Question

Mary Kay has failed to make two consecutive premium payments on her partnership-qualified LTCI policy. The insurer contacts Mary Kay's son, who promptly submits the missed payments, and the policy is automatically reinstated. This indicates what kind of policy provision?

a. nonforfeiture benefit
b. extension of benefits
c. unintentional lapse protection
d. guaranteed renewability

Answer 1

c. unintentional lapse protection

Step-by-step explanation:

The provided scenario describes a policy provision known as "unintentional lapse protection." This provision allows a policyholder to resume premiums and reinstate coverage in the event of a missed or late payment, provided the policyholder meets certain conditions, such as notifying the insurer of the problem and paying all premiums due within a specified time period. The main goal of this provision is to protect the policyholder from permanent loss of coverage due to a temporary lapse in payments. Therefore, option c. "unintentional lapse protection" is the correct answer.