California Life and Health Insurance Practice Exam

The "blackout period" affects whose benefits?

1. Child beneficiaries

2. Surviving spouse

3. Policyholders

4. Dependents

The correct answer is: Surviving spouse

The blackout period directly impacts the benefits available to a surviving spouse. This term typically refers to a time frame in which a surviving spouse may not receive certain income benefits, often related to social security or pension payouts, after the death of their partner. For instance, in the context of social security, if a spouse who has lost their partner is not yet eligible to receive survivor benefits (possibly due to age or other qualifications), they may face a period—referred to as the blackout period—where they receive no financial support. During this time, while they remain eligible for certain benefits in the long run, there is still a gap in financial assistance that can significantly affect their financial planning and stability. This contrasts with the effects on child beneficiaries, policyholders, and dependents. Child beneficiaries typically start receiving their benefits without such a blackout period, while dependents may have their own distinct eligibility criteria. Policyholders are primarily concerned with the policy benefits as they relate to themselves and their choices, rather than the specific widow's or widower’s financial gap referred to as the blackout period.