Question

Which of the following statements pertaining to the grace period and reinstatement provisions in health insurance policies is NOT correct?

A) Warren's medical expense policy was reinstated on September 30 and he became ill and entered the hospital on October 5. His hospital expense will not be paid by the insurer.
B) Craig's health policy has a grace period of 31 days. He had a premium due June 15 while he was on vacation. He returned home July 7, mailed his premium the next day and the insurer received it July 10. His policy would have remained in force.
C) States may require grace periods of 7,10, or 31 days, depending on the mode of premium payment or term of insurance. However, many states require a 31-day grace period in any case.
D) Under a health policy's reinstatement terms, insured losses from an illness are covered immediately after reinstatement.

Answer 1

The statement that Warren's medical expense policy would cover his hospital expenses after reinstatement is incorrect.

Step-by-step explanation:

The correct statement regarding the grace period and reinstatement provisions in health insurance policies is A) Warren's medical expense policy was reinstated on September 30 and he became ill and entered the hospital on October 5. His hospital expenses will not be paid by the insurer.

During the grace period, the insured has an opportunity to pay the premium without losing coverage. However, if the insurer receives the premium after the grace period has ended, the policy may not be reinstated, and any claims during that time may not be covered.

Therefore, in Warren's case, since he entered the hospital after the reinstatement date, the insurer would not be liable to cover his hospital expenses.