Life License Qualification Program (LLQP) Practice Exam

What is the term for the first portion of a covered Major Medical insurance expense that the insured must pay?

1. Corridor deductible

2. Initial deductible

3. Coinsurance deductible

4. Stop-loss deductible

The correct answer is: Initial deductible

The term for the first portion of a covered Major Medical insurance expense that the insured must pay is known as the "initial deductible." This is the amount the insured is responsible for paying out-of-pocket before their health insurance plan begins to cover the remaining eligible expenses. Understanding the initial deductible is crucial for policyholders as it directly influences their financial responsibility when accessing healthcare services. Before the insurer will contribute to the costs of covered medical expenses, the insured needs to satisfy this initial threshold. The other terms mentioned refer to different concepts within health insurance. For instance, a corridor deductible might apply in situations involving a combination of major medical insurance and a base plan, where there is a threshold that must be met before benefits are coordinated. Coinsurance refers to the percentage of costs that the insured pays after the deductible is met, while a stop-loss deductible limits the total amount an insured has to pay. However, none of these describe the first portion of medical expenses that an insured must handle before insurance begins to pay, which is the defining aspect of the initial deductible.