In a limited accident and health policy, losses are covered as

• A. All losses with no limits
• B. Losses that occur only in limited occupations
• C. Losses that occur only in limited age groups
• D. Limited perils and amounts

Answer: (D)

The idea being tested is that a limited accident and health policy pays benefits only for defined events (perils) and only up to specified dollar amounts. In these policies, benefits are usually fixed and paid regardless of actual expenses, and they apply only to the listed perils. If a loss comes from a peril not named in the policy, or if the cost exceeds the stated limit, the policy doesn’t cover the excess. That’s why this type of coverage is described as limited to particular perils and limited in the amount paid.