State RegulationsAZ specificDifficulty 2/5
A Scottsdale resident misses a monthly premium on her individual health policy but is still inside the grace period when she is hospitalized. What does Arizona law provide about her coverage during the grace period?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Under A.R.S. 20-1347, coverage under an individual health policy continues during the grace period even though the premium is unpaid. Practically, an insured in Scottsdale who misses a payment keeps full policy protection while catching up, so a loss arising in grace is still a covered loss and the premium remains due to the insurer.
Why the other options are wrong
- B) Immediate suspension would defeat the purpose of the statutory grace period, which keeps coverage in force while the premium is overdue.
- C) No insurer agreement is needed; continuation during grace is mandated by A.R.S. 20-1347.
- D) The statute imposes no loss exclusion during grace; coverage simply continues on the policy's regular terms.
Memory hook
Grace keeps the umbrella open while you find the premium.