Question 1

The most common form of medical plan deductible is established on a per-occurrence basis.

Accepted Answer

A) True 
 B)False  False

Question 2

Match the descriptions with their terms:
-A/An _________________ contract provides that termination of coverage is prohibited prior to a specified age as long as the premiums are paid when due.

Accepted Answer

A)  any occupation for which reasonably suited 
B)  Any willing provider laws 
C)  Continuation provisions 
D)  Disability income insurance 
E)  guaranteed renewable
F) Health maintenance organizations
G) individual practice HMO
H) Major medical insurance
I) nonscheduled basis
J) out-of-pocket cap
K) own occupation
L) preferred provider organizations
M) reasonable and customary
N) staff model HMO 
A)  any occupation for which reasonably suited 
B)  Any willing provider laws 
C)  Continuation provisions 
D)  Disability income insurance 
E)  guaranteed renewable
F) Health maintenance organizations
G) individual practice HMO
H) Major medical insurance
I) nonscheduled basis
J) out-of-pocket cap
K) own occupation
L) preferred provider organizations
M) reasonable and customary
N) staff model HMO E

Question 3

A health insurance policy contains a $200 per-cause deductible, a 75 percent coinsurance provision, and a $2,000 coinsurance cap. If a $10,000 covered claim is the only claim made this year, the insured would have to pay

Accepted Answer

A)  $2,650, 
B)  $2,000, 
C)  $7,800, 
D)  $2,200. 
A)  $2,650, 
B)  $2,000, 
C)  $7,800, 
D)  $2,200. D

Question 4

Long-term care insurance is rapidly decreasing in popularity.

Accepted Answer

A) True 
 B)False

Question 5

The effect of the misstatement-of-age clause is very different in an individual health insurance contract than in an individual life insurance contract.

Accepted Answer

A) True 
 B)False

Question 6

A situation for which a term health insurance policy is well suited is

Accepted Answer

A)  a two-week hiking expedition, 
B)  a young family with minor children, 
C)  an elderly couple with a limited income, 
D)  a single worker with no dependents. 
A)  a two-week hiking expedition, 
B)  a young family with minor children, 
C)  an elderly couple with a limited income, 
D)  a single worker with no dependents.

Question 7

The effect of a misstatement-of-age clause in a health insurance contract is that

Accepted Answer

A)  no benefits will be paid if it is shown that the insured intentionally misrepresented his or her age, 
B)  benefits will be paid based on the age represented in the application if two years pass before the discovery of the misstated age, 
C)  the policy will be voidable at the option of the insurer, and if the insurer decides to void the policy it must return all premiums collected with reasonable interest, 
D)  the benefits will be adjusted to equal the benefits that could have been purchased had the true age been known. 
A)  no benefits will be paid if it is shown that the insured intentionally misrepresented his or her age, 
B)  benefits will be paid based on the age represented in the application if two years pass before the discovery of the misstated age, 
C)  the policy will be voidable at the option of the insurer, and if the insurer decides to void the policy it must return all premiums collected with reasonable interest, 
D)  the benefits will be adjusted to equal the benefits that could have been purchased had the true age been known.

Question 8

Several contractual provisions are required by law to be included in individual health insurance policies.

Accepted Answer

A) True 
 B)False

Question 9

A continuation provision in a health insurance policy that is not commonly used is

Accepted Answer

A)  continually renewable, 
B)  optionally renewable, 
C)  guaranteed renewable, 
D)  noncancellable. 
A)  continually renewable, 
B)  optionally renewable, 
C)  guaranteed renewable, 
D)  noncancellable.

Question 10

Match the descriptions with their terms:
-Surgical policies written on a/an _________________ cover insured procedures up to the full amount of what is considered to be reasonable and customary.

Accepted Answer

A)  any occupation for which reasonably suited 
B)  Any willing provider laws 
C)  Continuation provisions 
D)  Disability income insurance 
E)  guaranteed renewable
F) Health maintenance organizations
G) individual practice HMO
H) Major medical insurance
I) nonscheduled basis
J) out-of-pocket cap
K) own occupation
L) preferred provider organizations
M) reasonable and customary
N) staff model HMO 
A)  any occupation for which reasonably suited 
B)  Any willing provider laws 
C)  Continuation provisions 
D)  Disability income insurance 
E)  guaranteed renewable
F) Health maintenance organizations
G) individual practice HMO
H) Major medical insurance
I) nonscheduled basis
J) out-of-pocket cap
K) own occupation
L) preferred provider organizations
M) reasonable and customary
N) staff model HMO

Question 11

From the insured's perspective, a major disadvantage typically associated with an HMO is that

Accepted Answer

A)  high deductibles and coinsurance percentages are typically associated with an HMO, 
B)  limitations are placed on the selection of physicians, 
C)  most medical specialties are not usually represented in an HMO, 
D)  surgical expenses are generally not covered by an HMO. 
A)  high deductibles and coinsurance percentages are typically associated with an HMO, 
B)  limitations are placed on the selection of physicians, 
C)  most medical specialties are not usually represented in an HMO, 
D)  surgical expenses are generally not covered by an HMO.

Question 12

A change that would tend to decrease the premium on a disability policy is

Accepted Answer

A)  a shorter elimination period, 
B)  use of an any occupation definition of disability instead of an any occupation to which reasonably suited definition, 
C)  increasing the benefit level from 67 percent to 75 percent of prior earnings, 
D)  lowering the payment period from until age 70 to until age 65. 
A)  a shorter elimination period, 
B)  use of an any occupation definition of disability instead of an any occupation to which reasonably suited definition, 
C)  increasing the benefit level from 67 percent to 75 percent of prior earnings, 
D)  lowering the payment period from until age 70 to until age 65.

Question 13

A health insurance policy contains a $200 calendar-year deductible, an 80 percent coinsurance provision, and a $2,500 out-of-pocket cap. If a $10,000 covered claim is the only claim made this year, the insurance company will pay

Accepted Answer

A)  $7,500, 
B)  $2,200, 
C)  $7,840, 
D)  $7,800. 
A)  $7,500, 
B)  $2,200, 
C)  $7,840, 
D)  $7,800.

Question 14

Organizations that were originally nonprofit organizations that allowed their subscribers to prepay some health care expenses are

Accepted Answer

A)  PPOs, 
B)  HMOs, 
C)  Blue Cross and Blue Shield organizations, 
D)  self-insured plans. 
A)  PPOs, 
B)  HMOs, 
C)  Blue Cross and Blue Shield organizations, 
D)  self-insured plans.

Question 15

Match the descriptions with their terms:
-_________________ describe the contractual rights regarding the renewal of a health insurance policy.

Accepted Answer

A)  any occupation for which reasonably suited 
B)  Any willing provider laws 
C)  Continuation provisions 
D)  Disability income insurance 
E)  guaranteed renewable
F) Health maintenance organizations
G) individual practice HMO
H) Major medical insurance
I) nonscheduled basis
J) out-of-pocket cap
K) own occupation
L) preferred provider organizations
M) reasonable and customary
N) staff model HMO 
A)  any occupation for which reasonably suited 
B)  Any willing provider laws 
C)  Continuation provisions 
D)  Disability income insurance 
E)  guaranteed renewable
F) Health maintenance organizations
G) individual practice HMO
H) Major medical insurance
I) nonscheduled basis
J) out-of-pocket cap
K) own occupation
L) preferred provider organizations
M) reasonable and customary
N) staff model HMO

Question 16

A reinstatement clause will allow a policy that has lapsed to be reinstated as long as premium payments are received by the insurer before the end of the grace period.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following statements is not true relating to preferred provider organizations?

Accepted Answer

A)  Most PPOs involve a fee reduction of health care services in return for certain concessions by the sponsoring organization, 
B)  An insurer may sponsor a PPO, 
C)  Employers sometimes agree to supply the PPO with a minimum number of patients each month, 
D)  Physicians are generally obligated by law to participate in a PPO if solicited by an insured participant. 
A)  Most PPOs involve a fee reduction of health care services in return for certain concessions by the sponsoring organization, 
B)  An insurer may sponsor a PPO, 
C)  Employers sometimes agree to supply the PPO with a minimum number of patients each month, 
D)  Physicians are generally obligated by law to participate in a PPO if solicited by an insured participant.

Question 18

Match the descriptions with their terms:
-_________________ are programs in which the members, who live within a well-defined geographical area, are provided with comprehensive health services by physicians associated with the organization.

Accepted Answer

A)  any occupation for which reasonably suited 
B)  Any willing provider laws 
C)  Continuation provisions 
D)  Disability income insurance 
E)  guaranteed renewable
F) Health maintenance organizations
G) individual practice HMO
H) Major medical insurance
I) nonscheduled basis
J) out-of-pocket cap
K) own occupation
L) preferred provider organizations
M) reasonable and customary
N) staff model HMO 
A)  any occupation for which reasonably suited 
B)  Any willing provider laws 
C)  Continuation provisions 
D)  Disability income insurance 
E)  guaranteed renewable
F) Health maintenance organizations
G) individual practice HMO
H) Major medical insurance
I) nonscheduled basis
J) out-of-pocket cap
K) own occupation
L) preferred provider organizations
M) reasonable and customary
N) staff model HMO

Question 19

Some PPOs offer a broad range of medical services, while others offer a narrowly focused set of services.

Accepted Answer

A) True 
 B)False

Question 20

Match the descriptions with their terms:
-_________________ provides periodic income payments to the insured while the insured is unable to work as a result of sickness or injury.

Accepted Answer

A)  any occupation for which reasonably suited 
B)  Any willing provider laws 
C)  Continuation provisions 
D)  Disability income insurance 
E)  guaranteed renewable
F) Health maintenance organizations
G) individual practice HMO
H) Major medical insurance
I) nonscheduled basis
J) out-of-pocket cap
K) own occupation
L) preferred provider organizations
M) reasonable and customary
N) staff model HMO 
A)  any occupation for which reasonably suited 
B)  Any willing provider laws 
C)  Continuation provisions 
D)  Disability income insurance 
E)  guaranteed renewable
F) Health maintenance organizations
G) individual practice HMO
H) Major medical insurance
I) nonscheduled basis
J) out-of-pocket cap
K) own occupation
L) preferred provider organizations
M) reasonable and customary
N) staff model HMO

Exam 17: Loss of Health

The most common form of medical plan deductible is established on a per-occurrence basis.

Match the descriptions with their terms: -A/An _________________ contract provides that termination of coverage is prohibited prior to a specified age as long as the premiums are paid when due.

A health insurance policy contains a $200 per-cause deductible, a 75 percent coinsurance provision, and a $2,000 coinsurance cap. If a $10,000 covered claim is the only claim made this year, the insured would have to pay

Long-term care insurance is rapidly decreasing in popularity.

The effect of the misstatement-of-age clause is very different in an individual health insurance contract than in an individual life insurance contract.

A situation for which a term health insurance policy is well suited is

The effect of a misstatement-of-age clause in a health insurance contract is that

Several contractual provisions are required by law to be included in individual health insurance policies.

A continuation provision in a health insurance policy that is not commonly used is

Match the descriptions with their terms: -Surgical policies written on a/an _________________ cover insured procedures up to the full amount of what is considered to be reasonable and customary.

From the insured's perspective, a major disadvantage typically associated with an HMO is that

A change that would tend to decrease the premium on a disability policy is

A health insurance policy contains a $200 calendar-year deductible, an 80 percent coinsurance provision, and a $2,500 out-of-pocket cap. If a $10,000 covered claim is the only claim made this year, the insurance company will pay

Organizations that were originally nonprofit organizations that allowed their subscribers to prepay some health care expenses are

Match the descriptions with their terms: -_________________ describe the contractual rights regarding the renewal of a health insurance policy.

A reinstatement clause will allow a policy that has lapsed to be reinstated as long as premium payments are received by the insurer before the end of the grace period.

Which of the following statements is not true relating to preferred provider organizations?

Match the descriptions with their terms: -_________________ are programs in which the members, who live within a well-defined geographical area, are provided with comprehensive health services by physicians associated with the organization.

Some PPOs offer a broad range of medical services, while others offer a narrowly focused set of services.

Match the descriptions with their terms: -_________________ provides periodic income payments to the insured while the insured is unable to work as a result of sickness or injury.

Introduction to Risk

Risk Identification and Evaluation

Property and Liability Loss Exposures

Life, Health, and Loss of Income Exposures

Risk Management Techniques: Noninsurance Methods

Insurance As a Risk Management Technique: Principles

Insurance As a Risk Management Technique: Policy Provisions

Selecting and Implementing Risk Management Techniques

Risk Management and Commercial Propertypart I

Risk Management and Commercial Propertypart II

Risk Management and Commercial Liability Risk

Workers Compensation and Alternative Risk Financing

Risk Management for Auto Ownerspart I

Risk Management for Auto Ownerspart II

Risk Management for Homeowners

Loss of Life

Retirement Planning and Annuities

Employee Benefits: Life and Health Benefits

Employee Benefits: Retirement Plans

Financial and Estate Planning

Risk Management and the Insurance Industry

Functions and Organization of Insurers

Government Regulation of Risk Management and Insurance

Filters