Ch. 15 HW Answers

Ch. 15 HW Answers - B In this situation the maximum...

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Chapters 15 AQs Chapter 15: 1. A. The insurer would be responsible for the payment of $24,400 which reflects 80% of the covered expenses minus the $250 deductible. B. Brittany would have to pay the deductible of $250 as well as 20% of the covered expenses under the coinsurance which is $6100. Brittany’s total payment would be $6350. C. Yes, if Brittany’s policy contained a stop-loss limit of $3,000, she would only be responsible for the payment of up to $3,000. The stop-loss limit reduces the financial burden on Brittany. She would have to also pay the deductible as well which makes her responsible for $3250 in total. 2. A. Janet would receive $12,000 from her insurer which is 80% of the covered expenses minus the $500 deductible. 15,500 – 500 = 15,000 * .8 = 12,000
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Unformatted text preview: B. In this situation, the maximum deductible would only be 500$ because of the presence of the common accident provision. Therefore, 80% of the remaining expenses, $2800, would be paid by the insurer. 4,000 – 500(1) = 3500 * 0.8 = $2,800 4. A. Jeff would collect $2,000 monthly after the elimination period of 30 days. Therefore he will be paid for 3 months for a total of $6,000. $2000/month after 30 day elimination period—which is the period of time that must pass before benefits begin to be paid B. Jeff would only be earning 6.6% of his initial income, which would probably be considered a 100% loss by the insurer and he should be eligible to receive the full monthly benefit of $2,000....
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This homework help was uploaded on 04/08/2008 for the course FIN 381 taught by Professor Knowles during the Spring '08 term at Bryant.

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