MONTANA LIFE INSURANCE EXAM 2026
QUESTION BANK RISK MANAGEMENT MODULE
SOLVED ITEMS AND RESPONSE KEY
◉ Major Medical Expense Policy. Answer: -A supplement (in
addition) to Basic Medical or as a stand-alone policy.
-individual or group policy.
-Take over when the Basic Policy runs out
◉ Hospital Expenses. Answer: -Pay for covered expenses incurred
during a hospital stay.
1. Daily hospital benefit - Room and Board
2. Miscellaneous expenses - Other Medical Expenses (X-Rays, MRI,
Prescriptions, Doctor Visits)
◉ Daily Hospital Benefit. Answer: -Cost of a hospital room, up to a
daily $ limit. The limit may be expressed either as a dollar amount,
e.g. $500 per day, or it may be expressed as the Usual, Customary
and Reasonable (UCR) and Charge
◉ Usual, Customary and Reasonable (UCR). Answer: Insurance
company will pay an amount for a given procedure based upon the
,average charge for that procedure in that specific geographic area.
The coverage is subject to a maximum amount or number of days.
◉ Benefit Schedule. Answer: -Specifically states what is covered in
the plan and for how much. The coverage is subject to a maximum
amount or number of days.
◉ Indemnity. Answer: Insured pays the bill and is reimbursed by the
insurance company up to a specified limit amount. Medical expense
policies that pay a fixed rate provide the insured with a stated
benefit amount for each day of hospital confinement.
◉ Reimbursement. Answer: Policyowners obtain medical treatment
from whatever source they want and submit their charges to their
insurer for reimbursement (actual amount).
◉ Service Based Contracts. Answer: -Pay doctors and hospitals
directly according to the # of days of coverage that is provided in the
contract for each event and are prepayment plans. Once a claim is
settled, the insured will receive an Explanation of Benefit (EOB),
which is a written confirmation that the claim was paid. Blue Cross
and Blue Shield, Health Service Corporations and Medicare coverage
are all provided on a Service Basis.
◉ Miscellaneous Expense Benefits. Answer: -Secondary benefits
(inside benefits) because they occur inside the hospital for charges
,related to the stay. X-rays, prescriptions, MRI's, anesthesia and lab
fees are usually separate fees incurred during a stay. Miscellaneous
Expense Benefits have separate limits, referred to as Inside Limits.
The are expressed usually as a multiple of the daily amount (UCR)
◉ Surgical Expense. Answer: A schedule of procedures lists the
amount allowable for each procedure. If a surgical procedure is not
found in the schedule, it will still be payable. The amount payable for
a procedure not listed is based on its relative value to a procedure of
similar difficulty. There are usually no deductibles.
◉ Surgical Schedule. Answer: Is simply a price list. Each procedure is
listed and a dollar amount assigned and if a procedure is not listed
in the schedule it is still paid.
◉ Relative Value. Answer: scientific method of paying different
benefits based on the region of the country an insured lives. It is
based on assigning a value to each procedure and using a conversion
factor. A schedule of assigned points for each procedure must be
included in the policy.
◉ Physicians Medical Expense. Answer: Pays for visits to the doctor
(office hospital) plus post operation care. There may be a per-visit
benefit, or the coverage is based on UCR.
-May or may not be a deductible . This policy is usually written as an
indemnity plan and has first dollar coverage (no deductible).
, -usually written as an indemnity plan and has first dollar coverage
◉ Major Medical Expense. Answer: -Cover "catastrophic" or huge
loss. A Catastrophic loss is defined as whenever Basic coverage runs
out and not a specific dollar amount.
-High Maximum Limits ($2,000,000)
-Deductibles (per person or per family ea yr))
-Co- insurance (Usually 80/20%)
-Stop Loss
-Miscellaneous Expense Benefits - x-rays, MRI, lab tests, etc.
◉ Coinsurance. Answer: - Once the deductible is met the insured and
the insurance company share in the expenses in what is called
coinsurance. It is written as 80/20, 70/30, etc. Also called
percentage participation requirement.
◉ Flat Deductible. Answer: -Portion of medical expenses that are
paid by the insured each year before benefits start. The higher the
deductible the lower the annual premium will be.
-If a medical incident occurs in the last three months of any plan
year and the annual deductible has met the yearly requirement then
the medical treatment for that incident only would be covered in the
new plan year. Thus a "carryover" into the next year of the paid
deductible has occurred.
QUESTION BANK RISK MANAGEMENT MODULE
SOLVED ITEMS AND RESPONSE KEY
◉ Major Medical Expense Policy. Answer: -A supplement (in
addition) to Basic Medical or as a stand-alone policy.
-individual or group policy.
-Take over when the Basic Policy runs out
◉ Hospital Expenses. Answer: -Pay for covered expenses incurred
during a hospital stay.
1. Daily hospital benefit - Room and Board
2. Miscellaneous expenses - Other Medical Expenses (X-Rays, MRI,
Prescriptions, Doctor Visits)
◉ Daily Hospital Benefit. Answer: -Cost of a hospital room, up to a
daily $ limit. The limit may be expressed either as a dollar amount,
e.g. $500 per day, or it may be expressed as the Usual, Customary
and Reasonable (UCR) and Charge
◉ Usual, Customary and Reasonable (UCR). Answer: Insurance
company will pay an amount for a given procedure based upon the
,average charge for that procedure in that specific geographic area.
The coverage is subject to a maximum amount or number of days.
◉ Benefit Schedule. Answer: -Specifically states what is covered in
the plan and for how much. The coverage is subject to a maximum
amount or number of days.
◉ Indemnity. Answer: Insured pays the bill and is reimbursed by the
insurance company up to a specified limit amount. Medical expense
policies that pay a fixed rate provide the insured with a stated
benefit amount for each day of hospital confinement.
◉ Reimbursement. Answer: Policyowners obtain medical treatment
from whatever source they want and submit their charges to their
insurer for reimbursement (actual amount).
◉ Service Based Contracts. Answer: -Pay doctors and hospitals
directly according to the # of days of coverage that is provided in the
contract for each event and are prepayment plans. Once a claim is
settled, the insured will receive an Explanation of Benefit (EOB),
which is a written confirmation that the claim was paid. Blue Cross
and Blue Shield, Health Service Corporations and Medicare coverage
are all provided on a Service Basis.
◉ Miscellaneous Expense Benefits. Answer: -Secondary benefits
(inside benefits) because they occur inside the hospital for charges
,related to the stay. X-rays, prescriptions, MRI's, anesthesia and lab
fees are usually separate fees incurred during a stay. Miscellaneous
Expense Benefits have separate limits, referred to as Inside Limits.
The are expressed usually as a multiple of the daily amount (UCR)
◉ Surgical Expense. Answer: A schedule of procedures lists the
amount allowable for each procedure. If a surgical procedure is not
found in the schedule, it will still be payable. The amount payable for
a procedure not listed is based on its relative value to a procedure of
similar difficulty. There are usually no deductibles.
◉ Surgical Schedule. Answer: Is simply a price list. Each procedure is
listed and a dollar amount assigned and if a procedure is not listed
in the schedule it is still paid.
◉ Relative Value. Answer: scientific method of paying different
benefits based on the region of the country an insured lives. It is
based on assigning a value to each procedure and using a conversion
factor. A schedule of assigned points for each procedure must be
included in the policy.
◉ Physicians Medical Expense. Answer: Pays for visits to the doctor
(office hospital) plus post operation care. There may be a per-visit
benefit, or the coverage is based on UCR.
-May or may not be a deductible . This policy is usually written as an
indemnity plan and has first dollar coverage (no deductible).
, -usually written as an indemnity plan and has first dollar coverage
◉ Major Medical Expense. Answer: -Cover "catastrophic" or huge
loss. A Catastrophic loss is defined as whenever Basic coverage runs
out and not a specific dollar amount.
-High Maximum Limits ($2,000,000)
-Deductibles (per person or per family ea yr))
-Co- insurance (Usually 80/20%)
-Stop Loss
-Miscellaneous Expense Benefits - x-rays, MRI, lab tests, etc.
◉ Coinsurance. Answer: - Once the deductible is met the insured and
the insurance company share in the expenses in what is called
coinsurance. It is written as 80/20, 70/30, etc. Also called
percentage participation requirement.
◉ Flat Deductible. Answer: -Portion of medical expenses that are
paid by the insured each year before benefits start. The higher the
deductible the lower the annual premium will be.
-If a medical incident occurs in the last three months of any plan
year and the annual deductible has met the yearly requirement then
the medical treatment for that incident only would be covered in the
new plan year. Thus a "carryover" into the next year of the paid
deductible has occurred.
