What determines the claim M is eligible for under a basic Hospital/Surgical Expense policy?

• A. The physician's charges
• B. The hospital's network status
• C. The terms of the policy
• D. The insured's income

Answer: (C)

In a basic Hospital/Surgical Expense policy, what a claim is eligible for is defined by the policy’s terms. The contract lays out what is covered, the benefit amounts, limits, deductibles, and any conditions that must be met for payment. The insurer pays according to that schedule, not by the actual physician charges, the hospital’s network status, or the insured’s income. For example, if the policy provides a set per-day hospital benefit and a separate surgical benefit, eligibility and the payout are determined by whether the service is covered and within those limits, plus any applicable deductibles or coinsurance.