Life License Qualification Program (LLQP) Practice Exam

Under a basic Hospital/Surgical Expense policy, what primarily determines the claim that an insured can make?

1. Physician's actual charges

2. Negotiated payment between physician and patient

3. Schedule of benefits from the hospital

4. Terms of the policy

The correct answer is: Terms of the policy

The primary determinant of the claim that an insured can make under a basic Hospital/Surgical Expense policy is the terms of the policy itself. This includes specific provisions that outline what is covered, any limitations on coverage, the deductibles, co-insurance, and maximum benefit amounts. Each policy will have its own rules defining coverage levels for various types of medical services, which ultimately dictate how much the insurer will reimburse the insured for their medical expenses. While physician's actual charges, negotiated payments, and the hospital's schedule of benefits all play a role in the overall healthcare billing process, they are subject to the parameters laid out in the policy. If the policy specifies that it will cover certain types of expenses but not others, or if there are limits on how much will be paid per service, these conditions will shape the final claim outcome. Hence, understanding the terms of the policy is crucial for insured individuals to effectively navigate their claims.