When an agent replaces a client's existing Medigap policy with a new one, what must be provided so the client can make an informed comparison?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Medigap replacement is closely regulated because switching policies can cost a consumer benefits and coverage continuity. When a new policy replaces an existing Medigap policy, the insurer and agent must deliver an outline of coverage and a replacement disclosure so the applicant understands what the new policy covers, how it compares with the old one, and whether any benefits are lost. The disclosure is meant to curb abusive sales practices such as churning, where an agent repeatedly replaces policies simply to earn commissions. Improper or unnecessary replacement of Medigap policies is prohibited, and the paperwork requirements support that prohibition.
Why the other options are wrong
- B) The client's physician is not part of the Medigap replacement process; the safeguards are disclosure documents, not medical opinions.
- C) Premium waivers on replacement are an abusive inducement that the rules are designed to prevent, not a required document.
- D) Medicare does not issue guaranteed issue certificates; guaranteed issue rights apply in specific situations but are not a certificate for every replacement.
Memory hook
Switching Medigap? Paperwork first: outline of coverage plus replacement disclosure.