Life and Health California Exam Health Insurance Policies 1 — Questions and Answers
Question 1: Under a major medical policy, what is the purpose of the 'corridor deductible'?
- It replaces the base plan deductible
- It is the amount paid between the basic plan maximum and the major medical coverage beginning (Correct answer)
- It eliminates the need for coinsurance
- It applies only to prescription drug costs
Correct answer: It is the amount paid between the basic plan maximum and the major medical coverage beginning
A corridor deductible is the gap amount the insured pays between the basic plan's maximum benefit and where major medical coverage kicks in.
Question 2: Which type of health insurance policy pays a fixed dollar amount per day of hospitalization regardless of actual expenses?
- Major medical policy
- Comprehensive health policy
- Hospital indemnity policy (Correct answer)
- Blanket health policy
Correct answer: Hospital indemnity policy
A hospital indemnity policy pays a fixed daily benefit for each day the insured is hospitalized, regardless of the actual costs incurred.
Question 3: A health insurance policy that covers a defined group of people under one master contract is called a:
- Individual policy
- Blanket policy (Correct answer)
- Franchise policy
- Group policy
Correct answer: Blanket policy
A blanket policy covers a defined group—such as students or sports teams—under one master contract without naming individual insureds.
Question 4: Under a basic hospital expense policy, which of the following is typically covered?
- Physician's office visits
- Room and board and miscellaneous hospital expenses (Correct answer)
- Dental surgery
- Long-term nursing home care
Correct answer: Room and board and miscellaneous hospital expenses
Basic hospital expense policies cover room and board, nursing services, and miscellaneous hospital charges during an inpatient stay.
Question 5: Which provision in a health insurance policy requires the insurer to continue coverage for an insured who becomes totally disabled?
- Waiver of premium (Correct answer)
- Reinstatement clause
- Guaranteed renewability
- Conversion privilege
Correct answer: Waiver of premium
The waiver of premium provision allows a totally disabled insured to stop paying premiums while keeping the policy in force.
Question 6: What does 'coinsurance' mean in the context of major medical health insurance?
- The insurer shares the premium cost with the employer
- The insured and insurer share covered expenses after the deductible is met (Correct answer)
- Two or more insurers share the risk equally
- The insured pays 100% of expenses until the out-of-pocket maximum
Correct answer: The insured and insurer share covered expenses after the deductible is met
Coinsurance means the insured pays a percentage (commonly 20%) and the insurer pays the remaining percentage (commonly 80%) of covered expenses after the deductible.
Life and Health California Exam Health Insurance Policies 1
Under a major medical policy, what is the purpose of the 'corridor deductible'?