In the Mary scenario, with SL = 200k and agg spec = 50k, what is the reimbursement amount?

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Multiple Choice

In the Mary scenario, with SL = 200k and agg spec = 50k, what is the reimbursement amount?

In this scenario, reimbursement is determined by applying a deductible-like amount (the aggregate spec) to the total limit (the SL), then reimbursing a portion of what’s left. First, subtract the aggregate spec from the SL to get the eligible amount: 200,000 − 50,000 = 150,000. Then apply the reimbursement rate to that eligible amount. Here, 80% of 150,000 equals 120,000. So the reimbursement amount is 120,000. If you test other extremes, no deductible would give 0.80 × 200,000 = 160,000, and a deductible that wipes out the SL would give zero.

In this scenario, reimbursement is determined by applying a deductible-like amount (the aggregate spec) to the total limit (the SL), then reimbursing a portion of what’s left. First, subtract the aggregate spec from the SL to get the eligible amount: 200,000 − 50,000 = 150,000. Then apply the reimbursement rate to that eligible amount. Here, 80% of 150,000 equals 120,000. So the reimbursement amount is 120,000. If you test other extremes, no deductible would give 0.80 × 200,000 = 160,000, and a deductible that wipes out the SL would give zero.

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