What You'll Learn in This Chapter
This chapter is the heart of health insurance - it covers every major type of health policy you need to know. From basic hospital plans to managed care (HMOs, PPOs), from disability income to long-term care, and from group insurance rules to tax-advantaged savings accounts.
At 16% of the exam, this is one of the highest-weighted chapters. Master the differences between plan types and the key numbers for each, and you'll lock in a big chunk of your passing score.
Key Terms to Know First
These words show up throughout the chapter. Learn them now so you're never confused later.
Accidental Bodily Injury
An unforeseen injury caused by an accident, not by sickness. The injury must be unexpected and unintentional.
Cafeteria Plan
An employee benefit plan that lets the insured choose between different benefit types - like picking items from a cafeteria line.
Deductible
The dollar amount the insured pays out of pocket first before insurance kicks in and starts paying its share.
Lump Sum
The entire benefit amount paid in one single payment, rather than spread out over time in installments.
Riders
Additions attached to a policy that add, modify, or delete policy provisions. Think of them as "upgrades" or "add-ons."
Underwriting
The process of selecting and classifying risks - deciding who to insure, at what price, and under what conditions.
Chapter Parts
Medical Expense Insurance
Basic plans, major medical, HMOs, PPOs, POS plans, and health savings accounts
Disability Income
Individual disability, business disability, and group disability policies
Accidental Death & Dismemberment
AD&D benefits, principal sum vs. capital sum, and schedule of losses
Long-Term Care
Levels of care, elimination periods, benefit triggers, and prohibited provisions
Group Insurance
COBRA continuation, HIPAA portability, conversion rights, and group underwriting
Limited Benefit Policies
Cancer policies, critical illness, hospital indemnity, and worksite coverage
Chapter 2 Review
Quick review of all health policy types, cheat sheet, and exam prep
The Big Picture: Types of Health Coverage
This chapter walks through each major type of health policy. Think of it as a menu of coverage options - each one protects against a different risk.
1. Medical
Doctor & hospital
2. Disability
Lost income
3. AD&D
Accident lump sum
4. Long-Term
Nursing care
5. Group
Employer plans
6. Limited
Specific illness