Life License Qualification Program (LLQP) Practice Exam

What do Major Medical policies typically include?

1. 100% coverage of all expenses

2. No deductible or coinsurance

3. Only in-network facilities

4. A deductible and coinsurance

The correct answer is: A deductible and coinsurance

Major Medical policies are designed to provide broad coverage for significant healthcare costs. They typically include a deductible and coinsurance, which are features that help manage healthcare expenses for both the insurer and the insured. The deductible is the amount that the insured must pay out-of-pocket before the insurance begins to cover costs, while coinsurance refers to the percentage of costs that the insured pays after the deductible has been met. This structure is essential as it encourages individuals to share in the cost of their healthcare, which can help keep premiums more affordable. By requiring the insured to pay a portion of their medical expenses, insurers can mitigate the risk of over-utilization of services. The other options describe characteristics that are generally not associated with Major Medical policies. For instance, comprehensive coverage that includes 100% payment for all expenses or having no deductible or coinsurance would lead to significantly higher premiums and could encourage overuse of medical services. Similarly, limiting coverage to only in-network facilities would contradict the broader access typically offered by major medical plans, which often allow for out-of-network services as well.