Illinois Health Insurance Practice Exam

What elements are typically accepted questions on health insurance applications to base premiums?

1. Gender and ethnicity

2. Past medical history and age

3. Tobacco use and family composition

4. Geographic region of residency and occupation

The correct answer is: Tobacco use and family composition

The correct elements that are typically accepted on health insurance applications to determine premiums include past medical history and age. These factors are critical because they provide insight into the risk profile of the applicant. Insurance companies use past medical history to evaluate the likelihood of future health issues based on an individual's medical background, while age is a significant factor as it correlates with the probability of needing medical care—older individuals generally have higher healthcare costs. In health insurance underwriting, factors like tobacco use can influence premiums but may not always be consistently categorized as primary elements. Family composition can affect coverage but is less impactful on individual premium calculations compared to medical history and age. Hence, focusing on past medical history and age gives a clearer understanding of the applicant's potential health risks and associated costs, which are crucial for setting premiums accurately.