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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.
,Life & Health Insurance Exam Prep
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.
, Life & Health Insurance Exam Prep
-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.
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