Download Florida Health 240 Insurance: Key Concepts and Definitions and more Exams Public Health in PDF only on Docsity!
FLORIDA HEALTH 240 INSURANCE
WITH 100% CORRECT ANSWERS
Rules of Construction - Correct Answer Help to identify and establish the intent of the parties to the
contract"
"Utmost good faith - Correct Answer Each party is entitled to rely on the representation of the other,
and each party should have a reasonable expectation that the other is acting in good faith without attempts to conceal or deceive."
"Aleatory Contract - Correct Answer A contract under which one party's performance is contingent on
an uncertain event."
"property and casualty agent - Correct Answer has the power to bind the insurer"
"Adhesion Contract - Correct Answer Insurance company drafts contract and the insured adheres to it.
Any ambiguity resolved in favor of the insured."
"Unilateral contract - Correct Answer Insured has completed paying the premium, only one party of
the contract is legally required to do something. Insured promises to pay the death benefit in the event of loss. Can not be held for breach of contract."
"Conditional contract - Correct Answer This type of contract is conditional because the company only
pays on condition of a loss."
"Personal Contract - Correct Answer The contract is between the insured and the insurer"
"warranty - Correct Answer guarantee; assurance by seller. Any breach provides grounds for voiding
the contract."
"representation - Correct Answer a statement believed to be true to the best of one's knowledge."
"false pretenses - Correct Answer When an uninsurable individual applying for insurance may ask
another person to substitute for him to take the physical examination."
"Misrepresentation - Correct Answer A false statement or lie that can render the contract void."
"concealment (n) - Correct Answer The failure to disclose material facts. Grounds for recission by
either party."
"Material Information or facts - Correct Answer Something crucial to acceptance of the risk."
"fraud (n) - Correct Answer An intentional act designed to deceive and induce another party to part
with something of value."
"Parol Evidence Rule - Correct Answer Rule of law disallowing oral evidence which disputes a written
agreement."
"Voidable Contract - Correct Answer A contract that may be legally avoided at the option of one or
both of the parties."
"Void Contract - Correct Answer an agreement of no legal effect."
"Implied Authority - Correct Answer Authority that is given not in writing but that is necessary for the
agent to transact insurance."
"Apparent Authority - Correct Answer A third party's reasonable belief that an agent has authority to
act on the principal's behalf."
"Express Authority - Correct Answer the authority of an agent, stated in the document or agreement
creating the agency."
"Lingering implied authority - Correct Answer means that the agent carries "signs or evidences of
authority."
"Estoppel - Correct Answer A legal impediment to denying a fact or restoring a right that has been
previously waived."
"Valid Contract (Legal Contract) - Correct Answer one that meets all of the requirements of a binding
contract. Competent parties, legal purpose, and consideration, not an actual written document."
"Policyfolder - Correct Answer Important documents with a custom folder."
"Plan Sponsors - Correct Answer Policyholder responsible for administering pan and making premiums
to insurance company."
"Employee or individual employer group - Correct Answer Employer is the policy-owner and
establishes eligible class of employees to be covered under group policy."
"consideration (n) - Correct Answer Initial premium sent with application."
"Underwriting - Correct Answer Reviewing background and medical history. Process of selection,
classification, and rating risk. Risk is acceptable it will be classified."
"applicants - Correct Answer Individual who fills out application for the insurance."
"Policyowner - Correct Answer Pays premium, accepts policy, has special rights and designated
beneficiaries."
"beneficiary (n) - Correct Answer one who receives benefits (heir, legatee, recipient)"
"Insured - Correct Answer Individual whose life is covered by the policy"
"Third Party Ownership - Correct Answer A person other than the insured is the owner of the policy.
Key employee policy."
"adverse selection - Correct Answer A tendency for risk to seek and be covered for insurance more
often than average risks."
"probationary period - Correct Answer For new employees wait period 1-6 months before they can
enroll for benefits."
"Shared funding arrangement - Correct Answer Allows employer to self fund healthcare expenses up
to a certain limit."
"Retrospective premium - Correct Answer Insurer agrees to collect a provisional premium but may
collect additional premium or make a premium refund."
"minimum premium - Correct Answer Employer agrees to find expected claims and the insurer find
the excess claims."
"Annuity - Correct Answer Policy designed to protect against the risk of living too long."
"Stocks - Correct Answer Type of insurance owned by its shareholders."
"Foreign Insurer - Correct Answer An insurer licensed to operate in a state but incorporated in another
state."
"Alien Insurer - Correct Answer An insurer domiciled in a country other than the United States."
"retention - Correct Answer Self-insurance method is risk."
"Insurer - Correct Answer The insurance company that provides planned protection against economic
losses."
"Risk - Correct Answer A social device for spreading the chance of financial loss amping a large number
of people."
"Avoidance - Correct Answer Choosing the option that is most likely to avoid the worst possible
result."
"Morale Hazard - Correct Answer A condition of carelessness or indifference that increases the
frequency or severity of loss"
"Suitability considerations - Correct Answer Addressing the needs of a prospect and the appropriate
products."
"Coinsurance - Correct Answer A cost-sharing provision requires the insured to assume a portion of
the cost of covered services."
"Mutual Insurer - Correct Answer A corporation owned by the policyholders."
"Pretext interviews are - Correct Answer NOT permitted unless some evidence of criminal activity
exists"
"A customer is anyone - Correct Answer With whom a company has an ongoing relationship with."
"Federal Government - Correct Answer Has the right to regulate the business of insurance to the
extent that such business is not regulated by state law."
"Insurance laws generally are written by - Correct Answer state legislature"
"Commissioner of Insurance - Correct Answer regulates insurance carriers and issues insurance
licenses, imposes penalties, admins and enforced laws."
"Market conduct laws - Correct Answer Non financial regulatory activities of an insurance department
fall under this."
"Producers - Correct Answer Either agents that represent the insurance company or brokers
representing the individual seeking insurance."
"Insurance regulation - Correct Answer Takes place at the state level"
"Applicants for insurance must be given advance notice about all info except - Correct Answer Person
collecting information"
"Claim frequency rate - Correct Answer How frequently claims happen among a particular population"
"Aggregate claim - Correct Answer limit is a contract provision used in insurance to limit the amount
that can be paid in the policy period."
"Net premium - Correct Answer Premium without expense loading."
"Reserves - Correct Answer Portion of premium that are set aside against the future claim under the
policy. Reserve= interest earned+ future premiums (in contractual obligations."
"Certificate of Insurance - Correct Answer Proof of coverage."
"Administrative services only - Correct Answer Funds all claims and manages paperwork for claims."
"minimum premium - Correct Answer Insurer pays excess or unexpected claims and all routine claims.
Policy is funded by this."
"disability income insurance - Correct Answer insurance that covers a portion of the income lost when
you cannot work because of accident or sickness."
"Accidental death and dismemberment - Correct Answer Can be rider in life insurance, part of
disability insurance, part of health insurance, or separate policy separate."
"Policy Summary - Correct Answer Similar in meaning to a policy's face amount."
"Capital sum - Correct Answer Amount paid for an accidental dismemberment benefit."
"Medical expense insurance - Correct Answer Hospitalization insurance hospital expenses and
outpatient expenses. Used as individual or hospital."
"Dental expense coverage - Correct Answer Part of group health for dental work."
"long term care insurance - Correct Answer provides payment for extended nursing care due to
accidents, illness, or old age."
"Hospital income hospital indemnity insurance - Correct Answer Pays a specific sum on a daily, weekly,
or monthly basis while insured is confined to a hospital."
"Travel accident policies - Correct Answer Coverage for death or injury resulting from accidents
occurring in a fare paying passenger on a common carrier."
"Accident only insurance - Correct Answer Coverage for accident excludes sickness."
"Blanket insurance policy - Correct Answer A policy that covers more than one person or piece of
property. Students campers come and go."
"credit insurance - Correct Answer Issued only to those who are in the debt to a creditor."
"Specified disease insurance - Correct Answer Provides for a variety of benefits for only certain
diseases."
"Skilled Nursing Facility (SNF) - Correct Answer Staffed with physicians/nurses. Patients require more
care than in standard nursing facility."
"assisted living facility - Correct Answer a resident facility designed to provide assistance and
supervision to residents on an intermittent basis."
"home health care - Correct Answer Provides nursing, therapy, personal care, or housekeeping
services in patient's own home."
"managed care - Correct Answer A health care system whose goals are to provide cost effective quality
care."
"reimbursement - Correct Answer amount paid to patient toward the cost of healthcare services"
"Insured - Correct Answer An individual who is covered by an insurer responsible for paying
providers."
"subscribers to the service - Correct Answer Policyholders"
"Usual customary and reasonable fee - Correct Answer Fees charged by other doctors in the same
geographical area."
"Point of Service (POS) - Correct Answer Health plan allowing the covered person to choose to receive
a service from a participating or nonparticipating provider associated with in plan and out of plan providers."
"Service-incurred - Correct Answer Entitled health care consumer to a wide range of services."
"group model HMO - Correct Answer one that contracts with a multispecialty group practice"
"capitation fee - Correct Answer Is a fixed amount of money paid per month, or other period, to the
pharmacy for certain patients."
"staff model HMO is - Correct Answer a group of physicians who are employees of an organization that
provide health care of a HMO."
"Exclusive Provider Organizations (EPOs) - Correct Answer the client chooses from a list of providers
within a contracted organization"
"Stop loss contract - Correct Answer Limit employers liability for claims."
"ASO contract - Correct Answer administrative services only contract. Insurer provides claims admin
claims and makes payments and employer provides funds."
"Voluntary employees beneficiary associations - Correct Answer Finding vehicles for employee
benefits offered to members."
"cafeteria plan - Correct Answer Provides subscribers and employees with a choice of HMO, PPO, or
traditional health insurance plan."
"Small employer - Correct Answer 50 or less employees."
"High deductible health plan - Correct Answer Annual deductible of $2-$3k individual and $4,050-
$6050k family."
"Flexible spending accounts - Correct Answer Cafeteria plan funded with the employees money by
means of a salary deduction."
"Health Savings Account (HSA) - Correct Answer A pre-tax savings account designed specifically for
medical expenses."
"Health Reimbursement Account (HRA) - Correct Answer Medical reimbursement plan set up and
funded by an employer"
"consumer driven health plans - Correct Answer High deductible health plan+ FSA, or HDS, or HRA.
Employer contributes and it Rolls over."
"Franchise insurance - Correct Answer Group policy where each person has their own individual
policy."
"Total Disability - Correct Answer Inability to engage in work for at least 12 months or until death."
"capitation fee - Correct Answer "
"Mode of premium - Correct Answer Frequency in payment. Increases slightly as frequency increases."
"Initial Premium - Correct Answer First premium paid to place the policy in effect."
"Policy fee - Correct Answer A general flat amount that helps defeat expenses i.e. commission,
acquisition costs etc."
"Constructive delivery - Correct Answer Insurer mails a policy to its producer for actual delivery to
policyowner."
"Ethics - Correct Answer Setting a standard of conduct or behavior based on established values."
"fiduciary - Correct Answer A person in a position of financial trust."
"Fiduciary Duty - Correct Answer A legal obligation of one party to act in the best interest of another."
"No Loss / No Gain - Correct Answer Continuing to pay on going claims for a previous policy under a
new contract."
"replacement - Correct Answer a person or thing that takes the place of another, protect life insurance
purchases, concerned with false and misleading statements."
"Entire Contract Provision - Correct Answer the policy owner is entitled to the entire contract so that
he knows any riders or waivers"
"reinstatement provision - Correct Answer permits the owner to reinstate a lapsed policy"
"Unearned - Correct Answer Policy canceled before expiration date."
"pro rata - Correct Answer Unearned portion returned."
"Short rate - Correct Answer When insurer keeps earned premium and unearned goes to customer"
"Free-Look Period - Correct Answer Allowing individuals to look over the policy for a specified period
with the right to refuse."
"Insuring Clause - Correct Answer o Defines and describes the scope of the coverage provided and
limits of indemnification"
"Cancelable policy - Correct Answer Insurance company may cancel the health insurance policy at any
time for any reason"
"Optionally Renewable - Correct Answer May elect to renew or not, but only on policy
anniversary date"
"Conditionally Renewable - Correct Answer May renew or not, based on conditions spelled out
in the policy"
"probationary period (disability) - Correct Answer Qualification period begins when policy goes into
affect nothing is paid for 15, 30 or 60 days for long term policies."
"preexisting condition - Correct Answer Health problems that existed before the policies inception."
"elimination period - Correct Answer the number of days an insured must be disabled before disability
income benefits become payable. It may be 30,60,90,120 days."
"Total disability (as commonly defined) - Correct Answer "The inability to perform your OWN normal
occupation or daily duties"."
"Multiple Employer Welfare Arrangements MEWAs - Correct Answer Created for small employers who
join to provide health insurance benefits for their employees."
"recurrent disability - Correct Answer no elimination/waiting period if within 90 days and some
insurers 6 months."
"Residual disability rider - Correct Answer Type of partial disability rider, which pays fluctuating % of
lost income w/out time limit."
"permanent disability - Correct Answer disability from which the insured does not recover"
"temporary disability - Correct Answer a disability that can improve and clear up"
"Confining Disability - Correct Answer Disability which restricts a person to staying indoors."
"Nonconfining Disability - Correct Answer Disability which does not restrict a person to staying
indoors."
"Accidental Bodily Injury - Correct Answer Unplanned, unforeseen traumatic injury to the body."
"sickness benefit - Correct Answer money paid by the government to someone who cannot work
because of illness"
"Long Term Disability (LTD) - Correct Answer A significant period of disability generally ranging from six
months to life"
"Lump sum disability - Correct Answer Usually happen in installments payments due to advances in
medicine."
"Rehabilitation benefit - Correct Answer Money for school for a different occupation sometimes as a
lump sum."
"Guaranteed Insurability Rider - Correct Answer Allows the insured to buy more coverage in pre-set
amounts at a later time"
"cost of living benefit - Correct Answer Insured monthly disability benefit (total or residual) will
increase automatically once insured is in the claim. After 12 months and each 12 months after."
"Lifetime benefits - Correct Answer Extends from 65 to lifetime. Applies to accident only or sickness
benefits."
"All or nothing rider - Correct Answer Insured paid only if social security pays nothing"
"Offset rider - Correct Answer Benefit reduced or offset by the amount paid by social security."
"Additional monthly benefit - Correct Answer Additional benefits in the initial 6 to 12 months of a
claim."
"Hospital confinement - Correct Answer Elimination period waived when insured is hospitalized as an
inpatient. Pays total disability while in hospital."
"Impairment rider - Correct Answer When a condition is excluded from coverage protecting insurance
company from undue risk and providing health care needs for applicant."
"Nondisabiling Injury rider - Correct Answer Pays for medical expense not disability"
"AD&D - Correct Answer Covers life insurance and health insurance benefit."
"Annual Renewable Term - Correct Answer Level term insurance which has a level face amount and
increasing premiums."
"Return of Premium Rider - Correct Answer Allows for a portion of the premium to be returned if the
policy owner is not disabled"
"Future increase option - Correct Answer Provides for the insured to be able to purchase additional
amounts of disability income periodically without proving insurability."
"Waiver of Premium - Correct Answer - exempts the owner from paying premiums while they're
disabled."
"BOE policy - Correct Answer "
"Lifetime Benefits OptionS - Correct Answer "
