Limited coverage is designed to pay for which type of risks or perils?

• A. Is designed to pay only for specific perils
• B. Pays for all risks
• C. Covers health care expenses
• D. Provides comprehensive disability benefits

Answer: (A)

Limited coverage focuses benefits on a narrow set of risks. In these policies, the insurer predefines specific perils or events that are covered and pays only for those, not for every possible health or disability claim. For example, a limited policy might cover only accidental injuries or only hospital confinement for certain conditions, rather than all health care expenses or all types of claims. Because the coverage is restricted to those named perils, it doesn’t provide broad protection.

This is why it isn’t designed to pay for all risks—that would be comprehensive coverage. It also doesn’t guarantee payment for all medical expenses or offer broad disability benefits—those would come from more expansive or different types of policies.