General Insurance✓ Verified · outline & fact-checked · Sep 2026Difficulty 1/5
In health insurance, the 'loss' that the policy indemnifies is best illustrated by which of the following?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
In insurance, a loss is the financial consequence of an event — the dollar measure of damage the insured suffers. A health policy indemnifies the insured against the monetary cost of covered care, so the hospital bill is the loss. The broken leg, the surgery, and the pain are physical and medical aspects of the event, but the insurance contract pays dollars for the financial harm; without a financial loss, there is nothing to indemnify.
Why the other options are wrong
- B) The broken leg is the injury (the result of the peril), not the financial loss; the loss is the cost of treating it.
- C) The surgery is a medical procedure, not the loss itself; the loss is the expense the procedure creates.
- D) Pain and inconvenience are real but are not a financial loss that a medical expense policy measures in dollars.
Memory hook
Insurance counts dollars, not injuries. The bill is the loss; the break is the event.