State RegulationsNJ specificDifficulty 2/5
An insured with a monthly-premium individual health policy pays the premium eight days after the due date, within the grace period. What is the status of the coverage?
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Answer & full 3-part explanation (select an option above, or peek)
Why D is correct
N.J.S.A. 17B:26-6 gives individual health policies with monthly premiums a 10-day grace period. Payment made on the eighth day falls inside that window, so the policy remains in force and any covered claim is payable, subject to deduction of the overdue premium. No reinstatement is needed, because the policy never lapsed.
Why the other options are wrong
- A) The policy does not lapse until the grace period runs out; with monthly mode that is 10 days after the due date.
- B) A late payment inside the grace period does not void the policy; voiding is not the grace-period mechanism.
- C) The insurer cannot deny claims merely because payment was late; the policy is in force throughout the grace period.
Memory hook
Inside the grace period the policy never lapsed — pay and keep going.