Long Term Care Certification Practice Test

What can trigger a long-term care insurance policy to be considered lapsed?

1. Failure to pay premiums after a specified period

2. Resignation from the insurance company

3. Change of address without notification

4. Filing a claim

The correct answer is: Failure to pay premiums after a specified period

A long-term care insurance policy can be considered lapsed primarily due to the failure to pay premiums after a specified period. Insurance contracts, including long-term care policies, are contingent upon the timely payment of premiums. If these premiums are not paid in accordance with the terms established in the policy, typically after a grace period, the policy may lapse, meaning that the coverage is no longer in force. This concept emphasizes the importance of policy maintenance and the necessity for policyholders to stay informed about their payment obligations. It underscores that ongoing coverage depends on continued financial commitment, and failure in this aspect can result in the loss of benefits. In contrast, resignation from the insurance company, change of address without notification, or filing a claim do not directly lead to policy lapse. Resignation is not a typical action for policyholders, as they generally do not have the authority to unilaterally end their policy in such a manner. A change of address may necessitate notification for updates in contact information but does not directly affect the status of premium payments or coverage. Lastly, filing a claim reflects the policyholder's utilization of their benefits and does not trigger a lapse; in fact, it can encourage policyholders to maintain their coverage. Hence, maintaining timely premium