Health · Chapter 13 · Classes of Health Insurance
Limited Policy
Definition
Covers only a few or only one type of loss — by specific peril (accident-only, cancer), benefit amount (basic medical expense), specific procedures/needs (basic surgical, prescription drugs), or particular circumstances (hospital indemnity, blanket insurance). If a cause or loss is not listed on the policy, it is NOT covered. A limited benefit policy is one that pays for: (1) expenses from accidental injury only; (2) fixed dollar amounts for specified diseases or impairments; (3) specified limited services; or (4) indemnity benefits of a fixed dollar amount per day — excluding long-term care policies. Many states require these policies to carry a "Notice to Insured" stating the contract is a limited benefit policy (Florida implements the disclosure through the outline of coverage).
In plain English
A checklist policy: it pays only for what's on the list. Limited policies exist to fill specific coverage gaps.
Exam tip
⚠️ The required disclosure is the Notice to Insured — a favorite "what must a limited policy include?" answer.
Easy to confuse with
These are what this term gets tested against — if you can't tell them apart cold, drill the contrast.
Related terms