Difficulty: Medium

Average Score: 64%

A Long-Term Care rider may lapse for nonpayment of premium only if the insured and the:

Rationale

Spouse have failed to purchase a waiver of Premium rider.

A Long-Term Care rider can lapse due to nonpayment of premium only if the insured and their spouse have not acquired a Waiver of Premium rider. This additional policy feature typically covers premium payments in case of disability or incapacity, ensuring that the Long-Term Care coverage remains active even if the insured or their spouse faces financial difficulties or health-related challenges.

A (beneficiary have refused to sign a viatical settlement) YOUR ANSWER

The beneficiary's decision regarding a viatical settlement, which involves selling a life insurance policy for immediate funds, is not directly linked to the payment or lapse of premiums for a Long-Term Care rider. This choice does not address the specific condition under which the rider may lapse.

B (spouse have failed to purchase a waiver of Premium rider) CORRECT

This statement correctly identifies the scenario leading to a possible lapse of a Long-Term Care rider. If the insured and their spouse do not secure a Waiver of Premium rider, the policy may lapse due to nonpayment, potentially jeopardizing the coverage and benefits associated with the Long-Term Care insurance.

C (designee fail to pay the premium more than 30 days after the lapse date) YOUR ANSWER

The responsibility for premium payments and the timing of nonpayment are crucial factors affecting the status of a Long-Term Care rider. However, the lapse criteria specified in this choice do not align with the conditions outlined in the original question, which focus on the role of the insured and their spouse in maintaining the policy.

D (assignee are declared mentally competent at the time the payment was due) YOUR ANSWER

The mental competence of an assignee, who receives rights to a policy, does not directly influence the payment status or potential lapse of a Long-Term Care rider. This choice introduces a different concept unrelated to the specific circumstances leading to a rider's lapse.

Conclusion

In the context of a Long-Term Care rider's premium payment and potential lapse, the critical factor lies in the insured and their spouse acquiring a Waiver of Premium rider to safeguard against nonpayment issues due to disability or other unforeseen circumstances. Failure to secure this additional coverage feature can result in the lapse of the Long-Term Care rider, emphasizing the importance of comprehensive insurance planning for long-term care needs.

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