New York Insurance Exam Practice Question
What is the purpose of a coordination of benefits provision in health insurance?
Correct Answer: B
Rationale: A coordination of benefits provision is essential in health insurance as it ensures that when a policyholder has multiple insurance plans, the total benefits paid do not exceed the actual costs incurred. This prevents duplicate coverage payments, ensuring that insurers only pay their share of the costs.
Option A is incorrect; the provision does not aim to increase premiums. Option C is misleading; while it may affect deductibles, the primary purpose is not to waive them. Option D is also incorrect, as coordination of benefits does not specifically limit out-of-network coverage but rather manages payment responsibilities between multiple plans.
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