State RegulationsCO specificDifficulty 1/5
An individual sickness and accident policy — other than a health benefit plan — is issued with premiums paid on the MONTHLY mode. What grace period must the policy provide before it may lapse for nonpayment?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Under C.R.S. § 10-16-202, the required grace period in individual S&A policies (other than health benefit plans) depends on premium mode: 7 days for weekly premium, 10 days for monthly premium, and 31 days for all other modes. Because the stem specifies the monthly mode, the correct grace period is 10 days. Coverage continues during the grace period, and claims arising then are payable less any unpaid premium.
Why the other options are wrong
- B) 7 days is the grace period for the WEEKLY premium mode, not the monthly mode named in the stem.
- C) 31 days is the grace period for all modes OTHER than weekly and monthly, and also the unsubsidized health-benefit-plan figure under C.R.S. § 10-16-140 — neither applies to a monthly-mode S&A policy.
- D) 45 days is not a Colorado S&A grace period; it is the paper-claim payment deadline under C.R.S. § 10-16-106.5.
Memory hook
Grace grows with the mode: weekly 7, monthly 10, all the rest 31.