Question

22. What does “full tort” or no limitation on lawsuit mean for a New Jersey motorist who is purchasing automobile insurance?

23. What are the differences between an HMO and a PPO in providing health care?

24. How much will the patient pay for an out of network PPO visit in which the doctor bills $400 and the insurance company determines reasonable and customary fees are $300. The patient has a 20% coinsurance and a $200 deductible? The doctor is billing up to charge.

25. How much will the benefit be for a $150 out of network physician visit with an HMO policy that has a $20 co-pay?

26. What are the advantages of saving with cash value whole life insurance?

Answer 1

Solution =

22.

The tort system says that if two parties are involved in a collision, the driver who is at fault is responsible for paying the victim's medical bills, property damage costs, additional lost wages, damages, and even "pain and suffering" resulting from the accident.

Full tort coverage will allow New Jersey motorist to sue for pain and suffering after a not-at-fault accident, regardless of the severity. The driver does not need to prove pain and suffering passed a certain threshold. Full tort insurance allows drivers to file a lawsuit claiming inconvenience and ongoing pain.

23.

HMO - With an HMO plan, you pick one primary care physician. All your health care services go through that doctor. That means that you need a referral before you can see any other health care professional, except in an emergency. Visits to health care professionals outside of your network typically aren’t covered by your insurance.

PPO- PPO plans give you flexibility. You don’t need a primary care physician. You can go to any health care professional you want without a referral - inside or outside of your network. Staying inside your network means smaller copays and full coverage.

So, If you prefer to have your care coordinated through a single doctor, an HMO plan might be right for you. And if you want greater flexibility or if you see a lot of specialists, a PPO plan might be what you’re looking for.

24.

Doctors bill -$400 , 20% coinsurance & $200 as deductible

The insurance company determines reasonable and customary fees are $300.

So amount is = 400 -300 = $100, Total after adding deductible = 100+ 200 = $300

Now that after meeting deductible, plan pays 80% of the remaining allowed amount. 20% of 100 = $20

Total bill = $100 + $200 + $20 = $320

25.

There will be no benefit for a $150 out of network physician visit with an HMO policy that has a $20 co-pay.

Total payment to be done = $150

26.

Major advantages-

• Permanent coverage – Although whole life insurance costs more than term life per dollar of death benefit, a whole life insurance policy covers the policyholder over the span of an entire life, not just for a fixed term of years. Whole life insurance never expires. As long as the premiums are paid and the policy is in force, the policyholder’s beneficiaries will receive financial protection if the policyholder dies.
• Guaranteed death benefit – As long as premiums are paid as agreed to by the policyholder, a whole life insurance policy’s death benefit will stay at a guaranteed level.
• Cash value component that grows over time – Instead of just paying premiums each month, a whole life policy creates a kind of “savings account” for the policyholder in addition to the insurance coverage.
• Good for later in life – Not everyone who needs life insurance is young and in prime health; people who need life insurance later in life might be wise to consider whole life insurance.
• Tax advantages – The cash value of a whole life insurance policy is a tax-deferred savings vehicle.
• Helpful in estate planning and business succession – Some high net worth individuals or family owned small businesses can use whole life insurance policies as a tax and final expenses planning tool.
• Additional savings options –Whole life insurance can be a good place for people to put some money to grow tax-deferred.