Test topic
The purpose of hospital/medical expense insurance is to protect insureds against the financial risk of illness or injury expenses they cannot individually afford
Hospital Expense Coverage
Pay benefits for only hospital expenses. Deductibles, coinsurance and/or co-payments may apply.
Daily Hospital benefits
Pays for hospital room, board, general nursing care and other routine services. Per day and maximum aggregate limits apply
Miscellaneous Hospital Expense benefits
Pays for hospital laboratory, x-ray, anesthetic, operating room and medicine and dressing expenses. Limits are expressed as a multiple of the daily hospital benefits
Surgical Expense benefits
Pays for hospital surgical procedures specified in the policy as well as any other the insured may be required to have. Benefits can be expressed either according to a Surgical Schedule or a Surgical Relative Value Table
Physicians expense benefits
Pays doctors charges incurred in the hospital and sometimes after being discharged for conditions treated in the hospital
Major Medical coverage
Major Medical can be issued as a separate policy by itself or along with Hospital Expense coverage.
It covers usual, reasonable and customary eligible hospital and medical expenses
Usual, Reasonable and Customary charges
Insurance organizations survey health care providers to determine what the normal range of fees charged for specified services is for each region in which the insurance organization issues policies.
Test topic
Most policies cover only expense that do not exceed what the insurance organization has determined to be reasonable and customary for the region in which the insured received service
Comprehensive Medical Expense
Hospital expense and Major Medical coverages can be combined together into one policy. When done this way it is called...
Deductible
Is an initial amount of loss which the insured must pay before the insurance company will begin to indemnify (reimburse).
Policyholder participation aka coinsurance
The insurance company pays a percentage often 80%, of usual, reasonable and customary eligible expenses. The insured pays the rest often 20% until eligible expenses in excess of the deductible have arrived at a stated level
Stop loss
The stated level of eligible expenses where the insurance company begins indemnifying 100% of the insured's expenses and where the insured's losses stop, is called a stop loss
Maximum out of pocket
Is the maximum the insured will be required to pay under both the deductible and policyholder participation requirements
Co - payment
Is a small, specific deductible amount that the insured must pay before the insurance company begins to indemnify (reimburse) for a particular type of expense. For example, some plans provide that the insured must pay a co-payment of $10 on each prescript
Test topic
The purpose of the co-payment, deductible and policyholder participation requirements is to encourage the insured to avoid unnecessary expenses and to eliminate small claims that the insured can afford
Test topic
Cosmetic and dental surgery are covered usually only if required as a result of an accident
Test topic
Premiums on individual hospital/medical expense coverage sometimes can be tax deducted by the insured
Test topic
Premiums paid by an employer on group hospital/medical expense coverage usually can be tax deducted by the employer
Test topic
There usually is not tax on individual or group hospital/medical expense benefits
Heath Savings Accounts aka HSA's
Are accounts that can be established by an individual, a family, or any size employer to cover hospital/medical expenses not covered by a High Deductible Health Plan. They can be established with a bank or insurance company
Test topic
Contributions to Health Savings Accounts (HSA's) are usually tax deductible.
Distributions from a Health Savings Account are usually not subject to tax
Test topic
Health Savings Account balances that remain at the end of the year usually can be carried over to the next year
Medical Savings Accounts aka MSA's
Are very similar to Health Savings accounts (HSA's). They are available to only employers of certain sizes. Health Savings Accounts have replaced them
Health reimbursement accounts aka HRA's
An employer and employee enter into an agreement whereby the employer reimburses the employee for the medical expenses that fall under deductibles, copays, coinsurance provisions and other medical expenses
Flexible Spending Accounts aka FSA
Under a Flexible Spending Account the employer reduces the employees wages by an agreed amount. Part of the account is used to pay premiums on the employees health insurance. The employee does not have to pay tax on the income that is deducted from his/he
Disability income coverage
Is when a person is unable to work due to an illness or injury
Test topic
Disability income insurance protects an insured against the financial risk of loss of income due to disability. It indemnifies the insured for loss of income while permanently and totally disabled
Test topic
To receive Disability insurance the insured does not have to be confined to a hospital
Test topic
Group disability income policy premiums paid by an employer can be tax deducted by the employer. Group disability income benefits usually are SUBJECT TO TAX
Short-term disability income coverage
A type of disability insurance that has a benefit period of 26 weeks or less. Common short-term disability benefits periods are 13 weeks or 26 weeks
*Short term disability income policies usually pay benefits per week
Insureds own occupation
The policy pays benefits as long as the insured is unable to perform functions of his/her own occupation
Any occupation for which the insured is reasonably suited by education and background
The policy pays benefits as long as the insured is unable to perform functions of any occupation for which he/she is reasonably suited by education and background
Any occupation
The policy pays benefits as long as the insured is unable to perform functions of any occupation at all
Waiting period provision
This is a specified period after disability has commenced. Under some policies it is 7 days, under other policies it is 14 days, under others it is 30, 60, 90 days. The longer the waiting period the lower the premium.
No benefits are payable during the wa
Retroactive waiting period provision
Some disability income policies provide that, after the Waiting Period requirement has been satisfied, the insurance company will pay the insured the benefits he/she would have been entitled to during the waiting period.
Nonretroactive waiting period provision
When a policy does not pay benefits retroactively that the insured would have been entitled to during the waiting period, the waiting period is classified as nonretroactive. A nonretroactive policy waiting period policy will usually have a lower premium t
Test topic
The purpose of the waiting period is to discourage avoidable, short-term disabilities and to eliminate small claims that the insured can afford and which would cost the insurance company to administer
Probationary Period Provision
It is a specific time requirement, usually a period of employment. It must be satisfied before the prospective insured is eligible to apply for coverage. It is sometimes 90, 180, or 365 days
Test topic
The purpose of the Probationary Period requirement is to avoid adverse selection
Recurrent Disability Period Provision
It is a time period after recovering from disability.
Another disability with the same symptoms within that time period will be considered to be a recurrence of the old disability, not a new one
Waiver of Premium Rider
Id added for an extra premium charge, it waives premiums as long as the policyowner is disabled starting after a specified period, such as after the sixth month of disability
Option to purchase additional insurance rider
-It is also sometimes called the Guaranteed Insurability Rider
-If added for an extra premium charge, it guarantees the insured the option to purchase additional amounts of insurance at the premium rate for the insured's attained age without evidence of i
Partial Disability rider
-It is sometimes called the Residual Disability rider
-If added for an extra premium charge, this provision will pay benefits to the insured person only after a period of total disability
-It pays a reduced benefit amount. It will be paid for a reduced be
Business Overhead Expense insurance
Is Disability income coverage with benefits used to pay continuing business overhead expenses, such as telephone, utilities, rent, salaries, and other expenses while a business or a professional person is disabled. It has a maximum benefit period of one y
Credit disability insurance
Is Disability Income coverage with benefits used to pay installment loan payments that come due while the insured is disabled. It is usually group insurance with the creditor as sponsor/master policyholder. There usually is either a 14 or 30 days waiting
Business disability buy out insurance
Is disability income coverage with benefits used to buy out the business interest of a disabled business owner, partner or stockholder in accordance with a buy out agreement
Social Security Disability benefits
To be eligible, a person must have contributed to Social Security enough quarters to achieve either fully insured or disability insured status
Fully insured status
A person must have contributed to Social Security at least 40 quarters
Disability insured status
To achieve disability insured status, a person must have contributed to Social Security for at least 20 quarters in the 40 quarters prior to the disability
Test topic
The disability must be expected to either last twelve months or result in death for a person to qualify for benefits
It pays on the any occupation basis
Dental coverage
-Dental coverage is scheduled, meaning it will list out every single procedure you may have done and how much it costs.
-Dental coverage is usually a group insurance benefit
Vision Care Coverage
Is an optional benefit sometimes offered as part of a group insurance plan
Hospital Indemnity coverage
-It is a supplement to Major Medical, Hospital Expense, HMO, PPO, and other coverages
-It pays a stated benefit amount each day the insured is confined in a hospital
-It usually pays in addition to the insured's Hospital Expense benefits, Major Medical be
Limited Disease coverage
It is a supplement to Major Medical, Hospital Expense, HMO, PPO and other coverages.
Limited Disease coverage protects an insured against the financial risk of incurring serious, critical or chronic illness expenses not covered by hospital/medical expense
Accidental Death and Dismemberment coverage
It pays benefits for death or dismemberment resulting from injuries caused by accidental means, both the injury and the cause of the injury must be unintended or accidental within a stated time period such as 100 days of the accident
It is non-coordinatin
Dismemberment
Includes:
Loss of sight in either one or both eyes
Loss of hand at or above wrist
Loss of arm at or above elbow
Loss of foot at or above the ankle
Loss of leg at or above knee
Double benefit provision
If added, it pays double the principal sum, if the insured dies in a specific type of accident, such as while a fare paying passenger on a common carrier
Aka double indemnity
Medicare - Hospital Insurance Plan Part A
It is automatic for anyone who is eligible for Social Security benefits at age 65 and in some cases for people under age 65 who qualify for Social Security Disability benefits. There is no charge to the insured person.
It is for eligible hospital expenses
Medicare Part A
- Each benefit period costs $1,288
- 61-90 days in hospital costs $322 per day
- You have 60 reserve days costing $644 per day
60 day benefit period provision aka spell of illness
Says that if a senior citizen has to go back to the hospital within 60 days, it will be classified as the same spell if illness, not as a new one. The senior citizen will pick up where he or she left off on his or her benefit period
Supplementary Medical Insurance Plan Part B
Helps pay for Medical Insurance.
This is automatic when enrolling in part A. The federal government pays part of the cost of part B, the covered person pays the rest.
Part B Eligible expenses
1. Hospital outpatient
2. Doctor charges - in hospital and out
3. Durable medical supplies
4. Home health care benefits
Part B exclusions
1. Drugs
2. Eyeglasses
3. Hearing aids
4. Dental
Primary/Secondary Payor
If the insured senior citizen's employer provided group plan has less than 20 members then Medicare is primary, the group plan is secondary
Primary/Secondary Payor
If the insured senior citizen's employer provided group plan has 20 or more members the group plan is primary and Medicare is secondary
Private Medicare Supplement Insurance
If an individual does not enroll in a Medicare Supplement plan within the initial enrollment period, there can be health questions, the person can be rejected or rated up and/or a pre-existing clause can apply. A medicare supplement policy pre-existing co
Test topic
All insurance companies that offer Medicare Supplement Plans must offer Plan A
Medicare Part C - Medicare Advantage Plans
Medicare has contracted with selected insurance organizations to provide to people who qualify for Medicare, health insurance programs that are more comprehensive than Medicare Part A and Part B
Test topic
Depending upon how broad the Advantage plan benefits are, and deductible and coinsurance requirements, there is usually a premium charge to the insured
Medicare Part D Prescription Drug Partial Coverage Plans
-It is an optional program
-Medicare has contracted with selected insurance organization to provide prescription drug services for individuals eligible for Medicare
-There is a premium charge to senior citizens insured
Medicaid
-Medicaid is unrelated to Medicare
-It is a federally funded, state administered program.
-It is for anyone who is medically in need and without income or financial resources
-It is a public assistance program which is sometimes referred to as Public Aid
Long-Term Care Insurance
If an individual has a long-term stay in a non-hospital nursing facility, sometimes the person will stay several years. Annual charges can range widely, but are generally in the tens of thousands of dollars
Long-term care insurance
A person of average means will quite often use up most of his/her savings and or investments. To avoid significantly depleting assets in the case of a long-term nursing home stay, it is important to have Long-term care insurance
Test topic
Long term care insurance pays a stated benefit amount for each day of service the insured receives confined to a non-hospital nursing facility. The benefit can be $100 per day, $150 per day, $200 per day or another amount
Test topic
Most Long-Term care policies pay benefits while the insured is unable to perform 2 or more Activities of Daily Living (ADL's)
1. Bathing
2. Dressing
3. Toileting
4. Transferring
5. Continence
6. Eating
Test topic
If a Long-term care policy has a pre-existing condition provision, it can go back no more than 6 months, forward no more than 6 months
Guaranteed Renewable
The insurance company must renew the policy. In other words, the insurance company cannot refuse to renew.
Waiver of premium rider
This rider can be added as an additional rider for an extra premium charge. If added, it waives premiums as long as the policyowner is confined to a long-term care facility starting after a specified period, such as after the 6th month of confinement
Inflation protection riders
Must be offered for an extra premium charge. If added, it guarantees the insured the option to purchase additional amounts of insurance at the premium rate for the insured's attained age without evidence of insurability
Cobra
-It is a federal law that applies to a group of 20 or more
-It allows covered members or dependents whose group insurance has terminated to continue the same hospital/medical expense coverage for specified time periods at the same premium rate plus up to
State health insurance continuation laws
-Are state laws that apply to groups of less than 20
-State health insurance continuation laws allow covered members or dependents of covered members to continue the same insurance benefits after their group hospital/medical expense insurance has been ter
Test topic
Children must be allowed to be covered under their parents coverage through age 25 until their 26th birthday
Blanket Accident insurance
The policy is issued to the sponsoring organization. It can be issued to schools, sports teams, etc. It covers only injury expenses if the insured is injured while engaging in a covered activity. It does not cover illness expenses.