Long Term Care Certification Practice Test

Which of the following is required to be offered by an insurer to prevent an unintentional lapse of a Long-Term Care policy?

1. Designate a third party to receive notice when a policy premium is unpaid for 30 days

2. Provide a grace period of 60 days on premium payments

3. Allow for a one-time premium reduction

4. Offer a free look period of 30 days

The correct answer is: Designate a third party to receive notice when a policy premium is unpaid for 30 days

The requirement for insurers to offer the option to designate a third party to receive notice when a policy premium is unpaid for 30 days is focused on safeguarding the insured from unintentional lapses in coverage. This provision is designed to promote ongoing communication and support for policyholders, particularly as many individuals who require long-term care may face challenges in managing their financial affairs due to health conditions or cognitive decline. By allowing the designation of a third party, insurers aim to ensure that someone close to the policyholder, who may be a family member or caregiver, is kept informed about the status of premium payments. This helps facilitate timely discussions and potential intervention before any lapse occurs, thereby reinforcing the policyholder’s financial security and continuous coverage. Other options may provide benefits or protections, but they do not specifically address the prevention of unintentional lapses in the same proactive manner as the designation of a third party. For instance, a grace period allows for additional time to make a payment but does not actively engage another individual in the process.