Chapter 9—Insuring Your Health
a.
actual surgical expense.
b.
listed benefit schedules.
c.
specific percentage of actual surgical expense.
d.
average national cost of the surgery.
e.
usual, reasonable, and customary expenses.
e
Moderate
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United States – BUSPROG: Reflective Thinking
Bloom’s: Remembering
72. Suppose a person has a health insurance policy with a $500 calendar-year deductible, a $2,000 out–of-pocket cap, and
an 80% coinsurance provision. If this person suffers a $600 covered loss, how much will the insurance company pay?
(Assume no previous losses have occurred.)
a.
$80
b.
$100
c.
$480
d.
$600
e.
Some other amount
a
Moderate
PFIN.BILL.17.9-4 – LO: 9-4
United States – BUSPROG: Reflective Thinking
Bloom’s: Applying
73. Nick has a comprehensive health care policy with a $250 per-calendar-year deductible, an 80% co-insurance
provision, and a $1,000 copayment cap per calendar year. In January, Nick had a $600 claim for which the insurance
company paid $280. Nick experiences another unrelated claim in October resulting in total bills of $5,000. How much will
Nick have to pay for the second claim?
a.
$5,000
b.
$3,930
c.
$1,800
d.
$930
e.
None of the above
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United States – BUSPROG: Reflective Thinking
Chapter 9—Insuring Your Health
74. Major medical plans are characterized by deductibles, internal limits, and
a.
benefit levels.
b.
participation or coinsurance.
c.
illness or injury frequency limits.
d.
maximum surgical medical benefits.
e.
sliding or decreasing premiums.
Moderate
PFIN.BILL.17.9-4 – LO: 9-4
United States – BUSPROG: Reflective Thinking
United States – KS – DISC: Risk and Return
Bloom’s: Understanding
75. Given a $250 annual deductible, an 80% co-insurance provision, and a $5,000 copayment cap, how much of a $27,500
medical bill will be paid by the insured?
a.
$250
b.
$5,000
c.
$5,450
d.
$5,250
e.
$5,700
Challenging
PFIN.BILL.17.9-4 – LO: 9-4
United States – BUSPROG: Reflective Thinking
United States – KS – DISC: Risk and Return
Bloom’s: Analyzing
76. A characteristic of dental insurance is
a.
high cost.
b.
dentist financing.
c.
high deductible limits.
d.
lack of orthodontic coverage.
e.
low maximum limits.
e
Challenging
PFIN.BILL.17.9-4 – LO: 9-4
Bloom’s: Applying
Chapter 9—Insuring Your Health
77. Miscellaneous sources of health care coverage include
a.
homeowners insurance.
b.
automobile insurance.
c.
veterans benefits.
d.
all of the above.
e.
none of the above.
Challenging
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United States – BUSPROG: Reflective Thinking
Bloom’s: Remembering
78. ____ are required by many insurance plans to reduce the number of unnecessary surgeries.
a.
Deductibles
b.
Waiting periods before the surgery is performed
c.
Second opinions
d.
Meetings with company surgical committees
e.
Approval by hospital surgical committees
c
Challenging
PFIN.BILL.17.9-4 – LO: 9-4
United States – BUSPROG: Reflective Thinking
United States – KS – DISC: Risk and Return
Bloom’s: Analyzing
79. Terms of payment under your health insurance are governed by
a.
policy limits.
b.
deductibles.
c.
coordination of benefits.
d.
set maximums for types of services.
e.
all of the above.
e
Moderate
United States – BUSPROG: Reflective Thinking
Bloom’s: Understanding
Chapter 9—Insuring Your Health
80. A “coordination of benefits” provision in a health insurance policy may possibly provide which of the following
benefits?
a.
Allows the policy holder to be double-covered for the same loss.
b.
Provides broader coverage than a policy without such provision.
c.
Often results in lower-cost insurance premiums.
d.
Drops pre-existing conditions clauses from a policy.
e.
All of the above
c
Challenging
PFIN.BILL.17.9-4 – LO: 9-4
United States – BUSPROG: Reflective Thinking
Bloom’s: Analyzing
81. Which of the following best describes a “pre-existing condition”?
a.
An exclusion
b.
Cancer, heart condition, or other serious diseases
c.
An injury that results from an accident
d.
Something not covered by the insurance policy
e.
A physical or mental problem you had at the time you bought the policy
e
Moderate
PFIN.BILL.17.9-4 – LO: 9-4
United States – BUSPROG: Reflective Thinking
Bloom’s: Applying
82. Your right to continue a health insurance policy if you choose is known as
a.
policy exclusions.
b.
persons covered.
c.
continuation.
d.
duration of benefits.
e.
renewability.
e
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United States – BUSPROG: Reflective Thinking
Bloom’s: Remembering
Chapter 9—Insuring Your Health
83. The insurance designed to help with nursing home or in-home care due to chronic illness is called
a.
Medicare
b.
major medical insurance
c.
comprehensive major medical insurance
d.
nursing home care insurance
e.
long-term care insurance
e
Easy
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United States – BUSPROG: Reflective Thinking
Bloom’s: Understanding
84. Which of the following statements is true about a guaranteed renewable long-term care policy?
a.
benefits are taxable.
b.
premiums are never tax deductible.
c.
the policy is noncancelable.
d.
premiums cannot be increased by the insurer unless they are increased for the entire rating class.
e.
premiums cannot increase for any reason.
Challenging
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United States – BUSPROG: Reflective Thinking
Bloom’s: Understanding
85. One drawback of long-term care insurance is its
a.
high annual premiums.
b.
overlap with Medicare.
c.
inability to cover custodial care.
d.
relatively high deductible.
e.
relatively high coinsurance requirement.
a
Moderate
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United States – BUSPROG: Reflective Thinking
Bloom’s: Remembering
Chapter 9—Insuring Your Health
86. Activities of daily living (ADLs) are important in determining ____ for long-term care insurance.
a.
type of care
b.
services covered
c.
waiting period
d.
eligibility
e.
benefit duration
Challenging
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United States – BUSPROG: Reflective Thinking
Bloom’s: Remembering
87. Which of the following is not a desirable feature in a long-term care policy?
a.
inflation protection
b.
optional renewability clause
c.
duration of benefits of 6 years
d.
coverage for Alzheimer’s disease
e.
coverage for preexisting conditions
Challenging
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United States – BUSPROG: Reflective Thinking
Bloom’s: Remembering
88. Which of the following best describes a custodial care facility?
a.
a place that provides meals, housekeeping, and personal care services.
b.
a place that provides limited medical attention and supervision, largely by nonmedical professionals.
c.
a place with licensed medical professionals that assist residents regularly with medically necessary care.
d.
a place that provides regular assistance with chronic health conditions that are acute in nature.
e.
a hospital wing where surgical facilities are always available nearby.
Moderate
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United States – BUSPROG: Reflective Thinking
Bloom’s: Remembering
Chapter 9—Insuring Your Health
PFIN.BILL.17.9-5 – LO: 9-5
United States – BUSPROG: Reflective Thinking
Bloom’s: Understanding
89. Bob and Barbara Castle are each 39 years old and have sought your advice with regard to their financial affairs. Bob is
a school administrator making $75,000 per year and Barbara is not employed outside of the home. The Castles’ net worth
is approximately $190,000. They have three kids, ages 6, 10, and 14. You have determined that the Castles currently have
adequate life, health, auto, and homeowner’s insurance. Which of the following forms of insurance is likely to fulfill their
highest-priority remaining risk-management need?
a.
supplemental major medical insurance
b.
disability income insurance
c.
critical illness insurance
d.
long-term care insurance
e.
additional life insurance
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United States – BUSPROG: Reflective Thinking
Bloom’s: Applying
90. Disability income insurance provides benefits that are designed to
a.
pay for hospital care costs from injuries.
b.
substitute for lost income.
c.
cover hospital care costs from illness.
d.
substitute for social security disability benefits.
e.
supplement retirement income for the elderly.
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United States – BUSPROG: Reflective Thinking
Bloom’s: Remembering
91. Which of the following changes would tend to increase the premium on a disability policy?
a.
a shorter elimination period
Chapter 9—Insuring Your Health
b.
use of “any occupation” definition of disability instead of “own occupation to which one is reasonably suited”
c.
decreasing the benefit level from 66% to 50% of prior earnings
d.
decreasing the payment period from until age 65 to a maximum of 2 years
e.
none of the above
a
Challenging
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United States – BUSPROG: Reflective Thinking
United States – KS – DISC: Risk and Return
Bloom’s: Analyzing
92. An elimination period in disability income insurance is most closely analogous to which of the following cost-sharing
provisions in health insurance?
a.
deductible
b.
coinsurance
c.
limit
d.
cap
a
Challenging
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United States – BUSPROG: Reflective Thinking
Bloom’s: Understanding
93. All of the following except a ____ are highly recommended for a long-term disability income policy.
a.
guaranteed renewable clause
b.
cost-of-living adjustment
c.
long duration of benefit
d.
short waiting period
e.
waiver of premium
Challenging
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United States – BUSPROG: Reflective Thinking
94. Suppose Janet, a skilled neurosurgeon, became unable to perform surgery because of severe arthritis. Which of the
following is true?
Chapter 9—Insuring Your Health
a.
If Janet has a disability policy with an “own occupation” definition of disability, she will probably collect
some benefits.
b.
If Janet has a disability policy with an “own occupation” definition of disability, the insurer will provide
coverage only if Janet would not be able to perform another type of job such as teaching or consulting.
c.
If Janet has a disability policy with an “any occupation for which reasonably suited” definition of disability,
the insurer will attempt to determine if there is another job for which Janet is suited and is still able to perform.
d.
If Janet has a disability policy with a presumptive disability clause for loss of hands, she will probably collect
some benefits.
e.
Both a and c are true.
PFIN.BILL.17.9-6 – LO: 9-6
United States – BUSPROG: Reflective Thinking
United States – KS – DISC: Risk and Return
Bloom’s: Applying
95. Disability income insurance will provide income to a disabled or ill person
a.
without a waiting period.
b.
with unlimited funds for years.
c.
with a waiting period before income is received.
d.
with payments made to the recipient for up to age 70.
e.
none of the above.
PFIN.BILL.17.9-6 – LO: 9-6
United States – BUSPROG: Reflective Thinking
United States – KS – DISC: Risk and Return
Bloom’s: Remembering
96. Disability income policies usually have ____ that is a time delay from the date of the issuance of the policy until
benefit privileges are activated.
a.
waiting periods
b.
probationary periods
c.
elimination periods
d.
internal limit periods
e.
outer limits
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United States – BUSPROG: Reflective Thinking
Chapter 9—Insuring Your Health
97. When trying to determine your disability income needs, you should consider available sick leave, income needs, and
a.
social security benefits.
b.
surgical expense protection.
c.
Medicare.
d.
life insurance.
e.
income tax bracket.
a
Moderate
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United States – BUSPROG: Reflective Thinking
United States – KS – DISC: Risk and Return
Bloom’s: Analyzing
98. In order to qualify for disability insurance under social security, a person must be
a.
unable to carry out the duties of the current job.
b.
unable to carry out the duties of any job.
c.
ill for at least two years.
d.
willing to undergo rehabilitation.
e.
none of these
Moderate
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United States – BUSPROG: Reflective Thinking
Bloom’s: Remembering
99. Which of the following is characteristic of social security disability income coverage?
a.
There is a one-year waiting period.
b.
It uses the “own occupation” definition of disability.
c.
Benefits are payable only if the disability is expected to last one year or be fatal.
d.
a and b
e.
a, b, and d
c
Moderate
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Bloom’s: Remembering
Chapter 9—Insuring Your Health
100. Most people do not need protection against
a.
the loss of income because of time spent away from work.
b.
a specific dread disease.
c.
medical and rehabilitation expenses.
d.
nursing home costs.
e.
in hospital services.
Easy
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United States – BUSPROG: Reflective Thinking
Bloom’s: Applying
101. Which of the following is a public assistance program that provides health insurance benefits only to those who are
unable to pay for healthcare?
a.
Medicare
b.
Medicaid
c.
Blue Cross/Blue Shield
d.
Social Security disability benefits
e.
Worker’s compensation
Easy
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United States – BUSPROG: Reflective Thinking
Bloom’s: Remembering
102. Joe has a disability income policy that pays a monthly benefit of $1,200. Joe has been disabled for 30 days, but he
only received a check in the amount of $600 from his disability insurance. What is probably the reason that he only
received $600?
a.
The policy has a deductible of $600.
b.
The elimination period is 15 days.
c.
The policy has a 50% coinsurance clause.
d.
Joe is considered to be only 50% disabled.
e.
Joe has only owned the policy for 6 months.
United States – BUSPROG: Reflective Thinking
Bloom’s: Remembering
Chapter 9—Insuring Your Health
103. Medicare Advantage supplemental benefits include all of the following except
a.
Vision
b.
Dental
c.
General checkups
d.
Hospitalization
e.
Wellness programs
Moderate
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United States – BUSPROG: Reflective Thinking
United States – KS – DISC: Risk and Return
Bloom’s: Remembering
104. Medicare Advantage policies require payment from the policyholder in the form of a
a.
Deductible
b.
Co-insurance
c.
Copayment
d.
Excess charge
e.
a and b
c
Moderate
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United States – BUSPROG: Reflective Thinking
United States – KS – DISC: Risk and Return
Bloom’s: Remembering
105. About ___ of Americans lack health insurance.
a.
10%
b.
13%
c.
20%
d.
35%
e.
50%
Easy
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Challenging
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United States – BUSPROG: Reflective Thinking
Bloom’s: Applying