Florida Life and Health Insurance License Practice Test

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What is the purpose of the coordination of benefits (COB) provision?

  1. To provide additional benefits

  2. To avoid duplication of benefit payments

  3. To ensure policy renewal

  4. To increase the premium

The correct answer is: To avoid duplication of benefit payments

The coordination of benefits (COB) provision is designed to prevent overpayment of medical benefits by ensuring that no more than 100% of the cost of a medical claim is paid by multiple insurance policies. Option A, providing additional benefits, is incorrect because the purpose of COB is to avoid duplication of payments, not to provide more benefits. Option C, ensuring policy renewal, is incorrect because COB does not have an impact on policy renewal. Option D, increasing the premium, is also incorrect because COB does not affect the cost of the policy. It is only designed to prevent overpayment.

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