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Questions and Answers
What does the insuring clause primarily define?
What does the insuring clause primarily define?
- The scope of coverage and the rights of each party (correct)
- The premiums required for coverage
- The health risks associated with the insured
- The duration of the insurance policy
Which statement is true regarding the free-look provision?
Which statement is true regarding the free-look provision?
- It is optional for insurance companies to provide.
- It generally lasts for 10 days from policy delivery. (correct)
- It mandates a full refund if the insured is dissatisfied.
- It allows a 30-day satisfaction guarantee.
What must state approval pertain to in the context of health insurance policies?
What must state approval pertain to in the context of health insurance policies?
- Additional provisions not conflicting with uniform provisions (correct)
- Only the premiums charged
- The overall plan structure
- The names of policyholders
Which of the following statements about individual health insurance policies is correct?
Which of the following statements about individual health insurance policies is correct?
Where is the insuring clause typically located in an insurance policy?
Where is the insuring clause typically located in an insurance policy?
Which of the following is NOT a characteristic of the free-look provision?
Which of the following is NOT a characteristic of the free-look provision?
What is the purpose of the consideration clause in an insurance policy?
What is the purpose of the consideration clause in an insurance policy?
How does the probationary period affect new employees in a group insurance plan?
How does the probationary period affect new employees in a group insurance plan?
What is meant by the elimination period in disability income policies?
What is meant by the elimination period in disability income policies?
What condition must be met for the waiver of premium rider to take effect?
What condition must be met for the waiver of premium rider to take effect?
Why is the probationary period included in disability income policies?
Why is the probationary period included in disability income policies?
What happens during the waiting period before the waiver of premium is activated?
What happens during the waiting period before the waiver of premium is activated?
What is a common characteristic of the elimination period?
What is a common characteristic of the elimination period?
Which of the following statements about the waiver of premium provision is true?
Which of the following statements about the waiver of premium provision is true?
What is the standard duration of the free-look period for most insurance policies?
What is the standard duration of the free-look period for most insurance policies?
What is the primary purpose of the free-look provision?
What is the primary purpose of the free-look provision?
Which clause in an insurance policy specifies the rights and duties of each party?
Which clause in an insurance policy specifies the rights and duties of each party?
In which situation can the free-look provision be especially beneficial?
In which situation can the free-look provision be especially beneficial?
Which statement is true regarding individual policies and the free-look provision?
Which statement is true regarding individual policies and the free-look provision?
What is the primary purpose of a deductible in insurance policies?
What is the primary purpose of a deductible in insurance policies?
Which type of deductible is characterized by being paid once a year regardless of claims?
Which type of deductible is characterized by being paid once a year regardless of claims?
In a family deductible, what condition must be met for it to be satisfied?
In a family deductible, what condition must be met for it to be satisfied?
What is a common accident provision in insurance policies?
What is a common accident provision in insurance policies?
What defines an integrated deductible?
What defines an integrated deductible?
Which deductible requires payment for each claim made by the insured?
Which deductible requires payment for each claim made by the insured?
What is the primary effect of the Affordable Care Act on pre-existing conditions?
What is the primary effect of the Affordable Care Act on pre-existing conditions?
In a typical coinsurance arrangement, what percentage is the insured expected to pay after the deductible is met?
In a typical coinsurance arrangement, what percentage is the insured expected to pay after the deductible is met?
What is the purpose of a stop-loss limit in insurance policies?
What is the purpose of a stop-loss limit in insurance policies?
Which of the following statements about coinsurance is true?
Which of the following statements about coinsurance is true?
Which insurance policies may still apply pre-existing condition limitations even after the Affordable Care Act was enacted?
Which insurance policies may still apply pre-existing condition limitations even after the Affordable Care Act was enacted?
How does a copayment provision differ from coinsurance?
How does a copayment provision differ from coinsurance?
What factor generally allows for lower insurance premiums in coinsurance arrangements?
What factor generally allows for lower insurance premiums in coinsurance arrangements?
What happens when an insured meets the stop-loss limit in their health insurance policy?
What happens when an insured meets the stop-loss limit in their health insurance policy?
Which of the following is NOT commonly excluded from health insurance coverage?
Which of the following is NOT commonly excluded from health insurance coverage?
What is meant by 'reductions' in health insurance policies?
What is meant by 'reductions' in health insurance policies?
How does coverage typically change when an insured person is residing in a foreign country?
How does coverage typically change when an insured person is residing in a foreign country?
What is a common limitation regarding mental and emotional disorders in major medical coverage?
What is a common limitation regarding mental and emotional disorders in major medical coverage?
Which of the following is an exclusion that applies to many health insurance policies?
Which of the following is an exclusion that applies to many health insurance policies?
What is the primary difference between a copayment and coinsurance?
What is the primary difference between a copayment and coinsurance?
What does an annual deductible signify in an insurance policy?
What does an annual deductible signify in an insurance policy?
What is the purpose of a deductible in an insurance policy?
What is the purpose of a deductible in an insurance policy?
How does a family deductible typically differ from an individual deductible?
How does a family deductible typically differ from an individual deductible?
What is a common accident provision in an insurance policy?
What is a common accident provision in an insurance policy?
Which statement is true concerning per occurrence deductibles?
Which statement is true concerning per occurrence deductibles?
Which feature of deductibles helps lower insurance premiums?
Which feature of deductibles helps lower insurance premiums?
Which type of deductible can be applied multiple times in a single year?
Which type of deductible can be applied multiple times in a single year?
What does the term 'usual/reasonable/customary' refer to in medical expense insurance?
What does the term 'usual/reasonable/customary' refer to in medical expense insurance?
Which of the following best describes a lifetime limit in medical expense insurance?
Which of the following best describes a lifetime limit in medical expense insurance?
What is the primary function of an annual limit in insurance policies?
What is the primary function of an annual limit in insurance policies?
Which statement accurately describes a per-cause limit in medical insurance?
Which statement accurately describes a per-cause limit in medical insurance?
What can a benefit schedule in a medical expense insurance policy provide?
What can a benefit schedule in a medical expense insurance policy provide?
Why might an insurance plan use usual/reasonable/customary charges?
Why might an insurance plan use usual/reasonable/customary charges?
What typically limits the amount payable for mental or emotional disorders under major medical coverage?
What typically limits the amount payable for mental or emotional disorders under major medical coverage?
Which of the following statements is true regarding the outpatient treatment of substance abuse?
Which of the following statements is true regarding the outpatient treatment of substance abuse?
Eligible expenses refer to what in the context of health insurance?
Eligible expenses refer to what in the context of health insurance?
What must an insured party obtain before undergoing certain medical procedures according to some health insurance policies?
What must an insured party obtain before undergoing certain medical procedures according to some health insurance policies?
What does the term 'usual, reasonable, and customary' refer to in medical expense insurance plans?
What does the term 'usual, reasonable, and customary' refer to in medical expense insurance plans?
What is a maximum benefit limit in a health insurance policy?
What is a maximum benefit limit in a health insurance policy?
Under what condition do limitations for mental and emotional disorders typically apply?
Under what condition do limitations for mental and emotional disorders typically apply?
Which of the following is generally NOT included in the eligibility criteria for covered expenses?
Which of the following is generally NOT included in the eligibility criteria for covered expenses?
Study Notes
Standard Provisions in Health Insurance
- Individual health insurance policies must include Uniform Mandatory Provisions, with additional state-approved provisions allowed.
- Policies often contain extra provisions specific to individual or group contracts.
Insuring Clause
- Located on the first page, it outlines the basic agreement, identifying both the insured and insurer along with the covered perils.
- Defines the scope of coverage and outlines the rights and responsibilities of both parties.
Free Look Provision
- Provides a period (commonly 10 days) for the insured to review the policy and return it for a full refund if dissatisfied.
- Mandated for individual policies in most states.
Consideration Clause
- States both parties must provide valuable consideration, with the insured's payment of premiums and the insurer's promise to pay benefits.
Probationary Period
- Specifies a waiting time before coverage for certain conditions becomes effective, often found in disability income policies.
- Commonly applies to new employees before enrollment in group plans.
Elimination Period
- A wait time that must pass post-illness or accident before disability benefits are paid.
- Longer elimination periods lead to lower costs for coverage.
Waiver of Premium
- Allows premiums to be waived during total and permanent disability for a specified timeframe (usually 3-6 months).
- The waiting period requires continued premium payment but often includes retroactive waiver benefits.
Pre-existing Conditions
- Conditions diagnosed or treated before applying for health coverage can be excluded from coverage.
- As of January 2014, the Affordable Care Act eliminated such restrictions for most health insurance plans, but they may still apply to specific policies like disability income and Medicare Supplement plans.
Coinsurance
- Most major medical policies feature coinsurance, where the insurer pays a larger portion (typically 80%) of expenses post-deductible, and the insured pays the remainder.
- Arrangements can vary (e.g., 90/10, 75/25) and are structured to manage costs and prevent overutilization.
Stop-Loss Limit
- Limits the insured's out-of-pocket expenses to a specified dollar amount; costs over this limit are covered fully by the insurer.
Copayments
- A fixed dollar amount paid by the insured for specific medical services, distinguishing it from coinsurance.
Deductibles
- A set amount the insured must pay before insurance benefits kick in, encouraging them to absorb smaller claims.
- Variants include annual, individual, family, per occurrence, and common accident provisions which determine how deductibles apply.
Exclusions and Limitations
- Specify conditions and scenarios not covered, including injuries from war, self-harm, cosmetic procedures, and care in government facilities.
- Coverage may suspend temporarily when residing abroad or during military service.
Mental and Emotional Disorders
- Major medical coverage often limits payouts for mental health, with specific caps on outpatient visits and lifetime benefits.
Substance Abuse
- Similar limitations apply for outpatient substance abuse treatment, often subject to a maximum limit.
Eligible Expenses
- Defined medical expenses covered by a health insurance plan and specified within the policy.
Pre-authorizations and Prior Approval
- Some policies require pre-approval for certain procedures to ensure coverage.
Usual, Reasonable, and Customary (URC) Charges
- The insurer pays based on average geographical charges for procedures, with some plans specifying coverage amounts.
Maximum Benefit Limits
- The largest benefit amount a policy will pay, which can be lifetime, annual, or per-cause limits.
- Lifetime limits specify total coverage over the insured's life, annual limits for each policy year, and per-cause limits for related expenses.
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Description
This quiz covers essential provisions in individual health insurance policies, including the insuring clause, free look provision, and consideration clause. Test your knowledge on the roles and responsibilities of both insured and insurer, as well as key terms like probationary periods.
