Health Insurance Mastery Practice Exam

Which type of policy pays a fixed hospital benefit directly to the insured regardless of actual expenses incurred?

1. Major medical policy

2. Health savings account

3. Hospital indemnity policy

4. Comprehensive health insurance policy

The correct answer is: Hospital indemnity policy

A hospital indemnity policy is designed specifically to provide a predetermined, fixed benefit amount directly to the insured for each day they are hospitalized, regardless of the actual expenses incurred. This type of policy helps cover out-of-pocket costs associated with a hospital stay, such as copayments, deductibles, or other ancillary expenses. The benefit of this type of policy lies in its predictable payout, which can ease the financial burden on insured individuals during a hospital stay without requiring them to provide proof of expenses. This makes it different from other types of health insurance policies that typically reimburse based on incurred costs or provide comprehensive coverage. In contrast, major medical policies and comprehensive health insurance policies generally reimburse based on actual medical costs and may have complex rules regarding deductibles and copayments. A health savings account does not provide direct benefits for hospital stays; instead, it offers tax advantages for saving and paying for qualified medical expenses.