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62 Cards in this Set
- Front
- Back
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On a disability income policy, how often does the insurer have the right to ask the insured to take a physical exam?
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every 6 months at the insurer's expense
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What are the tax implications of a Business Overhead policy?
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- Premiums are tax deductible
- Benefits paid to business owners are taxable |
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What are the tax implications of a Business Disability Buyout policy?
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- Premiums are not tax deductible
- Proceeds are not taxable |
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What is a business disability buyout policy?
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used to buyout a disabled business partner... like partnership life insurance - if a partner becomes disabled, proceeds are paid to the able partner and that partner uses the money to buy out the disabled partner.
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What are the tax implications of a Key Employee / Partner disability policy?
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Premiums are not tax deductible and proceeds are not taxable.
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What is a a Key Employee / Partner disability policy?
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In the event a key employee becomes disabled, the policy pays a lump sum to train someone new.
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What are the two parts of a AD&D policy?
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- Principle sum - amount paid for death or severe dismemberment i.e. two limbs same accident
- capital sum - usually 50% of the capital sum - paid for dismemberment |
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How is loss of eyesight handled on an AD&D policy?
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covered at the capital sum
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What is the only policy that has a relative value schedule?
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Surgical expense policy
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How are major medical insurance policies designed?
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to cover catastrophic illness in and out of the hospital
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What is a comprehensive Major Medical insurance policy?
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a combination of basic hospital/surgical plan and major medical
- anything not covered by basic plan moves into corridor where the major medical deductible and co-insurance apply. (Best possible coverage - very expensive) |
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What does MEWA stand for and what is it?
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Multiple Employer Welfare Association - a self-insurance program set up by 2 or more employers... - essentially and uninsured self-funded company
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What does Blue Cross cover?
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hospital
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What does Blue Shield cover?
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docs
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What is a Health Insurance Service Organization?
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Not a true insurance co - setup as a prepaid service plan
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What are the clients of a Health Insurance Service Organization called?
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subscribers
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What is a Medical Savings account?
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first tax qualified account for medical expenses... 2003 was last year to establish
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Who can make contributions to a FSA?
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either or both employer or employee... limits set by employer
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Does the account value of an FSA roll year to year?
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No
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Who contributes to an HRA?
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employer
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Who owns an HRA?
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employer
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When can an employee access an HRA?
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while currently employed
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Does an HRA roll year to year?
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as long as the employee is employed
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What is an HRA?
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Health Reimbursement Account
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What does an HSA allow?
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participants to deposit on an annual basis an amount equal to their deductible in a tax-preferred account
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What are the tax implications of an HSA?
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money goes in pre-tax, grows tax-deferred, earnings are tax deferred if used for qualified medical expenses
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Does an HSA roll over year to year?
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yes
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Who owns an HSA?
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individual
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What are producers required to give at the time of Medicare application?
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- Guide to people with Medicare (disclosure document)
- Outline of coverage |
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How are medicare policies renewable?
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guaranteed renewable
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What is the free look on a medicare policy?
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30 days?
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When is the best time for someone to enroll in medicare?
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During the 6 month open enrollment period when the applicant is at least 65 and enrolls in Medicare plan B
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What is the grace period on group medical?
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31 days
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What are the stipulations on COBRA?
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person and dependents can remain in the group
- up to 18 months after termination - up to 36 months on death or divorce of employee |
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What does HIPPA state about about probationary periods?
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- That employees who were covered by group insurance for at least 18 months may not have a new probationary period on an individual policy
- that when an employee switches from group to group as long as there is no gap in coverage greater than 63 days, the new group plan must cover pre-existing conditions immediately |
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What features must a tax-qualified LTC plan include?
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1) Guaranteed renewability
2) Non-forfeiture benefits (that insured can continue coverage in some form even if premium payments cease) 3) Disclosure requirements 4) optional inflation protection |
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What are the two methods of elimination on a LTC policy, and how do they work?
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1) Service day method - only counts the days in which long term care service was utilize
2) Calendar day method - counts every day of the week, including day in which the insured did not utilize LTC (more beneficial to insured and more expensive) |
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How many mandatory provisions must be in health care policies? and what are they?
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12
- entire contract clause - time limit on certain defenses (incontestability) - grace periods reinstatement provision - notice of claim by claimant - claims forms furnished by insurer - proof of loss to be furnished by claimant - time payment of claims by insurer - payment of claims -physical exam and autopsy - legal action by the insured - change of beneficiary |
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What are the grace periods on health insurance?
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depends on mode of payment
- 7 days if weekly - 10 days if monthly - 31 days all others |
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What is the Time Limit on Certain Defenses clause?
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similar to incontestability... after 2 years policy is incontestable except for fraud
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What are the optional provisions on health insurance?
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- Change of occupation
- Mistatement of age/gender - illegal occupation - other optional health insurance |
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What is the free look period on health insurance?
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10 days
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What is the free look period on medicare supplements?
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30 days
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what is the free look on long term care?
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30 days
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What is the waiver of premium rider?
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waives insureds premium if totally disabled for at least 6 months
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When is the elimination period waived on a disability income policy?
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if disability reoccurs within 90 days of when the insured returned to work
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What is an impairment rider?
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a rider that takes coverage away
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What is an optionally renewable policy?
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- renewal is entirely at insurer's discretion
- may not be canceled midterm |
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What does medicare part A cover?
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hospital
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What does medicare part B cover?
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physician services
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What is medicare part c?
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Medicare advantage plan
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What is medicare part D?
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perscription drug coverage
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What is disability income coverage under social security?
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- cannot be able to perform any job
- disabilty must be expected to last at least 12 months - 5 month waiting/elimination period (benefits don't begin until 6th month) |
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What is the social security death benefit?
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$255
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When does dependent's coverage end on a parents policy?
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- valid under age 19 or under 24 if a full time student in Colorado
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What does a COB provision state?
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One policy is primary. The other is secondary (excess).
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When is workers comp required?
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by all employers with 1 or more employees
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What is subrogation?
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The transfer to the insurance company the insured's right to sure to collect for damages
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What is estoppel?
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Inability to enforce legal rights once given up
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What four elements must a contract have to be enforceable in court?
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- consideration
- offer (made by the applicant) - acceptance (by the underwriter) - legal purpose and capacity |
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What type of contracts are all insurance policies?
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unilateral (one-sided)
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What is the doctrine of adhesion?
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Because the insurer wrote the contract, the insurer must "stick" to it.
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