Florida 2-15 Life, Health and Variable Annuity AgentGeneral Knowledge of Health InsuranceHard
A client has a comprehensive major medical policy with an 'All-Cause Deductible.' What does this characteristic imply about how the deductible applies to their medical expenses?
- AA separate deductible must be met for each different type of medical service (e.g., hospital, physician, prescription).
- BThe deductible is waived if the medical expenses result from an accident.
- CThe deductible only applies to catastrophic events, not routine medical care.
- DThe deductible applies once per policy period for any combination of covered medical expenses.
Show answer & explanationAnswer & explanation
Correct answer: D. The deductible applies once per policy period for any combination of covered medical expenses.
An 'All-Cause Deductible,' also known as a 'calendar year deductible,' means that the insured pays a single deductible amount for all covered medical expenses incurred within a policy period (usually a calendar year), regardless of the cause or type of service, before the insurer begins to pay benefits.
Why the other options are wrong
- A. This describes a 'per-cause' or 'per-service' deductible, which is less common in comprehensive plans.
- B. Most deductibles apply regardless of whether the expenses are from an accident or illness, unless a specific rider or limited policy exists.
- C. Deductibles apply to all covered expenses, not just catastrophic ones. Catastrophic plans might have higher deductibles, but the 'all-cause' concept refers to how it's applied.
All-Cause Deductible
A single deductible amount that applies to all covered medical expenses incurred by the insured during a policy period, regardless of the number or type of illnesses or injuries.
- Also known as a 'calendar year deductible'.
- Must be satisfied once per policy period.
- Simplifies deductible application for comprehensive plans.
Memory trick: All-Cause: One deductible to rule all your medical bills for the year.