Massachusetts Health & Accident Insurance Practice Exam

Which option allows a policy owner to elect a new policy before the original expires?

1. Waiver of Premium

2. Conversion Privilege

3. Assignment Provision

4. Free-Look Provision

The correct answer is: Conversion Privilege

The option that allows a policy owner to elect a new policy before the original expires is the conversion privilege. This feature is particularly significant in health insurance policies, allowing the insured to convert their group health insurance policy into an individual policy without having to provide proof of insurability. This is beneficial for individuals who may lose coverage due to changes in employment or who wish to maintain health insurance independently. The conversion privilege ensures continuity of coverage, protecting the policy owner from potential health issues that may arise. In contrast, the waiver of premium typically waives the premium payments during a period of disability or hardship, and does not focus on providing new coverage. The assignment provision refers to the transfer of rights to another party, often utilized in situations where benefits are to be redirected, but does not provide for the creation of a new policy. The free-look provision allows a policy owner to review the policy after purchasing it and to cancel if they are not satisfied, but it does not enable them to obtain a new policy before the first one expires.