Chapter 3: Health

Basic Medical Expense insurance... normally has a deductible and coinsurance covers an illness but not an accident pays for lost wages while hospitalized has lower benefit limits than Major Medical insurance

Which of the following is NOT a limited benefit plan? cancer policies life insurance policies dental policies critical illness policies

N has a Major Medical policy that only pays a portion of N's medical expenses. N is responsible for paying the remaining balance. This provision is known as Assignment of Benefits Coinsurance Indemnity Co-deductible

Deductibles are used in health policies to lower... the incidents of fraud the coinsurance amount overuse of medical services adverse selection

Which of the following statements BEST describes the intent of a Coinsurance clause in a Major Medical policy? Discourages overutilization of the insurance coverage Minimizes the need for deductibles Discourages adverse selection Minimizes the waiting period

All of the following statements about Major Medical benefits are true EXCEPT The deductible can be expressed as a fixed dollar amount The benefit period begins only after a specified amount of expenses have accrued Benefits are generally expressed as a percentage of eligible expenses Benefits have no maximum limit

All of the following are limited benefit plans EXCEPT: cancer policies life insurance policies dental policies critical illness policies

The first portion of a covered Major Medical insurance expense that the insured is required to pay is called the: corridor deductible initial deductible stop-loss deductible coinsurance deductible

Which of the following policy features allows an insured to defer current health charges to the following year's deductible instead of the current year's deductible? Deferral provision Carryover provision Stop Loss provision Corridor provision

Basic Hospital and Surgical policy benefits are: lower than the actual expenses incurred higher than the actual expenses incurred normally subject to deductibles normally subject to coinsurance

Which of the following costs would a Basic Hospital/Surgical policy likely cover? Surgically removing a facial birthmark Care given at a nursing home Treating a wound from a soldier injured at war Lost income caused by a hospital stay

Which of the following BEST describes a Hospital Indemnity policy? Coverage that reimburses an insured for surgeon expenses Coverage that pays a stated amount per day of a covered hospitalization Coverage that replaces lost income due to hospitalization Coverage that pays for hospital room and board

A prospective insured completes and signs an application for health insurance but intentionally conceals information about a pre-existing heart condition. The company issues the policy. Two months later, the insured suffers a heart attack and submits a claim. While processing the claim, the company discovers the pre-existing condition. In this situation, the company will: continue coverage but request a corrected application deny coverage and increase premiums continue coverage but exclude the heart condition rescind the coverage and return the premiums

M is insured under a basic Hospital/Surgical Expense policy. A physician performs surgery on M. What determines the claim M is eligible for? Claim payment is equal to physician's actual charges Claim payment is negotiated between physician and patient Determined by the schedule of benefits from the hospital Determined by the terms of the policy

Which of the following medical expenses does Cancer insurance NOT cover? Chemotherapy Radiation treatment Physician visit Arthritis