Question

Under a provision known as time payment of claims in a health insurance policy, after receiving proof of loss, all benefits other than those that are paid in periodic installments are supposed to be paid?

A) At the end of the month.
B) Within 30 days.
C) Immediately.
D) Within 60 days.

Answer 1

All benefits aside from periodic installments in a health insurance policy must be paid out immediately after proof of loss is received. Insurance policies also include deductibles, copayments, or coinsurance to share the cost burden with the policyholder.

Step-by-step explanation:

Under a provision known as time payment of claims in a health insurance policy, after receiving proof of loss, all benefits other than those that are paid in periodic installments are supposed to be paid immediately. This ensures timely financial support to the policyholder for covered losses. This is an important aspect of insurance policies which also tend to include deductibles, copayments, or coinsurance.

For example, insurance pays out when medical expenses are incurred, the policyholder dies, a car is damaged, stolen, or causes damage to others, or a dwelling is damaged or burglarized. Coinsurance comes into play when an insurance policyholder pays a percentage of a loss, and the insurance company pays the remaining cost, which helps reduce moral hazard by requiring the insured party to share in the financial impact of their claims.