Which statement is true about Medical Expense insurance?

Medical Expense insurance operates on the principle of reimbursement, meaning that policyholders submit claims for medical expenses incurred, and the insurance company reimburses them for eligible costs according to the policy terms. This reimbursement approach emphasizes that the insured has to first pay for medical services and then seek repayment from the insurer, which aligns with the correct answer.

Considering the other options, some inaccuracies exist that clarify why they don't apply. The option regarding upfront payment before treatment suggests a misunderstanding of how many medical expense policies work, as many plans may allow for direct billing to the insurer in certain network contexts, especially with managed care plans. The incorrect assertion that it does not cover hospital stays conflicts with the common provisions found in medical expense policies, which often include such coverage. Lastly, stating that it is only available for individuals over 65 significantly restricts the demographic eligible for coverage, whereas medical expense insurance is typically accessible to a broader range of ages and not limited to senior citizens.