IC-38 Insurance Agent Exam - Health flashcards

32 cards. Read the term and the definition here. The deck at the top of this page is optional.

Health insurance definition

A contract in which the insurer promises to pay specified benefits for sickness or injury in return for a premium paid by the insured or policyholder.

Indemnity plan

A fee-for-service health plan that reimburses the insured for covered medical expenses, usually subject to a deductible, coinsurance, and internal limits, with free choice of providers.

Deductible

The amount of covered expenses the insured must pay out of pocket each benefit period before the insurer begins paying benefits under the policy.

Coinsurance

The percentage of covered expenses, after the deductible is satisfied, that the insured pays; the insurer pays the remaining percentage as stated in the policy.

Copayment

A fixed dollar amount the insured pays at the time of service, commonly used in managed care plans for office visits and prescriptions.

Out-of-pocket maximum

The annual cap on covered cost sharing such as deductibles, coinsurance, and copayments; once reached, the insurer generally pays 100 percent of covered expenses.

HMO

A health maintenance organization that contracts with a network of providers, usually requires a primary care physician and referrals, and generally does not cover non-emergency out-of-network care.

PPO

A preferred provider organization that pays a higher benefit for in-network care and a reduced benefit for out-of-network care, with no referral requirement and no primary care gatekeeper.

POS plan

A point-of-service plan blending HMO and PPO features: a primary care physician coordinates in-network care, while out-of-network care is available with a referral at higher cost sharing.

Primary care physician

The network physician in an HMO or POS plan who provides initial care, maintains the member's records, and authorizes referrals to specialists.

Internal limits

Caps stated in a health policy on the amount payable for specific services, such as a maximum daily room charge or a limit per surgical procedure.

Preexisting condition

A condition for which medical advice or treatment was received before the effective date of coverage; its treatment may be limited or excluded as permitted by applicable law.

Coordination of benefits

Rules that determine which of two or more health plans pays first as primary and which pays secondary, preventing duplicate payment beyond covered expenses.

Elimination period

The waiting period after a disability begins before disability income benefits become payable; it functions like a time deductible.

Own occupation definition

A disability definition under which benefits are payable if the insured cannot perform the duties of the occupation held at the time of disability, typically the most favorable definition.

Any occupation definition

A stricter disability definition requiring that the insured be unable to perform the duties of any occupation for which he or she is reasonably qualified by education, training, or experience.

Residual disability benefit

A partial disability benefit that pays a proportionate amount when the insured returns to work at reduced income because of the disabling condition.

Benefit period

The maximum length of time disability income benefits are payable, such as two years, five years, to age 65, or for life.

Probationary period

A waiting period immediately after the policy's effective date during which sickness coverage is not yet in force, used to control adverse selection.

Waiting period for sickness

The interval after policy issue before benefits are payable for sickness, distinct from the elimination period that follows the onset of disability.

Grace period

The period after a premium due date during which the policy remains in force; health policies commonly provide a grace period of 7 to 31 days.

Reinstatement provision

A policy provision allowing restoration of lapsed coverage upon payment of overdue premium, often with a new probationary period for sickness and a requirement of insurability.

Incontestability clause

A provision stating that after the policy has been in force for a stated period, commonly two years, the insurer cannot contest the policy for misstatements except fraudulent ones.

Entire contract provision

A clause stating that the policy, the attached application, and any endorsements constitute the whole agreement, and no outside statements modify it.

Change of occupation provision

A disability policy clause that reduces benefits if the insured changes to a more hazardous occupation, or allows a premium refund if the new occupation is less hazardous.

Notice of claim

The insured's required written notification to the insurer that a loss has occurred, to be given within the time limit stated in the policy, commonly 20 days.

Proof of loss

The documentation, such as medical records and claim forms, that the insured must submit to the insurer within a stated period to support a claim for benefits.

Utilization review

A managed care process that evaluates the medical necessity and appropriateness of care, including precertification, concurrent review, and retrospective review.

Precertification

A requirement that the insured or provider obtain insurer approval before non-emergency hospitalization or specified procedures for benefits to be payable.

Adverse selection

The tendency of higher-risk individuals to seek or retain insurance more than lower-risk individuals, which underwriting and policy provisions are designed to control.

Field underwriting

The agent's role in gathering accurate application information, observing the applicant, and reporting material facts so the insurer can properly classify the risk.

Conditionally renewable policy

A health policy the insurer may decline to renew only for specified reasons, such as attainment of a stated age or loss of eligibility, not for deterioration of health.