Massachusetts Health & Accident Insurance Practice Exam

What is the definition of an insurance claim?

1. A formal request by a policyholder for compensation

2. A denial of coverage by the insurer

3. A type of insurance policy

4. A record of previous claims made

The correct answer is: A formal request by a policyholder for compensation

An insurance claim is defined as a formal request made by a policyholder to their insurance provider for compensation or coverage for a covered loss or event as stipulated in their policy. This request initiates the claims process, during which the insurer reviews the claim, assesses the validity of the amount claimed based on the policy terms, and decides whether to approve or deny the claim. This definition emphasizes the proactive nature of the policyholder seeking to access the benefits of their insurance coverage—demonstrating that claims are essential for fulfilling the purpose of insurance, which is to provide financial protection against unforeseen losses. The other choices relate to different aspects of insurance. A denial of coverage indicates the insurer’s refusal to pay a claim, which is the opposite of a claim. A type of insurance policy describes the coverage options available but does not encapsulate the concept of a claim itself. A record of previous claims involves the documentation of claims history but does not define what an insurance claim is.