LIFE AND HEALTH INSURANCE -
FINAL EXAM 2024 GRADED A
SOLUTIONS
Basic Medical Expense policies - Provide coverage for Hospital, Surgical and Physicians Medical Expense.-Purchased as an individual or group policy.-provide first dollar coverage (no deductibles).-limited benefit periods and low coverage limits.
Major Medical Expense Policy - -A supplement (in addition) to Basic Medical or as a stand- alone policy.-individual or group policy.-Take over when the Basic Policy runs out
Hospital Expenses - -Pay for covered expenses incurred during a hospital stay.
- Daily hospital benefit - Room and Board
- Miscellaneous expenses - Other Medical Expenses (X-Rays, MRI, Prescriptions, Doctor
Visits)
Daily Hospital Benefit - -Cost of a hospital room, up to a daily $ limit. The limit may be expressed either as a dollar amount, e.g. $500 per day, or it may be expressed as the Usual, Customary and Reasonable (UCR) and Charge
Usual, Customary and Reasonable (UCR) - Insurance company will pay an amount for a given procedure based upon the average charge for that procedure in that specific geographic area. The coverage is subject to a maximum amount or number of days.
Benefit Schedule - -Specifically states what is covered in the plan and for how much. The coverage is subject to a maximum amount or number of days.
Indemnity - Insured pays the bill and is reimbursed by the insurance company up to a specified limit amount. Medical expense policies that pay a fixed rate provide the insured with a stated benefit amount for each day of hospital confinement.
Reimbursement - Policyowners obtain medical treatment from whatever source they want and submit their charges to their insurer for reimbursement (actual amount).
Service Based Contracts - -Pay doctors and hospitals directly according to the # of days of coverage that is provided in the contract for each event and are prepayment plans. Once a claim is settled, the insured will receive an Explanation of Benefit (EOB), which is a written
confirmation that the claim was paid. Blue Cross and Blue Shield, Health Service Corporations and Medicare coverage are all provided on a Service Basis.
Miscellaneous Expense Benefits - -Secondary benefits (inside benefits) because they occur inside the hospital for charges related to the stay. X-rays, prescriptions, MRI's, anesthesia and lab fees are usually separate fees incurred during a stay. Miscellaneous Expense Benefits have separate limits, referred to as Inside Limits. The are expressed usually as a multiple of the daily amount (UCR)
Surgical Expense - A schedule of procedures lists the amount allowable for each procedure. If a surgical procedure is not found in the schedule, it will still be payable. The amount payable for a procedure not listed is based on its relative value to a procedure of similar difficulty. There are usually no deductibles.
Surgical Schedule - Is simply a price list. Each procedure is listed and a dollar amount assigned and if a procedure is not listed in the schedule it is still paid.
Relative Value - scientific method of paying different benefits based on the region of the country an insured lives. It is based on assigning a value to each procedure and using a conversion factor.A schedule of assigned points for each procedure must be included in the policy.
Physicians Medical Expense - Pays for visits to the doctor (office hospital) plus post operation care. There may be a per-visit benefit, or the coverage is based on UCR.-May or may not be a deductible . This policy is usually written as an indemnity plan and has first dollar coverage (no deductible).-usually written as an indemnity plan and has first dollar coverage
Major Medical Expense - -Cover "catastrophic" or huge loss. A Catastrophic loss is defined as whenever Basic coverage runs out and not a specific dollar amount.-High Maximum Limits ($2,000,000) -Deductibles (per person or per family ea yr)) -Co- insurance (Usually 80/20%) -Stop Loss -Miscellaneous Expense Benefits - x-rays, MRI, lab tests, etc.
Coinsurance - - Once the deductible is met the insured and the insurance company share in the expenses in what is called coinsurance. It is written as 80/20, 70/30, etc. Also called percentage participation requirement.
Flat Deductible - -Portion of medical expenses that are paid by the insured each year before benefits start. The higher the deductible the lower the annual premium will be.-If a medical incident occurs in the last three months of any plan year and the annual deductible has met the yearly requirement then the medical treatment for that incident only would be covered in the new plan year. Thus a "carryover" into the next year of the paid deductible has occurred.
Per Cause Deductible - A separate deductible for each separate illness or accident.
Stop Loss - Max amount the insured is required to pay out of pocket: After the stop loss amount is reached by the insured, in a calendar year, the company will pay 100% of the remaining covered expenses.-calculated by adding both deductibles and coinsurance amounts.
Comprehensive major medical - Major Medical and Basic Medical are written together.
Corridor deductible - Occurs in the middle of the hospital stay, and bridges the gap from the basic to the major medical plan.
Pre-Existing Condition - -To Prevent avoid adverse selection.-A is a medical condition for which an insured sought medical attention, treatment, or advice for symptoms or for which should have sought medical advice/treatment in the previous 6 months.-For individual policies, the exclusion can not exceed 24 months, for group policies 12 months, and for late enrollees in group plans, 18 months.
Exclusions found in Basic and Major Medical - -Injuries due to war or military conflict -Elective cosmetic surgery -Routine Dental Care -Eye Exams & Glasses Treatment in a Veterans Hospital or other Gov Facility -Workers Compensation Accidents -Claims Occurring Outside the U.S.-Intentionally Self-Inflicted Injury
Limited Coverage - Specified Coverage policies, or Limited Coverage, are insurance policies that limit coverage to one illness or one limiting group of coverage.
Dread Dieses (Limited Risk) - Policies provide a variety of benefits for a specific disease such as a cancer policy or a heart disease policy. Benefits are usually paid as a scheduled amount of indemnity for specified events or medical procedures, such as hospital confinement or chemotherapy.
Critical Illness Plans - -Pays a lump sum to the insured upon the diagnosis (& survival) of a critical illness. The insured must survive the illness for a certain time period (Ex 30 days).
Hospital Indemnity - -Provides a specific amount on a daily, weekly or monthly basis while the insured is confined to a hospital. The benefit payments are sent directly to the insured and can be used for any purpose.
Travel Insurance - Covers most kinds of travel accidents, but only for a specified period of time.
Workers Compensation - A benefit required by the state and benefits will vary to some degree from state to state. This coverage is made available through government programs, private
insurers, or by self-insuring. To be eligible the employee must work in an occupation covered by Workers Compensation insurance, and have had an accident or sickness that is work related.
Disability Income Insurance - -Designed to replace income lost due to a disability or illness of the insured wage earner. It never pays for the medical expenses; it only replaces lost income and must be paid no less frequently than monthly. Its to avoid Economic Death.-Can be group of individual policy
Malingering - Making the loss last longer than it has to.
DI Position Schedule - Used in employer sponsored group plans because it bases the benefit on the position held in the company.
DI Flat Dollar Amount - In the event the insured becomes disabled the policy might pay a flat $1,000 per month, regardless of any other income benefits.
DI Taxation - . If an individual buys Disability Insurance with his/her after-tax dollars, the benefits will be tax-free. On the other hand, when employers pay for Group Disability Income benefits, the benefits are taxable to the employee.
Morbidity Tables - -Based on the law of large numbers.-Predict how many people are going to be disabled in a given year and the severity the disability.-Tables are important to an insurer because some insureds become more disabled than others.
Total Disability - The inability to perform the duties of one's own occupation for which a person is suited by reason of education, training or experience.
Partial Disability - May be related to loss of Time, Function or Compensation. Partial disability is defined as the inability to perform one or more of the regular duties of one's own occupation or the inability to work on a full time basis, which results in a decrease in income.
Permanent Total Disability - The most severe of the classes. The insured will never work again.Examples might be paralysis or coma.
Temporary Total Disability - Insured is rendered unable to work for a period of time, but recovery can be anticipated. Maternity leave or traction for a bad back are examples.
Permanent Partial Disability - refers to a type of injury, which is permanent, but the insured can still work. A loss of a finger is an example of this type of injury
Temporary Partial Disability - The least severe of the classifications and usually refers to a disability which lasts a very short period of time. A sprained ankle which takes seven or eight days to recover would be an example
Probationary Period - is used to describe the period of time from the date the policy is issued during which no claims will be paid for Sickness Only. Usually this period of time is from 15 to
