Podcast
Questions and Answers
What does a cafeteria plan allow an insured to do?
What does a cafeteria plan allow an insured to do?
- Cancel their insurance at any time
- Choose between different types of benefits (correct)
- Limit the policies they can buy
- Select the coverage amount for their policy
Which of the following best describes comprehensive coverage?
Which of the following best describes comprehensive coverage?
- Coverage for only catastrophic medical events
- A coverage that excludes routine check-ups
- Coverage for most types of medical expenses (correct)
- Insurance for specific types of sickness only
What is a deductible in the context of health insurance?
What is a deductible in the context of health insurance?
- The total coverage provided by the policy
- An amount the insurer pays before coverage starts
- A specified amount the insured must pay first (correct)
- A premium for policy renewal
What does nonrenewal of an insurance policy mean?
What does nonrenewal of an insurance policy mean?
How is 'sickness' defined within insurance terms?
How is 'sickness' defined within insurance terms?
What does underwriting involve in the context of insurance?
What does underwriting involve in the context of insurance?
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Study Notes
Definitions of Key Insurance Terms
- Accidental Bodily Injury: Refers to unintentional injuries that occur due to an accident, differentiating them from injuries resulting from illness.
- Cafeteria Plan: An employee benefit program allowing participants to select from various benefits, catering to individual needs and preferences.
- Cancellation: Describes the process wherein an ongoing insurance policy is terminated before its expiration date, initiated by either the policyholder or the insurer.
- Comprehensive Coverage: Health insurance offering extensive protection, typically covering a wide range of medical expenses incurred by the insured.
- Deductible: The initial out-of-pocket expense that the insured must pay for a claim before the insurance company contributes towards the benefits.
- Lump Sum: A payment structure in insurance where the beneficiary receives the total benefit amount in one single payment rather than in installments.
- Nonrenewal: Occurs when an insurance policy expires without an option for renewal or replacement, effectively terminating coverage at the end of the policy period.
- Riders: Supplemental provisions added to a base insurance policy, allowing customization by modifying existing terms or adding new features.
- Sickness: Defined as an illness that begins while the insurance policy is active, affecting the applicability of coverage.
- Tax Exempt: Indicates income or benefits that are not liable for taxation under applicable tax laws.
- Taxable: Refers to income or benefits that are subject to taxation, impacting the overall financial burden on the recipient.
- Underwriting: The critical process of assessing risk factors and categorizing individuals for determining insurance policy terms and pricing.
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