Oklahoma Life Producer Practice Exam

Which of the following is NOT a characteristic of a limited benefits policy?

1. Full lifetime coverage

2. Specific conditions coverage

3. Lower premiums

4. Limited payout

The correct answer is: Full lifetime coverage

A limited benefits policy is designed to provide coverage for specific situations or limited conditions rather than offering comprehensive coverage for a wide range of medical needs. One of the key characteristics of such policies is that they typically do not provide full lifetime coverage; instead, they often limit the scope of coverage to certain conditions or events. This limitation allows insurers to lower the premiums, making these plans more affordable than traditional comprehensive policies. Limited benefits policies are structured with specific conditions in mind, providing benefits only for specified illnesses or injuries, rather than on a broader basis. Furthermore, they often have a cap on the total payout, ensuring that the benefits are limited rather than extensive. Therefore, the assertion that a limited benefits policy offers full lifetime coverage stands in contrast to its fundamental nature.