Life & Health Insurance Health Insurance Fundamentals Flashcards
7 cards from real Life & Health Insurance Exam practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Life & Health Insurance Health Insurance Fundamentals flashcards as text
What does the term 'coinsurance' mean in a health insurance policy?
Answer: The policyholder shares a percentage of costs after the deductible
Coinsurance is the percentage of covered costs the insured pays after meeting the deductible, such as 20% while the insurer pays 80%.
Which type of health plan requires members to choose a primary care physician (PCP)?
Answer: HMO
HMOs (Health Maintenance Organizations) require members to select a PCP who coordinates all care and provides referrals to specialists.
What is the maximum annual out-of-pocket limit designed to protect the insured against?
Answer: Catastrophic medical expenses
The out-of-pocket maximum caps the total amount an insured must pay in a plan year, protecting against catastrophic medical bills.
A health insurance policy that pays a fixed dollar amount per day of hospitalization regardless of actual charges is called a:
Answer: Hospital indemnity policy
A hospital indemnity policy pays a predetermined daily benefit for each day the insured is hospitalized, without regard to actual expenses.
Under HIPAA portability rules, how long must an employee be enrolled in group coverage before prior creditable coverage counts toward a preexisting condition exclusion period?
Answer: No minimum — all prior coverage counts
HIPAA allows creditable coverage to reduce or eliminate preexisting condition exclusion periods, and there is no minimum enrollment length required for that prior coverage to count.
Which provision in a health insurance policy requires the insurer to renew coverage as long as premiums are paid, regardless of claims history?
Answer: Guaranteed renewable
A guaranteed renewable policy must be renewed by the insurer as long as premiums are paid on time, though premiums can be increased by class.
What is the primary purpose of a coordination of benefits (COB) provision?
Answer: To prevent the insured from receiving more than 100% of covered expenses when covered by multiple plans
COB provisions ensure that when an individual is covered by more than one health plan, total benefits paid do not exceed 100% of actual covered expenses.