Practice Quiz

Health and Life Insurance

Category - Annuities & Policies

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Lee is a server in a restaurant. This type of job makes his income fluctuate and sometimes he does not make his life insurance payments on time. On the 20th of the month, Lee’s payment is 15 days overdue. Lee is in a fatal car wreck on his way home from work on the 30th of the month. As the beneficiary of Lee’s policy, Janet should expect what to happen?
  1. Payment of the policy less the missed premium
  2. Since the premium was not paid, there is no coverage
  3. Payment of the policy less the missed premium and the remaining balance of premiums
  4. Since the premium was not paid, a judge must determine what happens
Explanation
Answer: A - Janet should expect to receive the payment(s) from the policy less the missed premium. Because Lee’s policy was still within the 30 day grace period, the coverage is still in effect for Janet to receive payments. If Lee’s car wreck had occurred one week later, Janet would not receive anything as the missed premium payment would have cancelled the policy.
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