Illinois Health Insurance Practice Exam

The primary purpose of catastrophic health insurance is to offer coverage for worst-case scenarios while typically keeping premiums lower than those of comprehensive health plans. This type of insurance is designed to protect individuals from significant financial loss due to severe health issues or emergencies, such as major surgeries or hospitalization.

Catastrophic plans usually have high deductibles, meaning that the insured is responsible for paying out-of-pocket for most healthcare costs until that deductible is met. However, once the deductible is reached, the plan provides substantial coverage for very high medical expenses. These plans are particularly advantageous for young, healthy individuals or those who want to keep their premiums low while still having a safety net for major health crises.

While the other options reflect some aspects related to health insurance, they do not accurately capture the main goal of catastrophic health insurance. For instance, comprehensive coverage for everyday medical expenses would not describe catastrophic insurance, as these plans are not intended for routine healthcare. Additionally, while catastrophic plans do often cover preventive services, their primary design is not solely focused on preventive care. Also, eliminating all out-of-pocket costs is not a characteristic of catastrophic plans; instead, out-of-pocket expenses, especially before the deductible is met, can be significant. Thus, the nature of catastrophic health insurance