State RegulationsFL specificDifficulty 2/5
A Florida insured dies 10 days into the policy's grace period with the overdue premium still unpaid. How must the insurer handle the death claim?
Select an option to reveal the answer and the full 3-part explanation — free, no signup.
Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
Under Fla. Stat. 627.453, the policy stays in force during the grace period, and if the insured dies during grace, the insurer may deduct the overdue premium plus interest - capped at 8% per year - from the death benefit. The claim is payable because death during grace is still covered; the insurer simply recoups the missed premium rather than denying the claim.
Why the other options are wrong
- A) Death during the grace period is covered; the policy remains in force until the grace period runs out.
- C) The statute expressly allows deduction of the overdue premium plus interest from the proceeds.
- D) Paying cash value ignores that the policy remained in force; the full death benefit, minus the deduction, is owed.
Memory hook
Die in grace: pay the claim, minus the missed premium.