Nick and Sheila Preston are married and have purchased a comprehensive major med

Question

Nick and Sheila Preston are married and have purchased a comprehensive major medical policy which covers them and their two sons, Wally and Brent. The policy has a $500 calendar year family deductible, a $2,500 stop-loss provision, and an 80% coinsurance clause. The following losses occur: On January 1, 2004 Sheila was treated for an infection at a cost of $200, on July 1, 2004 Wally was treated for an injury suffered while waterskiing at a cost of $10,000, on December 5, 2004 Nick underwent eye surgery at a cost of $5,000, and on January 5, 2005 Brent was treated for a broken leg at a cost of $2,000. How much will the insurer pay for each of these losses?

Explanation / Answer

insurer payment is as follows January 1, 2004 nil July 1,2004 $7760 December 5, 2004 $4940 Total amount for 2004= 12700 (The family pays 1940+500+60= $2500) January 5, 2005 insurer will pay $1200

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