Which contract reimburses expenses incurred?

• A. Indemnity
• B. Valued
• C. Reimbursement
• D. Warranty

Answer: (C)

Reimbursement contracts are designed to repay the insured for the actual medical expenses they incur, up to the policy’s limits. With this type of plan, you can pay the provider first and then submit receipts or a claim to get back the amount that your plan covers for covered services. The key idea is that the payment matches the expenses incurred, not a fixed amount.

In contrast, a valued contract pays a fixed dollar amount regardless of the actual charges, so the payout isn’t tied to what was spent. A warranty isn’t a health insurance payment arrangement at all. Indemnity is a broad term about compensation for losses, but the specific mechanism described here—reimbursing actual expenses incurred—fits a reimbursement contract most directly.