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Life & Health Insurance Exam Prep Questions And Answers Rated A+ New Update Assured Satisfaction
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Life & Health Insurance Exam Prep- 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. - ANS-Coinsurance
-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 - ANS-Major Medical Expense Policy
-Allows an insured to increase the benefit level up to a specific predetermined amount at certain
times or on certain occasions, without proof of insurability.
-An increase may also be taken at one's marriage or birth of a child.
-In order to exercise this rider, the insured must qualify from an income standpoint to prevent
over insurance. - ANS-Future Increase Option, (FIO)
-Any premium paid by the employer is deductible as a business expenses.
-Any premiums paid by the employee are only deductible to the extent that the employee's
premiums, when added to all other un-reimbursed medical expenses, exceed 7.5% of the
taxpayer's adjusted gross income, if the taxpayer itemizes deductions. - ANS-Taxation of LTC
Premiums
-At least12 consecutive months in the event the insured requires confinement in any care center
environment, other than an acute unit of a hospital. - ANS-LTC Coverage
-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.
- ANS-Morbidity Tables
-Be Purely Accidental
-Occur within ninety days of the accident
-Occur before the age of 70 - ANS-Payment of AD&D Exceptions:
-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 - ANS-Daily Hospital Benefit
-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. - ANS-Major Medical Expense
-Designed to provide funds to pay continued expenses of a business when the proprietor
(owner) is disabled. Continuing expenses such as power, heat, rent and salaries of employees
are provided by this policy.
-Will not provide income for the owner
-Only actual incurred losses are payable. - ANS-Business Over Head Expense (BOE)
-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 - ANS-Disability Income Insurance
-Indemnifies an employer for the additional cost of doing business upon the disability of a Key
Employee.
-The funds can be used to replace the income from losing a key employee or for the hiring of a
replacement.
-3rd party ownership:The business is the owner, pays premium and is beneficiary - ANS-Key
Employee Policy
-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 - ANS-Exclusions found in Basic and Major Medical
-LTC benefits are received income tax free if the plan is a tax- qualified plan. Excessive benefits,
as determined by statute, are taxable as ordinary income. - ANS-Taxation of LTC Benefits
-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. - ANS-Service Based Contracts
-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) - ANS-Hospital Expenses
, -Payable if the insured is dismembered (loses a limb) in an accident. The Capital Sum is usually
different for each body part listed for coverage (hands, feet, legs, arms and eyeballs). The policy
will pay a Capital Sum for loss of use of eyesight and loss of hearing. Other loss of use is not
payable - ANS-Capital Sum
-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). - ANS-Critical Illness Plans
-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. - ANS-Flat Deductible
-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. - ANS-Hospital Indemnity
-Provision that specifies a period of time (usually 6 months) during which the reoccurrence of a
disability is considered to be a continuation of the prior claim. It addresses situations when a
claimant returns to work and is again disabled by the same cause. - ANS-Recurrent Disability
-Provisions for benefit increases for inflation and increased cost of living.
-Cannot be cancelled, non-renewed or otherwise terminated on the grounds of age or the
deterioration of the mental or physical health of the insured.
-Exclusions may not include Alzheimer's disease, senile dementia, or other organic brain
disorders.
-Must provide not only for skilled nursing care, but offer the same coverage for lower levels of
care. - ANS-LTC Policy's Must Include:
-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. - ANS-Waiting Period or Elimination Period
-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) -
ANS-Miscellaneous Expense Benefits
-Some Disability policies pay in conjunction with Workers Comp, such as STD
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