Unit 24: Types of Health Insurance policies Flashcards
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Like life insurance, health insurance is a contract that is:
3 points…
- legal agreement between parties
- promising a certain performance
- an exchange for a valuable consideration
What are the 4 contract participation requirements for a health insurance contract to be valid?
Handwritten summary
1.competent parties
2. legal purpose
3. offer acceptance
4. consideration
What are UNILATERALl contract concept?
only one party - the insurer - is required to fulfill its obligations under contract
What is a PERSONAL contract concept?
Health insur contracts are personal in nature – person not a thing is being insured
What is an ALEATORY contract concept?
unequal value given to both parties – insured (or beneficiary) may receive a lot more from insurer than premiums paid
What is a contract of ADHESION concept?
One sided as regard to perparation
Provisions are prepared by one party, the insurer
What is a CONDITIONAL contract concept?
Handwritten note:
Ground rules
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What are the two general categories of health policies?
- Disability income policies
- Medical expense policies
What do disability income policies do? In regard to payout
Periodic payment
Pay benefits (every week/month) for loss of income to insured who is disabled, can no longer earn regular income
What do medical expense policies do?
Often cover accident and illness
benefits usually paid in a lump sum to reimburse medical expenses of insured
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What is the definition of “accident” (for policies covering accidents not sickness)
an unforeseen event, unintended, generally resulting in injury.
What is dismemberment?
In many, but not all states, it pertains to loss of sight as well as loss of limb
Re: loss of limb means severed at or above the main joint. (I’m gonna vomit.)
What does loss of sight entail to be considered dismemberment?
Loss of sight does not mean eye has to be removed
Loss of sight has to be complete and permanent
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What is capital sum that is paid?
Capital sum = the amount paid to the insured when dismemberment occurs
(Most policies pay FULL capital sum is paid for a double loss - two feet - pay PART of capital sum for single dismemberment)
What is principal sum that is paid?
amount paid for accidental death
What is another name for “principal sum?”
Usually called “accidental death benefit”
Who is the beneficiary of an accidental death benefit?
the person who receives the death benefit
Define secondary/contingent beneficiary (onto page 334)
person next in line (after primary) to receive death benefit – if the primary person dies before the insured dies
Define primary beneficiary
first/primary person in line to receive death benefit
What is a tertiary/third beneficiary?
Some insureds specify this - next in line after secondary person dies
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What is an indemnity?
Any amount[s] an insurer pays in the event of a loss
What is a fractional indemnity?
partial indemnity paid - i.e. for loss of finger vs loss of whole hand
What does multiple indemnity mean?
For death/certain accidents, insurer may pay multiples of the stated benefit
triple and quadruple - multiple indemnity
Define two types “accidental” in a policy in terms of injury or death
- Accidental bodily injury (handwritten: “result”)
- Accidental bodily injury by accidental MEANS
(handwriten: “caused result”)
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Which of the two worded “accidental” policies is more restrictive?
Accidental bodily injury by ACCIDENTAL MEANS
Person who highlighted book, starred an example on page 335 for your to read
What are the time limits for most policies on when accidental death benefits will be paid in case of death?
most will only pay accidental death benefits if death occurs within 90 days of the date of the accident
