Life License Qualification Program (LLQP) Practice Exam

What does the Legal Actions provision in an Accident and Health policy require regarding lawsuits?

1. An insured must settle a claim within 60 days after Proof of Loss is submitted

2. An insured must wait at least 30 days after Proof of Loss has been submitted before a lawsuit can be filed

3. An insured must wait at least 60 days after Proof of Loss has been submitted before a lawsuit can be filed

4. An insured must settle a claim within 30 days after Proof of Loss is submitted

The correct answer is: An insured must wait at least 60 days after Proof of Loss has been submitted before a lawsuit can be filed

The Legal Actions provision in an Accident and Health policy stipulates that an insured must wait a minimum of 60 days after submitting Proof of Loss before initiating any lawsuits against the insurer. This period allows the insurer adequate time to process the claim and respond appropriately, potentially resolving the matter without needing to resort to a lawsuit. This requirement is significant because it underscores the intention to encourage resolution and communication between the insurer and the insured prior to legal proceedings. The specified waiting period can help mitigate unnecessary litigation, promote efficiency in claims processing, and foster a cooperative environment in dealing with claims. The other proposed options reflect misunderstandings about the required waiting period outlined by the Legal Actions provision. They erroneously state shorter waiting times or the necessity to settle a claim immediately after submitting Proof of Loss, which do not accurately represent the standard legal language found in such policies.