State RegulationsNC specificDifficulty 2/5
A Greensboro resident's individual hospital expense policy calls for quarterly premium payments. The insured fails to pay a renewal premium on time. North Carolina law requires the insurer to keep the policy in force during a grace period of at least:
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Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
Under G.S. 58-51-15(a)(3), policies whose premiums are not payable weekly or monthly — quarterly, semiannual, and annual modes included — must carry a grace period of not less than 31 days, and the policy continues in force during that period. A quarterly-premium hospital expense policy therefore falls in the 31-day tier.
Why the other options are wrong
- A) 7 days is the weekly-premium tier and is far too short for a quarterly mode.
- B) 10 days is the monthly-premium tier; quarterly payments are governed by the catch-all 31-day tier instead.
- D) 60 days is not an accident and health grace period under North Carolina law.
Memory hook
Quarterly or rarer premiums? The catch-all tier gives you 31 days.