Arkansas Life and Health Insurance Practice Exam

Which of the following would be considered an optional provision in a health insurance policy?

1. Grace Period

2. Misstatement of Age

3. Entire Contract

4. Time Limit on Certain Defenses

The correct answer is: Grace Period

In a health insurance policy, a grace period is considered an optional provision. A grace period is a specified amount of time after the premium due date during which the policy remains in force without penalty. This provision allows the policyholder additional time to make a late payment without the policy lapsing. The other options are not considered optional provisions in a health insurance policy: - Misstatement of Age: This provision addresses situations where the insured's age was misstated on the application. It clarifies how benefits will be adjusted based on the correct age. - Entire Contract: This provision specifies that the insurance policy, the application, and any attached endorsements constitute the entire contract between the insured and the insurer. - Time Limit on Certain Defenses: This provision limits the time frame during which the insurer can contest the validity of the policy based on certain factors like the insured's pre-existing conditions or suicide.