For a health insurance contract to be enforceable, the applicant must have an insurable interest in the person insured. When must this insurable interest exist?
A. At the time the policy is issued
B. Only at the time of claim
C. Only if the policy is a group policy
D. Insurable interest is never required for health insurance
Source: ALDOI Producer Examination Content Outline – Life and Health, Part I
The law of large numbers is a statistical principle underlying insurance pricing. What does it state?
A. Larger insurers always charge lower premiums
B. As the number of exposure units increases, actual loss results become more predictable
C. The more policies a producer sells, the higher the commission rate becomes
D. Claims decrease as the policy count increases
Source: ALDOI Producer Examination Content Outline – Life and Health, Part I
What is a key structural difference between an HMO and a PPO?
A. A PPO requires a primary care physician gatekeeper while an HMO does not
B. HMOs never require premiums
C. An HMO generally requires a primary care physician referral for specialist care and offers no out-of-network benefit, while a PPO allows self-referral and out-of-network coverage at a higher cost
D. PPOs cannot cover prescription drugs
Source: ALDOI Producer Examination Content Outline – Life and Health, Part III
A Point-of-Service (POS) plan combines features of which two managed care models?
A. Workers' compensation and disability income
B. Medicare and Medicaid
C. Term and whole life insurance
D. HMO and PPO
Source: ALDOI Producer Examination Content Outline – Life and Health, Part III
An Exclusive Provider Organization (EPO) plan is best described as:
A. A managed care plan that covers services only within its network, generally without requiring a PCP referral
B. A plan requiring a primary care physician referral for every specialist visit
C. A plan with no network restrictions at all
D. A government-funded plan for low-income individuals
Source: ALDOI Producer Examination Content Outline – Life and Health, Part III
