A policyholder files a claim after being hospitalized for pneumonia. How does an accident and sickness policy typically treat a sickness claim differently from an accident claim?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Accident and sickness policies separate coverage by cause: accident coverage responds to bodily injury caused by an accident, while sickness coverage responds to illness as defined in the contract. Sickness benefits are commonly subject to a probationary period, often the first 30 days, during which no sickness claims are payable, because illness is more susceptible to anti-selection than sudden accidental injury. Accidental injury, by contrast, is typically covered as of the effective date without a probationary window. The distinction is a core element of the accident vs sickness terminology tested under the general concepts of medical and disability insurance (AH-II.1). Knowing which clause applies determines how the claim is classified and what waiting restrictions apply.
Why the other options are wrong
- B) Sickness benefits are never paid without regard to policy limits, because every policy carries stated maximums, deductibles, and coinsurance that apply to both accident and sickness claims. Elimination periods are a disability income feature that delays benefit onset, not a restriction imposed on accident claims under a medical expense policy.
- C) Accident policies do not require the injury to arise from a peril specifically named in the contract; the standard is simply that the injury was caused by an accident. Sickness claims do require proof of the illness through diagnosis and medical evidence, so the claim that sickness never requires proof is incorrect.
- D) This statement reverses the definitions. Sickness is an illness, not an injury caused by an accident, so a pneumonia claim falls under the sickness portion of the policy. Coverage is triggered by the illness itself, and it is not conditioned on the illness resulting from an accident.
Memory hook
Accident = sudden injury; sickness = illness. Probationary periods usually guard the sickness side.