Difficulty: Easy

Average Score: 94%

Which of the following statements about the Waiver of Premium provision in an Accident & Health policy is CORRECT?

Rationale

Waiver of Premium provision in an Accident & Health policy waives the payment of premiums after the insured has been totally disabled for the specified period of time.

The Waiver of Premium provision is designed to ease the financial burden on the insured by suspending premium payments once the insured meets the criteria for total disability. This provision ensures that the policy remains in force even when the insured is unable to work due to disability.

A (It provides for payment of benefits to the beneficiary when the insured becomes sick or disabled.) YOUR ANSWER

This statement is incorrect. The Waiver of Premium provision does not directly provide benefits to the beneficiary but rather waives the obligation of the insured to pay premiums during a period of total disability.

B (It allows the insured to resume coverage under a lapsed policy.) YOUR ANSWER

This statement is incorrect. The Waiver of Premium provision does not address the reinstatement of a lapsed policy but instead focuses on relieving the insured from premium payments in case of total disability.

C (It waives the liability of the insurance company for excessive losses.) YOUR ANSWER

This statement is incorrect. The Waiver of Premium provision is not related to the insurance company's liability for losses but rather concerns the insured's obligation to pay premiums in case of total disability.

D (It waives the payment of premiums after the insured has been totally disabled for the specified period of time.) CORRECT

This statement is the correct answer. The Waiver of Premium provision indeed waives the requirement for the insured to pay premiums once they have been totally disabled for the stipulated duration, ensuring the policy remains active despite the insured's inability to work.

Conclusion

The Waiver of Premium provision in an Accident & Health policy serves to support the insured during times of total disability by relieving them from premium payments while maintaining the policy in force. This feature enhances the policy's value by providing financial security when the insured is unable to earn due to disability.

Related Questions

View all