Arkansas Life and Health Insurance Practice Exam

Which of the following provisions is commonly included in health insurance policies to limit the insurer's liability?

1. Grace Period

2. Legal Actions

3. Misstatement of Age

4. Physical Exam and Autopsy

The correct answer is: Grace Period

The Grace Period provision is commonly included in health insurance policies to limit the insurer's liability. This provision gives the policyholder an additional period (typically 31 days) after the premium due date to pay the premium without the policy lapsing. By providing this grace period, the insurer is limiting its liability by giving the policyholder a chance to make up late payments without immediately terminating coverage. The other options (B, C, and D) are not provisions that typically limit the insurer's liability in health insurance policies. Legal Actions typically refer to the policyholder's rights in pursuing legal action against the insurer if necessary. Misstatement of Age relates to inaccuracies in the policyholder's age information affecting coverage or premiums. Physical Exam and Autopsy provisions are usually part of the claims process, determining the cause of death and verifying information but do not directly limit the insurer's liability.