Types of Health Insurance PART 1

  1. 1. Contracts that are prepared by
    one party and submitted to the other party on a "take it or leave it"
    basis are classified as
    • A
    • Contracts of adhesion.

    B Unilateral contracts.

    C Aleatory contracts.

    D Binding contracts.

    • Insurance policies are written by
    • the insurer and submitted to the insured on a "take it or leave it"
    • basis. The insured does not have any input into the contract, but simply
    • adheres to the contract.
  2. 2.
    Insurable interest can be best described by which of the following?
    • A It is not necessary for the
    • insured to be aware of the insurable interest or give permission for the insurance
    • that is to be written

    • B
    • The applicant must experience a financial loss due to an accident or sickness
    • that befalls the insured.

    • C The insured must be genuinely
    • interested in the life of the applicant.

    • D All beneficiaries need to have
    • notification of their status.

    • Insurable interest means that the
    • applicant must experience a financial loss when the insured is hurt or sick.
    • Insurable interest is only needed by the applicant and only at the time of
    • application.
  3. 3. When a client is considering
    replacing existing health insurance, all of the following would be areas of
    concern EXCEPT
    A Waivers for impairments.

    • B
    • Reciprocity.

    C Time limit on certain defenses.

    D Pre-existing conditions.

    • When a new health insurance policy
    • is issued, the insurer may contest statements on the application for 2 years.
    • Also, certain claims could be denied because of waivers for impairments or
    • pre-existing conditions provisions in the policy. Reciprocity refers to writing
    • insurance across state lines.
  4. Which of the following would be an
    example of a limited accident and health insurance policy?
    A A long-term care policy

    • B
    • A dread disease policy

    C An automobile liability policy

    D A Medicare policy

    • Limited risk policies cover specific
    • illness or accidents.
  5. 5
    This arrangement specifies who will
    purchase a disabled partner’s interest in the event he or she becomes disabled.
    A Business overhead expense

    B Key-person insurance

    C Employee benefit plan

    • D
    • Disability buyout

    • Incorrect! The disability buyout agreement
    • specifies who will purchase a disabled partner's interest and legally obligates
    • that person or party to purchase such interest upon disability.
  6. 6. Which of the following LTC
    Coverages would NOT encourage an insured to receive care at home?

    A Respite Care

    B Home Health Care

    C Adult Day Care

    Residential Care
    • Respite care, home health care, and
    • adult day care are all coverages used to reduce the necessity of admission into
    • a care facility.
  7. 7. Which statement accurately
    describes group disability income insurance?

    A There are no participation
    requirements for employees.

    B Short-term plans provide benefits
    for up to 1 year.

    The extent of benefits offered is determined by the insured’s income.

    D In long-term plans, monthly
    benefits are limited to 75% of the insured’s income.
    • Group plans usually specify the
    • benefits based on a percentage of the worker’s income. Short-term group plans
    • usually provide maximum benefit periods of 13 to 26 weeks. Group long-term
    • plans provide monthly benefits usually limited to 60% of the individual’s
    • income. Group disability plans also have minimum participation requirements -
    • usually the employee must have worked for 30 to 90 days before they become eligible
    • for coverage.
  8. 8. Long term care coverage may be
    sold in all of the various ways EXCEPT

    A Endorsement to life policy.

    Endorsement to health policy.

    C Group long term care.

    D Individual long term care.
    • Long-term care insurance policies
    • may be purchased on an individual or group basis, or as an endorsement to a
    • life insurance policy.
  9. 9. After a person's employment is
    terminated, it is possible to obtain individual health insurance after losing
    the group health coverage provided by the employer. Which of the following is
    NOT true?

    A The employee can convert from
    group to individual insurance within 31 days of termination.

    B The premium of the individual
    health insurance policy can be higher than the original policy.

    By law, the new, individual policy must provide the same benefits as the group
    insurance policy.

    D Continuation of group coverage
    need not include dental, vision, or prescription drug benefits.
    • Terminated employees have 31 days to
    • convert to an individual health insurance policy, without having to provide
    • proof of insurability. The insurer can adjust the new, individual health
    • policy’s premium as it sees fit, as long as coverage is provided. The new
    • policy could offer lesser benefits than the original group health policy.
  10. 10. All of the following are correct
    about the cancellation of an individual health policy EXCEPT

    X Unearned premiums are retained by the insurance company.

    B Cancellation is on a
    "short-rate" basis if insured cancels.

    C Claims incurred before
    cancellation must be honored.

    D An insurance company may cancel
    upon meeting statutory requirements.
    • Any unearned premium must be
    • returned to the policyholder. If the insured requests cancellation, the
    • unearned premium will be returned on a "short rate" basis. If the
    • insurer cancels, the unearned premium will be returned on a 'pro rata' basis.
  11. 11. Teresa pays a monthly premium of
    $100 for her health insurance. What would be the duration of the grace period
    under her policy?

    A 60 days

    B 7 days

    X 10 days

    D 31 days
    • The grace period is seven days if
    • paid weekly, 10 days if paid monthly, 31 days for all other modes.
Card Set
Types of Health Insurance PART 1
Health Insurance