Florida 2-15 Life, Health and Variable Annuity AgentFlorida Laws and Regulations Specific to Health InsuranceHard
A Florida resident is reviewing their new long-term care insurance policy. The policy includes a mandatory provision that ensures the policy will not lapse due to nonpayment of premium if the insurer is notified that the insured has a cognitive impairment or is otherwise unable to pay. This provision is known as the:
- AReinstatement Provision
- BGrace Period
- CWaiver of Premium for Impaired Policyholders
- DIncontestable Clause
Show answer & explanationAnswer & explanation
Correct answer: C. Waiver of Premium for Impaired Policyholders
Florida law (and NAIC model regulations) mandates a 'Waiver of Premium for Impaired Policyholders' provision in Long-Term Care policies. This protects policyholders with cognitive impairment from inadvertently losing coverage due to missed premium payments, provided a designated person or the insurer is notified.
Why the other options are wrong
- A. Reinstatement Provision allows a lapsed policy to be put back in force, typically requiring a new application and premiums, not specific to cognitive impairment.
- B. Grace Period allows a short window to pay overdue premiums, but doesn't specifically address cognitive impairment.
- D. Incontestable Clause relates to misstatements on the application, not premium payment during cognitive impairment.
Waiver of Premium for Impaired Policyholders (LTC)
A mandatory provision in Florida Long-Term Care insurance policies designed to prevent policy lapse due to nonpayment of premium when the insured has a cognitive impairment or is otherwise unable to pay, provided a designated third party or the insurer is notified.
- Mandated by Florida law (and NAIC model)
- Protects cognitively impaired policyholders
- Requires notification to the insurer, often by a designated third party
- Distinct from standard waiver of premium for disability
Memory trick: Cognitive waiver prevents premium lapse.