Indiana State Life and Health Insurance Practice Exam

The statement regarding a policy's Grace Period that is considered false is that past due premiums are waived. During the Grace Period, which is a specified time after a premium due date during which a policy remains in force even if the premium has not been paid, the purpose is to allow the policyholder a chance to make the payment without losing coverage. However, this does not mean that past due premiums are waived; they still owe those premiums and must be paid to keep the policy in force.

In contrast, the other statements accurately reflect the provisions typically associated with a Grace Period. Policy loans can often still be taken during this time, allowing the policyholder access to the cash value of the policy. Full coverage generally continues throughout the Grace Period, meaning the benefits of the policy remain intact during this time frame. Lastly, the terms regarding the Grace Period, including its length and conditions, are generally specified within the policy documentation to inform policyholders of their responsibilities and the coverage status.