South Carolina Insurance Practice Exam

Which of the following is NOT a characteristic of a major medical expense policy?

1. Deductibles

2. Elimination periods

3. Co-insurance

4. Lifetime benefits

The correct answer is: Elimination periods

A major medical expense policy is designed to cover a wide range of healthcare costs and typically includes various features that help manage expenses. Among these characteristics, deductibles, co-insurance, and lifetime benefits are commonly included. Deductibles are an integral part of most major medical policies, requiring the insured to pay a certain amount out-of-pocket before benefits begin. This feature helps to keep premiums lower and encourages responsible use of medical services. Co-insurance is another key element, whereby once the deductible has been met, the policyholder and the insurance company share the costs of covered services, usually expressed as a percentage. This structure aims to promote shared responsibility and financial participation in healthcare decisions. Lifetime benefits refer to the maximum amount that an insurer will pay for covered services over the lifetime of the policyholder. This is an important consideration in major medical policies, ensuring that policyholders have access to extensive coverage over time. Elimination periods, however, are not a characteristic of major medical expense policies. Instead, elimination periods are associated with disability insurance policies, where a certain time frame must pass before benefits are paid following an injury or illness. This term does not apply to major medical expense policies, which focus instead on immediate healthcare costs and expenses. Thus, identifying elimination