Long Term Care Certification Practice Test

Which of the following statements does NOT apply to the reinstatement provision in LTC policies?

1. The insured can be required to pay back premiums

2. The insured must reapply for coverage

3. The policy is automatically reinstated if premiums are paid

4. Coverage resumes after a period of lapse

The correct answer is: The insured can be required to pay back premiums

The reinstatement provision in long-term care (LTC) policies typically allows a policyholder to restore their coverage after it has lapsed due to non-payment of premiums. The key aspect to note about reinstatement provisions is that they often require the policyholder to bring their premium payments current, so that they are in good standing with the insurer. The statement indicating that the insured can be required to pay back premiums reflects an accurate representation of what can happen during the reinstatement process. Insurers may stipulate that any overdue premiums must be paid to reinstate the policy. Reapplying for coverage, generally seen in some insurance policies upon lapse, is not a universal requirement in reinstatement provisions for LTC policies, which is why that aspect might not align with typical policy conditions. Additionally, policies can be automatically reinstated if premiums are paid within a specified timeframe, allowing a smooth transition back into coverage without gap or additional underwriting. The idea that coverage resumes after a period of lapse again aligns with standard practices for reinstatement, as these provisions are meant to provide a pathway for the insured to regain their coverage after a missed payment. In summary, while the notion that back premiums may be needed accurately reflects the financial responsibilities in reinstatement, the