Florida Life and Health Insurance License Practice Test

What does an assignment of benefits in a Health Policy do?

1. Transfers the policy to a new owner

2. Changes the beneficiary

3. Transfers payment rights to someone other than the policyowner

4. Increases the benefit amount

The correct answer is: Transfers payment rights to someone other than the policyowner

An assignment of benefits in a Health Policy refers to the transfer of payment rights to someone other than the policyowner. This means that the person entitled to receive the benefits from the policy can designate someone else to receive the payments instead. Option A is incorrect because an assignment of benefits does not transfer the policy to a new owner. The original policy owner remains the same, but the payment rights are assigned to someone else. Option B is incorrect because an assignment of benefits does not change the beneficiary. The beneficiary remains the same, but the payment rights are assigned to a designated person. Option D is incorrect because an assignment of benefits does not increase the benefit amount. It only transfers the payment rights to someone else. In summary, an assignment of benefits in a Health Policy is a legal agreement that allows the policyholder to designate someone else to receive the payments from the policy instead of the policy owner.