Life & Health Insurance — Disability, Medical Expense & LTC flashcards
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Disability income definitions, elimination and benefit periods, DI riders and business disability, AD&D, medical expense plans, cost sharing and managed care, HSAs, HRAs and FSAs, dental, critical illness and long-term care, with tax treatment.
Learn deck · part of Life and health insurance producer licence (national portion) · written against: Life, accident and health concepts common to state producer exams; NAIC model provisions; federal law as of 2026; state law excluded. Updated 2026-10-10.
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A surgeon loses fine motor control in one hand but could still teach medicine. Under an own-occupation definition, is she totally disabled?Yes. Own-occupation coverage treats her as disabled if she cannot perform the material duties of her own occupation, even if she could work in another.Disability Income › Definitions & Benefits
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Under an any-occupation definition of disability, when is an insured totally disabled?Only when unable to work in any occupation for which he is reasonably suited by education, training or experience.Disability Income › Definitions & Benefits
Why: the definition is stricter, so the premium is lower. -
Why do many disability policies use an own-occupation definition for the first few years of a claim and any-occupation after that?It protects the insured generously while adjusting to the disability, then tightens the definition to control the cost of long claims.Disability Income › Definitions & Benefits
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An insured loses the sight of both eyes but keeps working. Can he still collect total disability benefits?Yes, if the policy has a presumptive disability provision: specified severe losses, such as sight, speech, hearing or the use of two limbs, count as total disability even if the insured works.Disability Income › Definitions & Benefits
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Under accidental death and dismemberment coverage, how does the principal sum differ from the capital sum?The principal sum is paid for accidental death or certain double losses, such as both hands or both eyes; the capital sum, a percentage of the principal sum (often half), is paid for the loss of one hand, foot or eye.Long-Term Care & Other Health › Other Health Coverage
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An insured dies from accident injuries eight months after the accident. What decides whether an AD&D policy pays?The policy's time limit: AD&D pays only if the death or loss occurs within a set period after the accident, and that period varies by policy.Long-Term Care & Other Health › Other Health Coverage
Watch out: state rules based on the NAIC minimum standards make individual health policies allow at least 90 days, and some plans allow longer, such as 180 days or a full year (the federal employees' group plan allows a year); an eight-month death is paid under a one-year limit but not under a 90- or 180-day one. -
How does accidental bodily injury coverage differ from accidental means coverage?Accidental bodily injury requires only that the result was unintended; accidental means requires that both the cause and the result were unintended, so it is narrower.Long-Term Care & Other Health › Other Health Coverage
Example: a man who deliberately jumps off a wall and breaks his ankle is covered under accidental bodily injury, not accidental means. -
How does basic medical expense coverage differ from major medical?Basic plans pay hospital, surgical and physician expenses from the first dollar but with low limits; major medical covers a broad range of expenses with high limits, after a deductible and with coinsurance.Medical Expense & Managed Care › Plans & Cost Sharing
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How does a basic surgical plan that uses a relative value scale set its benefit?It assigns points to each procedure and multiplies them by a conversion factor (dollars per point).Medical Expense & Managed Care › Plans & Cost Sharing
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A plan has a 1,000 dollar deductible and 80/20 coinsurance. A covered bill is 6,000 dollars, and nothing has gone toward the deductible yet. How much does the insured pay?2,000 dollars: the 1,000 dollar deductible plus 20 percent of the remaining 5,000 dollars.Medical Expense & Managed Care › Plans & Cost Sharing
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About these cards
Review status: Second-reader reviewed, with corrections applied.
Checked against:
- Checked against the NAIC Uniform Individual Accident and Sickness Policy Provision Law, the NAIC Accident and Sickness Insurance Minimum Standards Model Regulation, and the NAIC Long-Term Care Insurance Model Act and Model Regulation, as commonly adopted; state versions vary. Individual disability income, business overhead expense and accidental death and dismemberment items also checked against the Interstate Insurance Product Regulation Commission's product standards (2018 and 2026).
- Federal items checked against the Internal Revenue Code (sections 104, 105, 106, 162, 213, 223, 265 and 7702B), IRS publications on HSAs, HRAs, FSAs, medical expenses and small-business expenses, an IRS Chief Counsel advice on business-owned disability insurance, the federal employees' group life insurance statute (5 U.S.C. 8704) and OPM handbook, the Social Security Act's Medicare exclusions, CMS's Medicare & You, the Bureau of Labor Statistics glossary and Social Security Administration disability publications; public domain U.S. government sources. No yearly-indexed limits are given.
- General insurance principles written from author knowledge; no textbook, prep-course or question-bank text copied. National content only: state insurance law, fees and figures indexed yearly are excluded.
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Not insurance or legal advice. These cards cover the national portion of the producer licensing exam only. State insurance law and your state's exam content are not included; check your state's insurance department and its candidate handbook.
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