Question

In a hospital indemnity plan, what does an elimination period refer to?

1) The number of days an insured must wait before becoming eligible to receive benefits for each hospital stay
2) The number of days an insured must wait before becoming eligible to receive benefits for each doctor visit
3) The number of days an insured must wait before becoming eligible to receive benefits for each prescription
4) The number of days an insured must wait before becoming eligible to receive benefits for each medical test

Answer 1

In a hospital indemnity plan, an elimination period refers to the number of days an insured must wait before becoming eligible to receive benefits for each hospital stay.

Step-by-step explanation:

In a hospital indemnity plan, an elimination period refers to the number of days an insured must wait before becoming eligible to receive benefits for each hospital stay.

For example, let's say an insurance policy has an elimination period of 3 days. If the insured is hospitalized, they will have to wait for 3 days before their insurance coverage kicks in and starts providing benefits.

This waiting period is designed to prevent people from using the insurance for minor issues that can be resolved without a hospital visit, reducing the risk and expenses for both the insured and the insurance company.