State RegulationsNC specificDifficulty 2/5
An insured dies on the twentieth day of the grace period under a North Carolina life policy, with the overdue premium still unpaid. Under G.S. 58-58-22(1), what may the insurer do?
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
Under G.S. 58-58-22(1), coverage continues through the 31-day grace period, and the statute expressly permits the insurer to deduct the overdue premium from a claim arising during grace. The beneficiary therefore receives the death benefit less the unpaid premium.
Why the other options are wrong
- A) Denial is improper because death benefit coverage remains in force during the grace period.
- C) The statute allows deduction of the overdue premium; it does not require the insurer to forgive it.
- D) Payment may not be postponed; the claim is payable with the overdue premium simply deducted.
Memory hook
Died in grace? Insurer pays, minus the missed premium.