Life & Health Insurance Exam Life & Health Insurance Health Insurance Fundamentals 4

Question 1

Which type of health savings account can only be used with a High Deductible Health Plan (HDHP)?

Accepted Answer

HSA

Answer

An HSA (Health Savings Account) is only available to individuals enrolled in a qualified HDHP and offers triple tax advantages.

Question 2

What is the term for the list of prescription drugs covered by a health insurance plan?

Accepted Answer

Formulary

Answer

A formulary is the plan's list of covered prescription drugs, typically organized into tiers that determine the member's cost-sharing level.

Question 3

An insured receives a bill for $1,000 after the deductible is met. The policy has an 80/20 coinsurance clause with a $2,000 out-of-pocket max already half-met. How much does the insured owe?

Accepted Answer

$200

Answer

With an 80/20 coinsurance split, the insured pays 20% of $1,000, which equals $200, assuming the out-of-pocket max has not yet been fully reached.

Question 4

Which health insurance provision prevents an insurer from reducing or denying a claim on the grounds that an application contained a misstatement after the policy has been in force for two years?

Accepted Answer

Incontestability clause

Answer

The incontestability clause bars the insurer from contesting the policy based on misstatements in the application after the policy has been in force for a specified period, typically two years.

Question 5

What distinguishes an Exclusive Provider Organization (EPO) from a PPO?

Accepted Answer

EPOs do not cover out-of-network care except in emergencies; PPOs do at higher cost

Answer

An EPO restricts coverage to in-network providers (except emergencies), while a PPO allows out-of-network use with higher cost-sharing.

Life & Health Insurance Exam Practice Test

Life & Health Insurance Exam Practice Test

Life & Health Insurance Exam Life & Health Insurance Health Insurance Fundamentals 4