What characterizes a major medical expense policy?

A major medical expense policy is characterized by its structure that typically includes deductibles and coinsurance cost-sharing. These features are designed to share the financial burden between the insurer and the insured.

Deductibles are the amount that the insured must pay out-of-pocket before the insurance begins to cover costs. This is important in managing healthcare expenses as it encourages insured parties to seek necessary care while also limiting the insurance company's expenses. Coinsurance, on the other hand, refers to the percentage of costs that the insured must pay after the deductible has been met. This further helps to ensure that both parties are sharing the financial responsibilities related to medical care.

The presence of these cost-sharing mechanisms in major medical expense policies helps keep premiums more affordable while still providing comprehensive coverage for a wide range of medical expenses, including hospital stays, outpatient treatments, and preventive care.

The other options describe characteristics that do not align with the nature of major medical policies. For example, narrow coverage with lower benefits may apply to more limited plans, while limited coverage for specialized procedures does not accurately reflect the broad scope of coverage found in major medical policies. Lastly, lower premiums with no out-of-pocket costs typically refer to less comprehensive plans, which do not encompass the full features and protections offered