Health Insurance Key Facts

Front 1

A condition that could result in a loss is known as an...

Back 1

EXPOSURE

Front 2

Parties to a contract must have legal capacity. A person who is considered to be _____ has the capacity to enter into contracts.

Back 2

SANE

Front 3

A proposal communicated from one party to another is known as an ______

Back 3

OFFER

Front 4

The exchange of value is the ___________ for a contract

Back 4

CONSIDERATION

Front 5

__________ is not an element of an insurable risk.

Back 5

SPECULATION

Front 6

Self insurance makes sense if future losses are ___________

Back 6

PREDICTABLE

Front 7

Individuals or insurers who join together in a syndicate to underwrite risks are known as
a __________________

Back 7

LLOYDS ORGANIZATION

Front 8

When an insurer elects which risks to reinsure and the reinsurer elects which risks to
accept, it is know as ____________ reinsurance

Back 8

FACULTATIVE

Front 9

The state insurance department looks at an insurers legal reserves in an effort to
determine __________

Back 9

SOLVENCY

Front 10

The ____________________________________enforces federal securities
laws.

Back 10

SECURITIES AND EXCHANGE COMMISSION (SEC)

Front 11

The _________________________________ regulates their
own members to assure they are in compliance with federal securities rules and
regulations.

Back 11

NATIONAL ASSOCIATION OF SECURITIES DEALERS (NASD)

Front 12

Counter-offers that modify the original application must be signed by ______ the agent
and the applicant.

Back 12

BOTH

Front 13

Applicants should be aware that a misstatement of a material fact on the application could
affect coverage.

Back 13

TRUE

Front 14

The insurers _________ are a factor in determining the premiums charged.

Back 14

EXPENSES

Front 15

Under the _____________________ a customer must be informed of the
source of the report if adverse underwriting action results.

Back 15

FAIR CREDIT REPORTING ACT

Front 16

An agent must give an applicant a ___________________ upon accepting the initial
premium payment.

Back 16

CONDITIONAL RECEIPT

Front 17

__________ part of the commission to the client is an Unfair Trade Practice.

Back 17

REBATING

Front 18

__________ commissions with agents with like licenses is permitted.

Back 18

SHARING

Front 19

A group _____________ be formed just to buy insurance.

Back 19

MAY NOT

Front 20

It is ______ a violation to sell insurance to residents of other states if the agent has a nonresident
license in those states.

Back 20

NOT

Front 21

Risk is defined as an uncertainty of loss.

Back 21

TRUE

Front 22

Misrepresenting a policy provision after a loss is an example of an unfair claims
settlement practice.

Back 22

TRUE

Front 23

An insurer domiciled outside of the US and selling in the US is an _______ insurer

Back 23

ALIEN

Front 24

A person adjudged sane ____ enter into a legally binding contract.

Back 24

CAN

Front 25

Reserves are an insurers future obligations to its policyholders.

Back 25

TRUE

Front 26

Insurers purchase reinsurance for a number of reasons but ____ to stabilize profits

Back 26

NOT

Front 27

An insurer ______ legally pay a commission to a person who is no longer licensed, as long
as that person was licensed when they earned the commission (sold the policy).

Back 27

CAN

Front 28

A breach of warranty can void coverage.

Back 28

TRUE

Front 29

The law of large numbers states that the more individual risks that an insurer takes on the
easier it becomes to predict future losses. However, the insurance company will still be
unable to predict who individually will have a loss.

Back 29

TRUE

Front 30

An _________ insurer is an insurer who is licensed to legally sell within a state.

Back 30

AUTHORIZED

Front 31

The authority that is granted in an agents contract is known as _________ authority

Back 31

EXPRESS

Front 32

The requirement that both parties must bring value toward the contract is ____________

Back 32

CONSIDERATION

Front 33

It is _____ a violation of the Fraud and False statements regulation to sell insurance in
another state as long as the agent holds a non resident license.

Back 33

NOT

Front 34

An insurer is responsible for all acts of their agents as long as the agent operates within
the ________________________ which is contained in their agents contract.

Back 34

SCOPE OF THEIR AUTHORITY

Front 35

Under federal law, a _____________________ policy must be guaranteed
renewable.

Back 35

QUALIFIED LONG TERM CARE

Front 36

The Health Insurance Portability and Accountability Act (HIPAA) applies to group
medical expense insurance written by insurers, HMOs and PPOs, but DOES NOT apply
to disability income insurance.

Back 36

TRUE

Front 37

In order for ___________ of coverage to apply under HIPAA, the applicant must have
at least 12 months of prior ____________ coverage with no gap of more than 63 days.

Back 37

PORTABILITY; CREDITABLE

Front 38

A _____________ health insurance policy may be canceled by either the insurer or the
insured.

Back 38

CANCELABLE

Front 39

Distributions from Medical Savings Accounts (MSAs) that are not used to pay for
qualified medical expenses are taxable as ordinary income PLUS they are subject to a
15% PENALTY TAX. The same is true on HSAs, but the penalty tax is 10% instead of
15%.

Back 39

TRUE

Front 40

Medical Savings Accounts may be set up only by small employers or individuals.

Back 40

TRUE

Front 41

A person who has violated the Fraud and False statements regulation is referred to as a
__________ person and can only sell insurance in a state with written approval from the
Insurance Commissioner of that state.

Back 41

RESTRICTED

Front 42

Health Savings Accounts (HSAs) are similar to MSAs, but may be set up by ANY
employer or individual who has a high deductible health insurance plan.

Back 42

TRUE

Front 43

Multiple Employer Trusts offer group coverage for employees of employers in the ______________

Back 43

SAME INDUSTRY

Front 44

A ____________________ provides an employee with evidence of group
insurance coverage.

Back 44

CERTIFICATE OF INSURANCE

Front 45

On group insurance, the employer is considered to be the _________________.

Back 45

MASTER POLICYHOLDER

Front 46

On ________________ group, 100% of the eligible employees must enroll.

Back 46

NON-CONTRIBUTORY

Front 47

Group health benefits paid to an employee are not taxable, EXCEPT for group disability
income.

Back 47

TRUE

Front 48

Group insurance often utilizes ________________, which takes into account the
prior claims history of the group.

Back 48

EXPERIENCE RATING

Front 49

Group underwriting takes into consideration the average age of the group, the health of
the group and _____________ factors.

Back 49

PERSISTENCY

Front 50

A disabled child may remain in the group as long as the parent submits proof of the
childs incapacity and continued dependency prior to their attainment of the limiting age.

Back 50

TRUE

Front 51

Group coverage must be written for the benefit of employees and cannot discriminate in
favor of highly paid workers.

Back 51

TRUE

Front 52

Under dental insurance, _________________ includes bridgework.

Back 52

PROSTHODONTICS

Front 53

Dental insurance has NO DEDUCTIBLE on diagnostic or preventative care.

Back 53

TRUE

Front 54

On an ____________ medical/dental plan, both medical and dental expenses are subject
to the SAME DEDUCTIBLE.

Back 54

INTEGRATED

Front 55

A health insurance policy that covers virtually all medical expenses is known as a _________________.

Back 55

COMPREHENSIVE PLAN

Front 56

Medicare covers SKILLED NURSING, but not custodial care.

Back 56

TRUE

Front 57

Health insurance INCLUDES / EXCLUDES injury or sickness resulting from WAR.

Back 57

EXCLUDES

Front 58

When selling a MEDICARE SUPPLEMENT, an agent must give out the Outline of
Coverage (or Guide) no later than the time of application and must obtain a signed receipt
from the applicant.

Back 58

TRUE

Front 59

MEDICARE SUPPLEMENT plans are / are not required to be approved by Medicare.

Back 59

ARE

Front 60

After receipt of NOTICE OF CLAIM from the insured, the insurer must / mustn't send out CLAIM FORMS.

Back 60

MUST

Front 61

Insurers do / do not have to pay UNSUBSTANTIATED claims.

Back 61

DO NOT

Front 62

When an insured has a PRESUMPTIVE DISABILITY, they no longer have to prove that
they meet the definition of total disability.

Back 62

TRUE

Front 63

To be FULLY INSURED for social security disability benefits, a worker must have
contributed to social security for at least 20 / 40 QUARTERS.

Back 63

40 QUARTERS

Front 64

Health insurance policies sometimes / may not pay claims on a USUAL, CUSTOMARY AND
REASONABLE basis, which is based upon the geographic area where the insured
resides.

Back 64

SOMETIMES

Front 65

Health Maintenance Organizations (HMOs) wont / will cover out of network services unless it
is on an EMERGENCY basis.

Back 65

WON'T

Front 66

PPO subscribers who go out of network for services will / will not receive reduced benefits.

Back 66

WILL

Front 67

Monitoring the length of a hospital stay is a form of ______________ review.

Back 67

CONCURRENT

Front 68

HMOs waive pre-authorization requirements in the event of ________________.

Back 68

EMERGENCIES

Front 69

On medical expense insurance with family coverage, newborn children must be covered
from the MOMENT OF BIRTH.

Back 69

TRUE

Front 70

A ________________________ applies to claims that occur during the last 3 months
of the calendar year. They carry over and apply to next years deductible.

Back 70

CARRY-OVER DEDUCTIBLE

Front 71

Medicare covers end-stage renal disease on an excess (or secondary) basis over and
above any group medical expense insurance that applies, regardless of the number of
employees covered by the group policy.

Back 71

TRUE

Front 72

On groups of 20 or more, employees remain eligible / ineligible for group coverage even after
attaining AGE 65.

Back 72

ELIGIBLE

Front 73

Under HIPAA, pregnancy may / may not be considered to be a pre-existing condition.

Back 73

MAY NOT

Front 74

The Medicare Part B co-insurance requirement is calculated as a percentage of
Medicares __________ AMOUNT, not the amount the doctor charges.

Back 74

APPROVED

Front 75

On Medicare, the difference between what the doctor bills and what Medicare pays is
called the _______________.

Back 75

EXCESS CHARGE

Front 76

Both insurance companies and HMOs may offer MEDICARE SELECT, which is a type
of Medicare Supplement policy that limits the insureds choice of providers, but offers
broader coverage for a lower price.

Back 76

TRUE

Front 77

An older person with little income or assets who is concerned about custodial care may
obtain coverage through _________.

Back 77

MEDICAID

Front 78

The period of time that a Long Term Care (LTC) policy will provide custodial care in a
nursing home is known as the _____________.

Back 78

BENEFIT PERIOD

Front 79

NON-CONTRIBUTORY group disability income benefits are / are not taxable to the employee.

Back 79

ARE

Front 80

Under the __________________ clause, benefits are adjusted to what the premium
paid would have purchased if the correct age was known.

Back 80

MISSTATEMENT OF AGE

Front 81

Requiring a SECOND OPINION prior to performing surgery will / will not result in fewer claims.

Back 81

WILL

Front 82

Basic Hospital Expense Policies:

Back 82

This is a first-dollar coverage with no deductible that pays for hospital room & board only. Pays per day for a defined number of days (usually 30 or 60).

This policy will pay the policy limit or your claim amount. whichever is less.

Front 83

Medical-Surgical expense policies:

Back 83

Gives "Schedule of Operations" indicating the maximum amount payable for each operation listed. Also no deductible, is usually sold with Basic Hospital Expense policies, but can be stand-alone.

Front 84

Basic Physicians Fees for Non-surgical Hospital Confinement Policy:

Back 84

Covers doctors visits, with no deductible, and may include emergency treatment, nursing and maternity expenses.

Front 85

Basic Plan OR Base Plan:

Back 85

Historically, the 3 plans of Basic Hospital Expense, Medical Surgical Expense and Basic Physicians' Fees are bought together.

Front 86

Major Medical Expense Policies:

Back 86

Provides benefits for catastrophic injury or sickness. Incorporates deductible, coinsurance, and a high lifetime limit (usually $1,000,000).

Front 87

Coinsurance is:

Back 87

Is the sharing the loss between the insurer and insured, after the deductible is satisfied.

Front 88

The Stoploss feature is:

Back 88

A certain dollar amount that applies to the coinsurance still after the deductible is paid - to protect the insured above a certain amount.

Front 89

Comprehensive Major Medical is:

Back 89

A combination of Basic & Major Medical policies (referred sometimes as the corridor). Has no deductible, yet a high limit.

Front 90

There are different types of deductibles:

Back 90

Calendar Year - Accumulation until amount is reached

Family - Whole family under same plan and each member has to pay their deductible before coinsurance

Common Accident - One single accident where all are injured, only one deductible needs to be met

Front 91

Benefits Service Plans are HMO's, PPO's

Back 91

Health Maintenance Organization, Preferred Provider Organization

Created to utilize preventative techniques to maintain healthy people due to rising health care costs.

Front 92

What are HMO's?:

Back 92

Restrict subscribers (insureds) to certain doctors & hospitals in a geographic area (network/service area). You select a PCP (gatekeeper) and that's the doctor you see. You pay co-payment and that's it. PCP can give referral for a specialist to prevent unnecessary treatment. Exceptions are emergencies.