Question

Which of the following provisions specifies how long a policy owner's health coverage will remain in effect if the policy owner does not pay the premium when it is due? a) Grace period

b) Incontestability clause
c) Reinstatement provision
d) Exclusion rider

Answer 1

A grace period is a specified period of time that allows a policy owner to make a premium payment after the due date has passed without any penalty. If the premium is paid within the grace period, the coverage will not be terminated.

Step-by-step explanation:

The correct answer is a) Grace period.

A grace period is a specified period of time that allows a policy owner to make a premium payment after the due date has passed without any penalty. It is typically a specified number of days, such as 30 days, during which the policy remains in effect. If the premium is paid within the grace period, the coverage will not be terminated.

For example, if a policy owner misses the premium payment due date by a few days, they can still make the payment within the grace period and the health coverage will continue without interruption. However, if the payment is not made within the grace period, the coverage may be terminated, and the policy owner may need to reapply for coverage.