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### Chapter 2: Types of Health Policies - Chapter Quiz

Question 2 of 15:

Insurers usually do not reimburse claimants for 100% of income lost due to disability. What is the reason for insurer limitations on coverage amounts?

A. To make sure there is enough money to reimburse all the claims

B. To provide an incentive for the insured to return to work

C. To reimburse only for the premiums paid into the policy

D. To pay no more than 50% of the pre-disability income

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Answer :

GinnyAnswer

Final answer:

Insurance companies limit reimbursement amounts for disability claims to reduce moral hazard and create incentives for the insured to return to work.


Explanation:

Insurance companies limit reimbursement amounts for disability claims to reduce moral hazard and ensure individuals do not exploit the insurance. By not reimbursing 100% of income lost, insurers create an incentive for the insured to return to work and share the costs of the claim.


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