Texas General Lines — Life, Accident, Health and HMOHealth InsuranceEasy
A client is covered by a health insurance policy that states the insurer will not pay for any medical expenses incurred due to injuries sustained while participating in a professional athletic event. This is an example of a(n):
- AExclusion
- BSubrogation Clause
- CFree-Look Provision
- DConditional Receipt
Show answer & explanationAnswer & explanation
Correct answer: A. Exclusion
An exclusion is a provision in an insurance policy that specifies situations, conditions, or causes of loss for which the insurer will not provide benefits.
Why the other options are wrong
- B. A subrogation clause allows the insurer to pursue a third party responsible for a loss paid by the insurer.
- C. A free-look provision allows the policyowner to review the policy and return it for a full refund within a specified period.
- D. A conditional receipt provides temporary coverage until the policy is issued or declined.
Exclusion (Health Insurance)
A policy provision that specifies certain conditions, causes, or circumstances for which the policy will not provide coverage.
- Limits the scope of coverage
- Common exclusions: war, self-inflicted injuries, elective cosmetic surgery, hazardous occupations/hobbies
- Clearly stated in the policy contract
Memory trick: Exclusions 'Exclude' what the policy 'Won't' cover.