AD Banker Comprehensive Practice Exam

Which provision allows medical expenses from the last 3 months of a calendar year to be used during the next calendar year to meet a deductible?

1. Carryover provision

2. Family deductible

3. Common accident provision

4. Stop loss provision

The correct answer is: Carryover provision

The carryover provision allows individuals to apply medical expenses incurred during the last three months of a calendar year towards meeting the deductible of the following calendar year. This provision is beneficial as it provides flexibility for policyholders, enabling them to potentially reduce the financial burden of their health care costs by streamlining how expenses are counted toward their deductible. In contrast, the family deductible refers to a group of individuals under a single insurance plan requiring a set amount to be met collectively before coverage kicks in. The common accident provision deals with how expenses related to an accident that affects multiple insured individuals are managed. Lastly, the stop loss provision refers to a feature where, after surpassing a certain amount of out-of-pocket expenses, the insurance company will cover 100% of further costs. Each of these elements serves distinct purposes in insurance policies, but it is the carryover provision that specifically addresses the scenario of using previous year expenses to manage the deductible effectively.