Disability and Health Insurance Overview Quiz

Questions and Answers

The benefits under a Disability Buy-Out policy are?

payable to the company or another shareholder

Which of the following statements does NOT accurately describe the tax treatment of premiums and benefits of individual Accident and Health insurance?

Accident and health policy premiums are typically not tax-deductible for individuals

Disability income policy premiums are tax-deductible (correct)

Disability income benefits are tax-free

Group accident policies have different tax rules

The Health Insurance Portability and Accountability Act (HIPAA) gives privacy protection for?

health information

When an employee is required to pay a portion of the premium for an employer/employee group health plan, the employee is covered under which of the following plans?

Contributory Signup and view all the answers

The federal income tax treatment of employer-provided group health insurance can be accurately described as?

Employee's coverage paid for by the employer is tax-deductible to the employer as a business expenditure Signup and view all the answers

Under which of the following circumstances do the benefits under COBRA continuation coverage expire?

All group health plans are eliminated by the employer Signup and view all the answers

T is covered by two health insurance plans: a group plan through his employer and his spouse's plan as a dependent. When T submits a claim, his employer's plan is considered what type of carrier under the Model Group Coordination of Benefits provision?

Primary carrier Signup and view all the answers

A Business Overhead Expense policy covers?

business expenses such as rent and utilities Signup and view all the answers

A Business Overhead Expense policy would cover which of the following if a business owner becomes disabled?

Utilities and office rent Signup and view all the answers

XYZ Company pays the entire premium for its group health plan. The MINIMUM percentage of eligible employees that must be covered is?

100% Signup and view all the answers

Which contract permits the remaining partners to buy-out the interest of a disabled business partner?

Disability Buy-Sell Signup and view all the answers

Which of these circumstances is a Business Disability Buy-Sell policy designed to help in the sale of a business?

Business owner becoming disabled Signup and view all the answers

Which of the following statements BEST describes how a policy that uses the 'accidental bodily injury' definition of an accident differs from one that uses the 'accidental means' definition?

Less restrictive Signup and view all the answers

An insurance company would MOST likely pay benefits under an Accidental Death and Dismemberment policy for which of the following losses?

Loss of eyesight due to an accidental injury Signup and view all the answers

All students attending a large university could be covered by?

a blanket policy Signup and view all the answers

J has an Accidental Death and Dismemberment policy with a principal sum of $50,000. While trimming the hedges, J cuts off one of his fingers. What is the MAXIMUM J will receive from his policy?

$25,000 Signup and view all the answers

Which of the following characteristics are associated with a large group disability income policy?

No medical underwriting Signup and view all the answers

The difference between group insurance and blanket health policies is?

Blanket health policies do not issue certificates Signup and view all the answers

The provision in a Group Health policy that allows the insurer to postpone coverage for a covered illness 30 days after the policy's effective date is referred to as the?

Waiting Period Signup and view all the answers

Which of the following is the reimbursement of benefits for the treatment of a beneficiary's injuries caused by a third party?

Subrogation Signup and view all the answers

Which of the following statements is correct regarding an employer/employee group health plan?

the employer receives a master policy and the employees receive certificates Signup and view all the answers

Which statement is TRUE regarding a group accident & health policy issued to an employer?

The employer is the policyowner and each employee receives a certificate of coverage Signup and view all the answers

If S dies, the company must allow his surviving spouse and dependents to continue their group health coverage for a maximum of how many months under COBRA regulations?

36 Signup and view all the answers

Many small business owners worry how their business would survive financially if the owner becomes disabled. The policy which BEST addresses this concern is?

Business Overhead Expense Signup and view all the answers

How does group insurance differ from individual insurance?

Premiums are lower Signup and view all the answers

The reason for a business having a Business Overhead Expense Disability Plan is to cover?

fixed business expenses Signup and view all the answers

Study Notes

Disability Buy-Out Policy

Benefits under a Disability Buy-Out policy are payable to the company or another shareholder.
A Disability Buy-Sell contract allows remaining partners to buy out the interest of a disabled business partner.

Accident and Health Insurance Tax Treatment

Disability income policy premiums are not tax-deductible.
Premiums for employer-provided group health insurance are tax-deductible for the employer as a business expenditure.

Health Information Privacy

The Health Insurance Portability and Accountability Act (HIPAA) provides privacy protections for health information.

Group Health Plan Coverage

Employees contribute to a Contributory group health plan.
100% of eligible employees must be covered if the employer pays the entire premium.

COBRA Continuation Coverage

COBRA benefits expire when all group health plans are eliminated by the employer.

Coordination of Benefits

In a coordination of benefits situation, an employer's group plan is the primary carrier when an employee is covered under two health insurance plans.

Business Overhead Expense Policy

Covers fixed business expenses, such as rent and utilities, if a business owner becomes disabled.

Accidental Death and Dismemberment

Loss of eyesight due to accidental injury is covered under an Accidental Death and Dismemberment policy.
A principal sum of $50,000 would pay a maximum of $25,000 for the loss of a finger.

Group vs. Blanket Health Policies

Large group disability income policies typically have no medical underwriting.
Blanket health policies do not issue certificates, unlike group insurance.

Waiting Period

The waiting period in a Group Health policy allows the insurer to postpone coverage for 30 days for a covered illness after the policy's effective date.

Subrogation

Subrogation refers to the reimbursement of benefits for injuries caused by a third party.

Group Health Policies Characteristics

Employers receive a master policy while employees receive certificates of coverage under a group health plan.

COBRA Regulations

Surviving spouses and dependents can continue group health coverage for a maximum of 36 months under COBRA if an employee dies.

Small Business Disability Protection

Business Overhead Expense policies are best suited for small businesses concerned about financial survival after the owner's disability.

Individual vs. Group Insurance

Group insurance typically has lower premiums compared to individual insurance policies.

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Description

This quiz covers essential aspects of Disability Buy-Out policies, tax treatments for Accident and Health Insurance, and HIPAA regulations. It also addresses group health plan coverage and COBRA continuation benefits. Test your understanding of these critical insurance concepts.

Disability and Health Insurance Policies Overview