Question

Health insurance policies typically contain a provision stating that insureds and their insurer will share covered losses in an agreed proportion. Which provision does this refer to?

- A) Deductible
- B) Coinsurance
- C) Premium
- D) Copayment

Answer 1

The provision that details the shared coverage of losses between the insurer and insured in health insurance is known as coinsurance. It is a system where the insured pays a percentage of the costs after the deductible has been met.

Step-by-step explanation:

The provision in health insurance policies that states insureds and their insurer will share covered losses in an agreed proportion refers to coinsurance. Coinsurance requires the policyholder to pay a certain percentage of the costs after meeting their deductible and the insurance company will pay the rest.

For example, a policy may have an 80/20 coinsurance, where the insurance covers 80% of the cost after the deductible, and the policyholder pays the remaining 20%. This is in contrast to a deductible, which is the amount paid out-of-pocket before the insurance company starts to pay, or a copayment, which is a flat fee paid by the policyholder for a specific service or item.