Health Insurance and Disability Income Quiz

Questions and Answers

Which of the following BEST describes how pre-admission certifications are used?

To limit patient choice

To prevent nonessential medical costs (correct)

To allow unnecessary medical procedures

To increase hospital admissions

Pre-hospitalization authorization is considered an example of?

managed care

How are the $3,000 benefit payments from a Disability Income policy taxable if T's employer paid the premiums?

Benefits are taxable to T

Which type of plan normally includes hospice benefits?

Managed care plans Signup and view all the answers

Which mode of payment is NOT used by health insurance policies?

Single premium Signup and view all the answers

Substandard applicants are never declined by underwriters.

False Signup and view all the answers

How much of P's monthly income from Individual Disability Income policy is subject to federal income tax?

$0 Signup and view all the answers

Which of the following actions will an insurance company most likely NOT take if an applicant, who has diabetes, applies for a Disability Income policy?

Issue the policy with an altered Time of Payment of Claims provision Signup and view all the answers

What is the next step the insurance company will take after an agent issues a conditional receipt?

Determine if the applicant is an acceptable risk by completing standard underwriting procedures Signup and view all the answers

What actions should an agent take if a customer wants to apply for an insurance policy?

Complete the application and review the information with the customer prior to obtaining the customer's signature, then send the application off to the insurance company Signup and view all the answers

What action should Agent J take if the premium check is made out to J instead of the insurance company?

Return to the customer, collect a new check made out to the insurance company, and send the new check out to the insurance company Signup and view all the answers

Information obtained from a phone conversation to the proposed insured can be found in which report?

Inspection report Signup and view all the answers

Which of the following actions would the insurance company NOT take after receiving an MIB report showing a stroke not disclosed in the application?

Send a notice to the MIB that the applicant was declined Signup and view all the answers

Which of the following are NOT managed care organizations?

Medical Information Bureau (MIB) Signup and view all the answers

Study Notes

Health Insurance Underwriting

Pre-admission certifications serve to prevent unnecessary medical expenses before hospital admission.

Managed Care

Pre-hospitalization authorization is a managed care practice requiring insurer approval for hospital entry to manage costs.
Managed care plans typically include hospice benefits, supporting end-of-life care.

Disability Income Taxation

Disability income benefits received from a policy fully paid by an employer are taxable to the recipient.
If a policyholder paid entirely for their own Disability Income policy, the benefits are not subject to federal income tax.

Underwriting Classifications

Substandard applicants may be rated below average but can also be outright declined by underwriters.
Insurance companies may reassess applications from individuals with conditions like diabetes but will not issue a policy with altered claims payment provisions.

Application Process

After taking a Disability Income application and collecting premium, insurers will perform standard underwriting procedures to evaluate risk.
Agents must complete insurance applications carefully, review details with clients, and send the finished application to the insurer for processing.

Payment Issues

If an agent receives a check made out to themselves instead of the insurance company, they must return it, collect a correctly made out check, and resend it to the insurer.

Reports and Discrepancies

Information from phone conversations with a proposed insured is compiled in an inspection report.
If an applicant fails to disclose a previous medical condition like a stroke, the insurance company would not notify the MIB of a decline.

Managed Care Organizations

Examples of managed care organizations include Point-of-Service (POS), Preferred Provider Organization (PPO), and Health Maintenance Organization (HMO).
The Medical Information Bureau (MIB) is not classified as a managed care organization.

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Description

Test your knowledge on health insurance underwriting, managed care practices, and disability income taxation. This quiz covers essential concepts related to pre-admission certifications, managed care authorization, and underwriting classifications. Understand how these factors interact within the health insurance landscape.