Mo Health Insurance Test

Front 1

How is an insurance company able to protect such a large number of people who could potentially suffer a loss?

Back 1

The transfer of the possibility of a loss (risk) to an insurance company, which in turn spreads the costs of unexpected losses to many individuals.
Insurance

Front 2

What is the difference between a stock company and a mutual company?

Back 2

A stock com­pany is respon­si­ble for mak­ing money for the stock hold­ers where as a Mutu­al owned com­pany is respon­si­ble for mak­ing money for the Pol­icy Hold­ers.

Front 3

What is the difference between an insurer that is authorized and one that is unauthorized?

Back 3

An authorized insurer is authorized or admitted into the state as a legal insurer. Insurers who aren't approved to do business in the state are unauthorized or non admitted.

Front 4

What is a contract and it's purpose?

Back 4

A contract is an agreement between two or more parties enforceable by law. The purpose of the contract must be legal, and not against public policy.

Front 5

Describe the concept of consideration on the part of the insured and how it differs from consideration on the part of the insurer.

Back 5

Consideration on the part of the insured is the submission of premium and the representations made in the contract. Consideration on the part of the insurer is the promise to cover a loss as per the contract agreement

Front 6

What does representation mean, and how does it differ from warranty?

Back 6

Representations are statements believed to be true to the best of ones knowledge but not guaranteed to be true.Warranties are absolutely true statements on which the validity of the insurance policy depends.

Front 7

If the insured intentionally answers any question on the insurance application untruthfully, and the information is material to the insurance, what type of statements are these? Can they void a contract?

Back 7

If the insured intentionally answers any of the question untruthfully, these statements are considered misrepresentations.. and they can void the contract.

Front 8

Who generally fills out the application?

Back 8

The agent and a medical examiner ( if applicable) on the basis of information received from the application on the life or health of the proposed insured.

Front 9

Who is required to sign the application?

Back 9

The Agent
The Applicant
The proposed insured ( if different than the applicant)

Front 10

What is an attending physicians statement and when is it required?

Back 10

An attending physicians statement is a source of information filled out by the applicants doctor which provides accurate information on the applicants medical history. It is required when an underwiter deems it necessary.

Front 11

How can an insurance company use the information it obtains from the MIB?

Back 11

An insurance company can use the information it obtains from the MIB to compare information they have collected on a potential insured with information other insurers may have discovered.

Front 12

What is the purpose of the Fair Credit Reporting Act?

Back 12

The Fair Credit Reporting act established procedures that consumer reporting agencies must follow in order to ensure that records are confidntial, accurate, relevant, and properly used.

Front 13

What is the difference between consumer report and an investigative consumer report?

Back 13

The difference between a consumer report and an investigative consumer report is that the information in an investigative report is obtained through an investigation and interviews with associates, friends, and neighbors of the consumer. Unlike ordinary consumer reports, these can't be made unless the consumer is advised in writing about the report within 3 days of the date the report was requested.

Front 14

What must the producer do if the premium doesn't accompany the application?

Back 14

Upon delivery, the agent must collect the premium and obtain a statement of continued good health from the applicant before releasing the policy

Front 15

Who is responsible for delivering the policy to the insured and collecting the premium?

Back 15

The Agent is responsible to deliver the policy and to collect any premium that may be due at the time of delivery.

Front 16

Explain the concept of coverage on a first dollar basis?

Back 16

First dollar coverage usually doesn't require the insured to pay a deductible. Commonly grouped into what are commonly referred to as Medical Expense Insurance, the basic medical coverages usually have more limited coverage than the Major Medical Policies.

Front 17

What coverages are provided by a Major Medical expense policy?

Back 17

Comprehensive coverage for hospital expenses, catastrophic medical expense protection, and benefits for prolonged injury or illness.

Front 18

Why do HMOs encourage members to get regular checkups?

Back 18

HMOs encourage members to get regular checkups to attempt to reduce the cost of health care by utilizing preventive care. It helps catch diseases in the earliest stages when they have the greatest chance of success for treatment.

Front 19

What is a primary care physician?

Back 19

The physician who provides primary care; "the primary care physician acts as a gatekeeper to the medical system".The main doctor a person would go to.

Front 20

Explain the gatekeeper concept?

Back 20

The Primary care Physician (gatekeeper) must refer a member to see a specialist in order for it to be covered under an HMO.

Front 21

How does a POS plan differ from a traditional HMO?

Back 21

The POS plan is like a combination of the HMO and PPO plans. You are required to designate an in-network physician to be your primary health care provider (just like with an HMO). Unlike an HMO however you may go out-of-network if you choose, but in doing so, you will have to pay most of the cost yourself, unless a primary care physician refers you to that specific doctor.

Front 22

What is the purpose of a Health Savings Account?

Back 22

To help individuals save for qualified health expenses that they, their spouse, or dependents incure.

Front 23

Once a disability policy is paying a claim, how long will it pay?

Back 23

Until the insured is able to return to work or normally a maximum of 2 years.

Front 24

How long does an elimination period usually last? State your answer in terms of a range.

Back 24

The elimination period found in most insurance policies range from 30 to 180 days.

Front 25

What is a probationary period? How is it different from an elimination period?

Back 25

A waiting period often 10 to 30 days in which benefits will not be paid for sickness related disabilities. Doesn't replace an elimination period but is in addition to it. It only applies to sickness related disabilities, and does not apply to injury.

Front 26

What is the purpose of a buy-sell agreement?

Back 26

A buy-sell agreement specifies how a business will pass between owners when one of the owners dies or becomes disabled

Front 27

Describe the taxation of premiums and benefits in a disability buyout agreement.

Back 27

Premiums in a buy-sell agreement are not tax deductible, and the benefits are not taxable.

Front 28

What is the purpose of key person disability insurance?

Back 28

Key man disability insurance is designed to protect the business in the unfortunate event that a key employee or executive suffers a disabling accident, injury or illness.

Front 29

With key person insurance, who pays the premium, who is the beneficiary and the insured?

Back 29

The business pays the premium and is also the insured as well as the beneficiary.

Front 30

In what ways can accidental death and dismemberment coverage be written?

Back 30

Accidental Death &Dismemberment (AD&D) can be written as a rider or as a separate policy.

Front 31

Under Accidental Death and Dismemberment coverage,when would the capital amount be paid? When would the principal amount be paid?

Back 31

The capital benefit amount is paid when there is a loss of sight or accidental dismemberment. The principal amount is paid in the event of accidental death.

Front 32

How do Limited Risk and Special Risk policies differ from each other?

Back 32

The limited risk policy defines the specific risk in which accidental death and dismemberment benefits will be paid. The special Risk policy will cover unusual types of risks, not normally covered by AD&D policies.

Front 33

Where is skilled nursing care generally provided?

Back 33

Skilled nursing care is normally provided in an institutional setting.

Front 34

Describe an individual who would be a candidate for custodial care. Who would provide it?

Back 34

Someone who needs assistance with eating,dressing, or bathing which can be provided by non medical personnel such as relatives or home health care workers

Front 35

Who would be eligible for adult day care? What services would be provided?

Back 35

Adult day care is provided for functionally impaired adults on a less than 24 hour basis. Transportation to and from the facility,and a variety of health, social and related services are included. Meals are usually included as well.

Front 36

What types of groups are eligible for group insurance?

Back 36

Employer sponsored and association sponsored.

Front 37

How is underwriting unique for group policies, as opposed to individual policies?

Back 37

Underwriting is unique in that every eligible member of the group must be covered regardless of physical condition, age, sex, or occupation.

Front 38

How is the cost of a group policy determined?

Back 38

By the ratio of males to females, and the average age of the group.

Front 39

What is required for eligibility in a group policy?

Back 39

In order to be eligible for group insurance, the group must be formed for another purpose other than obtaining group insurance.

Front 40

When is the group policy cost reevaluated, and for what purpose?

Back 40

The group cost is reevaluated annually and for the purpose of adjusting the premium cost based on prior claims, age, gender of the group etc.

Front 41

How many people must an association group have in order to purchase insurance?

Back 41

At least 100

Front 42

What are the requirements for terminated employees to convert the group health insurance to an individual plan without evidence of insurability?

Back 42

The terminated employee must initiate the option to convert from group to individual policy during the conversion period, which is within 31 days of termination of employment.

Front 43

Under COBRA, when are dependents covered and for how long?

Back 43

Dependents are covered when an employee is terminated.The coverage is for 18 months.For events such as death of the employee, divorce or legal separation, the period is 36 months for the dependents.

Front 44

Name at least 3 criteria that would make an individual eligible for HIPAA.

Back 44

Have 18 months of continuous creditable health care coverage...
Have been covered under a group plan in most recent insurance...
Have used up any COBRA or state continuation coverage...
Not eligible for medicare or medicaid...
Not have any other health insurance...
Apply for individual health insurance within 63 days of losing prior coverage.

Front 45

How are dread disease policies different from other types of policies?

Back 45

Dread disease or limited risk policy provides a variety of benefits for a specific disease such as cancer policy or heart disease policy. Benefits are usually paid as a scheduled, fixed dollar amount of indemnity for specific medical events or procedures, such as hospital confinement or chemotherapy.

Front 46

With group health insurance, who provides coverage?

Back 46

Employer or other group sponsor.

Front 47

What is included in the "entire contract"?

Back 47

The health insurance policy, together with a copy of the signed application and attached riders and amendments constitutes the entire contract

Front 48

Who has the authority to change a policy provision?

Back 48

Only an executive officer of the company.

Front 49

What are the grace periods for an individual policy?

Back 49

No less than 7 days for weekly pay policies (industrial policies)10 days for monthly pay policies, and 31 days for all other modes.Coverage will continue in force during the grace policy.

Front 50

If a premium has not been paid by the end of the grace period, what will happen to the policy?

Back 50

The policy will lapse (terminate).

Front 51

When an individual needs to file a health insurance claim, what are their responsibilities?

Back 51

Submit proof of loss within 90 days or as soon as reasonably possible.

Front 52

Which provision states to whom the claims are to be paid?

Back 52

The Insuring Clause states who the claim is paid to.

Front 53

If the insured misstates their age how will the benefits get paid?

Back 53

If an insured misstated their age at the time of the application, the benefits paid under the policy would be adjusted to what the premium paid would have been purchased at the correct age.

Front 54

Who decides which optional provisions are included in a policy?

Back 54

The insurance company.

Front 55

In what specific way could changing to a more dangerous occupation affect a persons insurance policy?

Back 55

If an insured makes a change to a more hazardous occupation, upon claim, the benefits will be reduced to that which premiums paid would have purchased assuming the more hazardous position.

Front 56

What is identified in the insuring clause?

Back 56

The basic agreement between the insurance company and the insured. It identifies the insured and the insurance company and the kind of loss that is covered.

Front 57

Where is the consideration clause usually located in the policy?

Back 57

On the first page of the contract. Makes it clear that both parties to the contract must give some valuable consideration.

Front 58

What are usual, reasonable and customary charges based on?

Back 58

The average charge for a procedure based upon the average charge for that procedure
in that specific geographic area.

Front 59

Which rider will allow the insured to purchase additional amounts of disability income coverage without evidence of insurability?

Back 59

Guaranteed Insurability Rider

Front 60

What is the difference between a guaranteed renewable and noncancelable policy?

Back 60

The guaranteed renewable policy is almost the same as a noncancelable policy with the exception of the insurer being able to increase the policy premium on the policy anniversary date.

Front 61

Which renewable provision gives the insured the right to renew the policy for the life of the contract but allows the insurer to alter premiums?

Back 61

Guaranteed renewable

Front 62

What is the difference between a conditionally renewable policy and one who's renewability is optional?

Back 62

The difference is that in an optionally renewable policy the insurer may cancel the policy for any reason on certain homogeneous classes (not individuals within a class).