B) $825

Question 9

What kind of table reflects the average number of disabilities due to sickness or accidents at various ages?

(A) Mortality
(B) Morbidity
(C) Claims underwriting
(D) Underwriting

Answer 9

(B) Morbidity

Question 10

What is the effect of an impairment rider attached to a health insurance policy?

(A) To increase the premium rate charged
(B) To decrease the amount of benefits provided
(C) To exclude from coverage losses resulting from specified conditions
(D) To increase the policy’s waiting period

Answer 10

(C) To exclude from coverage losses resulting from specified conditions