Health - Pearson Practice

In this scenario, the insured's brother is named as the primary beneficiary and the insured's son is named as the contingent beneficiary. The primary beneficiary receives the policy payout if the insured dies, but if the primary beneficiary is also deceased, the contingent beneficiary becomes the next in line to receive the payout. Since both the insured and his brother are killed in the accident, the policy would be paid to the insured's son, who is the contingent beneficiary.

A precertification review prior to a nonemergency hospitalization is an example of managed care because it involves the process of obtaining approval from a managed care organization before receiving certain medical services. This practice is commonly used by insurance companies to control costs and ensure appropriate utilization of healthcare resources. Managed care aims to coordinate and manage healthcare services for patients, often through networks of providers and utilization management techniques like precertification reviews.

If the insured fails to notify the insurer of a change in occupation, the insurer is likely to settle the claim according to what the premiums would have purchased under the more hazardous occupation. This means that the insured will receive benefits based on the higher premium rates associated with the more hazardous occupation. The insurer may not cancel the policy or refund premiums, but they may adjust the claim payout to reflect the increased risk associated with the new job.

A health care plan that reimburses a flat fee for medical care it provides at a clinic it owns and operates is referred to as a Health Maintenance Organization (HMO). HMOs are a type of managed care organization that offer comprehensive health care services to their members for a fixed monthly fee. They typically have their own network of doctors and hospitals and emphasize preventive care. The flat fee payment structure encourages cost-effective and efficient care delivery, as the HMO assumes financial risk for the services provided.

A producer would most likely recommend a Disability Buy-Out contract in this situation. This type of contract provides financial protection to the owners of the interior design studio in case either of them becomes permanently disabled. It ensures that the business can continue to operate smoothly by providing funds for the buy-out of the disabled owner's share of the business. This helps to secure the financial continuation of the business and mitigate the potential impact of a disability on its operations.

The Social Security program provides disability benefits, retirement benefits, and survivor benefits. However, it does not provide workers compensation. Workers compensation is a separate program that provides benefits to employees who are injured or become ill due to their job. While both programs provide financial support, they serve different purposes and have different eligibility criteria.

Medicaid is a government program that aims to provide medical expense coverage to individuals who meet specific income requirements. Unlike Medicare, which primarily covers healthcare costs for individuals aged 65 and older, Medicaid is designed to assist low-income individuals and families with their medical expenses. Therefore, the primary purpose of Medicaid is to provide medical expense coverage to persons meeting certain minimum income requirements.

The Fair Credit Reporting Act (Insurance Information and Privacy Protection Act) requires an insurer to notify an applicant in writing that an investigative consumer report may be made on the applicant. This law aims to protect the privacy and rights of individuals by ensuring that they are informed about the collection and use of their personal information for insurance purposes. By providing written notification, applicants have the opportunity to understand and potentially dispute any information contained in the investigative consumer report.

The producer should not keep the policy in their office for safe-keeping on behalf of the client. The policy should be given to the client for their safe-keeping. The producer should collect any premiums due, fully explain all exclusions and/or riders, and review all benefits provided by the policy.

Exclusions are the features that deal with suicide, pre-existing conditions, and self-inflicted injuries. Exclusions are specific conditions or situations that are not covered by an insurance policy. In this case, suicide, pre-existing conditions, and self-inflicted injuries are excluded from coverage, meaning that the insurance policy does not provide benefits or coverage for these situations.

The Coordination of Benefits clause in group health Master Contracts is used to avoid double payment of benefits to an insured who has duplicate group coverages. This means that if an insured individual has multiple group health insurance plans, this clause ensures that the total amount of benefits received does not exceed the actual expenses incurred. It prevents the insured from receiving duplicate payments for the same medical expenses from different insurance plans, thereby avoiding unnecessary financial burdens on insurers and preventing potential fraud or abuse of the system.

Under a long-term disability income policy, the insurer is obligated to make periodic claim payments to the insured. The frequency of these payments is determined by the terms of the policy. In this case, the correct answer is "month," indicating that the insurer must make payments to the insured at least once every month. This ensures that the insured receives regular financial support to compensate for their long-term disability.

Medicare Part A covers hospital room and board expenses. This means that it pays for the cost of a semi-private room, meals, general nursing care, and other hospital services and supplies. It does not cover surgical expenses, medications, or physician's services, which are typically covered under Medicare Part B.

J's coverage continues as long as J is continually incapacitated and is financially dependent on J's father. This means that as long as J remains physically impaired and unable to sustain employment or self-care, and is financially dependent on their father, their medical coverage will continue under the father's group plan.

Contracts of adhesion refer to contracts where one party has significantly more bargaining power than the other and the terms of the contract are presented on a "take it or leave it" basis. In the case of health insurance policies, the insurance company typically has more power and control over the terms of the contract, while the insured individual has limited ability to negotiate or modify the terms. Therefore, health insurance policies can be considered as contracts of adhesion.

An individual who has had a heart murmur since birth is likely to be issued an Exclusionary/Impairment rider in their individual health policy. This rider is typically added to exclude coverage for any medical expenses related to the pre-existing condition, in this case, the heart murmur. The purpose of this rider is to limit the insurance company's liability for potential future claims associated with the pre-existing condition. By adding this rider, the insurance company can still provide coverage for other medical conditions but exclude coverage for the heart murmur.

Group health insurance typically requires that 100% of eligible individuals must be offered coverage under a noncontributory plan. This means that all eligible individuals within the group must be provided with health insurance without any contribution or cost-sharing requirements on their part. This ensures that everyone in the group has access to health insurance coverage, regardless of their individual financial situation or ability to pay.

A Multiple Employer Trust (MET) is a health care plan that allows small employers to join together and pool their resources to purchase medical expense insurance for their employees. By combining their purchasing power, these small employers can negotiate better rates and benefits for their employees. This helps to provide affordable health care coverage for employees who may not have access to it otherwise. A MET is a cost-effective solution for small employers to offer comprehensive health care benefits to their employees.

The correct answer is experimental and investigative services. This is because an Eligible Expenses provision in a comprehensive major medical policy typically covers professional services of doctors and other medical practitioners, hospital charges for semi-private room and board, and pre-approved home health care. However, experimental and investigative services are usually not covered as they involve treatments or procedures that are still being researched or are not yet proven to be effective.

Under a group health plan, an employer may offer additional benefits to classes of employees based on factors such as length of employment, salary grade, and job category. However, it is not permissible to offer additional benefits based on an employee's gender. This is because gender-based discrimination is prohibited under various laws, such as Title VII of the Civil Rights Act of 1964. Therefore, offering additional benefits based on gender would be considered discriminatory and illegal.

The insurer will most likely pay the full claim because the disability was caused by a condition that existed prior to the policy issue date but was not specifically excluded from coverage. This means that the insurer cannot deny the claim based on a pre-existing condition.

Coinsurance helps control overutilization of benefits. This means that when a policyholder has coinsurance, they are required to pay a percentage of the cost of covered services or treatments. This encourages policyholders to be mindful of their healthcare utilization and avoid unnecessary or excessive use of benefits. By sharing the cost with the policyholder, coinsurance helps prevent overuse of benefits and promotes responsible healthcare decisions.

The provision that designates to whom claim payments are made is "Payment of Claims." This provision outlines the process and requirements for making claim payments to the appropriate recipients. It ensures that the payments are made to the rightful claimants and helps in maintaining transparency and accountability in the claims settlement process.

An insurer is required to provide claim forms to an insured within a maximum of fifteen days after receiving notice of an Accident & Health claim. This ensures that the insured has the necessary paperwork to file their claim and begin the process of receiving compensation for their accident or health-related expenses. It is important for insurers to promptly provide claim forms to insured individuals to ensure a smooth and efficient claims process.

The correct answer is July 5 because the Ten-Day Free Look provision allows the policyholder to return the policy within 10 days of receiving it and obtain a full premium refund. In this case, the policy was delivered to S on July 5, so he has until July 15 to return it and receive a refund.

The applicant is making an inquiry for an offer because they have submitted an application to the insurer without making any premium payment. This indicates that they are interested in obtaining insurance coverage and are seeking information about the terms and conditions of the policy. However, since no payment has been made, it cannot be considered as a formal offer.

Under the Claims Forms provision, if the insurance company fails to send claim forms within the required time period, the insured should submit the claim in any form. The company is obligated to accept this form as adequate proof of loss. This means that the insured does not have to wait for the claim form to arrive and can still proceed with the claim by submitting it in any format acceptable to the company.

The correct answer is fully taxable. This means that Disability Income benefits paid under an employer-paid group Disability Income are subject to income tax. This is because these benefits are considered as a form of income and should be reported on the individual's tax return. Therefore, the individual receiving these benefits will need to include them as taxable income when filing their taxes.

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The concept of assignment is not a requirement for a contract. Assignment refers to the transfer of rights or obligations under a contract to another party. While assignment can occur in certain situations, it is not an essential element for a contract to be valid. The other options listed - acceptance, legal capacity, and legal purpose - are indeed necessary components for a contract to be enforceable.

Insurable interest must exist at the inception of the policy under an Accidental Death and Dismemberment (AD&D) policy. This means that the policyholder must have a financial interest or relationship with the insured person at the time the policy is taken out. This ensures that the policyholder has a legitimate reason to protect the insured person's life or well-being. Having insurable interest at the inception of the policy helps prevent fraudulent or speculative insurance practices.

The provision of "Entire Contract" explains that a producer does not have the authority to waive the provisions of an insurance contract. This means that all the terms and conditions stated in the contract are binding and cannot be altered or waived by the producer. It ensures that both parties involved in the contract are obligated to fulfill their respective responsibilities as outlined in the agreement.

Medicare Supplement policies are designed to provide additional benefits beyond those provided by Medicare. These policies are meant to fill in the gaps in coverage that Medicare may not cover fully, such as deductibles, copayments, and coinsurance. They can also provide coverage for services that Medicare does not cover, such as vision, dental, and hearing. Medicare Supplement policies are purchased in addition to original Medicare to provide extra coverage and help individuals manage their healthcare costs more effectively.

The correct answer is that a Waiver of Premium provision in a Disability Income policy allows the insured to maintain a policy in force while disabled and unable to pay premiums. This means that if the insured becomes disabled and is unable to work, the insurance company will waive the premium payments for the policy, allowing the policy to remain active and providing the insured with the benefits outlined in the policy. This provision provides financial protection for the insured during a period of disability.

The correct answer is "Adjust the benefits downward according to the benefits that X would have been entitled to based on the premiums." This is because X made a material misrepresentation on the disability income insurance application by stating that he was forty years old when he was actually forty-five. The insurer is likely to adjust the benefits downward based on the premiums that X would have been entitled to if his true age had been disclosed. This is a fair course of action as it takes into account the misrepresentation while still providing some benefits to X.

Travel Accident policies typically require a beneficiary designation. This means that the policyholder must specify who will receive the benefits in the event of their death due to a covered accident while traveling. This is important because it ensures that the benefits are paid out to the intended recipient and helps to avoid any confusion or disputes regarding the distribution of the policy proceeds. The other health policies listed, such as Medicare Supplement, Blanket, and Long Term Care, may not necessarily require a beneficiary designation as they may have different payment structures or coverage provisions.

The insuring clause in an insurance policy is the clause that identifies the contracting parties and defines the scope and limits of coverage. It is the part of the policy that specifies who is insured and what risks are covered. This clause is crucial as it sets out the basic terms and conditions of the insurance contract, ensuring that both parties understand their rights and obligations.

The term "capital sum" in an Accidental Death and Dismemberment (AD&D) policy refers to the monthly disability income paid if an insured loses a limb or the sight in one eye. This means that if the insured experiences a covered accident resulting in the loss of a limb or sight in one eye, they will receive a monthly payment to help compensate for the disability.

The purpose of the Medical Information Bureau (MIB) is to share medical data among member companies. This means that the MIB collects and maintains medical information from various sources and makes it available to its member companies. This allows these companies to access important medical data when evaluating applications for insurance or determining premium rates. Sharing medical data helps member companies make more informed decisions and manage risks effectively.

Noncancellable health policies guarantee both the renewability and the premiums. This means that the policy cannot be canceled by the insurer as long as the premiums are paid on time, and the premiums cannot be increased by the insurer. It provides the policyholder with the assurance that their coverage will not be terminated or altered as long as they continue to fulfill their premium obligations.

Under a Guaranteed Renewable Accident & Health policy, the insurer retains the right to increase the premium rate for an entire class of insured. This means that the insurer can raise the premium rates for all individuals within a specific group or category of insured individuals. This allows the insurer to adjust the rates based on various factors such as the overall claims experience of the group or changes in the cost of providing coverage. It ensures that the insurer can effectively manage the financial risks associated with providing coverage to a specific class of insured individuals.

The producer should take all of the following actions during the delivery of the policy to the applicant except issuing a conditional receipt. A conditional receipt is typically issued when the applicant pays the initial premium, which is not the case in this scenario as no premium was submitted with the application. Therefore, the producer does not need to issue a conditional receipt.

Residual disability is the most suitable definition of disability that would cover a permanent partial disability. Residual disability refers to a condition where an individual is unable to perform all the duties of their occupation due to a disability, but can still perform some of the duties. This definition acknowledges that the disability is permanent and only affects certain aspects of the individual's ability to work. Therefore, it is the most appropriate option for covering a permanent partial disability.

The elimination period in most Disability Income policies applies to each separate disability. This means that for each new disability claim, there is a waiting period before the policyholder can start receiving benefits. The elimination period is a predetermined length of time, usually stated in days or weeks, during which the policyholder must be disabled before benefits become payable. This allows the insurance company to ensure that the disability is legitimate and not a temporary or minor condition. Once the elimination period is satisfied for a specific disability, the policyholder can start receiving benefits for that particular disability.

The consideration clause in an accident and health policy states that the applicant is responsible for paying the initial premium. This means that in order for the policy to be in effect, the applicant must make the required payment. The consideration clause is a common provision in insurance contracts and ensures that both parties fulfill their obligations for the policy to be valid.

The Notice of Claim provision in an Accident and Health policy requires the insured to provide written notice to the insurer within a maximum of 20 days after a loss. This means that the insured must inform the insurance company about the claim within 20 days to ensure that it is valid and can be processed. Waiting longer than the specified time limit may result in the claim being denied.

The inspection report may include information obtained by a telephone call to the proposed insured. This is because an inspection report involves a physical examination of the proposed insured's property or assets, and during this process, the inspector may need to contact the insured via telephone to gather additional information or clarify certain details. Therefore, the inspection report may contain information obtained through a telephone call.

A Disability Income policy with a Guaranteed Insurability rider allows the insured to periodically increase the amount of benefits payable under the policy. This means that the insured has the option to adjust their coverage as their needs change over time, without having to go through the underwriting process again. This can be beneficial in ensuring that the policy remains adequate and provides sufficient coverage in the event of a disability.

When a group long-term disability plan is integrated with Social Security, it means that the combined benefits from both sources cannot exceed a certain maximum limit. This means that if an individual is receiving benefits from both the group plan and Social Security, the total amount they receive cannot exceed this limit. Therefore, the correct statement is that Social Security and group benefits pay a combined maximum limit.

Conditionally renewable provisions guarantee renewability to a specified date or age unless certain specified events occur. This means that the policy can be renewed until a certain date or age, as long as the specified events do not happen. If the specified events occur, the policy may not be renewable.