State RegulationsNY specificDifficulty 2/5
Which statement about the grace period of a New York individual accident and health policy is correct?
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Answer & full 3-part explanation (select an option above, or peek)
Why D is correct
Under N.Y. Ins. Law §3216(d)(1)(C), whatever the premium mode, the policy remains in force during the grace period, so a covered loss occurring during grace is payable. The insurer's safeguard is the unpaid premium provision of §3216(d)(2)(G), which allows it to deduct the arrears from the benefit rather than deny the claim.
Why the other options are wrong
- A) Grace keeps the contract alive; it does not suspend coverage.
- B) Losses occurring during grace are covered, not deniable.
- C) The accident/sickness distinction is drawn in the reinstatement provision, not in grace.
Memory hook
Grace means still insured, with the overdue premium docked from any claim.