If the policy owner of a major medical policy forgets to pay their premium and is hospitalized, how will the insurer handle the claim?

In the scenario where a policy owner forgets to pay their premium for a major medical policy and then finds themselves hospitalized, the insurer's response will typically hinge on whether a grace period is applicable and the specific terms of the policy. If the grace period has lapsed, the insurer will not cover any claims incurred during this period of non-payment.

The correct answer, which states that the insurer will pay the claim in full minus the premium due, reflects a common practice in the insurance industry. Many major medical policies include provisions that address situations of non-payment: while claims will not be denied outright, the insurer may deduct any outstanding premiums from the amount payable. This means that the policy is still technically in force to a degree, despite the lapse, allowing for coverage of the claim, albeit reduced by the unpaid amount.

In contrast, simply denying the claim outright or waiving the premium during hospitalization would not align with how most insurance policies operate in these situations. Insurers typically recognize the emergency nature of hospitalization but also maintain the right to collect premiums owed as part of the contractual obligations laid out in the policy.