During the grace period, what may the insurer do if a claim is made?

The correct answer is that the insurer may deduct the amount of the premium plus interest if a claim is made during the grace period. The grace period is a specific timeframe that allows a policyholder to make overdue premium payments without the risk of losing their coverage. However, if a claim arises during this period and the premium has not been paid, the insurer is justified in withholding payment for the claim until the premium is settled.

In this case, the insurer can deduct the outstanding premium amount, plus any applicable interest, from the claim payout. This is an important risk management practice that helps insurers maintain their financial integrity while providing a safeguard for policyholders. This ensures that the insurer can continue providing coverage and fulfilling future obligations.

The other options do not accurately reflect the procedures insurers generally follow during the grace period. For instance, paying out the full claim without deductions would not be feasible if the premium is outstanding. Refusing any claims during that period would not align with standard insurance practices, as the grace period is designed to protect both the insurer and the insured. Charging a late fee for the claim isn’t typical; rather, the focus remains on deducting the premium amount from any claim due.