With a stop-loss limit of 5,000, a deductible of 500, and an 80/20 coinsurance on 25,000 of losses, the insured pays

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Study for the Louisiana Series 103 – Life, Health, and Accident or Sickness Insurance Exam. Familiarize yourself with key concepts through engaging questions and explanations. Prepare effectively for your exam!

Multiple Choice

With a stop-loss limit of 5,000, a deductible of 500, and an 80/20 coinsurance on 25,000 of losses, the insured pays

The stop-loss limit caps the insured’s total out-of-pocket costs for a policy period, even when coinsurance would otherwise exceed that cap. Here’s how it plays out with the numbers:

Total losses: 25,000.

Apply the deductible: the insured pays 500, leaving 24,500.

With 80/20 coinsurance on the remaining amount, the insured would owe 20% of 24,500, which is 4,900, and the insurer would pay 19,600.

Total the insured would pay without the cap: 500 + 4,900 = 5,400.

But the stop-loss limit is 5,000, so the insured’s actual out-of-pocket is capped at 5,000. The insurer covers the remaining 20,000 of the 25,000 losses.

Thus, the insured pays 5,000.

With a stop-loss limit of 5,000, a deductible of 500, and an 80/20 coinsurance on 25,000 of losses, the insured pays

Study for the Louisiana Series 103 – Life, Health, and Accident or Sickness Insurance Exam. Familiarize yourself with key concepts through engaging questions and explanations. Prepare effectively for your exam!

With a stop-loss limit of 5,000, a deductible of 500, and an 80/20 coinsurance on 25,000 of losses, the insured pays

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