RMIN Test 3 Flashcards

Question

Incontestable clause- life insurance contractual provisions

Answer 1

The insurer cannot contest the policy after it has been in force two years Protect the beneficiary if the insurer tries to deny payment of the claim years after policy was first issued Insurer has 2 years to deduct fraud

Answer 2

if the insured commits suicide within two years after the policy is issued, the face amount of insurance will not be paid; there is only a refund of the premiums paid

Answer 3

A policy contains a grace period during which the policyholder has a period of 31 days (or more) to pay an overdue premium Purpose: prevent policy from lapsing

Answer 4

Allows a lapsed policy to be reinstated Requirements: evidence of insurability; payment of past-due premiums; repayment or reinstatement of policy loans

Answer 5

The amount payable is the amount that the premiums paid would have purchased at the correct age and sex

Answer 6

Primary beneficiary → first to entitle to receive the policy proceeds on the insured’s death Contingent entitled to the proceeds if the primary beneficiary dies before the insured Revocable → policyholder reserves the right to change the beneficiary designation without the beneficiary;s consent Irrevocable→ one that cannot be charged without the beneficiary’s consent Specific → specifically identified Class→ member of a group eg. children of the insured

Answer 7

Paid annually, semiannually, quarterly, or monthly

Answer 8

Absolute assignment → all ownership in the policy are transferred to a new owner Collateral assignment → policy holder temporarily assigns a life insurance policy to a credit as collateral for a loan but only certain rights are transferred to the creditor

Answer 9

Policyholder must pay interest on the loan. A policy could lapse if the policyholder does not repay a loan

Answer 10

Under the automatic premium loan provision, an overdue premium is automatically borrowed from the cash value after the grace period expires. To prevent the policy from lapsing because of nonpayment.

Answer 11

A. Cash—most proceeds are paid as cash B. Interest Option C. Fixed-Period Option → policy proceeds are paid to a beneficiary over some fixed period of time D. Fixed-Amount Option→ fixed amount it periodically paid to the beneficiary E. Life Income Option → Installment payments are paid only while the beneficiary is alive and cease on the beneficiary’s death Life income options include: Life income with guaranteed period Life income w guaranteed total amount Joint and survivor income

Answer 12

* Rising Healthcare Expenditures * Large Number of Uninsured in the Population * Considerable Waste and Inefficiency * Harmful Insurer Practices

Answer 13

* Prohibition of Harmful Insurer Practices * Individual Mandate * Essential Health Benefits * Health Insurance Marketplace * Premium Tax Credits * Lifetime limits and annual limits prohibited

Answer 14

Calendar-year Deductible Coinsurance Copayments Annual Out-of-pocket Limit Exclusion

Answer 15

flat amount the insured must pay for certain benefits such as an office visit or generic drug Doesn’t count towards annual deductibles Ex: $25 for visit to primary care physician

Answer 16

Aggregate deductible that must be satisfied during the calendar year Amount the insured is responsible for in total (over all claims during the policy period) before the insurer pays anything Policies may include an individual and/or family deductible

Answer 17

percent of the bill in excess of the deductible which the insured must pay out-of-pocket up to some max annual dollar limit Helps prevent overutilization of plan benefits Typically 20%, 25%, or 30%

Answer 18

Most the insured will have to pay out-of-pocket in a calendar year After out-of-pocket limit is met, insurer pays 100% of all eligible expenses Called a stop loss limit

Answer 19

provides healthcare to its members on a prepaid basis in a particular area Negotiates rates/agreements w hospitals and physicians to provide medical services May own hospitals and employ physicians Choice of providers (doc/hospitals) is limited Not based on FFS(fee-for-service)

Answer 20

1. Employee enrolls in HMO plan 2. Employee selects a Primary Care Physician (PCP) 3. PCP acts as a “gatekeeper”. You must receive a referral from the PCP to see a specialist

Answer 21

- Premiums are high; annual costs may be lower bc cost-sharing is lower (coinsurance, deductibles) - Broad care; usually communication between providers

Answer 22

- Little to no out of network coverage - Must get referrals through PCP - If you join an HMO, you likely have to change doctors

Answer 23

contracts with healthcare providers to provide certain medical services at discounted fees plan forms a 'network' of providers Patients aren't required to use a provider within the network but the deductible and copay are lower if they do

Answer 24

- No referral needed for specialist - Can go to out of network physicians (but pay higher deductibles, coinsurance)

Answer 25

- More cost sharing than HMO - Out of network physicians may bill insured for amounts in excess of FFS - Less efficient communication between providers - Billings is more complicated than HMO since each medical provider has their own system

Answer 26

structured as an HMO in that members must select a primary care physician (who acts as a “gatekeeper”), but members can go outside of network for care If patients see providers who are in the network, they pay little or nothing out of pocket. Deductibles and copayments are higher if patients see providers outside the network.

Answer 27

combines a high-deductible health plan with a health savings account (HSA) A high-deductible health plan (HDHP) has an annual deductible that is substantially higher than traditional plans.

Answer 28

High cost to consumers who use a lot of healthcare. Low-income individuals/families may not be able to afford high deductibles Because of high deductible, some insureds may postpone needed medical care

Answer 29

Tax exempt account established exclusively for the purpose of paying qualified medical expenses Must be covered under a high-deductible health plan Account is an investment account from which the account holder can withdraw money tax-free for medical costs

Answer 30

Consumers with high deductibles will be more cost sensitive and avoid unnecessary tests. If not used, money in the HSA can be saved for retirement. Health insurance is more affordable (lower premiums)

Answer 31

Pays a daily or monthly benefit for medical or custodial care received in a nursing facility, in a hospital, or at home

Answer 32

Provides income payments when the insured is unable to work because of sickness or injury Partial Disability Residual Disability The benefit period is the length of time that disability payments are payable after the elimination period is met Elimination Period Waiver of Premium Rehabilitation Provision

Answer 33

Group - contract between insurer and employer - rate applies to group as a whole Underwriting based on average risk of group(age, distribution, industry, location) Individual - contract between insuerer and individual - Covered parties named in contract - Rate applies to indidiuals in contract - Underwriting based on risk of individuals (weight, family history)

Answer 34

helps pay the cost of normal dental care Plans cover x-rays, cleaning, fillings, etc. A covered employee or family must satisfy a deductible each calendar year Coinsurance requirements vary depending on the type of service provided Most plans have maximum limits on benefits Some dental services are excluded A predetermination-of-benefits provision informs the employee of the amount that the insurer will pay for a service before the service is performed