Life & Health Insurance Exam Prep
Accurate 100%
Basic Medical Expense policies - ANSWER Provide coverage for Hospital, Surgical and
Physicians Medical Expense.
-Purchased as a individual or group policy.
-provide first dollar coverage (no deductibles).
-limited benefit periods and low coverage limits.
Major Medical Expense Policy - ANSWER -A supplement (in addition) to Basic Medical
or as a stand-alone policy.
-individual or group policy.
-Take over when the Basic Policy runs out
Hospital Expenses - ANSWER -Pay for covered expenses incurred during a hospital
stay.
1. Daily hospital benefit - Room and Board
2. Miscellaneous expenses - Other Medical Expenses (X-Rays, MRI, Prescriptions,
Doctor Visits)
Daily Hospital Benefit - ANSWER -Cost of a hospital room, up to a daily $ limit. The limit
may be expressed either as a dollar amount, e.g. $500 per day, or it may be expressed
as the Usual, Customary and Reasonable (UCR) and Charge
Usual, Customary and Reasonable (UCR) - ANSWER Insurance company will pay an
amount for a given procedure based upon the average charge for that procedure in that
specific geographic area. The coverage is subject to a maximum amount or number of
days.
Benefit Schedule - ANSWER -Specifically states what is covered in the plan and for
how much. The coverage is subject to a maximum amount or number of days.
Indemnity - ANSWER Insured pays the bill and is reimbursed by the insurance company
up to a specified limit amount. Medical expense policies that pay a fixed rate provide the
insured with a stated benefit amount for each day of hospital confinement.
Reimbursement - ANSWER Policyowners obtain medical treatment from whatever
source they want and submit their charges to their insurer for reimbursement (actual
amount).
Service Based Contracts - ANSWER -Pay doctors and hospitals directly according to
the # of days of coverage that is provided in the contract for each event and are
prepayment plans. Once a claim is settled, the insured will receive an Explanation of
Benefit (EOB), which is a written confirmation that the claim was paid. Blue Cross and
,Blue Shield, Health Service Corporations and Medicare coverage are all provided on a
Service Basis.
Miscellaneous Expense Benefits - ANSWER -Secondary benefits (inside benefits)
because they occur inside the hospital for charges related to the stay. X-rays,
prescriptions, MRI's, anesthesia and lab fees are usually separate fees incurred during
a stay. Miscellaneous Expense Benefits have separate limits, referred to as Inside
Limits. The are expressed usually as a multiple of the daily amount (UCR)
Surgical Expense - ANSWER A schedule of procedures lists the amount allowable for
each procedure. If a surgical procedure is not found in the schedule, it will still be
payable. The amount payable for a procedure not listed is based on its relative value to
a procedure of similar difficulty. There are usually no deductibles.
Critical Illness Plans - ANSWER -Pays a lump sum to the insured upon the diagnosis (&
survival) of a critical illness. The insured must survive the illness for a certain time
period (Ex 30 days).
Hospital Indemnity - ANSWER -Provides a specific amount on a daily, weekly or
monthly basis while the insured is confined to a hospital. The benefit payments are sent
directly to the insured and can be used for any purpose.
Travel Insurance - ANSWER Covers most kinds of travel accidents, but only for a
specified period of time.
Workers Compensation - ANSWER A benefit required by the state and benefits will vary
to some degree from state to state. This coverage is made available through
government programs, private insurers, or by self-insuring. To be eligible the employee
must work in an occupation covered by Workers Compensation insurance, and have
had an accident or sickness that is work related.
Disability Income Insurance - ANSWER -Designed to replace income lost due to a
disability or illness of the insured wage earner. It never pays for the medical expenses; it
only replaces lost income and must be paid no less frequently than monthly. Its to avoid
Economic Death.
-Can be group of individual policy
Malingering - ANSWER Making the loss last longer than it has to.
DI Position Schedule - ANSWER Used in employer sponsored group plans because it
bases the benefit on the position held in the company.
DI Flat Dollar Amount - ANSWER In the event the insured becomes disabled the policy
might pay a flat $1,000 per month, regardless of any other income benefits.
, DI Taxation - ANSWER . If an individual buys Disability Insurance with his/her after-tax
dollars, the benefits will be tax-free. On the other hand, when employers pay for Group
Disability Income benefits, the benefits are taxable to the employee.
Morbidity Tables - ANSWER -Based on the law of large numbers.
-Predict how many people are going to be disabled in a given year and the severity the
disability.
-Tables are important to an insurer because some insureds become more disabled than
others.
Total Disability - ANSWER The inability to perform the duties of one's own occupation
for which a person is suited by reason of education, training or experience.
Partial Disability - ANSWER May be related to loss of Time, Function or Compensation.
Partial disability is defined as the inability to perform one or more of the regular duties of
one's own occupation or the inability to work on a full time basis, which results in a
decrease in income.
Permanent Total Disability - ANSWER The most severe of the classes. The insured will
never work again. Examples might be paralysis or coma.
Temporary Total Disability - ANSWER Insured is rendered unable to work for a period
of time, but recovery can be anticipated. Maternity leave or traction for a bad back are
examples.
Permanent Partial Disability - ANSWER refers to a type of injury, which is permanent,
but the insured can still work. A loss of a finger is an example of this type of injury
Temporary Partial Disability - ANSWER The least severe of the classifications and
usually refers to a disability which lasts a very short period of time. A sprained ankle
which takes seven or eight days to recover would be an example
Probationary Period - ANSWER is used to describe the period of time from the date the
policy is issued during which no claims will be paid for Sickness Only. Usually this
period of time is from 15 to 30 days. Used to avoid Adverse Selection (pre-existing
conditions). This helps to protect the insurer against individuals who would purchase a
disability policy shortly AFTER developing a health condition that requires immediate
attention.
Waiting Period or Elimination Period - ANSWER -Refer to a period of time from the date
of the claim (not date of issue) during which no benefit is paid. This provision can be
viewed as a deductible of days. The premium on a DI policy is adjusted depending on
the selection of the elimination period. Longer elimination periods result in lower
premiums.
Accurate 100%
Basic Medical Expense policies - ANSWER Provide coverage for Hospital, Surgical and
Physicians Medical Expense.
-Purchased as a individual or group policy.
-provide first dollar coverage (no deductibles).
-limited benefit periods and low coverage limits.
Major Medical Expense Policy - ANSWER -A supplement (in addition) to Basic Medical
or as a stand-alone policy.
-individual or group policy.
-Take over when the Basic Policy runs out
Hospital Expenses - ANSWER -Pay for covered expenses incurred during a hospital
stay.
1. Daily hospital benefit - Room and Board
2. Miscellaneous expenses - Other Medical Expenses (X-Rays, MRI, Prescriptions,
Doctor Visits)
Daily Hospital Benefit - ANSWER -Cost of a hospital room, up to a daily $ limit. The limit
may be expressed either as a dollar amount, e.g. $500 per day, or it may be expressed
as the Usual, Customary and Reasonable (UCR) and Charge
Usual, Customary and Reasonable (UCR) - ANSWER Insurance company will pay an
amount for a given procedure based upon the average charge for that procedure in that
specific geographic area. The coverage is subject to a maximum amount or number of
days.
Benefit Schedule - ANSWER -Specifically states what is covered in the plan and for
how much. The coverage is subject to a maximum amount or number of days.
Indemnity - ANSWER Insured pays the bill and is reimbursed by the insurance company
up to a specified limit amount. Medical expense policies that pay a fixed rate provide the
insured with a stated benefit amount for each day of hospital confinement.
Reimbursement - ANSWER Policyowners obtain medical treatment from whatever
source they want and submit their charges to their insurer for reimbursement (actual
amount).
Service Based Contracts - ANSWER -Pay doctors and hospitals directly according to
the # of days of coverage that is provided in the contract for each event and are
prepayment plans. Once a claim is settled, the insured will receive an Explanation of
Benefit (EOB), which is a written confirmation that the claim was paid. Blue Cross and
,Blue Shield, Health Service Corporations and Medicare coverage are all provided on a
Service Basis.
Miscellaneous Expense Benefits - ANSWER -Secondary benefits (inside benefits)
because they occur inside the hospital for charges related to the stay. X-rays,
prescriptions, MRI's, anesthesia and lab fees are usually separate fees incurred during
a stay. Miscellaneous Expense Benefits have separate limits, referred to as Inside
Limits. The are expressed usually as a multiple of the daily amount (UCR)
Surgical Expense - ANSWER A schedule of procedures lists the amount allowable for
each procedure. If a surgical procedure is not found in the schedule, it will still be
payable. The amount payable for a procedure not listed is based on its relative value to
a procedure of similar difficulty. There are usually no deductibles.
Critical Illness Plans - ANSWER -Pays a lump sum to the insured upon the diagnosis (&
survival) of a critical illness. The insured must survive the illness for a certain time
period (Ex 30 days).
Hospital Indemnity - ANSWER -Provides a specific amount on a daily, weekly or
monthly basis while the insured is confined to a hospital. The benefit payments are sent
directly to the insured and can be used for any purpose.
Travel Insurance - ANSWER Covers most kinds of travel accidents, but only for a
specified period of time.
Workers Compensation - ANSWER A benefit required by the state and benefits will vary
to some degree from state to state. This coverage is made available through
government programs, private insurers, or by self-insuring. To be eligible the employee
must work in an occupation covered by Workers Compensation insurance, and have
had an accident or sickness that is work related.
Disability Income Insurance - ANSWER -Designed to replace income lost due to a
disability or illness of the insured wage earner. It never pays for the medical expenses; it
only replaces lost income and must be paid no less frequently than monthly. Its to avoid
Economic Death.
-Can be group of individual policy
Malingering - ANSWER Making the loss last longer than it has to.
DI Position Schedule - ANSWER Used in employer sponsored group plans because it
bases the benefit on the position held in the company.
DI Flat Dollar Amount - ANSWER In the event the insured becomes disabled the policy
might pay a flat $1,000 per month, regardless of any other income benefits.
, DI Taxation - ANSWER . If an individual buys Disability Insurance with his/her after-tax
dollars, the benefits will be tax-free. On the other hand, when employers pay for Group
Disability Income benefits, the benefits are taxable to the employee.
Morbidity Tables - ANSWER -Based on the law of large numbers.
-Predict how many people are going to be disabled in a given year and the severity the
disability.
-Tables are important to an insurer because some insureds become more disabled than
others.
Total Disability - ANSWER The inability to perform the duties of one's own occupation
for which a person is suited by reason of education, training or experience.
Partial Disability - ANSWER May be related to loss of Time, Function or Compensation.
Partial disability is defined as the inability to perform one or more of the regular duties of
one's own occupation or the inability to work on a full time basis, which results in a
decrease in income.
Permanent Total Disability - ANSWER The most severe of the classes. The insured will
never work again. Examples might be paralysis or coma.
Temporary Total Disability - ANSWER Insured is rendered unable to work for a period
of time, but recovery can be anticipated. Maternity leave or traction for a bad back are
examples.
Permanent Partial Disability - ANSWER refers to a type of injury, which is permanent,
but the insured can still work. A loss of a finger is an example of this type of injury
Temporary Partial Disability - ANSWER The least severe of the classifications and
usually refers to a disability which lasts a very short period of time. A sprained ankle
which takes seven or eight days to recover would be an example
Probationary Period - ANSWER is used to describe the period of time from the date the
policy is issued during which no claims will be paid for Sickness Only. Usually this
period of time is from 15 to 30 days. Used to avoid Adverse Selection (pre-existing
conditions). This helps to protect the insurer against individuals who would purchase a
disability policy shortly AFTER developing a health condition that requires immediate
attention.
Waiting Period or Elimination Period - ANSWER -Refer to a period of time from the date
of the claim (not date of issue) during which no benefit is paid. This provision can be
viewed as a deductible of days. The premium on a DI policy is adjusted depending on
the selection of the elimination period. Longer elimination periods result in lower
premiums.
