73. An insured incurs a covered accident and health insurance loss on May 30 which is submitted to the insurer on June 8. If the insured terminated coverage on June 1, the insurer
Answer: C
The insurer must pay the claim upon receipt of the proof of loss.
The insured is entitled to receive payment for the claim despite terminating coverage on June 1, as the loss occurred on May 30, which is before the termination date. Therefore, the insurer must honor the claim once the proof of loss is submitted.
A) can refuse to pay the claim because coverage has been terminated
This option is incorrect because the loss occurred before the termination of coverage. Insurers typically cannot deny claims for losses incurred while the policy was active, regardless of subsequent termination.
B) can refuse to pay the claim under the post-existing conditions exclusion
This option is also incorrect. The concept of post-existing conditions typically applies to specific health conditions that arise after a policy has been terminated or when a new policy is issued. In this case, the loss occurred while the coverage was still in effect.
C) must pay the claim upon receipt of the proof of loss
This option is correct. Since the accident occurred on May 30, before the coverage termination, the insurer is obligated to pay the claim once the insured submits proof of loss, regardless of the subsequent termination of the policy.
D) must pay the claim within one year of termination of coverage
This option is incorrect as well. There is no requirement for the insurer to pay claims for losses incurred after the termination of coverage. Since the loss occurred before the termination, this time frame does not apply.
Conclusion
The insurer is required to pay the claim since the loss occurred prior to the termination of coverage, making Option C the only correct choice. All other options either misinterpret the timing of the loss in relation to coverage or apply irrelevant conditions.