State RegulationsNJ specificDifficulty 2/5
A buyer returns an individual accident and health policy on day 7 of the 10-day free-look period and asks for her money back. What is the result?
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Answer & full 3-part explanation (select an option above, or peek)
Why D is correct
Under N.J.A.C. 11:4-16.6(c), the 10-day free look lets the buyer return an individual health policy for a full premium refund. A return made on day 7 is timely, so the refund is complete and the policy is treated as though it never took effect. No service charge or retained premium is permitted, and the New Jersey Department of Banking and Insurance enforces the rule.
Why the other options are wrong
- A) The free-look refund is full; no service charge may be deducted.
- B) The insurer does not keep any premium when the policy is returned within the free-look period.
- C) Day 7 is still inside the 10-day window, so the refund right is fully intact.
Memory hook
Return it inside the free look and it is as if the policy never existed.