Richard has individual health insurance with a $2,500 calendar year deductible,

Question

Richard has individual health insurance with a $2,500 calendar year deductible, 20% coinsurance and 53,000 stop loss. He has outpatient surgery, and the total surgeon's bill is $16,000. Richard 60. has not incurred any other medical expenses during the current calendar year. Including the deductible, what amount must Richard pay out of pocket for the surgeon's bill? (a) $3,000 (b $5,200 (c) $5,500 (d) $5,700 61. The life insurance interest adjusted cost indexes includes all of the following factors except: (a) 5% interest rate (b) annuity due factor to convert from aggregate to annual cost (c) projected dividends and/ or cash values (d) guaranteed future dividends (e) Uniform time periods such as 10 years, 20 years and age 65 62. Which Life Insurance Cost Index includes the cash value? (a) Net payment cost (b) Surrender cost (c) Adjusted premium cost (d) Net premium cost

Explanation / Answer

60. Ans is a

Calculations: Richard has to pay the Deductible amount which is $2,500

Remaining Expenses = $16,000 - $2,500

=$13,500

Co-insurance = 20% of 13,500

=$2,700

Total out of pocket = Deductible + Co-insurance

=2,500 + 2,700

=$5,200

But Richard has a stop loss of $3,000 he needs to pay maximun $3,000 out of his pocket and rest of the expenses would be borne by the insurance company.

61. Ans is c

No one knows about future. So projected dividends or cash values may be not true. Datas for calculating dividend or cash projections we rely on insurance company. No company can see the future, so data they are providing may not be accurate because even insurance company cant predit how long one would keep the policy or they may know the current interest rate but they do not know about the future.

62. Ans is b

Surrender cost index establises the gurantee cash surrender value of a life insurance policy. Life insurance policies help the individual with a guranteed payment to someone if the policy owner dies during the policy period. Life insurance company charge periodic payment for this service. some policies even offer living benefits like dividends and cash value which the policy holder can access during they are alive. A surrender cost index helps the policy holder to compare policies to determine which provides the best surrender value when the buyer is more interested in cash value than death benefits.

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