What percentage of premiums collected must insurers pay out in benefits for individual Medicare Supplement policies?

• A. 50%
• B. 65%
• C. 75%
• D. 85%

Answer: (B)

For individual Medicare Supplement policies, insurers are required to pay out a minimum of 65% of the premiums collected in benefits. This percentage is designed to ensure that a substantial portion of the premiums goes toward providing actual coverage and benefits to policyholders rather than being used for administrative costs or profits. By mandating this minimum payout, regulations help protect consumers by ensuring that they receive a fair return on their insurance investment.

This structure encourages insurers to maintain a balance between profitability and the need to provide adequate benefits to those enrolled in Medicare Supplement plans. Understanding this percentage is critical for anyone involved in selling or managing these policies, as it reflects the regulatory framework designed to support and protect consumers in the marketplace.