Arizona Life and Health Practice Exam

How is a claim during an accident and health insurance policy's grace period handled by the insurer?

1. The claim is automatically denied

2. The unpaid premium is deducted from the claim reimbursement

3. The claim can be adjusted with an additional charge

4. The claim will be paid in full without deductions

The correct answer is: The unpaid premium is deducted from the claim reimbursement

When an insured individual submits a claim during the grace period of an accident and health insurance policy, the insurer typically handles the situation by deducting any unpaid premium from the claim reimbursement. The grace period is the time allowed for the policyholder to pay their premium after the due date without losing coverage. If a claim arises during this period and the premium has not yet been paid, the insurance company will honor the claim but will subtract the amount of the unpaid premium from the total reimbursement. This practice ensures that the insurer is compensated for the premium that is due—after all, the coverage is still active during the grace period, and the insurer has the right to recover any outstanding payments. Therefore, the policyholder receives a payout for the claim, albeit reduced by the necessary premium deduction. This approach effectively balances the interests of both the policyholder and the insurer, ensuring that claims are paid swiftly while accounting for any overdue premiums.