Larry Has a Health Insurance Policy That Includes a Deductible

question 84

Multiple Choice

Larry has a health insurance policy that includes a deductible of $1,000 and a coinsurance of 20%. If his total bill is $7,000, how much will his insurance pay?

• A) $800
• B) $1,000
• C) $2,200
• D) $4,800
• E) $6,000

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Definitions:

Substituted Contract

An agreement that replaces an existing contract, typically with the consent of all parties involved, establishing new terms and obligations.

Novation

The act of replacing one party in a contract with another party, or altering the terms of a contract, with all parties' consent, resulting in a new agreement.

Material Breach

A significant violation of a contract that permits the other party to either compel performance, seek remedies for damages, or terminate the agreement.

Nonbreaching Party

The party in a contract who has not violated the agreement and may be entitled to legal remedies.