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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
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
