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Terms in this set (76)
Only pays for specific perils
Designed to pay for any reasonable and necessary medical care
Applies after the deductible has been satisfied.
-Insurer pays 80% of all expenses that exceed the deductible
-Insured pays 20% of all expenses that exceed the deductible
Collects subscriber fees, accepts all sorts of risks, even catastrophic ones, and subscribers pay a flat monthly fee in exchange for access to medical services
A network of physicians who work out of their own offices and participate in the HMO on a part-time basis
Features health care providers that work in the HMO's facilities and are salaried employees of the HMO
-Preventive Care (physicals, etc.) no co-pay
-Physician services = small co-pay
-Primary care physician (PCP) also called gatekeeper
-Referral (specialty) physician
-Emergency Care - if out of network the subscriber must notify the HMO within 72 hours
Combines the characteristics of an HMO and a major medical plan. The health care is actually delivered by the PPO. The PPO is a group of doctors who have agreed to reduce their fees for insurance companies that contract with them.
-If the subscriber sees an in network ppo, pays co payment, out of network pays deductible and 80/20 may apply as well
Point of Service Plan (POS)
-Sometimes referred to as an open-ended HMO
Hybrid of HMO & PPO w/ greater flexibility on choosing specialists outside network w/ benefits still provided but @ higher co-pay.
Pure Loss of Income
Pays a % of lost income when unable to work. The benefit is usually capped at 60-80% of the insured's pre-disability earnings.
-Commonly used with group disability policies
Indemnity Disability Income
Pays a flat monthly benefit when the insured cannot work due to an accident or illness.
-Commonly used with individual disability policies
Recurrent Disability Benefit
If the insured returns to work after a qualifying disability, and the disability recurs within 6 months, the insured is eligible to restart benefits immediately
Heart surgeon who can't perform heart surgery
Defines a total disability as the insured's inability to perform any occupation for which the insured is reasonably qualified by education, training, or experience
Three circumstances automatically presumed to be disabled.
-Blindness in both eyes
-Loss of speech or hearing
-Loss of use of both hands, feet, or one hand and one foot
"At work" disability
-Covers wages lost when the insured is working less or making less upon returning to work
Pays a flat dollar amount per month (usually 50% of the total disability benefit) for a limited period of time - short term
The insurance company pays a % of the total disability benefit
Required Policy Provisions for Long-Term Care
-All long term care policies must have 30 day free look
-Must be guaranteed renewable or better
-No LTC policy may exclude preexisting conditions for longer than 6 months
-Must give the insured the right to designate one person other than themselves to receive advance notice of cancellation due to non-payment of premium
MN Reg's for LTC
-Provide shoppers guide to LTC insurance
-8 hour initial training course before being able to sell
Taxation of LTC
Deductible and tax-free benefits
Standard Provisions of Individual Health Insurance Policies
-Time limit on certain defenses (2 years)
-Grace period: 7/10/31
-Reinstatement (insurer may collect no more than 60 days of past due premiums, insured is auto covered if app not rejected within 45 days, coverage begins immediately but there is a 10 day probationary period for sickness)
-Notice of claim ( notify in 20 days)
-Claim forms ( send forms within 15 days)
-Proof of loss (90 days from date of loss)
-Time payment of claim
-Payment of claim
-Physical exam or autopsy
-Change of beneficiary
-legal action (60 days, no longer than 3 years)
11 Optional Provisions
-Change of occupation
-Misstatement of Age
Delivery of Policy
All changes to the application must be initialed by the applicant
These rates always lead to lower premiums
Open Enrollment Period
The time an employee may make changes to the insurance benefits.
-Needs to be a qualifying event like change in number of dependents or employment status
Changing Group Insurance Carriers
All money spent to satisfy a deductible or co-insurance requirement must be carried over to new plan.
-No loss, no gain
Applies to employees who lose eligibility for health insurance coverage for any reason except gross misconduct.
-Notification period: 14 days
-Decision period: 60 days
Continuation period: Qualified benny pays 102% to continue coverage
-Lasts 18 months for those who lose coverage due to termination of employment
-Lasts 29 months for those who can't work due to disability
-Lasts 36 months for dependents who lose coverage due to death, divorce or no longer a dependent
Conversion period for COBRA
A qualified benny has 30 days to convert
-MN regulations require a 10 day notification period rather than the 14 days required by federal law
Puts substantial restrictions on the ability of insurance companies to impose preexisting condition limitations on group health insurance plans
-Creditable coverage: had coverage within last 63 days
Small Employer Medical Plans
Co payment type
-Doctor services is $15
-ER is $50
-Hospital admission is $300
Insurer must pay at least 80% of charges that exceed the co-payment amount
Group term life insurance
The employer offers and pays for an amount of annually renewable term life insurance equal to the employee's annual salary. Usually doesn't require proof of insurability
If fired, just like COBRA, 18 months of continuation, then 31 days to convert
Group Credit Life Insurance
Protects a lender in the event a debtor dies before repaying a loan balance.
-The premium is paid by the lender (bank)
For the first two years of disability, the policy uses the own occupation definition of total disability
Health Savings Account (HSA)
A tax-advantaged personal savings account, set up to be used exclusively for medical expenses; must be paired with a high-deductible health insurance policy
Health Reimbursement Account (HRA)
Are established and funded by employers for employees as a source to cover eligible health care cost
Medical Savings Account (MSA)
Alternative means of health care in which individuals make tax-deductible contributions to a special account that can be used to pay medical expenses.
Flexible Spending Account (FSA)
An employer-sponsored benefit that allows the employee to pay for eligible medical expenses and/or dependent and child care expenses on a pre-tax basis
-They can't be used to reimburse health insurance premium costs, including premiums for a LTC policy
A federal gov health insurance program for individuals
-65 and older
-Have permanent kidney failure
-Have been entitled to SS disability benefits for the past 24 months
Administered by the Centers for Medicare and Medicaid Services (CMS)
Medicare Part A-Hospital Insurance (Mandatory)
Inpatient hospital care-90 day benefit period
-Insured satisfies initial deductible, medicare then pays 100% of first 60 days
-Skilled nursing facility-100 day benefit period. 3 days in hospital rule
-No bennys past day 100
Medicare Part B-Medical Insurance (optional)
Pays for a wide variety of outpatient doctor and medical services received anywhere in the US
-Insured pays calendar year deductible, 80/20 coinsurance
Medicare Part C-Medicare Advantage
PREPAID HEALTH PLANS THAT OFFER PART A AND PART B IN ADDITION TO OTHER SERVICES
-No outside coverage unless emergency
Medicare Part D
Subsidizes the costs of prescription drugs
-Participants pay an additional monthly premium for the coverage
A policy or rider designed to provide coverage for at least 12 consecutive months for diagnostic, preventive or personal care services provided in a setting other than the acute care unit of a hospital is called:
Medicare supplement insurance.
preexisting condition insurance.
long-term care insurance.
comprehensive insurance package benefits.
Joy, age 50, owns an individual long-term care insurance policy and pays $1,000 a year in premiums. After getting injured in a car accident, Joy needed skilled nursing care, for which her policy paid $150 a day in benefits. Which of the following statements is CORRECT?
Joy must include all of the LTC benefits received in her income because she is younger than age 65.
Joy cannot take an income tax deduction for any of the LTC premiums paid.
Joy must include part of the LTC benefits received in income.
Joy can exclude all of the LTC benefits from income.
Which of the following statements about Medicare supplement (Medigap) policies is NOT correct?
Medigap policies supplement Medicare benefits.
Medigap policies cover the cost of extended nursing home care.
Medigap policies pay for some health care services not covered by Medicare.
Medigap policies pay most, if not all, Medicare deductibles and copayments.
Which of the following is NOT available to Medicare beneficiaries through the Medicare Advantage Program?
After a health insurance policy is in force, the initial period that often must pass before a loss due to sickness can be covered is known as:
the preexisting interval.
the elimination period.
the probationary period.
the trial term.
Under the standard cancellation provision, an insurance company has the right to cancel a policy at any time with how many days' written notice to the insured?
Beth's health insurance policy contains a provision that allows her to renew coverage up to age 65. However, the policy also states that should Beth lose her job, the insurance company will cancel the policy, regardless of Beth's age. In terms of renewability, what type of policy does Beth have?
A waiver of premium provision may be included with which kind of health insurance policy?
An agent soliciting long-term care insurance in Minnesota must deliver the outline of coverage:
as soon as the application is completed and the initial premium paid.
prior to accepting the initial premium from the applicant.
at the time the agent delivers the policy.
before the presentation of an application or enrollment form.
An applicant for health insurance completes the application and satisfies all of the conditions of the conditional receipt. If the policy is eventually issued as applied for, coverage takes effect:
as soon as the policy has been delivered to the applicant.
as soon as the policy has been issued.
as soon as the underwriting process has been completed .
just as if the policy had already been issued.
Medicare supplement (or Medigap) policies pay:
Benefits to those who cannot afford Medicare Part B coverage.
Benefits provided under Medicare Part A.
Medical costs arising from extended custodial (nursing home) care.
All or most of Medicare's deductibles.
For situations where no initial premium was paid when the application was taken, when delivering that policy the agent is generally required to do all of the following EXCEPT:
present the insured with a conditional receipt.
collect any premium due.
obtain a Statement of Good Health from the insured.
explain the policy, its provisions, and any riders, exclusions, or ratings involved.
In writing group insurance, insurance companies use all of the following underwriting procedures to guard against adverse selection EXCEPT:
benefits determined by formula.
careful group selection.
medical examinations for prospective insureds who are borderline risks.
minimum participation rules.
The optional provision Other Insurance in This Insurer is specifically designed to:
discount the premiums if more than 1 policy is issued to insure the same individual.
avoid issuing 2 policies on an insured person.
limit the risk with any one individual insured by the insurance company.
restrict an insured's coverage to one type of accident and health insurance.
Which of the following statements regarding the Minnesota Life and Health Insurance Guaranty Fund is CORRECT?
Its purpose is to protect Minnesota residents and nonresidents who own or are beneficiaries of life or health insurance policies issued by insurers that cannot meet their financial obligations.
It cannot sue or be sued.
It is funded by contributions made by all authorized insurers.
It holds funds for the benefit of life insurance, annuities, and accident and health insurance in a single account.
Under what system do a group of doctors and hospitals in a designated area contract with an insurer to provide medical services at a prearranged cost to the insured?
When a group disability insurance plan is paid entirely by the employer, benefits paid to disabled employees are
deductible income to the employee
deductible income to the employer
taxable income to the employee
taxable income to the employer
Which of the following statements concerning federal income taxation of annuities is CORRECT?
Premiums are taxable; distributions are not taxable.
Annuity death benefits, in whole or in part, are taxable to the beneficiary.
Annuity death benefits are never taxable to a beneficiary.
Premiums are tax deductible; distributions are not taxable.
Under COBRA, the right to continue existing group health coverage is NOT available to an individual who
voluntarily leaves employment
has the number of working hours reduced
is a covered dependent who reaches the age of ineligibility
is terminated due to gross misconduct
The cost-of-living adjustment (COLA) rider found in many disability income policies automatically increases the monthly benefit when
the insured qualifies for Social Security disability benefits
the insured is disabled and receiving benefits
the policy has been in force for a certain number of years
the insured recovers from a disability
The type of policy that is paid up after a specified period of years and endows at age 100 is
a whole life policy
a single premium policy
a limited pay policy
an endowment policy
In the absence of any other election, the automatic settlement option in a life insurance policy is
life income with period certain
extended term insurance
reduced paid-up insurance
lump sum in cash
All of the following are characteristics of a disability buy-sell plan EXCEPT
a relatively long elimination period
the option to select a lump-sum payment
it is often used to protect the partners in a business
the premiums are not tax deductible
What type of insurance would a person select as the most efficient method of paying the outstanding debt on their home in the event of death?
Which of the following statements is CORRECT about an immediate annuity?
Payments fluctuate according to the performance of the investments in the separate account.
Immediate annuities typically have a long accumulation period.
Immediate annuities typically have a long annuity period.
Payments begin at the next payment cycle.
The waiting period to qualify for Social Security disability benefits is
In life insurance, the entire contract is considered to be
the policy and application
the insuring clause and riders, if any
the specification pages and application
the insuring clause, application, and riders or endorsements referred to in the contract
Which of the following premium payment modes is the most expensive?
The period immediately following the onset of a disability, during which time benefits are not payable, is called the
delayed disability period
A universal life policy may be surrendered for its cash value
only if there are no outstanding loans
only when the cash value equals the death benefit
within 30 days of an interest payment
at any time
In an employer-paid group disability policy, if the employee becomes disabled and the benefit is $2,000/month, which of the following is CORRECT?
Benefits are tax deductible to the employer.
Benefits are fully taxable to the employee.
Premiums are taxable to the employer.
Benefits are not taxable to the employee.
The process by which a mutual insurer is transformed into a stock insurer is known as
Which of the following statements concerning the elimination period under a disability income policy is CORRECT?
It describes the time after the policy is issued before benefits will be paid.
It can be thought of as a time deductible.
Only 1 elimination period must be satisfied each year.
An insured can select a longer elimination period and pay a higher premium.
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