In the individual insurance market, limited-benefit policies such as accident-only and specified disease plans are primarily intended to:
Select an option to reveal the answer and the full 3-part explanation — free, no signup.
Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Limited-benefit policies are designed as supplements: they pay a fixed, contract-defined amount for a specific event such as a trip, a cancer diagnosis, or an accidental injury, and are meant to be layered on top of comprehensive medical coverage. They are not a substitute for major medical, which pays actual covered expenses up to high limits. Because their benefit triggers are narrow and their ceilings low, they are sold at low premiums, and the agent must disclose their limited scope clearly so applicants do not mistake them for full health coverage.
Why the other options are wrong
- B) Replacing major medical is precisely what limited policies cannot do; their benefit ceilings are far too low to absorb a serious hospital bill, so their role is supplemental.
- C) Limited-benefit policies generally do not qualify as minimum essential coverage (MEC) for ACA purposes, so they cannot satisfy the coverage mandate.
- D) Long-term care services are provided by LTC insurance policies, not by accident-only or specified disease products, which pay event-triggered fixed amounts.
Memory hook
Limited = a side dish of coverage, not the main meal. It fills gaps, never replaces the policy that pays real bills.