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Question: 1 / 400

How will an insurer likely handle a disability income claim for a condition not disclosed at the time of application, after the policy has been in force for 5 years?

By increasing the premium

Through policy cancellation

Claim will be paid and coverage will remain in force

An insurer will likely handle a disability income claim for a condition not disclosed at the time of application, after the policy has been in force for 5 years by paying the claim and maintaining coverage. This is because after the initial 2-year contestability period, the insurer is generally bound to the terms of the policy and cannot deny coverage or cancel the policy due to non-disclosure of pre-existing conditions. Option A is incorrect because the insurer cannot increase the premium or change the terms of the policy after it has been in force for 5 years. Option B is incorrect because the policy cannot be cancelled for non-disclosure after the initial contestability period. Option D is incorrect because the insurer cannot refuse to pay the claim after the contestability period unless clear evidence of fraud can be proven.

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With a refusal to pay the claim due to fraud

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