Practice Quiz

Health and Life Insurance

Category - Annuities & Policies

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Because of downsizing, Steve has been terminated from ABC Firearms. Two weeks later Steve is cleaning up his personal items at home and a gun misfires killing Steve. The beneficiary to Steve’s policy will still receive payments. Why is this?
  1. Steve’s accident occurred with an ABC Firearm.
  2. Steve’s accident occurred in the grace period of conversion to an individual policy
  3. Steve’s insurance continues to cover him for up to one year.
  4. Steve’s insurance has accidental death clause
Explanation
Answer: B - Steve’s beneficiary will receive payments from the policy because Steve is in the grace period for converting from the group policy to an individual policy. The grace period is usually 31 days and provides coverage during times of transition. Because Steve was terminated, standard provisions allow him time to find another policy without losing coverage in case of an accident.
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