Question

An insured purchases a family Hospital/Surgical Expense policy on May 1, 2013. The policy is issued with a $250 deductible and a limit of three deductibles per calendar year. The insured and the insured's spouse incur medical expenses in excess of the deductible on July 15 and September 1 of the same year. Their two children incur medical expenses in excess of the deductible on January 15 and April 1 of the following year. The insured's MAXIMUM out-of-pocket expenses for 2013 would be which of the following amounts?

A) $250
B) $500
C) $750
D) $1,000

Answer 1

The insured's maximum out-of-pocket expenses for 2013 would be $500.

Step-by-step explanation:

The insured's maximum out-of-pocket expenses for 2013 would be $500.

Step-by-step explanation:

1. The policy has a $250 deductible.
2. The insured and spouse incurred expenses in excess of the deductible on July 15 and September 1.
3. Their two children incurred expenses in excess of the deductible on January 15 and April 1 of the following year.
4. Since the policy has a limit of three deductibles per calendar year, the insured will pay the deductible for the first three qualifying expenses.
5. The insured and spouse's July 15 and September 1 expenses are considered the first two deductible expenses.
6. Therefore, their maximum out-of-pocket expenses for 2013 would be $250 x 2 = $500.