Question 69

A coinsurance provision may be included in Major Medical policies.

Coinsurance provisions are typically part of Major Medical insurance policies, which are designed to cover a significant portion of medical expenses after the insured meets a deductible. This provision requires the insured to share a percentage of costs with the insurer, thus reducing overall insurance premiums.

A) Accidental Death and Dismemberment (AD&D)

Accidental Death and Dismemberment policies primarily provide benefits in the event of death or severe injury due to accidents. These policies do not include coinsurance provisions as they offer fixed benefits rather than covering ongoing medical expenses, making this option incorrect.

B) Major Medical

Major Medical policies often incorporate coinsurance provisions as they are intended to cover a broad range of healthcare expenses. This means that after the insured meets their deductible, they will pay a certain percentage of the costs, which is the defining characteristic of coinsurance, confirming this option as correct.

C) Hospital Indemnity

Hospital Indemnity insurance provides a fixed daily benefit for hospital stays but does not typically involve coinsurance. Instead, it pays a predetermined amount regardless of the actual costs incurred, therefore making this option incorrect.

D) Disability Income

Disability Income policies provide a set monthly benefit to replace lost income due to disability but do not include coinsurance provisions. These policies focus on income replacement rather than covering medical expenses, rendering this option incorrect.

Conclusion

The correct answer is Major Medical because it is the only type of policy among the options that typically includes a coinsurance provision, requiring the insured to share the costs of medical services. All other options focus on specific benefits or fixed payments, which do not align with the concept of coinsurance.