79. Many major medical policies include a provision whereby when expenses reach a certain dollar amount, the insured no longer shares in the cost of expenses; the insurer pays 100% of remaining covered charges. This is referred to as the
Answer: D
Stop-loss limit
The stop-loss limit refers to the provision in many major medical policies where, once the insured's expenses reach a specified dollar amount, they are no longer responsible for sharing in the cost of expenses, and the insurer pays 100% of the remaining covered charges.
A) maximum benefit.
The maximum benefit refers to the highest amount that an insurer will pay for a particular service or for a policy as a whole. This option is incorrect as it does not describe the mechanism of expenses being fully covered after reaching a certain threshold.
B) benefit restoration.
Benefit restoration generally pertains to the reinstatement of benefits that have been exhausted or used up. This option is incorrect because it does not correlate with the concept of an expense limit after which the insurer covers 100% of costs.
C) coinsurance percentage.
Coinsurance percentage is the portion of the costs that the insured is responsible for paying after the deductible has been met. This option is incorrect, as it does not apply to the situation where the insurer takes over payment after a certain expense limit.
D) stop-loss limit.
The stop-loss limit is accurately defined by the scenario presented in the question. It signifies the point at which the insured's financial responsibility ends after reaching a predetermined dollar amount, and all further covered expenses are paid fully by the insurer.
Conclusion
The stop-loss limit is the correct answer as it specifically addresses the situation where the insured ceases to incur costs after reaching a set expense threshold, with the insurer covering all subsequent charges. In contrast, the other options do not correctly describe this provision, highlighting their inapplicability to the context of the question.