California Life and Health Insurance Practice Exam 2025 – Complete Test Prep

Question: 1 / 400

What happens when a policy is canceled due to non-payment?

The policyholder can renew at any time

The policy is terminated before its normal expiration date

When a policy is canceled due to non-payment, it is indeed terminated before its normal expiration date. This means that the insurance company has ended the contract with the policyholder, usually because the policyholder has failed to pay the required premiums on time.

Once a policy is canceled, the coverage is no longer applicable, and the policyholder cannot invoke benefits or file claims as the insurance coverage has been effectively nullified. It's important to understand that while there may be various provisions regarding grace periods or refunds under specific circumstances, the action of cancellation means that the contractual agreement is no longer in effect. This makes it essential for policyholders to stay current on their payments to maintain their insurance coverage.

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The premium is refunded in full

The coverage continues for a grace period

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