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Life and Health Insurance Final Exam: Questions with Verified Solutions, Exams of Insurance law

A comprehensive set of questions and answers related to life and health insurance, covering various aspects such as medical expense policies, disability income policies, and group health insurance. It is a valuable resource for students studying insurance principles and practices, offering insights into key concepts, calculations, and policy provisions.

Typology: Exams

2024/2025

Available from 02/09/2025

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Life and Health Insurance Final Exam
Questions with Verified Solutions
________ is a health insurance policy that only covers physician services and procedures. Proves
first dollar benefits by the insurer, but low coverage limits. ✔✔Basic Medical Expense
________ is a health insurance policy that only covers room and board if the insured stays
overnight in a hospital and the miscellaneous expenses that occur because of that stay. ✔✔Basic
Hospital Expense
________ is a health insurance policy that only covers surgeries, surgeons and anesthesiologists.
It provides first dollar benefits by the insurer, but low limits. ✔✔Basic Surgical Expense
______ is a health insurance policy that offers broad coverage and high benefits for
hospitalization, surgeries, and physician services subject to deductibles and coinsurance.
✔✔Major Medical Expense
_________ is a type of traditional medical expense insurance designed to reimburse the
policyowner for out of pocket medical expenses. It is characterized by typically low deductibles
(100-500), coinsurance, and stop loss limits. ✔✔Comprehensive Major Medical
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Download Life and Health Insurance Final Exam: Questions with Verified Solutions and more Exams Insurance law in PDF only on Docsity!

Life and Health Insurance Final Exam

Questions with Verified Solutions

________ is a health insurance policy that only covers physician services and procedures. Proves first dollar benefits by the insurer, but low coverage limits. ✔✔Basic Medical Expense

________ is a health insurance policy that only covers room and board if the insured stays overnight in a hospital and the miscellaneous expenses that occur because of that stay. ✔✔Basic Hospital Expense

________ is a health insurance policy that only covers surgeries, surgeons and anesthesiologists. It provides first dollar benefits by the insurer, but low limits. ✔✔Basic Surgical Expense

______ is a health insurance policy that offers broad coverage and high benefits for hospitalization, surgeries, and physician services subject to deductibles and coinsurance. ✔✔Major Medical Expense

_________ is a type of traditional medical expense insurance designed to reimburse the policyowner for out of pocket medical expenses. It is characterized by typically low deductibles (100-500), coinsurance, and stop loss limits. ✔✔Comprehensive Major Medical

What feature of Major Medical policy requires 100% payment of covered expenses after the insured's claim cost reaches a certain level? ✔✔Stop Loss

The amount of loss paid by the policyowner before the health insurance policy pays the claims is known as.. ✔✔Deductible

Mary has a Major Medical policy with a $200 deductible and 80/20 coinsurance allocation. If she suffers a covered loss of $8200, how much will Mary be required to pay for this loss? ✔✔$

_______ is a health insurance policy that does not have a deductible. The company pays first when a claim is submitted. ✔✔First Dollar Coverage

Charlie owns a Comprehensive Major Medical policy with a $1000 Base plan, a $500 deductible and 80/20 coinsurance. If he suffers a covered loss of $9500, how much will the company pay? ✔✔$

Which is the correct order of the basic claim calculation? ✔✔Apply the base plan; subtract the deductible; allocate the coinsurance; check by adding

Which of the following do Medical Expense companies use to reduce adverse selection? ✔✔Preexisting conditions limitations

The Affordable Care Act allows dependents to remain on a parent/guardian's healthcare plan until age ✔✔ 26

A Disability Income Policy deductible is expressed in time and known as an ✔✔Elimination Period

______ is the key rating factor for Disability policy ✔✔Occupation

________ requires that the insured to be unable to perform the duties of his or her own occupation in order to receive disability income benefits. ✔✔Own Occupation

________ requires the insured to be unable to perform any occupation they would be reasonably suited to do based on education, training or work experience in order to receive disability income benefits from the policy. ✔✔Any Occupation

Short term disability is ______ year(s) or less. ✔✔Two

Any period exceeding ___ years is considered long term. ✔✔Five

Generally, policy limits are limited to _____% or ____% of your earned income. ✔✔60%;80%

What type of disability requires no proof of loss of time or duties? ✔✔Presumptive Disability

________ promises to pay the amount Social Security would have paid if Social Security Disability would have been approved. ✔✔Social Security Rider

__________ will pay the estimated Social Security Disability benefit while Social Security is determining eligibility. ✔✔Additional Monthly Benefit

__________ an illness of injury that prevents an insured from performing one or more of the important duties of their job, but not all of the occupational duties. ✔✔Partial Disability

_________ is a disability income payment based on the proportion of mission employer income. ✔✔Residual disability benefit

The Entire Contract is comprised of ✔✔application and policy

The Incontestable Provision gives companies _______ to legally contest the validity of a contract or deny a claim on the basis of misstatement in the application. ✔✔2 Years

Standard premium plan Grace Periods are: _______ days for weekly; ______ days for monthly; ______ days for all other premium payment plans. ✔✔7;10;

Companies are under no contractual obligation to _______ a lapsed policy, but may do so at their discretion. ✔✔Reinstate

________________ provision requires companies to be notified of a loss within 20 days or as soon thereafter as reasonably possible. ✔✔Notice of Claim

_________________ most be transmitted to the policyowner/insured within 15 days of claim or claim notification. ✔✔Claim Forms

________________ must be returned to the company within 90 days of the loss or as soon thereafter as reasonably possible. ✔✔Proof of Loss

Medical expense claims must be paid ___________ and Disability Income no less frequently than __________. ✔✔immediately; monthly

Claims are paid to the _________. ✔✔Policyowner

The company has the right to conduct a __________ and _________ to validate an accidental death claim. ✔✔physical exam; autopsy

A policyowner may sue their company for nonpayment of a claim after ____ days of submitting claim forms but no more than ____ years. ✔✔60; 3.

A policyowner has the right to name, change and designate _____________. ✔✔Beneficiaries.

Failure to notify a Disability Income carrier of a change to a higher risk occupation will result in a __________ of benefits. ✔✔reduction

______________ is an exception to the Incontestable Clause. ✔✔Misstatement of age or gender

__________ provides that if a policy is issued in a state that does not conform to state law, it will be interpreted as if it did. ✔✔Conformity with State Statutes

If __________ or __________ not prescribed by a doctor are linked directly to a loss then the claim may be denied. ✔✔Intoxicants or Narcotics

Group policies create a contract between the organizing entity of the group and ✔✔the insurance company

The Coordination of Benefits provision in a Group Medical Expense policy is designed to ✔✔Allow the insured to collect some benefits from each of the plans of two employed spouses

Which of the following statements about Group Medical Expense contracts is NOT true? ✔✔Group insurers do not like employee turnover.

Mentally or physically handicapped dependent children can remain on their parents plans ✔✔indefinitely

If you are terminated from your employment, you may be able to continue Group Health coverage under ✔✔COBRA.

COBRA is available for departing employees of plans which insure more than ✔✔20 employees.

Benefits paid to employees under a Group nonparticipating Disability Income policy are ✔✔taxable.

Jack and Jill are married, each has employer-sponsored Major Medical Coverage for the entire family. Jack was born on June 13, 1979 and Jill on April 1, 1981. Whose plan is primary for the children? ✔✔Jill's

Which plan is primary if two employer-sponsored spouses share the same birthday? ✔✔Whichever has been in effect the longest.

Both Jack and Jill's plan contains a $1000 deductible and 80/20 coinsurance. If Jill sustains a covered loss of $6000, how much will her policy pay? ✔✔$

Using the information above, how much would Jack's policy pay? ✔✔$

________ is teh compulsory hospitalization insurance funded by all workers through FICA taxation that provides coverage for inpatient care. ✔✔Medicare Part A

_______ is a voluntary coverage for supplementary medical insurance to pay some of the costs of physician and medical services on an outpatient basis; a monthly fee is paid by beneficiary. ✔✔Medicare Part B

________ is the federal government sponsored health care program for individuals age 65+, suffering from renal failure, or recognized by Social Security as disabled and collected 24 months of Social Security Disability benefits. ✔✔Medicare

Hospital insurance is found in Medicare Part ✔✔A

If you are still covered by Group Major Medical plan at age 67, what is considered to be the secondary payer? ✔✔Medicare

Which part of Medicare provides nursing home coverage? ✔✔Part A

The annual blood deductible under Parts A and B is _____ pints. ✔✔ 3

What type of facility exists to serve the needs of the terminally ill? ✔✔Hospice

Under Part B of Medicare, what % of the costs does Medicare pay after the deductible? ✔✔80%

What federally funded, state administered Medical Expense program is designed to serve the poor? ✔✔Medicaid

Which of the following does not qualify a person for Medicare? ✔✔Being impoverished

______ is a health insurance policy offered by commercial health insurers to fill the gaps in Medicare coverage. ✔✔Medicare Supplemental Policy

_______ is a type of health insurance that provides stated benefits for long-term care services typically taking place in a nursing home or home health care. ✔✔Long Term Care Policy

_______ provides hat an MSP may not be classified on the sole basis of age or deterioration of health. ✔✔Guaranteed Renewable

______ details the benefits, coverages, rights of renewal and premium increase provisions. ✔✔Outline of Coverage

Generally, Group MSP's should have a loss ratio of ______ and Individual MSP's of _____. ✔✔75%; 65%

MSP's must be notified of Medicaid eligibillity within _____ days. ✔✔ 90

AD&D policies or riders provide a death benefit known as the ✔✔principal sum

For and AD&D policy to pay for an accidental death, the death must occur within how many days of the accident? ✔✔ 90

Medicare enrollees who want the offset the deductibles and copayments should purchase ✔✔A Medicare Supplement policy

The Renewability provision of an MSP or LTC must at least provide the policyowner rights associated with which of the following? ✔✔Guaranteed Renewable

LTC policies must offer a Free Look period of ___ days. ✔✔ 30

A poverty stricken 75 year old would use which of the following to cover Medicare deductibles and copayments? ✔✔Medicaid

A wealthy 75 year old would use which of the following to cover Medicare deductibles and copayments? ✔✔An MSP

A person who can no longer perform the activities of daily living and will require custodial care for the rest of his life needs: ✔✔and LTC

LTCs must provide a minimum of how many months of continuous nursing home care? ✔✔ 12

If a company markets MSPs, it must offer ✔✔Plan A

his annuity provides stipulated payments at regular intervals for the life of the annuitant with no refund provisions once the annuitant dies. The most common use is to build a tax-deferred sum of money that funds stream of income that you cannot outlive. ✔✔Life Annuity

A ___________ contract will not pay income benefits until a later date, usually the annuitant's retirement age. ✔✔Deferred Annuity

Payments for a lifetime with a set time period for which payments will be made. ✔✔Variable Annuity

__________ allows your beneficiary to recover all of your principle in either a lump-sum or continued installments ✔✔Refund Life Annuity

____________ is intended to offset inflation. ✔✔Variable Annuity

__________ is the insurance company offering the Annuity. ✔✔Annuity Company

___________ is the individual whose mortality is measured when computing the lifetime benefit. ✔✔Annuitant

____________ is the person who pays for and controls the Annuity. ✔✔owner

___________ is the individual who would receive the value of the Annuity if the owner/annuitant dies during the accumulation period. ✔✔beneficiary

_____________ promises a specified benefit to the employee at retirement. ✔✔defined benefit plan

____________ defines how much will be contributed yearly. ✔✔Defined Contribution Plan

______________ allow the employee to defer some of their current

salary to provide for their retirement; participation is optional; employer may match employee contribution. ✔✔cash or Deferred Arrangement Plan

________ allows employees to borrow from their plans in certain circumstances subject to repayment requirements. ✔✔401k