Questions And All Correct Answers
2025-2026 Updated.
Basic Medical Expense policies - Answer Provide coverage for Hospital, Surgical and Physicians
Medical Expense.
-Purchased as a individual or group policy.
-provide first dollar coverage (no deductibles).
-limited benefit periods and low coverage limits.
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
,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.
, 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.
Per Cause Deductible - Answer A separate deductible for each separate illness or accident.
Stop Loss - Answer Max amount the insured is required to pay out of pocket: After the stop
loss amount is reached by the insured, in a calendar year, the company will pay 100% of the
remaining covered expenses.
-calculated by adding both deductibles and coinsurance amounts.
Comprehensive major medical - Answer Major Medical and Basic Medical are written
together.
Corridor deductible - Answer Occurs in the middle of the hospital stay, and bridges the gap
from the basic to the major medical plan.
Pre-Existing Condition - Answer -To Prevent avoid adverse selection.
-A is a medical condition for which an insured sought medical attention, treatment, or advice for
symptoms or for which should have sought medical advice/treatment in the previous 6 months.
-For individual policies, the exclusion can not exceed 24 months, for group policies 12 months,
and for late enrollees in group plans, 18 months.
Exclusions found in Basic and Major Medical - Answer -Injuries due to war or military conflict
-Elective cosmetic surgery
-Routine Dental Care
-Eye Exams & Glasses Treatment in a Veterans Hospital or other Gov Facility
-Workers Compensation Accidents
-Claims Occurring Outside the U.S.
-Intentionally Self-Inflicted Injury
2025-2026 Updated.
Basic Medical Expense policies - Answer Provide coverage for Hospital, Surgical and Physicians
Medical Expense.
-Purchased as a individual or group policy.
-provide first dollar coverage (no deductibles).
-limited benefit periods and low coverage limits.
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
,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.
, 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.
Per Cause Deductible - Answer A separate deductible for each separate illness or accident.
Stop Loss - Answer Max amount the insured is required to pay out of pocket: After the stop
loss amount is reached by the insured, in a calendar year, the company will pay 100% of the
remaining covered expenses.
-calculated by adding both deductibles and coinsurance amounts.
Comprehensive major medical - Answer Major Medical and Basic Medical are written
together.
Corridor deductible - Answer Occurs in the middle of the hospital stay, and bridges the gap
from the basic to the major medical plan.
Pre-Existing Condition - Answer -To Prevent avoid adverse selection.
-A is a medical condition for which an insured sought medical attention, treatment, or advice for
symptoms or for which should have sought medical advice/treatment in the previous 6 months.
-For individual policies, the exclusion can not exceed 24 months, for group policies 12 months,
and for late enrollees in group plans, 18 months.
Exclusions found in Basic and Major Medical - Answer -Injuries due to war or military conflict
-Elective cosmetic surgery
-Routine Dental Care
-Eye Exams & Glasses Treatment in a Veterans Hospital or other Gov Facility
-Workers Compensation Accidents
-Claims Occurring Outside the U.S.
-Intentionally Self-Inflicted Injury
