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Flashcards in Chapter 1 Health Deck (21):
1

J has an Accidental Death and Dismemberment policy with a principal sum of $50,000. While trimming the hedges, J cuts off one of his fingers. What is the MAXIMUM J will receive from his policy?

$25,000

2

Which of the following statements BEST describes how a policy that uses the "accidental bodily injury" definition of an accident differs from one that uses the "accidental means" definition?

Double indemnity

Benefits are taxable

More restrictive

Less restrictive

Less restrictive. A policy that uses the "accidental bodily injury" definition of an accident is less restrictive than the one that uses the "accidental means" definition.

3

Employee group health plans of fifty or more participants have all of the following characteristics EXCEPT

employers submit the group premium to the insurance company

employers receive master contracts

employees receive certificates of insurance

employees are required to take physical examinations before being enrolled

Employees are required to take physical examinations before being enrolled. Employee groups health plans of fifty or more participants do not require physical examinations before enrollment.

4

An employer pays the premium for a health policy covering an employee. If the employee is disabled and unable to work, the employer will receive the policy benefits. This type of coverage is known as

Key Employee Disability Income

5

An insured dies due to an accident. The insured's beneficiary receives $50,000. Under an Accidental Death and Dismemberment policy, this benefit is known as the

The Principal Sum. It's the amount under an AD&D policy that is payable as a death benefit if death is due to an accident.

6

Which of the following statements about Business Overhead Expense Disability Insurance is INCORRECT?

Overhead expenses include those usual necessary expenses incurred in the continuation of a business during the disability of the owner

Premiums are tax deductible as a business expense

Benefits are treated as taxable income

Owner's salary and profits are part of the overhead expenses

Owner's salary and profits are part of the overhead expenses. Business Overhead Expense Disability Insurance does not consider the owner's salary and profits as part of the overhead expenses.

7

Due to an accident, an insured receives $5,000 for the loss of an arm. Under an Accidental Death and Dismemberment policy, this benefit is known as the

The Capital Sum is the amount provided for accidental dismemberment or loss of eyesight.

8

What is issued to each employee of an employer health plan?

Certificate

9

Which of the following is the reimbursement of benefits for the treatment of a beneficiary's injuries caused by a third party?

Indemnity

Subrogation

Legal action

Consideration

Subrogation. Subrogation is the right for an insurer to pursue a third party that caused an insurance loss to the insured. This is done as a means of recovering the amount of the claim paid to the insured for the loss.

10

The benefits under a Disability Buy-Out policy are

payable to the company or another shareholder

11

Which of the following statements is correct regarding an employer/employee group health plan?

Each employee receives a duplicate policy from the insurer

The employer receives a master policy and the employees receive certificates

The employer and the employees both receive actual policies

The employer receives the master policy and the employees receive a summary of benefits

The employer receives a master policy and the employees receive certificates

12

The federal income tax treatment of employer-provided group Medical Expense insurance can be accurately described as

Employee's premiums paid by the employer is tax-deductible to the employer as a business expenditure.

13

Which contract permits the remaining partners to buy-out the interest of a disabled business partner?

Disability Buy-Sell

14

An employer pays the premium for a health policy covering an employee. If the employee is disabled and unable to work, the employer will receive the policy benefits. This type of coverage is known as

Key Employee Disability Income. The type of coverage where an employer pays the premium for a health policy covering an employee and receives the policy benefits when an employee becomes disabled and is usable to work is known as Key Employee Disability Income.

15

S is employed by a large corporation that provides group health coverage for its employees and their dependents. If S dies, the company must allow his surviving spouse and dependents to continue their group health coverage for a maximum of how many months under COBRA regulations?

36 Months

16

Under which of the following circumstances will the benefits under COBRA continuation coverage end?

Employee has become uninsurable

All group health plans are terminated by the employer

Employer moves headquarters to another state

Employee becomes permanently disabled

All group health plans are terminated by the employer

17

The difference between group insurance and blanket health policies is

Blanket health policies do not issue certificates

18

Which of the following characteristics is associated with a large group disability income policy?

No waiting periods

No medical underwriting

No elimination periods

No limit of benefits

No medical underwriting

19

Which of these types of coverage is best described as a short term medical policy?

interim coverage

provisional coverage

transitional coverage

conversion coverage

interim coverage

20

The reason for a business having a Business Overhead Expense Disability Plan is to cover

Fixed business expenses. The reason for a business having a Business Overhead Expense Disability Plan is to cover fixed business costs in the event the owner becomes disabled.

21

The Health Insurance Portability and Accountability Act (HIPAA) gives privacy protection for

health information