Chapter 2-Health Insurance Basics

Question 1

What is comprehensive coverage in health insurance?

Answer 1

Health insurance that provides coverage for most types of medical expenses.

Comprehensive coverage often includes preventive services, hospitalization, and emergency care.

Question 2

What is a copayment?

Answer 2

A fixed amount the insured pays upfront for a service, while the insurer pays the rest.

Copayments are common for doctor visits and prescription medications.

Question 3

Define deductible.

Answer 3

The amount the insured must pay out-of-pocket before the insurance begins to pay.

Question 4

Who is a dependent in health insurance?

Answer 4

Someone who relies on the insured for financial support.

Question 5

What is an enrollee?

Answer 5

A person enrolled in a health insurance plan, excluding dependents.

Question 6

What does it mean if an insurer is insolvent?

Answer 6

They are unable to meet financial obligations.

Question 7

What are pre-existing conditions?

Answer 7

Health conditions diagnosed or treated before applying for coverage.

Question 8

What are riders in an insurance policy?

Answer 8

Add-ons that modify, add, or remove policy provisions.

Question 9

What is solicitation in insurance?

Answer 9

An attempt to persuade someone to purchase a policy.

Question 10

What is a waiting period in insurance?

Answer 10

A delay before benefits are payable after a loss occurs.

Question 11

What are the two major perils in health insurance?

Answer 11

Accidental injury and sickness.

Question 12

What does Medical Expense insurance cover?

Answer 12

Many medical expenses, often on a scheduled basis.

Question 13

What does Long-Term Care insurance provide?

Answer 13

Nursing home or home health services, not hospital acute care.

Question 14

What does Disability Income insurance cover?

Answer 14

Loss of income due to inability to work from sickness or accident.

Question 15

What is AD&D insurance?

Answer 15

Accidental Death & Dismemberment; pays lump sum for specific injuries or accidental death.

Question 16

What is typically covered by Dental Expense insurance?

Answer 16

Preventative care, diagnostics, and pediatric dental care.

Question 17

What are the two main types of health insurance policies?

Answer 17

Coverage for healthcare expenses and coverage for income loss.

Question 18

Who is covered under individual policies?

Answer 18

The applicant, spouse, and dependents.

Question 19

What are the top 3 underwriting factors in individual policies?

Answer 19

• Physical condition
• Moral/morale hazards
• Occupation

Question 20

What is franchise insurance?

Answer 20

For small groups, with individual policies priced between individual and group rates.

Question 21

Who does government health insurance mainly serve?

Answer 21

The disabled and those over age 65 (Medicare, Medicaid).

Question 22

What is the difference between limited and comprehensive health insurance?

Answer 22

Limited covers specific risks; comprehensive covers most medical needs.

Question 23

What is an Accident-Only policy?

Answer 23

Covers injuries or death resulting from accidents only.

Question 24

What does Travel Accident insurance cover?

Answer 24

Injuries while traveling as a fare-paying passenger.

Question 25

What is Hospital Indemnity?

Answer 25

Pays a fixed amount per day/week/month while hospitalized.

Question 26

What does a Critical Illness policy do?

Answer 26

Pays a lump sum for specific illnesses like heart attack or stroke.

Question 27

What is Specified Disease (Dread Disease) insurance?

Answer 27

Covers specific illnesses with fixed payments.

Question 28

What is Short-Term Medical insurance?

Answer 28

Temporary coverage during transitions (e.g., job changes).

Question 29

What does Prescription Drug coverage include?

Answer 29

Medications under co-pay with limitations on quantity.

Question 30

What does Vision and Hearing coverage offer?

Answer 30

Eye exams, glasses, and hearing aids (usually once per 12 months).

Question 31

What does Blanket Insurance cover?

Answer 31

Specific groups doing an activity, on a come-and-go basis.

Question 32

What is Credit Disability insurance?

Answer 32

Pays off loans if the insured becomes disabled.

Question 33

Name 3 common health insurance exclusions.

Answer 33

* War injuries * Self-inflicted injuries * Elective cosmetic surgery

Question 34

Are experimental treatments covered?

Answer 34

No, they are excluded.

Question 35

What is the purpose of advertising regulations?

Answer 35

To ensure fair and honest presentation to consumers.

Question 36

What is field underwriting?

Answer 36

Agent gathers accurate information to assess risk.

Question 37

When must the Outline of Coverage be provided?

Answer 37

At application or policy delivery.

Question 38

What is the producer’s role in underwriting?

Answer 38

Field underwriter who collects risk information.

Question 39

What is required for a Medical Information Bureau (MIB) check?

Answer 39

Consent from the applicant.

Question 40

What are the 3 risk classifications?

Answer 40

* Preferred * Standard * Substandard

Question 41

What must happen if coverage is declined or altered?

Answer 41

Applicant must be informed of the reason.

Question 42

What should happen before replacing a health policy?

Answer 42

Ensure the new one is in place to avoid a lapse.

Question 43

How does the ACA affect pre-existing condition coverage?

Answer 43

Eliminates exclusions in individual and group plans.

Question 44

What is a probationary period for pre-existing conditions?

Answer 44

10–30 day wait before sickness benefits begin (accidents usually covered).