He sustained multiple severe injuries but miraculously survived the accident He

He sustained multiple severe injuries but

This preview shows page 3 - 7 out of 10 pages.

He sustained multiple severe injuries but miraculously survived the accident. He was immediately rushed to the local hospital for surgery. Lee remained there for 60 days of treatment, after which he was allowed to go home for further recuperation. During his hospital stay, he incurred the following expenses: surgeon, $2,500; physician, $1,000; hospital bill for room and board, $250 per day; nursing services, $1,200; anesthetics, $600; wheelchair rental, $100; ambulance, $150; and drugs, $350. Lee has a major medical policy that has a $3,000 deductible clause, an 80 percent co-insurance clause, internal limits of $180 per day on hospital room and board, and $1,500 as a maximum surgical fee. The policy provides no disability income benefits. a. Explain the policy provisions as they relate to deductibles, co-insurance, and internal limits.
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QUESTIONS AND ANSWERS 4 Solution Deductibles are the cost that the guaranteed individual must compensation before protection covers the remainder of the costs. Co-Insurance is an arrangement that the guarantor will pay a segment of the abundance of the derivation. Inside breaking points are confines for specific costs which the protection would not pay. b. How much should Lee recover from the insurance company? How much must he pay out of his own pocket? Solution Insurance: $15,700, Out-of-Pocket: $5,200 c. Would any other policies have offered Lee additional protection? What about his inability to work while recovering from his injury? Solution Comprehensive major medical coverage, disability income coverage, and rehabilitation coverage d. Based on the information presented, how would you assess Lee’s health care insurance coverage? Explain. Solution It is coverage, but it is not the best. He should go for something that will allow him to use any services that are out-of-network.
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QUESTIONS AND ANSWERS 5 7. Calculating need for disability income insurance. Use Worksheet 9.2. Andre Arreola, a 35- year-old computer programmer, earns $76,000 a year. His monthly take-home pay is $3,800. His wife, Justine, works part-time at their children’s elementary school, but receives no benefits. Under state law, Andre employer contributes to a worker’s compensation insurance fund that would provide $2,250 per month for six months if he were disabled and unable to work. a. Use Worksheet 9.2 to calculate Andre’s disability insurance needs assuming that he won’t qualify for Medicare under his Social Security benefits. Solution DISABILITY BENEFIT NEEDS Name(s): Ben West 1. Estimate current monthly take-home pay $ 3,750 2. Estimate existing monthly disability benefits: a. Social security benefits $_____ b. Other government benefits ______ c. Company benefits _____ d. Group disability policy benefits 2,250 3. Total existing monthly disability benefits (2a + 2b + 2c + 2d) $ 2,250 4. Estimated monthly disability benefits needed ([1] – [3]) $ 1,500 b. Based on your answer in part a, what would you advise Andre about his need for additional disability income insurance? Discuss the type and size of disability income
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QUESTIONS AND ANSWERS 6 insurance coverage that he should consider, including possible provisions that he might want to include. What other factors should he take into account if he decides to purchase
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  • Fall '18
  • Lee Nickerson

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