Tennessee Insurance Practice Exam 2026 – All-in-One Resource for Exam Success!

Question: 1 / 400

What is the objective of a Stop Loss provision in Major Medical Expense policies?

To provide coverage for routine check-ups

To limit an insured's out-of-pocket medical expenses

The objective of a Stop Loss provision in Major Medical Expense policies is to limit an insured's out-of-pocket medical expenses. This provision sets a maximum threshold for what the insured has to pay in a given plan year. Once this threshold is met, the insurance company covers all further medical expenses for that year.

This feature is crucial for protecting individuals from substantial financial burdens associated with high medical costs that can arise from serious illnesses or lengthy treatments. The underlying principle is to ensure that no matter how high the expenses become, the insured will not bear the full risk beyond a specific amount, thereby providing financial security and peace of mind.

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To cover all medical expenses without limits

To reduce premiums for the insured

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