Question 1

What type of benefit pays monthly or weekly for disabilities due to accident or sickness?

Accepted Answer

Loss of time insurance pays benefits weekly or monthly for disabilities due to accident or sickness. Sometimes this will be referred to as disability income insurance. Loss of income insurance is primarily used to replace an individual's loss of personal income if they become disabled. These policies can be issued on a personal plan or on a group plan that is employer-sponsored, through a labor union or an association.
Theory

Question 2

What does accidental death and dismemberment pay?

Accepted Answer

The accidental death and dismemberment pays the principal sum. This is similar to the face amount. Because it is accidental death and dismemberment, the same amount is paid in the event of death or if the individual loses two lags, two arms, or loss of vision in both eyes due to an accident. When paying for accident benefits, this is usually referred to as the capital sum.
Theory

Question 3

Which of the following is not a means of including an accidental death and dismemberment benefit?

Accepted Answer

An accidental death and dismemberment benefit cannot be included as an annuity addendum. The AD&D benefit can be included as a rider on a life insurance policy or as part of a health insurance policy. It can also fall under the disability income insurance if an individual has this. Some individuals choose to add AD&D as a type of limited coverage as a separate policy on its own.
Theory

Question 4

What type of insurance benefit should Laura look for if she wants to make sure both in-hospital and outpatient expenses are covered?

Accepted Answer

Laura should get medical expense insurance to cover in-hospital and outpatient expenses. The medical expense insurance, sometimes called hospitalization insurance, will provide benefits for treatment and surgery in-hospital as well as certain outpatient expenses. Outpatient expenses can include doctor visits, lab tests and diagnostic services. This insurance can be insured as an individual policy covering all family members, or as group insurance through employer sponsored programs.
Theory

Question 5

Dental insurance is usually sold

Accepted Answer

Dental insurance is usually sold as part of health insurance. The majority of insurers do not provide dental insurance coverage as an individual policy. Dental benefits typically offered are for preventative maintenance that includes cleaning and x-rays; for repairs to include fillings, root canals, and more; and for the replacement of teeth.
Theory

Question 6

What is the purpose of long term care insurance?

Accepted Answer

The purpose of long term care insurance is to pay for the care of persons with chronic diseases or disabilities. Long term care insurance may also include a wide range of health and social services that are provided under the supervision of a medical professional. Care often covered includes nursing home care, home-based care, and respite care that is full-time care to impaired individuals for short periods of time for the rest and respite of the primary care giver.
Theory

Question 7

Which of the following is not a special health insurance policy providing limited coverage?

Accepted Answer

Workers compensation is not a special health insurance policy providing limited coverage. By law, special health insurance policies must note on the first page of the policy in large letters that "THIS IS A LIMITED POLICY." Limited policies are for travel accident coverage, specific disease or dread disease such as cancer or heart disease, hospital income insurance, accident only insurance, credit insurance, and blanket insurance. Each of these is specified to a time or circumstance for the individual policy holder.
Theory

Question 8

What is the purpose of blanket insurance?

Accepted Answer

The purpose of blanket insurance is to provide coverage for a variety of people. Blanket insurance is a form of group insurance for people who are in positions of high-turnover. These include students, campers, passengers of common carriers, volunteers, or members of sports teams. Individuals covered by blanket insurance are automatically covered but will not receive certificates of insurance.
Theory

Question 9

Rebecca and Phil recently moved to a new town and have not established a family doctor. Phil gets sick and needs to see someone. Which of the following would be an option for Phil to see a physician after hours?

Accepted Answer

Phil would be able to go to an Urgent Care Center to see a doctor after hours. Urgent care centers often see patients without appointments during the day, as well, they provide evening and weekend availability. An urgent care center can care for an individual with a range of problems that would not require an emergency room visit. The evening and after hours options also make it more accessible for individuals that cannot get to the doctor during the day.
Theory

Question 10

Which type of health care provider would provide care for individuals who cannot currently take care of themselves?

Accepted Answer

Home health care provides care for individuals who cannot currently take care of themselves. This type of coverage is provided by nurses and others for patients who are ready to return home but are unable to care for all of their own needs. Home health care providers work in the patient's home until they are able to care for themselves.
Theory

Question 11

What is the purpose of managed care?

Accepted Answer

The purpose of managed care is to impose control on health care uses. Managed care controls the use of health care services, the providers of services, and the amount charged for the services. The idea behind this is to control costs and make health care more efficient. Managed care is usually provided through a health maintenance organization (HMO) or preferred provider organization (PPO).
Theory

Question 12

How are Blue Cross and Blue Shield different from traditional commercial insurance companies?

Accepted Answer

Blue Cross and Blue Shield are different from traditional commercial insurance companies because the majority of benefits are on a service basis. The service basis provides coverage where the insurer (Blue Cross and Blue Shield) pay the provider directly. This means the insured does not have to be reimbursed. Blue Cross and Blue Shield also have contractual relationships with hospitals and doctors so the costs are contractually agreed upon for services provided.
Theory

Question 13

ABC Company funds claims in house but uses EFG Company as the liaison between the employees and ABC Company. EFG Company makes sure that the plan runs smoothly for ABC Company. What type of arrangement would this be?

Accepted Answer

The arrangement for EFG Company to act as liaison between ABC Company and its employees, and to be sure the plan runs smoothly would be a third-party administrator relationship. EFG Company acts as a sponsor that develops the plan, sets underwriting rules, and administers the plan. ABC Company will fund claims as self-insured under the guidance of EFG Company.
Theory

Question 14

Why would a provider agree to be part of a preferred provider organization?

Accepted Answer

A provider might agree to be part of a preferred provider organization because of the guaranteed payments and the potential increase in patients. As part of a preferred provider organization, a selected group of independent hospitals and medical practitioners agree to provide a range of services for a particular area at a prearranged cost. Charges for medical services are agreed upon and are generally less than the provider would charge non-PPO patients. Providers that are part of a PPO are paid as fee-for-service.
Theory

Question 15

Which of the following is not an advantage of self-insurance?

Accepted Answer

Contracts not being regulated by insurance companies is not an advantage to self-insurance. When a company decides to self-insure and the contracts are not regulated by an insurance company, if there are problems the department cannot assist consumers with those problems. This disadvantage leaves the consumer attempting to work through any problems that may arise with their coverage on their own. Furthermore, contracts are not subject to the mandated benefit laws.
Theory

Question 16

When employees select health benefits from a variety of coverage options, this is called what?

Accepted Answer

When employees select health benefits from a variety of coverage options, this is called a cafeteria plan. The option of a cafeteria plan allows employees to select from a variety of coverage options. Although more complex and expensive for the employer, the cafeteria plan is designed to provide employees and their families with needed coverage that they choose for their particular situations. Under Section 125 of the Internal Revenue Code, the cafeteria must offer one taxable benefit and one qualified benefit.
Theory

Question 17

When small businesses are part of specific industries, health insurance benefits are established through a series of trusts. Who provides this type of coverage?

Accepted Answer

MET or Multiple Employer Trusts provide small businesses within specific industries health insurance benefits that are established through a series of trusts. The METs are usually designed for manufacturing, sales and service, real estate and other companies that are part of specific industries. States can require a minimum of five to ten participants for group benefits eligibility, but with an MET no such requirements exist. Therefore an MET could exist with a group of one. An MET is formed by insurers or third-party administrators known as sponsors.
Theory

Question 18

What is an arrangement that allows very small groups to have some of the benefits of group insurance, specifically the lower costs?

Accepted Answer

An arrangement that allows very small groups to have some of the benefits of group insurance, specifically the lower costs, is called a franchise policy. The franchise policy works like a group policy minus the master policy. Each member receives an individual policy allowing for individual coverage choices. Franchise policies require health information on the application and can be contributory or non-contributory.
Theory

Question 19

Which of the following is not a benefit of workers compensation?

Accepted Answer

Dental coverage is not part of worker's compensation. Workers compensation covers medical, income, death and rehabilitation benefits for individuals making legitimate claims. The purpose of worker's compensation is to help individuals that suffer from loss of income due to work related injury or illness. Eligibility requires work in an occupation that is covered and the sickness or accident must be work-related.
Theory

Question 20

Under a worker's compensation claim, which benefit is provided without limit?

Accepted Answer

Under a worker's compensation claim, medical benefits are provided without limit. If an employee is injured or gets sick as the result of a work related incident, they are entitled to receive all necessary benefits for medical and surgical treatment needed to cure, or relieve the condition. There are certain maximums or limits that may apply, however, overall benefits are unlimited.
Theory

Quiz 6: Health: Theory in Life Insurance