New Jersey Life Insurance Exam Practice Question
A group contract that lapses because of nonpayment of premium will continue to cover losses incurred by the insured for
Correct Answer: A
Rationale: A group contract lapses due to nonpayment of premium but maintains coverage during the Grace Period, which typically allows policyholders time to make payments without losing benefits.
Option B is incorrect as coverage does not extend for a maximum of 30 days after the Grace Period; it ends once the Grace Period concludes.
Option C misinterprets the timeline, suggesting coverage lasts 30 days post-payment, which is not aligned with standard policy terms.
Option D also incorrectly extends coverage beyond the Grace Period, which is not typically allowed. Thus, the Grace Period is the definitive timeframe for continued coverage.
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