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LIFE & HEALTH INSURANCE EXAM PREP
2024/2025 EXAM ACTUAL EXAM
COMPLETE 150 QUESTIONS WITH
DETAILED VERIFIED ANSWERS (100%
CORRECT ANSWERS) /ALREADY
GRADED A+
"Coinsurance - CORRECT ANSWER=> - Once the deductible is met the insured and the insurance
company share in the expenses in what is called coinsurance. It is written as 80/20, 70/30, etc. Also called percentage participation requirement."
"Flat Deductible - CORRECT ANSWER=> -Portion of medical expenses that are paid by the insured each
year before benefits start. The higher the deductible the lower the annual premium will be. -If a medical incident occurs in the last three months of any plan year and the annual deductible has met the yearly requirement then the medical treatment for that incident only would be covered in the new plan year. Thus a "carryover" into the next year of the paid deductible has occurred."
"Per Cause Deductible - CORRECT ANSWER=> A separate deductible for each separate illness or
accident."
"Stop Loss - CORRECT ANSWER=> Max amount the insured is required to pay out of pocket: After the
stop loss amount is reached by the insured, in a calendar year, the company will pay 100% of the remaining covered expenses. -calculated by adding both deductibles and coinsurance amounts."
"Comprehensive major medical - CORRECT ANSWER=> Major Medical and Basic Medical are written
together."
"Corridor deductible - CORRECT ANSWER=> Occurs in the middle of the hospital stay, and bridges the
gap from the basic to the major medical plan."
"Pre-Existing Condition - CORRECT ANSWER=> -To Prevent avoid adverse selection.
-A is a medical condition for which an insured sought medical attention, treatment, or advice for symptoms or for which should have sought medical advice/treatment in the previous 6 months.
-For individual policies, the exclusion can not exceed 24 months, for group policies 12 months, and for late enrollees in group plans, 18 months."
"Exclusions found in Basic and Major Medical - CORRECT ANSWER=> -Injuries due to war or military
conflict -Elective cosmetic surgery -Routine Dental Care -Eye Exams & Glasses Treatment in a Veterans Hospital or other Gov Facility -Workers Compensation Accidents -Claims Occurring Outside the U.S. -Intentionally Self-Inflicted Injury"
"Limited Coverage - CORRECT ANSWER=> Specified Coverage policies, or Limited Coverage, are
insurance policies that limit coverage to one illness or one limiting group of coverage."
"Dread Dieses (Limited Risk) - CORRECT ANSWER=> Policies provide a variety of benefits for a specific
disease such as a cancer policy or a heart disease policy. Benefits are usually paid as a scheduled amount of indemnity for specified events or medical procedures, such as hospital confinement or chemotherapy."
"Critical Illness Plans - CORRECT ANSWER=> -Pays a lump sum to the insured upon the diagnosis (&
survival) of a critical illness. The insured must survive the illness for a certain time period (Ex 30 days)."
"Hospital Indemnity - CORRECT ANSWER=> -Provides a specific amount on a daily, weekly or monthly
basis while the insured is confined to a hospital. The benefit payments are sent directly to the insured and can be used for any purpose."
"Travel Insurance - CORRECT ANSWER=> Covers most kinds of travel accidents, but only for a specified
period of time."
"Workers Compensation - CORRECT ANSWER=> A benefit required by the state and benefits will vary
to some degree from state to state. This coverage is made available through government programs, private insurers, or by self-insuring. To be eligible the employee must work in an occupation covered by Workers Compensation insurance, and have had an accident or sickness that is work related."
"Disability Income Insurance - CORRECT ANSWER=> -Designed to replace income lost due to a
disability or illness of the insured wage earner. It never pays for the medical expenses; it only replaces lost income and must be paid no less frequently than monthly. Its to avoid Economic Death. -Can be group of individual policy"
"Malingering - CORRECT ANSWER=> Making the loss last longer than it has to."
deductible of days. The premium on a DI policy is adjusted depending on the selection of the elimination period. Longer elimination periods result in lower premiums."
"Benefit Period - CORRECT ANSWER=> Range from a six month period to policies that provide
coverage to age 65. Disability payments cannot go beyond age 65 because the purpose of Disability is to replace lost income, and at age 65 you are presumed to be retired."
"Short Term Vs Long Term - CORRECT ANSWER=> benefit period of up to two years (24 months) are
considered short term. Policies which have a Benefit Period of more than two years are considered long term."
"Accidental bodily injury - CORRECT ANSWER=> means the DAMAGE to the body is unexpected and
unintended. A policy that uses the accidental bodily injury provision will provide more coverage than a policy that uses the accidental means provision."
"Accidental means - CORRECT ANSWER=> means the CAUSE of the accident must be unexpected and
unintended. Employ the use of "reasonable judgment" on the part of the insured to determine whether or not it would be accidental and covered by the policy"
"Sickness or illness - CORRECT ANSWER=> Defined as either a sickness or disease contracted after the
policy has been in force for at least 30 days, or a sickness or disease that first manifests itself after the policy is in force"
"Occupations or Non-occupational - CORRECT ANSWER=> Disability Income policies are classified as
Occupational or Non-occupational, depending on whether or not they will pay for accidents occurring on the job. In most cases, Group Disability Insurance is written on a Non-occupational basis because accidents occurring on the job are covered by Workers Comp. There are many people, who are not eligible for Workers Comp, such as self- employed individuals and Principals of Partnerships."
"Group Short Term Disability (STD) - CORRECT ANSWER=> -Some Disability policies pay in conjunction
with Workers Comp, such as STD -The benefit period for STD cannot be longer than 2 years."
"Group Long Term Disability (LTD) - CORRECT ANSWER=> Reserved for management or higher paid
employees. The Elimination Period will coincide with the benefit period of the STD Period so they don't overlap. The Benefit Period may be up to age 65. Lower paid employees are limited to 66 2/3% of their monthly wage."
"Disability Income (DI) - CORRECT ANSWER=> Written specifically to cover accidents only or sickness
only. These are usually short term policies designed to provide income on a per diem basis. Any policy that provides a flat dollar income benefit for each day of hospital confinement is referred to as a Hospital Indemnity Plan."
"Presumptive Disability - CORRECT ANSWER=> Provision that is found in most DI policies which
specifies the conditions that will automatically qualify the insured for full disability benefits. Some disability policies provide a benefit when people simply meet certain qualifications, regardless of their disability to work."
"The Cost of Living Adjustment (COLA) - CORRECT ANSWER=> Rider will help protect against inflation.
Insured's monthly benefit will be increased automatically once payments have begun. Generally, the first increase would be at the end of one year, and it would be followed by annual increases for as long as the insured remains on the claim. Some of these Riders provide for compound interest adjustments, while others provide simple interest adjustments."
"Future Increase Option, (FIO) - CORRECT ANSWER=> -Allows an insured to increase the benefit level
up to a specific predetermined amount at certain times or on certain occasions, without proof of insurability. -An increase may also be taken at one's marriage or birth of a child. -In order to exercise this rider, the insured must qualify from an income standpoint to prevent over insurance."
"Garmented Insurability Rider - CORRECT ANSWER=> Future Increase Option or Guaranteed Purchase
Option. This option is also available on the life policies which allow the insured to purchase additional amounts of Disability Income coverage without evidence of insurability (no medical exam)."
"Exclusions - CORRECT ANSWER=> -War and Military Service
-Intentionally self-inflicted injury, including attempted Suicide -Standard Aviation Exclusions -Losses occurring during the commission of a felony -Private Pilot Exclusions and Exclusions related to hazardous hobbies (sky diving, Race Car Driving etc.) -Pre-existing condition limitations -Impairment Riders (used to exclude specific named conditions from coverage)"
"Own Occupation - CORRECT ANSWER=> States that a disability occurs when a person cannot perform
any of the regular duties a person's own occupation is the most liberal to the insured. After 24 months it goes to Any Occupation"
"Any Occupation - CORRECT ANSWER=> Insured is qualified by reason of education, training or
experience, is less liberal and may be used when the policy provides for Total and Partial Disability coverage. Most policies are any occupation because it is easier to justify the "any occupation" definition when agreeing to issue a policy"
"Recurrent Disability - CORRECT ANSWER=> -Provision that specifies a period of time (usually 6
months) during which the reoccurrence of a disability is considered to be a continuation of the prior claim. It addresses situations when a claimant returns to work and is again disabled by the same cause."
"Key Employee Policy Disablity - CORRECT ANSWER=> Should a key person become disabled, the
benefit is treated as a reimbursement to the business for loss of services from that key person, and the benefit is collected tax-free"
"Business Buy Out - CORRECT ANSWER=> Designed for partnerships and closely held corporations and
is used to fund Buy-Sell Agreements between partners in the event of the total disability of any one of them. The Benefit is paid in a Lump Sum to the survivors in order for them to buy out the disabled partner"
"Accidental Death and Dismemberment (AD & D) - CORRECT ANSWER=> Policy pays specific benefits
to an insured who suffers a loss on a purely accidental basis. Always 2 benefits:
- Principal Sum
- Capital Sum No Payments will ever pay for loss of disease or sickness"
"Principal Sum - CORRECT ANSWER=> The amount paid if the insured dies because of an accident."
"Capital Sum - CORRECT ANSWER=> -Payable if the insured is dismembered (loses a limb) in an
accident. The Capital Sum is usually different for each body part listed for coverage (hands, feet, legs, arms and eyeballs). The policy will pay a Capital Sum for loss of use of eyesight and loss of hearing. Other loss of use is not payable"
"Payment of AD&D Exceptions: - CORRECT ANSWER=> -Be Purely Accidental
-Occur within ninety days of the accident -Occur before the age of 70"
"Death Benefit - CORRECT ANSWER=> (Face Amount, Face Value, Proceeds) is the amount paid when a
death claim occurs against a policy of insurance. In health policies, the only time a death benefit is paid is in AD&D policies, death must occur because of an accident only."
"Long Term Care (LTC) - CORRECT ANSWER=> Designed to cover people who have assets that they
want to protect and are in reasonably good health, who can qualify for the coverage, and can afford to pay for it. Many individuals requiring LTC are not sick or ill, but need support services to maintain an optimal level of functioning."
"LTC Coverage - CORRECT ANSWER=> -At least12 consecutive months in the event the insured requires
confinement in any care center environment, other than an acute unit of a hospital."
"Acute Unit of a Hospital - CORRECT ANSWER=> refers to the emergency room or other setting that is
designed for short term care and/or rehabilitation, so it is not covered in LTC."
"Individual VS Group LTC - CORRECT ANSWER=> Individual is the most common type of LTC in the
private market and is sold as a guaranteed renewable policy, meaning the only way to change benefits or cancel the policy is on a group or class basis. Group plans are gaining in popularity and offer less underwriting and open enrollment periods."
"Coverage Triggers - CORRECT ANSWER=> Event or condition that must occur before benefits are
payable. There are 3 event triggers: activities of daily living, cognitive impairments, and medical necessity. It is important to note that hospital confinement is not required to qualify for LTC benefits."
"Activities of Daily Living (ADL) - CORRECT ANSWER=> An insured qualifies for the LTC benefit by
meeting a test for determining needs which involves an individual's inability to independently perform the ADL. Coverage commences when the insured cannot perform at least two of the listed ADL's. (Walking, Sitting, Eating Etc)"
"Cognitive impairment - CORRECT ANSWER=> A person who can no longer take care of themselves
without help or supervision of another person due to mental incapacity certified within the previous 12 months. LTC policies must provide a benefit for insureds suffering from Alzheimer's disease."
"Medical Impairment (Physical) - CORRECT ANSWER=> LTC policy provides coverage for only medically
necessary diagnostic, therapeutic, rehabilitative, maintenance or personal care services."
"Skilled Care - CORRECT ANSWER=> Provides daily nursing care and rehab that can only be provided by
medical personnel and under the direction of a physician -Service is provided at a specialized institution and requires 24-hour care because it provides for the most severe cases"
"Intermediate Care - CORRECT ANSWER=> Occasional nursing care at an institution or a specialized
facility (rehab, for example). This provides coverage for individuals who require daily, but not 24-hour, care."
"Custodial Care - CORRECT ANSWER=> Provides assistance in areas such as eating, bathing and using
bathroom facilities. These are not performed by medical personnel, but prescribed by a physician. These services can be performed in a nursing home or at the claimant's residence since it provides for the least severe cases."
"Respite Care - CORRECT ANSWER=> Designed to provide relief to the family care giver, and can
include a service such as someone coming to the home while the caregiver takes a nap or goes out for a while. Adult day care centers also provide this type of relief for the caregiver."
"Home and Community based Services - CORRECT ANSWER=> Provided in one's home and might
include occasional visits to the person's home by registered or licensed nurses or community organizations like hospice. It may include physical therapy and some custodial care, such as meal preparation."
"State Partnership Programs for LTC - CORRECT ANSWER=> Joins a state's Medicaid program with
private insurance companies that offer LTC insurance. The Medicaid programs eligibility requirements are adjusted to provide financial incentives to purchase the coverage. If the insured requires care, the policy pays out its benefits. In the event additional care is needed, the insured can apply for Medicaid; the asset limit that Medicaid would otherwise impose does not apply to the owner of the LTC partnership policy and he/she will be able to keep assets equal in amount to benefits paid. All must be tax qualified plans."
"Qualified LTC Plans - CORRECT ANSWER=> HIPAA 1996 created LTC qualified plans and laid the
foundation for partnership plans. Marketing these plans has the following requirements: an outline of coverage and the NAIC Shoppers Guide to Long Term Care Insurance. Required LTC provisions are: provide a minimum 30 day free look, be issued guaranteed renewable or non-cancelable, must provide inflation protection, and give an unintentional lapse protection." "In insurance, a type of risk that involves the chance of loss or gain and which is therefore uninsurable is
called - CORRECT ANSWER=> speculative risk: Speculative risk is risk that may result in loss or gain.
This type of risk is generally uninsurable."
"A hurricane is an example of a(n) - CORRECT ANSWER=> Peril: A hurricane is an example of a peril. A
peril is a condition that involves danger or risk and is the cause of a loss. Insurance policies are written to provide financial protection against losses from stated perils."
"Which of the following is an example of pure risk? - CORRECT ANSWER=> the loss of life: The loss of a
life is a good example of pure risk because there is no possible gain in this situation."
"Which of the following is defined as increasing the severity or frequency of loss? - CORRECT
ANSWER=> Hazard: A hazard does indeed increase the number of, or the severity of, losses."
"Mary refuses to fly on a commercial airplane for her business. This is an example of risk ________. -
CORRECT ANSWER=> Avoidance: Mary refuses to fly on a commercial airplane for her business. This is
an example of risk avoidance." "The banding together of individuals who collectively agree to cover a loss suffered by any group
member is the definition of which method of handling risk? - CORRECT ANSWER=> share the risk:
Under risk-sharing each member of a group agrees to share the financial burden of a loss that could be suffered by any member." "Pamela replaces the batteries in her smoke alarms throughout the house and tests them once a year.
This is an example of - CORRECT ANSWER=> risk reduction: Risk reduction is an option to lessen the
possibility of loss when a risk cannot be avoided. In this case, the risk of fire that could result in severe loss is reduced through having active fire alarms."
"Which of the following is considered an element of insurable risk? - CORRECT ANSWER=> The risk of
loss must be measurable with a dollar value defined."
"Adverse selection can be described as - CORRECT ANSWER=> the fact that people in poor health are
more likely to buy and keep insurance. Adverse selection is selection against an insurer. It refers to the tendency of persons who are likely to make a claim based on their circumstances to buy and keep insurance. For example, a person who is sick is more likely to buy health insurance and to keep the policy in force than a healthy person." "This term is the principle that the greater the number of incidents of a random process, the more likely
that the expected number of incidents and the actual numbers of incidents will be the same. - CORRECT
ANSWER=> law of large numbers: The law of large numbers describes the principle that the greater the
number of incidents of a random process, the more likely that the expected number of incidents and the actual numbers of incidents will be the same. This fact allows the insurer to predict the extent of risk." "Both mutual insurance companies and stock insurance companies have which of the following features
in common? - CORRECT ANSWER=> Both can issue dividends:The stock company can issue dividends
to its stockholders; the mutual company can issue dividends to its policyowners." "The Grand Halvorson Lodge has 250 members, united by a common Danish heritage. For 50 years they have also run an annual carnival for the purpose of sponsoring families in need of medical care for their children. All the money brought in through dues and fund-raising events is used to support their non- profit work with needy families. The Grand Halvorson Lodge offers life insurance to its members. What
type of insurer is it considered? - CORRECT ANSWER=> fraternal benefit society: The members of a
lodge or fraternal organization can provide life insurance for their members." "A group of people who agree to pro-rate and share the losses suffered by other members is called a(an)
______________ insurer. - CORRECT ANSWER=> Reciprocal: A group of people who agree to pro-rate
and share the losses suffered by other members is called a reciprocal insurer."
"Which of the following services does Lloyd's of London provide? - CORRECT ANSWER=> a common
meeting ground where member associations can conduct insurance business: Lloyd's of London provides a common meeting ground where member associations can conduct insurance business." "When a state bars the sale of a particular coverage within its boundaries, a typical insurance company cannot cover it. In this case, an insurer not licensed in the state can underwrite this insurance through a
third party broker. What type of insurer can underwrite the coverage in this case? - CORRECT
ANSWER=> a surplus lines insurer: A surplus lines insurer is not licensed to do business in the state.
However, it must be eligible to provide unique coverage when requested through the surplus lines market." "When an insurance company cedes part of an insurance risk to another insurance company, the process
is known as - CORRECT ANSWER=> reinsurance: When an insurance company wants to transfer some
the $200,000 he requested. The legal term that refers to the action taken by ABC Insurance is
__________. - CORRECT ANSWER=> Counteroffer: ABC Insurance has rejected Henry's offer and made
a counteroffer." "The terms of an insurance policy must be accepted or rejected as presented; they are not open to
negotiation. Which term describes this characteristic of insurance policies? - CORRECT ANSWER=>
Adhesion: An insurance contract is a contract of adhesion. This means it is drafted by the insurer and offered to the prospective policyowner on a take-it-or-leave-it basis."
"Which of the following statements is TRUE about insurance policies? - CORRECT ANSWER=> Only the
insurer is required to make an enforceable promise. In a unilateral contract such as an insurance contract, only the insurer is required to make an enforceable promise." "With regard to an insurance contract, which of the following would constitute grounds to void the
contract? - CORRECT ANSWER=> Fraud: Fraud is the act of deceiving with the intent to gain something
of value. It is grounds to void a contract." "Fred's policy clearly states that he must send his premiums directly to the insurer's home office in Columbus, Ohio. For five years, however, Fred always paid his life insurance premiums to his agent instead. The agent then passed them on to the home office. Last month, on the 20th, Fred was hit by a truck and killed two days after receipt by the agent of Fred's latest annual premium. The insurer denied the death claim by stating the contract premium was not paid. However, the beneficiary is able to collect
the death benefit based on application of which of the following legal principles? - CORRECT
ANSWER=> Estoppel: Estoppel involves one party's giving up of a right, involuntarily. In this case, the
insurer gives up the right to deny a claim based on the issue of where premiums are paid because he has accepted the arrangement for the prior five years."
"Which of the following best describes an agent's responsibilities? - CORRECT ANSWER=> An agent has
to act in the best interests of insureds, applicants, and insurers. In addition to the duties an agent owes to the insurer, the agent also must act only in the best interests of the applicant or insured." "Julie accepts Tom's application for a life insurance policy. She also takes his premium and sends it directly to the insurance company's home office. Her agency contract does not mention the handling of
premiums. Which type of authority allows Julie's actions? - CORRECT ANSWER=> Implied Authority:
Julie's handling of the premium is an example of implied authority. While not specifically mentioned in her agent's contract, the contract implies Julie's authority to collect and remit premiums because it is required to carry out her duties as an agent."
"What authority does an insurer give to an agent through the agent's contract? - CORRECT ANSWER=>
express authority: The contract between the agent and insurer gives the agent express authority. An agent's contract specifies the activities the agent can perform and outlines the agent's duties."
"Under the captive agency system, who employs an agent? - CORRECT ANSWER=> one insurance
company. Under the captive (or career) agency system, one insurance company employs the agent. The agent works at a branch of the company and earns commissions for sales. A general agent supervises the agent."
"What is a person's alcoholism? - CORRECT ANSWER=> Hazard: A hazard is a condition that increases
the frequency or severity of the loss. Therefore, a person's alcoholism is a health hazard that may cause illness or early death."
"Adverse selection arises from which of the following? - CORRECT ANSWER=> The fact that people in
poor health are more likely to buy and keep insurance. Adverse selection is the tendency of people more likely to have a claim to buy and keep insurance. These people are selecting against the insurance company. For example, a person who is sick is more likely to buy health insurance and to keep the policy in force than a healthy person." "An insurer receives a "B" rating from a rating organization. Based on that rating, what is its ability to
meet its contract obligations? - CORRECT ANSWER=> speculative under stressful circumstances: If an
insurer receives a "B" rating, then the rating organization sees its ability to honor its insurance obligations under stressful circumstances as speculative."
"How do insurers treat a flood? - CORRECT ANSWER=> as a peril: A flood is a peril, which is a condition
that involves danger or risk and causes a loss. Insurance policies offer financial protection against losses caused by perils."
"Which of the following statements is TRUE regarding insurable interest? - CORRECT ANSWER=> An
applicant can take out a policy on a business partner in a small business. Business partners have a legitimate insurable interest in one another since the death of one would be very harmful to the business." "Jeff and his wife Anne each took out life insurance policies. Jeff named Anne and his son Andy as joint beneficiaries; Anne named Jeff and Andy as joint beneficiaries. Ten years later, they divorced. Sixteen months later, Jeff suddenly dies of a heart attack. At the time of Jeff's death, the policy was in force, and no changes had been made. According to the concept of insurable interest, who collects the death
benefit? - CORRECT ANSWER=> both Anne and Andy: Because the insurable interest existed at the
time the policy was written, the named beneficiaries, Anne and Andy, share in the death benefit." "An insurance product characterized by small coverage amounts, with premiums paid on a weekly or
monthly basis, and a death benefit but no living benefits, is called a(n) _________ policy. - CORRECT
ANSWER=> industrial insurance: An industrial insurance policy offers individual coverage in small
amounts usually around $1,000 to $2,000, with premiums paid frequently. Since little cash value accumulates, these policies do not offer living benefits."
the change. If the applicant makes a mistake on an application, he or she should cross out the incorrect entry, add the correct entry and initial the change." "Ted is taking out a life insurance policy naming his sister Gail as the insured. Their brother Randy is the beneficiary. Ted will be responsible for paying the premiums. Who is required to sign the application? -
CORRECT ANSWER=> Ted and Gail: Both the applicant and the insured must sign the application in this
case." "A customer has purchased over a dozen life insurance and annuity contracts over the past year, using cashier's checks to pay the premiums. If this action is part of a money laundering operation, what stage
does it represent? - CORRECT ANSWER=> layering stage: Money laundering is a process that moves
illegal money through three stages on its way to apparent legitimacy: placement, layering, and integration. The second stage, layering, is achieved by using cash or cash equivalents to purchase multiple financial instruments that can subsequently be converted into clean money." "When a producer determines that the sale of a life insurance policy will replace an existing policy, the
producer must do all of the following EXCEPT - CORRECT ANSWER=> notify the state insurance
department. A producer is not required to notify the state insurance department of a transaction that involves the replacement of a life insurance policy." "The insurer has approved the policy, with conditions that the applicant must meet before delivery is official. The type of policy delivery that the agent should make in this situation is called ________. -
CORRECT ANSWER=> Legal: If any conditions are attached to delivery of a policy then legal delivery is
preferred. Legal delivery requires personal delivery of the policy to the client, along with an explanation."
"A policy's effective coverage date begins on - CORRECT ANSWER=> the date of the receipt of a first
payment or the date of a medical exam, if required. The date of the receipt of a first payment or the date of a medical exam, if required, controls when the insurance coverage goes into effect. A binding or conditional receipt identifies this date when the premium is submitted with the application. If the premium is not submitted until the policy is delivered, the date the applicant pays the first premium is still the effective date of coverage."
"What type of information is typically found in the agent's report? - CORRECT ANSWER=> The agent's
report is the primary source for information about any prior insurance policy, if the new coverage is a replacement policy. The agent may also be able to identify other policies the applicant has."
āBasic Medical Expense policies - CORRECT ANSWER=> Provide coverage for Hospital, Surgical and
Physicians Medical Expense. -Purchased as a individual or group policy. -provide first dollar coverage (no deductibles). -limited benefit periods and low coverage limits."
"Major Medical Expense Policy - CORRECT ANSWER=> -A supplement (in addition) to Basic Medical or
as a stand-alone policy. -individual or group policy. -Take over when the Basic Policy runs out"
"Hospital Expenses - CORRECT ANSWER=> -Pay for covered expenses incurred during a hospital stay.
- Daily hospital benefit - Room and Board
- Miscellaneous expenses - Other Medical Expenses (X-Rays, MRI, Prescriptions, Doctor Visits)"
"Daily Hospital Benefit - CORRECT ANSWER=> -Cost of a hospital room, up to a daily $ limit. The limit
may be expressed either as a dollar amount, e.g. $500 per day, or it may be expressed as the Usual, Customary and Reasonable (UCR) and Charge"
"Usual, Customary and Reasonable (UCR) - CORRECT ANSWER=> Insurance company will pay an
amount for a given procedure based upon the average charge for that procedure in that specific geographic area. The coverage is subject to a maximum amount or number of days."
"Benefit Schedule - CORRECT ANSWER=> -Specifically states what is covered in the plan and for how
much. The coverage is subject to a maximum amount or number of days."
"Indemnity - CORRECT ANSWER=> Insured pays the bill and is reimbursed by the insurance company
up to a specified limit amount. Medical expense policies that pay a fixed rate provide the insured with a stated benefit amount for each day of hospital confinement."
"Reimbursement - CORRECT ANSWER=> Policyowners obtain medical treatment from whatever source
they want and submit their charges to their insurer for reimbursement (actual amount)."
"Service Based Contracts - CORRECT ANSWER=> -Pay doctors and hospitals directly according to the
of days of coverage that is provided in the contract for each event and are prepayment plans. Once a claim is settled, the insured will receive an Explanation of Benefit (EOB), which is a written confirmation that the claim was paid. Blue Cross and Blue Shield, Health Service Corporations and Medicare coverage are all provided on a Service Basis."
"Miscellaneous Expense Benefits - CORRECT ANSWER=> -Secondary benefits (inside benefits) because
they occur inside the hospital for charges related to the stay. X-rays, prescriptions, MRI's, anesthesia and lab fees are usually separate fees incurred during a stay. Miscellaneous Expense Benefits have separate limits, referred to as Inside Limits. The are expressed usually as a multiple of the daily amount (UCR)"
"Surgical Expense - CORRECT ANSWER=> A schedule of procedures lists the amount allowable for each
procedure. If a surgical procedure is not found in the schedule, it will still be payable. The amount payable for a procedure not listed is based on its relative value to a procedure of similar difficulty. There are usually no deductibles."
