Maryland Life and Health Insurance License Practice Exam

Which of the following is NOT a required provision in an accident and health insurance policy?

1. Change of occupation

2. Grace period

3. Time limit on certain defenses

4. Renewability provisions

The correct answer is: Change of occupation

The correct answer is that "Change of occupation" is not a required provision in an accident and health insurance policy. In insurance, required provisions are specific features that must be included in a policy to ensure that the rights and responsibilities of both the insurer and the insured are clearly defined. While change of occupation clauses may appear in some policies to protect the insurer if the insured takes on more hazardous work, they are not mandated by state insurance laws as essential components. On the other hand, provisions like the grace period, time limit on certain defenses, and renewability provisions are standard requirements in accident and health insurance policies. The grace period ensures policyholders have a specified amount of time to make premium payments without losing coverage. The time limit on certain defenses provision protects insured individuals by limiting the period during which an insurer can contest a claim based on misstatements or omissions in the application. Renewability provisions outline the terms under which the policy can be renewed, ensuring stability and predictability for the policyholder. Each of these provisions plays a critical role in offering a fair insurance experience, whereas change of occupation is more situational and not universally necessary for all policies.