Question 37

Premium is deducted from the claim.

When there is an unpaid premium at the time a health claim becomes payable under the unpaid premium Uniform Optional Provision, the premium amount owed is deducted from the claim amount.

A) claim is denied.

This option is incorrect because the provision does not stipulate that a claim will be denied due to an unpaid premium. Instead, the claim can still be processed, with adjustments made to the payout.

B) policy is cancelled.

This option is also incorrect. The provision does not indicate that the policy will be cancelled because of an unpaid premium; rather, it allows for the claim to be settled with the premium deducted.

C) premium is deducted from the claim.

This option is correct as it aligns with the provision's stipulation that any unpaid premium will be taken out of the claim amount. This means the insured will still receive a payout, albeit reduced by the unpaid premium.

D) claim is delayed until payment of the premium.

This option is incorrect because the provision does not suggest that there will be a delay in processing the claim. The claim can proceed, and the outstanding premium will simply be deducted from the amount paid out.

Conclusion

The correct answer is that the premium is deducted from the claim, which allows the claim to be processed despite the unpaid premium. Other options incorrectly suggest denial, cancellation, or delays, which do not reflect the provision's intent to ensure claim processing while addressing the unpaid premium.