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Life & Health Insurance Exam Prep
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Life & Health Insurance Exam Prep
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Life & Health Insurance Exam PrepBasic Medical Expense policies - correct 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 - correct 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 - correct 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 - correct 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) - correct 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 - correct 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 - correct 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 - correct answer-Policyowners obtain medical treatment from whatever
source they want and submit their charges to their insurer for reimbursement (actual
amount).
Service Based Contracts - correct 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 - correct 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 - correct 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.
Surgical Schedule - correct answer-Is simply a price list. Each procedure is listed and a
dollar amount assigned and if a procedure is not listed in the schedule it is still paid.
Relative Value - correct answer-scientific method of paying different benefits based on the
region of the country an insured lives. It is based on assigning a value to each procedure
and using a conversion factor. A schedule of assigned points for each procedure must be
included in the policy.
Physicians Medical Expense - correct answer-Pays for visits to the doctor (office hospital)
plus post operation care. There may be a per-visit benefit, or the coverage is based on UCR.
-May or may not be a deductible . This policy is usually written as an indemnity plan and has
first dollar coverage (no deductible).
-usually written as an indemnity plan and has first dollar coverage
Major Medical Expense - correct answer--Cover "catastrophic" or huge loss. A Catastrophic
loss is defined as whenever Basic coverage runs out and not a specific dollar amount.
-High Maximum Limits ($2,000,000)
-Deductibles (per person or per family ea yr))
-Co- insurance (Usually 80/20%)
-Stop Loss
-Miscellaneous Expense Benefits - x-rays, MRI, lab tests, etc.
Coinsurance - correct answer-- Once the deductible is met the insured and the insurance
company share in the expenses in what is called coinsurance. It is written as 80/20, 70/30,
etc. Also called percentage participation requirement.
Flat Deductible - correct answer--Portion of medical expenses that are paid by the insured
each year before benefits start. The higher the deductible the lower the annual premium will
be.
-If a medical incident occurs in the last three months of any plan year and the annual
deductible has met the yearly requirement then the medical treatment for that incident only
would be covered in the new plan year. Thus a "carryover" into the next year of the paid
deductible has occurred.
Per Cause Deductible - correct answer-A separate deductible for each separate illness or
accident.
, Stop Loss - correct answer-Max amount the insured is required to pay out of pocket: After
the stop loss amount is reached by the insured, in a calendar year, the company will pay
100% of the remaining covered expenses.
-calculated by adding both deductibles and coinsurance amounts.
Comprehensive major medical - correct answer-Major Medical and Basic Medical are written
together.
Corridor deductible - correct answer-Occurs in the middle of the hospital stay, and bridges
the gap from the basic to the major medical plan.
Pre-Existing Condition - correct answer--To Prevent avoid adverse selection.
-A is a medical condition for which an insured sought medical attention, treatment, or advice
for symptoms or for which should have sought medical advice/treatment in the previous 6
months.
-For individual policies, the exclusion can not exceed 24 months, for group policies 12
months, and for late enrollees in group plans, 18 months.
Exclusions found in Basic and Major Medical - correct answer--Injuries due to war or military
conflict
-Elective cosmetic surgery
-Routine Dental Care
-Eye Exams & Glasses Treatment in a Veterans Hospital or other Gov Facility
-Workers Compensation Accidents
-Claims Occurring Outside the U.S.
-Intentionally Self-Inflicted Injury
Limited Coverage - correct answer-Specified Coverage policies, or Limited Coverage, are
insurance policies that limit coverage to one illness or one limiting group of coverage.
Dread Dieses (Limited Risk) - correct answer-Policies provide a variety of benefits for a
specific disease such as a cancer policy or a heart disease policy. Benefits are usually paid
as a scheduled amount of indemnity for specified events or medical procedures, such as
hospital confinement or chemotherapy.
Critical Illness Plans - correct 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 - correct 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 - correct answer-Covers most kinds of travel accidents, but only for a
specified period of time.
Workers Compensation - correct answer-A benefit required by the state and benefits will
vary to some degree from state to state. This coverage is made available through
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