An extension of benefits provision in a group medical expense policy is designed to:
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
The extension of benefits (also called extended benefits) provision protects a covered person who is totally disabled on the date the group policy terminates: the insurer continues paying benefits for the same covered condition, typically for a specified period after termination. It exists because ending the plan would otherwise cut off payments in the middle of an active claim. The provision covers the ongoing condition, not new losses, and it is a standard contract term in group health insurance tested under the contract-provision objectives.
Why the other options are wrong
- B) Inflation or COLA adjustments are separate riders or features, not extension of benefits; the provision protects claims in progress.
- C) Adding dependents without evidence of insurability is a late-enrollment or open-enrollment feature, unrelated to extension of benefits.
- D) Retiree coverage is a separate employer decision; extension of benefits is claim-related, not an ongoing retiree plan.
Memory hook
Extension of benefits: if you are already down when the group plan ends, the insurer keeps paying for that same claim.