A policy provides hospital indemnity benefits on an other-than-expense-incurred basis. Which statement best distinguishes this benefit basis from the expense-incurred basis?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
ORC 3923.05 authorizes both optional provisions in Ohio individual A&H policies, and the outline treats them as paired opposites. On the other-than-expense-incurred (indemnity) basis, the insurer pays scheduled benefit amounts regardless of the actual expenses incurred, which means payments may duplicate other coverage. On the expense-incurred basis, the insurer reimburses only the covered expenses actually incurred, so recovery tracks the medical bills. The Ohio Department of Insurance expects producers to be able to distinguish these two benefit structures on the examination.
Why the other options are wrong
- B) This reverses the two bases: fixed sums without regard to charges describe the indemnity basis, while reimbursement of documented charges describes the expense-incurred basis.
- C) Neither basis is limited by accident versus sickness; both can cover either type of loss under ORC 3923.05.
- D) Payment order relative to other coverage is governed by other-insurance provisions, not by the choice between indemnity and expense-incurred benefit bases.
Memory hook
Indemnity = flat sum, duplication allowed; expense-incurred = pay the real bills.