Life & Health Insurance Flashcards
7 cards from real Insurance practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Life & Health Insurance flashcards as text
Which provision in a life insurance policy allows the policyowner to reinstate a lapsed policy within a specified period?
Answer: Reinstatement provision
The reinstatement provision allows a policyowner to restore a lapsed policy, typically within 3 years, by paying overdue premiums with interest and proving insurability.
What does the term 'subrogation' mean in health insurance?
Answer: The insurer's right to recover payments from a liable third party
Subrogation gives the health insurer the legal right to seek reimbursement from a third party who was responsible for the insured's injury or illness.
A 'guaranteed insurability' rider on a life insurance policy allows the policyowner to:
Answer: Purchase additional coverage at specified times without proof of insurability
The guaranteed insurability rider lets the insured buy additional life insurance at future option dates without having to prove insurability.
Under the ACA, what is the maximum out-of-pocket limit designed to protect?
Answer: Insureds from catastrophic annual medical costs
The ACA's out-of-pocket maximum caps the total amount an insured must pay in a plan year, protecting individuals from catastrophic medical expenses.
Which of the following best describes a 'self-funded' (self-insured) employer health plan?
Answer: The employer pays claims directly from its own funds rather than paying insurance premiums
In a self-funded plan, the employer assumes the financial risk and pays medical claims directly, often using a third-party administrator to process claims.
What is the primary purpose of a 'cost of living adjustment' (COLA) rider on a disability income policy?
Answer: To increase the benefit amount periodically to keep pace with inflation
A COLA rider adjusts disability income benefits upward—often tied to the CPI—so that purchasing power is maintained during a long-term disability.
Under HIPAA portability rules, a 'certificate of creditable coverage' was primarily used to:
Answer: Reduce or eliminate pre-existing condition exclusion waiting periods when changing group plans
HIPAA required insurers to provide certificates of creditable coverage so enrollees could offset pre-existing condition waiting periods at a new group plan, though the ACA largely eliminated these exclusions for most plans.